Background. In Docket No. RM2018-8, the Commission approved the Postal Service's methodology to distribute dispatch format revenue it receives from inbound LC/AO mail based whether the mailpiece was a letter, flat, or small packet/bulky letter. 2 However, the Commission noted that it was possible to refine the Postal Service's methodology to distribute inbound LC/AO revenue and that “distributing dispatch format revenue to item formats based on the revenue per piece and revenue per pound for those mail flows where terminal dues are calculated on a per-item and per-kilogram basis [is] worthy of further evaluation.” Order No. 4827 at 18. Although the Postal Service incorporated such a revenue distribution methodology in its Fiscal Year (FY) 2018 Annual Compliance Report (ACR), the Postal Service asserts that there was “no prior opportunity . . . to seek Commission review of the new procedure incorporated into the ACR.” Petition, Proposal Two at 2. In the FY 2018 Annual Compliance Determination, the Commission accepted the Postal Service's revenue distribution for inbound LC/AO mail for purposes of the compliance review, but directed the Postal Service to “file a petition for the initiation of a proceeding to consider this proposed change in analytical principles[.]”  3

Proposal. The Postal Service's proposal seeks to revise the revenue distribution methodology for inbound LC/AO mailpieces. Currently, the Postal Service distributes inbound LC/AO revenue based on weight proportions by shape in the dispatch data. Petition, Proposal Two at 3. Proposal Two would distribute dispatch format revenue to item formats based upon the revenue per piece and the revenue per pound for those items where remuneration is based on a per-item and per-kilogram basis. Id. at 2-3.

Rationale and impact. The Postal Service states that Proposal Two will apply more detailed piece and weight data to distribute inbound LC/AO revenue. Id. at 3. The Postal Service notes that Proposal Two requests review of the methodology it used to distribute inbound LC/AO revenue in its FY 2018 ACR, which was described in its response to Chairman's Information Request No. 1. Id. at 2-3.

The impact of Proposal Two is that revenue for inbound small packets and bulky letters decreases as revenue for inbound letters and flats increases. Id. at 3. The Postal Service states that this result is expected as the previous revenue distribution method, based solely on weight, would allocate more revenue towards the heavier weighted small packets and bulky letters. Id.

The Commission establishes Docket No. RM2019-7 for consideration of matters raised by the Petition. More information on the Petition may be accessed via the Commission's website at http://www.prc.gov . Interested persons may submit comments on the Petition and Proposal Two no later than August 12, 2019. Pursuant to 39 U.S.C. 505, Katalin K. Clendenin is designated as an officer of the Commission (Public Representative) to represent the interests of the general public in this proceeding.

It is ordered:

1. The Commission establishes Docket No. RM2019-7 for consideration of the matters raised by the Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Two), filed July 9, 2019.

2. Comments by interested persons in this proceeding are due no later than August 12, 2019.

3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. Clendenin to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket.

4. The Secretary shall arrange for publication of this order in the Federal Register .

As shown in Table 2, the Ash Grove Cement plant (“Ash Grove”) contributed less than 2.5% of total emissions in or near the East Helena NAA area in each of the final five years of complete ambient SO 2 monitoring. Ash Grove is located outside the geographic boundary of the East Helena SO 2 NAA, at a distance of 3 km to the south of the NAA's southern boundary and remains in operation. Ash Grove's allowable SO 2 emissions are limited to 386 tpy by its MAQP #2005-13 and Title V operating permit #OP2005-09. 41 Based on the emissions data provided above, and consistent with our past conclusions regarding the East Helena NAA, 42 the EPA proposes to concur with MDEQ's assertion that ASARCO emitted nearly all of the SO 2 in the East Helena area prior to its 2001 shutdown, and to concur with the State that monitored SO 2 concentrations in the area would have decreased substantially following the ASARCO shutdown.

As Montana submitted the East Helena SO 2 Redesignation Request to the EPA on October 26, 2018, contemporaneous ambient SO 2 monitoring data was not available due to the discontinuation of the East Helena monitoring network on May 31, 2001. Generally, for a redesignation, the most recent eight quarters of ambient monitoring data must show compliance with the NAAQS. 43 For this reason and based on the recommendations of applicable guidance discussed further below, the EPA also found it appropriate to review available air quality modeling to complete our determination of attainment analysis.

Generally, for redesignating a nonattainment area to attainment, the CAA requires the EPA to determine that the area has attained the applicable NAAQS. 44 For some pollutants, this determination relies solely on air quality monitoring data. However, for SO 2 , monitoring data alone is generally insufficient to assess an area's attainment status. The EPA's Calcagni Memo states that for SO 2 and specified other pollutants, “dispersion modeling will generally be necessary to evaluate comprehensively sources' impacts.” Typically, attainment planning for SO 2 involves dispersion modeling used to demonstrate that the emission limits adopted by the state suffice to assure attainment. With such modeling available, the EPA can generally determine an area to be attaining the standard without further modeling, provided monitoring data also support that determination. As noted, dispersion modeling was provided by the State and ASARCO and approved by the EPA to show attainment of the primary, but not secondary, SO 2 NAAQS. Because the EPA has approved Montana's primary SO 2 NAAQS dispersion modeling and attainment demonstration but has not received a secondary SO 2 NAAQS dispersion modeling and attainment demonstration from the State, we cannot rely on dispersion modeling as the sole basis for redesignation. Therefore, we have combined our analysis of monitoring and emissions data, listed above, with the modeling data discussed here to reach our proposed conclusion that the East Helena SO 2 NAA currently attains the 1971 SO 2 primary and secondary NAAQS.

In 1992, after promulgation of the CAA Amendments of 1990, MDEQ, ASARCO, and the EPA had been working together through compliance schedules and work plans to address issues found with early modeling studies to predict the ambient impacts of SO 2 emissions from the ASARCO smelter. These model results indicated that the NAAQS were violated when the facility operated at allowable emissions limits. Modeling results predicted SO 2 exceedances in two areas to the south and southeast of the smelter. The EPA concluded from these early modeling runs that there is an ambient SO 2 problem caused by ASARCO's emissions. 45 Consequently, ASARCO opted to establish an enhanced ambient monitoring network in the areas where initial modeling results indicated maximum SO 2 concentrations.

Based on the results of the early dispersion modeling, ASARCO developed an updated modeling protocol and refined dispersion modeling studies to demonstrate compliance with the primary SO 2 NAAQS. Control strategies to meet the NAAQS in this scenario included production and process limitations that would be put into place with the, as of that time, yet to be submitted East Helena primary SO 2 Attainment SIP approved by the EPA on January 27, 1995 (60 FR 5313).

The General Preamble of the Act details the EPA's interpretation of reasonably available control measures (RACM), including reasonably available control technology (RACT), requirements, and defines RACT for SO 2 as the control technology necessary to achieve the NAAQS. 46 As part of the EPA-approved ISCST and RTDM dispersion models used to predict ambient SO 2 concentrations around the ASARCO smelter, multiple modeling runs were performed to test SO 2 concentrations related to emissions from each stack. The results were then used to develop the emission limits and operating stipulations below for several of the major emission points of the ASARCO smelter.

From the modeling results, ASARCO developed a set of parameters for combined emissions of the two largest SO 2 emission points, the sinter and blast furnace stacks, in order to provide operating flexibility while still providing for attainment of both the annual and 24-hour primary SO 2 NAAQS. These emissions compliance parameters were approved as a set of three linear equations  47 regulating the sinter stack and blast furnace stack daily SO 2 emissions. Per these parameters, the emissions rate from the sinter stack would limit the allowable emissions rate at the blast furnace to a level that provided for protection of the annual and 24-hour primary SO 2 NAAQS. If the sinter stack daily emissions fell within one of the three equation ranges, then the daily emissions of the blast furnace stack must not exceed a corresponding given value determined by that equation.

In addition to the compliance parameters developed for regulating combined emissions of the sinter and blast furnace stacks, maximum daily SO 2 emission limits were also established for these and other ASARCO emission points. The maximum allowable SO 2 emissions for the sinter and blast furnace stacks were set at 60.27 tons per calendar day and 29.64 tons per calendar day, respectively. Daily emissions of SO 2 from the double-contact sulfuric acid plant stack were not to exceed 4.30 tons per calendar day. ASARCO was required to operate continuous emission monitoring systems (CEMS) to determine compliance with the emission limitations for the sinter plant stack, blast furnace stack, and acid plant stack. SO 2 emissions from the concentrate storage and handling building stack (including the exhaust from the sinter plant ventilation system baghouse) were not to exceed 46 pounds per hour or 0.552 tons per calendar day.

The SIP-approved daily maximum emission limits, and also the compliance parameters for the combined emissions of the sinter and blast furnace stacks, went into effect September 1, 1994. 48 Two additional emission limitations on minor stack sources at the ASARCO smelter took effect on June 30, 1995; SO 2 emissions from the crushing mill baghouse stacks #1 and #2 were not to exceed 0.19 and 0.37 tons per calendar day, respectively.

As well as the aforementioned emission limitations, the EPA also imposed additional provisions  49 on ASARCO's operating stipulations to ensure that SO 2 emissions from miscellaneous volume and fugitive sources would not increase beyond their current levels. Moreover, ASARCO's previously approved catalyst screening maintenance procedures were prohibited. 50 As a result, sulfur dioxide emissions were no longer allowed to bypass the double-contact sulfuric acid plant for catalyst screening while the blast furnace was operating. The East Helena primary SO 2 Attainment SIP set the sunset date of the catalyst screening exemption as November 15, 1995. The above emissions limitations and stipulations imposed on ASARCO were incorporated into the control strategy that the EPA fully approved for the East Helena primary SO 2 Attainment Plan's RACM (including RACT) as attaining the primary SO 2 NAAQS by November 15, 1995.

In addition to these modeled emission rates for the ASARCO smelter, Ash Grove was also included in the modeling for Montana's East Helena SO 2 Attainment SIP. The facility was modeled at a constant rate of 28.71 grams/second, equivalent to 998 tpy of SO 2 . As noted, Ash Grove's current allowable SO 2 emissions are limited to 386 tpy by MAQP #2005-13 and Title V operating permit #OP2005-09. 51

The EPA's criteria for evaluation of the modeling and attainment demonstration was the most recent version (at that time) of the EPA's Guideline on Air Quality Models at 40 CFR part 51, Appendix W. Through the modeling provided, Montana demonstrated that the emission limits ensured compliance with both the 24-hour and annual primary NAAQS. The EPA determined that the modeling indicated that both primary SO 2 NAAQS would be attained by November 15, 1995, thereby complying with the attainment date stipulated in the CAA Amendments of 1990. The ASARCO modeling and the East Helena primary SO 2 Attainment SIP were approved by the EPA on January 27, 1995 (60 FR 5313). 52

As noted in our January 27, 1995 approval of the East Helena primary SO 2 Attainment SIP (and elsewhere in this notice), the State of Montana was to provide the EPA with its 3-hour secondary NAAQS Attainment SIP in a forthcoming submittal. This was due to issues with compliance with the NAAQS, as discussed further below. After the promulgation of the CAA Amendments of 1990, the State of Montana was to provide modeling as part of an attainment demonstration showing compliance with the secondary 3-hour SO 2 NAAQS. Due to early modeled NAAQS violations, ASARCO elected to perform additional dispersion modeling using CTDMPLUS/ISCST2 and CTSCREEN models, and control strategy evaluations to show attainment with the secondary SO 2 NAAQS. Additionally, an enhanced meteorological monitoring network (to include doppler SODAR) was established to collect data for the complex CTDMPLUS dispersion model. Despite these efforts, the required submittal (including the modeled attainment demonstration) never materialized before the ASARCO smelter ceased operations in 2001.

As discussed earlier in this notice, ASARCO determined that the allowable emission rates modeled to achieve the primary 1971 SO 2 NAAQS in the East Helena primary SO 2 Attainment SIP would need to reduce emissions an additional 35 percent to achieve modeled compliance with the secondary SO 2 NAAQS. In our October 7, 1993 “Deadline for SIP Submittal” action, we noted that the substantial emissions reductions required to model attainment of the secondary SO 2 NAAQS cannot reasonably be achieved through production or process changes. ASARCO estimated that if production were reduced by 35 percent, annual revenue would be reduced by more than $12.4 million. ASARCO contended that such a reduction in revenue would make continued operation of the East Helena smelter economically infeasible. Though the EPA could not confirm the projected level of revenue loss, we noted that the economic impact to the industry and the community would be significant. We agreed with the State of Montana and ASARCO that the only feasible way to meet the secondary SO 2 NAAQS, based on modeling results, would be to install new air pollution control equipment or new process technologies. 53 Because Montana failed to submit the required secondary SO 2 NAAQS SIP, highway and offset sanctions were imposed by operation of law pursuant to a finding of failure to submit for a designated nonattainment area (42 U.S.C. 7509(a)(1)) on December 16, 1993. 54

Considering ASARCO's estimate (based on dispersion modeling)  55 that an additional 35 percent emissions reduction would be necessary to meet the secondary SO 2 NAAQS, the EPA concludes that this level of reduction was far surpassed by the ASARCO shutdown. ASARCO's maximum allowable SO 2 emissions were permitted at 18,773 tpy when the EPA determined that this level of control was sufficient to attain the 1971 primary SO 2 NAAQS, and thus approved the East Helena primary SO 2 Attainment SIP. 56 As noted, Ash Grove was also included in this attainment modeling, with a modeled constant emission rate of 28.71 grams per second, equivalent to 998 tpy of SO 2 . Hence, an additional reduction of 6,570.5 tpy (35 percent of 18,773) of SO 2 from ASARCO, or estimated allowable emissions 12,202.5 tpy, should suffice to meet the secondary SO 2 NAAQS even if Ash Grove were to emit 998 tpy of SO 2 annually, over 2.5 times current Ash Grove allowable emissions. The current allowable emissions in the East Helena area are 386.09 tpy of SO 2 (See Table 3), just 3 percent of the estimated allowable rates sufficient to attain the secondary SO 2 NAAQS. On this basis, the EPA is proposing to conclude that the modeling performed as part of the East Helena primary SO 2 Attainment SIP, considered alongside current allowable emissions in the East Helena area and the attaining monitoring listed in Table 1, demonstrate that the East Helena area is attaining the 3-hour secondary SO 2 NAAQS.

As will be discussed further in the EPA's review of 107(d)(3)(E) criteria 2 and 5, the EPA's longstanding interpretation of the nonattainment planning requirements of CAA section 172 is that once an area is attaining the NAAQS, those requirements are not “applicable” for purposes of CAA section 107(d)(3)(E)(ii) and therefore need not be approved into the SIP before the EPA can redesignate the area. The EPA is proposing to reach a similar conclusion regarding the State's outstanding requirement to submit to the EPA a 3-hour secondary NAAQS Attainment SIP. Specifically, because the EPA is proposing to conclude that the East Helena NAA is currently attaining the 3-hour secondary SO 2 NAAQS, the State is not required to also submit a SIP providing for such attainment.

As discussed above, the normal prerequisite for redesignation of a nonattainment area is submittal of quality-assured ambient data with no violations of the NAAQS for the most recent eight consecutive quarters. 57 Generally, a modeling demonstration is also necessary for SO 2 nonattainment areas seeking to redesignate. 58 The Seitz Memo recognizes that states should be provided an opportunity to request redesignation for areas where there is no contemporary monitoring data available if there is no reasonable basis for assuming that SO 2 violations persist after closure of the sources that were the cause of these violations. 59 We find that East Helena is such an area, and that available monitoring and modeling data discussed above also indicate current attainment of both the primary and secondary 1971 SO 2 NAAQS. We therefore propose to determine that the East Helena NAA is attaining the primary and secondary 1971 SO 2 NAAQS.

For redesignating a nonattainment area to attainment under a NAAQS, the CAA requires the EPA to determine that the state has met all applicable requirements for that NAAQS under section 110 and part D of title I of the CAA (CAA section 107(d)(3)(E)(v)) and that the state has a fully approved SIP under section 110(k) for that NAAQS for the area (CAA section 107(d)(3)(E)(ii)). The EPA proposes to find that Montana has met all applicable SIP requirements for the East Helena SO 2 NAA under section 110 of the CAA (general SIP requirements) for purposes of redesignation. Additionally, the EPA proposes to find that the Montana SIP satisfies the criterion that it meets applicable SIP requirements for purposes of redesignation under part D of title I of the CAA in accordance with section 107(d)(3)(E)(v). Further, the EPA proposes to determine that the SIP is fully approved with respect to all requirements applicable for the 1971 SO 2 NAAQS for purposes of redesignation in accordance with section 107(d)(3)(E)(ii). In making these determinations, the EPA ascertained which requirements are applicable to the East Helena SO 2 NAA and, if applicable, that they are fully approved under section 110(k).

General SIP elements and requirements are delineated in section 110(a)(2) of title I, part A of the CAA. These requirements include, but are not limited to, the following: Submittal of a SIP that has been adopted by the state after reasonable public notice and hearing; provisions for establishment and operation of appropriate procedures needed to monitor ambient air quality; implementation of a source permit program; provisions for the implementation of part C requirements (Prevention of Significant Deterioration (PSD)) and provisions for the implementation of part D requirements (New Source Review (NSR) permit programs); provisions for air pollution modeling; and provisions for public and local agency participation in planning and emission control rule development.

Section 110(a)(2)(D) requires that SIPs contain certain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision, the EPA has required certain states to establish programs to address the interstate transport of air pollutants. The section 110(a)(2)(D) requirements for a state are not linked with a particular nonattainment area's designation and classification in that state. The EPA believes that the requirements linked with a particular nonattainment area's designation and classifications are the relevant measures to evaluate in reviewing a redesignation request. The transport SIP submittal requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area in the state. Thus, the EPA does not believe that the CAA's interstate transport requirements should be construed to be applicable requirements for purposes of redesignation.

In addition, the EPA believes other section 110 elements that are neither connected with nonattainment plan submissions nor linked with an area's attainment status are applicable requirements for purposes of redesignation. The area will still be subject to these requirements after the area is redesignated. The section 110 and part D requirements which are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. This approach is consistent with the EPA's existing policy on applicability ( i.e., for redesignations) of conformity and oxygenated fuels requirements, as well as with section 184 ozone transport requirements. See Reading, Pennsylvania, proposed and final rulemakings (61 FR 53174-53176, October 10, 1996), (62 FR 24826, May 7, 2008); Cleveland-Akron-Loraine, Ohio, final rulemaking (61 FR 20458, May 7,1996); and Tampa, Florida, final rulemaking at (60 FR 62748, December 7, 1995). See also the discussion on this issue in the Cincinnati, Ohio, redesignation (65 FR 37890, June 19, 2000), and in the Pittsburgh, Pennsylvania, redesignation (66 FR 50399, October 19, 2001).

Section 172(c) of the CAA sets forth the basic requirements of attainment plans for nonattainment areas that are required to submit them pursuant to section 172(b). Subpart 5 of part D, which includes section 191 and 192 of the CAA, establishes requirements for SO 2 , nitrogen dioxide and lead nonattainment areas. A thorough discussion of the requirements contained in sections 172(c) can be found in the General Preamble for Implementation of Title I (57 FR 13498).

Section 172(c)(1) requires the plans for all nonattainment areas to provide for the implementation of all RACM as expeditiously as practicable and to provide for attainment of the NAAQS. The EPA interprets this requirement to impose a duty on all nonattainment areas to consider all available control measures and to adopt and implement such measures as are reasonably available for implementation in each area as components of the area's attainment demonstration. Under section 172, states with nonattainment areas must submit plans providing for timely attainment and meeting a variety of other requirements.

The EPA's longstanding interpretation of the nonattainment planning requirements of section 172 is that once an area is attaining the NAAQS, those requirements are not “applicable” for purposes of CAA section 107(d)(3)(E)(ii) and therefore need not be approved into the SIP before the EPA can redesignate the area. In the 1992 General Preamble for Implementation of Title I, the EPA set forth its interpretation of applicable requirements for purposes of evaluating redesignation requests when an area is attaining a standard. See 57 FR 13498, 13564 (April 16, 1992). The EPA noted that the requirements for Reasonable Further Progress (RFP) and other measures designed to provide for attainment do not apply in evaluating redesignation requests because those nonattainment planning requirements “have no meaning” for an area that has already attained the standard. Id. This interpretation was also set forth in the Calcagni Memo. The EPA's understanding of section 172 also forms the basis of its Clean Data Policy, which was articulated with regard to SO 2 in the 2010 SO 2 NAA Guidance and suspends a state's obligation to submit most of the attainment planning requirements that would otherwise apply, including an attainment demonstration and planning SIPs to provide for RFP, RACM, and contingency measures under section 172(c)(9). Courts have upheld the EPA's interpretation of section 172(c)(1) for “reasonably available” control measures and control technology as meaning only those controls that advance attainment, which precludes the need to require additional measures where an area is already attaining. NRDC v. EPA, 571 F.3d 1245, 1252 (D.C. Cir. 2009); Sierra Club v. EPA, 294 F.3d 155, 162 (D.C. Cir. 2002); Sierra Club v. EPA, 314 F.3d 735, 744 (5th Cir. 2002); Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004). But see Sierra Club v. EPA, 793 F.3d 656 (6th Cir. 2015).

Therefore, because attainment has been reached in the East Helena SO 2 NAA, no additional measures are needed to provide for attainment, and section 172(c)(1) requirements for an attainment demonstration and RACM are not part of the “applicable implementation plan” required to have been approved prior to redesignation per CAA section 107(d)(3)(E)(ii). The other section 172 requirements that are designed to help an area achieve attainment—the section 172(c)(2) requirement that nonattainment plans contain provisions promoting reasonable further progress, the requirement to submit the section 172(c)(9) contingency measures, and the section 172(c)(6) requirement for the SIP to contain control measures necessary to provide for attainment of the NAAQS—are also not required to be approved as part of the “applicable implementation plan” for purposes of satisfying CAA section 107(d)(3)(E)(ii). 60

Section 172(c)(3) requires submission and approval of a comprehensive, accurate, and current inventory of actual emissions. The East Helena primary SO 2 Attainment SIP contained an inventory which the EPA approved as meeting the requirements of CAA section 172(c)(3). 61 This inventory reported annual SO 2 emissions for the ASARCO facility at approximately 18,000 tpy, with approximately 280 tpy attributed to the Ash Grove kiln stacks. The more contemporary emissions inventory submitted as part of the maintenance plan for the East Helena SO 2 NAA will be discussed further in the maintenance plan portion of this proposed action.

Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources to be allowed in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. The EPA has a longstanding interpretation that because Nonattainment NSR (NNSR) is replaced by PSD upon redesignation, nonattainment areas seeking redesignation to attainment need not have a fully approved part D NNSR program in order to be redesignated. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Montana currently has a fully-approved PSD and part D NNSR program in place at Administrative Rules of Montana (ARM) Subchapter 8. Montana's PSD program will become effective in the East Helena SO 2 NAA upon redesignation to attainment.

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

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

Montana has an approved general conformity SIP for the East Helena area. See 67 FR 62392 (October 7, 2002). Moreover, the EPA interprets the conformity SIP requirements as not applying for purposes of evaluating a redesignation request under section 107(d) because, like other requirements listed above, state conformity rules are still required after redesignation and federal conformity rules apply where state rules have not been approved. See Wall v. EPA, 265 F.3d 426 (6th Cir. 2001) (upholding this interpretation); see also 60 FR 62748 (December 7, 1995) (redesignation of Tampa, Florida).

For these reasons, the EPA proposes to find that Montana has satisfied all applicable requirements for purposes of redesignation of the East Helena SO 2 NAA under section 110 and part D of title I of the CAA.

The EPA has fully approved the applicable Montana SIP for the East Helena SO 2 NAA under section 110(k) of the CAA for all requirements applicable for purposes of redesignation. As indicated above, the EPA believes that the section 110 elements that are neither connected with nonattainment plan submissions nor linked to an area's nonattainment status are not applicable requirements for purposes of redesignation. The EPA has approved all part D requirements applicable under the 1971 SO 2 NAAQS, as identified above, for purposes of this redesignation.

For redesignating a nonattainment area to attainment, the CAA requires the EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP, applicable federal air pollution control regulations, and other permanent and enforceable reductions (CAA section 107(d)(3)(E)(iii)). The EPA proposes to find that Montana has demonstrated that the observed air quality improvement in the East Helena SO 2 NAA is due to permanent and enforceable reductions in emissions. Specifically, the EPA considers the shutdown of the ASARCO smelter, identified as the cause of SO 2 NAAQS violations, 62 to be both permanent and enforceable due to the source's dismantling and permit revocation. The EPA notes that the ASARCO smelter was still operating during the 1987-2001 period during which the 1971 primary and secondary SO 2 NAAQS was attained across the East Helena enhanced monitoring network. Due to the ASARCO shutdown, the EPA reasonably concludes that the 1971 SO 2 NAAQS would have and will continue to be attained by a far greater margin following the facility's shutdown. As stated in the Calcagni Memo, “Emission reductions from source shutdowns can be considered permanent and enforceable to the extent that those shutdowns have been reflected in the SIP and all applicable permits have been modified accordingly.”  63 As noted, MDEQ revoked ASARCO's MAQP #2557-12 on January 5, 2010, and the source's Title V permit #OP2557-04 expired on April 4, 2007. 64 Further, the ASARCO facility has been demolished, making its future operation impossible and thus exhibiting the permanence of the emissions reductions in the nonattainment area. Any new sources seeking to operate within the East Helena NAA would first be required to demonstrate that their new SO 2 emissions would not interfere with attainment and maintenance of the 1971 (and 2010) SO 2 NAAQS. 65 Therefore, the EPA is proposing to find that the air quality improvement in the East Helena SO 2 NAA is due to permanent and enforceable reductions in emissions.

To redesignate a nonattainment area to attainment, the CAA requires the EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA (CAA section 107(d)(3)(E)(iv)). In conjunction with its request to redesignate the East Helena SO 2 NAA to attainment for the 1971 primary and secondary SO 2 NAAQS, MDEQ submitted a SIP revision to provide for the maintenance of these NAAQS for at least 10 years after the effective date of redesignation to attainment. As will be discussed in further detail in Section III.B., “CAA Section 175A Requirements,” the EPA is proposing to find that this maintenance plan for the area meets the requirements for approval under section 175A of the CAA.

CAA section 175A sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan demonstrating that attainment will continue to be maintained for the 10 years following the initial 10-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain contingency measures as the EPA deems necessary to assure prompt correction of any future SO 2 NAAQS violations. The Calcagni Memo provides further guidance on the content of a maintenance plan, explaining that a maintenance plan should address five requirements: The attainment emissions inventory; maintenance demonstration; monitoring; verification of continued attainment; and a contingency plan. 66

As noted, the Seitz Memo provides maintenance plan guidance specific to nonattainment areas whose historic violations were caused by a major point source that is no longer in operation. The Seitz memo provides a path for such areas to justify exemption from maintenance plan requirements of continued monitoring and describes how attainment and continued maintenance could be demonstrated in such areas. Based on our review of the East Helena SO 2 Redesignation Request and relevant past rulemaking actions, 67 the EPA finds that the East Helena SO 2 NAA is an appropriate area for application of the guidance laid out in the Seitz Memo. The EPA has therefore elected to assess the East Helena SO 2 Maintenance Plan based on the recommendations provided in the Seitz Memo, as discussed further below.

In order to allow areas to qualify for redesignation to attainment, the Seitz Memo policy requires that the maintenance plan address otherwise applicable provisions, and include: (1) Emissions inventories representing actual emissions when violations occurred, current emissions and emissions projected to the 10th year after redesignation; (2) Dispersion modeling showing that no NAAQS violations will occur over the next 10 years and that the shut down source was the dominant cause of the high concentrations in the past; (3) Evidence that if the shut down source resumes operation, it would be considered a new source and be required to obtain a permit under the PSD provisions of the CAA; and (4) A commitment to resume monitoring before any major SO 2 source commences operation. The EPA will address these requirements individually, below.

The Seitz Memo recommends a state's maintenance plan include emissions inventories representing actual emissions when violations occurred, current emissions and emissions projected to the 10th year after redesignation. Montana's East Helena SO 2 Maintenance Plan included both past actual and future projected attainment emissions inventories  68 for the East Helena SO 2 NAA. The two sources included in these inventories are the American Chemet Corporation (Chemet) and Ash Grove, despite the latter facility's location outside of the East Helena SO 2 NAA. MDEQ's future projected attainment inventory used Chemet's permitted allowable SO 2 limit of 0.09 tpy (per MAQP #1993-19) and Ash Grove's permitted allowable limit of 386 tpy, to calculate a total projection of 386.09 tpy of SO 2 emissions each year from 2017 to 2026. This attainment inventory is provided in Table 3, below, with actual emissions replacing the State's projected allowable limits for 2017. We conclude that the inventories provided by the State are complete, accurate, and consistent with applicable CAA provisions and the Seitz Memo.

The State also included historic emissions data for ASARCO and Ash Grove from 1990 to 2001. 69 Neither the State nor the EPA has emissions data available for these facilities prior to 1990, due to ASARCO's 2001 shut down and the passage of time. Therefore, there is not an inventory available that can provide actual emissions when violations occurred, as recommended by the Seitz Memo. We do not consider this to be an issue, as the historic emissions inventory provided by the State and our review of previous rulemaking actions for East Helena clearly show that the shut down source, ASARCO, was the cause of historic SO 2 violations.

Past EPA policy memoranda on SO 2 redesignations have recommended dispersion modeling. Per the Seitz Memo, the purpose of such modeling analysis is to show that; (1) No SO 2 NAAQS violations presently occur or can be projected to occur during the next 10 years anywhere within the nonattainment area, and (2) point sources, which have since shut down, were the dominant sources contributing to high SO 2 concentrations in the airshed. 70 The State elected not to submit an updated dispersion modeling analysis to the EPA as part of the East Helena SO 2 Maintenance Plan. For this reason, the EPA is relying on the dispersion modeling conducted in coordination with ASARCO, the MDEQ, and the EPA in the 1990's as part of the East Helena primary SO 2 Attainment Plan, to make this two-part showing. An in depth discussion on this modeling is presented in section III.A.1., above.

The EPA finds that the dispersion modeling for the East Helena primary SO 2 Attainment Plan is adequate to make the two-part showing recommended by the Seitz Memo. First, the SO 2 limits relied upon to model attainment of the 1971 primary SO 2 NAAQS, and the additional 35 percent SO 2 reduction necessary to model attainment of the secondary SO 2 NAAQS, both projected annual ASARCO emissions above 10,000 tpy and Ash Grove emissions at 998 tpy. Because current allowable emissions in the East Helena area are just 386.09 tpy, we find this sufficient evidence that no violations presently occur or can be projected to occur during the next 10 years anywhere within the nonattainment area. Second, the information provided throughout today's proposed rulemaking, most notably Table 2, clearly demonstrate that ASARCO was the dominant source contributing to high SO 2 concentrations in the East Helena area. For these reasons, the EPA finds that the ambient SO 2 modeling requirement for redesignations and maintenance plans is met.

For the East Helena SO 2 NAA, the NNSR permit program responsibilities are held by MDEQ. MDEQ has longstanding, SIP-approved PSD and minor NSR permitting programs. 71 In conjunction with all SIP-approved requirements of MDEQ's SIP-approved PSD permitting program, the Source Impact Analysis requires “[t]he owner or operator of the proposed source or modification shall demonstrate that allowable emission increases from the proposed source or modification, in conjunction with all other applicable emission increases or reductions (including secondary emissions), would not cause or contribute to air pollution in violation of any national ambient air quality standard in any air quality control region or any applicable maximum allowable increase over the baseline concentration in any area.”  72

Furthermore, in conjunction with all SIP-approved requirements of MDEQ's SIP-approved minor source permitting program, Conditions For Issuance or Denial of Permit, 73 requires that, “[a] Montana air quality permit may not be issued for a new or modified facility or emitting unit unless the applicant demonstrates that the facility or emitting unit can be expected to operate in compliance with the Clean Air Act of Montana and rules adopted under that Act, the Federal Clean Air Act and rules promulgated under that Act (as incorporated by reference in ARM 17.8.767), and any applicable requirement contained in the Montana State Implementation Plan (as incorporated by reference in ARM 17.8.767), and that it will not cause or contribute to a violation of any Montana or national ambient air quality standard.” MDEQ is committed to continuing to implement its SIP-approved major and minor source permitting programs in the East Helena maintenance area to ensure that any new or modified (or reopened)  74 industrial source of SO 2 emissions will not cause or contribute to a subsequent SO 2 NAAQS violation in the area. Further, any appropriate changes to the ARM will be submitted to the EPA for approval as a SIP revision.

These programs will apply to any major source wishing to locate in the East Helena NAA once the it is redesignated to attainment. The MDEQ commitment to treat any major source in or near East Helena as “new” under the PSD program satisfies the preconstruction permit provision of the Seitz Memo as one of the prerequisites to redesignation.

In the East Helena SO 2 Maintenance Plan, the State requires installation of appropriate SO 2 monitoring for a minimum of three years if a major source of SO 2 attempts to locate within the East Helena SO 2 NAA and the source's modeling indicates that the SO 2 impacts are greater than 75 percent of the NAAQS including background to ensure that the NAAQS are adequately protected. Moreover, Montana's PSD program also requires that permit applicants conduct preconstruction monitoring to identify baseline concentrations. Together, these commitments address the monitoring provision of the Seitz Memo.

As discussed above, CAA section 175A sets forth the statutory requirements for maintenance plans, and the Calcagni and Shaver memos cited above contain specific EPA guidance. The only maintenance plan element not covered by the Seitz Memo is the contingency provision. CAA Section 175A provides that maintenance plans “contain such contingency provisions as the Administrator deems necessary to assure that the State will promptly correct any violation of the standard which occurs after the redesignation of the area as an attainment area.”

The East Helena SO 2 Maintenance Plan includes the State's commitment to continue to implement and enforce measures necessary to maintain the SO 2 NAAQS. MDEQ's current operating permit program places limits on SO 2 emissions from existing sources. Should an existing facility (such as Chemet) want to increase SO 2 emissions by 40 tpy or more, the facility would be subject to the PSD program. Should a new facility be constructed in the East Helena maintenance area, the facility would also be subject to PSD.

The Calcagni Memo emphasizes the importance of specific contingency measures, schedules for adoption, and action levels to trigger implementation of the contingency plan. The Calcagni Memo also states that a contingency plan must require that the state implement all measures contained in the part D nonattainment plan. Since all of the measures contained in the East Helena primary SO 2 Attainment Plan (which satisfied part D for the 1971 primary NAAQS) specifically addressed the ASARCO facility, the EPA does not find it reasonable to contain such measures in the East Helena SO 2 Maintenance Plan now that the facility does not exist. Additionally, the EPA is proposing to conclude that the projected allowable SO 2 emissions limits for the two remaining sources in the East Helena area (Ash Grove and Chemet) are protective of the NAAQS. For these reasons, the State's contingency plan focuses on ensuring that new sources or modifications of existing permitted sources are protective of the SO 2 NAAQS. We agree with the State that any new source planning to locate within the maintenance area or existing source proposing a significant  75 increase in SO 2 emissions would be subject to Montana's SIP-approved PSD and minor NSR permitting programs. 76 Thus, we find that MDEQ's permitting program is sufficient to track future air quality trends and to assure that the East Helena maintenance area will not violate the NAAQS. If Montana identifies the potential for a NAAQS violation through the permitting process, the State would be required to ascertain what measures must be taken to avoid the violation. We are therefore proposing to conclude that the East Helena SO 2 Maintenance Plan satisfactorily addresses the “contingency plan” requirement of CAA section 175A.

The EPA generally requires that a state continue ambient monitoring to meet the maintenance plan requirement for verification of continued attainment. However, the Seitz Memo provides the opportunity for redesignated areas to be exempt from continued ambient monitoring of maintenance areas when the dominant source of SO 2 in the area has shut down. 77 As discussed earlier in this proposed notice, we find that the East Helena SO 2 NAA's unique circumstances are appropriate for application of the Seitz Memo guidance. Therefore, we determine that in this instance, an exemption to continued monitoring would be appropriate. If today's action is finalized as proposed, MDEQ will not be monitoring to verify SO 2 NAAQS compliance in the East Helena area unless required by Montana's permitting program following the introduction of a new or modified source to the area. The state has provided evidence that SO 2 monitoring conducted between 1987 and ASARCO's shutdown in 2001 met the applicable NAAQS with no violations observed during that time (See Table 1). Additionally, due to the total removal of the ASARCO facility, the source of the SO 2 NAAQS violations have been eliminated. With ASARCO removed from the total SO 2 emissions in the East Helena area, available evidence indicates attainment will be met by a wide margin. We agree with MDEQ that maintenance of the SO 2 NAAQS in the East Helena SO 2 maintenance area can be tracked through updates to the emissions inventory and operating permit applications received for SO 2 emitting sources for verification of continued attainment.

Based on the EPA's analysis of the East Helena SO 2 Redesignation Request and Maintenance Plan, provided in sections III.A. and III.B., the EPA is proposing to determine that the State has met all applicable requirements of CAA sections 107(d)(3)(E) and 175A.

After review and analysis of Montana's submittal, the EPA is proposing to redesignate the East Helena, Montana SO 2 NAA to attainment for the 1971 primary 24-hour and annual, and secondary 3-hour SO 2 NAAQS. The EPA is also proposing to approve the State's plan for continued maintenance and attainment of the 1971 primary 24-hour and annual, and secondary 3-hour SO 2 NAAQS in East Helena, Montana for ten years following redesignation to attainment.

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

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• 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 the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, the SIP is not proposed to apply on any Indian reservation land or in any other area where the 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).

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

The East Helena NAA is in southern Lewis and Clark County, and is defined as a rectangle that includes both the community of East Helena and unincorporated portions of southern Lewis and Clark County. On November 6, 1991 (56 FR 56694), the East Helena area was designated as nonattainment for the 1978 Pb NAAQS (1.5 μg/m 3 ). This designation was effective on January 6, 1992 and required the State to submit a CAA, title I, part D Pb nonattainment state implementation plan (SIP) by July 6, 1993. On August 16, 1995, July 2, 1996 and October 20, 1998 the Governor of Montana submitted SIP revisions to meet the part D SIP requirements. The control plan submitted as part of the East Helena Pb attainment plan focused on limiting emissions from the ASARCO lead smelter, which comprised the majority of lead emissions in the NAA, as well as restricting emissions from the American Chemet Copper Furnace. These emission reductions were further assisted through the complete removal of lead in gasoline by 1995.

On April 4, 2001, ASARCO shut down its lead smelter operations, thereby eliminating 99.8 percent of all stationary source Pb emissions in the NAA. The facility's three large smelter stacks were dismantled in August 2009. On April 15, 2007, ASARCO's Title V permit expired, and ASARCO's Montana Air Quality Permit was revoked in September 2013. The former ASARCO site is currently an active Superfund site, with no development possible until cleanup has been completed.

On June 18, 2001 (66 FR 32760), the EPA partially approved and partially disapproved the State's part D SIP submittals, which satisfied the CAA's criteria for Pb nonattainment SIPs. In the June 18, 2001 action, the EPA also determined that the NAA had attained the 1978 Pb NAAQS, based on air monitoring data through the calendar year 1999. The monitoring data used to determine attainment of the NAAQS included data while the ASARCO facility was still operating.

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

Under section 179(c)(1), the EPA has the responsibility for determining whether a nonattainment area has attained the Pb NAAQS. The EPA must make an attainment determination as expeditiously as practicable, but no later than 6 months after the attainment date for the area. On June 18, 2001, the EPA determined that the East Helena NAA attained the 1978 Pb NAAQS (66 FR 32763).

The EPA has approved the applicable Montana SIP for the East Helena NAA under section 110(k) of the CAA for all requirements applicable for purposes of redesignation. The EPA may rely on prior SIP approvals in approving a redesignation request (see Calcagni Memorandum  1 at p. 3) plus any additional measures it may approve in conjunction with a redesignation action. Following passage of the CAA of 1970, Montana has adopted and submitted, and the EPA has fully approved provisions addressing various SIP elements applicable for the 1978 lead NAAQS in the East Helena Pb NAA. See 66 FR 32760.

General SIP elements and requirements are delineated in section 110(a)(2) of title I, part A of the CAA. These requirements include, but are not limited to, the following: Submittal of a SIP that has been adopted by the state after reasonable public notice and hearing; provisions for establishment and operation of appropriate procedures needed to monitor ambient air quality; implementation of a source permit program; provisions for the implementation of part C requirements (Prevention of Significant Deterioration (PSD)) and provisions for the implementation of part D requirements (New Source Review (NSR) permit programs); provisions for air pollution modeling; and provisions for public and local agency participation in planning and emission control rule development.

Subpart 1 of part D, found in sections 172-176 of the CAA, sets forth the basic nonattainment requirements applicable to all nonattainment areas. All areas that were designated nonattainment for the 1978 lead NAAQS were designated under Subpart 1 in accordance with the deadlines in Subpart 5. For purposes of evaluating this redesignation request, the applicable Subpart 1 SIP requirements for all nonattainment areas are contained in sections 172(c)(1)-(9) and in section 176. A thorough discussion of the requirements contained in sections 172 and 176 can be found in the General Preamble for Implementation of title I. See 57 FR 13498 (April 16, 1992).

Section 172 requires states with nonattainment areas to submit attainment plans providing for timely attainment and meeting a variety of other requirements. The EPA's longstanding interpretation of the nonattainment planning requirements of section 172 is that once an area is attaining the NAAQS, those requirements are not “applicable” for purposes of CAA section 107(d)(3)(E)(ii) and therefore need not be approved into the SIP before the EPA can redesignate the area. In the 1992 General Preamble for Implementation of Title I, the EPA set forth its interpretation of applicable requirements for purposes of evaluating redesignation requests when an area is attaining a standard. See 57 FR 13498, 13564 (April 16, 1992). The EPA noted that the requirements for reasonable further progress (RFP) and other measures designed to provide for attainment do not apply in evaluating redesignation requests because those nonattainment planning requirements “have no meaning” for an area that has already attained the standard. Id. This interpretation was also set forth in the Calcagni Memorandum. The EPA's understanding of section 172 also forms the basis of its Clean Data Policy, which suspends a state's obligation to submit most of the attainment planning requirements that would otherwise apply, including an attainment demonstration and planning SIPs to provide for RFP, reasonably available control measures (RACM), and contingency measures under section 172(c)(9).

As noted above, EPA already approved Montana's attainment plan for the Area. See 66 FR 32760 (June 18, 2001). Among other things, the approved attainment plan satisfied the section 172(c)(1) requirements for RACM; 172(c)(2) requirements related to RFP; 172(c)(3) requirements for an emissions inventory; 172(c)(6); and 172(c)(9) requirements for contingency measures.

Section 172(c)(4) requires the identification and quantification of allowable emissions for major new and modified stationary sources to be allowed in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. The 1990 CAA Amendments contained revisions to the NSR program requirements for the construction and operation of new and modified major stationary sources located in nonattainment areas. The CAA requires states to amend their SIPs to reflect these revisions but does not require submittal of this element along with the other SIP elements. The CAA established June 30, 1992, as the submittal date for the revised NSR programs (Section 189 of the CAA). Montana has a fully approved nonattainment NSR program, most recently approved on July 18, 1995 (60 FR 36715) at Administrative Rules of Montana (ARM) Subchapter 8. Montana also has a fully approved PSD program, most recently approved on July 18, 1995 (60 FR 36715). Upon the effective date of redesignation of an area from nonattainment to attainment, the requirements of the Part D NSR program will be replaced by the PSD program and the maintenance area NSR program.

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

Section 172(c)(8) allows a state to use equivalent modeling, emission inventory, and planning procedures if such use is requested by the state and approved by the EPA. Montana has not requested the use of equivalent techniques under section 172(c)(8).

Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs, and projects that are developed, funded, or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement, and enforceability that the EPA promulgated pursuant to its authority under the CAA. In light of the elimination of lead additives in gasoline, transportation conformity does not apply to the lead NAAQS. See 73 FR 66964 (November 12, 2008).

For redesignating a nonattainment area to attainment, the CAA requires the EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP, applicable Federal air pollution control regulations, and other permanent and enforceable reductions (CAA section 107(d)(3)(E)(iii)). The EPA has determined that Montana has demonstrated that the observed air quality improvement in the East Helena NAA is due to permanent and enforceable reductions in emissions.

In the EPA's June 18, 2001 approval of the State of Montana's attainment plan (66 FR 32760), three major sources of Pb were identified in the East Helena NAA: The ASARCO Smelter complex; re-entrained dust from the roads of East Helena; and the American Chemet Corporation's copper oxide manufacturing facility. The East Helena attainment plan contained Pb control measures for these three sources, needed to attain the NAAQS to satisfy the section 172(c) RACM requirement. The EPA approved these controls as RACM/reasonably available control technology (RACT) and incorporated them into the SIP, making them permanent and enforceable SIP measures to meet the requirement of the CAA and the 1978 NAAQS. See (66 FR 32760).

On April 4, 2001, ASARCO shut down its lead smelter operations, thereby eliminating the largest source of Pb emissions in the NAA. The facility's three large smelter stacks were dismantled in August 2009. On April 15, 2007, ASARCO's Title V permit expired, and the ASARCO Montana Air Quality Permit was revoked in September 2013. With the removal of ASARCO lead smelter emissions, more than 99.8 percent of the lead emissions from all stationary sources in the NAA were permanently removed.

On June 10, 2013, the State of Montana submitted a request to remove stipulations limiting the allowable concentration of lead in raw feed at the American Chemet Corporation's East Helena facility. In order to approve the SIP revision, the EPA requested that the Montana Department of Environmental Quality (MDEQ) provide modeling to demonstrate noninterference with the attainment and maintenance of the Pb NAAQS and that the State finalize the revocation of ASARCO's permit. The EPA subsequently approved the requested SIP revision after the revocation of ASARCO's permit and after modeling showed a Pb concentration for the NAA of 0.14 μg/m 3 . This modeled concentration is an order of magnitude lower than the applicable 1978 Pb NAAQS (1.5 μg/m 3 ). See 83 FR 13196. Due to the closure of ASARCO, and based on recent modeling for the NAA, the EPA considers the Pb emission reductions in the NAA to be permanent and enforceable.

For redesignating a nonattainment area to attainment, the CAA requires the EPA to determine that the area has a fully approved maintenance plan pursuant to section 175A of the CAA. See CAA section 107(d)(3)(E)(iv). In conjunction with its request to redesignate the East Helena Pb NAA to attainment for the 1978 Pb NAAQS, MDEQ submitted a SIP revision to provide for maintenance of the 1978 Pb NAAQS for at least 10 years after the effective date of redesignation to attainment. The EPA believes that this maintenance plan meets the requirements for approval under section 175A of the CAA.

Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after the Administrator approves a redesignation to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan demonstrating that attainment will continue to be maintained for the 10 years following the initial 10-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain such contingency measures as the EPA deems necessary to assure prompt correction of any future 1978 lead violations. The Calcagni Memorandum provides further guidance on the content of a maintenance plan, explaining that a maintenance plan should address five requirements: the attainment emissions inventory; maintenance demonstration; monitoring; verification of continued attainment; and a contingency plan. As is discussed more fully below, the EPA has preliminarily determined that Montana's maintenance plan includes all the necessary components and is thus proposing to approve it as a revision to the Montana SIP.

The State of Montana submitted to the EPA emissions inventories for the East Helena NAA as part of their attainment plan that identified a level of emissions in the NAA that would be sufficient to attain the 1978 Pb NAAQS. As noted above, the EPA approved the attainment plan and determined that the area had attained the 1978 Pb NAAQS on June 18, 2001 (66 FR 32760). The controlled emissions inventory for ASARCO and American Chemet were 64.7 tons per year (tpy) and 0.0615 tpy, respectively.

A state may generally demonstrate maintenance of the 1.5 μg/m 3 standard by either showing that future Pb emissions will not exceed the level of the attainment inventory, or by modeling to show that the future mix of sources and emission rates will not cause a violation of the 1978 Pb NAAQS. The demonstration should be for a period of ten years following the redesignation, e.g., until 2028 for the maintenance plan update. The state demonstrates attainment of the standard using the attainment inventory since it is based on maximum permitted allowable emissions and Pb emissions are not expected to increase over the maintenance period. As a result of the closure of the major source of Pb emissions in the NAA, current Pb emissions in the Montana Maintenance Plan emission inventory represent less than 1 percent of the 1995 control plan stationary source emissions.

Further, on March 28, 2018, the EPA approved revisions to the East Helena Pb portion of the Montana SIP, submitted on September 13, 2013, which relied on dispersion modeling. Dispersion modeling is a more sophisticated means of demonstrating maintenance because it incorporates meteorology, topography, and source characteristics in addition to permitted allowable emissions rates. The EPA reviewed the supplied modeling analysis and agreed that the methodology was done in accordance with 40 CFR part 51, Appendix W and the EPA's “Guideline on Air Quality Models.” The AERMOD modeling analysis, conducted in accordance with Appendix W and the Guideline on Air Quality Models, used the emission limits in the SIP, located in Condition II.A.4.b of the 1995 Board Order, of 0.007 lb/hr and the results show a concentration of 0.14 μg/m 3 (which includes background concentrations).Therefore, East Helena is below the Pb NAAQS threshold for the applicable 1978 Pb NAAQS of 1.5 μg/m 3 . The submitted modeling analysis used background concentrations of lead based off lead monitoring results that were performed during the three quarters immediately after the ASARCO facility ceased operations in April of 2001 (See 83 FR 1602). No significant changes in modeling inputs have occurred since the September 11, 2013 submittal and none are anticipated through the maintenance period. Therefore, the EPA finds that Montana has demonstrated maintenance of the 1978 Pb NAAQS.

Following the EPA's June 18, 2001 determination of attainment for the 1978 Pb NAAQS for the East Helena NAA, and the permanent removal of Pb emission in the area due to ASARCO's closure, MDEQ discontinued the operation of all Pb monitors in the NAA. MDEQ has confirmed that the State commits to resume monitoring before any major source of Pb commences to operate. If a new major source of Pb locates within the East Helena NAA and the source modeling indicates that the Pb impacts are greater than 75 percent of the current NAAQS including background, the source will be required to install appropriate Pb monitoring for a period of no less than three years to assure that the current NAAQS are adequately protected within the NAA. Moreover, Montana's PSD program requires that permit applicants conduct preconstruction monitoring to identify baseline concentrations. Notably, the applicable NAAQS that a major Pb source be evaluated against, would be for the more stringent and current 2008 Pb NAAQS of 0.15 μg/m 3 as opposed to the 1978 NAAQS of 1.5 μg/m 3 .

The East Helena NAA Pb Maintenance Plan includes the State's commitment to continue to implement and enforce measures necessary to maintain the Pb NAAQS. MDEQ's current operating permit program places limits on Pb emissions from existing sources. Should an existing facility (such as Chemet) want to upgrade or increase Pb emissions, the facility would be subject to the PSD program. Should a new facility be constructed in the East Helena maintenance area, the facility would also be subject to PSD as required in the Calcagni Memo. If these measures prove insufficient to protect against exceedances of the NAAQS, the State of Montana has also committed to adopt, submit as a SIP revision, and implement expeditiously any and all measures needed to ensure maintenance of the NAAQS.

The Calcagni Memo emphasizes the importance of specific contingency measures, schedules for adoption, and action levels to trigger implementation of the contingency plan. Since there are no major sources of Pb emissions remaining in the NAA from the original 1995 East Helena Pb Attainment SIP, ambient Pb monitoring was discontinued in 2001 when ASARCO shut down and the State's contingency plan will focus on new sources or modifications of existing permitted sources, we conclude that the State's commitment satisfactorily addresses the CAA provisions.

Since there are neither significant Pb sources nor ambient Pb monitoring in the East Helena maintenance area, we agree with the State that any new source planning to locate within the maintenance area or existing source proposing a significant increase in Pb emissions would be subject to Montana's SIP-approved major NSR and minor source permitting programs. 2 Thus, we find that MDEQ's permitting program is sufficient to track future air quality trends and to assure that the East Helena maintenance area will not violate the NAAQS. If the State identifies the potential for a NAAQS violation through the permitting process, the State would ascertain what measures would be needed to avoid the violation.

Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs, and projects that are developed, funded, or approved under title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement, and enforceability that the EPA promulgated pursuant to its authority under the CAA. In light of the elimination of lead additives in gasoline, transportation conformity does not apply to the lead NAAQS. See 73 FR 66964 (November 12, 2008).

After review and analysis of Montana's submittal, the EPA is proposing to take the following actions pursuant to section 110 of the CAA: Redesignate the East Helena, Montana Pb nonattainment area to attainment for the 1978 Pb NAAQS; and approve Montana's October 28, 2018 SIP revision for continued maintenance and attainment of the 1978 Pb NAAQS in East Helena, Montana.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely proposes to approve 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);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

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

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land 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 proposed 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).

26. Further, we seek comment on how to transition from the existing category two budget rules to any modified category two budget rules. As described above, if we simply extend the current rules, in funding year 2020, an applicant's budget calculation would take into account funding requested in funding years 2016 through 2019. For administrative efficiency, however, we seek comment on starting fresh in funding year 2020 and resetting all applicant budgets, to allow applicants a new opportunity to track their category two budgets and ease the transition's impact on all E-Rate program stakeholders. We recognize, however, that some applicants have not requested all of their category two budgets from funding year 2015 through 2019, while others will have used all of their budgets for those years. We, therefore, also seek comment on whether there is an administratively feasible way to take previous category two funding commitments into account when transitioning all applicants in funding year 2020.

27. Alternatively, depending on the timing of the new rules and the extent of the changes, should we consider using funding year 2020 as a bridge to transition to the final rules we adopt in this proceeding? For example, should we consider extending the existing rules for one funding year without any modifications? This approach could allow applicants that received support in funding year 2015 and have completed the five-year cycle, or applicants still within their five-year cycles with funds remaining in their budgets, to request support and allow for a smoother transition to the new rules. Should we permit applicants who have completed a five-year cycle to nevertheless access any unused funds in funding year 2020, in what would be a sixth year? Similarly, should any particular restrictions apply to applicants that did not receive category two support in funding year 2015 through 2019? Should we further provide some additional category two support to the existing five-year budgets, for example, $30 per student or 20% of the library budget of $2.30 or $5.00? Commenters supporting this alternative are encouraged to also address what category two funding opportunities, if any, should be made for those E-Rate eligible entities who have already depleted their respective category two budgets. Or should we consider having a second, later filing window for category two service requests in funding year 2020? How can we best reduce applicant confusion and provide for simplified administration of the category two budgets as we move beyond funding year 2019? We seek comment on other alternatives that would afford a smooth and effective transition to the category two rules we adopt in the context of this proceeding.

28. Initial Regulatory Flexibility Analysis. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on a substantial number of small entities by the policies and rules proposed in this Notice of Proposed Rulemaking ( NPRM ). Written comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines for comments on the NPRM. The Commission will send a copy of the NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the NPRM and IRFA (or summaries thereof) will be published in the Federal Register .

29. The Commission is required by Section 254 of the Communications Act of 1934, as amended, to promulgate rules to implement the universal service provisions of Section 254. On May 8, 1997, the Commission adopted rules to reform its system of universal service support mechanisms so that universal service is preserved and advanced as markets move toward competition. Specifically, under the schools and libraries universal service support mechanism, also known as the E-Rate program, eligible schools, libraries, and consortia that include eligible schools and libraries may receive discounts for eligible telecommunications services, internet access, and internal connections.

30. Taking steps to close the digital divide is a top priority for the Commission. The E-Rate program provides a vital source of support to schools and libraries, ensuring that students and library patrons across the nation have access to high-speed broadband and essential communications services. The rules we propose in the NPRM seek to make permanent the category two budget approach for all E-Rate applicants beyond funding year 2019. We seek comment in the NPRM on streamlining and simplifying the administration of the E-Rate program for applicants, service providers, and the Universal Service Administrative Company. In addition, the rules that we propose or seek comment on in the NPRM would eliminate confusion over how to apply for category two services which provide connectivity within schools and libraries and include internal connections, basic maintenance of internal connections, and managed internal broadband services. We seek comment on our proposals as well as comments on other ways to lessen the administrative burden on participating schools and libraries within the framework of the category two budget approach.

31. The proposed action is authorized pursuant to sections 1 through 4, 201-205, 254, 303(r), and 403 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. 151 through 154, 201 through 205, 254, 303(r), and 403.

32. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one that: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

33. Small Businesses, Small Organizations, Small Governmental Jurisdictions. Our actions, over time, may affect small entities that are not easily categorized at present. We therefore describe here, at the outset, three broad groups of small entities that could be directly affected herein. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, according to data from the SBA's Office of Advocacy, in general a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States which translates to 28.8 million businesses.

34. Next, the type of small entity described as a “small organization” is generally “any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.” Nationwide, as of August 2016, there were approximately 356,494 small organizations based on registration and tax data filed by nonprofits with the Internal Revenue Service (IRS).

35. Finally, the small entity described as a “small governmental jurisdiction” is defined generally as “governments of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than fifty thousand.” U.S. Census Bureau data from the 2012 Census of Governments indicate that there were 90,056 local governmental jurisdictions consisting of general purpose governments and special purpose governments in the United States. Of this number there were 37,132 General purpose governments (county, municipal and town or township) with populations of less than 50,000 and 12,184 Special purpose governments (independent school districts and special districts) with populations of less than 50,000. The 2012 U.S. Census Bureau data for most types of governments in the local government category show that the majority of these governments have populations of less than 50,000. Based on this data we estimate that at least 49,316 local government jurisdictions fall in the category of “small governmental jurisdictions.”

36. As noted, a “small entity” includes non-profit and small government entities. Under the schools and libraries universal service support mechanism, which provides support for elementary and secondary schools and libraries, an elementary school is generally “a non-profit institutional day or residential school that provides elementary education, as determined under state law.” A secondary school is generally defined as “a non-profit institutional day or residential school that provides secondary education, as determined under state law,” and not offering education beyond grade 12. A library includes “(1) a public library, (2) a public elementary school or secondary school library, (3) an academic library, (4) a research library, and (5) a private library, but only if the state in which such private library is located determines that the library should be considered a library for the purposes of this definition.” For-profit schools and libraries, and schools and libraries with endowments in excess of $50,000,000, are not eligible to receive discounts under the program, nor are libraries whose budgets are not completely separate from any schools. Certain other statutory definitions apply as well. The SBA has defined for-profit, elementary and secondary schools and libraries having $6 million or less in annual receipts as small entities. In funding year 2017, approximately 104,500 schools and 11,490 libraries received funding under the schools and libraries universal service mechanism. Although we are unable to estimate with precision the number of these entities that would qualify as small entities under SBA's size standard, we estimate that fewer than 104,500 schools and 11,490 libraries might be affected annually by our action, under current operation of the program.

37. Incumbent Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small incumbent local exchange carriers. The closest applicable NAICS Code category is Wired Telecommunications Carriers. Under the applicable SBA size standard, such a business is small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms operated the entire year. Of this total, 3,083 operated with fewer than 1,000 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by our actions. According to Commission data, one thousand three hundred and seven (1,307) Incumbent Local Exchange Carriers reported that they were incumbent local exchange services. Of this total 1,307 an estimated 1,006 have 1,500 or fewer employees and 301 have more than 1,500 employees. Thus, using the SBA's size standard the majority of incumbent LECs can be considered small entities.

38. We have included small incumbent LECs in this RFA analysis. A “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard ( e.g., a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. We have, therefore, included small incumbent carriers in this RFA analysis, although we emphasize that this RFA action has no effect on the Commission's analyses and determinations in other, non-RFA contexts.

39. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to IXCs. The closest NAICS Code category is Wired Telecommunications Carriers. The applicable size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2012 indicate that 3,117 firms operated for the entire year. Of that number, 3,083 operated with fewer than 1,000 employees. According to internally developed Commission data, 359 companies reported that that their primary telecommunications service activity was the provision of interexchange services. Of this total, an estimated 317 have 1,500 or fewer employees. Consequently, the Commission estimates that the majority of interexchange service providers are small entities.

40. Competitive Access Providers (CAPs). Neither the Commission nor the SBA has developed a definition of small entities specifically applicable to CAPs. The closest applicable definition under the SBA rules is for Wired Telecommunications Carriers. Under the SBA size standard, a Wired Telecommunications Carrier is a small entity if it employs no more than 1,500 employees. U.S. Census Bureau data for 2012 show that 3,117 firms operated during that year. Of that number, 3,083 operated with fewer than 1,000 employees. According to Commission data, 1,442 CAPs and competitive local exchange carriers (competitive LECs) reported that they were engaged in the provision of competitive local exchange services. Of these 1,442 CAPs and competitive LECs, an estimated 1,256 have 1,500 or fewer employees and 186 have more than 1,500 employees. Consequently, the Commission estimates that most providers of competitive exchange services are small businesses.

41. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The appropriate size standard under SBA rules is that such a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census Bureau data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had employment of 999 or fewer employees and 12 had employment of 1000 employees or more. Thus, under this category and the associated size standard, the Commission estimates that the majority of wireless telecommunications carriers (except satellite) are small entities.

42. Wireless Telephony. Wireless telephony includes cellular, personal communications services, and specialized mobile radio telephony carriers. The closest applicable SBA category is Wireless Telecommunications Carriers (except Satellite). Under the SBA small business size standard, a business is small if it has 1,500 or fewer employees. For this industry, U.S. Census Bureau data for 2012 show that there were 967 firms that operated for the entire year. Of this total, 955 firms had fewer than 1,000 employees and 12 firms had 1,000 employees or more. Thus, under this category and the associated size standard, the Commission estimates that a majority of these entities can be considered small. According to Commission data, 413 carriers reported that they were engaged in wireless telephony. Of these, an estimated 261 have 1,500 or fewer employees and 152 have more than 1,500 employees. Therefore, more than half of these entities can be considered small.

43. Internet Service Providers (Broadband). Broadband internet service providers include wired ( e.g., cable, DSL) and VoIP service providers using their own operated wired telecommunications infrastructure fall in the category of Wired Telecommunication Carriers. Wired Telecommunications Carriers are comprised of establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired telecommunications networks. Transmission facilities may be based on a single technology or a combination of technologies. The SBA size standard for this category classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2012 show that there were 3,117 firms that operated that year. Of this total, 3,083 operated with fewer than 1,000 employees. Consequently, under this size standard the majority of firms in this industry can be considered small.

44. Internet Service Providers (Non-Broadband). Internet access service providers such as Dial-up internet service providers, VoIP service providers using client-supplied telecommunications connections and internet service providers using client-supplied telecommunications connections ( e.g., dial-up ISPs) fall in the category of All Other Telecommunications. The SBA has developed a small business size standard for All Other Telecommunications which consists of all such firms with gross annual receipts of $32.5 million or less. For this category, U.S. Census Bureau data for 2012 shows that there were 1,442 firms that operated for the entire year. Of these firms, a total of 1,400 had gross annual receipts of less than $25 million. Consequently, under this size standard a majority of firms in this industry can be considered small.

45. Vendors of Infrastructure Development or “Network Buildout.” The Commission has not developed a small business size standard specifically directed toward manufacturers of network facilities. There are two applicable SBA categories in which manufacturers of network facilities could fall and each have different size standards under the SBA rules. The SBA categories are “Radio and Television Broadcasting and Wireless Communications Equipment” with a size standard of 1,250 employees or less and “Other Communications Equipment Manufacturing” with a size standard of 750 employees or less.” U.S. Census Bureau data for 2012 show that for Radio and Television Broadcasting and Wireless Communications Equipment firms 841 establishments operated for the entire year. Of that number, 828 establishments operated with fewer than 1,000 employees, 7 establishments operated with between 1,000 and 2,499 employees and 6 establishments operated with 2,500 or more employees. For Other Communications Equipment Manufacturing, U.S. Census Bureau data for 2012 shows that 383 establishments operated for the year. Of that number 379 operated with fewer than 500 employees and 4 had 500 to 999 employees. Based on this data, we conclude that the majority of Vendors of Infrastructure Development or “Network Buildout” are small.

46. Telephone Apparatus Manufacturing. This industry comprises establishments primarily engaged in manufacturing wire telephone and data communications equipment. These products may be standalone or board-level components of a larger system. Examples of products made by these establishments are central office switching equipment, cordless telephones (except cellular), PBX equipment, telephones, telephone answering machines, LAN modems, multi-user modems, and other data communications equipment, such as bridges, routers, and gateways.” The SBA size standard for Telephone Apparatus Manufacturing is all such firms having 1,250 or fewer employees. U.S. Census Bureau data for 2012 show that there were 266 establishments that operated for the entire year. Of this total, 262 operated with fewer than 1,000 employees. Thus, under this size standard, the majority of firms can be considered small.

47. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: Transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment. The SBA has established a small business size standard for this industry of 1,250 employees or less. U.S. Census Bureau data for 2012 show that 841 establishments operated in this industry in that year. Of that number, 828 establishments operated with fewer than 1,000 employees, 7 establishments operated with between 1,000 and 2,499 employees and 6 establishments operated with 2,500 or more employees. Based on this data, we conclude that a majority of manufacturers in this industry are small.

48. The proposals under consideration in the NPRM, if adopted, may result in new and/or modified reporting, recordkeeping and other compliance requirements for both small and large entities. At this time, the Commission cannot quantify the cost of compliance with the potential rule changes in the NPRM, but we anticipate that the result of any rule changes will produce requirements that are equal to or less than existing requirements, and we do not believe small entities will have to hire attorneys, engineers, consultants, or other professionals in order to comply. Moving from a per-school or per-library budget to a per-district or per-system budget for category two services, for example, would streamline the application process for category two services from start to finish, simplifying the calculation, the FCC Form 471 application, Program Integrity Assurance (PIA) reviews, and the FCC Form 500 cancellation process. Moreover, adopting this approach may also simplify some of the more complicated issues that applicants face when seeking E-Rate support. Additionally, to find other ways to reduce any administrative processes which could impact compliance costs, we have sought comment on how the application process for category two services can be made simpler and more efficient. Regarding our proposal to amend our rules to make permanent the category two budget approach beyond funding year 2019 in five-year funding cycle increments, we have sought comment on whether the benefits associated with making permanent the category two budget rules outweigh the cost of compliance associated with administering them.

49. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rule for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”

50. In the NPRM, we have taken steps to minimize the economic impact on small entities with the rule changes that we have proposed. Under the current E-Rate program, the category two budget rules will begin to sunset in funding year 2020. Absent a rule change, applicants seeking category two services will have to navigate two sets of rules until funding year 2024. We have therefore proposed amending the rules to make permanent the category two budget approach for all applicants beyond funding year 2019, which, if adopted, will remove the burden and the cost to small entities of having to navigate and comply with two different sets of rules. This proposal will also lessen the reporting requirements on small entities thereby lessening their administrative costs for report preparation. To further reduce the reporting and administrative requirements for small entities, we seek comment on moving to a district-wide or system-wide budget, rather than a school entity or library entity budget. We anticipate that permitting school districts and library systems to calculate a district-wide budget, rather than maintaining records and allocating costs between budgets for each school and library, may simplify the current application process by reducing the number of applications filed, reducing the paperwork burden for reporting student counts, and reducing the complexity of the budgets overall. The Commission expects to more fully consider ways to minimize the economic impact and explore alternatives for small entities following the review of comments filed in response to the NPRM .

51. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules. None.

52. Paperwork Reduction Act. The NPRM may result in revised information collection requirements. If the Commission adopts any revised information collection requirement, the Commission will publish a notice in the Federal Register inviting the public to comment on the requirement, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

53. Ex Parte Rules. This proceeding shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda, or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format ( e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

54. Filing Procedures. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments and reply comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

• Electronic Filers: Comments may be filed electronically using the internet by accessing the ECFS: http://apps.fcc.gov/ecfs/ .

• Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing.

If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.

• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis Junction, MD 20701.

• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW, Washington, DC 20554.

55. People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

56. Accordingly, it is ordered that, pursuant to the authority found in sections 1 through 4, 201-202, 254, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151 through 154, 201 through 202, 254, and 303(r), this Notice of Proposed Rulemaking is adopted .

57. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reason discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR part 54 as follows: