On July 13, 2012, the U.S. Office of Personnel Management (OPM) issued an interim rule (77 FR 41247) to abolish the Washington, DC, Federal Wage System (FWS) special wage schedule for printing and lithographic positions. This change is necessary because Federal employment in printing and lithographic occupations in the Washington, DC, wage area has declined sharply in recent years, and a separate wage schedule is no longer viable or beneficial to employees. Agencies will place employees who are paid from the Washington, DC, special wage schedule on the Washington, DC, regular wage schedule on the first day of the first applicable pay period beginning on or after October 21, 2012.

The Federal Prevailing Rate Advisory Committee, the national labor-management committee that advises OPM on FWS pay matters, reviewed and concurred by consensus with this change. The interim rule had a 30-day comment period, during which OPM received no comments.

I certify that these regulations will not have a significant economic impact on a substantial number of small entities because they will affect only Federal agencies and employees.

The Council of the Inspectors General on Integrity and Efficiency (CIGIE) is issuing this regulation to provide the procedures and guidelines under which CIGIE will implement the Freedom of Information Act (FOIA) (5 U.S.C. 552). On July 20, 2012, CIGIE published a proposed rule implementing the Freedom of Information Act (FOIA) (U.S.C. 552) in the Federal Register . See 77 FR 42673, July 20, 2012. CIGIE provided interested persons with an opportunity to participate in the rulemaking through submission of written comments on the proposed rule. The comment period closed on September 18, 2012. CIGIE did not receive any comments during the 60-day comment period.

In issuing this regulation, CIGIE adhered to the regulatory philosophy and the applicable principles of regulation as set forth in Section 1 of Executive Order 12866, Regulatory Planning and Review, 58 FR 51735. This regulation has not been reviewed by the Office of Management and Budget under the Executive Order since it is not a significant regulatory action within the meaning of the Executive Order. For purposes of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), CIGIE certifies that the final regulations in this part do not contain any new reporting or record-keeping requirements.

Accordingly, as set forth in the preamble, the Council of the Inspectors General on Integrity and Efficiency establishes 5 CFR Chapter XCVIII, consisting of parts 9800 through 9899, to read as follows:

I. Background Information A. General

This notice relates to fees for the Commission's review of the rule enforcement programs at the registered futures associations  1 and designated contract markets (DCM) each of which is a self-regulatory organization (SRO) regulated by the Commission. The Commission recalculates the fees charged each year to cover the costs of operating this Commission program. 2 All costs are accounted for by the Commission's Budget Program Activity Codes (BPAC) system, formerly the Management Accounting Structure Codes (MASC) system, which records each employee's time for each pay period. The fees are set each year based on direct program costs, plus an overhead factor. The Commission calculates actual costs, then calculates an alternate fee taking volume into account, then charges the lower of the two. 3

The fees charged by the Commission to the SROs are designed to recover program costs, including direct labor costs and overhead. The overhead rate is calculated by dividing total Commission-wide overhead direct program labor costs into the total amount of the Commission-wide overhead pool. For this purpose, direct program labor costs are the salary costs of personnel working in all Commission programs. Overhead costs consist generally of the following Commission-wide costs: indirect personnel costs (leave and benefits), rent, communications, contract services, utilities, equipment, and supplies. This formula has resulted in the following overhead rates for the most recent three years (rounded to the nearest whole percent): 147 percent for fiscal year 2009, 153 percent for fiscal year 2010, and 145 percent for fiscal year 2011.

Under the formula adopted by the Commission in 1993, the Commission calculates the fee to recover the costs of its rule enforcement reviews and examinations, based on the three-year average of the actual cost of performing such reviews and examinations at each SRO. The cost of operation of the Commission's SRO oversight program varies from SRO to SRO, according to the size and complexity of each SRO's program. The three-year averaging computation method is intended to smooth out year-to-year variations in cost. Timing of the Commission's reviews and examinations may affect costs—a review or examination may span two fiscal years and reviews and examinations are not conducted at each SRO each year.

As noted above, adjustments to actual costs may be made to relieve the burden on an SRO with a disproportionately large share of program costs. The Commission's formula provides for a reduction in the assessed fee if an SRO has a smaller percentage of United States industry contract volume than its percentage of overall Commission oversight program costs. This adjustment reduces the costs so that, as a percentage of total Commission SRO oversight program costs, they are in line with the pro rata percentage for that SRO of United States industry-wide contract volume.

The calculation is made as follows: The fee required to be paid to the Commission by each DCM is equal to the lesser of actual costs based on the three-year historical average of costs for that DCM or one-half of average costs incurred by the Commission for each DCM for the most recent three years, plus a pro rata share (based on average trading volume for the most recent three years) of the aggregate of average annual costs of all DCMs for the most recent three years. The formula for calculating the second factor is: 0.5a + 0.5 vt = current fee. In this formula, “a” equals the average annual costs, “v” equals the percentage of total volume across DCMs over the last three years, and “t” equals the average annual costs for all DCMs. NFA has no contracts traded; hence, its fee is based simply on costs for the most recent three fiscal years. This table summarizes the data used in the calculations of the resulting fee for each entity:

An example of how the fee is calculated for one exchange, the Chicago Board of Trade, is set forth here:

a. Actual three-year average costs equal $78,553.

b. The alternative computation is: (.5) ($78,553) + (.5) (.274) ($1,340,083) = $222,868.

c. The fee is the lesser of a or b; in this case $78,553.

As noted above, the alternative calculation based on contracts traded is not applicable to NFA because it is not a DCM and has no contracts traded. The Commission's average annual cost for conducting oversight review of the NFA rule enforcement program during fiscal years 2009 through 2011 was $577,549 (one-third of $1,732,647). The fee to be paid by the NFA for the current fiscal year is $577,549.

Therefore, fees for the Commission's review of the rule enforcement programs at the registered futures associations and DCMs regulated by the Commission are as follows:

The Debt Collection Improvement Act (DCIA) requires deposits of fees owed to the government by electronic transfer of funds (See 31 U.S.C. 3720). For information about electronic payments, please contact Jennifer Fleming at (202) 418-5034 or jfleming@cftc.gov, or see the CFTC Web site at www.cftc.gov, specifically, www.cftc.gov/cftc/cftcelectronicpayments.htm.

PBGC's regulation on Benefits Payable in Terminated Single-Employer Plans (29 CFR part 4022) prescribes actuarial assumptions—including interest assumptions—for paying plan benefits under terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974. The interest assumptions in the regulation are also published on PBGC's Web site ( http://www.pbgc.gov ).

PBGC uses the interest assumptions in Appendix B to Part 4022 to determine whether a benefit is payable as a lump sum and to determine the amount to pay. Appendix C to Part 4022 contains interest assumptions for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using PBGC's historical methodology. Currently, the rates in Appendices B and C of the benefit payment regulation are the same.

The interest assumptions are intended to reflect current conditions in the financial and annuity markets. Assumptions under the benefit payments regulation are updated monthly. This final rule updates the benefit payments interest assumptions for January 2013.

PBGC normally updates the assumptions under the benefit payments regulation for January at the same time as PBGC updates assumptions for the first quarter of the year under its regulation on Allocation of Assets in Single-Employer Plans (29 CFR part 4044) in a single rulemaking document. Because of delays in obtaining data used in setting assumptions under Part 4044 for the first quarter of 2013, PBGC is publishing two separate rulemaking documents to update the benefit payments regulation for January 2013 and the allocation regulation for the first quarter of 2013.

The January 2013 interest assumptions under the benefit payments regulation will be 0.75 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for December 2012, these interest assumptions are unchanged.

PBGC has determined that notice and public comment on this amendment are impracticable and contrary to the public interest. This finding is based on the need to determine and issue new interest assumptions promptly so that the assumptions can reflect current market conditions as accurately as possible.

Because of the need to provide immediate guidance for the payment of benefits under plans with valuation dates during January 2013, PBGC finds that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication.

PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this amendment, the Regulatory Flexibility Act of 1980 does not apply. See 5 U.S.C. 601(2).

In consideration of the foregoing, 29 CFR part 4022 is amended as follows:

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

On March 1, 2012, EPA fully approved the California State Implementation Plan (SIP) for attainment of the 1997 8-hour ozone National Ambient Air Quality Standards (NAAQS) in the San Joaquin Valley and included provisions of this SIP in the Code of Federal Regulations (CFR) at 40 CFR 52.220(c). See 77 FR 12652 (March 1, 2012).

The regulatory text for this final action included paragraph (c)(396)(ii)(A)( 2 )( ii ) of 40 CFR 52.220. This paragraph contains CARB's commitment to update the air quality modeling in the San Joaquin Valley 8-Hour Ozone SIP to reflect emissions inventory improvements and any other new information by December 31, 2014 or the date by which state implementation plans are due for the expected revision to the Federal 8-hour ozone standard whichever comes first, as provided on page 3 of CARB Resolution No. 11-22 (dated July 21, 2011). CARB Resolution 11-22 documents CARB's adoption of the 8-Hour Ozone State Implementation Plan Revisions and Technical Revisions to the PM 2.5 State Implementation Plan Transportation Conformity Budgets for the South Coast and San Joaquin Valley Air Basins (dated June 20, 2011). However, the amendatory language at the beginning of this regulatory text (77 FR 12672) did not identify this paragraph and as a result this paragraph is not currently in the CFR. We are issuing this technical amendment to 40 CFR 52.220 to correct this oversight. This technical amendment makes no change to the substance of our March 1, 2012 approval of the SJV 8-Hour Ozone SIP.

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

Definitions

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

The CAA requires each state to develop plans, referred to as SIPs, to meet various air quality requirements. A state must submit its SIPs and SIP revisions to us for approval. Once approved, a SIP is enforceable by EPA and citizens under the CAA, also known as being federally enforceable. If a state fails to make a required SIP submittal or if we find that a state's required submittal is incomplete or unapprovable, then we must make a finding to that effect. This action involves the requirement that states have SIPs that address regional haze.

In 1990, Congress added section 169B to the CAA to address regional haze issues, and we promulgated regulations addressing regional haze in 1999. 64 FR 35714 (July 1, 1999), codified at 40 CFR part 51, subpart P. The requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in our visibility protection regulations at 40 CFR 51.300-309. The requirement to submit a regional haze SIP applies to all 50 states, the District of Columbia and the Virgin Islands. States were required to submit a SIP addressing regional haze visibility impairment no later than December 17, 2007. 40 CFR 51.308(b).

Utah submitted SIPs addressing regional haze on September 9, 2008 and May 26, 2011. (These superseded and replaced prior SIP submittals dated December 12, 2003 and August 8, 2004).

In a lawsuit in the U.S. District Court for the District of Colorado, environmental groups sued us for our failure to take timely action with respect to the regional haze requirements of the CAA and our regulations for the State of Utah. As a result of this lawsuit, we entered into a consent decree. The consent decree requires that we sign a notice of final rulemaking addressing the regional haze requirements for Utah by October 31, 2012. We are meeting that requirement with the signing of this notice of final rulemaking.

We published our notice of proposed rulemaking in the Federal Register on May 16, 2012 (77 FR 28825). In that notice, we provided a detailed description of the various regional haze requirements. We are not repeating that description here; instead, the reader should refer to our notice of proposed rulemaking for further detail.

In our proposal, we proposed to approve all sections of the May 26, 2011 SIP submittal as meeting the requirements under 40 CFR 51.309, with the exception of the requirements under 40 CFR 51.309(d)(4)(vii) pertaining to nitrogen oxides (NO X ) and particulate matter (PM) best available retrofit technology (BART). EPA proposed to disapprove the State's NO X and PM BART determinations and limits in section D.6.d of the SIP for the following four subject-to-BART electric generating units (EGUs): PacifiCorp Hunter Unit 1, PacifiCorp Hunter Unit 2, PacifiCorp Huntington Unit 1, and PacifiCorp Huntington Unit 2. EPA proposed to disapprove these BART determinations because they do not comply with our regulations under 40 CFR 51.308(e)(1)  1 pertaining to the factors that need to be considered as part of a BART determination. EPA also proposed to disapprove the State's SIP because it does not contain the provisions necessary to make BART limits practically enforceable as required by section 110(a)(2) of the CAA and Appendix V to part 51.

We proposed to approve specific sections of the State's September 9, 2008 SIP submittal. Specifically, we proposed to approve Utah Administrative Rules (UAR) R307-250— Western Backstop Sulfur Dioxide Trading Program and R307-150— Emission Inventories. R307-250, in conjunction with the SIP, implements the backstop trading program provisions in accordance with the requirements of the regional haze rule (RHR) under 40 CFR 51.309. The purpose of R305-150 is to establish consistent emission inventory reporting requirements for stationary sources in Utah to determine whether sulfur dioxide (SO 2 ) emissions are below the SO 2 milestones established for the trading program.

We requested comments on all aspects of our proposed action and provided a sixty-day comment period, with the comment period closing on July 16, 2012. We received comments on our proposed rule that supported our proposed action and that were critical of our proposed action. In this action, we are responding to the comments we have received, taking final rulemaking action, and explaining the bases for our action.

We are approving all sections of the May 26, 2011 SIP submittal as meeting the requirements under 40 CFR 51.309, with the exception of the requirements under 40 CFR 51.309(d)(4)(vii) pertaining to NO X and PM BART. EPA is disapproving the State's NO X and PM BART determinations and limits in section D.6.d of the SIP for the following four subject-to-BART EGUs: PacifiCorp Hunter Unit 1, PacifiCorp Hunter Unit 2, PacifiCorp Huntington Unit 1, and PacifiCorp Huntington Unit 2. EPA is disapproving these BART determinations because they do not comply with our regulations under 40 CFR 51.308(e)(1). EPA is also disapproving the State's SIP because it does not contain the provisions necessary to make BART limits practically enforceable as required by section 110(a)(2) of the CAA and Appendix V to part 51.

We are approving specific sections of the State's September 9, 2008 SIP submittal. Specifically, we are approving UAR R307-250— Western Backstop Sulfur Dioxide Trading Program and R307-150— Emission Inventories. We are taking no action on the rest of the September 9, 2008 submittal as the May 26, 2011 submittal supersedes and replaces the remaining sections of the September 9, 2008 SIP submittal. The State also submitted SIPs on December 12, 2003 and August 8, 2004 to meet the requirements of the RHR. These submittals have been superseded and replaced by the September 9, 2008 and May 26, 2011 submittals. We are taking no action on section G— Long-Term Strategy for Fire Programs of the May 26, 2011 submittal as we have proposed approval of this section in a separate notice (76 FR 69217, November 8, 2011).

We have fully considered all significant comments on our proposal and have concluded that no changes from our proposal are warranted. Our action is based on an evaluation of Utah's regional haze SIP submittal against the regional haze requirements at 40 CFR 51.300-51.309 and CAA sections 169A and 169B. All general SIP requirements contained in CAA section 110, other provisions of the CAA, and our regulations applicable to this action were also evaluated. The purpose of this action is to ensure compliance with these requirements. Our authority for action on Utah's SIP submittal is based on CAA section 110(k).

We are approving most of the State's regional haze SIP provisions because they meet the relevant RHR requirements and disapproving others because they do not meet the requirements of the RHR or other requirements of the CAA. Most of the adverse comments we received concerning our proposed approval of the regional haze SIP pertained to our proposed approval of the SO 2 backstop trading program and disapproval of the BART determinations for PacifiCorp Hunter Unit 1 and Unit 2, and PacifiCorp Huntington Unit 1 and Unit 2. However, the comments have not convinced us that the State did not meet the requirements of 40 CFR 51.309 that we proposed to approve or that the State met the requirements of the RHR or the CAA for which we proposed disapproval.

EPA has proposed to approve the SO 2 backstop trading program components of the RH SIPs for all participating States and has done so through four separate proposals: for the Bernalillo County proposal see 77 FR 24768 (April 25, 2012); for the Utah proposal see 77 FR 28825 (May 15, 2012); for the Wyoming proposal see 77 FR 30953 (May 24, 2012); finally, for the New Mexico proposal see 77 FR 36043 (June 15, 2012). National conservation organizations paired with organizations local to each state have together submitted very similar, if not identical, comments on various aspects of EPA's proposed approval of these common program components. These comment letters may be found in the docket for each proposal and are dated as follows: May 25, 2012 for Bernalillo County; July 16, 2012 for Utah; July 23, 2012 for Wyoming; and July 16, 2012 for New Mexico. Each of the comment letters has attached a consultant's report dated May 25, 2012, and titled: “Evaluation of Whether the SO 2 Backstop Trading Program Proposed by the States of New Mexico, Utah and Wyoming and Albuquerque-Bernalillo County Will Result in Lower SO 2 Emissions than Source-Specific BART.” In this section, we address and respond to those comments we identified as being consistently submitted and specifically directed to the component of the published proposals dealing with the submitted SO 2 backstop trading program. For our organizational purposes, any additional or unique comments found in the conservation organization letter that is applicable to this proposal ( i.e., for the State of Utah) will be addressed in the next section where we also address all other comments received.

Comment: The commenter acknowledges that prior case law affirms EPA's regulatory basis for having “better than BART” alternative measures, but nevertheless asserts that it violates Congress' mandate for an alternative trading program to rely on emissions reductions from non-BART sources and electric generating units (EGUs) from compliance with BART.

Response: The CAA requires BART “as may be necessary to make reasonable progress toward meeting the national goal” of remedying existing impairment and preventing future impairment at mandatory Class I areas. See CAA Section 169A(b)(2) (emphasis added). In 1999, EPA issued regulations allowing for alternatives to BART based on a reading of the CAA that focused on the overarching goal of the statute of achieving progress. EPA's regulations provided states with the option of implementing an emissions trading program or other alternative measure in lieu of BART so long as the alternative would result in greater reasonable progress than BART. We note that this interpretation of CAA Section 169A(B)(2) was determined to be reasonable by the D.C. Circuit in Center for Energy and Economic Development v. EPA, 398 F.3d 653, 659-660 (D.C. Cir. 2005) in a challenge to the backstop market trading program under Section 309, and again found to reasonable by the D.C. Circuit in Utility Air Regulatory Group v. EPA, 471 F.3d 1333, 1340 (D.C. Cir. 2006)(“* * * [W]e have already held in CEED that EPA may leave states free to implement BART-alternatives so long as those alternatives also ensure reasonable progress.”). Our regulations for alternatives to BART, including the provisions for a backstop trading program under Section 309, are therefore consistent with the CAA and not in issue in this action approving a SIP submitted under those regulations. We have reviewed the submitted 309 trading program SIPs to determine whether each has the required backstop trading program (see 40 CFR 51.309(d)(4)(v)), and whether the features of the program satisfy the requirements for trading programs as alternatives to BART (see 40 CFR 51.308(e)(2)). Our regulations make clear that any market trading program as an alternative to BART contemplates market participation from a broader list of sources than merely those sources that are subject to BART. See 40 CFR 51.308(e)(2)(i)(B).

Comment: The submitted 309 trading program is defective because only three of nine transport states remain in the program. The Grand Canyon Visibility Transport Commission (GCVTC) Report clearly stated that the program must be “comprehensive.” The program fails to include the other western states that account for the majority of sulfate contribution in the Class I areas of participating states, and therefore Class I areas on the Colorado Plateau will see little or no visibility benefit. Non-participation by other transport region states compounds the program's deficiencies.

Response: We disagree that the 309 trading program is defective because only three States remain in the program. EPA's regulations do not require a minimum number of Transport Region States to participate in the 309 trading program, and there is no reason to believe that the limited participation by the nine Transport States will limit the effectiveness of the program in the three States that have submitted 309 SIPs. The commenter's argument is not supported by the regional haze regulations and is demonstrably inconsistent with the resource commitments of the Transport Region States that have worked for many years in the WRAP to develop and submit SIPs to satisfy 40 CFR 51.309. At the outset, our regulations affirm that “certain States * * * may choose” to comply with the 40 CFR 51.309 requirements and conversely that “[a]ny Transport Region State [may] elect not to submit an implementation plan” to meet the optional requirements. 40 CFR 51.309(a); see also 40 CFR 51.309(f). We have also previously observed how the WRAP, in the course of developing its technical analyses as the framework for a trading program, “understood that some States and Tribes may choose not to participate in the optional program provided by 40 CFR 51.309.” 68 FR 33769 (June 5, 2003). Only five of nine Transport Region States initially opted to participate in the backstop trading program in 2003, and of those initial participants only Oregon and Arizona later elected not to submit 309 SIPs.

We disagree with the commenter's assertion that Class I areas on the Colorado Plateau will see little or no visibility benefit. Non-participating states must account for sulfate contributions to visibility impairment at Class I areas by addressing all requirements that apply under 40 CFR 51.308. To the extent Wyoming, New Mexico and Utah sources “do not account for the majority of sulfate contribution” at the 16 class I areas on Colorado Plateau, there is no legal requirement that they account for SO 2 emissions originating from sources outside these participating states. Aside from this, the modeling results detailed in the proposed rulemaking show projected visibility improvement for the 20 percent worst days in 2018 and no degradation in visibility conditions on the 20 percent best days at all 16 of the mandatory Class I areas under the submitted 309 plan.

Finally, we do not agree with the commenter's characterization of the GCVTC Report, which used the term “comprehensive” only in stating the following: “It is the intent of [the recommendation for an incentive-based trading program] that [it] include as many source categories and species of pollutants as is feasible and technically defensible. This preference for a `comprehensive' market is based upon the expectation that a comprehensive program would be more effective at improving visibility and would yield more cost-effective emission reduction strategies for the region as a whole.”  2

It is apparent that the GCVTC recommended comprehensive source coverage to optimize the market trading program. This does not necessitate or even necessarily correlate with geographic comprehensiveness as contemplated by the comment. We note that the submitted backstop trading program does in fact comprehensively include “many source categories,” as may also be expected for any intrastate trading program that any state could choose to develop and submit under 40 CFR 51.308(e)(2). As was stated in our proposal, section 51.309 does not require the participation of a certain number of states to validate its effectiveness.

Comment: The submitted 309 trading program is defective because the pollutant reductions from participating states have little visibility benefit in each other's Class I areas. The states that have submitted 309 SIPs are “largely non-contiguous” in terms of their physical borders and their air shed impacts. Sulfate emissions from each of the participating states have little effect on Class I areas in other participating states.

Response: We disagree. The 309 program was designed to address visibility impairment for the sixteen Class I areas on the Colorado Plateau. New Mexico, Wyoming and Utah are identified as Transport Region States because the GCVTC had determined they could impact the Colorado Plateau class I areas. The submitted trading program has been designed by these transport region states to satisfy their requirements under 40 CFR 51.309 to address visibility impairment at the sixteen Class I areas. The strategies in these plans are directed toward a designated clean-air corridor that is defined by the placement of the 16 Class I areas, not the placement of state borders. “Air sheds” that do not relate to haze at these Class I areas or that relate to other Class I areas are similarly not relevant to whether the requirements for an approvable 309 trading program are met. As applicable, any transport region state, with Class I areas not on the Colorado Plateau, implementing the provisions of section 309 must also separately demonstrate reasonable progress for any additional mandatory Class I areas other than the 16 Class I areas located within the state. See 40 CFR 51.309(g). More broadly, the state must submit a long-term strategy to address these additional Class I areas as well as those Class I areas located outside the state, which may be affected by emissions from the state. 40 CFR 51.309(g) and 51.308(d)(2). In developing long-term strategies, the Transport Region States may take full credit for visibility improvements that would be achieved through implementation of the strategies required by 51.309(d). A state's satisfaction of the requirements of 51.309(d), and specifically the requirement for backstop trading program, is evaluated independently from whether a state has satisfied the requirements of 51.309(g). In neither case, however, does the approvability inquiry center on the location or contiguousness of state borders.

Comment: The emission benchmark used in the submitted 309 trading program is inaccurate. The “better-than-BART” demonstration needs to analyze BART for each source subject to BART in order to evaluate the alternative program. The submitted 309 trading program has no BART analysis. The “better-than-BART” demonstration does not comply with the regional haze regulations when it relies on the presumptive SO 2 emission rate of 0.15 lb/MMBtu for most coal-fired EGUs. The presumptive SO 2 limits are inappropriate because EPA has elsewhere asserted that “presumptive limits represented control capabilities at the time the BART Rule was promulgated, and that [EPA] expected that scrubber technology would continue to improve and control costs would continue to decline.” 77 FR 14614 (March 12, 2012).

Response: We disagree that the submitted 309 trading program requires an analysis that determines BART for each source subject to BART. Source specific BART determinations are not required to support the better-than-BART demonstration when the “alternative measure has been designed to meet a requirement other than BART.” See 40 CFR 51.308(e)(2)(i)(C). The requirements of Section 309 are meant to implement the recommendations of the Grand Canyon Visibility Transport Commission and are regulatory requirements “other than BART” that are part of a long-term strategy to achieve reasonable progress. As such, in its analysis, the State may assume emission reductions “for similar types of sources within a source category based on both source-specific and category-wide information, as appropriate.” See id. The 309 States used this approach in developing their emission benchmark, and we view it to be consistent with what we have previously stated regarding the establishment of a BART benchmark. Specifically, we have explained that states designing alternative programs to meet requirements other than BART “may use simplifying assumptions in establishing a BART benchmark based on an analysis of what BART is likely to be for similar types of sources within a source category.” 71 FR 60619 (October 13, 2006).

We also previously stated that “we believe that the presumptions for EGUs in the BART guidelines should be used for comparisons to a trading program or other alternative measure, unless the State determines that such presumptions are not appropriate.” Id. Our reasoning for this has also long been clear. While EPA recognizes that a case-by-case BART analysis may result in emission limits more stringent than the presumptive limits, the presumptive limits are reasonable and appropriate for use in assessing regional emissions reductions for the better than BART demonstration. See 71 FR 60619 (“the presumptions represent a reasonable estimate of a stringent case BART because they would be applied across the board to a wide variety of units with varying impacts on visibility, at power plants of varying size and distance from Class I areas”). The submitted SIP revisions from the 309 states have accordingly and appropriately, followed our advice that the presumptions for EGUs in the BART guidelines, generally “should” be used for comparisons to the trading program unless the state determines otherwise.

EPA's expectation that scrubber technology would continue to improve and that control costs would continue to decline is a basis for not regarding presumptive limits as a default or safe harbor BART determination when the BART Guidelines otherwise call for a complete, case-by-case analysis. We believe it was reasonable for the developers of the submitted trading program to use the presumptive limits for EGUs in establishing the emission benchmark, particularly since the methodology used to establish the emission benchmark was established near in time to our promulgation of the presumptive limits as well as our guidance that they should be used. We do not think the assumptions used at the time the trading program was developed, including the use of presumptive limits, were unreasonable. Moreover, the commenter has not demonstrated how the use of presumptive limits as a simplifying assumption at that time, or even now, would be flawed merely because EPA expects that scrubber technology and costs will continue to improve.

Comment: The presumptive SO 2 emission rate overstates actual emissions from sources that were included in the BART benchmark calculation. In addition, states in the transport region have established or proposed significantly more stringent BART limits for SO 2 . Using actual SO 2 emission data for EGUs, SO 2 emissions would be 130,601 tpy, not the benchmark of 141,859 tpy submitted in the 309 trading program. Using a combination of actual emissions and unit-specific BART determinations, the SO 2 emissions would be lower still at 123,529 tpy. Finally, the same data EPA relied on to support its determination that reductions under the Cross State Air Pollution Rule are “better-than-BART” would translate to SO 2 emissions of 124,740 tpy. These analyses show the BART benchmark is higher than actual SO 2 emissions reductions achievable through BART. It follows that the submitted 309 trading program is flawed because it cannot be deemed to achieve “greater reasonable progress” than BART.

Response: The BART benchmark calculation does not overstate emissions because it was not intended to assess actual emissions at BART subject sources nor was it intended to assess the control capabilities of later installed controls. Instead, the presumptive SO 2 emission rate served as a necessary simplifying assumption. When the states worked to develop the 309 trading program, they could not be expected to anticipate the future elements of case-by-case BART determinations made by other states (or EPA, in the case of a BART determination through any federal implementation plan), nor could they be expected to anticipate the details of later-installed SO 2 controls or the future application of enforceable emission limits to those controls. The emissions projections by the WRAP incorporated the best available information at the time from the states, and utilized the appropriate methods and models to provide a prediction of emissions from all source categories in this planning period. In developing a profile of planning period emissions to support each state's reasonable progress goals, as well as the submitted trading program, it was recognized that the final control decisions by all of the states were not yet complete, as decisions as they may pertain to emissions from BART eligible sources. Therefore, we believe it is appropriate that the analysis and demonstration is based on data that was available to the states at the time they worked to construct the SO 2 trading program. The states did make appropriate adjustments based on information that was available to them at the time. Notably, the WRAP appropriately adjusted its use of the presumptive limits in the case of Huntington Units 1 and 2 in Utah, because those units were already subject to federally enforceable SO 2 emission rates that were lower than the presumptive rate. The use of actual emissions data after the 2006 baseline is not relevant to the demonstration that has been submitted.

Comment: SO 2 emissions under the 309 trading program would be equivalent to the SO 2 emissions if presumptive BART were applied to each BART-subject source. Because the reductions are equivalent, the submitted 309 trading program does not show, by “the clear weight of the evidence,” that the alternative measure will result in greater reasonable progress than would be achieved by requiring BART. In view of the reductions being equivalent, it is not proper for EPA to rely on “non-quantitative factors” in finding that the SO 2 emissions trading program achieves greater reasonable progress.

Response: We recognize that the 2018 SO 2 milestone equals the BART benchmark and that the benchmark generally utilized the presumptive limits for EGUs, as was deemed appropriate by the states who worked together to develop the trading program. If the SO 2 milestone is exceeded, the trading program will be activated. Under this framework, sources that would otherwise be subject to the trading program have incentives to make independent reductions to avoid activation of the trading program. We cannot discount that the 2003 309 SIP submittal may have already influenced sources to upgrade their plants before any case-by-case BART determination under Section 308 may have required it. In addition, the trading program was designed to encourage early reductions by providing extra allocations for sources that made reductions prior to the program trigger year. Permitting authorities that would otherwise permit increases in SO 2 emissions for new sources would be equally conscious of the potential impacts on the achievement of the milestone. We note that the most recent emission report for the year 2010 shows a 35% reduction in emissions from 2003. The 309 trading program is designed as a backstop such that sources would work to accomplish emission reductions through 2018 that would be superior to the milestone and the BART benchmark. If instead the backstop trading program is triggered, the sources subject to the program would be expected to make any reductions necessary to achieve the emission levels consistent with each source's allocation. We do not believe that the “clear weight of the evidence” determination referenced in 40 CFR 51.308(e)(2)(E)—in short, a determination that the alternative measure of the 309 trading program achieves greater reasonable progress than BART—should be understood to prohibit setting the SO 2 milestone to equal the BART benchmark. Our determination that the 2018 SO 2 milestone and other design features of the 309 SIP will achieve greater reasonable progress than would be achieved through BART is based on our understanding of how the SIP will promote and sustain emission reductions of SO 2 as measured against a milestone. Sources will be actively mindful of the participating states' emissions inventory and operating to avoid exceeding the milestone, not trying to maximize their emissions to be equivalent to the milestone, as this comment suggests. We note the 2018 milestone constitutes an emissions cap that persists after 2018 unless the trading program can be replaced via future SIP revisions submitted for EPA approval that will meet the BART and reasonable progress requirements of 40 CFR 51.308. See 40 CFR 51.309(d)(4)(vi)(A).

Comment: In proposing to find that the SO 2 trading program achieves greater reasonable progress than BART, EPA's reliance on the following features of the 309 trading program is flawed: non-BART emission reductions, a cap on new growth, and a mass-based cap on emissions. The reliance on non-BART emission reductions is “a hollow promise” because there is no evidence that the trading program will be triggered for other particular emission sources, and if the program is never triggered there will be no emission reductions from smaller non-BART sources. The reliance on a cap on future source emissions is also faulty because there is no evidence the trading program will be triggered, and thus the cap may never be implemented. Existing programs that apply to new sources will already ensure that SO 2 emissions from new sources are reduced to the maximum extent. EPA's discussion of the advantages of a mass-based cap is unsupported and cannot be justified. EPA wrongly states that a mass-based cap based on actual emissions is more stringent than BART. There should not be a meaningful gap between actual and allowable emissions under a proper BART determination. A mass-based cap does not effectively limit emissions when operating at lower loads and, as an annual cap, does not have restrictive compliance averaging. EPA's argument implies that BART limits do not apply during startup, shutdown or malfunction events, which is not correct. The established mass-based cap would allow sources to operate their SO 2 controls less efficiently, because some BART-subject EGUs already operate with lower emissions than the presumptive SO 2 emission rate of 0.15 lb/MMBtu and because some EGUs were assumed to be operating at 85% capacity when their capacity factor (and consequently their SO 2 emissions in tpy) was lower.

Response: We disagree that it is flawed to assess the benefits found in the distinguishing features of the trading program. The backstop trading program is not specifically designed so that it will be activated. Instead, sources that are covered by the program are on notice that it will be triggered if the regulatory milestones are not achieved. Therefore, the backstop trading program would be expected to garner reductions to avoid its activation. It also remains true that if the trading program is activated, all sources subject to the program, including smaller non-BART sources would be required to secure emission reductions as may be necessary to meet their emission allocations under the program.

We also disagree that the features of the 2018 milestone as a cap on future source emissions and as a mass-based cap has no significance. As detailed in our proposal, the submitted SIP is consistent with the requirement that the 2018 milestone does indeed continue as an emission cap for SO 2 unless the milestones are replaced by a different program approved by EPA as meeting the BART and reasonable progress requirements under 51.308. Future visibility impairment is prevented by capping emissions growth from those sources not eligible under the BART requirements, BART sources, and from entirely new sources in the region. The benefits of a milestone are therefore functionally distinct from the control efficiency improvements that could be gained at a limited number of BART subject sources. While BART-subject sources may not be operating at 85% capacity today, we believe the WRAP's use of the capacity assumption in consideration of projected future energy demands in 2018 was reasonable for purposes of the submitted demonstration. While BART requires BART subject sources to operate SO 2 controls efficiently, this does not mean that an alternative to BART thereby allows, encourages, or causes sources to operate their controls less efficiently. On the contrary, we find that the SIP, consistent with the well-considered 309 program requirements, functions to the contrary. Sources will be operating their controls in consideration of the milestone and they also remain subject to any other existing or future requirements for operation of SO 2 controls.

We also disagree with the commenter's contention that existing programs are equivalent in effect to the emissions cap. EPA's new source review programs are designed to permit, not cap, source growth, so long as the national ambient air quality standards and other requirements can be achieved. Moreover, we have not argued that BART does not apply at all times or that emission reductions under the cap are meant to function as emission limitations that are made to meet the definition of BART (40 CFR 51.301). The better-than-BART demonstration is not, as the comment would have it, based on issues of compliance averaging or how a BART limit operates in practice at an individual facility. Instead, it is based on whether the submitted SIP follows the regulatory requirements for the demonstration and evidences comparatively superior visibility improvements for the Class I areas it is designed to address.

Comment: The submitted 309 SIP will not achieve greater reasonable progress than would the requirement for BART on individual sources. The BART program “if adequately implemented” will promote greater reasonable progress, and EPA should require BART on all eligible air pollution sources in the state. EPA's proposed approval of the 309 trading program is “particularly problematic” where the BART sources cause or contribute to impairment at Class I areas which are not on the Uniform Rate of Progress (URP) glide-path towards achieving natural conditions. EPA should require revisions to provide for greater SO 2 reductions in the 309 program, or it should require BART reductions on all sources subject to BART for SO 2 .

Response: We disagree with the issues discussed in this comment. As discussed in other response to comments, we have found that the state's SIP submitted under the 309 program will achieve greater reasonable progress than source-by-source BART. As the regulations housed within section 309 make clear, states have an opportunity to submit regional haze SIPs that provide an alternative to source-by-source BART requirements. Therefore, the commenter's assertion that we should require BART on all eligible air pollution sources in the state is fundamentally misplaced. The commenter's use of the URP as a test that should apparently be applied to the adequacy of the 309 trading program as a BART alternative is also misplaced, as there is no requirement in the regional haze rule to do so.

Comment: The 309 trading program must be disapproved because it does not provide for “steady and continuing emissions reductions through 2018” as required by 40 CFR 51.309(d)(4)(ii). The program establishes its reductions through milestones that are set at three- year intervals. It would be arbitrary and capricious to conclude these reductions are “steady” or “continuous.”

Response: We disagree and find that the reductions required at each milestone demonstrate steady and continuing emissions reductions. The milestones do this by requiring regular decreases. These decreases occur in intervals ranging from one to three years and include administrative evaluation periods with the possibility of downward adjustments of the milestone, if warranted. The interval under which “steady and continuing emissions reductions through 2018” must occur is not defined in the regional haze rule. We find the milestone schedule and the remainder of the trading program submitted by Utah does in fact reasonably provide for “steady and continuing emissions reductions through 2018.”

Comment: The WRAP attempts to justify the SO 2 trading program because SO 2 emissions have decreased in the three transport region states relying on the alternative program by 33% between 1990-2000. The justification fails because the reductions were made prior to the regional haze rule. The reliance on reductions that predate the regional haze rule violates the requirement of 40 CFR 51.308(e)(2)(iv) that BART alternatives provide emission reductions that are “surplus” to those resulting from programs implemented to meet other CAA requirements.

Response: We did not focus on the WRAP's discussion of early emission reductions in our proposal. However, we do not understand commenters claim or agree with this comment. The WRAP's statements regarding past air quality improvements are not contrary to the requirement that reductions under a trading program be surplus. Instead, the WRAP was noting that forward-planning sources had already pursued emission reductions that could be partially credited to the design of the 309 SIP. We note that the most recent emission report for the year 2010 shows a 35% reduction in emissions from 2003. Sources that make early reductions prior to the program trigger year may acquire extra allocations should the program be triggered. This is an additional characteristic feature of the backstop trading program that suggests benefits that would be realized even without triggering of the program itself. The surplus emission reduction requirement for the trading program is not an issue, because the existence of surplus reductions is studied against other reductions that are realized “as of baseline date of the SIP.” The 1990-2000 period plainly falls earlier than the baseline date of the SIP, so we disagree that the WRAP's discussion of that period was problematic or violates 40 CFR 51.308(e)(2)(iv), regarding surplus reductions.

Comment: EPA must correct discrepancies between the data presented in the 309 SIPs. 3 There are discrepancies in what has been presented as the results of WRAP photochemical modeling. The New Mexico regional haze SIP proposal shows, for example, that the 20% worst days at Grand Canyon National Park have visibility impairment of 11.1 deciviews, while the other proposals show 11.3 deciviews. The discrepancy appears to be due to the submittals being based on different modeling scenarios developed by the WRAP. EPA must explain and correct the discrepancies and “re-notice” a new proposed rule containing the correct information.

Response: We agree that there are discrepancies in the numbers in Table 1 of the notices. The third column of the table below shows the modeling results presented in Table 1 of the Albuquerque, Wyoming and Utah proposals. The modeling results in the New Mexico proposal Table 1 are shown in the fourth column. The discrepancies come from New Mexico using different preliminary reasonable progress cases developed by the WRAP. The Wyoming, Utah and Albuquerque proposed notices incorrectly identify the Preliminary Reasonable Progress (PRP) case as the PRP18b emission inventory instead of correctly identifying the presented data as modeled visibility based on the “PRP18a” emission inventory. The PRP18a emission inventory is a predicted 2018 emission inventory with all known and expected controls as of March 2007. The preliminary reasonable progress case (“PRP18b”) used by New Mexico is the more updated version produced by the WRAP with all known and expected controls as of March 2009. Thus, we are correcting Table 1, column 5 in the Wyoming, Utah and Albuquerque of our proposed notices to include model results from the PRP18b emission inventory, consistent with the New Mexico proposed notice and the fourth column in the table below. We are also correcting the description of the Preliminary Reasonable Progress Case (referred to as the PRP18b emission inventory and modeled projections) to reflect that this emission inventory includes all controls “on the books” as of March 2009.

We are not re-noticing our proposed rulemaking as the discrepancies do not change our proposed conclusion that the SIP submitted by Utah contains reasonable projections of the visibility improvements expected at the 16 Class I areas at issue. The PRP18a modeling results show projected visibility improvement for the 20 percent worst days from the baseline period to 2018. The PRP18b modeling results show either the same or additional visibility improvement on the 20 percent worst days beyond the PRP18a modeling results. We also note there are two discrepancies in New Mexico's Table 1, column four compared to the other participating States' notices. The 2018 base case visibility projection in the New Mexico proposed notice for Black Canyon of the Gunnison National Park Wilderness and Weminuche Wilderness should be corrected to read 10.1 deciview rather than 10.0. Notwithstanding the discrepancies described above, we believe that Utah's SIP adequately project the improvement in visibility for purposes of Section 309.

Comment: EPA informally announced in the section 114 request letter that it had already decided, before publishing the partial disapproval, to reject certain parts of the Utah regional haze SIP. 4 EPA also concluded, before publishing the partial disapproval that Utah had improperly failed to submit a five-factor BART analysis for the PacifiCorp units as part of the Utah SIP. PacifiCorp believes that EPA's actions have prejudiced the process for properly considering the issues that EPA raised in the partial disapproval.

Response: We disagree with this comment. Contrary to commenter's assertions, EPA's October 20, 2011 letter to PacifiCorp “noted that the SIP did not contain analyses for the sources determined by the state to be subject-to-BART”. Therefore, the letter did not contain EPA conclusions, we requested the information from PacifiCorp, as explained in the letter relying on our authority under section 114(a) of the CAA to assist in “the development of, or in reviewing, a regional haze SIP,” in developing a Federal Implementation Plan (FIP), or “in carrying out the other responsibilities or actions under the CAA”.

Comment: We received comments that courts have consistently held that states are primarily responsible for SIP development and that EPA's role is ministerial. One commenter went on to point out that recently, the Fifth Circuit Court of Appeals described the federal and state roles: “The [Clean Air] Act assigns responsibility to the EPA for identifying air pollutants and establishing National Ambient Air Quality Standards (NAAQS). 42 U.S.C. 7408-7409. The states, by contrast, bear the primary responsibility for implementing those standards * * *. To implement the NAAQS, the states must adopt and administer State Implementation Plans (SIPs) that meet certain statutory criteria. § 7410. The states have wide discretion in formulating their plans.” Luminant Generation Co. v. EPA, 675 F.3d 917, 921 (5th Cir. 2012) ( citations and quotations omitted ); see also Train v. Natural Resources Defense Council, 421 U.S. 60, 78 (“Congress intended the States to retain [a] significant degree of control over the manner in which they attain and maintain national standards.”)

Commenters asserted that EPA's partial disapproval fails to account for the significant discretion granted to Utah under the CAA. Commenters pointed out that based on the language in the CAA, the RHR, EPA's own guidance, and case law; the states have significant discretion when creating their regional haze SIPs, and EPA failed to properly account for that discretion in analyzing the Utah regional haze SIP.

Response: Congress crafted the CAA to provide for states to take the lead in developing implementation plans, but balanced that decision by requiring EPA to review the plans to determine whether a SIP meets the requirements of the CAA. EPA has the authority to disapprove a SIP if it doesn't meet with minimum requirements. Our action today is consistent with the statute.

Our action does not contradict the Supreme Court's decision in Train. States have significant responsibilities in implementation of the CAA and meeting the requirements of the RHR. We recognize that states have the primary responsibility of drafting an implementation plan to address the requirements of the CAA Visibility Program. We also recognize that we have the responsibility of ensuring that the state plans, including RH SIPs, conform to the CAA requirements. We cannot approve a RH SIP that fails to address the BART requirements.

Our action in large part approves the RH SIP submitted by Utah. The disapproval is not intended to encroach on state authority. This action is only intended to ensure that CAA requirements are satisfied using our authority under the CAA.

Comment: We received numerous comments that EPA's proposed disapproval of Utah's BART determinations and “EPA's RH FIP” is improper because the BART units are meeting the presumptive limits in the BART guidelines based on the installation of combustion controls. Commenters went to assert that the BART Guidelines only require the installation of low NO X burners (LNBs) with overfire air (OFA) and that EPA determined in the guidelines that SCR was generally not cost-effective for BART. One commenter noted that EPA has completely ignored the presumptive BART limits in our proposed action and that this is contrary to the express requirements in both the RHR and the BART Rule. The commenter goes on to say that EPA's attempt to completely ignore the presumptive BART limits makes the presumptive BART limits meaningless and this is contrary to the requirements of the CAA and the clear intent of the BART Rule. Commenters asserted that the BART rule on its face, shows that an alternative analysis is required only when a source cannot meet the presumptive limits, and that while a state may choose to establish a limit that is more stringent than the BART limit, there is nothing in the BART rule that would require a state to do so.

Commenters asserted that EPA adopted the presumptive BART limits to establish the specific control levels required for EGUs. Commenters point out that EPA has not repealed the presumptive limits from the promulgated BART rule, but in this action EPA does not acknowledge the existence of the presumptive limits, as if the presumptive BART limits were no longer a binding regulation. Instead, commenters pointed out that EPA focused on the five-factor analysis and ignores the presumptive limits. Commenters argued that unless and until EPA goes through notice and comment rulemaking to remove the presumptive emissions limits and establish other requirements consistent with the CAA, then EPA must approve a state's BART determination that meets the presumptive regulatory limits.

One commenter went on to say that as the Utah 2008 regional haze SIP explains, “[t]he technical analysis conducted by EPA to determine presumptive BART limits for SO 2 and NO X is in effect a BART determination analysis for 419 EGUs including Hunter Units 1 and 2 and Huntington Units 1 and 2.” The commenter asserted that Utah then followed what EPA had done in developing Appendix Y and thus did a five-factor analysis. Because EPA found presumptive BART controls for PacifiCorp's Units to be “cost effective” and to provide a “substantial degree of visibility improvement,” the commenter stated it is evident that two key elements of the five-factor test are met.

Response: We disagree with the commenters. First, for each source subject to BART, the RHR, at 40 CFR 51.308(e)(1)(ii)(A), requires that states identify the level of control representing BART after considering the factors set out in CAA section 169A(g), as follows: “States must identify the best system of continuous emission control technology for each source subject to BART taking into account the technology available, the costs of compliance, the energy and non-air quality environmental impacts of compliance, any pollution control equipment in use at the source, the remaining useful life of the source, and the degree of visibility improvement that may be expected from available control technology.” 70 FR 39158. In other words, the presumptive BART limits do not obviate the need to identify the best system of continuous emission control technology on a case-by-case basis considering the five factors. A state may not simply “stop” its evaluation of potential control levels at a slightly lower limit than the presumptive level of control if more stringent control technologies or limits are technically feasible. We do not read the BART guidelines in appendix Y to contradict the requirement in our regulations to determine “the degree of reduction achievable through the application of the best system of continuous emission reduction” “on a case-by-case basis,” considering the five factors. 40 CFR 51.301 (definition of Best Available Retrofit Technology); 40 CFR 51.308(e).

Also, our position is supported by the following language in our BART guidelines: “While these levels may represent current control capabilities, we expect that scrubber technology will continue to improve and control costs continue to decline. You should be sure to consider the level of control that is currently best achievable at the time that you are conducting your BART analysis.” 70 FR 39171.

While the presumptive limits are meaningful as indicating a level of control that EPA generally considered achievable and cost effective at the time it adopted the BART guidelines in 2005, mere consideration of the presumptive limits does not eliminate the state's obligation to consider each of the five statutory factors in section 169A. As we wrote in our proposal, “[t]he presumptive limits accordingly are the starting point in a BART determination * * * unless the state determines that the general assumptions underlying EPA's analysis are not applicable in a particular case.” 77 FR 28841. Nothing in the State's record supports such a conclusion. Finally, our proposed notice did not contain a FIP.

Comment: In its proposed partial disapproval, EPA stated that “neither the State nor PacifiCorp have completed a BART analysis that considers the statutory factors under 40 CFR 51.308(e)(1)(ii)(A),” and that the requirement to conduct this analysis “is found in section 51.308(e)(1)(ii)(A) of the RHR,” However, as set forth below, EPA's reliance upon section 51.308 is misplaced.

EPA's RHR provides two regulatory paths to address regional haze. By meeting the requirements under 40 CFR 51.309, states are making reasonable progress toward the national goal of achieving natural visibility conditions for the 16 Class I areas on the Colorado Plateau. Utah submitted its regional haze SIP under section 51.309. Therefore, the requirements of section 51.308 only apply to the extent required by section 51.309.

Importantly, PM and NO X emissions and controls under section 51.309 are treated differently than PM and NO X emissions and controls under section 51.308, primarily because these emissions have a significantly smaller impact on visibility on the Colorado Plateau. WRAP has estimated “that stationary source emissions of PM probably cause less than 2 percent of the region's visibility impairment, whereas stationary source NO X emissions result in nitrates that probably cause about 2 to 5 percent of the impairment on the Colorado Plateau.” See “Stationary Source NO X and PM Emissions in the WRAP Region: An Initial Assessment of Emissions, Controls, and Air Quality Impacts,” October 1, 2003, at 1_3.13. Several illustrations in the WRAP NO X report show that nitrate emissions have very little impact on Class I areas in or near Utah and Wyoming. The WRAP report also explains that “controls on point source emissions of NO X and PM will have a relatively limited effect on visibility in much of the West, all else being equal.”

Section 51.309 understandably is intended to focus on SO 2 due to the greater visibility impact. Indeed, the GCVTC and WRAP focused their efforts primarily on sulfur dioxide emissions because the research indicated this pollutant had the greatest impact on visibility. The partial disapproval acknowledges that Utah has complied with the Section 51.309's SO 2 requirements and made great progress towards improving and protecting visibility as a result. For all of these reasons, section 51.309 takes a different approach to PM and NO X emissions than does section 51.308, placing much less emphasis on the need for significant reductions in PM and NO X emissions and instead focusing almost all attention and resources in the western U.S. on reducing SO 2 emissions.

As a result of the lesser emphasis in section 51.309 on PM and NO X emissions, section 51.309(d)(4)(vii) states that a regional haze SIP “must contain any necessary long-term strategies and BART requirements for stationary source PM and NO X emissions.” Section 51.308, by contrast, does not contain a similar “necessary” threshold for BART. In other words, if a BART requirement is not “necessary” for a section 51.309 state, such as Utah, to make “reasonable progress,” then it is not required as part of the regional haze SIP. EPA's partial disapproval fails to acknowledge the importance of the ”necessary” threshold in its own rules, and fails to identify how Utah's BART determinations do not meet this “necessary” threshold.

Response: We disagree with the comment. As explained in our proposed rulemaking for Section 51.309(d)(4)(viii) we explained that the provision “is intended to clarify that if EPA determines that the SO 2 emission reductions milestones and backstop trading program submitted in the Section 51.309 SIP makes greater reasonable progress than BART for SO 2 , this will not constitute a determination that BART for PM or NO X is satisfied for any sources which would otherwise be subject to BART for those pollutants” (emphasis added). 70 FR 44169 (Aug. 1, 2005). EPA does not interpret this statement to mean that there are different BART requirements for Section 308 and 308 RH SIPs. EPA's proposed rulemaking made no finding that BART determinations conducted for a state submitting a RH SIP under Section 51.309 should be conducted any differently than a state submitting a RH FIP under only Section 308. The use of the word “necessary” in Section 51.309(d)(4)(viii) was to explain that some states may have BART NOx emission limitations, while others may not. As already explained elsewhere in our proposal on the Utah SIP and our response to other comments, Utah did not conduct a proper evaluation of the five statutory factors, as required by 40 CFR 51.308(e)(1)(ii)(A) and section 169A(g) of the CAA.

EPA also disagrees with commenter's assertion that a BART submission is discretionary. 30 CFR 51.309(d)(4)(viii) is clear in that the implementation plan “must” contain BART requirements. The proposed regional haze rulemaking explained that the provision that provides that “[a]ny such BART provisions may be submitted pursuant to either § 51.308(e)(1) or 51.308(e)(2),” was included to “allow States the flexibility to address these BART provisions either on a source-by-source basis under Section 51.308(e)(1), or through an alternative strategy under Section 51.308(e)(2).” 70 FR 44169 (August 1, 2005).

Moreover, EPA's proposed regional haze rule made clear that “[i]n limited circumstances, it may be possible for a State to demonstrate that an alternative program which controls only emissions from SO 2 could achieve greater visibility improvement than application of source-specific BART controls on emissions of SO 2 , NO X and/or PM. We nevertheless believe that such a showing will be quite difficult to make in most geographic areas, given that controls on SO 2 emissions alone in most cases will result in increased formation of ammonium nitrate particles.” 70 FR 44169 (Aug. 1, 2005). Utah's RH SIP does not include a demonstration that the backstop SO 2 trading program under Section 51.309 achieves greater visibility improvement than application of source-specific PM BART controls. Therefore, Utah's Section 51.309 SIP does not provide the adequate level of visibility improvement to meet the BART requirements.

Comment: Utah was not required to comply with subsection 51.308(e)(1)(ii)(A) because it had complied with subsection 51.308(e)(l)(ii)(B). Subsection 51.308(e)(1) provides, “To address the requirements for BART, the State must submit an implementation plan containing the following plan elements and include documentation for all required analyses.” One of these elements is a “determination of BART for each BART-eligible source,” which may be “based on an analysis” of the five-factor test, § 51.308(e)(1)(ii)(A), or, in the case of “fossil-fuel fired power plants having a total generating capacity greater than 750 megawatts,” “must be made pursuant to the guidelines in appendix Y of this part,” § 51.308(e)(l)(ii)(B). Because Utah's regional haze SIP properly relied on Appendix Y, and thus satisfied subsection (B), it was incorrect for EPA to reject Utah's analysis as not complying with subsection (A).

Response: We disagree with this comment. The State must comply at all times with the requirements of 40 CFR 51.308(e)(1)(ii)(A). In addition, the State must comply with the requirements of 40 CFR 51.308(e)(1)(ii)(B) for sources that are greater than 750 MW. As we have stated in our proposed notice and elsewhere in our response to comments, the State did not perform an analysis pursuant to the five factors required by the RHR and BART Guidelines, thus the State's SIP does not meet the requirements of 40 CFR 51.308(e)(1)(ii)(A) or 40 CFR 51.308(e)(1)(ii)(B).

Comment: EPA is overlooking how Utah's permitting program supports the decisions it made in Utah's regional haze SIP. In this instance, EPA's comment disregards the review that Utah completed through its new source review (NSR) program. That review established the emission limits and monitoring, recordkeeping, and reporting (MRR) requirements for NO X and PM.

The notice of intent (NOI) for the pollution control project at Huntington Unit 2 was submitted in October 2004 and the approval order (AO) was issued in 2005. Because all four BART eligible units are essentially identical, 5 this AO established the requirements that were used for all four units. The NOI for the pollution control projects at Hunter Units 1 and 2 was submitted in June 2006 and the AO was issued in April, 2008. The NOI for the pollution control project at Huntington Unit 1 was submitted in April 2008 and the AO issued in August 2009.

When BART was evaluated for NO X in the 2008 SIP, Utah relied on the technical review that had been completed through the NSR program to justify the emission limits and MRR requirements in the AO. These limits were then evaluated to determine whether the existing controls satisfied the requirement for BART. Utah, in its regional haze SIP, determined that the existing controls met the BART requirement, and therefore no additional controls were required. It is a complete misrepresentation of the extensive process Utah undertook to say that the State determined the BART limit without any analysis.

Response: We disagree with this comment. While Utah may have considered BART controls through its NSR permitting program, as we have pointed out in our proposed notice and in our responses above, the State did not perform the required five-factor BART analysis pursuant to 40 CFR 51.308(e)(1).

Comment: The applicable requirements in the AOs for the Hunter and Huntington plants have been incorporated into the operating permits for these plants under authority of R307-415. The operating permit program was designed to ensure that applicable requirements are clear and are enforceable. A source that violates one or more enforceable permit conditions is subject to an enforcement action including, but not limited to, penalties and corrective action. Enforcement actions may be initiated by the local permitting authority, EPA or, in many cases, through citizen suits.

Utah's operating permit rule requires detailed monitoring, reporting, and recordkeeping (MRR) (see R307-415-6a(3)) to ensure that all emission limits are practically enforceable. If MRR provisions are changed in the AO, the operating permit rules provide a backstop to ensure that appropriate MRR occurs for each emission limit. R307-415-8, Permit Review by EPA and Affected States, describes the process by which EPA may veto the operating permit: “If EPA objects to the issuance of a permit in writing within 45 days of receipt of the proposed permit and all necessary supporting information, then the Executive Secretary shall not issue the permit. If the Executive Secretary fails, within 90 days after the date of an objection by EPA, to revise and submit a proposed permit in response to the objection, EPA may issue or deny the permit in accordance with the requirements of the Federal program promulgated under Title V of the Act. R307-415-8(3).”

In disapproving Utah's regional haze SIP because “EPA does not consider operating permit conditions adequate to meet the MRR and enforceability requirement”, EPA is thwarting the purpose of the Title V program, as enacted under the 1990 Amendments to the CAA. Taking EPA's position would require a SIP revision when an individual source desires to make a change to its AO and Title V permit. The drafters of the 1990 Amendments thought otherwise: “The concept behind this new [Title V] permit program is to minimize, if not eliminate, the degree to which decisions relating to individual major sources require SIP actions. Individual source issues should be resolved in the permit process, consistent with the SIP. EPA must avoid duplication between the SIP and permit processes.” Utah's rule is consistent with the purpose of Title V as enacted in the 1990 Amendments to the CAA and with Part 70 rules adopted there under. Moreover, if there are inadequate monitoring requirements in a source's Title V permit, the State, consistent with 40 CFR 70.6(c)(1), may supplement those requirements to rectify the inadequacy. Sierra Club v. EPA, 536 F.3d 675, 680 (D.C. Cir. 2008).

EPA is attempting to do through its partial disapproval of Utah's SIP what the D.C. Court of Appeals struck down in Sierra Club. After reversing course numerous times, in 2006 EPA adopted Part 70 rules prohibiting state and local authorities from supplementing inadequate monitoring requirements; instead EPA proposed to remedy such inadequacies by undertaking a “programmatic” strategy. See 71 FR 75422 (Dec. 15, 2006). At the same time as EPA announced its prohibition, it failed to correct monitoring deficiencies in Title V permits through a programmatic fix, which resulted in thousands of Title V permits containing inadequate monitoring requirements. In Sierra Club, the Court held “if Congress meant that potentially thousands of permits could be issued without adequate monitoring requirements then it would not have said `each permit shall set forth monitoring requirements to assure compliance with the permit terms and conditions.” Sierra Club, 535 F.3d at 678 (citing 42 U.S.C. 7661c(c). The Court concluded that permitting authorities may supplement inadequate monitoring requirements. Id.

EPA has ample means of federally enforcing whether the four EGUs in Utah either now or in the future abide by adequate MMR requirements through EPA's Title V authority and through Utah's other air permitting program. EPA should not resort to imposing draconian requirements on the State's SIP program and making the State's permit program practically unworkable by insisting that MRR requirements be contained in the regional haze SIP.

Response: EPA disagrees with this comment. EPA's approach in this action is entirely consistent with section 169A(b)(2) which, as we wrote when we promulgated the BART Guidelines, “provides that EPA must require SIPs to contain emission limits, schedules of compliance, and other measures as may be necessary to make reasonable progress towards meeting the goal” (emphasis added). 70 FR 39120 (July 6, 2005). The regulations require that the states “must submit an implementation plan containing emission limitations representing BART.” 40 CFR 51.308(e). The Guidelines require that states “must establish an enforceable emission limit for each subject emission unit at the source and for each pollutant subject to review that is emitted from the source.” 70 FR 39172 (July 6, 2005). CAA section 110(a)(2) also requires that SIPs shall “include enforceable emission limitations.”

Furthermore, Appendix V to 40 CFR part 51 sets forth the minimum criteria for determining whether a state implementation plan submitted for consideration by EPA is an official submission for purposes of review. The Appendix V criteria include “[e]vidence that the plan contains emission limitations, work practice standards and recordkeeping/reporting requirements, where necessary, to ensure emission levels” and “[c]ompliance/enforcement strategies, including how compliance will be determined in practice”. Appendix V, Sections 2.2(g) and (h). Therefore, EPA disagrees that the use of title V permits to implement the MRR necessary to ensure compliance with BART emission limitations is adequate under the Clean Air Act.

While the commenter suggests the title V permit program replaces SIP requirements, this simply is not the case. In fact, the Congressional Report cited by the commenter is clear that while the title V permit program provides for “harmonization” of the Clean Air Act requirements, “title V does not change, and gives EPA no authority to modify, the substantive provisions of these other titles.” CONFERENCE REPORT ON—CLEAN AIR ACT AMENDMENTS, 136 Cong. Rec. E3673-01, 1990 WL 206959.

Finally, the Sierra Club case cited by the commenter in support of its contentions did not involve challenges to SIP monitoring requirements and therefore is not applicable here. The commenter's claim that title V permits are adequate to meet SIP and regional haze statutory and regulatory requirements is unfounded and not supported by the case law cited or the CAA.

Comment: Utah's SIP and the permits that are issued under that plan are enforceable under state law and become federally enforceable when EPA approves the plan and incorporates it into 40 CFR part 52, Subpart TT.

In addition to a federally enforceable SIP, AOs issued by the State are also federally enforceable. AOs become federally enforceable through R307-401 Permits: New and Modified Sources, and R307-405 Permits: Major Sources in Attainment or Unclassified Areas (PSD), when those rules are approved by EPA as part of Utah's SIP and codified in 40 CFR 52.2320 and 40 CFR 52.2346. Region 8's Web site recognizes the role that state permits play in the SIP process: “SIPs contain state air regulations that, for example, allow states to permit the construction and operation of stationary sources, establish specific requirements for categories of stationary sources, and identify open burning requirements.”

AOs issued by the State under authority of R307-401 and R307-405 to the Hunter and Huntington plants, including provisions to make the pollution control projects enforceable, contain enforceable emission limits for NO X and PM, as well as MRR requirements to ensure that the emission limits are continuously met. EPA has discretion to federally enforce the provisions of these AOs under authority of the federally approved Utah SIP. There is no doubt that such AOs are federally enforceable, as evidenced by lawsuits brought previously by EPA against other sources in Utah.

Commenters also explain that Utah's NSR program for major and minor sources is part of the federally approved SIP. If PacifiCorp seeks to relax or modify the emission limitations in the AOs for the Hunter or Huntington plants at some point in the future, the company would be required to obtain a new AO and apply BACT under either Utah's major source (R307-405) or minor source (R307-401) rules. A modification may potentially trigger other requirements. As has been evident throughout the federal CAA programs that EPA has delegated to Utah, there are substantial federally enforceable requirements in the broad air program in Utah to ensure that the emission reductions achieved through the pollution control projects are maintained (through state or federal enforcement if necessary) into the future. If the emission limits in the AO were revised in the future, EPA has the opportunity to review the changes and provide comments through the NSR process. EPA could then veto the operating permit in the unlikely circumstance that the emission limits for NO X or PM became less stringent.

Commenters also suggest that EPA has proposed to disapprove the BART determination for NO X and PM in part because EPA believes that the emission limits and MRR requirements in the AOs and operating permits are not federally enforceable enough. It is not clear what additional enforcement action EPA would take due to a violation of a SIP condition versus a violation of a permit condition.

Response: We disagree. See our response above. EPA does not have the option of approving a RH SIP where BART emission limits are implemented only through construction or operating permits.

Comment: We received a comment that the BART emission limits must be included in the Utah SIP and be fully enforceable and that the commenter supported EPA's disapproval of the Utah regional haze SIP because it “does not contain provisions necessary to make BART limits practically enforceable as required by section 110(a)(2) of the CAA and Appendix V to part 51.” The commenter went on to say that the BART emission limits must be permanent, unalterable, and federally enforceable by both EPA and citizens.

Response: As our proposed notice and responses above indicate, we agree with the commenter on the need for the BART emission limits to be included in the SIP along with appropriate MRR requirements. Although we are not approving any BART determinations in this action, when Utah submits revised BART determinations, the State must include provisions in the SIP to make the emission limits federally enforceable.

Comment: We received comments that EPA made a mistake when it said in its proposal that because the PacifiCorp units have a 430 MW generating capacity, the State is not required to follow the BART Guidelines in making BART determinations for the units. Commenters went on to say that applicability of the BART guidelines is determined by the total generating capacity of the fossil fuel fired electric generating plant, not the size of the individual units. Commenters went on to say that the total generating capacity of the two units subject to BART at each facility is 960 MW, and as such, the total generating capacity of the Hunter and Huntington power plants both exceed the 750 MW trigger for applicability of the BART guidelines.

Response: We agree with this comment. EPA erred by stating that the State is not required to follow the BART Guidelines in making BART determinations for these units. Because of the generating capacity for the EGUs is above 750 MW, the State must follow the BART Guidelines when making its BART determinations. 70 FR 39158 (July 6, 2005).

Comment: We received numerous comments that Utah relied on the BART regulations when making its PM BART determinations for these Units. Commenters pointed out that EPA acknowledges in the proposed rule, “[t]here are no presumptive limits established for PM.” With there being no presumptive limit for PM, commenters state that Utah undertook its own analysis and reasonably determined that the PM limit for the Hunter and Huntington Units is the current operating permit level of 0.015. 6

Commenters asserted that because Utah determined that PM BART for the Hunter and Huntington units is the installation and operation of fabric filter baghouses, which is the most stringent PM control technology for EGUs, the State did not have to complete a comprehensive five-factor analysis.

One commenter asserted that EPA's position is in derogation of Executive Order 13563. In January 2011, President Obama signed Executive Order 13563—Improving Regulation and Regulatory Review. The commenter went on to say that the President described the goals of this order in an op-ed article published in the Wall Street Journal: “This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth * * *. Where necessary, we won't shy away from addressing obvious gaps: new safety rules for infant formula; procedures to stop preventable infections in hospitals; efforts to target chronic violators of workplace safety laws. But we are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb * * *. We're also getting rid of absurd and unnecessary paperwork requirements that waste time and money. We're looking at the system as a whole to make sure we avoid excessive, inconsistent and redundant regulation.” The commenter concluded that EPA should recognize that any further analysis of PM is “absurd and unnecessary paperwork” that is irrational, as well as a waste of time and money.

Response: The BART Guidelines state “[i]f you find that a BART source has controls already in place which are the most stringent controls available (note that this means that all possible improvements to any control devices have been made), then it is not necessary to comprehensively complete each following step of the BART analysis in this section. As long as these most stringent controls available are made federally enforceable for the purpose of implementing BART for that source, you may skip the remaining analyses in this section, including the visibility analysis in step 5. Likewise, if a source commits to a BART determination that consists of the most stringent controls available, then there is no need to complete the remaining analyses in this section.” 70 FR 39165 (July 6, 2005). While we agree that baghouses may well be the most stringent control equipment for controlling PM emissions, the State has not provided a demonstration that the BART PM emission limits at the Utah BART sources represent the most stringent controls. Thus, it may be possible for the State to provide an abbreviated BART determination for PM if it can demonstrate that the emission limits represent the most stringent level of control.

Comment: EPA is aware that the State of Utah, in cooperation with PacifiCorp, currently is conducting another five-factor BART analysis for the Units identified in EPA's section 114 request dated October 20, 2011 (see footnote 4). Until that BART analysis is completed and the results are incorporated into the Utah regional haze SIP, there is no reason for EPA to continue processing the partial disapproval. Therefore, EPA should “withdraw its FIP”.

In that way, EPA can focus its resources on the upcoming Utah regional haze SIP version that Utah has committed will contain the BART analysis information EPA has requested be included. Until then, continuing the administrative review process for the partial disapproval is a waste of taxpayer funds and other resources.

Response: We disagree with this comment. We are under a consent decree with Wild Earth Guardians to take final action on the Utah regional haze SIP by October 31, 2012. Under the consent decree, we must either approve or disapprove all the State's regional haze SIP. The consent decree does not allow us to delay action in determining whether the SIP meets the requirements of the RHR. Furthermore, we had a statutory obligation to act on SIPs within 12 months after they have been determined to be or deemed complete, and that date has passed. Moreover, Utah will not be submitting the additional information referenced above until after October 31, 2012, thus EPA is forced to take action on the SIP in its entirety. Finally, contrary to commenter's assertion, our proposed notice did not contain a FIP.

Comment: We received comments that the Utah SIP fails to comply with 40 CFR 51.309(g) or 40 CFR 51.308(d)(1)-(4), which require that SIPs address impacts to Class I areas not located on the Colorado plateau. Commenters went on to point out that sources in Utah have been shown to impact Class I areas outside of the Colorado Plateau.

Commenters pointed out that under both 40 CFR 51.309(g) and 40 CFR 51.308(d)(1)-(4), a long-term strategy must include such emission limits, schedules of compliance and other measures as may be necessary to achieve reasonable progress goals, and that for Class I areas outside a state's borders, the State has an obligation to adopt controls necessary to ensure it achieves its share of the pollution reductions that are required to meet the reasonable progress goals set for the subject Class I area. Since the requirements of 40 CFR 51.308(d)(1)-(4) apply to Utah, commenters assert that EPA must require Utah to develop a long-term strategy under 40 CFR 51.308(d)(3).

Response: We do not agree with this comment. States adopting the requirements of 40 CFR 51.309 are deemed to have met the requirements for reasonable progress for the Class I areas on the Colorado Plateau. 40 CFR 51.309(a). For such states, the requirements of 40 CFR 51.308(d)(1) and (d)(2) only apply to Class I areas within their state not on the Colorado Plateau. See 40 CFR 51.309(g)(2); 40 CFR 51.308(d)(1), (2). All of the Class I areas in Utah are on the Colorado Plateau. Therefore, the State met all reasonable progress requirements for the Class I areas in Utah.

With regard to Class I areas in other states, the State must satisfy the requirements of 40 CFR 51.308(d)(3). See 40 CFR 51.309(g)(2). In particular, 40 CFR 51.308(d)(3)(ii) requires that if emissions from Utah sources cause or contribute to impairment in another state's Class I area, Utah must demonstrate that it has included in its regional haze SIP all measures necessary to obtain its share of the emission reductions needed to meet the progress goal for that Class I area. Section 51.308(d)(3)(ii) also requires that, since Utah participated in a regional planning process, it must ensure it has included all measures needed to achieve its apportionment of emission reduction obligations agreed upon through that process. As we state in the RHR, Utah's commitments to participate in WRAP bind it to secure emission reductions agreed to as a result of that process.

Under 40 CFR 51.308(d)(3)(iii), a state must document the technical basis on which the state is relying to determine its apportionment of emission reduction obligations necessary to achieve reasonable progress in each mandatory Class I area the state affects. States may rely on technical analyses developed by regional planning organizations and approved by all state participants. Utah analyzed the WRAP modeling and inventories and determined that emissions from the State do not significantly impact or will not significantly impact other states' Class I areas. The State's analysis is summarized below and included in Section XX.K of the SIP. Inventories developed by the WRAP show a significant decrease in stationary source NO X and SO 2 emissions. The urban area in northern Utah that may impact Class I areas in Idaho, Nevada and Wyoming will have a significant reduction in NO X emissions from mobile sources as described in Section XX.F of the State's SIP. The State SIP shows that the contribution to nitrate on the 20% worst days from sources in Utah decreases substantially between 2002-2018 at Craters of the Moon in Idaho, Bridger and Fitzpatrick Wilderness Areas in Wyoming, and Jarbidge Wilderness Area in Nevada. The contribution to sulfates is not significant at any of the sites.

As described in Section XX.D.6 of the State's SIP plan, two BART-eligible plants in central Utah are projected to decrease SO 2 emissions by 13,200 tons and NO X emissions by 6,200 tons between 2002 and 2018. The State also shows that in general the impact from sources in Utah is not significant at La Garita Wilderness Area and Great Sand Dunes National Monument in Colorado, Bandelier National Monument in New Mexico and Mazatal and Pine Mountain Wilderness Areas in Arizona.

Utah accepted and incorporated the WRAP-developed visibility modeling into its regional haze SIP, and the State's regional haze SIP includes the controls assumed in the modeling. Utah satisfied the RHR's requirements and included controls in the SIP sufficient to address the relevant requirements of the RHR related to impacts on Class I areas in other states.

Comment: We received a comment that Utah still must comply with reasonable progress requirements to address visibility impairment attributable to Utah sources of NO X and PM with respect to all affected Class I areas including the 16 Class I areas within the Colorado Plateau, and that Utah first must establish reasonable progress goals for all Utah Class I areas.

Response: We do not agree with this comment. Pursuant to 40 CFR 51.309(a), if a state adopts the requirements under 40 CFR 51.309 it will be deemed to comply with the requirements for reasonable progress with respect to the Colorado Plateau Class I areas through 2018. As stated above, all of the Class I areas in Utah are on the Colorado Plateau, so Utah does not have to separately establish reasonable progress goals for them. As explained above, Utah has also met the requirements for Class I areas outside the state.

Comment: We received a comment from the NPS that, under 40 CFR 51.309(g), Utah should have developed a long-term strategy that evaluated NO X , PM, and SO 2 controls on large non-BART stationary sources of emissions such as PacifiCorp Hunter Unit 3 to meet reasonable progress requirements with respect to non-Colorado Plateau Class I areas. In particular, the NPS cited our notice proposing action on the Utah regional haze SIP. The NPS also referenced modeling results to argue that NO X emissions from certain non-BART stationary sources cause or contribute to visibility impairment at both Capitol Reef NP and at certain Class I areas outside Utah and off the Colorado Plateau. The NPS states that emission controls should be considered for these sources in order to meet reasonable progress requirements.

Response: We do not agree with these comments. As explained above, with respect to in-state Class I areas, our approval of the Utah SIP deems it as meeting reasonable progress requirements for the in-state Class I areas, as they are all on the Colorado Plateau. With respect to non-Colorado Plateau Class I areas, in this case 40 CFR 51.309(g) does not impose any separate obligations on Utah to analyze or impose emissions controls on non-BART sources to demonstrate reasonable progress at such areas. Instead, at most, Utah must show that it has included all measures needed to achieve its apportionment of emission reduction obligations agreed upon through the WRAP process. See 40 CFR 51.308(d)(3)(ii). As discussed above, Utah has met that requirement, and the commenter has not provided any information to the contrary.

Comment: Approximately 75% of Utah is located in a CAC. Utah has a legal duty to protect that CAC from new sources of air pollution both inside and outside of CACs. Specifically, Utah must identify significant emissions growth that “could begin” to impair visibility within any CAC and include “an analysis of the effects of increased emissions, including provisions for the identification of the need for additional emission reductions measures, and implementation of the additional measures where necessary.”

Utah's regional haze SIP fails to identify several new and proposed significant air pollution sources that “could begin” to adversely impact visibility in the Utah CAC and nearby Class I areas. For example, the Alton coal mine in southern Utah is located within the CAC and may adversely impact visibility in the corridor and in nearby Class I areas, such as Zion National Park. The Alton coal mine will emit visibility-impairing emissions, including SO 2 , NO X and PM. In addition, the Viresco coal gasification facility has been proposed for the City of Kanab. The Viresco coal gasification plant will burn coal from the Alton coal mine. Kanab is very close to Zion National Park and is also located inside Utah's CAC. A local citizen organization has requested that the State require an approval order regulating emissions from the Viresco coal plant. To date, the State has refused to regulate the Viresco coal gasification plant and failed to impose any air pollution limitations or controls on the plant. The EPA should require Utah to regulate the Viresco coal plant to limit emissions from the plant in order to protect CACs in Utah, as well as Class I areas.

Finally, the Deseret Power Electric Cooperative has proposed to add an additional coal-fired electric generating unit to the Bonanza plant in northeast Utah. This plant would be located outside of Utah's CAC, but has the potential to adversely impact visibility in the corridor and in neighboring Class I areas.

EPA may not approve the Utah regional haze SIP until the State identifies all potential sources of pollution; assesses the impact of these sources on visibility in CACs; and imposes air pollution control equipment and emission limitations on such sources consistent with 40 CFR 51.309(d)(3)(iii)-(iv).

Response: We disagree with this comment. Utah relied on the WRAP's Policy on Clean Air Corridors to determine if emissions within or outside of the CAC that could impair visibility within the CAC. The report concluded: “[p]]ursuant to 40 CFR 51.309(d)(3)(ii), the WRAP has examined patterns of growth in the corridor and finds that they are not causing significant emission increases that could have or are having visibility impacts at one or more of the 16 Class I areas. Nor, at this time, are such emission increases expected during the first planning period (2003-2018). Analyses performed by the Grand Canyon Visibility Transport Commission found that an increase of 25% in weighted emissions would result in a 0.7 dv reduction in visibility, whereas the weighted emission increase expected by 2018 is only 4%. Pursuant to 40 CFR 51.309(d)(3)(iii), the WRAP has examined emissions growth in areas outside the corridor and finds that significant emissions growth is not occurring that could begin or is beginning to impair the quality of the air in the corridor and thereby lead to visibility degradation for the least impaired days in one or more of the 16 Class I areas.”

In addition, Utah is using a comprehensive emissions tracking system established by WRAP to track emissions within portions of Oregon, Idaho, Nevada and Utah that have been identified as part of the CAC. The emission tracking system ensures that visibility does not degrade on the least-impaired days in any of the 16 Class I areas of the Colorado Plateau. If the emissions tracking system identifies emissions in or outside of the CAC that are causing visibility impairment, the State will be required to address these emissions in accordance with 40 CFR 51.309(d)(3) in the periodic plan revisions that the State is required to submit in 2013 and 2018. Therefore, should any of the project emissions highlighted in the comment degrade visibility on the least-impaired days in any of the 16 Class I areas, the State will be required to address those impacts.

Comment: Utah's technical arguments supporting a weak regional haze program should be rejected. The State has prepared a Powerpoint presentation arguing that its weak and illegal regional haze program should be approved by EPA. In support of Utah's weak BART determinations the State argues: 1) that NO X reductions are not creating expected visibility improvements; and, 2) that wintertime visibility problems should be ignored due to lower tourist visits in Utah's national parks.

Response: We note the commenter's concerns regarding consideration of these two factors. These two factors are outside the scope of the RH regulation and were not considered by EPA in its proposed partial approval and partial disapproval of the State's BART determinations. As discussed in detail elsewhere in this action, EPA finds that the State's trading program meets the regulatory requirements.

Comment: The State supports EPA's proposed approval of the projected visibility improvement in Part K of the Utah SIP. 77 FR 28833-34. As EPA has noted, the modeling results show projected visibility improvement for the best 20% days and no degradation for the 20% best days at the 16 Class I areas on the Colorado Plateau. In fact, the projected improvement is greater than described in EPA's proposed approval. The visibility results in Table 24 of Utah's SIP were adopted in 2008 based on the PRP18a modeling that was the most current modeling available at the time, not PRP18b as described in EPA's proposal. Table 1 shows the additional improvement shown by the WRAP's PRP18b modeling.

Response: We recognize the commenter's support of our proposed approval of the projected visibility improvement.

Comment: The GCVTC evaluated haze at Class I Areas on the Colorado Plateau, and determined that stationary source reductions should be focused on sulfur dioxide because this is the pollutant that has the most significant impact on haze. Utah's BART determination was developed within the context of the overall SIP and reflected this focus on SO 2 . The sulfate impact is much more significant than the nitrate impact, especially on the middle and best 20% days. Fire (organic carbon) is the second most significant component on the worst days). In addition, sulfate is a problem year round, while the nitrate impact is most significant during the winter months when visitation is low at Utah's national parks. PacifiCorp has already made significant reductions in NO X at the Hunter and Huntington plants. The nitrate component of haze in Class I areas on the Colorado Plateau does not justify going beyond the presumptive BART level for NO X established in EPA's BART rule.

Response: We do not agree with this comment. States are required to meet the requirements of 40 CFR 51.308(e)(1) and do a BART determination on a source-by-source basis in accordance with the BART Guidelines for EGUs over 750 MW. A regional scale modeling exercise does not obviate the requirement that the state perform such an analysis and that “States must identify the best system of continuous emission control technology for each source subject to BART * * *” 70 FR 39158.

Comment: We received 1,873 comments from members of National Parks and Conservation Association generally supportive of our disapproval and encouraging strict controls on the BART units. We also received comments from the general public and medical community generally in support of our action.

Response: We note the commenters' support of our proposed action.

We are not responding to the following comments on BART that pertain to cost effectiveness, control effectiveness, visibility improvement, and other factors. We are not responding because we are disapproving the State's BART determinations and will consider such comments when we take proposed action on BART determinations for the four Utah subject to BART EGUs. The following is a summary of the comments:

(1) Numerous retrofit technologies are available for the control of NO X from Hunter and Huntington Units 1 and 2. The suite of available retrofit control technologies for NO X control from coal boilers similar to these units is well known, and includes: selective catalytic reduction (SCR), LNBs, and separated overfire air (SOFA).

(2) SCR is technically feasible for all the units.

(3) SCR is a highly effective control technology that can achieve 90% reductions or higher and meet limits of 0.05 lbs/MMBtu or lower.

(4) The costs of SCR along with upgraded LNBs and SOFA at Hunter Units 1 and 2 and Huntington Units 1 and 2 are reasonable. The commenter estimated that costs for LNBs with SOFA and SCR at a NO X rate of 0.05 lb/MMBtu range from $1,700-$2,000/ton in 2010 dollars.

(5) The commenter went on to describe the methodology that they used to come to their cost effectiveness conclusions: “[t]oo [sic] summarize, we calculated cost effectiveness of NO X controls at Hunter Units 1 and 2 and Huntington Units 1 and 2 as follows. Based on the Sargent & Lundy SCR IPM Cost Module modified to be consistent with the Control Cost Manual methodology and to be more realistic of the costs for these units, as discussed above, we estimated the capital and O&M costs of SCR at Hunter Units 1 and 2 and Huntington Units 1 and 2. Costs were estimated in 2010 dollars. We estimated the capital and O&M costs of new LNBs and SOFA based on the cost estimates for the same controls provided by PacifiCorp to Wyoming DEQ for the similar but somewhat larger Jim Bridger Unit 1. We converted those costs to 2010 dollars so that these NO X controls could be readily compared to the SCR controls and so we could evaluate the cost effectiveness of the combination of LNBs/SOFA plus SCR at the Hunter and Huntington BART units. Annualized capital costs were based on the real cost of capital to PacifiCorp and a 20-year life of the pollution controls. Cost effectiveness was based on the total annual costs (annualized capital + annual O&M) divided by the tons per year NO X emissions reductions expected from the average baseline emissions over 2002-2004. The assumed controlled NO X emission rates were 0.26 lb/MMBtu for LNBs/SOFA and 0.05 lb/MMBtu for LNBs/SOFA plus SCR.”

(6) A proper NO X BART determination for Hunter Units 1 and 2 and Huntington Units 1 and 2 must be based on a baseline period from the 2001 to 2004 timeframe. This timeframe also reflects emissions prior to any NO X upgrades that have already been completed at the Hunter and Huntington units.

(7) According to the Utah regional haze plan, PacifiCorp has received permits to install new LNBs and two elevations of SOFA. Because these upgrades were intended to meet presumed regional haze requirements, these upgrades should be considered in a NO X BART analysis as part of the suite of controls to meet NO X BART requirements.

(8) The energy and non-air quality environmental impacts of SCR are standard, limited, and can be mitigated. In addition to monetary costs, SCR typically has several associated impacts that may be noted in a BART analysis, including increased auxiliary power requirements, waste associated with catalyst replacement and disposal, ammonia slip, and the partial conversion of SO 2 to sulfuric acid. The scope of these collateral impacts is nowhere near the scale that would outweigh the benefits provided by SCR. Thus, there are no energy or non-air quality environmental impacts that would preclude the application of SCR at these units.

(9) The visibility benefit of applying SCR and LNB/SOFA will likely be significant. A complete BART analysis also evaluates the projected visibility benefits associated with the implementation of the discussed controls. Utah did not provide any modeling analyses in the Utah regional haze plan that evaluated NO X BART options. Utah did include data on the results of the modeling to determine which units were subject to BART in its regional haze plan, and the results show that each unit has significant impacts in all of the Class I areas located within 300 km of each unit, including Capitol Reef, Canyonlands, Bryce Canyon, Zion, Grand Canyon, and Black Canyon of the Gunnison National Parks as well as Mesa Verde National Monument.

However, the subject-to BART modeling results provided in the Utah regional haze plan very likely understate the true baseline case visibility impacts of these units because the SO 2 emission rates modeled are much lower than the maximum 24-hour pound per hour SO 2 emission rates based on actual emissions data submitted by PacifiCorp to EPA's Clean Air Markets Database.

(10) Lower PM limits are achievable and appropriate. EPA must revise PM emission limits for Hunter Units 1 and 2 and Huntington Units 1 and 2 to reflect PM emission rates achievable with BART. We note that Utah's proposed PM BART limits are unclear. Utah's SIP submittal to EPA described (presumably filterable) PM limits of 0.05 lbs/MMBtu, which is echoed by EPA in its proposal. However, the underlying administrative orders appear to require this limit only until the LNBs, baghouse, and wet FGD are installed, at which point it drops to a limit of 0.015 lbs/MMBtu. Further, EPA's proposal states that this is a rolling 30-day limit, where the administrative orders specify stack testing once per year. At a minimum, EPA must establish PM BART limits that reflect the most stringent level of control that the existing and proposed baghouses are capable of, and must account for the different types of particulate matter that are emitted.

Consideration should be given to the following permit limits, which demonstrate achievable limits at or below 0.015 lbs/MMBtu. Three prevention of significant deterioration (PSD) permits have been issued with total PM 10 limits of 0.010 lb/MMBtu based on installation of a fabric filter baghouse, including for Plant Washington, Longleaf, and Desert Rock. A PSD permit issued to the Intermountain Power Services Corporation sets BACT emissions limits of 0.013 lb/MMBtu for filterable PM and 0.012 lb/MMBtu for filterable PM 10 . Similarly, a permit issued for the Comanche Generating Station Unit 3 in Colorado included BACT limits of 0.013 lb/MMBtu for filterable PM and 0.012 lb/MMBtu for filterable PM 10 .

There is no reason that the Utah units could not achieve PM emission rates comparable to a new unit with a properly designed and operated baghouse. Other states have made low PM BART determinations as well. For example, U.S. EPA Region 9 adopted BART filterable particulate limits for the Four Corners power plant, Navajo Nation at Units 1-3 of 0.012 lb/MMBtu for each unit and at Units 4 and 5, 0.015 lb/MMBtu. South Dakota adopted and EPA approved as BART for the Big Stone power plant a PM limit of 0.012 lb/MMBtu, applicable at all times including startup, shutdown, and malfunction.

Further, at the baghouses that are already installed, the limits should also be informed by the existing emissions, as determined by appropriate stack testing or CEMS. According to the available permits, this testing should already be completed and available for at least two units.

For any unit that has not yet installed a baghouse, an important option to consider in BART particulate matter analyses is the selection of filtration media. The filtration media determines the control efficiency of a baghouse for very small particles, which makes the largest contribution visibility. As both PM 10 and PM 2.5 are regulated as BART pollutants, it is important to select a filtration media that optimizes the removal of these two fractions. There is a wide range of media that can be used, most of which are much more efficient for larger particles than smaller particles.

Finally, at all units, methods to remove the condensable particulate matter, a major contributor to PM 2.5 and visibility impairment, should be considered. The primary condensable particulate matter removal devices are SO 2 scrubbers and wet electrostatic precipitators (WESPs). These have an achievable level of 99.99% PM control. A WESP could be installed either as a conversion of the outlet field of the existing electrostatic precipitator as a separate housing downstream of the primary electrostatic precipitator, or integrated into the scrubber, if one is present. The WESP would enhance the removal of both filterable PM 2.5 and condensables.

(11) EPA must evaluate BART for all PM. BART requires the evaluation of control technology for filterable PM 10 and PM 2.5 as well as condensable particulate matter. Because these sources are subject to BART for particulate matter, BART limits for both PM 10 and PM 2.5 , including condensables, should be developed.

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

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

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

For purposes of assessing the impacts of today's final rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any requirements on small entities because small entities are not subject to the requirements of this rule. We continue to be interested in the potential impacts of the final rule on small entities and welcome comments on issues related to such impacts.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under section 202 of UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and Tribal governments, in the aggregate, or to the private sector, of $100 million or more (adjusted for inflation) in any one year. Before promulgating an EPA rule for which a written statement is needed, section 205 of UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 of UMRA do not apply when they are inconsistent with applicable law. Moreover, section 205 of UMRA allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including Tribal governments, it must have developed under section 203 of UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

Under Title II of UMRA, EPA has determined that this final rule does not contain a federal mandate that may result in expenditures that exceed the inflation-adjusted UMRA threshold of $100 million by State, local, or Tribal governments or the private sector in any one year. In addition, this final rule does not contain a significant federal intergovernmental mandate as described by section 203 of UMRA nor does it contain any regulatory requirements that might significantly or uniquely affect small governments.

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

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely addresses the State not fully meeting its obligation to prohibit emissions from interfering with other States measures to protect visibility established in the CAA. Thus, Executive Order 13132 does not apply to this action.

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

EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. This action is not subject to EO 13045 because it implements specific standards established by Congress in statutes. However, to the extent this rule will limit emissions of NO X , SO 2 , and PM, the rule will have a beneficial effect on children's health by reducing air pollution.

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

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

This final rulemaking does not involve technical standards. Therefore, EPA is not considering the use of any voluntary consensus standards.

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

We have determined that this final action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population.

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, does not apply because this action is not a “major rule” as defined by 5 U.S.C. 804(2).

For the reasons stated in the preamble, 40 CFR part 52 is amended as follows:

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

EPA proposed to approve the following rule into the California SIP, in the Federal Register at 77 FR 1895, January 12, 2012.

We proposed to approve this rule because we determined that it complies with the relevant CAA requirements and is approvable as an equivalent alternative to the program required by section 185 of the Act for the 1-hour ozone standard as an anti-backsliding measure. Our proposed action contains more information on the rule and our evaluation.

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

a. Comment: Earthjustice commented that Rule 317 does not impose fees on major stationary sources, but instead collects an equivalent amount from other sources including government grants.

Response: We agree that section 185 requires major stationary sources to pay fees; however, today's action is to approve SCAQMD Rule 317 in the context of the revoked 1-hour ozone NAAQS. We conclude that Rule 317 is approvable into the California SIP as the District's equivalent alternative program because we have determined that Rule 317 contains provisions that ensure that the fee equivalency account will reflect expenditures that are at least equal to the amount that would otherwise be collected under section 185, and they ensure that the funds will be used to reduce ozone pollution. Specifically, Rule 317 contains requirements to calculate the section 185 fee obligation, establish a “section 172(e) fee equivalency account,” track qualified expenditures on pollution control projects, annually demonstrate equivalency, and provide for a backstop if equivalency cannot be demonstrated. We have therefore determined that Rule 317 satisfies the requirements of CAA section 185, consistent with the principles of section 172(e).

a. Comment: Earthjustice made several points relating to their general argument that the baseline used to determine the equivalent fee to be collected (and potentially to impose the fee if there is a shortfall) fails to comply with section 185. Another commenter supported Rule 317's alternative baseline provisions.

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

Rule 317 uses an alternative baseline to calculate the fees owed by all section 185 sources in the South Coast Air Basin. 1 Rather than calculating an alternative baseline for each source based on EPA's 2-in-10 PSD concept, Rule 317 sets an alternative baseline for all sources in the South Coast Air Basin by defining the term “baseline emissions” to mean the average of each source's actual emissions during a specific time period—fiscal years 2005-2006 and 2006-2007. 2

Therefore, we agree that Rule 317's baseline for sources in the South Coast Air Basin differs from the attainment year baseline set forth in section 185. We note, however, that we are approving SCAQMD Rule 317 in the context of the revoked 1-hour ozone NAAQS and that Rule 317 satisfies the requirements of CAA section 185, consistent with the principles of section 172(e). We respond below to Earthjustice's specific points regarding baseline issues.

b. Comment: Earthjustice stated that the statute allows for an alternative baseline “for a specific source” if emissions are irregular, cyclical or otherwise vary significantly from year to year and allows for alternative baselines based on the nature of source-specific operations. The commenter stated that Rule 317 renders this source-specific test meaningless. The commenter contended that choosing the baseline should be a source-specific determination that accounts for the variability, cycle or irregularity of the emissions. The commenter stated that the District's response to variability is a “blanket approach” that has no connection to the source-specific findings required by the Act. The commenter stated that the District's analysis shows that “all or nearly all” sources had emissions that varied and so undermines the claim that the variability was significant.

Response: EPA disagrees with the commenter's assertion that Rule 317 is inconsistent with section 185 because it does not utilize a “source-specific determination.” As described in EPA's proposed action, SCAQMD looked at available emissions data for all 234 sources subject to section 185 fees that reported actual emissions of at least 10 tons per year in 2010 and found that all 234 sources had some variability (see SCAQMD letter dated December 21, 2011, Exhibit D). In addition, SCAQMD conducted a more detailed analysis for 112 sources for which SCAQMD had ten consecutive years of actual emissions data. SCAQMD developed a mathematical formula to define and analyze variability. 3 Applying this formula, SCAQMD found that 107 of the 112 sources (or over 95% of the data set) had greater than 20 percent variability in emissions across a 10-year period.

EPA also disagrees with the commenter's argument that variability cannot be significant if it is experienced by all sources. The Act itself does not define the phrase “otherwise vary significantly from year to year;” therefore, EPA may supply a reasonable interpretation. SCAQMD separately considered the available information for each of the 234 sources and found that no source had consistent emissions. To the contrary, SCAQMD found that emissions for all sources varied from year to year. While some source's emissions varied more than others, all evidenced some variation. Moreover, SCAQMD's data shows that even sources with the smallest variation in emissions experienced a range of approximately 10 percent. As a practical matter, EPA notes that Rule 317's baseline definition makes little difference with respect to sources that have less emissions variability because, as a matter of course, less variation in emissions means that those sources owe essentially the same amount under either section 185's attainment year baseline or under Rule 317's universal alternative baseline using years 2006-2007.

c. Comment: Earthjustice stated that the District's justification of its approach based on the PSD regulations is arbitrary. The commenter further contended that Section 185 does not refer to the new source review program, so the baseline provisions in the PSD regulations are irrelevant to interpreting section 185.

Response: EPA disagrees with the comment that the District's justification of its approach based on EPA's PSD regulations is arbitrary because section 185 does not refer to the new source review program. In fact, to establish the default baseline for calculating emission fees, section 185 refers to “the lower of the amount of actual VOC emissions (`actuals') or VOC emissions allowed under the permit applicable to the source * * * (`allowables') during the attainment year.” SCAQMD's reference to the baseline established by EPA's PSD regulations is also valid because EPA's Baseline Guidance recommended the PSD 2-in-10 concept as an acceptable approach for states seeking to implement an alternative baseline in their section 185 fee programs. As explained in EPA's Baseline Guidance, EPA's rationale for the PSD 2-in-10 concept was that it would allow a source “to consider a full business cycle in setting a baseline emissions rate that represents normal operation of the source for that time period.” Lastly, we note that the commenter has not recommended, and we are not aware of, a superior alternative to basing the approach on EPA's PSD regulations.

d. Comment: Earthjustice commented that the District's analysis is not based on an assessment of the source itself and the nature of its operations, but on the broader impacts of the recession in the region. The commenter stated that the District's approach of raising the baseline from the atypical low production year is counter to the purpose of section 185's baseline requirement, which is to use the lowest level of emissions, whether actual or allowable. The commenter's reasoning is that if emissions at these levels are not low enough to attain the standard, the fee should be imposed to incentivize an additional 20 percent reduction. The commenter contended that Rule 317 undermines this objective—by raising the baseline level of emissions, a 20 percent reduction is less likely to result in attainment.

Response: EPA disagrees with the comment to the extent that it implies that the District inappropriately considered recessionary impacts on emissions when considering the appropriate baseline for Rule 317 or that the District acted inappropriately by not using the attainment year, 2010, as the baseline because it was an “atypical low production year.” Section 185 explicitly acknowledges the possibility that a fee program might need to adjust the baseline for emissions that are “irregular, cyclical, or otherwise vary significantly from year to year.”

EPA also disagrees with the comment's implication that Rule 317 undermines section 185's objectives because it does not establish a baseline based on the lowest level of emissions and thus will not result in the same level of emissions reductions. Again, the comment fails to acknowledge that Congress explicitly authorized use of an alternative baseline based on emissions over a period of more than one year in cases where there are variations in emissions levels. It is reasonable to assume that Congress's objectives in establishing the section 185 program were to allow for some discretion on the part of the regulatory agencies to account for practical realities that could arise during program implementation, even if the result might affect fees owed.

Moreover, we believe that SCAQMD's alternative baseline will result in emission reductions that are at least as significant as those that could be achieved under a source-by-source approach using EPA's Baseline Guidance. As explained in our proposed action, SCAQMD had the reasonable expectation that since virtually all sources had significant variability, most if not all sources would request a different baseline than the attainment year. Instead of allowing each source to select its own alternative two-year baseline period (as would be allowed under EPA's Baseline Guidance), Rule 317 calculates the fee obligation based on each source's emissions during Fiscal years 2005-2006 and Fiscal years 2006-2007. SCAQMD's analysis showed that its alternative baseline should be expected to result in more emission reductions than a fee program that used EPA's Baseline Guidance because under the approach allowed by the Guidance, each individual source would likely choose the two-year period in which it had its highest emissions, thereby resulting in a higher threshold for triggering the assessment of section 185 fees. Given the assumption that a source would pick the two consecutive years with the highest emissions, SCAQMD calculated such baselines from the historic data. SCAQMD's analysis showed that the SCAQMD method resulted in aggregate baseline emissions that were 7,081 tons lower than that allowed under the EPA's Baseline Guidance. (See SCAQMD letter dated December 21, 2011, Exhibit D). SCAQMD's decision to establish an alternative baseline period for all sources is reasonable given that SCAQMD's approach is more stringent than that allowed under EPA's Baseline Guidance. Finally, we note that the commenter did not challenge EPA's Baseline Guidance.

a. Comment: Earthjustice commented that nothing in the plain language of the Act, the “principles” behind that language, or South Coast Air Quality Management District v. EPA, 472 F.3d 882 (D.C. Cir. 2006) gives EPA the power to rewrite the terms of section 185. The commenter stated that EPA's argument that it can invent alternatives that fail to comply with the plain language of section 185 has no statutory basis. Other commenters stated that section 172(e) provides authority for EPA to approve Rule 317 and alternative fee programs generally.

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

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

As stated above, section 172(e) requires State Implementation Plans to contain “controls” that are “not less stringent” than the controls that applied to the area before the NAAQS revision. EPA's 2004 Rule defined the term “controls” in section 172(e) to exclude section 185. See 2004 Rule, 69 FR at 24000. The D.C. Circuit ruled that EPA's exclusion of section 185 from the list of “controls” for Severe and Extreme non-attainment areas was improper and remanded that part of the rule back to EPA. See South Coast, 472 F.3d at 902-03. The court did not, however, address the specific issue of whether the principles of section 172(e) required section 185 itself or any other controls not less stringent, and section 172(e) clearly on its face allows such equivalent programs. Further, the court in NRDC v. EPA, 643 F.3d 311 (D.C. Cir. 2011), specifically noted with respect to equivalent alternative programs that, “neither the statute nor our case law obviously precludes [the equivalent program alternative.]” 643 F.3d at 321. In this rulemaking approving SCAQMD Rule 317, EPA is fully recognizing section 185 as a “control” that must be implemented through the application of the principles of section 172(e). As explained above, the D.C. Circuit stated that EPA must apply the principles of section 172(e) to non-attainment requirements such as section 185. Thus, we are following the D.C. Circuit's holding that the principles of section 172(e) apply in full to implement 185 obligations.

a. Comment: Earthjustice commented that CAA section 172(e) does not apply to this situation because EPA has adopted a more health protective ozone standard. According to the commenter, EPA acknowledges that section 172(e) by its terms does not authorize EPA's action because the newer 8-hour ozone standard is not a relaxation of the prior 1-hour ozone standard. The commenter asserted that EPA claims that its authority to permit States to avoid the express requirements of section 185 derives from the “principles” of section 172(e), but the commenter contended that there is no principle in the CAA that Congress intended to give EPA authority to rewrite the specific requirements of section 185 when EPA finds that the health impacts related to ozone exposure are even more dangerous than Congress believed when it adopted the detailed requirements in the 1990 Clean Air Act Amendments. Other commenters stated that section 172(e) provides authority for EPA to approve Rule 317 and alternative fee programs generally.

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

a. Comment: Earthjustice commented that the Supreme Court in Whitman v. Am. Trucking Assns, interpreted the CAA as showing Congressional intent to limit EPA's discretion. The commenter claimed that the D.C. Circuit in SCAQMD also held that EPA's statutory interpretation maximizing agency discretion was contrary to the clear intent of Congress in enacting the 1990 amendments. The commenter stated that EPA's purported approach [with respect to 185] would allow EPA to immediately void the specific statutory scheme Congress intended to govern for decades. The commenter argued that where EPA has found that elevated 1-hour ozone exposures remain a serious concern, EPA cannot reasonably claim that Congress meant to give EPA the discretion to revise the carefully prescribed statutory requirements like section 185 that Congress intended to address such exposures. The commenter stated that EPA proposed to accept a program other than that provided by Congress in section 185. The commenter concluded that given that Congress provided a specific program, EPA has no discretion to approve an alternative. Other commenters stated that the Act provides EPA with discretion to approve Rule 317 and alternative fee programs generally.

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

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

Further, as noted above, EPA believes that South Coast supports our reliance on section 172(e) principles to approve Rule 317 as fulfilling section 185 requirements for the revoked 1-hour standard. As the court stated, “EPA was not, as the Environmental petitioners contend, arbitrary and capricious in withdrawing the one-hour requirements, having found in 1997 that the eight-hour standard was `generally even more effective in limiting 1-hour exposures of concern than is the current 1-hour standard.' * * * The only remaining requirements as to the one-hour NAAQS are the anti-backsliding limitations.” Id. (citation omitted).

a. Comment: Earthjustice commented that EPA's different and inconsistent tests for determining “not less stringent” undermine the reasonableness of these options as valid interpretations of the Act. The commenter stated that EPA's interpretation means that a program that achieves the same emission reductions as section 185 and a program that achieves fewer emission reductions than section 185 can both be considered “not less stringent.” However, stringency is either a measure of the emission reductions achieved or it is not. The commenter concluded that if it is, then a program that does not achieve equivalent reductions cannot pass the test. The commenter contended that EPA did not actually interpret the term “stringent” and that it offers no basis for claiming that Congress intended this term to have different meanings and allow for different metrics for guarding against backsliding. Other commenters stated that EPA's criteria for equivalency were reasonable and supported EPA's proposal with respect to the concept of alternative section 185 fee programs.

Response: We believe that the three alternatives we identified in our proposed action (i.e., same emission reductions; same amount of revenue to be used to pay for emission reductions to further improve ozone air quality; a combination of the two) are reasonable and consistent with Congress' intent. First, we note that Congress did not define the phrase “not less stringent” or the term “stringent” in the Act. EPA, therefore, may use its discretion and expertise to reasonably interpret section 172(e). Furthermore, we note that the D.C. Circuit, in NRDC v. EPA, 643 F.3d 311 (D.C. Cir. 2011), while finding that EPA's guidance document providing our initial presentation of various alternatives to section 185  4 should have been promulgated through notice-and-comment rulemaking, declined to rule on whether the types of alternative programs we considered in connection with our proposed action on Rule 317 were illegal, stating, “neither the statute nor our case law obviously precludes [the program alternative].” Id. at 321.

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

Lastly, as discussed in our proposal, SCAQMD has demonstrated that Rule 317 will result in a federally enforceable requirement to obtain funding for and make expenditures on air pollution reduction projects in amounts at least equal to the amounts that would otherwise be collected under section 185. In addition, it is reasonable to expect that in one respect SCAQMD's alternative program will achieve more emission reductions than direct implementation of section 185 because the funding that results from the District's alternative program must be used on programs intended to reduce emissions, while section 185 has no such direct requirement. The comment suggests that EPA's logic, if unreasonably extended, might theoretically lead it to approve a program that achieves fewer emission reductions than a program directly implemented under section 185. We are not doing that in this action, deciding whether to approve Rule 317 as it has been submitted to us. We also have no intention of doing so in the future.

a. Comment: Earthjustice commented that to be “not less stringent,” a control must be no less rigorous, strict, or severe and claimed that none of EPA's alternatives meets this definition. The commenter stated that EPA's description of the alternatives does not focus on “stringency” but on “equivalency.” The commenter contended that Section 172(e) does not allow for “equivalent” controls; it requires controls to be “not less stringent.”

Response: EPA interprets the criterion set forth in section 172(e), “not less stringent,” to mean that, in the context of the revoked 1-hour ozone NAAQS, an alternative control that is as stringent as a previously applicable control should be considered approvable. An alternative control that is equivalent to the applicable control still meets section 172(e)'s criterion, “not less stringent” because it is as stringent, and therefore not less stringent, than the applicable control.

b. Comment: Earthjustice commented that Congress made deliberate choices as to which sources would be subject to penalties, the magnitude of those penalties and the duration of those penalties. The commenter stated that the purpose of Rule 317 is to avoid the stringent requirements of section 185 and dilute the severity of the 185 penalty on major industrial sources. The commenter averred that it is not possible to claim that Rule 317 is “not less stringent” than section 185 when that is the very purpose of the rule. Other commenters stated that Rule 317's focus on mobile sources rather than stationary sources is appropriate and more likely to lead to emission reductions and attainment with the one-hour ozone standard.

Response: We agree that section 185 requires major stationary sources to pay fees whereas Rule 317 does not; however, today's action is to approve SCAQMD Rule 317 in the context of the revoked 1-hour ozone NAAQS, consistent with the principles of section 172(e). By their very nature, the environmental outcomes that will be achieved by incentive-based programs (such as the fee programs envisioned by section 185) are difficult to predict with any precision, making the relative stringency of incentive-based programs difficult to evaluate. Thus, EPA's review focuses on whether the District provided a reasonable comparison of relative stringency. In particular, it is difficult to assess the relative stringency of section 185 and Rule 317 based on a comparison of where or how the funds associated with the 185 and the alternative program come from. We acknowledge as reasonable the District's decision, in developing an alternative fee program, to focus on mobile sources rather than stationary sources because emissions from mobile sources constitute approximately 90 percent of NO X emissions in SCAQMD. 6

Moreover, it is clear that Rule 317, through the creation of a fee equivalency account that will be used to offset fees required under section 185, and a requirement to annually demonstrate and report equivalency, will result in a federally enforceable requirement to obtain funding for and make expenditures on air pollution reduction projects. Rule 317 contains provisions that ensure that the fee equivalency account will reflect expenditures that are at least equal to the amount that would otherwise be collected under section 185 and that ensure that the funds will be used to reduce ozone pollution. By one measure, Rule 317, which requires the expenditure of funds on projects that reduce ozone nonattainment, will be more effective than a section 185 fee program, which is not required to contain an enforceable requirement to spend funds to reduce air pollution, in producing actual air quality benefits.

a. Comment: Earthjustice commented that a program that raises an equivalent amount of money is not supported by section 185's structure and legislative history. The commenter stated that section 185 was not intended as a revenue generating provision. The commenter concluded that nothing in the legislative history indicates that Congress' intent was to collect a certain amount of money.

Response: Section 185 explicitly mandates a specific fee, requires that the fee be indexed for inflation, establishes a baseline for measuring such fees, and authorizes an alternative baseline for use in calculating that fee. For those reasons, and the additional reasons discussed above, we believe that section 185 has both monetary and emissions-related aspects and that it is reasonable for EPA to assess the stringency of alternative programs on the basis of either aspect of section 185 or on the combination of both.

Rule 317 will result in a federally enforceable requirement to obtain funding and to spend those funds on ozone pollution reduction projects. In addition, we note that the District's focus on alternative funding from programs that relate to mobile sources is reasonable in light of the fact that approximately 90 percent of NO X emissions in the District are attributable to mobile sources. 7 Thus, only 10 percent of NO X emissions are caused by stationary sources, most of which are already subject to either best available retrofit control technology or best available control technology or lowest achievable emission rate requirements. 8 Thus, Rule 317 by ensuring the expenditure of these funds on the primary causes of ozone nonattainment is likely to be more effective in producing real reductions in ozone pollution than a 185 fee program.

a. Comment: Earthjustice commented that the measure of equivalency should be section 185's emission reduction incentive. The commenter contended that penalties end if an area is redesignated to attainment or a source reduces its emissions by 20 percent. The commenter pointed out that the D.C. Circuit noted, “[T]hese penalties are designed to constrain ozone pollution.” The commenter stated EPA should assess how Rule 317 will create incentives for major stationary sources to reduce emissions. Many commenters stated that most stationary sources have already installed air pollution controls such as best available control technology or best available retrofit technology. As a result, installation of additional controls would not be feasible. According to these commenters, to avoid fees, sources would curtail production, which would be harmful to the economy. In addition, curtailing production is not a realistic option for sources such as hospitals and providers of essential services.

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

In addition, Earthjustice's comment does not acknowledge that section 185 allows major sources to pay fees and not reduce emissions; consequently, the actual impact of the “incentive” underlying section 185 is uncertain, and must be acknowledged in any comparison to the effect of Rule 317. Nevertheless, we note that Rule 317 creates an incentive for the District to ensure that it obtains funding in an amount at least equal to the amount of fees that would be collected under section 185 and to use those funds to reduce ozone pollution, in order to annually demonstrate equivalency of the program.

In response to the comments in support of our approval of Rule 317, we acknowledge that Rule 317 avoids possibly substantial burdens on major stationary sources within the District, some of which may be small businesses because of the 10 tons/year threshold for major stationary sources in the South Coast Air Basin.

b. Comment: Section 185 is a market-based policy device to internalize the external costs of pollution and thereby incentivize emission reductions at major stationary sources. The commenter argued that EPA must assess how the incentives in Rule 317 compare to the incentives in section 185. The commenter stated that this analysis would look at how a pollution tax might drive sources to improve controls.

Response: We do not agree that the comparison of “incentives” or a pollution tax proposed by the commenter is the only approach to evaluating the relative stringency of an alternative program, as explained above. In addition, we note SCAQMD's observation that many of the sources subject to the section 185 fee are not necessarily able to internalize the costs of the fees. These sources, which the District identified as refineries, utilities and sewage treatment plants, “are likely to have an inelastic response to fees * * * [and] are more likely to pass through any increased fee dollars to the consumer rather than curtail emissions.”  9 Moreover, we anticipate that Rule 317 will reduce ozone pollution in the District because it creates a federally enforceable requirement to demonstrate on an annual basis that it has obtained funding and made expenditures on projects related to improving ozone air quality.

c. Comment: Earthjustice commented that Rule 317 severs the link between the fee and pollution levels by, for example, pre-funding the District's fee equivalency account with government subsidies. The commenter stated that using taxpayer dollars creates no incentive to reduce pollution. Other commenters stated that Rule 317 appropriately focuses on programs that will reduce emissions from mobile sources because they are primarily responsible for ozone pollution in the District.

Response: As stated above, it is difficult to quantitatively compare any incentives created by section 185 or Rule 317. Section 185 explicitly requires fees from major stationary sources in Severe and Extreme ozone nonattainment areas as a penalty for failure to reach attainment by their attainment deadlines, but does not directly mandate emissions reductions. Rule 317 replaces the uncertain effect of the fee incentive with a direct obligation for the District to annually invest fee-equivalent funding in projects designed to improve ozone levels. In the event the District fails to make this investment, Rule 317 includes a backstop provision requiring the District to adopt a rule to address any shortfall. In this context, we have determined that Rule 317 provides a “not less stringent” program structure.

a. Comment: Earthjustice commented that EPA does not demonstrate that Rule 317 establishes a process for revenues to be used to improve ozone air quality. The commenter concluded that Rule 317 on its face includes no such process, and provides no detail or mechanism for assuring that the fees will result in actual emission reductions that will improve ozone air quality. The commenter stated that EPA has previously refused to give emission reduction credit for vague incentive programs and it is arbitrary for EPA to assume that Rule 317 will improve air quality without providing a basis for reaching a different conclusion.

Response: EPA disagrees with the comment based on our determination that Rule 317 contains adequate provisions to ensure that the alternative funding will be used on programs that will improve ozone air quality. Rule 317(c)(3) and (5) require the District to make an annual demonstration of equivalency and file an annual report with CARB and EPA that includes, among other things, a list of all facilities subject to section 185 and their fee obligations, and a listing of all programs and associated expenditures that were credited into the section 172(e) equivalency account. The listing of expenditures that were credited to the equivalency account must show the programs and program descriptions, a description of the funding, a certification of eligibility for each program and the expenditures themselves. In addition, Rule 317 contains provisions to ensure the integrity of the demonstration process. For example, Rule 317(c)(1)(A) specifies various criteria for the types of programs that are eligible for credit, including requirements that the projects be “surplus to the SIP,” designed to reduce VOC or NO X emissions, as well as a requirement that “only monies actually expended from qualified programs during a calendar year shall be credited.”

In addition, the District's Staff Report for Rule 317, at Attachment A, contains a listing of programs that the District has already identified as appropriate for use as credits in the section 172(e) equivalency account. These programs include school bus retrofits and replacements, liquefied natural gas truck replacements, and funding under AB2766, a state law that authorizes the collection of an additional $4 per motor vehicle registration to be used for programs to reduce motor vehicle pollution.

Our basis for approving Rule 317 is that it is not less stringent than the requirements of section 185 because it will result in funds equal to the fees that would be collected under section 185. Additionally, we believe that SCAQMD's alternative program will result in improvements in air quality since the funds will be used on projects that will reduce NO X and VOC emissions in the District. This finding is consistent with our actions referenced in the comment regarding other incentive programs. In those cases, we acknowledged that incentive programs would result in some emission reductions but noted that the air district had not adequately demonstrated a specific amount of reductions. Similarly, SCAQMD has not demonstrated a specific amount of emission reductions from the use of funds identified in Rule 317, but there is no reason to expect that it would be less than the reductions that might result from direct implementation of section 185, which does not require sources to reduce emissions and does not require that collected fees be directed towards emission reductions.

Section 185 creates an incentive to reduce emissions but in some cases it may not work and may be punitive. In addition, section 185 does not require that the state use the funds collected for any particular purpose, making it unlikely that the funds will be used directly to reduce ozone formation. Rule 317 will result in a federally enforceable requirement to obtain funding for and make expenditures on air pollution reduction projects in amounts at least equal to the amounts that would otherwise be collected under section 185. In addition, it is reasonable to expect that in one respect SCAQMD's alternative program will achieve more emission reductions than direct implementation of section 185 because the funding that results from the District's alternative program must be used on programs intended to reduce emissions, while section 185 has no such direct requirement.

a. Comment: Earthjustice commented that EPA's analysis that Rule 317 will improve air quality because the fees are “surplus” does not make sense. The commenter claimed that the District's 1-hour ozone SIP failed to result in attainment of the standard and the 9th Circuit Court of Appeals has held that EPA should have disapproved the plan. Further, the commenter claimed the District does not have a meaningful plan for attaining the 1-hour ozone standard and all existing sources of funding have failed to provide “surplus” reductions that are not required for attainment. The commenter stated that the District has collected those fees and yet sources continue to emit at levels that have not provided for attainment. The commenter concluded that “Equivalent fees” credited to the District's accounts do not improve air quality. One commenter stated that the programs that are surplus to the SIP are an appropriate part of an alternative fee program.

Response: As explained in our proposal, Rule 317 specifies that expenditures used to offset section 185 fee obligations via the Section 172(e) Fee Equivalency Account must be “surplus” to the 1-hour ozone SIP and must be used on programs intended to reduce ozone formation. We explained that “surplus” reductions are those that are not relied upon nor assumed by the SIP to provide for reasonable further progress (RFP) or attainment. 10 Our proposal also explained that we had reviewed the various funding sources identified by the District as “surplus” and confirmed that they were in fact surplus to the approved 1-hour ozone SIPs for the South Coast Air Basin (the 1997/1999 Air Quality Management Plan) and the Southeast Desert Air Quality Management Area (1994 Air Quality Management Plan).

We do not agree with the commenter's characterization of the court's holding in Assoc'n of Irritated Residents v. EPA. In particular, we disagree with the commenter's statement that, “the Ninth Circuit Court of Appeals has held that EPA should have disapproved the plan's flawed attainment demonstration.” In fact, the court's ruling concerned EPA's disapproval in 2009 of an attainment demonstration adopted by the District in 2003 as an update to the approved 1997/1999 SIP for the South Coast Air Basin. Because the District's 2003 attainment demonstration indicated that the 1997/1999 SIP was inadequate, the court held that EPA should take additional action to evaluate the adequacy of the 1997/1999 SIP. The court also stated that EPA's authority to evaluate the adequacy of the plan could arise either under CAA provisions for a Federal Implementation Plan or for a SIP call. 11 The court, however, did not state that EPA should have disapproved the 1997/1999 SIP or any part of it, nor did the court's ruling invalidate or affect the legal status of the 1997/1999 SIP. Therefore, the 1997/1999 SIP remains in place as the approved 1-hour SIP for the South Coast Air Basin.

We also disagree with the commenter's conclusion that the 1997/1999 SIP cannot be a basis to determine “surplus” reductions because the 1997/1999 SIP failed to result in attainment of the 1-hour standard. By extension, this argument would mean that a nonattainment area that fails to reach attainment by the applicable deadline would have no emissions that could ever be considered “surplus.” The loss of “surplus” emissions would result in potentially drastic consequences, such as the inability to issue or obtain offset credits and thus a virtual cessation of permitting activity for large industrial sources in nonattainment areas with missed attainment deadlines. 12 If Congress had intended such a significant consequence for failure to reach attainment by an applicable deadline, Congress could have explicitly provided for such a result. 13 14 Because Congress did not provide for the loss of all surplus emissions upon a state's failure to attain a standard by an applicable attainment deadline, we believe that the 1997/1999 SIP, as the currently approved SIP, is a valid basis for determinations of “surplus” for purposes of the 1-hour ozone standard in the South Coast Air Basin.

Nevertheless, EPA recognizes that the 1997/1999 SIP did not result in attainment of the 1-hour ozone standard in the South Coast Air Basin. 15 Following the holding in Assoc'n of Irritated Residents v. EPA that EPA must review the adequacy of the 1997/1999 SIP, EPA initiated the SIP call process with a proposed finding of substantial inadequacy, as published at 77 FR 58072, September 19, 2012. 16 If finalized as proposed, the SIP call will require the District to submit, within 12 months, a plan providing for attainment of the 1-hour ozone standard (“1-hour ozone attainment plan”). Upon approval by EPA, the new 1-hour ozone attainment plan will become the new basis for determining what reductions are “surplus.”

EPA believes that Rule 317 is drafted with sufficient flexibility that the District will be able to continue to implement the rule by making determinations of surplus based on the new 1-hour ozone attainment plan. Specifically, Rule 317(c)(1)(i) specifies that the Section 172(e) Fee Equivalency Account can offset section 185 fee obligations with expenditures from qualified programs that are “surplus to the State Implementation Program for the federal 1-hour ozone standard. * * *” Thus, Rule 317's requirements for crediting expenditures from qualified programs in the Section 172(e) Fee Equivalency Account, as well as the requirements for the annual demonstration and reporting of equivalency, would accommodate a future 1-hour ozone attainment plan and the District will be able to continue to implement the equivalency program.

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

Response: EPA is acting on SCAQMD's Rule 317, which does not include these program features. If these program features are included in a specific SIP submittal for another alternative program, EPA would evaluate them at that time.

b. Comment: Numerous commenters expressed concerns that if fees were assessed in a direct application of section 185, the fees would have a devastating effect on small businesses, jobs, and the economy in Southern California. Consequently, they supported SCAQMD's approach in Rule 317 and urged EPA to approve the rule.

Response: We acknowledge the comments and the public's interest in this issue. No response needed to these comments that support our proposed action.

EPA is finalizing approval of Rule 317, “Clean Air Act Non-Attainment Fee,” as a revision to SCAQMD's portion of the California SIP, and as a “not less stringent” alternative to the program required by section 185 of the Act for anti-backsliding purposes with respect to the revoked 1-hour ozone standard.

The comments submitted do not fundamentally change our assessment that Rule 317 complies with the relevant CAA requirements and associated EPA rules. Therefore, as authorized in section 110(k)(3) of the Act, EPA is fully approving Rule 317 into the California SIP as an equivalent alternative program, consistent with the principles of section 172(e) of the Act. Final approval of Rule 317 satisfies California's obligation under sections 182(d)(3), (e) and (f) to develop and submit a SIP revision for the South Coast Air Basin and the Riverside County portion of the Salton Sea Air Basin  17 1-hour ozone nonattainment areas to meet the requirements for a program not less stringent than that of section 185. Final approval of Rule 317 also permanently terminates all sanctions and Federal Implementation Plan (FIP) implications associated with section 185 for the 1-hour ozone NAAQS and previous action (75 FR 232, January 5, 2010) regarding the South Coast Air Basin and the Riverside County portion of the Salton Sea Air Basin.

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 12, 2013. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

Therefore, 40 CFR chapter I is amended as follows:

On September 19, 2012, the Federal Register published a direct final rule and a companion proposed rule issuing listings for three fire suppressants under EPA's Significant New Alternatives Policy program (77 FR 58035). Because EPA received adverse comment concerning C7 Fluoroketone, we are withdrawing that part of the direct final rule that listed C7 Fluoroketone.

The listing would have found C7 Fluoroketone acceptable subject to narrowed use limits, as a substitute for halon 1211 for use as a streaming agent in portable fire extinguishers in nonresidential applications. We stated in that direct final rule that if we received adverse comment by October 19, 2012, that we would publish a timely withdrawal in the Federal Register . We subsequently received one adverse comment on that part of the direct final rule, but no comments on the other listings in the direct final rule. The other listings in that direct final rule, finding Powdered Aerosol F and Powdered Aerosol G acceptable subject to use conditions as substitutes for halon 1301 for use as a total flooding agent in normally unoccupied areas, will take effect on December 18, 2012. EPA intends to address the adverse comment concerning C7 Fluoroketone in a subsequent final action, which will be based on the parallel proposed rule published on September 19, 2012 (77 FR 58081). As stated in the direct final rule and the parallel proposed rule, we will not institute a second comment period on this action.

Accordingly, the entire entry for “Streaming: C7 Fluoroketone as a substitute for Halon 1211” in Appendix S to Subpart G of Part 82 in the direct final rule published on September 19, 2012 (77 FR 58035) is withdrawn as of December 14, 2012.

I. Background

In FR Doc. 2012-26507 of November 6, 2012 (77 FR 66670), there were a number of technical errors that are identified and corrected in the Correction of Errors section below. The provisions in this correction document are effective as if they had been included in the document published November 6, 2012. Accordingly, the corrections are effective January 1, 2013.

In the November 6, 2012 final rule (77 FR 66670), we inadvertently published technical errors in § 447.400(a) and § 447.405 listed on page 66701. One correction ensures consistency between two sentences in the same paragraph and the other restores text inadvertently omitted from the final rule that had been included in the May 11, 2012 notice of proposed rulemaking (77 FR 27671) on pages 26789-90. Thus, we are correcting page 66701 to reflect the correct information.

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a rule take effect in accordance with section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we can waive this notice and comment procedure if the Secretary finds, for good cause, that the notice and comment process is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons therefore in the notice.

Section 553(d) of the APA ordinarily requires a 30-day delay in effective date of final rules after the date of their publication in the Federal Register . This 30-day delay in effective date can be waived, however, if an agency finds for good cause that the delay is impracticable, unnecessary, or contrary to the public interest, and the agency incorporates a statement of the findings and its reasons in the rule issued. The policies expressed in final rule (77 FR 66670) have been previously subjected to notice and comment procedures. This notice merely provides a technical correction to the final rule and does not make substantive changes to the policies or methodologies that were expressed in the final rule. One technical correction ensures consistency of two sentences of the same paragraph, and the other restores text that had been present in the notice of proposed rulemaking (77 FR 27671) but inadvertently omitted from the final rule text. Therefore, we find it unnecessary to undertake further notice and comment procedures with respect to this correction notice and find good cause to waive notice and comment procedures and the 30-day delay in the effective date for this correction notice.

In FR Doc. 2012-26507 of November 6, 2012 (77 FR 66670), make the following corrections:

1. On page 66701, in the first column; in the last full sentence, in the first partial paragraph, the sentence reads, “A physician self-attests that he/she:”. Correct the sentence to read, “Such physician then attests that he/she:”.

2. On the same page, in the same column; in the last full paragraph, paragraph (a) reads, “For CYs 2013 and 2014, a state must pay for physician services described in § 447.400 based on:”. Correct the sentence to read, “For CYs 2013 and 2014, a state must pay for physician services described in § 447.400 based on the lower of:”.

DOE is amending Parts 908, Required Sources of Supplies and Services, 945, Government Property, 952, Solicitation Provisions and Contract Clauses, and 970, Management and Operating Contracts, to remove out-of-date coverage, to update references and to conform to the FAR.

This final rule contains several administrative changes that will not substantially change the content of the regulation. Changes include adding correct citations; correcting office names; updating vehicle license tag ordering procedures; correcting the excess personal property screening timeframe; revising the contractor's reporting of sensitive item listing; and retaining the definition of “Capital Equipment” which was included in the proposed rule for deletion. After further analysis, it is necessary to retain the “Capital Equipment” definition for the purpose of this rule. In addition, during the review of the final rule, it was discovered that section 952.245-5 referenced FAR 52.245-5 which is “Reserved” under the FAR rewrite.

This final rule follows a notice of proposed rulemaking published in the Federal Register on March 4, 2011, 76 FR 11985. There were no comments received as a result of that proposed rulemaking.

DOE is amending the DEAR as follows:

1. Section 908.1102 is amended by redesignating paragraph (a) (4) as 908.1102-70 Vehicle leasing to conform to the FAR convention, and adding the phrase “All subsequent lease renewals or extensions may be exercised only when General Service Administration (GSA) has advised that it cannot furnish the vehicle(s) as prescribed herein.”

2. Section 908.1104(f) is amended by removing “Federal Property Management Regulation (FPMR) 41 CFR 101-38.6.” and adding in its place “Federal Management Regulation (FMR) 41 CFR 102-34.160, 102-34.175 and 102-34.80” to provide the updated citation.

3. Section 908.7101-2 (a) is amended by removing “FPMR 41 CFR 101-25.304, 101-26.501, and 101-38.13 and DOE-PMR 41 CFR 109-25.304, 109- 38.13, and 109-38.51” and adding in its place “Federal Property Management Regulations (FPMR) 41 CFR 101-26.501, and FMR 41 CFR 102-34, and Department of Energy-Property Management Regulations (DOE-PMR) 41 CFR 109-26.501” to provide the updated citation.

4. Section 908.7101-2 paragraph (b) is amended by removing “on GSA Form 1781, Motor Vehicle Requisition—Delivery Order—Invoice,” and adding in its place “utilizing GSA's on-line system (Auto Choice)” to update the procedures.

5. Section 908.7101-3 is amended by removing in the second sentence “Office of Property Management” and adding in its place “Personal Property Policy Division” to update office name. Remove “those” in the third sentence and remove in the last sentence, “(See DOE-PMR 41 CFR 109-38.5102-4)” and add in its place 41 CFR 109-26.501-1 to correct grammar and to remove an out-of-date citation.

6. Section 908.7101-4 is amended in paragraph (a) by removing “FMPR 101-38.9 and DOE-PMR 41 CFR 109-38.9” and adding in its place “41 CFR 102-34.270” and 41 CFR 109-38.402 to update the citation.

7. Section 908.7101-5 is amended in the third sentence by removing “DOE-PMR 41 CFR 38.5102” and adding in its place “41 CFR 109-26.501-50 and 109-26.501-51”, to update the citation.

8. Section 908.7101-6 is amended in paragraph (a) by removing in the second sentence “Office of Property Management” and replacing it with “Personal Property Policy Division” to update office name; and remove the last three sentences and adding in their place “Such forecast shall be submitted to the Property Executive, or designee, when requested.

9. Section 908.7101-6 is amended in paragraph (b) by removing “Sedans, station wagons, and light trucks requisitioned according to an approved forecast, but not contracted for by GSA until the subsequent fiscal year, will” and adding in its place “Approved sedans, station wagons, and light trucks requisitioned, but not contracted for by GSA until the subsequent fiscal year, shall” to update the procedures.

10. Section 908.7101-7 is amended in paragraph (a) by removing “FPMR 41 CFR 101-38.303” and adding in its place “41 CFR 102-34.140” to update the citation.

11. Section 908.7101-7 is amended in paragraph (b) by removing in the second sentence “Assignments of specific “blocks” of tag numbers and the maintenance of tag records are performed by the “Director, Office of Property Management,” within the Headquarters procurement organization. Assignments of additional “blocks” of tag numbers will be made upon receipt of written request from field offices” and adding in its place “Assignment of new tag numbers will be made by UNICOR via the UNICOR online vehicle license tag ordering data base. Contractors must obtain approval from their Federal fleet manager or OPMO for ordering authorization to utilize the UNICOR data base. Director, Personal Property Policy Division within the Headquarters procurement organization will maintain tag assignment records issued by UNICOR for new plates” to correct punctuation, update office name and current tag ordering procedures.

12. Section 908.7101-7 is amended in paragraph (e) by removing the sentence and adding in its place “See 41 CFR 109-38.202-2 and 109-38.202-3 for additional guidance.” to update the citation.

13. Section 908.7102 is amended by removing the sentence and adding in its place “Acquisition of aircraft shall be in accordance with 41 CFR 102-33, subpart B and DOE Order 440.2B latest revision.” to update the citation.

14. Section 908.7103 is amended by removing “41 CFR 101-25.302-3, 101-25.302-4, and 101-25.302-6, and 101-25.403, and 41 CFR 109-25.302-3 to delete outdated citations.

15. Section 908.7104 is amended by removing “41 CFR 101-25.302-1 and 101-25.302-8, and 41 CFR 109-25.302-1 to delete outdated citations.

16. Section 908.7121 is revised to update the first paragraph to clarify that the contracting officers shall require authorized contractors to follow procedures set forth in paragraphs (a) through (c).

17. Section 908.7121(b) Precious metals is revised to update the responsible office in subparagraph (1) and add subparagraph (2) to reference 48 CFR 945.604-1 for contractor identification and reporting for contractor inventory containing precious metals or possessing precious metals excess.

18. Section 908.7121(c) is amended to state that lithium is available from The National Nuclear Security Administration (NNSA), Y-12 National Security Complex in Oak Ridge, TN (Y-12) and that the excess quantities at Y-12 are to be the first source of supply.

19. Part 945 is amended to simplify procedures, clarify language, and eliminate obsolete requirements related to the management and disposition of Government property in the possession of contractors to conform to 48 CFR part 45 Government Property regulation.

20. Section 945.000 is amended by lower casing the first letter of the word “part”; by reversing “operating and management” to read “management and operating”; and by removing the second sentence in its entirety.

21. Section 945.101 is amended adding a definition of sensitive property. For clarity, since the FAR definition of sensitive property was changed under FAC 2005-17 and for further emphasis by DOE, the FAR definition is incorporated by reference. The definition of capital equipment was removed in the proposed rule. However, after further analysis, it has been determined to retain the definition as it is necessary for the purpose of this rule. The definition is amended by removing “a unit acquisition cost of $5,000” and adding “; dollar threshold for capital equipment is as established by the DOE Financial Management Handbook.”

22. Section 945.102-70 is revised in the first paragraph, first sentence, by removing “Within 30 days after the end of each fiscal year,” and adding in its place “The Head of the Contracting Activity may be required to report” (this language changes what was contained in the proposed rule and provides clarity); and by removing “Director, Office of Property Management,” and adding in its place “Personal Property Policy Division”; in paragraph (e), by removing “dollar” and adding in its place “acquisition”; and in paragraph (e), by removing “as reported on last semiannual asset report (including date of report),”. These changes correct the reporting process and provide the correct title of the receiving activity. Changes pertain to the Property Information Database System (PIDS) which was created by the Idaho National Lab and has been in use since the late 1990's. The PIDS system is used by both DOE and Contractors alike.

23. Subpart 945.1 is revised to add the new section “945.102-72 Reporting of contractor sensitive property inventory” to reflect the current sensitive property policy. To further streamline approvals for sensitive property list, this section deleted in its entirety and replace with the following language “The contractor must develop and maintain a list of personal property items considered sensitive. Sensitive Items List must be approved by the PA/OPMO annually.”

24. Section 945.3 is amended by redesignating subpart 945.3 and section 945.303-1 as section 945.170 and section 945.170-1, respectively and by reserving section 945.3 and by using lower case letters for “property” and “contractors” in the section 945.170 title, and by adding a period at the end of “contractors”. These changes are made to conform to the FAR.

25. Subpart 945.4 is amended by removing and reserving this subpart in its entirety to conform to the FAR.

26. Section 945.5 title is amended by removing “Management of Government Property in the Possession of Contractors” and adding in its place “Support Government Property Administration” to conform to the FAR.

27. Section 945.505-11 is removed in its entirety to conform to the FAR.

28. Subpart 945.5 is revised by changing its title to “945.570 Management of Government property in the possession of contractors” to conform to the FAR.

29. Section 945.506 is removed in its entirety.

30. Section 945.570-2 is redesignated as 945.570-1 and is amended at paragraph (c) the second sentence by removing “(GSA Form 1781)”, and adding “via GSA AutoChoice” after “should be processed”. The replaced information updates the DEAR to conform to GSA's current procedures.

31. Redesignated 945.570-1(f) is amended by removing “Motor Vehicle Rental” and adding in its place “Leasing of Automobiles and Light Trucks”.

32. Section 945.570-7 is redesignated as 945.570-2.

33. Section 945.570-8 is redesignated as 945.570-3 and is revised in section (a) in the first sentence, by removing “(on or before December 1)”.

34. Redesignated 945.570-3(b) is amended after “DOE-owned” by adding “, GSA leased”; before “and/or” and by adding “electronically” before “submit”.

35. Redesignated 945.570-3(b)(1) is amended by removing “DOE Report of Motor Vehicle Data (passenger vehicles)” and adding in its place “Annual Motor Vehicle Fleet Report”.

36. Redesignated section 945.570-3(b) (2) is amended by removing “DOE Report of Truck Data” and adding in its place “Federal Fleet Report (41 CFR 102-34.335)”.

37. Subpart 945.6 is amended by removing the subpart title “Reporting, Redistribution, and Disposal of Contractor Inventory” and adding in its place “Reporting, Reutilization, and Disposal”.

38. Subpart 945.6 is amended by adding a new section “945.602 Reutilization of Government property.” 945.602-3(a)(1) is amended in the second sentence by changing the screening period from 15 days to 12 days, to conform with current procedures.

39. Subpart 945.6 is amended by adding a new section “945.602-70 Local screening”.

40. Section 945.603 is redesignated as 945.670, DOE disposal methods.

41. Section 945.603-70 is amended by redesignating this section as “945.670-1”; and removing “FAR Subpart 45.6” and adding in its place “48 CFR 45.606-3”. This amendment is to conform the DEAR to the FAR.

42. Section 945.603-71 is redesignated as “945.670-2”; and is revised by adding “or its successor” after “41 CFR 109-45.50.”

43. Subpart 945.6 is amended by adding a new section 945.603 Abandonment, destruction or donation of excess personal property which refers to 48 CFR 945.670 for disposal methods. These changes are made to conform to the FAR and move current DEAR information to a new section.

44. Subpart 945.6 is amended by adding a new section 945.604 Disposal of surplus property to conform to the FAR.

45. Section 945.607-2(b) is redesignated as 945.604-1 Recovering precious metals. The office name and address are updated. Paragraph (d) references 945.670 for DOE disposal methods. By adding the other precious metals, we are aligning the DEAR to FAR 46.101.

46. Section 945.608-2 is redesignated as “945.602-3(a)” and is amended by removing subparagraph (b)(1) in its entirety and adding in its place “(a) Standard screening. (1) Prior to reporting excess property to GSA, all reportable property, as identified in Federal Management Regulation 41 CFR 102-36.220, shall be reported for centralized screening in the DOE Energy Asset Disposal System (EADS). Reportable excess personal property will be screened internally via the EADS system for a period of 12 days.” These changes are made to update the DEAR to the current on-line reporting timeframe.

47. Redesignated section 945.602-3(a)(1)(i) [previously 945.608-2(b)(1)] is amended in the first sentence, by removing “REAPS” and adding in its place “EADS”; in the first sentence, by removing “address code” and adding in its place “Activity Address Code (AAC)”; by removing the second sentence in its entirety and adding in its place “The AAC will be assigned by DOE Headquarters upon receipt of a formal letter of authorization signed by the DOE contracting officer,”, and by removing the third sentence in its entirety. These changes are made to update the current procedure.

48. Redesignated section 945.602-3(a)(1)(ii) is amended by removing the sentence in its entirety and adding a new sentence to indicate that any changes to an Activity Address code shall be submitted to the Office of Property Management, Personal Property Policy Division, within the Headquarters procurement organization.

49. The section designated as 945.608-3 is removed. Section 945.602-70 Local screening provides the correct process and title for property screening and disposal.

50. The section designated as 945.608-4 is removed.

51. Section 945.608-5 is redesignated as 945.602-3(b)(2) and is amended in the first paragraph, by adding “(b) Special screening requirements . (2) Special test equipment with commercial components—” prior to the redesignated text.

52. Section 945.608-5(c) is redesignated as 945.602-3(b)(3).

53. Section 945.608-6 is redesignated as 945.670-3; and is amended in paragraph (a) after requirements, by removing “in accordance with the provisions of FAR 45.608-6.”; in both paragraphs, by removing “Office of Property Management Division” and adding in its place “Personal Property Policy Division”; and in paragraph (b) by removing “HCA” and adding in its place “Procurement Directors”.

54. Section 945.610-4 is redesignated as 945.671; and is amended after “41 CFR 109-43.5 and 45.51” by adding “or its successor”, and adding 48 CFR 45.302 to update correct FAR citation.

55. Section 970.5244-1(k) is amended by removing the paragraph in its entirety and adding in its place “ Government Property ”. The Contractor shall establish and maintain a property management system that complies with criteria in 48 CFR 970.5245-1, Property, and 48 CFR 52.245-1, Government Property.”

56. Section 952.245-5 is modified to reference FAR 52.245-1(e)(3) to update citation.

57. Section 970.5244-1 (q)(13) is added to correct an error in the DEAR Final Rule [74 FR 36376-36378, dated July 22, 2009] which omitted “Products made in Federal and penal and correctional institutions—41 CFR 101-26.702.”

58. Section 970.5245-1 is amended by removing and reserving paragraph (i)(1)(ii)(B). This amendment clarifies the contract conditions for property management systems approval.

This regulatory action has been determined not to be a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” (58 FR 51735, October 4, 1993). Accordingly, this final rule is not subject to review under that Executive Order by the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB).

DOE has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). Executive Order 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 to: (1) Propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.

Executive Order 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. DOE believes that today's final rule is consistent with these principles, including the requirement that, to the extent permitted by law, agencies adopt a regulation only upon a reasoned determination that its benefits justify its costs and, in choosing among alternative regulatory approaches, those approaches maximize net benefits.

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” (61 FR 4729, February 7, 1996), imposes on Executive 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) and promote simplification and burden reduction. With regard to 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 United States Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or if it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, these regulations meet the relevant standards of Executive Order 12988.

This rule has been reviewed under the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., which requires preparation of an initial regulatory flexibility analysis for any rule that must be proposed for public comment and which is likely to have a significant economic impact on a substantial number of small entities. This rule would not have a significant economic impact on small entities because it imposes no significant burdens. Any costs incurred by DOE contractors complying with the rule would be reimbursed under the contract.

Accordingly, DOE certifies that this rule would not have a significant economic impact on a substantial number of small entities, and, therefore, no regulatory flexibility analysis is required and none has been prepared.

This final rule contains no new information collection or recordkeeping requirements. Information collection or recordkeeping requirements mentioned in this rule relative to the collection of certain contractor data are the same as the previous rule. The clearance number is 1910-4100 with an expiration date of October 31, 2014.

DOE has concluded that promulgation of this rule falls into a class of actions which would not individually or cumulatively have significant impact on the human environment, as determined by DOE's regulations (10 CFR part 1021, subpart D) implementing the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq. ). Specifically, this rule is categorically excluded from NEPA review because the amendments to the DEAR are strictly procedural (categorical exclusion A6). Therefore, this rule does not require an environmental impact statement or an environmental assessment pursuant to NEPA.

Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. DOE has examined this rule and has determined that it does not preempt State law and does 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. No further action is required by Executive Order 13132.

The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires a Federal agency to perform a detailed assessment of costs and benefits of any rule imposing a Federal mandate with costs to State, local or tribal governments, or to the private sector of $100 million or more in any single year. This rule does not impose a federal mandate on State, local or tribal governments or the private sector.

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 rulemaking or policy that may affect family well-being. This rule will have no impact on family well-being.

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 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; (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 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.

This final rule is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

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

As required by 5 U.S.C. 801, the Department will report to Congress promulgation of this rule prior to its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(3).

The Office of the Secretary of Energy has approved issuance of this final rule.

For the reasons set out in the preamble, the Department of Energy (DOE) amends Chapter 9 of Title 48 of the Code of Federal Regulations as set forth below.

The dolphin and wahoo fishery off the Atlantic states is managed under the Fishery Management Plan for the Dolphin and Wahoo Fishery of the Atlantic (FMP). The FMP was prepared by the South Atlantic Fishery Management Council, in cooperation with the Mid-Atlantic and New England Fishery Management Councils, and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act by regulations at 50 CFR part 622.

The commercial ACL for wahoo is 64,147 lb (29,097 kg), round weight, as specified in 50 CFR 622.49(f)(1).

The AMs for wahoo, specified at 50 CFR 622.49(f)(1), require NMFS to close the commercial sector for wahoo when the commercial ACL for wahoo has been reached, or is projected to be reached, by filing a notification to that effect with the Office of the Federal Register . NMFS has determined that the commercial ACL for Atlantic wahoo has been met. Accordingly, the commercial sector for wahoo in the EEZ off the Atlantic states (Maine through the east coast of Florida) is closed effective 12:01 a.m., local time, December 19, 2012, until 12:01 a.m., local time, January 1, 2013.

The operator of a vessel with a valid commercial vessel permit for Atlantic dolphin and wahoo having wahoo onboard must have landed and bartered, traded, or sold such wahoo prior to 12:01 a.m., local time, December 19, 2012. During this commercial closure, the bag and possession limit specified in 50 CFR 622.39(f) applies to all harvest or possession of wahoo in or from the Atlantic EEZ, and the sale or purchase of wahoo taken from the EEZ is prohibited. The prohibition on sale or purchase does not apply to the sale or purchase of wahoo that were harvested, landed ashore, and sold prior to 12:01 a.m., local time, December 19, 2012, and were held in cold storage by a dealer or processor.

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

This action is taken under 50 CFR 622.49(f)(1) and is exempt from review under Executive Order 12866.

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

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds that the need to immediately implement this action to close the commercial sector for wahoo constitutes good cause to waive the requirements to provide prior notice and opportunity for public comment pursuant to the authority set forth in 5 U.S.C. 553(b)(B), as such procedures would be unnecessary and contrary to the public interest. Such procedures would be unnecessary because the rule that implemented the Atlantic wahoo ACL and AMs has been subject to notice and comment (77 FR 15916, March 16, 2010), and all that remains is to notify the public of the closure. Allowing prior notice and opportunity for public comment is contrary to the public interest because of the need to immediately implement this action to protect the wahoo resource. The capacity of the fishing fleet allows for rapid harvest of the ACL and prior notice and opportunity for public comment would require time and would potentially result in a harvest well in excess of the established commercial ACL.

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

Regulations governing the summer flounder fishery are found at 50 CFR part 648. The regulations require annual specification of a commercial quota that is apportioned on a percentage basis among the coastal states from North Carolina through Maine. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.102.

The initial total commercial quota for summer flounder for the 2012 fishing year is 13,136,001 lb (5,958,490 kg) (76 FR 82189, December 30, 2011). The percent allocated to vessels landing summer flounder in New York is 7.64699 percent, resulting in a commercial quota of 1,004,509 lb (455,645 kg). The 2012 allocation was reduced to 922,705 lb (418,539 kg) after deduction of research set-aside and adjustment for quota overages carried forward from 2011. However, NMFS determined on December 5, 2012, that this quota allocation was incorrect due to an error in determining the 2012 commercial summer flounder quota. The correct 2012 allocation to New York is 953,773 lb (432,624 kg).

The Administrator, Northeast Region, NMFS (Regional Administrator), monitors the state commercial quotas and has determined that, due to the error, there is commercial summer flounder quota available for harvest in New York. NMFS is required to publish notification in the Federal Register to reopen the fishery, advising and notifying commercial vessels and dealer permit holders that, effective upon a specific date, there is commercial quota available for landing summer flounder in that state.

Therefore, effective 0001 hours, December 12, 2012, vessels holding summer flounder commercial Federal fisheries permits can land summer flounder in New York until the corrected commercial state quota is fully harvested. Effective 0001 hours December 12, 2012, federally permitted dealers can also purchase summer flounder from federally permitted vessels that land in New York until the corrected commercial state quota is fully harvested.

This action is required by 50 CFR part 648 and is exempt from review under Executive Order 12866.