The NRC will collect $0.3 million in annual fees from the uranium recovery facilities fee class in FY 2024, as shown in table XI. The FY 2023 uranium recovery facilities fees are shown for comparison purposes.

In comparison to FY 2023, the FY 2024 annual fee for the non-DOE licensee in the uranium recovery facilities fee class is increasing primarily due to a rise in budgeted resources attributed to licensing reviews associated with one licensed uranium recovery facility and two licensed, but not yet constructed, uranium recovery facilities.

The NRC regulates DOE's Title I and Title II activities under the Uranium Mill Tailings Radiation Control Act (UMTRCA). 2 The annual fee assessed to DOE includes the resources specifically budgeted for the NRC's UMTRCA Title I and Title II activities, as well as 10 percent of the remaining budgeted resources for this fee class. The NRC described the overall methodology for determining fees for UMTRCA in the FY 2002 fee rule (67 FR 42612; June 24, 2002), and the NRC continues to use this methodology. The DOE's UMTRCA annual fee is increasing compared to FY 2023 primarily due to a rise in budgeted resources needed to conduct generic work that the NRC will be performing to resolve the following: (1) issues associated with abandoned uranium mine waste cleanups and the potential waste disposal on or near uranium mill tailings sites including existing DOE sites under NRC oversight; (2) coordination on license termination strategies for sites; and (3) performance issues relating to existing cover systems at mill tailings sites. The annual fee is partially offset by a rise in the 10 CFR part 170 estimated billings for the anticipated workload increases at various DOE UMTRCA sites. The NRC assesses the remaining 90 percent of its budgeted resources to the remaining licensee in this fee class, as described in the work papers, which is reflected in table XII.

Further, for any non-DOE licensees, the NRC will continue using a matrix to determine the effort levels associated with conducting generic regulatory actions for the different licensees in the uranium recovery facilities fee class; this is similar to the NRC's approach for fuel facilities, described previously. The matrix methodology for uranium recovery licensees first identifies the licensee categories included within this fee class (excluding DOE). These categories are conventional uranium mills and heap leach facilities, uranium in situ recovery (ISR) and resin ISR facilities, and mill tailings disposal facilities. The matrix identifies the types of operating activities that support and benefit these licensees, along with each activity's relative weight (see the work papers). Currently, there is only one remaining non-DOE licensee, which is a basic ISR facility. Table XIII displays the benefit factors for the non-DOE licensee in that fee category.

The FY 2024 annual fee for the remaining non-DOE licensee is calculated by allocating 100 percent of the budgeted resources, as summarized in table XIV.

The NRC will collect $0.292 million in annual fees from the non-power production or utilization facilities fee class in FY 2024, as shown in table XV. The FY 2023 non-power production or utilization facilities fees are shown for comparison purposes.

In comparison to FY 2023, the FY 2024 annual fee for the non-power production or utilization facilities fee class is increasing, as discussed in the following paragraphs.

In FY 2024, the budgeted resources decreased primarily due to a reduction in medical radioisotope production facilities workload primarily due to a delay with the SHINE Technologies LLC's (SHINE) operating license application for a medical radioisotope production facility and a delay in the construction schedule. The offset to the decline in budgetary resources is the rise in the fully-costed FTE rate compared to FY 2023 due to an increase in salaries and benefits.

The 10 CFR part 170 estimated billings associated with the current fleet of operating non-power production or utilization facilities licensees subject to annual fees have declined compared to FY 2023 due to a reduction in workload for license amendment activities associated with the shutdown of the General Electric Hitachi Vallecitos Nuclear Center in FY 2024. The 10 CFR part 170 estimated billings with respect to medical radioisotope production facilities and advanced research and test reactors have declined when compared with FY 2023 primarily due to the following: (1) a reduction in staff hours due to the delay with SHINE's operating license application and a delay in the construction schedule; and (2) the completion of the safety review of the Kairos Power, LLC's (Kairos) application for a permit to construct the Hermes 1 test reactor. This decline in 10 CFR part 170 estimated billings is offset due to the following: (1) the review of the Kairos Hermes 2 application for a permit to construct two test reactors; and (2) conducting pre-application meetings due to the anticipated submission of several license applications.

Furthermore, the increase in the annual fee is also affected by these contributing factors: (1) an increase in the 10 CFR part 171 billing adjustment due to the timing of invoices in FY 2023; and (2) an increase in the generic transportation surcharge due to an increase in the generic transportation budgeted resources for the non-power production or utilization facilities fee class.

The annual fee recovery amount is divided equally among the three non-power production or utilization facilities licensees subject to annual fees and results in an FY 2024 annual fee of $97,200 for each licensee.

In FY 2024, the NRC has allocated approximately $0.2 million in budgeted resources to this fee class; however, because all the budgeted resources will be recovered through service fees assessed under 10 CFR part 170, the NRC will not assess or collect annual fees in FY 2024 for this fee class.

The NRC will collect $46.3 million in annual fees from materials users licensed under 10 CFR parts 30, 40, and 70 in FY 2023, as shown in Table XVI. The FY 2024 materials users fees are shown for comparison purposes.

The formula for calculating 10 CFR part 171 annual fees for the various categories of materials users is described in detail in the work papers. Generally, the calculation results in a single annual fee that includes 10 CFR part 170 costs, such as amendments, renewals, inspections, and other licensing actions specific to individual fee categories.

The total annual fee recovery of $46.3 million for FY 2024 shown in table XVI consists of $36.6 million for general costs, $9.5 million for inspection costs, and $0.1 million for LLW costs. To equitably and fairly allocate the $46.3 million required to be collected among approximately 2,400 diverse materials users licensees, the NRC continues to calculate the annual fees for each fee category within this class based on the 10 CFR part 170 application fees and estimated inspection costs for each fee category. Because the application fees and inspection costs are indicative of the complexity of the materials license, this approach is the methodology for allocating the generic and other regulatory costs to the diverse fee categories. This fee calculation method also considers the inspection frequency (priority), which is indicative of the safety risk and resulting regulatory costs associated with the categories of licenses.

In comparison to FY 2023, the FY 2024 annual fees are increasing for all fee categories within the materials users fee class, ranging from 14 percent to 25 percent primarily due to an increase in the budgeted resources. The budgeted resources increased due to the following: (1) an increase in licensing and oversight workload, including the expected reviews of exempt distribution and sealed source device applications, updating licensing guidance, and the development of a regulatory guide on veterinary issues; (2) hiring actions to double encumber and train health physics staff to ensure an appropriate pipeline and knowledge management for future agency mission related activities; (3) support for rulemaking activities; (4) support for materials research activities; and (5) an increase in the fully-costed FTE rate compared to FY 2023 due to an increase in salaries and benefits.

In addition, the FY 2024 annual fees are increasing due to the following: (1) an increase in generic transportation costs for materials users; (2) a decrease in the 10 CFR part 170 estimated billings for new licensing applications; (3) a decrease of 53 materials users licensees from FY 2023; and (4) an increase in the 10 CFR part 171 billing adjustment due to the timing of invoices issued in FY 2023.

A constant multiplier is established to recover the total general costs (including allocated generic transportation costs) of $36.6 million. To derive the constant multiplier, the general cost amount is divided by the sum of all fee categories (application fee plus the inspection fee divided by inspection priority) then multiplied by the number of licensees. This calculation results in a constant multiplier of 1.29 for FY 2024. The average inspection cost is the average inspection hours for each fee category multiplied by the professional hourly rate of $317. The inspection priority is the interval between routine inspections, expressed in years. The inspection multiplier is established to recover the $9.5 million in inspection costs. To derive the inspection multiplier, the inspection costs amount is divided by the sum of all fee categories (inspection fee divided by inspection priority) then multiplied by the number of licensees. This calculation results in an inspection multiplier of 1.72 for FY 2024. The unique category costs are any special costs that the NRC has budgeted for a specific category of licenses. Please see the work papers for more detail about this classification.

The annual fee being assessed to each licensee also takes into account a share of approximately $0.1 million in LLW surcharge costs allocated to the materials users fee class (see Table IV, “Allocation of LLW Surcharge, FY 2024,” of this document). The annual fee for each fee category is shown in the revision to § 171.16(d).

The NRC will collect $2.3 million in annual fees to recover generic transportation budgeted resources in FY 2024, as shown in table XVII. The FY 2023 fees are shown for comparison purposes.

In comparison to FY 2023, the FY 2024 annual fee for the transportation fee class is increasing primarily due to an increase in the budgeted resources; (2) a rise in the distribution of the generic transportation resources allocated to other fee classes; and (3) a decrease in the 10 CFR part 170 estimated billings.

In FY 2024, the budgeted resources increased primarily to support the following: (1) rulemaking activities; (2) environmental reviews and licensing of transportation packages for ATF, the anticipated licensing review of one transportable microreactor application, other advanced reactors fuels, and microreactors; and (3) a rise in the fully-costed FTE rate compared to FY 2023 due to an increase in salaries and benefits.

The increase in the annual fee is partially offset by a rise in the distribution of generic transportation resources allocated to respective other fee classes resulting from additional number of CoCs for 2024.

Furthermore, the annual fee is also increasing due to a decrease in the 10 CFR part 170 estimated billings as a result of: (1) delays in submittals of major amendments of transportation packages and submittals requiring revisions to the applications; and (2) a delay in inspection activities.

Consistent with the policy established in the NRC's FY 2006 final fee rule (71 FR 30722; May 30, 2006), the NRC recovers generic transportation costs unrelated to DOE by including those costs in the annual fees for licensee fee classes. The NRC continues to assess a separate annual fee under § 171.16, fee category 18.A., for DOE transportation activities. The amount of the allocated generic resources is calculated by multiplying the percentage of total CoCs used by each fee class (and DOE) by the total generic transportation resources to be recovered.

This resource distribution to the licensee fee classes and DOE is shown in table XVIII. Note that for the non-power production or utilization facilities fee class, the NRC allocates the distribution to only those licensees that are subject to annual fees. Although five CoCs benefit the entire non-power production or utilization facilities fee class, only three out of 30 operating non-power production or utilization facilities licensees are subject to annual fees. Consequently, the number of CoCs used to determine the proportion of generic transportation resources allocated to annual fees for the non-power production or utilization facilities fee class has been adjusted to 0.5 so these licensees are charged a fair and equitable portion of the total fees (see the work papers).

The NRC assesses an annual fee to DOE based on the number of 10 CFR part 71 CoCs held by DOE. The NRC, therefore, does not allocate these DOE-related resources to other licensees' annual fees because these resources specifically support DOE.

The NRC is not making any policy changes in FY 2024.

The NRC is making 11 administrative changes in FY 2024:

1. Amend §§ 2.205(i), 15.35(c), 37.27(c)(2), 73.17(m)(1), 73.57(d)(3)(i), 110.64(e), 140.7(d), 170.12(f), and 171.19(a) by clarifying payment methods.

The NRC is amending §§ 2.205(i), 15.35(c), 37.27(c)(2), 73.17(m)(1), 73.57(d)(3)(i), 110.64(e), 140.7(d), 170.12(f), and 171.19(a) to align with the U.S. Department of the Treasury's (Treasury) “No-Cash No-Check” policy. The Treasury encourages Federal agencies to use the most efficient, cost-effective, and best-suited collection and payment solutions. The Treasury's Bureau of the Fiscal Service provides central collection and payment services to agencies to maintain the financial integrity and operational efficiency of the Federal Government. The Treasury's Bureau of the Fiscal Service notified the NRC that the agency is expected to transition from paper-based collections to one or more offered electronic methods by September 30, 2024.

The “No-Cash No-Check” policy will improve timeliness of collections, thereby reducing interest/penalty/administrative fees associated with late payments, and reduce resources associated with processing paper checks. The available electronic payment options will enhance processing speed and accuracy, and adopting this policy will make consumer and business payments and remittances to agencies easier and more efficient. Accordingly, the NRC is amending §§ 2.205(i), 15.35(c), 37.27(c)(2), 73.17(m)(1), 73.57(d)(3)(i), 110.64(e), 140.7(d), 170.12(f), and 171.19(a) to revise available payment methods to remove paper forms of payment and provide that payments are to be made electronically using the methods accepted at www.Pay.gov.

2. Amend table 1 in § 170.31 to add language to 7.A, 7.A.1, 7.A.2, 7.C, 7.C.1, and 7.C.2 for clarity.

The NRC is amending table 1 in § 170.31 to add language to 7.A., 7.A.1, 7.A.2, 7.C, 7.C.1, and 7.C.2, to clarify with respect to 10 CFR part 170 fees that these categories also include the possession and use of source material for shielding when authorized on the same license.

3. Revise footnote 17 to table 2 in § 171.16(d) for clarity.

The NRC is revising footnote 17 in table 2 paragraph (d) in § 171.16 to clarify that with respect to annual fees, medical licensees paying fees under 7.A, 7.A.1, 7.A.2, 7.B, 7.B.1, 7.B.2, 7.C, 7.C(1), or 7.C(2) are not subject to fees under 2.B. for possession and shielding authorized on the same license.

The NRC published a proposed rule on February 20, 2024 (89 FR 12759) and requested public comment on its proposed revisions to 10 CFR parts 170 and 171. By the close of the comment period, the NRC received nine written comment submissions on the FY 2024 proposed rule. In general, commenters were supportive of the specific proposed regulatory changes, although most commenters expressed concerns about broader fee policy issues related to the overall size of the NRC's budget, fairness of fees, transparency, and budget formulation. Some commenters' concerns were outside the scope of the fee rule.

The commenters are listed in Table XIX.

Information about obtaining the complete text of the comment submissions is provided in the “Availability of Documents,” section of this document.

The NRC has carefully considered the public comments received on the proposed rule. The comments have been organized by topic. Comments from multiple commenters raising similar specific concerns were combined to capture the common issues raised by the commenters. Comments from a single commenter have been quoted to ensure accuracy; brackets within those comments are used to show changes that have been made to the quoted comments.

Comment: Several commenters suggested that the NRC should use the additional carryover to further offset FY 2024 budgets for Operating Power Reactors, Spent Fuel Storage/Reactor Decommissioning, Non-Power Production or Utilization Facilities, and Fuel Cycle Facilities to help reduce fees. (NEI, Westinghouse, and CEG)

Response: Each fiscal year, the NRC follows the direction of Congress that accompanies the annual appropriations act. The FY 2024 final fee rule reflects a total budget authority in the amount of $944.1 million, which is an increase of $16.9 million from FY 2023, but a decrease of $35.1 million from the FY 2024 proposed fee rule. The estimated net budget authority ( i.e., excluded activities) specified in the Consolidated Appropriations Act, 2024, for the NRC's “Salaries and Expenses” account reflects a decrease of $18.9 million from the FY 2024 budget request. The explanatory statement associated with the Consolidated Appropriations Act, 2024, directed the NRC to use $62.0 million of carryover. The explanatory statement allocates $16.0 million for the UNLP and language in the Senate Report demonstrates an intent for the NRC to fund the UNLP in FY 2024 using fee-based carryover. The direction to use the $62.0 million carryover also reflects the $27.1 million proposed in the FY 2024 budget request to offset the Nuclear Reactor Safety budget and an additional $18.9 million in prior-year unobligated balances, which offsets the $18.9 million reduction in the estimated net budget authority specified in the Consolidated Appropriations Act, 2024, for the NRC's “Salaries and Expenses” account. With these allocations of the $62.0 million in prior-year unobligated carryover funds, no additional carryover remains that could be applied to offset fees for other fee classes.

No changes were made to this final rule as a result of these comments.

Comment: “Most licensees must estimate and budget their NRC fees well in advance of the proposed fee rule and upon issuance must adjust their operating budget to accommodate the changes. Given the significant changes that are likely to result from the Consolidated Appropriations Act of 2024, we strongly encourage the NRC to use any means available to notify licensees of any substantial changes made during the crafting of the final rule. This would provide licensees the additional time needed to realign their budgets.” (NEI)

Response: The NRC strives to ensure that the proposed fee rule is as accurate as possible and explains its assumptions about the budgetary resources and other factors associated with annual fees to provide the best information available regarding the fiscal year's proposed fees. The NRC discussed these assumptions during the March 7, 2024, public meeting on the FY 2024 proposed fee rule.

The NRC must comply with statutory requirements, including NEIMA and the Administrative Procedure Act (APA). NEIMA requires the NRC to recover, to the maximum extent practicable, approximately 100 percent of its total budget authority for the fiscal year less the budget authority for excluded activities, through fees assessed by the end of the fiscal year. Section 553 of the APA requires the NRC to give the public an opportunity to comment on a published proposed rule. Because the Office of Management and Budget has found the fee rule to be a major rule under the Congressional Review Act, the effective date of the final rule cannot be less than 60 days from the date of publication and must allow for timely final billing prior to the end of the fiscal year ( i.e., September 30, 2024 for FY 2024). Depending on the timing of the enacted budget, the NRC may not have sufficient time to provide advance notification of all changes within the final rule prior to publication and meet its statutory requirements.

No changes were made to this final rule in response to these comments.

Comment: Several commenters expressed concerns about the average 22 percent annual fee increase for all operating fuel cycle facilities, which is a significant escalation in comparison to the agency's budgeted increase of 5.62% and multiples higher than the other business lines. The commenters stated that the fuel facilities business line budget and annual fees decreased for each of the fiscal years (FY 2019-FY 2022) to more accurately reflect the reduced number of operating facilities and the corresponding reduction in workload. The commenters expressed concern that increase in the annual fees in FY 2023 and FY 2024 is not efficient and limits the potential of nuclear energy advancement, and that despite the number of operating facilities remaining steady, the proposed annual fee increase is not based on quantitative workload or effort factors and does not reflect the relatively low risk profile of the existing and predicted fuel cycle facility fleet. The commenters expressed concern that the basis for the increase in the annual fee is not adequate and clear. In addition, the commenters expressed concern regarding the increase in the budget for licensing and oversight activities and the disparity between lower 10 CFR part 170 (service fees) relative to 10 CFR part 171 (annual fees). The commenters also expressed that available carryover funds should be applied to eliminate the proposed 22 percent increase above the FY 2023 levels. One commenter suggested that the NRC should apply an annual fee cap to fuel facilities, similar to the annual fee cap for operating power reactors in NEIMA. (NEI, BWXT, and Westinghouse)

Response: The NRC remains mindful of the impact of its budget on the fees for the fuel facilities fee class. The NRC notes that efforts to deploy ATF and advanced reactors, along with a focus on domestic fuel supplies, have resulted in an environment with a fluctuating workload. When formulating the budget, the NRC takes into consideration various factors, including workload forecasting, historical data and trends in the business line, information from licensees and potential applicants, and uncertainty of projections. The NRC assesses the current environment and looks for significant drivers that could impact future workload. These include, but are not limited to, technical and regulatory developments that have the potential to generate additional work or reduce work ( i.e., pre-application activities and applications for new fuel facilities, potential major amendments and license termination requests, rulemaking activities, guidance development, and oversight of the fuel facilities program), related reactor licensing work, federal funding opportunities, and geopolitical changes that could influence the availability of uranium.

In addition, the NRC evaluates historical data and trends to measure how execution in previous years lines up with the budget assumptions at the time. The NRC uses that data to inform the budget and identify areas where the assumptions previously used have changed. Historical data allows the NRC to identify trending in quantity and/or complexity of the planned submittals, and to incorporate efficiencies gained and lessons learned from previous data.

The NRC also relies on communication from stakeholders to identify accurate dates for planned submittals ( i.e., major amendment requests, renewals, and new fuel facility applications), including letters of intent provided by licensees and applicants, and collecting information from Federal partners. For large licensing projects, the NRC tries to balance the appropriate resource needs against the relative certainty that an application will be submitted on schedule.

While the NRC understands the commenters' concerns regarding the impact of budget on the existing operating fuel facilities licensees, NEIMA requires the NRC to recover, to the maximum extent practicable, approximately 100 percent of its annual budget authority, less the budget authority for excluded activities, and to do so through a combination of both user fees and annual fees. When budgeted 10 CFR part 170 work does not materialize (due to circumstances like delayed or cancelled licensing submittals or construction inspections) changes to the annual fee for the fee class can result. This change in 10 CFR part 170 billings due to fact-of-life changes was a significant contributor to the annual fee increases in FY 2023 and FY 2024 for the fuel facilities fee class.

As expressed by the commenters, from FY 2019 through FY 2022, the annual fee for fuel facilities fee class decreased each year and, after a significant decrease in the budgeted resources for the fee class from FY 2019 to FY 2020, budgeted resources remained relatively flat from FY 2020 to FY 2022. The decrease in the fuel facilities budgeted resources over this period appropriately aligned resources with the projected workload for the fuel facilities fee class at the time. For example, during this time, there were fewer license renewals, limited guidance development, and only routine licensing actions.

In FY 2023, the fuel facilities fee class experienced an increase in the budget by $4.2 million compared to FY 2022, which included an increase of 5.3 FTE and approximately $0.5 million in contract support, for licensing, oversight, and rulemaking activities. The FY 2024 fuel facilities fee class budget is $30.9 million, which includes 58.9 FTE and approximately $2.9 million in contract support resources. This is $0.9 million or 3 percent higher than the FY 2019 fuel facilities budgeted resources of $30.0 million, which included 66.7 FTE and approximately $2.0 million in contract support.

The FY 2024 CBJ, published in March 2023, explains that the increase in budgeted resources for the fuel facilities business line supports activities such as: (1) licensing actions related to enrichment and manufacturing of HALEU fuel and ATF; (2) the review of one new fuel facility license applications; (3) programmatic oversight activities in support of Category II fuel facilities and an anticipated new fuel facility; (4) potential rulemaking for enhanced security of special nuclear material and guidance development for fuel cycle facility security; and (5) an increase in the fully-costed FTE rate compared to FY 2023 due to an increase in salaries and benefits to support Federal pay raises for NRC employees. The increase in budgetary resources is partially offset due to a decline in IT services. Additionally, changing workload drivers, including delays in the submittal of licensing activities, have impacted the FY 2024 budget for the fuel facilities business line.

Consistent with NEIMA, when developing the annual fee rule, the NRC accounted for changes that occurred in the two-year interval between the development of the FY 2024 budget request, which began in FY 2022, and the enactment of the FY 2024 appropriation in March 2024.

As part of developing the annual fee rule, the NRC estimates the amount of 10 CFR part 170 service fees by each fee class by analyzing billing data and the actual cost of work under NRC contracts charged to licensees and applicants for the previous four quarters. The estimate, therefore, reflects recent changes in the NRC's regulatory activities. The NRC used four quarters of the prior year invoice data to calculate fees in its FY 2024 proposed rule, and is using a combination of two quarters of the prior year and two quarters of the current year billing data (which is also updated to reflect workload changes) for this final fee rule.

In the FY 2024 proposed fee rule, the 10 CFR part 170 estimated service fees for the fuel facilities fee class increased from $9.2 million in FY 2023 to $10.5 million as shown in the FY 2024 proposed fee rule, which is an increase of $1.3 million or approximately 14.1 percent compared to FY 2023.

During the March 7, 2024, public meeting to discuss the FY 2024 proposed fee rule, the NRC explained that the increase in proposed annual fees for the fuel facilities fee class was primarily due to budget increases and lower than anticipated 10 CFR part 170 billings. At the public meeting, the NRC explained that the increase in proposed annual fees described in the FY 2024 proposed fee rule was primarily due to budget increases and lower than anticipated 10 CFR part 170 billings. The lower than anticipated 10 CFR part 170 billings was because of delays in the submittals of Niowave's new medical isotope production facility application and Global Nuclear Fuel-Americas amendment supporting Natrium fuel fabrication. The FY 2024 final fee rule reflects a further decrease in 10 CFR part 170 billings that was caused by the completion of more licensing actions than estimated, the further delay in commencing inspection activities for the TRISO-X, LLC new fabrication facility, the slowdown of the TRISO-X, LLC new fuel facility license application review while the NRC awaits the applicant's submittal of a major design change, and other delays in routine licensing actions.

During the public meeting, the NRC identified that, during the budget formulation and execution process, it can account for fact-of-life changes and implemented these changes, where possible, in FY 2024. These changes are reflected in the FY 2024 final fee rule, where the NRC reallocated resources from the fuel facility fee class to other fee classes within the nuclear materials and waste safety control point. While these changes did not lower the final FY 2024 annual fees for the fuel facilities fee class in comparison to the annual fees in FY 2024 proposed fee rule, they did mitigate what would have been an even more significant increase.

Although the NRC is aware of the impact its budgeted resources has on the fees for fuel facilities licensees subject to 10 CFR part 171 annual fees, the fee class budget is not linearly proportional to the number of licensees in the fuel facilities fee class. Resources are required to develop and maintain the infrastructure independent of the number of operational fuel facilities. The fuel facilities business line must maintain certain minimum requirements to meet the NRC's regulatory and statutory oversight role. This includes maintaining expertise in several technical areas, including integrated safety analysis, radiation protection, criticality safety, chemical safety, fire safety, emergency management, environmental protection, decommissioning, management measures, material control and accounting, physical protection, and information security. Budgeted resources in technical areas are recovered through 10 CFR part 170 user fees as well as 10 CFR part 171 annual fees. Additionally, the infrastructure costs include indirect services and the business line portion of corporate support. Indirect services include rulemaking, maintaining guidance for licensees, maintaining procedures for NRC staff, training, and travel. Corporate support includes, but is not limited to, the cost for information management and technology, security, facilities management, rent, utilities, human resources, financial management, and acquisitions.

As explained above, because the NRC's fee recovery under 10 CFR part 170 will not equal approximately 100 percent of the agency's budget authority for the fiscal year (less the budget authority for excluded activities), the NRC also assesses 10 CFR part 171 annual fees. Estimated 10 CFR part 170 billings, therefore, are inversely related to the proposed annual fee for a fee class. The more the NRC estimates to collect in 10 CFR part 170 billings, the less it assesses in annual fees. While the NRC anticipated an increase in 10 CFR part 170 estimated billings in the FY 2024 proposed fee rule, this anticipated increase was not enough to offset the overall increase in budgetary resources in FY 2024. Moreover, additional decreases in 10 CFR part 170 billings occurred since the issuance of the FY 2024 proposed fee rule that contributed to the additional increase in the annual fees for the fuel facilities fee class in the FY 2024 final fee rule. The additional decreases in 10 CFR part 170 billings were caused by the completion of more licensing actions than estimated, the further delay in commencing inspection activities for the TRISO-X, LLC new fabrication facility, the slowdown of the TRISO-X, LLC new fuel facility license application review while the NRC awaits the applicant's submittal of a major design change, and other delays in routine licensing actions.

One commenter also recommended that the NRC apply an annual cap to fuel facilities, similar to the annual fee cap for operating power reactors in NEIMA. Section 102(b)(3)(B)(i) of NEIMA established a cap for the annual fees charged to operating reactor licensees. Under this provision, the annual fee for an operating reactor licensee, to the maximum extent practicable, shall not exceed the annual fee amount per operating reactor licensee established in the FY 2015 final fee rule, adjusted for inflation. NEIMA did not establish such a cap on the annual fees charged to fuel facility licensees.

This final fee rule does not include an annual cap to fuel facilities. The NRC will continue to assess resource requirements, evaluate programmatic efficiencies, and make changes as appropriate. In addition, the NRC staff is exploring options to address the volatility in the fuel facilities fee class annual fees and will engage with the Commission as appropriate.

No changes were made to this final rule as a result of these comments.

Comment: Several commenters expressed concerns that they have finalized their calendar year 2024 budgets and funding a 22 percent increase in the FY 2024 annual fees is not currently budgeted and can only be fulfilled by making difficult resource decisions while maintaining the safety and security of plant operations. (NEI and Westinghouse)

Response: The NRC recognizes that the issuance of the fee rule may not coincide with budget cycles of industry. NEIMA requires the NRC to recover, to the maximum extent practicable, approximately 100 percent of its annual budget authority, less the budget authority for excluded activities, through fees by the end of the fiscal year. The NRC must set its fees in accordance with the enacted budget. Even though the NRC does not know the amount of fees it will need to collect until after it receives an annual appropriation from Congress, the NRC starts the process of developing the fee rule in the preceding summer to allow for timely final billing prior to the end of the fiscal year, consistent with the requirements of NEIMA.

Furthermore, the NRC must comply with additional statutory requirements, including the APA. Section 553 of the APA requires the NRC to give the public an opportunity to comment on a published proposed rule. Moreover, because OMB has found the fee rule to be a major rule under the Congressional Review Act, the effective date of this final rule cannot be less than 60 days from the date of publication and must allow for timely final billing prior to the end of the fiscal year. NEIMA requires the NRC to collect fees for FY 2024 by September 30, 2024. These scheduling constraints required the NRC to propose revisions to its fee schedules before receiving its annual appropriation.

The NRC strives to ensure that the proposed fee rule is as accurate as possible and explains its assumptions about the budgetary resources and other factors associated with annual fees to provide the best information available regarding the fiscal year's proposed fees. The NRC discussed these assumptions during the March 7, 2024, public meeting on the FY 2024 proposed fee rule. The NRC recognizes that the issuance of the fee rule may not coincide with budget cycles of industry; however, the NRC must promulgate a notice-and-comment rule based on the most accurate data available regarding the cost of NRC services in the context of the NRC's budget for a given fiscal year. Nonetheless, the NRC can and will continue to inform licensees of anticipated major changes in 10 CFR part 170 billings based on changes in the timing of licensing action submittals or inspection activities that could ultimately impact annual fees.

No changes were made to this final rule as a result of these comments.

Comment: “Approximately 83% of the fee class budget for FY2024 is from the power reactor fee class. Over the past five years the Part 170 fee-for-service collections have decreased by 24%, meaning that the NRC's fee-for-service workload has decreased by roughly 34%. Yet, over this same period, the budget for operating reactors has increased. Consequently, a greater percentage of the operating budget is required to be recovered through annual fees. . . . [T]he percentage of the operating plant budget that is derived from annual fees (currently at 76.4%) continues to increase; up from 68% in FY2019. This growing disparity between `fee-for-service' collections and `overhead,' combined with the increasing levels of carryover, point to a need for the NRC to reevaluate its budget and fee collection model.” (NEI)

Response: The NRC disagrees with the commenter's suggestion that the allocation of service fees versus annual fees for the operating power reactor fee class in the FY 2024 proposed fee rule necessities a revaluation of the NRC's fee-recovery framework. The operating power reactors fee class supports the activities of the operating reactors and new reactors business lines, including both direct-billable licensing actions and those general activities that indirectly support the agency's mission in these areas. The NRC's FY 2024 CBJ provided the agency's explanation and justification for the resources requested to allow the agency to complete its mission, and the reason for the changes in the budget for the NRC compared to the prior year.

The NRC continues to actively evaluate resource requirements to address changes that occur between budget formulation and execution, and to pursue improvements that enhance the accuracy of projections used in budget formulation. For example, the NRC considers projected operating power plant closures and other external factors when estimating workload changes in a manner that allows the agency to meet its fee collection statutory responsibilities as the industry changes. The NRC also seeks information from licensees and other entities relevant to projected workload through public meetings and other forms of public outreach, to better inform the NRC's budget formulation workload assumptions.

Ultimately, however, the NRC budget is not linearly proportional to the size of the operating fleet, as there is a cost for the agency infrastructure that must be maintained independent of the number of operating power reactors in the fleet.

Consistent with NEIMA, when developing the annual fee rule, the NRC considered changes that occurred in the two-year interval between the development of the FY 2024 budget request, which began in FY 2022, and the enactment of the FY 2024 appropriation in March 2024. The NRC strives to ensure that the proposed fee rule is as accurate as possible and explains its assumptions about the budgetary resources and other factors associated with annual fees to provide the best information available regarding the fiscal year's proposed fees. As part of the development of the annual fee rule, the NRC estimates the amount of 10 CFR part 170 service fees by each fee class by analyzing billing data and the actual cost of work under NRC contracts charged to licensees and applicants for the previous four quarters. The estimate, therefore, reflects any recent changes in the NRC's regulatory activities.

The FY 2024 proposed rule utilized four quarters of the prior year invoice data, while the NRC is using a combination of two quarters of the prior year and two quarters of the current year billing data (which is also updated to reflect workload changes) for the FY 2024 final rule. In the FY 2024 proposed fee rule, the 10 CFR part 170 estimated service fees for the operating power fee class increased from $158.9 million in FY 2023 to $165.3 million as shown in the FY 2024 proposed fee rule, which is an increase of $6.4 million or approximately 4.0 percent compared to FY 2023. As described in the FY 2024 proposed fee rule, the 10 CFR part 170 estimated billings increased primarily due to the following: (1) an anticipated increase in hours associated with the review of an increasing number of license renewal applications; and (2) an anticipated increase in new reactor licensing activities, including the review of standard design approvals, pre-application activities, and construction permits. This estimated increase is partially offset by an expected decline in the submission of topical reports. The NRC discussed these assumptions for the operating power reactors fee class during the March 7, 2024, public meeting on the FY 2024 proposed fee rule.

The NRC will continue to assess resource requirements, evaluate programmatic efficiencies, and make changes as appropriate.

No changes were made to this final rule as a result of these comments.

Comment: Some commenters expressed concern about the overall increase in the budget, which has resulted in increases in annual fees and the hourly rate in FY 2024 and the potential for increases in the future. The commenters requested that the NRC re-evaluate fees associated with the FY 2024 proposed fee rule. (Congressman Byron Donalds, et. al, DPC, DAEC, BWXT, NEI, Westinghouse)

Response: The NRC is committed to the application of fairness and equity in the assessment of fees. Fees are reassessed annually with stakeholder engagement and published in the Federal Register for public comment. The NRC held a public meeting on March 7, 2024, to discuss the key aspects of the FY 2024 proposed fee rule, including the impact of the budget upon fees. In developing the budget, the NRC seeks information on projected workload through public meetings, letters of intent from industry, and other forms of public outreach with licensees to better inform budget formulation workload assumptions. NEIMA requires the NRC to recover, to the maximum extent practicable, approximately 100 percent of its annual budget less certain amounts excluded from this fee recovery requirement. The FY 2024 proposed fee rule was based on the FY 2024 budget request because a full-year appropriation had not yet been enacted for FY 2024. A full-year appropriation was enacted on March 9, 2024, with the Consolidated Appropriations Act, 2024, which included less total budget authority than the budget request and direction to use $62.0 million in carryover funding. As a result, the FY 2024 final fee rule reflects the NRC's re-evaluation of fees based on the FY 2024 enacted budget. In addition, the final fee rule reflects updates to estimated billings based on workload changes for each fee class.

The NRC will continue to assess resource requirements, evaluate programmatic efficiencies, and make changes as appropriate. For example, the NRC recently modified its fee regulations to address the economic differences between the current fleet of large operating reactors and much smaller small modular reactors (SMRs) to make them technology-inclusive and establish a fair and equitable approach for assessing annual fees to all SMRs, in light of increased interest in licensing non-light water reactors.

No changes were made to this final rule as a result of these comments.

Comment: “The FY2024 proposed fee rule represents a 1.5% increase in the annual fee for the three paying licensees in the fleet. Notably, we understand that in FY2025, the number of fee-paying facilities will drop from three to two. Because of this significant change (representing a 33% reduction of the fee-paying licensee base), we are concerned about the downstream effects this could place on the two remaining licensees, resulting in a disproportionate financial impact and burden. This undesirable outcome has been observed with prior year fee rules in several other business lines, including NPUFs, when the size of the fleet is significantly downsized, yet the overall business line is not commensurately reduced. The staff highlighted this fact in the February 22, 2024, Commission briefing on the research and test reactor regulatory program. The staff stated that they are currently pursuing mitigating solutions for FY2025. We look forward to hearing more from the staff on any solutions, and we are open to supporting further dialogue on this topic. As this FY2025 decrease in the number of facilities is known, we expect the NRC to reduce its resources commensurately. This is especially important considering their primary national mission of education, research, training, and outreach, as highlighted in the Atomic Energy Act, Section 104(c).” (NEI)

Response: The NRC recognizes the impact of its budgeted resources on the fees for facilities involved in education, research, training, and outreach. As mentioned during the February 22, 2024, Commission meeting, and the March 7,2024, public meeting to discuss the FY 2024 proposed fee rule, the NRC is actively exploring options to address the non-power production or utilization facilities (NPUF) fee class due to the decline in number of operating NPUFs and will engage with the Commission as appropriate.

For this fee rule, in FY 2024, the NRC budgeted activities for NPUFs to address emerging work needs and maintaining adequate oversight of the existing fleet of facilities. As discussed in the FY 2024 proposed fee rule, the NPUF budgetary resources, which are included under the operating reactors business line, decreased because of a reduction in medical radioisotope production facilities workload primarily due to a delay with the SHINE operating license application for a medical radioisotope production facility and a delay in the construction schedule. The decrease in the budgeted resources was partially offset by an increase in the fully-costed FTE rate compared to FY 2023 due to an increase in salaries and benefits. In addition, the 10 CFR part 170 estimated billings associated with the current fleet of operating NPUF licensees subject to annual fees have declined compared to FY 2023 due to a reduction in workload for license amendment activities associated with the anticipated shutdown of the General Electric Hitachi Vallecitos Nuclear Center in FY 2024. The 10 CFR part 170 estimated billings with respect to medical radioisotope production facilities and advanced research and test reactors have declined when compared with FY 2023 primarily due to the following: (1) a reduction in staff hours due to the delay with SHINE's operating license application and a delay in the construction schedule; and (2) the completion of the safety review of the Kairos application for a permit to construct the Hermes 1 test reactor. This decline in 10 CFR part 170 estimated billings is offset due to the following: (1) the review of the Kairos Hermes 2 application for a permit to construct two test reactors; and (2) conducting pre-application meetings due to the anticipated submission of several license applications.

While the NRC agrees that it should reduce its budget commensurate with the reduction in the number of NPUFs that pay fees, that reduction is not linearly proportional as there is a cost for the infrastructure that must be maintained independent of the number of operational NPUFs. These infrastructure costs include indirect services and the business line portion of corporate support. Indirect services include rulemaking, maintaining guidance for licensees, maintaining procedures for NRC staff, training, and travel. Corporate support includes, for example, the cost for information management, IT, security, facilities management, rent, utilities, financial management, acquisitions, human resources, and policy support.

No changes were made to this final rule as a result of these comments.

Comment: “We appreciate the NRC efforts to manage and reduce Corporate Support costs. However, these efforts do not appear to be effective. The Corporate Support budget for FY2024 is 30.2% of total budget authority compared to the FY2024 NEIMA limit of 29%. In FY2025 the NEIMA limit on Corporate Support budget decreases to 28%. However, the NRC's proposed budget for FY2025 has a Corporate Support budget that increases to 31.9% of total budget authority. We encourage NRC to double its efforts to reduce Corporate Support costs.” (NEI)

Response: Section 102(a)(3) of NEIMA provides that corporate support costs include annual budget justification submitted to Congress, to the maximum extent practicable, shall not exceed 29%. This requirement pertains to the annual budget justification and does not apply to the annual fee rule.

As stated in the Executive Summary to the FY 2024 CBJ, the NRC's corporate support request was approximately 30.2 percent of the agency's total requested budget authority and reflects the agency's efforts to comply with section 102(a)(3)(A) of NEIMA to the maximum extent practicable.

The agency will continue efforts to implement efficiencies and invest resources in initiatives that will result in future savings in corporate support activities.

No changes were made to this final rule as a result of these comments.

Comment: Several commenters expressed concern about using fee-based carryover funding for the UNLP and not complying with NEIMA. One commenter stated that “[t]he FY2024 proposed budget does not include funding for the University Nuclear Leadership Program (UNLP). However, the Consolidated Appropriations Act 2024 included $16 million for UNLP and directed the use of fee-based carryover funds for this purpose. This is contrary to the Nuclear Energy Innovation and Modernization Act (NEIMA) of 2018, where UNLP is one of the activities excluded from recovery using fee-based funding. The FY2024 payment, combined with similar payments in FY2023, FY2022 and FY2021, totals $64 million in payments by licensees that should have been excluded from the fee base.”

One commenter also expressed concern that licensee fees should not subsidize other Federal agencies. They stated, “[t]he FY2024 budget includes approximately $6 million to subsidize rent for the Food and Drug Administration (FDA) and the National Institutes of Health (NIH). In its October 12, 2021, letter to Congress on NEIMA, NRC identified that over the course of this lease the nuclear industry will pay approximately $48 million to subsidize rent for the Food and Drug Administration (FDA) and the National Institutes of Health (NIH) in the 3WFN building. These payments do nothing to support the agency's mission and should not be funded through fees collected from NRC licensees and, ultimately, electricity rate payers. We encourage the NRC to continue its discussions with Congress to remove these payments from the fee base.” (NEI and CEG)

Response: Each fiscal year, the NRC follows the direction of Congress that accompanies the annual appropriations act. In FY 2024, the explanatory statement associated with the Consolidated Appropriations Act, 2024 included direction for the NRC to use $62.0 million of carryover. The explanatory statement allocates $16.0 million for the UNLP, and consistent with language in the Senate Report, the UNLP is funded in FY 2024 using carryover. As part of the NRC's ongoing communications with Congress, the NRC provides information to and has discussions with Congress regarding various budgetary matters.

The Three White Flint subsidy is not currently an excluded activity under NEIMA.

No change was made to this final rule as a result of these comments.

Comment: “We recognize that there are no further policy changes proposed this year following last year's addition of another minimum fee and variable rate for non-light water reactors under 10 CFR 171.15. NEI encourages the NRC to consider other changes to the fee structure for micro-reactors. Specifically, the overall licensing and ongoing oversight costs for micro-reactors need to be less than 1% of the total cost of manufacture and operations. If the policy in the current fee rule places undue economic burden on micro-reactors through annual fees that do not reflect lower oversight costs, due to their simplicity and very small radionuclide inventories, then the annual fees will challenge their economic viability. The current minimum fee, set equal to that of the NPUF fee class, is expected to be a significant percentage of annual operating costs for micro-reactors. Further, the distribution of NPUF fees for dozens of reactors among a fraction of payers (only three NPUF licensees are subject to annual fees) is not representative of commercial micro-reactor expectations to each pay their share of annual fees. The scaling of many tens or hundreds of micro-reactors up to 4500 MWth will continue to propagate the disproportionate impact and there may be a need for the policy to be revisited as early as next year.” (NEI)

Response: In FY 2016, the NRC amended § 171.15 to establish a variable annual fee structure for LWR SMRs (81 FR 32617; May 24, 2016). Thereafter, in FY 2023, the NRC further amended § 171.15 to: (1) expand the applicability of the SMR variable fee structure to include non-LWR SMRs; and (2) establish an additional minimum fee and variable rate applicable to SMRs with a licensed thermal power rating of less than or equal to 250 MWt (88 FR 39120; June 15, 2023).

In developing this fee framework for SMRs, the NRC engaged with industry and other interested stakeholders to develop a knowledge base and understanding of the characteristics and proposed designs of non-LWR SMRs. The NRC also conducted public meetings with stakeholders to share information and discuss topics related to the development and licensing of non-LWRs and participated in preapplication activities with several applicants. During these public meetings, the NRC staff discussed possible approaches to assessing annual fees for non-LWR SMRs. Stakeholders recommended that the NRC consider lower fees for non-LWR SMRs and requested the NRC proceed with rulemaking expeditiously. In developing an approach to assess annual fees to future non-LWR SMRs, the NRC considered stakeholder input from these public meetings and analyzed a position paper from NEI, “NEI Input on NRC Annual Fee Assessment for Non-Light Water Reactors.”

Ultimately, the NRC modified its fee regulations to address the economic differences between the current fleet of large operating reactors and much smaller SMRS to make them technology-inclusive and establish a fair and equitable approach for assessing annual fees to all SMRs, including micro-reactors. That said, the NRC recognizes that the annual regulatory cost associated with LWR and non-LWR SMRs is inherently uncertain before such a licensed facility is operational.

As stated in the FY 2023 final fee rule, the NRC intends to re-evaluate the variable annual fee structure at the appropriate time to ensure consistency with NEIMA. This re-evaluation will occur once SMR facilities become operational and sufficient regulatory cost data becomes available. Operational experience data should provide insights that will identify the correlation between design features and the level of NRC oversight typically needed for these new types of power plants as well as inform whether further annual fee adjustments for SMRs may be needed. As cost data and operating experience for LWR and non-LWR SMRs are accumulated, the NRC will propose adjustments to fees as needed to make sure that the fees assessed to LWR and non-LWR SMRs (and to all operating power reactors) are commensurate with the regulatory support services provided by the NRC, consistent with NEIMA.

No changes were made to this final rule in response to these comments.

Comment: Several commenters expressed concerns about the annual fee increase for the spent fuel storage/reactor decommissioning fee class. One commenter stated that an increase in annual and professional charges proposed for the fee class of 26.4 percent, and an increase of 117 percent since 2019, is systemically unsustainable. The commenter stated that their sites no longer produce electricity and the assumption that they will recover costs from the DOE via litigation or settlement(s) is one that ignores that the costs are not allowed for recovery. That cost is the erosion of the recovery due to the time value of money and that others do not receive full recovery of costs. Costs associated with the recovery process are not included. Another commenter stated that the FY 2024 proposed fee rule assigns the same fee for all decommissioning plants and does not distinguish between reactor sites that are actively decommissioning or moving spent fuel, which require significant active NRC oversight, and those in a SAFSTOR setting with no active fuel movement, which require much less NRC oversight. The commenters suggested that the NRC adjust the proposed rule to more accurately and equitably allocate its costs to plants in a decommissioning status based on the necessary level of NRC involvement. The commenters asked that the NRC undertake serious discussions internally, and then with the Congress and OMB, to seek long-term solutions to the dramatic and unsustainable increases in members' fees. (DPC and DAEC)

Response: The NRC is aware of the impact of the budget on the fees for the spent fuel storage/reactor decommissioning fee class that is assessed to 10 CFR part 50 and 10 CFR part 52 power reactor licensees, and on 10 CFR part 72 licensees that do not hold a 10 CFR part 50 license or a 10 CFR part 52 combined license. The spent fuel storage/reactor decommissioning fee class supports the activities of the spent fuel storage and transportation and the decommissioning and LLW business lines, including both direct-billable licensing actions and those general activities that indirectly support the agency's mission in these areas.

When formulating the budget, the NRC takes into consideration various factors, including workload forecasting, historical data and trends, information from licensees and potential applicants, and uncertainty of projections. The NRC assesses the current environment and performs workload forecasting, which includes looking for significant drivers that could impact the future workload. These include, but are not limited to, technical and regulatory developments that have the potential to generate additional work or reduce work. In addition, the NRC reviews historical data and trends to measure how execution in previous years lines up with the budget assumptions at the time. The NRC uses that data to inform the future budget and identify areas where the assumptions previously used may have changed. The NRC also relies on communications from stakeholders to identify planned submittals, including letters of intent. In budgeting for large licensing projects, the NRC tries to balance the anticipated resource needs against the relative certainty that an application will be submitted on schedule and the level of complexity.

The NRC's FY 2024 CBJ, published in March 2023, provided the agency's explanation and justification for the resources being requested to allow the agency to complete its mission under the spent fuel storage and transportation and the decommissioning and LLW business lines as pertaining to the spent fuel storage/reactor decommissioning fee class. As explained in the FY 2024 proposed fee rule, the spent fuel storage/reactor decommissioning fee class budgeted resources increased primarily to support the following: (1) an increase in FTEs to support licensing and oversight activities for the reactor decommissioning program, which includes both power and non-power reactors in various stages of decommissioning; and (2) an increase in the fully-costed FTE rate compared to FY 2023 due to an increase in salaries and benefits to support Federal pay raises for NRC employees.

While NRC recognizes the impact of its budgeted resources on the fees for the spent fuel storage/reactor decommissioning facilities subject to 10 CFR part 171 annual fees, the fee class budget is not linearly proportional to the number of facilities in the fee class. Resources are required to develop and maintain the infrastructure independent of the number of facilities in the spent fuel storage/reactor decommissioning fee class. The spent fuel storage and transportation and the decommissioning and LLW business lines must maintain certain minimum requirements to meet the NRC's regulatory and statutory oversight role.

Consistent with NEIMA, when developing the annual fee rule, the NRC considered changes that occurred in the two-year interval between the development of the FY 2024 budget request, which began in FY 2022, and the enactment of the FY 2024 appropriation in March 2024. As part of the development of the annual fee rule, the NRC estimates the amount of 10 CFR part 170 service fees by each fee class by analyzing billing data and the actual cost of work under NRC contracts charged to licensees and applicants for the previous four quarters. The estimate, therefore, reflects any recent changes in the NRC's regulatory activities. The FY 2024 proposed rule utilized four quarters of the prior year invoice data, while the NRC is using a combination of two quarters of the prior year and two quarters of the current year billing data (which is also updated to reflect workload changes) for the FY 2024 final rule.

The commenters also raised concerns regarding the professional charges and that the FY 2024 proposed fee rule does not distinguish between sites that are in active decommissioning or where licensees are moving spent fuel, and those in a SAFSTOR setting that require less oversight. Under NEIMA, the NRC must use its IOAA authority first to collect 10 CFR part 170 service fees for NRC work that provides specific benefits to identifiable recipients, such as licensing activities, inspections, and special projects. In so doing, the NRC establishes a professional hourly rate for its work. To the extent that the NRC's work directly benefits a licensee or applicant, the NRC then collects 10 CFR part 170 user fees from that licensee or applicant. As a result, the spent fuel storage/reactor decommissioning fee class facilities are only paying 10 CFR part 170 fees for work that directly benefits an entity engaged in their specific activities ( i.e., decommissioning licensing and oversight activities, moving spent fuel, and the review of certificate of compliance applications for amendments). With respect to 10 CFR part 170 service fees, the NRC staff time spent on licensing and inspection activities is subject to change, depending on the novelty and complexity of the application under review or the facility being inspected. Because the NRC's fee recovery under the IOAA (10 CFR part 170) will not equal 100 percent of the agency's total budget authority for the fiscal year (less the budget authority for excluded activities), the NRC also assesses annual fees under 10 CFR part 171 to recover the remaining amount necessary to comply with NEIMA.

The NRC believes that the assessment of annual fees from 10 CFR part 50 and 10 CFR part 52 power reactor licensees, and from 10 CFR part 72 licensees that do not hold a 10 CFR part 50 license or a 10 CFR part 52 combined license under spent fuel storage/reactor decommissioning, is fair and equitable to recover NRC costs for generic spent fuel storage and reactor decommissioning activities. This annual fee includes the costs of the NRC's generic and other research activities directly related to reactor decommissioning and spent fuel storage, and other safety, environmental, and safeguards activities related to reactor decommissioning and spent fuel storage, except those activities which are subject 10 CFR part 170 fees. The NRC recognizes that sites will be required to continue to store spent fuel onsite until another solution becomes available. Nonetheless, NEIMA requires the NRC to recover, to the maximum extent practicable, approximately 100 percent of its annual budget less certain amounts excluded from the fee-recovery requirement.

The NRC continues to actively evaluate resource requirements to address changes that occur between budget formulation and execution. The NRC will continue to evaluate programmatic efficiencies and make changes as appropriate.

No changes were made to this final rule in response to these comments.

Several commenters raised issues outside the scope of the FY 2024 fee rule. Commenters raised concerns with the agency's budgeting process and making changes to future budgets, and on the NRC's overall licensing processes. These matters are outside the scope of this final rule. The primary purpose of the rule is to update the NRC's fee schedules to recover approximately 100 percent of the NRC's total budget authority for the current fiscal year, less the budget authority for excluded activities, and to make other necessary corrections or appropriate changes to specific aspects of the NRC's fee regulations to ensure compliance with NEIMA.

The NRC understands the importance of examining and improving the efficiency of its operations and the prioritization of its regulatory activities. Accordingly, the NRC continues to seek improvements and efficiencies in NRC operations and enhancing the agency's approach to regulating while maintaining safety and security.

As required by the Regulatory Flexibility Act of 1980, as amended (RFA), 3 the NRC has prepared a regulatory flexibility analysis related to this final rule. The regulatory flexibility analysis is available as indicated in the “Availability of Documents” section of this document.

Under NEIMA, the NRC is required to recover, to the maximum extent practicable, approximately 100 percent of its annual budget for FY 2024 less the budget authority for excluded activities. The NRC established fee methodology guidelines for 10 CFR part 170 in 1978 and established additional fee methodology guidelines for 10 CFR part 171 in 1986. In subsequent rulemakings, the NRC has adjusted its fees without changing the underlying principles of its fee policy to ensure that the NRC continues to comply with the statutory requirements for cost recovery.

In this final rule, the NRC continues this longstanding approach. Therefore, the NRC did not identify any alternatives to the current fee structure guidelines and did not prepare a regulatory analysis for this final rule.

The NRC has determined that the backfit and issue finality provisions, §§  50.109, “Backfitting”; 52.39, “Finality of early site permit determinations”; 52.63, “Finality of standard design certifications”; 52.83, “Finality of referenced NRC approvals; partial initial decision on site suitability”; 52.98, “Finality of combined licenses; information requests”; 52.145, “Finality of standard design approvals; information requests”; 52.171, “Finality of manufacturing licenses; information requests”; and 70.76, “Backfitting,” do not apply to this final rule and that a backfit analysis is not required because these amendments do not require the modification of, or addition to, (1) systems, structures, components, or the design of a facility; (2) the design approval or manufacturing license for a facility; or (3) the procedures or organization required to design, construct, or operate a facility.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC wrote this document to be consistent with the Plain Writing Act, as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31885).

The NRC has determined that this final rule is the type of action described in § 51.22(c)(1). Therefore, neither an environmental impact statement nor environmental assessment has been prepared for this final rule.

This final rule does not contain any new or amended collections of information subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq. ). Existing collections of information were approved by OMB, approval number 3150-0190.

The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.

This final rule is a rule as defined in the Congressional Review Act of 1996 (5 U.S.C. 801-808). OMB has found it to be a major rule as defined in the Congressional Review Act.

The National Technology Transfer and Advancement Act of 1995, Public Law 104-113, requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. In this final rule, the NRC is amending the licensing, inspection, and annual fees charged to its licensees and applicants, as necessary, to recover, to the maximum extent practicable, approximately 100 percent of its annual budget for FY 2024 less the budget authority for excluded activities, as required by NEIMA. This action does not constitute the establishment of a standard that contains generally applicable requirements.

The Small Business Regulatory Enforcement Fairness Act requires all Federal agencies to prepare a written compliance guide for each rule for which the agency is required by 5 U.S.C. 604 to prepare a regulatory flexibility analysis. The NRC, in compliance with the law, prepared the “Small Entity Compliance Guide” for the FY 2023 fee rule. The compliance guide was developed when the NRC completed the small entity biennial review for FY 2023. The NRC plans to continue to use this compliance guide for FY 2024 and has relabeled the compliance guide to reflect the current FY. This compliance guide is available as indicated in the “Availability of Documents” section of this document.

The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553, the NRC is making the following amendments to 10 CFR parts 2, 15, 37, 73, 110, 140, 170 and 171:

The Delaware River Basin Commission (“DRBC” or “Commission”) is a Federal-interstate compact agency formed by the enactment of concurrent legislation by four states and the United States in 1961  1 to manage the water resources of the Delaware River Basin (the “Basin”) without regard to political boundaries. The Commission's members are, ex officio, the governors of the states of Delaware, New Jersey, New York, and Pennsylvania, and the Division Engineer of the U.S. Army Corps of Engineers North Atlantic Division, who represents the United States.

The Commission's Rules of Practice and Procedure (“RPP”), comprising part 401 of title 18 of the Code of Federal Regulations, govern the adoption and revision of the Commission's Comprehensive Plan and Water Resources Program, exercise of the Commission's authority pursuant to the provisions of Article 3.8 of the Delaware River Basin Compact (the “Compact”), and other actions of the Commission mandated or authorized by the Compact, including but not limited to the administration of public access to records and information in the Commission's possession.

On September 28, 2023, the Commission published a proposed rule (88 FR 66722) to amend the RPP to: resolve ambiguities around the automatic termination of project approvals issued by the Commission and make conforming amendments to related provisions as appropriate; update the Commission's Water Resources Program and Project Review procedures to better conform them to current practice; remove incorrect references to the Federal Freedom of Information Act in the Commission's regulations providing for access to public records; and align pronouns with the Commission's policies regarding diversity, inclusion, and belonging. A notice of the proposed amendments appeared in the Delaware Register of Regulations, 27 Del. Reg. 196, 206, on October 1, 2023, the New Jersey Register, 55 N.J.R. 2179(a), on October 16, 2023, the New York Register, 45 N.Y. Reg. 9, on October 11, 2023, and the Pennsylvania Bulletin, 53 Pa. B. 6698, on October 28, 2023.

Opportunity for public input on the proposed rules was provided during a comment period that ran from September 28, 2023, through November 30, 2023. In addition to soliciting written comments, the Commission accepted oral comment at two hearings conducted via Zoom and telephone. The Commission received a total of 209 public comment submissions, consisting of 199 written submissions and ten oral comments. The submissions typically consisted of a set of comments from a single individual or organization, and they typically addressed more than one aspect or provision of the proposed amendments. In many instances, a single submission included a set of comments by two or more individuals or organizations. Some submissions consisted of petitions or a set of comments with multiple signers. Similar or identical comments were in many instances submitted by individual commenters using form letters or template language provided by others. Commenters were not limited to a single submission, and some commenters offered two or more submissions. The “199” figure represents the number of individual written submissions the Commission received during the comment period without regard to the number of comments within a submission, the number of signers on a single submission, or the number of individuals making a joint submission.

The Commission reviewed all comments and supporting material it received during the comment period. The staff, in consultation with the Commissioners, prepared a Comment and Response Document summarizing the comments on the proposed rule and setting forth the Commission's responses and revisions in detail. By Resolution No. 2024—06 on June 5, 2024, the Commission adopted the Comment and Response Document simultaneously with its adoption of the final rule.

The final rule differs from the proposed in the following respects:

Action on request for extension. The final rule provides that the Commissioners, not the Executive Director, will approve or deny all requests for extended or renewed approval under amended § 401.41(a) and (b), respectively. In conjunction with this change, rather than establishing a prescribed extension term of five years, as originally proposed, the final rule at § 401.41(a) provides for the Commissioners to grant an extension of up to five years.

Eligibility for extension. Under the final rule, to qualify for extension of a docket approval that would otherwise expire under § 401.41, in addition to demonstrating that approved activities, site conditions, and the Comprehensive Plan have not materially changed, the docket holder (project sponsor) will be required to demonstrate that it is diligently pursuing the project, which can be shown through its planning, construction or project operational activities, its project expenditures, its efforts to secure government approvals necessary for the project, or its active participation in appeals of government decisions on its applications for government approvals.

The docket holder will not be required to demonstrate that it has expended a fixed, minimum dollar amount, a proposal to which commenters objected. Nor will the docket holder be obligated to show that it has expended a substantial sum in relation to the project cost, as the rule originally provided, or that it has expended a fixed percentage representing a substantial sum in relation to the total cost of the project, as some commenters proposed. In the Commission's view, those approaches are impracticable where the project costs consist primarily of construction costs, and where the sponsor could not lawfully or reasonably commence construction because all final approvals have not been secured.

Public process. In accordance with the final rule, the Commission will publish notice that it has received a request for a docket extension under § 401.41(a) and provide an opportunity for written comment of at least ten days' length on whether the docket holder has demonstrated all elements requisite for an extension— i.e., that the approved activities, site conditions, and Comprehensive Plan have not materially changed, and that the project sponsor has diligently pursued the project in reliance on the Commission's approval. The project sponsor will be afforded an opportunity to respond to the comments received but will not be obligated to do so. The Commission will provide notice at least ten days prior to the date of a business meeting at which the Commissioners consider action on a request pursuant to § 401.41(a).

Public hearing. The final rule provides that a public hearing on a request for a docket extension under § 401.41(a) will be held if three or more Commission members request such a hearing in writing to the Executive Director or by vote at a public meeting.

Administrative continuance. Under the final rule, a docket that is the subject of a request for extension under § 401.41(a) filed at least 90 days before the docket's expiration will be administratively continued pending final Commission action on the request in the event that such action occurs after the otherwise effective date of termination.

Construction complete. The final rule clarifies that if the activities authorized by the Commission's docket are limited to construction activities, an extension in accordance with § 401.41(a) is no longer required once construction is complete. Because some dockets issued for construction activities impose ongoing obligations on docket holders, the final rule further clarifies that the expiration of the docket, including any approved extension, does not eliminate ongoing docket obligations expressly identified as such in the docket approval.

Language of final § 401.41(b). The final language adopted for § 401.41(b) has been modified from the originally proposed language to more accurately reflect that the burden is on the docket holder to demonstrate eligibility for an extension under § 401.41(a).

Process for re-application. Under the final rule, if a request for extension under § 401.41(a) is denied, and the project sponsor wishes to apply for renewal of its docket approval under paragraph (b), the project sponsor must do so by a date to be established by the Commission. In this situation, the docket approval is not thereafter administratively continued automatically. However, the Commission may, in its discretion, administratively extend the docket approval in whole or in part for a period ending on or before the date on which the Commission renders a final decision on the sponsor's renewal application.

On October 8, 1987, the Commission redesignated portions of the Rules of Practice and Procedure (52 FR 37602). The final rule that contained the redesignation inadvertently failed to update certain cross-references affected by the redesignation. This final rule corrects those cross-references. The affected provisions are 18 CFR 401.108(c), 401.109(a), (d), and (e), 401.113, and 401.115(b).

Additional materials can be found on the Commission's website at: https://www.nj.gov/drbc/about/regulations/finalrule_RPPamendments.html. These include links to Resolution No. 2024—06 of June 5, 2024 adopting the final rule and incorporating a clean copy of the rule text; the Commission's Comment and Response Document; a mark-up comparing the final to the proposed rule text; a mark-up comparing the final to the former rule text; and copies of the comments received.

The Commission's notice of proposed rulemaking and proposed rule text can be found on the Commission's website at: https://www.nj.gov/drbc/meetings/proposed/notice_RPP_amendments.html.

For the reasons set forth in the preamble, the Delaware River Basin Commission amends 18 CFR chapter III as follows:

The comment period for our January 2024 proposal closed on February 26, 2024. We received relevant comments during the comment period from eight sources: CPS Energy; Earthjustice—on behalf of Air Alliance Houston, Texas Environmental Justice Advocacy Services, and Sierra Club; Office of the Harris County Attorney; Texas Chemistry Council; TCEQ; Texas Oil & Gas Association; Texas Pipeline Association; and a member of the public. These comments are available for review in the docket for this rulemaking. Our responses to the comments are provided in Section II of this rulemaking.

Comment: Commenters state that the EPA has no discretion to deny the reclassification request and the EPA should have issued a direct final approval granting the reclassification request.

Response: The EPA is granting the request to reclassify the San Antonio, DFW, and HGB nonattainment areas from Moderate to Serious for the 2015 ozone NAAQS, but we disagree that a direct final action is appropriate in this circumstance for several reasons. First, our January 2024 proposal proposed to determine that the EPA's October 2023 findings with respect to the Texas SIP revisions for the demonstration of attainment by the prior attainment date, the RACM analysis tied to the prior attainment date, and contingency measures specifically related to the area's failure to attain by the prior attainment date for the Moderate classification are now moot, and that the associated deadlines triggered by the October 2023 findings for imposition of sanctions or promulgation of a Federal Implementation Plan (FIP) no longer apply with respect to these three elements. Second, our January 2024 proposal requested comments on deadlines proposed for SIP submission and for implementation of certain CAA requirements, which we are required to establish pursuant to CAA section 182(i). Thus, the proposal provides the public an opportunity to review and comment upon the proposed actions and deadlines. Finally, we disagree that a direct final action is a required vehicle to grant the voluntary reclassification request. CAA section 181(b)(3) provides that the EPA “shall publish a notice in the Federal Register of any such request and of action by the Administrator granting the request” but does not dictate the form of such Federal Register action. Our action here is consistent with section 181(b)(3) and with a prior action granting the Texas Governor's request to reclassify the HGB area from Moderate to Severe for the 1997 ozone NAAQS, where we did not issue a direct final action but instead, used the same notice-and-comment format as we have here. 5

Comment: The Office of the Harris County Attorney asks that EPA provide guidance on how it interprets CAA section 181(b)(3) in the event a governor requests a reclassification after a missed SIP deadline. The commenter contends that the Governor's reclassification request and the reasoning behind it is contrary to the intent of the CAA, which is not to protect industry and economy but the people living and breathing in Texas. The commenter states that the January 2024 proposal, if finalized, would give Texas several years to complete certain SIP requirements, and EPA has found some requirements pertaining to the prior attainment date to now be moot. The commenter states that this sets a precedent which may further delay ozone improvements, in contravention to the intent of the CAA. The commenter suggests clarifications on which requirements would be moot, deadlines, and other issues addressed in the January 2024 proposal would be helpful for both stakeholders and states when contemplating the consequences of such an action.

Response: CAA section 181(b)(3) does not require states to provide a reason for their request for a voluntary reclassification, nor does it condition EPA's action on the request on such reasoning. Consistent with 40 CFR 51.1303(b), “[a] state may request, and the Administrator must approve, a higher classification for an area for any reason in accordance with CAA section 181(b)(3).”  6 Reclassification is a legitimate method provided by the CAA to address the circumstances of the San Antonio, DFW, and HGB areas—as illustrated by the TCEQ's proposed Moderate attainment demonstration SIP revisions for these areas that indicated, based on the TCEQ's modeling and available data, these three areas were not expected to attain the 2015 ozone NAAQS by their 2024 attainment dates. 7

We disagree that approving the request to reclassify the area from Moderate to Serious would delay implementation of the CAA SIP requirements in a manner inconsistent with the CAA. The commenter did not describe which ozone improvements would be delayed. Our January 2024 proposal did not propose delays for the Moderate or Serious area SIP submissions. As mentioned in our January 2024 proposal, upon reclassification, stationary air pollution sources in the San Antonio, DFW, and HGB ozone nonattainment areas will be subject to Serious ozone nonattainment area NSR and Title V permit requirements. The source applicability thresholds for major sources and major source modification emissions will be 50 tons per year (tpy) for volatile organic compounds (VOC) and oxides of nitrogen (NO X ). For new and modified major stationary sources subject to review under Texas Administrative Code Title 30, Chapter 116, Section 116.150 (30 TAC 116.150) in the EPA approved SIP, 8 VOC and NO X emission increases from the proposed construction of new or modified major stationary sources must be offset by emission reductions by a minimum offset ratio of 1.20 to 1 (see CAA section 182(c)(10)). We note that the DFW and HGB areas are classified as Severe under the 2008 ozone NAAQS and thus, the more stringent Severe area requirements are currently being implemented—and will continue to be implemented—in those areas. 9 Our January 2024 proposal listed the remaining Moderate area SIP requirements that continue to be required after these areas are reclassified as Serious, which are: (1) a 15 percent rate-of-progress (ROP) plan (40 CFR 51.1310), (2) contingency measures for failure to achieve RFP, including the 15 percent ROP requirement for Moderate areas (CAA sections 172(c)(9) and 182(c)(9)), (3) a RACT demonstration (40 CFR 51.1312), (4) Nonattainment New Source Review (NNSR) rules (40 CFR 51.165), and (5) a Basic I/M program (CAA section 182(b)(4) and 40 CFR 51 subpart S). Because these SIP requirements are not dependent upon the Moderate attainment date itself, voluntary reclassification does not change the submission requirement or implementation deadlines for these SIP elements that were due January 1, 2023, for the Moderate classification for the San Antonio, DFW, and HGB areas. Reclassifying the areas as Serious in response to a reclassification request does not result in an attainment date that is any later than the attainment date that would have applied had the area been initially classified as Serious, and the Serious requirements that depend on that date are all still applicable.

We disagree that approving the request to reclassify the area from Moderate to Serious would set a precedent that may further delay ozone improvements, as suggested by the commenter. We note that our approval of the prior Texas Governor's request to reclassify the HGB area from Moderate to Severe for the 1997 ozone NAAQS provided that once reclassified, the area would no longer be required to submit an attainment demonstration for the prior classification. 10 In our January 2024 proposal, we explained that once reclassified as Serious, these three areas have a new statutory attainment deadline, so certain SIP elements (in this case, specifically, the Moderate area attainment demonstration and the associated RACM and contingency measures for failure to attain) that are dependent on the Moderate attainment deadline are no longer applicable or required for the lower, superseded (in this case, Moderate) classification. None of the remaining SIP requirements for the Moderate classification and none of the SIP requirements for the Serious classification were proposed as moot or delayed in our January 2024 proposal. We also note that for the prior voluntary reclassification of the HGB area from Moderate to Severe for the 1997 ozone NAAQS, the HGB area was able to attain the 1997 ozone NAAQS by the end of 2014, significantly ahead of the area's June 15, 2019, attainment date. 11

We elaborate on the Serious SIP submission and implementation deadlines in our responses to the comments that follow.

Comment: Commenters agree with EPA's determination that the attainment demonstration, RACM, and contingency measure elements for failure to attain for the Moderate level classification would no longer be due upon reclassification as Serious and that EPA's October 2023 findings should be mooted for these elements.

Response: The EPA appreciates these comments.

Comment: The commenter states that the EPA repeatedly reassured the TCEQ that voluntary reclassification would provide an extended timeframe to meet the CAA deadlines. The commenter states that the January 2024 proposal is inconsistent with those representations as the January 2024 proposal continues to hold Texas to the Moderate nonattainment area deadlines.

Response: We disagree that a voluntary reclassification provides the EPA with authority to extend existing deadlines associated with a prior nonattainment classification. The Moderate nonattainment SIP submission deadlines were established when the areas were reclassified from Marginal to Moderate and the TCEQ did not challenge the deadlines in that final action. 12 We note that the period of time between the effective date of reclassification and the area's attainment date could be greater for an area requesting a voluntary reclassification, since the effective date of reclassification would presumably occur earlier than for an area mandatorily reclassified following a Finding of Failure to Attain. 13 Thus, reclassification can have the practical effect of providing more time to develop and implement plans to meet an area's attainment date.

Our January 2024 proposal proposes to moot only the Moderate area attainment demonstration and associated RACM demonstration and contingency measures specifically tied to the Moderate attainment date. The remaining Moderate nonattainment SIP elements continue to be required and their associated deadlines are not otherwise altered.

Comment: Commenters state that the CAA is explicit that a state has authority to request voluntary reclassification, and therefore to moot all elements required under the prior classification. Commenters state that voluntary reclassification allows the state to delay elements required under the prior classification, because the purpose of the reclassification is to permit states to develop and implement the most effective collection of measures associated with the required elements to attain the NAAQS. Commenters state that CAA section 181(b)(3) affects the CAA's other provisions that are key to reclassification. Commenters state that when a state exercises its authority under CAA section 181(b)(3), the voluntary reclassification works on the CAA's other components and abrogates the need for submittals associated with the lower classification.

Response: The EPA disagrees. Commenters assert that voluntary reclassification to a higher classification exempts a state from needing to make a submittal for any SIP elements addressing the lower classification, but this assertion is inconsistent with the plain language of the statute. Specifically, CAA section 182(c) states that “each State in which all or part of a Serious Area is located shall, with respect to the Serious Area . . . make the submissions described under subsection (b) of this section (relating to Moderate Areas) and shall also submit the revisions to the applicable implementation plan (including the plan items) described under this subsection.” Thus, the CAA clearly requires that Serious areas meet Moderate area requirements in addition to Serious area requirements ( see CAA section 182(c)). These Moderate area requirements apply to areas initially classified as Serious as well as areas reclassified as Serious, whether their reclassification as Serious is mandatory as a result of failure to attain or is voluntary in response to a reclassification request. The CAA does not otherwise provide for delaying Moderate area requirement deadlines beyond their prescribed timeframes, regardless of how the area came to become classified as Serious. What the voluntary reclassification does provide is additional lead time before the attainment date, as compared to a mandatory reclassification, for the state to adopt and implement such measures as necessary to attain while recognizing that the CAA requires that reasonable further progress as required for Moderate areas must still be achieved.

Our approach here is consistent with past actions to grant voluntary reclassifications. When Texas previously requested a voluntary reclassification for the HGB area from Moderate to Severe under the 1997 ozone NAAQS, we stated that, “Texas has a continuing responsibility for certain elements of the Moderate area requirements. EPA has stated that reclassification does not provide a basis for extending submission deadlines for SIP elements unrelated to the attainment demonstration that were due for the area's Moderate classification.”  14 With the exception of the Moderate area attainment demonstration and the associated RACM demonstration and contingency measures for failure to attain by the Moderate attainment date, the TCEQ has not been relieved of its obligation to comply with SIP submission deadlines for the Moderate area requirements.

Comment: Commenters disagree with EPA's assertion that RFP requirements are not tied to the attainment date and therefore cannot be mooted for the Moderate classification upon reclassification as Serious. Commenters state that EPA's assertion that RFP requirements are not tied to the attainment date runs counter to plain language in CAA section 182(b)(1)(A), which states: “Such plan shall provide for such specific annual reductions in emissions of volatile organic compounds [VOC] and oxides of nitrogen [NO X ] as necessary to attain the national primary ambient air quality standard for ozone by the attainment date applicable under this chapter” [emphasis added by commenters]; as well as CAA section 182(c)(2)(B), which states: “A demonstration that the plan, as revised, will result in VOC emissions reductions from the baseline emissions . . . until the attainment date ” [emphasis added by commenters]. Commenters state that while an RFP SIP revision is not designed to demonstrate attainment, the timing of the emissions reduction targets for the Moderate RFP demonstration are based on the attainment deadline for that Moderate classification, and the Moderate RFP contingency measures would be required if an area fails to meet those RFP targets that are based on the Moderate attainment deadline. Commenters state that EPA's argument for superseding the attainment demonstration and RACM requirements is that “EPA interprets the CAA such that following reclassification, any required attainment demonstration and associated RACM analysis must be done with respect to the new and current applicable attainment date.” Commenters state that this interpretation should also apply to RFP as a new demonstration would be required with targets based on the Serious classification attainment date. Commenters add that the targets based on the Moderate attainment date would also be demonstrated within the Serious classification RFP SIP revision using the most recent emissions development methods ( e.g., MOVES4); therefore, eliminating the need for the Moderate classification RFP submittal.

Response: Commenters' assertions that RFP is tied to the attainment date as they suggest is inconsistent with the RFP requirements established in the implementing regulations for the 2015 ozone NAAQS which are based on a long-held EPA interpretation of RFP for ozone nonattainment areas. As commenters note, Moderate and higher ozone nonattainment areas are subject to the general requirements for nonattainment plans in CAA subpart 1 and the specific requirements for ozone areas in CAA subpart 2, including the requirements related to RFP and attainment. This is consistent with the structure of the CAA as modified under the 1990 amendments, which introduced additional subparts to part D of title I of the CAA to address requirements for specific NAAQS pollutants, including ozone (subpart 2), carbon monoxide (subpart 3), particulate matter (subpart 4), and sulfur oxides, nitrogen dioxide, and lead (subpart 5).

These subparts apply tailored requirements for these pollutants, including those based on an area's designation and classification, in addition to and often in place of the generally applicable provisions retained in subpart 1. While CAA section 172(c)(2) of subpart 1 states only that nonattainment plans “shall require reasonable further progress,” CAA sections 182(b)(1) and 182(c)(2)(B) of subpart 2 provide specific percent reduction targets for ozone nonattainment areas to meet the RFP requirement. Put another way, subpart 2 defines RFP for ozone nonattainment areas by specifying the incremental amount of emissions reduction required by set dates for those areas. 15 For Moderate ozone nonattainment areas, CAA section 182(b)(1) defines RFP by setting a specific 15 percent VOC reduction requirement over the first six years of the plan. The 15 percent reduction is “the base program that all moderate and above areas must meet. This base program is necessary to ensure actual progress toward attainment in the face of uncertainties inherent with SIP planning.”  16

For Serious or higher ozone nonattainment areas, the 15 percent requirement still applies, and section 182(c)(2)(B) further requires specific annual percent reductions for the period following the first six-year period and allows averaging over a three-year period. With respect to the 1-hour ozone NAAQS, the EPA stated that, by meeting the specific percent reduction requirements in CAA sections 182(b)(1) and 182(c)(2)(B), the state will also satisfy the general RFP requirements of section 172(c)(2) for the time period discussed. 17

The EPA has adapted the RFP requirements under the CAA to implement the three 8-hour ozone NAAQS that have been promulgated since the 1990 CAA Amendments. In the “Phase 2” SIP Requirements Rule for the 1997 Ozone NAAQS (Phase 2 rule), 18 the EPA adapted the RFP requirements of CAA sections 172(c)(2) and 182(b)(1) to require plans to provide for the minimum required percent reductions and, for certain Moderate areas, to provide for the reductions as necessary for attainment. See, e.g., 40 CFR 51.910(a)(1)(ii)(A) and (b)(2)(ii)(C).

In 2015, the EPA replaced the regulations promulgated through the Phase 2 rule with the regulations promulgated through the 2008 Ozone SIP Requirements Rule (SRR). 19 In the 2008 Ozone SRR, the EPA established RFP requirements for the 2008 ozone NAAQS that are similar, in most respects, to those in the Phase 2 rule for the 1997 ozone NAAQS but that do not define RFP for certain Moderate areas in terms of the reductions needed for attainment. 20 More explicitly, in the 2008 Ozone SRR, the EPA defined RFP as meaning both the “emissions reductions required under CAA section 172(c)(2) which the EPA interprets to be an average 3 percent per year emissions reductions of either VOC or NO X and CAA sections 182(c)(2)(B) and (c)(2)(C) and the 15 percent reductions over the first six years of the plan and the following three percent per year average under 40 CFR 51.1110.”  21 Thus, under the 2008 Ozone SRR, the RFP emissions reductions required for Serious or higher ozone nonattainment areas under CAA section 172(c)(2) are based on a set annual percentage found in the CAA, not on the specific attainment needs for the area. In this regard, EPA has been even more explicit in our SRR for the 2015 ozone NAAQS:  22 “Reasonable further progress (RFP) means the emissions reductions required under CAA sections 172(c)(2), 182(c)(2)(B), 182(c)(2)(C), and 40 CFR 51.1310. The EPA interprets RFP under CAA section 172(c)(2) to be an average 3 percent per year emissions reduction of either VOC or NO X.”   23

In the SRR for the 2015 Ozone NAAQS, which is the set of regulations that governs the EPA's action here, RFP is defined in terms of percent reduction from the area's emissions in the baseline year, not in terms of the reductions necessary for attainment. In other words, for the 2015 ozone NAAQS, the requirement to demonstrate RFP is independent of the requirement to demonstrate attainment by the attainment date. RFP for the 2015 ozone NAAQS represents the minimum progress that is required under the CAA, and our regulations, and does not necessarily need to provide for the reductions necessary to achieve attainment of the ozone NAAQS by the attainment date, which could vary largely from one nonattainment area to another. For all of these reasons, EPA disagrees with commenter's claim that RFP should be treated the same as the Moderate area attainment demonstration, RACM, and contingency measures for failure to attain. EPA's explanation for why those three particular SIP elements are no longer required following a voluntary reclassification does not apply to the Moderate area RFP SIP element. Unlike the other three SIP elements, RFP is not “tied to the applicable attainment deadline” as explained above.

Moreover, the SRR for the 2015 ozone NAAQS lists RFP and ROP as distinct provisions for implementation. See 40 CFR 51.1300(l), 51.1300(m), 51.1310(a)(2)(i) and 51.1310(a)(4)(i). These provisions clearly demonstrate the necessity for RFP reductions during the first 6 years of the plan, regardless of the area's initial classification, or whether it was Moderate before reclassifying as Serious, whether voluntarily, or mandatorily. EPA therefore disagrees with the commenter's implicit suggestion that the Moderate area RFP SIP submittal should be delayed until submitted within the Serious area RFP SIP submittal, as that would further delay submission of the Moderate RFP plans, which are addressed in our October 2023 findings. The Moderate RFP SIP submittal was due to EPA on January 1, 2023, and the State will also be required to provide an RFP SIP submittal for the Serious classification by January 1, 2026. Considering the reasoning above explaining that the State is still required to provide an RFP demonstration for the Moderate classification, and the undisputed fact that the area is required to demonstrate RFP for this time period, the EPA is not convinced by the commenter that further delay of the RFP demonstration is warranted.

Comment: Commenters state that the EPA's proposal to require Texas to continue to meet Moderate RFP and contingency measure obligations does not align with EPA's rationale in its Clean Data Policy (40 CFR 51.1318), which provides that elements related to the attainment date, including RFP and contingency measure obligations, are eligible for suspension if the area is meeting the NAAQS. Commenters state that the EPA has not identified a rationale for treating the nature of these elements differently in the context of voluntary reclassification.

Response: Commenters misunderstand the purpose of the Clean Data Policy, which states, “[u]pon a determination by the EPA that an area designated nonattainment for a specific ozone NAAQS has attained that NAAQS, the requirements for such area to submit attainment demonstrations and associated RACM, RFP plans, contingency measures for failure to attain or make reasonable progress, and other planning SIPs related to attainment of the ozone NAAQS for which the determination has been made, shall be suspended until such time as the area is redesignated to attainment for that NAAQS, at which time the requirements no longer apply; or the EPA determines that the area has violated that NAAQS, at which time the area is again required to submit such plans.” (40 CFR 51.1318). The rationale for treatment of RFP in the Clean Data Policy is different from the rationale used here for reclassification. While the Clean Data Policy is reasonably based on the fact that an area that is attaining the NAAQS need not make further progress toward attainment in the form of RFP reductions, it does not follow that an area that is not attaining the NAAQS would be relieved of the need to make CAA-mandated progress toward attainment as a result of it being reclassified and given a later attainment date.

The DFW, HGB, and San Antonio areas currently are not meeting the 2015 ozone NAAQS, and thus the Clean Data Policy does not apply here. Moreover, as areas not meeting the standard, these areas must continue achieving emission reduction progress as required by the CAA and EPA's regulations.

Comment: A commenter disagrees that RACT requirements are not tied to the attainment date and therefore cannot be mooted for the Moderate classification upon reclassification as Serious. Commenters cite to CAA section 182(b)(2)(A) that states must consider each category of VOC sources in the area covered by a control techniques guideline (CTG) document issued by the Administrator between November 15, 1990, and the date of attainment, and thus the statutory connection of the RACT review to the attainment date is clear. Commenters state that the EPA clearly bases RACT requirements on the attainment deadline for an area's classification as evidenced by this action in which EPA is proposing RACT implementation deadlines based on the timing required to influence attainment of the standard by the attainment date. Commenters state that the RACT connection to the attainment date is also evident through the connection with the classification level itself, as the RACT analysis is grounded in the review of the applicable major stationary source threshold. Commenters state that the reclassification as Serious would result in more stringent application of RACT requirements to the nonattainment areas under a major source threshold of 50 tpy, which would capture major sources under the 100 tpy Moderate classification threshold, thus eliminating the need for a submittal to address Moderate classification RACT.

Response: The EPA disagrees. For reclassified areas, the RACT requirements at 40 CFR 51.1312(a)(2)(ii) and (3)(ii) obligate a state to conduct a new, individual RACT analysis for the new classification and implement any identified measures as necessary. Reclassification does not relieve the RACT obligation for the prior classification. As stated in our January 2024 proposal, the CAA requirement in section 182(b)(2) to implement RACT for specified categories of sources is implemented and assessed based on whether the RACT rules are implementing what is economically and technologically feasible and is not based on reductions needed to attain by the attainment deadline (89 FR at 5147).

We disagree that CAA section 182(b)(2)(A) provides a statutory connection of RACT to the attainment date. Section 182(b)(2)(A) states that RACT requirements apply to each category of sources covered by a CTG document issued by the Administrator between November 15, 1990, “and the date of attainment.” This language establishes the sources covered by the RACT analysis that a Moderate or higher area must consider. The reference to the attainment date sets an outer bound of what CTGs will define the categories of sources that fall under the Moderate RACT requirement. It does not tie the substantive RACT analysis, and the level of controls required by application of RACT, to the attainment date.

We also disagree that the stationary source threshold set by the classification level evidences a connection between RACT and the attainment date. Just as 182(b)(2)(A) defines the categories of sources that need to be covered by a RACT assessment so too the stationary source threshold associated with a classification level defines the sources that need to be covered in the state's RACT assessment. The stationary source threshold establishes the emission levels where RACT would be applied but does not define the substance or content of the RACT analysis. In this case, the prior Moderate classification required evaluation of any sources in any category subject to a CTG and any non-CTG sources with a potential to emit more than 100 tpy of NOx or VOCs. The commenter is correct in that the new Serious classification means the State needs to address RACT for additional sources, namely non-CTG sources with a potential to emit 50 tpy or more of NOx. But the commenter has failed to explain why this fact, that RACT must be analyzed and implemented for additional smaller sources, should result in delayed submission and implementation of RACT on the original set of sources covered by the Moderate classification. If EPA were to go with such an interpretation, it would delay the requirement in this instance for Texas to submit a SIP addressing the RACT obligation from January 1, 2023, to January 1, 2026, in an area that is not attaining the 2015 ozone NAAQS. This would lead to a three-year delay in required controls in areas that have air quality that exceeds levels protective of human health and the environment. The commenter has not identified any language in the CAA that necessitates or even supports such a result.

Finally, the commenters point to the fact that EPA has based RACT implementation deadlines on the timing required to influence attainment of the standard by the attainment date. This is a correct characterization of EPA's action, but also does not inevitably lead to an interpretation that required SIP revisions and RACT implementation should be delayed by three years following an area's reclassification. As explained at proposal and elsewhere in this action, the substantive analysis required in a RACT SIP, namely the implementation of controls that are economically and technologically feasible, does not hinge on what level of control is needed for the area's attainment by the attainment date (this is in contrast to, e.g., the analysis required for RACM). A state's RACT SIP should be based on, and EPA will review it for, imposition of reasonably available control technology, even if that imposition of reasonably available control technology is not nearly enough to get the area to attainment by the attainment date. At the same time, it is also true that implementation of RACT-level control should aid, at least in part, in getting an area to attainment by the attainment date. It defies logic to have an area's attainment date be in 2027, but for EPA to require a SIP revision requiring RACT level controls not due until 2028. Accordingly, both of these things can be true: that RACT is not a requirement directly tied to attainment while also requiring that RACT SIPs be due and RACT-level controls be implemented in time to matter for the overall efforts to get an area to attainment.

Comment: Commenters state that while vehicle I/M and nonattainment new source review (NNSR) elements are not explicitly tied to the attainment date for a classification, as with the other elements, the Serious classification would supersede these requirements with more stringent requirements. Commenters repeat that the evident legislative goal of the CAA, Part D, Subpart 2 requirements for the ozone NAAQS clearly indicate that reclassification to more stringent requirements subsume the less stringent requirements. Commenters add that in cases where elements are often satisfied with the submittal of certification statements noting that the requirements have already been addressed, commonly used for addressing I/M and NNSR requirements, it is illogical to hold areas under a finding of failure to submit for elements that have already been submitted and approved under previous classifications or standards. Commenters state that submittal of a certification statement is not legally necessary for EPA to know that an element, upon which EPA has already acted and approved, has been addressed, as EPA's SIP approval actions legally stand on their own merit. Commenters state that EPA's treatment of those elements as “not submitted” is legally insufficient to support a finding of failure to submit that results in sanctions and FIP clocks. Commenters add that the infrastructure SIP submittal requirements for each NAAQS already provide certification from the state that existing regulations are adequate to meet the applicable nonattainment area planning requirements.

Response: The EPA disagrees. Our January 2024 proposal did not propose to relieve the Basic I/M and Moderate NNSR requirements for the DFW, HGB, and San Antonio Moderate nonattainment areas. The Moderate nonattainment SIP submission deadlines, including the Basic I/M and Moderate NNSR requirements for the DFW, HGB, and San Antonio nonattainment areas, were established when the areas were reclassified from Marginal to Moderate and those deadlines were not challenged. 24 Our January 2024 proposal only proposed to relieve the Moderate area attainment demonstration and associated RACM demonstration and contingency measures specifically tied to the Moderate attainment date. The remaining Moderate nonattainment plan SIP deadlines, including I/M and NNSR, are not otherwise altered. We do not believe that the specific control requirements of the prior classification can or should be relieved because an area has been reclassified. More stringent NNSR and I/M are required because the area is subject to Serious requirements and in this final action, EPA is establishing submission and implementation deadlines for these new requirements but not relieving the requirements that should be implemented on the schedule set in the reclassification from Marginal to Moderate.

While our October 2023 findings are outside the scope of this action, the EPA disagrees that SIP certification statements triggered by a reclassification are redundant and already accomplished through other SIP processes, including approved SIP submissions under prior classifications or NAAQS. We continue to interpret the specific nonattainment planning requirements of CAA section 182 to require a state to provide a SIP submission to meet each nonattainment area planning requirement for a revised ozone NAAQS. 25 To the extent that commenters suggest the EPA should adopt a general presumption of adequacy for previously approved SIP elements, we disagree. The submission of individual nonattainment SIP elements for purposes of a reclassified area provides the public and the EPA an opportunity to review and comment upon each element of a nonattainment SIP. If the air agency reviews an existing SIP element and concludes it does not need to be revised in light of the reclassification, submission of a certification SIP allows the public to review the air agency's assessment and provide comment on any changes they may think necessary. The EPA then also has an opportunity to review the air agency's assessment and ensure that it is consistent with CAA requirements in relation to the reclassified area. The certification statement option is intended to streamline the SIP submission process, providing air agencies with the flexibility to address multiple SIP elements in a single certification statement, and combine the SIP certification action with other actions subject to public notice and comment. The EPA does not believe that developing and submitting certification SIP elements will be a significant and unnecessary drain on state resources. We also note with regard to the I/M programs, as discussed in 40 CFR 51 Subpart S, the vehicle fleet can change and impact whether the program continues to meet the required performance standard.

We disagree that the Texas infrastructure SIP submittal provides certification that existing regulations are adequate to meet the applicable nonattainment area planning requirements (CAA section 110(a)(2)(I)). The Texas infrastructure submittal for the 2015 ozone NAAQS did not address CAA section 110(a)(2)(I). 26 The infrastructure SIP submission is triggered by a NAAQS revision and provides the public and the EPA an opportunity to review the basic structure of a state's air quality management program. It is not intended—nor can it be presumed—to address the adequacy of individual nonattainment SIP elements for purposes of the revised NAAQS.

Comment: Commenters state that the EPA's January 2024 proposal notes that “changing the submission requirement or implementation deadlines for these [Moderate attainment area] elements would delay the implementation of these measures beyond what the CAA intended.” Commenters claim however that, like the attainment demonstration and RACM, all Moderate classification requirements would be superseded with more stringent requirements under the Serious classification, which eliminates the need for submittals to cover less stringent requirements with deadlines that have already passed to meet attainment dates that would no longer apply. Commenters state that the EPA must give legal effect to all parts of the statute—not just the parts it prefers. Commenters state that requiring the state to submit and have EPA act on these superseded Moderate classification elements would make no logical or practical sense.

Response: The EPA disagrees. As noted in our January 2024 proposal, the attainment demonstration with respect to the Moderate attainment date, the RACM analysis with respect to the Moderate attainment date, and contingency measures for failure to attain by the Moderate attainment date are all dependent on the Moderate attainment date. Once voluntarily reclassified, the area no longer has a Moderate attainment date. However, the other Moderate area requirements remain in place, even as the state works to implement the requirements of the higher classification. The Moderate nonattainment SIP submission deadlines, including the requirements for the DFW, HGB, and San Antonio Moderate areas, were established when the areas were reclassified from Marginal to Moderate—those deadlines were not challenged and they stand as finalized. 27 As noted earlier, comments addressing the Moderate nonattainment area submissions, with the exception of the Moderate attainment demonstration and the associated RACM and contingency measures for failure to attain by the Moderate attainment date, are outside the scope of this action.

While the EPA agrees that it must give legal effect to all parts of the statute, the CAA requirements for nonattainment areas are cumulative, adding more stringent requirements with each higher classification and building on the requirements of the lower classifications, and the EPA disagrees that this building of requirements always results in the lower classification requirements being superseded. As noted earlier, pursuant to CAA section 182(c), “each State in which all or part of a Serious Area is located shall, with respect to the Serious Area . . . make the submissions described under subsection (b) of this section (relating to Moderate Areas) and shall also submit the revisions to the applicable implementation plan (including the plan items) described under this subsection.” Except for elements specifically related to the attainment date, which are superseded by a voluntary reclassification, the higher classification requirements are added to the lower classification requirements. For example, although the Serious area major source threshold is more stringent than it is for a Moderate area, this does not supersede the NSR requirements for any source covered under the Moderate threshold. Instead, NSR requirements for smaller sources under the Serious threshold are in addition to those for sources covered under the Moderate threshold.

Our approach here is consistent with past actions to grant voluntary reclassifications. When Texas previously requested a voluntary reclassification for the HGB area from Moderate to Severe under the 1997 ozone NAAQS, we noted that, “Texas has a continuing responsibility for certain elements of the Moderate area requirements. EPA has stated that reclassification does not provide a basis for extending submission deadlines for SIP elements unrelated to the attainment demonstration that were due for the area's Moderate classification.”  28 We subsequently approved the HGB RFP for the Moderate nonattainment area for the 1997 ozone NAAQS. 29 We maintain that Texas has not been released from its CAA obligations to comply with SIP submission deadlines for other Moderate area requirements not related to the attainment demonstration.

Comment: The commenter states that, as an alternative to all Moderate classification requirements being mooted, the Moderate classification RFP contingency measure element could be mooted for areas where RFP targets have been met and requests clarification on how to demonstrate this element is no longer required. The commenter also cites 85 FR 40026, a proposed reclassification action in which EPA proposed to determine that contingency measures for RFP were no longer necessary for the prior Moderate classification nonattainment plan because the state had adequately demonstrated that the applicable quantitative milestones under the Moderate plan had been met. 30 The commenter states that if it can demonstrate that the RFP targets have been met for the San Antonio, DFW, and HGB Moderate nonattainment areas, the requirement to submit RFP contingency measures would be unnecessary. The commenter states that since the milestone compliance demonstration is not required for the Moderate areas, the TCEQ requests clarification regarding the appropriate mechanism to demonstrate that the Moderate RFP targets have been met.

Response: The EPA acknowledges that in certain unideal situations, where the state has demonstrated that an RFP milestone has actually been met and where EPA has determined that demonstration to be adequate, the question of whether the state has adequate contingency measures for failure to meet RFP with respect to that milestone can be moot. This situation is unideal because the CAA is not designed to operate this way with respect to timing, and these situations typically arise because the state is overdue for submitting approvable contingency measures. Under normal CAA timelines, the contingency measures submittal and EPA approval should occur before the RFP milestone arrives so that the contingency measures could be triggered if the area failed to meet RFP. States should not delay submittal of required contingency submittals in the hopes that they may become moot at a later time. Such an approach contravenes the statutory timelines established by the CAA, and the intent of the contingency measures requirement. If this situation arises and the RFP milestone is not met, the CAA requires implementation of contingency measures without further action by the state or EPA. That requirement cannot be met on time if the contingency measures submittal is delayed.

For these reasons, EPA made a finding of failure to submit for contingency measures triggered by failure to meet RFP for the Moderate ozone nonattainment areas at issue here (and other elements) in October 2023. That finding started sanctions and FIP clocks that are still running because these (and other elements) are still outstanding. With this voluntary reclassification, EPA also urges the timely submittal of all required elements for the Serious classification, including contingency measures for all Serious RFP milestones and for failure to attain by the Serious area attainment date.

Under unusual circumstances in which EPA determines the Moderate area RFP reduction target was met before the state makes its overdue submittal to satisfy the requirement for Moderate contingency measures for failure to meet RFP, the EPA believes that no submittal of contingency measures for Moderate area RFP would be necessary. We acknowledge the EPA took a similar position within a PM 2.5 action cited by the commenter and believe the same logic could apply here.

This situation is also somewhat similar to EPA's prior disapproval of contingency measures in Texas for the 2008 Ozone NAAQS where we stated that, “EPA agrees with TCEQ that there is no longer a need for contingency measures triggered by failure to meet RFP for the DFW and HGB Serious nonattainment plan for purposes of the 2008 8-hour ozone NAAQS, because these areas met RFP for this specific classification. However, contingency measures are still required for the failure to attain (and indeed, noting the fact that areas failed to attain, should already have taken effect).”  31 There, the contingency measures were not needed for failure to meet RFP because EPA had previously determined that the area had met RFP, but contingency measures were still needed for failure to attain. But here, as explained previously, with this voluntary reclassification there will be no possibility of failure to attain by the Moderate area attainment date, and so the voluntary reclassification negates the need for contingency measures for failure to attain for the Moderate classification. Further, an RFP demonstration that EPA determined to be adequate would in this case negate the need to submit the Moderate contingency measures for failure to meet RFP, thus resulting in mooting the Moderate area contingency measures requirement entirely. Note, however, that the first Serious area RFP milestone is December 31, 2026, so a timely Serious area contingency measures submittal by January 1, 2026, is necessary to ensure that contingency measures are in place before the milestone occurs.

Finally, in response to the commenter's inquiry as to the appropriate mechanism for demonstrating that the Moderate RFP emission reduction targets have been met, the EPA notes that it does not have specific guidance or rules for this. Section 182(g) of the CAA does not require a milestone compliance demonstration (MCD) for Moderate areas. EPA expects that the process would work similar to that for PM (40 CFR 51.1013(b)) or for other MCDs for ozone (40 CFR 51.1310(c)(2)), where the state would provide to the EPA Regional Administrator a formal demonstration ( e.g., from the Governor or designee) showing the basis for establishing that RFP was met. The contingency measures SIP submittal requirement for failure to meet RFP would not be mooted unless and until EPA formally responds with a determination that it is adequate. EPA encourages the state to work with the Regional Office to discuss the demonstration process further.

Comment: The TCEQ states that the EPA should allow states flexibility in meeting RFP requirements, especially in areas where states can demonstrate that required reductions would not advance attainment. The TCEQ states that RFP requirements for areas classified as Moderate nonattainment for the 2015 ozone NAAQS are incredibly challenging to meet due to the significant reductions in ozone precursor emissions since 1990. The TCEQ states that as moderate classification RFP targets will still need to be demonstrated for the Bexar County nonattainment area under the Serious classification, EPA should allow states to substitute NO X emissions reductions in place of the 15 percent reduction in VOC required for initially designated Moderate ozone nonattainment areas when NO X emissions reductions are demonstrated to be at least as effective at reducing ozone concentrations. The TCEQ states that it recognizes that the CAA mandates the 15 percent VOC emissions reductions, but preliminary TCEQ photochemical modeling indicates that VOC reductions will not advance attainment of the 2015 ozone NAAQS in Bexar County. The TCEQ states that instead, this modeling indicates NO X emissions reductions will be more effective at reducing ozone concentrations in Bexar County. The TCEQ states that in Bexar County, point sources account for less than 5 percent of the total anthropogenic VOC emissions, and that area sources (including emissions from consumer products) account for about 70 percent of anthropogenic VOC emissions. The TCEQ states that the EPA should not require states to develop regulations that are ineffective at reducing ozone, economically penalizing to consumers, difficult to enforce, and unlikely to achieve the required reductions. The TCEQ states that allowing states flexibility in this sphere (and others discussed herein) will further the CAA's cooperative federalism framework, ensure proper respect for the states' role in fulfilling their CAA obligations, and result in better outcomes consistent with the aims of the CAA.

Response: We appreciate these comments and recognize the challenges that meeting the 15 percent VOC emissions reduction requirement can pose for newly designated ozone nonattainment areas. The EPA is working on this issue with several states to identify approaches that would be allowable under the Clean Air Act including under CAA section 182(b)(1)(A)(ii), which specifically provides that a state may use a percentage less than 15 percent by adopting certain requirements.

Comment: Commenter states that the TCEQ submitted SIP revisions to EPA addressing Basic I/M for the San Antonio Moderate nonattainment area on December 18, 2023.

Response: The EPA agrees and will act on the SIP submissions for Basic

I/M for the San Antonio area in a separate rulemaking action.

Comment: Commenters state that the EPA must require RACM to be adopted for the DFW, HGB, and San Antonio Moderate nonattainment areas. Commenters mention that courts have deferred to EPA's decisions tying RACM to the statutory attainment deadlines and state that EPA has “authority to change its approach to RACM, so long as it “displays awareness that it is changing position, provides a reasoned explanation for the change, and is also cognizant of reliance interests on the agency's prior policy.”  32

Response: We appreciate the information provided by the commenters. The EPA disagrees that RACM is required in this circumstance for the DFW, HGB, and San Antonio Moderate nonattainment areas. EPA has long interpreted the CAA requirement for ozone nonattainment areas to assess and implement reasonably available control measures to mean that states need to analyze and implement measures that advance an ozone area's attainment, and a measure is not RACM if it would not advance the attainment date (57 FR 13498, 13560). 33 As the commenters note, this interpretation has been upheld by federal courts. See Sierra Club v. EPA, 294 F.3d 155 (D.C. Cir. 2002) and Sierra Club v. United States EPA, 314 F.3d 735 (5th Cir. 2002). In developing a SIP revision pursuant to the RACM requirement, a state must consider all potentially available measures to determine whether they are reasonably available for implementation in the area, and whether they would advance the area's attainment date. The state may reject any measures as not RACM if they would not advance the attainment date, would cause substantial widespread and long-term adverse impacts, or would be economically or technologically infeasible. Sierra Club v. EPA at 162-163 (D.C. Cir. 2002); Sierra Club v. EPA, 314 F.3d 735 (5th Cir. 2002); BCCA Appeal Group v. EPA, 355 F.3d 817 (5th Cir. 2003). Following reclassification as Serious, to demonstrate measures that advance attainment of the ozone standard the emission reductions from the measures must occur no later than the start of the 2015 ozone NAAQS attainment season— i.e., by January 1, 2026 (for the HGB area) and by March 1, 2026 (for the DFW and San Antonio areas). Because the relevant attainment date for such an analysis will be the Serious area attainment date, we believe it is appropriate to conclude that a demonstration of RACM with respect to the Moderate area attainment date no longer has meaning.

We acknowledge and support the commenters' claim that the EPA has authority to change our approach to RACM, “so long as we display awareness that we are changing position, provide a reasoned explanation for the change, and are also cognizant of reliance interests on the agency's prior policy.” However, EPA is not changing its historical interpretation of the RACM requirement in this action, as outlined in our final rule for implementation of the 2015 ozone NAAQS, which retains our existing general RACM requirements  34 and our reclassification of areas classified as Marginal for the 2015 ozone NAAQS does not address any change in our approach to RACM. 35

Comment: Commenters provide examples of RACM that could be quickly implemented in the DFW, HGB, and San Antonio nonattainment areas.

Response: The EPA appreciates the information and examples provided. Following reclassification, such measures must be considered as Texas undertakes the required RACM analysis for the newly reclassified Serious areas, and Texas must evaluate these measures for their potential to advance the attainment date ahead of the otherwise applicable Serious date.

Comment: Commenters state that reclassification as Serious does not change the submission requirement or implementation deadlines for these five SIP elements that were due January 1, 2023, for the DFW, HGB, and San Antonio Moderate nonattainment areas: (1) a 15 percent rate-of-progress (“ROP”) plan, (2) contingency measures for failure to achieve RFP, including the 15 percent ROP requirement for Moderate areas, (3) a RACT demonstration, (4) NNSR rules; and (5) a Basic I/M program.

Response: The EPA agrees.

Our January 2024 proposal did not propose any changes to the Serious area plan requirements but instead listed the SIP requirements that apply specifically to Serious areas, consistent with CAA sections 172(c) and 182(c), and 40 CFR 51 Subpart CC. 36 We received no comments addressing the Serious area plan requirements. Therefore, we are finalizing the Serious area plan requirements as proposed and such plan requirements are listed in Section III of this final action.

We invited comments on a range of deadlines, from 12 to 18 months from the effective date of reclassification, for submission of the revised SIPs for the San Antonio, DFW, and HGB Serious nonattainment areas.

Comment: Commenters provide a wide range of recommendations, including “as expeditiously as possible” and that the SIP submission deadline be set at 12 months. Commenters also state that the 12-month SIP deadline based on CAA section 179(d) has no relevance to the current circumstance. Commenters state that a SIP deadline of 18 months or longer is consistent with CAA section 110(k)(5), allowing the EPA to establish reasonable deadlines. Commenters also state that the EPA should finalize a SIP submission deadline of 18 months or January 1, 2026, whichever is later.

One commenter (the TCEQ) urged the EPA to set a submittal deadline of at least 18 months from the effective date of reclassification, but no sooner than January 1, 2026. The TCEQ provided justification, citing the substantial amount of time to conduct modeling, evaluate controls, develop attainment plans, and conduct rulemaking while allowing affected sources sufficient time to implement control requirements. The TCEQ added that significant resources are required to address each of the three reclassified Serious nonattainment areas and expressed concern that an expedited SIP submittal deadline would reduce the time needed to prepare and submit approvable SIPs. The TCEQ also expressed the desire to incorporate on-road and non-road emission inventories in the Serious SIP revisions using the newly released version of the Motor Vehicle Emission Simulator (MOVES4) model, which would require significant work to develop inventories for multiple years and areas.

Response: The EPA notes that the proposal pointed to CAA sections 179(d) and 110(k)(5) as examples of statutory provisions establishing timeframes for states to revise SIPs in instances where SIPs had been insufficient to result in an area's attainment by the attainment date and where SIPs had been identified as substantially inadequate to attain the NAAQS (among other things). To the extent that the commenter is asserting these provisions do not directly apply to the three areas being voluntarily reclassified, we agree. But we do not agree that the timing considerations of those provisions have no relevance to informing EPA's consideration and establishment of the SIP submission deadlines contemplated here. Here, as in the situation contemplated by CAA section 179(d), the areas in question would fail to timely attain by the Moderate area attainment date, absent the state's voluntary request to reclassify as Serious. Here, as in the situation contemplated by CAA section 110(k)(5), the state's SIPs have been inadequate to attain the NAAQS. So, while we agree that these provisions do not directly apply because EPA has not made the requisite findings to trigger those provisions, the Act's imposition of a 12-month clock, or an outer limit of no more than 18 months, for states to submit revisions addressing these conditions are informative of the appropriate timeframe to apply to these areas under these circumstances. It was therefore reasonable for EPA to propose a range of statutory timeframes for the SIP submission deadline that were in part informed by the relevant, though not directly applicable, statutory situations presented in CAA sections 179(d) and 110(k)(5).

We appreciate the information provided by the TCEQ. We are finalizing a SIP submission deadline of 18 months from the effective date of this action or January 1, 2026, whichever is earlier. As noted in the proposal, the 2026 ozone season, which in some areas begins on January 1, 2026, is the last ozone season that can impact air quality before the areas' attainment dates in 2027. We note that commenter's request that we establish a SIP submission deadline of “no sooner than January 1, 2026” appears to acknowledge the significance of that date with respect to the statutory and regulatory constraints on SIP submittal deadlines and implementation. Per EPA's 2015 ozone SRR, and as discussed below, states must implement RACT no later than the beginning of the ozone season of the attainment year, see 40 CFR 51.1312(a)(3), and it is appropriate to establish SIP deadlines no later than when the control measures in those SIPs are required to be implemented. 37 As discussed in the proposal, EPA's action establishing deadlines is informed by CAA section 182(i), which governs the adjustment of SIP revision deadlines following a mandatory reclassification for failure to timely attain by the attainment date. That provision instructs that the Administrator may adjust deadlines for meeting requirements associated with the reclassification, “to the extent such adjustment is necessary and appropriate to assure consistency among the required submissions.” CAA section 182(i). Given that the beginning of the attainment year ozone season for some of these areas is January 1, 2026 (and for the other two it is March 1) we are setting the maximum SIP submission deadline as no later than January 1, 2026, in order to assure consistency among all of the state's submissions.

We are finalizing this more extended timeframe for submitting the Serious area requirements (as opposed to 12 months, which was also contemplated in the proposal), because we acknowledge, as raised by the commenter, the complexity in developing and implementing effective emission reductions for the areas, and the opportunity a longer timeframe provides for more robust attainment demonstration plans that include the newer MOVES modeling. Developing and implementing effective emission reductions for these areas is complex due to the complex coastal meteorology and large industrial area in the HGB area, and the large urban and growing populations in all three areas. With a SIP submission deadline of 18 months from the effective date of this action but no later than January 1, 2026, we believe the TCEQ will be able to use the best information available in its Serious SIP submissions, while ensuring that SIP elements requiring control measures needed for attainment are submitted no later than when those controls are required to be implemented.

Comment: A commenter states that there is no way for RACT to be implemented sooner, or more expeditiously, than the latest date required by the CAA. Commenters state that the EPA should set implementation deadlines for RACT by area instead of imposing one blanket deadline. Commenters state that the EPA has inappropriately proposed the same RACT implementation deadline ( i.e., January 1, 2026) for all three areas without considering the circumstances of each area. Commenters state that the different ozone seasons, historic frequency of ozone exceedances, emission sources, and timelines for emission control compliance support different implementation deadlines. Commenters state that the ozone season for the HGB nonattainment area begins on January 1, but the ozone season for the DFW and San Antonio nonattainment areas begins on March 1. Commenters state that implementing RACT at the start of the ozone season would not likely influence the design values as most of the highest ozone observations occur in May or later for all three areas. Commenters provide, as an example, “the HGB area has not measured an eight-hour ozone concentration greater than 70 ppb before March 1 for over 10 years so the requirement for RACT implementation by January 1, 2026, would not benefit the area's design value.” Commenters state that advancing attainment of the area is not a factor of consideration when evaluating RACT and therefore, it is not imperative that RACT be implemented by no later than the beginning of the attainment year ozone season; and it is inadequate support for requiring RACT implementation dates to be uniform for all nonattainment areas.

Commenters state that the EPA should finalize RACT implementation deadlines to allow affected entities to comply with RACT on a timeline that considers sources' ability to control emissions based on technological and economic feasibility, which are primary factors in determining RACT. Commenters state that the ability to control could vary between sources, source categories, and areas, particularly for Bexar County, and additional time may be needed to allow affected sources to comply with new rules. Commenters state that compliance may necessitate that affected sources purchase, install, test, and operate new equipment or control devices, and even if new regulations only require affected sources to replace higher VOC-content materials with lower VOC-content materials, owners and operators would still need time to address existing stocks, find suppliers, and order new supplies.

Response: We appreciate these comments. Texas is now required to submit SIP revisions to implement RACT level controls for all three nonattainment areas now classified as Serious, which includes a lower Serious area source threshold of a potential to emit 50 tpy or more down from the Moderate area level of 100 tpy.

RACT-level controls should already be largely implemented in the DFW and HGB areas for sources within the Serious area source threshold, as these two areas were reclassified from Moderate to Serious for the 2008 ozone NAAQS, effective September 23, 2019, and the required RACT implementation deadlines were August 3, 2020, and July 20, 2021. 38 Any delays in implementing the more stringent requirements associated with reclassification would delay related air quality improvements and human health benefits for residents across these areas, including those that may already bear a disproportionate burden of pollution, as shown in the Environmental Justice (EJ) considerations referenced in our January 2024 proposal and included in the docket for this action.

We appreciate the TCEQ's comments addressing eight-hour ozone concentrations greater than 70 ppb before March 1 in the HGB area. We reviewed the State's data for the San Antonio, DFW, and HGB areas for January and February, from 2013 through 2024, and did not see any regulatory monitors with concentrations over 70 ppb. 39 However, consistent with our January 2024 proposal and the EPA's implementing regulations for the 2015 ozone NAAQS, for RACT required pursuant to reclassification, for the HGB area we are finalizing the Serious RACT implementation deadline to be as expeditiously as practicable, but no later than the start of the attainment year ozone season associated with the area's new attainment deadline, which is January 1, 2026. 40 For the DFW area, consistent with our January 2024 proposal and the EPA's implementing regulations for the 2015 ozone NAAQS, for RACT required pursuant to reclassification we are finalizing the Serious RACT implementation deadline to be as expeditiously as practicable, but no later than the start of the attainment year ozone season associated with the area's new attainment deadline, which is March 1, 2026. 41

We appreciate the TCEQ's concerns regarding RACT in Bexar County. However, the implementation deadline for the Moderate area RACT was January 1, 2023, and by this time, implementation of RACT for the Moderate area should already be underway in the San Antonio area. Accordingly, most sources should already be under RACT controls for the Moderate classification and this voluntary reclassification as Serious will add those sources emitting less than 100 tpy that have the potential to emit 50 tpy or more. In addition, and as noted earlier, delays in implementing the more stringent requirements associated with reclassification would delay related air quality improvements and human health benefits for residents across the San Antonio nonattainment area, including those that may already bear a disproportionate burden of pollution, as shown in the EJ considerations referenced in our January 2024 proposal and included in the docket for this action. Therefore, consistent with our January 2024 proposal and the EPA's implementing regulations for the 2015 ozone NAAQS, for RACT required pursuant to reclassification we are finalizing the Serious RACT implementation deadline to be as expeditiously as practicable, but no later than the start of the attainment year ozone season associated with the area's new attainment deadline, which is March 1, 2026. 42

Comment: The Office of the Harris County Attorney states that vehicle emissions in Harris County are especially important in tackling ozone because the area's vehicle emissions will likely increase in the next several years as heavy traffic and population increase. The commenter believes a three-year deadline is reasonable and more appropriate than the proposed four-year deadline.

Response: We appreciate the commenter's concerns. The HGB (which includes Harris County), as well as the DFW, Serious ozone nonattainment areas are currently implementing Enhanced I/M pursuant to the requirements for the 2008 ozone NAAQS. 43 However, as described in our January 2024 proposal and consistent with the I/M regulations, for the existing Enhanced I/M programs in these areas, the TCEQ would need to conduct and submit a performance standard  44 modeling (PSM) analysis  45 as well as make any necessary program revisions as part of the Serious area I/M SIP submissions to ensure that I/M programs are operating at or above the Enhanced I/M performance standard level for the 2015 ozone NAAQS. 46 The TCEQ may determine through the PSM analysis that an existing SIP-approved program would meet the Enhanced performance standard for purposes of the 2015 ozone NAAQS without modification. In this case, the TCEQ could submit an I/M SIP revision with the associated performance modeling and a written statement certifying their determination in lieu of submitting new revised regulations. 47 To this end, the TCEQ included a PSM analysis for the existing Enhanced I/M program in Appendix C of the SIP revisions, proposed by the State on May 31, 2023, for the DFW and HGB Moderate attainment demonstrations for the 2015 ozone NAAQS. 48 The EPA will address these SIP revisions in a separate future action after the TCEQ has finalized the proposed I/M SIP revisions and submitted them to the EPA for consideration.

We also discussed in our January 2024 proposal that if the State wishes to rely upon emission reductions from any revisions to its I/M programs in SIPs demonstrating attainment or RFP, the State would need to fully implement these I/M program revisions as expeditiously as practicable but no later than the beginning of the applicable attainment year, i.e., January 1, 2026 for the HGB area and March 1, 2026 for the DFW and San Antonio areas. However, the EPA has long taken the position that, like VOC RACT, the statutory requirement for states to implement I/M in ozone nonattainment areas classified Moderate and higher generally exists independently from the attainment planning requirements for such areas. 49 Thus, EPA believes that if the emission reductions from any I/M program revisions are not relied upon to demonstrate attainment by the attainment deadline or towards RFP for the 2015 ozone NAAQS, then an implementation deadline of no more than four years after the effective date of reclassification is reasonable given the unique nature of I/M programs and the many challenges, tasks, and milestones that must be met in implementing an Enhanced I/M program.

Furthermore, giving up to a four-year timeframe to implement Enhanced I/M in reclassified Serious nonattainment areas (that do not rely upon emission reductions from the new or revised Enhanced I/M programs for attainment demonstration or RFP SIP purposes) is consistent with the no more than four-year I/M implementation period established in the recent final rule that reclassified Marginal nonattainment areas to Moderate for the 2015 ozone NAAQS (which triggered requirements for Basic I/M programs). 50 Therefore, the EPA is finalizing its proposed deadline, that any new or revised Enhanced I/M programs, not intending to rely upon emission reductions from the new or revised Enhanced I/M programs for attainment demonstration or RFP SIP purposes, are to be fully implemented as expeditiously as practicable but no later than four years after the effective date of this final action.

Comment: The commenter disagrees that it is necessary to establish a January 1, 2026, implementation date for the Enhanced I/M program under the Serious classification in order to use the emissions reductions toward meeting Serious area attainment demonstration and RFP SIP obligations. The commenter states that the EPA has not provided a rationale for why newly required Enhanced I/M programs for the 2015 ozone standard would have to be fully implemented by no later than January 1, 2026, the beginning of the Serious classification attainment year. The commenter contends that if emissions reductions from implementation of an Enhanced I/M program can be used for meeting SIP requirements under the Serious classification, the reductions can be based on when the program starts within the attainment year. The commenter states that emissions reductions from I/M programs are variable, depending on the number of vehicles tested in any given month, the vehicles' emissions profiles, and state of repair.

Response: We appreciate these comments. However, as mentioned in our proposal and the SRR for the 2015 ozone NAAQS, all control measures in the attainment plan and demonstration must be implemented no later than the beginning of the attainment year ozone season, notwithstanding any alternate RACT and/or RACM implementation deadline requirements in 40 CFR 51.1312 (see 40 CFR 51.1308(d) and 83 FR 62998). Therefore, for those areas intending to rely upon emissions reductions from any revisions to its I/M programs for the Serious attainment demonstration or RFP SIP purposes, it is necessary to establish an I/M implementation deadline of no later than the start of the attainment year ozone season.

The EPA is finalizing its proposed deadline, that any new or revised Enhanced I/M programs, intending to rely upon emission reductions from the new or revised Enhanced I/M programs for attainment demonstration or RFP SIP purposes, are to be fully implemented as expeditiously as practicable but no later than January 1, 2026 (for the HGB area) and March 1, 2026 (for the DFW and San Antonio areas).

We received no comments addressing the reporting deadline for the transportation control demonstration. Therefore, consistent with our proposal and CAA section 182(c)(5), the first transportation control demonstration is due no later than January 1, 2028, which is two years after the attainment demonstration SIP is due, and subsequent transportation control demonstrations are due every three years thereafter.

Comment: The Office of the Harris County Attorney states that EPA provides an analysis of the HGB area's environmental justice (EJ) considerations in the proposed rule and notes that analyzing Harris County and its population with the inclusion of two other counties might not be the most accurate or effective way of understanding the EJ issues in Harris County. The commenter states that Harris County is geographically larger than Rhode Island, has a population larger than several states, is the third largest county in the United States, and has a sizable income gap. The commenter states that Harris County contains urban, suburban, and rural populations and does not have zoning laws, so commercial and industrial areas are often sited within or near residential areas, and consequently, neighborhoods in Harris County experience ozone pollution and EJ factors in different degrees. The commenter states that EPA noted this discrepancy in denying Texas's request for a 1-year extension of the attainment date for the HGB area for the 2008 ozone NAAQS—EPA based its denial, in part, on “considerations of existing pollution burdens for some communities within the area.”  51 The commenter states that EPA noted communities residing and working near violating ozone monitors in the Houston area and the Houston Ship Channel are exposed to a significant and disproportionate burden of ozone pollution and other sources of pollution (e.g., vehicle traffic and particulate matter emissions) compared to the greater Houston area and the U.S. as a whole. 52 The commenter asks the EPA to factor this disparity between populations in Harris County into future EJ analysis in actions concerning Harris County.

Response: The EPA appreciates these comments.

Comment: Commenters state that the EPA's analysis failed to identify that EJScreen indicators in Bexar County exceed the 80th percentile for particulate matter and ozone pollution, although a graph provided in the docket did so. 53 Commenters state that this information does not change the result, but it is essential that EPA accurately identify environmental justice issues.

Response: The EPA appreciates these comments.

Comment: The TCEQ states that the EPA should conduct rulemaking to establish requirements for approvable contingency measures or, in the absence of rulemaking, finalize and respond to the comments submitted on the March 2023 draft guidance on contingency measure requirements. Commenters state that finalization of this guidance is necessary for the TCEQ to meet the deadlines required for SIP development related to this reclassification action and to develop effective measures that EPA may find approvable.

Response: The EPA acknowledges this comment. Our draft guidance serves as a useful interim statement of EPA policy that can inform States' contingency measures SIP development. As to the necessity or desirability of EPA conducting a rulemaking or finalizing guidance, or the timing thereof, these comments are outside the scope of this action. With respect to TCEQ's concerns about developing approvable contingency measures for the Serious attainment plan in the absence of finalized guidance, EPA staff is available to assist the TCEQ in the development and implementation of approvable contingency measures that are consistent with the statute and relevant court decisions.

Comment: Commenters state that it is not logical to run a sanctions clock for deadlines that have already passed and will be reset based on a higher classification. Commenters state that the EPA should terminate all sanctions clocks associated with its October 2023 findings. Other commenters state that the EPA should move forward with FIPs under the October 2023 findings.

Response: The EPA did not propose sanctions in our January 2024 proposal. Comments addressing our October 2023 findings are outside the scope of this action. However, as discussed in detail elsewhere in this final action, all Moderate area requirements remain in effect with the exception of the Moderate attainment demonstration, contingency measures associated with failure to attain by the Moderate attainment date, and RACM associated with the Moderate area attainment date.

Comment: Commenters state that the EPA is well within its authority to direct for any judicial review of final action to the D.C. Circuit.

Response: The EPA appreciates these comments.

Pursuant to CAA section 181(b)(3), we are granting the Texas Governor's request to voluntarily reclassify the San Antonio, DFW, and HGB nonattainment areas from Moderate to Serious for the 2015 ozone NAAQS. The EPA is also finalizing a deadline of 18 months from the effective date of this action or January 1, 2026, whichever is earlier, for the TCEQ to submit SIP revisions addressing the CAA Serious ozone nonattainment area requirements for the San Antonio, DFW, and HGB areas. The Serious area requirements include Enhanced monitoring (CAA section 182(c)(1)); Emissions inventory and emissions statement rule (40 CFR 51.1300(p) and 40 CFR 51.1315); RFP (40 CFR 51.1310); Attainment demonstration and RACM (40 CFR 51.1308 and 40 CFR 51.1312(c)); RACT (40 CFR 51.1312); Nonattainment NSR (40 CFR 51.1314 and 40 CFR 51.165); Enhanced I/M (CAA section 182(c)(3) and 40 CFR 51 Subpart S); Clean-fuel vehicle programs (CAA section 182(c)(4); and Contingency measures (CAA sections 172(c)(9) and 182(c)(9)). In addition, a demonstration evaluating the need for a transportation control measure program (CAA section 182(c)(5)) is also required. We are also finalizing deadlines for implementation of new RACT controls: in the HGB area, implementation shall occur as expeditiously as practicable but no later than January 1, 2026, and in the San Antonio and DFW areas implementation shall occur as expeditiously as practicable but no later than March 1, 2026. We are also finalizing a deadline for any new or revised Enhanced I/M programs in the HGB area to be fully implemented as expeditiously as practicable but no later than January 1, 2026, if emission reductions from I/M program revisions are relied upon for attainment demonstration or RFP SIP purposes and no later than four years after the effective date of the final action reclassifying these areas as Serious for the 2015 ozone NAAQS if emission reductions from I/M program revisions are not relied upon for attainment demonstration or RFP SIP purposes. We are also finalizing a deadline for any new or revised Enhanced I/M programs in the San Antonio and DFW areas to be fully implemented as expeditiously as practicable but no later than March 1, 2026, if emission reductions from I/M program revisions are relied upon for attainment demonstration or RFP SIP purposes and no later than four years after the effective date of the final action reclassifying these areas as Serious for the 2015 ozone NAAQS if emission reductions from I/M program revisions are not relied upon for attainment demonstration or RFP SIP purposes. We are also finalizing a deadline for the first transportation control demonstration, as required by CAA section 182(c)(5), of no later than January 1, 2028, and for subsequent transportation control demonstrations every 3 years thereafter.

As stated in our January 2024 proposal and for informational purposes only, EPA conducted screening analyses of the San Antonio, DFW, and HGB areas using EPA's Environmental Justice (EJ) screening tool (EJScreen tool, version 2.2). 54 The results of this analysis are provided for informational and transparency purposes, not as a basis of our proposed action. The EJScreen analysis reports are available in the docket for this rulemaking. The EPA found, based on the EJScreen analyses, that this final action will not have disproportionately high or adverse human health or environmental effects on a particular group of people, because EPA's granting of the Texas Governor's request to reclassify the San Antonio, DFW, and HGB ozone nonattainment areas from Moderate to Serious will require ongoing reductions of ozone precursor emissions, as required by the CAA. Specifically, this final rule would require that Texas submit plans for each area including: Enhanced monitoring (CAA section 182(c)(1)); Emissions inventory and emissions statement rule (40 CFR 51.1300(p) and 40 CFR 51.1315); RFP (40 CFR 51.1310); Attainment demonstration and RACM (40 CFR 51.1308 and 40 CFR 51.1312(c)); RACT (40 CFR 51.1312); Nonattainment NSR (40 CFR 51.1314 and 40 CFR 51.165); Enhanced I/M (CAA section 182(c)(3) and 40 CFR 51 Subpart S); Clean-fuel vehicle programs (CAA section 182(c)(4); Contingency measures (CAA sections 172(c)(9) and 182(c)(9)); and a demonstration evaluating the need for a transportation control measure program (CAA section 182(c)(5)). These required measures would help to improve air quality in the affected nonattainment areas. Information on ozone and its relationship to negative health impacts can be found at https://www.epa.gov/ground-level-ozone-pollution.

This final action is not a significant regulatory action as defined in Executive Order 12866, as amended by Executive Order 14094, and was therefore not subject to a requirement for Executive Order 12866 review. Because the statutory requirements are clearly defined with respect to the differently classified areas, and because those requirements are automatically triggered by reclassification, the timing of the submittal of the Serious area requirements does not impose a materially adverse impact under Executive Order 12866.

This final action does not impose an information collection burden under the provisions of the PRA.

I certify that this final rule will not have a significant economic impact on a substantial number of small entities under the RFA. This final action will not impose any requirements on small entities. Granting a request to reclassify an area to the next higher classification does not in and of itself create any new requirements beyond what is mandated by the CAA. Instead, this rulemaking only makes factual conclusions, and does not directly regulate any entities.

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

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

This final action does not have Tribal implications as specified in Executive Order 13175. There are no Indian reservation lands or other areas where the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction within the San Antonio, DFW, or HGB ozone nonattainment areas. Therefore, this final action 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.

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

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

This final action does not involve technical standards.

Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations, 59 FR 7629, February 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.”

This final action would reclassify the San Antonio, DFW, and HGB nonattainment areas from Moderate to Serious for the 2015 ozone NAAQS, set deadlines for the submission of revised SIPs addressing the Serious area requirements for these three nonattainment areas, and set deadlines for implementation of controls required for these three nonattainment areas. This final does not revise measures in the current SIP. As such, at a minimum, this action would not worsen any existing air quality and is expected to ensure the areas are meeting requirements to attain and/or maintain air quality standards. Further, there is no information in the record indicating this action is expected to have disproportionately high or adverse human health or environmental effects on a particular group of people. The EPA performed an environmental justice analysis, as described earlier in this action under “Environmental Justice Considerations.” The analysis was done for the purpose of providing additional context and information about this action to the public, not as a basis of the action.

This final rule is exempt from the CRA because it is a rule of particular applicability. The rule makes factual determinations for specific entities and does not directly regulate any entities. The EPA's approval to grant the request to reclassify does not in itself create any new requirements beyond what is mandated by the CAA.

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 August 19, 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 81, chapter I, title 40 of the Code of Federal Regulations is amended as follows: