Table of Contents I. Authority and Background II. Summary of the Notice of Proposed Rulemaking III. Discussion A. Description of AFUE Inflation Issues Associated with Omitting Cool-Down and Heat-Up Testing for Two-Stage and Modulating Condensing Furnaces and Boilers B. Options To Correct Existing Test Procedure 1. Suspend the Use of Section 9.10 for Two-Stage and Modulating Condensing Furnaces and Boilers 2. Develop Additional Equations to Correct Existing Test Procedure C. Results of Preliminary DOE Testing D. Proposed Corrective Action IV. Procedural Issues and Regulatory Review A. Review Under Executive Order 12866 B. Review Under the Regulatory Flexibility Act C. Review Under the Paperwork Reduction Act of 1995 D. Review Under the National Environmental Policy Act of 1969 E. Review Under Executive Order 13132 F. Review Under Executive Order 12988 G. Review Under the Unfunded Mandates Reform Act of 1995 H. Review Under the Treasury and General Government Appropriations Act, 1999 I. Review Under Executive Order 12630 J. Review Under Treasury and General Government Appropriations Act, 2001 K. Review Under Executive Order 13211 L. Review Under Section 32 of the Federal Energy Administration Act of 1974 V. Public Participation A. Attendance at Public Meeting B. Procedure for Submitting Requests To Speak and Prepared General Statements for Distribution C. Conduct of Public Meeting D. Submission of Comments E. Issues on Which DOE Seeks Comment VI. Approval of the Office of the Secretary I. Authority and Background

Title III, Part B  1 of the Energy Policy and Conservation Act of 1975 (“EPCA” or “the Act”), Public Law 94-163 (42 U.S.C. 6291-6309, as codified) sets forth a variety of provisions designed to improve energy efficiency and established the Energy Conservation Program for Consumer Products Other Than Automobiles. 2 These include residential furnaces and boilers, the subject of today's notice. (42 U.S.C. 6292(a)(5))  3

Under EPCA, this program consists essentially of four parts: (1) Testing; (2) labeling; (3) Federal energy conservation standards; and (4) certification and enforcement procedures. The testing requirements consist of test procedures that manufacturers of covered products must use as the basis for: (1) Certifying to DOE that their products comply with the applicable energy conservation standards adopted pursuant to EPCA, and (2) making representations about the efficiency of those products. (42 U.S.C. 6293(c); 42 U.S.C. 6295(s)) Similarly, DOE must use these test requirements when determining whether the products comply with any relevant standards promulgated under EPCA. (42 U.S.C. 6295(s))

Under 42 U.S.C. 6293, EPCA sets forth the criteria and procedures that DOE must follow when prescribing or amending test procedures for covered products. EPCA provides, in relevant part, that any test procedures prescribed or amended under this section must be reasonably designed to produce test results which measure energy efficiency, energy use, or estimated annual operating cost of a covered product during a representative average use cycle or period of use, and must not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3))

In addition, if DOE determines that a test procedure amendment is warranted, it must publish proposed test procedures and offer the public an opportunity to present oral and written comments on them. (42 U.S.C. 6293(b)(2)) Finally, DOE has tentatively concluded that any test procedure changes arising from this rulemaking would not impact existing energy conservation standards for residential furnaces and boilers, because such changes would simply allow for the generation of accurate information reflecting the energy efficiency of affected basic models, which are typically comfortably above the existing minimum standard level.

DOE's current energy conservation standards for residential furnaces and boilers are expressed as minimum annual fuel utilization efficiency (AFUE). AFUE is an annualized fuel efficiency metric that fully accounts for fuel consumption in active, standby, and off modes. The existing DOE test procedure for determining the AFUE of residential furnaces and boilers is located at 10 CFR part 430, subpart B, Appendix N, Uniform Test Method for Measuring the Energy Consumption of Furnaces and Boilers. The current DOE test procedure for residential furnaces and boilers was originally established by a final rule published in the Federal Register on May 12, 1997, and it incorporates by reference American National Standards Institute (ANSI)/American Society of Heating, Refrigerating, and Air-conditioning Engineers (ASHRAE) Standard 103-1993, Method of Testing for Annual Fuel Utilization Efficiency of Residential Central Furnaces and Boilers (ASHRAE 103-1993). 62 FR 26140, 26157 (incorporated by reference at 10 CFR 430.3(f)(9)). On October 14, 1997, DOE published an interim final rule in the Federal Register to revise a provision concerning the insulation of the flue collector box in order to ensure the updated test procedure would not affect the measured AFUE of existing furnaces and boilers. (62 FR 53508.) This interim final rule was subsequently adopted without change in a final rule published in the Federal Register on February 24, 1998. 63 FR 9390.

On October 20, 2010, DOE amended its test procedure for furnaces and boilers to establish a method for measuring the electrical energy use in standby mode and off mode for gas and oil-fired furnaces and boilers pursuant to requirements established by EISA 2007. 75 FR 64621. These test procedure amendments were primarily based on and incorporated by reference provisions of the International Electrotechnical Commission (IEC) Standard 62301 (First Edition), “Household electrical appliances—Measurement of standby power.” On December 31, 2012, DOE published a final rule in the Federal Register that updated the incorporation by reference of the standby mode and off mode test procedure provisions to refer to the latest edition of IEC Standard 62301 (Second Edition). 77 FR 76831.

On January 4, 2013, DOE published a request for information (RFI) in the Federal Register that requested comment and information on a variety of issues relating to the residential furnace and boiler AFUE test method. 78 FR 675. Key issues discussed in the RFI include avenues for reducing test burden and the addition of a performance test for automatic means of adjusting water temperature in hot water boilers.

In this notice of proposed rulemaking (NOPR), DOE proposes to modify the existing DOE testing procedures for residential furnaces and boilers to address an omission in the current test procedure regarding the calculation of AFUE for two-stage and modulating condensing furnaces and boilers that employ the optional procedure to skip the heat-up and cool-down tests, as described in section 9.10 (Optional Test Procedure for Condensing Furnaces and Boilers That Have No Off-Period Flue Losses) of ASHRAE 103-1993. Section 9.10 of ASHRAE 103-1993, which is incorporated by reference into the DOE test procedure for use at Appendix N to subpart B of 10 CFR part 430, allows certain condensing furnaces and boilers to omit the heat-up and cool-down tests provided that the model: (1) Has no measurable airflow through the combustion chamber and heat exchanger during the burner off-period, and (2) has post-purge period(s) of less than 5 seconds. Specifically, section 9.10 of ASHRAE 103-1993 reads as follows:

For single-stage condensing furnaces and boilers, section 11.3.11.3 of ASHRAE 103-1993 provides two separate equations to calculate the heating seasonal efficiency (which contributes to the ultimate calculation of AFUE). One equation is based on the results of the heat-up and cool-down tests described in sections 9.5 and 9.6 and is to be used if these tests were conducted, and the other equation is based on the results of the steady-state test described in section 9.1 and is to be used if these tests were not conducted and the option in section 9.10 was employed instead. Having two separate equations for this section adequately addresses the difference in the data collected depending on whether the option in section 9.10 is employed. Therefore, for single-stage condensing boilers and furnaces, the necessary equations are already present for the calculation of AFUE when the optional procedure described in section 9.10 is utilized.

However, for two-stage and modulating condensing furnaces and boilers, there are no corresponding equations provided in ASHRAE 103-1993 to calculate the heating seasonal efficiency (which contributes to the ultimate calculation of AFUE) if the option in section 9.10 is selected. The only equation provided in the test procedure to calculate the heating seasonal efficiency for two-stage and modulating condensing furnaces and boilers requires values for the part-load efficiencies, which are based on the results of the heat-up and cool-down tests. Therefore, if two-stage and modulating condensing furnaces or boilers were tested and the heat-up and cool-down tests were omitted in accordance with section 9.10, the part-load efficiencies, heating seasonal efficiency, and resulting AFUE would all be erroneous if calculated using the DOE test method. DOE is aware that many boiler manufacturers have utilized the optional section 9.10 provisions for two-stage and modulating condensing boilers, regardless of the fact that no equations exist in section 11.5.11 that would provide for the calculation of the part-load efficiencies for such equipment. In calculating the AFUE, manufacturers have used “0” for the temperatures that would be taken during the heat-up and cool-down tests. Research into this issue conducted by the Air-conditioning, Heating, and Refrigeration Institute (AHRI) revealed that AFUE values calculated for boilers using this approach are inflated from one to four percent above their true values. (AHRI, No. 1 at p. 6)

DOE has considered two options to correct this issue for two-stage and modulating condensing furnaces and boilers, including: (1) suspend the use of the option in section 9.10 and require heat-up and cool-down tests be performed; and (2) develop or adopt a new set of equations to address the use of the option in section 9.10.

DOE has tentatively determined that the best course of action is to proceed with adopting equations to address the use of the option in section 9.10. Accordingly, DOE is proposing in today's NOPR to amend the test procedure to include equations that would allow for the calculation of the part-load efficiencies at the maximum input rate and reduced input rates (and ultimately AFUE) of two-stage and modulating condensing furnaces and boilers when utilizing the option to skip the heat-up and cool-down tests, as provided under section 9.10 of ASHRAE 103-1993.

In any rulemaking to amend a test procedure, DOE must determine to what extent, if any, the proposed test procedure would alter the measured energy efficiency or measured energy use of any covered product as determined under the existing test procedure. (42 U.S.C. 6293(e)(1)) If DOE determines that the amended test procedure would alter the measured efficiency or measured energy use of a covered product, DOE must amend the applicable energy conservation standard accordingly. (42 U.S.C. 6293(e)(2))

The proposed test procedure amendments include a revised method for calculating the AFUE for two-stage and modulating condensing furnaces and boilers. While this change may lead to a revised AFUE rating for certain residential furnaces or boilers, DOE does not believe that the resulting changes in AFUE would require amending the applicable energy conservation standard or affect compliance with the standard by the models at issue here. As noted, the error applies only to two-stage and modulating condensing models, which test well above the current minimum standards. The current minimum energy conservation standards are based on AFUE ratings that correspond to non-condensing furnaces and boilers, and those values would not change as a result of today's proposal to remedy the omission of necessary equations pertaining to condensing models. DOE does not foresee that a model that would need to be re-rated using the equation proposed in today's notice would have a resulting AFUE below the minimum required efficiency.

Recent investigation by AHRI has demonstrated that the DOE test procedure erroneously omits an equation needed to calculate the AFUE rating of two-stage and modulating condensing furnaces or boilers that utilize an optional procedure allowing the tester to skip the heat-up and cool-down tests. This error carries through to the software commonly used in the heating industry to rate and verify the energy efficiency of residential furnaces and boilers, and, thus, the software produces an erroneously high energy efficiency rating for some types of product under certain conditions. DOE has since independently confirmed these findings.

The Federal test procedure for determining the energy efficiency of residential furnaces and boilers in Appendix N to Subpart B of 10 CFR part 430 is based largely upon ASHRAE 103-1993, which the DOE test procedure incorporates by reference. A product's energy efficiency rating is expressed in terms of AFUE, which is an estimate of the product's fuel consumption during the heating season when operating under a set of standard conditions. Energy lost during a product's transient heat-up and cool-down stages and during steady-state operation reduces the product's AFUE rating, which can be no higher than 100 percent.

ASHRAE 103-1993 requires consideration of several sources of energy loss when determining a product's energy efficiency rating. For non-weatherized residential boilers, which DOE requires be rated as indoor units (10 CFR part 430, subpart B, Appendix N, section 10.1 in the definition of Effy HS ), all energy loss is in the form of heat exhausted from the product's vent system. During the burner's on-cycle, losses consist of residual heat in the flue gases and flue gas condensate. During the burner off-cycle, losses include heat transferred from the product's heat exchanger to any air that moves through the heat exchanger when the combustion air fan is running to purge combustible gases from the boiler and/or naturally due to residual draft in the vent system. If the product draws combustion air from inside the heated space, losses also include the heat contained in the warm room air vented during the on-cycle and off-cycle ( i.e., infiltration loss). Since boilers are rated as indoor units, off-cycle infiltration losses can be significant, therefore most mid-efficiency boilers are equipped with vent dampers to minimize the loss of room air in the off cycle. Also, because boiler heat exchangers retain a significant amount of heat in the form of hot water, off-cycle sensible heat losses  4 can be significant.

In contrast to residential boilers, DOE requires that non-weatherized residential furnaces be rated as isolated combustion systems (ICS) (10 CFR 430, subpart B, Appendix N, section 10.1 in the definition of Effy HS ). This means that furnaces are assumed to draw all combustion air from outside the building. Since no indoor air is used for the combustion process, there is no efficiency penalty related to heating the unconditioned air which would infiltrate the house. Moreover, furnace heat exchangers have lower residual thermal mass than boiler heat exchangers, so off-cycle sensible losses are less significant.

Off-cycle infiltration and sensible heat losses are quantified by the heat-up and cool-down tests contained in ASHRAE 103-1993. In these tests, the test engineer measures the temperature and mass flow of the vent gases as the flue gases rise to steady-state temperature and after the burner is turned off. However, the test engineer is allowed to omit the heat-up and cool-down tests for condensing furnaces and boilers that are “units designed with no measurable airflow through the combustion chamber and heat exchanger during the burner off-period and having post-purge periods of less than 5 seconds.” (See ASHRAE 103-1993, section 9.10, “Optional Test Procedures for Condensing Furnaces and Boilers That Have No Off-Period Flue Losses.”) Since air movement through the heat exchanger in the off-cycle is responsible for any off-cycle AFUE penalties for boilers, when no air can flow through the heat exchanger in the off-cycle, there is no AFUE penalty to be calculated. Thus, ASHRAE 103-1993 reasonably disregards infiltration and sensible heat losses in the off-cycle for condensing products when air cannot flow through the heat exchanger by allowing the manufacturer the option to omit the heat-up and cool-down tests. This reduces the testing burden and would have a negligible effect on a product's AFUE rating.

At the present time, the judgment of whether a unit is designed with no measurable off-cycle airflow typically has been determined at the discretion of the testing engineer and/or the manufacturer who is responsible for testing. DOE plans to investigate objective methods for determining whether units have no measurable off-cycle airflow in a separate, ongoing test procedure rulemaking for furnaces and boilers. 5 Should the test engineer elect to omit the heat-up and cool-down tests, ASHRAE 103-1993 provides an alternate calculation that omits the results of those tests for single-stage condensing products (section 11.3.11.3). However, the alternate calculation applies only to products having a single firing rate—there is no counterpart in section 11.5.11 for two-stage and modulating condensing products. Thus, ASHRAE 103-1993 and the Federal test procedure do not provide a method of calculating AFUE for two-stage and modulating condensing products when the heat-up and cool-down tests are omitted, even though the test procedure explicitly provides for such an option. This ambiguity has worked its way into the AFUE calculation software  6 commonly employed by industry in testing and rating residential furnaces and boilers. The software was originally developed by the National Institute of Science and Technology (NIST), before being reprogrammed for use with Microsoft Windows and offered for sale by the Gas Appliance Manufacturers Association (GAMA), which is now AHRI. AHRI is the trade association for manufacturers of heating equipment, and it also administers an industry energy efficiency verification program.

As noted above, when calculating the AFUE of a product for which the heat-up and cool-down tests have been omitted, test engineers have been substituting 0 °F for various temperatures ordinarily measured during the omitted tests. For single-stage condensing equipment, these zeros trigger the AFUE calculator to use the correct alternate equation. However, for two-stage and modulating condensing equipment, the AFUE calculator erroneously uses those zeros in the ordinary efficiency calculation as if the heat-up and cool-down tests were actually performed. The calculated results indicate that the boiler seems to be recovering heat during heat-up and cool-down instead of losing it, which inflates its AFUE rating, and according to AHRI, the error results in the over-rating of AFUE in two-stage and modulating condensing products by one to four percent. (AHRI, No. 1 at p. 6) The error applies to any two-stage or modulating condensing product for which the heat-up and cool-down tests have been omitted. Based on assertions from AHRI, such over-rating appears to be common for high-efficiency condensing boilers and no other product type. (AHRI, No. 1 at p. 2)

In considering how to address the omitted calculation for two-stage and modulating condensing furnaces and boilers, DOE considered two potential options: (1) Suspending the use of section 9.10 for those models; and (2) developing or adopting a new set of equations to address the use of the option in section 9.10 with those models. Each of these potential options is discussed in detail below.

The existing DOE test procedure currently does not provide the necessary equations to accommodate the use of the option in section 9.10 of ASHRAE 103-1993 for two-stage and modulating condensing equipment in the calculations provided in section 11.5.11. If DOE were simply to suspend the use of section 9.10 for two-stage and modulating products, manufacturers and test engineers would need to conduct heat-up and cool-down tests for all two-stage and modulating furnaces and boilers, both condensing and non-condensing.

DOE considered this option as a straightforward approach that could be implemented quickly, would eliminate confusion, and would resolve this issue. Requiring the heat-up and cool-down tests would also ensure more accurate AFUE ratings than those developed using the optional method in section 9.10. However, this approach would also increase test burden on manufacturers and industry. Not only would this be an issue for manufacturers rating equipment efficiency in the future, but initially, it would require a significant amount of re-rating of existing equipment through additional testing, which could significantly burden test labs. Upon considering these concerns and the potential alternatives discussed later in this section, DOE has tentatively decided not to pursue this option.

ASHRAE 103-1993 lacks equations for determining heating seasonal efficiency for two-stage and modulating condensing furnace and boiler products when the heat-up and cool-down tests are omitted. For single-stage equipment, when the heat-up and cool-down tests are omitted, an alternate equation is provided in which cyclic sensible and infiltration loss factors are replaced with the steady-state sensible heat loss factor, corrected for outdoor air temperature if applicable. More specifically, in section 11.3.11.3, “Heating Seasonal Efficiency,” the alternate equation substitutes the steady-state sensible heat loss adjusted for outdoor air temperature when applicable, in place of the sum of the sensible and infiltration heat losses during the on and off cycles.

If the option in section 9.10 of ASHRAE 103-1993 is not employed:

If the option in section 9.10 of ASHRAE 103-1993 is employed:

So, under the option in section 9.10 of ASHRAE 103-1993, ( C S )( L S,SS ) is substituted for ( L S,ON + L S,OFF + L I,ON + L I,OFF ).

This concept of replacing cyclic infiltration and sensible heat losses with steady-state infiltration and sensible heat losses also applies when dealing with two-stage and modulating condensing furnaces and boilers. DOE proposes the following equations for use in testing two-stage and modulating condensing furnaces and boilers when employing the option in section 9.10 of ASHRAE 103-1993:

In its investigation of the issue, AHRI developed identical equations to accommodate the option of omitting the heat-up and cool-down tests, as they pertain to two-stage and modulating condensing furnaces and boilers. (AHRI, No. 2 at p. 1)

DOE conducted testing on two modulating condensing residential boilers to validate the equations discussed above. The test results showed that the AFUEs calculated by omitting the heat-up and cool-down tests and using of the equations discussed in section III.B.2 were within 0.04 percent AFUE of the AFUE determined using the heat-up and cool-down tests. Tables III.1 and III.2 show the results of the testing and various intermediate values for the two boilers, labeled boilers “A” and “B.”

As shown in the tables above, the difference between the AFUE values calculated using section 9.10 of ASHRAE 103-1993 with the proposed equations and the AFUE values calculated using the heat-up and cool-down tests is 0.03 percent AFUE for boiler “A” and 0.04 percent AFUE for boiler “B.” DOE believes that the difference between the two calculation methods is small enough that the AFUE values using the new equations are representative of the actual performance of the models. Thus, the resulting values are an accurate representation of the product's energy efficiency for consumer information purposes and would result in minimal additional test burden.

DOE is proposing to amend the DOE test procedure for residential furnaces and boilers in Appendix N to subpart B of 10 CFR part 430 by adopting the alternate equations that were developed by DOE and also independently proposed by AHRI, as described in section III.B.2 above.

The Office of Management and Budget has determined that test procedure rulemakings do not constitute “significant regulatory actions” under section 3(f) of Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (Oct. 4, 1993). Accordingly, this regulatory action was not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).

The Regulatory Flexibility Act (“Act”) (5 U.S.C. 601 et seq., as amended) requires preparation of an initial regulatory flexibility analysis (IFRA) for any rule that by law must be proposed for public comment and a final regulatory flexibility analysis (FRFA) for any such rule that an agency adopts as a final rule, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. A regulatory flexibility analysis amines the impact of the rule on small entities and considers alternative ways of reducing negative effects. Also, as required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the DOE rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's Web site: http://energy.gov/gc/office-general-counsel.

DOE reviewed today's proposed rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. DOE has concluded that the rule would not have a significant impact on a substantial number of small entities. The factual basis for this certification is as follows:

For manufacturers of residential furnaces and boilers, the Small Business Administration (SBA) has set a size threshold, which defines those entities classified as “small businesses” for the purposes of the Act. DOE used the SBA's small business size standards to determine whether any small entities would be subject to the requirements of the rule. 13 CFR part 121. These size standards and codes are established by the North American Industry Classification System (NAICS) and are available at http://www.sba.gov/sites/default/files/files/Size_Standards_Table(1).pdf . Residential boiler manufacturing is classified under NAICS 333414, “Heating equipment (except warm air furnaces) manufacturing,” for which the size threshold is 500 employees. Residential furnace manufacturing is classified under NAICS 333415, “Air-conditioning and warm air heating equipment and commercial and industrial refrigeration equipment manufacturing” for which the size threshold is 750 employees. DOE surveyed the AHRI certification directories for furnaces and boilers, as well as the SBA database and market research tools ( e.g., Hoovers  7 ), to identify manufacturers of residential furnaces and boilers. DOE then consulted publically-available data or contacted companies, as necessary, to determine if they meet the SBA's definition of a “small business” manufacturer, and have their manufacturing facilities located within the United States. Based on this analysis, DOE identified 11 small businesses that manufacture residential furnaces, and 14 small businesses that manufacture residential boilers (one of which also manufactures residential furnaces), for a total of 24 small businesses potentially impacted by this rulemaking.

Today's notice of proposed rulemaking would amend DOE's test procedure by incorporating additional equations to account for the use of section 9.10 of ASHRAE 103-1993 (the relevant industry standard incorporated by reference) for two-stage and modulating condensing furnaces and boilers. As explained earlier in this notice, section 9.10 permits a manufacturer of condensing furnaces and boilers the option of omitting the specified heat-up and cool-down tests if the model has no measurable airflow through the combustion chamber and heat exchanger during the burner off period and has post-purge period(s) of less than 5 seconds. However, under the current DOE test procedure, the equations needed to use section 9.10 do not exist for two-stage and modulating condensing models, and, thus, DOE assumes that manufacturers are currently conducting the heat-up and cool-down tests in order to properly rate the performance of their two-stage and modulating condensing furnaces and boilers. Therefore, DOE believes the equations proposed for adoption today would lessen manufacturer burden in comparison to application of the current test procedure. To the extent that any manufacturers have applied the option in section 9.10, even in absence of the equations needed to use that section, to rate the AFUE of their two-stage and modulating condensing furnace and boiler models, those manufacturers would be required to re-rate their models using either today's proposed equations, if adopted in a final rule, or by conducting the heat-up and cool-down tests. The estimated costs of re-rating using the proposed equations is discussed below, along with the estimated costs of conducting the heat-up and cool-down tests.

DOE believes that manufacturers are likely to choose one of two approaches to use the proposed equations to recalculate the efficiency of two-stage and modulating condensing models for which section 9.10 has been employed: (1) Manufacturers may recalculate the efficiency for each model individually by doing the calculations manually; or (2) manufacturers may update the AFUE calculation computer program to account for the new equations.

DOE estimates that recalculating the AFUE manually using the new equation would take between 30 minutes and 1 hour per basic model. At an hourly rate of $60 for a test lab technician, DOE believes that each model that is re-rated in this manner would cost approximately $30 to $60.

Alternatively, an individual manufacturer may decide to reprogram its software for calculating AFUE to account for the new equation. DOE estimates that a programmer would need between 16 and 40 hours to rewrite the program code to account for this new equation. At an hourly rate of $80 for a programmer, the resulting cost would be a one-time expenditure of $1280 to $3200 to update the automatic AFUE calculation program. DOE notes that given the role AHRI has traditionally played and the potential for cost savings for AHRI members AHRI may decide to reprogram its software, In this case, the effort required to recalculate AFUE for individual manufacturers, would be much less than the cost AHRI would incur to modify the program, as described in the following paragraph.

DOE notes that at the time of this publication, the AHRI certification directories for residential furnaces and boilers contain a combined total of over 1800 active condensing models for which recalculation could potentially be required, although only a fraction of the total condensing models would be two-stage and modulating products which might need to be re-rated using the new equations. Further, DOE notes that AHRI required member manufacturers of condensing two-stage or condensing modulating boilers to either: (1) Re-rate their products at 90 percent AFUE; (2) discontinue the model; or (3) substantiate the model's efficiency rating by providing data from the heat up and cool down tests. (AHRI, No. 1 at p. 2) DOE examined the number of models in the AHRI certified directory for boilers that are rated at 90 percent AFUE (the majority of which are likely to be re-rated models that used option 9.10) and found that there are 210 models rated at 90 percent AFUE. If all of these models were to be re-rated through the use of the updated computer program, the per-model cost would be $6 to $15.

In comparison to re-rating product efficiency using the proposed equations, DOE estimates that conducting the heat-up and cool-down tests generally requires 2 hours combined for two-stage and modulating condensing products. In contrast, at $60 per hour for a lab technician, the cost to perform the heat-up and cool-down tests is approximately $120 per model.

When considering the costs discussed above, DOE believes they are small relative to the overall cost of manufacturing, testing, and certifying residential furnace and boiler products. DOE seeks comment on its conclusion. For the reasons stated above, DOE certifies that the proposed rule, if promulgated, would not have a significant economic impact on a substantial number of small entities. Therefore, DOE did not prepare an initial regulatory flexibility analysis for the proposed rule. DOE will transmit its certification and a supporting statement of factual basis to the Chief Counsel for Advocacy of the SBA for review pursuant to 5 U.S.C. 605(b).

Manufacturers of residential furnaces and boilers must certify to DOE that their products comply with all applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedures for residential furnaces and boilers, including any amendments adopted for those test procedures on the date that compliance is required. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including residential furnaces and boilers. 76 FR 12422 (March 7, 2011). The collection-of-information requirement for certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (PRA). This requirement has been approved by OMB under OMB control number 1910-1400. Public reporting burden for the certification is estimated to average 20 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

In this proposed rule, DOE proposes test procedure amendments that it expects will be used to develop and implement future energy conservation standards for residential furnaces and boilers. DOE has determined that this rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ) and DOE's implementing regulations at 10 CFR part 1021. Specifically, this proposed rule would amend the existing test procedures without affecting the amount, quality, or distribution of energy usage, and, therefore, would not result in any environmental impacts. Thus, this rulemaking is covered by Categorical Exclusion A5 under 10 CFR part 1021, subpart D, which applies to any rulemaking that interprets or amends an existing rule without changing the environmental effect of that rule. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” 64 FR 43255 (August 10, 1999) imposes certain requirements on Federal agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States, and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this proposed rule and has tentatively determined that it would not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of today's proposed rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) No further action is required by Executive Order 13132.

Regarding the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (Feb. 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. Regarding the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and tentatively determined that, to the extent permitted by law, the proposed rule meets the relevant standards of Executive Order 12988.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For regulatory actions likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. (This policy is also available at http://energy.gov/gc/office-general-counsel. ) DOE examined today's proposed rule according to UMRA and its statement of policy and has tentatively determined that the rule contains neither an intergovernmental mandate, nor a mandate that may result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year. Accordingly, no further assessment or analysis is required under UMRA.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. This rule would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

Pursuant to Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 18, 1988), DOE has determined that this proposed rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.

Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for Federal agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed today's proposed rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OIRA at OMB, a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.

Today's regulatory action to amend the test procedure for measuring the energy efficiency of residential furnaces and boilers is not a significant regulatory action under Executive Order 12866 or any successor order. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects for this rulemaking.

Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101 et seq. ), DOE must comply with all laws applicable to the former Federal Energy Administration, including section 32 of the Federal Energy Administration Act of 1974 (Pub. L. 93-275), as amended by the Federal Energy Administration Authorization Act of 1977 (Pub. L. 95-70). (15 U.S.C. 788; FEAA) Section 32 essentially provides in relevant part that, where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Chairman of the Federal Trade Commission (FTC) concerning the impact of the commercial or industry standards on competition.

Today's proposed rule incorporates testing methods contained in the following commercial standard: ASHRAE 103-1993 (Method of Testing for Annual Fuel Utilization Efficiency of Residential Central Furnaces and Boilers). Today's NOPR proposes to continue the use of ASHRAE 103-1993 as the basis for the DOE test procedure, albeit with changes to certain equations. The Department has evaluated this standard and is unable to conclude whether it fully complies with the requirements of section 32(b) of the FEAA, ( i.e., that it was developed in a manner that fully provides for public participation, comment, and review). DOE will consult with the Attorney General and the Chairman of the FTC concerning the impact on competition of requiring manufacturers to use the test methods contained in this standard prior to prescribing a final rule.

The time, date and location of the public meeting are listed in the DATES and ADDRESSES sections at the beginning of this document. If you plan to attend the public meeting, please notify Ms. Brenda Edwards at (202) 586-2945 or Brenda.Edwards@ee.doe.gov. As explained in the ADDRESSES section, foreign nationals visiting DOE Headquarters are subject to advance security screening procedures. Any foreign national wishing to participate in the meeting should advise DOE of this fact as soon as possible by contacting Ms. Brenda Edwards to initiate the necessary procedures.

In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants will be published on DOE's Web site at: http://www1.eere.energy.gov/buildings/appliance_standards/product.aspx/productid/72. Participants are responsible for ensuring their systems are compatible with the webinar software.

Any person who has an interest in the topics addressed in this notice, or who is representative of a group or class of persons that has an interest in these issues, may request an opportunity to make an oral presentation at the public meeting. Such persons may hand-deliver requests to speak to the address show in the ADDRESSES section at the beginning of this notice between 9:00 a.m. and 4:00 p.m., Monday through Friday, except Federal holidays. Requests may also be sent by mail or email to Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Program, Mailstop EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-0121, or Brenda.Edwards@ee.doe.gov. Persons who wish to speak should include in their request a computer diskette or CD-ROM in WordPerfect, Microsoft Word, PDF, or text (ASCII) file format that briefly describes the nature of their interest in this rulemaking and the topics they wish to discuss. Such persons should also provide a daytime telephone number where they can be reached.

DOE requests persons selected to make an oral presentation to submit an advance copy of their statements at least one week before the public meeting. DOE may permit persons who cannot supply an advance copy of their statement to participate, if those persons have made advance alternative arrangements with the Building Technologies Program. As necessary, request to give an oral presentation should ask for such alternative arrangements.

Any person who has plans to present a prepared general statement may request that copies of his or her statement be made available at the public meeting. Such persons may submit requests, along with an advance electronic copy of their statement in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format, to the appropriate address shown in the ADDRESSES section at the beginning of this notice. The request and advance copy of statements must be received at least one week before the public meeting and may be emailed, hand-delivered, or sent by mail. DOE prefers to receive requests and advance copies via email. Please include a telephone number to enable DOE staff to make follow-up contact, if needed.

DOE will designate a DOE official to preside at the public meeting and may also use a professional facilitator to aid discussion. The meeting will not be a judicial or evidentiary-type public hearing, but DOE will conduct it in accordance with section 336 of EPCA (42 U.S.C. 6306). A court reporter will be present to record the proceedings and prepare a transcript. DOE reserves the right to schedule the order of presentations and to establish the procedures governing the conduct of the public meeting. There shall not be discussion of proprietary information, costs or prices, market share, or other commercial matters regulated by U.S. anti-trust laws. After the public meeting, interested parties may submit further comments on the proceedings, as well as on any aspect of the rulemaking, until the end of the comment period.

The public meeting will be conducted in an informal, conference style. DOE will present summaries of comments received before the public meeting, allow time for prepared general statements by participants, and encourage all interested parties to share their views on issues affecting this rulemaking. Each participant will be allowed to make a general statement (within time limits determined by DOE), before the discussion of specific topics. DOE will allow, as time permits, other participants to comment briefly on any general statements.

At the end of all prepared statements on a topic, DOE will permit participants to clarify their statements briefly and comment on statements made by others. Participants should be prepared to answer questions by DOE and by other participants concerning these issues. DOE representatives may also ask questions of participants concerning other matters relevant to this rulemaking. The official conducting the public meeting will accept additional comments or questions from those attending, as time permits. The presiding official will announce any further procedural rules or modification of the above procedures that may be needed for the proper conduct of the public meeting.

A transcript of the public meeting will be included in the docket, which can be viewed as described in the Docket section at the beginning of this notice, and will be accessible on the DOE Web site. In addition, any person may buy a copy of the transcript from the transcribing reporter.

DOE will accept comments, data, and information regarding this proposed rule before or after the public meeting, but no later than the date provided in the DATES section at the beginning of this proposed rule. Interested parties may submit comments using any of the methods described in the ADDRESSES section at the beginning of this notice.

Submitting comments via regulations.gov. The www.regulations.gov web page will require you to provide your name and contact information. Your contact information will be viewable to DOE Building Technologies staff only. Your contact information will not be publicly viewable except for your first and last names, organization name (if any), and submitter representative name (if any). If your comment is not processed properly because of technical difficulties, DOE will use this information to contact you. If DOE cannot read your comment due to technical difficulties and cannot contact you for clarification, DOE may not be able to consider your comment.

However, your contact information will be publicly viewable if you include it in the comment itself or in any documents attached to your comment. Any information that you do not want to be publicly viewable should not be included in your comment, nor in any document attached to your comment. Otherwise, persons viewing comments will see only first and last names, organization names, correspondence containing comments, and any documents submitted with the comments.

Do not submit to www.regulations.gov information for which disclosure is restricted by statute, such as trade secrets and commercial or financial information (hereinafter referred to as Confidential Business Information (CBI)). Comments submitted through www.regulations.gov cannot be claimed as CBI. Comments received through the Web site will waive any CBI claims for the information submitted. For information on submitting CBI, see the Confidential Business Information section.

DOE processes submissions made through www.regulations.gov before posting. Normally, comments will be posted within a few days of being submitted. However, if large volumes of comments are being processed simultaneously, your comment may not be viewable for up to several weeks. Please keep the comment tracking number that www.regulations.gov provides after you have successfully uploaded your comment.

Submitting comments via email, hand delivery/courier, or mail. Comments and documents submitted via email, hand delivery/courier, or mail also will be posted to www.regulations.gov . If you do not want your personal contact information to be publicly viewable, do not include it in your comment or any accompanying documents. Instead, provide your contact information on a cover letter. Include your first and last names, email address, telephone number, and optional mailing address. The cover letter will not be publicly viewable as long as it does not include any comments.

Include contact information each time you submit comments, data, documents, and other information to DOE. If you submit via mail or hand delivery/courier, please provide all items on a CD, if feasible, in which case it is not necessary to submit printed copies. No telefacsimiles (faxes) will be accepted.

Comments, data, and other information submitted to DOE electronically should be provided in PDF (preferred), Microsoft Word or Excel, WordPerfect, or text (ASCII) file format. Provide documents that are not secured, written in English, and are free of any defects or viruses. Documents should not contain special characters or any form of encryption and, if possible, they should carry the electronic signature of the author.

Campaign form letters. Please submit campaign form letters by the originating organization in batches of between 50 to 500 form letters per PDF or as one form letter with a list of supporters' names compiled into one or more PDFs. This reduces comment processing and posting time.

Confidential Business Information. Pursuant to 10 CFR 1004.11, any person submitting information that he or she believes to be confidential and exempt by law from public disclosure should submit via email, postal mail, or hand delivery/courier two well-marked copies: one copy of the document marked “confidential” including all the information believed to be confidential, and one copy of the document marked “non-confidential” with the information believed to be confidential deleted. Submit these documents via email or on a CD, if feasible. DOE will make its own determination about the confidential status of the information and treat it according to its determination.

Factors of interest to DOE when evaluating requests to treat submitted information as confidential include: (1) A description of the items; (2) whether and why such items are customarily treated as confidential within the industry; (3) whether the information is generally known by or available from other sources; (4) whether the information has previously been made available to others without obligation concerning its confidentiality; (5) an explanation of the competitive injury to the submitting person which would result from public disclosure; (6) when such information might lose its confidential character due to the passage of time; and (7) why disclosure of the information would be contrary to the public interest.

It is DOE's policy that all comments may be included in the public docket, without change and as received, including any personal information provided in the comments (except information deemed to be exempt from public disclosure).

Although DOE welcomes comments on any aspect of this proposal, DOE is particularly interested in receiving comments and views of interested parties concerning the following issues:

1. The proposed equations for determining the heating seasonal efficiency (which contributes to the ultimate calculation of AFUE) of two-stage and modulating condensing furnaces and boilers that are tested under option 9.10 of ASHRAE 103-1993.

2. DOE's conclusion that the costs of complying with the proposed test procedure changes are small relative to the overall cost of manufacturing, testing, and certifying residential furnace and boiler products, along with any additional information regarding average annual revenues for manufacturers of these products.

The Secretary of Energy has approved publication of today's notice of proposed rulemaking.

For the reasons stated in the preamble, DOE is proposing to amend part 430 of Chapter II, subchapter D of Title 10, Code of Federal Regulations as set forth below:

The revisions and additions read as follows:

We last published final rules making comprehensive revisions to genitourinary body system listings on July 5, 2005. 1 These listings are scheduled to expire on September 6, 2013. 2 We published an ANPRM on November 10, 2009, in which we invited interested people and organizations to send us written comments and suggestions about whether and how we should revise these listings. 3 We are now proposing to update the medical criteria in the listings to reflect our program experience and to address adjudicator questions and public comments that we have received since 2005.

We propose to:

• Revise the name of the body system from “Genitourinary Impairments” to “Genitourinary Disorders”;

• Reorganize and revise the introductory text for the adult listings (section 6.00) and the childhood listings (section 106.00);

• Reorganize, revise, and rename adult listing 6.02 and childhood listing 106.02 for impairment of renal function;

• Add a listing criterion for evaluating chronic kidney disease (CKD), with impairment of kidney function, in adults (6.05) and in children (106.05);

• Reorganize and revise adult listing 6.06 and childhood listing 106.06 for nephrotic syndrome;

• Add an adult listing (6.09) for evaluating complications of CKD requiring hospitalizations; and

• Reorganize and revise childhood listing 106.07 for congenital genitourinary disorders.

We propose to change the name of this body system from “Genitourinary Impairments” to “Genitourinary Disorders” to make it consistent with our names for other body systems. We have re-named other body systems to include the word “disorders” as we revise them, and the name change we are proposing in this NPRM is consistent with that approach.

The following chart provides a comparison of the current introductory text for adults and the proposed introductory text:

As the chart illustrates, we are proposing to make minor revisions to terms in the introductory text (for example, changing the word “impairment” to “disorder,” where appropriate) and to reorganize the information in the text. We propose to replace the word “renal” with “kidney” throughout the introductory text because the medical community commonly uses the word “kidney.” The only exception to this proposal is that we would retain the term “renal osteodystrophy” because it remains a common term in the medical community.

Proposed section 6.00A corresponds to current section 6.00A and explains the disorders we evaluate under the genitourinary disorders listings.

We propose to remove current 6.00B that lists definitions because we would provide a definition, as appropriate, when we first use a term in the introductory text.

Proposed section 6.00B corresponds in part to current 6.00C and explains the evidence we need to evaluate a person's CKD. We propose to revise the text to remove redundancies and to add a description of estimated glomerular filtration rate (eGFR).

Proposed section 6.00C corresponds to part of current sections 6.00C and 6.00E. We propose to revise the text to remove redundancies and add guidance on anorexia with weight loss and on complications of CKD requiring hospitalizations.

We propose to remove current 6.00D because that section's guidance is not specific to evaluating genitourinary disorders. Only one listing, proposed 6.06, would require the presence of a particular medical finding despite treatment. We do not propose to evaluate a person's response to treatment under any other listings in this section.

We propose to remove current 6.00F because we would no longer use the term “persistent” in these listings. Instead, we would provide specific parameters for determining whether an impairment meets the duration requirement.

Proposed section 6.00D corresponds to current section 6.00G. We propose to make minor editorial changes to the way that we cite regulations in the current section by removing the paragraph levels of the citations to shorten them.

The following chart provides a comparison of the current listings for adults and the proposed listings:

We propose to revise current listing 6.02 by making each of the three criteria a separate listing. We believe that this revision would improve our ability to monitor claims involving CKD. It would also improve our ability to schedule continuing disability reviews because the timing of these reviews is different for each of the three criteria. We also propose to replace the term “impairment of renal function” in the listing title with “chronic kidney disease.”

Proposed listing 6.03 and 6.04 correspond to current listings 6.02A and 6.02B, respectively. We are not proposing any changes to the current criteria.

Proposed listing 6.05 corresponds to current listing 6.02C. We propose to restructure the listing to clarify the requirements in the current listing.

We propose to add a criterion to proposed listing 6.05A3 for estimated glomerular filtration rate (eGFR). The glomerular filtration rate (GFR) is the best overall measure of kidney function; however, it is difficult to measure directly. Most clinicians who treat CKD use the eGFR instead of the GFR to determine the severity of a person's CKD and to make decisions about the course of treatment. The eGFR values will likely be readily available in the medical records for people with CKD.

We would replace the criterion for “[p]ersistent motor or sensory neuropathy” in current 6.02C2 with “[p]eripheral neuropathy” in proposed 6.05B2. People with CKD develop neuropathy at a later stage of the disease than they once did because of advances in CKD treatment. We do not need to replace “persistent” with a criterion based on a defined period of time because when neuropathy develops at a later stage of CKD, it is invariably persistent.

We would replace the criterion for “[p]ersistent” in current 6.02C3 with a criterion based on a defined period of time to evaluate hypertension (proposed 6.05B3a), vascular congestion (proposed 6.05B3b), and anorexia (proposed 6.05B4).

Proposed listing 6.06 for nephrotic syndrome corresponds to current listing 6.06. We propose to restructure the listing to clarify the requirements in the current listing. We would add a criterion for the urine total-protein-to-creatinine ratio (a laboratory calculation based on total protein and creatinine in a urine sample). This ratio is an alternative to the 24-hour measurement in 6.06A2a and is widely used in the clinical community to monitor proteinuria.

We propose to add listing 6.09 to evaluate complications of CKD that require periodic hospitalization. We would require a person to have at least three hospitalizations occurring at least 30 days apart to ensure that we are evaluating separate complication events. Each hospitalization must last at least 48 hours, including hours in a hospital emergency department immediately before the hospitalization. We would require that each hospitalization last at least 48 hours because we believe this period is indicative of a severe complication of CKD. We would include the hours the person spends in the emergency department immediately before hospital admission because the person is likely to be receiving the same intensity of care as he or she will receive in the hospital. We would also require that these three hospitalizations occur within a consecutive 12-month period, consistent with our rules in other body systems.

The following chart provides a comparison of the current introductory text for children and the proposed introductory text:

A. Instructions for Submitting Comments

EPA's policy is to include all comments received in the public docket without change. We may make comments available online at http://www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be CBI or other information for which disclosure is restricted by statute. Do not submit information that you consider to be CBI or that is otherwise protected through http://www.regulations.gov or email. The http://www.regulations.gov web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to EPA, without going through http://www.regulations.gov, we will include your email address as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should not include special characters or any form of encryption, and be free of any defects or viruses.

The proposed rule published on December 21, 2012, relies on documents, information and data that are listed in the index on http://www.regulations.gov under docket number EPA-R09-OAR-2012-0904. Although listed in the index, some information is not publicly available (e.g., Confidential Business Information (CBI)). Certain other material, such as copyrighted material, is publicly available only in hard copy form. Publicly available docket materials are available either electronically at http://www.regulations.gov or in hard copy at the Planning Office of the Air Division, AIR-2, EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105. EPA requests that you contact the individual listed in the FOR FURTHER INFORMATION CONTACT section to view the hard copy of the docket. You may view the hard copy of the docket Monday through Friday, 9-5:00 PST, excluding Federal holidays.

Do not submit CBI to EPA through http://www.regulations.gov or email. Clearly mark the part or all of the information that you claim as CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, you must submit a copy of the comment that does not contain the information claimed as CBI for inclusion in the public docket. We will not disclose information so marked except in accordance with procedures set forth in 40 CFR part 2.

When submitting comments, remember to:

• Identify the rulemaking by docket number and other identifying information (e.g., subject heading, Federal Register date and page number).

• Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

• Describe any assumptions and provide any technical information and/or data that you used.

• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

• Make sure to submit your comments by the identified comment period deadline.

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

Table 1 lists the rules we are approving with the dates that they were adopted by the local air agency and submitted by the California Air Resources Board (CARB).

On October 24, 2011 and October 24, 2006, EPA determined that the submittals for SCAQMD Rules 1150.1 and 1127, respectively, met the completeness criteria in 40 CFR part 51 Appendix V, which must be met before formal EPA review.

We approved an earlier version of Rule 1150.1 into the SIP on July 1, 2002 (67 FR 44062). SCAQMD adopted revisions to the SIP-approved version on April 1, 2011 and CARB submitted them to us on September 27, 2011.

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. EPA's technical support documents (TSD) have more information about these rules.

SCAQMD Rule 1150.1, “Control of Gaseous Emissions from Municipal Solid Waste Landfills,” is an amended rule that regulates landfill gas emissions. The submitted rule applies to both active and inactive municipal solid waste (MSW) landfills and defines an active MSW landfill as one that has received solid waste on or after November 8, 1987.

The two previous versions of Rule 1150.1 (April 10, 1998 and March 10, 2000) focused on controlling VOC emissions, as well as toxic air contaminant (TAC) emissions. SCAQMD's intent was to reduce the contribution of these pollutants to atmospheric ozone, avoid public nuisance complaints from odorous compounds, and prevent the detriment to public health caused by such emissions.

Increased focus on controlling greenhouse gases (GHGs) led to the enactment by the California Legislature of Assembly Bill 32 (AB 32), the Global Warming Solutions Act of 2006. SCAQMD's primary purpose for revising Rule 1150.1 is to incorporate provisions to achieve equivalency with an AB 32 early action measure, the Landfill Methane Regulation (California Code of Regulations, Title 17, Sections 95460 to 95476). We note that the revisions to Rule 1150.1 also enhance the regulation of VOCs by improving the rule's overall enforceability through clarifications of standards for already-required controls and the streamlining of duplicative recordkeeping and reporting requirements.

SCAQMD Rule 1127 was adopted on August 6, 2004. The purpose of the rule is to reduce emissions of ammonia, VOC and particulate matter under 10 microns (PM 10 ) from dairies. Applicable operations include dairies, heifer, and calf farms within the SCAQMD's jurisdiction. It also applies to manure processing operations, such as composting operations and anaerobic digesters.

Rule 1127 was designed to implement the 2003 Air Quality Management Plan (AQMP) control measure, WST-01, and establish Best Available Control Measure (BACM) requirements for dairies pursuant to Senate Bill (SB) 700 (Florez) signed by California governor Gray Davis on September 22, 2003. SB 700 required applicable non-attainment areas to remove exemptions for certain agricultural operations from permitting requirements. EPA is evaluating the rule provisions for conformance with reasonable available control technology (RACT) requirements pursuant to Clean Air Act (CAA) Section 182(b)(2).

Generally, SIP rules must be enforceable (see section 110(a) of the Act), must require 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). SCAQMD regulates an ozone nonattainment area (see 40 CFR part 81), so Rules 1150.1 and 1127 must fulfill RACT.

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

1. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook).

2. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

We believe these rules are consistent with the relevant policy and guidance regarding enforceability, RACT and SIP relaxations. The revisions to Rule 1150.1 strengthen the rule by improving enforceability and streamlining duplicative requirements. Rule 1127 meets the RACT criteria by implementing control technology that is reasonably available, considering technological and economic feasibility. The TSDs have more information on our evaluation.

EPA has no recommendation to further improve Rule 1150.1. We do have recommendations to improve Rule 1127 which are detailed in the TSD.

Because EPA believes the submitted rules fulfill all relevant requirements, we are proposing to fully approve them as described in section 110(k)(3) of the Act. We will accept comments from the public on this proposal for the next 30 days. Unless we receive convincing new information during the comment period, we intend to publish a final approval action that will incorporate these rules into the federally enforceable 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 (Public Law 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 April 5, 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. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the Proposed Rules section of today's Federal Register , rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

EPA is proposing to take the following two separate but related actions, one of which involves multiple elements: (1) to redesignate the Atlanta Area to attainment for the 1997 8-hour ozone NAAQS and (2) to approve into the Georgia SIP, under section 175A of the CAA, Georgia's plan for maintaining the 1997 8-hour ozone NAAQS (1997 ozone NAAQS maintenance plan), including the associated MVEBs. EPA is also notifying the public of the status of EPA's adequacy determination for the Atlanta Area MVEBs. These actions are summarized below and described in greater detail throughout this notice of proposed rulemaking.

First, EPA proposes to determine that the Atlanta Area has met the requirements for redesignation under section 107(d)(3)(E) of the CAA. In this action, EPA is proposing to approve a request to change the legal designation of the Atlanta Area from nonattainment to attainment for the 1997 8-hour ozone NAAQS.

Second, EPA is proposing to approve Georgia's 1997 ozone NAAQS maintenance plan for the Atlanta Area as meeting the requirements of section 175A (such approval being one of the CAA criteria for redesignation to attainment status). The maintenance plan is designed to help keep the Atlanta Area in attainment of the 1997 8-hour ozone NAAQS through 2024. Consistent with the CAA, the maintenance plan that EPA is proposing to approve today also includes NO X and VOC MVEBs for the year 2024 for the Atlanta Area. EPA is proposing to approve (into the Georgia SIP) the 2024 MVEBs that are included as part of Georgia's 1997 ozone NAAQS maintenance plan.

EPA is also notifying the public of the status of EPA's adequacy process for the newly-established NO X and VOC MVEBs for 2024 for the Atlanta Area. The public comment period for Adequacy for the Atlanta Area 2024 MVEBs began on February 29, 2012, with EPA's posting of the availability of this submittal on EPA's Adequacy Web site ( http://www.epa.gov/otaq/stateresources/transconf/currsips.htm#atlanta2 ). The Adequacy comment period for these MVEBs closed on March 30, 2012. No comments, adverse or otherwise, were received during EPA's adequacy process for the MVEBs associated with Georgia's 1997 8-hour ozone maintenance plan. Please see section VII of this proposed rulemaking for further explanation of this process and for more details on the MVEBs.

Today's notice of proposed rulemaking is in response to Georgia's April 4, 2012, SIP revision. That document addresses the specific issues summarized above and the necessary elements described in section 107(d)(3)(E) of the CAA for redesignation of the Atlanta Area to attainment of the 1997 8-hour ozone NAAQS.

On July 18, 1997, EPA promulgated a revised 8-hour ozone NAAQS of 0.08 parts per million (ppm). Under EPA's regulations at 40 CFR part 50, the 1997 8-hour ozone NAAQS is attained when the 3-year average of the annual fourth highest daily maximum 8-hour average ambient air quality ozone concentrations is less than or equal to 0.08 ppm (i.e., 0.084 ppm when rounding is considered). See 69 FR 23857 (April 30, 2004). 1 Ambient air quality monitoring data for the 3-year period must meet a data completeness requirement. The ambient air quality monitoring data completeness requirement is met when the average percent of days with valid ambient monitoring data is greater than 90 percent, and no single year has less than 75 percent data completeness as determined in Appendix I of part 50.

Upon promulgation of a new or revised NAAQS, the CAA requires EPA to designate as nonattainment any area that is violating the NAAQS, based on the three most recent years of ambient air quality data at the conclusion of the designation process. The Atlanta Area was designated nonattainment for the 1997 8-hour ozone NAAQS on April 30, 2004 (effective June 15, 2004) using 2001-2003 ambient air quality data (69 FR 23857, April 30, 2004). At the time of designation the Atlanta Area was classified as a marginal nonattainment area for the 1997 8-hour ozone NAAQS. In the April 30, 2004, Phase I Ozone Implementation Rule, EPA established ozone nonattainment area attainment dates based on Table 1 of section 181(a) of the CAA. This established an attainment date 3 years after the June 15, 2004, effective date for areas classified as marginal areas for the 1997 8-hour ozone nonattainment designations. Therefore, the Atlanta Area's original attainment date was June 15, 2007. See 69 FR 23951, April 30, 2004.

The Atlanta Area failed to attain the 1997 8-hour ozone NAAQS by June 15, 2007 (the applicable attainment date for marginal nonattainment areas), and did not qualify for any extension of the attainment date as a marginal area. As a consequence, on March 6, 2008, EPA published a rulemaking determining that the Atlanta Area failed to attain and, consistent with Section 181(b)(2) of the CAA, the Atlanta Area was reclassified by operation of law to the next highest classification, or “moderate” nonattainment. See 73 FR 12013. When an area is reclassified, a new attainment date for the reclassified area must be established. Section 181 of the CAA explains that the attainment date for moderate nonattainment areas shall be as expeditiously as practicable, but no later than six years after designation, or June 15, 2010. 2 EPA further required that Georgia submit the SIP revisions meeting the new moderate area requirements as expeditiously as practicable, but no later than December 31, 2008.

On October 21, 2009, Georgia submitted an attainment demonstration and associated reasonably available control measures (RACM), a reasonable further progress (RFP) plan, contingency measures, a 2002 base year emissions inventory and other planning SIP revisions related to attainment of the 1997 8-hour ozone NAAQS in the Atlanta Area. Subsequently, on June 23, 2011 (76 FR 36873), EPA determined that the Atlanta Area attained the 1997 8-hour ozone NAAQS. The determination of attaining data was based upon complete, quality-assured and certified ambient air monitoring data for the 2008-2010 period, showing that the Area had monitored attainment of the 1997 8-hour ozone NAAQS. The requirements for the Area to submit an attainment demonstration and associated RACM, RFP plan, contingency measures, and other planning SIP revisions related to attainment of the standard were suspended as a result of the determination of attainment, so long as the Area continues to attain the 1997 8-hour ozone NAAQS. See 40 CFR 52.582(d). Within the April 4, 2012, maintenance plan and redesignation request cover letter, Georgia withdrew the Atlanta Area's attainment demonstration (except the emissions inventory) as allowed by 40 CFR 51.1004(c); however, such withdrawal does not suspend the emissions inventory requirement found in CAA section 172(c)(3) and section 182(a)(1). EPA took direct final action to approve the baseline emissions inventory portion of the attainment demonstration SIP revision on April 24, 2012 (77 FR 24399). The emissions statements requirement was approved on November 27, 2009 (74 FR 62249).

The CAA provides the requirements for redesignating a nonattainment area to attainment. Specifically, section 107(d)(3)(E) of the CAA allows for redesignation providing that: (1) the Administrator determines that the area has attained the applicable NAAQS; (2) the Administrator has fully approved the applicable implementation plan for the area under section 110(k); (3) the Administrator determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP and applicable federal air pollutant control regulations and other permanent and enforceable reductions; (4) the Administrator has fully approved a maintenance plan for the area as meeting the requirements of section 175A; and (5) the state containing such area has met all requirements applicable to the area for purposes of redesignation under section 110 and part D of the CAA.

On April 16, 1992, EPA provided guidance on redesignation in the General Preamble for the Implementation of title I of the CAA Amendments of 1990 (57 FR 13498), and supplemented this guidance on April 28, 1992 (57 FR 18070). EPA has provided further guidance on processing redesignation requests in the following documents:

1. “Ozone and Carbon Monoxide Design Value Calculations,” Memorandum from Bill Laxton, Director, Technical Support Division, June 18, 1990;

2. “Maintenance Plans for Redesignation of Ozone and Carbon Monoxide Nonattainment Areas,” Memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, April 30, 1992;

3. “Contingency Measures for Ozone and Carbon Monoxide (CO) Redesignations,” Memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, June 1, 1992;

4. “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (hereafter referred to as the “Calcagni Memorandum”);

5. “State Implementation Plan (SIP) Actions Submitted in Response to Clean Air Act (CAA) Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992;

6. “Technical Support Documents (TSDs) for Redesignation of Ozone and Carbon Monoxide (CO) Nonattainment Areas,” Memorandum from G. T. Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993;

7. “State Implementation Plan (SIP) Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS) On or After November 15, 1992,” Memorandum from Michael H. Shapiro, Acting Assistant Administrator for Air and Radiation, September 17, 1993;

8. “Use of Actual Emissions in Maintenance Demonstrations for Ozone and CO Nonattainment Areas,” Memorandum from D. Kent Berry, Acting Director, Air Quality Management Division, November 30, 1993;

9. “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994; and

10. “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard,” Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, May 10, 1995.

11. “Next Steps for Pending Redesignation Requests and State Implementation Plan Actions Affected by the Recent Court Decision Vacating the 2011 Cross-State Air Pollution Rule,” Memorandum from Gina McCarthy, Assistant Administrator, November 19, 2012.

On April 4, 2012, the State of Georgia, through GA EPD, requested the redesignation of the Atlanta Area to attainment for the 1997 8-hour ozone NAAQS. EPA's evaluation indicates that the Atlanta Area has attained the 1997 8-hour ozone NAAQS, and that the Atlanta Area meets the requirements for redesignation set forth in section 107(d)(3)(E), including the maintenance plan requirements under section 175A of the CAA. As a result, EPA is proposing to take the two related actions summarized in section I of this notice.

As stated above, in accordance with the CAA, EPA proposes in today's action to: (1) redesignate the Atlanta Area to attainment for the 1997 8-hour ozone NAAQS; and (2) approve the Atlanta Area's 1997 8-hour ozone NAAQS maintenance plan, including the associated MVEBs, into the Georgia SIP. These actions are based upon EPA's preliminary determinations that the Atlanta Area continues to attain the 1997 8-hour ozone NAAQS, and EPA's preliminary determination that Georgia has met all other redesignation criteria for the Atlanta Area. The five redesignation criteria provided under CAA section 107(d)(3)(E) are discussed in greater detail for the Atlanta Area in the following paragraphs of this section.

For ozone, an area may be considered to be attaining the 1997 8-hour ozone NAAQS if it meets the 1997 8-hour ozone NAAQS, as determined in accordance with 40 CFR 50.10 and Appendix I of part 50, based on three complete, consecutive calendar years of quality-assured air quality monitoring data. To attain these NAAQS, the 3-year average of the fourth-highest daily maximum 8-hour average ozone concentrations measured at each monitor within an area over each year must not exceed 0.08 ppm. Based on the data handling and reporting convention described in 40 CFR part 50, Appendix I, the NAAQS are attained if the design value is 0.084 ppm or below. The data must be collected and quality-assured in accordance with 40 CFR part 58, and recorded in the EPA Air Quality System (AQS). The monitors generally should have remained at the same location for the duration of the monitoring period required for demonstrating attainment.

On June 23, 2011, at 76 FR 36873, EPA determined that the Atlanta Area was attaining the 1997 8-hour ozone NAAQS. For that action EPA reviewed ozone monitoring data from monitoring stations in the Atlanta Area for the 1997 8-hour ozone NAAQS for 2008-2010. These data have been quality-assured and are recorded in AQS. EPA has reviewed the 2009-2011 data, which indicate that the Area continues to attain the 1997 8-hour ozone NAAQS beyond the submitted 3-year attainment period of 2008-2010. The fourth-highest 8-hour ozone average for 2008, 2009, 2010, 2011, and the 3-year averages of these values (i.e., design values), are summarized in the following Table 1 of this proposed rulemaking.

The 3-year design value for 2008-2010 submitted by Georgia for redesignation of the Atlanta Area is 0.080 ppm, which meets the NAAQS as described above. As mentioned above, on June 23, 2011 (76 FR 36873), EPA published a clean data determination for the Atlanta Area for the 1997 8-hour ozone NAAQS. The 2009-2011 certified data show that the Atlanta Area continues to attain the 1997 8-hour ozone NAAQS with a design value of 0.080 ppm at the Confederate Ave monitor. In today's action, EPA is proposing to determine that the Area is attaining the 1997 8-hour ozone NAAQS. EPA will not go forward with the redesignation if the Area does not continue to attain the 1997 8-hour ozone NAAQS until the time that EPA finalizes the redesignation. As discussed in more detail below, the State of Georgia has committed to continue monitoring in this Area in accordance with 40 CFR part 58.

For redesignating a nonattainment area to attainment, the CAA requires EPA to determine that the state has met all applicable requirements under section 110 and part D of title I of the CAA (CAA section 107(d)(3)(E)(v)) and that the state has a fully approved SIP under section 110(k) for the area (CAA section 107(d)(3)(E)(ii)). EPA proposes to find that Georgia has met all applicable SIP requirements for the Atlanta Area under section 110 of the CAA (general SIP requirements) for purposes of redesignation. Additionally, EPA proposes to find that the Georgia SIP satisfies the criterion that it meets applicable SIP requirements for purposes of redesignation under part D of title I of the CAA (requirements specific to 1997 8-hour ozone nonattainment areas) in accordance with section 107(d)(3)(E)(v). Further, EPA proposes to determine that the SIP is fully approved with respect to all requirements applicable for purposes of redesignation in accordance with section 107(d)(3)(E)(ii). In making these proposed determinations, EPA ascertained which requirements are applicable to the Area and, if applicable, that they are fully approved under section 110(k). SIPs must be fully approved only with respect to requirements that were applicable prior to submittal of the complete redesignation request.

General SIP requirements. Section 110(a)(2) of title I of the CAA delineates the general requirements for a SIP, which include enforceable emissions limitations and other control measures, means, or techniques; provisions for the establishment and operation of appropriate devices necessary to collect data on ambient air quality; and programs to enforce the limitations. General SIP elements and requirements are delineated in section 110(a)(2) of title I, part A of the CAA. These requirements include, but are not limited to, the following: submittal of a SIP that has been adopted by the state after reasonable public notice and hearing; provisions for establishment and operation of appropriate procedures needed to monitor ambient air quality; implementation of a source permit program; provisions for the implementation of part C requirements (Prevention of Significant Deterioration (PSD)) and provisions for the implementation of part D requirements (New Source Review (NSR) permit programs); provisions for air pollution modeling; and provisions for public and local agency participation in planning and emission control rule development.

Section 110(a)(2)(D) requires that SIPs contain certain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, EPA has required certain states to establish programs to address the interstate transport of air pollutants (e.g., NO X SIP Call  3 and the Clean Air Interstate Rule (CAIR)  4 ). The section 110(a)(2)(D) requirements for a state are not linked with a particular nonattainment area's designation and classification in that state. EPA believes that the requirements linked with a particular nonattainment area's designation and classifications are the relevant measures to evaluate in reviewing a redesignation request. The transport SIP submittal requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area in the state. Thus, EPA does not believe that the CAA's interstate transport requirements should be construed to be applicable requirements for purposes of redesignation. However, as discussed later in this notice, addressing pollutant transport from other states is an important part of an area's maintenance demonstration.

In addition, EPA believes other section 110 elements that are neither connected with nonattainment plan submissions nor linked with an area's attainment status are applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated. The section 110 and part D requirements which are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with EPA's existing policy on applicability (i.e., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See Reading, Pennsylvania, proposed and final rulemakings (61 FR 53174-53176, October 10, 1996), (62 FR 24826, May 7, 1997); Cleveland-Akron-Loraine, Ohio, final rulemaking (61 FR 20458, May 7, 1996); and Tampa, Florida, final rulemaking at (60 FR 62748, December 7, 1995). See also the discussion on this issue in the Cincinnati, Ohio, redesignation (65 FR 37890, June 19, 2000), and in the Pittsburgh, Pennsylvania, redesignation (66 FR 50399, October 19, 2001).

EPA completed rulemaking on a submittal from Georgia dated December 13, 2007, addressing “infrastructure SIP” elements required for the 1997 8-hour ozone NAAQS under CAA section 110(a)(2) on February 6, 2012. See 77 FR 5706. However, these are statewide requirements that are not a consequence of the nonattainment status of the Atlanta Area. As stated above, EPA believes that section 110 elements not linked to an area's nonattainment status are not applicable for purposes of redesignation. Therefore, EPA believes it has approved all SIP elements under section 110 that must be approved as a prerequisite for redesignating the Atlanta Area to attainment.

Title I, Part D, subpart 1 applicable SIP requirements. Subpart 1 of part D, found in sections 172(c)(1) through (9) and in section 176 of the CAA, sets forth the basic nonattainment requirements applicable to all nonattainment areas. A thorough discussion of the requirements contained in section 172 can be found in the General Preamble for Implementation of title I (57 FR 13498, April 16, 1992). Subpart 2 of part D, which includes section 182 of the CAA, establishes additional specific requirements depending on the area's ozone nonattainment classification. A thorough discussion of the requirements contained in section 182 can be found in the General Preamble for Implementation of Title I (57 FR 13498).

Part D Subpart 1 Section 172 Requirements and Part D, Subpart 2 Section 182 Requirements. Section 172(c)(1) requires the plans for all nonattainment areas to provide for the implementation of all RACM as expeditiously as practicable and to provide for attainment of the national primary ambient air quality standards. EPA interprets this requirement to impose a duty on all nonattainment areas to consider all available control measures and to adopt and implement such measures as are reasonably available for implementation in each area as components of the area's attainment demonstration. Under section 172, states with nonattainment areas must submit plans providing for timely attainment and meeting a variety of other requirements. Section 182 of the CAA, found in subpart 2 of part D, establishes additional specific requirements depending on the area's ozone nonattainment classification. For purposes of evaluating this redesignation request, the applicable part D, subpart 2 SIP requirements for all moderate nonattainment areas are contained in sections 182(b)(1)-(5). However, pursuant to 40 CFR 51.918, EPA's June 23, 2011, determination that the Area was attaining the 1997 8-hour ozone NAAQS suspended Georgia's obligation to submit most of the attainment planning requirements that would otherwise apply. Specifically, the determination of attainment suspended Georgia's obligation to submit an attainment demonstration and planning SIPs to provide for RFP, RACM, and contingency measures under sections 172(c)(9) and 182(b)(1) of the CAA.

The General Preamble for Implementation of Title I (57 FR 13498, April 16, 1992) also discusses the evaluation of these requirements in the context of EPA's consideration of a redesignation request. The General Preamble sets forth EPA's view of applicable requirements for purposes of evaluating redesignation requests when an area is attaining a standard (General Preamble for Implementation of Title I (57 FR 13498, April 16, 1992)).

Because attainment has been reached in the Atlanta Area, no additional measures are needed to provide for attainment for the 1997 8-hour ozone NAAQS, 5 and section 172(c)(1) requirements for an attainment demonstration and RACM are no longer considered to be applicable for purposes of redesignation as long as the Area continues to attain the 1997 8-hour ozone NAAQS until redesignation. See also 40 CFR 51.918.

The RFP plan requirements under sections 172(c)(2) and 182(b)(1) are defined as progress that must be made toward attainment for the 1997 8-hour ozone NAAQS. These requirements are not relevant for purposes of redesignation because EPA has determined that the entire Atlanta Area has monitored attainment of the 1997 8-hour ozone NAAQS. See General Preamble, 57 FR 13564. See also 40 CFR 51.1004 (c). While it is not a requirement for redesignation, EPA is considering taking action on Georgia's RFP plan for the 1997 8-hour ozone NAAQS separate from today's proposed action.

Section 172(c)(3) and section 182(b) requires submission and approval of a comprehensive, accurate, and current inventory of actual emissions. Section 182(b) references section 182(a) of the CAA which requires, in part, for states to submit a current inventory of actual emissions (182(a)(1)). As part of Georgia's attainment demonstration for the Atlanta Area, Georgia submitted a 2002 base year emissions inventory. EPA approved the 2002 base year inventory on March 24, 2012, as meeting the section 172(c)(3) and section 182(a)(1) emissions inventory requirement. See 77 FR 24399.

Section 172(c)(4) requires the identification and quantification of emissions for major new and modified stationary sources to be allowed in an area, and section 172(c)(5) and section 182(b) require source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA has determined that, since PSD requirements will apply after redesignation, areas being redesignated need not comply with the requirement that a NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D NSR. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Georgia has demonstrated that the Atlanta Area will be able to maintain the NAAQS without part D NSR in effect, and therefore Georgia need not have fully approved part D NSR programs prior to approval of the redesignation request. Nonetheless, Georgia currently has a fully-approved part D NSR program in place. Georgia's PSD program will become applicable in the Atlanta Area upon redesignation to attainment. Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the NAAQS. Because attainment has been reached, no additional measures are needed to provide for attainment.

Section 172(c)(7) requires the SIP to meet the applicable provisions of section 110(a)(2). As noted above, EPA believes the Georgia SIP meets the requirements of section 110(a)(2) applicable for purposes of redesignation.

Section 182(b) references, in part, section 182(a)(3), which requires states to submit periodic inventories and emissions statements. Section 182(a)(3)(A) of the CAA requires states to submit a periodic inventory every 3 years. The periodic emissions inventory is discussed in more detail in Criteria (4)(e), Verification of Continued Attainment.

Section 182(a)(3)(B) of the CAA requires states with areas designated nonattainment for the ozone NAAQS to submit a SIP revision to require emissions statements to be submitted to the state by sources within that nonattainment area. EPA approved Georgia's emissions statements requirement, which is part of the attainment plan submittal, on November 27, 2009. See 74 FR 62249. EPA believes the Georgia SIP meets the requirements of section 182(a)(3)(B) applicable for purposes of redesignation.

Section 182(b)(2) of the CAA requires states with areas designated nonattainment for the ozone NAAQS to submit a SIP revision to require reasonably available control technology (RACT) for all major VOC and NO X sources and for each category of VOC sources in the Area covered by a Control Techniques Guidelines (CTG) document.

The CTGs established by EPA are guidance to the states and provide recommendations only. A state can develop its own strategy for what constitutes RACT for the various CTG categories, and EPA will review that strategy in the context of the SIP process and determine whether it meets the RACT requirements of the CAA and its implementing regulations. If no major sources of VOC or NO X emissions (which should be considered separately) or no sources in a particular source category exist in an applicable nonattainment area, a state may submit a negative declaration for that category.

EPA approved Georgia's RACT submittals on September 28, 2012. See 77 FR 59554. EPA believes the Georgia SIP meets the requirements of section 182(b)(2) applicable for purposes of redesignation.

Originally, the section 182(b)(3) Stage II requirement also applied in all moderate ozone nonattainment areas. However, under section 202(a)(6) of the CAA, 42 U.S.C. 7521(a)(6), the requirements of section 182(b)(3) no longer apply in moderate ozone nonattainment areas after EPA promulgated the onboard refueling vapor recovery standards on April 6, 1994, 59 FR 16262, codified at 40 CFR parts 86 (including 86.098-8), 88 and 600. Under implementation rules issued in 2002 for the 1997 8-hour ozone NAAQS, EPA retained the Stage II-related requirements under section 182(b)(3) as they applied for the now-revoked 1-hour ozone NAAQS. See 40 CFR 51.900(f)(5) and 40 CFR 51.916(a). As a previous 1-hour ozone nonattainment area, Georgia currently has Stage II requirements approved in its SIP for 13 counties in the Atlanta Area. This proposed rulemaking does not relate to those requirements and is not proposing any action to remove those requirements from Georgia's SIP.

Section 182(b)(4) of the CAA requires states with areas designated nonattainment for the ozone NAAQS to submit SIPs requiring inspection and maintenance of vehicles (I/M). Section 182(c)(3)requires enhanced vehicle inspection and maintenance (I/M) in ozone nonattainment areas classified as serious or worse. Georgia's enhanced I/M rule for the 13 county nonattainment area under the 1990 1-hr ozone standard was submitted to EPA on August 9, 1999, and approved on April 19, 2002 (67 FR 19335), effective June 18, 2002. Even though the Atlanta Area was designated as part of the moderate Atlanta Area for the 1997 8-hour ozone NAAQS, applicability of the I/M regulations to areas outside the Ozone Transport Region is based on the population of the urbanized area as defined by the 1990 census. In 1990, the Atlanta urbanized area was totally contained within Georgia and did not touch the State line. Therefore, the applicability level of a 1990 census population of 200,000 or more in an urbanized area (40 CFR 51.350(a)(1)) applies to the Atlanta urbanized area. EPA believes the Georgia SIP meets the requirements of section 182(b)(3) and 182(b)(4) applicable for purposes of redesignation.

Section 182(b)(5) of the CAA requires that for purposes of satisfying the general emission offset requirement, the ratio of total emission reductions to total increase emissions shall be at least 1.15 to 1. Georgia currently requires these offsets. EPA believes the Georgia SIP meets the requirements of section 182(b)(5) applicable for purposes of redesignation.

Section 176 Conformity Requirements. Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs and projects that are developed, funded or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with federal conformity regulations relating to consultation, enforcement and enforceability that EPA promulgated pursuant to its authority under the CAA.

EPA interprets the conformity SIP requirements  6 as not applying for purposes of evaluating a redesignation request under section 107(d) because state conformity rules are still required after redesignation and federal conformity rules apply where state rules have not been approved. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001) (upholding this interpretation); see also 60 FR 62748 (December 7, 1995) (redesignation of Tampa, Florida). Nonetheless, Georgia has an approved conformity SIP for the Atlanta Area. See 77 FR 35866, June 15, 2012. Thus, the Atlanta Area has satisfied all applicable requirements for purposes of redesignation under section 110 and part D of title I of the CAA.

EPA has fully approved the applicable Georgia SIP for the Atlanta Area under section 110(k) of the CAA for all requirements applicable for purposes of redesignation. EPA may rely on prior SIP approvals in approving a redesignation request ( see Calcagni Memorandum at p. 3; Southwestern Pennsylvania Growth Alliance v. Browner, 144 F.3d 984, 989-90 (6th Cir. 1998); Wall, 265 F.3d 426) plus any additional measures it may approve in conjunction with a redesignation action ( see 68 FR 25426 (May 12, 2003) and citations therein). Following passage of the CAA of 1970, Georgia has adopted and submitted, and EPA has fully approved at various times, provisions addressing the various 1997 8-hour ozone NAAQS SIP elements applicable in the Atlanta Area (March 2, 1976, 41 FR 8956; 110(a)(1) and (2) for 1997 8-hour ozone NAAQS, February 6, 2012, 77 FR 5706; RACT, September 28, 2012, 77 FR 59554; emissions inventory, March 24, 2012, 77 FR 24399; emissions statement, November 27, 2009, 74 FR 62249).

As indicated above, EPA believes that the section 110 elements that are neither connected with nonattainment plan submissions nor linked to an area's nonattainment status are not applicable requirements for purposes of redesignation. EPA has approved all part D subpart 1 requirements applicable for purposes of this redesignation.

For redesignating a nonattainment area to attainment, the CAA requires EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP and applicable federal air pollution control regulations and other permanent and enforceable reductions (CAA section 107(d)(3)(E)(iii)). EPA has preliminarily determined that Georgia has demonstrated that the observed air quality improvement in its portion of the Atlanta Area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP, federal measures, and other state adopted measures. EPA does not have any information to suggest that the decrease in ozone concentrations in the Atlanta Area is due to unusually favorable meteorological conditions

State, local and federal measures enacted in recent years have resulted in permanent emission reductions. Most of these emission reductions are enforceable through regulations. A few non-regulatory measures also result in emission reductions.

The state measures, some of which implement federal requirements, that have been implemented to date and relied upon by Georgia to demonstrate attainment and/or maintenance include: Georgia Rule (yy)—Emissions of Nitrogen Oxides, Georgia Rule (lll)—NO X from Fuel Burning Equipment, Georgia Rule (rrr)—NO X from Small Fuel Burning Equipment, and Georgia Rule (jjj)—NO X from EGUs. These rules have been approved in the federally-approved SIP.

Georgia's smoke management plan is a state-only requirement and is therefore not federally enforceable. This measure is not necessary for the continued maintenance of the Atlanta nonattainment area, however the implementation of this plan will support the maintenance of the ozone NAAQS for the Atlanta area. Additionally, Georgia Rule (sss) has not been submitted to EPA for approval into the SIP and is therefore not federally enforceable. The rule requirements to install and operate the control equipment have been incorporated into the each facility's respective title V federal operating permit. The rule alone is not relied upon to meet continued maintenance; however, the rule was designed to meet the emission reductions and deadlines of CAIR. Without the operation of the equipment required by Rule (sss), it would be impossible for the coal-fired EGUs operating in the state of Georgia to meet the emission budgets of either CAIR. Rule (sss) is state-effective and currently being implemented in Georgia.

The federal measures that have been implemented include the following:

Tier 2 vehicle standards. Implementation began in 2004 and will require all passenger vehicles in any manufacturer's fleet to meet an average standard of 0.07 grams of NO X per mile. The Tier 2 rule also reduced the sulfur content of gasoline to 30 ppm starting in January of 2006.

Large Non-road Diesel Engines Rule and Ultra Low-Sulfur Diesel Rule. EPA issued this rule in June 2004 (69 FR 38958), which applies to diesel engines used in industries, such as construction, agriculture, and mining. It is estimated that compliance with this rule will cut NO X emissions from non-road diesel engines by up to 90 percent nationwide. The non-road diesel rule was fully implemented by 2010.

Control Technique Guidelines. Georgia listed CTGs under federal measures implemented in the Atlanta Area. CTGs are not federal control measures. CTGs are federal guidelines for states to use in order to meet a CAA requirement for states to control VOC emissions from specific source categories. The resulting state controls are considered state measures, not federal measures. See criteria 2(a) of section V of this action for more information regarding CTGs.

Heavy-duty gasoline and diesel highway vehicle standards and Ultra Low-Sulfur Diesel Rule. EPA issued this rule in January 2001 (66 FR 5002). This rule includes standards limiting the sulfur content of diesel fuel, which went into effect in 2004. A second phase took effect in 2007, which further reduced the highway diesel fuel sulfur content to 15 ppm, leading to additional reductions in combustion NO X and VOC emissions. This rule is expected to achieve a 95 percent reduction in NO X emissions from diesel trucks and buses.

Nonroad spark-ignition engines and recreational engines standards. This rule was effective in 2003 and will reduce NO X and hydrocarbon emissions.

NO X SIP Call in Surrounding States. The NO X SIP Call created the NO X Budget Trading Program designed to reduce the amount of ozone that crosses state lines.

EPA has considered the relationship of the Atlanta Area's maintenance plan to the reductions currently required pursuant to CAIR. Although CAIR was remanded to EPA, the remand of CAIR does not alter the requirements of the NO X SIP Call and the State has demonstrated that the Atlanta Area can maintain the 1997 ozone NAAQS without any additional requirements (beyond those required by the NO X SIP Call in surrounding states). Therefore, EPA has made the preliminary determination that the State's demonstration of maintenance under sections 175A and 107(d)(3)(E) remains valid based on reductions from the NO X SIP Call.

The NO X SIP Call required states to make NO X emissions reductions. It also provided a mechanism (the NO X Budget Trading Program) that states could use to achieve those reductions. When EPA promulgated CAIR, it discontinued (starting in 2009) the NO X Budget Trading Program, 40 CFR 51.121(r), but established another mechanism—the CAIR ozone season trading program—which states could use to meet their NO X SIP Call obligations, 70 FR 25289-90. EPA notes that a number of states, when submitting SIP revisions to require sources to participate in the CAIR ozone season trading program, removed the SIP provisions that required sources to participate in the NO X Budget Trading Program. In addition, because the provisions of CAIR including the ozone season NO X trading program have remained in place during the remand, EPA is not currently administering the NO X Budget Trading Program. Nonetheless, all states regardless of the current status of their regulations that previously required participation in the NO X Budget Trading Program, will remain subject to all of the requirements in the NO X SIP Call even if the existing CAIR ozone season trading program is withdrawn or altered. In addition, the anti-backsliding provisions of 40 CFR 51.905(f) specifically provide that the provisions of the NO X SIP Call, including the statewide NO X emission budgets, continue to apply after revocation of the 1-hour NAAQS. Thus, for purposes of today's action, emissions reductions associated with the NO X SIP Call are “permanent and enforceable.”

All NO X SIP Call states have SIPs that currently satisfy their obligations under the NO X SIP Call; the NO X SIP Call reduction requirements are being met; and EPA will continue to enforce the requirements of the NO X SIP Call even after any response to the CAIR remand. For these reasons, EPA believes that regardless of the status of the CAIR program, the NO X SIP Call requirements can be relied upon in demonstrating maintenance. Here, the State has demonstrated maintenance based in part on those requirements.

CAIR and CSAPR. CAIR remains in place and enforceable until substituted by a “valid” replacement rule. Regardless of the timing of the transition from CAIR to CSAPR, or a resulting court-ordered interstate transport remedy, emissions of NO X and SO 2 have declined significantly and are expected to continue to decrease in the future due to the continuation of CAIR and Georgia's own EGU emissions rules.

To the extent that the Georgia submittal relies on CAIR reductions that occurred through 2012, the recent directive from the D.C. Circuit in EME Homer City ensures that the reductions associated with CAIR will be permanent and enforceable for the necessary time period for purposes of CAA section 107(d)(3)(E)(iii) and Georgia's request to redesignate the Atlanta Area and seek approval of its maintenance plan and other requirements associated with redesignation. EPA has been ordered by the court to develop a new rule, and the opinion makes clear that after promulgating that new rule EPA must provide states an opportunity to draft and submit SIPs to implement that rule. CAIR thus cannot be replaced until EPA has promulgated a final rule through a notice-and-comment rulemaking process, states have had an opportunity to draft and submit SIPs, EPA has reviewed the SIPs to determine if they can be approved, and EPA has taken action on the SIPs, including promulgating a Federal Implementation Plan, if appropriate. The court's clear instruction to EPA is that it must continue to administer CAIR until a “valid replacement” exists and thus CAIR reductions may be relied upon until the necessary actions are taken by EPA and states to administer CAIR's replacement. Furthermore, the court's instruction provides an additional backstop; by definition, any rule that replaces CAIR and meets the court's direction would require upwind states to have SIPs that eliminate significant contributions to downwind nonattainment and prevent interference with maintenance in downwind areas.

Further, in vacating CSAPR and requiring EPA to continue administering CAIR, the D.C. Circuit emphasized that the consequences of vacating CAIR “might be more severe now in light of the reliance interests accumulated over the intervening four years.” EME Homer City, 696 F.3d at 38. The accumulated reliance interests include the interests of states who reasonably assumed they could rely on reductions associated with CAIR, which brought certain nonattainment areas into attainment with the NAAQS. If EPA were prevented from relying on reductions associated with CAIR in redesignation actions, states would be forced to impose additional, redundant reductions on top of those achieved by CAIR. EPA believes this is precisely the type of irrational result the court sought to avoid by ordering EPA to continue administering CAIR. For these reasons also, EPA believes it is appropriate to allow states to rely on CAIR, and the existing emissions reductions achieved by CAIR, as sufficiently permanent and enforceable for purposes such as redesignation. Following promulgation of the replacement rule, EPA will review SIPs as appropriate to identify whether there are any issues that need to be addressed. In light of these unique circumstances and for the reasons explained above, EPA is proposing to approve the redesignation request and related SIP revisions for the Atlanta Area. EPA continues to implement CAIR in accordance with current direction from the court, and thus CAIR is in place and enforceable and will remain so until substituted by a valid replacement rule. Georgia's SIP revision lists CAIR as a control measure, which became state-effective on February 28, 2007, and was approved by EPA on October 9, 2007, 72 FR 57202, for the purpose of reduction SO 2 and NO X emissions. The monitoring data used to demonstrate the Area's attainment of the 1997 8-hour ozone standard was impacted by CAIR.

For redesignating a nonattainment area to attainment, the CAA requires EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA (CAA section 107(d)(3)(E)(iv)). In conjunction with its request to redesignate the Atlanta Area to attainment for the 1997 8-hour ozone NAAQS, GA EPD submitted a SIP revision to provide for the maintenance of the 1997 8-hour ozone NAAQS for at least 10 years after the effective date of redesignation to attainment. EPA has made the preliminary determination that this maintenance plan meets the requirements for approval under section 175A of the CAA.

Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan which demonstrates that attainment will continue to be maintained for the remainder of the 20-year period following the initial 10-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain contingency measures as EPA deems necessary to assure prompt correction of any future 1997 8-hour ozone violations. The Calcagni Memorandum provides further guidance on the content of a maintenance plan, explaining that a maintenance plan should address five requirements: the attainment emissions inventory, maintenance demonstration, monitoring, verification of continued attainment, and a contingency plan. As is discussed more fully below, EPA proposes to find that Georgia's maintenance plan includes all the necessary components and is thus proposing to approve it as a revision to the Georgia SIP.

The Atlanta Area attained the 1997 8-hour ozone NAAQS based on monitoring data for the 3-year period from 2008-2010. Georgia selected 2008 as the attainment emissions inventory year. The attainment inventory identifies a level of emissions in the Area that is sufficient to attain the 1997 8-hour ozone NAAQS. Georgia began development of the attainment inventory by first generating a baseline emissions inventory for the Atlanta Area. As noted above, the year 2008 was chosen as the base year for developing a comprehensive emissions inventory for NO X and VOC, for which projected emissions could be developed for 2017 and 2024.

The attainment year emissions were projected to future years separately using different methods by seven source categories, including: EGU point sources; non-EGU point sources; area sources; fires; nonroad mobile sources; nonroad mobile sources—marine, aircraft and railroad; and onroad mobile sources. Point sources captured in the inventory include stationary sources whose actual emissions equal or exceed 25 tons per year (tpy) of VOC or NO X in the 13 counties in the Atlanta area that were previously nonattainment for the 1-hour ozone NAAQS and are currently nonattainment for the 1997 8-hour ozone NAAQS (Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Paulding, and Rockdale), and 100 tpy of VOC or NO X in the seven remaining counties that make up the Atlanta nonattainment area for the 1997 8-hour ozone NAAQS (Barrow, Bartow, Carroll, Hall, Newton, Spalding, and Walton).

The emissions inventory is composed of four major types of sources: point, area, on-road mobile and non-road mobile. Process-level emissions estimates for three EGU facilities in the Atlanta Area during 2008 were obtained from NEI2008 Version 1.5. The emissions were projected to year 2017 and 2024 using corresponding growth and control factors.

Ozone season daily emissions for EGU point sources were calculated by multiplying the annual total emissions with daily emissions fractions during June, July and August. The fractions for NO X and VOC emissions during June, July and August were estimated, respectively, using hourly 2008 CAMD CEM NO X emissions and heat input data, and then were divided by the number of days in these three months (92) to get ozone season daily emissions fractions. The same daily fractions have been used for both attainment year and future years. For future year emissions from Plant McDonough-Atkinson, the fraction of NO X emissions during the months of June through August was calculated as the product of the NO X ozone-season limit and three months divided by the sum of the ozone-season limit times five months and the non-ozone season limit times seven months.

Emissions estimates for non-EGU point sources in 2008 were obtained from NEI2008 Version 1.5. Emissions in future years 2017 and 2024 were estimated using SCC- and county-specific growth factors generated with the U.S. EPA's Economic Growth Analysis System Version 5.0 (EGAS 5.0) with “Default REMI 6.0 SCC Configuration.” Appendix B-2 contains a summary of the SCC specific growth factors for Atlanta ozone nonattainment area. These emissions are not subject to additional controls in the future years 2017 and 2024. Ozone season daily emissions for non-EGU point sources were estimated by multiplying the annual total emissions with ozone season daily emissions fractions, which were calculated using the same temporal allocation method used in Sparse Matrix Operator Kernel Emissions (SMOKE, http://www.smoke-model.org/index.cfm ). The SMOKE temporal profiles and reference files were obtained from EPA's 2005 Modeling Platform Web site ( ftp://ftp.epa.gov/EmisInventory/2005v4_2/ancillary_smoke ). The SMOKE temporal profiles gave monthly emissions fractions, and were linked to each emission record by SCC according to the SMOKE temporal reference file. The total of the monthly fractions of June, July and August were divided by the number of days in these three months (92) to get ozone season daily emissions fractions.

Nonpoint sources captured in the inventory include stationary sources whose emissions levels of NO X , SO 2 , and particulate matter are each less than 25 tons per year. Emissions from nonpoint sources in 2008 were obtained from NEI2008 version 1.5. Ozone season daily emissions for area sources were calculated using the SMOKE temporal profiles as described for non-EGU point sources.

Emissions from fires in 2008 were obtained from NEI2008 version 1.5. These estimates were provided by Georgia Environmental Protection Division as part of AERR2008 submission (Georgia Air Protection Branch, 2011). This inventory was developed using 2008 burned area data and burning permit data provided by Georgia Forestry Commission and the same method as used for the VISTAS2002 fire inventory ( www.epa.gov/ttnchie1/conference/ei13/rpo/barnard_pres.pdf ). Emissions in future years 2017 and 2024 were assumed to be the same as attainment year 2008. Ozone season daily emissions for fires were calculated by dividing the total emissions during June, July and August by the number of days in these three months (92). The emissions during these three months were estimated using monthly emissions for nonpoint fires and event emissions records for wildfires occurred during this period in NEI2008.

The 2008 NO X and VOC emissions for the Atlanta Area, as well as the emissions for other years, were developed consistent with EPA guidance and are summarized in Tables 2 through 4 of the following subsection discussing the maintenance demonstration.

The April 4, 2012, final SIP revision includes a maintenance plan for the Atlanta Area. The maintenance plan:

(i) Shows compliance with and maintenance of the 8-hour ozone standard by providing information to support the demonstration that current and future emissions of NO X and VOC remain at or below 2008 emissions levels.

(ii) Uses 2008 as the attainment year and includes future emissions inventory projections for 2017, 2020, and 2024.

(iii) Identifies an “out year” at least 10 years (and beyond) after the time necessary for EPA to review and approve the maintenance plan. Per 40 CFR part 93, NO X and VOC MVEBs were established for the last year (2024) of the maintenance plan (see section VI below).

(iv) Provides actual and projected emissions inventories, in tons per day (tpd), for the Atlanta Area, as shown in Tables 2 through 4 below.

Tables 2 through 4 summarize the 2008 and future projected emissions of NO X and VOC from Atlanta. In situations where local emissions are the primary contributor to nonattainment, the ambient air quality standard should not be violated in the future as long as emissions from within the nonattainment area remain at or below the baseline with which attainment was achieved. Georgia has projected emissions as described previously and determined that emissions in the Atlanta Area will remain below those in the attainment year inventory for the duration of the maintenance plan.

As discussed in section VI of this proposed rulemaking, a safety margin is the difference between the attainment level of emissions (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. The attainment level of emissions is the level of emissions during one of the years in which the area met the NAAQS. Georgia selected 2008 as the attainment emissions inventory year for the Atlanta Area. The State has decided to allocate a safety margin to the 2024 MVEB for the Atlanta Area. The safety margin was calculated as 99.43 tpd for NO X and 62.56 tpd for VOC. A portion of the overall emissions reductions from 2008 to 2024 will be used as the safety margin for MVEB. The MVEB to be used for transportation conformity proposes is discussed in section VI. This allocation and the resulting available safety margin for the Atlanta Area are discussed further in section VI of this proposed rulemaking.

There are currently nine monitors measuring ozone in Atlanta. The State of Georgia, through GA EPD, has committed to continue operation of the monitors in Atlanta Area in compliance with 40 CFR part 58 and have thus addressed the requirement for monitoring. EPA approved the ozone portion of Georgia's 2012 annual ambient air monitoring network plan on October 16, 2012.

The State of Georgia, through GA EPD, has the legal authority to enforce and implement the requirements of the 1997 8-hour ozone maintenance plan for the Atlanta Area. This includes the authority to adopt, implement and enforce any subsequent emissions control contingency measures determined to be necessary to correct future ozone attainment problems.

Verification of continued attainment is accomplished through operation of the ambient ozone monitoring network and the periodic updates of the Area's emissions inventory. GA EPD will continue to operate the current monitors located in the metro Atlanta area. There are no plans to discontinue operation, relocate, or otherwise change the existing ambient monitoring network. Georgia will continue to update its emissions inventory at least once every three years.

The Consolidated Emissions Reporting Rule (CERR) was promulgated by EPA on June 10, 2002. The CERR was replaced by the Annual Emissions Reporting Requirements (AERR) rule on December 17, 2008. The most recent triennial inventory for Georgia was compiled for 2008. The larger point sources of air pollution will continue to submit data on their emissions on an annual basis as required by the AERR. Emissions from the rest of the point sources, the nonpoint source portion, and the on-road and nonroad mobile sources continue to be quantified on a three-year cycle. The inventory will be updated and maintained on a three-year cycle. As required by the AERR, the next overall emissions inventory will be compiled for 2011.

The contingency measures are designed to promptly correct a violation of the NAAQS that occurs after redesignation. Section 175A of the CAA requires that a maintenance plan include such contingency measures as EPA deems necessary to assure that the state will promptly correct a violation of the NAAQS that occurs after redesignation. The maintenance plan should identify the contingency measures to be adopted, a schedule and procedure for adoption and implementation, and a time limit for action by the state. A state should also identify specific indicators to be used to determine when the contingency measures need to be implemented. The maintenance plan must include a requirement that a state will implement all measures with respect to control of the pollutant that were contained in the SIP before redesignation of the area to attainment in accordance with section 175A(d).

The contingency plan included in Georgia's April 4, 2012, SIP revision includes a triggering mechanism to determine when contingency measures are needed and a process of developing and implementing appropriate control measures. The State of Georgia will use actual ambient monitoring data and emissions inventory data as the indicators to determine whether contingency measures should be implemented.

Georgia has identified a primary trigger (Tier I) for the 1997 8-hour ozone NAAQS when any quality-assured 8-hour ozone monitoring reading exceeds 0.084 ppm at an ambient monitoring station located in the Atlanta maintenance area or if the periodic emission inventory updates reveal excessive or unanticipated growth greater than 10 percent in emissions of either ozone precursor over the attainment or intermediate emissions inventories for the Atlanta maintenance area (as determined by the triennial emission reporting required by AERR). GA EPD will conduct an evaluation as expeditiously as practicable to determine if the trend is likely to continue. If it is determined that additional emission reductions are necessary, GA EPD will adopt and implement any required measures in accordance with the schedule and procedure for adoption and implementation of contingency measures.

The ozone trigger concentrations described above apply to each monitor in the maintenance area. GA EPD will evaluate a Tier I condition, if it occurs, as expeditiously as practicable to determine the cause(s) of the ambient ozone or emissions inventory increase and to determine if a Tier II condition (see below) is likely to occur.

A secondary trigger (Tier II) is activated when any violation of the 1997 8-hour ozone NAAQS at any of the metro Atlanta ambient monitoring stations in the Atlanta maintenance area is recorded, based on quality-assured monitoring data. In this event, GA EPD will conduct a comprehensive study to determine the cause(s) of the ambient ozone increase and will implement any required measures as expeditiously as practicable, taking into consideration the ease of implementation and the technical and economic feasibility of selected measures

GA EPD will, in the event of 1) a Tier II trigger condition or 2) a Tier I condition in which GA EPD has determined that a Tier II condition is likely to occur, conduct a comprehensive study to determine what contingency measure(s) are required for the maintenance of the ozone standard. Since the metro Atlanta area may be influenced by emissions from outside the maintenance area, the study will attempt to determine whether the trigger condition is due to local emissions, emissions from elsewhere, or a combination of the previous. The comprehensive analysis, based on quality-assured ambient data, will examine:

• The severity of the trigger condition;

• the meteorological conditions (in the case of an ambient concentration trigger)

• associated with the trigger condition;

• potential contributing local emissions sources;

• potential contributing emissions resulting from regional or long-range transport;

• the geographic applicability of possible contingency measures;

• emission trends, including implementation timelines of potential control measures;

• timelines of “on-the-books” (adopted) measures that are not yet fully implemented (e.g., Georgia Rule (sss) NO X controls);

• current and recently identified control technologies.

The comprehensive study will be completed and submitted to EPA for review as expeditiously as practical but no later than nine months after the Tier I or Tier II trigger is activated. When GA EPD determines, through the comprehensive study, what contingency measure(s) are required for the maintenance of the ozone standard, appropriate corrective measures will be adopted and implemented within 18 to 24 months after the Tier I or II trigger occurs. EPA anticipates that control measures not relied upon for attainment but that are currently being implemented by GA EPD will continue to produce substantial reductions in ozone precursors in excess of what is relied upon in this maintenance plan. They include the Georgia Multipollutant Rule as well as diesel engine retrofit, replacement, and repowering programs and truck stop electrification programs. Contingency measures will be adopted no later than 18 months following the date on which the Tier I or Tier II trigger is activated. Selection of measures will take into consideration the ease of implementation as well as technical and economic feasibility. If it is determined that adoption and implementation of a rule will take longer than 24 months following the trigger date, GA EPD will submit for EPA's approval a revised schedule for the development and adoption of contingency measures.

If the analysis required above determines emissions from the local area are contributing to the trigger condition, GA EPD will evaluate those measures as specified in Section 172 of the CAA for control options as well as other available measures. Section 175A(d) requires that state maintenance plans shall include a requirement that the state will implement all measures with respect to the control of the air pollutant concerned which were contained in the SIP for the area before redesignation of the area to attainment. Currently all such measures are in effect for the Atlanta Area. Contingency measure(s) will be selected from the following types of measures or from any other measure deemed appropriate and effective at the time the selection is made:

• RACM for sources of VOC and NO X .

• RACT for point sources of VOC and NO X , specifically the adoption of new and revised RACT rules based on Groups II, III, and IV CTGs.

• Expansion of RACM/RACT to area(s) of transport within the State.

• Mobile Source Measures.

• Implementation of a new measure/control that is already promulgated and scheduled to be implemented at the federal or state level.

• Additional NO X reduction measure(s) yet to be identified.

EPA has concluded that the maintenance plan adequately addresses the five basic components of a maintenance plan: attainment inventory, monitoring network, verification of continued attainment, and a contingency plan. Therefore, the maintenance plan SIP revision submitted by the State of Georgia for the Atlanta Area meets the requirements of section 175A of the CAA, and thus EPA is proposing approval of the plan.

Under section 176(c) of the CAA, new transportation plans, programs, and projects, such as the construction of new highways, must “conform” to (i.e., be consistent with) the part of the state's air quality plan that addresses pollution from cars and trucks. Conformity to the SIP means that transportation activities will not cause new air quality violations, worsen existing violations, or delay timely attainment of the NAAQS or any interim milestones. If a transportation plan does not conform, most new projects that would expand the capacity of roadways cannot go forward. Regulations at 40 CFR part 93 set forth EPA policy, criteria, and procedures for demonstrating and assuring conformity of such transportation activities to a SIP. The regional emissions analysis is one, but not the only, requirement for implementing transportation conformity. Transportation conformity is a requirement for nonattainment and maintenance areas. Maintenance areas are areas that were previously nonattainment for a particular NAAQS but have since been redesignated to attainment with an approved maintenance plan for that NAAQS.

Under the CAA, states are required to submit, at various times, control strategy SIPs and maintenance plans for nonattainment areas. These control strategy SIPs (including RFP and attainment demonstration) and maintenance plans create MVEBs for criteria pollutants and/or their precursors to address pollution from cars and trucks. Per 40 CFR part 93, a MVEB must be established for the last year of the maintenance plan. A state may adopt MVEBs for other years as well. The MVEB is the portion of the total allowable emissions in the maintenance demonstration that is allocated to highway and transit vehicle use and emissions. See 40 CFR 93.101. The MVEB serves as a ceiling on emissions from an area's planned transportation system. The MVEB concept is further explained in the preamble to the November 24, 1993, Transportation Conformity Rule (58 FR 62188). The preamble also describes how to establish the MVEB in the SIP and how to revise the MVEB.

After interagency consultation with the transportation partners for the Atlanta Area, Georgia has developed MVEBs for NO X and VOC for the Atlanta Area. Georgia is developing these MVEBs, as required, for the last year of its maintenance plan, 2024. The MVEBs reflect the total on-road emissions for 2024, plus an allocation from the available NO X and VOC safety margin. Under 40 CFR 93.101, the term “safety margin” is the difference between the attainment level (from all sources) and the projected level of emissions (from all sources) in the maintenance plan. The safety margin can be allocated to the transportation sector; however, the total emissions must remain below the attainment level. The NO X and VOC MVEBs and allocation from the safety margin were developed in consultation with the transportation partners and were added to account for uncertainties in population growth, changes in model vehicle miles traveled and new emission factor models. The NO X and VOC MVEBs for the Atlanta Area are defined in Table 5 below.

As mentioned above, Georgia has chosen to allocate a portion of the available safety margin to the NO X and VOC MVEBs for 2024 for the Atlanta Area. This allocation is 26.9 tpd and 29.4 tpd for NO X and VOC, respectively. Thus, the remaining safety margins for 2024 are 28.87 tpd and 276.69 tpd NO X and VOC, respectively.

Through this rulemaking, EPA is proposing to approve the MVEBs for NO X and VOC for 2024 for the Atlanta Area because EPA has preliminarily determined that the Area maintains the 1997 8-hour ozone NAAQS with the emissions at the levels of the budgets. Once the MVEBs for the Atlanta Area are approved or found adequate (whichever is completed first), they must be used for future conformity determinations. After thorough review, EPA has preliminarily determined that the budgets meet the adequacy criteria, as outlined in 40 CFR 93.118(e)(4), and is proposing to approve the budgets because they are consistent with maintenance of the 1997 8-hour ozone NAAQS through 2024.

When reviewing submitted “control strategy” SIPs or maintenance plans containing MVEBs, EPA may affirmatively find the MVEB contained therein adequate for use in determining transportation conformity. Once EPA affirmatively finds the submitted MVEB is adequate for transportation conformity purposes, that MVEB must be used by state and federal agencies in determining whether proposed transportation projects conform to the SIP as required by section 176(c) of the CAA.

EPA's substantive criteria for determining adequacy of a MVEB are set out in 40 CFR 93.118(e)(4). The process for determining adequacy consists of three basic steps: public notification of a SIP submission, a public comment period, and EPA's adequacy determination. This process for determining the adequacy of submitted MVEBs for transportation conformity purposes was initially outlined in EPA's May 14, 1999, guidance, “Conformity Guidance on Implementation of March 2, 1999, Conformity Court Decision.” EPA adopted regulations to codify the adequacy process in the Transportation Conformity Rule Amendments for the “New 8-Hour Ozone and PM 2.5 National Ambient Air Quality Standards and Miscellaneous Revisions for Existing Areas; Transportation Conformity Rule Amendments—Response to Court Decision and Additional Rule Change,” on July 1, 2004 (69 FR 40004). Additional information on the adequacy process for transportation conformity purposes is available in the proposed rule entitled, “Transportation Conformity Rule Amendments: Response to Court Decision and Additional Rule Changes,” 68 FR 38974, 38984 (June 30, 2003).

As discussed earlier, Georgia's maintenance plan submission includes NO X and VOC MVEBs for the Atlanta Area for 2024, the last year of the maintenance plan. EPA reviewed the NO X and VOC MVEBs through the adequacy process. The Georgia SIP submission, including the Atlanta Area NO X and VOC MVEBs, was open for public comment on EPA's adequacy Web site on February 29, 2012, found at: http://www.epa.gov/otaq/stateresources/transconf/currsips.htm#atlanta2. The EPA public comment period on adequacy for the MVEBs for 2024 for the Atlanta Area closed on March 30, 2012. No comments, adverse or otherwise, were received during EPA's adequacy process for the MVEBs associated with Georgia's 1997 8-hour ozone maintenance plan.

EPA intends to make its determination on the adequacy of the 2024 MVEBs for the Atlanta Area for transportation conformity purposes in the near future by completing the adequacy process that was started on February 29, 2012. After EPA finds the 2024 MVEBs adequate or approves them, the new MVEBs for NO X and VOC must be used for future transportation conformity determinations. For required regional emissions analysis years for 2024 and beyond, the applicable budgets will be the new 2024 MVEBs established in the maintenance plan, as defined in section VI of this proposed rulemaking.

EPA previously determined that the Atlanta Area was attaining the 1997 8-hour ozone NAAQS on June 23, 2011, at 76 FR 36873. EPA is now proposing to take two separate but related actions regarding the Atlanta Area's redesignation and maintenance of the 1997 8-hour ozone NAAQS.

First, EPA is proposing to determine, based on complete, quality-assured and certified monitoring data for the 2009-2011 monitoring period that the Atlanta Area is attaining the 1997 8-hour ozone NAAQS. Based on 2010-2012 preliminary data in AQS, the Area is continuing to attain the 1997 8-hour ozone NAAQS. EPA is proposing to determine that Georgia has met the criteria under CAA section 107(d)(3)(E) for the Atlanta Area for redesignation from nonattainment to attainment for the 1997 8-hour ozone NAAQS. On this basis, EPA is proposing to approve Georgia's redesignation request for the 1997 8-hour ozone NAAQS for the Atlanta Area.

Second, EPA is proposing to approve the maintenance plan for the Atlanta Area, including the NO X and VOC MVEBs for 2024, into the Georgia SIP (under CAA section 175A). The maintenance plan demonstrates that the Area will continue to maintain the 1997 8-hour ozone NAAQS, and the budgets meet all of the adequacy criteria contained in 40 CFR 93.118(e)(4) and (5). Further, as part of today's action, EPA is describing the status of its adequacy determination for the NO X and VOC MVEBs for 2024 in accordance with 40 CFR 93.118(f)(1). Within 24 months from the effective date of EPA's adequacy determination for the MVEBs or the effective date for the final rule for this action, whichever is earlier, the transportation partners will need to demonstrate conformity to the new NO X and VOC MVEBs pursuant to 40 CFR 93.104(e).

If finalized, approval of the redesignation request would change the official designation of Barrow, Bartow, Carroll, Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Forsyth, Fulton, Gwinnett, Hall, Henry, Newton, Paulding, Rockdale, Spalding and Walton Counties in Georgia from nonattainment to attainment for the 1997 8-hour ozone NAAQS as found at 40 CFR part 81. This proposed action is does not relate to these same counties designation status under the 2008 8-hour ozone NAAQS. Those counties in the Atlanta Area that were designated nonattainment for the 2008 8-hour ozone NAAQS would remain nonattainment for that NAAQS even if this action is finalized.

EPA's proposed actions establish the basis upon which EPA may take final action on the issues being proposed for approval today. Approval of Georgia's redesignation request would change the legal designation of the designated portion of Atlanta Area for the 1997 8-hour ozone NAAQS, found at 40 CFR part 81, from nonattainment to attainment. 7 Approval of Georgia's request would also incorporate a plan for maintaining the 1997 8-hour ozone NAAQS in the Atlanta Area through 2024 into the Georgia SIP. This maintenance plan includes contingency measures to remedy any future violations of the 1997 8-hour ozone NAAQS and procedures for evaluation of potential violations. The maintenance plan also establishes NO X and VOC MVEBs for 2024 for the Atlanta Area. The NO X MVEB is 126 tpd. The VOC MVEB is 92 tpd. Additionally, EPA is notifying the public of the status of EPA's adequacy determination for the newly-established NO X and VOC MVEBs for 2024 for the Atlanta Area.

Under the CAA, redesignation of an area to attainment and the accompanying approval of a maintenance plan under section 107(d)(3)(E) are actions that affect the status of a geographical area and do not impose any additional regulatory requirements on sources beyond those imposed by state law. A redesignation to attainment does not in and of itself create any new requirements, but rather results in the applicability of requirements contained in the CAA for areas that have been redesignated to attainment. Moreover, 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 CAA. Accordingly, these proposed actions merely approve state law as meeting federal requirements and does not impose additional requirements beyond those imposed by state law. For this reason, these proposed actions:

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

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

• are 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. );

• do 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);

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

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

• are not significant regulatory actions subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• are 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

• do 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 1989, the Board's predecessor, the Interstate Commerce Commission (ICC), adopted URCS as its general purpose costing system. Adoption of the Unif. R.R. Costing Sys. as a Gen. Purpose Costing Sys. for All Regulatory Costing Purposes, 5 I.C.C.2d 894 (1989). The Board uses URCS for a variety of regulatory functions. URCS is used to make the jurisdictional determination in railroad maximum rate reasonableness proceedings, as well as the revenue allocation methodology and rate prescription methodology. URCS is also used to develop variable costs for making cost determinations in abandonment proceedings; to provide the railroad industry and shippers with a standardized costing model; to cost the Board's Car Load Waybill Sample to develop industry cost information; and to provide interested parties with basic cost information. URCS develops a regulatory cost estimate that can be applied to a service that occurs anywhere on a rail carrier's system.

URCS develops these cost estimates through three distinct phases. In Phase I, which was completed one time when URCS was originally developed, regression analyses were performed using the annual reports submitted by Class I rail carriers (R-1 reports) at the time and equations linking expense account groupings with particular measures of railroad activities were estimated. In Phase II, which is performed annually, URCS takes the aggregated cost data provided by Class I carriers in their most recent R-1 reports and disaggregates them by calculating the system-average unit costs associated with specific rail activites. In Phase III, URCS takes the unit costs from Phase II and applies them to the characteristics of a particular movement in order to calculate the system-average variable and total costs of that movement.

The ICC and now the Board have made modest adjustments to URCS over the years. 1 In August 2009, the Senate Committee on Appropriations directed the Board to submit a report providing options for updating URCS. In the report submitted by the Board in May 2010, the Board identified the “make-whole adjustment” as one area that warranted further review. 2 This rulemaking is intended to address concerns with the make-whole adjustment in URCS.

The make-whole adjustment is applied by URCS to correct the fact that, when disaggregating data and calculating system-average unit costs in Phase II, URCS currently does not take into account the economies of scale realized from larger shipment sizes. The purpose of the make-whole adjustment, which is calculated and applied in Phase III, is to recognize the efficiency savings that a carrier obtains in its higher-volume shipments and thus render more accurate unit costs.

URCS applies the make-whole adjustment through a three-step process. First, URCS assumes that a movement's costs are equal to that of a system-average movement. Next, URCS applies “efficiency adjustments” to higher-volume movements (multi-car and trainload), thereby reducing the system-average unit costs of such movements. 3 Last, URCS redistributes the total savings obtained in all of the higher-volume shipments (the “shortfall”) across all of the lower-volume shipments (single-car and multi-car), such that the sum of variable costs across all of the carrier's movements remains the same. Currently, single-car shipments are defined as 1 to 5 cars, multi-car shipments are defined as 6 to 49 cars, and trainload shipments are defined as 50 or more cars. 4

There are two primary concerns with how the make-whole adjustment is currently applied by URCS. The first concern involves the step function that results from the application of efficiency adjustments, which generally reduce the system-average unit costs by various set percentages depending on whether the movement is classified as trainload, multi-car, or single-car. For example, the system-average unit cost for a multi-car movement is the same whether it is a 6-car or 49-car shipment. The same is true for the unit cost for a trainload movement, whether it be a 50-car or 85-car shipment. At the same time, however, the system-average unit cost for a 49-car multi-car shipment is noticeably higher than a 50-car trainload shipment. In other words, “break points” exist between single-car and multi-car shipments, and between multi-car and trainload shipments. Our concern with respect to the efficiency adjustments is that there is a relatively large difference between the unit costs of a movement on one side of a break point compared to the unit costs just on the other side of a break point.

The second concern is with how the make-whole adjustment redistributes the shortfall across single-car and multi-car movements. Currently, the shortfall is distributed across lower volume movements on a per-car basis. For example, under the per-car method for switching related costs, costs are increased in proportion to the number of cars switched (i.e., a two-car movement is costed as twice as expensive to switch as a one-car movement, a three-car movement is three times as expensive to switch as a one-car movement, etc.). Yet the actual switching costs for two cars as opposed to one car are not likely to be twice as expensive because the time, equipment, and personnel involved do not double. By not decreasing the per-car costs as shipment size increases, the redistribution of savings does not adequately account for economies of scale. Additionally, the redistribution of savings creates a second step function because the add-ons increase costs per-car across single-car and multi-car shipments, but do not apply to trainload shipments. For example, under the current system, the costs are increased in proportion to the number of cars. If the shortfall redistribution for a one-car shipment is $1,000, then the shortfall redistribution for a 49-car shipment is $49,000. But because the add-ons do not apply to trainload shipments, there is no redistribution of costs to a 50-car shipment. This causes the costs of a 49-car shipment to be higher than a 50-car shipment, thus creating a step function. This second step function, in which there is a relatively large difference between the variable costs of a 49-car movement and a 50-car movement, is caused by the current per-car method of redistributing the shortfall.

Rather than attempting to refine the make-whole adjustment as it is currently applied, we believe that the best course of action is to more accurately calculate the system-average unit costs in Phase II. If the unit costs calculated in Phase II were to more accurately account for operating costs and economies of scale as shipment size increases, then it would no longer be necessary to apply a separate make-whole adjustment in Phase III. In other words, we propose to change how certain system-average unit costs are calculated in Phase II to better reflect railroad operations and to automatically reflect economies of scale as shipment size increases. This solution would thus obviate our concerns about the step functions, properly account for economies of scale, and ultimately render more accurate system-average unit costs.

With this goal in mind, we evaluated the three categories of costs for which efficiency adjustments are made to determine what changes would be needed in order to adjust the calculation of system-average unit costs in Phase II. These categories are: (1) Switching costs related to switch engine minutes; (2) equipment costs for the use of railroad-owned cars during switching; and (3) station clerical costs. After addressing each category below, we will then address several other proposed changes to further improve URCS.

Switching Costs Related to Switch Engine Minutes. This rulemaking proposes to adjust how URCS calculates the operating costs for switching cars, regardless of car ownership. These costs are referred to as “switch engine minute” (SEM) costs. Currently, in Phase II, URCS calculates SEM costs on a per-car basis, which we do not believe reflects actual railroad operations or economies of scale as shipment size increases. Instead, this rulemaking proposes to calculate SEM unit costs in Phase II on a per-shipment basis for all five types of switching accounted for by URCS, namely: (1) Industry switching; (2) inter-train & intra-train (I&I) switching; (3) interchange switching; (4) intraterminal switching; and (5) interterminal switching. 5

Operationally, a shipment of rail cars is generally connected into a contiguous block of cars prior to loading, and is handled as a contiguous block from origin to destination. As such, the costs to switch a shipment of a four-car block should be the same as the costs to switch a shipment of an eight-car block. For this reason, the costs for each type of SEM switching are better accounted for on a per-shipment basis rather than a per-car basis. This change would not only better reflect actual operating costs, but the per-car cost of switching would drop as shipment size increases, thus properly reflecting economies of scale. As a result, URCS would no longer need to make a separate make-whole adjustment because the operating efficiencies of larger shipments would already be reflected in the unit costs.

In order to calculate SEM unit costs on a per-shipment basis, we also propose adjusting our reporting requirements accordingly. In order to calculate the SEM unit costs on a per-shipment basis, we propose to adjust the reporting requirements of both the Annual Report of Cars Loaded and Cars Terminated (Form STB-54) and the Quarterly Report of Freight Commodity Statistics (Form QCS). Specifically, in addition to the information currently required by both forms, the Form STB-54 would require information on shipments loaded and terminated, while the Form QCS would require information on number of shipments. 6 For the purposes of both forms, a “shipment” would be defined as a block of one or more cars moving under the same waybill from origin to destination. See, e.g., App. A (proposed § 1248.2(a)(3)); App. B (Form STB-54 Instructions). These new requirements should not pose a significant burden on the Class I rail carriers because it is likely that they are already tracking this information. The proposed rules governing the Form STB-54 and the Form QCS are set forth in Appendix A. 7 Additionally, the proposed changes to the Form STB-54 and Form QCS are set out in Appendix B and C, respectively.

Equipment Costs for the Use of Railroad-Owned Cars During Switching. Another category of system-average unit costs associated with switching pertains to the equipment costs for the use of railroad-owned cars. Currently, URCS calculates the costs for use of railroad-owned cars on a per-car basis in Phase II, and then applies the make-whole adjustment in Phase III to account for efficiencies in multi-car and unit-train movements. We believe that these costs, which are distance- and time-related, 8 are properly accounted for by URCS on a per-car basis. In other words, unlike SEM switching costs, we believe a two-car shipment will incur twice the car-miles and car-days as a one-car shipment. Therefore, we propose to continue calculating equipment costs for the use of railroad-owned cars during switching on a per-car basis, which in turn requires the continued reporting of number of cars that are interchanged.

Although we propose to continue calculating these costs on a per-car basis in Phase II, this proposal nonetheless would affect a change in how these costs are applied in Phase III. Under our new proposal, which eliminates a separate make-whole adjustment in Phase III, the costs for the use of railroad-owned cars would not receive a subsequent adjustment because it does not appear that there are efficiencies associated with these costs.

Station Clerical Costs. This rulemaking also proposes to adjust how URCS calculates station clerical costs, which are the administrative costs associated with a shipment. Currently, in Phase II, URCS calculates station clerical costs on a per-car basis, which we are concerned does not properly reflect actual railroad operations or economies of scale. We believe that, operationally, there is little difference in the administrative costs between shipments of different sizes. As such, we propose to also calculate station clerical costs in Phase II on a per-shipment basis. To implement this change, we would rely on the proposed changes to the Form QCS and the Form STB-54 described above, wherein Class I railroads would be required to report on the number of shipments.

Other Changes. In addition to the above changes to how URCS calculates system-average unit costs in Phase II, we also propose additional changes that would further our effort to more accurately calculate costs under URCS.

Car-Mile Costs. In order to calculate car-mile costs, URCS currently uses what is referred to as the Empty/Loaded Ratio (E/L Ratio) to adjust the number of miles in a particular movement. The E/L Ratio is used when costing all movements because, although there are costs associated with both empty miles and loaded miles, URCS only requires a user to input loaded miles to cost a movement. Thus, to account for the costs of a carrier's total miles, URCS multiplies loaded miles by the E/L Ratio. The E/L Ratio, which can be described as total miles divided by loaded miles, is a figure computed by URCS based on data supplied by the Class I carriers.

Currently, in Phase III, URCS uses the E/L Ratio for single-car and multi-car movements. For trainload movements, however, URCS replaces the E/L Ratio with the figure 2.0, which is meant to assume that a loaded car will return to its origination location, such that empty miles are equal to loaded miles. In other words, URCS treats all trainload movements as dedicated unit trains. Currently, if a rail carrier's E/L Ratio is less than 2.0 (i.e., there are fewer empty miles and thus more efficiencies), URCS will disregard that more efficient E/L ratio and apply the less efficient value of 2.0. 9

We believe that the E/L Ratio computed from data supplied by the carriers is the best reflection of a railroad's actual operations and that it should not be replaced by the figure 2.0 in the case of a trainload movement. Therefore, we propose to adjust URCS so that it would apply the E/L Ratio to all types of movements. With this change, URCS would no longer treat all trainload movements as unit trains, but would instead reflect unit train service only to the extent that such service is indicated by the E/L Ratio.

I&I Switching Mileage. Currently, URCS assumes that single-car and multi-car shipments receive I&I switching every 200 miles. A number of years ago, the Board noted that this figure appeared to be outdated. Review of Gen. Purpose Costing Sys., EP 431 (Sub-No. 2), slip op. at 5 n.18 (STB served Oct. 1, 1997). We now propose to update this figure to reflect the fact that, since the mergers of the 1990s, the average length of haul on individual railroads has increased. Based on a comparison of the average length of haul for the Class I railroads in 1990 (pre-mergers) and 2011 (post-mergers), we observed a 60% increase in the overall length of haul. We therefore propose to increase the distance between I&I switches by 60%, from 200 miles to 320 miles. We acknowledge that the actual average distance between I&I switches may be greater than 320 miles, and we encourage interested parties to submit data and comments on whether 60% is an appropriate increase, or whether the Board should consider an alternative distance between I&I switches that more accurately reflects railroad operations.

Definition of Trainload. Under this proposal to eliminate a separate make-whole adjustment in Phase III, URCS would no longer make percentage reductions in Phase III based on the number of cars per movement. As such, the distinction between single-car and multi-car would become largely irrelevant. The definition of trainload would, however, continue to play a role, despite the fact that the E/L Ratio would no longer be adjusted exclusively for trainload movements under our proposal, because URCS assumes that trainload movements receive no I&I switching. In other words, when distinguishing movements based on the number of cars per movement, the operative distinctions under our proposal would be “trainload” and “non-trainload.” It is, therefore, appropriate to consider the proper definition of trainload.

A trainload shipment is currently defined as a shipment consisting of 50 or more cars. Also inherent in the definition of trainload is the fact that a trainload shipment constitutes the only shipment on the particular train on which it moves. We propose to increase the number of cars in a trainload movement to account for the fact that train lengths have increased over the years due to a variety of factors, including higher horsepower engines and advances in distributive power. By way of example, today it is not unusual for a carrier to move 100 cars or more in one train, which is double the figure at which trainload is currently defined. If the railroads can routinely move two 50-car shipments on one train, then the current definition of trainload is likely inadequate, as a trainload movement is supposed to constitute the only shipment on the train.

Therefore, we propose to define trainload as consisting of 80 cars or more. The 80-car figure appears appropriate because the shipment size is large enough that rail carriers do not routinely move two 80-car shipments on one train. 10 In other words, an 80-car shipment is likely to be the minimum size shipment that a carrier would move as a single train, consistent with the definition of trainload where only one shipment is on a train. A survey of the 2011 Waybill Sample, which is the most recently available data and thus the best reflection of current railroad operations, reveals that, for shipment sizes between 50 and 90, there is a higher occurrence of 80-car movements than any other shipment size. This suggests that 80 cars may be an appropriate definition for trainload. Nevertheless, we encourage interested parties to submit data or comments on whether the Board should adopt the proposed definition or consider an alternate figure in defining trainload.

Locomotive Unit-Mile. Finally, this rulemaking proposes to adjust the locomotive unit-mile (LUM) cost allocation. Currently, the LUM cost allocation produces a third step function between multi-car and trainload shipments, such that the LUM costs assigned to a 49-car shipment (the maximum multi-car shipment under the current definition) are higher than the costs assigned to a 50-car shipment (the minimum number of cars under the current definition of trainload). The total locomotive unit-miles are calculated by multiplying the total distance of a movement by the average number of locomotives for a particular type of train. Because a single-car or multi-car shipment (i.e., non-trainload) should only incur a portion of the LUM costs for the entire train, as that train will contain other shipments, URCS allocates the LUM costs of the train to a shipment based on the gross tons of that shipment compared to the average gross tons of that entire train. 11

We therefore propose two modifications to how URCS currently allocates LUM costs. First, the entire train's LUM costs would be allocated to the trainload shipment, regardless of the gross tons of the trainload shipment relative to the average gross tons of a particular train. This should be more accurate than the current approach because, by definition, a trainload shipment has no other shipments that should share the LUM costs of that train.

Second, the allocation of LUM costs for single and multi-car shipments would be based on the number of cars in the shipment relative to the minimum number of cars in a trainload shipment, which, as described above, we propose to be 80 cars. For example, a 20-car shipment would be allocated 25% (20/80) of the LUM costs. 12 While the current allocation of LUM costs to single and multi-car shipments is based on the gross tons of the shipment relative to the average gross tons of way trains and through trains, basing the allocation on the number of cars in the shipment should be sufficiently precise, particularly if most cars are homogenously loaded at or near the maximum weight. Moreover, whenever practical, we seek a smooth cost function, such that there is no large cost discrepancy between a 79-car multi-car movement and an 80-car trainload movement. Basing this allocation on the number of cars in the shipment should assign LUM costs consistently on a prorated share of the total LUM costs and produce a smooth cost function across all shipment sizes, including trainload shipments.

We believe that the proposed modifications to URCS described above would produce more accurate costs and would more accurately reflect the current state of rail industry operations. We also believe that the modifications to our reporting requirements, which update the existing regulations and add additional reporting requirements in order to implement the proposed changes to URCS, would not impose a significant burden on the railroads. We therefore invite public comment on each of the proposals described herein.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities. In drafting a rule, an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact; and (3) make the analysis available for public comment. 5 U.S.C. 601-604. In its notice of proposed rulemaking, the agency must either include an initial regulatory flexibility analysis, § 603(a), or certify that the proposed rule would not have a “significant impact on a substantial number of small entities,” § 605(b).

Because the goal of the RFA is to reduce the cost to small entities of complying with federal regulations, the RFA requires an agency to perform a regulatory flexibility analysis of small entity impacts only when a rule directly regulates those entities. In other words, the impact must be a direct impact on small entities “whose conduct is circumscribed or mandated” by the proposed rule. White Eagle Coop. Ass'n v. Conner, 553 F.3d 467, 478, 480 (7th Cir. 2009). An agency has no obligation to conduct a small entity impact analysis of effects on entities that it does not regulate. United Dist. Cos. v. FERC, 88 F.3d 1105, 1170 (DC Cir. 1996).

This proposal will not have a significant economic impact upon a substantial number of small entities, within the meaning of the RFA. The reporting requirements that we are proposing here are applicable only to Class I rail carriers, which, under the Board's regulations, have annual carrier operating revenues of $250 million or more in 1991 dollars. Class I carriers generally do not fall within the Small Business Administration's definition of a small business for the rail transportation industry. The purpose of our changes to URCS is to improve the Board's general purpose costing system, which is used to develop regulatory cost estimates for rail carriers. These changes will result in more accurate estimates of variable costs. Therefore, the Board certifies under 49 U.S.C. 605(b) that this proposed rule, if promulgated, will not have a significant economic impact on a substantial number of small entities within the meaning of the RFA.

Pursuant to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3549, and Office of Management and Budget (OMB) regulations at 5 CFR 1320.8(d)(3), the Board seeks comments regarding: (1) Whether each of the collections of information (the Form QCS and the Form STB-54), as modified in the proposed rules and further described in Appendix D, is necessary for the proper performance of the functions of the Board, including whether the collection has practical utility; (2) the accuracy of the Board's burden estimates; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate. The modified collections in this proposed rule will be submitted to OMB for review as required under 44 U.S.C. 3507(d) and 5 CFR 1320.11.

This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

It is ordered:

1. The Board proposes to adjust URCS and to amend its rules as detailed in this decision. Notice of this decision and the proposed rules will be published in the Federal Register .

2. Comments are due by March 21, 2013; replies are due by April 22, 2013.

3. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration.

4. This decision is effective on its service date.

For the reasons set forth in the preamble, the Surface Transportation Board proposes to amend parts 1247 and 1248 of title 49, chapter X, of the Code of Federal Regulations as follows: