[Federal Register Volume 82, Number 187 (Thursday, September 28, 2017)]
[Rules and Regulations]
[Pages 45187-45191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-20724]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R03-OAR-2017-0215; FRL-9968-34-Region 3]


Approval and Promulgation of Air Quality Implementation Plans; 
Virginia; Removal of Clean Air Interstate Rule (CAIR) Trading Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking direct 
final action to approve a state implementation plan (SIP) revision 
submitted by the Commonwealth of Virginia. The submitted revision 
requests EPA remove from the Virginia SIP regulations from the Virginia 
Administrative Code that established EPA-administered trading programs 
under the Clean Air Interstate Rule (CAIR), one of which also included 
requirements to address nitrogen oxide (NOX) reductions 
required under the NOX SIP Call. The EPA-administered 
trading programs under CAIR were discontinued on December 31, 2014 upon 
the implementation of the Cross-State Air Pollution Rule (CSAPR), which 
was promulgated by EPA to replace CAIR. CSAPR established federal 
implementation plans (FIPs) for 23 states, including Virginia. The SIP 
submittal seeks removal from the Virginia SIP of Virginia regulations 
that implemented the CAIR annual NOX, ozone season 
NOX, and sulfur dioxide (SO2) trading programs 
(as CSAPR has replaced CAIR). EPA is approving the SIP revision in 
accordance with the requirements of the Clean Air Act (CAA).

DATES: This rule is effective on November 27, 2017 without further 
notice, unless EPA receives adverse written comment by October 30, 
2017. If EPA receives such comments, it will publish a timely 
withdrawal of the direct final rule in the Federal Register and inform 
the public that the rule will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R03-
OAR-2017-0215 at https://www.regulations.gov, or via email to 
[email protected]. For comments submitted at Regulations.gov, 
follow the online instructions for submitting comments. Once submitted, 
comments cannot be edited or removed from Regulations.gov. For either 
manner of submission, EPA may publish any comment received to its 
public docket. Do not submit electronically any information you 
consider to be

[[Page 45188]]

confidential business information (CBI) or other information whose 
disclosure is restricted by statute. Multimedia submissions (audio, 
video, etc.) must be accompanied by a written comment. The written 
comment is considered the official comment and should include 
discussion of all points you wish to make. EPA will generally not 
consider comments or comment contents located outside of the primary 
submission (i.e. on the web, cloud, or other file sharing system). For 
additional submission methods, please contact the person identified in 
the FOR FURTHER INFORMATION CONTACT section. For the full EPA public 
comment policy, information about CBI or multimedia submissions, and 
general guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Sara Calcinore, (215) 814-2043, or by 
email at [email protected].

SUPPLEMENTARY INFORMATION: On January 5, 2017, the Commonwealth of 
Virginia, through the Virginia Department of Environmental Quality 
(VADEQ), submitted a SIP revision (Revision D16) that requests removal 
from its SIP of Virginia Administrative Code regulations including 9 
VAC 5 Chapter 140: Part II--NOX Annual Trading Program; Part 
III--NOX Ozone Season Trading Program; and Part IV--
SO2 Annual Trading Program (Sections 5-140-1010 through 5-
140-3880).

I. Background

    EPA promulgated CAIR (70 FR 25162, May 12, 2005) to address 
transported emissions that significantly contributed to downwind 
states' nonattainment and maintenance of the 1997 ozone and fine 
particulate matter (PM2.5) national ambient air quality 
standards (NAAQS). CAIR required 28 states, including Virginia, to 
reduce emissions of NOX and SO2, precursors to 
the formation of ambient ozone and PM2.5. Under CAIR, EPA 
established federal implementation plans (FIPs) comprised of separate 
cap and trade programs for annual NOX, ozone season 
NOX, and annual SO2. States could comply with the 
requirements of CAIR by remaining on the FIP, which applied only to 
electric generating units (EGUs), or by submitting a CAIR SIP revision 
that included as trading sources EGUs and certain non-EGUs \1\ that 
formerly traded in the NOX Budget Trading Program under the 
NOX SIP Call.\2\ On December 28, 2007 (72 FR 73602), EPA 
approved a SIP revision submitted by Virginia that allowed the 
Commonwealth to participate in the EPA-administered CAIR regional cap 
and trade programs for NOX annual, NOX ozone 
season, and SO2 annual emissions. Virginia's NOX 
ozone season trading program under CAIR included non-EGUs that were 
previously trading in the NOX budget trading program under 
the NOX SIP Call, which satisfied Virginia's obligations 
under the NOX SIP Call.
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    \1\ These non-EGUs are defined in the NOX SIP Call as 
stationary, fossil fuel-fired boilers, combustion turbines, or 
combined cycle systems with a maximum design heat input greater than 
250 million British thermal units per hour (MMBtu/hr).
    \2\ In October 1998, EPA finalized the ``Finding of Significant 
Contribution and Rulemaking for Certain States in the Ozone 
Transport Assessment Group Region for Purposes of Reducing Regional 
Transport of Ozone''--commonly called the NOX SIP Call. 
See 63 FR 57356 (October 27, 1998).
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    After EPA promulgated CAIR, litigation ensued. The United States 
Court of Appeals for the District of Columbia Circuit (D.C. Circuit) 
initially vacated CAIR in 2008,\3\ but ultimately remanded the rule to 
EPA without vacatur to preserve the environmental benefits provided by 
CAIR.\4\ The ruling allowed CAIR to remain in effect temporarily until 
a replacement rule consistent with the D.C. Circuit's opinion was 
developed. While EPA worked on developing a replacement rule, the CAIR 
program continued as planned with the NOX annual and ozone 
season programs beginning in 2009 and the SO2 annual program 
beginning in 2010.
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    \3\ North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008).
    \4\ North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008).
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    On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit's 
remand, EPA promulgated CSAPR to replace CAIR to address the interstate 
transport of emissions contributing to nonattainment and interfering 
with maintenance of the two air quality standards covered by CAIR as 
well as the 2006 PM2.5 NAAQS. The rule also contained 
provisions that would sunset CAIR-related obligations on a schedule 
coordinated with the implementation of CSAPR compliance requirements. 
CSAPR was to become effective January 1, 2012; however, the timing of 
CSAPR's implementation was impacted by a number of court actions.
    Numerous parties filed petitions for review of CSAPR in the D.C. 
Circuit, and on December 30, 2011, the D.C. Circuit stayed CSAPR prior 
to its implementation and ordered EPA to continue administering CAIR on 
an interim basis.\5\ On August 21, 2012, the D.C. Circuit issued its 
ruling, vacating and remanding CSAPR to EPA and ordering continued 
implementation of CAIR. EME Homer City Generation, L.P. v. EPA, 696 
F.3d 7, 38 (D.C. Cir. 2012). The D.C. Circuit's vacatur of CSAPR was 
reversed by the United States Supreme Court on April 29, 2014, and the 
case was remanded to the D.C. Circuit to resolve remaining issues in 
accordance with the Supreme Court's ruling. EPA v. EME Homer City 
Generation, L.P., 134 S. Ct. 1584 (2014). On remand, the D.C. Circuit 
affirmed CSAPR in most respects.
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    \5\ Order of Dec. 30, 2011, in EME Homer City Generation, L.P. 
v. EPA, D.C. Cir. No. 11-1302.
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    Throughout the initial round of D.C. Circuit proceedings and the 
ensuing Supreme Court proceedings, the stay on CSAPR remained in place, 
and EPA continued to implement CAIR. Following the April 2014 Supreme 
Court decision, EPA filed a motion asking the D.C. Circuit to lift the 
stay in order to allow CSAPR to replace CAIR in an equitable and 
orderly manner while further D.C. Circuit proceedings were held to 
resolve remaining claims from petitioners. Additionally, EPA's motion 
requested to toll, by three years, all CSAPR compliance deadlines that 
had not passed as of the approval date of the stay. On October 23, 
2014, the D.C. Circuit granted EPA's request,\6\ and on December 3, 
2014 (79 FR 71663), in an interim final rule, EPA set the updated 
effective date of CSAPR as January 1, 2015 and tolled the 
implementation of CSAPR Phase I to 2015 and CSAPR Phase 2 to 2017. In 
accordance with the interim final rule, the sunset date for CAIR was 
December 31, 2014, and EPA began implementing CSAPR on January 1, 2015.
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    \6\ Order Document #1518738, EME Homer City Generation, L.P. v. 
EPA, No. 11-1302 (D.C. Cir. Issued Oct. 23, 2014).
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    Starting in January 2015, the CSAPR FIP trading programs for annual 
NOX, ozone season NOX, and annual SO2 
were applicable in Virginia. Thus, since January 1, 2015, Virginia 
regulations implementing the CAIR annual trading programs, including 
the NOX ozone season trading program addressing Virginia's 
obligations under the NOX SIP Call, have been obsolete and 
moot and none of these programs contribute to emission reductions in 
Virginia.
    On October 26, 2016 (81 FR 74504), EPA finalized the CSAPR Update 
Rule to address interstate transport of ozone pollution with respect to 
the 2008 ozone NAAQS, and issued FIPs that updated the ozone season 
NOX budgets for 22 states, including Virginia. Starting in 
January 2017, the CSAPR Update budgets were implemented via 
modifications to the CSAPR NOX ozone season allowance 
trading program that was established under the original CSAPR.

[[Page 45189]]

II. Summary of SIP Revision and EPA Analysis

    VADEQ submitted a SIP revision on January 5, 2017 requesting the 
removal of regulations from the Virginia SIP under 9 VAC 5 Chapter 140: 
Part II--NOX Annual Trading Program, Part III--
NOX Ozone Season Trading Program, and Part IV--
SO2 Annual Trading Program (Sections 5-140-1010 through 5-
140-3880), which implemented the CAIR annual NOX, ozone 
season NOX, and annual SO2 trading programs. 
These regulations have been moot since January 1, 2015, when CSAPR 
replaced CAIR, and have been repealed in their entirety from the 
Virginia Administrative Code. The amendments removing these regulations 
were adopted by the State Air Pollution Control Board on September 9, 
2016 and were effective as of November 16, 2016.
    As noted previously, on January 1, 2015, the CAIR annual 
NOX, ozone season NOX, and annual SO2 
trading programs were replaced by the trading programs under the CSAPR 
FIP. Therefore, regulations in the Virginia SIP that implemented the 
CAIR annual trading programs have been obsolete and moot since January 
1, 2015. None of the provisions in 9 VAC 5 Chapter 140 which Virginia 
seeks to remove from the SIP presently reduce NOX or 
SO2 emissions from EGUs or certain non-EGUs after December 
31, 2014 as CAIR was replaced by CSAPR.
    These obsolete regulations include provisions under 9 VAC 5 Chapter 
140: Part III--NOX Ozone Season Trading Program Article 1--
CAIR NOX Ozone Season Trading Program General Provisions and 
Article 5--CAIR NOX Ozone Season Allowance Allocations, 
which addressed Virginia's obligations under the NOX SIP 
Call by including EGUs and certain large non-EGUs that had formerly 
traded under the NOX SIP Call trading program as CAIR 
trading sources. Unlike the CAIR trading program, CSAPR's trading 
program for ozone season NOX as promulgated in 2011 does not 
provide for non-EGUs to participate in trading. Therefore, since 
January 1, 2015, when CSAPR replaced CAIR and the CSAPR FIP became 
effective in Virginia, the Virginia SIP has not contained an effective 
regulation addressing Virginia's obligation under the NOX 
SIP Call to reduce NOX emissions from non-EGUs such as 
stationary, fossil fuel-fired boilers, combustion turbines, or combined 
cycle systems with a maximum design heat input greater than 250 MMBtu/
hr. The absence of an effective regulation in the Virginia SIP to 
reduce NOX emissions from these non-EGUs that formerly 
participated in the CAIR trading program resulted from the sunset of 
CAIR and EPA's implementation of CSAPR starting January 1, 2015. 
Because CSAPR did not provide for trading by non-EGUs, Virginia's SIP 
no longer meets the Virginia NOX SIP Call obligation with 
respect to these non-EGUs that formerly traded in CAIR. However, 
Virginia's request in its January 5, 2017 SIP seeking removal from its 
SIP of 9 VAC 5 Chapter 140: Part III--NOX Ozone Season 
Trading Program and EPA's action to approve the January 5, 2017 
submittal did not create this gap in coverage under the Virginia SIP. 
According to Virginia, the Commonwealth is in the process of drafting a 
regulation to address the Commonwealth's obligations under the 
NOX SIP Call (including its obligation to address these non-
EGUs which formerly traded in CAIR). In remedying its provisions to 
address the NOX SIP Call, Virginia must satisfy the 
requirements of 40 CFR 51.121(f) which lists requirements such as 
control measures to be included in SIP revisions to meet NOX 
budgets assigned under the NOX SIP Call. EPA expects 
Virginia will submit such provisions to EPA to be included in 
Virginia's SIP, and EPA will review and act on any such SIP submittal 
from Virginia addressing the Commonwealth's NOX SIP Call 
obligations in a separate rulemaking.
    Since the regulations implementing the CAIR annual NOX, 
ozone season NOX, and annual SO2 trading programs 
have been moot and non-operational since CAIR was replaced by CSAPR on 
January 1, 2015, removing these regulations from the Virginia SIP will 
not interfere with reduction of NOX or SO2 
emissions in Virginia and will not interfere with Virginia's attainment 
of any NAAQS, reasonable further progress, or any other applicable CAA 
requirement. In addition, as Virginia's SIP has not effectively 
addressed non-EGUs that formerly traded in CAIR for NOX SIP 
Call obligations since CAIR sunset, removing 9 VAC 5 Chapter 140: Part 
III--NOX Ozone Season Trading Program from the Virginia SIP 
will also not interfere with attainment of NAAQS, reasonable further 
progress, or any CAA requirement as the CAIR's sunset removed the non-
EGUs from the ozone season NOX trading program. Thus, EPA 
finds the January 5, 2017 SIP revision approvable in accordance with 
section 110 of the CAA, including specifically with section 110(l) of 
the CAA.

III. Final Action

    EPA is approving the January 5, 2017 SIP revision submission from 
the Commonwealth of Virginia, which sought removal from the Virginia 
SIP of moot regulations under 9 VAC 5 Chapter 140 that implemented the 
CAIR annual NOX, ozone season NOX, and annual 
SO2 trading programs at Part II--NOX Annual 
Trading Program; Part III--NOX Ozone Season Trading Program; 
and Part IV--SO2 Annual Trading Program (Sections 5-140-1010 
through 5-140-3880). EPA is publishing this rule without prior proposal 
because EPA views this as a noncontroversial amendment and anticipates 
no adverse comment. However, in the ``Proposed Rules'' section of 
today's Federal Register, EPA is publishing a separate document that 
will serve as the proposal to approve the SIP revision if adverse 
comments are filed. This rule will be effective on November 27, 2017 
without further notice unless EPA receives adverse comment by October 
30, 2017. If EPA receives adverse comment, EPA will publish a timely 
withdrawal in the Federal Register informing the public that the rule 
will not take effect. EPA will address all public comments in a 
subsequent final rule based on the proposed rule. EPA will not 
institute a second comment period on this action. Any parties 
interested in commenting must do so at this time. Please note that if 
EPA receives adverse comment on an amendment, paragraph, or section of 
this rule and if that provision may be severed from the remainder of 
the rule, EPA may adopt as final those provisions of the rule that are 
not the subject of an adverse comment.

IV. General Information Pertaining to SIP Submittals From the 
Commonwealth of Virginia

    In 1995, Virginia adopted legislation that provides, subject to 
certain conditions, for an environmental assessment (audit) 
``privilege'' for voluntary compliance evaluations performed by a 
regulated entity. The legislation further addresses the relative burden 
of proof for parties either asserting the privilege or seeking 
disclosure of documents for which the privilege is claimed. Virginia's 
legislation also provides, subject to certain conditions, for a penalty 
waiver for violations of environmental laws when a regulated entity 
discovers such violations pursuant to a voluntary compliance evaluation 
and voluntarily discloses such violations to the Commonwealth and takes 
prompt and appropriate measures to remedy the violations. Virginia's 
Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-
1198, provides a privilege that protects from disclosure documents and 
information about the

[[Page 45190]]

content of those documents that are the product of a voluntary 
environmental assessment. The Privilege Law does not extend to 
documents or information that: (1) Are generated or developed before 
the commencement of a voluntary environmental assessment; (2) are 
prepared independently of the assessment process; (3) demonstrate a 
clear, imminent and substantial danger to the public health or 
environment; or (4) are required by law.
    On January 12, 1998, the Commonwealth of Virginia Office of the 
Attorney General provided a legal opinion that states that the 
Privilege Law, Va. Code Sec.  10.1-1198, precludes granting a privilege 
to documents and information ``required by law,'' including documents 
and information ``required by federal law to maintain program 
delegation, authorization or approval,'' since Virginia must ``enforce 
federally authorized environmental programs in a manner that is no less 
stringent than their federal counterparts . . . .'' The opinion 
concludes that ``[r]egarding Sec.  10.1-1198, therefore, documents or 
other information needed for civil or criminal enforcement under one of 
these programs could not be privileged because such documents and 
information are essential to pursuing enforcement in a manner required 
by federal law to maintain program delegation, authorization or 
approval.'' Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides 
that ``[t]o the extent consistent with requirements imposed by federal 
law,'' any person making a voluntary disclosure of information to a 
state agency regarding a violation of an environmental statute, 
regulation, permit, or administrative order is granted immunity from 
administrative or civil penalty. The Attorney General's January 12, 
1998 opinion states that the quoted language renders this statute 
inapplicable to enforcement of any federally authorized programs, since 
``no immunity could be afforded from administrative, civil, or criminal 
penalties because granting such immunity would not be consistent with 
federal law, which is one of the criteria for immunity.''
    Therefore, EPA has determined that Virginia's Privilege and 
Immunity statutes will not preclude the Commonwealth from enforcing its 
program consistent with the federal requirements. In any event, because 
EPA has also determined that a state audit privilege and immunity law 
can affect only state enforcement and cannot have any impact on federal 
enforcement authorities, EPA may at any time invoke its authority under 
the CAA, including, for example, sections 113, 167, 205, 211 or 213, to 
enforce the requirements or prohibitions of the state plan, 
independently of any state enforcement effort. In addition, citizen 
enforcement under section 304 of the CAA is likewise unaffected by 
this, or any, state audit privilege or immunity law.

V. Statutory and Executive Order Reviews

A. General Requirements

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the CAA and applicable 
federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, 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 Orders 
12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 
2011);
     does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     does not have federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land as 
defined in 18 U.S.C. 1151 or in any other area where EPA or an Indian 
tribe has demonstrated that a tribe has jurisdiction. In those areas of 
Indian country, the rule does not have tribal implications and will not 
impose substantial direct costs on tribal governments or preempt tribal 
law as specified by Executive Order 13175 (65 FR 67249, November 9, 
2000).

B. Submission to Congress and the Comptroller General

    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).

C. Petitions for Judicial Review

    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by November 27, 2017. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this action for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. Parties with objections to this direct final rule are 
encouraged to file a comment in response to the parallel notice of 
proposed rulemaking for this action published in the proposed rules 
section of today's Federal Register, rather than file an immediate 
petition for judicial review of this direct final rule, so that EPA can 
withdraw this direct final rule and address the comment in the proposed 
rulemaking action.
    This action removing from the Virginia SIP regulations under 
Sections 5-140-1010 through 5-140-3880 of 9 VAC 5 Chapter 140 that 
implemented the CAIR annual NOX, ozone season 
NOX, and annual SO2 trading programs may not be 
challenged later in

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proceedings to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
oxides, Volatile organic compounds.

    Dated: September 8, 2017.
Cecil Rodrigues,
Acting Regional Administrator, Region III.

    40 CFR part 52 is amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

     Authority: 42 U.S.C. 7401 et seq.

Subpart VV--Virginia


Sec.  52.2420  [Amended]

0
2. In Sec.  52.2420, the table in paragraph (c) is amended by:
0
a. Removing the section entitled ``Part II NOX Annual 
Trading Program'', including ``Article 1'' through ``Article 9'' 
including entries ``5-140-1010'' through ``5-140-1880'';
0
b. Removing the section entitled ``Part III NOX Ozone Season 
Trading Program'', including ``Article 1'' through ``Article 9'' 
including entries ``5-140-2010'' through ``5-140-2880''; and;
0
c. Removing the section entitled ``Part IV SO2 Annual 
Trading Program'', including ``Article 1'' through ``Article 9'' 
including entries ``5-140-3010'' through ``5-140-3880''.

[FR Doc. 2017-20724 Filed 9-27-17; 8:45 am]
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