I. Background Information

On March 13, 2020, President Trump declared the ongoing Coronavirus Disease 2019 (COVID-19) pandemic of sufficient severity and magnitude to warrant an emergency declaration for all states, territories, and the District of Columbia. With the COVID-19 emergency, many small businesses nationwide are experiencing economic hardship as a direct result of the Federal, State, and local public health measures that are being taken to minimize the public's exposure to the virus. These measures, some of which are government-mandated, are being implemented nationwide and include the closures of restaurants, bars, and gyms. In addition, based on the advice of public health officials, other measures, such as keeping a safe distance from others or even stay-at-home orders, are being implemented, resulting in a dramatic decrease in economic activity as the public avoids malls, retail stores, and other businesses.

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act or the Act) (Pub. L. 116-136) to provide emergency assistance and health care response for individuals, families, and businesses affected by the coronavirus pandemic. The Small Business Administration (SBA) received funding and authority through the Act to modify existing loan programs and establish a new loan program to assist small businesses nationwide adversely impacted by the COVID-19 emergency.

Section 1102 of the Act temporarily permits SBA to guarantee 100 percent of 7(a) loans under a new program titled the “Paycheck Protection Program.” Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. A more detailed discussion of sections 1102 and 1106 of the Act is found in section III below.

The intent of the Act is that SBA provide relief to America's small businesses expeditiously. This intent, along with the dramatic decrease in economic activity nationwide, provides good cause for SBA to dispense with the 30-day delayed effective date provided in the Administrative Procedure Act. Specifically, small businesses need to be informed on how to apply for a loan and the terms of the loan under section 1102 of the Act as soon as possible because the last day to apply for and receive a loan is June 30, 2020. The immediate effective date of this interim final rule will benefit small businesses so that they can immediately apply for the loan with a full understanding of loan terms and conditions. This interim final rule is effective without advance notice and public comment because section 1114 of the Act authorizes SBA to issue regulations to implement Title 1 of the Act without regard to notice requirements. This rule is being issued to allow for immediate implementation of this program. Although this interim final rule is effective immediately, comments are solicited from interested members of the public on all aspects of the interim final rule, including section III below. These comments must be submitted on or before May 15, 2020. The SBA will consider these comments and the need for making any revisions as a result of these comments.

The CARES Act was enacted to provide immediate assistance to individuals, families, and businesses affected by the COVID-19 emergency. Among the provisions contained in the CARES Act are provisions authorizing SBA to temporarily guarantee loans under a new 7(a) loan program titled the “Paycheck Protection Program.” Loans guaranteed under the Paycheck Protection Program (PPP) will be 100 percent guaranteed by SBA, and the full principal amount of the loans may qualify for loan forgiveness. The following outlines the key provisions of the PPP.

SBA is authorized to guarantee loans under the PPP through June 30, 2020. Congress authorized a program level of $349,000,000,000 to provide guaranteed loans under this new 7(a) program. The intent of the Act is that SBA provide relief to America's small businesses expeditiously, which is expressed in the Act by giving all lenders delegated authority and streamlining the requirements of the regular 7(a) loan program. For example, for loans made under the PPP, SBA will not require the lenders to comply with section 120.150 “What are SBA's lending criteria?.” SBA will allow lenders to rely on certifications of the borrower in order to determine eligibility of the borrower and use of loan proceeds and to rely on specified documents provided by the borrower to determine qualifying loan amount and eligibility for loan forgiveness. Lenders must comply with the applicable lender obligations set forth in this interim final rule, but will be held harmless for borrowers' failure to comply with program criteria; remedies for borrower violations or fraud are separately addressed in this interim final rule. The program requirements of the PPP identified in this rule temporarily supersede any conflicting Loan Program Requirement (as defined in 13 CFR 120.10).

You are eligible for a PPP loan if you have 500 or fewer employees whose principal place of residence is in the United States, or are a business that operates in a certain industry and meet the applicable SBA employee-based size standards for that industry, and:

i. You are:

A. A small business concern as defined in section 3 of the Small Business Act (15 U.S.C. 632), and subject to SBA's affiliation rules under 13 CFR 121.301(f) unless specifically waived in the Act; or

B. A tax-exempt nonprofit organization described in section 501(c)(3) of the Internal Revenue Code (IRC), a tax-exempt veterans organization described in section 501(c)(19) of the IRC, Tribal business concern described in section 31(b)(2)(C) of the Small Business Act, or any other business; and

ii. You were in operation on February 15, 2020 and either had employees for whom you paid salaries and payroll taxes or paid independent contractors, as reported on a Form 1099-MISC.

You are also eligible for a PPP loan if you are an individual who operates under a sole proprietorship or as an independent contractor or eligible self-employed individual, and you were in operation on February 15, 2020.

You must also submit such documentation as is necessary to establish eligibility such as payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.

SBA intends to promptly issue additional guidance with regard to the applicability of affiliation rules at 13 CFR 121.103 and 121.301 to PPP loans.

You are ineligible for a PPP loan if, for example:

i. You are engaged in any activity that is illegal under Federal, state, or local law;

ii. You are a household employer (individuals who employ household employees such as nannies or housekeepers);

iii. An owner of 20 percent or more of the equity of the applicant is incarcerated, on probation, on parole; presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction; or has been convicted of a felony within the last five years; or

iv. You, or any business owned or controlled by you or any of your owners, has ever obtained a direct or guaranteed loan from SBA or any other Federal agency that is currently delinquent or has defaulted within the last seven years and caused a loss to the government.

The Administrator, in consultation with the Secretary of the Treasury (the Secretary), determined that household employers are ineligible because they are not businesses. 13 CFR 120.100.

Businesses that are not eligible for PPP loans are identified in 13 CFR 120.110 and described further in SBA's Standard Operating Procedure (SOP) 50 10, Subpart B, Chapter 2, except that nonprofit organizations authorized under the Act are eligible. (SOP 50 10 can be found at https://www.sba.gov/document/sop-50-10-5-lender-development-company-loan-programs. )

Under the PPP, the maximum loan amount is the lesser of $10 million or an amount that you will calculate using a payroll-based formula specified in the Act, as explained below.

The following methodology, which is one of the methodologies contained in the Act, will be most useful for many applicants.

i. Step 1: Aggregate payroll costs (defined in detail below in f.) from the last twelve months for employees whose principal place of residence is the United States.

ii. Step 2: Subtract any compensation paid to an employee in excess of an annual salary of $100,000 and/or any amounts paid to an independent contractor or sole proprietor in excess of $100,000 per year.

iii. Step 3: Calculate average monthly payroll costs (divide the amount from Step 2 by 12).

iv. Step 4: Multiply the average monthly payroll costs from Step 3 by 2.5.

v. Step 5: Add the outstanding amount of an Economic Injury Disaster Loan (EIDL) made between January 31, 2020 and April 3, 2020, less the amount of any “advance” under an EIDL COVID-19 loan (because it does not have to be repaid).

The examples below illustrate this methodology.

Payroll costs consist of compensation to employees (whose principal place of residence is the United States) in the form of salary, wages, commissions, or similar compensation; cash tips or the equivalent (based on employer records of past tips or, in the absence of such records, a reasonable, good-faith employer estimate of such tips); payment for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums, and retirement; payment of state and local taxes assessed on compensation of employees; and for an independent contractor or sole proprietor, wages, commissions, income, or net earnings from self-employment, or similar compensation.

Yes. The Act expressly excludes the following:

i. Any compensation of an employee whose principal place of residence is outside of the United States;

ii. The compensation of an individual employee in excess of an annual salary of $100,000, prorated as necessary;

iii. Federal employment taxes imposed or withheld between February 15, 2020 and June 30, 2020, including the employee's and employer's share of FICA (Federal Insurance Contributions Act) and Railroad Retirement Act taxes, and income taxes required to be withheld from employees; and

iv. Qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (Pub. L. 116-127).

No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower's PPP loan calculation.

The interest rate will be 100 basis points or one percent.

The Administrator, in consultation with the Secretary, determined that a one percent interest rate is appropriate. First, it provides low cost funds to borrowers to meet eligible payroll costs and other eligible expenses during this temporary period of economic dislocation caused by the coronavirus. Second, for lenders, the 100 basis points offers an attractive interest rate relative to the cost of funding for comparable maturities. For example, the FDIC's weekly national average rate for a 24-month CD deposit product for the week of March 30, 2020 is 42 basis points for non-jumbo and 44 basis points for jumbo ( https://www.fdic.gov/regulations/resources/rates/ ). Third, the interest rate is higher than the yield on Treasury securities of comparable maturity. For example, the yield on the Treasury two-year note is approximately 23 basis points. This higher yield combined with the fact that the loans are 100 percent guaranteed by the SBA and the fact that lenders will receive a substantial processing fee from the SBA provide ample inducement for lenders to participate in the PPP.

The maturity is two years. While the Act provides that a loan will have a maximum maturity of up to ten years from the date the borrower applies for loan forgiveness (described below), the Administrator, in consultation with the Secretary, determined that a two year loan term is sufficient in light of the temporary economic dislocations caused by the coronavirus. Specifically, the considerable economic disruption caused by the coronavirus is expected to abate well before the two year maturity date such that borrowers will be able to re-commence business operations and pay off any outstanding balances on their PPP loans.

No. The Administrator, in consultation with the Secretary, determined that no eligible borrower may receive more than one PPP loan. This means that if you apply for a PPP loan you should consider applying for the maximum amount. While the Act does not expressly provide that each eligible borrower may only receive one PPP loan, the Administrator has determined, in consultation with the Secretary, that because all PPP loans must be made on or before June 30, 2020, a one loan per borrower limitation is necessary to help ensure that as many eligible borrowers as possible may obtain a PPP loan. This limitation will also help advance Congress' goal of keeping workers paid and employed across the United States.

Yes, e-signature or e-consents can be used regardless of the number of owners.

Yes.

You will not have to make any payments for six months following the date of disbursement of the loan. However, interest will continue to accrue on PPP loans during this six-month deferment. The Act authorizes the Administrator to defer loan payments for up to one year. The Administrator determined, in consultation with the Secretary, that a six-month deferment period is appropriate in light of the modest interest rate (one percent) on PPP loans and the loan forgiveness provisions contained in the Act.

Yes. The amount of loan forgiveness can be up to the full principal amount of the loan and any accrued interest. That is, the borrower will not be responsible for any loan payment if the borrower uses all of the loan proceeds for forgiveable purposes described below and employee and compensation levels are maintained. The actual amount of loan forgiveness will depend, in part, on the total amount of payroll costs, payments of interest on mortgage obligations incurred before February 15, 2020, rent payments on leases dated before February 15, 2020, and utility payments under service agreements dated before February 15, 2020, over the eight-week period following the date of the loan. However, not more than 25 percent of the loan forgiveness amount may be attributable to non-payroll costs. While the Act provides that borrowers are eligible for forgiveness in an amount equal to the sum of payroll costs and any payments of mortgage interest, rent, and utilities, the Administrator has determined that the non-payroll portion of the forgivable loan amount should be limited to effectuate the core purpose of the statute and ensure finite program resources are devoted primarily to payroll. The Administrator has determined in consultation with the Secretary that 75 percent is an appropriate percentage in light of the Act's overarching focus on keeping workers paid and employed. Further, the Administrator and the Secretary believe that applying this threshold to loan forgiveness is consistent with the structure of the Act, which provides a loan amount 75 percent of which is equivalent to eight weeks of payroll (8 weeks/2.5 months = 56 days/76 days = 74 percent rounded up to 75 percent). Limiting non-payroll costs to 25 percent of the forgiveness amount will align these elements of the program, and will also help to ensure that the finite appropriations available for PPP loan forgiveness are directed toward payroll protection. SBA will issue additional guidance on loan forgiveness.

No, independent contractors have the ability to apply for a PPP loan on their own so they do not count for purposes of a borrower's PPP loan forgiveness.

The applicant must submit SBA Form 2483 (Paycheck Protection Program Application Form) and payroll documentation, as described above. The lender must submit SBA Form 2484 (Paycheck Protection Program Lender's Application for 7(a) Loan Guaranty) electronically in accordance with program requirements and maintain the forms and supporting documentation in its files.

The proceeds of a PPP loan are to be used for:

i. payroll costs (as defined in the Act and in 2.f.);

ii. costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;

iii. mortgage interest payments (but not mortgage prepayments or principal payments);

iv. rent payments;

v. utility payments;

vi. interest payments on any other debt obligations that were incurred before February 15, 2020; and/or

vii. refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020. If you received an SBA EIDL loan from January 31, 2020 through April 3, 2020, you can apply for a PPP loan. If your EIDL loan was not used for payroll costs, it does not affect your eligibility for a PPP loan. If your EIDL loan was used for payroll costs, your PPP loan must be used to refinance your EIDL loan. Proceeds from any advance up to $10,000 on the EIDL loan will be deducted from the loan forgiveness amount on the PPP loan.

However, at least 75 percent of the PPP loan proceeds shall be used for payroll costs. For purposes of determining the percentage of use of proceeds for payroll costs, the amount of any EIDL refinanced will be included. For purposes of loan forgiveness, however, the borrower will have to document the proceeds used for payroll costs in order to determine the amount of forgiveness. While the Act provides that PPP loan proceeds may be used for the purposes listed above and for other allowable uses described in section 7(a) of the Small Business Act (15 U.S.C. 636(a)), the Administrator believes that finite appropriations and the structure of the Act warrant a requirement that borrowers use a substantial portion of the loan proceeds for payroll costs, consistent with Congress' overarching goal of keeping workers paid and employed. As with the similar limitation on the forgiveness amount explained earlier, the Administrator, in consultation with the Secretary, has determined that 75 percent is an appropriate percentage that will align this element of the program with the loan amount, 75 percent of which is equivalent to eight weeks of payroll. This limitation on use of the loan funds will help to ensure that the finite appropriations available for these loans are directed toward payroll protection, as each loan that is issued depletes the appropriation, regardless of whether portions of the loan are later forgiven.

If you use PPP funds for unauthorized purposes, SBA will direct you to repay those amounts. If you knowingly use the funds for unauthorized purposes, you will be subject to additional liability such as charges for fraud. If one of your shareholders, members, or partners uses PPP funds for unauthorized purposes, SBA will have recourse against the shareholder, member, or partner for the unauthorized use.

On the Paycheck Protection Program application, an authorized representative of the applicant must certify in good faith to all of the below:  1

i. The applicant was in operation on February 15, 2020 and had employees for whom it paid salaries and payroll taxes or paid independent contractors, as reported on a Form 1099-MISC.

ii. Current economic uncertainty makes this loan request necessary to support the ongoing operations of the applicant.

iii. The funds will be used to retain workers and maintain payroll or make mortgage interest payments, lease payments, and utility payments; I understand that if the funds are knowingly used for unauthorized purposes, the Federal Government may hold me legally liable such as for charges of fraud. As explained above, not more than 25 percent of loan proceeds may be used for non-payroll costs.

iv. Documentation verifying the number of full-time equivalent employees on payroll as well as the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight week period following this loan will be provided to the lender.

v. Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. As explained above, not more than 25 percent of the forgiven amount may be for non-payroll costs.

vi. During the period beginning on February 15, 2020 and ending on December 31, 2020, the applicant has not and will not receive another loan under this program.

vii. I further certify that the information provided in this application and the information provided in all supporting documents and forms is true and accurate in all material respects. I understand that knowingly making a false statement to obtain a guaranteed loan from SBA is punishable under the law, including under 18 U.S.C. 1001 and 3571 by imprisonment of not more than five years and/or a fine of up to $250,000; under 15 U.S.C. 645 by imprisonment of not more than two years and/or a fine of not more than $5,000; and, if submitted to a federally insured institution, under 18 U.S.C. 1014 by imprisonment of not more than thirty years and/or a fine of not more than $1,000,000.

viii. I acknowledge that the lender will confirm the eligible loan amount using tax documents I have submitted. I affirm that these tax documents are identical to those submitted to the Internal Revenue Service. I also understand, acknowledge, and agree that the Lender can share the tax information with SBA's authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.

i. All SBA 7(a) lenders are automatically approved to make PPP loans on a delegated basis.

ii. The Act provides that the authority to make PPP loans can be extended to additional lenders determined by the Administrator and the Secretary to have the necessary qualifications to process, close, disburse, and service loans made with the SBA guarantee. Since SBA is authorized to make PPP loans up to $349 billion by June 30, 2020, the Adminstrator and the Secretary have jointly determined that authorizing additional lenders is necessary to achieve the purpose of allowing as many eligible borrowers as possible to receive loans by the June 30, 2020 deadline.

iii. The following types of lenders have been determined to meet the criteria and are eligible to make PPP loans unless they currently are designated in Troubled Condition by their primary Federal regulator or are subject to a formal enforcement action with their primary Federal regulator that addresses unsafe or unsound lending practices:

I. Any federally insured depository institution or any federally insured credit union;

II. Any Farm Credit System institution (other than the Federal Agricultural Mortgage Corporation) as defined in 12 U.S.C. 2002(a) that applies the requirements under the Bank Secrecy Act and its implementing regulations (collectively, BSA) as a federally regulated financial institution, or functionally equivalent requirements that are not altered by this rule; and

III. Any depository or non-depository financing provider that originates, maintains, and services business loans or other commercial financial receivables and participation interests; has a formalized compliance program; applies the requirements under the BSA as a federally regulated financial institution, or the BSA requirements of an equivalent federally regulated financial institution; has been operating since at least February 15, 2019, and has originated, maintained, and serviced more than $50 million in business loans or other commercial financial receivables during a consecutive 12 month period in the past 36 months, or is a service provider to any insured depository institution that has a contract to support such institution's lending activities in accordance with 12 U.S.C. 1867(c) and is in good standing with the appropriate Federal banking agency.

iv. Qualified institutions described in 3.a.iii.I. and II. will be automatically qualified under delegated authority by the SBA upon transmission of CARES Act Section 1102 Lender Agreement (SBA Form 3506) unless they currently are designated in Troubled Condition by their primary Federal regulator or are subject to a formal enforcement action by their primary Federal regulator that addresses unsafe or unsound lending practices.

Each lender shall:

i. Confirm receipt of borrower certifications contained in Paycheck Protection Program Application form issued by the Administration;

ii. Confirm receipt of information demonstrating that a borrower had employees for whom the borrower paid salaries and payroll taxes on or around February 15, 2020;

iii. Confirm the dollar amount of average monthly payroll costs for the preceding calendar year by reviewing the payroll documentation submitted with the borrower's application; and

iv. Follow applicable BSA requirements:

I. Federally insured depository institutions and federally insured credit unions should continue to follow their existing BSA protocols when making PPP loans to either new or existing customers who are eligible borrowers under the PPP. PPP loans for existing customers will not require re-verification under applicable BSA requirements, unless otherwise indicated by the institution's risk-based approach to BSA compliance.

II. Entities that are not presently subject to the requirements of the BSA, should, prior to engaging in PPP lending activities, including making PPP loans to either new or existing customers who are eligible borrowers under the PPP, establish an anti-money laundering (AML) compliance program equivalent to that of a comparable federally regulated institution. Depending upon the comparable federally regulated institution, such a program may include a customer identification program (CIP), which includes identifying and verifying their PPP borrowers' identities (including e.g., date of birth, address, and taxpayer identification number), and, if that PPP borrower is a company, following any applicable beneficial ownership information collection requirements. Alternatively, if available, entities may rely on the CIP of a federally insured depository institution or federally insured credit union with an established CIP as part of its AML program. In either instance, entities should also understand the nature and purpose of their PPP customer relationships to develop customer risk profiles. Such entities will also generally have to identify and report certain suspicious activity to the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). If such entities have questions with regard to meeting these requirements, they should contact the FinCEN Regulatory Support Section at FRC@fincen.gov. In addition, FinCEN has created a COVID-19-specific contact channel, via a specific drop-down category, for entities to communicate to FinCEN COVID-19-related concerns while adhering to their BSA obligations. Entities that wish to communicate such COVID-19-related concerns to FinCEN should go to www.FinCEN.gov, click on “Need Assistance,” and select “COVID19” in the subject drop-down list.

Each lender's underwriting obligation under the PPP is limited to the items above and reviewing the “Paycheck Protection Application Form.” Borrowers must submit such documentation as is necessary to establish eligibility such as payroll processor records, payroll tax filings, or Form 1099-MISC, or income and expenses from a sole proprietorship. For borrowers that do not have any such documentation, the borrower must provide other supporting documentation, such as bank records, sufficient to demonstrate the qualifying payroll amount.

Yes. The lender does not need to conduct any verification if the borrower submits documentation supporting its request for loan forgiveness and attests that it has accurately verified the payments for eligible costs. The Administrator will hold harmless any lender that relies on such borrower documents and attestation from a borrower. The Administrator, in consultation with the Secretary, has determined that lender reliance on a borrower's required documents and attestation is necessary and appropriate in light of section 1106(h) of the Act, which prohibits the Administrator from taking an enforcement action or imposing penalties if the lender has received a borrower attestation.

SBA will pay lenders fees for processing PPP loans in the following amounts:

i. Five (5) percent for loans of not more than $350,000;

ii. Three (3) percent for loans of more than $350,000 and less than $2,000,000; and

iii. One (1) percent for loans of at least $2,000,000.

No. When evaluating an applicant's eligibility lenders will not be required to apply the “credit elsewhere test” (as set forth in section 7(a)(1)(A) of the Small Business Act (15 U.S.C. 636) and SBA regulations at 13 CFR 120.101)).

Loans will be guaranteed under the PPP under the same terms, conditions and processes as other 7(a) loans, with certain changes including but not limited to:

i. The guarantee percentage is 100 percent.

ii. No collateral will be required.

iii. No personal guarantees will be required.

iv. The interest rate will be 100 basis points or one percent.

v. All loans will be processed by all lenders under delegated authority and lenders will be permitted to rely on certifications of the borrower in order to determine eligibility of the borrower and the use of loan proceeds.

i. There will be no up-front guarantee fee payable to SBA by the Borrower;

ii. There will be no lender's annual service fee (“on-going guaranty fee”) payable to SBA;

iii. There will be no subsidy recoupment fee; and

iv. There will be no fee payable to SBA for any guarantee sold into the secondary market.

Agent fees will be paid by the lender out of the fees the lender receives from SBA. Agents may not collect fees from the borrower or be paid out of the PPP loan proceeds. The total amount that an agent may collect from the lender for assistance in preparing an application for a PPP loan (including referral to the lender) may not exceed:

i. One (1) percent for loans of not more than $350,000;

ii. 0.50 percent for loans of more than $350,000 and less than $2 million; and

iii. 0.25 percent for loans of at least $2 million.

The Act authorizes the Administrator to establish limits on agent fees. The Administrator, in consultation with the Secretary, determined that the agent fee limits set forth above are reasonable based upon the application req uirements and the fees that lenders receive for making PPP loans.

Yes. A PPP loan may be sold on the secondary market after the loan is fully disbursed. A PPP loan may be sold on the secondary market at a premium or a discount to par value. SBA will issue guidance regarding any advance purchase for loans sold in the secondary market.

Yes. A lender may request that the SBA purchase the expected forgiveness amount of a PPP loan or pool of PPP loans at the end of week seven of the covered period. The expected forgiveness amount is the amount of loan principal the lender reasonably expects the borrower to expend on payroll costs, covered mortgage interest, covered rent, and covered utility payments during the eight week period after loan disbursement. At least 75 percent of the expected forgiveness amount shall be for payroll costs, as provided in 2.o. To submit a PPP loan or pool of PPP loans for advance purchase, a lender shall submit a report requesting advance purchase with the expected forgiveness amount to the SBA. The report shall include: the Paycheck Protection Program Application Form (SBA Form 2483) and any supporting documentation submitted with such application; the Paycheck Protection Program Lender's Application for 7(a) Loan Guaranty (SBA Form 2484) and any supporting documentation; a detailed narrative explaining the assumptions used in determining the expected forgiveness amount, the basis for those assumptions, alternative assumptions considered, and why alternative assumptions were not used; any information obtained from the borrower since the loan was disbursed that the lender used to determine the expected forgiveness amount, which should include the same documentation required to apply for loan forgiveness such as payroll tax filings, cancelled checks, and other payment documentation; and any additional information the Administrator may require to determine whether the expected forgiveness amount is reasonable. The Administrator, in consultation with the Secretary, determined that seven weeks is the minimum period of time necessary for a lender to reasonably determine the expected forgiveness amount for a PPP loan or pool of PPP loans, since the PPP is a new program and the likelihood that many borrowers will be new clients of the lender. The expected forgiveness amount may not exceed the total amount of principal on the PPP loan or pool of loans. The Administrator will purchase the expected forgiveness amount of the PPP loan(s) within 15 days of the date on which the Administrator receives a complete report that demonstrates that the expected forgiveness amount is indeed reasonable.

All loans guaranteed by the SBA pursuant to the CARES Act will be made consistent with constitutional, statutory, and regulatory protections for religious liberty, including the First Amendment to the Constitution, the Religious Freedom Restoration Act, 42 U.S.C. 2000bb-1 and bb-3, and SBA regulation at 13 CFR 113.3-1h, which provides that nothing in SBA nondiscrimination regulations shall apply to a religious corporation, association, educational institution or society with respect to the membership or the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution or society of its religious activities. SBA intends to promptly issue additional guidance with regard to religious liberty protections under this program.

SBA may provide further guidance, if needed, through SBA notices and a program guide which will be posted on SBA's website at www.sba.gov.

Questions on the Paycheck Protection Program 7(a) Loans may be directed to the Lender Relations Specialist in the local SBA Field Office. The local SBA Field Office may be found at https://www.sba.gov/tools/local-assistance/districtoffices.

This interim final rule is economically significant for the purposes of Executive Orders 12866 and 13563. SBA, however, is proceeding under the emergency provision at Executive Order 12866 Section 6(a)(3)(D) based on the need to move expeditiously to mitigate the current economic conditions arising from the COVID-19 emergency. This rule's designation under Executive Order 13771 will be informed by public comment.

This rule is necessary to implement Sections 1102 and 1106 of the CARES Act in order to provide economic relief to small businesses nationwide adversely impacted under the COVID-19 Emergency Declaration. We anticipate that this rule will result in substantial benefits to small businesses, their employees, and the communities they serve. However, we lack data to estimate the effects of this rule.

SBA has drafted this rule, to the extent practicable, in accordance with the standards set forth in section 3(a) and 3(b)(2) of Executive Order 12988, to minimize litigation, eliminate ambiguity, and reduce burden. The rule has no preemptive or retroactive effect.

SBA has determined that this rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various layers of government. Therefore, SBA has determined that this rule has no federalism implications warranting preparation of a federalism assessment.

SBA has determined that this rule will impose recordkeeping or reporting requirements under the Paperwork Reduction Act (“PRA”). SBA has obtained emergency approval under OMB Control Number 3245-0407 for the information collection (IC) required to implement the program described above. This IC consists of Form 2483 (Paycheck Protection Program Application Form), SBA Form 2484 (Paycheck Protection Program Lender's Application for 7(a) Loan Guaranty), and SBA Form 3506 (CARES Act Section 1102 Lender Agreement), and SBA Form 3507 (CARES Act Section 1102 Lender Agreement—Non-Bank and Non-Insured Depository Institution Lender). The collection is approved for use until September 30, 2020.

The Regulatory Flexibility Act (RFA) generally requires that when an agency issues a proposed rule, or a final rule pursuant to section 553(b) of the APA or another law, the agency must prepare a regulatory flexibility analysis that meets the requirements of the RFA and publish such analysis in the Federal Register . 5 U.S.C. 603, 604. Specifically, the RFA normally requires agencies to describe the impact of a rulemaking on small entities by providing a regulatory impact analysis. Such analysis must address the consideration of regulatory options that would lessen the economic effect of the rule on small entities. The RFA defines a “small entity” as (1) a proprietary firm meeting the size standards of the Small Business Administration (SBA); (2) a nonprofit organization that is not dominant in its field; or (3) a small government jurisdiction with a population of less than 50,000. 5 U.S.C. 601(3)-(6). Except for such small government jurisdictions, neither State nor local governments are “small entities.” Similarly, for purposes of the RFA, individual persons are not small entities.

The requirement to conduct a regulatory impact analysis does not apply if the head of the agency “certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” 5 U.S.C. 605(b). The agency must, however, publish the certification in the Federal Register at the time of publication of the rule, “along with a statement providing the factual basis for such certification.” If the agency head has not waived the requirements for a regulatory flexibility analysis in accordance with the RFA's waiver provision, and no other RFA exception applies, the agency must prepare the regulatory flexibility analysis and publish it in the Federal Register at the time of promulgation or, if the rule is promulgated in response to an emergency that makes timely compliance impracticable, within 180 days of publication of the final rule. 5 U.S.C. 604(a), 608(b).

Rules that are exempt from notice and comment are also exempt from the RFA requirements, including conducting a regulatory flexibility analysis, when among other things the agency for good cause finds that notice and public procedure are impracticable, unnecessary, or contrary to the public interest. Small Business Administration's Office of Advocacy guide: How to Comply with the Regulatory Flexibility Ac. Ch.1. p.9. Accordingly, SBA is not required to conduct a regulatory flexibility analysis.

Authority: 15 U.S.C. 636(a)(36); Coronavirus Aid, Relief, and Economic Security Act, Public Law 116-136, Section 1114.

I. Background Information

On March 13, 2020, President Trump declared the ongoing Coronavirus Disease 2019 (COVID-19) pandemic of sufficient severity and magnitude to warrant an emergency declaration for all States, territories, and the District of Columbia. With the COVID-19 emergency, many small businesses nationwide are experiencing economic hardship as a direct result of the Federal, State, tribal, and local public health measures that are being taken to minimize the public's exposure to the virus. These measures, some of which are government-mandated, are being implemented nationwide and include the closures of restaurants, bars, and gyms. In addition, based on the advice of public health officials, other measures, such as keeping a safe distance from others or even stay-at-home orders, are being implemented, resulting in a dramatic decrease in economic activity as the public avoids malls, retail stores, and other businesses.

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act or the Act) (Pub. L. 116-136) to provide emergency assistance and health care response for individuals, families, and businesses affected by the coronavirus pandemic. The Small Business Administration (SBA) received funding and authority through the Act to modify existing loan programs and establish a new loan program to assist small businesses nationwide adversely impacted by the COVID-19 emergency.

Section 1102 of the Act temporarily permits SBA to guarantee 100 percent of 7(a) loans under a new program titled the “Paycheck Protection Program.” Section 1106 of the Act provides for forgiveness of up to the full principal amount of qualifying loans guaranteed under the Paycheck Protection Program. On April 2, 2020, SBA issued an interim final rule (the Initial Rule) announcing the implementation of sections 1102 and 1106 of the Act. A more detailed discussion of sections 1102 and 1106 of the Act is found in section III of the Initial Rule.

This interim final rule supplements the Initial Rule with additional guidance regarding the application of certain affiliate rules applicable to SBA's implementation of sections 1102 and 1106 of the Act and requests public comment.

The intent of the Act is that SBA provide relief to America's small businesses expeditiously. This intent, along with the dramatic decrease in economic activity nationwide, provides good cause for SBA to dispense with the 30-day delayed effective date provided in the Administrative Procedure Act (5 U.S.C. 553(b)(3)(B)). Specifically, small businesses need to be informed on how to apply for a loan and the terms of the loan under section 1102 of the Act as soon as possible because the last day to apply for and receive a loan is June 30, 2020. The immediate effective date of this interim final rule will benefit small businesses so that they can immediately apply for the loan with a better understanding of loan terms and conditions. This interim final rule is effective without advance notice and public comment because section 1114 of the Act authorizes SBA to issue regulations to implement Title 1 of the Act without regard to notice requirements. This rule is being issued to allow for immediate implementation of this program. Although this interim final rule is effective immediately, comments are solicited from interested members of the public on all aspects of the interim final rule. These comments must be submitted on or before May 15, 2020. The SBA will consider these comments and the need for making any revisions as a result of these comments.

The CARES Act was enacted to provide immediate assistance to individuals, families, and organizations affected by the COVID-19 emergency. Among the provisions contained in the CARES Act are provisions authorizing SBA to temporarily guarantee loans under the Paycheck Protection Program (PPP). Loans under the PPP will be 100 percent guaranteed by SBA, and the full principal amount of the loans may qualify for loan forgiveness. Additional information about the PPP is available in the Initial Rule.

In most cases, a borrower will be considered together with its affiliates for purposes of determining eligibility for the PPP. 1 Under SBA rules, entities may be considered affiliates based on factors including stock ownership, overlapping management, 2 and identity of interest. 13 CFR 121.301.

An entity generally is eligible for the PPP if it, combined with its affiliates, is a small business as defined in section 3 of the Small Business Act (15 U.S.C. 632), or (1) has 500 or fewer employees whose principal place of residence is in the United States or is a business that operates in a certain industry and meets applicable SBA employee-based size standards for that industry, and (2) is a tax-exempt nonprofit organization described in section 501(c)(3) of the Internal Revenue Code (IRC), a tax-exempt veterans organization described in section 501(c)(19) of the IRC, a Tribal business concern described in section 31(b)(2)(C) of the Small Business Act, or any other business concern. Prior to the Act, the nonprofit organizations listed above were not eligible for SBA Business Loan Programs under section 7(a) of the Small Business Act; only for-profit small business concerns were eligible. The Act made such nonprofit organizations not only eligible for the PPP, but also subjected them to SBA's affiliation rules. Specifically, section 1102 of the Act provides that the provisions applicable to affiliations under 13 CFR 121.103 apply with respect to nonprofit organizations and veterans organizations in the same manner as with respect to small business concerns. However, the detailed affiliation standards contained in § 121.103 currently do not apply to PPP borrowers, because § 121.103(a)(8) provides that applicants in SBA's Business Loan Programs (which include the PPP) are subject to the affiliation rule contained in 13 CFR 121.301.

This rule exempts otherwise qualified faith-based organizations from the SBA's affiliation rules, including those set forth in 13 CFR part 121, where the application of the affiliation rules would substantially burden those organizations' religious exercise. This exemption is required, or at a minimum authorized, by the Religious Freedom Restoration Act (RFRA) (Pub. L. 103-141), which provides that the “[g]overnment shall not substantially burden a person's exercise of religion” unless the government can “demonstrate[] that application of the burden” to the person is both “in furtherance of a compelling governmental interest” and “the least restrictive means of furthering that compelling governmental interest.” 42 U.S.C. 2000bb-1.

A substantial burden under RFRA includes both government action that compels a person to violate his sincere religious beliefs or suffer a penalty, see, e.g., Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 726 (2014), and the imposition of a substantial burden through “indirect” measures. Thomas v. Review Bd. of Ind. Emp. Sec. Div., 450 U.S. 707, 717-18 (1981). Notably, the government imposes a substantial burden on religious exercise when it “conditions receipt of an important benefit upon conduct proscribed by a religious faith, or where it denies such a benefit because of conduct mandated by religious belief.” Id. at 718. For example, in Sherbert v. Verner, 374 U.S. 398 (1963), a State denied the plaintiff unemployment benefits because she would not work on Saturday, the Sabbath of her faith. Id. at 400-01. Even though no “sanctions directly compel[led]” her to work on Saturday, the Supreme Court held that the State's denial of benefits “puts the same kind of burden upon the free exercise of religion as would a fine imposed against [her] for her Saturday worship.” Id. at 404. As the Court observed, the State's framework “forces her to choose between following the precepts of her religion and forfeiting benefits, on the one hand, and abandoning one of the precepts of her religion in order to accept work, on the other hand.” Id. Consistent with these precedents, RFRA explicitly contemplates that “the denial of government funding, benefits, or exemptions” may violate its protections. 42 U.S.C. 2000bb-4.

SBA is aware of the existence of faith-based organizations that would qualify for relief under the CARES Act but for their affiliation with other entities as an aspect of their religious practice. Supreme Court precedent has long recognized that the organizational structure of faith-based entities may itself be a matter of significant religious concern and that faith-based organizations are therefore guaranteed the “power to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine.” Kedroff v. St. Nicholas Cathedral of Russian Orthodox Church in N. Am., 344 U.S. 94, 116 (1952). Moreover, an assessment of the extent to which questions concerning religious polity rest upon theological or other religious foundations presents particular difficulties, for the First Amendment “forbids civil courts” from “the interpretation of particular church doctrines and the importance of those doctrines to the religion.” Presbyterian Church v. Mary Elizabeth Blue Hull Mem'l Presbyterian Church, 393 U.S. 440, 450 (1969). A number of faith-based organizations understand their affiliation with other religious entities as a part of their exercise of religion, as a mandate given the “hierarchical or connectional” structure of their church, Jones v. Wolf, 443 U.S. 595, 597 (1979), or as an expression of their sincere religious belief. Cf. 1 W. Cole Durham & Robert Smith, Religious Organizations and the Law section 8.19 (Westlaw rev. ed. 2017) (“Religious organizations, such as parishes or mission centers, normally tend to choose the civil-property-holding structures that most closely mirror their own ecclesiology or polity.”). Either affiliation decision falls within the definition of “religious exercise” that applies to RFRA, which “includes any exercise of religion, whether or not compelled by, or central to, a system of religious belief.” See 42 U.S.C. 2000cc-5(7)(A); 2000bb-2(4) (“the term `exercise of religion' means religious exercise, as defined in section 2000cc-5 of this title”).

As applied to these faith-based organizations, the affiliation rules would impose a substantial burden. The affiliation rules would deny an important benefit (participation in a program for which they would otherwise be eligible under the CARES Act) because of the exercise of sincere religious belief (affiliation with other religious entities).

The Administrator has also concluded that she does not have a compelling interest in denying emergency assistance to faith-based organizations that are facing the same economic hardship to which the CARES Act responded and who would be eligible for PPP but for their faith-based organizational and associational decisions. This conclusion is reinforced by the fact that the affiliation rules already contain numerous exemptions, see generally 13 CFR 121.103(b), ranging from “[b]usiness concerns owned and controlled by Indian Tribes, Alaska Native Corporations, [and] Native Hawaiian Organizations,” id. § 121.103(b)(2)(i) to “member shareholders of a small agricultural cooperative.” Id. § 121.103(b)(7). In light of these exemptions, it is difficult to maintain that denying relief to these faith-based organizations is necessary to further a compelling government interest, let alone the least restrictive means of doing so. See Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 547 (1993) (“[A] law cannot be regarded as protecting an interest of the highest order when it leaves appreciable damage to that supposedly vital interest unprohibited.”) (cleaned up); Gonzales v. O Centro Espirita Beneficiente Uniao do Vegetal, 546 U.S. 418, 433 (2006) (applying same principle under RFRA). SBA accordingly must exempt faith-based organizations that would otherwise be disqualified from the PPP based on features of those organizations' affiliations that are a matter of sincere religious exercise as defined in 42 U.S.C. 2000bb-2.

This action is also supported by 15 U.S.C. 634(b)(6), which authorizes the Administrator to “make such rules and regulations as he deems necessary to carry out the authority vested in him by or pursuant to this chapter.” As relevant here, the CARES Act expanded eligibility for the covered loans during the covered period for nonprofit organizations that employ not more than 500 employees or, if applicable, the size standard in number of employees established by the Administrator for the industry in which the nonprofit organization operates. 15 U.S.C. 636(a)(36)(D)(i). That expansion posed unique concerns for the Administrator, who is tasked with applying the “provisions applicable to affiliations under section 121.103 of title 13, Code of Federal Regulations, or any successor thereto, . . . with respect to a nonprofit organization and a veterans organizations in the same manner as with respect to a small business concern.” Id. 636(a)(36)(D)(vi). Although these rules may easily be applied to faith-based organizations in many cases, their application to certain faith-based organizations presents significant challenges, in particular because of the large number of faith-based organizations who would now be eligible for the PPP but for their religious exercise.

As discussed above, carrying the affiliation rules over to all faith-based organizations without modification would raise concerns under RFRA. Moreover, application of the affiliation rules, which, for example, provide for assessment of whether one faith-based organization “controls or has the power to control” another organization, 13 CFR 121.103(a)(1), could involve SBA in questions of church governance concerning “the allocation of power within a (hierarchical) church so as to decide . . . religious law (governing church polity),” in violation of the First Amendment. Serbian E. Orthodox Diocese for the U.S.A. & Canada v. Milivojevich, 426 U.S. 696, 709 (1979) (internal quotation marks omitted)). Finally, affiliation rules developed in the context of for-profit enterprises present significant administrative difficulties where faith-based organizations are concerned. For example, “the notion of corporate subsidiarity or affiliation in civil law is entirely foreign to the polity of religious organizations,” and there is a significant risk that civil authorities will “mischaracterize or misinterpret the polity of a religious body.” 1 W. Cole Durham & Robert Smith, Religious Organizations and the Law sections 8.19, 8.21 (discussing examples of judicial mischaracterizations). Consistent with these concerns, it is also notable that other areas of federal law approach issues analogous to affiliation differently for religious organizations. See, e.g., 26 U.S.C. 512 (b)(12).

For these reasons, in addition to the RFRA mandate, the Administrator has determined that it is appropriate to exercise the authority granted under 15 U.S.C. 634(b)(6) to exempt from application of SBA's affiliation rules faith-based organizations that would otherwise be disqualified from participation in PPP because of affiliations that are a part of their religious exercise.

Accordingly, the SBA's affiliation rules, including those set forth in 13 CFR part 121, do not apply to the relationship of any church, convention or association of churches, or other faith-based organization or entity to any other person, group, organization, or entity that is based on a sincere religious teaching or belief or otherwise constitutes a part of the exercise of religion. This includes any relationship to a parent or subsidiary and other applicable aspects of organizational structure or form. A faith-based organization seeking loans under this program may rely on a reasonable, good faith interpretation in determining whether its relationship to any other person, group, organization, or entity is exempt from the affiliation rules under this provision, and SBA will not assess, and will not require participating lenders to assess, the reasonableness of the faith-based organization's determination.

SBA may provide further guidance, if needed, through SBA notices and a program guide which will be posted on SBA's website at www.sba.gov.

Questions on the Paycheck Protection Program 7(a) Loans may be directed to the Lender Relations Specialist in the local SBA Field Office. The local SBA Field Office may be found at https://www.sba.gov/tools/local-assistance/districtoffices.

This interim final rule is economically significant for the purposes of Executive Orders 12866 and 13563, and is considered a major rule under the Congressional Review Act. SBA, however, is proceeding under the emergency provision at Executive Order 12866 Section 6(a)(3)(D) based on the need to move expeditiously to mitigate the current economic conditions arising from the COVID-19 emergency. This rule's designation under Executive Order 13771 will be informed by public comment.

SBA has drafted this rule, to the extent practicable, in accordance with the standards set forth in section 3(a) and 3(b)(2) of Executive Order 12988, to minimize litigation, eliminate ambiguity, and reduce burden. The rule has no preemptive or retroactive effect.

SBA has determined that this rule will not have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various layers of government. Therefore, SBA has determined that this rule has no federalism implications warranting preparation of a federalism assessment.

SBA has determined that this rule will impose recordkeeping or reporting requirements under the Paperwork Reduction Act (“PRA”). SBA has obtained emergency approval under OMB Control Number 3245-0407 for the information collection (IC) required to implement the program described above. This IC consists of Form 2483 (Paycheck Protection Program Application Form) and SBA Form 2484 (Paycheck Protection Program Lender's Application for 7(a) Loan Guaranty) SBA Form 3506 (CARES Act Section 1102 Lender Agreement), and SBA Form 3507 (CARES Act Section 1102 Lender Agreement—Non-Bank and Non-Insured Depository Institution Lender). The collection is approved for use until October 31, 2020.

The Regulatory Flexibility Act (RFA) generally requires that when an agency issues a proposed rule, or a final rule pursuant to section 553(b) of the APA or another law, the agency must prepare a regulatory flexibility analysis that meets the requirements of the RFA and publish such analysis in the Federal Register . 5 U.S.C. 603, 604. Specifically, the RFA normally requires agencies to describe the impact of a rulemaking on small entities by providing a regulatory impact analysis. Such analysis must address the consideration of regulatory options that would lessen the economic effect of the rule on small entities. The RFA defines a “small entity” as (1) a proprietary firm meeting the size standards of the Small Business Administration (SBA); (2) a nonprofit organization that is not dominant in its field; or (3) a small government jurisdiction with a population of less than 50,000. 5 U.S.C. 601(3)-(6). Except for such small government jurisdictions, neither State nor local governments are “small entities.” Similarly, for purposes of the RFA, individual persons are not small entities.

The requirement to conduct a regulatory impact analysis does not apply if the head of the agency “certifies that the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” 5 U.S.C. 605(b). The agency must, however, publish the certification in the Federal Register at the time of publication of the rule, “along with a statement providing the factual basis for such certification.” If the agency head has not waived the requirements for a regulatory flexibility analysis in accordance with the RFA's waiver provision, and no other RFA exception applies, the agency must prepare the regulatory flexibility analysis and publish it in the Federal Register at the time of promulgation or, if the rule is promulgated in response to an emergency that makes timely compliance impracticable, within 180 days of publication of the final rule. 5 U.S.C. 604(a), 608(b).

Rules that are exempt from notice and comment are also exempt from the RFA requirements, including conducting a regulatory flexibility analysis, when among other things the agency for good cause finds that notice and public procedure are impracticable, unnecessary, or contrary to the public interest. SBA Office of Advocacy guide: How to Comply with the Regulatory Flexibility Ac. Ch.1. p.9. Accordingly, SBA is not required to conduct a regulatory flexibility analysis.

For the reasons stated in the preamble, the Small Business Administration amends 13 CFR part 121 as set forth below:

DEA is extremely concerned with the recent increase in the illicit manufacture and distribution of fentanyl. Therefore, on September 13, 2019, DEA published a Notice of Proposed Rulemaking (NPRM) to control the precursor chemicals benzylfentanyl and 4-anilinopiperdine as list I chemicals. 84 FR 48314. This rulemaking finalizes that NPRM.

This action subjects handlers of benzylfentanyl and 4-anilinopiperidine to the chemical regulatory provisions of the CSA and its implementing regulations. This rulemaking does not establish a threshold for domestic and international transactions of benzylfentanyl or 4-anilinopiperidine. As such, all transactions involving benzylfentanyl or 4-anilinopiperidine are regulated, regardless of transaction size or quantity, and are subject to control under the CSA. In addition, chemical mixtures containing benzylfentanyl or 4-anilinopiperidine are not exempt from regulatory requirements at any concentration. Therefore, all transactions of chemical mixtures containing any quantity of benzylfentanyl or 4-anilinopiperidine are regulated pursuant to the CSA.

The CSA gives the Attorney General the authority to specify, by regulation, chemicals as list I or list II chemicals. 21 U.S.C. 802(34) and (35). A “list I chemical” is a chemical that is used in manufacturing a controlled substance in violation of Title II of the CSA and is important to the manufacture of the controlled substance. 21 U.S.C. 802(34). A “list II chemical” is a chemical (other than a list I chemical) that is used in manufacturing a controlled substance in violation of Title II of the CSA. 21 U.S.C. 802(35). The current list of all listed chemicals is published at 21 CFR 1310.02. Pursuant to 28 CFR 0.100(b), the Attorney General has delegated his authority to designate list I and list II chemicals to the Administrator of the Drug Enforcement Administration.

DEA is extremely concerned with the increase in the illicit manufacture and distribution of fentanyl. Fentanyl is a synthetic opioid and was first synthesized in Belgium in the late 1950's. Fentanyl is controlled in schedule II of the CSA due to its high potential for abuse and dependence, and accepted medical use in treatment in the United States. Fentanyl was introduced into medical practice and is approved for medical practitioners in the United States to prescribe lawfully for anesthesia and analgesia. Due to its pharmacological effects, fentanyl can serve as a substitute for heroin, oxycodone, and other opioids in opioid dependent individuals.

The unlawful trafficking of fentanyl in the United States continues to pose an imminent hazard to the public safety. Since 2012, fentanyl has shown a dramatic increase in the illicit drug supply as a single substance, in mixtures with other illicit drugs ( i.e., heroin, cocaine, and methamphetamine), or in forms that mimic pharmaceutical preparations including prescription opiates and benzodiazepines.

DEA has noted a significant increase in overdoses and overdose fatalities from fentanyl in the United States in recent years. A recent report  1 from the Centers for Disease Control and Prevention (CDC) highlights this trend. According to this report, of the 41,430 drug overdose deaths occurring in the United States in 2011, 1,662 (4.0 percent) involved fentanyl. 2 Of the 63,632 drug overdose deaths in 2016, 18,335 (28.8 percent) involved fentanyl. This was the first time that fentanyl was reported in more drug related fatalities than heroin.

The increase of drug overdose deaths continued into 2017. According to the CDC, 3 there were 70,237 drug overdose deaths in the United States in 2017, an increase from the 63,632 overdose deaths recorded in 2016. Of the 70,237 overdose deaths in 2017, 47,600 (67.8 percent) involved an opioid. Deaths involving prescription opioids and heroin remained stable from 2016 to 2017; synthetic opioid overdose deaths (other than methadone), which include deaths involving fentanyl, increased 45.2 percent from 19,413 deaths in 2016 to 28,466 deaths in 2017.

The increase in overdose fatalities involving fentanyl coincides with a dramatic increase of law enforcement encounters of fentanyl. According to the National Forensic Laboratory Information System (NFLIS), 4 submissions to forensic laboratories that contained fentanyl increased exponentially beginning in 2012: 694 in 2012, 1,044 in 2013, 5,537 in 2014, 15,455 in 2015, 37,294 in 2016, 61,382 in 2017, and 70,453 in 2018.

Fentanyl is not a naturally occurring substance. As such, the manufacture of fentanyl requires it to be produced through synthetic organic chemistry. Synthetic organic chemistry is the process in which an organic molecule is created through a series of chemical reactions, which involve precursor chemicals. In the early 2000's, a synthetic process, commonly known as the Siegfried method, was utilized to manufacture fentanyl in several domestic and foreign clandestine laboratories. 72 FR 20039. At that time, DEA had determined that two primary synthesis routes ( i.e., the Janssen method and the Siegfried method) were being used to produce fentanyl clandestinely, although it believed the Janssen synthesis route to be difficult to perform and beyond the rudimentary skills of most clandestine laboratory operators. The Siegfried synthetic route involves two important intermediates, N -phenethyl-4-piperidone (NPP) and 4-anilino- N -phenethylpiperidine (ANPP). DEA controlled NPP on April 23, 2007, as a list I chemical through an interim rule (72 FR 20039), which was finalized on July 25, 2008. 73 FR 43355. ANPP was controlled as a schedule II immediate precursor to fentanyl on August 30, 2010. 75 FR 37295.

In 2017, the United Nations Commission on Narcotic Drugs placed NPP and ANPP in Table I of the Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 (1988 Convention) in response to the international reintroduction of fentanyl on the illicit drug market. As such, member states of the United Nations were required to control these precursor chemicals at the national level. In addition, the People's Republic of China controlled NPP and ANPP on February 1, 2018.

Recent law enforcement information indicates that illicit manufacturers of fentanyl may utilize synthetic routes other than the Siegfried method in response to international controls placed on NPP and ANPP. The Janssen method, previously thought to be beyond the skills of most clandestine laboratory operators, is now used with the precursor chemical benzylfentanyl, and other synthetic routes use the precursor chemical 4-anilinopiperidine. DEA is not aware of any legitimate uses of benzylfentanyl or 4-anilinopiperidine other than in the synthesis of fentanyl.

The original published synthetic pathway to fentanyl, known as the Janssen method, does not involve NPP or ANPP as a chemical precursor. This synthetic pathway involves the important precursors, benzylfentanyl and norfentanyl. Benzylfentanyl is converted to N -phenyl- N -(piperidin-4-yl)propionamide (norfentanyl), the immediate precursor in this synthetic pathway, in one chemical reaction. Norfentanyl is then subjected to one simple chemical reaction to complete the synthesis of fentanyl.

According to DEA forensic laboratory data, the Janssen method was confirmed as the synthetic route used in 94 percent of 85 fentanyl drug exhibits that were evaluated to determine the synthetic route. These exhibits were seized in 2018. In addition, the number of law enforcement encounters of benzylfentanyl has increased in 2017 and 2018, which coincides with the international control that placed NPP and ANPP in Table I of the 1988 Convention in 2017.

According to NFLIS, there was one identification of benzylfentanyl in 2016; however, benzylfentanyl was identified in 195 reports in 2017 and 237 reports in 2018. Since DEA is not aware of any legitimate uses of benzylfentanyl other than potentially in the synthesis of fentanyl, it is believed that these law enforcement encounters indicate a change in the synthetic route to the Janssen method by some clandestine manufacturers in efforts to evade chemical regulations on NPP and ANPP.

DEA has determined that benzylfentanyl is commercially available from both domestic and foreign chemical suppliers. DEA is aware of at least five domestic suppliers and three foreign suppliers in China, two suppliers in Canada, and one supplier in the United Kingdom. Benzylfentanyl is attractive to illicit manufacturers due to the lack of chemical regulations on this substance, it is readily available from chemical suppliers, and it can be converted to the immediate precursor, norfentanyl, in a one-step chemical reaction.

In addition to the Janssen and Siegfried methods, clandestine manufacturers are using other methods to synthesize fentanyl. 4-Anilinopiperidine can serve as an alternative precursor chemical to NPP in the synthesis of ANPP, albeit through a different synthetic process. 4-Anilinopiperidine has been marketed as a replacement to ANPP as a precursor chemical used in the illicit manufacture of fentanyl by foreign chemical suppliers. This is believed to be in response to international controls placed on NPP and ANPP. Although marketed as a replacement for ANPP, DEA understands that 4-anilinopiperidine is not a direct replacement for ANPP in the synthesis of fentanyl. DEA is not aware of any legitimate uses of 4-anilinopiperidine other than potentially in the synthesis of fentanyl. In contrast to NPP, where two chemical reaction steps are required to synthesize ANPP, 4-anilinopiperidine can be converted to ANPP in a one-step chemical reaction. The resulting ANPP can then be used as the immediate precursor chemical in the illicit manufacture of the schedule II controlled substance, fentanyl. ANPP was controlled in schedule II of the CSA as of August 30, 2010 for this reason. 75 FR 37295 (June 29, 2010).

4-Anilinopiperidine has been imported and identified in law enforcement seizures in the United States. In addition to domestic encounters, DEA is aware of international encounters of 4-anilinopiperidine beginning as early as July 2018. The International Narcotics Control Board of the United Nations reported 32 international transactions of 4-anilinopiperidine through the International Operations on Novel Psychoactive Substances Communication System (IONICS)  5 reporting system. These identifications, totaling approximately 30 kg, were reported by Mexico as the destination country. In addition, 4-anilinopiperidine was identified at a clandestine laboratory located in Mexico, which was involved in the illicit manufacture of fentanyl.

These recent law enforcement encounters of 4-anilinopiperidine coincide with the placement of NPP and ANPP in Table I of the 1988 Convention, and the February 1, 2018, control of NPP and ANPP in the People's Republic of China. The international encounters of 4-anilinopiperidine at ports of entry in Mexico indicate a change in illicit fentanyl manufacturing methods in efforts to evade international controls on NPP and ANPP.

DEA determined that 4-anilinopiperidine is commercially available from both domestic and foreign chemical suppliers. DEA has identified 38 domestic suppliers and 28 foreign suppliers of 4-anilinopiperidine from Canada (3), China (11), Germany (3), Hong Kong (1), India (1), Latvia (1), Lithuania (1), Switzerland (2), and the United Kingdom (5). 4-Anilinopiperidine is attractive to illicit manufacturers due to the lack of chemical controls on this substance, it is readily available from chemical suppliers, and it can easily be converted to the schedule II immediate precursor, ANPP, which can subsequently be converted to fentanyl.

The CSA, specifically 21 U.S.C. 802(34), 21 U.S.C. 802(35), and its implementing regulations at 21 CFR 1310.02(c), provide the Attorney General with the authority to specify, by regulation, additional precursor or essential chemicals as “listed chemicals” if they are used in the manufacture of controlled substances in violation of the CSA. Recent law enforcement encounters indicate benzylfentanyl and 4-anilinopiperidine are being used in the illicit manufacture of the schedule II controlled substance fentanyl.

On September 13, 2019, DEA published an NPRM proposing control of benzylfentanyl and 4-anilinopiperidine as list I chemicals due to their use in clandestine laboratories to illicitly manufacture the schedule II controlled substance fentanyl. This rulemaking finalizes the control of benzylfentanyl and 4-anilinopiperidine as list I chemicals because DEA finds that benzylfentanyl and 4-anilinopiperidine are used in the manufacture of the controlled substance fentanyl, and are important to the manufacture of the controlled substance fentanyl because they cannot be replaced by other chemicals in their respective synthetic pathways in the manufacture of fentanyl.

As part of the NPRM published on September 13, 2019 (84 FR 48314), DEA specifically solicited comment on any possible legitimate uses of benzylfentanyl and 4-anilinopiperidine unrelated to fentanyl production (including industrial uses) in order to assess the potential commercial impact of controlling benzylfentanyl and 4-anilinopiperidine. DEA had searched information in the public domain for legitimate uses of these two chemicals, and had not documented a legitimate commercial use for benzylfentanyl or 4-anilinopiperidine other than as intermediary chemicals in the production of fentanyl. DEA sought, however, to document any unpublicized use(s) and other proprietary use(s) of benzylfentanyl and 4-anilinopiperidine that are not in the public domain. Therefore, DEA solicited comment on the uses of benzylfentanyl and 4-anilinopiperidine in the legitimate marketplace.

DEA solicited input from all potentially affected parties regarding: (1) The types of legitimate industries using benzylfentanyl and 4-anilinopiperidine; (2) the legitimate uses of benzylfentanyl and 4-anilinopiperidine, if any; (3) the size of the domestic market for benzylfentanyl and 4-anilinopiperidine; (4) the number of manufacturers of benzylfentanyl and 4-anilinopiperidine; (5) the number of distributors of benzylfentanyl and 4-anilinopiperidine; (6) the level of import and export of benzylfentanyl and 4-anilinopiperidine; (7) the potential burden these proposed regulatory controls of benzylfentanyl and 4-anilinopiperidine may have on any legitimate commercial activities; (8) the potential number of individuals/firms that may be adversely affected by these proposed regulatory controls (particularly with respect to the impact on small businesses); and (9) any other information on the manner of manufacturing, distribution, consumption, storage, disposal, and uses of benzylfentanyl and 4-anilinopiperidine by industry and others. DEA invited all interested parties to provide any information on any legitimate uses of benzylfentanyl and 4-anilinopiperidine in industry, commerce, academia, research and development, or other applications. DEA sought both quantitative and qualitative data. DEA did not receive any responses to these specific solicitations.

In response to the NPRM, DEA received four comments. Two commenters were in support of controlling benzylfentanyl and 4-anilinopiperidine as list I chemicals. One commenter expressed concern over a regulatory mechanism that would place benzylfentanyl and 4-anilinopiperidine in schedule I of the CSA. One commenter submitted a response that was outside the scope of the action.

Comment: One commenter stated that this rule will be an integral part of domestic regulation of illegal fentanyl by decreasing manufacture of illegal fentanyl. This commenter also expressed concern about the ease of obtaining, and importing illegal fentanyl and chemical precursors into the United States.

DEA response: DEA agrees that this rule is an important step in decreasing illicit fentanyl production and making it more difficult to obtain and import these chemical precursors into the United States. This rule provides law enforcement a tool to identify and investigate illicit fentanyl manufacturers. As list I chemicals, imports and exports of benzylfentanyl and 4-anilinopiperidine will be regulated per 21 CFR part 1313.

Comment: One commenter stated that benzylfentanyl and 4-anilinopiperidine must be regulated as list I chemicals to reduce illicit access to fentanyl. The commenter expressed concern about uncontrolled illicit production of fentanyl and the recent outcomes of fentanyl abuse in the United States.

DEA response: DEA agrees with the comment in support of controlling benzylfentanyl and 4-anilinopiperidine as list I chemicals. DEA is concerned with the abuse of illicitly manufactured fentanyl in the United States and believes this rule will help to control the illicit manufacture of fentanyl.

Comment: One commenter expressed concern about a regulatory mechanism that places benzylfentanyl and 4-anilinopiperidine in schedule I. The commenter proposed a separate regulatory avenue for precursors which submits them to scrutiny, study, and regulation in order to protect the public without resorting to the use of schedule I regulation. The commenter further stated that schedule I designations have a long history of hampering research and advancement of medicine in the United States.

DEA response: This rule does not place benzylfentanyl and 4-anilinopiperidine in schedule I of the CSA. The CSA currently provides a mechanism to regulate precursor chemicals separately, which is the authority utilized in this rule. 21 U.S.C. 802(34). Since benzylfentanyl and 4-anilinopiperidine are not subject to schedule I regulations, the comment is unrelated to this action. However, DEA supports and encourages legitimate research on schedule I controlled substances.

Comment: One commenter stated that controlling benzylfentanyl and 4-anilinopiperidine as list I chemicals is a bad idea and recommended keeping the government from micromanaging our economy and hobbling future production for emergencies. The commenter also stated that fentanyl gas can be used in hostage situations.

DEA response: DEA is concerned with the abuse of illicitly manufactured fentanyl in the United States and believes this rule will help to control the illicit manufacture of fentanyl. DEA believes that this rule will not have a significant impact on the economy or on legitimate manufacture of fentanyl. DEA also believes any potential cost as a result of this regulation is minimal. The comment regarding hostage situations is outside the scope of this rule.

Under this rulemaking, chemical mixtures containing benzylfentanyl or 4-anilinopiperidine shall not be exempt from regulatory requirements at any concentration, unless an application for exemption of a chemical mixture is submitted by a benzylfentanyl or 4-anilinopiperidine manufacturer and the application is reviewed and accepted by DEA under 21 CFR 1310.13 (Exemption by Application Process). The control of chemical mixtures containing any amount of benzylfentanyl or 4-anilinopiperidine is necessary to prevent the illicit extraction, isolation, and use of benzylfentanyl or 4-anilinopiperidine to manufacture fentanyl. This rule modifies the Table of Concentration Limits in 21 CFR 1310.12(c) to reflect the fact that chemical mixtures containing any amount of benzylfentanyl or 4-anilinopiperidine are subject to the CSA chemical control provisions.

DEA has implemented an application process to exempt mixtures from the requirements of the CSA and its implementing regulations. 21 CFR 1310.13. Under the application process, manufacturers may submit an application for exemption for those mixtures that do not qualify for automatic exemption. Exemption status can be granted if DEA determines that the mixture is formulated in such a way that it cannot be easily used in the illicit production of a controlled substance and that the listed chemical cannot be readily recovered ( i.e., it meets the conditions in 21 U.S.C. 802(39)(A)(vi)).

This final rule subjects benzylfentanyl and 4-anilinopiperidine to all of the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, importing, and exporting of list I chemicals. Upon the effective date of this final rule, persons handling benzylfentanyl or 4-anilinopiperidine, including regulated chemical mixtures containing benzylfentanyl or 4-anilinopiperidine, shall be required to comply with list I chemical regulations, including the following:

1. Registration. Any person who manufactures, distributes, imports, or exports benzylfentanyl or 4-anilinopiperidine, or proposes to engage in the manufacture, distribution, importation, or exportation of benzylfentanyl or 4-anilinopiperidine, must obtain a registration pursuant to 21 U.S.C. 822, 823, 957, and 958. Regulations describing registration for list I chemical handlers are set forth in 21 CFR part 1309.

Upon the effective date of this final rule, any person manufacturing, distributing, importing, or exporting benzylfentanyl or 4-anilinopiperidine, or a chemical mixture containing benzylfentanyl or 4-anilinopiperidine, will become subject to the registration requirement under the CSA. However, DEA recognizes that it is not possible for persons who are subject to the registration requirement to immediately complete and submit an application for registration and for DEA to immediately issue registrations for those activities. Therefore, to allow continued legitimate commerce in benzylfentanyl and 4-anilinopiperidine, DEA is establishing in 21 CFR 1310.09, a temporary exemption from the registration requirement for persons desiring to engage in activities with benzylfentanyl or 4-anilinopiperidine, provided that DEA receives a properly completed application for registration or exemption of a chemical mixture on or before May 15, 2020. The temporary exemption for such persons will remain in effect until DEA takes final action on their application for registration or application for exemption of a chemical mixture.

The temporary exemption applies solely to the registration requirement; all other chemical control requirements, including recordkeeping and reporting, would become effective on the effective date of this final rule. This is necessary because a delay in regulating these transactions could result in increased diversion of chemicals desirable to drug traffickers.

Additionally, the temporary exemption for registration does not suspend applicable Federal criminal laws relating to benzylfentanyl or 4-anilinopiperidine, nor does it supersede State or local laws or regulations. All handlers of benzylfentanyl or 4-anilinopiperidine must comply with applicable State and local requirements in addition to the CSA regulatory controls.

2. Records and Reports. Every DEA registrant must maintain records and submit reports with respect to benzylfentanyl and 4-anilinopiperidine pursuant to 21 U.S.C. 830 and in accordance with 21 CFR part 1310. Pursuant to 21 CFR 1310.04, a record must be kept for two years after the date of a transaction involving a listed chemical, provided the transaction is a regulated transaction.

Each regulated bulk manufacturer of a listed chemical must submit manufacturing, inventory, and use data on an annual basis. 21 CFR 1310.05(d). Existing standard industry reports containing the required information are acceptable, provided the information is separate or readily retrievable from the report.

3. Importation and Exportation. All importation and exportation of benzylfentanyl or 4-anilinopiperidine must be done in compliance with 21 U.S.C. 957, 958, and 971 and in accordance with 21 CFR part 1313.

4. Security. All applicants and registrants must provide effective controls against theft and diversion of list I chemicals in accordance with 21 CFR 1309.71-1309.73.

5. Administrative Inspection. Places, including factories, warehouses, or other establishments and conveyances, where registrants or other regulated persons may lawfully hold, manufacture, distribute, or otherwise dispose of a list I chemical or where records relating to those activities are maintained, are controlled premises as defined in 21 U.S.C. 880(a) and 21 CFR 1316.02(c). The CSA allows for administrative inspections of these controlled premises as provided in 21 CFR part 1316, subpart A. 21 U.S.C. 880.

6. Liability. Any activity involving benzylfentanyl or 4-anilinopiperidine not authorized by, or in violation of, the CSA, would be unlawful, and would subject the person to administrative, civil, and/or criminal action.

This final rulemaking, which adds benzylfentanyl and 4-anilinopiperidine as list I chemicals, was developed in accordance with the principles of Executive Orders 12866, 13563, and 13771. Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health, and safety effects; distributive impacts; and equity). Executive Order 13563 is supplemental to and reaffirms the principles, structures, and definitions governing regulatory review as established in Executive Order 12866. Executive Order 12866 classifies a “significant regulatory action,” requiring review by the Office of Management and Budget (OMB), as any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. DEA has determined that this rule is not a “significant regulatory action” under Executive Order 12866, section 3(f).

Executive Order 13771 requires an agency, unless prohibited by law, to identify at least two existing regulations to be repealed when the agency publicly proposes for notice and comment or otherwise promulgates a new regulation. 6 In furtherance of this requirement, Executive Order 13771 requires that the new incremental costs associated with new regulations, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations. 7 According to guidance provided by OMB, the requirements of Executive Order 13771 only apply to each new “significant regulatory action that . . . imposes costs.”  8 This rule is not an Executive Order 13771 regulatory action because this rule is not significant under Executive Order 12866.

This final rulemaking subjects benzylfentanyl and 4-anilinopiperidine to all of the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, importing, and exporting of list I chemicals. Benzylfentanyl and 4-anilinopiperidine are used in, and are important to, the illicit manufacture of the schedule II controlled substance fentanyl. The distribution of illicitly manufactured fentanyl has caused an unprecedented outbreak of thousands of fentanyl-related overdoses in the United States in recent years.

DEA has searched information in the public domain for any legitimate uses of these two chemicals, and has not documented a use for benzylfentanyl or 4-anilinopiperidine other than as intermediary chemicals in the production of fentanyl. Based on the review of import and quota information for NPP, ANPP, and fentanyl, DEA believes the vast majority of, if not all, legitimate pharmaceutical fentanyl is produced via a synthetic route involving NPP and ANPP as intermediaries, not benzylfentanyl (and norfentanyl) or 4-anilinopiperidine. The quantities of NPP and ANPP indicated in import and quota documents generally correspond with the quantities of legitimate pharmaceutical fentanyl produced in the United States. Therefore, DEA concludes the vast majority of, if not all, benzylfentanyl or 4-anilinopiperidine is used for the manufacturing of illicit fentanyl.

DEA cannot rule out the possibility that minimal quantities of benzylfentanyl or 4-anilinopiperidine are used for the manufacturing of legitimate pharmaceutical fentanyl. However, if there are any quantities of benzylfentanyl or 4-anilinopiperidine used for the manufacturing of legitimate pharmaceutical fentanyl, the quantities are believed to be small and economically insignificant. DEA did not receive comment to the contrary.

DEA evaluated the costs and benefits of this action.

DEA believes the market for benzylfentanyl or 4-anilinopiperidine for the legitimate manufacturing of pharmaceutical fentanyl is minimal. As stated above, the only use for benzylfentanyl and 4-anilinopiperidine of which DEA is aware is as intermediaries for the manufacturing of fentanyl. Any manufacturer, distributor, importer, or exporter of benzylfentanyl or 4-anilinopiperidine for the production of legitimate pharmaceutical fentanyl, if they exist at all, will incur costs upon the effective date of this final rule. The primary costs associated with this rule would be the annual registration fees for scheduled drugs or list I chemicals ($3,047 for manufacturers and $1,523 for distributors, importers, and exporters). However, any manufacturer that uses benzylfentanyl or 4-anilinopiperidine for legitimate pharmaceutical fentanyl production would already be registered with DEA and have all security and other handling processes in place because of the controls already in place on fentanyl, resulting in minimal cost to those entities. While different forms of handling the scheduled substance versus the list I chemical (distribution of fentanyl vs exporting benzylfentanyl) could require a separate registration for the different handling of the substances, if an entity is already registered to handle, manufacture, import, or export a scheduled substance, the entity would not need an additional registration for the list I chemical, provided it is handling the list I chemical in the same manner that it is registered for with the scheduled substance, or as a coincident activity permitted by 21 CFR 1309.21. Even with the possibility of these additional registrations, DEA believes that the cost will be minimal.

DEA has identified 38 domestic suppliers of benzylfentanyl, 4-anilinopiperidine, or both. Only one is registered to handle list I chemicals, the remaining 37 are not registered with DEA to handle list I chemicals. It is difficult to estimate how much benzylfentanyl and 4-anilinopiperidine is distributed by these suppliers. It is common for chemical distributors to have items on their catalog while not actually having any material level of sales. Based on the review of import and quota information for NPP, ANPP, and fentanyl, where the quantities of NPP and ANPP imported and manufactured generally correspond with the quantities of fentanyl produced, DEA believes any quantity of sales from these distributors for legitimate pharmaceutical fentanyl manufacturing is minimal. Upon the effective date of this final rule, suppliers for the legitimate use of benzylfentanyl or 4-anilinopiperidine are expected to choose the least-cost option, and stop selling the minimal quantities, if any, of benzylfentanyl or 4-anilinopiperidine, rather than incur the registration cost. Because DEA believes the quantities of benzylfentanyl or 4-anilinopiperidine supplied for the legitimate manufacturing of pharmaceutical fentanyl are minimal, DEA estimates that the cost of foregone sales is minimal; and thus, the cost of this rule is minimal. DEA requested public comment regarding this estimate; however, no public comment was received during the notice and comment period.

This analysis excludes consideration of any economic impact to those businesses that facilitate the manufacturing and distribution of benzylfentanyl or 4-anilinopiperidine for the production of manufacturing illicit fentanyl. As a law enforcement organization and as a matter of principle, DEA believes considering the economic utility of facilitating the manufacture of illicit fentanyl would be improper.

Controlling benzylfentanyl and 4-anilinopiperidine is expected to prevent, curtail, and limit the unlawful manufacture and distribution of the controlled substance, fentanyl. As list I chemicals, handling of benzylfentanyl and 4-anilinopiperidine requires registration with DEA and various controls and monitoring as required by the CSA. This rule is also expected to assist preventing the possible theft or diversion of benzylfentanyl and 4-anilinopiperidine from any legitimate firms. DEA also believes control is necessary to prevent unscrupulous chemists from synthesizing benzylfentanyl and 4-anilinopiperidine and selling it (as an unregulated material) through the internet and other channels, to individuals who may wish to acquire unregulated intermediary chemicals for the purpose of manufacturing illicit fentanyl.

In summary, DEA conducted a qualitative analysis of costs and benefits. DEA believes this action will minimize the diversion of benzylfentanyl and 4-anilinopiperidine. DEA believes the market for benzylfentanyl and 4-anilinopiperidine for the legitimate manufacturing of pharmaceutical fentanyl is minimal. Therefore, any potential cost as a result of this regulation is minimal.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

This rulemaking does not have federalism implications warranting the application of Executive Order 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government.

This rule does not have tribal implications warranting the application of Executive Order 13175. This rule does not have substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.

The Acting Administrator, in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612), has reviewed this rule and by approving it certifies that it will not have a significant economic impact on a substantial number of small entities. As discussed above, benzylfentanyl and 4-anilinopiperidine shall be subject to all of the regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, importing, and exporting of list I chemicals upon the effective date of this rulemaking. Benzylfentanyl and 4-anilinopiperidine are used in, and are important to, the illicit manufacture of the schedule II controlled substance fentanyl. The distribution of illicitly manufactured fentanyl has caused an unprecedented outbreak of thousands of fentanyl-related overdoses in the United States in recent years. DEA has not identified any legitimate industrial use for benzylfentanyl and 4-anilinopiperidine, other than their role as intermediary chemicals in the production of fentanyl. However, DEA believes the vast majority, if not all, of legitimate pharmaceutical fentanyl is produced via a synthetic route involving NPP and ANPP as intermediaries, not benzylfentanyl (and norfentanyl) or 4-anilinopiperidine. The review of import and quota information for fentanyl, ANPP, and NPP supports this belief. Therefore, DEA believes the vast majority, if not all, of benzylfentanyl or 4-anilinopiperidine is used for the illicit manufacturing of fentanyl. DEA did not receive comment to the contrary. The primary costs associated with this rule are the annual registration fees ($3,047 for manufacturers and $1,523 for distributors, importers, and exporters). Additionally, any manufacturer that uses benzylfentanyl or 4-anilinopiperidine for legitimate pharmaceutical fentanyl production would already be registered with DEA and have all security and other handling processes in place, resulting in minimal cost. DEA has identified 38 domestic suppliers of benzylfentanyl, 4-anilinopiperidine, or both, 37 of which are not registered with DEA to handle list I chemicals. All 37 non-registered domestic suppliers are affected, of which 35 (94.5%, based on Small Business Administration size standard for chemical distributors and Statistics of U.S. Business data) are estimated to be small entities. It is impossible to know how much benzylfentanyl or 4-anilinopiperidine is distributed by these suppliers. It is common for chemical distributors to have items on their catalog while not actually having any material level of sales. Based on the review of import and quota information for NPP, ANPP, and fentanyl, where the quantities of NPP and ANPP imported and manufactured generally correspond with the quantities of fentanyl produced, DEA believes any quantity of sales from these distributors for legitimate pharmaceutical fentanyl manufacturing is minimal. DEA did not receive comment to the contrary. Therefore, DEA estimates the cost of this rule on any affected small entity is minimal. DEA did not receive public comment regarding this estimate. Based on these factors, DEA projects that this rule will not result in a significant economic impact on a substantial number of small entities.

On the basis of information contained in the “Regulatory Flexibility Act” section above, DEA has determined and certifies pursuant to the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1501 et seq., that this action would not result in any Federal mandate that may result “in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted for inflation) in any one year * * *.” Therefore, neither a Small Government Agency Plan nor any other action is required under provisions of UMRA.

This action does not impose a new collection of information requirement under the Paperwork Reduction Act, 44 U.S.C. 3501-3521. This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

For the reasons set out above, DEA amends 21 CFR part 1310 as follows:

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

PBGC uses the interest assumptions in appendix B to part 4022 (“Lump Sum Interest Rates for PBGC Payments”) to determine whether a benefit is payable as a lump sum and to determine the amount to pay. Because some private-sector pension plans use these interest rates to determine lump sum amounts payable to plan participants (if the resulting lump sum is larger than the amount required under section 417(e)(3) of the Internal Revenue Code and section 205(g)(3) of ERISA), these rates are also provided in appendix C to part 4022 (“Lump Sum Interest Rates for Private-Sector Payments”).

This final rule updates appendices B and C of the benefit payments regulation to provide the rates for May 2020 measurement dates.

The May 2020 lump sum interest assumptions will be 0.50 percent for the period during which a benefit is (or is assumed to be) in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for April 2020, these assumptions represent an increase of 0.50 percent in the immediate rate and are otherwise unchanged.

PBGC updates appendices B and C each month. PBGC has determined that notice and public comment on this amendment are impracticable and contrary to the public interest. This finding is based on the need to issue new interest assumptions promptly so that they are available for plans that rely on our publication of them each month to calculate lump sum benefit amounts.

Because of the need to provide immediate guidance for the payment of benefits under plans with valuation dates during May 2020, PBGC finds that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication.

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

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

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

Table of Contents I. Background A. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 B. Calculation of Adjustments C. Effect of the Rule in Federal Program States and on Indian Lands D. Effect of the Rule on Approved State Programs II. Procedural Matters A. Regulatory Planning and Review (Executive Orders 12866, 13563, and 13771) B. Regulatory Flexibility Act C. Small Business Regulatory Enforcement Fairness Act D. Unfunded Mandates Reform Act E. Takings (Executive Order 12630) F. Federalism (Executive Order 13132) G. Civil Justice Reform (Executive Order 12988) H. Consultation With Indian Tribes (Executive Order 13175 and Departmental Policy) I. Paperwork Reduction Act J. National Environmental Policy Act K. Effects on Energy Supply, Distribution, and Use (Executive Order 13211) L. Clarity of This Regulation M. Data Quality Act N. Administrative Procedure Act I. Background A. The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015

Section 518 of SMCRA, 30 U.S.C. 1268, authorizes the Secretary of the Interior to assess civil monetary penalties (CMPs) for violations of SMCRA. The Office of Surface Mining Reclamation and Enforcement's (OSMRE) regulations implementing the CMP provisions of section 518 are located in 30 CFR parts 723, 724, 845, and 846. We are adjusting CMPs in six sections—30 CFR 723.14, 723.15, 724.14, 845.14, 845.15, and 846.14.

On November 2, 2015, the President signed the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (Sec. 701 of Pub. L. 114-74) (2015 Act) into law. The 2015 Act, which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990 (codified as amended at 28 U.S.C. 2461 note), requires Federal agencies to promulgate rules to adjust the level of CMPs to account for inflation. The 2015 Act required an initial “catch-up” adjustment. OSMRE published the initial adjustment in the Federal Register on July 8, 2016 (81 FR 44535), and the adjustment took effect on August 1, 2016. The 2015 Act also requires agencies to publish annual inflation adjustments in the Federal Register no later than January 15 of each year. These adjustments are aimed at maintaining the deterrent effect of civil penalties and furthering the policy goals of the statutes that authorize the penalties. Further, the 2015 Act provides that agencies must adjust civil monetary penalties “notwithstanding section 553 of [the Administrative Procedure Act].” Therefore, the public procedure that the Administrative Procedure Act generally requires for rulemaking—notice, an opportunity for comment, and a delay in the effective date—is not required for agencies to issue regulations implementing the annual CMP adjustments. See also December 16, 2019, Memorandum for the Heads of Executive Departments and Agencies (M-20-05), from Russell T. Vought, Acting Director, Office of Management and Budget, Implementation of Penalty Inflation Adjustments for 2020, Pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (OMB Memorandum).

Pursuant to SMCRA and the 2015 Act, this final rule reflects the statutorily required CMP adjustments as follows:

In the chart above, there are no numbers listed in the “Points” column relative to 30 CFR 723.15(b), 30 CFR 724.14(b), 30 CFR 845.15(b), and 30 CFR 846.14(b) because those regulatory provisions do not set forth numbers of points. For those provisions, the current regulations only set forth the dollar amounts shown in the chart in the “Current Penalty Dollar Amounts” column; the adjusted amounts, which we are adopting in this rule, are shown in the “Adjusted Penalty Dollar Amounts” column.

OMB issued guidance on the 2020 annual adjustments for inflation. See OMB Memorandum (December 16, 2019). The OMB Memorandum notes that the 1990 Act defines “civil monetary penalty” as “any penalty, fine, or other sanction that . . . is for a specific monetary amount as provided by Federal law; or . . . has a maximum amount provided for by Federal law; and . . . is assessed or enforced by an agency pursuant to Federal law; and . . . is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts . . . .” It further instructs that agencies “are to adjust `the maximum civil monetary penalty or the range of minimum and maximum civil monetary penalties, as applicable, for each civil monetary penalty by the cost-of-living adjustment.' ” See December 16, 2019 OMB Memorandum. The 1990 Act, as amended by the 2015 Act, and the OMB Memorandum specify that the annual inflation adjustments are based on the percent change between the Consumer Price Index for all Urban Consumers (the CPI-U) published by the Department of Labor for the month of October in the year of the previous adjustment, and the October CPI-U for the preceding year. The recent OMB Memorandum specified that the cost-of-living adjustment multiplier for 2020, not seasonally adjusted, is 1.01764 (the October 2019 CPI-U (257.346) divided by the October 2018 CPI-U (252.885) = 1.01764). OSMRE used this guidance to identify applicable CMPs and calculate the required inflation adjustments. The 1990 Act, as amended by the 2015 Act, specifies that any resulting increases in CMPs must be rounded according to a stated rounding formula and that the increased CMPs apply only to violations that occur after the date the increase takes effect.

Generally, OSMRE assigns points to a violation as described in 30 CFR 723.13 and 845.13. The CMP owed is based on the number of points received, ranging from one point to 70 points. For example, under our existing regulations in 30 CFR 845.14, a violation totaling 70 points would amount to a $16,815 CMP. To adjust this amount, we multiply $16,815 by the 2020 inflation factor of 1.01764, resulting in a raw adjusted amount of $17,111.62. Because the 2015 Act requires us to round any increase in the CMP amount to the nearest dollar, in this case a violation of 70 points would amount to a new CMP of $17,112. Pursuant to the 2015 Act, the increases in this final rule apply to CMPs assessed after the date the increases take effect, even if the associated violation predates the applicable increase.

OSMRE directly regulates surface coal mining and reclamation operations within a State or on Tribal lands if the State or Tribe does not obtain its own approved program pursuant to sections 503 or 710(j) of SMCRA, 30 U.S.C. 1253 or 1300(j). The increases in CMPs contained in this rule will apply to the following Federal program States: Arizona, California, Georgia, Idaho, Massachusetts, Michigan, North Carolina, Oregon, Rhode Island, South Dakota, Tennessee, and Washington. The Federal programs for those States appear at 30 CFR parts 903, 905, 910, 912, 921, 922, 933, 937, 939, 941, 942, and 947, respectively. Under 30 CFR 750.18, the increase in CMPs also applies to Indian lands under the Federal program for Indian lands.

As a result of litigation, see In re Permanent Surface Mining Regulation Litigation, No. 79-1144, Mem. Op. (D.D.C. May 16, 1980), 19 Env't. Rep. Cas. (BNA) 1477, State regulatory programs are not required to mirror all of the penalty provisions of our regulations. Thus, this rule has no effect on CMPs in States with SMCRA primacy.

Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget will review all significant rules. OIRA has determined that agency regulations exclusively implementing the annual inflation adjustments are not significant, provided they are consistent with the OMB Memorandum. Because this final rule exclusively implements the annual inflation adjustments, is consistent with the OMB Memorandum, and will have an annual impact of less than $100 million, it is not significant under Executive Order 12866.

Executive Order 13563 reaffirms the principles of Executive Order 12866 while calling for improvements in the Nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The Executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. Executive Order 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements, to the extent permitted by statute.

Executive Order 13771 of January 30, 2017, directs Federal agencies to reduce the regulatory burden on regulated entities and control regulatory costs. Executive Order 13771, however, applies only to significant regulatory actions, as defined in Section 3(f) of Executive Order 12866. As mentioned above, OIRA has determined that agency regulations exclusively implementing the annual adjustments are generally not significant regulatory actions under Executive Order 12866, provided they are consistent with the OMB Memorandum ( see OMB Memorandum, M-20-05, at 3) and have an annual impact of less than $100 million. Because this final rule exclusively implements the annual adjustments, is consistent with the OMB Memorandum, and will have an annual impact less than $100 million, Executive Order 13771 does not apply to this rulemaking.

The Regulatory Flexibility Act (RFA) requires an agency to prepare a regulatory flexibility analysis for all rules unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The RFA applies only to rules for which an agency is required to first publish a proposed rule. See 5 U.S.C. 603(a) and 604(a). The Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires agencies to adjust civil penalties annually for inflation “notwithstanding section 553 [of the Administrative Procedure Act].” Thus, no proposed rule will be published, and the RFA does not apply to this rulemaking.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:

(a) Will not have an annual effect on the economy of $100 million or more.

(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

(c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises.

This rule does not impose an unfunded mandate on State, local, or Tribal governments, or the private sector, of more than $100 million per year. The rule does not have a significant or unique effect on State, local, or Tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

This rule does not effect a taking of private property or otherwise have takings implications under Executive Order 12630. A takings implication assessment is not required.

Under the criteria in section 1 of Executive Order 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. A federalism summary impact statement is not required.

This rule complies with the requirements of Executive Order 12988. Specifically, this rule:

(a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and

(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.

The Department of the Interior strives to strengthen its government-to-government relationship with Tribes through a commitment to consultation with Tribes and recognition of their right to self-governance and Tribal sovereignty. We have evaluated this rule under the Department's consultation policy, under Departmental Manual Part 512, Chapters 4 and 5, and under the criteria in Executive Order 13175 and have determined that it has no substantial direct effects on Federally-recognized Tribes or Alaska Native Claims Settlement Act (ANCSA) Corporations, and that consultation under the Department's Tribal consultation policy is not required.

This rule does not contain information collection requirements, and a submission to the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ) is not required. We may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number.

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because the rule is covered by a categorical exclusion. This rule is excluded from the requirement to prepare a detailed statement because it is a regulation of an administrative nature. (For further information see 43 CFR 46.210(i).) We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.

This rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required.

We are required by Executive Orders 12866 (section 1(b)(12)), 12988 (section 3(b)(1)(B)), and 13563 (section 1(a)), and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

If you believe that we have not met these requirements in issuing this final rule, please contact the individual listed in the FOR FURTHER INFORMATION CONTACT section. Your comments should be as specific as possible in order to help us determine whether any future revisions to the rule are necessary. For example, you should tell us the numbers of the sections or paragraphs that you find unclear, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

In developing this rule, we did not conduct or use a study, experiment, or survey requiring peer review under the Data Quality Act (Pub. L. 106-554).

We are issuing this final rule without prior public notice or opportunity for public comment. As discussed above, the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 requires agencies to publish adjusted penalties annually. Under the 2015 Act, the public procedure that the Administrative Procedure Act generally requires—notice, an opportunity for comment, and a delay in the effective date—is not required for agencies to issue regulations implementing the annual adjustments required by the 2015 Act. See OMB Memorandum, M-20-05, at 4.

For the reasons given in the preamble, the Department of the Interior amends 30 CFR parts 723, 724, 845, and 846 as set forth below.

I. Background and Overview

On October 1, 2015, EPA promulgated revised primary and secondary NAAQS for ozone, revising the 8-hour ozone standards from 0.075 parts per million (ppm) to a new more protective level of 0.070 ppm. See 80 FR 65292 (October 26, 2015). Pursuant to section 110(a)(1) of the CAA, states are required to submit SIP revisions meeting the applicable requirements of section 110(a)(2) within three years after promulgation of a new or revised NAAQS or within such shorter period as EPA may prescribe. Section 110(a)(2) requires states to address basic SIP elements such as requirements for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the NAAQS. This particular type of SIP is commonly referred to as an “infrastructure SIP.” States were required to submit such SIP revisions for the 2015 8-hour ozone NAAQS to EPA no later than October 1, 2018. 1

As explained in a notice of proposed rulemaking (NPRM) published on February 11, 2020 (85 FR 7695), Georgia and North Carolina cite to several regulations  2 3 to demonstrate that their respective SIPs meet the PSD-related requirements of sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) (Prong 3), 4 and 110(a)(2)(J). Each of these requirements are met if the state's implementation plan includes a PSD program that meets current Federal requirements, however, Georgia's and North Carolina's SIP-approved PSD programs do not contain or reference the most recent version of 40 CFR part 51, appendix W, Guideline on Air Quality Models. 5 Therefore, on November 14, 2019, and December 16, 2019, GA EPD and NC DEQ, respectively, submitted commitment letters to EPA requesting conditional approval of the PSD-related requirements of sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) (Prong 3), and 110(a)(2)(J) of the aforementioned infrastructure SIP revisions. In these letters, Georgia and North Carolina commit to satisfying the PSD program requirements of sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) (Prong 3), and 110(a)(2)(J) for the 2015 8-hour ozone NAAQS by revising their PSD regulations to reflect the most recent version of appendix W and submitting SIP revisions containing these revised rules within one year of final conditional approval.

If Georgia and North Carolina meet their respective commitments within one year of the final conditional approval, the PSD-related program requirements of sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) (Prong 3), and 110(a)(2)(J) of the conditionally approved infrastructure SIP submissions will remain a part of the SIP until EPA takes final action approving or disapproving the new SIP revision(s). However, if Georgia or North Carolina fails to submit these revisions within the one-year timeframe, the conditional approval will automatically become a disapproval one year from EPA's final conditional approval and EPA will provide notification of the disapproval of these requirements. If the conditional approval is converted to a disapproval, the final disapproval triggers the FIP requirement under CAA section 110(c).

In the NPRM published on February 11, 2020, EPA proposed to conditionally approve Georgia and North Carolina's SIP submissions provided on September 24, 2018, and September 27, 2018, for the applicable infrastructure SIP requirements of the 2015 8-hour ozone NAAQS. The NPRM provides additional detail regarding the background and rationale for EPA's action. Comments on the NPRM were due on or before March 12, 2020. EPA received one comment in support of this action and did not receive any adverse comments.

EPA is taking final action to conditionally approve the portions of Georgia's and North Carolina's September 24, 2018, and September 27, 2018, 2015 8-hour ozone infrastructure SIP submission, respectively, that address the PSD-related requirements of CAA sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) (Prong 3), and 110(a)(2)(J). All other outstanding applicable infrastructure requirements for this SIP submission have been or will be addressed in separate rulemakings.

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

• Are not significant regulatory actions 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);

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 15, 2020. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

Title 40 CFR part 52 is amended as follows:

Preamble acronyms and abbreviations. The EPA uses multiple acronyms and terms in this preamble. While this list may not be exhaustive, to ease the reading of this preamble and for reference purposes, the EPA defines the following terms and acronyms here:

In the 2012 MATS rulemaking, the EPA established one subcategory of coal-fired EGUs for purposes of regulating acid gas HAP emissions. The Agency specifically rejected a request from some commenters for a separate acid gas HAP standard for all coal refuse-fired EGUs because we determined that the emissions of such HAP from some units combusting coal refuse were among the best performing sources for acid gas HAP as determined consistent with CAA section 112(d)(3). The EPA has reevaluated the data available when the 2012 MATS rule was established, in addition to new data generated since promulgation of that rule, and we now recognize that there are differences in the acid gas HAP emissions from EGUs firing EBCR as compared to EGUs firing other types of coal, including those firing types of coal refuse other than EBCR. Specifically, the EPA recognizes that there are differences between anthracite coal refuse and bituminous coal refuse, and that the type of fuel used leads to differences in the acid gas HAP emissions from EGUs firing those respective fuels. In the February 7, 2019 Proposal (84 FR 2670), the EPA explained that these differences in acid gas HAP emissions support the establishment of a subcategory for such sources and solicited comment on the need to establish a subcategory of certain existing EGUs firing EBCR for acid gas HAP emissions and on potential emissions standards for affected EGUs in that subcategory. After reviewing public comments and other available information, the EPA concludes that such a subcategory is warranted. Thus, this final action establishes a subcategory of certain existing EBCR-fired EGUs for emissions of hydrochloric acid (HCl) and sulfur dioxide (SO 2 )—both of which serve as a surrogate for all acid gas HAP emitted from EGUs under MATS. Under CAA section 112(d)(1), the EPA has the discretion to “. . . distinguish among classes, types, and sizes of sources within a category or subcategory in establishing . . . standards.” Further, when separate subcategories are established, the minimum level of control, referred to as the “maximum achievable control technology (MACT) floor,” is determined separately for each subcategory.

The EPA has determined that emission limits reflecting a more stringent ( i.e., “beyond-the-floor”) level of control than the MACT floor level of control are appropriate for the new subcategory. The SO 2 emission standard (set in pounds (lb) SO 2 /million British thermal units (MMBtu)) that the EPA is promulgating here is an emission rate that the currently operating EBCR-fired EGUs have demonstrated an ability to achieve based on their emissions data and considering cost and non-air quality related environmental factors. 1 The EPA does not have corresponding emissions data for HCl  2 or output-based emissions of SO 2 ( i.e., lb SO 2 /megawatt-hour (MWh)) and, therefore, the EPA has established the final beyond-the-floor standards for SO 2 (in lb/MWh) and for HCl (in both lb/MMBtu and lb/MWh) consistent with the percentage reduction in the SO 2 lb/MMBtu emissions rate between the MACT floor value and the beyond-the-floor value. This action establishes the following emission limits for the subcategory of existing EBCR-fired EGUs:  3

A further description of what the EPA is promulgating here, the rationale for the final decisions, and discussion of the key comments received regarding the need for such a subcategory and the acid gas HAP emission standards appropriate for that subcategory are provided in section III of this preamble.

Categories and entities potentially regulated by this action are shown in Table 1 of this preamble.

Table 1 of this preamble is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be affected by the final action for the source category listed. Specifically, entities that own and/or operate certain existing EBCR-fired EGUs subject to the NESHAP for Coal- and Oil-Fired EGUs (40 CFR part 63, subpart UUUUU) will be affected by this final action. To determine whether your facility is affected, you should examine the applicability criteria in the NESHAP for Coal- and Oil-Fired EGUs and the amendatory text of this final action. If you have any questions regarding the applicability of any aspect of this NESHAP, please contact the appropriate person listed in the preceding FOR FURTHER INFORMATION CONTACT section of this preamble.

In addition to being available in the docket, an electronic copy of this action is available on the internet. Following signature by the EPA Administrator, the EPA will post a copy of this final action at https://www.epa.gov/mats/regulatory-actions-final-mercury-and-air-toxics-standards-mats-power-plants. Following publication in the Federal Register , the EPA will post the Federal Register version of the final rule and key technical documents at this same website.

Under CAA section 307(b)(1), judicial review of this final action is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit (hereafter referred to as “the D.C. Circuit,” or “the Court”) by June 15, 2020. Under CAA section 307(b)(2), the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by the EPA to enforce the requirements.

Section 307(d)(7)(B) of the CAA further provides that only an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review. This section also provides a mechanism for the EPA to reconsider the rule if the person raising an objection can demonstrate to the Administrator that it was impracticable to raise such objection within the period for public comment or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule. Any person seeking to make such a demonstration should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, WJC South Building, 1200 Pennsylvania Ave. NW, Washington, DC 20460, with a copy to both the person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT section of this preamble, and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave. NW, Washington, DC 20460.

The NESHAP for Coal- and Oil-Fired EGUs (commonly referred to as MATS) was proposed on May 3, 2011 (76 FR 24976), under title 40, part 63, subpart UUUUU. In that proposal, the EPA proposed a single acid gas HAP emission standard for all coal-fired power plants—using HCl as a surrogate for all acid gas HAP. The EPA also proposed an alternative equivalent emission standard for SO 2 as a surrogate for all the acid gas HAP for coal-fired EGUs with FGD systems and SO 2 CEMS installed and operational at all times. SO 2 is also an acidic gas—though not a HAP—and the controls used for SO 2 emission reduction are also effective at controlling the acid gas HAP emitted by EGUs. Further, most, if not all, affected EGUs already measure and report SO 2 emissions as a requirement of the EPA's Acid Rain Program, 40 CFR part 75.

The Appalachian Region Independent Power Producers Association (ARIPPA)  5 submitted comments on the 2011 MATS proposal arguing that the characteristics of all coal refuse made achievement of the standard too costly for its members and requested that the EPA create a subcategory for all EGUs burning coal refuse. The EPA determined that there was no basis to create such a subcategory and, on February 16, 2012 (77 FR 9304), finalized emission standards for both HCl and SO 2 that apply to all coal-fired EGUs, including the coal refuse-fired units subject to this final action. ARIPPA, along with other petitioners, challenged the EPA's determination in the D.C. Circuit, and the Court upheld the final rule. White Stallion Energy Center, et. al. v. EPA, 748 F.3d 1222, 1249-50 (D.C. Cir. 2014).

In addition to challenging the final rule, ARIPPA also petitioned the EPA for reconsideration, again requesting a subcategory for the acid gas standards for facilities combusting all types of coal refuse. The EPA denied the Petition for Reconsideration on grounds that ARIPPA had adequate opportunity to comment on the ability of coal refuse-fired facilities to comply with the final standard. Furthermore, the EPA determined that the ARIPPA petition did not present any new information to support a change in the previous determination regarding the appropriateness of a subcategory for the acid gas HAP standard. ARIPPA subsequently sought judicial review of the denial of the Petition for Reconsideration. ARIPPA v. EPA, No. 15-1180 (D.C. Cir.). 6 In petitioner's briefs, ARIPPA claimed that the EPA had misunderstood its reconsideration petition and pointed to a distinction between the control of acid gas HAP emissions from units burning anthracite coal refuse and those burning bituminous coal refuse. See Industry Pets. Br. at 35-36, ARIPPA, No. 15-1180 (D.C. Cir. filed December 6, 2016). The EPA disagrees with the assertion that the Agency misunderstood the basis for ARIPPA's reconsideration petition as we could not find a single statement in the rulemaking record that clearly or even vaguely requested a separate acid gas HAP limit based on the distinction between anthracite coal refuse and bituminous coal refuse. Nonetheless, the EPA has since looked at emissions data from these sources and observed that there are differences in emissions based on the type of coal refuse used, and, consequently, recognized the differences in the 2019 Proposal. 7 Specifically, the EPA recognized that there are differences between anthracite coal refuse and bituminous coal refuse, and that the type of fuel used leads to differences in the acid gas HAP emissions from EGUs firing those respective fuels. The Agency also noted that the differences may impact the unit's ability to control those emissions. Additionally, the EPA recognized that there are differences between western bituminous coal refuse and subbituminous coal refuse as compared to EBCR and announced in the 2019 Proposal that it was considering establishing a subcategory of certain existing EGUs firing EBCR for emissions of acid gas HAP. The proposal solicited comment on whether establishment of such a subcategory is needed and on the acid gas HAP emission standards that would be established if such a subcategory was created. 84 FR 2700-2703.

After considering and evaluating comments and data provided in response to the solicitation of comment on establishing a subcategory of certain existing EGUs firing EBCR for emissions of acid gas HAP in its 2019 Proposal, the EPA is taking final action to establish a separate subcategory to address the issue. In this final action, the EPA is establishing a subcategory of certain existing EGUs firing EBCR for emissions of acid gas HAP and acid gas HAP emission standards that are applicable to the new subcategory. The final rule defines Eastern bituminous coal refuse (EBCR) to mean coal refuse generated from the mining of bituminous coal in Pennsylvania and West Virginia. The final rule defines Unit designed for eastern bituminous coal refuse (EBCR) subcategory to mean any existing ( i.e., construction was commenced on or before May 3, 2011) coal-fired EGU with a net summer capacity of no greater than 150 megawatts (MW) that is designed to burn and that is burning 75 percent or more (by heat input) eastern bituminous coal refuse on a 12-month rolling average basis. The 150 MW net summer capacity level selected by the EPA limits the universe of sources that are in the new subcategory to only those EGUs identified in Table 2 to this preamble. Net summer capacity is the maximum output that generating equipment can supply to system load at the time of summer peak demand (period of June 1 through September 30). The 75 percent or more heat input requirement selected by the EPA is consistent with the Federal Energy Regulatory Commission requirement that to be considered a qualifying facility under the Public Utility Regulatory Policies Act, as the EGUs in the new subcategory are, at least 75 percent of the heat content must come from coal refuse.

The existing EBCR-fired EGUs in the new subcategory being established in this action are listed in Table 2 of this preamble and the applicable HCl and SO 2 limits being finalized in this action are provided in Table 3 of this preamble. Four existing EBCR-fired EGUs at two facilities that were listed in the 2019 Proposal as being part of the new subcategory, if established, are no longer part of the subcategory. The EPA has learned that the Cambria facility shut down in June 2019, and the facility and surrounding property have been sold to a salvage company which plans to dismantle the facility over time. 8 The EPA has also learned that the Morgantown Energy facility will be transformed into a natural gas-fueled steam-only production facility, and the closure of the waste coal-fired boilers and complete transformation of the facility to steam-only production are expected to be completed by early to mid-2020. 9

Sources in the new subcategory must comply with the applicable HCl or SO 2 requirements no later than the effective date of this final rule. Sources must demonstrate that compliance has been achieved, by conducting the required performance tests and other activities as specified in 40 CFR part 60, subpart UUUUU, no later than 180 days after the compliance date. To demonstrate initial compliance using either an HCl or SO 2 CEMS, the initial performance test consists of 30-boiler operating days. If the CEMS is certified prior to the compliance date, the test begins with the first operating day on or after that date. If the CEMS is not certified prior to the compliance date, the test begins with the first operating day after certification testing is successfully completed. Continuous compliance with the newly established emission limits is required to be demonstrated on a 30-boiler operating day rolling average basis.

The EPA's final decisions regarding establishing a subcategory for certain existing EGUs that fire EBCR and the acid gas HAP standards applicable to the new subcategory are provided later in this section of this preamble. Specifically, the EPA's rationale for the final decisions and discussion relating to the key comments received regarding the need for such a subcategory and the attendant acid gas HAP emission standards are provided. A summary of all significant public comments regarding the EPA's consideration of establishing such a subcategory and the EPA's responses to those comments is available in the document titled Summary of Public Comments and Responses Regarding Establishment of a Subcategory and Acid Gas HAP Emission Standards for Certain Existing Eastern Bituminous Coal Refuse-Fired EGUs (response to comments document), Docket ID No. EPA-HQ-OAR-2018-0794. A “track changes” version of the regulatory language that incorporates the changes in this action is also available in the docket for this action.

Under CAA section 112(d)(1), the Administrator has discretion to “* * * distinguish among classes, types, and sizes of sources within a category or subcategory in establishing * * *” standards. Based on the EPA's better understanding of the differences in anthracite coal refuse and bituminous coal refuse, and the acid gas HAP emissions profile associated with each, the EPA has now determined that, contrary to its earlier position, it is appropriate to establish a new subcategory for certain units firing EBCR. Specifically, the EPA is establishing a new subcategory for certain units with a net summer capacity of 150 MW or lower that fire EBCR because there are differences between emissions of acid gas HAP from these units and larger units burning EBCR and units burning other types of coal, including other types of coal refuse. See U.S. Sugar Corp. v. EPA, 830 F.3d 579, 656 (DC Cir. 2016) (finding that “[s]ection 7412(d) gives the EPA discretion to create subcategories based on boiler type, and nothing in the statute forecloses the Agency from doing so based on the type of fuel a boiler was designed to burn.”). Units in this new subcategory of EGUs are smaller, were designed to burn EBCR, and were constructed in close proximity to legacy piles of EBCR for the primary purposes of reclaiming abandoned mining sites while reducing the environmental hazards attendant to such piles of coal refuse. The EPA cannot predict with certainty what the industry response would be absent the establishment of a new subcategory as discussed in greater detail elsewhere in this preamble and in a docketed memorandum on expected costs and benefits. Among those possible outcomes, many industry commenters and others have suggested that some—and maybe all—of the affected sources would shut down. 10 If that is the case, then the establishment of this new subcategory will allow those units to continue to achieve both of their purposes of reclaiming abandoned mining sites and preserving the environmental benefits of repurposing coal refuse, while also maintaining emissions of acid gas HAP at levels similar to current emissions levels. 11

Immediately below and in the response to comments document, we discuss in more detail the basis for the new subcategory and address the significant comments on the new subcategory.

As stated in the 2019 Proposal, the EPA finds that the emissions of acid gas HAP from EGUs firing EBCR are distinct from acid gas HAP emissions from EGUs firing other types of coal—including other forms of coal refuse. Specifically, the EPA recognized in the 2019 Proposal that there are differences between anthracite coal refuse and bituminous coal refuse, and that the type of fuel used leads to differences in the acid gas HAP emissions from EGUs firing those respective fuels. Bituminous coals (and, thus, bituminous coal refuse) from the Appalachian and Interior Regions of the U.S. have higher sulfur and chlorine contents than anthracite or coals of all types from the Western Region of the U.S. (and, thus, anthracite coal refuse or western bituminous and subbituminous coal refuse), and these differences lead to differences in emissions of acid gas HAP. These differences between the types of coal refuse used by EGUs to generate electricity may also impact a unit's ability to control those emissions. All coal refuse fuels are fired in fluidized bed combustors (FBC) that use limestone injection to reduce SO 2 emissions and to increase heat transfer efficiency. The EPA has been informed that limestone injection technology is generally adequate to allow EGUs that are firing anthracite coal refuse and western coal refuse to meet the 2012 final MATS alternative surrogate emission standard of 2.0E-1 lb/MMBtu for SO 2 . 12 This is because anthracite coals are naturally much lower in impurities (including sulfur and chlorine) and western coals (western bituminous coal and subbituminous coal) have lower sulfur and chlorine content and higher free alkalinity (which can act as a natural sorbent to neutralize acid gases produced in the combustion process). The same is not generally true for EGUs combusting EBCR. Because all existing EGUs firing anthracite coal refuse and western bituminous coal refuse are currently emitting SO 2 at rates that are below the 2012 final MATS emission standard for SO 2 and the existing EGU firing subbituminous coal refuse is currently emitting HCl at a rate that is below the 2012 final MATS emission standard for HCl, the EPA believes there is no need to broaden the subcategory to include those units.

The EBCR-fired EGUs that will be included in the new subcategory are also small units (all have capacities less than 120 MW and most are less than 100 MW). As contemplated in the 2019 Proposal, this final rule excludes the two EBCR-fired EGUs at the Seward Generating Station in Pennsylvania from the new subcategory. 84 FR 2702. Those units are the newest and, at 260 MW each, are, by far, the largest coal refuse-fired EGUs. The Seward units were also designed and constructed with downstream acid gas controls already incorporated, so they do not have the space limitations and other configurational challenges that may affect other smaller existing EBCR-fired EGUs attempting to retrofit air pollution controls. Retrofitting air pollution controls to an existing EGU can often be challenging due to lack of available space within the facility and the potential need to re-route the exhaust gas stream to accommodate such equipment configurational changes. Control equipment that results in pressure drop along the exhaust stream can challenge existing blowers. These challenges and space limitations can be considered in the design of a new facility. The Seward units were among the best performing EGUs—with respect to HCl emissions—when the EPA developed the final MATS emission standards and, based on MATS compliance reports for the Seward EGUs, currently emit HCl at well below the final MATS HCl standard of 2.0E-3 lb/MMBtu, applicable to coal-fired EGUs. 13

In response to the 2019 Proposal's solicitation of comment, the EPA received comments both supporting and opposing the establishment of a subcategory of certain existing EGUs firing EBCR for emissions of acid gas HAP.

Several commenters pointed out the environmental benefits provided by EBCR-fired EGUs in the coal regions where they are located. Specifically, commenters pointed out that removal of coal refuse piles reduces surface and groundwater pollution from acidic drainage and reduces uncontrolled emissions of air pollutants that are released from self-ignited internal smoldering of the coal refuse piles. In addition, commenters pointed out that the alkaline ash produced by EBCR-fired EGUs is used to reclaim mining-affected lands by returning them to a productive use. Commenters further noted that the Pennsylvania Department of Environmental Protection has standards governing such beneficial use of coal ash in mine land reclamation (Title 25 PA Code, Chapter 290). 14

Several commenters asserted that the 2012 final MATS limits for acid gas HAP and their SO 2 surrogate are not achievable by EBCR-fired EGUs and do not reflect the design, functionality, and economics of those units. Commenters stated that while limestone injection into the unit's combustion zone controls SO 2 and HCl emissions to a certain extent, there are operational and design limitations on the EGUs' ability to provide an adequate amount of limestone to reduce SO 2 and HCl emissions beyond a certain point. Commenters further stated that the reduction of SO 2 and acid gases through increased injection of limestone is asymptotic, and significant additional limestone does not result in further significant acid gas emission reduction. Commenters explained that the configuration of the EGUs and their combustion zone physically limit the amount of material that the unit can hold, which impacts and limits the amount of coal refuse and limestone that can be injected into the unit. Commenters explained, for example, that increasing the amount of limestone injected to achieve the 2012 final MATS SO 2 emission limit could result in less coal refuse being fired. This would result in a corresponding reduction in steam production and electricity generation, making it uneconomic to operate in the current power market.

The EPA does not have detailed information regarding the specific amount of limestone that is injected into the EBCR-fired EGUs. However, the Agency acknowledges that it is current industry practice to inject limestone into the FBC in amounts based on an optimized calcium-to-sulfur (Ca:S) molar ratio. Therefore, the optimum limestone injection amount will vary with the sulfur content of the coal refuse being burned. Along with the coal (fuel) and limestone that are injected and utilized, the fluidized bed units also contain an inert bed material ( e.g., sand or other). There is a limit to the amount of solid material— i.e., the sand, the coal refuse, coal ash, and limestone—that can be in the combustor. An increase in limestone injection may necessarily result in a decrease in coal refuse utilization. Utilization of the limestone for acid gas neutralization is dependent upon decomposition (calcination) of the limestone to lime and subsequent reaction of the lime with the acid gases via the following reactions:

The necessary calcination of the limestone and the desulfurization reactions occur within specific temperature ranges (typically around ~ 900 °Celsius or 1,650 °F) and the FBC operators must utilize sufficient fuel to maintain the boiler in the optimum temperature range. Lower temperatures result in insufficient calcination and lower boiler efficiency. Higher temperatures can result in materials sintering, which results in lower desulfurization capacity.

Commenters also noted concerns that a significant increase in limestone injection for control of SO 2 emissions could negatively impact the ability to beneficially use the combustion fly ash. 15 For example, for certain uses, the Pennsylvania Department of Environmental Protection Guidelines for Beneficial Use of Coal Ash at Coal Mines   16 warns that mixing of coal ash with conventional alkaline materials ( e.g., limestone, lime, hydrated lime) may increase the likelihood of the coal ash becoming cementitious and reduce the neutralizing ability of the coal ash and the conventional material. In such cases, the captured fly ash would have to be disposed of in a lined landfill rather than beneficially reused. Commenters also contended that EBCR-fired EGUs may have to consider switching from EBCR as the primary fuel to firing less EBCR along with a lower sulfur fuel as a means of reducing SO 2 emissions to meet the 2012 final MATS SO 2 emission limit. Commenters stated that such practice, in addition to being uneconomical, could reduce EBCR usage to below the minimum 75-percent coal refuse heat input requirement to be considered a qualifying facility under the Public Utility Regulatory Policies Act. Commenters claimed that both approaches described earlier ( i.e., increased limestone injection and fuel switching) undermine the environmental benefits realized by the EBCR-fired EGUs through clean-up of waste coal refuse sites.

One commenter stated that regardless of limestone addition and fuel switching, meeting the 2012 final MATS SO 2 limit would require additional control technology and likely result in permanent retirement of the facility. Several commenters pointed out that they are not aware of any retrofit installation of back-end scrubbing technology or a back-end dry sorbent injection (DSI) system for an EBCR-fired EGU. Commenters asserted that downstream acid gas controls cannot be considered technically or economically feasible for EBCR-fired EGUs and provided information regarding evaluation of such technologies. Commenters claimed that adding on back-end control equipment would boost sulfur capture, but the capital and operating costs increases would not be supported by power sales revenues. Commenters further claimed that in addition to being cost prohibitive for the small EBCR units, control strategies such as wet FGD scrubbers and spray dryer absorbers (SDA) present installation difficulties given layout of the facilities, local topography, and needs of the systems to interface with existing EGU equipment. 17 Although commenters acknowledged that DSI systems do not present such technical challenges with deployment, they pointed out other problems associated with the alkaline sorbents (typically sodium- or calcium-based) injected in such systems. Several commenters stated that coal refuse-fired EGUs currently achieve extremely efficient mercury (Hg) control due, at least in part, to the relatively high levels of chlorine in coal refuse which can promote the oxidation of the Hg to the divalent form. This, coupled with the higher levels of unburned carbon in the fly ash, allows the Hg to be more readily captured in the downstream baghouse ( i.e., fabric filter particulate matter (PM) control device) and not emitted through the stack. Commenters explained that reducing the amount of chlorine (or HCl) in the flue gas prior to the oxidation reaction can have the effect of increasing Hg emissions from the facility. One commenter stated that their testing of both sodium- and calcium-based sorbents injected at the inlet of the baghouse (essentially in a DSI configuration) resulted in an increase in Hg emissions by a factor of 4 to 40 times resulting in levels exceeding the 2012 final MATS Hg emission limit. 18 Therefore, the commenter asserted that, even if technically feasible, the use of DSI could affect the unit's ability to meet other MATS emission limits. Several commenters stated that the potential for DSI technology to have a negative impact on the ability to use combustion ash for mine site reclamation and restoration activities would remove it as a viable alternative. Commenters explained that use of sodium-based sorbents ( e.g., trona or sodium bicarbonate) could alter the leaching characteristics of the ash such that it would no longer be of beneficial use and would have to be disposed of in a lined landfill. One commenter stated that testing at their facility confirmed such a change in the quality of the ash to the point that it was at risk of failing to satisfy leaching requirements of the standards for beneficial use in mine land reclamation. Commenters claimed that ash disposal costs, especially when considering the significant quantity of ash generated, would far exceed the revenue generated through the sale of electricity. Commenters also pointed out that significant environmental benefits provided by EBCR-fired EGUs would be eliminated if the ash cannot be beneficially used.

Several commenters asserted that there is no justification for establishing a subcategory of certain existing EGUs firing EBCR for emissions of acid gas HAP. Commenters claimed that the EPA has not provided a valid technical basis for the subcategory, stating that while the EPA has said that eastern bituminous coal is distinguished by higher sulfur content and lesser content of free alkali, the EPA offers nothing to distinguish the EGUs it would subcategorize from other EGUs burning the same coals and subject to MATS. Commenters further claimed that there is no basis for a subcategory for EBCR-fired EGUs because some of those EGUs currently emit SO 2 at rates below the 2012 final MATS SO 2 limit and have shown that the current standards are achievable because there are technologies that are feasible. Commenters stated that the assessment of the need for a subcategory cannot reasonably be based on data for the period of January 2015 through June 2018, terminating before EGUs reported results of installed pollution controls. Commenters added that even if limestone injection alone is not adequate to meet the MATS limits, the fact that certain EGUs would need to install additional controls is not a valid basis for a subcategory. Commenters also added that the EPA may not subcategorize based on cost, even if some add-on controls would be particularly expensive, and the EPA may not alter the MACT floor because some sources may not be able to meet it. Commenters further stated that the EPA notes that the use of some sorbents may negatively impact the salability of fly ash, but commenters contend that losing the ability to sell the ash—a consequence for all EGUs using DSI, not just those using eastern bituminous coal-waste—does not suggest any basis in the class, type, or size of the EGUs at the six plants that might allow the EPA to set different standards for those EGUs. Commenters pointed to a plant within the proposed subcategory that they contend demonstrates that units can meet the MATS acid gas limits while still re-using their ash. Commenters refuted the EPA's assertion that use of DSI technology results in a considerable increase in Hg emissions and would require the use of additional Hg controls, and, further, stated that even if true, it provides no lawful basis for the subcategory. Commenters pointed to EBCR-fired EGUs that they contend not only can meet both the MATS acid gas and Hg limits, they can achieve such low emissions of Hg that they qualify for low-emitting EGU status ( i.e., their emissions are less than 10 percent of the MATS limit) without any Hg-specific controls. Commenters added that CAA section 112 does not permit the EPA to loosen emission limitations based on the EPA's desired control configuration.

The EPA disagrees with comments opposed to establishing a new subcategory of certain existing EGUs firing EBCR for emissions of acid gas HAP. Under CAA section 112(d)(1), the Administrator has the discretion to “ * * * distinguish among classes, types, and sizes of sources within a category or subcategory in establishing * * * ” standards. The EPA generally establishes subcategories to address differences between units that make the nature of the HAP emissions different or if there are technical feasibility issues associated with different emission control approaches. Normally, the basis for subcategorizing ( e.g., type of unit) must be related to an effect on emissions, rather than some difference which does not affect emissions performance. EGUs are generally designed for a particular type of fuel, and the type of fuel being burned can impact the degree of combustion and the level and type of HAP emissions because the amount of fuel-borne HAP such as acid gases is primarily dependent upon the composition of the fuel. In addition, the type of fuel and attendant unit design can limit the availability and functionality of different types of controls, particularly for existing sources that must retrofit if add-on controls are required. Finally, the D.C. Circuit recently confirmed that the EPA may establish a subcategory based on the type of fuel a boiler is designed to burn. See U.S. Sugar Corp. v. EPA, 830 F.3d at 656. Consistent with the statute and case law, the EPA is establishing a subcategory based on the size (boiler 150 MW or less) and type (boiler designed to burn EBCR) to address the different acid gas HAP emissions from such sources.

To inform our consideration, the EPA reviewed EGU design, operating information, air emissions data compiled from the 2010 Information Collection Request (ICR) that was used by the EPA during development of the 2012 MATS final rule, and other available information for coal-fired EGUs in the source category. The EPA found that there are significant design and operational differences in coal-fired EGUs that are based on the expected source of fuel and the design of the unit that affect the levels of emissions of HCl and SO 2 —both of which serve as a surrogate for all acid gas HAP emitted from coal-fired EGUs under MATS. These differences support our decision to establish a subcategory for existing EGUs that burn EBCR and have a net summer capacity of 150 MW or lower. Specifically, the emissions data for HCl and SO 2 show a distinguishable difference in performance exists between coal-fired units with a net summer capacity of no greater than 150 MW designed to burn EBCR and other coal-fired units, including units that burn coal refuse other than EBCR. 19 20 Because the EBCR-fired units have different emission characteristics for acid gas HAP, the EPA has determined that units that are designed to burn EBCR, and actually burn at least 75-percent EBCR, are a different type of unit and should be subcategorized for acid gas HAP emissions. 21

The determination that EBCR-fired EGUs have different emission characteristics for acid gas HAP is reasonably based on the same 2010 ICR dataset used to establish the bases of subcategories and standards in the 2012 MATS final rule. An examination of the data shows that there were no coal-fired units with a net summer capacity of 150 MW or less designed to burn EBCR among the top performing 12 percent of coal-fired units for emissions of HCl or SO 2 , even though the EPA used 12 percent of the entire source category (130 units) to establish the acid gas HAP standard for coal-fired EGUs. There were, however, EGUs firing bituminous coal, subbituminous coal, and lignite among the top performing units for HCl and EGUs firing bituminous, subbituminous, lignite, and non-EBCR coal refuse among the top performers for SO 2 . The EPA points out that the assessment of the need for a subcategory was not based on data for the period of January 2015 through June 2018 as suggested by commenters. As discussed in section III.B of this preamble, those data were used to determine the SO 2 lb/MMBtu emission rate for beyond-the-floor level of control. The EPA disagrees with commenters' assertions that the fact that some EBCR-fired EGUs have met the 2012 final MATS SO 2 limit means the new subcategory is unreasonable. The EPA is aware of EGUs at two plants  22 that have been able to meet the 2012 final MATS SO 2 limit. Historical SO 2 emissions data reported to the EPA's Emissions Collection and Monitoring Plan System (ECMPS) for those EGUs shows that those plants had lower SO 2 emissions than other EBCR-fired EGUs. Thus, the additional SO 2 emissions reductions required for those EGUs to meet the 2012 final MATS SO 2 limit are more likely to be achievable through means such as increased limestone injection and fuel switching without the limitations described by several commenters and summarized earlier in this section of the preamble. The EPA's understanding, however, is that the operational changes made to those EGUs with historically lower SO 2 emissions in order to meet the 2012 final MATS SO 2 limit result in less EBCR being disposed of and are not economically feasible in the long term. One facility has met the SO 2 limit by injecting more limestone and the other facility has met the limit by co-firing lower sulfur coal. Similarly, the ability of those same units to meet the 2012 final MATS acid gas HAP limit as well as the Hg limit or to meet the 2012 final MATS acid gas HAP limit while still re-using their ash does not mean a separate subcategory is unwarranted or unreasonable. The information in the record supports a conclusion that the existing EGUs in the new subcategory are different from a fuel and design perspective and it is reasonable to establish a new subcategory based on the size and type of unit. In addition, this new subcategory is also reasonable because the alternative is to maintain a standard that requires the sources to operate in a manner that undermines the purpose for which they were constructed and may be technologically infeasible for certain units in the subcategory. Specifically, the coal refuse-fired EGUs at issue were constructed at or near legacy piles of EBCR for the primary purposes of reducing the health and environmental hazards associated with the coal piles and using the resultant coal ash to reclaim abandoned mining sites. The commenters in support of the rule provided information indicating the reasons the new subcategory is warranted and how requiring compliance with the 2012 MATS limit for acid gas HAP would undermine the continued viability of the EBCR-fired EGUs to perform both of these functions.

For all these reasons, we do not agree that the commenters have raised any significant objections to the EPA's determination that it is reasonable and appropriate to establish a new subcategory for EBCR-fired EGUs. Accordingly, we are finalizing the new subcategory.

As noted in the 2019 Proposal, the EPA conducted an analysis to determine the numerical acid gas emission standards for the subcategory of certain existing EGUs that fire EBCR should such a subcategory be established. 23 The EPA explained that it determined the MACT floor and the beyond-the-floor ( i.e., more stringent than the MACT floor) levels of control for HCl and SO 2 emissions. The EPA further explained that the SO 2 lb/MMBtu emission rate for beyond-the-floor level of control was determined for each currently operating EBCR-fired EGU using monthly SO 2 data available in the EPA's ECMPS for the period of January 2015 through June 2018. 24 The EPA stated that if a beyond-the-floor (with floor at 1.0 lb/MMBtu) SO 2 emissions limit was established, it would likely be in the range of 0.60-0.70 lb/MMBtu; a limit that, on average, the currently operating EBCR-fired EGUs have demonstrated an ability to achieve based on their monthly emissions data for January 2015 through June 2018. The EPA explained that due to data limitations ( i.e., no HCl lb/MMBtu or lb/MWh emissions data have been submitted for the currently operating EBCR-fired EGUs, and SO 2 lb/MWh emissions data are available for only two of the currently operating EBCR-fired EGUs), this same beyond-the-floor methodology used to determine the beyond-the-floor standards for SO 2 in lb/MMBtu could not be used to evaluate beyond-the-floor standards for SO 2 in lb/MWh or for HCl in either lb/MMBtu or lb/MWh. The EPA, therefore, further explained that it determined that beyond-the-floor standards for those pollutants, if established, should reasonably be set based on the same percentage reduction as the SO 2 lb/MMBtu described earlier ( i.e., the 40-percent reduction in the emissions rate for SO 2 between the calculated MACT floor value of 1.0 lb/MMBtu and the beyond-the-floor value of 0.60 lb/MMBtu). The EPA solicited comment on the analysis conducted to determine the numerical acid gas emission standards and, on its methodology, and results. Table 4 of this preamble shows the results of the MACT floor and beyond-the-floor analyses as discussed in the 2019 Proposal.

Immediately below and in the response to comments document, we discuss in more detail the basis for the acid gas HAP emission standards that are applicable to the new subcategory and address the significant comments on the standards for the new subcategory.

In response to the 2019 Proposal's solicitation of comment, the EPA received comments both supporting and opposing its analysis to determine the numerical acid gas emission standards for a subcategory of existing EBCR-fired EGUs. Several commenters agreed with the methodology that the EPA used to determine the MACT floor and beyond-the-floor levels of control for emissions of SO 2 and HCl. Commenters further stated that an SO 2 limit of 0.6 lb/MMBtu, as discussed in the 2019 Proposal, is reasonable, technologically and economically defensible, and would allow facilities to continue providing multimedia environmental benefits from coal refuse reclamation and remediation of mining-affected lands. Other commenters disagreed with the EPA's analyses of the MACT floor and beyond-the-floor levels of control and the resulting emission limits presented in the 2019 Proposal. Specifically, commenters disagreed with the data used in the analyses, claiming that it is not representative of the emissions reductions achieved in practice by the best-performing sources because it excludes time periods when controls were installed. In addition, commenters stated that the beyond-the-floor analysis fails to recognize that each plant in the subcategory already has acid gas controls sufficient to meet the current standard and, instead, assumes that such controls are infeasible. Further, commenters stated that the only relevant cost for purposes of any beyond-the-floor standard is the cost of operating (rather than installing) the control.

The EPA disagrees with those comments opposing the data used in the MACT floor and beyond-the-floor analyses and the resulting emission limits. The MACT floor analyses for HCl and SO 2 for the subcategory of EBCR-fired EGUs are reasonably based on the same 2010 ICR dataset and methodology used to determine MACT floor emission values for pollutants regulated under the 2012 MATS final rule. HCl and SO 2 emissions data for the EBCR-fired EGUs that were operating at the time of the 2012 MATS final rule were used to calculate separate existing source MACT floors for HCl in lb/MMBtu and lb/MWh and SO 2 in lb/MMBtu and lb/MWh. Thus, the MACT floor analysis and resulting floor values are consistent with how MACT floors for other HAP emissions standards were calculated and are representative of the HCl and SO 2 emissions reductions achieved in practice by the best-performing EBCR-fired EGUs at that time, irrespective of the means that the reductions were achieved.

The beyond-the-floor analysis and resulting beyond-the-floor emission limit for SO 2 lb/MMBtu are reasonably based on the extensive data available in the EPA's ECMPS for each currently operating EBCR-fired EGU. As described in the 2019 Proposal, an SO 2 emission limit of 0.6 lb/MMBtu is a limit that the currently operating EBCR-fired EGUs have demonstrated an ability to achieve based on their monthly emissions data for January 2015 through June 2018. Any means being used to control acid gases during that time period would be reflected in the average SO 2 lb/MMBtu emission rate for those EBCR-fired EGUs. Thus, the EPA's analysis does not exclude time periods when controls were installed. We note, however, that we are unaware of any EBCR-fired EGUs that have installed any downstream acid gas controls in addition to limestone injection into the FBC in response to the 2012 MATS rule. Further, the EPA has confirmed that extending the time horizon through March 2019 to include emissions data that have become available since the analysis for the 2019 Proposal would not result in changes to average SO 2 lb/MMBtu emission rates for the currently operating EBCR-fired EGUs nor to the SO 2 emission limit of 0.6 lb/MMBtu that, on average, those EGUs have achieved for that time period. 25

Contrary to some comments, the beyond-the-floor analysis does recognize that each EBCR-fired EGU in the subcategory has controls to address acid gas emissions and, as explained earlier, average SO 2 lb/MMBtu emission rates reflect those controls. In addition, the 2019 Proposal, as well as section III.A of this preamble, point out that all coal refuse fuels are fired in FBC that use limestone injection to minimize SO 2 emissions and to increase heat transfer efficiency. As discussed in section III.A of this preamble, commenters have pointed out, however, that there are limitations on the ability of existing EBCR-fired EGUs to control acid gas emissions to the level of the 2012 final MATS acid gas standard by increasing the amount of limestone injected. As such, the EPA disagrees with comments claiming that the current controls are sufficient to meet the 2012 final MATS acid gas standard and that, therefore, the only relevant cost for purposes of any beyond-the-floor standard is the cost of operating (rather than installing) the control. As also discussed in section III.A of this preamble, commenters have pointed out feasibility issues associated with installation and operation of various downstream acid gas control technologies in order to meet the 2012 final MATS acid gas standard. For those same reasons, the EPA determined that downstream acid gas control technologies such as scrubbers (either wet FGD scrubbers or SDA) or DSI systems are not beyond-the-floor options for acid gas HAP emissions from the subcategory of existing EBCR-fired EGUs. 26

Based on a review of the public comments and other available information, the EPA is finalizing HCl and SO 2 emission limits reflecting beyond-the-floor level of control using the methodology described in the 2019 Proposal and earlier in this section of the preamble. Specifically, this action establishes the following emission limits for the new subcategory of existing EBCR-fired EGUs:

The SO 2 lb/MMBtu emissions limit is a limit that, on average, the currently operating EBCR-fired EGUs have achieved based on their monthly emissions data for January 2015 through June 2018. 28 Because the EPA does not have such HCl emissions data or SO 2 lb/MWh emissions data, beyond-the-floor standards for SO 2 in lb/MWh and for HCl in lb/MMBtu and lb/MWh are based on the percentage reduction in the SO 2 lb/MMBtu emissions rate between the MACT floor value and the beyond-the-floor value.

Affected sources are EGUs that are in the unit designed for eastern bituminous coal refuse (EBCR) subcategory, as defined under this final action. Based on available information, there are six currently operating EBCR-fired EGUs that are in the newly established subcategory and subject to the newly established acid gas HAP emission standards. The six EGUs, located at three facilities in Pennsylvania and one facility in West Virginia, are listed in Table 2 of this preamble.

Absent the subcategory finalized in this action, many affected EBCR-fired EGUs would likely discontinue operations. Although the new emission standards will allow higher acid gas HAP and SO 2 emissions from these facilities compared to the emission standards in the original 2012 MATS, emissions of other HAP will not change under this action. These higher allowable emissions may, however, be partially offset. In the absence of this rule, closure of the units would likely result in reduced remediation of abandoned mine lands (AMLs) and potentially increase the risk and impact of emissions from refuse piles. Refuse piles at AMLs are prone to spontaneous internal combustion (smoldering) which emits uncontrolled air pollutants including acid gases and other HAP, and with less remediation, the potential for greater emissions from smoldering increases. More detailed analysis of potential air impacts of this rule is presented in a docketed memorandum. 29

Relative to a baseline in which the subcategory is not finalized and the existing 2012 MATS acid gas HAP emissions limits are enforced, the new subcategory could reduce costs by eliminating the need for investment in additional compliance measures which have not yet been made by affected units. The magnitude of potential cost reductions is discussed in a docketed memorandum. 30

The impact of the newly finalized subcategory of EBCR-fired EGUs for emissions of acid gas HAP on the broader electricity sector is likely to be minor due to the relatively small size of these facilities. Additionally, the risk of the affected EBCR-fired EGUs closing because of challenges in meeting MATS acid gas HAP limits is reduced by the new subcategory. As a result, the coal refuse reclamation services the units provide are more likely to be sustained in the future, potentially offsetting reclamation costs that may be otherwise incurred by the states of Pennsylvania and West Virginia. Additionally, because of the reduced risk of closure, the acid gas HAP subcategory finalized in this action could prevent labor market transitions for individuals who operate and perform support functions for these facilities. However, it may limit labor market opportunities that could result from AML reclamation by other means.

Absent the subcategory finalized in this action, affected EBCR-fired EGUs would likely either discontinue operations or perform compliance measures to comply with the previous MATS acid gas HAP limits, which would have the effect of reducing acid gas HAP emissions. The newly finalized subcategory will likely increase emissions of SO 2 relative to a baseline in which the subcategory is not finalized; this in turn would form fine PM (PM 2.5 ) concentrations in the atmosphere and potentially adversely affect human health. The magnitude of those forgone co-benefits depends on the magnitude of the air quality impacts described earlier. Notably, most counties in Pennsylvania and bordering states attain the current PM 2.5 National Ambient Air Quality Standards (NAAQS), set at a level requisite to protect public health with an adequate margin of safety. The magnitude of potential forgone benefits is discussed in a docketed memorandum. 31

In contrast, if plants continue to operate when they otherwise would not have absent this action, the continued remediation of AMLs could provide water quality co-benefits through reductions in toxic metal leaching and acid mine drainage. As noted earlier, removal of coal refuse piles reduces surface and groundwater pollution from acidic drainage and reduces uncontrolled emissions of air pollutants that are released from self-ignited internal smoldering of the coal refuse piles. In addition, commenters pointed out that the alkaline ash produced by EBCR-fired EGUs is used to reclaim mining-affected lands by returning them to a productive use.

Remediation of AMLs through the use of waste coal is supported by the state of Pennsylvania through policies such as tax credits and treatment of these units as renewable for purposes of the state's renewable portfolio standard. If these waste coal units are no longer able to operate, the state will need to find alternative means to remediate these sites leading to, at best, a delay in these benefits, if not a loss of these benefits altogether. These benefits are discussed qualitatively in greater detail in the docketed memorandum.

As noted earlier, while the EPA cannot predict with certainty what the industry response would be absent the establishment of a new subcategory, industry commenters have suggested that some—and maybe all—of the affected sources would shut down. 32 If that is the case, then the establishment of this new subcategory will allow those units to continue to achieve both of their purposes while also maintaining emissions of acid gas HAP at levels similar to current emissions levels.

While the EPA cannot predict with certainty what the industry response would be in the absence of a new subcategory, commenters' claim that the units would shut down is plausible. Coal-fired power plants are currently facing tremendous competitive pressures. As a result, coal's share of total U.S. electricity generation has been declining for over a decade, while generation from natural gas and renewables has increased significantly. A large number of coal units—especially smaller ones like the EBCR-fired EGUs—have retired since 2010. Indeed, as mentioned earlier, four of the ten units that were identified as affected by this action in the 2019 Proposal have now either retired or announced plans to convert to natural gas.

Additional information about these statutes and Executive Orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

This action is an economically significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review. Any changes made in response to OMB recommendations have been documented in the docket. The EPA has conducted an analysis of all reasonably anticipated costs and benefits arising out of this rule, including those arising out of co-benefits pursuant to Executive Orders 12866 and 13563. That analysis can be found in a separate memorandum titled Analysis of Potential Costs and Benefits for the National Emission Standards for Hazardous Air Pollutants: Coal- and Oil-Fired Electric Utility Steam Generating Units—Subcategory of Certain Existing Electric Utility Steam Generating Units Firing Eastern Bituminous Coal Refuse for Emissions of Acid Gas Hazardous Air Pollutants, that is available in the docket.

This action is considered an Executive Order 13771 deregulatory action. This final rule provides meaningful burden reduction by revising the acid gas HAP emission standards for a new subcategory of certain existing EGUs that are currently subject to MATS and does not impose any additional regulatory requirements on the affected electric utility industry.

This action does not impose any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2060-0567. This action does not impose an information collection burden because the regulatory changes resulting from this action do not affect the currently approved information collection requirements. Specifically, this action establishes acid gas HAP emission standards for a new subcategory of certain existing EGUs that are currently subject to MATS and the new emission standards do not result in any changes to the recordkeeping or reporting requirements that those impacted EGUs are currently subject to.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden, or otherwise has a positive economic effect on the small entities subject to the rule. This is a deregulatory action, and the burden on all entities affected by this final rule, including small entities, is reduced compared to the 2012 MATS.

This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. It will neither impose substantial direct compliance costs on tribal governments, nor preempt Tribal law. Specifically, this action establishes acid gas HAP emission standards for a new subcategory of certain existing EGUs currently subject to MATS and located in Pennsylvania and West Virginia, states without any federally recognized tribal entities. Thus, Executive Order 13175 does not apply to this action.

Consistent with the EPA Policy on Consultation and Coordination with Indian Tribes, the EPA consulted with tribal officials during the development of this action. The EPA held consultations with the Blue Lake Rancheria and the Fond du Lac Band of Lake Superior Chippewa on April 2, 2019, and April 3, 2019, respectively. Neither tribe provided comments regarding the 2019 Proposal's solicitation of comment on establishing a subcategory of certain existing EGUs firing EBCR for acid gas HAP emissions.

This action is not subject to Executive Order 13045 because the EPA does not believe the environmental health risks or safety risks addressed by this action present a disproportionate risk to children. While children may experience forgone benefits as a result of this action, the potential forgone emission reductions (and related benefits) from the final amendments are small compared to the overall emission reductions (and related benefits) from the 2012 MATS.

Furthermore, this action does not affect the level of public health and environmental protection already being provided by existing NAAQS and other mechanisms in the CAA. This action does not affect applicable local, state, or federal permitting or air quality management programs that will continue to address areas with degraded air quality and maintain the air quality in areas meeting current standards. Areas that need to reduce criteria air pollution to meet the NAAQS will still need to rely on control strategies to reduce emissions. To the extent that states use other mechanisms in order to comply with the NAAQS, and still achieve the criteria pollution reductions that would have otherwise occurred, this action will not have a disproportionate adverse effect on children's health.

This action is not a “significant energy action” because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Further, the EPA concludes that this action is not likely to have any adverse energy effects because it establishes acid gas HAP emission standards for a new subcategory of certain existing EGUs that are currently subject to MATS and does not impose any additional regulatory requirements on the affected electric utility industry.

This action does not involve technical standards.

The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994). While these communities may experience forgone benefits as a result of this action, the potential forgone emission reductions (and related benefits) from the final action are small compared to the overall emission reductions (and related benefits) from the 2012 MATS.

Moreover, this action does not affect the level of public health and environmental protection already being provided by existing NAAQS, including ozone and PM 2.5 , and other mechanisms in the CAA. This action does not affect applicable local, state, or federal permitting or air quality management programs that will continue to address areas with degraded air quality and maintain the air quality in areas meeting current standards. Areas that need to reduce criteria air pollution to meet the NAAQS will still need to rely on control strategies to reduce emissions.

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. The CRA allows the issuing agency to make a rule effective sooner than otherwise provided by the CRA if the agency makes a good cause finding under the provisions of 5 U.S.C. 808(2). The EPA finds that there is good cause under the provisions of 5 U.S.C. 808(2) to make this final rule effective without full, prior Congressional review under 5 U.S.C. 801 and to make the rule effective on April 15, 2020. The EPA finds that it is unnecessary to delay the date this rule could be effective because the Agency has determined that the owners or operators of affected MATS sources do not need time to adjust to this final action. This final action establishes a subcategory of certain existing EGUs firing EBCR and acid gas HAP emission standards applicable only to the new subcategory. Sources in the new subcategory will be subject to an SO 2 emissions limit that, on average, the currently operating six EBCR-fired EGUs have demonstrated an ability to achieve but, otherwise, will not be subject to any new regulatory requirements. 33

The EPA also finds that it is impracticable to delay the effective date of this rule. Three of the four facilities with EBCR-fired EGUs in the new subcategory are subject to EPA-issued Administrative Compliance Orders that provide interim SO 2 emission limits that terminate on April 15, 2020. Those facilities have asserted that they cannot meet the 2012 final MATS HCl emission standard, or the 2012 final MATS SO 2 acid gas HAP surrogate emission standard, while burning the coal refuse fuel for which their facilities were designed. By 11:59 p.m. on April 15, 2020, EBCR-fired EGUs at those facilities must achieve full compliance with MATS. Absent this final action's acid gas HAP emission standards for the new subcategory being effective by that date, EGUs at those three facilities would be subject to the 2012 final MATS acid gas HAP emission standards that they are not currently in compliance with, and, thus, in violation of their Orders. According to the facilities, if subject to the 2012 acid gas HAP emission standards, they would no longer be in a position to continue operating their EBCR-fired EGUs and, thus, provide the environmental benefits associated with removal of coal refuse piles and reclamation and remediation of mining-affected lands.

Accordingly, the EPA finds it would be unnecessary and impracticable to delay the effective date of this action and that there is good cause to dispense with the opportunity for a 60-day period of prior Congressional review and to publish this final rule with an effective date of April 15, 2020.

For the reasons set forth in the preamble, the Environmental Protection Agency amends 40 CFR part 63 as follows:

Preamble acronyms and abbreviations. We use multiple acronyms and terms in this preamble. While this list may not be exhaustive, to ease the reading of this preamble and for reference purposes, the EPA defines the following terms and acronyms here:

Background information. On February 4, 2019, the EPA proposed the results of the RTR for the HCl NESHAP and proposed amendments to add electronic reporting and address periods of SSM. In the proposal, the EPA also solicited public comments regarding maintenance activities. In this action, we are finalizing decisions and revisions for the rule. We summarize some of the more significant comments we timely received regarding the proposed rule and provide our responses in this preamble. A summary of all other public comments on the proposal and the EPA's responses to those comments is available in the Summary of Public Comments and Responses for Risk and Technology Review for Hydrochloric Acid Production, in Docket ID No. EPA-HQ-OAR-2018-0417. A “track changes” version of the regulatory language that incorporates the changes in this action is available in the docket.

Organization of this document. The information in this preamble is organized as follows:

Regulated entities. Categories and entities potentially regulated by this action are shown in Table 1 of this preamble.

Table 1 of this preamble is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be affected by the final action for the source category listed. To determine whether your facility is affected, you should examine the applicability criteria in the appropriate NESHAP. If you have any questions regarding the applicability of any aspect of this NESHAP, please contact the appropriate person listed in the preceding FOR FURTHER INFORMATION CONTACT section of this preamble.

In addition to being available in the docket, an electronic copy of this final action will also be available on the internet. Following signature by the EPA Administrator, the EPA will post a copy of this final action at: https://www.epa.gov/hydrochloric-acid-production-national-emission-standards-hazardous. Following publication in the Federal Register , the EPA will post the Federal Register version and key technical documents at this same website.

Additional information is available on the RTR website at https://www.epa.gov/stationary-sources-air-pollution/risk-and-technology-review-national-emissions-standards-hazardous. This information includes an overview of the RTR program and links to project websites for the RTR source categories.

Under CAA section 307(b)(1), judicial review of this final action is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit (the Court) by June 15, 2020. Under CAA section 307(b)(2), the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by the EPA to enforce the requirements.

Section 307(d)(7)(B) of the CAA further provides that only an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review. This section also provides a mechanism for the EPA to reconsider the rule if the person raising an objection can demonstrate to the Administrator that it was impracticable to raise such objection within the period for public comment or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule. Any person seeking to make such a demonstration should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, WJC South Building, 1200 Pennsylvania Ave. NW, Washington, DC 20460, with a copy to both the person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT section, and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave. NW, Washington, DC 20460.

Section 112 of the CAA establishes a two-stage regulatory process to address emissions of HAP from stationary sources. In the first stage, we must identify categories of sources emitting one or more of the HAP listed in CAA section 112(b) and then promulgate technology-based NESHAP for those sources. “Major sources” are those that emit, or have the potential to emit, any single HAP at a rate of 10 tons per year (tpy) or more, or 25 tpy or more of any combination of HAP. For major sources, these standards are commonly referred to as maximum achievable control technology (MACT) standards and must reflect the maximum degree of emission reductions of HAP achievable (after considering cost, energy requirements, and non-air quality health and environmental impacts). In developing MACT standards, CAA section 112(d)(2) directs the EPA to consider the application of measures, processes, methods, systems, or techniques, including, but not limited to those that reduce the volume of or eliminate HAP emissions through process changes, substitution of materials, or other modifications; enclose systems or processes to eliminate emissions; collect, capture, or treat HAP when released from a process, stack, storage, or fugitive emissions point; are design, equipment, work practice, or operational standards; or any combination of the above.

For these MACT standards, the statute specifies certain minimum stringency requirements, which are referred to as MACT floor requirements, and which may not be based on cost considerations. See CAA section 112(d)(3). For new sources, the MACT floor cannot be less stringent than the emission control achieved in practice by the best-controlled similar source. The MACT standards for existing sources can be less stringent than floors for new sources, but they cannot be less stringent than the average emission limitation achieved by the best-performing 12 percent of existing sources in the category or subcategory (or the best-performing five sources for categories or subcategories with fewer than 30 sources). In developing MACT standards, we must also consider control options that are more stringent than the floor under CAA section 112(d)(2). We may establish standards more stringent than the floor, based on the consideration of the cost of achieving the emissions reductions, any non-air quality health and environmental impacts, and energy requirements.

In the second stage of the regulatory process, the CAA requires the EPA to undertake two different analyses, which we refer to as the technology review and the residual risk review. Under the technology review, we must review the technology-based standards and revise them “as necessary (taking into account developments in practices, processes, and control technologies)” no less frequently than every 8 years, pursuant to CAA section 112(d)(6). Under the residual risk review, we must evaluate the risk to public health remaining after application of the technology-based standards and revise the standards, if necessary, to provide an ample margin of safety to protect public health or to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect. The residual risk review is required within 8 years after promulgation of the technology-based standards, pursuant to CAA section 112(f). In conducting the residual risk review, if the EPA determines that the current standards provide an ample margin of safety to protect public health, it is not necessary to revise the MACT standards pursuant to CAA section 112(f). 1 For more information on the statutory authority for this rule, see 84 FR 1570, February 4, 2019.

The EPA promulgated the HCl Production NESHAP on April 17, 2003 (68 FR 19075). The standards are codified at 40 CFR part 63, subpart NNNNN. The HCl production industry consists of facilities that produce a liquid HCl product from a gas stream containing HCl through absorption.

The HCl production facility is the basic unit defined in the NESHAP. Specifically, the rule defines an HCl production facility as the collection of unit operations and equipment associated with the production of liquid HCl product. The production of liquid HCl product occurs through the absorption of gaseous HCl into either water or an aqueous HCl solution. The HCl production facility includes HCl storage tanks (as defined in 40 CFR 63.9075), HCl transfer operations that load the HCl product into a tank truck, rail car, ship, or barge, and equipment leaks. A plant site could have several separate and distinct HCl production facilities. The affected source includes all HCl production facilities at the same site. An HCl production facility begins at the point where a gaseous stream containing HCl enters an absorber and ends at the point where the liquid HCl product is loaded into a tank truck, rail car, ship, or barge, at the point the HCl product enters another process on the plant site, or at the point the HCl product leaves the plant site via pipeline. The source category covered by this MACT standard currently includes 19 facilities.

The 2003 NESHAP established emissions limitations for existing and new process vents, storage tanks, transfer operations, and equipment leaks. The NESHAP includes numerical emissions limitations for process vents, HCl storage tanks, and HCl transfer operations as well as work practice standards for equipment leaks.

On February 4, 2019, the EPA published a proposed rule in the Federal Register for the HCl Production NESHAP, 40 CFR part 63, subpart NNNNN, that took into consideration the RTR analyses and proposed no changes to the NESHAP based on our CAA section 112(f) and 112(d)(6) (RTR) reviews. In addition, we proposed to add electronic reporting and to remove exemptions for periods of SSM. Finally, we sought public comments on work practice standards for maintenance activities.

We proposed revisions to the SSM provisions of the standards to ensure that they are consistent with the Court decision in Sierra Club v. EPA, 551 F. 3d 1019 (D.C. Cir. 2008). Specifically, the Court vacated the SSM exemption contained in 40 CFR 63.6(f)(1) and 40 CFR 63.6(h)(1), holding that under section 302(k) of the CAA, emissions standards or limitations must be continuous in nature and that the SSM exemption violates the CAA's requirement that some CAA section 112 standards apply continuously.

This action finalizes the EPA's determinations pursuant to the RTR provisions of CAA section 112 for the HCl Production source category and the EPA's decision that revisions to the NESHAP are not necessary under the risk review or technology review because the NESHAP protects public health with an ample margin of safety and protects against an adverse environmental effect. We did not identify any developments in practices, processes, or control technologies under the technology review that warrant revisions to the MACT standards for this source category. However, this action finalizes other changes to the NESHAP, including removal of exemptions for periods of SSM, and the addition of electronic reporting requirements. This action also reflects changes to the February 2019 proposal in consideration of comments received during the public comment period related to work practice standards for maintenance activities described in section IV of this preamble.

This section describes the final actions regarding the HCl Production NESHAP that the EPA is taking pursuant to CAA section 112(f). The EPA proposed no changes to the NESHAP based on the risk review conducted pursuant to CAA section 112(f). In this action, we are finalizing our proposed determination that risks caused by emissions from HCl production are acceptable, and that the standards provide an ample margin of safety to protect public health and that more stringent standards are not necessary to prevent an adverse environmental effect.

The EPA is, therefore, not revising the standards under CAA section 112(f)(2) (for NESHAP 40 CFR part 63, subpart NNNNN) based on the residual risk review and is readopting the existing standards under CAA section 112(f)(2). See Summary of Public Comments and Responses for the Risk and Technology Review for the Hydrochloric Acid Production Source Category, available in the docket for this action, for discussion of key comments and responses regarding the residual risk review.

We determined that there are no developments in practices, processes, and control technologies that warrant revisions to the MACT standards for this source category. Therefore, we are not finalizing revisions to the MACT standards under CAA section 112(d)(6).

In the February 4, 2019, proposal, the Agency sought comments on maintenance provisions recommended by industry prior to proposal to address the anticipated removal of SSM exemptions from the NESHAP. A company that owns multiple HCl production facilities and a trade association representing HCl producers commented that removing the SSM exemption would create uncertainty regarding how emissions from intermittent planned maintenance activities would be regulated. Commenters stated that equipment is cleaned and cleared of chemicals prior to opening to the atmosphere for maintenance activities. The commenters recommended work practice standards in lieu of numerical emissions standards for maintenance activities due to the impracticality of capturing and measuring these emissions.

In this final rule, based on consideration of public comments, the EPA is adding work practice standards for maintenance vents to ensure emissions from these activities are subject to standards. As discussed in section IV.D of this preamble, we determined that it is impractical to measure the extremely small amounts of HCl and chlorine (Cl 2 ) that could be emitted after opening these “maintenance vents” to the atmosphere and that these emissions could be adequately addressed through work practice standards.

The Agency is finalizing, as proposed, changes to the HCl Production NESHAP to eliminate the SSM exemption. Consistent with Sierra Club v. EPA, 551 F.3d 1019 (DC Cir. 2008), the EPA is establishing standards in this rule that apply at all times. Table 7 to Subpart NNNNN of Part 63 (General Provisions applicability table) is being revised to change several references related to requirements that apply during periods of SSM. The EPA eliminated or revised certain recordkeeping and reporting requirements related to the eliminated SSM exemption. The EPA also made changes to the rule to remove or modify inappropriate, unnecessary, or redundant language in the absence of the SSM exemption. Other than the periods of maintenance activities described above which will be covered by work practice standards, the EPA determined that facilities in this source category can meet the applicable emission standards in the HCl Production NESHAP at all times, including periods of startup and shutdown. Also, as stated in our proposal, the EPA interprets CAA section 112 as not requiring emissions that occur during periods of malfunction to be factored into development of CAA section 112 standards, and this reading has been upheld as reasonable by the Court in U.S. Sugar Corp. v. EPA, 830 F.3d 579, 606-610 (2016). The legal rationale and detailed changes for SSM periods that are being finalized in this rule are set forth in the preamble to the proposed rule. See 84 FR 1584 through 1587 (February 4, 2019) and discussed below.

We are finalizing, as proposed, revisions to the General Provisions table (Table 7) entry for 40 CFR 63.6(e)(1)(i) by changing the “yes” in column 3 to a “no.” Section 63.6(e)(1)(i) describes the general duty to minimize emissions during periods of SSM. With the elimination of the SSM exemption, there is no need to differentiate between normal operations, startup and shutdown, and malfunction events in describing the general duty. The EPA is adding general duty regulatory text at 40 CFR 63.9005(b) that reflects the general duty to minimize emissions during all periods of operation.

The EPA is also revising the General Provisions table (Table 7) entry for 40 CFR 63.6(e)(1)(ii) by changing the “yes” in column 3 to a “no.” This provision requires malfunctions to be corrected as quickly as practicable and minimize emissions consistent with safety and good air pollution control practices. Section 63.6(e)(1)(ii) imposes requirements that are not necessary with the elimination of the SSM exemption or are redundant with the general duty requirement being added at 40 CFR 63.9005(b).

As proposed, the EPA is revising the General Provisions table (Table 7) entry for 40 CFR 63.6(e)(3) by changing the “yes” in column 3 to a “no.” Generally, these paragraphs require development of an SSM plan and specify SSM recordkeeping and reporting requirements related to the SSM plan. As noted, the EPA is proposing to remove the SSM exemptions. Therefore, affected units will be subject to an emission standard during such events. The applicability of a standard during such events will ensure that sources have the same incentive to plan for and achieve compliance as they do during periods of normal operation and, thus, planning requirements specific for SSM are no longer necessary.

The EPA is revising the General Provisions table (Table 7) entry for 40 CFR 63.6(f)(1) by changing the “yes” in column 3 to a “no.” The current language of 40 CFR 63.6(f)(1) exempts sources from non-opacity standards during periods of SSM. As discussed above, the Court in Sierra Club vacated the exemptions contained in 40 CFR 63.6(f)(1) and held that the CAA requires a standard to apply continuously. Consistent with Sierra Club, the EPA is revising standards in this rule to apply at all times.

The EPA is revising the General Provisions table (Table 7) entry for 40 CFR 63.7(e)(1) by changing the “yes” in column 3 to a “no.” Section 63.7(e)(1) describes performance testing requirements. The EPA is instead adding a performance testing requirement at 40 CFR 63.9020(a)(3). The performance testing requirements we are adding differ from the General Provisions performance testing provisions in several respects. Specifically, the new performance testing requirements do not include the language in 40 CFR 63.7(e)(1) restating the SSM exemption. However, we are including similar language that precludes startup and shutdown periods from being considered “representative” for purposes of performance testing. We are including language in 40 CFR 63.9020(a)(3), similar to that in 40 CFR 63.7(e)(1), providing that performance tests conducted under this subpart should not be conducted during malfunctions. This is because conditions during malfunctions are not representative of normal operating conditions. The EPA is adding language that requires the owner or operator to record the process information that is necessary to document operating conditions during the test and include in such records an explanation to support that such conditions represent normal operation. Section 63.7(e) requires that the owner or operator make available upon request by the Administrator such records “as may be necessary to determine the condition of the performance test,” but does not specifically require the information to be recorded. The regulatory text the EPA is adding in 40 CFR 63.9020(a)(3) includes the record requirements in 40 CFR 63.7(e)(1) and also makes explicit the requirement to record the information.

The EPA is revising the General Provisions table (Table 7) entry for 40 CFR 63.8(c)(1)(i) and (iii) by changing the “yes” in column 3 to a “no.” The cross-references to the general duty and SSM plan requirements in those subparagraphs are not necessary in light of the removal of the SSM exemption and other requirements of 40 CFR 63.8 that require good air pollution control practices (40 CFR 63.8(c)(1)) and that set out the requirements of a quality control program for monitoring equipment (40 CFR 63.8(d)). We are revising the General Provisions table (Table 7) entry for 40 CFR 63.8(d)(3) by changing the “yes” in column 3 to a “no.” The final sentence in 40 CFR 63.8(d)(3) refers to the General Provisions' SSM plan requirement which is no longer applicable. The EPA is adding to the rule at 40 CFR 63.9005(d)(5) text that is identical to 40 CFR 63.8(d)(3) except that the final sentence is replaced with the following sentence: “The program of corrective action should be included in the plan required under § 63.8(d)(2).”

The EPA is revising the General Provisions table (Table 7) entry for 40 CFR 63.10(b)(2)(i) by changing the “yes” in column 3 to a “no.” Section 63.10(b)(2)(i) describes the recordkeeping requirements during startup and shutdown. These recordkeeping provisions are no longer necessary because the EPA is finalizing, as proposed, that recordkeeping and reporting applicable to normal operations will apply during startup and shutdown. In the absence of special provisions applicable to startup and shutdown, such as a startup and shutdown plan, there is no reason to retain recordkeeping for startup and shutdown periods separate from the requirement that applies during normal operation.

We are revising the General Provisions table (Table 7) entry for 40 CFR 63.10(b)(2)(ii) by changing the “yes” in column 3 to a “no.” Section 63.10(b)(2)(ii) describes the recordkeeping requirements during a malfunction. The EPA is adding such requirements to 40 CFR 63.9055. The regulatory text we are adding differs from that in the General Provisions; the General Provisions require the creation and retention of a record of the occurrence and duration of each malfunction of process, air pollution control, and monitoring equipment. The EPA is finalizing, as proposed, that this requirement applies to any failure to meet an applicable standard and is requiring that the source record the date, time, and duration of the failure rather than the “occurrence.” The EPA is also adding to 40 CFR 63.9055 a requirement that sources keep records that include a list of the affected source or equipment and actions taken to minimize emissions, an estimate of the quantity of each regulated pollutant emitted over the standard which the source failed to meet, and a description of the method used to estimate the emissions. Examples of such methods would include product loss calculations, mass balance calculations, measurements when available, or engineering judgment based on known process parameters. The EPA is requiring that sources keep records of this information to ensure that there is adequate information to allow the EPA to determine the severity of any failure to meet a standard, and to provide data that may document how the source met the general duty to minimize emissions when the source has failed to meet an applicable standard.

We are revising the General Provisions table (Table 7) entry for 40 CFR 63.10(b)(2)(iv) by changing the “yes” in column 3 to a “no.” When applicable, the provision requires sources to record actions taken during SSM events when those actions were inconsistent with their SSM plan. The requirement is no longer appropriate because SSM plans will no longer be required. The requirement previously applicable under 40 CFR 63.10(b)(2)(iv)(B) to record actions to minimize emissions and record corrective actions is now applicable in 40 CFR 63.9055.

We are revising the General Provisions table (Table 7) entry for 40 CFR 63.10(b)(2)(v) by changing the “yes” in column 3 to a “no.” When applicable, the provision requires sources to record actions taken during SSM events to show that actions taken were consistent with their SSM plan. The requirement is no longer appropriate because SSM plans will no longer be required.

The EPA is revising the General Provisions table (Table 7) entry for 40 CFR 63.10(d)(5) by changing the “yes” in column 3 to a “no.” Section 63.10(d)(5) describes the reporting requirements for SSM events. To replace the General Provisions reporting requirement, the EPA is adding reporting requirements to 40 CFR 63.9050(c)(5). The replacement language differs from the General Provisions requirement in that it eliminates periodic SSM reports as stand-alone reports. We are adding language that requires sources that fail to meet an applicable standard at any time to report the information concerning such events in the semi-annual compliance report already required in 40 CFR 63.9050. We are requiring that the report must contain the number, date, time, duration, and the cause of such events (including unknown cause, if applicable), a list of the affected source or equipment, an estimate of the quantity of each regulated pollutant emitted over any emission limit, and a description of the method used to estimate the emissions.

Examples of such methods would include product-loss calculations, mass balance calculations, measurements when available, or engineering judgment based on known process parameters. The EPA is finalizing this requirement to ensure that there is adequate information to determine compliance, to allow the EPA to determine the severity of the failure to meet an applicable standard, and to provide data that may document how the source met the general duty to minimize emissions during a failure to meet an applicable standard.

The amendments eliminate the cross-reference to 40 CFR 63.10(d)(5)(i) that contains the description of the previously required SSM report format and submittal schedule. These specifications are no longer necessary because the events will be reported in otherwise required reports with similar format and submittal requirements.

We are revising the General Provisions table (Table 7) entry for 40 CFR 63.10(d)(5)(ii) by changing the “yes” in column 3 to a “no.” Section 63.10(d)(5)(ii) describes an immediate report for SSM events when a source failed to meet an applicable standard but did not follow the SSM plan. We will no longer require owners and operators to report when actions taken during a SSM event were not consistent with an SSM plan, because such plans will no longer be required.

We are revising the General Provisions table (Table 7) entry for 40 CFR 63.10(c)(15) by changing the “yes” in column 3 to a “no.” The EPA is finalizing, as proposed, that 40 CFR 63.10(c)(15) no longer applies. When applicable, the provision allows an owner or operator to use the affected source's SSM plan or records kept to satisfy the recordkeeping requirements of the SSM plan, specified in 40 CFR 63.6(e), to also satisfy the requirements of 40 CFR 63.10(c)(10) through (12). The EPA is eliminating this requirement because SSM plans will no longer be required, and, therefore, 40 CFR 63.10(c)(15) will no longer be available to satisfy the requirements of 40 CFR 63.10(c)(10) through (12).

The EPA is also finalizing a revision to the performance testing requirements at 40 CFR 63.9020(a)(2) through (3). This final rule text states that each performance test must be conducted under normal operating conditions; and operations during periods of startup, shutdown, or nonoperation do not constitute representative conditions for purposes of conducting a performance test. The final rules also require that operators maintain records to document that operating conditions during the test represent normal operations.

Section IV.C.3 of this preamble provides a summary of key comments we received on the SSM provisions and our responses.

This rule also finalizes, as proposed, revisions to several other NESHAP requirements. The revisions are briefly described in this section (refer to section IV.D of this preamble for further details).

To increase the ease and efficiency of data submittal and data accessibility, we are finalizing a requirement that owners or operators of facilities in the HCl Production source category submit electronic copies of certain required performance test results and reports, performance evaluation reports, compliance reports, and Notice of Compliance Status (NOCS) reports through the EPA's Central Data Exchange (CDX) website. Performance test and performance evaluation test reports are prepared using the EPA's Electronic Reporting Tool (ERT). We also are finalizing, as proposed, provisions that allow facility operators the ability to seek extensions for submitting electronic reports for circumstances beyond the control of the facility ( i.e., a possible outage in the CDX or Compliance and Emissions Data Reporting Interface (CEDRI) or a force majeure event in the time just prior to a report's due date), as well as the process to assert such a claim. In addition, we are finalizing all proposed revisions for clarifying text or correcting typographical errors, grammatical errors, and cross-reference errors. No public comment has been received on the editorial corrections and clarifications, and these changes are being finalized as proposed. See 84 FR 1594 and 1596 (February 4, 2019).

The revisions to the MACT standards being promulgated in this action are effective on April 15, 2020. Existing affected sources and new affected sources that commenced construction or reconstruction on or before February 4, 2019, must comply with the amendments no later than 180 days after April 15, 2020. Affected sources that commence construction or reconstruction after February 4, 2019, must comply with all requirements of 40 CFR part 63, subpart NNNNN, including the amendments being finalized, no later than the effective date of the final rule or upon startup, whichever is later. The EPA is finalizing four changes that affect ongoing compliance requirements for this subpart. First, we are changing the requirements for SSM by removing the provisions that provide an exemption from the requirements to meet the standard during SSM periods. Second, we are removing the requirement to develop and implement an SSM plan. Third, we are adding work practice standards for maintenance vents. Finally, we are adding a requirement that performance test results and reports, performance evaluation reports, compliance reports, and NOCS reports be submitted electronically. From the assessment of the timeframe needed for implementing the entirety of the revised requirements, the EPA proposed a period of 180 days to be the most expeditious compliance period practicable. The EPA received public comments from owners of HCl production facilities requesting more than 180 days for electronic reporting requirements to go into effect. Thus, the compliance date of the final amendments for all existing sources and new sources that commenced construction or reconstruction on or before February 4, 2019, will be October 13, 2020 for all revisions other than the electronic reporting requirements, which will be April 16, 2021 or when final electronic reporting templates for subpart NNNNN are finalized, whichever is later. The compliance date of the final amendments for new sources that commence construction or reconstruction after February 4, 2019, will be April 15, 2020.

For each issue, this section provides a description of what we proposed and what we are finalizing for the issue, the EPA's rationale for the final decisions and amendments, and a summary of key comments and responses. For all comments not discussed in this preamble, comment summaries and the EPA's responses can be found in the comment summary and response document available in the docket.

Pursuant to CAA section 112(f), the EPA conducted a residual risk review and presented the results of this review, along with our proposed decisions regarding risk acceptability and ample margin of safety, in the February 4, 2019, proposed rule for 40 CFR part 63, subpart NNNNN (84 FR 1582). The results of the risk assessment for the proposal are presented briefly in Table 2 of this preamble. More detail may be found in the residual risk technical support document, Residual Risk Assessment for the Hydrochloric Acid Production Source Category in Support of the 2018 Risk and Technology Review Proposed Rule, which is available in the docket for this rulemaking.

The results of the inhalation cancer risk assessment, as shown in Table 2 of this preamble, indicate there is no quantifiable cancer risk posed by the source category since the two HAP emitted from the HCl Production source category are not known or suspected carcinogens. Neither the EPA nor the International Agency for Research on Cancer (IARC) has evaluated the weight of evidence with respect to human carcinogenicity for Cl 2 . However, IARC has determined that HCl is not classifiable as a human carcinogen. Likewise, the total estimated cancer incidence is 0 (zero) excess cancer cases per year and no people are estimated to have cancer risk associated with this source category. The maximum modeled chronic noncancer target-organ-specific hazard index (TOSHI) value for the source category based on actual emissions is estimated to be 0.2, driven by emissions of Cl 2 from process vents. The target organ affected is the respiratory system. The maximum modeled chronic noncancer TOSHI increases when based on allowable emissions, with a TOSHI as high as 2 (respiratory) driven by Cl 2 emissions from process vents at two facilities. Based on allowable emissions, 300 people are estimated to have a noncancer HI above 1 at these two facilities.

The screening and refined analyses for acute impacts were based on an estimate of peak hourly actual emissions. To estimate the peak hourly emission rates from the annual average rates, a default multiplier of 10 was used for emission points in the source category. The choice of a default multiplier of 10 is discussed in section III.C.3.c of this preamble. The results of the acute refined analysis indicate that the maximum off-facility-site acute hazard quotient (HQ) is 0.7, based on the reference exposure level value for HCl, and occurs at one facility.

No HAP known to be persistent and bio-accumulative in the environment (cadmium, dioxins, polycyclic organic matter, mercury, arsenic, and lead) are emitted from this source category. Therefore, a multi-pathway assessment is not warranted. The only environmental HAP emitted by facilities in this source category is HCl. Results of the analysis for HCl indicate that, based on actual emissions, the maximum annual off-site concentration is below all ecological benchmarks for all facilities. Therefore, we do not expect an adverse environmental effect as a result of HAP emissions from this source category.

All health risk factors were weighed, including those shown in Table 2 of this preamble, in our risk acceptability determination and the EPA proposed that the risks posed by the HCl Production source category are acceptable (see section IV.B.1 of proposal preamble, 84 FR 1570, February 4, 2019).

The EPA then considered whether 40 CFR part 63, subpart NNNNN, provides an ample margin of safety to protect public health and whether, taking into consideration costs, energy, safety, and other relevant factors, and to prevent an adverse environmental effect. In considering whether standards are required to provide an ample margin of safety to protect public health, the same risk factors were considered as for the acceptability determination along with costs, technological feasibility, and other relevant factors related to emissions control options that might reduce risk associated with emissions from the source category. As discussed in the proposal preamble (84 FR 1570, February 4, 2019), after considering all the factors mentioned above, the EPA proposed that additional emissions controls for the HCl Production source category are not required to provide an ample margin of safety to protect public health. The Agency also proposed that it is not necessary to set a more stringent standard to prevent, taking into consideration costs, energy, safety, and other relevant factors, an adverse environmental effect. See sections IV.B.2 and 3 of the proposal preamble, 84 FR 1570, February 4, 2019.

The EPA did not receive any public comments or data that caused the Agency to change our emissions estimates, risk assessment methods, or decisions regarding acceptability and ample margin of safety from those presented in the proposal. Therefore, the EPA did not rerun the risk modeling analyses. At proposal, we determined that risks due to the HCl Production source category are acceptable, no revisions are needed to provide an ample margin of safety, and more stringent standards are not necessary to prevent an adverse environmental effect. Upon consideration of the comments received, we are finalizing our determination that the current standards provide an ample margin of safety and it is not necessary to set a more stringent standard to prevent an adverse environmental effect. More details regarding the risk assessment can be found in the Residual Risk Assessment for the Hydrochloric Acid Production Source Category in Support of the 2019 Risk and Technology Review Final Rule, available in the docket for this rulemaking.

The EPA received mixed public comments on the risk review, with some commenters supportive of our methodology and proposed decisions while others disagreed. Examples from commenters on suggested changes to the EPA's risk assessment methodology included that the EPA should lower its presumptive limit of acceptability for cancer risks to below 100-in-1 million, include emissions outside of the source categories in question in the risk assessment, and assume that pollutants with noncancer health risks have no safe level of exposure. After review of all the comments received, it was determined that no changes were necessary. The comments and specific responses can be found in the document, Summary of Public Comments and Responses for the Risk and Technology Review for the Hydrochloric Acid Production Source Category, available in the docket for this action.

As noted in the proposal, the EPA sets standards under CAA section 112(f)(2) using “a two-step standard-setting approach, with an analytical first step to determine an `acceptable risk' that considers all health information, including risk estimation uncertainty, and includes a presumptive limit on MIR of “approximately 1-in-10 thousand” (see 54 FR 38045, September 14, 1989). All health risk measures and factors in our risk acceptability determination are weighed, including the cancer MIR, cancer incidence, the maximum cancer TOSHI, the maximum acute noncancer HQ, the extent of noncancer risks, the distribution of cancer and noncancer risks in the exposed population, and the risk estimation uncertainties.

As noted above, the EPA did not receive any comments that resulted in a change to the risk estimates for the source category. After considering all comments regarding the EPA's risk review methodology and proposed decisions, the EPA has determined to finalize its proposed determinations regarding risk acceptability, ample margin of safety, and adverse environmental effects. For the reasons explained in the proposed rule, in section IV.A.2 of this preamble, and in the EPA's Response to Comment document for this final rule, the EPA determines that the risks from the source category are acceptable, the current standards provide an ample margin of safety to protect public health, and more stringent standards are not necessary to prevent an adverse environmental effect. Therefore, the EPA is not revising the standards pursuant to CAA section 112(f)(2) based on the residual risk review, and the Agency is readopting the existing standards under CAA section 112(f)(2).

At proposal, the EPA sought public comments on the use of the updated ethylene oxide cancer risk value for regulatory purposes. 2 We received a number of comments related to this request and as stated in the proposal for the Miscellaneous Organic NESHAP RTR proposal, we are incorporating those comments into the record for that rulemaking and plan to respond to them in the final RTR rulemaking for that source category. See 84 FR 69187, December 17, 2019. 3 We also note that the Agency is taking action to address emissions of ethylene oxide in a number of ways as described in the proposal preamble. See 84 FR 1584, February 4, 2019.

Pursuant to CAA section 112(d)(6), the EPA proposed to conclude that no revisions to the current standards are necessary for the HCl Production source category. No developments were found in practices, processes, and control technologies that could be applied to HCl production facilities.

We have not changed any aspect of the technology review since the February 4, 2019, RTR proposal for the HCl Production source category.

The comments and our specific responses can be found in the comment summary and response document titled Summary of Public Comments and Responses for the Risk and Technology Review for Hydrochloric Acid Production, which is available in the docket for this action.

Pursuant to CAA section 112(d)(6), we are finalizing the technology review as proposed. For the reasons explained in the proposed rule, we determined that there are no developments in practices, processes, or control technologies that warrant revisions to the standards. We evaluated all of the comments on the EPA's technology review and, for the reasons stated in our responses to those comments, we determined no changes to the review are needed.

We proposed removing and revising provisions related to SSM that are not consistent with the requirement that standards apply at all times. More information concerning our proposal on SSM can be found in the proposed rule (84 FR 1584, February 4, 2019).

Since proposal, the SSM provisions have not changed.

The comments and our specific responses can be found in the comment summary and response document titled Summary of Public Comments and Responses for the Risk and Technology Review for Hydrochloric Acid Production, which is available in the docket for this action.

We evaluated all of the comments on the EPA's proposed amendments to the SSM provisions. For the reasons explained in the preamble to the proposed rule (84 FR 1584, February 4, 2019) and our response to comment document, we are removing the provisions related to SSM that are not consistent with the requirement that the standards apply at all times, and are finalizing revised requirements for periods of SSM, as proposed.

We proposed that owners or operators submit electronic copies of initial notifications, initial startup reports, annual compliance certifications, deviation reports, and performance test reports through the EPA's CDX using the CEDRI. For initial notifications, initial startup reports, annual compliance certifications, and deviation reports, the proposed rule would require that owners or operators use the appropriate spreadsheet template to submit information to CEDRI. We also proposed two broad circumstances in which we may provide extension to these requirements. We proposed at 40 CFR 63.9050(m) that an extension may be warranted due to outages of the EPA's CDX or CEDRI that precludes an owner or operator from accessing the system and submitting required reports. We also proposed at 40 CFR 63.9050(n) that an extension may be warranted due to a force majeure event, such as an act of nature, act of war or terrorism, or equipment failure or safety hazards beyond the control of the facility.

The Agency sought public comment on whether there was a need to address equipment that is opened during regular maintenance activities, in light of the proposed removal of the SSM exemptions, and if these maintenance activities should be addressed via work practice standards. See 84 FR 1589, February 4, 2019. Prior to the February 4, 2019, proposal, industry representatives expressed concerns about the regulatory status of certain equipment opened to the atmosphere during periods for maintenance, given that they believed the activities previously were exempted under the SSM provisions.

We are finalizing as proposed the requirements for owners or operators to submit electronic copies of initial notifications, initial startup reports, annual compliance certifications, deviation reports, and performance test reports electronically. We also are finalizing, as proposed, the provisions that allow facility operators the ability to seek extensions for submitting electronic reports for circumstances beyond the control of the facility.

After considering the public comments received regarding maintenance activities that occur during startup and shutdown, the EPA is finalizing a requirement for equipment designated as “maintenance vents” to be thoroughly purged of HCl and Cl 2 prior to opening that equipment to the atmosphere. We have added paragraph (f) to 40 CFR 63.9040 with requirements for equipment that owners/operators designate as a maintenance vent. Owners or operators must demonstrate that equipment served by a maintenance vent contains less than 20 pounds of residual HCl or Cl 2 prior to opening that equipment to the atmosphere.

We received one comment providing input on the proposed requirement for owners and operators of HCl production facilities to submit electronic copies of initial notifications, initial startup reports, annual compliance certifications, deviation reports, and performance test reports.

Comment: One commenter stated that the EPA must not finalize the proposed electronic reporting extension provisions because the definition of a force majeure event is too broad, the provisions do not set a firm deadline to request an extension of the reporting deadline, and the decision to allow an extension is solely within the discretion of the Administrator. The commenter urged that the proposed provisions are unlawful and arbitrary because they would create a broad and vague mechanism that a facility owner or operator could use to evade binding emission standards by evading the binding compliance reporting deadlines set to assure compliance with those standards. The commenter further stated that the EPA should not import the concept of “ force majeure” into any part of the CAA, as to do so is a variation of the prior malfunction exemptions that are unlawful under the CAA. The commenter also noted that the EPA has provided that there are no known issues with submission of ERT-formatted performance test and evaluation reports in CEDRI (per the Petroleum Refinery NESHAP), thus, there is no rational basis for providing the proposing reporting extensions. At a minimum, the commenter requested that the EPA set a new firm deadline to assure that the extension request allows only a temporary period when the facility need not report, such as a 10-day extension, rather than an open-ended extension without a deadline.

Response: The commenter states that the brief case-by-case extension of report submittal deadlines is a “reporting exemption.” This is not the case. The proposed provisions the commenter questions are in paragraphs 40 CFR 63.9050(m) and (n).

There is no exception or exemption to reporting, much less an exemption from compliance with the numerical emission standards, only a method for requesting an extension of the reporting deadline. Reporters are required to justify their request and identify a reporting date. There is no predetermined timeframe for the length of extension that can be granted, as this is something best determined by the Administrator ( i.e., the EPA Administrator or delegated authority as defined in 40 CFR 63.2) when reviewing the circumstances surrounding the request. Different circumstances may require a different length of extension for electronic reporting. For example, a tropical storm may delay electronic reporting for a day, but a Hurricane Katrina scale event may delay electronic reporting much longer, especially if the facility has no power, and, as such, the owner or operator has no ability to access electronically stored data or to submit reports electronically. The Administrator will be the most knowledgeable of the events leading to the request for extension and will assess whether an extension is appropriate, and, if so, a reasonable length for the extension. The Administrator may even request that the report be sent in hard copy until electronic reporting can be resumed. While no new fixed duration deadline is set, the regulation requires that the report be submitted electronically as soon as possible after the CEDRI outage or after the force majeure event resolves.

The concept of force majeure has been implemented by the EPA in this context since May 2007 within the CAA requirements through the performance test extensions provided in 40 CFR 60.8(a)(1) and 63.7(a)(4). Like the performance test extensions, the approval of a requested extension of an electronic reporting deadline is at the discretion of the Administrator.

The EPA disagrees that the ability to request a reporting extension “would create a broad and vague mechanism” that owners and operators “could use to evade binding emissions standards” or evade “binding compliance reporting deadlines” for emissions standards. While reporting is an important mechanism for the EPA and air agencies to assess whether owners and operators are in compliance with emissions standards, reporting obligations are separate from ( i.e., in addition to) requirements that an owner or operator be in compliance with an emissions standard. The commenter references deadlines set forth in the CAA for demonstrating initial compliance following the effective date of emission standards, which differs from deadlines for submitting reports. There are no such deadlines stated in the CAA for report due dates, meaning the EPA has discretion to establish reporting schedules, and also discretion to allow a mechanism for extension of those schedules on a case-by-case basis. In fact, under the commenter's reasoning, if the statutory deadlines for compliance with standards were read to strictly apply to continuing reporting requirements, no such reporting could be required after 3 years from the promulgation of the standards. This would not be a reasonable result. Reporting deadlines are often different from compliance deadlines. Rules under 40 CFR part 60 and 63 typically allow months following an initial compliance deadline to conduct testing and submit reports, but compliance with standards is required upon the compliance date.

Additionally, the ability to request a reporting extension does not apply to a broad category of circumstances; on the contrary, the scope for submitting an extension request for an electronic report is very limited in that claims can only be made for an event outside of the owner's or operator's control that occurs in the 5 business days prior to the reporting deadline. The claim must then be approved by the Administrator, and in approving such a claim, the Administrator agrees that something outside the control of the owner or operator prevented the owner or operator from meeting its reporting obligation. In no circumstance does this electronic reporting extension allow for the owner or operator to be out of compliance with the underlying emissions standards. If the Administrator determines that a facility has not acted in good faith to reasonably report in a timely manner, the Administrator can reject the claim and find that the failure to report timely is a deviation from the regulation. CEDRI system outages are infrequent, but the EPA knows when they occur and whether a facility's claim is legitimate. Force majeure events ( e.g., natural disasters impacting a facility) are also usually well-known events.

Finally, the EPA disagrees that the existing statistics on the use of CEDRI and e-reporting precludes the need for a provision to account for an outage of the CEDRI system. Prudent management of electronic data systems builds in allowances for unexpected, non-routine delays, such as occurred on July 1, 2016, and October 20-23, 2017, and is consistent with the already-existing provisions afforded for unexpected, non-routine delays in performance testing [see 40 CFR 60.8(a)(1) and (2) and 40 CFR 63.7(a)(4)]. For both electronic reporting and performance testing, owners or operators are to conduct and complete their activities within a short window of time. The EPA believes it is prudent to allow owners or operators to make force majeure claims for situations beyond their reasonable control. The EPA also disagrees that incidental issues with questions on completing the form or the procedures for accessing CEDRI for which the CEDRI Helpdesk is available, are conditions that would be considered either force majeure or a CEDRI system outage. The existence of the Helpdesk for answering questions on procedures in submitting reports to CEDRI have no impact on the availability of CEDRI in such a circumstance. The purpose of these requests for extensions are to accommodate owners and operators in cases where they cannot successfully submit a report electronically for reasons that are beyond their control and occur during a short window of time prior to the reporting deadline. The extension is not automatic, and the Administrator retains the right to accept or reject the request. The language was added as part of the standard electronic reporting language based on numerous comments received on the proposal for the Electronic Reporting and Recordkeeping Requirements for the New Source Performance Standards (80 FR 15100, March 20, 2015). As such, we have determined that no changes to the electronic reporting requirements are necessary in the final rule.

Comment: Two commenters requested that the EPA address small and intermittent levels of HCl and Cl 2 emissions that could occur during maintenance activities. According to the commenters, these activities were previously not subject to the NESHAP due to the SSM exemptions included in the HCl Production NESHAP. The commenters state that lines and equipment used in this source category are routinely cleared and cleaned of chemicals. The frequency of these activities varies depending on the facility, but plants may be shut down annually for scheduled maintenance. The equipment is purged free of materials and washed with water, and in some cases, it is further purged with air to a control device. Even in these scenarios after washing and purging, when the equipment is opened to the atmosphere, there may be some small trace levels of HCl and/or Cl 2 that could be present and potentially emitted. The commenters claim that it would be significantly burdensome for every vent with these small amounts of HCl or Cl 2 emissions to be addressed by the rule's requirements for process vents. The commenters state that this could trigger costly controls, testing, monitoring, and recordkeeping/reporting obligations for trace emissions.

The commenters suggest two courses of action for the EPA to address emissions from maintenance activities and vents through which emissions occur during these periods. These suggestions are, (1) adding a definition for maintenance vent to the list of sources excluded from process vent standards, or (2) adding a work practice standard that applies to maintenance vents, similar to work practices added in other recent NESHAP amendments in which the SSM exemptions were removed.

The commenters state that removing the SSM exemption creates uncertainty regarding whether any emissions from a maintenance vent, regardless of magnitude, may become subject to the standard. The commenters also add that planned maintenance activities typically occur on an annual basis. The commenters state that they believe the best performing sources in the category drain and purge lines prior to performing maintenance activities. The commenters state that should the EPA choose to regulate emissions from these maintenance activities, setting a numerical emission limit would be impractical because the type and size of equipment being maintained differs between facilities. Furthermore, the commenters assert that measuring emissions from these maintenance activities would be impractical due to the small magnitude of emissions and their short duration.

Response: Upon consideration of the public comments submitted, the EPA is finalizing a definition for maintenance vents and work practice standards that minimize the potential for emissions from maintenance activities that occur during periods of startup or shutdown. We agree with the commenters that it is impractical to measure the small levels of HCl or Cl 2 that could be emitted from these pieces of equipment during intermittent maintenance activities. Furthermore, we agree with the commenters that cleaning and purging equipment to a control device prior to opening that equipment during maintenance activities represents the performance of the best performing sources in the industry.

Additional comments on the proposed electronic reporting requirements and other amendments discussed in this section and our specific responses to those comments can be found in the memorandum titled Summary of Public Comments and Responses for the Risk and Technology Review for Hydrochloric Acid Production, available in the docket for this action.

We considered the comments on the EPA's proposed amendments to require electronic reporting initial notifications, initial startup reports, annual compliance certifications, deviation reports, and performance test reports. For the reasons explained in the proposed rule, and in our responses to those comments, we are establishing electronic reporting, as proposed. These amendments will increase the ease and efficiency of data submittal and improve data accessibility. More information concerning the proposed requirement for owners and operators of HCl production facilities to submit electronic copies of certain notifications and reports is in the preamble to the proposed rule (84 FR 1593, February 4, 2019) and the document, Summary of Public Comments and Responses for the Risk and Technology Review for Hydrochloric Acid Production, available in the docket for this action. Therefore, we are finalizing our approach for submission of initial notifications, initial startup reports, annual compliance certifications, deviation reports, and performance test reports as proposed. We are, however, allowing facilities up to 1 year from publication of the final rule or 1 year from finalization of the electronic reporting templates for owners/operators of HCl production facilities to use electronic reporting. Furthermore, after considering public comments, we are finalizing work practice standards for periods of maintenance activities.

There are 19 HCl production facilities currently operating as major sources of HAP subject to the final amendments. A complete list of facilities that are currently subject to the MACT standards is available in the memorandum titled Industry Characterization for the Hydrochloric Acid Production NESHAP Residual Risk and Technology Review Final, available in Docket ID No. EPA-HQ-OAR-2018-0417.

Because the EPA is not revising the emission limits, we do not anticipate any quantifiable air quality impacts as a result of these amendments. However, we determined that the final requirements, including the work practice standards for maintenance activities, are at least as stringent as the current rule requirements. The work practice standards include requirements for facilities to clear equipment of HCl and Cl 2 before it is opened to the atmosphere. These requirements will minimize emissions during these periods.

The cost impacts from these final amendments are net savings in costs to affected HCl production facilities due to revised recordkeeping and reporting requirements. One way to present cost estimates is in present value (PV terms). The PV for these proposed amendments is equal to an estimated cost savings of $55,341 at a discount rate of 3 percent and a cost savings of $44,911 at a discount rate of 7 percent, discounted to 2020. The equivalent annualized value, which is an annualized value consistent with the PV estimates, is equal to $7,649 at a discount rate of 3 percent and $7,029 at a discount rate of 7 percent (2016 dollars). The time period over which these estimates are calculated includes the 5-year period following promulgation of these amendments. These calculations are documented in the Economic Impact Analysis for the Hydrochloric Acid Production RTR Final, which is available in the docket for this rulemaking.

As noted earlier, we estimated a nationwide cost savings associated with the final requirements over the 5-year period following promulgation of these amendments. This cost savings will not yield adverse economic impacts to affected entities or markets. For further information on the economic impacts associated with the final requirements, see the memorandum, Economic Impact Analysis for Hydrochloric Acid Production NESHAP RTR Final, which is available in the docket for this action.

The EPA is not finalizing changes to emissions limits, and we estimate the final changes ( i.e., changes to SSM, monitoring, recordkeeping and reporting, and the addition work practices for maintenance activities) are not economically significant. Because these final amendments are not considered economically significant, as defined by Executive Order 12866 and because no emissions reductions were estimated, we did not estimate any benefits from reducing emissions.

As discussed in the preamble to the proposed rule, to examine the potential for any environmental justice issues that might be associated with the source category, we performed a demographic analysis, which is an assessment of risks to individual demographic groups of the populations living within 5 kilometers (km) and within 50 km of the facilities. In the analysis, we evaluated the distribution of HAP-related cancer and noncancer risks from the HCl Production source category across different demographic groups within the populations living near facilities. When examining the risk levels of those exposed to emissions from HCl production facilities, we found that no one is exposed to a cancer risk at or above 1-in-1 million or to a chronic noncancer TOSHI greater than 1.

The documentation for this decision is contained in section IV.A of the preamble to the proposed rule and the technical report titled Risk and Technology Review—Analysis of Demographic Factors for Populations Living Near Hydrochloric Acid Production, which is available in the docket for this action.

The EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action's health and risk assessments are summarized in section IV.A of this preamble and are further documented in the risk report, Residual Risk Assessment for the Hydrochloric Acid Production Source Category in Support of the 2020 Risk and Technology Review Final Rule, available in the docket for this action.

Additional information about these statutes and Executive Orders can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action and was, therefore, not submitted to the Office of Management and Budget (OMB) for review.

This action is considered an Executive Order 13771 deregulatory action. Details on the estimated cost savings of this final rule can be found in the EPA's analysis of the potential costs and benefits associated with this action.

The information collection activities in this rule have been submitted for approval to the OMB under the PRA. The Information Collection Request (ICR) document that the EPA prepared has been assigned EPA ICR number 2032.11. You can find a copy of the ICR in the docket for this rule, and it is briefly summarized here. The information collection requirements are not enforceable until OMB approves them.

The EPA is finalizing amendments that revise provisions pertaining to emissions during periods of SSM; add requirements for electronic reporting of certain notifications and reports and performance test results; and make other minor clarifications and corrections. This information will be collected to assure compliance with the HCl Production NESHAP.

Respondents/affected entities: Owners or operators of HCl production facilities.

Respondent's obligation to respond: Mandatory (40 CFR part 63, subpart NNNNN).

Estimated number of respondents: 19 (assumes no new respondents over the next 3 years).

Frequency of response: Initially, occasionally, and annually.

Total estimated burden: 22,000 hours (per year) to comply with all of the requirements in the NESHAP. Burden is defined at 5 CFR 1320.3(b).

Total estimated cost: $2,700,000 (per year), including $162,000 annualized capital or operation and maintenance costs, to comply with all of the requirements in the NESHAP.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9. When OMB approves this ICR, the Agency will announce that approval in the Federal Register and publish a technical amendment to 40 CFR part 9 to display the OMB control number for the approved information collection activities contained in this final rule.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. This action will not impose any requirements on small entities. There are no small entities among the 14 ultimate parent companies impacted by this proposed action given the Small Business Administration small business size definition for this industry (1,000 employees or greater for NAICS 325180), and no significant economic impact on any of these entities.

This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local, or tribal governments or the private sector.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.

This action does not have tribal implications as specified in Executive Order 13175. None of the HCl production facilities that have been identified as being affected by this final action are owned or operated by tribal governments or located within tribal lands. Thus, Executive Order 13175 does not apply to this action.

This action is not subject to Executive Order 13045 because the EPA does not believe the environmental health risks or safety risks addressed by this action present a disproportionate risk to children. This action's health and risk assessments are contained in sections IV.A of this preamble and the document, Residual Risk Assessment for the Hydrochloric Acid Production Source Category in Support of the 2020 Risk and Technology Review Final Rule, which is available in the docket for this rulemaking.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

This action involves technical standards. Therefore, the EPA conducted a search to identify potentially applicable voluntary consensus standards. However, the Agency identified no such standards. A thorough summary of the search conducted and results are included in the memorandum titled Voluntary Consensus Standard Results for Hydrochloric Acid Production Residual Risk and Technology Review, which is available in the docket for this action.

The EPA believes that this action does not have disproportionately high and adverse human health or environmental effects on minority populations, low-income populations, and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994).

The documentation for this decision is contained in section IV.A of this preamble and in the technical report, Risk and Technology Review—Analysis of Demographic Factors for Populations Living Near Hydrochloric Acid Production Facilities, available in the docket for this action.

This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

For the reasons set forth in the preamble, the EPA is amending 40 CFR part 63 as follows:

I. General Information A. Does this action apply to me?

Entities potentially regulated by this final action include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities that the EPA is now aware could potentially be regulated by this action. Other types of entities not listed in the table could also be regulated. To determine whether your entity is regulated by this action, you should carefully examine the applicability criteria found in 40 CFR 122.26 and 122.32, and the discussion in the preamble. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the FOR FURTHER INFORMATION CONTACT section.

The EPA is finalizing a set of changes to the NPDES eRule that updates the data elements that apply to regulated MS4s. These changes are necessary because of a separate rulemaking that the EPA promulgated after publication of the NPDES eRule. That rulemaking, published on December 9, 2016, and referred to as the MS4 General Permit Remand Rule (MS4 Remand Rule), modified the NPDES permit requirements for small MS4s contained within the Phase II stormwater regulations. Promulgation of these Phase II regulatory changes made a number of the MS4-related data elements in the NPDES eRule no longer accurate. This final rule updates those specific data elements to make them consistent with current stormwater Phase II regulations, corrects related typographical errors, and clarifies some other data elements at the request of state NPDES permitting authorities. The changes are limited to the correction of inaccuracies and the addition of requested clarifications, and do not increase reporting burden on regulated MS4 permittees.

This final rule modifies the NPDES eRule; therefore, the authorities for this action are derivative of the authorities for that action. The EPA promulgated the NPDES eRule on October 22, 2015 (80 FR 64064), pursuant to the Clean Water Act (CWA), 33 U.S.C. 1251 et seq., which added a new part to title 40 of the Code of Federal Regulations (CFR) (40 CFR part 127) and made changes to existing regulations. The EPA promulgated the NPDES eRule under authority of the CWA sections 101(f), 304(i), 308, 402, and 501.

These updates to the NPDES eRule are necessary because the EPA promulgated subsequent modifications to the Phase II stormwater permitting regulations for small MS4s, known as the MS4 Remand Rule. The authority for that rule is the Federal Water Pollution Control Act, 33 U.S.C. 1251 et seq., including sections 402 and 501. The MS4 Remand Rule was published on December 9, 2016 (81 FR 89320) and was incorporated into the CFR at 40 CFR 122.28(d), and as modifications to 40 CFR 122.33 through 122.35.

These regulatory updates do not increase the regulatory burden associated with complying with the NPDES eRule, but rather correct inconsistencies between the language used in the data elements and the newly modified Phase II stormwater regulations, and make several clarifications suggested by state NPDES permitting authorities. The EPA anticipates no change in the overall cost burden to affected entities to comply with the NPDES eRule above what was projected as a result of promulgating the rule.

Under the NPDES eRule (promulgated on October 22, 2015, see 80 FR 64064), NPDES permitting authorities and permittees must replace the paper-based system of reporting permit information and data with an electronic system. The rule also lists specific data elements that must be reported in the EPA's national NPDES data system, the Integrated Compliance Information System (ICIS)-NPDES. See 40 CFR part 127, appendix A. Permitting authorities and permittees are currently required to begin reporting electronically for permitted MS4s on December 21, 2020. (Note, however, that in a separate action, the EPA published a proposed rule on February 28, 2020 to change to this deadline from December 21, 2020 to December 21, 2023. See 85 FR 11909.)

Following the issuance of the NPDES eRule, the EPA promulgated changes to certain Phase II stormwater permitting requirements related to small MS4s. This rulemaking, referred to as the MS4 General Permit Remand Rule (MS4 Remand Rule), was published on December 9, 2016 (see 81 FR 89320), and became effective as of January 9, 2017. The Phase II rule changes address a decision by the U.S. Court of Appeals for the Ninth Circuit in Environmental Defense Center, et al. v. EPA, 344 F.3d 832 (9th Cir. 2003) (EDC decision). That court found that the EPA's regulations for obtaining coverage under a small MS4 general permit did not provide for adequate public notice, the opportunity to request a hearing, or permitting authority review to determine whether the best management practices (BMPs) selected by each MS4 in its stormwater management program (SWMP) meet the CWA requirements, including the requirement at CWA section 402(p)(3)(B)(iii) to “reduce the discharge of pollutants to the maximum extent practicable.” The Phase II rule changes addressed these issues by revising the procedures to be used to issue and administer small MS4 general permits, and by making it clear that the terms and conditions of the permit are enforceable, not the contents of the permittee-developed SWMP.

Because the description of the MS4-related data elements in appendix A of the NPDES eRule were based on the regulations in place prior to issuance of the MS4 Remand Rule, it is necessary to update the NPDES eRule to reflect these changes. If left unchanged, the eRule data elements would be inconsistent with the new requirements for small MS4 permits in the Phase II regulations. The EPA is taking this action now to ensure that such inconsistencies are fixed, and to correct a small number of typographical errors and other mistakes made in relevant parts of the appendix A data elements.

The EPA is also clarifying the MS4-related data elements to address suggestions by authorized NPDES programs that participated in the EPA-State Stormwater Technical Workgroup (Workgroup). The EPA convened the Workgroup to discuss the MS4 data elements listed in appendix A to 40 CFR part 127. This Workgroup met bi-weekly from November 2017 to July 2018 and included approximately 100 subject matter experts from the EPA Headquarters, seven EPA Regions, and 34 states. The EPA documented member recommendations in a memorandum entitled Implementation Technical Paper No. 9: Data Requirements for NPDES Electronic Reporting Rule Stormwater Information (EPA, October 2018), posted on the EPA's website at https://www.epa.gov/compliance/data-entry-guidance-and-technical-papers. This technical paper provides more detail on electronic formatting and submission of data elements required through authorized NPDES program inspections and oversight, MS4 program compliance monitoring reports, NPDES permit applications, and NPDES general permit reports [ e.g., Notices of Intent (NOIs)]. The EPA plans to use this technical paper to develop electronic reporting tools and to update NPDES data sharing protocols and schemas, the EPA's NPDES data system (ICIS-NPDES), and the forthcoming NPDES Noncompliance Report (NNCR).

In a separate action, the EPA plans to propose changing the deadline for implementation of Phase 2 of the NPDES eRule from December 21, 2020, to December 21, 2023 (see § 127.16 Table 1). Phase 2 implementation includes general permits and program reports. The EPA also plans to propose new provisions to allow the EPA to approve alternative start dates for electronic reporting and data sharing of Phase 2 data.

The EPA received one comment during the public comment period that suggested one edit and further clarifications related to the proposed updates to the data elements. The EPA made the requested change to the data elements and provided further clarification on the Agency's intentions regarding several of the proposed data elements. To view the EPA's specific responses to these comments, refer to the Response-to-Comment document, which can be found in the docket for this final rule.

The changes needed to eliminate the inconsistencies between the NPDES eRule data elements and the post-MS4 Remand Rule regulations are limited, and because these inconsistencies were repeated frequently, they fall into several broad categories. The following describes the broad categories of inconsistencies that existed previously and the types of changes made in this final rule.

The MS4 Remand Rule modified the Phase II stormwater regulations by, among other things, clarifying that it is the permit that establishes the enforceable requirements for the MS4. By establishing procedures for the permitting authority to ensure that the permit contains all of the requirements to assess compliance, the MS4 Remand Rule also clarified that these requirements are not found in documents such as the MS4's Notice of Intent for coverage or its SWMP, unless the SWMP, or portions of it, has been formally incorporated as part of the permit following a review, approval, and public notice process. See related discussion in the MS4 Remand Rule preamble at 81 FR 89339 (December 9, 2016).

The MS4 data elements in Table 2 of the NPDES eRule's appendix A data elements were based on the pre-MS4 Remand Rule version of the Phase II regulations. Therefore, some of the language used for the original NPDES eRule data elements does not accurately reflect that the permit terms alone constitute the enforceable requirements of the permit. In order to ensure that reported information related to MS4s accurately reflects the regulations upon which they are based, the EPA clarifies the descriptions of the data elements where necessary to ensure that the requirements that are reported and tracked through electronic reporting are the terms and conditions of the permit.

The following is a summary of the changes that the EPA is making in order to correct the inconsistencies described above.

• Corrections to data elements that referenced the permittee's intentions as opposed to the permit requirements. Language in the previous appendix A data elements that described the permittee's intentions in implementing the “minimum control measure” components of its stormwater program were not consistent with the current Phase II regulations. For instance, the previous appendix A data element description for the public education and outreach minimum control measure was described as “The one or more unique codes/descriptions that identifies educational materials the permittee intends to distribute or equivalent outreach activities . . .” (emphasis added). Use of this data description made sense under the pre-MS4 Remand Rule regulations, where the MS4's compliance obligation was contained within the permittee's SWMP, the contents of which were also required to be summarized in the MS4's NOI, if the permitting authority elected to issue a general permit for eligible small MS4s.

The MS4 Remand Rule clarified, among other things, that the MS4's description of its compliance actions does not substitute for the terms and conditions in the permit. The revised Phase II regulations make it clear that the permittee's compliance is judged by whether it has met the requirements of the permit; the permittee's intention as reflected in its SWMP does not constitute the basis for permit compliance. Though, in the example above, this language accurately reflected existing regulatory requirements for the public education and outreach minimum control measure prior to the MS4 Remand Rule, its emphasis on the intention of the permittee, rather than the permit requirements, was inconsistent with the revised Phase II regulations.

The EPA's rule modifies the relevant language for each of the data elements that included this type of language to reflect that the permit establishes the enforceable requirements, not the SWMP or NOI. Using the public education and outreach example again, this final rule revises the data element description to read as follows: “The one or more unique codes/descriptions that identifies the permit elements associated with the public education and outreach program requirements . . .” This modification clarifies that it is the specific “permit elements” related to the public education and outreach program that the regulations require the MS4 to report to the EPA. Another related, yet minor, change modifies the corresponding “Data Name” to reflect that it is not the details within the SWMP that define the permittee's compliance responsibilities. Therefore, instead of using “MS4 Public Education Program” as the data name, the name now refers to “Public Education and Outreach Permit Requirements.” These same changes are made to the data elements for the other five minimum control measures.

• Corrections to data elements that referred to the MS4's “measurable goals” as opposed to its permit requirements. Several of the data elements previously referred to the permittee's “measurable goals,” which is language that is no longer current after the EPA modified the Phase II regulations. Under the original Phase II regulations, small MS4s were required to submit information describing the “specific actions taken by the permittee to implement each BMP and the frequency and the dates for such actions.” See 64 FR 68763 (December 8, 1999). The submitted measurable goals were then used as the basis for the permittee's enforceable requirements, and the permittee was required to evaluate and submit annual reports on the progress made with respect to meeting these measurable goals. References to the MS4's measurable goals were largely removed from the Phase II regulations as part of the MS4 Remand Rule to more clearly convey that the terms and conditions in the relevant permit are enforceable, not the permittee's proposed measurable goals.

The EPA's final rule removes references in the previous MS4 data elements to measurable goals and replaces them with language that refers to the “specific schedules or deadlines” for complying with the relevant requirements of the permit. Another related, yet minor, change modifies the corresponding “Data Name” to remove language that made reference to measurable goals and substitutes it with the permit's relevant “deadlines.”

• Updates to the data element(s) associated with permit requirements established in addition to the minimum control measure requirements. The final rule also updates the language used to describe MS4 terms and conditions that are included in the permit to address the modified Phase II regulatory language at 40 CFR 122.34(c) related to “other applicable NPDES requirements.” These changes include updates to the language used for the “Data Name” and “Data Description.” The final rule also corrects an error by adding a data element that was omitted from the previous Table 2 related to the deadlines associated with “other applicable permit requirements.”

• Additional clarifications to accurately characterize the source of data on permit requirements. The final rule suggests a few additional changes to clarify that the source of data on an MS4's permit requirements is the permit itself, not the permit application or NOI. For instance, the previous title for one of the Table 2 sections for MS4 data elements was “Municipal Separate Storm Sewer System (MS4) Information on NPDES Permit Application or Notice of Intent.” In order to clarify that the terms and conditions that the MS4 is responsible for meeting are found in the permit, the EPA modifies this title as follows: “Municipal Separate Storm Sewer System (MS4) Information in NPDES Permit.”

• Removing data element made unnecessary or obsolete by the modified Phase II regulations. One of the previous data elements required information from permittees that is no longer required under the revised Phase II regulations. The data element titled MS4 Permit Components Descriptions and Measurable Goals is now deleted from Table 2 of appendix A in the section entitled “Compliance Monitoring Activity Information (Data Elements Specific to Municipal Storm Sewer System Program Reports).” The previous data element requested information on “all of the permitted components and measurable goals that are included in the MS4 permit.” This data element was redundant of the data element that in the final rule is now titled “Municipal Separate Storm Sewer System (MS4) Information in NPDES Permit,” and for that reason has been removed.

• Changes to conform data elements to current Phase II reporting requirements. The following are changes made to data elements to reflect the current Phase II reporting requirements for small MS4s under 40 CFR 122.34(d)(3). These data elements are all located in the section entitled “Compliance Monitoring Activity Information (Data Elements Specific to Municipal Storm Sewer System Program Reports).”

1. Status of Compliance with Each Minimum Control Measure. The final rule modifies this data element to reflect the changes made to the description of information required to be reported under 40 CFR 122.34(d)(3)(i). To reflect the fact that the Phase II regulations were changed to require the permittee to include in its report “[t]he status of compliance with permit terms and conditions,” conforming changes are made to the Data Name so that the revised Data Name is “Status of Compliance with MS4 Permit Requirements.” Similar changes are made to the Data Description to read as follows: “The unique codes/descriptions that identify if the permittee has complied with the MS4 permit requirements.”

2. Results of Information Collected and Analyzed. The previous data elements inadvertently omitted information required to be reported under 40 CFR 122.34(d)(3)(ii). This provision required small MS4 permittees to include in their annual reports “[r]esults of information collected and analyzed, including monitoring data, if any, during the reporting period.” The final rule corrects this omission by adding a new data element to capture this information.

3. Progress and Summary of Results with Each Minimum Control Measure. The final rule modifies this data element to reflect the changes made to the description of information required to be reported under 40 CFR 122.34(d)(3)(iii). To reflect the modified description of the information to be reported, namely “[a] summary of the storm water activities the permittee proposes to undertake to comply with the permit during the next reporting cycle,” conforming changes are made to the Data Name ( i.e., it is changed to “Summary of Activities Undertaken to Comply with the MS4 Permit Requirements”) and to the Data Description ( i.e., it is changed to “This is a text summary describing the stormwater activities undertaken by each permittee to comply with the MS4 permit requirements.”).

4. Changes to MS4 Permittee's Components and Measurable Goals. The final rule modifies this data element to reflect the changes made to the description of information required to be reported at 40 CFR 122.34(d)(3)(iv). To reflect the changes in the regulations that require the permittee to include in its report “[a]ny changes made during the reporting period to the permittee's storm water management program,” conforming changes are made to the Data Name ( i.e., it is changed to “Summary of Activities Undertaken to Comply with the MS4 Permit Requirements”) and to the Data Description ( i.e., it is changed to “The one or more codes/descriptions that describe . . . any changes made to the MS4 permittee's Stormwater Management Program (SWMP) during the reporting period.”).

• Clarification related to data provided for small MS4 permittees under a Two-Step General Permit approach. For permitting authorities that use a “Two-Step General Permit” under 40 CFR 122.28(d)(2) to provide permit coverage for small MS4s, there is flexibility regarding whether the permittee or the NPDES authority will be responsible for submitting data initially. NPDES authorities will likely choose to require the permittee to supply the initial information that characterizes what actions the MS4 proposes to take to address the permit requirements as a first step. Then, during the second step of the permitting process, the permitting authority will modify this information as necessary to reflect the final permit requirements. To allow or authorize this approach, the final rule includes the following text for many of the data elements in the “MS4 NPDES Permit-Related Information” section: “This data element includes proposed activities that are submitted by small MS4s seeking coverage under a 'Two-Step General Permit.' Following completion of the second permitting step, the authorized NPDES program will be responsible for sharing the final permit terms and conditions with U.S. EPA as required in subpart B of this part.”

Additionally, the EPA adds a note to the MS4 Permit-Related Information section of Table 2 that provides a basic explanation of how the Two-Step General Permit process is designed to work, and how the permit information for these types of permits is to be reported.

• Clarification related to data provided for Phase I MS4 permittees and Phase II small MS4 permittees under a Comprehensive General Permit approach. By comparison to the anticipated process that will be used by permitting authorities that issue Two-Step General Permits, where the permitting authority is issuing a Phase I individual permit or a Phase II comprehensive general permit, it is the EPA's expectation that the permitting authority will assume responsibility for providing the relevant information required by the data elements in appendix A, Table 2 related to “Municipal Separate Storm Sewer System (MS4) NPDES Permit-Related Requirements” ( e.g., public education and outreach permit requirements, and associated deadlines). For both of these types of MS4 permits, the terms and conditions are established in the first instance as part of the final permit by the permitting authority; therefore, the permitting authority is in the best position to be able to provide accurate information required by the MS4 NPDES Permit-Related Requirements data elements.

• Updates to regulatory citations to reflect current Phase II regulations. The final rule updates a number of the existing MS4 regulatory citations in Table 2 of appendix A in order to reflect changes made to the Phase II regulations, and, in a few instances, to correct erroneous citations that were previously included in the table. For instance, the previous table references 40 CFR 122.28(b)(2)(ii) for the supporting authority for the data elements associated with each of the minimum control measures. Because the modified Phase II regulations now include a section addressing small MS4 general permits, this citation is updated to refer to the correct section ( i.e., 40 CFR 122.28(d)). Elsewhere, the final rule adds references to 40 CFR 122.33(b) to more accurately reflect the current Phase II regulatory authority for requiring basic system information. The final rule also provides the updated reference to the correct annual reporting provision ( i.e., 40 CFR 122.34(d)(3)). Other examples include the addition of updated citations for Phase I MS4s, such as an updated citation to 40 CFR 122.26(d)(2)(iv)(A)( 6 ), (d)(2)(iv)(B)( 5 ), and (d)(2)(iv)(D)( 4 ) to support the use of the data element for “Deadlines Associated with Public Education and Outreach Permit Requirements” for Phase I MS4s.

• Corrections to previous description of the frequency of required small MS4 reporting. The previous Table 1 imprecisely noted that small MS4s are required to report only in years two and four of permit coverage. While this was correct for small MS4s that have already been permitted for at least one permit term, if the permittee is in its first permit term, it is required to report annually for the entire permit term. The final rule corrects this inaccuracy. See 40 CFR 122.34(d)(3).

• Clarification of the types of MS4 permit holders that can be chosen under the data element for MS4 Permit Class. The final rule includes a minor update to the examples of MS4 permit types under the MS4 Permit Class data element, which better reflect the types of general permits that are described under the revised Phase II permitting regulations. The following examples replace the previous examples: Large/Medium MS4 permit (Phase I), Small MS4 permit (Phase II)—Comprehensive General Permit, Small MS4 permit (Phase II)—Two-Step General Permit, Small MS4 permit (Phase II)—Individual Permit.

During meetings of the EPA-State Stormwater technical workgroup (see Section III), Regional and state subject matter experts suggested the need for additional clarification to the MS4 data elements. The clarifications that are included in the final rule are described as follows.

• Revised description of the types of entities potentially covered under an MS4 permit. The data description that accompanied the unique MS4 identifier data element did not reflect the fact that regulated small MS4s can also include so-called “non-traditional MS4s,” such as colleges or universities, military installations, transportation systems, and state and federal facilities. In order to more accurately describe the different types of MS4s that can be regulated, the final rule includes modified examples of the types of MS4 entities that are intended to be included, including those that are non-traditional MS4s.

A further clarification is added to better describe how the unique identifier can be used to apply to multiple MS4 entities covered under one permit by indicating, for example, that if one MS4 NPDES permit covers two cities, the authorized NPDES program may elect to assign each city with a unique identifier. A minor change is also made to the Data Name to better describe the types of entities that may be regulated; the Data Name now reads as “Unique MS4 Regulated Entity Identifier” instead of “Unique Identifier for Each Municipality Covered Under MS4 Permit.”

Additionally, to better match the existing regulations, the final rule replaces references throughout Table 2 to “municipality” with the word or phrase “entity” or “MS4-regulated entity.”

• Inclusion of a unique identifier for each permit requirement or set of permit requirements. The final rule requires that each unique permit requirement or set of permit requirements be designated with a “Unique MS4 Activity Identifier.” This addition is intended to improve the accuracy of compliance reporting by linking permit requirements to a unique identifier. The EPA does not consider this additional identifier to constitute a change in reporting burden given that information on permit requirements is already required; this new element merely ensures that each individual permit requirement (referred to in appendix A as “the one or more unique codes/descriptions that identify” the permit requirement) can be recognized with its own unique number or other identifier. Additionally, the permitting authority can automate the creation of these data during development of the final permit terms and conditions.

• Consolidation of data elements related to tracking implementation activities performed by other government entities. The previous data elements required information to be submitted with the annual report on whether the MS4 permittee was relying on other government entities to satisfy any permit obligations, and to provide the status of their implementation activities. To assist the states in more accurately tracking these other government entities to the specific permit requirements for which they have assumed responsibility, the final rule moves the requirement to report on the MS4's reliance on other government entities to a different section of Table 2, namely the MS4 NPDES Permit-Related Information section. The Workgroup (see Background) indicated that this change would enable NPDES permitting authorities to obtain information on the MS4's reliance on other government entities in a way that will better enable them to ensure that reporting on the compliance status of these specific permit responsibilities will be accurate and more easily understood. By making this change, the EPA deletes two existing elements, which would already be addressed, namely the “MS4 Reliance on Other Government Entities Status” and “MS4 Reliance on Other Government Entities Permit Component Status” data elements.

• Clarification of permit information required for storm sewer system map. The final rule clarifies that, for previously permitted MS4 permittees, rather than requiring information on “the status of the permittee's storm sewer system map” associated with the Illicit Discharge Detection and Elimination permit requirement, a more direct way of conveying this information is to request the “date of the most recent storm sewer system map.” Additionally, the final rule clarifies that the requirement to show all “MS4 outfalls” on the storm sewer system map excludes private outfalls. This clarification is consistent with the regulatory definition of MS4, which is limited to stormwater conveyances “owned or operated by a . . . public body” at 40 CFR 122.26(b)(8)(i). Privately-owned conveyances and their associated outfalls do not fall within the definition of an MS4 because they are not “owned or operated by a . . . public body.”

• Relocation of MS4 industrial stormwater control data element. The final rule moves the Phase I MS4 industrial stormwater control data element from its previous location in the “Compliance Monitoring Activity” section of Table 2 to the newly named MS4 NPDES Permit-Related Information section. This change is not substantive, but merely intended to better reflect the fact that this information is typically provided prior to permit coverage, much like the other information included in that same section.

Additionally, the final rule adds an accompanying data element for any permit deadlines associated with the industrial stormwater control requirements. The EPA does not consider this a new reporting burden, but rather a clarification that where the permit establishes specific deadlines for actions related to industrial stormwater control, compliance with these dates must be tracked.

• Ability to submit further information regarding instances of noncompliance. The data element requiring information on whether the permittee has complied with the MS4 permit requirements previously limited the information submitted to a “Yes” or “No” response. Members of the Workgroup recommended that MS4s be given the opportunity to provide further information for context if the MS4 reports that it has not complied with one or more permit requirements. To address this recommendation, the final rule clarifies that MS4s as necessary will be asked to provide information related to noncompliance.

• Clarification of information required to be reported in the summary of activities to comply with the MS4 permit requirements. The final rule clarifies that among the information that must be reported by the MS4 as part of its annual report is a summary of activities undertaken (1) as part of the industrial stormwater control program (for Phase I MS4s and select Phase II MS4s that have industrial stormwater requirements), and (2) to comply with permit requirements during the next reporting period. This clarification does not constitute a new reporting burden since this information was already required to be reported; the text just makes the requirement clearer.

• Clarification regarding how information on enforcement actions taken by Phase II MS4s is to be reported. The final rule clarifies that Phase II MS4s are not required to distinguish between different types of enforcement action, as Phase I MS4s are required to do. In contrast with Phase I MS4s, Phase II MS4s may simply report any enforcement action taken as a “Phase II MS4 Enforcement Action.” The permitting authority may elect to provide this option as a system default so that MS4 permittees may simply select “Phase II MS4 Enforcement Action” to fulfill this requirement for the reporting period.

• Clarification related to data elements that may not apply to non-traditional MS4s. The final rule provides further clarification on the data elements that may not apply because non-traditional MS4s typically do not possess the requisite legal authority to enforce stormwater laws. A sentence is added to three data elements ( i.e., “MS4 Enforcement Action Type,” “MS4 Enforcement Action Total by Type,” and “MS4 Enforcement Agency”) explaining that there may be different reported data for non-traditional MS4s ( e.g., transportation MS4s) since they may not have legal authority to enforce one or more MS4 permit requirements and may report on items like referrals to the state permitting authorities or use mechanisms such as encroachment permits.

• Clarification regarding how to report the specific MS4 enforcement agency in the annual report. The final rule provides alternate wording to better explain how MS4 permittees should specifically identify in the annual report the specific MS4 enforcement agency that was responsible for taking enforcement action during the reporting period. The final language explains that the permittee will select the MS4 enforcement agency from among the unique MS4 regulated entities identified during the permit application process for co-permittees applying for coverage under an individual permit, unless there is only one regulated entity.

Additional information about these statutes and Executive orders can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

This action is not a significant regulatory action and therefore was not submitted to the Office of Management and Budget (OMB) for review.

This action is not expected to be an Executive Order 13771 regulatory action because this action is not significant under Executive Order 12866.

This action does not impose any new information collection burden under the PRA. OMB has previously approved the information collection activities contained in the existing regulations and has assigned OMB control number 2040-0004. The final rule imposes no new information collection burdens beyond what has already been approved by OMB for the NPDES eRule published on October 22, 2015 (80 FR 64064). This final rule is limited to updating the language used to describe various data requirements for MS4 permittees to reflect recent changes to the underlying NPDES regulations and to correct various errors and omissions.

I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden, or otherwise has a positive economic effect on the small entities subject to the rule. This final rule imposes no new regulatory burdens on regulated entities in the NPDES program. The action is limited to updating the language used to describe various data requirements for MS4 permittees to reflect recent changes to the underlying NPDES regulations, to correct various errors and omissions, to make targeted clarifications by request of state NPDES permitting authorities. The EPA has therefore concluded that this action will have no net regulatory burden for all directly regulated small entities.

This action does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action imposes no enforceable duty on any state, local or tribal governments or the private sector.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the National Government and the states, or on the distribution of power and responsibilities among the various levels of government.

This final rule does not have tribal implications, as specified in Executive Order 13175. The EPA considered the potential impacts on tribes and concluded that there would be no substantial direct compliance costs or impact on tribes. Because the purpose of the final rule is to eliminate inconsistencies between regulations and application forms, improve permit documentation, transparency and oversight, provide clarifications to existing regulations, and delete outdated provisions, it is not expected to have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Executive Order 13175 does not apply to this action and the EPA determined that tribal consultation is not necessary for this action.

The EPA notes that it consulted with tribal officials under the EPA Policy on Consultation and Coordination with Indian Tribes early in the process of developing the final NPDES eRule, which this final rule modifies, to permit them to have meaningful and timely input into its development. A summary of that consultation is provided in Section VIII.F of the final NPDES eRule preamble at 80 FR 64094.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive order. This action is not subject to Executive Order 13045 because it does not concern an environmental health risk or safety risk.

This action is not subject to Executive Order 13211, because it is not a significant regulatory action under Executive Order 12866.

This rulemaking does not involve technical standards.

The EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. This final rule offers the same environmental justice benefits that were described in the final NPDES eRule preamble in Section VIII.J. That final rule preamble states that “[a]s described in the context of non-monetary benefits, discussed in Section VI and described below, the final rule would significantly increase transparency and access to crucial information that is relevant to the protection of the health and environment of minority, low income, and tribal populations.” See 80 FR 64095.

This action is subject to the Congressional Review Act, and the EPA will submit a rule report to each House of Congress and to Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

For the reasons set forth in the preamble, the EPA amends 40 CFR part 127 as follows: