On July 26, 2012, at 77 FR 43734, the Federal Register published our notice of proposed rulemaking (NPRM), which proposed to amend 14 CFR part 39 to include an AD that would apply to Eurocopter Model AS350BA helicopters with AERAZUR left-hand emergency flotation gear container assembly (container assembly), part number (P/N) 158170 or 158210-1, or right-hand container assembly, P/N 158171 or 158215-1, installed. That NPRM proposed to require replacing each container assembly at specified time limits based on the date of manufacture. The proposed requirements were intended to prevent failure of the emergency container assembly because of age and subsequent damage to the helicopter and injury to the occupants after an emergency water landing.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, issued EASA AD No. 2008-0189, dated October 10, 2008, to correct an unsafe condition for the Eurocopter Model AS350BA helicopters with certain AERAZUR emergency flotation gear installed. EASA advises that that the container assemblies have an operating life limit of 10 years from the date of manufacture. The EASA AD states that “as of June 2006, this limit is no longer recorded in the Maintenance Program; therefore, after June 2006, container assemblies having already exceeded the 10-year limit could have not been replaced yet.” The EASA AD also states that “floating performance of a helicopter may prove to be insufficient in the event of ditching, in case of failure of a container assembly being operated beyond its operating time limit.”

We gave the public the opportunity to participate in developing this AD, but we received no comments on the NPRM (77 FR 43734, July 26, 2012).

These helicopters have been approved by the aviation authority of France and are approved for operation in the United States. Pursuant to our bilateral agreement with France, EASA, its technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of these same type designs and that air safety and the public interest require adopting the AD requirements as proposed.

Eurocopter has issued Alert Service Bulletin No. 25.01.02, dated September 24, 2008 (EASB), which specifies certain times measured from the date of manufacture to replace the container assemblies. EASA classified this EASB as mandatory and issued AD No. 2008-0189, dated October 10, 2008, to ensure the continued airworthiness of these helicopters.

We estimate that this AD will affect 85 helicopters of U.S. registry. We estimate that operators may incur the following costs to comply with this AD.

• It will take minimal time to determine the manufacturing date of the container and about 1/2 work-hour per helicopter to replace the container assemblies at an average labor rate of $85 per work hour.

• Required parts will cost about $21,775 for the left container assembly and $26,690 for the right container assembly per helicopter.

Based on these figures, we estimate the AD's total cost impact on U.S. operators to be $485,075, assuming 10 helicopters require replacement of the right and left container assemblies.

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

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

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(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);

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

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

We prepared an economic evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

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

I. Background

On July 21, 2010, President Obama signed the Dodd-Frank Act, 1 which amended the CEA  2 to establish a new regulatory framework for swaps. The legislation was enacted to reduce systemic risk, increase transparency, and promote market integrity within the financial system by, among other things: (1) Providing for the registration and comprehensive regulation of SDs and MSPs; (2) imposing clearing and trade execution requirements on standardized derivative products; (3) creating rigorous recordkeeping and data reporting regimes with respect to swaps, including real-time public reporting; and (4) enhancing the Commission's rulemaking and enforcement authorities over all registered entities, intermediaries, and swap counterparties subject to the Commission's oversight. Section 722(d) of the Dodd-Frank Act also amended the CEA to add section 2(i), which provides that the swap provisions of the CEA apply to cross-border activities when certain conditions are met, namely, when such activities have a “direct and significant connection with activities in, or effect on, commerce of the United States” or when they contravene Commission rulemaking. 3

In the two years since its enactment, the Commission has finalized 41 rules to implement Title VII of the Dodd-Frank Act. The finalized rules include those promulgated under CEA section 4s, 4 which address registration of SDs and MSPs and other substantive requirements applicable to SDs and MSPs. Notably, many section 4s requirements applicable to SDs and MSPs are tied to the date on which a person is required to register, unless a later compliance date is specified. 5 A number of other rules specifically applicable to SDs and MSPs have been proposed but not finalized. 6

Further, the Commission published for public comment the Proposed Guidance, 7 which set forth the manner in which it proposed to interpret section 2(i) of the CEA as it applies to the requirements under the Dodd-Frank Act and the Commission's regulations promulgated thereunder regarding cross-border swap activities. Specifically, in the Proposed Guidance, the Commission described the general manner in which it proposed to consider: (1) Whether a non-U.S. person's swap dealing activities are sufficient to require registration as a “swap dealer”, 8 as further defined in a joint release adopted by the Commission and the Securities and Exchange Commission (“SEC”) (collectively, the “Commissions”);  9 (2) whether a non-U.S. person's swap positions are sufficient to require registration as a “major swap participant,”  10 as further defined in the Final Entities Rules; and (3) the treatment of foreign branches, agencies, affiliates, and subsidiaries of U.S. SDs and of U.S. branches of non-U.S. SDs. The Proposed Guidance also generally described the policy and procedural framework under which the Commission may permit compliance with a comparable regulatory requirement of a foreign jurisdiction to substitute for compliance with the requirements of the CEA. Last, the Proposed Guidance set forth the manner in which the Commission proposed to interpret section 2(i) of the CEA as it applies to the clearing, trading, and certain reporting requirements under the Dodd-Frank Act with respect to swaps between counterparties that are not SDs or MSPs.

Contemporaneously with the Proposed Guidance, the Commission published the Proposed Order pursuant to section 4(c) of the CEA, 11 in order to foster an orderly transition to the new swaps regulatory regime and to provide market participants greater certainty regarding their obligations with respect to cross-border swap activities during the pendency of the Proposed Order. The Proposed Order would grant temporary relief from certain swap provisions of Title VII of the Dodd-Frank Act.

The public comment periods on the Proposed Order and the Proposed Guidance ended on August 13, 2012 and August 27, 2012, respectively. The Commission received approximately 26 letters on the Proposed Order and approximately 288 letters on the Proposed Guidance from a variety of market participants and other interested parties, including major U.S. and non-U.S. banks and financial institutions that conduct global swaps business, trade associations, clearing organizations, law firms (representing international banks and dealers), individual citizens, and foreign regulators. 12 The Commission staff also held numerous meetings and discussions with various market participants, domestic bank regulators, and other interested parties to discuss the Proposed Order and the Proposed Guidance. 13

Further, the Commission staff closely consulted with the staff of the SEC in an effort to increase understanding of each other's regulatory approaches and to harmonize the cross-border approaches of the two agencies to the greatest extent possible, consistent with their respective statutory mandates. 14 The Commission expects that this consultative process will continue as each agency works towards implementing its respective cross-border policy.

The Commission also recognizes the critical role of international cooperation and coordination in the regulation of derivatives in the highly interconnected global market, where risks are transmitted across national borders and market participants operate in multiple jurisdictions. Close cooperative relationships and coordination with other jurisdictions take on even greater importance given that, prior to the recent reforms, the swaps market has largely operated without regulatory oversight and many jurisdictions are in differing stages of implementing their regulatory reform. To this end, the Commission staff has actively engaged in discussions with their foreign counterparts in an effort to better understand and develop a more harmonized cross-border regulatory framework. The Commission expects that these discussions will continue as it finalizes the cross-border interpretive guidance and as other jurisdictions develop their own regulatory requirements for derivatives. 15

The Commission has determined not to take further action on the Proposed Guidance at this time. The Commission believes it will be beneficial to have further consultations with other domestic and international regulators in an effort to harmonize cross-border regulatory approaches prior to taking action with respect to the Proposed Guidance. The Commission also believes that further consideration of public comments, including the comments that may be received on the Further Proposed Guidance regarding the Commission's interpretation of the term “U.S. person,” and its guidance regarding aggregation for purposes of SD registration, will be helpful to the Commission in issuing final interpretive guidance.

Nonetheless, the Commission has determined to issue the Final Order as a time-limited exemptive order that is substantially similar to the Proposed Order, except for the addition of provisions regarding registration and certain modifications and clarifications addressing public comments. Recently, the Commission staff granted time-limited, no-action relief to promote continuity in the application of Dodd-Frank requirements and facilitate the transition to those requirements by enabling swap market participants to apply a uniform and readily ascertainable standard regarding which swaps must be included in the calculations under the SD and MSP definitions. 16 The Final Order continues that process and furthers the same purposes. 17

In preparing the Final Order, the Commission has attempted to be responsive to commenters' concerns and recommendations, so that market practices will not be unnecessarily disrupted during the transition to the new swap regulatory regime. At the same time, the Commission also recognizes the importance of the new SD and MSP regulatory scheme to the Dodd-Frank swap reforms and, therefore, is mindful that its implementation should not be subject to undue delay. The Commission believes that the Final Order strikes the proper balance between promoting an orderly transition to the new regulatory regime, while appropriately tailoring relief to ensure that the Commission can responsibly discharge its statutory duties.

This release is organized in seven sections. Section II provides a brief overview of the Commission's exemptive authority under section 4(c) of the CEA and the Proposed Order; Section III provides a summary of the comments received on the Proposed Order and the Commission determinations regarding the Final Order; Section IV provides the Commission's findings pursuant to CEA section 4(c); Section V addresses the Paperwork Reduction Act; Section VI discusses cost benefit considerations; and Section VII contains the Final Order.

Section 4(c)(1) of the CEA authorizes the Commission to “promote responsible economic or financial innovation and fair competition” by exempting any transaction or class of transaction from any of the provisions of the CEA (subject to certain exceptions) where the Commission determines that the exemption would be consistent with the public interest and the purposes of the CEA. 18 Under section 4(c)(2) of the CEA, the Commission may not grant exemptive relief unless it determines that: (1) The exemption is appropriate for the transaction and consistent with the public interest; (2) the exemption is consistent with the purposes of the CEA; (3) the transaction will be entered into solely between “appropriate persons”; and (4) the exemption will not have a material adverse effect on the ability of the Commission or any contract market to discharge its regulatory or self-regulatory responsibilities under the CEA. 19 In enacting section 4(c), Congress noted that the purpose of the provision is to give the Commission a means of providing certainty and stability to existing and emerging markets so that financial innovation and market development can proceed in an effective and competitive manner. 20

Under the Proposed Order, the Commission would allow non-U.S. SDs and MSPs to delay compliance with certain Entity-Level Requirements of the Dodd-Frank Act (and the Commission's regulations thereunder), subject to specified conditions described therein. 21 An exception to the foregoing relief from the Entity-Level Requirements related to the swap data repository (“SDR”) reporting requirement  22 and part 20 of the Commission's regulations relating to large-trader reporting (“LTR”). Specifically, non-U.S. SDs and MSPs would be required to comply with the SDR reporting and LTR requirements for all swaps with U.S. counterparties upon their compliance date. Further, for swaps with non-U.S. counterparties, the Commission proposed that only those non-U.S. SDs and MSPs that are not affiliates or subsidiaries of a U.S.-based SD would be permitted to delay compliance with the SDR reporting and LTR requirements.

With respect to U.S. SDs and MSPs, the Commission proposed to permit such registrants  23 to delay compliance with certain Entity-Level Requirements through January 1, 2013. This relief with respect to Entity-Level Requirements, however, would not extend to swap data recordkeeping, SDR reporting or LTR requirements. That is, U.S. SDs and MSPs would be required to comply with the swap data recordkeeping, SDR reporting and LTR requirements for all swaps.

The Commission also proposed to grant, with respect to certain Transaction-Level Requirements of the Dodd-Frank Act (and the Commission's regulations thereunder), temporary relief to non-U.S. SDs and MSPs, as well as foreign branches of U.S. SDs and MSPs, for swaps with a non-U.S. counterparty so that they may comply only with the regulations as may be required in the home jurisdiction of the non-U.S. registrant (or in the case of a foreign branch of a U.S. registrant, the foreign location of the branch). 24 With respect to swaps with any U.S. counterparty, however, these registrants (as well as foreign branches of U.S. SDs and MSPs) would be required to comply with all applicable Transaction-Level Requirements that are in effect. Finally, the Commission did not propose exemptive relief for swaps between market participants that are neither SDs nor MSPs.

The proposed temporary exemptive relief for non-U.S. registrants (and foreign branches of U.S. registrants with respect to Transaction-Level Requirements) would become effective on the compliance date for registration and expire 12 months following the publication of the Proposed Order in the Federal Register ( i.e., July 12, 2013). In the Proposed Order, the Commission also stated that, in the interest of promoting an orderly transition to the new swap regulatory regime, it intends to consider extending the effectiveness of the exemptive relief at its expiration based on, among other things, whether and when substituted compliance with foreign regulatory requirements for non-U.S. persons is available.

A non-U.S. registrant seeking relief under the Proposed Order would have to satisfy certain conditions. First, a non-U.S. person that is required to register as an SD or MSP would have to apply to become registered as such when registration is required. Second, within 60 days of applying for registration, a non-U.S. registrant would have to submit to the National Futures Association (“NFA”) a compliance plan addressing how it plans to comply, in good faith, with all applicable requirements under the CEA and related rules and regulations upon the effective date of final cross-border interpretive guidance.

The Commission further noted that the proposed relief would neither: (1) Limit the applicability of any CEA provision or Commission regulation to any person, entity or transaction except as provided in the Proposed Order; nor (2) affect any effective date or compliance date set out in any specific Dodd-Frank Act rulemaking by the Commission.

Many commenters expressed general support for the Proposed Order but urged the Commission to broaden the scope of the relief to give market participants adequate time to implement necessary operational and compliance changes and to reflect the fact that certain key aspects of the Proposed Guidance (particularly those relating to registration determinations) were not yet final as of the date of the comments. 25 Many of the commenters supporting temporary exemptive relief also suggested specific modifications or clarifications of the Proposed Order concerning the scope and/or timing of the exemptive relief. 26

On the other hand, other commenters—namely, public interest groups such as Americans for Financial Reform (“AFR”) and Public Citizen's Congress Watch—expressed concerns about delaying the implementation of the Dodd-Frank Act to overseas activities. 27 AFR stated that the Proposed Order would significantly extend the period where markets lack critical protections against derivatives risks and expressed concern about taxpayer exposure to foreign banks, particularly “foreign affiliates of U.S. banks whose liabilities are guaranteed (implicitly or explicitly) by the parent company.”  28 Similarly, Public Citizen's Congress Watch expressed the concern that the Proposed Order would unnecessarily delay compliance with most entity requirements and transaction requirements for foreign subsidiaries and affiliates of U.S. financial institutions and for U.S. subsidiaries and affiliates of foreign banks, further prolonging exposure of U.S. taxpayers to unnecessary systemic risks. 29

Although at this time the Commission is not making any determinations as to the scope of the final interpretive guidance, the Commission believes that the comments received on the definition of U.S. person set forth in the Proposed Guidance are nonetheless relevant and helpful in determining the appropriate scope of exemptive relief in the Final Order. Taken together, these comments generally support, as an interim measure, the approach taken by the Commission staff in CFTC Letter No. 12-22 regarding the initial scope of the application of the CEA to swaps activities. Accordingly, in light of the Commission's experience to date with CFTC Letter No. 12-22 and these comments, it is taking a similar approach to the definition of U.S. person to that set forth in the staff no-action letter and supported by many commenters.

To be clear, the Commission wishes to emphasize that the discussion here is not, and should not be construed as, an indication of, or a limitation on, the definition of the term “U.S. person” that the Commission may adopt in final cross-border interpretive guidance. As discussed further below, the Commission is seeking further comment on this issue. However, the Commission is aware that the terms “U.S. person” and “non-U.S. person” are commonly used in the discussion of these issues. For ease of reference, therefore, this release and the Final Order use the term “U.S. person” to refer to a person that is described by the criteria discussed below, and the term “non-U.S. person” to refer to any other person. 30

Under the Proposed Guidance, the term “U.S. person” would be defined by reference to the extent to which swap activities or transactions involving one or more such persons have the relevant connection with activities in, or effect on, U.S. commerce. 31 As proposed, the term “U.S. person” would encompass both: (1) Persons (or classes of persons) located within the United States; as well as (2) persons that may be domiciled or operating outside the United States, but whose swap activities have a “direct and significant connection with activities in, or effect on, commerce of the United States” within the meaning of CEA section 2(i). 32 That is, the term “U.S. person” identifies those persons whose swap activities—either individually or in the aggregate—satisfy the jurisdictional nexus under section 2(i) of the CEA.

In general, commenters stated that the proposed “U.S. person” definition presented significant interpretive issues and implementation challenges. 33 The commenters contended that it would be difficult to determine U.S. person status because the proposed definition was, they said, overly broad, contained ambiguities, and would require collection of information not readily accessible at this time. The commenters, therefore, urged the Commission to provide market participants with sufficient time to implement a final definition of the term “U.S. person” and to reconsider the proposed definition in favor of “a simpler, more easily applied” definition of “U.S. person.”  34

A number of commenters requested that the Commission adopt an interim definition of “U.S. person” that would allow firms to rely on their existing systems and classifications and avoid the need to develop systems to achieve temporary compliance with standards that may change when a definition of the term “U.S. person” is finalized. 35 IIB explained that applying any definition of “U.S. person” that departs from status based on residence or jurisdiction of organization, and in some cases principal place of business, will require time to implement relevant documentation conventions and diligence procedures. 36 IIB, therefore, requested that the Commission implement a phased-in interim approach to the “U.S. person” definition that would encompass, in general, (1) a natural person who is a U.S. resident; and (2) a corporate entity that is organized or incorporated under the laws of the United States or has its place of business in the United States. 37

SIFMA also urged the Commission to phase in the “U.S. person” definition, citing the implementation difficulties identified by IIB. Specifically, SIFMA recommended that the Commission allow market participants to apply an interim definition of “U.S. person” until 90 days after the final definition of “U.S. person” is published. 38 SIFMA stated that its interim definition—which was identical to IIB's interim definition—should identify “core” U.S. persons and allow its members to phase in compliance with the Dodd-Frank requirements without building new systems that might have to be changed when a final definition is adopted.

The Commission finds merit in the comments suggesting that it should adopt a phased approach to cross-border activities. The Commission understands, from the comments, that market participants may need additional time to assess their businesses in light of the Final Order and to institute necessary changes to their systems and operations. Therefore, for purposes of the Final Order, the Commission will apply a definition of the term “U.S. person” based upon the counterparty criteria set forth in CFTC Letter No. 12-22  39 with certain modifications as described below. With respect to the other issues raised by commenters regarding the definition of “U.S. person,” the Commission believes that further public comment and consideration during the effectiveness of the Final Order will be helpful.

For purposes of the Final Order, the Commission will treat as a “U.S. person” any person identified by the following five criteria:  40

(i) A natural person who is a resident of the United States;

(ii) A corporation, partnership, limited liability company, business or other trust, association, joint-stock company, fund or any form of enterprise similar to any of the foregoing, in each case that is (A) organized or incorporated under the laws of a state or other jurisdiction in the United States or (B) effective as of April 1, 2013 for all such entities other than funds or collective investment vehicles, having its principal place of business in the United States;

(iii) A pension plan for the employees, officers or principals of a legal entity described in (ii) above, unless the pension plan is primarily for foreign employees of such entity;

(iv) An estate of a decedent who was a resident of the United States at the time of death, or a trust governed by the laws of a state or other jurisdiction in the United States if a court within the United States is able to exercise primary supervision over the administration of the trust; or

(v) An individual account or joint account (discretionary or not) where the beneficial owner (or one of the beneficial owners in the case of a joint account) is a person described in (i) through (iv) above.

The modifications made by the Commission to the counterparty criteria set forth in CFTC Letter No. 12-22 relate to (1) the location of an entity's principal place of business, (2) the treatment of pension plans for foreign employees, (3) the treatment of estates and trusts, and (4) the treatment of joint accounts. 41

First, regarding the location of an entity's principal place of business, the Commission considered that the second counterparty criterion in CFTC Letter No. 12-22 is generally intended to cover legal entities that are physically located or incorporated within U.S. territory. For purposes of the Final Order, the Commission believes it is appropriate to treat as a “U.S. person” a legal entity that is not incorporated in the United States but that nonetheless has its “principal place of business” in the United States. 42 The Commission believes that it is appropriate to consider an entity that is organized outside the United States but nonetheless has its “principal place of business” within the United States in the same manner as an entity organized or incorporated under the laws of the United States, because the center of direction, control and coordination of its business activities is located in the United States. 43 However, the Commission understands from commenters that market participants will need a short period of time to implement the treatment of entities with a principal place of business in the United States as “U.S. persons.”  44 Therefore, the Commission will not treat entities incorporated or organized outside the United States and with a principal place of business in the United States as U.S. persons until April 1, 2013 ( i.e., approximately 90 days after effectiveness of the Final Order). The Commission also understands from commenters that the application of the principal place of business element may be complex for funds and collective investment vehicles and require further guidance in this regard; therefore, at this time for purposes of the Final Order, the Commission has determined that this element will not apply to funds or collective investment vehicles. 45

Second, regarding the treatment of pension plans, the Commission is refining the third counterparty criterion in CFTC Letter No. 12-22 to indicate that a pension plan that is “primarily” (rather than exclusively) for the foreign employees of an entity is also a “U.S. person” for purposes of the Final Order. 46

Third, regarding the treatment of estates and trusts, the Commission is refining the fourth counterparty criterion in CFTC Letter No. 12-22 so that the treatment of an estate or trust for purposes of this relief does not depend on whether the income of the estate or trust is subject to U.S. income tax. 47 The Commission understands that whether income is subject to U.S. tax can depend on a variety of factors, including the source of the income, which may not be relevant for purposes of the Dodd-Frank Act. Accordingly, for purposes of the Final Order, the Commission is of the view that an estate should be treated as a “U.S. person” if the decedent was a resident of the United States at the time of death, and a trust should be treated as a “U.S. person” if it is governed by the law of a state or other jurisdiction in the United States and a court within the United States is able to exercise primary supervision over the administration of the trust.

The Commission believes that this approach is appropriate in view of how estates and trusts use swaps, and is consistent with how they are treated for other purposes under law. For estates, if the decedent was a party to any swaps at the time of death, then those swaps would continue to be treated in the same way after the decedent's death, when the swaps would most likely pass to the decedent's estate. Also, this test will be predictable and easy to apply for natural persons planning for how their swaps will be treated after death, for executors and administrators of estates, and for the swap counterparties to natural persons and estates.

With respect to trusts, the Commission considered that each trust is governed by the laws of a particular jurisdiction, which may depend on steps taken when the trust was created or other circumstances surrounding the trust. The Commission believes that if a trust is governed by U.S. law ( i.e., the law of a state or other jurisdiction in the United States), then it is reasonable to treat the trust as a U.S. person for purposes of the Final Order. The definition also requires that a court within the United States be able to exercise primary supervision over the administration of the trust. 48 Including this element of the definition will ensure that the treatment of the trust for purposes of the Final Order will be in line with how the trust is treated for other legal purposes.

Finally, regarding the treatment of joint accounts, the Commission is refining the fifth counterparty criterion in CFTC Letter No. 12-22 to include not only individual accounts where the beneficial owner is a person described in the preceding counterparty criteria, but also joint accounts where any of the beneficial owners is such a person.

Due Diligence. As described above, many commenters said that the information necessary to accurately assess the status of their counterparties as U.S. persons may not be available, or may be available only through overly burdensome due diligence. For this reason, these commenters requested that the Commission allow for reasonable reliance on counterparty representations as to their “U.S. person” status. 49

The Commission agrees with the commenters that a party to a swap, in order to rely upon the exemptive relief provided in the Final Order, should be able to reasonably rely on its counterparty's representation in determining whether the counterparty is a “U.S. person.” In this context, the Commission interprets the “reasonable” standard to mean that a party to a swap should conduct reasonable due diligence on its counterparties, with what is reasonable in a particular situation to depend on the relevant facts and circumstances. The Commission notes that under its external business conduct rules, an SD or MSP generally meets its due diligence obligations if it reasonably relies on counterparty representations, absent indications to the contrary. 50 Similarly here, the Commission believes that allowing for reasonable reliance on counterparty representations provides for an objective standard and avoids subjective evaluations. This, in turn, facilitates a more consistent and foreseeable determination of whether a person is a “U.S. person” for purposes of relying on temporary exemptive relief.

Finally, the Commission confirms that this definition of “U.S. person” applies only for purposes of the Final Order. Further, the Commission confirms that the definition of “U.S. person” applies only to Commission regulations promulgated under Title VII's swap provisions. Thus, for example, it would not apply to the CEA provisions (and Commission regulations promulgated thereunder) relating to the futures markets.

Foreign Branch of U.S. Person. The Commission views as a “U.S. person” the foreign branch of a U.S. person. As the Commission explained in the Proposed Guidance, a branch does not have a legal identity separate from that of its principal entity. In this respect, the Commission notes that branches are neither separately incorporated nor separately capitalized and, more generally, the rights and obligations of a branch are the rights and obligations of its principal entity (and vice versa). Under these circumstances, the Commission views the activities of a foreign branch as the activities of the principal entity. 51

Accordingly, the Commission declines to recognize foreign branches of U.S. persons separately from their U.S. principals for purposes of the Dodd-Frank swap provisions, including registration and Entity-Level and Transaction-Level Requirements. Therefore, if a foreign branch were to be an SD or MSP, as discussed further below, its U.S. principal would be required to register, and that registration would encompass the foreign branch. Based on the same rationale, the Dodd-Frank Act fully applies to a swap between a foreign branch of a U.S. person and a foreign branch of another U.S. person. Nevertheless, for purposes of the Final Order, as discussed further below, foreign branches of U.S. persons may comply only with transaction-level requirements as may be required in the location of the foreign branch with respect to swaps with foreign counterparties. Further, non-U.S. persons may exclude swaps with foreign branches of registered SDs for purposes of determining whether they have exceeded the de minimis level of swap dealing activity under the SD definition. Finally, for purposes of the Final Order, as further discussed below, the Transaction-Level Requirements will not apply to a swap transaction between foreign branches of U.S. SDs or foreign branches of U.S. MSPs. The Commission believes that it is appropriate to extend the foregoing relief on a temporary basis while the Commission continues to consider, and works with foreign regulators regarding, the treatment of foreign branches of U.S. registrants.

The Proposed Order did not include any delay in the timing of the registration requirement for either U.S. or non-U.S. prospective registrants. A number of commenters urged the Commission to delay registration of SDs and MSPs. 52 Some of these commenters noted that final regulatory determinations essential to the implementation of Commission regulations are either still in proposed form or have only recently been finalized. 53 As a result, commenters said, firms will need additional time to assess whether they will be required to register as an SD or MSP and the consequences of doing so. 54

SIFMA recommended a delay of at least 90 days following the publication of final interpretive guidance;  55 Societe Generale recommended delaying registration at least until the Proposed Guidance has been finalized. 56 Cleary recommended a delay of at least 90 days after a final exemptive order is issued, explaining that firms will need additional time to assess and comply with the determinations therein. 57 Lloyds suggested that registration be delayed for non-U.S. SDs for at least 12 months after the publication of final guidance, with computation of the de minimis threshold starting from that date. 58

Throughout the Dodd-Frank rulemaking process, the Commission consistently has strived to strike the proper balance between the need to implement the new regulatory framework for swaps without undue delay, and the need to minimize disruption and hardships for market participants. Consistent with that goal, the Commission has taken steps to provide greater certainty to market participants regarding registration determinations and their compliance obligations. The Commission is also mindful that more than two years have passed since the Dodd-Frank Act—a comprehensive reform of the swaps market—was enacted as a direct response to the financial crisis of 2008. A central element of this reform is the registration and regulation of SDs and MSPs. For example, registered SDs and MSPs are required to clear swaps with certain counterparties, are subject to detailed reporting and recordkeeping requirements and must comply (when final) with new capital and margin requirements—all of which are designed to enhance market transparency and protections against systemic risk.

In the Commission's view, any further delay in the registration of SDs and MSPs would effectively postpone Dodd-Frank's comprehensive new regulatory regime for swaps, frustrating the congressional mandate embodied in the Dodd-Frank Act. Further, given the global nature of the swaps market, an SD or MSP—whether operating in or outside the United States—plays an important role in the U.S. swaps market. Under these circumstances, the Commission believes that a further delay in the compliance date for registration as an SD or MSP would adversely affect the Commission's ability to discharge its responsibilities under the CEA and would be contrary to the public interest. Therefore, the Commission declines to delay the registration requirement for non-U.S. SDs and MSPs.

However, the Commission believes it is appropriate to provide targeted, time-limited exemptive relief with respect to the swap dealing transactions to be included in the de minimis threshold calculation that applies for purposes of the SD definition. The Commission expects that this step, and the other relief provided in the Final Order, will substantially address commenters' concerns regarding the complexity of implementing the swap requirements for the interim period during which the Final Order is in effect.

The Commission has adopted final rules and interpretive guidance implementing the statutory definitions of the terms “swap dealer” and “major swap participant” in CEA sections 1a(49) and 1a(33). 59 The Final Entities Rules delineate the activities that cause a person to be an SD and the level of swap positions that cause a person to be an MSP. In addition, the Commission has adopted rules concerning the statutory exceptions from the definition of an SD, including the de minimis exception. 60 Commission regulation 1.3(ggg)(4) sets forth a de minimis threshold of swap dealing, which takes into account the notional amount of a person's swap dealing activity over the prior 12 months. 61 When a person engages in swap dealing transactions above that threshold, the person meets the SD definition in section 1a(49) of the CEA. 62 Commission regulations 1.3(jjj)(1) and 1.3(lll)(1) set forth swap position thresholds for the MSP definition in Commission regulation 1.3(hhh). When a person holds swap positions above those thresholds, such person meets the MSP definition in section 1a(39) of the CEA.

In the Proposed Guidance, the Commission addressed the general manner in which a person's overseas swap dealing activities or positions may require registration as an SD or MSP, respectively. Specifically, under the Proposed Guidance, a non-U.S. person whose swap dealing transactions with U.S. persons exceed the de minimis threshold would be required to register as an SD. 63 Likewise, under the Proposed Guidance, a non-U.S. person who holds swap positions with U.S. counterparties that are above the specified MSP thresholds would be required to register as an MSP. 64 In determining whether a non-U.S. person is engaged in more than a de minimis level of swap dealing, the Proposed Guidance would include the notional value of any swap transactions between such non-U.S. person (or any of its non-U.S. affiliates under common control) and a U.S. person, other than foreign branches of registered SDs. 65 Following a similar rationale, the Proposed Guidance stated that in calculating whether a non-U.S. person meets an MSP threshold, the non-U.S. person would include the notional value of any swaps entered into between such non-U.S. person and a U.S. person. 66

In general, commenters did not raise concerns or objections to the Commission's interpretation that non-U.S. persons who engage in more than a de minimis level of swap dealing with U.S. persons would be required to register as SDs. 67 A number of commenters argued, however, that a non-U.S. person should not be required to register as an SD solely by reason of its swap obligations being guaranteed by a U.S. person. 68 SIFMA stated that the “connection between a non-U.S. swap dealing entity and its U.S. guarantor creates too tenuous a nexus to justify registration on the basis of this relationship alone.”  69 Other commenters raised various other issues with respect to the treatment of guarantees. 70

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

On September 21, 2006, EPA retained the 1997 annual PM 2.5 NAAQS at 15.0 micrograms per cubic meter (μg/m 3 ) (hereby “the 2006 annual PM 2.5 NAAQS”) based on a 3-year average of annual mean PM 2.5 concentrations, and promulgated a new 24-hour standard of 35 μg/m 3 based on a 3-year average of the 98th percentile of 24-hour concentrations (71 FR 61144, October 17, 2006). The revised 2006 24-hour PM 2.5 standard (hereafter “the 2006 24-hour PM 2.5 NAAQS”) became effective on December 18, 2006. See 40 CFR 50.13.

Many petitioners challenged aspects of EPA's 2006 revisions to the PM 2.5 NAAQS. See American Farm Bureau Federation and National Pork Producers Council, et al. v. EPA, 559 F.3d 512 (D.C. Cir. 2009). As a result of this challenge, the U.S. Court of Appeals for the District of Columbia Circuit remanded the 2006 annual PM 2.5 NAAQS to EPA for further proceedings. The 2006 24-hour primary and secondary PM 2.5 NAAQS were not affected by the remand and remain in effect.

On November 13, 2009, EPA published designations for the 2006 24-hour PM 2.5 NAAQS (74 FR 58688), which included the Philadelphia Area as a nonattainment area. Designations became effective on December 14, 2009. The Philadelphia Area is composed of New Castle County in Delaware; Burlington, Camden, and Gloucester Counties in New Jersey; and Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania. See 40 CFR 81.339 (Pennsylvania), 40 CFR 81.331 (New Jersey), and 40 CFR 81.308 (Delaware).

On October 2, 2012 (77 FR 60089), EPA published a notice of proposed rulemaking (NPR) for the States of Delaware and New Jersey and the Commonwealth of Pennsylvania, proposing to determine that the Philadelphia Area has attained the 2006 24-hour PM 2.5 NAAQS, based on the quality-controlled, quality-assured, and certified data from 2008-2010 and 2009-2011 monitoring periods. Preliminary data available for 2012 are consistent with continued attainment of the Philadelphia Area.

EPA's determination is being made in accordance with its longstanding interpretation under the Clean Data Policy, and with previously issued rules and determinations of attainment. A brief description of the Clean Data Policy with respect to the 2006 24-hour PM 2.5 NAAQS is set forth below. In addition, the docket for this rulemaking includes documentation providing more detail regarding the application of EPA's Clean Data Policy to determinations of attainment for the 2006 24-hour PM 2.5 NAAQS.

In April 2007, EPA issued its PM 2.5 Implementation Rule for the 1997 annual PM 2.5 NAAQS. 72 FR 20586 (April 25, 2007). In March 2012, EPA published implementation guidance for the 2006 24-hour PM 2.5 NAAQS. See Memorandum from Stephen D. Page, Director, Office of Air Quality Planning and Standards, “Implementation Guidance for the 2006 24-Hour Final Particle (PM 2.5 ) National Ambient Air Quality Standards (NAAQS)” (March 2, 2012). In that guidance, EPA stated its view “that the overall framework and policy approach of the 2007 PM 2.5 Implementation Rule continues to provide effective and appropriate guidance on the EPA's interpretation of the general statutory requirements that states should address in their SIPs. In general, the EPA believes that the interpretations of the statute in the framework of the 2007 PM 2.5 Implementation Rule are relevant to the statutory requirements for the 2006 24-hour PM 2.5 NAAQS * * * .” Id. at page 1.

In keeping with the principles set forth in the guidance, and with respect to the effect of a determination of attainment for the 2006 24-hour PM 2.5 NAAQS, EPA is applying the same interpretation with respect to the implications of clean data determinations that it set forth in the preamble to the 1997 annual PM 2.5 NAAQS and in the regulation that embodies this interpretation. 40 CFR 51.1004(c). 1 EPA has long applied this interpretation in regulations and individual rulemakings for the 1-hour ozone and 1997 8-hour ozone NAAQS, the coarse particulate matter (PM 10 ) NAAQS, and the lead NAAQS.

In 1995, based on the interpretation of CAA sections 171 and 172, and section 182 in the General Preamble, EPA set forth what has become known as its “Clean Data Policy” for the 1-hour ozone NAAQS. See Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard” (May 10, 1995). In 2004, EPA indicated its intention to extend the Clean Data Policy to the PM 2.5 NAAQS. See Memorandum from Steve Page, Director, EPA Office of Air Quality Planning and Standards, “Clean Data Policy for the Fine Particle National Ambient Air Quality Standards” (December 14, 2004).

The Clean Data Policy represents EPA's interpretation that certain requirements of subpart 1 of part D of the CAA are by their terms not applicable to areas that are currently attaining the NAAQS. 2 It is important to note that the obligation of a state with respect to an area which attains the 2006 24-hour PM 2.5 NAAQS based on three years of data, to submit an attainment demonstration and related planning submissions is suspended only for so long as the area continues to attain the standard. If EPA subsequently determines, after notice-and-comment rulemaking, that the area has violated the NAAQS, the requirements for the state to submit a SIP to meet the previously suspended requirements would be reinstated. It is likewise important to note that the area remains designated nonattainment pending a further redesignation action. The docket for this rulemaking action includes documentation providing additional information regarding the basis for use of EPA's Clean Data Policy for the 2006 24-hour PM 2.5 NAAQS.

In this rulemaking action, EPA is finalizing the determination of attainment of the 2006 24-hour PM 2.5 NAAQS for the Philadelphia Area, based on the quality-controlled, quality-assured, and certified data from 2008-2010 and 2009-2011 monitoring periods and preliminary data for 2012. EPA previously determined that the PM 2.5 monitoring network for the Philadelphia Area is adequate. EPA found that the number of monitors in the Area meets the minimum regulatory requirements given in 40 CFR part 58, appendix D, section 4.7, and that the monitoring network in place is in accordance with the States' most recent annual monitoring network plans approved by EPA, as required by 40 CFR 58.10.

EPA's review of quality-assured, quality-controlled, certified ambient air monitoring data collected in the Philadelphia Area during 2008-2010 and 2009-2011 shows that the Area has attained the 2006 24-hour PM 2.5 NAAQS. Additionally, preliminary PM 2.5 data available for 2012 is consistent with continued attainment of the 2006 24-hour PM 2.5 NAAQS in the Philadelphia Area.

No public comments were submitted in response to the NPR, published on October 2, 2012 (77 FR 60089). EPA's evaluation of air quality data and additional information regarding the monitoring network and air quality data used in this determination are available in the NPR and in the Technical Support Document for the NPR and thus are not restated here. Relevant support documents for this action are available online at www.regulations.gov, Docket number EPA-R03-OAR-2012-0371.

EPA is making a determination that the Philadelphia Area has attained the 2006 24-hour PM 2.5 NAAQS, based upon quality-controlled, quality-assured and certified ambient air monitoring data for the 2008-2010 and 2009-2011 periods. Preliminary data available for 2012 are consistent with continued attainment. This final action, in accordance with the Clean Data Policy (which is reflected in 40 CFR 51.1004(c)), suspends the requirements for the Philadelphia Area to submit an attainment demonstration and associated RACM, RFP plan, contingency measures, and other planning SIP revisions related to the attainment of the standard, for so long as the Area continues to attain the 2006 24-hour PM 2.5 NAAQS. This determination is not equivalent to the redesignation of the Philadelphia Area to attainment for the 2006 24-hour PM 2.5 NAAQS. If EPA subsequently determines, after notice-and-comment rulemaking in the Federal Register , that the Area has violated the 2006 24-hour PM 2.5 NAAQS, the basis for the suspension of the specific requirements would no longer exist for the Philadelphia Area, and the Area would thereafter have to address the applicable requirements for the 2006 24-hour PM 2.5 NAAQS.

Finalizing this determination does not constitute a redesignation of the Philadelphia Area to attainment of the 2006 24-hour PM 2.5 NAAQS under section 107(d)(3) of the CAA, nor does it involve approving a maintenance plan for the Philadelphia Area as required under section 175A of the CAA. This determination does not address other requirements for redesignation under the CAA, including that the attainment be due to permanent and enforceable emission reductions. 3 The designation status of the Philadelphia Area will remain nonattainment for the 2006 24-hour PM 2.5 NAAQS until such time as EPA determines that the Area meets the CAA requirements for redesignation to attainment and takes action to redesignate the Philadelphia Area, or portion thereof.

In accordance with 5 U.S.C. 553(d), EPA finds there is good cause for this action to become effective immediately upon publication. A delayed effective date is unnecessary due to the nature of a determination of attainment, which suspends the obligation to submit certain attainment-related CAA planning requirements that would otherwise apply. The immediate effective date for this action is authorized under both 5 U.S.C. 553(d)(1), which provides that rulemaking actions may become effective less than 30 days after publication if the rule “grants or recognizes an exemption or relieves a restriction,” and section 553(d)(3), which allows an effective date less than 30 days after publication “as otherwise provided by the agency for good cause found and published with the rule.” The purpose of the 30-day waiting period prescribed in section 553(d) is to give affected parties a reasonable time to adjust their behavior and prepare before the final rule takes effect. Today's rule, however, does not create any new regulatory requirements such that affected parties would need time to prepare before the rule takes effect. Rather, today's rule relieves the affected states of the obligation to submit certain attainment-related planning requirements for this PM 2.5 nonattainment area. For these reasons, EPA finds good cause under 5 U.S.C. 553(d) for this action to become effective on the date of publication of this notice.

This action, which makes a determination of attainment for the Philadelphia Area based on air quality, results in the suspension of certain Federal requirements and does not impose any 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 CAA; and

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

In addition, this determination of attainment of the Philadelphia Area with respect to the 2006 24-hour PM 2.5 NAAQS does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the determination 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 CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 8, 2013. 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, in which EPA has determined that the Philadelphia Area has attained the 2006 24-hour PM 2.5 NAAQS, may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

40 CFR part 52 is amended as follows:

For the purpose of this document, we are giving meaning to certain words or initials as follows:

(i) The words or initials Act or CAA mean or refer to the Clean Air Act, unless the context indicates otherwise.

(ii) The initials AQS mean or refer to EPA's Air Quality System database.

(iii) The words EPA, we, us or our mean or refer to the United States Environmental Protection Agency.

(iv) The initials NAAQS mean or refer to National Ambient Air Quality Standard.

(v) The initials PM 10 mean or refer to particulate matter with an aerodynamic diameter equal to or less than 10 micrometers (coarse particulate matter).

(vi) The initials RACM mean or refer to reasonably available control measures.

(vii) The initials RFP mean or refer to reasonable further progress.

(viii) The initials SIP mean or refer to State Implementation Plan.

(ix) The words State or Utah mean the State of Utah, unless the context indicates otherwise.

(x) The initials UDEQ mean or refer to Utah Department of Environmental Quality.

On July 30, 2012, EPA proposed to find that the Ogden City nonattainment area is currently attaining the 24-hour PM 10 NAAQS based on certified and quality-assured data from the most recent three-year period, 2009 through 2011, and to suspend certain CAA requirements related to attainment for so long as the area continues to attain the standard. See 77 FR 44544; (July 30, 2012).

To summarize our proposed rule, we described the 24-hour PM 10 NAAQS, which is 150 micrograms per cubic meter (μg/m 3 ), and reviewed the designation and classification of the Ogden City nonattainment area for that standard. We then discussed how EPA makes attainment determinations for PM 10 and indicated that the 24-hour PM 10 NAAQS is attained when the expected number of exceedances averaged over a three-year period is less than or equal to one at the monitoring site within the nonattainment area. See 40 CFR part 50, appendix K.

We described Utah Department of Environmental Quality's (UDEQ's) one PM 10 monitoring site in the Ogden City nonattainment area. We noted that UDEQ has certified the data it submits to EPA's Air Quality System (AQS) database as quality-assured.

Next, we reviewed the ambient PM 10 data collected at the monitor site in the Ogden City nonattainment area for the most recent three-year period, 2009 through 2011. We concluded that the area is attaining the PM 10 standard because the expected number of exceedances per year for 2009 through 2011 for the Ogden City nonattainment area was equal to 1.0. For additional information on the PM 10 NAAQS, the designation and classification of the Ogden City nonattainment area, the monitoring site, and the data we relied on for our clean data determination, please see 77 FR 44544.

In conjunction with, and based on, our proposed determination that the Ogden City nonattainment area is currently attaining the PM 10 NAAQS, EPA proposed to determine that Utah's obligation to submit revisions to the Utah State Implementation Plan (SIP) to meet the following CAA requirements is not applicable for so long as the Ogden City nonattainment area continues to attain the PM 10 standard: The part D, subpart 4 obligation to provide an attainment demonstration pursuant to section 189(a)(1)(B); the reasonably available control measure (RACM) requirements of section 189(a)(1)(C); the reasonable further progress (RFP) requirements of section 189(c); and the attainment demonstration, RACM, RFP, and contingency measure requirements of part D, subpart 1 contained in section 172. We proposed to suspend these SIP requirements based on application of the Clean Data Policy to the Ogden City nonattainment area. In doing so, we noted that our application of the Clean Data Policy to the Ogden City nonattainment area is consistent with a number of actions we have taken for other PM 10 nonattainment areas that we also determined were attaining the NAAQS. For a detailed explanation of our Clean Data Policy and its application to the Ogden City nonattainment area, please see 77 FR 44544.

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

No comments were submitted to change our assessment of the 2009 through 2011 ambient PM 10 data collected in the Ogden City nonattainment area and related finding that the area is attaining the NAAQS, or our application of the Clean Data Policy as described in our proposed action. Therefore, EPA is finalizing its determination that the Ogden City nonattainment area in Utah is currently attaining the NAAQS for PM 10 .

EPA is also taking final action to determine that Utah's obligation to make SIP submissions to meet the following CAA requirements is not applicable for as long as the Ogden City nonattainment area continues to attain the PM 10 NAAQS: The part D, subpart 4 obligation to provide an attainment demonstration pursuant to section 189(a)(1)(B); the RACM requirements of section 189(a)(1)(C); the RFP requirements of section 189(c); and the attainment demonstration, RACM, RFP, and contingency measure requirements of part D, subpart 1 contained in section 172.

This final action does not constitute a redesignation to attainment under CAA section 107(d)(3) because Utah has not submitted a maintenance plan and EPA has not approved such a plan for the Ogden City nonattainment area as meeting the requirements of section 175A of the CAA, nor has EPA determined that Utah has met the other CAA requirements for redesignation. The classification and designation status in 40 CFR part 81 remains moderate nonattainment for the Ogden City nonattainment area until such time as EPA determines that Utah has met the CAA requirements for redesignating the Ogden City nonattainment area to attainment.

With this action, we are making a determination regarding attainment of the PM 10 NAAQS based on air quality data and, based on this determination, suspending certain Federal requirements. Therefore, this action would not impose additional requirements beyond those imposed by State law or by the CAA. 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 proposed action does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249; November 9, 2000), because the determinations discussed herein do not apply to Indian Tribes and thus 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 March 8, 2013. 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) of the CAA.)

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

On October 30, 2012 (77 FR 65656), EPA proposed to determine that the Nogales nonattainment area  1 has attained the 2006 24-hour NAAQS  2 for fine particles (generally referring to particles less than or equal to 2.5 micrometers in diameter, PM 2.5 ).

In our proposed rule, we explained how EPA makes an attainment determination for the 2006 24-hour PM 2.5 NAAQS by reference to complete, quality-assured data gathered at a State and Local Air Monitoring Station(s) (SLAMS) and entered into EPA's Air Quality System (AQS) database and by reference to 40 CFR 50.13 (“National primary and secondary ambient air quality standards for PM 2.5 ”) and appendix N to [40 CFR] part 50 (“Interpretation of the National Ambient Air Quality Standards for PM 2.5 ”). EPA proposed the determination of attainment for the Nogales area based upon a review of the monitoring network operated by the Arizona Department of Environmental Quality (ADEQ) and the data collected at the one monitoring site operating during the most recent complete three-year period (i.e., 2009 to 2011). Based on this review, EPA found that complete, quality-assured and certified data for the Nogales area showed that the 24-hour design value for the 2009-2011 period was equal to or less than 35 μ/m 3 at the monitor site. See the data summary table on page 65658 of the October 30, 2012 proposed rule. We also noted that preliminary data available in AQS for 2012 indicates that the Nogales area continues to attain the NAAQS.

In our proposed rule, based on the proposed determination of attainment, we also proposed to apply EPA's Clean Data Policy to the 2006 PM 2.5 NAAQS and thereby suspend the requirements for this area to submit an attainment demonstration, associated reasonably available control measures (RACM), a reasonable further progress (RFP) plan, and contingency measures for so long as the area continues to attain the 2006 24-hour PM 2.5 NAAQS. See pages 65658-65660 of our October 30, 2012 proposed rule. In proposing to apply the Clean Data Policy to the 2006 PM 2.5 NAAQS, we explained how we are applying the same statutory interpretation with respect to the implications of clean data determinations that the Agency has long applied in regulations for the 1997 8-hour ozone and PM 2.5 NAAQS and in individual rulemakings for the 1-hour ozone, PM 10 and lead NAAQS.

Please see the October 30, 2012 proposed rule for more detailed information concerning the PM 2.5 NAAQS, designations of PM 2.5 nonattainment areas, the regulatory basis for determining attainment of the NAAQS, ADEQ's PM 2.5 monitoring network, EPA's review and evaluation of the data, and the rationale and implications for application of the Clean Data Policy to the 2006 PM 2.5 NAAQS.

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

For the reasons provided in the proposed rule and summarized herein, EPA is taking final action to determine that the Nogales nonattainment area in Arizona has attained the 2006 24-hour PM 2.5 NAAQS based on the most recent three years of complete, quality-assured, and certified data in AQS for 2009-2011. Preliminary data available in AQS for 2012 show that this area continues to attain the standard.

EPA is also taking final action, based on the above determination of attainment, to suspend the requirements for the Nogales nonattainment area to submit an attainment demonstration and associated RACM, a RFP plan, contingency measures, and any other planning SIPs related to attainment of the 2006 PM 2.5 NAAQS for so long as the area continues to attain the 2006 PM 2.5 NAAQS. EPA's final action is consistent and in keeping with its long-held interpretation of CAA requirements, as well as with EPA's regulations for similar determinations for ozone ( see 40 CFR 51.918) and the 1997 fine particulate matter standards ( see 40 CFR 51.1004(c)).

Today's final action does not constitute a redesignation of the Nogales nonattainment area to attainment for the 2006 24-hour PM 2.5 NAAQS under CAA section 107(d)(3) because we have not yet approved a maintenance plan for the Nogales nonattainment area as meeting the requirements of section 175A of the CAA or determined that the area has met the other CAA requirements for redesignation. The classification and designation status in 40 CFR part 81 remain nonattainment for this area until such time as EPA determines that Arizona has met the CAA requirements for redesignating the Nogales nonattainment area to attainment.

If the Nogales nonattainment area continues to monitor attainment of the 2006 PM 2.5 NAAQS, the requirements for the area to submit an attainment demonstration and associated RACM, a RFP plan, contingency measures, and any other planning requirements related to attainment of the 2006 PM 2.5 NAAQS will remain suspended. If after today's action EPA subsequently determines, after notice-and-comment rulemaking in the Federal Register , that the area has violated the 2006 PM 2.5 NAAQS, the basis for the suspension of the attainment planning requirements for the area would no longer exist, and the area would thereafter have to address such requirements.

This final action makes a determination of attainment based on air quality and suspends certain federal requirements, and thus, this action would not impose additional requirements beyond those imposed by state law. For this reason, the final 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 CAA; 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 final action does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP obligations discussed herein do not apply to Indian Tribes, and thus this action 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 CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 8, 2013. 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 “we,” “us,” or “our” refer to EPA.

On September 19, 2012 (77 FR 58072), EPA proposed to find that the California SIP for the Los Angeles-South Coast Air Basin (South Coast)  1 is substantially inadequate to comply with the obligation to adopt and implement a plan providing for attainment of the 1-hour ozone national ambient air quality standard (NAAQS or “standard”). EPA proposed this finding pursuant to the “SIP call” authority found in section 110(k)(5) of the Clean Air Act (CAA or “Act”). 2 In our proposed rule, we explained that States remain obligated to adopt and implement an attainment demonstration plan for the 1-hour ozone standard, notwithstanding the revocation of the standard in 2005, under EPA's “anti-backsliding” regulations governing the transition from the 1-hour ozone standard to the 1997 8-hour ozone standard. 3 See 40 CFR 51.905(a)(1)(i).

EPA also proposed to require California to submit a revision to its SIP correcting these deficiencies by a date no later than 12 months after the effective date of a final rule finding the current SIP inadequate. The SIP revision must meet the requirements of CAA section 182(c)(2)(A)  4 and demonstrate attainment of the 1-hour ozone standard as expeditiously as practicable but no later than five years from the effective date of a final SIP call unless the State can justify a later date, not to exceed 10 years beyond the effective date of the final SIP call. In considering whether a period longer than five years is warranted, EPA must consider the severity of the remaining nonattainment problem in the South Coast and the availability and feasibility of pollution control measures. See section 172(a)(2).

We noted that if EPA were to find that California has failed to submit a complete SIP revision or if EPA disapproves such revision, such finding or disapproval would trigger clocks for mandatory sanctions and an obligation for EPA to impose a Federal Implementation Plan (FIP). EPA proposed that if EPA makes such a finding or disapproval, the offset sanction would apply 18 months after such finding or disapproval and highway funding restrictions would apply six months later. Sanctions would apply unless EPA first takes action to stay the imposition of the sanctions or to stop the sanctions clock based on a preliminary or final determination that the State has cured the SIP deficiencies.

EPA proposed this action in response to a decision by the United States Court of Appeals for the Ninth Circuit (Ninth Circuit or Court) in a lawsuit challenging EPA's partial approval and partial disapproval of the 2003 South Coast 1-Hour Ozone SIP. 5 See Association of Irritated Residents v. EPA, 632 F.3d 584 (9th Cir. 2011), reprinted as amended on January 27, 2012, 686 F.3d 668, further amended February 13, 2012 (“ AIR v. EPA” ).

The 2003 South Coast 1-Hour Ozone SIP was intended by California to update the attainment demonstration for the 1-hour ozone standard for the South Coast contained in the 1997/1999 South Coast 1-Hour Ozone SIP that EPA approved in 2000. Among other issues, the petitioners in the AIR v. EPA case challenged EPA's conclusion that the Agency's disapproval of the updated attainment demonstration for the 1-hour ozone standard in the 2003 South Coast 1-Hour Ozone SIP did not obligate the Agency to promulgate a FIP because the plan that was disapproved was not required to be submitted given that the SIP contained a fully-approved 1-hour ozone attainment demonstration for the South Coast (i.e., the 1997/1999 South Coast 1-Hour Ozone SIP).

The court disagreed with EPA, and held that EPA must promulgate a FIP under CAA section 110(c) or issue a SIP call where EPA disapproves a new attainment demonstration unless the Agency determines that the SIP as approved remains sufficient to demonstrate attainment of the NAAQS.

In response, EPA reviewed the 1997/1999 South Coast 1-Hour Ozone SIP to determine whether it remained sufficient to demonstrate attainment of the 1-hour ozone standard notwithstanding the disapproval of the updated 1-hour ozone attainment demonstration in the 2003 South Coast 1-Hour Ozone SIP and determined that the SIP was substantially inadequate to comply with the obligation under EPA's anti-backsliding regulations to adopt and implement a 1-hour ozone attainment demonstration. In the September 19, 2012 proposed rule, EPA proposed this finding of substantial inadequacy based on the following considerations:

• Documentation included in the 2003 South Coast 1-Hour Ozone SIP showing that motor vehicle emissions were significantly underestimated in the 1997/1999 South Coast 1-Hour Ozone SIP; that the carrying capacity associated with attainment of the 1-hour ozone standard was significantly lower than projected for the 1997/1999 South Coast 1-Hour Ozone SIP; and that, as a result, additional emissions reductions would be necessary to attain the 1-hour ozone standard by the applicable attainment date (November 15, 2010) beyond those incorporated in the 1997/1999 South Coast 1-Hour Ozone SIP;

• EPA's “anti-backsliding” requirements promulgated in 2004 governing the transition from the 1-hour ozone standard to the 1997 8-hour ozone standard and requiring a state to adopt and implement an attainment demonstration for the 1-hour ozone standard (40 CFR 51.905(a)(1)(i)) notwithstanding the revocation of the 1-hour ozone standard in areas designated as nonattainment for the 1997 8-hour ozone standard; and

• EPA's final determination at 76 FR 82133 (December 30, 2011) that the South Coast area failed to attain the 1-hour ozone standard by the applicable attainment date (November 15, 2010).

For more information about the 1-hour and 8-hour ozone standards, the designations and classifications for the South Coast, the various South Coast SIP revisions submitted in response to CAA nonattainment area requirements, the litigation over EPA's action on the 2003 South Coast 1-Hour Ozone SIP, and the rationale behind the proposed 12-month deadline and sequence of mandatory sanctions, please see our September 19, 2012 proposed rule.

As stated above, on September 19, 2012, EPA proposed to find that the California SIP was substantially inadequate to comply with the obligation to adopt and implement a plan providing for attainment of the 1-hour ozone standard (see 77 FR 58072), and held a 30-day comment period which ended on October 19, 2012. On October 16, 2012, we received two requests to extend the comment period. On October 25, 2012, we published a Federal Register notice reopening the comment period for 14 days (see 77 FR 65151). This comment period ended on November 8, 2012.

In response to the proposed rule, we received 11 comment letters that we have grouped into five categories. We received comments from:

• Pechanga Indian Reservation-Temecula Band of Luiseno Mission Indians (“Pechanga Tribe”);

• South Coast Air Quality Management District (SCAQMD), and the State of California Air Resources Board (CARB) (“government agencies”);

• Coalition for Clean Air, Communities for a Better Environment, Natural Resources Defense Council; and Physicians for Social Responsibility—Los Angeles, (“environmental and community groups”);

• American Chemistry Council, American Coatings Association, Consumer Specialty Products Association, International Fragrance Association, National Aerosol Association, and Personal Care Products Council (“industry groups”); and

• A private citizen.

None of the commenters challenged the proposed finding of substantial inadequacy, the proposed one-year deadline for submittal of a new 1-hour ozone attainment plan, the proposed sequence for application of mandatory sanctions in the event of failure by California to meet the deadline, or the proposed application of the provisions in 40 CFR 52.31 regarding staying the sanctions clock and deferring the imposition of sanctions. Instead, the comments relate to the contents of a future 1-hour ozone attainment demonstration for the South Coast and the potential impacts of the SIP call on Indian tribes in the region. Below, we set forth a summary of the comments and EPA's responses.

Comment 1: In its comment letter, the Pechanga Tribe requested an opportunity to consult on a government to government basis with EPA Region IX regarding the potential impacts of this proposed action on federally recognized tribes located in the region.

Response 1: On November 28, 2012, EPA Region IX staff met with members and representatives of the Pechanga Tribe and explained that, as stated in the proposed rule, EPA foresaw no direct impact to the Tribe due to a SIP call for a new South Coast 1-hour ozone attainment demonstration plan. EPA acknowledged that a portion of Pechanga Indian country lies within the South Coast 1-hour ozone “extreme” nonattainment area, but indicated that, under the “Tribal Authority Rule” (40 CFR part 49), tribes are not subject to SIP submittal deadlines. See 40 CFR 49.4(a). 6 Moreover, under 40 CFR 49.4(c), Tribes will also not be treated as States with respect to the mandatory imposition of sanctions under section 179 of the Act because of a failure to submit an implementation plan or required plan element by a specific deadline, or the submittal of an incomplete or disapproved plan or element. Thus, the Tribes in the South Coast will not be subject to the deadline that we are setting today for the State of California for submittal of a new 1-hour ozone attainment demonstration for the South Coast, and the Tribes will not be subject to mandatory sanctions in the event that sanctions are imposed as a consequence of failure to submit or disapproval of the submitted SIP revision.

Comment 2: In response to the attainment date that would be established under the proposed SIP call (i.e. as expeditiously as practicable but no later than five years unless the State can justify a later date, not to exceed 10 years), SCAQMD indicates that it and CARB intend to request and justify that the full ten years are needed for the attainment demonstration.

Response 2: This comment is not relevant for purposes of the current rule as it concerns the potential contents of a future SIP submittal from the State. Consistent with the requirement of CAA section 172(a)(2)(A), EPA would consider the severity of nonattainment and the availability and feasibility of pollution control measures in determining whether to approve any future submitted plan with an attainment date that is later than five years from the effective date of this final rule.

Comment 3: SCAQMD asserts that the new technology provisions of CAA section 182(e)(5) are available for the purposes of the new 1-hour ozone attainment demonstration plan for the South Coast so long as the reductions to be obtained from them are not needed for the first ten years after November 15, 1990, i.e. through November 15, 2000, citing CAA section 182(e)(5). While the SCAQMD asserts that the plain language of section 182(e)(5) settles any question as to whether that provision applies to a new 1-hour ozone attainment demonstration plan for the “extreme” South Coast nonattainment area, it also asserts that there is no policy reason to interpret the statute to preclude reliance on section 182(e)(5) even if the language were ambiguous. CARB's comment letter expressed agreement and support for comments provided by SCAQMD on the availability of CAA section 182(e)(5) new technology provisions for the new South Coast 1-hour ozone attainment demonstration plan.

Response 3: We did not explicitly address section 182(e)(5)  7 in our proposed SIP call because its availability or lack of availability is not directly relevant to the issue of our finding of substantial inadequacy of the California SIP for the South Coast with respect to the 1-hour ozone standard, or the issues of submittal or attainment dates. Thus, this comment is not relevant for purposes of the current rule as it concerns the potential contents of a future SIP submittal from the State. We will consider the approvability of the future South Coast 1-hour ozone attainment demonstration, including the control strategy on which it relies, once the plan is submitted, in the context of a subsequent rulemaking on the submitted plan.

Comment 4: Citing the long period of nonattainment and the health effects of ozone at levels even below the 1-hour ozone standard, environmental and community groups request that the final rule include more details about the need for a 1-hour ozone plan in the South Coast.

Response 4: EPA believes that the Agency provided sufficient support for its finding of substantial inadequacy and related SIP call. The rationale for the proposed finding and SIP call is set forth at 77 FR, 58072, 58074-58075. In short, in response to a remand by the Ninth Circuit in the AIR v. EPA case, we proposed to find the approved 1997/1999 South Coast 1-Hour Ozone SIP is substantially inadequate to provide for attainment of the 1-hour ozone standard and is therefore substantially inadequate to comply with EPA's “anti-backsliding” requirement at 40 CFR 51.905(a)(1)(i) to adopt and implement such a plan for the South Coast. We based this determination on a review of the technical information and updated control measure strategy contained in the 2003 South Coast SIP and also considered our determination in December 2011 that the South Coast had failed to attain the applicable attainment date (2010) for the 1-hour ozone standard. Today, we are taking final action to find that the California SIP is substantially inadequate and to issue the SIP call for a new 1-hour ozone attainment demonstration plan for the South Coast on the basis of the rationale set forth in the proposed rule.

Comment 5: The environmental and community groups believe that EPA should clearly state that the future 1-hour ozone attainment demonstration plan cannot rely on the new technology provisions of section 182(e)(5) (i.e., the “black box”). The groups contend that the text of the CAA demonstrates that the black box was not intended to be used past the attainment date. In support for this contention, the groups note that, under section 182(e)(5), there can be no contingency measures that are “adequate to produce emissions reductions sufficient, * * * to achieve the periodic emissions reductions * * * and attainment by the applicable dates” where, as is the case for South Coast, the attainment date (2010) has passed.

Response 5: In issuing a SIP call, CAA section 110(k)(5) directs EPA to the extent that EPA deems appropriate to subject the State to the requirements of this chapter to which the State was subject when it developed and submitted the plan for which such finding was made, except that the EPA may adjust any dates applicable under such requirements as appropriate (except that the EPA may not adjust any attainment date prescribed under part D of this subchapter, unless such date has elapsed.) In this case, the prescribed attainment date (2010) under part D of the title I of the CAA for extreme 1-hour ozone nonattainment areas, such as the South Coast, has passed, and thus, CAA section 110(k)(5) authorizes EPA to establish a new attainment date for the purposes of the new South Coast 1-hour ozone attainment demonstration plan.

With respect to black box provisions, as noted in response to comment #3, we did not explicitly address section 182(e)(5) in our proposed SIP call because its availability or lack of availability is not directly relevant to the issue of our finding of substantial inadequacy of the California SIP for the South Coast with respect to the 1-hour ozone standard, or the issues of submittal or attainment dates. Thus, this comment is not relevant for purposes of the current rule as it concerns the potential contents of a future SIP submittal from the State. We will consider the approvability of the future South Coast 1-hour ozone attainment demonstration, including the control strategy on which it relies, once the plan is submitted, in the context of a subsequent rulemaking on the submitted plan.

Comment 6: The environmental and community groups assert that the new requirements that must be fulfilled by SIPs in 1-hour ozone areas that fail to attain by the statutory deadline are provided in section 179(d). They further assert that the failure to attain does not allow areas to start all over again under section 182 and that the new plan should be governed by sections 110 and 172, neither of which provide for a black box. Moreover, they contend that the attainment deadline for these areas is governed by section 179(d)(3).

Response 6: We disagree that the new requirements for the new 1-hour attainment demonstration are governed by the provisions of section 179(d). The provisions of section 179(d) are triggered by a finding of failure to attain the standard under section 179(c), but under our anti-backsliding regulations governing the transition from the 1-hour ozone standard to the 8-hour ozone standard, we are no longer obligated to determine pursuant to section 179(c) whether an area attained the 1-hour ozone standard by the applicable attainment date for the 1-hour ozone standard. See 40 CFR 51.905(e)(2). In our 2011 determination that the South Coast failed to attain the applicable attainment date (2010) for the 1-hour ozone standard, we relied on section 301(a) and the relevant portion of section 181(b)(2) for the purpose of ensuring implementation of 1-hour ozone anti-backsliding requirements, such as contingency measures and section 185 major stationary source fee programs. See 76 FR 82133, at 82145 (December 30, 2011). We did not make the determination of failure to attain under section 179(c) and thus the provisions of section 179(d) do not apply.

As to the applicability of subpart 2 requirements, we note that the “substantial inadequacy” that is the basis for our SIP call relates directly to the requirements that continue to apply to an 8-hour ozone nonattainment area by virtue of that area's classification under subpart 2 for the 1-hour ozone standard at the time we designated the area as nonattainment for the 1997 8-hour ozone standard. In this instance, the South Coast 8-hour ozone nonattainment area remains subject to the obligation to adopt and implement the “applicable requirements” in 40 CFR 51.900(f) to the extent such requirements apply or applied to the South Coast as an “extreme” area for the 1-hour ozone standard in June 2004 (i.e., at designation for the 1997 8-hour ozone standard). One such “applicable requirement” is the attainment demonstration requirement. 40 CFR 51.900(f)(13).

EPA had approved a 1-hour ozone attainment demonstration plan for the South Coast (i.e., the 1997/1999 South Coast Ozone SIP) prior to revocation, but in response to the remand in the AIR v. EPA case, we reconsidered the adequacy of 1997/1999 South Coast Ozone SIP for compliance with the obligation to adopt and implement a 1-hour ozone attainment demonstration, and proposed to find the 1997/1999 South Coast Ozone SIP substantially inadequate to comply with the anti-backsliding requirements and to require California to submit a new 1-hour ozone attainment demonstration plan for the “extreme” South Coast 1-hour ozone nonattainment area within one year of the effective date of the final determination.

Even though we look to subpart 2 (of part D) and 40 CFR 51.905(a)(1) as the statutory and regulatory basis, respectively, for the new South Coast 1-hour ozone attainment demonstration, we do not view our SIP call for the South Coast as allowing California to start all over again. The new 1-hour ozone attainment demonstration plan necessarily will build upon the extensive ozone control strategy developed over the past 40 years in the South Coast. Moreover, the new plan will not be allowed 20 years to demonstrate attainment of the 1-hour ozone standard, as was initially allowed for “extreme” ozone nonattainment areas, under the CAA Amendments of 1990. Rather, the new plan must demonstrate attainment as expeditiously has practicable but no later than five years from the final SIP call unless California can justify a later date, not to exceed 10 years beyond the final SIP call, by considering the severity of the remaining nonattainment problem in the South Coast and the availability and feasibility of pollution control measures.

Lastly, while we disagree that section 179(d)(3) applies to establish the attainment date for the new 1-hour ozone attainment demonstration plan, we note that the attainment deadline under section 179(d)(3) would only be a little over one year earlier than the deadline established in this final action because they both derive from the formulation set forth in section 172(a)(2) (“* * * as expeditiously as practicable, but no later than 5 years, * * * may extend the attainment date * * * for a period no greater than 10 years * * *”). The only difference is that the start date for the final SIP call will be the effective date of this final rule, whereas section 179(d)(3) would have established a start date of December 30, 2011, i.e., the publication date of our final finding of failure to attain the 1-hour ozone standard for the South Coast (76 FR 82133).

Comment 7: The environmental and community groups contend that, if black box measures are allowed for an attainment plan developed after a region failed to attain the deadline, the state or local air district would have no incentive to close the black box within the attainment timeframes laid out in the CAA and could continually roll the black box over past the attainment date. Second, as a practical matter, the environmental and community groups contend that allowance for black box measures for a plan with at most a ten year planning horizon does not allow for the time necessary to develop the types of new technologies envisioned in section 182(e)(5).

Response 7: With respect to black box provisions, as noted in response to comment #3, we did not explicitly address section 182(e)(5) in our proposed SIP call because its availability or lack of availability is not directly relevant to the issue of our finding of substantial inadequacy of the California SIP for the South Coast with respect to the 1-hour ozone standard, or the issues of submittal or attainment dates. Thus, this comment is not relevant for purposes of the current rule as it concerns the potential contents of a future SIP submittal from the State.

Comment 8: The industry groups assert that EPA should not require California to impose further VOC reductions on the consumer and commercial products for the new South Coast 1-hour ozone attainment demonstration. They point out that the 2003 State Strategy included stringent consumer and commercial products rules to achieve VOC reductions by 2010, and that this portion of the State Strategy was not withdrawn. They further contend that additional VOC reductions are unnecessary to provide for attainment of the 1-hour standard, and that EPA has the ability to issue a SIP call that focuses on NO X reductions to address ozone attainment in the South Coast, citing Michigan v. EPA. Finally, the industry groups assert that control measures for additional VOC reductions from consumer products would likely not constitute reasonably available control technology (RACT) because they would not be economically or technically feasible.

Response 8: Through this action, EPA is not establishing specific requirements that must be included as part of the State's plan to attain the 1-hour ozone NAAQS. In general, a State has fairly broad discretion to select the mix of control measures it will rely on to demonstrate attainment and EPA's role is limited to ensuring that the State plan meets the minimum criteria in the CAA. We are requiring California to submit a new attainment demonstration for 1-hour ozone, and we leave to the state's discretion whether to impose further VOC reductions on sources.

Comment 9: A private citizen states that the effect of methane on the air quality region is understated and asserts that methane affects the ozone layer. The citizen reports that current studies suggest spikes in methane emissions, possibly caused by broken pipelines, earthquake faults or malfunctioning mitigation equipment, and suggests that a multiple agency response is warranted to address the situation.

Response 9: This action is being taken with regard to the State's plan to address ground-level ozone and does not address the effect of pollutants on the ozone layer. EPA agrees that pollutants that affect the integrity of the ozone layer are a concern and separate programs under the Act address that problem. We note that many control measures that reduce VOC emissions have the co-benefit of reducing methane, and thus, the new 1-hour ozone attainment demonstration and related control measures could indirectly result in reductions of methane emissions in the region.

For the reasons provided in the proposed rule, and after due consideration of the comments received, EPA is taking final action, pursuant to section 110(k)(5) of the CAA, to find that the California SIP is substantially inadequate to comply with the obligation to adopt and implement a plan providing for attainment of the 1-hour ozone NAAQS in the Los Angeles-South Coast ozone nonattainment area. In response to this finding, California must revise and submit to EPA an attainment demonstration SIP for 1-hour ozone for the South Coast within 12 months of the effective date of this rule. The SIP must provide for attainment of the 1-hour ozone NAAQS in the South Coast nonattainment area as expeditiously as practicable, but no later than five years from the effective date of today's rule, unless the State can demonstrate that it needs up to an additional five years to attain in light of the severity of the nonattainment problem and the availability and feasibility of control measures.

If EPA finds that California has failed to submit a complete SIP revision as required by this final rule, or if EPA disapproves such a revision, such finding or disapproval would trigger clocks for mandatory sanctions and an obligation for EPA to impose a FIP. 8 In connection with mandatory sanctions, we are taking final action to establish the same sequence for application of mandatory sanctions (if California fails to submit a new 1-hour ozone plan or EPA disapproves the submitted plan) as established in 40 CFR 52.31. Specifically, our finding of failure to submit or our disapproval of the SIP revision will trigger the new source review (NSR) offset sanction in CAA section 179(b)(2) and the highway funding sanction under CAA section 179(b)(1) in the South Coast ozone nonattainment area 18 months, and 24 months, respectively, after the effective date of the finding or disapproval. The sanctions clock will permanently stop once we find the SIP submittal complete (if we had issued a finding of failure to submit a complete plan) or take final action approving (if we had disapproved the plan) SIP revisions meeting the relevant requirements of the CAA prior to the time the sanctions would take effect. Lastly, we are taking final action to apply the provisions in 40 CFR 52.31 regarding staying the sanctions clock and deferring the imposition of sanctions where we make a preliminary finding that it is more likely than not that the deficiency has been corrected. A FIP clock triggered by a finding of failure to submit or a disapproval of a submitted SIP can be stopped only by EPA approval of a SIP revision correcting the SIP deficiency.

Under the CAA, a finding of substantial inadequacy and subsequent obligation on a State to revise its SIP arise out of section 110(a) and 110(k)(5). The finding and State obligation do not directly impose any new regulatory requirements. In addition, the State obligation is not legally enforceable by a court of law. EPA would review its intended action on any SIP submittal in response to the finding in light of applicable statutory and Executive Order requirements, in subsequent rulemaking acting on such SIP submittal. For those reasons, this rule:

• 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 CAA; and

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

In addition, this rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the Tribes with Indian country in the subject ozone nonattainment area would not be subject to the deadline established herein for the State of California nor would they be subject to the imposition of mandatory sanctions if California were to fail to submit a complete SIP revision or if EPA were to disapprove the SIP revision submitted by California in response to this final SIP call, 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 CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 8, 2013. 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).)

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

On July 8, 2010 (75 FR 39366), we published a limited approval and limited disapproval of the following rules listed in Table 1, as adopted locally on November 9, 2005 and submitted by the State on June 16, 2006.

We based our limited disapproval action on certain deficiencies in the submittal. This disapproval action started a sanctions clock for imposition of offset sanctions 18 months after August 9, 2010 and highway sanctions 6 months later, pursuant to section 179 of the Clean Air Act (CAA) and our regulations at 40 CFR 52.31. As such, offset sanctions began on February 9, 2012 and highway sanctions began on August 9, 2012.

On October 16, 2012, ICAPCD adopted revisions to Rules 800, 804, 805, and 806 that were intended to correct the deficiencies identified in our limited disapproval action. On November 7, 2012, the State submitted these revisions to EPA. In the Proposed Rules section of today's Federal Register , we have proposed approval of this submittal because we believe it corrects the deficiencies identified in our July 8, 2010 disapproval action. Based on today's proposed approval, we are taking this final rulemaking action, effective on publication, to stay imposition of sanctions that were triggered by our July 8, 2010 limited disapproval.

EPA is providing the public with an opportunity to comment on this stay of sanctions. If comments are submitted that change our assessment described in this final determination and the proposed full approval of revised ICAPCD Rules 800, 804, 805, and 806, we intend to take subsequent final action to reimpose sanctions pursuant to 40 CFR 51.31(d). If no comments are submitted that change our assessment, then all sanctions and sanction clocks will be permanently terminated on the effective date of a final rule approval.

We are making an interim final determination to stay CAA section 179 sanctions associated with ICAPCD Rules 800, 804, 805, and 806 based on our concurrent proposal to approve the State's SIP revision as correcting deficiencies that initiated sanctions.

Because EPA has preliminarily determined that the State has corrected the deficiencies identified in EPA's limited disapproval action, relief from sanctions should be provided as quickly as possible. Therefore, EPA is invoking the good cause exception under the Administrative Procedure Act (APA) in not providing an opportunity for comment before this action takes effect (5 U.S.C. 553(b)(3)). However, by this action EPA is providing the public with a chance to comment on EPA's determination after the effective date, and EPA will consider any comments received in determining whether to reverse such action.

EPA believes that notice-and-comment rulemaking before the effective date of this action is impracticable and contrary to the public interest. EPA has reviewed the State's submittal and, through its proposed action, is indicating that it is more likely than not that the State has corrected the deficiencies that started the sanctions clocks. Therefore, it is not in the public interest to keep applied sanctions in place when the State has most likely done all it can to correct the deficiencies that triggered the sanctions clocks. Moreover, it would be impracticable to go through notice-and-comment rulemaking on a finding that the State has corrected the deficiencies prior to the rulemaking approving the State's submittal. Therefore, EPA believes that it is necessary to use the interim final rulemaking process to stay sanctions while EPA completes its rulemaking process on the approvability of the State's submittal. Moreover, with respect to the effective date of this action, EPA is invoking the good cause exception to the 30-day notice requirement of the APA because the purpose of this notice is to relieve a restriction (5 U.S.C. 553(d)(1)).

This action stays Federal sanctions and imposes no additional requirements.

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

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

The administrator certifies that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

This rule does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4).

This rule does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

This action does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999).

This rule is not subject to Executive Order 13045, “Protection of Children From Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272) do not apply to this rule because it imposes no standards.

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

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to Congress and the Comptroller General. However, section 808 provides that any rule for which the issuing agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest, shall take effect at such time as the agency promulgating the rule determines. 5 U.S.C. 808(2). EPA has made such a good cause finding, including the reasons therefore, and established an effective date of January 7, 2013. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 8, 2013. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purpose of judicial review nor does it extend the time within which 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)).

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

On April 27, 2012 (77 FR 25109), EPA proposed to approve the following rule into the California SIP.

We proposed to approve this rule because we determined that it complied with the relevant CAA requirements. Our proposed action contains more information on the rule and our evaluation.

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

No comments were submitted. Therefore, as authorized in section 110(k)(3) of the Act, EPA is fully approving this rule into the California SIP.

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).

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 March 8, 2013. 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, “we,” “us,” and “our” refer to EPA.

Table 1 lists the rules we are approving with the dates that they were amended by the local air agencies and submitted by the California Air Resources Board.

On August 22, 2008, October 24, 2011, and May 6, 2011, EPA determined that the submittal for SDAPCD Rule 61.4, NSAQMD Rule 214, and SMAQMD Rules 448 and 449 met the completeness criteria in 40 CFR part 51 Appendix V, which must be met before formal EPA review.

There is no previous version of NSAQMD Rule 214 in the SIP, although the NSAQMD adopted earlier versions of these rules on March 27, 2007 and February 22, 2010, and CARB submitted them to us on March 7, 2008 and July 20, 2010. We approved an earlier version of SDAPCD Rule 61.4 into the SIP on May 13, 1993 (58 FR 28354). The SDAPCD adopted revisions to the SIP-approved version of SDAPCD Rule 61.4 on March 26, 2008 and CARB submitted them to us on July 18, 2008. We also approved earlier versions of SMAQMD Rule 448 into the SIP on January 23, 1996 (61 FR 1716) and SMAQMD Rule 449 into the SIP on March 24, 2003 (68 FR 14156). The SMAQMD adopted revisions to the SIP-approved versions of the two rules on February 26, 2009 and CARB submitted them to us on April 5, 2011. While we can act on only the most recently submitted version, we have reviewed materials provided with previous submittals.

Volatile organic compounds (VOCs) help produce ground-level ozone and smog, which harm human health and the environment. Section 110(a) of the CAA requires States to submit regulations that control VOC emissions. The revisions to the gasoline transfer rules incorporate an exemption when widespread onboard refueling vapor recovery system is in use and update several standards to match what is required by the California Air Resources Board regarding certification, testing, monitoring, and recordkeeping. EPA's technical support document (TSD) has more information about these rules.

Generally, SIP rules must be enforceable (see section 110(a) of the Act), must require Reasonably Available Control Technology (RACT) for each category of sources covered by a Control Techniques Guidelines (CTG) document as well as each major source in nonattainment areas (see sections 182(a)(2) and (b)(2)), and must not relax existing requirements (see sections 110(l) and 193). The SDAPCD, NSAQMD, and SMAQMD regulate ozone nonattainment areas (see 40 CFR part 81), so NSAQMD Rule 214, SMAQMD Rule 448, and SMAQMD Rule 449 must fulfill RACT. However, because SDAPCD was classified on May 14, 2012 (77 FR 28424), RACT SIP requirements for the district do not come into effect until one year after the effective date of the classification and do not currently apply to SDAPCD Rule 61.4.

Guidance and policy documents that we use to evaluate enforceability and RACT requirements consistently include the following:

Throughout this document wherever “we”, “us” or “our” are used, it is intended to refer to EPA.

EPA is taking direct final action to approve the Limited Maintenance Plan (LMP) submitted by the State of Alaska on September 29, 2010, for the Eagle River nonattainment area (Eagle River NAA) and to concurrently redesignate the area to attainment for the PM 10 NAAQS. EPA has reviewed air quality data for the area and determined that the Eagle River NAA attained the PM 10 NAAQS by the required attainment date, and that monitoring data continue to show attainment. EPA also approves exclusion of data from a high wind exceptional event on October 30, 2009.

“Particulate matter,” also known as particle pollution or PM, is a complex mixture of extremely small particles and liquid droplets. The size of particles is directly linked to their potential for causing health problems. EPA is concerned about particles that are 10 micrometers in diameter or smaller because those are the particles that generally pass through the throat and nose and enter the lungs. Once inhaled, these particles can affect the heart and lungs and cause serious adverse health effects. People with heart or lung diseases, children and older adults are the most likely to be affected by particle pollution exposure. However, even healthy individuals may experience temporary symptoms from exposure to elevated levels of particle pollution.

On July 1, 1987, EPA promulgated a NAAQS for PM 10 (52 FR 24634). EPA established a 24-hour standard of 150 μg/m 3 and an annual standard of 50 μg/m 3 , expressed as an annual arithmetic mean. EPA also promulgated secondary PM 10 standards that were identical to the primary standards. In a rulemaking action dated October 17, 2006, EPA retained the 24-hour PM 10 standard but revoked the annual PM 10 standard (71 FR 61144, effective December 18, 2006).

On August 7, 1987, EPA designated the “Anchorage (Eagle River)” (referred to as Eagle River henceforth) area as a PM 10 nonattainment area due to measured violations of the 24-hour PM 10 standard (52 FR 29383). The notice announcing the designation upon enactment of the 1990 CAA Amendments was published on March 15, 1991 (56 FR 11101). On November 6, 1991, the Eagle River NAA was subsequently classified as moderate under sections 107(d)(4)(B) and 188(a) of the CAA (56 FR 56694).

After the Eagle River NAA was designated nonattainment for PM 10 , the Alaska Department of Environmental Conservation (ADEC) and Municipality of Anchorage (MOA) worked with the community of Eagle River to develop a plan to bring the area into attainment no later than December 31, 1994. The State submitted the plan to EPA on October 15, 1991, as a moderate PM 10 State Implementation Plan (SIP) under section 189(a) of the CAA. The primary control measure submitted by the State was a comprehensive road paving program. EPA took final action to approve the State's moderate PM 10 SIP on August 13, 1993 (58 FR 43084). On October 19, 2010, EPA made an attainment determination that the Eagle River nonattainment area attained the PM 10 NAAQS (75 FR 64162).

The State of Alaska prepared a LMP and provided notice and an opportunity for public comment on the proposed plan. On September 29, 2010, the State submitted to EPA for approval the Eagle River PM 10 LMP and requested that EPA redesignate the Eagle River NAA to attainment for the PM 10 NAAQS.

A nonattainment area can be redesignated to attainment after the area has measured air quality data showing the NAAQS has been attained and when certain planning requirements are met. Section 107(d)(3)(E) of the CAA, and the General Preamble to Title I provide the criteria for redesignation (57 FR 13498, April 16, 1992). These criteria are further clarified in a policy and guidance memorandum from John Calcagni, Director, Air Quality Management Division, EPA Office of Air Quality Planning and Standards dated September 4, 1992, entitled “Procedures for Processing Requests to Redesignate Areas to Attainment” (Calcagni memo). The criteria for redesignation are:

1. The Administrator has determined that the area has attained the applicable NAAQS;

2. The Administrator has fully approved the applicable SIP for the area under section 110(k) of the CAA;

3. The State containing the area has met all requirements applicable to the area under section 110 and part D of the CAA;

4. The Administrator has determined that the improvement in air quality is due to permanent and enforceable reductions in emissions; and

5. The Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A of the CAA.

On August 9, 2001, EPA issued guidance on streamlined maintenance plan provisions for certain moderate PM 10 nonattainment areas seeking redesignation to attainment (Memo from Lydia Wegman, Director, Air Quality Standards and Strategies Division, entitled “Limited Maintenance Plan Option for Moderate PM 10 Nonattainment Areas” (LMP Option memo)). The LMP Option memo contains a statistical demonstration that areas meeting certain air quality criteria will, with a high degree of probability, maintain the standard 10 years into the future. Thus, EPA has already provided the maintenance demonstration for areas meeting the criteria outlined in the LMP Option memo. It follows that future year emission inventories for these areas, and some of the standard analyses to determine transportation conformity with the SIP are no longer necessary.

To qualify for the LMP Option, the area should have attained the PM 10 NAAQS and, based upon the most recent five years of air quality data at all monitors in the area, the 24-hour design value should be at or below 98 μg/m 3 . If an area cannot meet this test, it may still be able to qualify for the LMP Option if the average design value (ADV) for the site is less than the site-specific critical design value (CDV). In addition, the area should expect only limited growth in on-road motor vehicle PM 10 emissions (including fugitive dust) and should have passed a motor vehicle regional emissions analysis test. The LMP Option memo also identifies core provisions that must be included in the LMP. These provisions include an attainment year emissions inventory, assurance of continued operation of an EPA-approved air quality monitoring network, and contingency provisions.

The transportation conformity rule and the general conformity rule (40 CFR parts 51 and 93) apply to nonattainment areas and maintenance areas covered by an approved maintenance plan. Under either conformity rule, an acceptable method of demonstrating that a Federal action conforms to the applicable SIP is to demonstrate that expected emissions from the planned action are consistent with the emissions budget for the area.

While EPA's LMP Option does not exempt an area from the need to affirm conformity, it explains that the area may demonstrate conformity without submitting an emissions budget. Under the LMP Option, emissions budgets are treated as essentially not constraining for the length of the maintenance period because it is unreasonable to expect that the qualifying areas would experience so much growth in that period that a violation of the PM 10 NAAQS would result. For transportation conformity purposes, EPA would conclude that emissions in these areas need not be capped for the maintenance period and therefore a regional emissions analysis would not be required. Similarly, Federal actions subject to the general conformity rule could be considered to satisfy the “budget test” specified in 40 CFR 93.158 (a)(5)(i)(A) for the same reasons that the budgets are essentially considered to be unlimited.

To demonstrate that an area has attained the PM 10 NAAQS States must submit an analysis of ambient air quality data from an ambient air monitoring network representing peak PM 10 concentrations. The data should be quality-assured and stored in the EPA Air Quality System database. EPA has reviewed air quality data for the area and has determined that the Eagle River NAA attained the PM 10 NAAQS  1 by the applicable attainment date of December 31, 1994, and continues to attain the PM 10 NAAQS. EPA's analysis is described below.

The 24-hour PM 10 NAAQS is 150 μg/m 3 . An area has attained this 24-hour standard when the average number of expected exceedances per year is less than or equal to one, when averaged over a three-year period (40 CFR 50.6). To make this determination, three consecutive years of complete ambient air quality data must be collected in accordance with Federal requirements (40 CFR part 58 including appendices).

A comprehensive air quality monitoring plan, meeting the requirements of 40 CFR part 58, was submitted by ADEC to EPA on January 18, 1980 (40 CFR 52. 70), and approved by EPA on April 15, 1981 (72 FR 21944). Updated monitoring plans have been subsequently submitted, with the most recent approval by EPA on October 25, 2012. The monitoring plan describes the Alaska monitoring network throughout the State, which includes site #02-020-1004 (Parkgate Site) in the Eagle River area. In the LMP submittal, ADEC States that the nonattainment designation was based on data collected at the Parkgate Site. With the exception of two volcanic eruptions and high wind exceptional events, a review of data from 1988 through the present show that PM 10 concentrations recorded at this site remain well below the 24-hour PM 10 NAAQS. In addition, ADEC states that the Parkgate Site is operated in compliance with EPA monitoring guidelines set forth in 40 CFR part 58, Ambient Air Quality Surveillance. More information on the monitoring plan can be found at http://dec.alaska.gov/air/am/am_airmonplan.htm.

Data from the Parkgate Site has been quality assured by ADEC and submitted to EPA's Air Quality System (AQS), accessible through EPA's AirData Web site at http://www.epa.gov/airdata/. To show attainment for the 24-hour PM 10 NAAQS the three most recent years of data, calendar years 2009-2011, must be below 1.0 Expected number of Exceedances (EE), as established in Appendix K to 40 CFR part 50. The Parkgate Site recorded one exceedance during the 2009-2011 period on October 30, 2009. ADEC has flagged this exceedance as being caused by a high wind exceptional event. Under EPA's Exceptional Events Rule, the Agency may exclude data from a regulatory determination related to an exceedance or violation of the NAAQS if the State adequately demonstrates that an exceptional event caused the exceedance or violation. 40 CFR 50.1 and 50.14. For the reasons set forth in the AK Eagle River PM 10 October 30, 2009 Exceptional Event concurrence letter and analysis (November 2, 2012), EPA excluded data showing an exceedance on October 30, 2009 in determining whether the Eagle River NAA has attained the PM 10 NAAQS. ADEC also submitted an exceedance on October 31, 2009 for consideration as an exceptional event however this request was not approved as described in the concurrence letter. The concurrence letter explains how ADEC met its burden to demonstrate that the October 30, 2009 exceedance qualifies as an exceptional event. Based on this demonstration, the area's EE was 0.4, which is well below the 1.0 upper limit. EPA therefore concludes that the area was not violating the PM 10 NAAQS during the three-year period 2009 to 2011 (Eagle River PM 10 NAAQS and LMP Determination, November 8, 2012).

To qualify for redesignation, the SIP for an area must be fully approved under section 110(k) of the CAA, and must satisfy all requirements that apply to the area. As discussed in Section II.B. above, Alaska submitted a moderate PM 10 SIP for the Eagle River NAA on October 15, 1991. EPA took final action to fully approve the State's moderate PM 10 SIP on August 13, 1993 (58 FR 43084), as satisfying all requirements that apply to the area. Thus the area has a fully approved nonattainment area SIP under section 110(k) of CAA.

Section 107(d)(3)(E) of the CAA requires that a state containing a nonattainment area meet all applicable requirements under section 110 and Part D of the CAA for the area to be redesignated to attainment. EPA interprets this to mean that the state must meet all requirements that applied to the area prior to, and at the time of, the submission of a complete redesignation request. The following is a summary of how Alaska meets these requirements.

Section 110(a)(2) of the CAA contains general requirements for nonattainment plans. These requirements include, but are not limited to: Submittal of a SIP that has been adopted by the state after reasonable notice and public hearing; provisions for establishment and operation of appropriate apparatus, methods, systems and procedures necessary to monitor ambient air quality; implementation of a permit program; provisions for Part C—Prevention of Significant Deterioration (PSD) and Part D—New Source Review (NSR) permit programs; criteria for stationary source emission control measures, monitoring and reporting; provisions for modeling; and provisions for public and local agency participation. See the General Preamble for further explanation of these requirements (57 FR 13498, April 16, 1992). EPA's approval of Alaska's SIP for attainment and maintenance of national standards can be found at 40 CFR 52.72. For purposes of redesignation of the Eagle River PM 10 NAA, EPA has reviewed the Alaska SIP and finds that the State has satisfied all applicable requirements under CAA section 110(a)(2) for the PM 10 NAAQS.

Part D of the CAA contains general requirements applicable to all areas designated nonattainment. The general requirements are followed by a series of subparts specific to each pollutant. All PM 10 nonattainment areas must meet the general provisions of Subpart 1 and the specific PM 10 provisions in Subpart 4, “Additional Provisions for Particulate Matter Nonattainment Areas.” The following paragraphs discuss these requirements as they apply to the Eagle River PM 10 NAA.

Section 172(c) contains general requirements for nonattainment area plans. A thorough discussion of these requirements may be found in the General Preamble (57 FR 13538, April 16, 1992). CAA section 172(c)(2) requires nonattainment plans to provide for reasonable further progress (RFP). Section 171(1) of the CAA defines RFP as “such annual incremental reductions in emissions of the relevant air pollutant as are required by this part (part D of title I) or may reasonably be required by the Administrator for the purpose of ensuring attainment of the applicable national ambient air quality standard by the applicable date.” The requirements for reasonable further progress, identification of certain emissions increases and other measures needed for attainment were satisfied with the approved Eagle River PM 10 SIP (58 FR 43084). In the October 19, 2010 action (75 FR 64162), EPA determined that the Eagle River NAA attained the 24-hour PM 10 NAAQS by the December 31, 1994, attainment date. Therefore, EPA believes no further showing of RFP or quantitative milestones is necessary.

For redesignation, Section 172(c)(3) of CAA requires a comprehensive, accurate, current inventory of actual emissions from all sources in the Eagle River PM 10 NAA. Alaska included an emissions inventory for the Eagle River area for the year 2007 in the September 29, 2010 submittal. The inventory estimated emissions during spring break-up and fall freeze-up include: Dust from paved roads; wind-generated dust from roads, parking lots and un-vegetated areas; fireplaces and woodstoves; natural gas combustion; and motor vehicles exhaust, tire and brake wear. The emissions inventory included emissions estimates for unpaved roads for the initial SIP attainment plan ( Eagle River PM 10 Control Plan ), but all roads have been paved and so those emissions have not been included in the 2007 nor 2020 inventories. Emissions estimates for road dust and motor vehicle exhaust, brake wear, and tire wear were developed using the EPA-approved MOBILE6.2 model, and vehicle miles traveled estimates were obtained from the 2007 Chugiak-Eagle River Long Range Transportation Plan. The remaining emissions estimates were calculated using EPA approved AP-42 emission factors. EPA reviewed the inventory and associated calculations submitted by Alaska and believes that the 2007 Eagle River emissions inventory is current, accurate and comprehensive and therefore meets the requirements of section 172(c)(3) of the CAA.

The CAA requires all nonattainment areas to meet several requirements regarding NSR. The state must have an approved major NSR program that meets the requirements of CAA section 172(c)(5). EPA evaluated and initially approved the Alaska major NSR program on July 5, 1983 (48 FR 30623) and most recently approved revisions to Alaska's NSR program on February 11, 2011 (76 FR 7116). In the Eagle River PM 10 NAA, the requirements of the Part D NSR program will be replaced by the State's PSD program requirements upon the effective date of redesignation.

Once an area is redesignated, the state must continue to operate an appropriate air monitoring network in accordance with 40 CFR part 58 to verify the attainment status of the area. On July 18, 1980 Alaska submitted a comprehensive air quality monitoring plan (40 CFR 52.70), meeting the requirements of 40 CFR part 58, to EPA. EPA approved the plan on April 15, 1981 (72 FR 21944). This monitoring plan has been updated, with the most recent approval by EPA on October 25, 2012 (Alaska Air Monitoring Plan Approval Letter, dated October 25, 2012). As described in section IV. A., ADEC operate a comprehensive monitoring network.

The CAA requires that contingency measures take effect if an area fails to meet RFP requirements or fails to attain the NAAQS by the applicable attainment date. Because, as part of this action, EPA has determined the Eagle River NAA attained the PM 10 NAAQS by the applicable attainment date of December 31, 1994, contingency measures are no longer required under section 172(c)(9) of the CAA. However, contingency provisions are required for maintenance plans under Section 175A. See section VI. F. for a description of Alaska's maintenance plan contingency provisions.

Section 189(a), (c), and (e) apply to moderate PM 10 nonattainment areas. Any of these requirements which were applicable and due prior to the submission of the redesignation request must be fully approved into the SIP before redesignating the area to attainment. With respect to the Eagle River PM 10 NAA, these requirements include:

(a) Provisions to assure that reasonably available control measures were implemented by December 10, 1993 (section 189(a)(1)(C));

(b) Either a demonstration that the plan provided for attainment as expeditiously as practicable, but not later than December 31, 1994, or a demonstration that attainment by that date was impracticable (section 189(a)(1)(B));

(c) Quantitative milestones which were achieved every three years and which demonstrate RFP toward attainment by December 31, 1994 (section 189(c)(1)); and

(d) Provisions to assure that the control requirements applicable to major stationary sources of PM 10 also apply to major stationary sources of PM 10 precursors except where the Administrator determined that such sources do not contribute significantly to PM 10 levels which exceed the NAAQS in the area (section 189(e)).

Provisions for reasonably available control measures, attainment demonstration, and RFP milestones were fully approved into the SIP upon EPA approval of the moderate PM 10 SIP for the Eagle River NAA on August 13, 1993 (58 FR 43084). EPA most recently approved revisions to Alaska's NSR program on February 9, 2011 (76 FR 7116). Alaska's major NSR rules include control requirements that apply to major stationary sources of PM 10 in nonattainment areas and attainment/unclassifiable areas. For the Eagle River area, EPA determined that major stationary sources do not contribute significantly to PM 10 levels in excess of the NAAQS. Therefore, in EPA's action to approve the moderate PM 10 SIP for Eagle River, EPA granted the exclusion from control requirements authorized under section 189(e) for major stationary sources of PM 10 precursors (58 FR 43084).

Section 107(d)(3)(E)(iii) of the CAA provides that a nonattainment area may not be redesignated unless EPA determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP. Therefore, a State must be able to reasonably attribute the improvement in air quality to permanent and enforceable emission reductions by demonstrating that air quality improvements are the result of actual enforceable emission reductions. This showing should consider emission rates, production capacities, and other related information. The analysis should assume that sources are operating at permitted levels (or historic peak levels) unless evidence is presented that such an assumption is unrealistic.

Permanent and enforceable control measures in the Eagle River moderate PM 10 SIP include road paving and surfacing projects to address fugitive dust. These controls were approved by EPA into the Eagle River PM 10 SIP, and they are both permanent and federally enforceable (58 FR 43084). As described in the submittal, the primary control measure relied on is the road paving program which either paved or surfaced all of the roads in the area by 2007. The program paved 22 miles of road which equals almost half of the roads in the area. The Municipality of Anchorage (MOA) commits itself to maintenance of the roads during their 10-15-year lifetime and resurfacing thereafter. The MOA also will work with the Alaska Department of Transportation and Public Facilities to limit the amount of silt allowed in winter traction sand as well as explore other road maintenance techniques that minimize road dust while still cleaning and maintaining safe roads.

EPA believes that areas that qualify for the LMP Option will meet the NAAQS, even under worst case meteorological conditions. Therefore, under the LMP Option, the maintenance demonstration is presumed to be satisfied if an area meets the qualifying criteria. A description of the LMP qualifying criteria and how the Eagle River area meets these criteria is provided below. By qualifying for the LMP Option, Alaska presumptively demonstrates that the air quality improvements in the Eagle River area are the result of permanent emission reductions and not a result of either economic trends or meteorology.

In this action, we are approving the LMP in accordance with the principles outlined in the LMP Option memo. Upon the effective date of this action, the area will have a fully approved maintenance plan.

The LMP Option memo outlines the requirements for an area to qualify for the LMP Option. First, the area should be attaining the NAAQS. In this action, EPA has determined that the Eagle River NAA attained the PM 10 NAAQS by the required attainment date, and continues to be in attainment with the PM 10 NAAQS. Please see section V. A. for a detailed discussion.

Second, the average design value (ADV) for the past five years of monitoring data must be at or below the critical design value (CDV). The CDV is a margin of safety value at which an area has been determined to have a one in ten probability of exceeding the NAAQS. The LMP Option memo provides two methods to review monitoring data for the purpose of determining qualification for the LMP Option. The first method is a comparison of a site's ADV with the CDV of 98 µg/m 3 for the 24 hour PM 10 NAAQS and 40 µg/m 3 for the annual PM 10 NAAQS. A second method that applies to the 24-hour PM 10 NAAQS is the calculation of a site-specific CDV and a comparison of the site-specific CDV with the ADV for the past five years of monitoring data. The State's submittal provides a comparison of five-year ADVs compared to the 24-hour CDV, as described in the first method for review of monitoring data to determine qualification for the LMP Option. Alaska's analysis demonstrates that the Eagle River NAA meets the LMP design value criteria for the period 2003-2007. Using EPA-recommended methodology, Alaska calculated the average 24-hour design value for the area to be 92.3 µg/m 3 , which is below the CDV of 98 µg/m 3 . Alaska did not include two events that they considered to be exceptional events on March 12, 2003 and December 2, 2007.

Given that the LMP memo requires that the most recent five years of data be used to determine LMP eligibility, EPA calculated average design values using more recent data from 2007-2011. EPA found that the Eagle River area meets the LMP design value criteria for both the 24-hour ADV (95 µg/m 3 compared to the 98 µg/m 3 24 hr ADV) and the annual ADV (17 µg/m 3 compared to the 40 µg/m 3 annual ADV) (Eagle River PM 10 NAAQS and LMP Determination Memo, November 8, 2012). EPA's calculations did not include data from October 30, 2009, which EPA agreed was an exceedance caused by an exceptional event. EPA finds that Eagle River meets the design value criteria outlined in the LMP Option memo.

Third, the area must meet the motor vehicle regional emissions analysis test in attachment B of the LMP Option memo. Using the methodology outlined in attachment B, Alaska submitted an analysis of whether increased emissions from on-road mobile sources would increase PM 10 concentrations in the Eagle River NAA to levels that would threaten the assumption of maintenance that underlies the LMP policy. Based on monitoring data for the period 2003-2007, Alaska has determined that the Eagle River NAA passes the motor vehicle regional emissions analysis test. EPA has reviewed the calculations in Appendix A of the State's submittal and concurs with this conclusion.

As described above, the Eagle River NAA meets the qualification criteria set forth in the LMP Option memo and therefore qualifies for the LMP Option. The LMP Option memo also indicates that once a state selects the LMP Option and it is in effect, the state will be expected to determine, on an annual basis, that the LMP criteria are still being met. If the state determines that the LMP criteria are not being met, it should take action to reduce PM 10 concentrations enough to requalify for the LMP Option. One possible approach the state could take is to implement contingency provisions. The State's submittal included a description of contingency provisions which are discussed in Section V. I. EPA believes the contingency provisions submitted by Alaska meet the requirements of CAA section 175A as outlined in the LMP Option memo.

As a result of the above analysis, EPA is approving the LMP for the Eagle River area and the State's request to redesignate the Eagle River NAA to attainment for PM 10 .

Pursuant to the LMP Option memo, the state's approved attainment plan should include an emissions inventory which can be used to demonstrate attainment of the NAAQS. The inventory should represent emissions during the same five-year period associated with air quality data used to determine whether the area meets the applicability requirements of the LMP Option. The state should review its inventory every three years to ensure emissions growth is incorporated in the inventory if necessary.

Alaska's submittal includes an emissions inventory for the year 2007. After reviewing the 2007 emissions inventory and determining that it is current, accurate and complete, as well as reviewing monitoring data for the years 2003-2007, EPA has determined that the 2007 emissions inventory is representative of the attainment year inventory because the NAAQS was not violated during 2007. In addition, the year 2007 is representative of the level of emissions during the time period used to calculate the average design value because 2007 is one of the years during the five-year period used to calculate the design value (2003-2007). The submittal meets EPA guidance, as described above, for purposes of an attainment emissions inventory.

PM 10 monitoring was established in the Eagle River area in 1985. ADEC currently maintains a PM 10 monitoring network which includes the Parkgate Site within the Eagle River area. This monitoring network was developed and has been maintained in accordance with Federal siting and design criteria in 40 CFR part 58 and in consultation with Region 10. EPA most recently approved Alaska's air monitoring plan on October 25, 2012 (Alaska Air Monitoring Plan Approval Letter, dated October 25, 2012). In the September 29, 2010 submittal, Alaska states that it will continue to monitor for PM 10 in the Eagle River NAA through the end of the maintenance planning period (2020).

CAA Section 175A states that a maintenance plan must include contingency provisions, as necessary, to ensure prompt correction of any violation of the NAAQS which may occur after redesignation of the area to attainment. As explained in the LMP Option memo and Calcagni memo, these contingency provisions are considered to be an enforceable part of the SIP. The plan should clearly identify the provisions to be adopted, a schedule and procedures for adoption and implementation, and a specific time limit for action by the state. The maintenance plan should identify the events that would “trigger” the adoption and implementation of a contingency provision, the contingency provision that would be adopted and implemented, and the schedule indicating the time frame by which the state would adopt and implement the provision. The LMP Option memo and Calcagni memo state that EPA will review what constitutes a contingency plan on a case-by-case basis. At a minimum, it must require that the State will implement all measures contained in the Part D nonattainment plan for the area prior to redesignation.

ADEC has included maintenance plan contingency provisions to ensure the area continues to meet the PM 10 NAAQS. Specifically, the submittal includes a list of potential contingency measures based on the primary sources of PM 10 identified in the emission inventory. These include traffic-related paved road dust, wind-blown dust from roadways, parking lots and cleared areas, and fireplaces and woodstoves. Traffic-related road dust and wind-blown dust contingency provisions include application of chemical dust palliatives based on a successful field study in 2008 during their spring break-up period, and the potential use of road sweeping. Another provision primarily directed at wind-blown dust would require that traction sand materials meet specifications which would reduce the amount of re-entrained dust. Fireplace and woodstove provisions would include curtailment scenarios if economics or meteorology increased the amount of PM 10 emissions generated by residential wood combustion.

The contingency provisions submitted by ADEC will be formally assessed by MOA within 30 days following the violation of the PM 10 NAAQS. Within 120 days a report, will be prepared and ultimately approved by ADEC. The report will assess existing controls and provide a recommendation with respect to the contingency provisions or alternatives. Actions will occur at the discretion of the Municipal Mayor and Assembly. Some measures may require changes to the local ordinances. The contingency provisions identify potential control measures and provide a specific schedule for review, recommendation, adoption and implementation. EPA believes the contingency provisions are adequate to meet CAA Section 175A requirements and the LMP Option memo.

Under the LMP Option, emissions budgets are treated as essentially not constraining for the maintenance period because it is unreasonable to expect that qualifying areas would experience so much growth in that period that a NAAQS violation would result. While areas with maintenance plans approved under the LMP Option are not subject to the budget test, the areas remain subject to the other transportation conformity requirements of 40 CFR part 93, subpart A. Thus, the metropolitan planning organization (MPO) in the area or the state must document and ensure that:

(a) Transportation plans and projects provide for timely implementation of SIP transportation control measures (TCMs) in accordance with 40 CFR 93.113;

(b) Transportation plans and projects comply with the fiscal constraint element as set forth in 40 CFR 93.108;

(c) The MPO's interagency consultation procedures meet the applicable requirements of 40 CFR 93.105;

(d) Conformity of transportation plans is determined no less frequently than every three years, and conformity of plan amendments and transportation projects is demonstrated in accordance with the timing requirements specified in 40 CFR 93.104;

(e) The latest planning assumptions and emissions model are used as set forth in 40 CFR 93.110 and 40 CFR 93.111;

(f) Projects do not cause or contribute to any new localized carbon monoxide or particulate matter violations, in accordance with procedures specified in 40 CFR 93.123; and

(g) Project sponsors and/or operators provide written commitments as specified in 40 CFR 93.125.

In the 2012 adequacy finding for the Eagle River, Alaska Particulate Matter (PM 10 ) Limited Maintenance Plan, EPA determined that the Eagle River area met the criteria to be exempted from regional emissions analysis for PM 10 (77 FR 25164, 2 April 27, 2012). However, project level conformity requirements would continue to apply to the area. With EPA's approval of the LMP, the area continues to be exempt from performing a regional emissions analysis, but must meet project-level conformity analyses as well as the transportation conformity criteria mentioned above.

For Federal actions required to address the specific requirements of the general conformity rule, one set of requirements applies particularly to ensuring that emissions from the action will not cause or contribute to new violations of the NAAQS, exacerbate current violations, or delay timely attainment. One way that this requirement can be met is to demonstrate that “the total of direct and indirect emissions from the action (or portion thereof) is determined and documented by the State agency primarily responsible for the applicable SIP to result in a level of emissions which, together with all other emissions in the nonattainment area, would not exceed the emissions budgets specified in the applicable SIP” (40 CFR 93.158(a)(5)(i)(A)).

The decision about whether to include specific allocations of allowable emissions increases to sources is one made by the state and local air quality agencies. These emissions budgets are different than those used in transportation conformity. Emissions budgets in transportation conformity are required to limit and restrain emissions. Emissions budgets in general conformity allow increases in emissions up to specified levels. Alaska has not chosen to include specific emissions allocations for Federal projects that would be subject to the provisions of general conformity.

EPA is taking direct final action to approve the LMP submitted by the State of Alaska for the Eagle River NAA and concurrently redesignate the area to attainment for the PM 10 NAAQS. EPA has reviewed air quality data for the area and determined that the Eagle River NAA attained the PM 10 NAAQS by the required attainment date, and that air monitoring data continue to show attainment.

EPA is publishing this action without prior proposal because the Agency views this as a noncontroversial amendment and anticipates no adverse comments. However, in the proposed rules section of this Federal Register publication, EPA is publishing a separate document that will serve as the proposal to approve the SIP revision should adverse comments be filed. This rule will be effective March 8, 2013 without further notice unless the Agency receives adverse comments by February 6, 2013.

If EPA receives such comments, then EPA will publish a timely withdrawal of the direct final rule informing the public that the rule will not take effect. All public comments received will then be addressed in a subsequent final rule based on the proposed rule. The EPA will not institute a second comment period on this rule. Any parties interested in commenting on this rule should do so at this time. If no such comments are received, the public is advised that this rule will be effective on March 8, 2013 and no further action will be taken on the proposed rule.

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 the requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 8, 2013. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2)).

40 CFR parts 52 and 81 are amended as follows:

The fishery for coastal migratory pelagic fish (king mackerel, Spanish mackerel, and cobia) is managed under the Fishery Management Plan for the Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic (FMP). The FMP was prepared by the Gulf of Mexico and South Atlantic Fishery Management Councils (Councils) and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

Amendment 18 to the FMP (76 FR 82058, December 29, 2011) implemented a commercial annual catch limit (equal to the commercial quota) of 3.13 million lb (1.42 million kg) for the Atlantic migratory group of Spanish mackerel. Atlantic migratory group Spanish mackerel are divided into a northern and southern zone for management purposes. The southern zone for Atlantic migratory group Spanish mackerel extends from 30°42′45.6″ N. lat., which is a line directly east from the Georgia/Florida boundary, to 25°20.4′ N. lat., which is a line directly east from the Miami-Dade/Monroe County, Florida, boundary.

For the southern zone, seasonally variable trip limits are based on an adjusted commercial quota of 2.88 million lb (1.31 million kg). The adjusted commercial quota is calculated to allow continued harvest in the southern zone at a set rate for the remainder of the current fishing year, February 28, 2013, in accordance with 50 CFR 622.44(b)(2). Beginning December 1, annually, the trip limit is unlimited on weekdays and limited to 1,500 lb (680 kg) of Spanish mackerel per day on weekends. After 75 percent of the adjusted commercial quota of Atlantic migratory group Spanish mackerel is taken until 100 percent of the adjusted commercial quota is taken, Spanish mackerel in or from the EEZ in the southern zone may not be possessed on board or landed from a permitted vessel in amounts exceeding 1,500 lb (680 kg) per day.

NMFS has determined that 75 percent of the adjusted commercial quota for Atlantic group Spanish mackerel has been taken. Accordingly, the 1,500 lb (680 kg) per day commercial trip limit applies to Spanish mackerel in or from the EEZ in the southern zone effective 6 a.m., local time, January 6, 2013, until 12:01 a.m., local time, March 1, 2013, unless changed by subsequent notification in the Federal Register .

The Regional Administrator, Southeast Region, NMFS, has determined this temporary rule is necessary for the conservation and management of Atlantic migratory group Spanish mackerel and is consistent with the Magnuson-Stevens Act and other applicable laws.

This action is taken under 50 CFR 622.43(a) and is exempt from review under Executive Order 12866.

These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.

Pursuant to 5 U.S.C. 553(b)(B), the Assistant Administrator for Fisheries, NOAA, (AA), finds good cause to waive the requirements to provide prior notice and the opportunity for public comment on this temporary rule. Such procedures are unnecessary because the rule itself has already been subject to notice and comment, and all that remains is to notify the public of the trip limit reduction.

Allowing prior notice and opportunity for public comment is contrary to the public interest because of the need to immediately implement this action to protect the Atlantic migratory group Spanish mackerel resource because the capacity of the commercial fleet allows for rapid harvest of the quota. Prior notice and opportunity for public comment would require time and could potentially result in a harvest well in excess of the established quota.

For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in effectiveness of this action under 5 U.S.C. 553(d)(3).