I. Overview

On May 21, 2022, the President signed the Access to Baby Formula Act of 2022 (ABFA, Pub. L. 117-129) into law. ABFA amends Section 17 of the Child Nutrition Act of 1966 (CNA, 42 U.S.C. 1786) to (1) establish permanent waiver authority to the Secretary of Agriculture to address certain emergencies, disasters, and supply chain disruptions impacting WIC; and (2) require WIC State agency infant formula cost containment contracts to include specific remedies to protect against disruptions to the Program in the event of an infant formula recall. This rule amends 7 CFR part 246 to codify the provisions of ABFA and implement related changes which will strengthen WIC's ability to address emergency periods and supply chain disruptions, particularly those impacting infant formula. For the purpose of this rule:

• emergency periods are defined as a public health emergency declared by the Secretary of Health and Human Services and any renewal of such a public health emergency; a presidentially declared major disaster; or a presidentially declared emergency, in alignment with the definition set forth in ABFA. 1 2

• supply chain disruption is defined as a shortage of WIC supplemental foods, including infant formula, that limits WIC participants' ability to reasonably purchase WIC supplemental foods benefits within a State agency's jurisdiction, as determined, and declared by the Secretary, in alignment with the definition set forth in ABFA. 3

Specifically, this rulemaking will:

(1) Codify permanent, expanded waiver authority of the Secretary to help ensure continuity of WIC services during emergency periods and supply chain disruptions impacting WIC.

(2) Codify requirements for WIC State agencies to include language in their WIC infant formula cost containment contracts that describes remedies in the event of an infant formula recall, including how an infant formula manufacturer would protect against disruption to supplemental food access by WIC participants.

(3) Add a new provision that WIC State agencies must include as a part of the State Plan a “plan of alternate operating procedures” in the event of an emergency period, supplemental food recall, or other supply chain disruption.

In the development of this rule, the Department prioritized equity, access, and nutrition security for WIC applicants and participants. 4 The Department also recognizes that the rule may impact WIC State agencies, including Indian Tribal Organizations (ITOs), local agencies, clinics, and WIC-authorized vendors. Additionally, the Department recognizes that the rule may impact infant formula manufacturers. While WIC is not designed to be a disaster assistance program, this rule aims to improve the continuity of services and Program benefits and access to supplemental foods for participants during these unforeseen circumstances. Relatedly, customer service, participation, and retention, as well as program integrity, have also been considered in this rulemaking. To support WIC State agencies in equitable implementation of this rulemaking, FNS plans to provide WIC State agencies with technical assistance, which may include guidance documents, memoranda, webinars, and/or presentations at conferences. In addition, FNS will explore ways to support WIC State agencies in providing alternative languages and formats and effective communication of program changes, including with auxiliary aids and services to participants and vendors.

Given the need for swift implementation of ABFA following recent disruptions to the supply chain and wide-ranging effects of the infant formula recall, this is a final rule with request for comments pursuant to the Administrative Procedure Act's exemption on matters relating to agency management or personnel or to public property, loans, grants, benefits, or contracts. 5 It is imperative the provisions are implemented as soon as is feasible so that FNS and WIC State agencies have mechanisms in place to ensure continuity of operations and access to Program benefits for WIC participants. The Department has requested comments on specific topics in this rule that can inform future rulemaking, policy, and/or guidance related to infant formula and will consider comments on all aspects of the rule when developing guidance and policy. Given the prescriptive nature of ABFA and the need for swift implementation ultimately in the interest of WIC participants, the Department believes this approach best serves the public interest. The Department has collected, and will consider, input from stakeholders to ensure the implementation of this rule supports the WIC population and achieves the intended results. For example, FNS Regional Operations and Support has collected feedback on FNS' response to the infant formula recall and the Coronavirus Disease 2019 (COVID-19) public health emergency from FNS Regional Offices and WIC State agencies. FNS has considered this feedback in development of this rule and will continue to do so when developing guidance and policy to support the successful implementation of the rule. The Department recognizes the value of stakeholder feedback and will continue to seek and collect feedback to inform future technical assistance.

WIC is currently administered by 89 WIC State agencies, including the 50 geographic states, the District of Columbia, 33 Indian Tribal Organizations (ITOs), and five U.S. Territories (the Commonwealth of the Northern Mariana Islands, American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands). By providing supplemental foods, nutrition education, including breastfeeding promotion and support, and referrals to health and other social services, WIC addresses the nutritional needs and safeguards the health of low-income pregnant and postpartum participants, infants, and children up to 5 years of age who are at nutritional risk.

According to their participant category and nutritional needs, WIC participants receive supplemental foods on a monthly basis from one of seven evidence-based food packages. The amounts and categories of foods provided are intended to supplement participants' diets and provide specific nutrients known to be lacking in the diets of WIC's target population.

WIC participants typically access supplemental foods, including infant formula, through a retail food delivery system. In such systems, a WIC shopper goes to a WIC-authorized vendor ( i.e., a retail store authorized by the State agency), selects foods available in their benefit balance, and uses a food instrument, typically an Electronic Benefits Transfer (EBT) card, to purchase the items. Outside of a retail food delivery system, some WIC participants access their supplemental foods through a home food delivery or direct distribution system operated by the WIC State agency. Additionally, WIC participants with certain medical conditions who require exempt formulas or WIC-eligible nutritionals may receive these as part of, or in addition to, their WIC food package with appropriate documentation. These exempt formulas and WIC-eligible nutritionals are procured outside of the traditional WIC State agency cost-containment contracting process for standard milk and soy-based infant formula and may be purchased at the store like their other WIC items, or through other systems set up by the WIC State agency, depending on availability and need for the product(s).

Historically, WIC has had limited authority to waive Program requirements. However, since the onset of the COVID-19 public health emergency, WIC has experienced a series of disruptions to Program operations necessitating the ability for USDA's Food and Nutrition Service (FNS) to have permanent waiver authority.

On February 17, 2022, a major infant formula manufacturer voluntarily recalled certain powder infant formula, including exempt infant formula. While recalls may be conducted because a mandatory order has been issued by the U.S. Food and Drug Administration (FDA) under statutory authority, they can also be conducted voluntarily by a manufacturer, as in this case. This recall exacerbated existing supply chain issues resulting from the ongoing COVID-19 public health emergency. During its early response to the shortage, FNS used waiver authority granted under Section 301 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, (“Stafford Act,” 42 U.S.C. 5121), to approve several waiver types for WIC State agencies to help WIC participants obtain infant formula. This was possible because of existing COVID-19 major disaster declarations covering the geographic areas of all WIC State agencies, including States, ITOs, and Territories. 6 7

Section 301 of the Stafford Act provides any Federal agency charged with the administration of a federal assistance program with the authority to modify or waive administrative conditions for assistance that would otherwise prevent the giving of assistance if the inability to meet such conditions is a result of the major disaster. Activation of Section 301 of the Stafford Act requires a State Governor's request and the President's approval. When approved, these are referred to as Major Disaster Declarations. Section 301 of the Stafford Act cannot be activated by emergency declarations, public health emergencies, or supply chain disruptions. Prior to March 2020, Section 301 of the Stafford Act was the only waiver authority available to grant administrative flexibilities in WIC.

On March 13, 2020, the ongoing COVID-19 crisis was declared a public health emergency of sufficient severity and magnitude to warrant declaration of a nationwide public health emergency through the Secretary of Health and Human Services. Over the next several weeks, in response to the COVID-19 public health emergency, major disaster declarations were put into place covering all WIC State agencies, including States, Indian Tribal Organizations, and U.S. Territories, pursuant to Section 501(b) of the Stafford Act. While the major disaster declarations would eventually enable WIC State agencies to request regulatory waivers under the Stafford Act's authority, immediate and additional flexibilities were necessary to support WIC State agencies.

Therefore, on March 18, 2020, the Families First Coronavirus Response Act (FFCRA, Pub. L. 116-127) was signed into law to assist with the COVID-19 public health emergency. USDA received temporary authority to provide WIC State agencies with flexibilities necessary to continue operations and safely provide Program benefits to participants. Specifically, Section 2203 of FFCRA provided USDA with the statutory waiver authority necessary to waive the physical presence requirement for all applicants and participants seeking certification or recertification in WIC; and defer anthropometric ( i.e., height/length and weight) and bloodwork requirements which are used to determine nutritional risk. As a result, FNS waived the statutory requirement for in-person WIC clinic visits, thereby encouraging social distancing, during the COVID-19 public health emergency. Under Section 2204 of FFCRA, WIC State agencies could also request USDA to waive or modify WIC regulations. Such requests could only be granted if the WIC State agency (1) could not meet regular Program requirements due to COVID-19, and (2) such waiver or modification was necessary to provide assistance to WIC participants. As prescribed in FFCRA, the Department had the authority to provide waivers through September 30, 2020, which was then extended through September 30, 2021, through the Continuing Appropriations Act, 2021 and Other Extensions Act (Pub. L. 116-159). Certain WIC waivers granted prior to September 30, 2021, were then extended through FNS' policy guidance until 90 days after the end of the nationally declared public health emergency under Section 319 of the Public Health Service Act, 8 which ended on May 11, 2023, per announcement from the U.S. Department of Health and Human Services (HHS). FFCRA provided USDA with the necessary authority to provide WIC State agencies with the flexibility to pivot operations and continue serving Program participants during a public health emergency. However, USDA's authority was temporary and designed to specifically address COVID-19.

While the existing COVID-19 major disaster declarations and resulting Stafford Act authority provided a vehicle through which FNS could grant WIC State agencies waivers, under normal circumstances, such waiver authority would not typically be available for the Department to respond to an infant formula recall, nor could the Department issue nationwide waivers. As a result, in direct response to the infant formula recall, Congress recognized the need to provide USDA with permanent authority to waive or modify certain statutory and regulatory requirements when certain conditions are present.

ABFA amended Section 17 of the CNA (42 U.S.C. 1786) to (1) establish waiver authority for the Secretary of Agriculture to address certain emergencies, disasters, and supply chain disruptions impacting WIC; and (2) require WIC State agency infant formula cost containment contracts to include specific remedies to protect against disruptions to the Program in the event of a recall. Unlike the Stafford Act, ABFA provides USDA with the authority to issue waivers for one or more State agencies, including nationwide, and does not require that each State agency individually request specific waivers. As a result of ABFA, FNS issued an implementing policy memorandum describing the infant formula cost containment contract requirements and waiver authority. 9 In order to provide WIC State agencies with additional notice in anticipation of the expiration of the major disaster declarations in affected areas which formally ended May 11, 2023, FNS transferred waivers originally approved under the Stafford Act and the existing COVID-19 major disaster declaration for the affected area to approval under the waiver authority granted by ABFA and the existing COVID-19 major disaster declaration for the affected area. Accordingly, to aid WIC participants in purchasing infant formula using WIC benefits, FNS extended waivers set to expire under the ABFA authority and established a new expiration date for most waivers granted in response to the infant formula recall through the earlier of either January 31, 2023, or 60 days after the expiration of the COVID-19 major disaster declaration in the affected area. 10 This revised expiration schedule applied to most waiver types, including those related to medical documentation, maximum monthly allowances of infant formula, imported formula authorization and issuance, and vendor substitutions. 11 This expiration date was again extended on December 19, 2022, in a letter sent to WIC State agencies and formally implemented through FNS Policy Memorandum #2023-3: Unwinding Formula Flexibilities in WIC on February 2, 2023. FNS communicated that revised expiration dates for the formula waivers included rolling extensions for various waivers through June 30, 2023, based on the continued need for flexibility by the WIC State agencies. 12

I. Background Current Policy

Title VI of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, or national origin in programs receiving Federal financial assistance. Additionally, Department of Justice (DOJ) regulations at title 28 of the Code of Federal Regulations (CFR), § 42.406(a), 1 require all Federal agencies to provide guidelines for the collection of race and ethnicity data from applicants and beneficiaries of Federal assistance programs sufficient to permit effective enforcement of title VI. Accordingly, SNAP regulations at 7 CFR 272.6(g) and (h) require State agencies to collect race and ethnicity data on participating households and report the data to FNS to help ensure program benefits are distributed without regard to race, color, or national origin. FNS uses this data to determine how effectively FNS programs are reaching potential eligible persons and beneficiaries, identify areas where additional outreach is needed, assist in the selection of locations for compliance reviews, and complete reports, as required. State agencies report aggregate race and ethnicity data to FNS annually via the form FNS-101, “Participation in Food Programs by Race” (Office of Management and Budget (OMB) Control Number 0584-0594, expiration 7/31/2023). FNS uses this aggregate data to conduct compliance reviews and investigations, identify trends or disparities that affect participation goals and opportunities to address them, and identify any potential adverse or disproportionate impacts when developing program policy.

Per 7 CFR 272.6(g), State agencies that administer SNAP are required to collect data on participants' race and ethnicity in the manner specified by FNS. The regulations provide that the application form must clearly indicate that the information is voluntary and that it will not affect the eligibility or the level of benefits. SNAP regulations at 7 CFR 272.6(g) also require State agencies to develop alternative means of collecting race and ethnicity data on households, such as by observation during the interview, when the information is not provided voluntarily by the household on the application form.

In the proposed rule, Supplemental Nutrition Assistance Program: Revision of Civil Rights Data (87 FR 38010), FNS proposed to update SNAP regulations at 7 CFR 272.6(g) to remove the example of visual observation during the interview as an alternative means of collecting race and ethnicity data when not voluntarily provided by a household on the application form. FNS had several reasons for making this change. FNS cited the need to comply with OMB Directive 15, Standards for the Classification of Federal Data on Race and Ethnicity;  2 which provides that self-identification is the preferred means for gaining information about an individual's race and ethnicity, when practicable, and notes that when these data points are collected through observation, they are likely to be very different than from the information obtained when respondents report about themselves, especially in populations with multiple racial heritages. In addition, there was a desire to be in line with updated FNS Civil Rights Division and Child Nutrition Programs guidance, 3 which was supported by a recent Centers for Medicare and Medicaid Services (CMS) study that assessed the quality of race and ethnicity information in observational health databases. 4 These documents indicate that a third party's observation of an individual's appearance is not a reliable means to capture how a participant self-identifies their own race or ethnicity identity.

During the 60-day public comment period on the proposed rule, which ended on August 26, 2022, FNS received 14 comments. Five commenters were members of the public, one was a State agency that administers SNAP, six were research and advocacy organizations, and two were associations representing health and human service agency leaders and nutrition education administrators. All the commenters supported the proposal to remove visual observation as an alternative data collection method for race and ethnicity, and one commenter recommended that FNS explicitly prohibit using visual observation as a data collection method in the final rule. Several commenters questioned why other alternative data collection methods remain in the rule after visual observation is being removed. Two commenters recommended that FNS remove the ability for States to use alternative data collection methods noting that if an individual chooses not to provide the information, States should not try to collect it. One commenter encouraged FNS to gather best practices for alternative data collection methods, and one commenter expressed concerns about using aggregate data as an alternative data collection method.

FNS agrees that it is important to clearly state that the final rule removes the option to use visual observation and amends the regulatory language at 7 CFR 272.6(g) to expressly prohibit using that option. FNS has updated language in the final rule but will continue to allow other alternative methods of data collection. FNS cannot eliminate the option to use alternative data collection methods in this final rule. The use of alternate data collection methods is required by OMB Directive 15. To ensure compliance with title VI of the Civil Rights Act of 1964 and associated regulations, FNS will retain requirements at regulation 7 CFR 272.6(g) for State agencies to develop alternative means of collecting race and ethnicity data when participants do not self-identify. However, FNS recognizes that there are challenges associated with the use of alternative methods of data collection for race and ethnicity, such as choosing and obtaining appropriate data sources, and keeping up with emerging technology and tools. Therefore, FNS will gather and disseminate to State agencies information on best practices for developing alternative means of collecting race and ethnicity data when participants do not self-identify, including considerations when using aggregate data.

One commenter suggested that FNS should ensure that when State agencies use other data sources to collect race and ethnicity data, the State should clearly identify the data sources and verify that visual observation was not utilized. FNS recognizes the need to support compliance with requirements at 7 CFR 272.6(g) and agrees with the commentor. FNS will incorporate review of State alternative methods for collection of race and ethnicity data into its ongoing oversight and management evaluation processes ( e.g., Civil Rights and/or Program Access reviews) and will require corrective actions, as needed.

One commenter suggested increasing the number of race and ethnicity options available for SNAP applicants to self-identify. SNAP regulations at 7 CFR 272.6(g) and (h) do not specify the race and ethnicity options that State agencies must provide to SNAP applicants for self-identification. However, FNS requires State agencies to annually submit the “Participation in Food Programs—By Race” (FNS-101) form, which includes selected race and ethnicity options. OMB currently has an ongoing effort to gather public comments to improve the quality and usefulness of Federal race and ethnicity data, including through improved race and ethnicity options. FNS will consider information obtained through OMB's effort when considering future changes to the FNS-101 race and ethnicity options. Additionally, FNS 113-1 Civil Rights Compliance and Enforcement Instruction states that “A State agency may have categories for race in addition to the ones required by FNS; however, the additional categories must be mapped and extracted to the FNS-required categories.”

Executive Orders 12866, 13563, and 14094 direct 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 emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Office of Management and Budget has determined this rule to be not significant under Executive Order 12866.

This rule has been designated as not significant by the Office of Management and Budget. Therefore, no Regulatory Impact Analysis is required.

The Regulatory Flexibility Act (5 U.S.C. 601-612) requires Agencies to analyze the impact of rulemaking on small entities and consider alternatives that would minimize any significant impacts on a substantial number of small entities. Pursuant to that review, the Secretary certifies that this rule would not have a significant impact on a substantial number of small entities. This rule will not have an impact on small entities because the changes required by the regulations are directed toward State agencies operating SNAP.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as not a major rule, as defined by 5 U.S.C. 804(2).

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and Tribal governments and the private sector. Under section 202 of the UMRA, the Department generally must prepare a written statement, including a cost benefit analysis, for rules with “Federal mandates” that may result in expenditures by State, local, or Tribal governments, in the aggregate, or the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the Department to identify and consider a reasonable number of regulatory alternatives and adopt the most cost effective or least burdensome alternative that achieves the objectives of the rule.

This final rule does not contain Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and Tribal governments or the private sector of $100 million or more in any one year. Thus, the rule is not subject to the requirements of sections 202 and 205 of the UMRA.

SNAP is listed in the Catalog of Federal Domestic Assistance under No. 10.551. For the reasons set forth in the Federal Register notice published June 24, 1983 (48 FR 29115), this Program is excluded from the scope of Executive Order 12372, which requires intergovernmental consultation with State and local officials.

Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under section (6)(b)(2)(B) of Executive Order 13132.

The Department has determined that this rule does not have federalism implications. This rule does not impose substantial or direct compliance costs on State and local governments. Therefore, under section 6(b) of the Executive order, a federalism summary impact statement is not required.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have preemptive effect with respect to any State or local laws, regulations, or policies which conflict with its provisions or which would otherwise impede its full and timely implementation. This rule is not intended to have retroactive effect. Prior to any judicial challenge to the provisions of the final rule, all applicable administrative procedures must be exhausted.

FNS has reviewed the rule, in accordance with Department Regulation 4300-004, Civil Rights Impact Analysis, to identify and address any major civil rights impacts the rule might have on minorities, women, individuals with disabilities and individuals with limited English proficiency (LEP). The changes to SNAP regulations in this rule are to remove the option for visual observation for race and ethnicity data collection from SNAP regulations. After careful review of the rule's intent and provisions and available data sets, FNS anticipates that the promulgation of this rule will increase the accuracy of data collected on the race and ethnicity of SNAP households by reducing errors in data collection caused by inaccurate visual observation. While this rule does provide for the collection of race and ethnicity data of SNAP households, as required by Federal law, it does not change any eligibility criteria.

Executive Order 13175 requires Federal agencies to consult and coordinate with Tribes on a government-to-government basis on policies that have Tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that 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. FNS determined that this rule does not require Tribal consultation. We are unaware of any current Tribal laws that could be in conflict with this rule.

The Paperwork Reduction Act of 1995 (44 U.S.C. Chap. 35; 5 CFR part 1320) requires OMB approve all collections of information by a Federal agency before they can be implemented. Respondents are not required to respond to any collection of information unless it displays a current valid OMB control number under the Paperwork Reduction Act of 1995.

Information collection activities associated with this rule are approved under existing OMB Control Numbers. OMB Control Number 0584-0064 (expiration 02/29/2024) includes burden estimates associated with the collection of race and ethnicity data on SNAP applications. OMB Control Number 0584-0594 (expiration 07/31/2023) includes burden estimates associated with race and ethnicity data reporting on the form FNS-101, “Participation in Food Programs—by Race”. The requirements in this rule do not introduce any new or changed information collection requirements subject to approval by the Office of Management and Budget under the Paperwork Reduction Act of 1995.

The Department is committed to complying with the E-Government Act of 2002, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Accordingly, 7 CFR part 272 is amended as follows:

On November 24, 2023, RBCS issued a final rule which published in the Federal Register [88 FR 82225] entitled “Guaranteed Loanmaking and Servicing Regulations.” This final rule updates the B&I CARES Act Program Loans, as implemented in 7 CFR part 4279—Guaranteed Loan Making and 7 CFR part 4287—Servicing and as published in the Federal Register on May 22, 2020, as an interim rule. The final rule that published on November 24, 2023 incorrectly stated that the effective date was November 24, 2023. Since this final rule has been reviewed by the Office of Management and Budget and it is determined to be “Significant” under Section 3(f)(1) of Executive Order 12866, the Congressional Review Act (CR) requires a 60-day delay from date of publication in the Federal Register . This stay of the final rule for 60-days as provided in this notification will bring the final rule into compliance with the CRA.

This rulemaking also corrects the Executive Order 12866, Regulatory Planning and Review, which the final rule was determined to be significant.

In FR Doc. 2023-25908 (88 FR 82225) appearing on pages 82225 and 82227 in the Federal Register of Friday, November 24, 2023, the following correction is made:

1. On page 82227, in the first column, under Executive Order 12866, Regulatory Planning and Review, is corrected to read: This final rule has been reviewed by the Office of Management and Budget and is determined to be “Significant” under Section 3(f)(1) of Executive Order 12866. A “significant regulatory action” means any regulatory action that is likely to result in a rule that may: “have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of OIRA for changes in gross domestic product); or will 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.”

I. Background

On March 25, 2015, Rural Business-Cooperative Service (RBCS or the Agency), a Rural Development (RD) agency of the USDA, published an interim final rule with comment, 80 FR 15665, for the RBDG program. The interim final rule with comment ensured the Agency had a regulation in place to meet the Congressional mandate established in the Agricultural Act of 2014 (2014 Farm Bill). The RBDG program is targeted at public governmental entities, including Tribal Governments, and non-profit entities, which in turn empower business and market development. However, following implementation of the interim final rule, the Agency received regular feedback through Tribal consultation that the interim final rule did not adequately define and address how Tribes legally structure their businesses and related enterprises as arms or instrumentalities of Tribes. The RBDG program did not previously identify Tribally-owned businesses separate from Tribal Governments. This nuance effectively prevented full access to participation for Tribes and Tribally-owned businesses.

Tribal Governments do not maintain a tax base; therefore, Tribes often establish corporate or other business entities as government arms or instrumentalities to provide for a public (Tribal) good or to generate revenue for the provision of public (Tribal) goods by the Tribal Government. These Tribal Government entities often significantly contribute to their local economy through employment of Tribal and non-Tribal members (non-Tribal United States citizens), job training and advancement opportunities, and by filling gaps in commerce across Tribal lands that are often food, economic, and credit deserts. The Federal Government maintains a treaty and trust responsibility to provide for economic self-sufficiency among Indian Tribes.

Consistent input from Tribal Governments and Tribal stakeholders indicated that the RBDG program has experienced reduced participation of Tribal Governments and Tribal entities, since inception of the program. This reduction in participation is due to policies that have not fully considered or included the range of strategies that Tribal nations employ to build Tribal markets and economies through government arms and instrumentalities. Historically, Tribes have not fully utilized the RBDG program due to Agency policy, which does not adequately consider the range of entities that Tribal nations incorporate, that are Tribal Government owned and operated to foster economic development and promote meaningful employment, while also generating revenue for the Tribal Government. The complex legal and political structure and nature of Tribal nations and these Tribal entities necessitates a close relationship between both entities with ownership and control remaining with the Tribal Governments. The amendments update and codify the Agency's policy regarding Tribal nations and their Tribal-owned entities.

The Agency published a proposed rule on May 24, 2023 (88 FR 33552) to solicit comments on plans to reduce barriers to access for Tribes in the RBDG program by amending Tribal applicant definitions, Tribal applicant references, conflict of interest language, and appearance of conflict of interest and affiliation language as it relates to Tribes in the RBDG regulation 7 CFR part 4280, subpart E. A 60-day comment period was provided for the proposed rule, which closed on July 24, 2023, and no comments were received through the regulatory public comment period.

The Agency conducted a virtual Tribal Consultation and listening session on July 12, 2023, for Tribal leaders and tribal organizations. An additional 30-day comment period was provided to Tribal leaders so they could submit Tribal consultation written comments via email. The Tribal consultation written comment period closed on August 14, 2023. RBCS received comments from three respondents (two were from elected Tribal leaders and the third was from a regional Tribal non-profit). Most comments were supportive of the rule. However, a few concerns were raised regarding how the Agency would process these changes in a consistent manner.

(a) Virtual Tribal Consultation and Listening Session Comments. The Agency's virtual Tribal consultation and listening session included a Tribal Caucus portion.

(1) Tribal Caucus Session. This session provided Tribal leaders the opportunity to discuss relevant consultation issues and was facilitated by a representative from a recognized Tribal organization, without Federal policymakers online.

(2) Tribal Consultation and Listening Session and associated briefing materials (framing paper and Dear Tribal Leader Letter). This session provided Tribal leaders an opportunity to review the Agency's summary of proposed changes to the RBDG regulation. Specifically, this included the clarification and expansion of eligibility for federally recognized Tribes to support wholly owned Tribal-government entities as program beneficiaries. Additional topics included the proposed expansion of the “Small and Emerging Business” definition to include Tribal governments and Tribally owned entities, as well as clarification of the definition of “Conflict of Interest” to explain how the Agency defines the relationship between Tribal Nations and their Tribal-owned entities. These topics were covered by the Agency.

For the listening session the Agency provided four (4) standard questions to the attendees to obtain feedback. The four standard questions are listed below with a summary of the feedback received for each question.

(i) Do Tribal leaders agree these changes will help increase tribal eligibility within the RBDG program? The feedback received during the consultation indicated unanimous support for the proposed changes.

(ii) Is there anything we should strike or edit in the updated regulatory language? There was no indication of striking or editing any proposed language by participants.

(iii) Is there anything we overlooked that we should include in the updated regulatory language? There was no indication of any omissions in the proposed language by participants.

(iv) Does your Tribe have any unique organizational structures for your enterprises that we should consider as we finalize these changes? There were no suggestions made for this question in the listening session.

(b) Tribal Comment #1. Tribal leader for Central Council of Tlingit and Haida Indian Tribes of Alaska (Tlingit & Haida) provided recommendations as follows:

(i) The definition for Tribal governments cited to the Tribal List Act of 1994 (Pub. L. 103-454, 108 Stat. 4791) should include as an eligible entity Tribal organization as defined by 25 U.S.C. 5304(l).

(ii) The RBDG program should not require tribal resolutions from each tribal member of the tribal organization to participate in the RBDG program.

Agency Response. The Agency agrees with the first comment and asserts that the rulemaking recognizes both Tribal government arms and instrumentalities and democratically elected Tribal organizations when registered as non-profits as eligible direct RBDG applicants and program beneficiaries. As such, Tribal organizations as defined by 25 U.S.C. 5304(l) are already included as eligible entities and the Agency will work with staff administering the program to ensure that this clarification is made through future training and staff instruction.

The Agency also agrees with the second part of the comment. The Agency requires a resolution of the board or governing body of any RBDG program applicant to ensure that the organization has approved the application. However, due to the unique nature of the Tribal organizations under 25 U.S.C. 5304(l) the member Tribes have already empowered these organizations to apply on their behalf, and therefore requiring separate resolutions of support from the member Tribes is not needed. Tribal organizations under 25 U.S.C. 5304(l) may need to provide documentation that they are empowered to apply on behalf of their member Tribes through existing organizational documents, etc.

(c) Tribal Comment #2. Tribal leader for the Oglala Sioux Tribe submitted responses to the four standard questions that were provided during the listening sessions. The responses were in support of the proposed regulatory language revisions, and the Tribal leader did not have any suggested edits.

Agency Response. The Agency appreciates the time and participation of the Oglala Sioux Tribe in the listening session and the communication sent on August 14, 2023.

(d) Tribal Comment #3. Tribal leader for United South and Eastern Tribes Sovereignty Protection Fund (USET SPF) provided the following comments:

(i) Expressed concern regarding expansion of the Small and Emerging Business definition. USET SPF would like the language associated with this definition to ensure that Tribal governments are not referred to, or categorized as business entities, but rather they are distinct sovereigns with a legally established, recognized, and upheld nation-to-nation, government-to-government relationship with the U.S. Federal government.

(ii) Recommended that the Agency provide additional training and develop clear guidance to USDA State Office Staff to better understand Tribal sovereignty, U.S. Tribal Nation relations, and the unique distinctions between Tribal governments and Tribally owned and operated entities and businesses.

Agency Response. The Agency appreciates the comments. In reference to the first comment, the Agency feels the RBDG regulation provides an adequate distinction between Tribal governments and Tribal business entities. One of the goals of the RBDG program is to assist small and emerging businesses and the nature of the proposed revisions are limited to that context. The Agency recognizes that Tribal governments are distinct sovereigns with a legally established, recognized, and upheld nation-to-nation, government-to-government relationship with the U.S. Federal Government. The effort of the proposed language is to simply reflect and codify the Agency's understanding, within the context of RBDG eligibility, of the relationship between Tribal governments and their Tribally owned entities. In reference to the second comment, the Agency agrees and intends to provide training to USDA State Office staff to better understand the regulatory changes, Tribal sovereignty, and the unique relationship that the federal government has with federally recognized Tribes. Training that is developed will include input and participation from RBDG program staff, RD's Tribal Relations Team and USDA's Office of Tribal Relations.

The summary of changes provided below are the same as what was provided in the proposed rule published in the Federal Register (88 FR 33552) on May 24, 2023. The final rule provides no new changes.

The RBDG Program (7 CFR part 4280) is currently listed under chapter XLII, Rural Business-Cooperative Service and Rural Utilities Service, Department of Agriculture, along with Direct and Insured Loanmaking (7 CFR part 4274), Guaranteed Loanmaking (7 CFR part 4279), Grants (7 CFR part 4284), Cooperative Agreements (7 CFR part 4285), Servicing (7 CFR part 4287), Payment Programs (7 CFR part 4288), and Rural Business Investment Company (“RBIC”) Program (7 CFR part 4290). This final rule will update the ownership of chapter XLII to remove Rural Utilities Service as these programs are all under RBCS exclusively.

The definitions section is being revised to add and revise definitions.

Conflict of Interest. The Conflict of interest definition is added to codify the Agency's interpretation of the relationship of Tribal nations and their Tribal owned entities to expand eligibility opportunities for Tribal applicants.

Indian Tribe (Tribal). The current operating definition for Indian Tribe (Tribal) is being revised to Indian Tribe (Tribal), Tribal Government, and/or Federally Recognized Tribes. Historically, the Program has utilized the list of Federally Recognized Tribes published by the Bureau of Indian Affairs to determine if a Tribe was eligible to directly apply for RBDG assistance. No change to the current policy is being implemented and the statutory cite for this policy will now be included within the regulation. Eligible applicants for RBDG assistance continue to be rural Towns, Communities, State agencies, Authorities, Nonprofit corporations, Institutions of higher education, Federally Recognized Tribes ( https://www.bia.gov/service/tribal-leaders-directory ), and cooperatives (if organized as a private nonprofit corporation).

Small and Emerging Business. The Small and Emerging Business definition is being revised to add language to clarify the relationship of Tribal Governments and Tribal owned entities. Specifically, the management and Board of Directors of the Tribal government owned entity or business do not have to be independent of the Tribal Council. Language has also been added to clarify that the asset and employee size limitations to qualify as a small and emerging business are limited to the Tribal entity that is applying for assistance and is not intended to be inclusive of all Tribal assets or all Tribal employees. Consequently, it is anticipated that financial documentation required for Program participation will be limited to the immediate Tribal entity that is applying for the assistance and not required for the Tribe or its other Tribal entities, unless the Tribe itself is the applicant. These amendments were made in accordance with direct Tribal leader input conducted through Tribal consultation and will improve Tribal Government accessibility to both the regular RBDG Program and RBDG funds appropriated specifically to support projects that benefit federally recognized Tribes and their members.

On March 25, 2015, RBCS published an interim final rule with comment for the RBDG Program, 80 FR 15665, that assigned Office of Management and Budget (OMB) control numbers 0570-0022 and 0570-0024 in accordance with the Paperwork Reduction Act of 1995 (PRA). OMB control numbers 0570-0022 and 0570-0024 have been discontinued as of 2016. A new collection package in accordance with PRA was issued in 2016 and the new OMB control number is 0570-0070.

This final rule has been determined to be not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this final rule as not a major rule, as defined by 5 U.S.C. 804(2).

The Assistance Listing Number assigned to the RBDG Program is 10.351. The Assistance Listings are available on the internet at https://sam.gov/.

This program is subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. RBCS conducts intergovernmental consultations for each loan in accordance with 2 CFR part 415, subpart C. However, Tribes and Tribal entities as defined in this final rule are exempt of this requirement.

This final rule contains no new reporting or recordkeeping burdens under OMB control number 0570-0070 that would require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

In accordance with the National Environmental Policy Act of 1969, Public Law 91-190, this final rule has been reviewed in accordance with 7 CFR part 1970 (“Environmental Policies and Procedures”). The Agency has determined that (i) this action meets the criteria established in 7 CFR 1970.53(f); (ii) no extraordinary circumstances exist; and (iii) the action is not “connected” to other actions with potentially significant impacts, is not considered a “cumulative action,” and is not precluded by 40 CFR 1506.1. Therefore, the Agency has determined that the action does not have a significant effect on the human environment, and therefore neither an Environmental Assessment nor an Environmental Impact Statement is required.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act (“APA”) or any other statute. The APA exempts from notice and comment requirements rules “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts” (5 U.S.C. 553(a)(2)), so therefore an analysis has not been prepared for this final rule.

This final rule has been reviewed under Executive Order 12988. In accordance with this final rule: (1) unless otherwise specifically provided, all State and local laws that conflict with this rule will be preempted; (2) no retroactive effect will be given to this rule except as specifically prescribed in the rule; and (3) administrative proceedings of the National Appeals Division of the Department of Agriculture (7 CFR part 11) must be exhausted before bringing suit in court that challenges action taken under this rule.

Title II of the UMRA, Public Law 104-4, establishes requirements for Federal Agencies to assess the effects of their regulatory actions on State, local, and Tribal Governments and on the private sector. Under section 202 of the UMRA, Federal Agencies generally must prepare a written statement, including cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or Tribal Governments, in the aggregate, or to the private sector, of $100 million or more in any one-year. When such a statement is needed for a rule, section 205 of the UMRA generally requires a Federal agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This final rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and Tribal Governments or for the private sector. Therefore, this final rule is not subject to the requirements of sections 202 and 205 of the UMRA.

It has been determined, under E.O. 13132, Federalism, that the policies contained in this final rule do not have any substantial direct effect on 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. Nor does this final rule impose substantial direct compliance costs on State and local Governments. Therefore, consultation with the States is not required.

This final rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a Government-to-Government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that 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.

RBCS has determined that the rule does have a substantial direct effect on one or more Indian tribe(s) or on either the relationship or the distribution of powers and responsibilities between the Federal Government and Indian Tribes but reflects a remedy to RBDG Tribal barriers identified in Tribal consultation, including recent Tribal consultations on equity hosted in March 2021 and April 2022. USDA also held an additional follow-up Tribal consultation for input during the 60-day comment period. Additionally, if a Tribe requests Government-to-Government consultation regarding this rule, the Agency will work with the USDA Office of Tribal Relations to ensure meaningful consultation is provided. Interested Tribal leaders are encouraged to contact the Office of Tribal Relations or RD's Tribal Coordinator at AIAN@usda.gov to request such a consultation.

RD is committed to the E-Government Act of 2002, Public Law 107-347, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible and to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

RD has reviewed this final rule in accordance with USDA Regulation 4300-4, “Civil Rights Impact Analysis,” to identify any major civil rights impacts the rule might have on program participants on the basis of age, race, color, national origin, sex, disability, marital or familial status. Based on the review and analysis of the final rule and all available data, issuance of this proposal is not likely to negatively impact low and moderate-income populations, minority populations, women, Indian tribes or persons with disability, by virtue of their age, race, color, national origin, sex, disability, or marital or familial status. No major civil rights impact is likely to result from this final rule.

In accordance with Federal civil rights laws and USDA civil rights regulations and policies, the USDA, its mission areas, agencies, staff offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.

Program information may be made available in languages other than English. Persons with disabilities who require alternative means of communication to obtain program information ( e.g., Braille, large print, audiotape, American Sign Language) should contact the responsible Mission Area, agency, or staff office; or the 711 Relay Service.

To file a program discrimination complaint, a complainant should complete a Form AD-3027, USDA Program Discrimination Complaint Form, which can be obtained online at https://www.usda.gov/sites/default/files/documents/ad-3027.pdf from any USDA office, by calling (866) 632-9992, or by writing a letter addressed to USDA. The letter must contain the complainant's name, address, telephone number, and a written description of the alleged discriminatory action in sufficient detail to inform the Assistant Secretary for Civil Rights (ASCR) about the nature and date of an alleged civil rights violation. The completed AD-3027 form or letter must be submitted to USDA by:

(1) Mail: U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 20250-9410; or

(2) Fax: (833) 256-1665 or (202) 690-7442; or

(3) Email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

For the reasons discussed in the preamble, 7 CFR chapter XLII is amended as follows:

On October 30, 2023 (88 FR 74019), the NRC published a direct final rule amending its regulations in part 72 of title 10 of the Code of Federal Regulations to include Renewed Amendment No. 17 to Certificate of Compliance No. 1014. Renewed Amendment No. 17 updates the HI-STORM 100 Cask System description in the certificate of compliance to indicate that only the portions of the components that contact the pool water need to be made of stainless steel or aluminum. Minor editorial and formatting changes also were made.

In the direct final rule, the NRC stated that if no significant adverse comments were received, the direct final rule would become effective on January 16, 2024. The NRC did not receive any comments on the direct final rule. Therefore, this direct final rule will become effective as scheduled.

Comments Invited

The FAA invites you to send any written data, views, or arguments about this final rule. Send your comments to an address listed under ADDRESSES . Include “FAA-2023-2241 Project Identifier AD-2023-01214-A” at the beginning of your comments. The most helpful comments reference a specific portion of the final rule, explain the reason for any recommended change, and include supporting data. The FAA will consider all comments received by the closing date and may amend this final rule because of those comments.

Except for Confidential Business Information (CBI) as described in the following paragraph, and other information as described in 14 CFR 11.35, the FAA will post all comments received, without change, to regulations.gov, including any personal information you provide. The agency will also post a report summarizing each substantive verbal contact received about this final rule.

CBI is commercial or financial information that is both customarily and actually treated as private by its owner. Under the Freedom of Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public disclosure. If your comments responsive to this AD contain commercial or financial information that is customarily treated as private, that you actually treat as private, and that is relevant or responsive to this AD, it is important that you clearly designate the submitted comments as CBI. Please mark each page of your submission containing CBI as “PROPIN.” The FAA will treat such marked submissions as confidential under the FOIA, and they will not be placed in the public docket of this AD. Submissions containing CBI should be sent to Tuan Tran, Aviation Safety Engineer, FAA, 1701 Columbia Avenue, College Park, GA 30337. Any commentary that the FAA receives which is not specifically designated as CBI will be placed in the public docket for this rulemaking.

On November 15, 2023, the FAA received a report that a bearing fell out of a control column mount during routine handling, prior to installation on a Piper Model PA-46-600TP airplane. To conform to the type design, this bearing is installed in the mount block using a retaining compound into a recess in the control column mount with secondary retention provided by a retaining ring. Piper's investigation into this incident revealed that the retaining ring was not installed. If the bearing is not secure due to the absence of the retaining ring the quadrant assembly and shaft could migrate aft and separate from the firewall attachment, creating a free end on the affected control column. With a free end on the control column, combined with other factors, the aileron cables could become slack, resulting in loss of aileron control, and it could also bind the free operation of the elevator control system. Slack aileron cables and binding of the elevator controls would affect both the pilot and copilot controls. On November 17, 2023, further investigation by Piper into this situation found a quality escape issue on certain Piper Model PA-46-350P, PA-46-500TP, and PA-46-600TP airplanes where the possibility exists that the retaining ring was not installed during production or retaining compound was not applied to the bearing. A missing retaining ring in a control column mount, if not addressed, could lead to a major failure in the aileron quadrant assembly and result in loss of pitch and roll control of the airplane during flight with consequent loss of control of the airplane. The FAA is issuing this AD to address the unsafe condition on these products.

The FAA is issuing this AD because the agency has determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

The FAA reviewed Piper Service Bulletin No. 1409A, dated November 21, 2023 (Piper SB 1409A). This service information specifies procedures for inspecting the left and right control column mounts to determine if a retaining ring is installed, inspecting the bearing in the mount block for the presence of retaining compound, installing a retaining ring, and applying retaining compound to the bearing. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in ADDRESSES .

This AD requires accomplishing the actions identified as “RC” (required for compliance) in Part III. of the Instructions in Piper SB 1409A.

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) authorizes agencies to dispense with notice and comment procedures for rules when the agency, for “good cause,” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without providing notice and seeking comment prior to issuance. Further, section 553(d) of the APA authorizes agencies to make rules effective in less than thirty days, upon a finding of good cause.

An unsafe condition exists that requires the immediate adoption of this AD without providing an opportunity for public comments prior to adoption. The FAA has found that the risk to the flying public justifies forgoing notice and comment prior to adoption of this rule because a missing retaining ring in a control column mount, if not addressed, could lead to a major failure in the aileron quadrant assembly without warning and result in loss of pitch and roll control of the airplane during flight with consequent loss of control of the airplane. Because this could happen without warning, the left and right control column mounts must be inspected before further flight to determine if the retaining ring is missing. Accordingly, notice and opportunity for prior public comment are impracticable and contrary to the public interest pursuant to 5 U.S.C. 553(b)(3)(B).

In addition, the FAA finds that good cause exists pursuant to 5 U.S.C. 553(d) for making this amendment effective in less than 30 days, for the same reasons the FAA found good cause to forgo notice and comment.

The requirements of the Regulatory Flexibility Act (RFA) do not apply when an agency finds good cause pursuant to 5 U.S.C. 553 to adopt a rule without prior notice and comment. Because FAA has determined that it has good cause to adopt this rule without prior notice and comment, RFA analysis is not required.

The FAA estimates that this AD affects 57 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA estimates the following costs to do any necessary actions that would be required based on the results of the inspection. The agency has no way of determining the number of aircraft that might need these actions:

The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected operators.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866, and

(2) Will not affect intrastate aviation in Alaska.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Background

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all MHI RJ Aviation ULC Model CL-600-2B19 (Regional Jet Series 100 & 440), CL-600-2C10 (Regional Jet Series 700, 701 & 702), CL-600-2C11 (Regional Jet Series 550), CL-600-2D15 (Regional Jet Series 705), CL-600-2D24 (Regional Jet Series 900), and CL-600-2E25 (Regional Jet Series 1000) airplanes. The NPRM published in the Federal Register on July 28, 2023 (88 FR 48767). The NPRM was prompted by AD CF-2023-03, dated January 20, 2023, issued by Transport Canada, which is the aviation authority for Canada (referred to after this as the MCAI). The MCAI states that in-service reports of PCU rod end fractures due to pitting corrosion led to the issuance of Transport Canada AD CF-2018-29, dated November 2, 2018 (which corresponds to FAA AD 2019-19-08, Amendment 39-19744 (84 FR 60902, November 12, 2019) (AD 2019-19-08). AD 2019-19-08 requires detailed inspections of the elevator PCU rod ends and applicable corrective actions, and prohibits using certain aircraft maintenance manual tasks. Pitting corrosion can cause the PCU end rod spherical bearing to seize, potentially inducing a bending moment on the PCU output rod. The bending moment will eventually fracture the rod end. This condition, if not corrected, could lead to a disconnect between the PCU and the elevator or rudder control surface, resulting in potential loss of the control surface function or inadequate flutter suppression. Since Transport Canada AD CF-2018-29 was issued, MHI RJ conducted further safety analyses and determined that new or more restrictive airworthiness limitations are necessary for the operational check of each individual rudder PCU and elevator PCU. Additionally, Transport Canada determined that certain return-to-service AMM tasks are needed following short-term or long-term airplane storage.

In the NPRM, the FAA proposed to require, for certain airplanes, revising the existing maintenance or inspection program, as applicable, to incorporate new or more restrictive airworthiness limitations. The NPRM also proposed to require accomplishing certain aircraft maintenance manual (AMM) tasks and corrective actions following short-term or long-term storage. The FAA is issuing this AD to address fractured PCU rod ends. This condition, if not addressed, could lead to a disconnect between the PCU and the elevator or rudder control surface, resulting in potential loss of the control surface function or inadequate flutter suppression.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2023-1639.

The FAA received a comment from Air Line Pilots Association, International, who supported the NPRM without change.

The FAA received additional comments from two commenters, including Air Wisconsin Airlines and MHI RJ Aviation ULC. The following presents the comments received on the NPRM and the FAA's response to each comment.

Air Wisconsin Airlines requested that the phrase “or later revisions of these tasks,” as found in the Canadian AD, be added to any AMM revisions in the NPRM. Air Wisconsin stated that this phrase could help avoid the need for an AMOC at every AMM revision.

The FAA does not agree to the requested change. Specifying in an AD the use of “later revisions” of required service information, which do not exist at the time a final rule is published, violates the policies of the Office of the Federal Register (OFR) for material that is incorporated by reference. This AD has not been changed regarding this request.

MHI RJ requested that the reference to MRM TR ALI-0759 be deleted from paragraph (i)(1) of the proposed AD, “Required Actions for Model CL-600-2E25 Airplanes,” because that TR is not applicable to those airplanes. The commenter noted that this would agree with the MCAI.

The FAA agrees to the requested change. The reference to TR ALI-0759 has been deleted from paragraph (i)(1) of this AD.

This product has been approved by the aviation authority of another country and is approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, it has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data, considered the comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on this product. Except for minor editorial changes, and any other changes described previously, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed MHI RJ Temporary Revisions ALI-0757 and ALI-0759, both dated September 24, 2021. This service information specifies new or more restrictive airworthiness limitations for the elevator and rudder PCUs.

The FAA also reviewed the following service information. This service information specifies, among other tasks, operational tests of the rudder control and elevator control systems, and detailed inspections of the rudder PCU rod end spherical ball and elevator PCU rod end spherical ball, and corrective actions. Corrective actions include making sure that the applicable parts are moving or rotating correctly. These documents are distinct since they apply to different airplane models in different configurations.

• Task 27-21-00-710-805, Operational Test of the Rudder Control System, Subject 27-21-00, Rudder Control System, Chapter 27, Flight Controls, of MHI RJ CRJ200 Aircraft Maintenance Manual, CSP A-001, Revision 66, dated October 10, 2022.

• Task 27-23-01-220-801, Detailed Inspection of the Rudder PCU Rod End Spherical Ball, Subject 27-23-01, Power Control Unit (PCU), Rudder, Chapter 27, Flight Controls, of MHI RJ CRJ200 Aircraft Maintenance Manual, CSP A-001, Revision 66, dated October 10, 2022.

• Task 27-31-00-710-803, Operational Test of the Elevator Control System, Subject 27-31-00, Elevator Control System, Chapter 27, Flight Controls, of MHI RJ CRJ200 Aircraft Maintenance Manual, CSP A-001, Revision 66, dated October 10, 2022.

• Task 27-33-01-220-801, Detailed Inspection of the Elevator PCU Rod End Spherical Ball, Subject 27-33-01, Power Control Unit (PCU), Elevator, Chapter 27, Flight Controls, of MHI RJ CRJ200 Aircraft Maintenance Manual, CSP A-001, Revision 66, dated October 10, 2022.

• Task 27-23-01-220-802, Detailed Inspection of the Rudder PCU Rod End Spherical Ball, Subject 27-23-01, Power Control Unit (PCU), Rudder, Chapter 27, Flight Controls, of MHI RJ CRJ700/900/1000 Aircraft Maintenance Manual, Part 2, CSP B-001, Revision 71, dated December 16, 2022.

• Task 27-23-01-710-801, Operational Test of the Rudder PCU, Subject 27-23-01, Power Control Unit (PCU), Rudder, Chapter 27, Flight Controls, of MHI RJ CRJ700/900/1000 Aircraft Maintenance Manual, Part 2, CSP B-001, Revision 71, dated December 16, 2022.

• Task 27-33-01-220-801, Detailed Inspection of the Elevator PCU Rod End Spherical Ball, Subject 27-33-01, Power Control Unit (PCU), Elevator, Chapter 27, Flight Controls, of MHI RJ CRJ700/900/1000 Aircraft Maintenance Manual, Part 2, CSP B-001, Revision 71, dated December 16, 2022.

• Task 27-33-01-710-802, Operational Test of the Elevator Power-Control Units (PCUs), Subject 27-33-01, Power Control Unit (PCU), Elevator, Chapter 27, Flight Controls, of MHI RJ CRJ700/900/1000 Aircraft Maintenance Manual, Part 2, CSP B-001, Revision 71, dated December 16, 2022.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The FAA estimates that this AD affects 1,125 airplanes of U.S. registry. The FAA estimates the following costs to comply with this AD:

The FAA has determined that revising the maintenance or inspection program takes an average of 90 work-hours per operator, although the agency recognizes that this number may vary from operator to operator. Since operators incorporate maintenance or inspection program changes for their affected fleet(s), the FAA has determined that a per-operator estimate is more accurate than a per-airplane estimate. Therefore, the agency estimates the average total cost per operator to be $7,650 (90 work-hours × $85 per work-hour).

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority, as it updates airspace descriptions. This update is an administrative change and does not change the airspace boundaries or operating requirements.

Class D and Class E airspace are published in paragraphs 5000, 6004, and 6005 of FAA Order JO 7400.11, Airspace Designations and Reporting Points, which is incorporated by reference in 14 CFR 71.1 annually. This document amends the current version of that order, FAA Order JO 7400.11H, dated August 11, 2023, and effective September 15, 2023. FAA Order JO 7400.11H is publicly available as listed in the ADDRESSES section of this document. These amendments will be published in the next FAA Order JO 7400.11 update. FAA Order JO 7400.11H lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action amends the Class D airspace, Class E airspace designated as an extension to a Class D surface area, and Class E airspace extending upward from 700 feet above the surface for Arnold Palmer Regional Airport, Latrobe, Pennsylvania, by replacing the terms Notice to Airmen with Notice to Air Missions, and Airport/Facility Directory with Chart Supplement in the appropriate airspace descriptions. Also, this action removes the city name in the second line of the airspace header as per FAA Order 7400.2. Finally, this action updates the airport's geographic coordinates in the appropriate airspace descriptions to coincide with the FAA's database.

This action is an administrative change and does not affect the airspace boundaries or operating requirements; therefore, notice and public procedure under 5 U.S.C. 553(b) is unnecessary.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore: (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1F, “Environmental Impacts: Policies and Procedures,” paragraph 5-6.5a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant the preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

History

The FAA published a final rule in the Federal Register (88 FR 47361, July 24, 2023; corrected September 26, 2023 (FR 88 65797)) for Doc. No. FAA-2023-1186, amending Class E airspace extending upward from 700 feet above the surface for Polk County Airport/Cornelius Moore Field, Cedartown, Georgia, as a new instrument approach procedure has been designed for this airport. After publication, the FAA found the listed title associated with the airspace indicated Florida (FL) instead of Georgia (GA). This action corrects this error.

Accordingly, pursuant to the authority delegated to me, the amendment of Class E airspace for Polk County Airport/Cornelius Moore Field, Cedartown, GA, in Docket No. FAA-2023-1186, as published in the Federal Register on July 24, 2023 (88 FR 47361; corrected September 26, 2023 (FR 88 65797)), is corrected in the Federal Register of July 24, 2023 (88 FR 47361) as follows:

In the Federal Register of August 9, 2023 (88 FR 53764), FDA issued a direct final rule amending its regulations that provide for the use of PHOs given our determination that PHOs are no longer GRAS and revoking prior sanctions ( i.e., pre-1958 authorization of certain uses) for the use of PHOs in margarine, shortening, and bread, rolls, and buns based on our conclusion that these uses of PHOs may be injurious to health. The direct final rule provided a 75-day comment period ending October 23, 2023. We stated that the effective date of the direct final rule would be on December 22, 2023, 60 days after the end of the comment period, unless any significant adverse comment was submitted to FDA during the comment period. We did not receive any significant adverse comments.

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

On July 14, 2023, in accordance with CAA section 110(k)(3), the EPA proposed to approve portions of SIP revisions submitted by the California Air Resources Board (CARB) to meet CAA requirements for the 1997 annual PM 2.5 NAAQS in the San Joaquin Valley PM 2.5 nonattainment area. 1 The San Joaquin Valley is classified as a Serious nonattainment area for the 1997 annual PM 2.5 NAAQS and is also subject to CAA section 189(d) requirements because of the failure of the area to attain the 1997 annual PM 2.5 NAAQS by the area's original Serious area attainment date ( i.e., December 31, 2015). The EPA's determination that the area failed to attain by the original December 31, 2015 attainment date triggered the requirement for the State to submit the SIP revisions on which the EPA is taking final action in this document. 2

The SIP revisions on which we proposed action are those portions of the “2018 Plan for the 1997, 2006, and 2012 PM 2.5 Standards” (“2018 PM 2.5 Plan”)  3 and the “San Joaquin Valley Supplement to the 2016 State Strategy for the State Implementation Plan” (“Valley State SIP Strategy”)  4 that pertain to the 1997 annual PM 2.5 NAAQS, and the “Attainment Plan Revision for the 1997 Annual PM 2.5 Standard” (“15 µg/m 3 SIP Revision”). 5 CARB submitted the 2018 PM 2.5 Plan and Valley State SIP Strategy to the EPA as a revision to the California SIP on May 10, 2019, and submitted the 15 µg/m 3 SIP Revision on November 8, 2021. We refer to these three submissions collectively as the “SJV PM 2.5 Plan” or “Plan.” The SJV PM 2.5 Plan was developed jointly by the San Joaquin Valley Unified Air Pollution Control District (SJVUAPCD or “District”) and CARB and addresses Serious area nonattainment plan and CAA section 189(d) requirements for the 1997 annual PM 2.5 NAAQS in the San Joaquin Valley, except for the requirement for contingency measures. The Plan includes the State's demonstration that the area will attain the 1997 annual PM 2.5 NAAQS by December 31, 2023.

Following submittal of the SJV PM 2.5 Plan, CARB transmitted to the EPA two technical supplements providing additional information in support of the Plan. The first supplement, submitted on March 30, 2023, included documents titled “Ammonia: Supplemental Information for EPA in Support of 15 µg/m 3 Annual PM 2.5 Standard, March 2023” (“March 2023 Ammonia Supplement”) and “Building Electrification Technical Supplement for the 1997 Annual PM 2.5 NAAQS” (“March 2023 Building Heating Supplement”). The second supplement was submitted on June 15, 2023, and included information on the State's consideration of Title VI of the Civil Rights Act of 1964 (“Title VI”) in the context of SIP development to provide necessary assurances for purposes of CAA section 110(a)(2)(E)(i) (“Title VI Supplement”). 6

The EPA proposed to approve the best available control measures/best available control technology (BACM/BACT) demonstration, 7 the five percent annual emissions reduction demonstration, the attainment demonstration (including air quality modeling), the reasonable further progress (RFP) demonstration, and the quantitative milestones demonstration in the SJV PM 2.5 Plan as meeting the Serious nonattainment area and CAA section 189(d) planning requirements for the 1997 annual PM 2.5 NAAQS. We also proposed to find that the previously approved  8 2013 base year emissions inventories continue to satisfy the requirements of CAA section 172(c)(3) and 40 CFR 51.1008 for purposes of both the Serious area and the CAA section 189(d) attainment plans, and to find that the forecasted inventories for the years 2017, 2018, 2019, 2020, 2023, and 2026 provide an adequate basis for the BACM, RFP, five percent, and modeled attainment demonstration analyses. Finally, we proposed to approve the motor vehicle emissions budgets for 2020 and 2023 and the trading mechanism provided for use in transportation conformity analyses. 9

Please see our July 14, 2023 proposed rulemaking for additional background and a detailed explanation of the rationale for our proposed action.

The public comment period for the proposed rulemaking opened on July 14, 2023, the date of its publication in the Federal Register , and closed on August 14, 2023. During this period, the EPA received three comment submissions from the following entities: (1) a coalition of six environmental and community organizations (collectively referred to herein as “CCEJN”), 10 (2) a coalition of eight environmental and community organizations (collectively referred to herein as “CVAQ”), 11 and (3) a private citizen commenter. 12 We respond to the comments herein.

Comment 1.A: CCEJN questioned the EPA's proposed approval of the SJV PM 2.5 Plan because of concerns about the adequacy of the necessary assurances that the State provided in the Title VI supplement. The commenter contends that to comply with CAA section 110(a)(2)(E), a state's necessary assurances must relate to a state's nonattainment plan SIP submission itself, not merely the public processes carried out while preparing the plan or state laws and policies outside of the plan. The commenter claims that the Title VI Supplement fails to do this because it “has nothing to do with” the specific contents of the SJV PM 2.5 Plan. As an example, the commenter points to the State's lack of a Title VI analysis supporting its decision to not regulate ammonia as part of its PM 2.5 reduction strategy and contends that this example indicates that the State has failed to provide adequate necessary assurances. Additionally, CCEJN asserts that the EPA's analysis of the Plan must consider how the Plan itself complies with Title VI and that the EPA did not do so in its proposal.

Response 1.A: The EPA agrees with the commenter that CAA section 110(a)(2)(E)(i) requires that a state provide necessary assurances that implementing the SIP submission at issue would not be prohibited by Title VI. However, the EPA disagrees with the commenter that the necessary assurances provided by CARB, in conjunction with the substantive elements of the Plan itself, are insufficient to show that implementation of the Plan is not prohibited by Title VI, consistent with CAA section 110(a)(2)(E)(i). The EPA explained its rationale regarding its evaluation of the necessary assurances and CAA section 110(a)(2)(E)(i) in detail in our proposal. 13

As a point of clarification, the commenter includes references to “compliance with Title VI” as the relevant inquiry for purposes of necessary assurances under CAA section 110(a)(2)(E)(i). The EPA does not agree with this characterization of its responsibilities under the CAA. 14 In the proposal action, the EPA clearly noted that “[t]he EPA's proposed SIP approval does not constitute a formal finding of compliance with Title VI or 40 CFR part 7.”  15 The EPA further noted that “[a]pproval of this SIP submission for purposes of CAA 110(a)(2)(E)(i) does not affect the EPA's discretion to enforce Title VI and/or the EPA's civil rights regulations.”  16 Without making a formal finding of compliance with Title VI, the EPA believes the analysis in the EPA's proposed approval and in this final rulemaking is consistent with CAA section 110(a)(2)(E)(i). 17

With respect to the substance of the State's submission, the EPA disagrees with the commenter that the public processes surrounding the development and implementation of an attainment plan have no bearing on necessary assurances under CAA section 110(a)(2)(E)(i). As stated in the proposal, “[w]hat is appropriate for purposes of necessary assurances can vary depending upon the nature of the issues in a particular situation. Thus, the EPA evaluates a state's compliance with CAA 110(a)(2)(E)(i) on a case-by-case basis.”  18 Further, the EPA has discretion to determine what assurances are necessary and may require more or different information as needed in other SIP actions. 19 For example, in other contexts, the EPA has identified public participation as an established approach for recipients of EPA assistance to provide meaningful access to programs and activities. 20 Therefore, the EPA does not agree with the contention that methods of providing for public participation are not relevant to the analysis of necessary assurances under CAA section 110(a)(2)(E)(i).

In the Title VI Supplement, the State described the early and enhanced public engagement processes that CARB and the District undertook during the development and approval of the 2016 State SIP Strategy, Valley State SIP Strategy, 2018 PM 2.5 Plan, and 15 µg/m 3 SIP Revision, all of which formed the basis for the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS. It also described steps the State and District took to solicit and respond to public input following the local adoption of the Plan and to implement the control measures and strategy outlined in the Plan. These approaches are beyond minimum public notice and comment requirements and provide relevant information and important context of the necessary assurances under CAA section 110(a)(2)(E)(i) that the Plan was adopted and will be implemented into the future in a manner that is not prohibited by Title VI.

Similarly, the descriptions of State measures like Assembly Bill 617 (“AB 617”) and the development of community air monitoring networks provide relevant context for the regulatory landscape in which the State will implement the Plan, as well as the intent of the regulators. The EPA believes the State initiatives to prevent or diminish potential health-related impacts to communities most impacted by air pollution also, in part, provide assurances that the implementation of the Plan is not prohibited by Title VI in a manner consistent with CAA section 110(a)(2)(E)(i). The State's Civil Rights Policy, too, provides additional support for the conclusion that implementation of the Plan would not be prohibited by Title VI. For example, the policy would allow for members of the public to notify and file a formal complaint with the State that an alleged violation of Title VI is occurring “during the administration of [the State's] programs.”  21 Taken together, these various State processes and initiatives support the conclusion that the State provided necessary assurances that implementation of the plan would not be prohibited by Title VI.

The commenter points to one primary substantive deficiency in the Plan that they believe indicates the State has not demonstrated compliance with CAA section 110(a)(2)(E)(i): The commenter claims that ammonia is a major precursor of PM 2.5 and that the policy decision “to decline to regulate ammonia implicates disparate treatment and/or disparate impact, yet CARB provides no necessary assurances that this policy decision does not violate Title VI.” The EPA's proposed and final actions, based upon the State's SIP submissions, reflect the EPA's agreement that ammonia is not a significant precursor of PM 2.5 for the purposes of the 1997 annual PM 2.5 NAAQS in the San Joaquin Valley. As described in more detail in Section II.A.3 of this document, this final determination comes following the EPA's review of the State's submittal and request for additional information to support the State's decision not to regulate ammonia for this NAAQS, as well as the EPA's review of the exhibits and attachments from the commenter. Included in the State's submittal and March 2023 Ammonia Supplement are estimates of the level of emissions reductions possible with a suite of potential ammonia control measures, justifications for why many of these measures are not feasible or are already being implemented in the area, and ultimately, why the State has chosen to focus on reducing direct PM 2.5 and NO X to reduce PM 2.5 concentrations in the San Joaquin Valley air basin. The EPA believes the technical information provided by the State to support its decision not to regulate ammonia for purposes of the 1997 annual PM 2.5 NAAQS provides adequate necessary assurances that the implementation of this Plan will not be prohibited by Title VI.

The EPA recognizes that the San Joaquin Valley area has previously struggled to attain the 1997 annual PM 2.5 NAAQS and that the Demographic Index analysis the EPA completed as a part of the proposed approval indicates the area includes communities of color and low-income populations above the national average. However, as explained in this response and in our proposal, the EPA believes the information in the record contains adequate necessary assurances consistent with CAA section 110(a)(2)(E)(i). This analysis is based in part on technical analyses such as that the modeling in the State's and District's Plan shows attainment for these NAAQS by the applicable attainment date and that the control strategy for PM 2.5 takes into consideration the unique atmospheric conditions in the San Joaquin Valley air basin in which the PM 2.5 response to reductions in ammonia emissions would be relatively small. Thus, based on the existing technical record before the EPA, we find that the State has adequately provided necessary assurances that the implementation of the Plan is consistent with CAA section 110(a)(2)(E)(i).

Comment 1.B: Next, CCEJN contends that the policies cited by CARB in its Title VI supplement to support its necessary assurances, e.g., AB 617, community air monitoring networks, and CARB's Civil Rights Policy, are not enforceable parts of the submitted Plan (pursuant to CAA section 110(a)(2)(A)), cannot lead to credited emissions reductions for SIP purposes, and thus cannot be relied upon as necessary assurances.

Response 1.B: The EPA disagrees that necessary assurances must themselves be enforceable parts of a plan. While in some instances a state may submit additional enforceable measures as a component of necessary assurances, the EPA believes that this is not a requirement. The commenter cites the CAA section 110(a)(2)(A) requirement that plans include enforceable emissions limitations and other control measures as a basis for the assertion that necessary assurances must be enforceable and part of the plan. The EPA agrees that nonattainment plans must contain enforceable emissions limitations and other control measures—but this does not mean that CAA section 110(a)(2)(E)(i) necessary assurances must themselves be emissions limitations or control measures. The EPA interprets section 110(a)(2)(E)(i) as allowing an “assurance” to include an analysis of the plan. In this context, a state providing adequate information to the EPA to provide necessary assurances that the state is not prohibited by Title VI from carrying out the plan in the SIP submission is sufficient. In the proposal action, the EPA explained the rationale for this approach, including citing to relevant case law finding that “what assurances are `necessary' is left to the EPA's discretion.”  22 This is consistent with necessary assurances that the EPA requires when needed for other issues related to section 110(a)(2)(E)(i). For example, states also provide necessary assurances concerning the adequacy of personnel, funding, and state law authority to implement a SIP submission, and the EPA generally relies on facts, analyses, and other forms of assurances from the state for these purposes—not enforceable measures (that is, the EPA generally does not require SIP-approved rules that are incorporated by reference into the Code of Federal Regulations to provide such necessary assurances). There may be circumstances under which the EPA would expect a state to provide a state law provision for inclusion into the SIP in order to provide such necessary assurances for these other requirements, but this is not generally the case.

Where a necessary assurances analysis concludes that additional enforceable measures are needed, a state would also include such new measures in the SIP submission, but necessary assurances need not necessarily themselves constitute such measures, as the commenter suggests. In this case, the EPA has concluded that the information provided by the State concerning its existing policies and programs provides adequate necessary assurances that the State's implementation of the SIP submissions at issue would not be prohibited by Title VI.

Comment 2.A: CCEJN states that the soil NO X emissions estimate of approximately 10 tons per day (tpd) used in the modeling emissions inventory was dubious when the State submitted the Plan in 2018 and that the estimate is clearly inaccurate based on more recent studies, which the commenter claims suggest soil NO X may contribute as much as 100 tpd to total NO X emissions. The commenter also asserts that studies suggest that soil NO X emissions are likely driven primarily by agriculture and therefore should be considered anthropogenic. To support these assertions, the commenter references Exhibit A to the letter (“Exhibit A”), which summarizes 10 studies from 2015-2023, from which the author concludes that 9 of the studies indicate that standard soil NO X parameterizations underestimate agricultural soil NO X emissions by a factor of 2 to 10.

CCEJN further states that “[t]he state has acknowledged that its existing inventory may be outdated, and it has begun the process of studying NO X emissions from soil in order to update the inventory for future submissions to EPA,” but that its use of the existing inventory in the interim “. . . is unlawful because it is based exclusively on inertia, and `the EPA cannot simply recite “scientific uncertainty” to evade its statutory duty to update regulations' ” (citing A Cmty. Voice v. EPA, 997 F.3d 983, 994 (9th Cir. 2021)). The commenter suggests that “[i]nstead, the state must make an updated good faith estimate—if not a perfect estimate—of emissions, taking into account that the Clean Air Act is `preventative' and `precautionary' in nature,” and asserts that such estimate would undoubtedly be higher than the estimate in the current inventory and would identify significant anthropogenic soil NO X emissions.

Based on its analysis, CCEJN concludes that the EPA must disapprove the inventory because it is neither “current” nor “accurate” and that failure to do so is arbitrary and capricious.

Response 2.A: The EPA acknowledges the information provided by CCEJN in its comments and in the studies described in Exhibit A suggesting that soil NO X emissions may be higher than have typically been estimated in the past. The studies cited by the commenter rely on variants of several emissions estimation approaches, including efforts to achieve better agreement between air quality models and satellite measurements, and to correlate satellite measurements over croplands with the expected soil temperature and moisture dependence of soil NO X emissions. While most of the studies cited by the commenter were published after the State developed the emissions and conducted the modeling for the 2018 PM 2.5 Plan upon which the 15 µg/m 3 SIP Revision is based, the EPA would not characterize the studies as providing “updated” emissions that would make the estimates in the 2018 PM 2.5 Plan obsolete, as suggested by the commenter. Rather, as discussed further in the remainder of this response, we find that some recent studies provide evidence that soils are an important NO X source, and several provide alternative estimates of soil NO X emissions using various approaches.

The EPA agrees that there is evidence suggesting soil NO X emissions may be higher than previously estimated but disagrees with the characterization in Exhibit A that 9 out of the 10 studies conclude that California soil NO X is underestimated by a factor of 2 or more. That was the conclusion of two of the studies, those described in Almaraz et al. (2018)  23 and Sha et al. (2021). 24 Luo et al. (2022)  25 did not opine on how their estimate compares with prior estimates, though the authors did provide an estimate that the author of Exhibit A notes implies that prior estimates are largely underestimated. The other studies provide evidence consistent with soil NO X as an important source or suggest a stronger temperature dependence for soil NO X emissions compared to previous approaches.

While there is evidence suggesting soil NO X emissions may be higher than previously estimated, there are conflicting conclusions in the literature. Because the inventories in the SJV PM 2.5 Plan reflect the State's best estimate based on the information available at the time the Plan was developed, the EPA does not believe a change in the soil NO X emissions estimation approach relied on in the SJV PM 2.5 Plan is warranted at this time. There is a need to reconcile the disagreement among studies by examining the differing assumptions, techniques, data sources, locations, and time periods covered. Such further examination may also help resolve the substantial uncertainty and variability of the proportion of soil NO X emissions that can be attributed to anthropogenic sources such as agricultural fertilizer application.

The EPA further disagrees with CCEJN's assertion that the State relies on the soil NO X emissions estimates in its existing inventory due to “inertia.” As noted by the commenter, the State has effectively acknowledged that its methodology for estimating soil NO X emissions may need to be updated when it shared its plans to convene a subject matter expert review panel to assess the state of the science on soil NO X emissions and make recommendations for future estimates. 26 These efforts indicate that the State is taking the issue seriously and attempting to address it, as acknowledged by the commenter. However, in exploring possible improvements to its soil NO X estimation approach, the State is not disavowing the approach used in the SJV PM 2.5 Plan, nor is there a widely accepted soil NO X emissions inventory approach that the State is willfully refusing to use. Depending on the outcomes of the review panel's work, the State may find that its current approach provides the best estimate and retain such approach, or the State may determine that an alternative approach would provide a more accurate estimate and use such approach moving forward.

For the SJV PM 2.5 Plan, the State used the DeNitrification‐DeComposition model (DNDC) to estimate the 10 tpd of soil NO X emissions used in the modeling. 27 The approach is supported by research conducted in the same time frame as studies cited by the commenter and therefore the EPA does not consider the State's approach to be outdated. The emissions inventory in the Plan was among the work that led to the paper by Guo et al. (2020), 28 which was cited in Exhibit A as among the recent research on soil NO X . Guo et al. (2020) did not find that soil NO X emissions are significantly underestimated in the State's emissions inventory. Rather, the study examined evidence from satellite retrievals and ground-based measurements that indicate that the State's approach provides an accurate emissions inventory for the San Joaquin Valley. The EPA believes that the DNDC-based soil NO X emissions used in the modeling are a good faith estimate consistent with the State's current view of the state of the science, and that the State's estimate is acceptable for use in the modeling emissions inventory in the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS.

The EPA acknowledges that there is evidence that soil NO X emissions have historically been underestimated, including evidence from some studies finding that satellite observations of column NO 2 (total amount of NO 2 in a vertical column of the atmosphere) indicate that soil NO X emissions are higher than predictions by photochemical models using emissions estimates from older soil NO X parameterizations. The commenter describes some of such evidence in Exhibit A. However, the case for soil NO X emissions being significantly underestimated in the San Joaquin Valley is not as settled as CCEJN's comment implies. The studies cited by the commenter differ in the questions they attempt to address, their assumptions and analytical approaches, their data analysis techniques and metrics, and in the differing environmental conditions in the locations and time periods they cover.

In the remainder of this response, we identify statements from the ten research papers listed in Exhibit A to show that their support for a substantially greater soil NO X emissions for the San Joaquin Valley is not definitive, and that there is not an agreed upon method to estimate a missing increment of emissions if one is in fact needed. Note that these points are not meant to discredit the work of the respective authors but rather to illustrate that there are varying factors that require greater investigation to determine the magnitude of soil NO X emissions in the San Joaquin Valley. Given these complicating factors and uncertainties, the EPA requests that CARB and the District continue their work to examine their current methodology for estimating soil NO X emissions, and as appropriate, revise their methodology based on the findings of the expert review panel and the latest available research.

Oikawa et al. (2015)  29 measured NO X emissions from sorghum plots after applying fertilizer, and explored the effect of higher soil NO X emissions on the performance of an air quality model by comparing the model results with satellite NO 2 column observations and surface measurements. The study authors concluded that soil NO X emissions would need to be 10 or more times higher to match observations. However, surface measurements were not consistently underestimated in the model, and increasing emissions in the model to match the satellite retrievals led to overestimates in emissions at the surface derived from measurements of soil NO X emissions fluxes. The paper also noted that global estimates of soil NO X emissions from other studies vary by a factor of three (ranging from 9 to 27 Tg per year), indicating a high level of uncertainty. The study conclusions suggest that soil NO X emissions are largely underestimated but the magnitude of the underestimate is not quantified.

Parrish et al. (2017)  30 focuses on understanding trends in ozone design values, noting a difference in the San Joaquin Valley trend in comparison with other California air basins. The authors note that the difference may partially be accounted for by the higher agricultural activity in the Valley, for which controls have not been implemented as extensively as for other anthropogenic sources. While this explanation could also hold for agricultural soil NO X , that particular issue is not explored.

Exhibit A cites Kleeman et al. (2019)  31 as providing evidence of a missing source of NO X emissions that could help correct a “consistent underprediction” in nitrate concentrations. The EPA believes this underprediction was overstated. For the January average of the three model years reported, there was a modest underprediction of nitrate in the model base cases without soil NO X compared to a somewhat larger overprediction when soil NO X emissions were added; whereas for the 2010 model year, nitrate was overpredicted in the base case and the overprediction was worsened in the soil NO X case. 32 In the conclusion, the authors state that “further research is required to more accurately estimate winter emissions rates of soil NO X and to account for year-to-year variations driven by changes in meteorological conditions, fertilizer application rates, and irrigation practices,” and that the tests conducted “do not definitely prove that the missing emissions source is indeed fertilized agricultural soils. Future measurements should be made in the rural portions of the SJV to further test the hypothesis that soil NO X emissions are a significant factor in the air quality cycles within the region.”  33 The EPA interprets such conclusions as an acknowledgement that additional research is needed, with a focus on wintertime conditions when San Joaquin Valley PM 2.5 concentrations are highest.

The author of Exhibit A summarizes a result from Chen et al. (2020), 34 noting acceptable PM 2.5 model performance despite overly low atmospheric mixing heights. But the author goes on to suggest that overly low mixing heights should have led to PM 2.5 overpredictions; the good performance therefore may imply that the PM 2.5 precursor emissions were too low. The study also found that rural site column NO 2 was underpredicted by 25 percent relative to NO 2 columns derived from surface-based measurements, suggesting that soil NO X emissions are underestimated. Thus, the study authors acknowledge that soil NO X emissions may need to be further examined. However, they also note good agreement between modeled column NO 2 and the NO 2 columns derived from surface-based measurements at the urban sites of Fresno and Bakersfield, where NO 2 is double that of the rural sites, and state that “it is unlikely that NO X emissions from croplands are comparable to mobile sources” (the main source of NO X emissions). That is, the NO X emissions increase that would be needed to increase the model predictions by 25 percent for the low-NO 2 rural sites is unlikely to be comparable to the NO X emissions driving the high NO 2 urban sites. This finding supports further exploration of soil NO X emissions, and a possible underestimate, but does not imply a large underestimate in soil NO X emissions.

Wang et al. (2021)  35 explored the relatively modest downward trend in satellite column NO 2 measurements after 2009, as compared to the steady decrease in anthropogenic NO X emissions, and the role of soil NO X emissions in this apparent discrepancy. They found better model agreement with satellite column NO 2 when they increased the temperature responsiveness of their soil NO X emissions estimates, especially at high temperatures. This change also improved the correlation between modeled column NO 2 and satellite column NO 2 in the central United States. This correlation is an important finding, implying soil NO X emissions may be underestimated. However, it should be noted that in absolute terms, even without soil NO X , the model simulation overpredicted the NO 2 concentration relative to the satellite retrieval. The authors acknowledge that there are many reasons why the predictions might not match the observations. The authors cite an uncertainty of 35 percent in the satellite NO 2 columns, and the uncertainty in the satellite retrieval encompasses all of the results, from the zero soil NO X scenario to the increased soil NO X scenario. 36 The EPA views this as a large enough uncertainty to limit confidence in at least some of the study conclusions.

Wang et al. (2021) states that the downward trend in the satellite column NO 2 is smaller than the downward trend in anthropogenic NO X emissions, and that the discrepancy is greater for the central U.S. than for the eastern or western U.S. Since the San Joaquin Valley is in the west, the EPA interprets this result as indicating that there is less of a potential need for increases in soil NO X emissions estimates in the San Joaquin Valley relative to the central U.S. to resolve the discrepancy. The authors also cited another study in which the apparent discrepancy between the trends in modeled versus surface-level ambient measurements (as opposed to the satellite retrieval) was found to be within the bounds of the uncertainty of the ambient measurements. The study provides a strong impetus for exploring soil NO X emissions and their potential increased rate at higher temperatures but does not provide evidence that soil NO X emissions are significantly underestimated in the San Joaquin Valley.

To evaluate the human health and climate benefits of reducing reactive nitrogen emissions, Luo et al. (2022)  37 used the Fertilizer Emission Scenario Tool for CMAQ (FEST-C) to generate soil NO X emissions estimates for every U.S. county, including those counties in the San Joaquin Valley. Exhibit A notes that the FEST-C-derived San Joaquin Valley county total emissions of soil NO X is 100 tpd compared to CARB's emissions inventory for all anthropogenic NO X which amounts to roughly 200 tpd. The study used a different emissions model than the model used by CARB, underscoring the need to explore why emissions models yield such different results. The study did not validate the model-derived NO 2 predictions using satellite retrievals or ground-based measurements, so it does not provide direct evidence that soil NO X emissions are underestimated for the San Joaquin Valley.

Wang et al. (2023)  38 explored trends in satellite column NO 2 and ground level measurements, and the role of lightning and soil NO X in explaining spatial and temporal distributions of NO 2 . Among other results, they found that temperature and soil moisture, which are important drivers of soil NO X emissions, were highly correlated with satellite column NO 2 in rural areas of California, including crop lands. This suggests soil NO X is an important source of NO X near crop lands. The study examined trends in NO X over time rather than attempting to quantify soil NO X emissions and therefore does not provide direct evidence that soil NO X emissions are underestimated for the San Joaquin Valley.

Finally, three studies cited in Exhibit A, Almaraz et al. (2018), Guo et al. (2020), and Sha et al. (2021), provided estimates of soil NO X emissions in California. Almaraz et al. (2018)  39 estimated soil NO X emissions using a top-down approach based on aircraft measurements as well as the Integrated Model for the Assessment of the Global Environment (IMAGE) soil model. Guo et al. (2020)  40 compared satellite measurements of NO 2 with CMAQ air quality model predictions using soil NO X emissions from the DNDC soil model. Sha et al. (2021)  41 conducted a similar measurement-model comparison but using the Weather Research and Forecasting model coupled with Chemistry (WRF-Chem) air quality model and the Berkeley Dalhousie Iowa Soil NO Parameterization (BDISNP) soil model. The IMAGE and BDISNP models are empirical or parametric models. They rely on emissions factors that are derived from empirical measurements and that may vary by land use, precipitation, and temperature, but do not incorporate algorithms that reflect the underlying physical principles. The DNDC model used in Guo at al. (2020) and in the State's emissions inventory is a biogeochemical or mechanistic model. It also uses measurements for validation but includes detailed consideration of the individual physical and biological processes in soils that lead to NO X emissions and their dependence on factors like the soil's various nitrogen- and carbon-containing species, moisture, and temperature.

Comparisons between the results described in Almaraz et al. (2018), Guo et al. (2020), and Sha et al. (2021) show large disagreements. 42 Almaraz et al. (2018) estimated that soil NO X emissions from fertilized croplands account for 32 percent of California NO X emissions, Sha et al. (2021) estimated soil NO X emissions comprise 40.1 percent of California's total NO X emissions, while Guo et al. (2020) estimate that soil NO X emissions are only 1.1 percent of California anthropogenic NO X emissions. (As noted earlier in this response, the DNDC model emissions estimation work performed for the Guo et al. (2020) study was also the basis for the State's soil NO X emissions estimate.) The fraction of nitrogen applied as fertilizer released as NO X to the atmosphere was estimated by Almaraz et al. (2018) to be 15 percent, while 7 other studies reviewed by Guo et al. (2020) estimate it to be 2 percent or less. Furthermore, there is an additional possible discrepancy between the work described in Wang et al. (2021)  43 and Wang et al. (2023), 44 and the results in Guo et al. (2020). The former two found correlations between satellite-derived column NO 2 over agricultural areas and modeled soil emissions, suggesting soil NO X as a driver of NO 2 there. However, using correlations and ratios of NO X to CO among monitoring sites, and satellite column NO 2 retrievals, Guo et al. (2020) found little difference between the diurnal and seasonal temporal variation at rural sites compared to urban sites, consistent with a larger contribution of emissions from urban sources rather than rural soils. Higher soil NO X emissions would increase summer emissions more in rural areas than in urban areas.

Despite widely differing estimates of the relative portion of California's NO X emissions inventories attributable to soil NO X in Almaraz et al. (2018), Sha et al. (2021), and Guo et al. (2020), each study reported high agreement between its modeled and its observed soil NO X emissions. Reconciling the differences in input data used in the models, such as fertilizer and irrigation amounts and timing; other inputs to the air quality models; and data analysis techniques would be necessary for a process-based understanding of the differences in the contribution and magnitude of soil NO X emissions estimates between models. There is also a need for additional measurements of soil NO X emissions fluxes for various locations and conditions to help develop and validate soil models.

The various authors acknowledge considerable uncertainty in their work. While Almaraz et al. (2018) suggest that soil NO X emissions may be significantly underestimated using current techniques, the study acknowledges the limited number of surface measurements that were available for purposes of validating the model results and that, where observations exist, there is a large range in observed values due to varying soil conditions ( e.g., relating to temperature, moisture, and fertilizer application). The “top-down” NO X emissions estimates derived from aircraft measurements relied upon in the study also reflect a significant degree of uncertainty, reported at 190 tpd plus or minus 130 tpd, i.e., plus or minus 68 percent. The authors acknowledge the limited number of surface measurements that were available for purposes of comparing with the model results, the difficulty in comparing the model results with the observations, and the need for more field measurements. Guo et al. (2020) stated that obtaining an emissions factor correlating NO X emissions to fertilizer application from the presently available data in various studies (including Almaraz et al. (2018)) would be “difficult or impossible” due to the sparseness of data collected in terms of sampling length, sampling frequency, and the episodic nature of nitrogen gases from soil.

Most of the discussion herein concerns the varying estimates of overall total soil NO X emissions. However, how those emissions are distributed in time and space are also of great importance for understanding the effect of NO X emissions on ambient PM 2.5 concentrations. PM 2.5 concentrations in the San Joaquin Valley are highest in the cool, moist winter, whereas soil NO X emissions are highest in the warm, dry summer. For modeling PM 2.5 concentrations, it is especially important that the soil NO X approach that is used performs well under wintertime conditions. Also important is how the approach reflects soil composition, soil management practices, and fertilizer application, each of which vary in time and space. Adopting a different soil NO X emissions estimation approach is not a matter of simply replacing one estimate of total soil NO X with another. Rather, it requires ensuring that the approach accurately reflects the spatial and temporal variation of the many factors affecting emissions and of the emissions themselves.

In light of the uncertainties and disagreements among studies, the EPA does not believe that the available research provides sufficient certainty about the magnitude and proportion of soil NO X emissions to warrant a revision to the State's inventory for purposes of the SJV PM 2.5 Plan. 45 The EPA is not convinced that any revised estimate developed by the State at this time would be verifiably more accurate than the inventory in the Plan. A revision to the State's inventory approach may be warranted in the future pending the State's ongoing work in this area and the most up-to-date understanding of soil NO X emissions, as discussed earlier in this response. The EPA encourages the State to continue its ongoing work to convene a subject matter expert review panel to assess the state of the science on soil NO X emissions, to keep abreast of the latest research, and to update its estimation methodologies, as appropriate. However, for purposes of the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS that is the subject of this action, we find that the State relied on a reasonable methodology that is supported by the research literature. Thus, we conclude that the State provided an accurate, up-to-date emissions inventory for NO X .

Comment 2.B: Regarding the motor vehicle emissions modeling, CCEJN points to a previous statement from the EPA, saying that “it could approve an outdated inventory so long as the inventory was built using the `latest EPA-approved' emission model `at the time [the State] developed the submission.' ” The commenter asserts that the EPA now “proposes to abandon both the statutory text and the already-lax requirement to use the most recent EPA-approved model,” by allowing the State to rely on a model that is a decade old when two more recent models are available, one of which (EMFAC2017) shows higher attainment-year emissions of both NO X and PM 2.5. CCEJN contends that the State and the EPA speculate that the higher values would not affect the attainment demonstration. However, CCEJN asserts that the effect on the attainment demonstration is unknown and that it is also unknown what the effects would be on the precursor demonstration, which the commenter claims relies on low estimates of NO X in 2023 to conclude that the State need not regulate ammonia.

Finally, the commenter states that the “EPA's decision to abandon its recently adopted standard that inventories should be built using the `latest EPA-approved' emission model is arbitrary and capricious,” asserting that the EPA is “simply resistant to the idea that a current inventory must be used” and has lost litigation over this issue (citing Sierra Club v. EPA, 671 F.3d 955 (9th Cir. 2012)), and claiming that “. . .the agency is therefore bending over backwards to adopt whatever standard will allow the state to continue to use the outdated inventory.”

Response 2.B: The EPA disagrees with CCEJN's claims that we are resistant to require, or have changed our position, that inventories must be developed using the latest EPA-approved emissions model available at the time the State developed the SIP submission and that our proposed action to reaffirm the base year inventory is arbitrary and capricious. As discussed in our proposal, the SJV PM 2.5 Plan relies on much of the same technical information and analyses from the 2018 PM 2.5 Plan, including the emissions inventories. 46 The EPA previously found, for purposes of the 1997 annual PM 2.5 NAAQS as well as other PM 2.5 standards, that these inventories were based on the most current and accurate information available to the State and District at the time they were developing the 2018 PM 2.5 Plan and inventories, including the latest version of California's mobile source emissions model that had been approved by the EPA at the time, EMFAC2014. 47 Thus, as part of our prior action on the 2018 PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS, we approved the emissions inventories as meeting the Serious area and CAA section 189(d) requirements for the 1997 annual PM 2.5 NAAQS. 48

In the EPA's final action approving the base year inventories in the 2018 PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS, the EPA addressed concerns raised by a commenter about the use of EMFAC2014. 49 The EPA discussed the timeline for the State's submittal of the emissions inventories in the 2018 PM 2.5 Plan relative to the EPA's approval of EMFAC2014 and EMFAC2017, explaining that EMFAC2014 was the most current mobile source model available for emissions inventory development purposes at the time the State was developing the plan. Nevertheless, at that time, we considered comparisons between EMFAC2014 and EMFAC2017 in the 2013 base year as provided by CARB in its “Staff Report, Proposed SIP Revision for the 15 µg/m 3 Annual PM 2.5 Standard for the San Joaquin Valley” (“CARB Staff Report”). 50 Based on our review of the State's analysis, we concluded that the 2013 base year emissions inventories in the 2018 PM 2.5 Plan were comprehensive, accurate, and current, consistent with the requirements of CAA section 172(c)(3) and 40 CFR 51.1008.

Given that the 15 µg/m 3 SIP Revision was submitted to the EPA by the State as an “administrative revision” to the 2018 PM 2.5 Plan and relies on much of the same technical information that was developed for the 2018 PM 2.5 Plan, the State continued to rely on the previously approved emissions inventories from the 2018 PM 2.5 Plan. However, to address the most up-to-date information available, in addition to the EMFAC2017 model results noted earlier in this response, the State provided to the EPA comparisons between the estimated annual NO X and PM 2.5 emissions developed for the 2018 PM 2.5 Plan using EMFAC2014 with those developed using the most recent EPA-approved version of EMFAC, EMFAC2021. 51 CARB's analysis included comparisons between all three EMFAC models for both the 2020 RFP year and the 2023 attainment year. 52 As the commenter correctly notes, model results from EMFAC2017 indicate higher NO X and PM 2.5 emissions in the 2023 attainment year than those derived for the same year using EMFAC2014. However, EMFAC2021, which was the most recent EPA-approved model at the time of the EPA's proposal, 53 indicates that NO X and PM 2.5 emissions in the 2023 attainment year are lower than those derived for the same year using EMFAC2014.

As discussed in the EPA's technical support document (TSD) for our proposal, 54 the differences in emissions estimates for mobile sources between the three EMFAC model versions correspond to differences of approximately two percent or less of the regional emissions inventories for PM 2.5 and NO X for the 2023 attainment year. 55 Using the sensitivity of the PM 2.5 design value per tpd of emissions modeled by the State, the EPA assessed the effects of the various EMFAC model version results on the attainment demonstration in the Plan. 56 Based on our technical analysis, we determined that although the NO X and PM 2.5 emissions estimates in the 2023 attainment year are higher in EMFAC2017 than in EMFAC2014, the effect on the PM 2.5 concentrations of 0.07 µg/m 3 is sufficiently small that the attainment demonstration remains valid. 57 Furthermore, more up-to-date emissions data from EMFAC2021 show lower emissions of NO X and PM 2.5 in the attainment year, indicating that the attainment modeling results in the Plan derived using EMFAC2014 are conservative. The same is true for the modeling for the precursor demonstration—the lower NO X estimates derived using EMFAC2021 would produce lower sensitivities of PM 2.5 to ammonia, since they would increase the abundance of ammonia relative to NO X (since particulate ammonium nitrate formation would be less limited by, and so less sensitive to, the amount of ammonia) . Therefore, the State's conclusions based on their use of EMFAC2014 are conservative relative to if it had used the most up-to-date EPA-approved model, EMFAC2021. Thus, we disagree with the assertions that the effects of the various EMFAC versions on the attainment demonstration and precursor demonstration are unknown and find that reliance on the previously approved emissions inventories is acceptable.

Finally, we also disagree with the commenter's assertion (citing Sierra Club )  58 that the EPA has lost litigation over the issue that a current inventory must be used. In Sierra Club, the Ninth Circuit remanded the EPA's March 2010 approval of an ozone attainment plan for the San Joaquin Valley submitted in 2004, holding that the EPA's failure to consider new emissions data that the State had submitted in 2007 as part of a separate ozone plan rendered the EPA's action arbitrary and capricious under the Administrative Procedure Act. 59 The decision in that case rested on the unreasonableness of the EPA's failure to address the new emissions data. The court found the EPA's action arbitrary and capricious because of its “reliance on old data without meaningful comment on the significance of more current compiled data” and concluded that “it was unreasonable for EPA summarily to rely on the point of view taken [in longstanding policy] without advancing an explanation for its action based on `the facts found and the choice made.' ”  60

For purposes of this action, the EPA has reviewed the emissions data derived using more recent versions of the EMFAC model provided by CARB, consistent with the holding in Sierra Club. Based on our technical analysis of the latest information available described earlier in this response, we determined that the precursor and attainment demonstrations are valid. Thus, we continue to find that the 2013 base year inventories in the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS satisfy the requirements of CAA section 172(c)(3) and 40 CFR 51.1008 for purposes of both the Serious area and the CAA section 189(d) attainment plan requirements, and to find that the forecasted inventories provide an adequate basis for the BACM, RFP, and the modeled attainment demonstration analyses in the Plan.

Comment 3: CCEJN states that the EPA must disapprove the ammonia precursor demonstration based on considerations outlined in several specific comments (summarized in Comments 3.A through 3.D that follow), but also in several introductory remarks. In the introductory remarks, the commenter appears to refer to the precursor demonstration's modeled PM 2.5 responses to ammonia reductions for the 2020 analysis year, some of which are above the 0.2 µg/m 3 EPA-recommended contribution threshold for the 2012 annual PM 2.5 NAAQS in the EPA's “PM 2.5 Precursor Demonstration Guidance” (“PM 2.5 Precursor Demonstration Guidance”). 61 Based on these model results, the commenter asserts that the State tacitly acknowledges that ammonia assessments in previous PM 2.5 plans, finding that ammonia does not contribute significantly to PM 2.5 levels that exceed the 1997 annual PM 2.5 NAAQS, were incorrect. The commenter concludes that these results indicate that the State should have been regulating ammonia in the recent past, and also that the State should err on the side of caution and regulate ammonia now. Finally, CCEJN contends that not regulating ammonia has led to greater ammonium nitrate PM 2.5, thereby implicating disparate treatment and disparate impacts, and that the State has failed to provide necessary assurances that the policy decision not to regulate ammonia complies with Title VI.

Response 3: The EPA disagrees with the commenter's premise that the modeled PM 2.5 responses for the 2020 analysis year indicate that ammonia contributed significantly to PM 2.5 levels in the past. Under the EPA's PM 2.5 Precursor Demonstration Guidance, a response above the recommended contribution threshold indicates a “contribution,” but additional information can be considered in determining whether that response “contributes significantly.”  62 Such information may include, but is not limited to, the amount by which the threshold is exceeded, studies to evaluate specific atmospheric chemistry in the area, trends in ambient speciation data and precursor emissions, 63 and the general facts and circumstances of the nonattainment area. 64 In concluding that ammonia does not contribute significantly, the State considered model responses for the 2024 analysis year in addition to 2020, as well as other additional information, as summarized in the EPA's February 2020 Precursor Technical Support Document. 65 We do not believe that viewing modeled responses to ammonia for specific years in isolation or out of context is an adequate method for determining whether a precursor contributes significantly to PM 2.5 levels.

Additionally, the EPA does not agree that prior precursor assessments should be considered erroneous based on the analysis in a newer plan, particularly when the more recent plan uses different criteria for assessing precursor significance. Previous plans for the 1997 annual PM 2.5 NAAQS in the San Joaquin Valley, like the ones mentioned by the commenter, predated the 2016 “Fine Particulate Matter National Ambient Air Quality Standards: State Implementation Plan Requirements” (“PM 2.5 SIP Requirements Rule”)  66 and the 2019 PM 2.5 Precursor Demonstration Guidance; therefore, they did not assess a modeled ammonia response relative to a contribution threshold but rather relied on the conclusions from modeling performed at the time and from past studies indicating that ammonium nitrate PM 2.5 is far more responsive to NO X reductions than to ammonia reductions. Following promulgation of the PM 2.5 SIP Requirements Rule, the EPA now requires that each precursor be evaluated individually by comparing modeled responses to the contribution threshold and considering additional information. 67 The State conducted its precursor analysis for the SJV PM 2.5 Plan in accordance with these requirements.

Regarding CCEJN's Title VI-related concerns, we address the comments regarding Title VI in Responses 1.A, 1.B, 5, and 7, which rely on supporting information discussed in Responses 3.A, 3.B.1 through 3.B.4, 3.C, and 3.D.

Comment 3.A: CCEJN's first specific stated concern with the precursor demonstration is that the State's conclusion that the San Joaquin Valley is NO X -limited relies on low NO X estimates based on soil NO X emissions that are biased low. The commenter asserts that “. . .the state's estimates of soil NO X emissions are on the extreme low-end of those reported in the academic literature, and the state has acknowledged that it is unsure how much NO X is actually emitted from soil in the Valley.” The commenter asserts that the State's only rationale for maintaining the current estimate is that it will take time to develop a new estimate, even though including anthropogenic soil NO X emissions has been a longstanding request by Valley advocates.

Additionally, CCEJN asserts that “[t]he state's reliance on very low estimates of soil NO X emissions is contrary to the presumption that precursors should be regulated and to the overall `preventative' and `precautionary' tenor of the Act.” The commenter asserts that even if there was not sufficient time to fully evaluate the scientific literature, a key question is what assumptions the State should rely on in the interim. The commenter proposes that the State should base its decision of whether to regulate ammonia on a median reasonable estimate of soil NO X emissions, if not the high-end estimate.

Response 3.A: We do not agree that the information provided by the commenter on soil NO X emissions undermines the State's conclusion that PM 2.5 formation in the San Joaquin Valley is NO X -limited ( i.e., much more sensitive to NO X emissions reductions than to ammonia emissions reductions). Three lines of evidence support the EPA's agreement with the State's conclusion. First, at this time, it is not clear that soil NO X emissions estimates are largely underestimated as the commenter suggests. Second, ammonia emissions are likely underestimated and so the response to an ammonia reduction is likely overestimated in the modeling. Third, ambient measurements strongly suggest that PM 2.5 concentrations would respond relatively little to ammonia emissions reductions. We discuss each of these lines of evidence in the paragraphs that follow.

We do not dispute that increasing NO X emissions in the model would be expected to decrease the modeled amount of ammonia relative to NO X and increase the modeled sensitivity of PM 2.5 concentrations to ammonia reductions. However, as discussed in detail in Response 2.A, further investigation is needed and merited regarding whether soil NO X emissions are underestimated or the magnitude of such underestimation. The magnitude of the difference, if any, could have an important effect on whether the model responses to ammonia reductions would be above the contribution threshold. Additionally, even if it is determined that soil NO X emissions are underestimated, proper updating of the model emissions inventory to address the relative abundance of ammonia and NO X could require updates to both the NO X and ammonia emissions inventories, and there is ample evidence that ammonia emissions are underestimated. Furthermore, independent of any emissions estimates or modeling, evidence from ambient measurements imply that PM 2.5 concentrations would respond very little to ammonia reductions, and that the model responses in the precursor demonstration may be overestimated, as discussed further in the remainder of this response. Thus, the EPA disagrees with the commenter's assertions that the State's conclusion that the San Joaquin Valley is NO X -limited (in the sense that it is much more sensitive to NO X reductions than to ammonia reductions) is based on biased soil NO X emissions estimates that compel the EPA to disapprove the ammonia precursor demonstration.

A second line of evidence is that multiple studies have suggested that ammonia emissions are underestimated in the San Joaquin Valley. These studies reached this conclusion by comparing ambient measurements and satellite retrievals to model results that incorporate estimates of ammonia emissions, and by comparing monitoring or modeling results to what would be expected based on the size(s) of the ammonia and NO X emissions inventories. For example, in a summary report for the CalNex air quality study, the authors concluded based on direct measurements of ammonia emissions flux that “[p]reliminary results indicate that within the San Joaquin Valley, [ammonia] emissions could be underestimated in inventories by about a factor of three.”  68 This finding was confirmed in later modeling using monitored data from the DISCOVER-AQ field study. 69 Other studies identified in a literature search also suggest that ammonia emissions are underestimated, as discussed in the remainder of this response. If higher ammonia emissions were used in the modeling to correct the underestimation, then modeled ammonia would be more abundant relative to nitrate, and particulate nitrate formation would be more NO X -limited. Thus, the modeled response to ammonia reductions would be lower than reported in the precursor demonstration in the SJV PM 2.5 Plan, and below the contribution threshold.

A literature search conducted by the EPA found ample evidence that ammonia emissions may be underestimated in the San Joaquin Valley. 70 Most studies compared air quality model results with satellite retrievals; a few compared model results to measurements from aircraft. All of the studies reviewed concluded that ammonia emissions are underestimated by a factor of two to five. A factor of two is greater than the 20-51 percent increase in total NO X emissions estimated by Almaraz et al. (2018) and would more than offset the effect of an increase in soil NO X on the sensitivity of PM 2.5 concentrations to ammonia reductions. These studies collectively suggest that ammonia emissions are underestimated in the San Joaquin Valley. In turn, that implies that model estimates of the sensitivity in the precursor demonstration may be overestimated.

Note that such an underestimate does not imply that the emissions inventories in the SJV PM 2.5 Plan do not meet the requirements of CAA section 172(c)(3); rather it reflects that more work is needed to continue to improve ammonia emissions estimates. Studies may deduce that there is underestimation using a “top down” approach relying on ambient measurements or satellite observations; the measurements reflect the atmospheric sum of the contribution of many sources, possibly over an extended area. On the other hand, an emissions inventory developed for regulatory purposes is typically a “bottom-up” estimate, derived from compiling an inventory of stationary, area, mobile, and biogenic sources, with their associated emissions factors and activity rates. The emissions inventory is based on detailed knowledge and measurements of specific source types under particular conditions. It is impractical to measure every source under all environmental conditions or under all possible variations, and to know the exact mix of source types and of management practices in place. Thus, the emissions inventory depends on the basic assumption that information compiled for the subset of sources that it is practical to measure can be generalized to the full population of sources in an area. Characterizing ammonia emissions from the bottom up requires spatially and temporally resolved data, such as detailed farming practices including irrigation and fertilizer application, and how they affect emissions, which may vary depending on multiple factors. Such detailed data may not be available except at an enormous, impractical cost. A bottom-up emissions inventory may use the best available data and techniques, yet not match estimates made via top-down approaches. The discrepancy between the estimates from top-down and bottom-up approaches indicates the need for further research to better characterize the specific source types that contribute to the total.

In 2021, CARB reported comparisons between its own model predictions of ammonia to ambient data. 71 The SJV PM 2.5 Plan did not include an evaluation of model performance for ammonia per se (just for particulate ammonium), but in a supplemental transmittal, CARB described the results of two analyses confirming the likely underestimation of ammonia. CARB compared CMAQ model predictions of ammonia with the 2013 DISCOVER-AQ  72 aircraft measurements and found that near-ground ammonia was underpredicted by 50 percent at Fresno and 200 percent at Porterville. CARB also compared 2017 satellite observations of ammonia from the Infrared Atmospheric Sounding Interferometer to CMAQ model predictions and found that modeled ammonia concentrations were half of the magnitude of the satellite retrievals at some locations, and that the modeled average in the San Joaquin Valley was about 25 percent less than observed. CARB also noted that underprediction of ammonia would result in the modeled PM 2.5 response to ammonia reductions being overpredicted.

Finally, a third line of evidence supports the conclusion that PM 2.5 in the San Joaquin Valley is relatively insensitive to ammonia reductions. Evidence from ambient data is especially strong since it is independent of uncertainties in the emissions estimates and the modeling exercises. Appendix G (“Precursor Demonstration”) of the 2018 PM 2.5 Plan and Appendix C (“Weight of Evidence Analysis”) of the CARB Staff Report on the 2018 PM 2.5 Plan  73 describe previous research in support of the claim that ammonium nitrate PM 2.5 formation is NO X -limited rather than ammonia-limited. That is, PM 2.5 concentrations in the San Joaquin Valley are expected to be sensitive to reductions in NO X emissions but much less sensitive to reductions in ammonia. Essentially, due to the abundance of ammonia, even with ammonia emissions reductions there would still be enough available ammonia to combine with NO X (in the form of nitric acid) to form about the same amount of particulate ammonium nitrate. This was the conclusion of Lurmann et al. (2006)  74 based on ambient measurements during the California Regional Particulate Air Quality Study (CRPAQS), an intensive field study during winter 2000-2001. Ammonia was almost always abundant relative to the amount of nitric acid  75 (derived from NO X and the immediate precursor to particulate nitrate), so the authors concluded that ammonium nitrate formation in the San Joaquin Valley was NO X -limited. This conclusion was based on ambient data collected before the additional 60 percent reduction in NO X emissions that has occurred in the interim, which would be expected to have increased the degree of NO X -limitation ( i.e., particulate ammonium nitrate formation would be more limited by, and so more sensitive to, the amount of NO X ).

Consistent with CRPAQS, aircraft-borne measurements during the more recent 2013 DISCOVER-AQ  76 study led CARB to a similar conclusion, based on the large amount of “excess ammonia”. This is defined as the amount of measured ammonia left over if all the nitrate and sulfate present combined with available ammonia to form particulate. The CARB December 2018 Staff Report describes this in more detail, 77 and also lists results from multiple other recent studies with similar conclusions. Two studies with chemical modeling, 78 79 at temperature and humidity levels typical for the San Joaquin Valley and with ammonia and nitrate concentrations observed during DISCOVER-AQ, showed that over 90 percent of the nitrate is present as particulate rather than gas, consistent with abundance of ammonia and with low sensitivity to ammonia changes. Two other studies, one using data from DISCOVER-AQ  80 and one using data from the 2010 CalNex field campaign, 81 found measured ammonia to be 50-100 times as abundant as nitric acid, implying low sensitivity to ammonia emissions changes. 82 In summary, the ambient field study data that the EPA is aware of is consistent with a conclusion that PM 2.5 concentrations in the Valley are much more sensitive to NO X emissions reductions than to ammonia emissions reductions. This evidence is independent of the State's soil NO X emissions estimate and is an important basis for the EPA's determination that the responses to ammonia reductions for the 1997 annual PM 2.5 NAAQS that are slightly above the recommended contribution threshold are likely overestimated. Thus, the ambient evidence supports the EPA's determination that ammonia does not contribute significantly to PM 2.5 levels above the 1997 annual PM 2.5 NAAQS.

Comment 3.B.1: CCEJN's second concern with the precursor demonstration relates to the State's conclusions regarding the level of ammonia reductions that could be achieved through potential control measures. The commenter asserts that “. . . the state repeatedly uses a lack of certainty about emission reduction potential to justify no regulation at all.” As an example, they argue that the State acknowledges that research shows that ammonia emissions from manure-based fertilizer can be reduced by 50-90 percent through quick mixing or injection but that it declines to consider the measure feasible for synthetic fertilizers merely because the State does not know how effective it will be.

Response 3.B.1: We disagree with CCEJN's claim that the State relies primarily on a lack of certainty about potential emissions reductions to justify not regulating ammonia in the San Joaquin Valley. Rather, the State based its decision not to regulate ammonia for purposes of meeting the 1997 annual PM 2.5 NAAQS on the technical analyses it performed indicating that ammonia does not contribute significantly to PM 2.5 concentrations that exceed the 1997 annual PM 2.5 NAAQS.

Where the State identifies uncertainties about potential ammonia emissions reductions, it does so in the context of its controls analysis to support the ammonia precursor demonstration, which it conducted at the request of the EPA and in accordance with EPA guidance. As acknowledged by the commenter, under the PM 2.5 SIP Requirements Rule, a state may submit an optional precursor demonstration showing that a particular PM 2.5 precursor chemical species does not contribute significantly to PM 2.5 levels above the standard in the area. 83 If the EPA approves a precursor demonstration for a particular chemical species, the state is not required to control emissions of that precursor from existing sources in the relevant attainment plan. 84

The EPA's July 2023 proposal includes a detailed summary of the precursor demonstration in the SJV PM 2.5 Plan and supporting March 2023 Ammonia Supplement, and of the EPA's evaluation. We will not reiterate all of the State's conclusions herein except to highlight the key finding that modeled sensitivities for the 1997 annual PM 2.5 NAAQS of PM 2.5 concentrations to a 30 percent ammonia reduction are approximately at or below the contribution threshold used to determine significance. The PM 2.5 Precursor Guidance explains that in cases where the PM 2.5 response to a 30 percent reduction in precursor emissions is close to the contribution threshold, the EPA may require air agencies to identify and evaluate potential emissions controls in support of a precursor demonstration that relies on a sensitivity analysis. The response of ambient PM 2.5 to an actual assessment of the benefit from potential controls can be used to determine whether controlling ammonia would significantly affect PM 2.5 levels. In accordance with 40 CFR 51.1010(a)(2)(ii), the EPA required the State to provide an analysis of potential controls to aid the EPA in its evaluation of the precursor demonstration. The State provided such controls analysis in the March 2023 Ammonia Supplement, which built upon information previously provided in the 2018 PM 2.5 Plan.

As discussed in our proposal, the State's controls analysis included a review of ammonia emissions reductions achieved nationwide from 2011 to 2017, an evaluation of the main ammonia source categories in the San Joaquin Valley, a summary of existing control measures in the San Joaquin Valley that affect ammonia from these sources, a review of existing control measures implemented by other air districts, and an evaluation of additional mitigation options for ammonia sources in the Valley. 85 Based on the State's and District's analyses, they determined that significant ammonia emissions reductions are already being achieved by measures targeting VOC emissions and that the ammonia reductions achievable from additional controls are well below 30 percent.

In this action, we are finalizing our determination that the State has provided adequate support for its conclusion that available additional ammonia controls would yield less than a 30 percent reduction in ammonia emissions. We are finding that the District made a convincing case that significant ammonia reductions have already been achieved through District Rule 4570 and that few additional mitigation measures could provide only modest further reductions from confined animal facilities (CAFs), which account for 58 percent of the total ammonia inventory. Similarly, the State has provided support for its assertion that additional reductions are not feasible from the fertilizer, composting, and other smaller source categories through its analysis of potential fertilizer controls and information regarding controls that are already in place for these source categories. As discussed in our proposal, we acknowledge the uncertainty in the reductions that are currently being achieved from the fertilizer source category but are finalizing our determination that even if ammonia reductions could be reduced by a very high percentage, such reductions added to the potential reductions from CAFs would amount to less than a 30 percent reduction in total ammonia emissions.

Given that the State's modeled sensitivities of PM 2.5 concentrations to a 30 percent ammonia reduction are approximately at or below the threshold used for identifying an impact that is significant for the 1997 annual PM 2.5 NAAQS, and that the potential additional reductions would be well below 30 percent, the response of PM 2.5 to an ammonia reduction of a percentage smaller than 30 percent would be below the contribution threshold, indicating that ammonia does not contribute significantly to ambient PM 2.5 concentrations for purposes of the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS. Based on these results, the State excluded ammonia controls from the SIP submission. Because the EPA is finalizing approval of the State's precursor demonstration as proposed, the State is not required to regulate ammonia for purposes of meeting the CAA requirements for the 1997 annual PM 2.5 NAAQS.

Regarding the example cited by the commenter of quickly mixing or injecting fertilizer into the soil, we do not disagree that research literature indicates that quick mixing or injection can reduce ammonia emissions from manure-based fertilizer. The State acknowledges in the March 2023 Technical Supplement that applying manure to the soil surface without incorporation can lead to significant ammonia emissions and includes an extensive discussion of the various methods of incorporation as well as the related requirements for injection and incorporation of manure-based fertilizer in District Rule 4570. We disagree, however, with the commenter's assertions that because the measure is effective at reducing ammonia from manure-based fertilizers, the State should infer a similar magnitude of effectiveness for synthetic fertilizers. The studies cited by the commenter acknowledge uncertainties and highlight the importance of additional research to adapt a potential measure to local conditions. 86 For example, Ti et al. (2019), in a global meta-analysis of measures to reduce ammonia emissions from livestock and cropping systems, found that the effects of fertilizer application processes are highly dependent on crop type. 87 The paper further concludes that mitigation needs to be carefully planned and adapted to local conditions because ammonia emissions are dependent on environmental factors such as weather and soil conditions, that the applicability of measures depends strongly on farm structures, and that studies examining economic feasibility and the effects of combinations of measures are needed. 88 The State's March 2023 Ammonia Supplement draws similar conclusions about the need for additional research to assess the potential for ammonia emissions reductions, specifically as they relate to quick mixing and injection, under conditions representative of those in the San Joaquin Valley. 89 Given these uncertainties, we agree with the State's conclusion that additional research is needed and find that the State's decision not to assign ammonia reductions to such measure at this time to be reasonable.

In addition to helping to resolve the uncertainties related to the effectiveness of mitigation measures, additional research would also be beneficial for improving understanding of any potential disbenefits that may be specific to the area. The commenter appears to acknowledge the potential for disbenefits in a footnote to their comment, which notes that CCEJN does not endorse any specific approach for reducing ammonia emissions, including quick mixing or injection, and that “regulation of ammonia emissions cannot be permitted to exacerbate degradation of groundwater quality.” These expressed concerns about the potential for adverse effects on water quality seem to align with the State's position that more research is needed. Such research may also inform other important considerations, such as the effects on greenhouse gas emissions.

Comment 3.B.2: CCEJN asserts that the State's evaluation of emissions from fertilizers is limited in that it is seemingly based on just two studies, and does not consider additional mitigation options identified in the literature such as using non-urea based fertilizers; using controlled release fertilizers; using fertilizers with nitrification inhibitors; irrigating immediately after fertilizer placement; or adding amendments to fertilizers, such as zeolite, pyrite, or organic acids. The commenter also points to a study on the field of precision agriculture as a resource on mechanisms to minimize fertilizer use, 90 as well as two studies examining how modeling can be used to predict ammonia volatilization, claiming that such studies undermine the State's position that emissions reductions cannot be calculated. 91

Response 3.B.2: We disagree with CCEJN's characterization of the State's analysis of emissions from fertilizer as “extremely narrow.” We infer that the commenter is referring to the State's analyses for synthetic fertilizer specifically, based on the numerous studies cited in the State's discussion of manure application-related measures, 92 and the commenter's assertion that the State's evaluation of fertilizers is seemingly based on the findings from just two studies and that Table 13 of the March 2023 Ammonia Supplement lists references for Guthrie et al. (2018)  93 and Eory et al. (2016) only. 94 However, we note that both Guthrie et al. (2018) and Eory et al. (2016) are compilation studies covering a range of mitigation options for organic and synthetic fertilizer application and that the State's March 2023 Ammonia Supplement cites numerous studies in addition to these two compilation studies. Furthermore, the State turned to the research literature only after reviewing how other California State agencies are engaged in fertilizer use and attempting to identify any existing rules or regulations in the nation controlling ammonia emissions from this source category.

Regarding the additional mitigation options identified by CCEJN, we appreciate that the commenter raises these potential strategies. We acknowledge the studies cited by the commenter finding that implementation of some of these strategies may help minimize ammonia emissions from agricultural systems around the globe. We encourage CARB and the District to keep abreast of research examining mitigation options for minimizing ammonia emissions from fertilizer application in support of future policy and management decisions, particularly as they may relate to reducing PM 2.5 exposure in the San Joaquin Valley. However, as discussed in the following paragraphs, in light of the absence of any SIP-approved requirements elsewhere in the nation, the regulations adopted by other California State agencies to control fertilizer application, and the uncertainties discussed in the studies cited by CARB and the commenters, the EPA continues to agree with the State's overall conclusions that more research is needed on potential mitigation measures to reduce ammonia emissions from fertilizer application in the San Joaquin Valley. We also agree that based on the information currently available, the additional reductions achievable are sufficiently low that the PM 2.5 response to such reduction would be below the contribution threshold, indicating that ammonia does not contribute significantly to ambient PM 2.5 concentrations for purposes of the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS. As we emphasized in our proposal, this finding is specific to the facts and circumstances of this particular plan and does not pre-determine the outcome of significance determinations of precursors in the future.

In the March 2023 Ammonia Supplement, the State describes its efforts to identify any SIP-approved requirements limiting ammonia emissions from fertilizers that are being implemented in any other areas of the United States and explains that it has not identified any rules or regulations being implemented elsewhere. Thus, it describes regulations in place adopted by other California State agencies to control fertilizer application and its review of research studies examining techniques for reducing ammonia emissions from synthetic fertilizer application.

The State describes in Appendix C (“Stationary Source Control Measure Analyses”) of the 2018 PM 2.5 Plan and in the March 2023 Ammonia Supplement the various State agencies responsible for ensuring environmentally safe use of fertilizer material. It describes requirements for commercial irrigated lands in the San Joaquin Valley to prepare a farm management plan (including an irrigation nitrogen management plan) that complies with waste discharge requirements in accordance with the Central Valley Irrigated Lands Regulatory Program established by the California State Water Resources Control Board. The nitrogen management plan is designed to ensure that the amount of nitrogen applied to agricultural lands is in reasonable balance with the needs of crops that are being grown. The State explains that the “4 R's” of nitrogen management (“Right source” of nitrogen at the “right rate,” “right time,” and “right place”)  95 serve as guiding nitrogen efficiencies principles that growers are recommended to follow when developing their management plans, and that growers are required to employ enhanced strategies if it is determined that they are not optimizing fertilizer use, as determined by the fraction of nitrogen applied to nitrogen used.

Next, CARB discusses measures identified in the literature for reducing ammonia emissions from fertilizer application, which include optimizing fertilizer use, adding a urease inhibitor, mixing and injecting fertilizer into the soil quickly, and applying fertilizer during optimal weather conditions. Based on its review, the State finds that several of the strategies align with the 4 R's of nitrogen management but that more research is needed to determine the feasibility and effectiveness of such strategies in California due to the unique climate conditions and farming practices in the San Joaquin Valley, and to explore any potential adverse consequences. CARB cites studies linking weather conditions with ammonia emissions, 96 and states that it is unclear which environmental factors are the most important for different fertilizer types.

As discussed in Response 3.B.1, the studies cited by CCEJN similarly highlight the need for additional research to examine how the potential for ammonia emissions reductions varies with local conditions. These studies largely focused on the United Kingdom or were global in scale and none of them appear to address mitigation potentials in the western United States or San Joaquin Valley specifically. Thus, none of the studies reflect climate conditions or farming practices in the San Joaquin Valley, and likely also do not reflect efficiencies already achieved through local regulations in the Valley. Furthermore, several of the studies suggest that some of the measures have already been adopted in many areas, adding to the uncertainty about whether and where there are opportunities for significant reductions in ammonia. For example, Pan et al. (2016), notes that “[e]nhanced efficiency fertilizers have been widely adopted to minimize N[itrogen] loss, including NH 3 volatilization from agricultural systems.”  97 Similarly, Gu et al. (2023), in a study examining the potential to mitigate nitrogen pollution from global cropland, concluded that the largest reduction of reactive nitrogen input and losses available were in East and South Asia and Southeast Asia, which they attribute to an overuse of fertilizer in those areas. 98 They calculated a much lower reduction potential in the European Union, Australia, and North America, where they concluded that nitrogen use in croplands is “closer to the estimated optimal level.”

In addition to the uncertainty in emissions reduction potentials, we note that studies suggest that one of the five mitigation options identified by CCEJN, using fertilizers with nitrification inhibitors, may lead to an increase in ammonia emissions. For example, Pan et al. (2016) noted that “[a]lthough nitrification inhibitors are designed to target N 2 O emissions, the use of these inhibitors may prolong the retention of NH 4 in the soil resulting in [ammonia] volatilization (Kim et al., 2012; Lam et al., 2016; Ni et al., 2014).”  99 Pan et al. (2016) concluded that nitrification inhibitors increase ammonia volatilization by 38.0 percent. 100 Similarly, Ti et al. (2019) found that nitrification inhibitors increased ammonia emissions by 42.6 percent, 101 whereas Newell Price et al. (2011) found that “[ammonia] emissions to air and ammonium/nitrite losses to water may be increased by a small amount.”  102 While studies specific the San Joaquin Valley may show different results, based on the studies cited by the commenter, the research currently available does not indicate that use of fertilizers with nitrification inhibitors would reduce ammonia emissions in the San Joaquin Valley.

The studies that CCEJN points to on precision agriculture also note wide adoption of such practices while acknowledging some potential for additional environmental benefits. For example, in a 2021 report on the benefits of precision agriculture in the United States, the Association of Equipment Manufacturers discusses environmental improvements that have already been achieved through adoption of precision agriculture technologies. 103 Whitmore (2019) notes that larger farms have been quicker to adopt precision agriculture techniques due to greater resources, 104 and Lowenberg-Deboer and Erickson (2019) note that “[t]he biggest gap in [precision agriculture] adoption is for medium and small farms in the developing world that do not use motorized mechanization,” which they attribute to cost-effectiveness challenges. 105 Lowenberg-Deboer and Erickson (2019) also highlight the perception that adoption of precision agriculture has been slow, but state that “[s]ome aspects of [precision agriculture] were adopted as quickly and as widely as any technology in history, while others have lagged behind for technical and economic reasons.”  106

Taken together, the EPA finds that the studies cited by CCEJN highlight the uncertainties in the feasibility of the measures identified in its comment letter and suggest that more research is needed to estimate the additional reductions achievable in the San Joaquin Valley. Furthermore, while several studies suggest that there may be the potential for additional ammonia reductions from synthetic fertilizer application, they also indicate that such potential is not quantifiable with the information available at this time and may be lower in the San Joaquin Valley than in other locations around the globe.

Finally, regarding CCEJN's comment about the availability of modeling to predict ammonia volatilization, we acknowledge these additional studies  107 identified by the commenter describing models for estimating ammonia emissions. However, we disagree with the commenter that the output from these models compel certain policy decisions in the San Joaquin Valley at this time. Here again the commenter cites large-scale studies that do not reflect model performance under conditions representative of those in the Valley. Both studies cited by the commenter note uncertainties due to crop type, meteorological conditions, and other factors, suggesting that research specific to the climate and farming practices in the Valley is needed. Furthermore, it is not clear that the models discussed in the studies are ripe for application in a regulatory context. For example, Gurung et al. (2021) concludes that additional research is needed before the models could be used to evaluate policy decisions for mitigating ammonia emissions from soils:

Thus, based on our review, we find the State's conclusions that further research is needed to explore ammonia reduction potentials in the San Joaquin Valley to be reasonable. We encourage the State and District to perform and keep abreast of research on quantifying the effects of mitigation measures on ammonia emissions and their implications for policy and management decisions.

Comment 3.B.3: CCEJN asserts that the State dismisses controls for fertilizers on the basis that there is no published literature on control effectiveness in the San Joaquin Valley specifically. The commenter contends that such justification is “sometimes absurd” and that it cannot be true that studies specific to the Valley are necessary to determine that minimizing the use of fertilizer will decrease ammonia emissions. The commenter asserts that “this bar for effectiveness makes meaningful regulation impossible, particularly when the state disincentivizes research in the Central Valley by insisting that ammonia need not be regulated.” The commenter further notes that it is unfortunate that the State never mentions conducting any studies in the San Joaquin Valley.

Response 3.B.3: We disagree with CCEJN that the State claims that studies specific to the Valley are needed to discern that reducing fertilizer use will reduce ammonia emissions. In the 2018 PM 2.5 Plan, the State discusses the link between fertilizer application and both ammonia emissions and nitrate contamination in groundwater, and describes current State regulations aimed at optimizing fertilizer use to minimize emissions of ammonia to the atmosphere. 108 Additionally, in its discussion of optimizing or minimizing fertilizer use in the 2023 Ammonia Supplement, the State discuss the “4 R's” of nitrogen management ( i.e., “applying the `Right source' of nitrogen at the `Right rate,' `Right time,' and `Right place' ”) and that minimizing fertilizer use is consistent with the right rate principle. CARB also notes that Guthrie et al. (2018) describes that minimizing the application of fertilizer to a level commensurate with optimal crop production can reduce ammonia emissions. 109 Thus, the State does acknowledge the potential benefits of minimizing fertilizer use on ammonia emissions. Where the State concludes that additional research is needed is in the context of how optimal fertilizer use can be achieved, which it notes is “not well described by both Guthrie et al. (2018) and the publications they referenced, nor were any specific regulations identified.” Given that some level of reduction is already being achieved through existing regulations and current practices, and the importance of careful consideration of environmental factors for optimizing fertilizer use, we find the State's conclusion that additional research specific to the warm, dry climate conditions of the San Joaquin Valley is needed to determine whether additional strategies could further optimize fertilizer use and reduce ammonia emissions to be reasonable.

Regarding CCEJN's statement that the State dismisses controls for fertilizers based on a lack of information on control effectiveness in the Valley, as discussed in Responses 3.B.1 and 3.B.2, studies reviewed by the State, as well as studies cited by the commenter, emphasize that strategies to reduce ammonia emissions are highly dependent on local environmental factors and farm structures, and that more research is needed to examine these factors, as well as the effects of combinations of measures. The State concludes that specific mitigation strategies identified in the literature, such as optimizing fertilizer use, are already being implemented in the San Joaquin Valley because of regulations adopted by other California State agencies and co-benefits such as reduced cost to farmers. Based on the literature study findings regarding the importance of local information and the need to examine combinations of measures, the absence of existing rules or regulations in other areas controlling ammonia emissions directly, and the State's evaluation of the mitigation strategies already implemented through regulation by other State agencies, we maintain that it is reasonable that the State concludes that more research specific to the Valley is needed to assess the feasibility and effectiveness of additional measures for synthetic fertilizers.

We also disagree with CCEJN's assertions that needing additional studies specific to the conditions in the Valley makes meaningful regulation impossible and that the State disincentivizes research by concluding ammonia does not need to be regulated. Contrary to the commenter's claim that the State does not discuss any studies that it is conducting to assess the effectiveness of ammonia controls in the Valley, the State does include a discussion of recent and ongoing and research in Section 4 of the March 2023 Ammonia Supplement. CARB's work includes the development of a mobile measurement platform equipped with an ammonia monitor and other instrumentation to examine ammonia sources. The State notes that in fall 2018, CARB collaborated with researchers from the University of California, Davis to measure ammonia and other air pollutants near dairies in the San Joaquin Valley to evaluate the effectiveness of alternative manure management practices. 110 The State also mentions additional research to evaluate emissions from dairies, to use satellite and remote sensing data to evaluate ammonia emissions sources across the Valley, and to identify opportunities to reduce ammonia and other pollutant emissions from dairy manure lagoons specifically. These efforts may inform future decision-making regarding the regulation of ammonia in the San Joaquin Valley.

Moreover, the EPA's action herein to approve the precursor demonstration in the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS does not preclude the State from adopting controls for ammonia in the future. As discussed in our proposal, a consequence of this final action to approve the State's ammonia precursor demonstration is that the State is not required to implement BACM/BACT level controls for sources of ammonia for purposes of the SJV PM 2.5 Plan for 1997 annual PM 2.5 NAAQS. Under 40 CFR 51.1006(b), such precursor demonstration approval applies only to the SJV PM 2.5 Plan that is the subject of this final action. For any new PM 2.5 attainment plan that the State is required to submit in accordance with 40 CFR 51.1003 for purposes of any PM 2.5 NAAQS, the EPA may determine that ammonia contributes significantly to PM 2.5 levels that exceed the NAAQS and that the State is required to implement controls for sources of ammonia for purposes of such attainment plan.

Comment 3.B.4: Regarding the District's current rules, CCEJN asserts that the State assumes that farmers are already adopting the most efficient practices ( e.g., feeding the most efficient amount of protein, incorporating manure quickly) but “provides little support for these assumptions, even though it is well established that farmers do not always adopt the most efficient practices.” The commenter proposes that the precursor analysis should err on maintaining the presumption that precursors should be regulated and thereby err on the side of high estimates of potential effectiveness and that because the State does not do so, its analysis is arbitrary and capricious. The commenter asserts that the State relies on “biased assumptions,” assuming low potential effectiveness from measures not being implemented, high reductions from Rule 4570, and that making optional measures mandatory would have no impact. The commenter further contends that if Rule 4570 is effective, the State should make its most effective requirements mandatory where feasible and possibly increase the stringency, and that the EPA should require the State to conduct further analysis of the rule.

Response 3.B.4: We disagree with CCEJN's assertions that the State provides little support for its estimates of ammonia reductions that have been achieved by existing regulations and that the assumptions it makes to arrive at those estimates are biased. As discussed in our proposal, the District discusses in detail in Appendix C of the 2018 PM 2.5 Plan how Rule 4570 is structured, the control menu requirements for each of the CAF operations/sources, and research papers that support its estimates of ammonia emissions reductions from the measures. 111 As the District explains, some of the measures in Rule 4570 are required to be implemented but the rule also requires that additional measures be selected from a menu of options. The menu-based approach was developed to allow facilities flexibility to select measures that are the most practical and effective for their design and operation. 112

For those measures that are required to be selected from a menu of options, the District presents its rationale in Appendix C of the 2018 PM 2.5 Plan and Appendix F of the staff report for Rule 4570 for its assumptions about which measure a farmer will select and the resulting effects on ammonia emissions. 113 The District references research studies to support many of its assumptions, and where there is greater uncertainty about which measures may be selected or the corresponding ammonia reductions that can be achieved, the District explains how its assumptions are conservative. CCEJN has not provided any evidence to refute the District's analysis or conclusions. Therefore, based on the information presented, the EPA believes that the District relied on its expertise and the best information available and applied that information reasonably.

Regarding CCEJN's statement that the State should err on the side of high estimates of potential reductions from additional measures, given the uncertainties discussed in Responses 3.B.1 and 3.B.2, we find that the potential emissions reductions achievable in the San Joaquin Valley from many of the measures are not quantifiable at this time and that the State drew reasonable conclusions based on the information it evaluated. While the EPA appreciates that the commenter raises additional research studies not identified by the State in its analysis, as discussed in Responses 3.B.1 and 3.B.2, we have reviewed the studies and find that they do not contradict the State's conclusions. Thus, we find that the State's analysis of potential ammonia emissions reductions is neither arbitrary nor capricious.

We also find that CCEJN's claim that it is well-established that farmers do not adopt the most efficient practices is not well supported. To back this claim, the commenter cites two studies discussing the rates of adoption of precision agriculture technologies. 114 However, these studies do not appear to indicate any reluctance on the part of farmers to adopt the most efficient practices. As discussed in Response 3.B.2, these papers discuss widespread adoption of precision agriculture technology while also acknowledging areas where there are opportunities for increased adoption, such as for specific crop types or farm sizes and for specific precision agriculture technologies, such as variable rate technology. 115 Where adoption has been slower, the studies point to feasibility constraints and the need for more research. For example, Lowenberg-DeBoer and Erickson (2019) emphasize that precision agriculture has been widely adopted and that in cases where technologies have been adopted at a slower pace, the authors attribute it to technological and economic feasibility challenges. 116 The study authors also note that the studies they reviewed hypothesize that more reliable decision rules that account for the effects of moisture, temperature, soil organic matter, and other factors on nitrogen response may be needed to increase variable rate technology adoption. 117 Whitmore (2019) similarly notes the complexity and high cost of new equipment as barriers to wider adoption of precision technology. 118 CCEJN does not provide any evidence related to other measures in its letter or other measures in the State's analysis to support its claim.

Finally, we disagree with CCEJN's assertion that if Rule 4570 is effective, the State must consider making its optional requirements mandatory. As discussed earlier in this response, if the EPA approves a state's precursor demonstration showing that a particular PM 2.5 precursor chemical species does not contribute significantly to PM 2.5 levels above the standard in the area, the state is relieved of the obligation to control emissions of that precursor from existing sources in the relevant attainment plan.

Comment 3.C: Regarding the State's reliance on 2024 modeling results for its precursor analysis, CCEJN asserts that the State should not have relied on modeling of 2024, which is after the 2023 attainment deadline, and which nevertheless shows ammonia contributions that are above the contribution threshold. CCEJN further asserts that the use of 2024 modeling “violates the Act in three ways.”

First, the commenter asserts that the approach ignores the requirement to demonstrate attainment as expeditiously as practicable because it does not consider ammonia reductions that may have resulted in attainment before 2023. They note that the State claimed it was close to attaining in 2020 and that meaningful reductions in ammonia would have most likely resulted in attainment earlier ( i.e., in 2021 or 2022).

Second, the commenter notes that the State relies not only on a future year but a year after the attainment deadline. Because NO X emissions are expected to be lower in 2024 than 2023, the commenter suggests that the impacts of ammonia reductions would be less in 2024 than in 2023 and that the impacts of ammonia reductions in 2023 are unknown. The commenter also claims that the EPA makes assumptions about how the State conducted its analysis and recommends that the EPA seek clarification from the State about whether the analysis relied on emissions projected from baseline ( i.e., existing) control measures or baseline measures plus measures committed to in the plan. If the State did not conduct the analysis “with numbers that are comparable to what are expected in 2023,” the commenter contends that the EPA must require the State to redo the analysis.

Third, CCEJN asserts that the State's model indicating a design value of 12.03 µg/m 3 cannot accurately describe 2023 conditions given that 2022 data show a design value well above 16 µg/m 3 . They conclude that the “EPA's approval of a precursor analysis that relies on such unrealistic modeling is therefore arbitrary and capricious and contrary to law.”

Response 3.C: While the State relied on 2024 modeled sensitivities of PM 2.5 to ammonia reductions, it is important to note that the EPA also considered the 2023 model responses via a NO X -based interpolation between the State's model results for 2020 and 2024. The highest estimated response was at the Hanford site, 0.26 µg/m 3 for 2024 and 0.27 µg/m 3 for 2023, and did not change the EPA's conclusions regarding the ammonia precursor demonstration. 119 In determining that ammonia does not contribute significantly in the San Joaquin Valley despite the Hanford response being above the 0.25 µg/m 3 contribution threshold that the State derived for the 1997 annual PM 2.5 NAAQS, we continue to rely on the abundant ambient evidence of excess ammonia relative to NO X . This evidence includes evidence specific to the Hanford area, where mobile laboratory observations during the DISCOVER-AQ study showed ambient concentrations of ammonia that were approximately five times higher than those that were modeled. 120 These factors led the EPA to conclude that the model responses were likely overestimated and did not represent a significant contribution of ammonia to PM 2.5 levels.

We further disagree with the commenter's assertion that the State's approach ignores the requirement for expeditious attainment. The CAA requirement for expeditious attainment is not directly relevant for evaluating a precursor demonstration, which is mainly concerned with whether PM 2.5 in the atmosphere is sensitive to emissions reductions of the precursor. For that purpose, the PM 2.5 Precursor Demonstration Guidance provides for the use of modeled sensitivities of PM 2.5 to a reduction in precursor emissions evaluated in the base year or a future year, noting that there are many considerations in choosing the appropriate year to model. 121 The key factor for the State's use of a future year was the fact that sizable NO X emissions reductions were projected to occur over time and would change the atmospheric chemistry in the San Joaquin Valley. The reductions are mainly due to the existing motor vehicle control program and would occur independent of any controls in, or EPA action on, the Plan. 122 The sensitivity of PM 2.5 concentrations to ammonia reductions decreases with decreasing NO X emissions. Between 2020 and 2024, the modeled response to a 30 percent ammonia emissions reduction declines by 50 percent at the design value monitoring site, Bakersfield-Planz, from 0.24 µg/m 3 down to 0.12 µg/m 3 . (The corresponding decline is 37 percent for the average over all monitoring sites.) Thus, much of the benefit of ammonia controls applied in 2020 would be lost by 2023 and 2024.

With regard to whether ammonia emissions reductions could have resulted in earlier attainment, the EPA used results from the Plan's attainment demonstration to assess the effect of a 30 percent ammonia reduction in 2022 and found that it would not have resulted in attainment in that year. 123 We estimated the 2022 design value as 15.4 µg/m 3 by using a NO X emissions-based interpolation between the Plan's 2018 and 2023 design values, 16.3 and 14.7 µg/m 3 , respectively. 124 Similarly we estimated the 2022 sensitivity to ammonia from the State's modeled sensitivities for 2020 and 2024. Applying a 30 percent ammonia reduction for 2022 resulted in a design value of 15.2 µg/m 3 , which is above the level of the 1997 annual PM 2.5 NAAQS ( i.e., 15.0 µg/m 3 ). Thus, we conclude that ammonia emissions reductions would not have resulted in attainment before the Plan's projected 2023 attainment date.

Regarding the use of 2024 modeled sensitivities in lieu of modeled sensitivities for 2023, the EPA finds that our conclusions would be the same for the purposes of our evaluation of the precursor demonstration. We estimated 2023 responses to ammonia emissions reductions by interpolating between the responses for available 2020 and 2024 modeling; the interpolation used projected NO X emissions for 2020, 2023, and 2024 and found the estimated 2023 response to be only 0.01 µg/m 3 higher than in 2024. 125 While there are several differences between 2020 and 2024 modeled emissions for the various PM 2.5 precursors and direct PM 2.5 , the key difference for assessing the change in the sensitivity of PM 2.5 to ammonia reductions is NO X emissions levels. The modeling for 2020 and 2024 represent PM 2.5 design values for the NO X emissions levels in 2020 and 2024, and their respective responses to a 30 percent ammonia emissions reduction. To estimate the PM 2.5 response to ammonia reductions in other years or for other control scenarios, only the NO X emissions level is needed. The estimate does not depend on NO X emissions differences between 2023 and 2024 calculated for baseline, controlled, or other scenarios, only on the resulting 2023 emissions level being evaluated.

The commenter states that it is unclear whether the precursor demonstration analysis relied on a baseline emissions inventory, or an inventory considering the controls in the plan. While this is not documented prominently in the submittal materials, the precursor demonstration modeling performed by the State used baseline projections, 126 that is, emissions expected with existing control measures and without new control measures from the 2018 PM 2.5 Plan or the 15 µg/m 3 SIP Revision. 127 Notably, the EPA's conclusions for the precursor demonstration do not depend on which of the two inventories is used. For the interpolation to 2023, the EPA relied on controlled NO X emissions levels (150.6 tpd) to estimate the 2023 response to 30 percent reduction to be 0.265 µg/m 3 (reported as 0.27 µg/m 3 ). Using baseline NO X emissions (153.6 tpd), the estimated 2023 response is 0.275 µg/m 3 , which is about 0.01 µg/m 3 higher. Thus, the difference between using the baseline or controlled emissions for assessing the sensitivity to ammonia emissions reductions is negligible.

Finally, the EPA disagrees that a monitored 2022 design value being “well above” the modeled 2023 design value invalidates the modeling for purposes of the precursor demonstration. As discussed in the EPA's modeling TSD for the 2018 PM 2.5 Plan, 128 the State determined that the model performance was excellent, and the EPA found the results to be adequate for attainment demonstration modeling. The modeling used a 2013 base year, i.e., the specific meteorological and emissions conditions of 2013, not those of 2022 (nor of the 2018 monitored value used in scaling the modeling results from the 2018 PM 2.5 Plan). Even when the modeling itself is valid, the model-predicted design value can differ from a recent monitored design value due to different meteorological conditions than in 2013 base case, emissions variability, and atypical events that affect the monitored value, but that are not necessarily reflected in the modeling because they are inherently unpredictable. 129 The greater uncertainty in the precursor demonstration, which supports the EPA's conclusion in this final action, is that the modeling seems to conservatively overestimate the sensitivity of PM 2.5 concentrations to ammonia reductions compared to what would be expected based on ambient measurements of ammonia and nitrate, as discussed in Response 3A.

Comment 3.D: CCEJN's fourth concern with the precursor analysis is that it believes that “[t]he State improperly adopts a lax contribution threshold of 0.25 µg/m 3 .” The commenter acknowledges that the State's approach of using a 0.25 µg/m 3 threshold is consistent with the EPA's guidance but contends that the guidance is arbitrary and capricious and that the EPA should reject it in this rulemaking. To support their assertion, the commenter reasons that

The commenter concludes that there is no advantage of two distinct thresholds because the area will need to apply the lower threshold eventually, and states that the “EPA's failure to grapple with this arbitrary result means that it has failed to provide a reasoned explanation for its guidance, and the guidance—or at least its application in this case—is arbitrary and capricious.” For areas not meeting both the 1997 and 2012 annual PM 2.5 NAAQS, the commenter proposes that the EPA should require states to apply the threshold for the 2012 NAAQS for purposes of evaluating a precursor contribution for both NAAQS.

Response 3.D: The EPA disagrees that the same contribution threshold must be used regardless of the level of the NAAQS being examined. The EPA believes that applying a threshold that is proportional to the level of the NAAQS is appropriate and consistent with the Act; i.e., 0.2 µg/m 3 is appropriate for the 2012 annual PM 2.5 NAAQS of 12.0 µg/m 3 , and 0.25 µg/m 3 is appropriate for the 1997 annual PM 2.5 NAAQS of 15.0 µg/m 3 .

The contribution thresholds the EPA derived in the PM 2.5 Precursor Demonstration Guidance represent a change in air quality that is statistically indistinguishable from the inherent variability in the measured atmospheric concentrations. A contribution threshold that is proportional to, or scales with, the level of the NAAQS may also be termed a “relative” approach, since the size of the threshold is relative to the level of the NAAQS. The contribution thresholds in the PM 2.5 Precursor Demonstration Guidance were derived from a relative variability estimate multiplied by the NAAQS level for the 2006 24-hour PM 2.5 NAAQS and 2012 annual PM 2.5 NAAQS. Notably, the PM 2.5 Precursor Demonstration Guidance states:  130

The Technical Basis Document  131 referred to in the guidance explains that relative variability (concentration changes as a fraction of total concentration) was found to be more stable than absolute variability (concentration changes in µg/m 3 ), and notes that this “indicates that a central tendency value for the relative variability in the DV [design value]. Therefore, a representative value can be multiplied by the level of that NAAQS to obtain a value in concentration units (µg/m 3 for PM 2.5 ) that is appropriately used to characterize variability.”  132 The Technical Basis Document also explains that the “relative variability was fairly consistent across the range of design values, suggesting a commonality in the relative variability across a wide range of geographic regions, chemical regimes, and baseline air quality levels.”  133 Thus, a concentration amount that is relative, or proportional, to the NAAQS level is a better basis than a fixed concentration number for determining the size of a concentration change that is within the inherent variability of monitored concentrations. The superiority of the relative variability approach that was the basis of the PM 2.5 Precursor Demonstration Guidance contribution threshold of 0.2 µg/m 3 for the 2012 annual PM 2.5 NAAQS makes it appropriate to scale that value according to the NAAQS level to arrive at 0.25 µg/m 3 for the 1997 annual PM 2.5 NAAQS.

Moreover, the EPA does not agree that it is arbitrary or contrary to the Act to apply a lower contribution threshold or to potentially regulate a precursor only for a more stringent NAAQS—it is reasonable to expect that achieving lower PM 2.5 concentrations may require regulation of additional sources of direct PM 2.5 and/or PM 2.5 precursors. This is true even if an area is nonattainment for both the higher and lower NAAQS and the EPA will ultimately be applying the lower contribution threshold for a subsequent plan to attain the more stringent NAAQS. Indeed, the PM 2.5 SIP Requirements Rule at 40 CFR 51.1000 defines a precursor demonstration to mean analyses showing that precursor emissions do not contribute significantly to PM 2.5 levels that exceed the relevant PM 2.5 standard ” [emphasis added]. Applying a lower threshold for the 1997 annual PM 2.5 NAAQS because the area is in nonattainment for a more stringent NAAQS could presume that the modeling and precursor demonstration in a future plan will show responses to ammonia reductions above the lower threshold and that ammonia will be determined to be significant, such that ammonia would need to be controlled. The EPA does not believe it is appropriate to prejudge the analyses for a potential future plan.

Comment 4: Regarding the BACM demonstration, CCEJN notes that the EPA's proposed approval does not address the CAA requirement for most stringent measures (MSM), asserting that such analysis is required for a 189(d) plan under 40 CFR 51.1010(c)(2)(i) and (c)(4), and 88 FR 45280, 45297, 45322. The commenter claims that it appears that the State acknowledges that the MSM requirement applies in its submittal and asserts that the EPA cannot approve the Plan until it reviews the State's control measures under the MSM standard.

The commenter also states that “[t]he state's control measures meet neither the BACM nor MSM standards.” They note that in previous letters to the EPA (as summarized in a previous letter attachment included as Exhibit B), Valley groups have identified numerous weaknesses and presented ways the District could strengthen its regulations. The commenter asserts that the EPA's technical support document accompanying the proposed action addresses few of these weaknesses, and advises that “[t]o the extent EPA has not considered whether the suggestions in the letter constitute BACM or MSM for purposes of the 1997 annual standard, it should do so.” Specifically, the commenter notes that “[o]ne particularly glaring shortfall in the state's submission is its failure to contain any analysis of potential control measures to minimize soil NO X emissions,” and suggests that the EPA must require the State to analyze the measures in Exhibit A to CCEJN's comment letter (citing control measures described on pages 5 and 6), including measures to reduce soil NO X emissions from fertilized farmlands.

Response 4: We disagree with CCEJN's assertion that the EPA must review the State's control measures analysis under the MSM standard. As outlined in the PM 2.5 SIP Requirements Rule, the CAA requirement for MSM is tied to a specific trigger in the act—an extension of the Serious area deadline under CAA section 188(e). 134 The EPA addressed the relevance of MSM to a 189(d) plan as part of our discussion of the control strategy for such plan in the technical support document accompanying the final rule:  135

Thus, we noted in the summary of the requirements for Serious PM 2.5 areas that fail to attain in our proposed action that MSM is applicable only if the EPA granted an extension of the attainment date under CAA section 188(e) for the area for the NAAQS at issue. 136

As discussed in our proposal, California's Serious area plan for the 1997 PM 2.5 NAAQS submitted in 2015 included a request under CAA section 188(e) to extend the attainment date for the 1997 annual PM 2.5 NAAQS by five years to December 31, 2020. 137 However, after considering public comments, the EPA denied California's request for an extension of the attainment date and subsequently determined that the area failed to attain by the December 31, 2015 Serious area attainment date, triggering the requirement for the 189(d) plan. Consequently, because the San Joaquin Valley area did not receive an extension of the Serious area attainment date under CAA section 188(e), the MSM requirement does not apply for purposes of the 1997 annual PM 2.5 NAAQS.

Regarding the commenter's claim that the State appears to acknowledge in its submission that MSM applies, we note that the State's controls analysis in the 2018 PM 2.5 Plan was developed to address multiple PM 2.5 NAAQS, including the 2006 PM 2.5 NAAQS for which the State requested an attainment date extension under CAA section 188(e), triggering the MSM requirement for those NAAQS. Any assertion by the State in the SJV PM 2.5 Plan that a particular measure meets the MSM standard may not necessarily indicate that the State believes that the requirement applies for the 1997 annual PM 2.5 NAAQS. Regardless, regarding CCEJN's comment that the State's control measures do not meet the BACM or MSM standards, given that the MSM standard does not apply to the 1997 annual PM 2.5 NAAQS, as discussed earlier in this response, we are responding only to the commenter's assertion regarding BACM.

We also disagree with the commenter's assertion that the control measures in the Plan do not meet the requirement for BACM for the 1997 annual PM 2.5 NAAQS. As discussed in our proposed rule, in our review of the State's and District's BACM demonstration, we considered our evaluation of the State's and District's rules, supporting information provided in the SJV PM 2.5 Plan, and our prior evaluations of the BACM and MSM demonstrations in the 2018 PM 2.5 Plan for other PM 2.5 NAAQS. 138 These prior evaluations include those to support our approval of the demonstration for BACM (including BACT) for the 1997 24-hour PM 2.5 NAAQS, 139 our approval of the demonstrations for BACM and MSM for the 2006 24-hour PM 2.5 NAAQS, 140 and our proposed disapproval of the demonstration for BACM for the 2012 annual PM 2.5 NAAQS. 141 The EPA's prior actions for the 1997 24-hour, 2006 24-hour, and 2012 annual PM 2.5 NAAQS are relevant to our evaluation for this final rulemaking because the State relied on a common analysis for each of the PM 2.5 standards. The EPA conducted a thorough analysis of the State's BACM demonstration for purposes of these prior actions, and updated the analysis for certain source categories, as appropriate, for purposes of our proposed approval of the BACM demonstration in the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS.

Regarding the EPA's prior approval of the BACM demonstration in the 2018 PM 2.5 Plan as meeting the CAA requirements for the 2006 24-hour PM 2.5 NAAQS, we note that on September 17, 2020, a group of five environmental, public health, and community groups petitioned the Ninth Circuit Court of Appeals (“Ninth Circuit”) for review of the EPA's final rulemaking approving the 2018 PM 2.5 Plan's demonstration of BACM, BACT, and MSM for emissions sources of direct PM 2.5 and NO X for purposes of the 2006 PM 2.5 NAAQS. 142 On April 13, 2022, the Ninth Circuit denied the petitioners' challenge with respect to the EPA's approval of the Plan's BACM/MSM demonstration, upholding such approval for those NAAQS.

Following approval of the State's BACM and MSM demonstrations for the 2006 24-hour PM 2.5 NAAQS, on December 29, 2021, the EPA proposed to approve portions of the 2018 PM 2.5 Plan as meeting the Serious area requirements for the San Joaquin Valley for the 2012 annual PM 2.5 NAAQS, including the requirement that the plan include BACM. However, after considering public comments, on October 5, 2022, the EPA proposed to disapprove portions of the District's BACM demonstration, including the evaluations of ammonia emissions sources and building heating sources. 143 We proposed to disapprove the BACM demonstration for ammonia sources based in part on our on proposed disapproval of the State's ammonia precursor analysis for the 2012 annual PM 2.5 NAAQS, 144 as well as the State's control measure analysis for ammonia. 145 We proposed to disapprove the BACM demonstration for building heating sources based on recent control measure developments and the time horizon of the 2012 annual PM 2.5 NAAQS portion of the SJV PM 2.5 Plan, which raised questions about the feasibility of implementing additional controls for such sources for BACM purposes in the San Joaquin Valley. 146 Notably, we did not re-propose action on any other portions of the State's and District's BACM demonstration that we had previously proposed to approve.

In response to the EPA's proposed disapproval of portions of the BACM demonstration for the 2012 annual PM 2.5 NAAQS, CARB and the District developed and submitted additional information to support the ammonia precursor demonstration and building heating BACM demonstration for purposes of meeting the Serious area and CAA section 189(d) requirements for the 1997 annual PM 2.5 NAAQS. Our proposal and accompanying “Technical Support Document, San Joaquin Valley PM 2.5 Plan Revision for the 1997 Annual PM 2.5 NAAQS,” April 2023 (“EPA's 1997 Annual PM 2.5 TSD”) summarize the additional information provided by the State and District and the EPA's evaluation. Based on our review, we determined that the additional information provided by the State and District addressed the deficiencies identified in the proposed disapproval of the 2018 PM 2.5 Plan for the 2012 annual PM 2.5 NAAQS as they pertained to the 1997 annual PM 2.5 NAAQS. Thus, considering our prior approvals of the State's and District's BACM analysis for the 1997 24-hour PM 2.5 NAAQS, BACM and MSM analysis for the 2006 PM 2.5 NAAQS (which was upheld by the Ninth Circuit), and the supplemental information provided to update the SJV PM 2.5 Plan based on the latest information available, we proposed to approve the BACM demonstration for the 1997 annual PM 2.5 NAAQS.

Regarding the measures in Exhibit B to CCEJN's comment letter, the EPA has reviewed and considered the recommendations for improvements to the District's PM 2.5 control strategy as outlined in the two letters in Exhibit B sent by environmental groups to the EPA in 2021  147 and 2022. 148 A detailed summary of our evaluation of the feasibility of these measures, as well as numerous others, is provided in Sections III and IV of the “EPA Source Category and Control Measure Assessment and Reasoned Justification Technical Support Document” (“Control Measure Assessment TSD”)  149 accompanying our proposed action to promulgate a federal implementation plan for contingency measures for the 1997 annual PM 2.5 NAAQS, the 2006 24-hour PM 2.5 NAAQS, and the 2012 annual PM 2.5 NAAQS. 150 The EPA determined that the recommended measures are either not technologically feasible or not economically feasible within the two year timeframe for implementation as contingency measures discussed in the EPA's draft guidance. 151 Given that by statute, contingency measures are additional requirements that go beyond attainment planning requirements, and the shorter timeframe of the attainment plan for the 1997 annual PM 2.5 NAAQS ( i.e., by December 31, 2023), we similarly conclude that these measures are not feasible for purposes of the BACM requirement for the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS.

Lastly, we disagree with CCEJN's assertion that the EPA must require the State to analyze the control measures for soil NO X emissions outlined in Exhibit A in order to approve the BACM demonstration for the 1997 annual PM 2.5 NAAQS. The EPA previously addressed the issues of soil NO X emissions and of analyzing potential controls for such emissions in the context of the 2018 PM 2.5 Plan in the EPA's “Response to Comments Document for the EPA's Final Action on the San Joaquin Valley Serious Area Plan for the 2006 PM 2.5 NAAQS,” June 2020 (“EPA's 2020 Response to Comments”). 152 More recently, the EPA also addressed the issue of soil NO X emissions from the use of fertilizers and pesticides in the context of our final rulemaking approving CARB's submission of emissions inventories for VOC and NO X for the 2015 ozone NAAQS for areas in California (“2015 Ozone Inventory Final Rule”). 153

In both the EPA's 2020 Response to Comments and the 2015 Ozone Inventory Final Rule, the EPA acknowledged the studies cited by commenters finding that soil NO X emissions from fertilizer and pesticide use contribute to atmospheric NO X levels in California. 154 Particularly, the EPA acknowledged the growing body of research surrounding the identification and quantification of soil NO X emissions from fertilizer application in agricultural soils. However, in light of the uncertainties and disagreements among the studies regarding the contribution of fertilized cropland soils to NO X emissions in California, the EPA found that CARB's emissions inventories met the applicable requirements of the CAA notwithstanding the absence of soil NO X emissions from fertilizer or pesticide use. 155 Furthermore, for purposes of our final action on the San Joaquin Valley Serious Area Plan for the 2006 PM 2.5 NAAQS, we determined that there was not sufficient information available to require a controls evaluation for soil NO X emissions for purposes of the BACM analysis for those NAAQS. 156

Upon reviewing the studies cited by CCEJN in its comment letter, we similarly find that the information provided is not sufficient to compel a revision to the emissions inventories in the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS, given the large uncertainties in the emissions estimates. As discussed in Response 2.A, the magnitude of soil NO X emissions varies based on temperature; agricultural practices, such as the timing and amount of fertilizer application and irrigation; crop type; and other factors. Additionally, soil NO X is not directly emitted and involves numerous natural emissions sources and processes. Thus, soil NO X emissions are inherently difficult to estimate and model. Likewise, given that the production of NO X in the soil is complex, it may also be challenging to estimate the effects of potential controls. Due to the complexity of estimating soil NO X emissions, the partially natural source of the emissions, and the uncertainties in the effectiveness of potential control measures, the EPA concludes that there is not sufficient information available at this time to warrant an evaluation of potential controls for soil NO X emissions in the San Joaquin Valley for purposes of the BACM analysis for the 1997 annual PM 2.5 NAAQS. We encourage CARB and the District to continue their ongoing efforts to resolve the uncertainties in soil NO X emissions and examine any implications for air quality modeling and planning.

Comment 5: CCEJN asserts that the EPA must disapprove portions of the attainment plan for the 1997 annual PM 2.5 NAAQS because the State did not provide public notice and the opportunity to comment on portions of the Plan.

The commenter identifies two submissions made by CARB in March 2023 and June 2023 to provide additional information relevant to the original SIP submissions comprising the Plan: the March 2023 Ammonia Supplement and the March 2023 Building Heating Supplement, discussing the ammonia precursor demonstration and the BACM requirement for building electrification, and the Title VI Supplement, addressing necessary assurances under CAA section 110(a)(2)(E). CCEJN notes that CAA section 110(a)(2) requires “[e]ach implementation plan submitted by a State under this chapter shall be adopted by the State after reasonable notice and public hearing.” The commenter states that the supplements are “required contents of such plans” and notes that the EPA's supplemental proposal for the 2012 annual PM 2.5 NAAQS indicated the EPA's expectation that any Title VI necessary assurances would go through state-level notice and comment along with the remainder of the Plan.

Because CARB submitted these supplements directly to the EPA without first going through additional public process and after CARB had formally submitted the Plan, the commenter asserts that the EPA cannot rely upon these supplements to approve the State's precursor demonstration, BACM demonstration, or necessary assurances under CAA section 110(a)(2)(E)(i).

Response 5: Generally, the EPA agrees with CCEJN that SIP submissions must meet the reasonable notice and public hearing requirements of CAA section 110(a)(2). This is a basic requirement for SIP submissions that appears in section 110(a)(1), section 110(a)(2), and section 110(l), as well as EPA regulations pertaining to the completeness of SIP submissions in 40 CFR part 51, Appendix V. However, the EPA does not agree that this requirement necessarily applies to all information of any type that a state may provide to the EPA. This includes such instances as when the state is providing additional information to supplement a SIP submission that did previously meet notice and public hearing process requirements, particularly when the EPA has requested that the state provide such additional information to clarify an ambiguity in the original SIP submission or to aid the EPA in evaluating adverse comments raising an issue related to the original SIP submission. 157 The EPA considers it appropriate to rely on such supplemental information, even if it is not in the form of a formal SIP submission that underwent full notice and public hearing process, when it expands on and confirms information presented in the state's original SIP submission or addresses potential deficiencies in the pre-existing data. 158 In such situations, the EPA considers the relevant question to be whether the state provided reasonable notice and public hearing with respect to the issue as part of the original SIP submission. It would be illogical to require a state to restart the entire SIP development process and would delay the EPA's action on a SIP submission, thereby potentially delaying needed emissions reductions, were the Agency to interpret CAA section 110(a)(2) notice and public hearing requirements to apply to any and all supplemental information provided by state. Thus, the EPA disagrees with CCEJN's assertion that it is inappropriate for the Agency to rely on the additional information provided by CARB in the two supplements in its analysis of the SJV PM 2.5 Plan because it would violate the requirement under section 110(a)(2) that plans submitted to the EPA for inclusion in the SIP must go through “reasonable notice and public hearing.”

With respect to the 2023 Ammonia Supplement and the 2023 Building Heating Supplement, the EPA believes the information contained therein falls within the EPA's discretion to accept as a supplement, as it expands upon and confirms information provided in the State's previously submitted SIP submissions that did undergo the full notice and public hearing process. CARB submitted the supplement to “support action on the attainment plan” and the supplement was intended as “clarifying information” rather than a formal SIP revision. 159 Also, CARB submitted this information in reaction to prior comments related to the EPA's proposed action on the SIP submissions with respect to the 2012 annual PM 2.5 NAAQS, and in anticipation of receiving those same comments in this action. In this respect, CARB provided additional information that it anticipated the EPA would request to help evaluate the issues raised in such comments.

In the ammonia context, the 2018 PM 2.5 Plan and 15 µg/m 3 SIP Revision present the fundamental elements of the State's demonstration that ammonia does not contribute significantly to exceedances of the 1997 annual PM 2.5 NAAQS, including research that supports its conclusion that ammonium nitrate PM 2.5 formation in the San Joaquin Valley is NO X -limited rather than ammonia-limited;  160 evidence that the area's measures targeting VOC reductions are already reducing ammonia;  161 and an analysis of how the District's control measures compare with other state's rules and regulations. 162 Upon initial review of the State's submission, and in light of related comments received on attainment plans for other PM 2.5 NAAQS for the San Joaquin Valley, the EPA requested clarifying information and additional analysis to support the State's conclusions in the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS. 163 The information and analysis the State provided in the March 2023 Ammonia Supplement does not deviate from or fundamentally alter the analysis in the SJV PM 2.5 Plan; rather, it provides a wide array of potential controls and analyses to support the fundamental conclusions in the submitted SIP. The EPA believes that CARB provided reasonable notice and public hearing on its position with respect to the ammonia precursor issue in the initial SIP submission, and the additional information in the March 2023 Ammonia Supplement merely expands upon that position. Moreover, by taking into account the information that CARB provided in that supplement during this rulemaking action, the EPA itself has provided the commenters with the opportunity to address that supplemental information now.

Similarly, the building heating BACM demonstration in the 2018 PM 2.5 Plan provides the foundations and analysis for CARB's conclusions that the State is implementing BACM with respect to building heating appliances. As discussed in Section II.A.4, in 2020, the EPA approved this demonstration as meeting BACM for the 2006 24-hour PM 2.5 NAAQS. 164 However, given comments concerning this same issue on an EPA proposal related to the 2018 PM 2.5 Plan with respect to 2012 annual PM 2.5 NAAQS, the EPA requested that the State support its conclusion with more up-to-date, additional analysis. 165 Like the supplemental information for the ammonia precursor demonstration, the March 2023 Building Heating Supplement merely provides additional support for the State's original analysis and determination that it is implementing BACM for this source category in the San Joaquin Valley area. The EPA believes that CARB provided reasonable notice and public hearing on its position with respect to the building heating and electrification issue during the development of initial SIP submission, and the additional information in the March 2023 Building Heating Supplement merely expands upon that position.

Thus, the EPA believes the State provided reasonable notice and opportunity for public engagement with respect to its conclusions in the ammonia precursor demonstration and building heating BACM elements of the SIP and satisfied the reasonable notice and public hearing requirements of the CAA. 166

With respect to the Title VI Supplement, the EPA acknowledges that it provides additional information related to an issue that the State did not expressly address during the development of the SJV PM 2.5 Plan, i.e., the State did not previously engage in public process specifically with respect to CAA section 110(a)(2)(E) necessary assurances that implementation of the Plan would not be prohibited by Title VI. However, in this instance, the issue of necessary assurances arose in adverse comments on a related EPA proposed action on the same 2018 PM 2.5 Plan with respect to the 2012 PM 2.5 NAAQS. 167 In order to address the concerns raised by the commenter, the EPA sought additional information from the State to supplement the SJV PM 2.5 Plan by providing necessary assurances and CARB provided that information in the Title VI Supplement to do so.

In light of prior comments, and the responsiveness of the Title VI Supplement to the prior comments, the EPA considers it appropriate to rely on the additional information provided by CARB in this way. Going forward, as part of developing new SIP submissions, the EPA requests that CARB and the District include consideration of issues related to compliance with Title VI as part of that process, in order to ensure public awareness and engagement. The public notice and comment process required for development of SIP submissions provides an opportunity for an air agency to share its position on necessary assurances publicly, and to develop the record supporting their analysis of CAA section 110(a)(2)(E)(i) as it pertains to a particular SIP submission. Through this process, the EPA expects states to develop adequate necessary assurances so that they can be reviewed during the air agency-level public comment process and subsequently by the EPA. 168

Comment 6: CVAQ's comments cover many of the same issues as the comments from CCEJN. In summary, they assert that the State's plan “improperly relies upon faulty emission inventories and modeling data, fails to regulate key PM 2.5 precursors like ammonia and soil NO X , does not analyze the most stringent measures needed for attainment, and does nothing to prove State compliance with Title VI of the Civil Rights [Act] (Title VI).” The commenter also notes that the two CARB-submitted supplements did not go through the State's public process, and that the EPA had an obligation to issue a federal implementation plan in January 2021 and has failed to do so.

Response 6: The EPA has addressed CVAQ's concerns about the emissions inventory and modeling data in Response 2.B; ammonia in Responses 3.A through 3.D; soil NO X in Responses 2.A and 4; MSM in Response 4; Title VI in Responses 1.A and 1.B, Response 5, and in Response 7 that follows; and the State's public process in Response 5 of this document.

Regarding the EPA's federal implementation plan (FIP) obligation, we do not dispute that the EPA has had an obligation to implement a FIP for the San Joaquin Valley for the 1997 annual PM 2.5 NAAQS due to a prior finding of failure to submit the required attainment plan. As we explained in the proposed rule, as a result of the EPA's December 6, 2018 determination effective January 7, 2019, that California had failed to submit the required attainment plan for the 1997 annual PM 2.5 NAAQS, among other required SIP submissions for the San Joaquin Valley, the EPA became subject to a statutory deadline to promulgate a FIP for this purpose no later than two years after the effective date of that determination— i.e., by January 7, 2021. 169 However, as a result of this final rulemaking approving all but the contingency measure requirement of the submitted Serious area and section 189(d) plan for the 1997 annual PM 2.5 NAAQS, the only outstanding deficiency for these NAAQS relates to contingency measures. We note that CARB has submitted three SIP submissions to address the CAA contingency measure requirements for the 1997 annual PM 2.5 NAAQS (as well as other PM 2.5 NAAQS) in the San Joaquin Valley, including (1) the “PM 2.5 Contingency Measure State Implementation Plan Revision,” submitted to the EPA on June 8, 2023;  170 (2) amendments to District Rule 8051 (“Open Areas”), submitted to the EPA on October 16, 2023;  171 and (3) the state-wide “California Smog Check Contingency Measure for the State Implementation Plan,” submitted to the EPA on November 13, 2023. 172 The EPA will act on the contingency measure SIP revisions, and/or promulgate a FIP for the contingency measure requirement for the 1997 annual PM 2.5 NAAQS and other NAAQS, in a separate rulemaking.

Comment 7: The private citizen commenter believes that the State's plan contains “aspirational and misleading `assurances' of compliance with the Civil Rights Act” and that the “EPA has missed an opportunity to live up to the commitments of the Biden administration and EPA Administrator Regan to prioritize environmental justice and civil rights.”

In addition, the commenter notes the length of time that has passed since the EPA committed to put out guidance on what would constitute “necessary assurances” under the Act and its failure to do so prior to accepting the necessary assurances demonstration in the SJV PM 2.5 Plan for the 1997 annual PM 2.5 NAAQS. The commenter recommends that a simple interim guidance could include: (1) “some sort of equity or environmental justice assessment,” and (2) “consideration of alternative measures to lessen or eliminate any potentially discriminatory burdens revealed by that assessment.”

The commenter provides a short summary of the interaction between CAA section 110(a)(2)(E) and Title VI at the EPA, including identifying a SIP rulemaking in 1997 where the connection between section 110(a)(2)(E) and Title VI was raised and a 2012 rulemaking pertaining to the San Joaquin Valley on which the EPA received comments about the same issue.

The commenter generally recommends that the EPA exercise its discretion in determining what constitutes necessary assurances to require more from the State in favor of a more rigorous posture as to what constitutes necessary assurances. In doing so, the commenter disputes the EPA's distinction in its proposal between necessary assurances under CAA section 110(a)(2)(E) and a formal finding of compliance with Title VI.

Next, the commenter outlines the contents of CARB's Title VI supplement. In particular, the commenter alleges that CARB's Civil Rights and Discrimination Process does not have processes or procedures for handling a complaint originating from outside of CARB, that the policy has been rarely used, and was adopted prior to complaints filed at the EPA against CARB for procedural deficiencies in the State's policy. Additionally, the commenter believes that neither the EPA nor CARB has demonstrated that the State's policy will be implemented in a systemic manner to avoid disproportionate effects.

The commenter asserts that the EPA's approval of the necessary assurances conflates the concrete statutory requirements of Title VI with policy-based programs and policies of environmental justice. The commenter believes that relying on the policy-based environmental justice initiatives does not rise to the level of the systematic and defined methods of Title VI compliant laws.

The commenter then describes many of the environmental justice resources available to CARB and the EPA in developing and determining the adequacy of necessary assurances. The commenter acknowledges that the EPA identified many of these resources in its proposal but believes the necessary assurances discussion should demonstrate that these resources were considered and used in determining whether there is a disproportionate effect in a particular SIP-based action.

Ultimately, based on 2013 EPA guidance on compliance with CAA section 110(a)(2)(E) and the terms of conditions under Title VI for CARB receiving funding from the EPA, the commenter does not believe that CARB submitted a sufficient demonstration that the required Title VI compliance programs exist under CARB's purview. In their conclusion, the commenter notes that the EPA could conditionally approve the Plan, accompanied by an enforceable condition requiring CARB and the District to bring their programs into demonstrated compliance with Title VI.

Response 7: To the extent the comment letter is providing input to the EPA on content for a forthcoming guidance document for CAA section 110(a)(2)(E)(i) with respect to Title VI, such considerations are outside the scope of this action.

As we noted in our proposal, the EPA has discretion with regard to what may constitute necessary assurances under CAA section 110(a)(2)(E)(i). For this action, we believe the State has provided adequate necessary assurances to support approval, under these specific facts and circumstances. The EPA notes that what constitutes necessary assurances for purposes of Title VI for a given SIP submission depends upon the facts and circumstances of the Plan, and the Agency may require more or different information as needed in other SIP actions. This finding does not limit the Agency to review for different factors in the future.

Importantly, as explained in the proposal action, the EPA's evaluation of necessary assurances pertains to CAA section 110(a)(2)(E)(i) compliance with respect to a specific SIP submission, and not to Title VI compliance more broadly. 173 Formal findings of compliance with Title VI follow procedures outlined in the CFR after administrative complaints are filed with the EPA alleging discrimination prohibited by Title VI and the other civil rights laws, 174 or if the EPA initiates an affirmative compliance review. 175 Section 110(a)(2)(E)(i), in contrast, requires a state to provide necessary assurances that the state's implementation of the SIP submission at issue is not prohibited by federal law, including Title VI. As an additional point of clarification, this necessary assurances analysis concerning Title VI is distinct from considerations of environmental justice more broadly. Title VI involves specific considerations of federal law as it pertains to individuals on the basis of race, color, or national origin. The language at issue in CAA section 110(a)(2)(E)(i) is specific to implementation of the SIP submissions and prohibitions under Title VI.

The EPA separately reviewed information related to environmental justice considerations and those considerations are addressed in Section IV of this document. The EPA reiterates that in our proposed approval of the Plan, the EPA completed a Demographic Index analysis of the area subject to the Plan, identifying environmental burdens and susceptible populations in disadvantaged communities in the San Joaquin Valley nonattainment area. As explained in more detail in Section II.A.1 of this document, we believe the State has provided the necessary assurances, including information that through its initial implementation that the State has meaningfully considered input from the public through public outreach that is beyond the minimum legal requirements for public comment during SIP development, and that the Plan submission complies with CAA section 110(a)(2)(E)(i).

With respect to the “EPA's processing prior (to this 2023 action but subsequent to the 2016 policy) complaints against CARB and in which it had noted several procedural deficiencies,” the EPA is not aware of any complaints filed against CARB within that time period regarding CARB's Civil Rights and Discrimination Complaint Process, and no complaint was specifically cited to by the commenter. 176 The EPA notes that it publishes all external civil rights complaints and compliance reviews online. 177

The EPA previously determined that the 2020 and 2023 motor vehicle emissions budgets in the 15 µg/m 3 SIP Revision were adequate for use in transportation conformity findings. In a letter dated February 1, 2022, the EPA notified CARB and other agencies involved in the interagency consultation process in the San Joaquin Valley that we had reviewed the 2020 RFP and 2023 attainment year budgets in the 15 µg/m 3 SIP Revision and found that they are adequate for transportation conformity purposes. 178 The EPA announced the availability of the budgets and notified the public of the adequacy finding via a Federal Register notice on February 10, 2022. 179 This adequacy finding became effective on February 25, 2022 and the budgets have been used in transportation conformity determinations in the San Joaquin Valley area since that date.

The EPA proposed approval of these same budgets, shown in Table 1 of this document, on July 14, 2023. 180 181 The Plan establishes separate direct PM 2.5 and NO X subarea budgets, based on EMFAC2014, for each county, and partial county (for Kern County), in the San Joaquin Valley. 182 The EPA discussed the State's evaluation of the significance/insignificance factors for ammonia, SO 2 , and VOC, and re-entrained road dust emissions in the proposed rule. 183 In this action, the EPA is finalizing approval of the State's demonstration that emissions of ammonia, SO 2 , and VOCs do not contribute significantly to PM 2.5 levels that exceed the 1997 annual PM 2.5 NAAQS in the San Joaquin Valley. Therefore, consistent with the transportation conformity regulation, 184 motor vehicle emissions budgets are not required for transportation-related emissions of ammonia, SO 2 , and VOC for purposes of the 1997 annual PM 2.5 NAAQS in the San Joaquin Valley. In addition, since neither the State nor the EPA has made a finding that re-entrained road dust emissions are significant, under 40 CFR 93.103(b)(3) and 93.122(f), re-entrained road dust emissions are not required to be included in the budgets for 1997 annual PM 2.5 NAAQS in the San Joaquin Valley.

For the reasons discussed in Sections IV.D and IV.E of the proposed rule, the EPA is approving the attainment, RFP, and 5 percent demonstrations, respectively, in the SJV PM 2.5 Plan. The 2020 RFP and 2023 attainment year budgets are consistent with these demonstrations, are clearly identified and precisely quantified, and meet all other applicable statutory and regulatory requirements including the adequacy criteria in 40 CFR 93.118(e)(4) and (5). For these reasons, the EPA is finalizing approval of the 2020 and 2023 budgets listed in Table 1 of this document.

The Plan also included budgets for direct PM 2.5 and NO X emissions for 2017 (RFP milestone year) and 2026 (post-attainment quantitative milestone year). We are not approving the 2017 budgets  185 or the post-attainment year 2026 budgets at this time. Although the post-attainment year quantitative milestone is a required element of the Serious area plan, it is not necessary to demonstrate transportation conformity for 2026 or to use the 2026 budgets in transportation conformity determinations until such time as the area fails to attain the 1997 annual PM 2.5 NAAQS. Therefore, the EPA is not taking action on the submitted budgets for 2026 in the SJV PM 2.5 Plan at this time. However, if the EPA determines that the San Joaquin Valley has failed to attain the 1997 annual PM 2.5 NAAQS by the applicable attainment date, the EPA would begin the budget adequacy and approval processes under 40 CFR 93.118 for the 2026 post-attainment year budgets concurrent with such determination that the area failed to attain.

Also on July 14, 2023, the EPA proposed to approve a trading mechanism for transportation conformity analyses that would allow the MPOs in the area to use future decreases in NO X emissions from on-road mobile sources to offset any on-road increases in direct PM 2.5 emissions as allowed for under 40 CFR 93.124(b). 186 187 As described in the proposed rule, the EPA reviewed the trading mechanism and found it is appropriate for transportation conformity purposes in the San Joaquin Valley for the 1997 annual PM 2.5 NAAQS. 188 The methodology for estimating the trading ratio for conformity purposes is essentially an update (based on newer modeling) to the State's approach, approved in the previous plan, to model the effect of areawide direct PM 2.5 and NO X emissions reductions on ambient PM 2.5 , and to express the ratio of these modeled sensitivities as an inter-pollutant trading ratio.

In a previous action on the 2018 PM 2.5 Plan for the 2012 annual PM 2.5 NAAQS, we found that the State's approach is a reasonable method to use to develop ratios for transportation conformity purposes and approved the 6.5 to 1 NO X to PM 2.5 trading mechanism as an enforceable component of the transportation conformity program for the San Joaquin Valley for the 2012 PM 2.5 NAAQS. 189 Here, we similarly find that the State's approach is reasonable and are approving the 6.5 to 1 NO X for PM 2.5 trading mechanism as enforceable components of the transportation conformity program for the San Joaquin Valley for the 1997 annual PM 2.5 NAAQS. This trading ratio replaces the 9 to 1 NO X to PM 2.5 trading ratio approved for the San Joaquin Valley for analysis years after 2014 for the 1997 annual PM 2.5 NAAQS. 190

As described in detail in our proposal, the EPA reviewed environmental and demographic data for the San Joaquin Valley using the EPA's environmental justice (EJ) screening and mapping tool (“EJSCREEN”), 191 192 and compared the data to the corresponding data for the United States as a whole. The results of the analysis are provided for informational and transparency purposes.

This final action approves the State's plan for attaining the 1997 annual PM 2.5 NAAQS. Information on the 1997 annual PM 2.5 NAAQS and its relationship to health impacts can be found at 62 FR 38652 (July 18, 1997). We expect that this action and resulting emissions reductions will generally be neutral or contribute to reduced environmental and health impacts on all populations in the San Joaquin Valley, including people of color and low-income populations. At a minimum, this action would not worsen existing air quality and is expected to ensure the area is meeting requirements to attain and/or maintain air quality standards. Further, there is no information in the record indicating that this action is expected to have disproportionately high or adverse human health or environmental effects on a particular group of people.

For the reasons discussed in this final rule, the proposed rule, and the related technical support documents, under CAA section 110(k)(3), the EPA is approving the portions of the SJV PM 2.5 Plan as meeting CAA requirements for implementation of the 1997 annual PM 2.5 NAAQS as follows:

(1) We are finding that the 2013 base year emissions inventories continue to satisfy the requirements of CAA section 172(c)(3) and 40 CFR 51.1008 for purposes of both the Serious area and the CAA section 189(d) attainment plans, and to find that the forecasted inventories for the years 2017, 2018, 2019, 2020, 2023, and 2026 provide an adequate basis for the BACM, RFP, five percent, and modeled attainment demonstration analyses;

(2) We are approving the following elements as meeting the Serious nonattainment area planning requirements:

(a) the BACM/BACT demonstration as meeting the requirements of CAA section 189(b)(1)(B) and 40 CFR 51.1010(a);

(b) the demonstration (including air quality modeling) that the Plan provides for attainment as expeditiously as practicable as meeting the requirements of CAA sections 179(d) and 189(b) and 40 CFR 51.1011(b);

(c) the RFP demonstration as meeting the requirements of CAA sections 172(c)(2) and 171(1) and 40 CFR 51.1012; and

(d) the quantitative milestone demonstration as meeting the requirements of CAA section 189(c) and 40 CFR 51.1013;

(3) We are approving the following elements as meeting the CAA section 189(d) planning requirements:

(a) the BACM/BACT demonstration as meeting the requirements of CAA sections 189(a)(1)(C)  193 and 189(b)(1)(B) and 40 CFR 51.1010(c);

(b) the demonstration that the Plan will, at a minimum, achieve an annual five percent reduction in emissions of NO X as meeting the requirements of CAA section 189(d) and 40 CFR 51.1010(c);

(c) the demonstration (including air quality modeling) that the Plan provides for attainment as expeditiously as practicable as meeting the requirements of CAA sections 179(d) and 189(d) and 40 CFR 51.1011(b);

(d) the RFP demonstration as meeting the requirements of CAA sections 172(c)(2) and 171(1) and 40 CFR 51.1012; and

(e) the quantitative milestone demonstration as meeting the requirements of CAA section 189(c) and 40 CFR 51.1013;

(4) We are approving the motor vehicle emissions budgets for 2020 and 2023 as shown in Table 1 of this final rulemaking because they are derived from approvable RFP and attainment demonstrations and meet the requirements of CAA section 176(c) and 40 CFR part 93, subpart A; and

(5) We are approving the trading mechanism provided for use in transportation conformity analyses for the 1997 annual PM 2.5 NAAQS, in accordance with 40 CFR 93.124(b).

As discussed in Section I.B of the proposal, on November 26, 2021, the EPA partially approved and partially disapproved portions of the 2018 PM 2.5 Plan that addressed attainment of the 1997 annual PM 2.5 NAAQS in the San Joaquin Valley nonattainment area. The elements that the EPA disapproved include the attainment demonstration, comprehensive precursor demonstration, five percent annual emissions reductions demonstration, BACM demonstration, RFP demonstration, quantitative milestones, motor vehicle emissions budgets, and contingency measures. This disapproval was effective on December 27, 2021. In a separate final partial approval and partial disapproval action, also effective December 27, 2021, the EPA disapproved the contingency measure element of the 2018 PM 2.5 Plan as it relates to the requirements for the Serious area plan 2006 24-hour PM 2.5 NAAQS and the Moderate area plan for the 2012 annual PM 2.5 NAAQS. 194

In our November 26, 2021 final disapprovals, we noted that offset and highway sanctions under CAA sections 179(b)(2) and 179(b)(1), respectively, would not apply if California submits, and the EPA approves, a SIP submission that corrects all of the deficiencies identified in our final actions prior to the imposition of sanctions. 195 Through this final approval action, we find that California has corrected the deficiencies associated with the Serious area and CAA section 189(d) SIP elements for the 1997 annual PM 2.5 NAAQS for the San Joaquin Valley (except for the contingency measures element). Thus, upon the effective date of this final rule, all sanctions and any sanctions clocks associated with the Serious area and CAA section 189(d) SIP elements for the 1997 annual PM 2.5 NAAQS for the San Joaquin Valley (except the contingency measures element) will be permanently terminated.

This final action does not address the prior disapprovals of the contingency measure elements for the 1997 annual PM 2.5 NAAQS, the 2006 24-hour PM 2.5 NAAQS, and the 2012 annual PM 2.5 NAAQS. Therefore, all sanctions and any sanctions clocks associated with the disapprovals of the contingency measure elements for those standards will continue to apply in the San Joaquin Valley as outlined in the November 26, 2021 final disapprovals unless or until the EPA approves a SIP submission or submissions meeting the outstanding contingency measure requirements for these NAAQS. As discussed in Response 6, CARB has submitted three SIP submissions to address the CAA contingency measure requirements for the 1997 annual PM 2.5 NAAQS, the 2006 24-hour PM 2.5 NAAQS, and the 2012 annual PM 2.5 NAAQS in the San Joaquin Valley. The EPA will act on these submissions and determine the effects on the sanctions, if any, in accordance with 40 CFR 52.31 through one or more separate rulemaking actions.

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

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 14094 (88 FR 21879, April 11, 2023);

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

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

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

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

• Is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it approves a State program;

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

Executive Order 12898 (Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, Feb. 16, 1994) directs federal agencies to identify and address “disproportionately high and adverse human health or environmental effects” of their actions on minority populations and low-income populations to the greatest extent practicable and permitted by law. The EPA defines environmental justice (EJ) as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.” The EPA further defines the term fair treatment to mean that “no group of people should bear a disproportionate burden of environmental harms and risks, including those resulting from the negative environmental consequences of industrial, governmental, and commercial operations or programs and policies.”

The State did not evaluate environmental justice considerations as part of its SIP submittal; the CAA and applicable implementing regulations neither prohibit nor require such an evaluation. The EPA's evaluation of environmental justice is described in the section of this document titled, “Environmental Justice Considerations.” The analysis was done for the purpose of providing additional context and information about this rulemaking to the public, not as a basis of the action. Due to the nature of the action being taken here, this action is expected to have a neutral to positive impact on the air quality of the affected area. In addition, there is no information in the record upon which this decision is based that is inconsistent with the stated goal of E.O. 12898 of achieving environmental justice for people of color, low-income populations, and Indigenous peoples.

This action is subject to the Congressional Review Act, 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).

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by February 12, 2024. 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).)

Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:

Background

The Secretary of Transportation, through MARAD, is authorized to provide guarantees of debt (obligation guarantees) to finance all types of vessel construction and shipyard modernization and improvement, except for fishing vessels. The Title XI Program is a loan guarantee program, administered by MARAD, which was established under Title XI of the Merchant Marine Act, 1936, Public Law 74-835, codified at 46 U.S.C. Chapter 537, as amended (the “Act”). Title XI provides for the full faith and credit of the United States, acting by and through the Maritime Administrator, for the payment of debt obligations for: (1) U.S. shipowners for the purpose of financing or refinancing U.S. flag vessels constructed, reconstructed, or reconditioned in U.S. shipyards; and (2) U.S. shipyards for the purpose of financing advanced shipbuilding technology and modern shipbuilding technology of a privately-owned shipyard facility located in the U.S. As the Title XI Program guarantees full payment of the obligation's unpaid principal and interest in the event of a default by the borrower, both the statute and regulations contain several criteria and requirements intended to reduce the risk of a loan default. Though the Title XI Program regulations have been amended over the years, the current financial requirements and limitations remain substantially the same as when MARAD introduced them in 1978. As lending practices have evolved, MARAD's regulatory standards have not changed to reflect modern lending practices for vessel financing. For example, when the regulations where implemented, certain leases were not included as an expense under generally accepted accounting principles (GAAP), but today GAAP requires that all leases be included as an expense. Today, retained earnings are also expected to be included in any calculation of equity or net worth pursuant to GAAP. Accordingly, the modifications to the regulations will eliminate confusion and align the Title XI Program regulations with modern accounting standards.

Prior to execution of a guarantee, MARAD is bound by statute to, among other things, make determinations of economic soundness of the project and the financial and operating capability of the applicant. To that end, the Title XI regulations currently require each borrower, and operator if applicable, to have and maintain: (1) working capital of at least $1; (2) at least 90 percent of its equity as shown on the last audited balance sheet; and (3) long-term debt not to exceed twice its equity. By this amendment, MARAD is modernizing its financial review process by removing static financial covenants and loan thresholds and replacing them with a review and evaluation of the creditworthiness of each borrower based on revenue metrics based on federal credit and maritime lending best practices. The use of these revenue metrics is intended to improve the quality of MARAD financial requirements applied to new borrowers. As part of its regular programmatic evaluation process, MARAD frequently seeks feedback from potential applicants and borrowers on its processes. Potential applicants have advised MARAD that the challenges caused by the regulatory requirements are a reason why they will not use the program. Borrowers also have cited the incompatibility of Title XI debt financial covenants with the other lender covenants as an obstacle in the prompt processing and approval of loan guarantee applications.

The “National Defense Authorization Act for Fiscal Year 2020,” (Pub. L. 116-92; December 20, 2019) (“NDAA 2020”) established the Federal Financing Bank as the “preferred lender” for the Title XI Program. Additionally, the NDAA 2020 directed MARAD to periodically review Title XI application procedures and documents to assure they “meet current commercial best practices to the extent permitted by law.” The 2020 NDAA also provided that MARAD establish a process for expedited consideration of low-risk applications which would “utilize, to the extent practicable, relevant Federal and industry best practices found in the maritime and shipbuilding industries.” As a result, MARAD identified best practices from federal credit programs that make loans and obligation guarantees similar to the Title XI Program. MARAD considered a review of federal credit practices that identified the Title XI Program was the only program with regulatorily-imposed financial covenants and thresholds. 1 This deviation from federal credit best practices was highlighted as a significant hinderance to the Title XI Program's ability to tailor the terms of credit assistance to address the characteristics of a specific project.

Restrictions on the flexibility of the program limit the program's ability to succeed. Reliance on the current static metrics and limited amortization requirements prevent the Title XI Program from adjusting its financial terms and conditions and debt amortization when best credit practices would recommend otherwise. The amendments made to the regulation under this final rule are intended to attract a higher volume of high-quality applicants and mitigate risk to the U.S. Government.

Moreover, with the implementation of the Federal Financing Bank as the preferred lender for Title XI obligation guarantees, there is no longer a need for the strict uniformity in the regulatory structure of the guaranteed obligations. Previously, Title XI guaranteed debt was marketed to the public through investment banks. This created a need for uniformity to encourage the purchase of the debt by entities not familiar with maritime financings and to allow for easier resale by a debt purchaser to a third-party at a future date. The expectation of uniformity by the market limited the payment schedule options available for Title XI Program participants in circumstances where it may have been in the U.S. Government's best interest to structure the debt differently to mitigate risk.

Due to the length of time since the regulations were last updated, the availability of modern financial requirements of similar federal programs, the evolving maritime environment, changes to federal credit and maritime lending best practices, and updates to the Title XI statute, MARAD is amending its regulations. These amendments include permitting MARAD to use financial requirements, consistent with federal credit and maritime lending best practices for entities having a similar credit rating that MARAD determines are necessary and appropriate to protect the interest of the United States. The amendments will also allow MARAD to use alternative methods of amortization, other than level principal or level debt payment, when an independent financial advisor approved by MARAD conducts independent analysis and review and demonstrates that such other method is in the best interests of the United States.

The final rule will update the lending parameters in the current regulations, which no longer best achieve the intended purpose of minimizing the risk of Title XI Program defaults and will better align the lending practices to reflect federal credit and maritime lending best practices. Additionally, MARAD expects that the amended regulations will reduce the economic burden on applicants in complying with Title XI Program requirements that are inconsistent with other lending instruments. MARAD also expects that the updated lending parameters will encourage the construction of vessels in United States shipyards which otherwise would not meet the current constrained Title XI Program financial requirements.

In developing this rule, MARAD published a notice of proposed rulemaking in the Federal Register on April 25, 2023 (88 FR 24962) with a sixty-day comment period which closed on June 26, 2023. MARAD received one comment from Argent Group, Ltd. a financial services firm specializing in the Jones Act maritime industry.

The commenter expressed concern that the proposed modifications to the regulations for both the qualifying requirements of a company to close on the Title XI Program financing documents as well as the continuing financial compliance requirements for a company to maintain throughout the time the Title XI Program financing documents are in effect.

The commenter proposed a modification to the regulation that was the same for both sections. The commenter noted that the changes to the regulation made it unclear what the financial requirements would be for a company and proposed MARAD maintain substantially similar financial tests as exist in the current regulations except when a company has existing credit agreements then MARAD should apply those financial covenants or ratios.

MARAD does not agree that maintaining the current financial compliance requirements provides clarity as the commenter suggests. The statute has been updated several times since the regulations were last updated. The final rule conforms MARAD creditworthiness review standards with the statute. Additionally, the commenter proposes that MARAD adopt requirements to provide for an alternative to the existing financial compliance covenants in instances where the company has existing private sector credit agreements. MARAD does not agree. The option to incorporate the financial compliance covenants or ratios of applicable private sector credit agreements already exists in MARAD regulations.

The commenter expressed concern about the proposed modification to the regulation for changes to the amortization schedule of guaranteed obligations requiring independent analysis by a third-party expert. The commenter noted that MARAD regularly retains third party experts and, while MARAD would likely consult third-party experts as part of any adjustment to the amortization schedule of guaranteed obligations, nowhere else in the regulation is there a requirement that MARAD use third-party experts to determine what is in the best interests of the United States Government. MARAD agrees and is removing that requirement from the final rule.

Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). For information on DOT's compliance with the Privacy Act, please visit https://www.transportation.gov/privacy.

Under Executive Order (E.O.) 12866, as amended (58 FR 51735, October 4, 1993, 88 FR 21879, April 11, 2023), supplemented by E.O. 13563, as amended (76 FR 3821, January 18, 2011, 88 FR 21879, April 11, 2023) and USDOT policies and procedures, a determination must be made whether a regulatory action is “significant,” and therefore subject to the Office of Management and Budget (OMB) review and the requirements of the order. The order defines “significant regulatory action” as one likely to result in a rule that may: (1) have an annual effect on the economy of $200 million or more (adjusted every 3 years by the Administrator of OIRA for changes in gross domestic product); 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, territorial, 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 legal or policy issues for which centralized review would meaningfully further the President's priorities or the principles set forth in this Executive order, as specifically authorized in a timely manner by the Administrator of OIRA in each case.

This rulemaking has been determined to be a non-significant regulatory action under section 3(f) of E.O. 12866 by the Office of Information and Regulatory Affairs (OIRA) within OMB.

The Title XI Program guarantees full payment of the obligation's unpaid principal and interest in the event of a default by the borrower. Both the statute and MARAD's implementing regulations also contain several criteria and requirements intended to reduce the risk of a loan default. Though the Title XI Program regulations have been amended over the years, the current financial requirements and limitations remain substantially the same as when they were introduced in 1978. As lending practices have evolved, the regulatory standards have not changed to reflect current lending practices for vessel financing.

The major benefits of amending Part 298 will be to: (1) modernize MARAD's financial review process by removing static financial covenants and loan thresholds and replacing them with best practices intended to improve the quality of MARAD financial reviews; and (2) allow MARAD to examine more indicators of financial health, thus improving MARAD's ability to accurately assess applicants and to better mitigate financial risk to the Government.

MARAD does not believe that the rulemaking is likely to impose quantifiable or nonquantifiable costs. The primary function of this regulatory change is to modernize MARAD financial review methods and processes, thereby improving MARAD's ability to evaluate applicants.

On December 20, 2019, the NDAA 2020 directed MARAD “to utilize, to the extent practicable, relevant Federal and industry best practices found in the maritime and shipbuilding industries.” In considering potential alternatives, MARAD reviewed several Federal credit programs that make loans and obligation guarantees similar to the Title XI Program. MARAD considered a review of Federal credit practices that identified the Title XI Program as the only Federal program with regulatorily-imposed financial covenants and thresholds. 2 The report found that the static regulatory requirements significantly hindered the Title XI Program's ability to tailor the terms of credit assistance to address the characteristics of a specific project. MARAD considered the report's findings in light of its current practices and is in this final rule amending the regulations to conform to the report's findings.

MARAD has examined the rule pursuant to E.O. 13132 (64 FR 43255, August 10, 1999) and concluded that no additional consultation with States, local governments, or their representatives is mandated beyond the rulemaking process. The Agency has concluded that the rulemaking would not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The rule will not have “substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government.”

MARAD has determined that this rulemaking, in which MARAD proposes to amend its regulations implementing the Title XI Program financial requirements to implement statutory changes and update the existing financial requirements imposed on Title XI Program obligors, will not significantly or uniquely affect the communities of Indian Tribal Governments when analyzed under the principles and criteria contained in E.O. 13175 (Consultation and Coordination with Indian Tribal Governments). Therefore, the funding and consultation requirements of this Executive order do not apply.

The requirements of E.O. 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this rulemaking, because it would not directly affect the interests of State and local governments.

The Regulatory Flexibility Act of 1980 requires MARAD to assess whether this rulemaking would have a significant economic impact on a substantial number of small entities and to minimize any adverse impact. Potential applicants to the Title XI program are vessel owners and operators, as well as shipyard owners. These industries fit under NAICS codes 336611, Ship Building and Repairing and NAICS codes 483111-483212, which cover different types of transportation by vessel and would include vessel owners and operators. 3 The SBA defines a small business under NAICS code 36611 as a business with 1,250 employees or less and under NAICS code. The SBA defines small businesses under NAICS codes 483111-483212 as businesses with 500-1,500 employees or less, depending on the specific NAICS code.

The Title XI Program guarantees full payment of the obligation's unpaid principal and interest in the event of a default by the borrower. The program maintains a $5,000 application fee, a fee that has not increased in 30 years and would remain unchanged by this proposal. MARAD also estimates that the application process currently takes approximately 150 hours, a figure that would also remain unchanged by this proposal. The program provides substantial financial assistance to maritime industry participants, and the changes are intended to eliminate challenges caused by the regulatory requirements, a reason cited by stakeholders as to why they will not use the program. The rule is also intended to make Title XI debt financial covenants compatible with other lender covenants, which stakeholders cited as an obstacle in the prompt processing and approval of loan guarantee applications. MARAD intends for the changes to attract a higher volume of high-quality applicants to the program. Based on the foregoing, MARAD certifies that this rulemaking will not have a significant economic impact on a substantial number of small entities.

E.O. 12988 requires that agencies promulgating new regulations or reviewing existing regulations take steps to minimize litigation, eliminate ambiguity and to reduce burdens on the regulated public. MARAD has reviewed this rulemaking and has determined that this rulemaking action conforms to the applicable standards in sections 3(a) and 3(b)(2) of E.O. 12988, Civil Justice Reform,

The Unfunded Mandates Reform Act of 1995 requires Agencies to evaluate whether an Agency action would result in the expenditure by State, local, and Tribal Governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any 1 year, and if so, to take steps to minimize these unfunded mandates. This action will not result in additional expenditures by State, local, or tribal governments or by any members of the private sector. Therefore, MARAD has not prepared an assessment pursuant to the Unfunded Mandates Reform Act.

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

Under the Paperwork Reduction Act of 1995 (PRA), a person is not required to respond to a collection of information by a federal agency unless the collection displays a valid OMB control number. This rulemaking amends an existing regulation without any change to the contemplated submission of information which might otherwise result in a change to the applicant's burden hours. Therefore, the rulemaking can rely on the existing information collected under OMB control number 2133-0018. Information submitted by applicants to the program will continue to be used to evaluate an applicant's project and capabilities, make the required determinations, and administer any agreements executed upon approval of loan guarantees.

For the reasons described in the preamble, the Maritime Administration amends 46 CFR part 298 to read as follows: