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

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Rural Development has determined that this rule meets the applicable standards provided in section 3 of that Executive Order. In addition, all State and local laws and regulations that are in conflict with this rule will be preempted. No retroactive effect will be given to the rule and, in accordance with section 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)), administrative appeal procedures must be exhausted before an action against the Department or its agencies may be initiated.

RUS has determined that this proposed rule will not have a significant economic impact on a substantial number of small entities, as defined in the Regulatory Flexibility Act (5 U.S.C. 601et seq.). RUS provides loans to borrowers at interest rates and on terms that are more favorable than those generally available from the private sector. RUS borrowers, as a result of obtaining federal financing, receive economic benefits that exceed any direct economic costs associated with complying with RUS regulations and requirements.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), RUS invites comments on this information collection for which RUS intends to request approval from the Office of Management and Budget (OMB).

Comments on this notice must be received by December 13, 2011.

Comments are invited on (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumption used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques on other forms of information technology.

Comments may be sent to Michele Brooks., Director, Program Development and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, 1400 Independence Ave., SW., Stop 1522, Room 5159 South Building, Washington, DC 20250-1522.

Title:Substantially Underserved Trust Areas.

Type of Request:Approval of a new collection.

Abstract:The RUS provides loan, loan guarantee and grant programs for rural electric, water and waste, and telecommunications and broadband infrastructure. The SUTA initiative gives the Secretary of Agriculture certain discretionary authorities relating to financial assistance terms and conditions that can enhance the financing possibilities in areas that are underserved by certain RUS electric, water and waste, and telecommunications and broadband programs. The data covered by this collection of information are those materials necessary to allow the agency to determine applicant and community eligibility and an explanation and documentation of the high need for the benefits of the SUTA provisions. Program specific application materials are covered by the information collection package for the specific RUS program being applied for.

Estimate of Burden:Public reporting burden for this collection of information is estimated to average 2 hours per response.

Respondents:Tribes, tribal leaders, tribal members and other stakeholders interested in developing utility infrastructure on trust areas.

Estimated Number of Respondents:10.

Estimated Number of Responses per Respondent:1.

Estimated Total Annual Burden on Respondents:20 hours.

Copies of this information collection can be obtained from Michele Brooks,Program Development and Regulatory Analysis, at (202) 690-1078.

All responses to this information collection and recordkeeping notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record.

Rural Development is committed to the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible

The programs described by this rule are listed in the Catalog of Federal Domestic Assistance Programs under number 10.759, Special Evaluation Assistance for Rural Communities and Households Program (SEARCH); 10.760, Water and Waste Disposal Systems for Rural Communities; 10.761, Technical Assistance and Training Grants; 10.762, Solid Waste Management Grants; 10.763, Emergency Community Water Assistance Grants; 10.770, Water and Waste Disposal Loans and Grants (Section 306C); 10.850, Rural Electrification Loans and Loan Guarantees; 10.851, Rural Telephone Loans and Loan Guarantees, 10.855, Distance Learning and Telemedicine Loans and Grants; 10.857, State Bulk Fuel Revolving Fund Grants; 10.859, Assistance to High Energy Cost Rural Communities; 10.861, Public Television Station Digital Transition Grant Program; 10.862, Household Water Well System Grant Program; 10.863, Community Connect Grant Program; 10.864, Grant Program to Establish a Fund for Financing Water and Wastewater Projects; 10.886, Rural Broadband Access Loans and Loan Guarantees.

The Catalog is available on the Internet athttp://www.cfda.gov.

Most programs covered by this rulemaking are excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may require consultation with State and local officials. See the final rule related notice entitled “Department Programs and Activities Excluded from Executive Order 12372,” (50 FR 47034). However, the Water and Waste Disposal Loan Program, CFDA number 10.770, is subject to the provisions of Executive Order 12372 which requires intergovernmental consultation with State and local officials.

This rule contains no Federal mandates (under the regulatory provision of Title II of the Unfunded Mandate Reform Act of 1995) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandate Reform Act of 1995.

Rural Development has determined that this rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321et seq.). Therefore, this action does not require an environmental impact statement or assessment.

The policies contained in this rule do not have any substantial direct effect on states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with the states is not required

The policies contained in this rule do not impose substantial unreimbursed direct compliance costs on Indian tribal, Alaska native, or native Hawaiian governments and sovereign institutions or have tribal implications that preempt tribal law. Prior to development of this rulemaking, the agency held Tribal Consultations at seven (7) USDA regional consultations, conducted sixteen (16) SUTA specific consultations and hosted three (3) internet and toll free teleconference based webinars in order to determine the impact of this rule on Tribal governments, communities, and individuals. Reports from these sessions for consultation will be made part of the USDA annual reporting on Tribal Consultation and Collaboration, the annual SUTA Report to Congress and were used extensively throughout the drafting of this proposed rule.

USDA Rural Development (Rural Development) is a mission area within the U.S. Department of Agriculture comprising the Rural Housing Service, Rural Business/Cooperative Service and Rural Utilities Service. Rural Development's mission is to increase economic opportunity and improve the quality of life for all rural Americans. Rural Development meets its mission by providing loans, loan guarantees, grants and technical assistance through more than forty programs aimed at creating and improving housing, businesses and infrastructure throughout rural America.

Rural Utilities Service (RUS) loan, loan guarantee and grant programs act as a catalyst for economic and community development. By financing improvements to rural electric, water and waste, and telecom and broadband infrastructure, RUS also plays a big role in improving other measures of quality of life in rural America, including public health and safety, environmental protection, conservation, and cultural and historic preservation.

The 2008 Farm Bill (Pub. L. 110-246, codified at 7 U.S.C. 906f) authorized the Substantially Underserved Trust Area (SUTA) initiative. The SUTA initiative gives the Secretary of Agriculture certain discretionary authorities relating to financial assistance terms and conditions that can enhance the financing possibilities in areas that are underserved by certain RUS electric, water and waste, and telecom and broadband programs. Given the challenges, dynamics, and opportunities in implementing the SUTA initiative, RUS has aimed to foster a process that includes the voices of tribal leaders, tribal community members, Alaska Native Regional and Village Corporations, Guam, American Samoa and the Commonwealth of the Northern Mariana Islands, and other stakeholders.

Preliminary research by RUS identified various reports that provided several insights. In 2007, the United States Census Bureau Facts for Features article (dated 10/29/07) reported that the poverty rate of people who reported being sole race American Indian and Alaska Native (AI/AN) was 27 percent. Additionally, in 2006, the United States Government Accountability Office reported that based on the 2000 decennial census, the telephone subscribership rate for Native American households on tribal lands was substantially below the national level of about 98 percent. Specifically, about 69 percent of Native American households on tribal lands in the lower 48 states and about 87 percent in Alaska Native villages had telephone service. Finally, in 2000, the United States Census Bureau reported that on Native American lands, 11.7 percent of residents lack complete plumbing facilities, compared to 1.2 percent of the general U.S. population.

There are special considerations and challenges in implementing an initiativeon trust lands. Many American Indians, Alaska Natives, Native Hawaiians, and Pacific Islanders have a deep spiritual, cultural, and historical relationship with the land. In certain circumstances, the objectives of economic and infrastructure development can be at odds with spiritual, cultural, historical, and environmental values. Additionally, there are special legal considerations inherent in financing projects in areas where the land itself cannot be used as security.

The SUTA initiative identifies the need and improves the availability of RUS programs to reach trust areas when they are determined by the Secretary of Agriculture (such authority has been delegated to the Administrator of RUS) to be substantially underserved. The RUS programs that are affected by this provision include: Rural Electrification Loans and Guaranteed Loans, and High Cost Energy Grants; Water and Waste Disposal Loans, Guaranteed Loans and Grants; Telecommunications Infrastructure Loans and Guaranteed Loans; Distance Learning and Telemedicine Loans and Grants; and Broadband Loans and Guaranteed Loans.

In addition to its discretionary authority to implement the SUTA provisions, RUS is under a continuing obligation to make annual reports to Congress on (a) The progress of the SUTA initiative, and (b) recommendations for any regulatory or legislative changes that would be appropriate to improve services to substantially underserved trust areas. RUS has submitted three reports to Congress, dated June 18, 2009, and June 21, 2010, and August 23, 2011.

The USDA Office of Native American Programs (since renamed the Office of Tribal Relations, hereinafter OTR) and RUS began exploring a potential SUTA initiative in 2008 after passage of the Farm Bill. RUS in conjunction with OTR interpreted this to include formal USDA Tribal Consultation in working with stakeholders that are federally recognized tribes. Pursuant to this determination and in accordance with President Obama's November 5, 2009, Memorandum on Tribal Consultation, RUS conducted sixteen (16) direct tribal consultations, seven (7) regional consultations, one listening session and three (3) internet and toll free teleconference based webinars on implementation of the SUTA provision with Indian tribes from across the country. Additionally, the agency heard from six Federal agencies at three separate consultations on how best to implement the SUTA provision.

Federal agencies that were consulted include: the Department of the Interior, as the primary Federal agency with direct responsibilities to serve Native American and Pacific Islander stakeholders; the Department of Veterans Affairs, for its clarification of the definition of “trust land”; the Environmental Protection Agency, because it has information regarding underserved trust areas with environmental challenges; the Department of Energy, because it has an interest in promoting energy development in trust areas; the Department of Commerce and the Federal Communications Commission, because each agency has an interest in telecommunications development in trust areas; the Department of Health and Human Services; and the Office of Management and Budget.

As a result of categorizing and analyzing the comments received at both sets of consultations, RUS was able to identify certain issues that impact both the underserved areas who seek better access to RUS programs, and the federal agencies who have similar yet sometimes competing interests in these areas. This regulation is informed by the insight gained through the consultations, and is designed to complement existing loan, grant, and combination loan and grant programs with the SUTA provisions that authorize the Administrator to apply certain discretionary authorities (2 percent interest and extended repayment terms; waivers of nonduplication restrictions, matching fund requirements, or credit support requirements; and highest funding priority) for the benefit of eligible communities, and the entities that serve them, in underserved Trust areas.

For reasons set out in the preamble, the agency proposes to amend chapter XVII of title 7 of the Code of Federal Regulations by proposing to amend part 1700 to read as follows:

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning these special conditions. The docket is available for public inspection before and after the comment closing date. If you wish to review the docket in person, go to the address in theADDRESSESsection of this preamble between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

If you want the FAA to acknowledge receipt of your comments on this proposal, include with your comments a self-addressed, stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you.

On January 11, 2008, Learjet Inc. applied for a type certificate for a new Model LJ-200-1A10 airplane. This airplane is 68 feet long with a 65-foot wing span and accommodates up to 10 passengers. The LJ-200-1A10 airplane uses a hydrophobic windshield coating, in lieu of windshield wipers, for an unobstructed outside view from the pilot compartment.

Under the provisions of Title 14, Code of Federal Regulations (14 CFR) 21.17, Learjet Inc. must show that the Model LJ-200-1A10 airplane meets the applicable provisions of part 25, as amended by Amendments 25-1 through 25-123.

If the Administrator finds that the applicable airworthiness regulations (i.e.,14 CFR part 25) do not contain adequate or appropriate safety standards for the Model LJ-200-1A10 airplane because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

In addition to the applicable airworthiness regulations and special conditions, the Model LJ-200-1A10 airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36, and the FAA must issue a finding of regulatory adequacy pursuant to § 611 of Public Law 92-574, the “Noise Control Act of 1972.”

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.17(a)(2).

The Learjet Model LJ-200-1A10 airplane will incorporate the following novel or unusual design features:

The Model LJ-200-1A10 airplane flight deck design incorporates a hydrophobic windshield coating to provide, during precipitation, an adequate outside view from the pilot compartment. Sole reliance on such a coating, without windshield wipers, constitutes a novel or unusual design feature for which the applicable airworthiness regulations do not contain adequate or appropriate safety standards. Therefore, a special condition is required to provide a level of safety equivalent to that established by the regulations.

14 CFR 25.773(b)(1) requires a means to maintain a clear portion of the windshield for both pilots to have a sufficiently extensive view along the flight path during precipitation conditions. The regulations require this means to maintain such an area during heavy-rain precipitation at airplane speeds up to 1.5 VSR1. Hydrophobic windshield coatings may depend to some degree on airflow to maintain a clear-vision area. The heavy rain and high speed conditions specified in the current rule do not necessarily represent the limiting condition for this new technology. For example, airflow over the windshield, which may be necessary to remove moisture from the windshield, may not be adequate to maintain a sufficiently clear area of the windshield in low-speed flight or during surface operations. Alternatively, airflow over the windshield may be disturbed during such critical times as the approach to land, where the airplane is at a higher-than-normal pitch attitude. In these cases, areas of airflow disturbance or separation on the windshield could cause failure to maintain a clear-vision area on the windshield.

As discussed above, these special conditions are applicable to the Model LJ-200-1A10 airplane. Should Learjet Inc. apply at a later date for a change to the type certificate to include other type designs incorporating the same novel or unusual design feature, the specialconditions would apply to that model as well.

This action affects only certain novel or unusual design features on the Model LJ-200-1A10 airplane. It is not a rule of general applicability.

The authority citation for these special conditions is as follows:

Accordingly, the Federal Aviation Administration (FAA) proposes the following special conditions as part of the type-certification basis for Learjet Inc. Model LJ-200-1A10 airplanes.

The airplane must have a means to maintain a clear portion of the windshield, during precipitation conditions, enough for both pilots to have a sufficiently extensive view along the ground or flight path in normal taxi and flight attitudes of the airplane. This means must be designed to function, without continuous attention on the part of the crew, in conditions from light misting precipitation to heavy rain, at speeds from fully stopped in still air, to 1.5 VSR1with lift and drag devices retracted.

Background on Viticultural Areas TTB Authority

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels, and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the regulations promulgated under the FAA Act.

Part 4 of the TTB regulations (27 CFR part 4) allows the establishment of definitive viticultural areas and the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) sets forth standards for the preparation and submission of petitions for the establishment or modification of American viticultural areas and lists the approved American viticultural areas.

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region having distinguishing features as described in part 9 of the regulations and a name and a delineated boundary as established in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to its geographic origin. The establishment of viticultural areas allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of a viticultural area is neither an approval nor an endorsement by TTB of the wine produced in that area.

Section 4.25(e)(2) of the TTB regulations outlines the procedure for proposing an American viticultural area and provides that any interested party may petition TTB to establish a grape-growing region as a viticultural area. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes standards for petitions for the establishment or modification of American viticultural areas. Such petitions must include the following:

• Evidence that the area within the proposed viticultural area boundary is nationally or locally known by the viticultural area name specified in the petition;

• An explanation of the basis for defining the boundary of the proposed viticultural area;

• A narrative description of the features of the proposed viticultural area that affect viticulture, such as climate, geology, soils, physical features, and elevation, that make the proposedviticultural area distinctive and distinguish it from adjacent areas outside the proposed viticultural area boundary;

• A copy of the appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed viticultural area, with the boundary of the proposed viticultural area clearly drawn thereon; and

• A detailed narrative description of the proposed viticultural area boundary based on USGS map markings.

TTB received a petition from Steven J. DeBaker of Trout Springs Winery in Green Leaf, Wisconsin, to establish the “Wisconsin Ledge” American viticultural area. The proposed viticultural area contains approximately 3,800 square miles, with approximately 320 acres of vineyards in at least 14 commercially-producing vineyards and wineries, and an additional 70 acres projected to be planted within the next two years. A map that was submitted with the petition shows that the commercial vineyards and wineries are geographically disbursed throughout the proposed viticultural area. The proposed Wisconsin Ledge viticultural area lies in Door, Kewaunee, Manitowoc, Sheboygan, Ozaukee, Washington, Dodge, Fond du Lac, Calumet, Outagamie, and Brown Counties of northeast Wisconsin and does not overlap, or otherwise involve, any existing or proposed viticultural area.

The proposed Wisconsin Ledge viticultural area is largely surrounded by water, including Lake Winnebago, the Fox River, Green Bay, and Lake Michigan. The distinguishing features of the proposed area are its geology, geography, climate, hydrology, and soils. According to the petition, the region is heavily affected by the lasting effects of ancient glacial activity and the moderating marine influence of the surrounding bodies of water.

As stated in the petition, the “Wisconsin Ledge” name combines the state name of “Wisconsin” with “Ledge,” the geographical name commonly used by Wisconsin residents to refer to the region.

The petition explains that the proposed Wisconsin Ledge viticultural area is located in the northern portion of the Niagara Cuesta landform, which is the easterly sloping plateau-like surface of the western edge of the bowl formed by the Niagara Escarpment. As described in the preamble to T.D. TTB-33, which established the “Niagara Escarpment” viticultural area in Niagara County, New York (published in theFederal Registerat 70 FR 53300 on September 8, 2005), the Niagara Escarpment is “a limestone ridge that runs for more than 650 miles through the Great Lakes region [and] forms a horseshoe that begins near Rochester, New York, and continues west through southern Ontario, Canada, Lake Huron, the upper peninsula of Michigan, and terminates in eastern Wisconsin.” The petition states that “the Ledge” is the name generally used to refer to the specific region in which the proposed Wisconsin Ledge viticultural area is located, which is in the northeastern part of Wisconsin bordering Lake Michigan and Green Bay.

The Ledge region is widely referenced in local newspaper reports, some of which are exhibits to the petition. For example, one report entitled “The Ledge” details the discoveries of skeletons, pottery, and cooking utensils “on the ledge” during local explorations (“The Ledge,” Fond du Lac Daily Reporter, Feb. 23, 1907). Another report describes horticultural rare blooms and ancient calendars found along “the ledge” landscape (“Ledge discoveries cloud 151 Bypass options,” Fond du Lac Reporter, April 26, 2009). A third report discusses the “limestone backbone of the Niagara Escarpment we fondly call the Ledge” (“We are citizens of the Earth,” Fond du Lac Reporter, April 19, 2009). As described in that report, local residents planned to band together and “tramp the ancient Ledge” to view the effigy mounds and petroform markers left behind long ago by Native Americans.

The petition further notes that “the Ledge” is part of the name of many local businesses within the proposed viticultural area, including LedgeStone Vineyards, Top of the Ledge Campground, and Pheasants on the Ledge. In addition, among other name evidence cited in the petition, “the Ledge” is referenced in local real estate listings to describe the location of area properties, it is identified in a fact sheet provided by the Niagara Escarpment Resource Network that describes the Ledge portion of the Niagara Escarpment, and it is described in the Comprehensive Conservation Plan for the Horicon and Fox River National Wildlife Refuges.

Finally, the petition adds that Horicon Ledge Park, Ledge View County Park, and Ledge View Nature Center, all of which are county parks or nature centers located within the proposed viticultural area, include “ledge” in their names.

The petition states that the geographical area encompassing the proposed Wisconsin Ledge viticultural area is an upland area between 7 and 20 miles wide at its northern end on the Door Peninsula and 25 to 50 miles wide to the south, near Port Washington. In total, the Ledge landform is 172 miles long north-to-south, and 50 miles wide east-to-west, and it is the primary basis for the proposed boundary line. The proposed Wisconsin Ledge viticultural area is generally triangular-shaped, with the west leg of the triangle primarily bounded by Lake Winnebago, the Fox River, and Green Bay, and the east leg of the triangle bounded by Lake Michigan. The base of the triangle follows various state and local roads.

According to the USGS maps and the proposed boundary description submitted with the petition, the proposed boundary line begins at the northernmost tip of the Door Peninsula, and it then continues southward along the Lake Michigan shorelines of Kewaunee, Manitowoc, and Sheboygan Counties, to a point east of Cedarburg in Ozaukee County. The boundary line then turns inland and westward away from the Lake Michigan shoreline, according to the USGS maps.

The petition explains that the southern portion of the boundary line uses state and local roads that follow terrain changes. The proposed boundary line extends through Ozaukee and Washington Counties, to a point north of Clyman Junction in Dodge County. The landscape within the proposed area contrasts with the areas to the south of the boundary line, toward Milwaukee and northern Illinois, where elevations decline to a more flat, discontinuous, and dissected topography. The area to the south of the proposed Wisconsin Ledge viticultural area has been described as generally flatter, more urbanized, densely populated, and lacking viticultural potential (“The Physical Geography of Wisconsin,” Lawrence Martin, University of Wisconsin Press, 1965, page 281).

The western portion of the proposed boundary line extends north-northeast into Fond du Lac County, eventually meeting the southern shoreline of Lake Winnebago. The proposed boundary line then proceeds north-northeast along Lake Winnebago's eastern shoreline to a road that then connects the boundary with the Fox River. The boundary then follows the river, which flows north-northeast, to Green Bay. The proposed boundary line then follows the eastern shoreline of Green Bay north to the Porte de Morts Passage and the startingpoint on the Door Peninsula. The USGS maps show a combination of large bodies of water and rural areas immediately to the west of the proposed Wisconsin Ledge viticultural area. According to the USGS maps, the Ledge landform slopes eastward within the proposed viticultural area and has decreasing elevations towards the Lake Michigan shoreline.

According to the petition, the distinguishing features of the proposed Wisconsin Ledge viticultural area are its geology, geography, climate, hydrology, and soils. Given that the proposed viticultural area is surrounded by water to the east, north, and northwest, TTB notes that the sections below only contrast the distinguishing features of the proposed viticultural area to the surrounding areas to the south, southwest, and west.

The petition states that the proposed Wisconsin Ledge viticultural area is a geomorphologic land mass that formed over 420 million years ago. The area was shaped by repeated glaciations, including a 2,000-meter thick ice sheet and climatic erosion that altered the landform and brought in igneous and metamorphic rocks from other places (“The Physical Geography of Wisconsin,”supra,at page 248).

The petition explains that, in the time between the Jurassic Era and today, erosion created much of the Ledge region landscape. During the Paleozoic Era, the edges of rock layers (Michigan Basin bowls) were leveled off and exposed. The thin outer edges of the hard, resistant formations eventually wore away, leaving high cliffs and escarpments, according to the petition.

The petition further explains that the glacial ice sheet left deposits of unsorted till (finely ground particles), or boulder clay, and stratified gravel, sand, and clay throughout the region (“Wisconsin Geological and Natural History Survey Map,” “General Soils of Wisconsin,” F. D. Hale, 1973, Figure 8a). The glacial deposition of till and rock fragments created massive moraines that rise up to 20 meters above the surrounding landscape. As the glaciers slowly receded, limestone and till were deposited on the surface to form till plains, according to the petition. The petition states that the resulting broad sloping cuesta is viticulturally beneficial because the glacial till and well-drained strata are well-suited for grape-growing, especially when combined with the light breezes and moderated climate due to the surrounding bodies of water.

South of the proposed Wisconsin Ledge viticultural area are the Southeast Glacial Plains (“Ecological Landscapes of Wisconsin-Southeast Glacial Plains Landscape,” Wisconsin Department of Natural Resources Web site,http://dnr.wi.gov/landscapes/,January 10, 2009). The petition states that, although the southeast plains area received glacial deposits, its topography is more discontinuous and its soils are more fertile than those of the Wisconsin Ledge region because it is covered with silt-loam loess cap.

The USGS maps submitted with the petition show that the lowlands around the Rock River, Lake Winnebago, and Green Bay are to the west of the proposed Wisconsin Ledge viticultural area. The floor of the lowlands is composed of the back slope of Galena-Black River limestone. The limestone is mainly buried beneath glacial drift, but it is evident in some surface areas near quarries. The area to the west of the proposed Wisconsin Ledge viticultural area is generally flat and includes Green Bay, several lakes, and many small ponds and streams, according to the USGS maps.

Further west of the Ledge region and the lowlands, lakes, and Green Bay are the Magnesian and Black River Cuestas (“The Physical Geography of Wisconsin,”supra,at page 214). These cuestas are a part of the driftless area of southwest Wisconsin, which escaped the most recent glaciations and residual drift (“Dip Slope, West Shore of Green Bay,” site map, “Geological Features of Wisconsin-Niagara Escarpment,” Steven Dutch, University of Wisconsin Green Bay, 1999). The petition notes that the lack of glacial activity to the west contrasts with the geological history to the east in the Ledge region.

The petition states that the proposed Wisconsin Ledge viticultural area has a gently rolling landscape of drifted, mantled plains broken by areas of steep slope. The upland elevations mostly contain dolomitic limestone and layers of glacial till, which are beneficial for grape-growing, according to the petition. In addition, the higher elevations of the Ledge region prevent other sediments from the lower north, south, and west elevations from spreading to the upland area. The Niagara Cuesta, which includes the Ledge region, ends at Lake Winnebago, Green Bay, and the Fox River, which generally form the western portion of the boundary line of the proposed viticultural area. To the west is the lower Magnesian Cuesta, which has flat and swampy lowland features, according to the petition.

The USGS maps submitted with the petition show that elevations vary by approximately 600 feet within the proposed Wisconsin Ledge viticultural area. TTB notes that the lowest elevations, at about 580 feet, are along the shorelines of Green Bay, which forms much of the western portion of the proposed boundary line, and Lake Michigan, which forms all of the northern and eastern portions of the proposed boundary line. The highest elevations, at approximately 1,060 feet, are located in the southwest interior part of the proposed Wisconsin Ledge viticultural area, near Herman Center in Dodge County, according to USGS maps.

The petition states that the upland part of the Niagara Cuesta landform, which is a geological mass of thick, hard, continuous limestone bedrock, extends from the northern tip of Door County southward toward the state line. As noted above, the proposed Wisconsin Ledge viticultural area is in the northern, higher elevation part of the Niagara Cuesta, and the proposed viticultural area includes most of the Wisconsin portion of the Niagara Escarpment ridgeline. The Niagara Escarpment crest, at 1,060 feet in elevation, distinguishes the Ledge region, the petition explains. To the south of the proposed viticultural area, the Niagara Escarpment decreases in elevation so that it is no longer a conspicuous topographical feature near Waukesha and Oconomowoc.

The petition adds that the broad sloping portion of the Niagara Cuesta that is within the proposed viticultural area is the portion that is best suited for viticulture, largely because of the glacial till covering in the area. According to the petition, the land in the surrounding regions does not contain the dolomitic limestone and thin layers of glacial till that are found in the proposed Wisconsin Ledge viticultural area due to the decreased glaciations and differing geological history in the lower elevation regions to the west and south.

The petition further explains that the topography changes significantly at Cedarburg, which is to the south of the proposed Wisconsin Ledge viticultural area. From that point, the landscape slowly declines in elevation to a near-flat, dissected topography that includes urban areas. The petition also states that the southwestern portion of the proposed boundary line separates the proposed Wisconsin Ledge viticultural area from the relatively flat lowlands of the Rock River, Lake Winnebago, and the Green Bay area to the west of theproposed Wisconsin Ledge viticultural area.

According to the petition, the proposed Wisconsin Ledge viticultural area has a significant marine influence, which results in moderated climatic conditions that are conducive to viticulture. The marine influence from Lake Michigan, Lake Winnebago, and Green Bay, along with the elevated ledge landform, creates a growing season that is generally longer and warmer than in areas outside of the proposed viticultural area, the petition explains.

As described in the petition, the large bodies of water that surround much of the proposed Wisconsin Ledge viticultural area serve as heat storage tanks that moderate the near-shore land climates (“Confront Climate Change in the Great Lakes Region,” a consensus opinion by the Union of Concerned Scientists-The Ecological Society of America). The petition further explains that the waters of the lakes and Green Bay warm and cool more slowly with the changing seasons than the surrounding land, moderating the summer mean maximum and winter mean minimum temperatures in the proposed Wisconsin Ledge viticultural area. The petition notes that climatic conditions to the west of the proposed Wisconsin Ledge viticultural area are not temperature-moderated by the warm winds from Lake Michigan, Lake Winnebago, and Green Bay because the wind speeds west of the Ledge region drop significantly further inland to the west of Lake Winnebago and Green Bay.

The petition also states that the slow seasonal changes in water temperatures surrounding the Ledge region reduce the chance for late spring frosts or early fall freezes. In addition, according to the petition, the slope and elevation changes of the Ledge create an air circulation movement pattern that reduces frost damage occurrences, mildew, and other humidity-related grape-growing problems. By contrast, to the south of the Ledge area, cold air masses pool on the flat, low terrain and are unable to drain eastward into Lake Michigan, and the areas to the west of the proposed viticultural area lack the elevational differences that are necessary for climate migration, according to the petition.

The table below shows temperature, growing degree day1 (GDD), and growing season information for locations within the proposed Wisconsin Ledge viticultural area and in other parts of Wisconsin (based on a data provided by the State of Wisconsin Climatology Office, 1971-2000).

As shown in the table, the climate in the proposed Wisconsin Ledge viticultural area provides an average annual temperature that is only about 2 degrees Fahrenheit higher than the other listed locations in the State, but the temperatures in the proposed viticultural area are significantly warmer than the surrounding areas in September, with an average of 54 GDD units more than the locations outside of the proposed viticultural area during the month.

The petition explains that the cumulative effect of the moderated climate and warm September temperatures in the proposed viticultural area creates an average grape growing season that is longer than in other parts of Wisconsin. The petition states that the data in the above table illustrates this point, with an average growing season in the proposed viticultural area of 164 days that on average runs from May 3 to October 11 annually, whereas in the rest of Wisconsin, the growing season averages only 136 days, running on average from May 18 to September 22 annually. As a result, according to the petition, the growing season continues in the proposed Wisconsin Ledge viticultural area for an average of three weeks longer than in other areas, resulting in additional hang time for grapes to reach maturity prior to harvest.

The proposed Wisconsin Ledge viticultural area is primarily underlain by the Eastern Dolomite Aquifer (“The Physical Geography of Wisconsin,”supra,at pages 12 and 21). The petition states that Dolomite resembles limestone and contains ground water.The yield of water from the aquifer depends on the porosity of the carbonate rock and frequency of cracks or fractures. The unique rock formations and water patterns of the Eastern Dolomite Aquifer vary from other areas of the state, which are primarily covered by the Sand and Gravel Aquifer, according to the petition.

In addition, mineral rich water and dolomite limestone, which the petition notes are important factors for viticulture, are common in the Wisconsin Ledge region (“The Physical Geography of Wisconsin,” page 21). The petition explains that the carbonate rock and porous karst features of the Eastern Dolomite Aquifer enhance the delivery and availability of water and nutrients to grapevines because nutrients are added to the water as it travels through the porous rock, which then enriches area soils and grapevines.

Further, according to the petition, the Eastern Dolomite Aquifer has a constant 50 degrees Fahrenheit water temperature, which provides a moderating effect that yields more consistent soil temperatures. The petition also notes that early spring and late fall fogs form from the constant 50 degree Fahrenheit groundwater that reacts to the much colder air temperatures; those fogs blanket the area and help protect the vineyards from damaging freezes and frosts.

The petition states that the Eastern Dolomite Aquifer is unique to the eastern-most part of Wisconsin, including the Wisconsin Ledge region and the adjacent parts of Lake Michigan. As described in the petition, the aquifer rock formation rises to the Earth's surface in the Ledge region and then eventually dips eastward under the waters of Lake Michigan. By comparison, the Sand and Gravel Aquifer that covers most of Wisconsin is easily contaminated because the top of the aquifer is also the land surface, according to the petition. In addition, the petition notes that water flow in the Sand and Gravel Aquifer is highly variable due to the spatial variability of the sand and gravel deposits, and water from the aquifer contains fewer nutrients because it has a short residence time in the aquifer and discharges close to the recharge point of the aquifer.

According to the petition, the soils deposited in the Ledge region by the glacial drift are unsorted till and stratified gravel, sand, and clay (“General Soils of Wisconsin,”supra), which are well-suited for viticulture. As stated in the petition, these soils have ample permeability with average to steep slopes and contain fragments of local limestone, shale, and igneous and metamorphic rocks that the glacial ice sheet brought to the region. Although the soils in the Ledge region vary somewhat, they generally come from glacial drift, with Miami and Coloma loams as the two general soil types in the proposed Wisconsin Ledge viticultural area, according to the petition. The petition further states that the ground moraine that covers most of the proposed Wisconsin Ledge viticultural area has a variable, slightly rolling topography of drift-mantled plains. Composed largely of till, the ground moraine also contains small amounts of stratified sand, gravel, and a base of dolomite bedrock (“Bedrock Geology of Wisconsin,” map, University of Wisconsin-Extension, Geological and Natural History Survey, April 1981).

The petition explains that the soils to the south and west of the proposed Wisconsin Ledge viticultural area have less glacial till and fewer rock formations. Those soils are sandier with less limestone and more organic composition (generally rich fertile black loam) as compared to the prairie soils and sandy plains that are common in the Wisconsin Ledge.

TTB concludes that the petition to establish the approximately 3,800 square mile Wisconsin Ledge viticultural area merits consideration and public comment, as invited in this notice.

See the narrative boundary description of the petitioned-for viticultural area in the proposed regulatory text published at the end of this notice.

The petitioner provided the required maps, and TTB lists them below in the proposed regulatory text.

Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. If TTB establishes this proposed viticultural area, its name, “Wisconsin Ledge,” will be recognized as a name of viticultural significance under 27 CFR 4.39(i)(3). The text of the proposed regulation clarifies this point.

On the other hand, TTB does not believe that any single part of the proposed viticultural area name standing alone, that is, “Wisconsin” or “Ledge,” would have viticultural significance in relation to this proposed viticultural area because “Wisconsin,” standing alone, is locally and nationally known as referring to the State of Wisconsin, which is already a term of viticultural significance as a state-wide appellation of origin under 27 CFR 4.25(a)(1)(ii), which provides that a State is an American appellation of origin, and 27 CFR 4.39(i)(3), which notes that “[a] name has viticultural significance when it is the name of a state * * *”; and the term “ledge” refers to a common geographical landform found in many locations in the United States and internationally. Therefore, the proposed part 9 regulatory text set forth in this document specifies only “Wisconsin Ledge” as a term of viticultural significance for purposes of part 4 of the TTB regulations.

If this proposed regulatory text is adopted as a final rule, wine bottlers using “Wisconsin Ledge” in a brand name, including a trademark, or in another label reference as to the origin of the wine, will have to ensure that the product is eligible to use “Wisconsin Ledge” as an appellation of origin.

For a wine to be labeled with a viticultural area name or with a brand name that includes a viticultural area name or other term identified as being viticulturally significant in part 9 of the TTB regulations, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name or other term, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible for labeling with the viticultural area name or other viticulturally significant term and that name or term appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the viticultural area name or other viticulturally significant term appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label.

Different rules apply if a wine has a brand name containing a viticultural area name or other term of viticultural significance that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.

TTB invites comments from interested members of the public on whether it should establish the proposed Wisconsin Ledge viticultural area. TTBis interested in receiving comments on the sufficiency and accuracy of the name, boundary, climate, and other required information submitted in support of the petition. Please provide any available specific information in support of your comments.

Because of the potential impact of the establishment of the proposed Wisconsin Ledge viticultural area on wine labels that include the term “Wisconsin Ledge” as discussed above under Impact on Current Wine Labels, TTB is also interested in comments as to whether there will be a conflict between the proposed viticulturally significant term and currently used brand names. If a commenter believes that a conflict will arise, the comment should describe the nature of that conflict, including any anticipated negative economic impact that approval of the proposed viticultural area will have on an existing viticultural enterprise. TTB is also interested in receiving suggestions for ways to avoid conflicts, for example, by adopting a modified or different name for the viticultural area.

You may submit comments on this notice by using one of the following three methods:

•Federal e-Rulemaking Portal:You may send comments via the online comment form posted with this notice within Docket No. TTB-2011-0007 on “Regulations.gov,” the Federal e-rulemaking portal, athttp://www.regulations.gov.A direct link to that docket is available under Notice No. 121 on the TTB Web site athttp://www.ttb.gov/wine/wine_rulemaking.shtml.Supplemental files may be attached to comments submitted via Regulations.gov. For complete instructions on how to use Regulations.gov, visit the site and click on “User Guide” under “How to Use this Site.”

•U.S. Mail:You may send comments via postal mail to the Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-4412.

•Hand Delivery/Courier:You may hand-carry your comments or have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street, NW., Suite 200-E, Washington, DC 20005.

Please submit your comments by the closing date shown above in this notice. Your comments must reference Notice No. 121 and include your name and mailing address. Your comments also must be made in English, be legible, and be written in language acceptable for public disclosure. TTB does not acknowledge receipt of comments, and TTB considers all comments as originals.

If you are commenting on behalf of an association, business, or other entity, your comment must include the entity's name as well as your name and position title. If you comment viahttp://www.regulations.gov,please enter the entity's name in the “Organization” blank of the online comment form. If you comment via postal mail or hand delivery/courier, please submit your entity's comment on letterhead.

You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine whether to hold a public hearing.

All submitted comments and attachments are part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider to be confidential or inappropriate for public disclosure.

On the Federal e-rulemaking portal, Regulations.gov, TTB will post, and you may view, copies of this notice, selected supporting materials, and any electronic or mailed comments TTB receives about this proposal. A direct link to the Regulations.gov docket containing this notice and the posted comments received on it is available on the TTB Web site athttp://www.ttb.gov/wine/wine_rulemaking.shtmlunder Notice No. 121. You may also reach the docket containing this notice and the posted comments received on it through the Regulations.gov search page athttp://www.regulations.gov.For instructions on how to use Regulations.gov, visit the site and click on “User Guide” under “How to Use this Site.”

All posted comments will display the commenter's name, organization (if any), city, and state, and, in the case of mailed comments, all address information, including e-mail addresses. TTB may omit voluminous attachments or material that it considers unsuitable for posting.

You also may view copies of this notice, all related petitions, maps and other supporting materials, and any electronic or mailed comments TTB receives about this proposal by appointment at the TTB Information Resource Center, 1310 G Street, NW., Washington, DC 20220. You may also obtain copies at 20 cents per 8.5- x 11-inch page. Contact TTB's information specialist at the above address or by telephone at 202-927-2270 to schedule an appointment or to request copies of comments or other materials.

TTB certifies that this proposed regulation, if adopted, would not have a significant economic impact on a substantial number of small entities. The proposed regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

This proposed rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, it requires no regulatory assessment.

Elisabeth C. Kann of the Regulations and Rulings Division drafted this notice.

For the reasons discussed in the preamble, TTB proposes to amend title 27, chapter I, part 9, Code of Federal Regulations, as follows:

The Neuse River Bridge Run Committee on behalf of the North Carolina Department of Transportation has requested a temporary deviation from the current operating regulation of the US 70 Alfred Cunningham Bascule Bridge across the Trent River, mile 0.0, at New Bern, NC. The route of the three Neuse River Bridge Run races cross the bridge and the requested deviation is to accommodate a safe and efficient passage across the bridge for the racers. To facilitate this event, the draw of the bridge will be maintained in the closed-to-navigation position from 6:30 a.m. until 9:30 a.m. on Saturday, October 15, 2011.

The vertical clearance for this bridge in the closed position is 14 feet at Mean High Water and unlimited in the open position. The operating regulations are set forth in 33 CFR 117.843(a) which states that during this time of year the bridge shall open on signal.

Vessels that can pass through the bridge in the closed position may do so at any time. The Coast Guard will inform the waterway users of the closure through our Local Notices to Mariners and other appropriate local media to minimize any impact caused by the temporary deviation. The bridge will be able to open for emergencies. Most vessel traffic utilizing this bridge consists of recreational boaters. October is outside of the high recreational boating season therefore, only a small number of boaters may be affected by this temporary closure. There are no alternate routes to the Neuse River from the Trent River.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

Throughout this document, whenever “we,” “us,” or “our” is used, we mean EPA. On July 12, 2011, the Virginia Department of Environmental Quality submitted a SIP revision pertaining to amendments of Virginia's regulations regarding the new 1-hour primary NAAQS for SO2. EPA is proposing to approve this SIP revision.

On June 2, 2010, EPA announced a new 1-hour primary NAAQS for SO2of 75 parts per billion (ppb), which is attained when the 3-year average of the 99th-percentile of the annual distribution of daily maximum 1-hour average concentrations does not exceed 75 ppb at each monitor within an area. On June 22, 2010 (75 FR 35520), the final rule for the 1-hour primary NAAQS for SO2was published and became effective on August 23, 2010. This rule also revoked the previous 24-hour and annual primary NAAQS for SO2. On July 12, 2011, the Virginia Department of Environmental Quality submitted a SIP revision pertaining to the adoption of the new SO2standard. The Virginia SIP revision consists of amending the state regulations by adopting the new 1-hour primary SO2NAAQS of 75 ppb as well as the nullification of the previous annual primary SO2standard of 30 ppb, and 24-hour primary SO2standard of 140 ppb. The previous standards will be revoked one year after the effective date of the designations of the 1-hour primary SO2standard of 75 ppb, pursuant to section 107 of the CAA.

The amendments to Virginia's regulations include the adoption of the new 1-hour SO2NAAQS and the nullification of the previous annual and 24-hour primary SO2NAAQS, one year after designations for the new 1-hour primary SO2NAAQS. These amendments can be found under Regulation 9VAC5-30-30. There were also administrative changes regarding these amendments. These changes include updates to documents incorporated by reference under 40 CFR part 50, as well as administrative changes in regards to those updates. These changes can be found under Regulation 9VAC5-20-21.E.1.

In 1995, Virginia adopted legislation that provides, subject to certain conditions, for an environmental assessment (audit) “privilege” for voluntary compliance evaluations performed by a regulated entity. The legislation further addresses the relative burden of proof for parties either asserting the privilege or seeking disclosure of documents for which the privilege is claimed. Virginia's legislation also provides, subject to certain conditions, for a penalty waiver for violations of environmental laws when a regulated entity discovers such violations pursuant to a voluntary compliance evaluation and voluntarily discloses such violations to the Commonwealth and takes prompt and appropriate measures to remedy the violations. Virginia's Voluntary Environmental Assessment Privilege Law, Va. Code Sec. 10.1-1198, providesa privilege that protects from disclosure documents and information about the content of those documents that are the product of a voluntary environmental assessment. The Privilege Law does not extend to documents or information (1) That are generated or developed before the commencement of a voluntary environmental assessment; (2) that are prepared independently of the assessment process; (3) that demonstrate a clear, imminent and substantial danger to the public health or environment; or (4) that are required by law.

On January 12, 1998, the Commonwealth of Virginia Office of the Attorney General provided a legal opinion that states that the Privilege Law, Va. Code Sec. 10.1-1198, precludes granting a privilege to documents and information “required by law,” including documents and information “required by Federal law to maintain program delegation, authorization or approval,” since Virginia must “enforce Federally authorized environmental programs in a manner that is no less stringent than their Federal counterparts * * *.” The opinion concludes that “[r]egarding § 10.1-1198, therefore, documents or other information needed for civil or criminal enforcement under one of these programs could not be privileged because such documents and information are essential to pursuing enforcement in a manner required by Federal law to maintain program delegation, authorization or approval.”

Virginia's Immunity Law, Va. Code Sec. 10.1-1199, provides that “[t]o the extent consistent with requirements imposed by Federal law,” any person making a voluntary disclosure of information to a state agency regarding a violation of an environmental statute, regulation, permit, or administrative order is granted immunity from administrative or civil penalty. The Attorney General's January 12, 1998 opinion states that the quoted language renders this statute inapplicable to enforcement of any Federally authorized programs, since “no immunity could be afforded from administrative, civil, or criminal penalties because granting such immunity would not be consistent with Federal law, which is one of the criteria for immunity.”

Therefore, EPA has determined that Virginia's Privilege and Immunity statutes will not preclude the Commonwealth from enforcing its program consistent with the Federal requirements. In any event, because EPA has also determined that a state audit privilege and immunity law can affect only state enforcement and cannot have any impact on Federal enforcement authorities, EPA may at any time invoke its authority under the CAA, including, for example, sections 113, 167, 205, 211 or 213, to enforce the requirements or prohibitions of the state plan, independently of any state enforcement effort. In addition, citizen enforcement under section 304 of the CAA is likewise unaffected by this, or any, state audit privilege or immunity law.

EPA is proposing to approve the Virginia SIP revision for the adoption of the new 1-hour primary SO2NAAQS at a level of 75 ppb to the state regulations, which was submitted on July 12, 2011. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.

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

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

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

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

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

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

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

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

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

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

In addition, the proposed approval of the adoption of the 1-hour primary SO2NAAQS into Virginia's regulation does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

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

Regulated Entities.Entities regulated by this action primarily are fossil fuel-fired boilers, turbines, and combined cycle units that serve generators that produce electricity for sale or cogenerate electricity for sale and steam. Regulated categories and entities include:

This table is not intended to be exhaustive, but rather to provide a guide for readers regarding entities likely to be regulated by this action. This table lists the types of entities which EPA is now aware could potentially be regulated by this action. Other types of entities not listed in this table could also be regulated. To determine whether your facility, company, business, organization,etc.,is regulated by this action, you should carefully examine the applicability criteria in §§ 97.404, 97.504, and 97.604 of title 40 of the Code of Federal Regulations. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the precedingFOR FURTHER INFORMATION CONTACTsection.

In addition to being available in the docket, an electronic copy of this proposal will also be available on theWorld Wide Web. Following signature by the EPA Administrator, a copy of this action will be posted on the transport rule Web sitehttp://www.epa.gov/airtransport.

1.Submitting CBI.Do not submit this information to EPA throughhttp://www.regulations.govor email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2. Send or deliver information identified as CBI only to the following address: Roberto Morales, OAQPS Document Control Officer (C404-02), U.S. EPA, Research Triangle Park, NC 27711, Attention Docket ID No. EPA-HQ-OAR-2009-0491.

2.Tips for preparing your comments.

• Identify the rulemaking by docket number and other identifying information (subject heading,Federal Registerdate and page number).

• Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

• Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

• Describe any assumptions and provide any technical information and/or data that you used.

• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

• Make sure to submit your comments by the comment period deadline identified.

EPA has identified errors or potential errors in unit-specific modeling assumptions that affect the proper calculation of Transport Rule state budgets in Florida, Louisiana, Michigan, Mississippi, Nebraska, New Jersey, New York, Texas, and Wisconsin, as well as new unit set-asides in Arkansas and Texas. EPA is proposing to take the following distinct actions to revise individual state budgets and new-unit set asides: (1) Revise Michigan's annual NOXbudget to account for an erroneously assumed selective catalytic reduction (SCR) emission control device at one unit; (2) revise Nebraska's annual NOXbudget to account for an erroneously assumed SCR emission control device at one unit; (3) revise the Texas SO2budget to account for erroneously assumed flue gas desulphurization (FGD, or scrubber) emission control devices at three units and revised assumptions regarding flue gas treatment in existing scrubbers at seven units; (4) revise the Arkansas ozone-season new unit set-aside to account for erroneously omitted projected emissions from one new unit; (5) revise the Texas new unit set-aside to account for erroneously omitted projected emissions for SO2, ozone-season NOX, and annual NOX; (6) revise New Jersey's ozone season NOX, annual NOX, and SO2budgets to account for an erroneously assumed FGD and SCR emission control devices at one unit, and taking into account operational constraints likely to necessitate non-economic generation at six facilities; (7) revise Wisconsin's SO2and annual NOXbudgets to account for erroneously assumed FGD and SCR devices at two units; (8) revise New York's SO2, annual NOX, and ozone season NOXbudgets taking into account operational constraints likely to necessitate non-economic generation at ten units; (9) revise Louisiana's ozone season NOXbudget taking into account operational constraints likely to necessitate non-economic generation at twelve units; (10) revise Mississippi's ozone season NOXbudget taking into account operational constraints likely to necessitate non-economic generation at four units; (11) revise the Texas annual NOXand ozone season NOXbudgets taking into account operational constraints likely to necessitate non-economic generation at seven units; and (12) revise Florida's ozone-season NOXbudget taking into account the unavailability of a previously operating nuclear unit. See section III.A of this preamble for further explanation of these revisions.

These proposed revisions to state budgets also entail revisions to the affected states' assurance levels, as the variability limits for each state are calculated as a percentage of the applicable budget. See the final Transport Rule, 76 FR 48208, 48267-68, August 8, 2011 (explaining variability limit derivation). The purpose of these revisions is to establish state budgets and new unit set-asides that are consistent with the proper application of methodologies established in the final Transport Rule.

The resulting budgets maintain significant emission reductions from historic levels and are consistent with the final Transport Rule's methodology for defining significant contribution and interference with maintenance. The changes represent the proper application of the methodology established in the final Transport Rule. No changes to that methodology are being proposed, and EPA is not reopening the methodology established in the final Transport Rule for public comment. EPA is also not proposing any change to the levels of stringency (i.e.,cost per ton) selected in the finalTransport Rule's determination of significant contribution and interference with maintenance and is not reopening that issue for public comment. See “Significant Contribution Assessment TSD” in the docket for this rulemaking for a demonstration of how the revisions in this rulemaking represent the proper application of and are consistent with the methodology developed in the final Transport Rule.

It is EPA's intent, in conducting this rulemaking, to make the revisions in this proposal as well as to conduct a clearly defined, time-limited process by which any similarly justified revisions to the final Transport Rule state budgets are identified and effectuated in a timely and expeditious manner. To that end, EPA is seeking that all relevant information that may support similar revisions be submitted in full by the comment deadline on this rulemaking, such that the Agency may consider whether a subsequent and timely rulemaking should address any further revisions to the final Transport Rule state budgets. EPA believes that the likelihood of additional substantive revisions merited to the Transport Rule state budgets is limited, considering that EPA has already conducted several notice-and-comment processes through initial proposal of the Transport Rule and multiple notices of data availability (NODAs) to prompt the public to provide the relevant input information that informs the calculation of the Transport Rule state budgets. Please see section III.A of this preamble for a more detailed description of the type of information EPA is requesting in comments on this rulemaking for this purpose.

EPA is also proposing revisions to allowance allocations at certain units in six states that are affected by existing utility consent decrees. EPA has identified provisions in certain utility consent decrees which the Agency believes would restrict the use of Transport Rule allowances allocated to certain units and effectively make certain Transport Rule reduction requirements marginally more stringent than intended by making certain allowances intended for compliance purposes unavailable. When establishing the state budgets under the final Transport Rule, EPA successfully accounted for the emission reduction requirements of these consent decrees; therefore, the Transport Rule state budgets sustain the environmental protection secured by those existing utility consent decrees. However, when dividing those state budgets into individual unit-level allowance allocations, EPA included allowance allocations to certain units that exceed those units' allowable emissions under the terms of the applicable consent decree. Under these conditions, the consent decree provisions of concern identified in this proposal would determine the quantity of allocated allowances in excess of allowable emissions at the unit in question and prevent them from being available for compliance use by any source under the Transport Rule programs. Because EPA has already secured the environmental improvements required by the consent decrees by incorporating their emission reductions into the Transport Rule state budgets, there is no environmental need to prevent the allowances from being used for compliance by sources subject to the Transport Rule aside from those sources whose emissions are restricted by the terms of the consent decrees to which they are subject. Therefore, EPA is proposing to revise Transport Rule unit-level allowance allocations to the specific units affected by these consent decrees to reflect their maximum allowable emissions, such that none of the allowances affected by the provisions of concern are unnecessarily removed from use for compliance by other units. While EPA intends to perform this revision to benefit program implementation, EPA does not believe resolution of this issue is a necessary precondition for successful implementation of and compliance with the Transport Rule programs in 2012, because as described in section IV of this preamble, notwithstanding these proposed revisions, EPA will still be able to distribute 99.7 percent of all existing unit allowances under the state budgets established in the final Transport Rule by that rule's November 7 deadline. See section III.B of this preamble for further explanation of this revision.

EPA is also proposing in this action to amend the assurance penalty provisions of the Transport Rule to make them effective January 1, 2014. This change takes account of the fact that the revisions described above are being proposed, and any information described above concerning requested additional revisions may be submitted, close to the commencement of the Transport Rule programs. The proposed amendment to the assurance provisions is intended to promote the development of allowance market liquidity as these revisions are finalized, thereby smoothing the transition from the Clean Air Interstate Rule (CAIR) programs to the Transport Rule programs in 2012. See section III.C of this preamble for further explanation of this revision.

EPA is also proposing to correct typographical errors in certain sections of rule text in parts 52 and 97 in the final Transport Rule. See section III.D of this preamble for further explanation of these corrections.

After the final Transport Rule was published, EPA identified discrepancies in certain data assumptions that substantially affected the calculation of a few states' budgets in the final rule. Therefore, EPA is proposing the following revisions:

(1) Increase Michigan's 2012 and 2014 annual NOXbudgets in accordance with a revision to the final Transport Rule analysis that erroneously assumed that an SCR exists at Monroe Unit 2.

EPA is proposing to revise Michigan's 2012 and 2014 annual NOXbudgets in accordance with a revision to the final Transport Rule analysis that erroneously assumed an SCR exists at Monroe Unit 2. This SCR is planned, but is not expected to be online in 2012 or 2014. Therefore, EPA is proposing to adjust its 2012 and 2014 projections to reflect projected emissions without an SCR at this unit. This would result in a 5,228 ton increase in the state's annual NOXbudget. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance level, new unit set-aside, and Indian country new unit set-aside, and “Revisions to Unit Level Allocations under the FIP” in the docket for a quantitative demonstration of the effect of this revision on unit-level allocations under the FIP.

This revised assumption about Monroe Unit 2 would also affect the calculation of Michigan's potential ozone-season NOXbudget (as well as the state's assurance level, new unit set-aside, Indian country new unit set-aside, and unit-level allocations under the FIP) if that state is included in the Transport Rule ozone-season NOXprogram as previously proposed (76 FR 40662, July 11, 2011). EPA will address this issue, along with other public comments submitted on that rulemaking, when the Agency finalizes that rulemaking later this year.

(2) Increase Nebraska's 2012 and 2014 annual NOXbudgets in accordance with a revision to the final Transport Rule analysis that erroneously assumed that an SCR exists at Nebraska City Unit 1.

EPA is proposing to increase Nebraska's 2012 and 2014 annual NOXbudgets in accordance with a revision to the final Transport Rule analysis that erroneously assumed that an SCR exists at Nebraska City Unit 1. There is no SCR that is present, planned, or under construction at the unit. Therefore, EPA is proposing to adjust its baseline emission projections for the state to reflect projected emissions without an SCR at this unit. This adjustment results in an increase of 3,599 tons to the state's annual NOXbudget. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance level, new unit set-aside, and Indian country new unit set-aside, and “Revisions to Unit Level Allocations under the FIP” in the docket to this rulemaking for a quantitative demonstration of the effect of this proposed revision on unit-level allocations under the FIP.

(3) Increase the Texas 2012 and 2014 SO2budgets in accordance with a revision to the final Transport Rule analysis that erroneously assumed that scrubbers exist at W.A. Parish Unit 6, J.T. Deely Unit 1, and J.T. Deely Unit 2, and that assumed full flue gas treatment in existing scrubbers at Martin Lake, Monticello, Sandow, W.A. Parish, and Oklaunion facilities.

EPA is proposing to address several revisions to the modeling assumptions affecting the calculation of the Texas SO2budget. In particular, EPA is proposing to increase the Texas SO2budget in accordance with a revision to the final Transport Rule analysis that erroneously assumed flue-gas desulfurization (FGD) technology is installed on J.T. Deely Units 1 and 2 and W.A. Parish Unit 6 by 2012. At the time that EPA conducted its final Transport Rule analysis to determine state budgets, EPA had information (both from public sources, as cited below, as well as from a private subscription-only power sector pollution control database) showing that FGD retrofits for these sources were originally planned or announced to be installed by 2012.1 2 However, newer information shows that these FGDs are no longer scheduled to be installed in 2012.

A number of facilities in Texas currently face limitations regarding the amount of flue gas that can be treated in their existing FGDs. In the final Transport Rule analysis, EPA relied on the SO2removal efficiency that these facilities reported at their scrubbers to the Energy Information Administration (EIA). However, EPA has now determined that the facilities' reports only intended to address the removal efficiency for the portion of the flue gas treated in the scrubber. For this reason, that removal efficiency should not be applied to the total amount of sulfur combusted in the coal consumed (as some of the flue gas at these units must be vented without being treated in the scrubber as originally constructed). When the SO2removal rates are decreased to reflect the reported operational constraint of each affected scrubber's flue gas treatment, the projected emission level for Texas, after all significant contribution identified in the final Transport Rule is addressed, correspondingly rises.

Therefore, in accordance with the revised unit-level input assumptions regarding existing scrubbers and flue gas treatment at the Texas units described above, EPA is proposing to increase the state's 2012 and 2014 SO2budgets each by 70,067 tons. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of how each of these unit-level adjustments affects the calculation of this proposed revision, as well as for the impacts this revision would have on the state's assurance levels, new unit set-aside, and Indian country new unit set-aside.

(4) Increase Arkansas' ozone-season NOXnew unit set-aside in accordance with a revision to the final Transport Rule's calculation of the new unit set-aside that erroneously omitted Plum Point Unit 1's projected emissions.

EPA is not proposing to adjust Arkansas' ozone season NOXbudget in this rulemaking. However, EPA is proposing to adjust the portion of that budget dedicated to the new unit set-aside account. In the final Transport Rule, EPA had determined a 2 percent new unit set-aside for ozone season NOXin the state. That value would be changed to 5 percent in this rulemaking. The revision is consistent with the new unit set-aside methodology described in the final rule. The updated value simply reflects the revised classification of one unit to be treated as a new unit for purposes of unit-level allowance allocation. This unit, Plum Point Unit 1, commenced commercial operation on or after January 1, 2010, and therefore should be considered a new unit under the final Transport Rule's unit-level allocation methodology (76 FR 48290); however, the final Transport Rule erroneously omitted this unit's projected emissions from the calculation of Arkansas' ozone-season NOXnew unit set-aside. Including this unit's projected emissions in the calculation would yield a revised new unit set-aside of 5 percent of the state's budget instead of the previous 2 percent value. See the “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision.

This proposed revision to Arkansas' new unit set-aside would necessarily result in changes to allowance allocations to existing units. See “Revisions to Unit Level Allocations under the FIP” tables in the docket to this rulemaking for a quantitative demonstration of the effect of this revision on unit-level allocations under the FIP.

(5) Increase Texas' ozone-season NOX, annual NOX, and SO2new unit set-asides in accordance with a revision to the final Transport Rule's calculations of the new unit set-asides that erroneously omitted Oak Grove Unit 2's projected emissions.

EPA is also proposing a revision to the calculation of the new unit set-asides for ozone-season NOX, annual NOX, and SO2in Texas. The updated values would simply reflect the revised classification of one unit to be treated as a new unit for purposes of unit-level allowance allocation. This unit, Oak Grove Unit 2, commenced commercial operation on or after January 1, 2010, and therefore should be considered a new unit under the final Transport Rule's unit-level allocation methodology; however, the final Transport Rule erroneously omitted this unit's projected emissions from the calculation of Texas's ozone-season NOX,annual NOX, and SO2new unit set-asides. Including this unit's projected emissions in the calculation would yield revised new unit set-asides of 4 percent of the state's ozone-season NOXbudget, 4 percent of the state's annual NOXbudget, and 5 percent of the state's SO2budget. See the “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision.

(6) Increase New Jersey's 2012 and 2014 ozone-season NOX, annual NOX, and SO2budgets in accordance with revisions to the final Transport Rule analysis that erroneously assumed thatan SCR and scrubber exist at BL England Unit 1 and to reflect operational constraints likely to necessitate non-economic dispatch at six other facilities in 2012.

EPA is proposing to revise New Jersey's ozone-season NOX, annual NOX, and SO2budgets in accordance with revisions to assumed control technologies at BL England Unit 1 as well as operational constraints affecting units at six other facilities. The SCR and scrubber that had been planned to be installed at BL England Unit 1, and which EPA assumed would be in place in 2012, are not actually required by a New Jersey administrative order until December 2013. Furthermore, the agreement limits operation of the unit to the ozone season. Therefore, EPA is proposing to adjust New Jersey's 2012 state budgets to reflect projected emissions without an SCR or scrubber at this unit and its operation only during the ozone season.

EPA is also proposing revisions to New Jersey's state budgets based on information demonstrating that northern New Jersey is an out-of-merit-order dispatch area, meaning that units in that area are frequently dispatched out of regional economic order as a result of short-run limitations on the ability to meet local electricity demand with generation from outside the area. Conditions in this out-of-merit-order dispatch area are likely to necessitate what would otherwise be non-economic generation at six New Jersey plants (Bergen, Edison, Essex, Kearny, Linden, and Sewaren Generating Stations) in the immediate future. EPA did not consider these immediate-term conditions in its calculation of the New Jersey emission budgets in the final Transport Rule. EPA is proposing to adjust New Jersey's emission budgets based on analysis of the frequency these units have recently been called to run for non-economic purposes, according to data provided by the utility operating those units.

For this proposal, EPA has calculated the net change in the state's 2012 and 2014 total emissions (that inform the state budgets) to account for increased generation (and related emissions) from the specific units affected by the immediate-term non-economic constraints described above, as well as for a corresponding reduction in generation (and related emissions) at other units within the state, to maintain the electricity supply and demand equilibrium modeled in the final Transport Rule.

EPA re-calculated the emissions from BL England Unit 1 and the six plants with non-economic generation to account for the input assumption changes described above. These calculations yield increases to the New Jersey 2012 state budgets for SO2of 2,096 tons, annual NOXof 420 tons, and ozone-season NOXof 592 tons; and 2014 state budget increases for annual NOXof 112 tons, and ozone-season NOXof 195 tons. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance level and new unit set-aside, and “Revisions to Unit Level Allocations under the FIP” in the docket for a quantitative demonstration of the effect of this revision on unit-level allocations under the FIP.

(7) Increase Wisconsin's 2014 SO2budget and 2012 and 2014 annual NOXbudget in accordance with a revision to the final Transport Rule analysis that erroneously assumed that an FGD exists at Weston Unit 3, wet FGDs (instead of dry FGDs) exist at Columbia Units 1 and 2, and a SCR exists at John P. Madgett Unit 1.

EPA is proposing to increase Wisconsin's SO2budget in accordance with revisions to the Weston Unit 3 and Columbia Units 1 and 2 FGD status in 2014. EPA had assumed that a scrubber would be available at Weston Unit 3 in 2014 in its base case modeling. There is no FGD expected to be online at the facility in 2014. The final Transport Rule did not assume an operating scrubber at Weston Unit 3 in 2012, but did assume the FGD would be in place and operating by 2014. Therefore, EPA is proposing to adjust Wisconsin's 2014 SO2budget to reflect the unit's operation without an FGD in 2014.

EPA had also assumed that the two scrubbers being installed at Columbia Units 1 and 2 were wet scrubbers. Instead, dry scrubbers have been planned and approved at these units. In EPA's modeling, the assumed removal rate of a new wet scrubber is 96 percent and a new dry scrubber is 92 percent. Therefore, the 2014 modeled remedy emissions from these units would be twice their current amount, if the assumption of wet scrubbers was changed to dry scrubbers for the facility. No change is needed for 2012 since EPA did not model any scrubbers operating at those units in that year.

To account for these adjustments, EPA is proposing to increase the Wisconsin SO2budget by a total of 7,757 tons in 2014.

EPA is also proposing to increase Wisconsin's annual NOXbudget in 2012 and 2014. EPA had assumed a SCR would be installed at John P. Madgett Unit 1 in 2012 in its budget determination and remedy modeling. There is no SCR expected to be online in 2012 or 2014 at the unit. Therefore, EPA is proposing to adjust Wisconsin's annual NOXbudgets to reflect the unit's operation without a SCR. This would result in a 2,473 ton increase to the state's annual NOXbudget.

The revised assumptions about John P. Madgett Unit 1 would also affect the calculation of Wisconsin's potential ozone-season NOXbudget (as well as the state's assurance level, new unit set-aside, Indian country new unit set-aside, and unit-level allocations under the FIP) if that state is included in the Transport Rule ozone-season NOXprogram as previously proposed (76 FR 40662, July 11, 2011). EPA will address this issue, along with other public comments submitted on that rulemaking, when the Agency finalizes that rulemaking later this year.

See the “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance level, new unit set-aside, and Indian country new unit set-aside, and “Revisions to Unit Level Allocations under the FIP” in the docket for a quantitative demonstration of the effect of this revision on unit-level allocations under the FIP.

(8) Increase New York's 2012 and 2014 ozone-season NOX, annual NOX, and SO2budgets in accordance with a revision to the final Transport Rule analysis that did not reflect operational constraints likely to necessitate non-economic dispatch at certain units.

EPA is proposing to increase the New York state ozone-season NOX, annual NOX, and SO2budgets in accordance with revisions to the assumed operation of several specific units in 2012, to satisfy three specific immediate-term operational constraints documented by the New York Independent System Operator (NYISO). These three constraints are referred to here as the N-1-1 Contingency, the Minimum Oil Burn Rules, and out-of-merit-order dispatch conditions, which collectively affect the likely 2012 and 2014 operations of specific units in the New York City and Long Island areas.

The N-1-1 Contingency requires that certain units be available to deliver generation with advance notice of only 30 seconds at certain times during the year. These specific units require several hours to reach the necessary level of generation under these contingency circumstances; therefore, the contingency requirement frequently necessitates their ongoing operationwhether or not the contingency is actually triggered at any given time. Based on information published by NYISO, EPA identified Arthur Kill Generating Station, Ravenswood, and Astoria Generating Station as needing to maintain minimum generation levels at two units in each facility to meet the N-1-1 Contingency constraint.

The Minimum Oil Burn Rules require that certain units be able to immediately burn oil in the event of a natural gas supply disruption to the New York City and Long Island area infrastructure. Some units are incapable of immediately switching fuel, so they must burn a minimum amount of oil on an ongoing basis when operating to comply with this requirement. EPA determined that the Minimum Oil Burn Rules would require residual fuel oil consumption at the Arthur Kill Generating Station, Ravenswood, Astoria Generating Station, and Northport facilities. Based on information published by the NYISO, EPA determined that these units would burn oil in 2012 and 2014 at the same proportion of total projected heat input as shown for the share of historic heat input reported as residual fuel oil at those facilities.

Data presented in the NYISO 2010 Comprehensive Area Transmission Review Study and the NYISO Operating Study, Summer 2011, demonstrate that Long Island is an out-of-merit-order dispatch area, meaning that units in that area are frequently dispatched out of regional economic order as a result of short-run limitations on the ability to meet local electricity demand with generation from outside the area. Conditions in this out-of-merit-order dispatch area are likely to necessitate in the immediate future what would otherwise be non-economic generation at 3 units at the Northport facility.

For this proposal, EPA has calculated the net change in the state's total emissions (that inform the state budgets) to account for increased generation (and related emissions) from the specific units affected by the immediate-term non-economic constraints described above, as well as for a corresponding reduction in generation (and related emissions) at other units within the state, to maintain the electricity supply and demand equilibrium modeled in the final Transport Rule. These calculations yield increases to the New York 2012 and 2014 state budgets for SO2of 3,527 tons, annual NOXof 3,485 tons, and ozone-season NOXof 1,911 tons. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance levels, new unit set-aside, and Indian country new unit set-aside.

(9) Increase Louisiana's 2012 and 2014 ozone-season NOXbudgets in accordance with a revision to the final Transport Rule analysis to reflect operational constraints likely to necessitate non-economic dispatch at twelve units.

EPA is proposing revisions to Louisiana's 2012 and 2014 state ozone season NOXbudgets based on information demonstrating that the West of the Atchafalaya Basin (WOTAB), Downstream of Gypsy (DSG), and Amite South regions of Louisiana are out-of-merit-order dispatch areas, meaning that units in those areas are frequently dispatched out of regional economic order as a result of short-run limitations on the ability to meet local electricity demand with generation from outside the area. Conditions in these out-of-merit-order dispatch areas are likely to necessitate what would otherwise be non-economic generation at five Louisiana plants (R.S. Nelson, Nine Mile Point, Michoud, Little Gypsy, and Waterford) in the immediate future. EPA did not consider these immediate-term conditions in its calculation of the Louisiana emission budget in the final Transport Rule. EPA is proposing to adjust Louisiana's ozone season NOXemission budget based on analysis projecting the minimum frequency these units will have to run in the immediate term for non-economic purposes, according to data provided by the utility operating those units.

For this proposal, EPA has calculated the net change in the state's total emissions (that inform the state budgets) to account for increased generation (and related emissions) from the specific units affected by the immediate-term non-economic constraints described above, as well as for a corresponding reduction in generation (and related emissions) at other units within the state, to maintain the electricity supply and demand equilibrium modeled in the final Transport Rule.

EPA re-calculated the emissions from the five plants with non-economic generation to account for the input assumption changes described above. These calculations yield increases to Louisiana's 2012 and 2014 state budgets for ozone-season NOXof 4,231 tons. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance level, new unit set-aside, and Indian country new unit set-aside, and “Revisions to Unit Level Allocations under the FIP” in the docket for a quantitative demonstration of the effect of this revision on unit-level allocations under the FIP.

(10) Increase Mississippi's 2012 and 2014 ozone-season NOXbudgets in accordance with a revision to the final Transport Rule analysis to reflect operational constraints likely to necessitate non-economic dispatch at certain units.

EPA is proposing revisions to Mississippi's state ozone season NOXbudget based on information demonstrating that the Mississippi Region is an out-of-merit-order dispatch area, meaning that units in that area are frequently dispatched out of regional economic order as a result of short-run limitations on the ability to meet local electricity demand with generation from outside the area. Conditions in this out-of-merit-order dispatch area are likely to necessitate what would otherwise be non-economic generation at three Mississippi plants (Rex Brown, Gerald Andrus, and Baxter Wilson) in the immediate future. EPA did not consider these immediate-term conditions in its calculation of the Mississippi emission budget in the final Transport Rule. EPA is proposing to adjust Mississippi's 2012 and 2014 ozone season NOXemission budgets based on analysis projecting the minimum frequency these units will have to run in the immediate-term for non-economic purposes, according to data provided by the utility operating those units.

For this proposal, EPA has calculated the net change in the state's total emissions (that inform the state budgets) to account for increased generation (and related emissions) from the specific units affected by the immediate-term non-economic constraints described above, as well as for a corresponding reduction in generation (and related emissions) at other units within the state, to maintain the electricity supply and demand equilibrium modeled in the final Transport Rule.

EPA re-calculated the emissions from the three plants with non-economic generation to account for the input assumption changes described above. These calculations yield increases to Mississippi's 2012 and 2014 state budgets for ozone-season NOXof 2,136 tons. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance level, new unit set-aside, and Indian country new unit set-aside, and “Revisions to Unit Level Allocations under the FIP” in the docket for a quantitative demonstration of the effect of this revision on unit-level allocations under the FIP.

(11) Increase Texas's 2012 and 2014 annual and ozone-season NOXbudgets in accordance with a revision to the final Transport Rule analysis to reflect operational constraints likely to necessitate non-economic dispatch at certain units.

EPA is proposing revisions to Texas's 2012 and 2014 state annual and ozone season NOXbudgets based on information demonstrating that the West of the Atchafalaya Basin (WOTAB) and Western Regions are out-of-merit-order dispatch areas, meaning that units in those areas are frequently dispatched out of regional economic order as a result of short-run limitations on the ability to meet local electricity demand with generation from outside the area. Conditions in these out-of-merit-order dispatch areas are likely to necessitate what would otherwise be non-economic generation at two Texas plants (Lewis Creek and Sabine) in the immediate future. EPA did not consider these immediate-term conditions in its calculation of the Texas emission budgets in the final Transport Rule. EPA is proposing to adjust Texas's emission budgets based on analysis projecting the minimum frequency these units will have to run in the immediate-term for non-economic purposes, according to data provided by the utility operating those units.

For this proposal, EPA has calculated the net change in the state's total emissions (that inform the state budgets) to account for increased generation (and related emissions) from the specific units affected by the immediate-term non-economic constraints described above, as well as for a corresponding reduction in generation (and related emissions) at other units within the state, to maintain the electricity supply and demand equilibrium modeled in the final Transport Rule.

EPA re-calculated the emissions from the two plants with non-economic generation to account for the input assumption changes described above. These calculations yield increases to Texas's 2012 and 2014 state budgets for annual NOXof 1,375 tons and ozone-season NOXof 1,375 tons. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance level, new unit set-aside, and Indian country new unit set-aside, and “Revisions to Unit Level Allocations under the FIP” in the docket for a quantitative demonstration of the effect of this revision on unit-level allocations under the FIP.

(12) Increase Florida's 2012 ozone-season NOXbudget in accordance with a revision to the final Transport Rule analysis to reflect the unavailability of Crystal River Unit 3, a nuclear unit.

EPA's power sector analysis in the final Transport Rule that informed its calculation of Florida's state ozone-season budget included generation from Crystal River Unit 3, a nuclear unit that has operated historically. However, utilities in Florida have notified EPA that this unit will be offline for repairs throughout 2012 and is expected to return to service in 2013. As such, EPA expects that the generation previously projected in the Transport Rule analysis from this unit in 2012 will necessarily have a different origin with different emission consequences that should be considered in the calculation of Florida's ozone-season NOXstate budget. EPA has calculated that this replacement generation would yield an increase of 819 tons of ozone-season NOXin 2012 and is proposing to increase Florida's 2012 ozone-season NOXbudget by 819 tons, accordingly. See “Technical Revisions and Adjustments to State Budgets TSD” in the docket for this rulemaking for a quantitative demonstration of this proposed revision, as well as for the impacts this revision would have on the state's assurance level, new unit set-aside, and Indian country new unit set-aside, and “Revisions to Unit Level Allocations under the FIP” in the docket for a quantitative demonstration of the effect of this revision on unit-level allocations under the FIP.

EPA has also received and is making available in the public docket for this proposal additional unit-level information provided by Florida utilities addressing assumptions of each unit's ability to control ozone-season NOX. EPA requests comment on all aspects of the data in the docket, including whether the emission data provided in this information is a more accurate representation of achievable NOXemission rates in 2012, and whether using this data would be consistent with the methodology used in the Transport Rule. EPA specifically requests comment on whether this information could support a further revision to the state's ozone-season NOXbudget, and if so, how such a revision should be calculated. See “Information Submitted by Florida Utilities” in the docket for this rulemaking.

Further Explanation on Revisions and Request for Comments.All of the proposed revisions to state budgets and new unit set-asides described above would correspondingly affect unit-level allowance allocations in the states involved. Specifically, any changes to the levels of new unit set-asides or state budgets would be carried through to unit-level allocations based on the final Transport Rule allocation methodology for existing units (including any amendments made to specific unit-level allocations in this rulemaking, described below). For example, if a state budget would increase, then the share of that increase going to existing units would be apportioned based on the final Transport Rule's allocation methodology to existing units (aside from specific unit-level allocation adjustments included in this proposal pertinent to utility consent decrees, discussed below in section III.B of this preamble). Unit-level allocations to potential covered sources under the Transport Rule have been updated to reflect all of the proposed revisions described in this proposal and are set forth in the “Revisions to Unit Level Allocations under the FIP” TSD in the docket for this rulemaking.

EPA evaluated the likely air quality impacts of the revisions presented above using the air quality assessment tool, on a state-by-state and case-by-case basis, for the SO2budget increases in 2014 for Texas, New York, and Wisconsin, and compared those estimates to the final Transport Rule air quality analysis. The results do not change the conclusions that EPA made about the appropriateness of controlling upwind emissions at the cost-effective thresholds selected in the final Transport Rule to successfully quantify and eliminate significant contribution to nonattainment and interference with maintenance at downwind receptors. For more information, this evaluation can be found in the “Significant Contribution Assessment Technical Support Document” in the docket for this rulemaking.

For this proposal, EPA also assessed this proposal's revisions to annual NOXand ozone-season NOXstate budgets against each state's total NOXemission inventories which informed the air quality projections in the final Transport Rule analysis. The annual NOXbudget increases for Michigan, Nebraska, New Jersey, New York, Texas, and Wisconsin are 5,228, 3,599, 112, 3,485, 1,375 and 2,473 tons, respectively. Comparing those budget increases to the total 2014 annual NOXemission inventories in those states under the final Transport Rule's controlscenario analysis, EPA calculates that these revisions represent increases of 1.2 percent, 2.1 percent, 0.1 percent, 0.8 percent, 0.1 percent, and 1.0 percent, respectively, of the total annual NOXemission inventories for those states in the final Transport Rule's 2014 control scenario analysis. See the “Significant Contribution Assessment TSD” in the docket for this rulemaking for more details. These increases represent only a small portion of each state's total NOXemissions.

The ozone-season NOXbudget increases in 2014 for Louisiana, Mississippi, New Jersey, New York, and Texas are 4,231, 2,136, 195, 1,911, and 1,375 tons, respectively. Comparing those budget increases to the total 2014 ozone-season NOXemission inventories in those states under the final Transport Rule's control scenario analysis, EPA calculates that these revisions represent increases of 2.2 percent, 2.4 percent, 0.2 percent, 1.0 percent, and 0.2 percent, respectively, of the total ozone-season NOXemission inventories for those states in the final Transport Rule's 2014 control scenario analysis. See the “Significant Contribution Assessment TSD” in the docket for this rulemaking for more details. These increases represent only a small portion of each state's total ozone-season NOXemissions.

EPA requests comment on the revised unit-level and utility-system operational information described above and on the corresponding proposed revisions in state budgets, variability limits, new unit set-asides, Indian country new unit set-asides, and unit-level allocations resulting from the application of such revised information using the methodologies set forth in the final Transport Rule for developing state budgets, variability limits, new unit set-asides, Indian country new unit set-asides, and unit-level allocations. EPA is not requesting comment on those methodologies set forth in the final Transport Rule. For example, EPA is not seeking comment on the methodology by which existing unit allocations are determined with regard to any given Transport Rule state budget.3

Moreover, EPA recognizes that parties may be aware of other immediate-term unit-specific operational constraints not accounted for in the final Transport Rule whose inclusion may warrant revisions in state budgets, with associated revisions to the state assurance levels and unit-level allocations for existing units. EPA has already provided several opportunities—through the proposed Transport Rule and subsequent notices of data availability—for the public, including stakeholders, to present unit-level information demonstrating constraints on immediate-term operations. However, EPA will accept—by the deadline for comment on this proposal—submission of additional unit-level operational information that would have a material impact on the calculation of Transport Rule state budgets (with associated impacts on corresponding assurance levels and unit-level allocations for existing units). For this purpose, EPA intends a “material impact” to reflect a corresponding recalculation of the relevant state budget that would be at least 1 percent different from that budget's value as calculated in the final Transport Rule (76 FR 48208, August 8, 2011). EPA remains focused on successful implementation of the Transport Rule programs and does not believe that a change of less than 1 percent in a state's budget would be a meaningful action to further this goal. As a result, EPA encourages commenters to consider whether or not revisions to a given unit's or group of units' input assumptions would yield a material impact of at least a 1 percent difference in the calculation of the relevant state budget before submitting this information to EPA for review.

EPA is therefore accepting for review information provided in comments on this rulemaking specifically addressing the following topics for specific electric generating units:

(1) Post-combustion pollution control equipment (such as SCRs and FGDs) assumed in the final Transport Rule analyses to be present by 2012 at the unit in question; and/or

(2) Immediate-term (i.e.,binding on 2012) operational requirements necessitating non-economic generation at the unit in question, including data that demonstrate why the unit in question is required to generate in the immediate term for reasons other than the regional economic sale of electricity, and how often during the ozone season and during the calendar year that such non-economic generation is necessitated from that unit.

EPA will review information provided in comments addressing the topics described above and will determine if any of the information merits a subsequent proposal of revisions to the Transport Rule programs beyond the actions presented in this proposal.

After the final Transport Rule was published, EPA determined that while the state budgets accurately incorporated the emission reduction requirements of existing utility consent decrees, the unit-level allowance allocations under the Transport Rule FIPs did not properly account for provisions in those consent decrees that effectively require the surrender, or restrict the trading, of “excess” Transport Rule allowances. As a result, Transport Rule allowance allocations to certain units may unintentionally reduce the availability of some of those allowances to other sources, given the restrictions on the use of those allowances by the initial recipient unit imposed by the applicable consent decree.

In today's action, EPA is proposing to add a constraint on Transport Rule unit-level allowance allocations designed to reflect the maximum allowable emissions at the units affected by existing utility consent decrees which contain annual tonnage limits and require the surrender or restrict trading of Transport Rule allowances allocated in excess of annual tonnage limits. See “Assessment of Impact of Consent Decree Annual Tonnage Limits on Transport Rule Allocations TSD” in the docket for this rulemaking for information on the consent decrees covered by the proposed addition of the new constraint for purposes of determining unit-level allocations.

The addition of this constraint would align unit level allocations for units described in several existing Federally-enforceable consent decrees with the annual tonnage limits in those decrees. This constraint would prevent heatinput-based allocations from exceeding the terms of Federally-enforceable consent decrees that contain annual tonnage limits for SO2and/or NOX. Because existing consent decrees that establish annual tonnage limits for SO2and/or NOXdo so at the system or facility level, EPA calculated unit-level annual tonnage limit equivalents (unit-level caps) for purposes of allocating allowances to individual units. EPA is not seeking comment on any elements of the allocation methodology finalized in the final Transport Rule (76 FR 48288-90). Rather, EPA is seeking comment only on the addition of a unit-level consent decree constraint and unit-level cap apportionment methodology.

The proposed additional constraint would affect unit-level allocations in six states—Alabama, Indiana, Kansas, Kentucky, Ohio, and Tennessee—with units subject to existing Federally-enforceable consent decree annual tonnage limits. These consent decree requirements have already been accounted for in the determination of budgets for these states. EPA is proposing to establish unit-level caps for 82 units covered by annual tonnage limits in Federally-enforceable consent decrees in these six states. The addition of this constraint would not alter any state budget. This additional constraint also would have no impact on existing unit-level allocations in states that do not contain units covered by a Federally-enforceable consent decree with annual tonnage limits.

EPA is proposing to revise the Transport Rule unit-level allocations for the specific units subject to these consent decrees, such that allowance allocations would be constrained by both historical emissions (as described in the final Transport Rule (76 FR 48290)) and a unit-level cap derived from the annual tonnage limit in the Federally-enforceable consent decree. Although these revisions would not alter the state budgets, they would have the effect of increasing the number of allowances within the budget that are available for use for compliance purposes and that would not otherwise be available without this proposed change to the allocation of allowances—such that the total number of allowances available would equal the state's emission budget, as intended. These proposed revisions are thus intended to revise the application of the final Transport Rule's unit-level allowance allocation methodology to enable the proper implementation of state budgets under the programs. While EPA intends to perform this revision to benefit program implementation, EPA does not believe resolution of this issue is a necessary precondition for successful implementation of and compliance with the Transport Rule programs in 2012, as notwithstanding these proposed revisions, EPA will still be able to distribute 99.7 percent of all existing unit allowances under the state budgets established in the final Transport Rule by that rule's November 7 deadline. See section IV of this preamble for further information about allowance recordation.

EPA calculated unit-level caps for each unit subject to an SO2and/or NOXannual tonnage limit contained in a Federally-enforceable consent decree. A unit-level cap is an apportionment of the applicable system- or facility-wide consent decree annual tonnage limit. The apportionment of a system- or facility-wide consent decree annual tonnage limit to a unit level is solely for the purposes of Transport Rule allocations and does not modify, or create additional, consent decree requirements or limitations.

EPA is not proposing to limit allocations to units covered by consent decrees that do not contain SO2and or NOXannual tonnage limits. The Agency determined that calculation of unit-level caps where annual tonnage limits do not exist would require the use of unit-level projections whose application in setting unit-level allocations would be difficult to support and that, in any event, adjustment of unit—level allocations using such unit-level caps would not be necessary. Calculating a unit-level cap from other consent decree directives would require projections about future utilization and emissions performance of each unit involved, increasing the complexity and uncertainty of the approach. Further, EPA believes that there are few Transport Rule allowances that might be rendered unavailable for compliance by the consent decrees that contain trading restrictions or allowance surrender requirements but that do not contain annual tonnage limits.

EPA is proposing to follow a two-step methodology to identify the specific unit-level allocation constraints that would be associated with this proposed additional constraint. First, EPA would determine if the annual tonnage limit in an existing Federally-enforceable consent decree that is already reflected in a state budget is more restrictive than the unit-level allocations under the Transport Rule by comparing the Federally-enforceable consent decree annual tonnage limits for calendar year 2012 and thereafter to aggregate unit-level allocations (as determined using the approach finalized in the final Transport Rule) for all units affected by the annual tonnage limit. If in 2012 or thereafter the collective unit-level allocations are greater than the Federally-enforceable consent decree annual tonnage limit, EPA would apply unit-level caps equal, in aggregate, to the Federally-enforceable consent decree annual tonnage limit.

If a unit is shut down by a Federally-enforceable consent decree or, in the case of SO2, repowers to natural gas or shuts down, the unit-level cap would be calculated as zero in any year following the required shut down or repower when the unit would otherwise receive allocations using the approach in the final Transport Rule (76 FR 48287 and 48289-90).

Second, EPA would calculate unit-level caps for 2012 and thereafter on Transport Rule allowances for each unit covered by a system- or facility-wide annual tonnage limit in a Federally-enforceable consent decree that is more restrictive than current allocations for the units involved. To accomplish this, EPA would first calculate a ratio, expressed as a percentage, comparing the annual tonnage limit in the Federally-enforceable consent decree to the aggregate allocations listed in the “Final Transport Rule Unit Level Allocations under the FIP” (http://www.epa.gov/crossstaterule/actions.html) for units covered by the Federally-enforceable consent decree annual tonnage limit to the annual tonnage limit. EPA would then multiply this ratio by the unit-level allocation listed in the “Final Transport Rule Unit Level Allocations under the FIP” (http://www.epa.gov/crossstaterule/actions.html) for each unit involved. The allocations for a given year would be limited to this unit-level cap. As noted above, in some situations the unit level cap for a 2012 or thereafter would be zero if a Federally-enforceable consent decree requires the shutdown or repowering of a unit.

An example of how EPA would determine unit level caps follows:

EPA would apply this additional unit-level constraint when calculating existing unit-level allocations under the final Transport Rule FIPs. This additional unit level constraint would be applied in steps 9 and 10 of the methodology described in the preamble to the final Transport Rule (76 FR 48290). This additional constraint would be applied in step 9 to limit allocations to existing units covered by consent decrees. This constraint would be applied in step 10 to ensure that any allowances that cannot be allocated to existing units (because all existing units are subject to either the constraint on maximum historical emissions or this additional constraint) would be directed to the state's new unit set aside. For example, EPA has determined that, if this additional constraint is finalized as proposed, all the units in the state of Tennessee would be constrained by either historical emissions or a unit-level cap for the Transport Rule SO2Group 1 program in calendar years 2013, 2018, 2019, and each year thereafter. As described above, the new unit set aside for the state of Tennessee would increase in 2013, 2018, 2019, and each year thereafter, by 8,460, 3,173 and 5,225 tons respectively.

EPA is not seeking comment on any aspects of the allocation methodology in the final Transport Rule (76 FR 48290). EPA is only seeking comment on the addition of the constraint described above to steps 9 and 10 of that methodology. See “Assessment of Impact of Consent Decree Annual Tonnage Limits on Transport Rule Allocations TSD” in the docket for this rulemaking for further information on the proposed addition of the new constraint for purposes of determining unit-level allocations.

EPA is also proposing in this action to amend the effective date of the Transport Rule assurance provisions to make them effective beginning on January 1, 2014. During outreach discussions with various stakeholders, the application of assurance penalties at the outset of the program has been raised as a major concern for compliance and market development in the early years of the program. Several stakeholders have expressed concern that Transport Rule allowance market development may be delayed by uncertainty over how each state will transition from 2010 and 2011 emission levels to meet the projected Transport Rule assurance levels in 2012 and 2013.

Under the assurance provisions, a state's emissions for any control period in a given year must not exceed the state assurance level,i.e.,the state budget plus the state's variability limit. In order to implement this requirement, EPA first determines whether, for the control period, any state's total emissions exceeded the state's assurance level. If a state had emissions exceeding the state assurance level, then EPA applies additional criteria to determine which owners and operators of units in the state will be subject to the assurance penalty, which is a requirement to surrender additional allowances. In applying the additional criteria, EPA identifies which groups of units with a common designated representative (DR) in the state had emissions exceeding the respective common DR's share of the state assurance level, and calculates what percentage each such group's emissions above the common DR's share comprise of the state's emissions above the state assurance level. The assurance penalty applied to the owners and operators of each of those groups of units is the surrender of an amount of allowances equal to the state's emissions above the state assurance level multiplied by the group's percentage and multiplied by two (in order to reflect the penalty of two allowances for each ton of the state's excess emissions). EPA implements the assurance penalty provisions through a series of notices of data availability that make available the necessary calculations and provide an opportunity for public objections to the calculations. The requirements that owners and operators comply with the assurance provisions, including where appropriate the assurance penalty, and the procedures followed by the Administrator are set forth in 40 CFR 97.406(c)(2) and 97.425 (for the TR NOXannual program), 97.506(c)(2) and 97.525 (for the TR NOXozone season program), 97.606(c)(2) and 97.625 (for the TR SO2Group 1 program), and 97.706(c)(2) and 97.725 (for the TR SO2Group 2 program).

EPA proposes to determine that amending the assurance provisions to take effect starting in 2014 is appropriate. EPA believes that a limited postponement of the effectiveness of these provisions is justified in order to smooth the transition from the existing CAIR programs to the new Transport Rule programs.

In line with the Court's remand of CAIR, EPA designed the Transport Rule to achieve necessary emission reductions by relevant NAAQS attainment deadlines and to ensure that necessary reductions will be achieved within each covered state. As explained in the final Transport Rule, EPA determined that it was appropriate for the Transport Rule programs to address emissions in 2012 and beyond in order to ensure that the deadlines in the rule were aligned, as legally required, with the downwind nonattainment deadlines (76 FR 48277-48279). CAIR remains in effect to address emissions through the end of the 2011 control periods, and the Transport Rule programs address emissions in 2012 and beyond.

EPA took several steps in the final Transport Rule to ease the transition from the CAIR programs to the Transport Rule trading programs.

The Transport Rule maintains programmatic elements that were successfully implemented and recognizable to sources from compliance experiences under CAIR while also addressing that rule's legal shortcomings identified by the Court. Under both CAIR and the Transport Rule, individual units have the flexibility to supplement their own emission reductions with the acquisition from the marketplace of any additional allowances needed to cover emissions under the Transport Rule programs. Robust markets (e.g.,markets with a high level of liquidity and accessibility of price information) for the CAIR annual NOX,CAIR ozone-season NOX, and Acid Rain (SO2) program allowances have been in existence for many years. Sources covered by CAIR have relied on the availability of these robust markets when developing compliance plans. The Transport Rule (TR) creates new TR SO2Group 1, TR SO2Group 2, TR NOX, and TR ozone-season NOXallowances. Markets for these allowances are developing now, and EPA is beginning to record the allowances in allowance accounts and introduce the allowances into the marketplace over a year before the Transport Rule programs' first compliance deadlines (December 1, 2012, for the 2012 ozone-season NOXprogram, and March 1, 2013, for the 2012 annual NOXand SO2programs). However, with the allocation revisions proposed in this rulemaking and the potential for additional revisions based on additional information that might be submitted in response to this rulemaking, some allowances would be recorded and introduced into the marketplace at later dates.

Based on observed compliance planning behavior among sources anticipating the 2012 control periods, and in light of the proposed revisions in this rulemaking and the potential for additional revisions based on additional information, EPA believes that amending the effective date of the assurance provisions to apply in 2014 would ease the transition from CAIR to Transport Rule compliance for parties across the board by promoting the liquidity of, and accessibility of price information in, new Transport Rule allowance markets and instilling confidence that utilities can flexibly comply through a variety of unit-level operational strategies that are not limited by initial Transport Rule unit-level allowance allocations.

EPA believes that this change would accelerate the development of robust Transport Rule allowance markets and facilitate a smooth transition to the Transport Rule programs. If, in response to concerns about when robust markets will develop, utilities were to artificially constrain 2012 operational plans to not exceed initially allocated allowances, the volume of early trading activity might be unnecessarily limited. Early trading activity is important for demonstrating market liquidity and assisting in price discovery to inform compliance planning by affected sources. Actions by utilities to limit early trading activity, therefore, could have negative impacts not only on those utilities, but on all participants in the Transport Rule trading programs. EPA believes that amending the effectiveness of the assurance provisions in 2012 and 2013 would encourage greater confidence among utilities for engaging immediately in cost-effective compliance planning that takes into account the flexibility of a robust market for acquiring allowances to cover emissions to the extent use of allowances is the most economic approach for compliance under the Transport Rule programs.

Amending the assurance provisions would not affect, in any way, the requirements of the rule in 2014 and beyond. EPA is proposing only a short postponement of the assurance penalty provisions to ensure a smooth transition from CAIR to the Transport Rule programs. EPA believes that, notwithstanding postponement of the assurance penalty provisions, the states covered by the Transport Rule programs will still achieve the emission reductions in 2012 and 2013 necessary to eliminate each state's significant contribution to nonattainment and interference with maintenance identified in the final Transport Rule (with the revisions included in this proposal). The highly detailed state-specific bases on which individual state budgets were determined using the approach and methodologies developed in the final Transport Rule, and included in the record for the Transport Rule, together with the derivation of the variability limits from historic data reflecting state-level year-to-year variation in power sector emissions, support EPA's belief. EPA noted in the Transport Rule proposal that knowledge about installed air pollution control equipment “* * * provides greater certainty of where [near-term] reductions will occur and how these reductions should impact air quality in downwind areas. * * * Consequently, EPA believes that there is a high level of certainty that emissions reductions projected for 2012-2013 with interstate trading would be achieved within the states where they are projected to occur, making imposition of the assurance provisions during 2012-2013 unnecessary” (75 FR 45314-45315).

In the final Transport Rule, EPA did not disavow the proposal's rationale for starting the assurance provisions in 2014; however, the Agency chose to make the assurance provisions effective starting in 2012 with the intent to err on the side of providing “even further assurance” of securing the targeted emission reductions in upwind states (76 FR 48296). EPA, therefore, has never concluded that starting the assurance provisions in 2014 would fail to meet the 110(a)(2)(D) obligation to eliminate significant contribution or interference with maintenance in 2012 and 2013. Moreover, this proposal's revisions to pollution control technology assumptions involve only 17 units of the approximately 3,600 units whose known controls inform the Transport Rule budgets. EPA continues to believe that, because the immediate-term Transport Rule state budgets for 2012 and 2013 (in contrast with the budgets for 2014 and thereafter) are uniquely based on the ability of the known existing fleet of EGUs and known existing or soon-to-be-installed pollution control equipment to deliver emission reductions in specific upwind states, there is a high level of certainty that the state assurance levels will not be exceeded in 2012 and 2013. EPA believes that this near-term certainty allows the Agency to postpone the effectiveness of the Transport Rule's assurance penalty provisions until 2014 without sacrificing the Transport Rule's ability to ensure necessary near-term emission reductions in each upwind state, supported by the calculation of each upwind state's emission reduction potential (informing the determination of state budgets) under the rule.

With the proposed, temporary postponement of the assurance provisions, EPA believes that, in the near term (as well as in the long term), Transport Rule allowance markets would provide compliance flexibility at the unit level and incentivize cost-effective, unit-level emission reductions. In the aggregate, these flexibilities and reductions at the unit level would result in achievement in each state of the state-level cost-effective emission reductions projected in the final Transport Rule (with the revisions included in this proposal). In other words, EPA is only proposing to postpone temporarily the assurance penalty provisions to address the ability of owners and operators of individual units to make the cost-effective emission reductions in 2012 and 2013 on which EPA's state-level emission projections relied in determining each state's amount of significant contribution and interference with maintenance under the final Transport Rule. Consequently, EPA believes that this proposal to postpone temporarily the assurance provisions will not yield substantially different state-level emission outcomes under the Transport Rule programs in 2012 or 2013 than the state-level emissions reflected in the state-specific budgets and assurance levels in the respective Transport Rule program.

EPA believes that a two year postponement of the effective date of the assurance penalty provisions is sufficient to guarantee robust market development, is consistent with the DC Circuit's decision leaving CAIR in place during the transition to a new rule, and will not interfere with the air quality objectives of the program. EPA does not, at this time, believe a longer postponement would be justified. EPA requests comment on all aspects of this proposal including the length of the postponement.

Since under this proposal, the assurance provisions would continue to be effective for 2014 and thereafter, EPA maintains that the Transport Rule, revised consistent with this proposal, would continue to address and meet the Court's concerns inNorth Carolina.

Any revisions to state budgets from this proposal that are finalized would also include corresponding revisions to the relevant assurance levels that would apply in 2014 with this proposed postponement.

EPA is proposing to correct typographical errors in certain sectionsof rule text in parts 52 and 97 in the final Transport Rule. Specifically, EPA proposes to change an erroneous reference in 40 CFR 52.39(i)(1)(ii) to “TR SO2Group 1 allowances” to refer instead to “TR SO2Group 2 allowances” and to redesignate sections 52.745 and 52.746 in 40 CFR part 52, subpart O as sections 52.731 and 52.732 and redesignate section 52.2241 in 40 CFR part 52, subpart VV as section 52.2441. EPA also proposes to remove some redundant words in 40 CFR 97.406(e)(2), 97.606(e)(2), and 97.706(E)(2). EPA requests comment concerning only the specific corrections and not concerning any other aspect of the provisions in which these corrections would be made.

EPA recognizes that successful implementation of the Transport Rule programs in 2012 depends in part on the development of robust allowance markets, in which covered sources can locate and purchase any additional allowances necessary to comply with the rule. As such, EPA intends to allocate as many 2012 Transport Rule allowances as possible as early as possible to assist implementation and compliance planning. While none of the actions presented in this proposal would reduce any state's total number of allowances issued under that state's budgets, some of the actions presented in this proposal would slightly alter unit level allocations. For example, as described above, allocations to certain units covered by consent decrees would be limited. EPA does not believe it would be prudent or reasonable to record in allowance accounts, before taking final action on this proposal, allowance allocations in excess of the amount any given unit would receive if this proposal is finalized as proposed. EPA will record by November 7, 2011 for each unit, the lesser of the amount that unit would receive under the allocation scheme finalized in the Transport Rule or the amount the unit would receive if this proposal is finalized as proposed. This approach will allow EPA to allocate over 99.7 percent of all existing unit allowances under the state budgets established in the final Transport Rule by that rule's November 7 deadline (76 FR 48398, 48424, 48450, and 48475, August 8, 2011). During this timeframe, the only units that will receive substantially fewer allowances under this approach than under the allocations as finalized in the Transport Rule are units already subject to legally binding consent decrees that limit their emissions; therefore, EPA does not believe this approach will have any negative impact on compliance planning at sources in anticipation of the implementation of the Transport Rule programs. EPA is proposing to allocate the remaining 0.3 percent of the allowances no later than 7 days after finalization of this action is legally effective. In addition, if EPA finalizes the proposed actions that yield increases to state budgets, the Agency will act swiftly to record these additional allowances and thereby put them into the marketplace as quickly as possible following this rule's finalization, so that the allowances would be available significantly in advance of the compliance deadlines for the 2012 control periods (i.e.,the allowance transfer deadlines of December 1, 2012 (for the NOXozone season program) and March 1, 2013 (for the NOXand SO2annual programs)). See the “Transport Rule Allowance Recordation Schedule TSD” in the docket for this rulemaking for a demonstration of how many allowances EPA will record by November 7, 2011 in each state.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a “significant regulatory action.” Accordingly, EPA submitted this action to the Office of Management and Budget (OMB) for review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been documented in the docket for this action.

This action does not impose any new information collection burden. This action makes relatively minor revisions to the emission budgets and allowance allocations or allowance allocations only in certain states in the final Transport Rule and corrects minor technical errors which are ministerial. However, the Office of Management and Budget (OMB) has previously approved the information collection requirements contained in the final Transport Rule under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501et seq.and has assigned OMB control number 2060-0667. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's action on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. The small entities directly regulated by this action are electric power generators whose ultimate parent entity has a total electric output of 4 million megawatt-hours (MWh) or less in the previous fiscal year. We have determined that the changes considered in this proposed rulemaking pose no additional burden for small entities. The proposed revision to the new unit set-asides in Arkansas and Texas would yield an extremely small change in unit-level allowance allocations to existing units, including small entities, such that it would not affect the analysis conducted on small entity impacts under the finalized Transport Rule. In all other states, the revisions proposed in this rulemaking would yield additional allowance allocations to all units, including small entities, without increasing program stringency, such that it is not possible for the impact to small entities to be any larger than that already considered and reviewed in the finalized Transport Rule.

This action does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and Tribal governments, in the aggregate, or the private sector in anyone year. This action is increasing the budgets and increasing the total number of allowances or maintaining the same budget but revising unit-level allocations in several other states in the Transport Rule. Thus, this rule is not subject to the requirements of sections 202 or 205 of UMRA.

In developing the final Transport Rule, EPA consulted with small governments pursuant to a plan established under section 203 of UMRA to address impacts of regulatory requirements in the rule that might significantly or uniquely affect small governments.

This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action makes relatively minor revisions to the emissions budgets and allowance allocations or allowance allocations only in certain states in the final Transport Rule. Thus, Executive Order 13132 does not apply to this rule. EPA did provide information to state and local officials during development of both the proposed and final Transport Rule.

This action does not have Tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). This action makes relatively minor revisions to the emissions budgets and allowance allocations in several states in the final Transport Rule and helps ease the transition from CAIR. Indian country new unit set-asides will increase slightly or remain unchanged in the states affected by this action. Thus, Executive Order 13175 does not apply to this action. EPA consulted with Tribal officials during the process of promulgating the final Transport Rule to permit them to have meaningful and timely input into its development.

This action is not subject to EO 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in EO 12866, and because the Agency does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. Analyses by EPA that show how the emission reductions from the strategies in the final Transport Rule will further improve air quality and children's health can be found in the final Transport Rule RIA.

This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. EPA believes that there is no meaningful impact to the energy supply beyond that which is reported for the Transport Rule program in the final Transport Rule.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g.,materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

As described in section XII.I of the preamble to the final Transport Rule, the Transport Rule program requires all sources to meet the applicable monitoring requirements of 40 CFR part 75. Part 75 already incorporates a number of voluntary consensus standards. This action, however, does not involve technical standards. Therefore, EPA did not consider the use of any voluntary consensus standards.

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes Federal executive policy on environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

EPA has determined that this action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. EPA believes that the vast majority of communities and individuals in areas covered by the Transport Rule program inclusive of this action, including numerous low-income, minority, and Tribal individuals and communities in both rural areas and inner cities in the eastern and central U.S., will see significant improvements in air quality and resulting improvements in health. EPA's assessment of the effects of the final Transport Rule program on these communities is detailed in section XII.J of the preamble to the final Transport Rule.

For the reasons set forth in the preamble, parts 52 and 97 of chapter I of title 40 of the Code of Federal Regulations are proposed to be amended as follows:

The information presented in this preamble is organized as follows:

Categories and entities potentially regulated by these proposed revisions include:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. To determine whether your facility would be regulated by this action, you should examine the applicability criteria in 40 CFR 60.70a. If you have any questions regarding the applicability of this proposed action to a particular entity, contact the person in the precedingFOR FURTHER INFORMATION CONTACTsection.

Do not submit information that you consider to be CBI electronically throughhttp://www.regulations.govor e-mail. Send or deliver information identified as CBI only to the following address: Roberto Morales, OAQPS Document Control Officer (C404-02), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, NC 27711, Attention Docket ID No. EPA-HQ-OAR-2010-0750. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information marked as CBI will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

In addition to being available in the docket, an electronic copy of the proposed action is available on the Worldwide Web (WWW) through the Technology Transfer Network (TTN) Web site. Following signature, EPA posted a copy of the proposed action on the TTN Web site's policy and guidance page for newly proposed or promulgated rules athttp://www.epa.gov/ttn/oarpg.The TTN Web site provides information and technology exchange in various areas of air pollution control.

If anyone contacts EPA requesting to speak at a public hearing by October 24, 2011, a public hearing will be held on October 28, 2011. Persons interested in presenting oral testimony or inquiring as to whether a public hearing is to be held should contact Mr. Chuck French, listed in theFOR FURTHER INFORMATION CONTACTsection.

New source performance standards (NSPS) implement Clean Air Act (CAA) section 111. Section 111 of the CAA requires that NSPS reflect the application of the best system of emission reductions which (taking into consideration the cost of achieving such emission reductions, any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated. This level of control has sometimes been referred to as “best demonstrated technology” or BDT, and will be referred to in this preamble as best system of emissions reduction (BSER). In assessing whether a standard is achievable, EPA must account for routine operating variability associated with performance of the system on whose performance the standard is based. SeeNational Lime Ass'nv.EPA,627 F. 2d 416, 431-33 (DC Cir. 1980).

Common sources of information as to what constitutes a BSER, and for assessing that technology's level of performance, include best available control technology (BACT) determinations made as part of new source review (NSR). Also, emissions limits that exist in state and federal permits for recently permitted sources,and emissions test data for demonstrated control technologies collected for compliance demonstration or other purposes are evaluated during these assessments. EPA compares permit limitations and BACT determination data with actual performance test data to identify any site-specific factors that could influence general applicability of this information. Also, as part of this review we evaluate if NOXemissions limits more stringent than those in Subpart G have been established, or if emissions limits have been developed for additional air pollutants.

The use of State permit data and BACT determination developed as part of NSR is appropriate because a BACT determination evaluates information that is similar to BSER, such as available controls, their performance, cost, and non-air environmental impacts. One important difference between BACT determinations and a BSER determination for purposes of NSPS is that BACT determinations are made on a site-specific basis. Therefore, in evaluating BACT determinations, we have to account for any site-specific factors that may not be applicable to the source category as a whole.

Section 111(b)(1)(B) of the CAA requires EPA to periodically review and revise the standards of performance, as necessary, to reflect improvements in methods for reducing emissions.

Existing affected facilities that are modified or reconstructed would also be subject to these proposed revisions for affected sources. Under CAA section 111(a)(4), “modification” means any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted. Changes to an existing facility that do not result in an increase in emissions are not considered modifications. Rebuilt affected facilities would become subject to the proposed standards under the reconstruction provisions, regardless of changes in emission rate. Reconstruction means the replacement of components of an existing facility such that (1) The fixed capital cost of the new components exceeds 50 percent of the fixed capital cost that would be required to construct a comparable entirely new facility; and (2) it is technologically and economically feasible to meet the applicable standards (40 CFR 60.15).

The NSPS are directly enforceable federal regulations issued for categories of sources which cause, or contribute significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare. The primary purpose of the NSPS is to attain and maintain ambient air quality by ensuring that the best demonstrated emission control technologies are installed as the industrial infrastructure is modernized, when it is most cost effective to build in controls. Since 1970, the NSPS have been successful in achieving long-term emissions reductions in numerous industries by assuring that cost-effective controls are installed on new, reconstructed, or modified sources.

The current NSPS for Nitric Acid Plants (40 CFR part 60, Subpart G) were promulgated in theFederal Registeron December 23, 1971 (36 FR 24881). The first review of the Nitric Acid Plants NSPS was completed on June 19, 1979 (44 FR 35265). An additional review was completed on April 5, 1984 (49 FR 13654). No changes were made to the NSPS as a result of those reviews. Minor testing and monitoring changes were made during three reviews since the original promulgation in 1971 (October 6, 1975 (40 FR 46258), April 22, 1985 (50 FR 15894), and February 14, 1989 (54 FR 6666)). The current Nitric Acid Plants NSPS (Subpart G) applies to each nitric acid production unit constructed or modified after August 17, 1971. The present NSPS has an emissions limit of 3.0 lb of NOXper ton of 100% nitric acid produced and a 10% opacity standard as an additional method of demonstrating compliance with the NOXemission limit. Continuous NOXmonitors are required as well as recording daily production rates.

Today's proposed standards would apply to new nitric acid production units. Nitric acid plants may include one or more nitric acid production units. For purposes of these proposed regulations, a nitric acid production unit is defined as any facility producing weak nitric acid by either the pressure or atmospheric pressure process. This definition has not changed from Subpart G.

A new nitric acid production unit is defined as a nitric acid production unit for which construction, modification, or reconstruction commences on or after October 14, 2011. The affected facility under the proposed NSPS is each nitric acid production unit.

The pollutant to be regulated under section 111(b), for new nitric acid production units, is NOXwhich undergo reactions in the atmosphere to form particulate matter and ozone. Nitrogen oxides, particulate matter, and ozone are all subject to national ambient air quality standards under section 109 of the Clean Air Act, based on their adverse effects to human health and welfare. NOXis a criteria pollutant.

These nitric acid production units also emit another nitrogen compound known as nitrous oxide (N2O), which is considered a greenhouse gas (GHG). We are not proposing an N2O emission standard in this action. Although we have limited data from facilities in the U.S, we believe that owners/operators of nitric acid production units should consider technologies and technology combinations that would be appropriate for controlling both NOXand N2O. Some technologies such as selective catalytic reduction (SCR) and hydrogen peroxide injection (HPI) are effective only in controlling NOX. However, other technologies such as nonselective catalytic reduction (NSCR) are effective in controlling both NOXand N2O.

The technology combinations that control both NOXand N2O include SCR plus secondary catalysts (located in the ammonia reactor), and SCR plus other non-NSCR types of tertiary catalysts (located after the absorption tower). We expect any controls applied to control NOXemissions would not preclude installing cost effective N2O control technologies in the future. We solicit relevant comments and additional information on these technologies. Nitric acid production is also one of the industrial sectors for which “white papers” were written to provide basic information on GHG control options to assist state and local air pollution control agencies, tribal authorities, and regulated entities in implementing measures to reduce GHGs, particularly in the assessment of BACT under the PSD permitting program. These papers provide basic technical information that may be useful in a BACT analysis but they do not define BACT for each sector. For more information regarding the “white papers,” seehttp://www.epa.gov/nsr/ghgpermitting.html.

We are proposing to reduce the NOXemissions limit from 3.0 pounds of NOXper ton of nitric acid produced (lb NOX/ton acid), expressed as NO2, with the production being expressed as 100 percent nitric acid, to 0.50 lb NOX/tonacid as a 30-day emission rate calculated each operating day based on the previous 30 consecutive operating days.

The general provisions in 40 CFR part 60 provide that emissions in excess of the level of the applicable emissions limit during periods of startup, shutdown, and malfunction shall not be considered a violation of the applicable emission limit unless otherwise specified in the applicable standard. See 40 CFR 60.8(c). The general provisions, however, may be amended for individual subparts. See 40 CFR 60.8(h). Here, the EPA is proposing standards in Subpart Ga that apply at all times, including periods of startup or shutdown, and periods of malfunction.

Section 111(a)(1) requires that standards of performance for new sources reflect the—

For affected sources constructed, modified, or reconstructed after October 14, 2011, we are proposing to reduce the NOXemissions limit from 3.0 lb NOX/ton acid to 0.50 lb NOX/ton acid as a 30-day emission rate calculated each operating day based on the previous 30 consecutive operating days.

The NOXemissions limit for affected facilities constructed, modified, or reconstructed after August 17, 1971, and before October 14, 2011 remains unchanged at 3.0 lb NOX/ton acid.

The 1971 promulgated Nitric Acid Plants NSPS were based on emission levels achieved using catalytic reduction (see 36 FR 2881, December 23, 1971). Additional reviews of the NSPS were conducted in 1979 and 1984, where EPA again concluded that catalytic reduction was the BSER considering economic, energy, and nonair environmental impacts. No changes were made to the NSPS during these reviews.

There are currently 40 nitric acid production facilities in the U.S. with a total of 67 nitric acid production units. For this review, information was collected from responses to a section 114 information collection request (ICR), through site visits and from trade associations. The information and comments from stakeholders are contained in the docket.

The review of permits and other available information in the record revealed that SCR, NSCR, and HPI are all air pollution control technologies that are used for NOXcontrol in the nitric acid production source category and EPA considered all of these as candidates for BSER as we developed this proposed rule. We are not aware of any other established or emerging technologies that should be considered as candidates for BSER for this source category. SCR is used in 25 nitric acid production units in the U.S. NSCR is used in 14 nitric acid process units in the U.S. HPI is used by one facility. All of these air pollution control technologies are effective in controlling NOXemissions. The average NOXemission reductions for these controls are: SCR—98%; NSCR—99%, HPI—95% (for more information see Table 3.3 in the Economic Impact Analysis, which is available in the docket for this action).

The approach used for determining BSER for nitric acid production units involved reviewing the emission test data submitted in response to the section 114 ICR, recently issued state permit data, and BACT determinations developed as part of NSR. In response to clarifications of the section 114 ICRs, industry provided additional data. In determining BSER we generally look at the controls and control performance of new sources. All recent nitric acid units have installed SCR as NOXcontrols. Recent BACT determinations have also identified SCR as BACT.

A 2009 BACT determination has been incorporated into the facility permit limit for a nitric acid plant in American Falls, Idaho (Southeast Idaho Energy, LLC). For this analysis, SCR was determined as BACT, and 0.60 lb NOX/ton acid was determined as the BACT level of control. The Southeast Idaho Energy, LLC emission limit of 0.60 lb NOX/ton acid will apply at all times during steady-state operations (no standard applies during periods of startup or shutdown, and periods of malfunction). The compliance period was not specified.

There are other recent BACT analyses at two other nitric acid production units. At Agrium in North Bend, Ohio, the BACT limit set in 2009 is 0.61 lb NOX/ton acid on a 365-day rolling basis. At Agrium in Kennewick, Washington, the BACT limit set in 2008 is 0.60 lb NOX/ton acid in any continuous 12-month period (including startup, shutdown and malfunction).

As part of our BSER analysis, we are proposing that the standard be stated as a rolling 30-day limit based on 30 consecutive operating days and that the limit be met at all times. We believe that the 0.50 lb NOX/ton acid standard, supported by existing source data and BACT determinations, is more stringent than any state BACT determination because 0.50 lb NOX/ton acid is lower than both 0.61 lb NOX/ton acid and 0.60 lb NOX/ton acid.

Emissions test data were obtained from a number of sources including a section 114 ICR, trade associations, and the EPA Region 5. We received nine relative accuracy test audit (RATA) reports for 5 nitric acid production units controlled with SCR, 6 RATA reports for 6 nitric acid production units controlled with NSCR, and 1 RATA report for 1 nitric acid production unit controlled with HPI. These emissions tests are short term and are presented in the memorandumSummary of Test Data Received from Section 114 ICR,dated August 25, 2010 (updated December 17, 2010).

In response to the section 114 request, nitric acid plants submitted NOXContinuous Emission Monitoring Systems (CEMS) data. These included 3 facilities using SCR and 2 facilities using NSCR.

All emission test data (short term and CEMS data) indicate that lower emissions than the current Subpart G emission limit of 3.0 lb NOX/ton acid are being achieved, regardless of the type of NOXcontrol being used. We decided to further analyze the long-term CEMS data because: (1) Long term data include periods of startup and shutdown, where emissions are shown to be larger than during steady state operating conditions, (2) long term data allow the seasonal impacts of temperature and humidity on NOXcontrols to be evenly distributed, as these factors often vary by the time of year and location, and (3) long term data include seasonal supply and demand cycles so that all factors that influence production are equally considered.

We have concluded that SCR is BSER based on data showing lower emissions rates from SCR-controlled units. For more information, see Table 1 of this preamble and the related discussion. The fact that SCR is the only known NOXcontrol technology being installed in new nitric acid production units, and that SCR has been determined to be BACT supports this conclusion. Further, SCR does not produce any secondary environmental impacts.

The next step in the NSPS process is to establish an achievable standard using BSER. In assessing whether a standard is achievable, the EPA must account for routine operating variabilityassociated with performance of the system on which the standard is based. For each plant that submitted long-term CEMS data, these data cover the entire operating period including startups, shutdowns and malfunctions. To ensure that the new NOXstandard is achievable by all properly designed and operated SCR units and covers all operating periods including startup and shutdowns, we analyzed the statistical variation by calculating the 99th percentile. When establishing an emissions limit (which is considered a never to exceed level of emissions), we use a 99th percentile based on statistical analyses. This approach accounts for short and long-term variability in emissions associated with all normal operating conditions, including startup and shutdown (see 72 FR 54878-79, September 27, 2007). This analysis is contained in the memorandumStatistical Evaluation of CEMS Data to Determine the NO XEmission Standard, dated July 18, 2011.

Using the long term CEMS data received through the ICR, the EPA determined that there were sufficient data to directly calculate the 99th percentile for the best performing sources. The EPA determined that the CEMS represents long-term performance and accounts for long-term and day-to-day variability.

Long term CEMS data were obtained from 3 plants using SCR and 2 plants using NSCR. The plant with HPI did not submit long term CEMS data. Following is a discussion of these data—the 3 plants with SCR are discussed first followed by the 2 plants with NSCR.

The 99th percentile was directly calculated for these 5 best performing sources. A summary of the values is shown in Table 1.

The Agrium-North Bend plant submitted data spanning from January 2010 through December 2010. The continuous data over the 12-month period show 0.50 lb NOX/ton acid as the 99th percentile for each 30-day rolling time period. The 30-day periods with high NOXemissions occurred during periods of startup and shutdown.

The PCS Geismar plant submitted 15-minute average data for Train 5 for 2007-2009. Train 5 is controlled with SCR. The period spanning January 2009 through December 2009 was analyzed. The continuous data from a 12-month period show 0.38 lb NOX/ton acid as the 99th percentile for each 30-day rolling time period.

The El Dorado plant submitted hourly averages data for the period of July 2010-June 2011. The continuous data from a 12-month period show 0.37 lb NOX/ton acid as the 99th percentile for each 30-day rolling time period.

We also received 15-minute average data on NOXemissions for 2007-2009 from the PCS Geismar plant for Train 4, which is controlled with NSCR. The period spanning January 2009 through December 2009 was analyzed to be consistent with Train 5 (controlled with SCR). The continuous data from a 12-month period show 2.41 lb NOX/ton acid as the 99th percentile emissions level for a 30-day time period for train 4. The result of this analysis is limited due to the fact that the nitric acid train was operational for approximately 65 days during the 12-month period. It is unlikely that this short time period is representative of the NSCR performance over time.

The Agrium-Sacramento plant submitted data spanning from January 2010 through December 2010. The continuous data over the 12-month period show 1.29 lb NOX/ton acid as the 99th percentile for a 30-day time period. The 30-day periods with high NOXemissions occurred during periods of startup and shutdown.

As shown by Table 1, all units are meeting the current Subpart G NOXemission standard of 3.0 lb NOX/ton acid, regardless of the compliance period. We did not receive any long term data from the nitric acid train using HPI but the table shows that the NOXemissions from nitric acid trains using SCR are lower than nitric acid trains using NSCR. For example, reviewing the 99th percentile on a 30-day rolling basis, SCR data range from 0.38 to 0.50 lb NOX/ton acid and NSCR data range from 1.29 to 2.41 lb NOX/ton acid. The lower emissions from SCR when compared to emissions from NSCR are the main reason that SCR has been determined as BSER.

Whether NSCR can meet the levels achievable by SCR over a long term, is uncertain. The long term CEMS data from 2 NSCR plants indicate difficulty in meeting the 0.50 lb NOX/ton limit. However, we have monthly average data from 2 other facilities using NSCR. These plants with NSCR (Dyno Nobel-Deer Island and JR Simplot-Helm) submitted monthly block averages for a three year period. For 2009, the monthly block averages for both plants were very close and range from 7 to 17 ppm or approximately 0.15-0.36 lb NOX/ton acid. As these data are not continuous but rather block monthly averages, comparison of these with the CEMS data discussed above is not possible. These data are presented to show that NSCR may be able to achieve the proposed emission limit. Also, the data presented in the memorandumSummary of Test Data Received from Section 114 ICR,dated August 25, 2010 (updated December 17, 2010) show that low short-term NOXemissions rates are possible when using NSCR and HPI.

For the units controlled by SCR, we have not been able to identify any specific factors associated with the El Dorado Nitrogen and PCS Nitrogen Train 5 units that account for the lower emission levels compared to the Agrium-North Bend unit. Thus, based on the information currently in the record, we believe that emission levels of NOXare not only dependent on the use of SCR but also on process factors that result in variability that cannot be avoided through better or different design or through changes in operating practices.

By selecting an emission limit based on the 99th percentile of emissions data from unit with BSER (which is SCR), we ensure that this limit reflects BSER but is also achievable during all periods by facilities that have BSER equivalentcontrols. The available data for units with BSER, which were used to derive the proposed NOXemissions limit for new, modified and reconstructed units, are from existing nitric acid units that have been in operation for at least 10 years. Therefore, we believe that reconstructed, modified and new sources will be able to meet the proposed limit. We have no reason to believe that modified or reconstructed sources would not be able to meet this limit. Thus, we do not believe different standards are needed for modified or reconstructed sources.

Moreover, in the past when companies chose to increase production or replace units, it is our understanding that they would build new production units rather than modify or reconstruct existing units. In fact, to our knowledge, no existing nitric acid production unit has been reconstructed or modified since Subpart G was promulgated. Therefore, we expect no reconstructions or modifications to occur for the nitric acid industry in the foreseeable future. Nevertheless, we request comment on any reconstructions or modifications to nitric acid production units that have taken place or information about any future plans to do such modifications or reconstructions. Also, we request data on the level of NOXemissions that these nitric acid units are able to achieve. If these emission levels are different than 0.50 lb NOX/ton acid on a 30 day rolling basis, the commenter should include data to support the suggested emission level.

Nevertheless, we expect that growth within the industry will be limited to newly constructed nitric acid production units. We believe that new nitric acid production units will be able to meet the proposed limit which takes into consideration routine operating variability as well as variation due to weather and periods of startups and shutdowns. The proposed emission limit of 0.50 lb NOX/ton acid is a never to exceed limit. We have not identified any specific process or technology that new nitric acid production units could employ to consistently meet an emission limit lower than 0.50 lb NOX/ton acid. Therefore, we are proposing a limit of 0.50 lb NOX/ton acid for Subpart Ga.

As part of our BSER analysis, we are proposing that the standard be stated as a rolling 30-day limit based on 30 consecutive operating days and that the limit be met at all times including periods of startup and shutdown. We believe that the 0.50 lb NOX/ton acid standard is supported by existing source data. The use of a 30-day period accounts for peaks in the data that occur during startup and shutdown. These periods occur on average about 3 to 4 hours per month and emissions during those periods are much higher than normal. Therefore, the 3 to 4 hour periods can affect average emissions beyond that 3 to 4 hour period. Setting the standard with a 30-day compliance period meets the statutory requirement that the standard reflect the degree of emission limitation that is achievable through BSER, including during periods that include startup and shutdown.

Although the proposed limit of 0.50 lb NOX/ton acid is based on the data for SCR, NSPS do not require the use and installation of a specific control device. We request additional long-term data (in units of the standard) to determine whether NSCR and HPI can achieve the proposed limit.

For all of the reasons discussed above, we are proposing 0.50 lb NOX/ton acid as the revised standard for Nitric Acid Plants to be established in Subpart Ga.

Periods of Startup or Shutdown.In proposing the standards in this rule, the EPA has taken into account startup and shutdown periods and, for the reasons explained below, has not proposed different standards for those periods.

According to information received from industry in the section 114 ICR, NOXemissions during startup and shutdown are higher than during normal operations. Due to the relatively short duration of startup and shutdown events (generally a few hours) compared to normal steady-state operations, we believe that a 30-day emission rate calculated based on 30 consecutive operating days will allow affected sources to meet the 0.50 lb NOX/ton acid at all times, including periods of startup and shutdown. We request comment on the use of a 30-day emission rate calculated based on 30 consecutive operating days. Further, we request comment on whether the standard should be set with a compliance period that is shorter (such as 24 hours). For any comment suggesting a shorter time period, the comment should explain why that different period is appropriate and include data supporting the different compliance period and how startup and shutdown would be factored into a shorter term limit.

If you believe that the EPA's conclusion is incorrect, or that the EPA has failed to consider any relevant information on this point, we encourage you to submit comments. In particular, we note that the general provisions in Part 60 require facilities to keep records of the occurrence and duration of any startup, shutdown or malfunction (40 CFR 60.7(b)) and either report to the EPA any period of excess emissions that occurs during periods of startup, shutdown or malfunction (40 CFR 60.7(c)(2)) or report that no excess emissions occurred (40 CFR 60.7(c)(4)). Thus, any comments that contend that sources cannot meet the proposed standard during startup and shutdown periods should provide data and other specifics supporting their claim.

Periods of Malfunction.Periods of startup, normal operations, and shutdown are all predictable and routine aspects of a source's operations. However, by contrast, malfunction is defined as a “sudden, infrequent, and not reasonably preventable failure of air pollution control and monitoring equipment, process equipment or a process to operate in a normal or usual manner * * *” (40 CFR 60.2). The EPA has determined that malfunctions should not be viewed as a distinct operating mode. Further, nothing in section 111 or in case law requires that the EPA anticipate and account for the innumerable types of potential malfunction events in setting emission standards. See,Weyerhaeuserv.Costle,590 F.2d 1011, 1058 (DC Cir. 1978) (“In the nature of things, no general limit, individual permit, or even any upset provision can anticipate all upset situations. After a certain point, the transgression of regulatory limits caused by `uncontrollable acts of third parties,' such as strikes, sabotage, operator intoxication or insanity, and a variety of other eventualities, must be a matter for the administrative exercise of case-by-case enforcement discretion, not for specification in advance by regulation.”)

Further, it is reasonable to interpret section 111 as not requiring the EPA to account for malfunctions in setting emissions standards. For example, we note that section 111 provides that the EPA will set standards of performance which reflect the degree of emission limitation achievable through “the application of the best system of emission reduction” that the EPA determines is adequately demonstrated. Applying the concept of “the application of the best system of emission reduction” to periods during which a source is malfunctioning presents significant difficulties. The “application of the best system of emission reduction” is more appropriately understood to include operating in such a way as to avoid malfunctions of their units.

Moreover, even if malfunctions were considered a distinct operating mode, we believe it would be impracticable to take malfunctions into account in setting CAA section 111 standards for the nitric acid production units that willbe covered in the proposed Subpart Ga. As noted above, by definition, malfunctions are sudden and unexpected events and it would be difficult to set a standard that takes into account the myriad different types of malfunctions that can occur across all sources in the category. Moreover, malfunctions can vary in frequency, degree, and duration, further complicating standard setting.

If the standard is stated as a 30-day emission rate calculated based on 30 consecutive operating days, or some other time period, we believe that sources will be able to operate their plants in compliance with the standard even if they experience malfunctions. Also, excess emissions from a nitric acid production unit during a malfunction can frequently be mitigated or avoided by shutting the plant down if a key component fails.

In the event that a source fails to comply with the applicable CAA section 111 standards as a result of a malfunction event, the EPA would determine an appropriate response based on, among other things, the good faith efforts of the source to avoid malfunctions and to minimize emissions during malfunction periods, including preventative and corrective actions, as well as root cause analyses to ascertain and rectify excess emissions. The EPA would also consider whether the source's failure to comply with the CAA section 111 standard was, in fact, “sudden, infrequent, not reasonably preventable” and was not instead “caused in part by poor maintenance or careless operation.” 40 CFR 60.2 (definition of malfunction).

Finally, the EPA recognizes that even equipment that is properly designed and maintained can sometimes fail and that such failure can sometimes cause an exceedance of the relevant emission standard. (See,e.g., State Implementation Plans: Policy Regarding Excessive Emissions During Malfunctions, Startup, and Shutdown(Sept. 20, 1999);Policy on Excess Emissions During Startup, Shutdown, Maintenance, and Malfunctions(Feb. 15, 1983)). The EPA is therefore proposing to add an affirmative defense to civil penalties for exceedances of emission limits that are caused by malfunctions. See 40 CFR 60.71a (defining “affirmative defense” to mean, in the context of an enforcement proceeding, a response or defense put forward by a defendant, regarding which the defendant has the burden of proof, and the merits of which are independently and objectively evaluated in a judicial or administrative proceeding). We also are proposing other regulatory provisions to specify the elements that are necessary to establish this affirmative defense; the source must prove by a preponderance of the evidence that it has met all of the elements set forth in 60.74a. (See 40 CFR 22.24). The criteria ensure that the affirmative defense is available only where the event that causes an exceedance of the emission limit meets the narrow definition of malfunction in 40 CFR 60.2 (sudden, infrequent, not reasonably preventable and not caused by poor maintenance and/or careless operation). For example, to successfully assert the affirmative defense, the source must prove by a preponderance of the evidence that excess emissions “[w]ere caused by a sudden, infrequent, and unavoidable failure of air pollution control and monitoring equipment, process equipment, or a process to operate in a normal or usual manner * * *.” The criteria also are designed to ensure that steps are taken to correct the malfunction, to minimize emissions in accordance with section 60.72a(b) and to prevent future malfunctions. For example, the source must prove by a preponderance of the evidence that “[r]epairs were made as expeditiously as possible when the applicable emission limitations were being exceeded * * *” and that “[a]ll possible steps were taken to minimize the impact of the excess emissions on ambient air quality, the environment and human health * * *.” In any judicial or administrative proceeding, the Administrator may challenge the assertion of the affirmative defense and, if the respondent has not met its burden of proving all of the requirements in the affirmative defense, appropriate penalties may be assessed in accordance with section 113 of the Clean Air Act (see also 40 CFR part 22.77).

The current NSPS requires an initial performance test, the installation of a continuous NOXmonitor and the recording of the daily production rate and hours of operations. We are proposing that the new Subpart Ga also require the installation, operation, and maintenance of an exhaust gas flow rate monitor. The capital cost of this monitor is $39,000 and the total annualized cost for this monitor for a new nitric acid production unit is estimated to be $15,000. The gas flow rate monitor provides data on the volume of gas emitted per unit of time, and this information combined with the data from the NOx monitor will result in more accurate measurements of the total NOXbeing emitted.

Subpart G currently requires that owners/operators of nitric acid production units conduct an initial performance test to demonstrate initial compliance with the NOXemission limit. The initial performance test is based on three one-hour test runs for NOXusing manual testing methods; specifically, Method 7 (or, alternatively, Method 7A, 7B, 7C, or 7D) for NOXconcentration, and Method 2 for volumetric flow rate (40 CFR 60, appendix A-4). The nitric acid production rate also must be determined during the initial performance test so that the emissions can be calculated in terms of the emissions limit, lb NOXper ton of acid produced (100 percent acid basis). The current rule does not provide specific procedures or criteria for determining the production rate or concentration.

The current NSPS also requires the owner/operator to install, calibrate, maintain and operate a CEMS for measuring NOXconcentration (40 CFR 60, appendix B, Performance Specification 2) to demonstrate continuing compliance. The owner/operator is required to establish a conversion factor expressed as lb NOXper ton acid produced per ppm NOXby comparing the CEMS data (ppm NOX) obtained during the performance test to the performance test results (lb NOXper ton of acid). The conversion factor is used to convert the CEMS concentration data into units of the emissions standard on an on-going basis. Subsequently, the owner/operator must report periods of excess emissions defined as any 3-hour period during which the average nitric acid emissions (arithmetic average of three contiguous 1-hour periods) as measured by the CEMS exceed the emissions standard. The owner/operator must reestablish the conversion factor during any subsequent performance test.

As part of an ongoing effort to improve compliance with various federal air emission regulations, we are proposing to require use of a continuous compliance determination method (CCDM) for NOXfor nitric acid production units subject to Subpart Ga. The proposed CCDM is a continuous emissions rate monitoring system (CERMS) comprised of the NOXCEMS and a continuous exhaust gas flow rate monitoring system. The CERMS would be required to meet the requirements of performance specification 6 (40 CFR 60, appendix B).

Performance Specification 6 (PS6) provides performance criteria for the flow rate monitoring system and stipulates the overall performancecriteria for the monitoring system in terms of pollutant emissions rate (i.e.,lb NOX/hour). PS6 refers to the criteria of performance specification 2 (PS2) for the NOXCEMS. Extractive Fourier Transform Infrared Spectroscopy (FTIR) is capable of measuring NOXthrough the requirements in Performance Specification 15 (PS15). The proposed regulation allows use of the FTIR CEMS for determining compliance with the NOXemissions limit, in lieu of a monitor meeting the requirements of PS2, at the discretion of the owner/operator.

This proposed rule would require the acid production rate to be determined on a daily basis. The daily NOXemissions rate measured by the CERMS (lb) and the daily production rate (tons of acid per day) are used to calculate the emissions rates in units of the standard, lbs NOXper ton of acid. This proposed rule would provide options for measuring the production rate and stipulates a minimum accuracy requirement for the measurement equipment. This proposed rule also requires that the concentration of the produced nitric acid be tested daily.

We are proposing that nitric acid production units subject to Subpart Ga will not be subject to an opacity standard; consequently no test or monitoring method for opacity is included in this proposed rule. Using the nitric acid production rate and concentration of the nitric acid, the NOXconcentration from the NOXCEMS, and the flow rate from the proposed flow monitor, the NOXemission rate in units of the standard (lb NOX/ton acid) can be determined at any point in time. Therefore, an opacity standard is not required as an additional method of demonstrating compliance with a NOXemission limit.

The only recordkeeping requirements in the existing Subpart G are of daily production rate and hours of operation. The reporting requirements in the existing subpart G include reports of excess emissions and production rate. The frequency of reporting is semiannually as specified in 60.7(c).

Reporting and recordkeeping requirements are being proposed as separate sections for Subpart Ga. Owners/operators subject to Subpart Ga must keep records of all performance tests and results; and dated daily records of hours of operation, nitric acid production rate, and nitric acid concentration; explanations for periods of noncompliance and corrective actions taken; span exceedances; and any modifications to CERMS which could affect the ability of the CERMS to comply with applicable performance specifications.

Owners/operators must report all performance tests and results; dated daily records of NOXemission rates that exceed the standard, explanations for periods of noncompliance and corrective actions taken, span exceedances, and any modifications to CERMS which could affect the ability of the CERMS to comply with applicable performance specifications; and RATA (i.e.,from the initial certification) and performance test data. The frequency of reporting for Subpart Ga is the same as for Subpart G.

In setting standards, the CAA requires us to consider alternative emission control approaches, taking into account the estimated costs as well as impacts on energy, solid waste, and other effects.

We are presenting estimates of the impacts for the proposed 40 CFR part 60, Subpart Ga that change the performance standards for new nitric acid production units. The cost, environmental, and economic impacts presented in this section are expressed as incremental differences between the impacts of nitric acid production units complying with the proposed Subpart Ga and the current NSPS requirements of Subpart G (i.e.,baseline). The impacts are presented for future nitric acid production units that commence construction, reconstruction, or modification over the 5 years following promulgation of the revised NSPS. Costs are based on 2nd quarter of 2010. The analyses and the documents referenced below can be found in Docket ID No. EPA-HQ-OAR-2010-0750.

In order to determine the incremental impacts of this proposed rule, we first estimated the number of new nitric acid production units that would become subject to regulation during the five year period after promulgation of subpart Ga. Based on existing nitric acid production units and estimated future growth rates, 6 new nitric acid production units are expected to be required to meet the nitric acid production demand in that five year period. For further detail on the methodology of these calculations, see memorandumImpacts of Nitric Acid NSPS Review—NO X, dated December 15, 2010, in Docket ID No. EPA-HQ-OAR-2010-0750.

The proposed Subpart Ga NOXemission limit reflects the use of control technologies currently in use by the industry and reflects an adjustment of the limit to more accurately reflect the performance of these control technologies. The current Subpart G NSPS NOXemissions limit can be achieved using a number of control techniques including NSCR, SCR and HPI. In many cases, the air pollution control systems used to meet the current NSPS could be used to meet the proposed revised NOXemission limit for future affected facilities. The potential nationwide emission reduction associated with lowering the NOXlimit from 3.0 to 0.50 lb NOX/ton acid (100 percent acid basis) is estimated to be 2,000 tons per year (tpy) NOX. This potential emission reduction may be overestimated because the majority of control systems installed on future affected facilities would likely result in emissions at or below the proposed emissions limit even in the absence of these proposed revisions.

There are many existing nitric acid production units currently meeting 0.50 lb NOX/ton acid. Therefore, there is no increase in control costs of meeting the proposed emission limit of 0.50 lb NOX/ton acid for new nitric acid production units compared to the control costs to comply with subpart Ga. The only costs incurred would be the installation of an air flow monitor, which is discussed below.

There are differences in notification, testing, monitoring, reporting, and recordkeeping (MRR) between Subpart G and the new Subpart Ga that result in increased costs. We are proposing the use of a CERMS for monitoring compliance with Subpart Ga. The CERMS requires the installation of both a continuous NOXmonitor and continuous exhaust gas flow rate monitor. The current NSPS (subpart G) requires only the installation of a continuous NOXmonitor. The installation, operation, and maintenance of an exhaust gas flow rate monitor will increase the cost to nitric acid production units over what would be incurred to comply with subpart G. We estimate that the total increase in nationwide annual cost associated with this proposed monitoring revision is $90,110 for all six of the new production units projected to be built from 2011 to 2016.

The estimated nationwide incremental 5-year NOXemissions reductions and cost impacts for these proposed revisions are summarized in Table 2 of this preamble. The methodology is detailed in the memorandumImpacts of Nitric AcidNSPS Review—NO X ,dated December 13, 2010 (updated July 27, 2011). The overall cost effectiveness is about $45 per ton of NOXremoved.

Indirect or secondary air quality impacts are impacts that would result from the increased electricity usage associated with the operation of control devices (i.e.,increased secondary emissions of criteria pollutants from power plants). Energy impacts consist of the electricity and steam needed to operate control devices and other equipment that would be required under this proposed rule. In most cases, to comply with the current Subpart G NOXemission limit or this Subpart Ga NOXemission limit, the same control system (SCR, NSCR, or HPI) would have been installed. These proposed revisions only require the addition of exhaust gas flow monitors, which would result in minimal secondary air impacts or increase in overall energy demand.

We performed an economic impact analysis that estimates changes in prices and output for nitric acid production units nationally using the annual compliance costs estimated for this proposed rule. All estimates are for the fifth year after promulgation since this is the year for which the compliance cost impacts are estimated. The impacts to producers and consumers affected by this proposed rule are slightly higher product prices and slightly lower outputs. Prices for products (nitric acid) from affected plants should increase by less than 0.07 percent for the fifth year. The output of nitric acid should decrease by less than 0.50 percent for the fifth year. Hence, the overall economic impact of this proposed NSPS should be low on the affected industries and their consumers. For more information, please refer to the Economic Impact Analysis for this proposed rulemaking in the public docket.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a significant regulatory action because it could raise novel legal or policy issues. Accordingly, the EPA submitted this action to the Office of Management and Budget for review under Executive Order 12866 and any changes made in response to OMB recommendations have been documented in the docket for this action.

The information collection requirements in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501et seq.The Information Collection Request (ICR) document prepared by the EPA has been assigned the EPA ICR number [2445.01].

These proposed revisions to the existing new source performance standards for nitric acid production units would add monitoring requirements for future affected facilities. We have revised the ICR for the existing rule.

These proposed revisions to the new source performance standards for nitric acid production units for future affected facilities include a change to the emission limit and additional continuous monitoring requirements. The monitoring requirements include installing a continuous flow monitor and monitoring the nitric acid concentration. These monitoring requirements are in addition to a CEMS for NOXconcentration which is required under the current subpart G. These requirements are based on specific requirements in Subpart Ga which are mandatory for all operators subject to NSPS. These recordkeeping and reporting requirements are specifically authorized by section 114 of the CAA (42 U.S.C. 7414). All information submitted to the EPA pursuant to the recordkeeping and reporting requirements for which a claim of confidentiality is made is safeguarded according to the EPA policies set forth in 40 CFR part 2, subpart B.

The annual burden for this information collection averaged over the first 3 years of this ICR is estimated to total 968 labor-hours per year at a cost of $91,808 per year. The annualized capital costs are estimated at $19,288 per year. The annualized operation and maintenance (O&M) costs are $23,488. The total annualized capital and O&M costs are $42,776 per year. Burden is defined at 5 CFR 1320.3(b).

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.

To comment on the agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing respondent burden, the EPA has established a public docket for this rule, which includes this ICR, under Docket ID number EPA-HQ-OAR-2010-0750. Submit any comments related to the ICR to the EPA and OMB. SeeADDRESSESsection at the beginning of this notice for where to submit comments to the EPA. Send comments to OMB at the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW., Washington, DC 20503,Attention:Desk Office for the EPA. Since OMB is required to make a decision concerning the ICR between 30 and 60 days after October 14, 2011, a comment to OMB is best assured of having its full effect if OMB receives it by November 14, 2011. The final rule will respond to any OMBor public comments on the information collection requirements contained in this proposal.

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that this rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This certification is based on the economic impact of this action to all affected small entities. Only four small entities may be impacted by this proposed rule. We estimate that all affected small entities will have annualized costs of less than 0.3 percent of their sales. We conclude that there is no significant economic impact on a substantial number of small entities (SISNOSE) for this rule.

For more information on the small entity impacts associated with this proposed rule, please refer to the Economic Impact and Small Business Analyses in the public docket. Although this proposed rule would not have a significant economic impact on a substantial number of small entities, the EPA nonetheless tried to reduce the impact of this proposed rule on small entities. When developing the revised standards, the EPA took special steps to ensure that the burdens imposed on small entities were minimal. The EPA conducted several meetings with industry trade associations to discuss regulatory options and the corresponding burden on industry, such as recordkeeping and reporting. We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts.

This rule does not contain a federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or to the private sector in any one year. This rule is not expected to impact state, local, or tribal governments. The nationwide annualized cost of this proposed rule for affected industrial sources is $90,010/yr. Thus, this rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act (UMRA).

This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. This rule will not apply to such governments and will not impose any obligations upon them.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Nitric acid plants are privately owned companies and there will be no direct impact on states and other federal offices. Thus, Executive Order 13132 does not apply to this proposed rule. In the spirit of Executive Order 13132, and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicited comment on this proposed rule from state and local officials.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes, as specified in Executive Order 13175. This proposed rule imposes requirements on owners and operators of nitric acid production units and not tribal governments. We do not know of any nitric acid production units owned or operated by Indian tribal governments. However, if there are any, the effect of this proposed rule on communities of tribal governments would not be unique or disproportionate to the effect on other communities. Thus, Executive Order 13175 does not apply to this action. The EPA specifically solicits additional comment on this proposed rule from tribal officials.

The EPA interprets Executive Order 13045 (62 FR 19885, April 22, 1997) as applying to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it is based solely on technology performance.

This action is not subject to Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 104-113 (15 U.S.C. 272 note), directs the EPA to use voluntary consensus standards (VCS) in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. VCS are technical standards (e.g.,materials specifications, test methods, sampling procedures, business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs the EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable VCS.

This proposed rulemaking involves technical standards. The EPA proposes to use: ASTM D6348-03, Standard Test Method for Determination of Gaseous Compounds by Extractive Direct Interface Fourier Transform Infrared (FTIR) Spectroscopy, and ASTM E1584, Standard Test Method for Assay of Nitric Acid, which have been incorporated by reference.

The EPA welcomes comments on this aspect of the proposed rulemaking and specifically invites the public to identifypotentially applicable voluntary consensus standards and to explain why such standards should be used in this regulation.

Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.

The EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. The EPA has also determined that a proximity-based demographic study comparing populations in closest proximity to the regulated sources to the general population is not appropriate for this rulemaking due to lack of pollutants with localized effects.

For the reasons stated in the preamble, title 40, chapter I, of the Code of Federal Regulations is amended as follows:

The Preamble to this notice of proposed rulemaking is organized as follows:

This NPRM is proposed under the authority of section 361 of the Public Health Service Act (PHS Act) (42 U.S.C. 264). This provision authorizes the Health and Human Services (HHS) Secretary to make and enforce such regulations as in her judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions of the United States and from one State or possession into any other State or possession. For purposes of carrying out and enforcing such regulations, the HHS Secretary may authorize a variety of public health measures, including inspection, fumigation, disinfection, sanitation, pest extermination, destruction of animals or articles found to be sources of dangerous infection to human beings, and other measures.

The Foreign Quarantine regulations (42 CFR part 71) set forth provisions to prevent the introduction, transmission, and spread of communicable disease from foreign countries into the United States. Part 71, Subpart F (Importations) contains provisions for importation of etiological agents, hosts, and vectors (42 CFR 71.54), requiring persons to obtain a permit issued by the CDC before importing or distributing after import of these materials.

This document proposes to revise the regulations that cover the importation of etiological agents and the hosts and vectors of human disease (42 CFR 71.54) as described below. We will consider comments that are received within 60 days of publication of this notice in theFederal Register.

The heading for 42 CFR 71.54 would be changed from “Etiological agents, hosts, and vectors.” to “Import Regulations for Infectious Biological Agents, Infectious Material, and Vectors” to clarify proposed changes discussed below. Under the proposed changes, only the following infectious biological agents, materials, and vectors would require a permit issued by the CDC Director prior to entry into the United States, or subsequently being transferred within the United States:

Infectious biological agent.A microorganism (including, but not limited to, bacteria (including rickettsiae), viruses, fungi, or protozoa) or prion, whether naturally occurring, bioengineered, or artificial, or a component of such microorganism or prion that is capable of causing communicable disease in a human.

Infectious material.Any material which is known or suspected to contain a biological agent infectious to humans.

Vector.Any animals (vertebrate or invertebrate) including arthropods or any noninfectious self-replicating system known to transfer or capable of transferring an infectious biological agent to a human (e.g.,a mosquito).

We also propose to remove the term “host” because we believe “host” means the same as the current proposed definition for “vector.” However, CDC is interested in comments concerning the removal of the term “host” from the proposed language. CDC is also interested in comments concerning the scope of the definition for “vector” and whether it should be limited in some manner to exclude animals intended to be exhibited in zoos or mounted animals or hides intended for museum displays while remaining broad enough to include mosquitoes that carry the malaria parasitePlasmodiumbetween humans.

The key principle in selecting the appropriate safeguards for the conduct of the microbiological research is “risk assessment.” Risk assessment is a process used to identify the hazardous characteristics of a known infectious agent or potentially infectious agent or material, the activities that can result in exposure to such an agent, the likelihood that such exposure will cause a laboratory-acquired infection (LAI), and the probable consequences of such an infection. The information identified through risk assessment is used to guide the selection of appropriate microbiological practices, safety equipment, and facility safeguards (biosafety measures) that, when used properly, can prevent exposures and dramatically reduce the incidence of LAIs. Risk assessment is a common first step in an overall risk-management process.

The safe possession and work with infectious biological agents, infectious material, and vectors requires that importers have the appropriate biosafety measures in place for imported material. Accordingly, CDC proposes that import regulations clearly state that the applicant have biosafety measures that are commensurate with the hazard posed by the infectious biological agent, infectious material, and/or vector to be imported, and the level of risk given its intended use. These biosafety measures may be entity-wide, laboratory-specific, or agent-specific. CDC believes importers engaged in microbiological research and related activities utilizing safe laboratory practices, safety equipment, and facility safeguards will reduce the incidence of LAIs and other incidents and will protect the public health and environment.

In developing the appropriate biosafety measures, importers working with infectious biological agents, infectious material, and vectors should use the appropriate microbiological practices, safety equipment, and facility safeguards that, when used properly, can prevent exposures and dramatically reduce the incidence of LAIs. An applicant should consider: (1) The CDC/National Institutes of Health (NIH) publication, “Biosafety in Microbiological and Biomedical Laboratories” (BMBL), including all appendices. Copies may be obtained at the CDC Web site athttp://www.cdc.gov/and (2) The “NIH Guidelines for Research Involving Recombinant DNA Molecules (NIH Guidelines).” Copies may be obtained from the NIH Web site athttp://oba.od.nih.gov/rdna/nih_guidelines_oba.html.

To implement CDC's inspection authority as provided under 42 U.S.C. 264(a), CDC proposes that prior to CDC issuing a permit, it may inspect the applicant's facility to evaluate whether the importer's implementation of its biosafety measures (e.g.,physical structure and features of the facility, and operational and procedural safeguards) are effective and commensurate with the risk posed by the infectious biological agent, infectious material, and/or vector, and the level of risk given its intended use. CDC will use the following specific criteria to determine which entities are to be inspected—(1) facilities that request to perform research with imported agents that would need to be conducted in a biosafety level (BSL)-3, BSL-4, Animal biosafety level (ABSL)-3, ABSL-4 or BSL-3 Agriculture laboratory as described in the BMBL (e.g., Mycobacterium tuberculosis), and (2) that have not been inspected by CDC's Select Agent Program.

Even though CDC is proposing that the import regulations specifically state a requirement for appropriate biosafety measures as a prerequisite for theissuance of a permit, we believe, based on our experience with import permit submissions addressing the capabilities of the receiving laboratories, that most, if not all, importers of etiological agents already have written biosafety plans. Based on permit applications submitted to CDC between March 1, 2011, and July 22, 2011, the total number of applicants with adequate written biosafety plans was 632 out of 644 or 98%. Based on the content of those plans, CDC is confident that each of them would meet the requirement for appropriate biosafety measures of this NPRM. If an importer's biosafety measures were found to be inadequate, CDC would offer to work with the entity to address any biosafety issues prior to denying the permit.

Currently, in accordance with 9 CFR part 121 and 42 CFR part 73 (Select Agent Regulations), only individuals or entities registered with the CDC or U.S. Department of Agriculture, Animal and Plant Health Inspection Service's (APHIS') Select Agent Program can legally import select agents (i.e.,biological agents and toxins that could pose a severe threat to public health and safety) into the United States. A select agent may only be imported under the conditions described in 9 CFR 121.16 and 42 CFR 73.16 and must be authorized by APHIS or CDC prior to importation. Therefore, we are proposing that importation of select agents in accordance with the Select Agent Regulations be exempted from the requirement to have an additional import permit under 42 CFR 71.54.

As defined by the proposed rule, a diagnostic specimen is any specimen of human or animal matter (including tissue, blood, body discharges, fluids, excretions or similar material), or an environmental sample. CDC's policy regarding diagnostic specimens is that only diagnostic specimens that are known to contain, or are suspected of containing, an infectious biological agent require a permit issued by the CDC Director prior to entry into the United States or subsequent transfer within the United States. CDC proposes to clarify this policy in the regulation by adding a provision that a permit is not required for a diagnostic specimen not known by the importer to contain, or suspected by the importer of containing, an infectious biological agent and the specimen is accompanied by an importer certification statement confirming that the material is not known or suspected to contain an infectious biological agent. Importers would not be required to perform confirmatory tests on these specimens, only certify in writing that they have no reason to believe that the samples contain an infectious biological agent. Examples of these types of diagnostic specimens not known by the importer to contain, or suspected by the importer of containing, an infectious biological agent may include urine samples submitted for urine drug screens or serum samples submitted for cholesterol testing.

Genomic material from infectious biological agents can consist of Deoxyribonucleic acid (DNA) or Ribonucleic acid (RNA). The nucleic acid comprising the genome may be single-stranded or double-stranded, and in a linear, circular or segmented configuration. Single-stranded viral genomes may be positive sense (same polarity as mRNA), negative sense, or ambisense (mixture of the two). Viral genomes which consist of positive sense RNA are infectious when the purified viral RNA is applied to permissive cells in the absence of any viral proteins. In some cases, viral genomes which are composed of double-stranded DNA are also infectious (e.g.,genome of Cercopithecine Herpesvirus 1 (Herpes B virus)). If genomic material being imported does not encode for infectious and/or replication competent forms of an infectious biological agent then a permit is not required. For example, a permit would not be required for RNA obtained from negative stranded RNA viruses or for genomic DNA isolated from bacteria. As such, CDC proposes to clarify this policy by adding a provision in the regulation that a permit is not required for nucleic acids that cannot produce infectious forms of any infectious biological agent and the specimen is accompanied by an importer certification statement confirming that the material is not known to contain or suspected of containing an infectious biological agent. Importers would not be required to perform confirmatory tests on these specimens, only certify in writing that they have no reason to believe that the samples can produce infectious forms of any infectious biological agent.

CDC proposes to exempt material contained in certain products from the requirement to obtain a CDC Permit for importation into the United States or subsequent transfer within the United States. If the material is contained in a product that is cleared, approved, licensed, or authorized under the provisions of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301et seq.), Section 351 of the Public Health Service Act pertaining to biological products (42 U.S.C. 262), or the Virus-Serum-Toxin Act (21 U.S.C. 151-159), CDC has determined that it is unlikely that material in these products would present a risk of the introduction, transmission, or spreading of a communicable disease. This exemption would include all investigational products for which an Investigational New Drug application (IND) is in place with the U.S. Food and Drug Administration (FDA). Examples of products that have been cleared, approved, licensed, or authorized by the FDA include FDA-licensed live attenuated vaccines and diagnostic test kits authorized for marketing or investigational use. Examples of products for Section 351 of the Public Health Service Act pertaining to biological products (42 U.S.C. 262) or the Virus-Serum-Toxin Act (21 U.S.C. 151-159) include vaccines, antibody products, and blood products.

CDC proposes to clarify this policy by adding a provision in the regulation that a permit is not required for a product that is cleared, approved, licensed, or is otherwise authorized under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 301et seq), Section 351 of the Public Health Service Act pertaining to biological products (42 U.S.C. 262), or the Virus-Serum-Toxin Act (21 U.S.C. 151-159).

During the importation of the infectious biological agents, infectious material, or vectors, the importer must be in compliance with all applicable laws concerning the packaging and shipment of infectious substances, including the following:

• Agriculture (9 CFR parts 92, 94, 95 96, 121, 122, and 130),

• Occupational Health and Safety Administration (29 CFR 1910.1030),

• Transportation (49 CFR parts 171 through 180), and

• Postal Service (39 CFR part 111).

Since 2003, CDC has denied 2 applications for permits. CDC proposes to provide applicants with an opportunity for a written appeal in theevent that the CDC Director denies a request for a permit to import infectious biological agents, infectious material, or vectors under this part. Under the proposal, an applicant who wishes to make such an appeal would have 30 calendar days after receiving the denial to submit the appeal in writing to the CDC Director. The appeal must state the factual basis for the appeal and provide any supporting documentations to justify the appeal (e.g.,documents that demonstrate the facility has the appropriate biosafety measures in place for working safely with requested imported material). CDC would then issue a written response, which would then constitute final agency action. CDC invites comments on this process.

In researching the proposed changes, we reviewed how U.S. Department of Agriculture/Animal and Plant Health Inspection Service (USDA/APHIS) regulates the importation plant and animal products and the Federal Select Agent Program regulates the possession, use, and transfer of select agents and toxins. We learned that HHS/CDC identified, through its Select Agent Program inspection program, specific biosafety measure implementation issues in 81 of the 316 the entities inspected by CDC since 2003. Some of the biosafety measure implementation issues were serious enough to require the suspension of registration or other restrictions on biological work at these facilities. USDA/APHIS has identified similar biosafety issues.

Thus, in the proposed rule, import regulations clearly state that the applicant have biosafety measures that are commensurate with the hazard posed by the infectious biological agent, infectious material, and/or vector to be imported, and the level of risk given its intended use. The safe possession and work with infectious biological agents, infectious material, and vectors requires that importers have the appropriate biosafety measures in place for imported material. These biosafety measures may be entity-wide, laboratory-specific, or agent-specific. HHS/CDC believes importers engaged in microbiological research and related activities utilizing safe laboratory practices, safety equipment, and facility safeguards will reduce the incidence of LAIs and other incidents and will protect the public health and environment. HHS/CDC also considered a requirement that the applicant must develop and implement a written biosafety plan that is commensurate with the hazard posed by the infectious biological agent, infectious material, and/or vector to be imported, and the level of risk given its intended use, including what elements of the plan are essential to prevent exposures and dramatically reduce the incidence of LAIs and protect the public health and environment. However, we believe that most, if not all, importers of etiological agents already have such biosafety plans based on our experience with import permit submissions addressing Section G (Receiving Laboratory Capabilities) of the permit application. The total number of applicants estimated to have biosafety plans from March 2011 to the present is 632 out of 644 or 98%. CDC would be interested in comments concerning the cost and burden of formalizing a written biosafety plan.

Finally, we also provided exemptions to allow importers to import certain material that is already approved or authorized by another agency or material that has been determined not to be an infectious biological agent. We believe this will reduce burden for clinical/diagnostic laboratories or small business selling manufactured goods.

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

Based on past experience, we estimate that there will be approximately 2,000 applications for both import and distribution permit requests each year and that the average response time to complete the application is 20 minutes. We believe that the burden has been limited to requesting only essential information on the application, verifying information, when required, by telephone, and mailing information to the appropriate parties.

With regard to the new proposed requirement to have in place biosafety measures, our current experience with reviewing the information submitted for the import permit applications addressing Section G (Receiving Laboratory Capabilities) (e.g.,detailed description of any required personal protective equipment (PPE)), and laboratory equipment (i.e.,biosafety cabinets, autoclaves) that ensures materials are properly handled and contained indicates that the vast majority of importers of etiological agents already have instituted such biosafety measures. In fact, based on the review of applications received since March 2011, we estimated that 98% (632 out of 644) of the applicants possess written biosafety plans and already follow standard biosafety practices and procedures.

With regard to whether CDC will inspect an import facility, as noted above, CDC will use the following specific criteria to determine which entities are to be inspected—(1) facilities that request to perform research with imported agents that would need to be conducted in a BSL-3, BSL-4, ABSL-3, ABSL-4 or BSL-3 Agriculture laboratory as described in the BMBL (e.g., Mycobacterium tuberculosis), and (2) that have not been inspected by CDC's Select Agent Program.

Since 2009, we have refined the CDC import permit database to include better descriptions of material being imported, the biosafety level of the laboratory where the work will be performed, and the type of work to be conducted (e.g.,diagnostic, research). To estimate the number of facilities that we anticipate would require a biosafety inspection; we first identified those facilities that applied to import “BSL-3 agents” for research. From that list, we deleted those facilities already receiving periodic biosafety from either CDC or APHIS inspections due to their registration with the Federal Select Agent Program and concluded that approximately 25 facilities would need to be inspected per year to verify that they have in place the appropriate biosafety measures that are commensurate with the risk posed by the infectious biological agent, infectious material, and/or vector, and the level of risk given its intended use. We based our estimate on fact that the remaining facilities would not need to be inspected based on our current experience with reviewing the information contained in the import permit applications which address in detail the capabilities of receiving laboratories (description of any required personal protective equipment and laboratory equipment (biosafety cabinets, autoclaves), which if used properly ensures materials are properlyhandled and contained). We therefore anticipate that this requirement will impose only a minimal burden on importers. However, we believe that the addition of this requirement is important to ensure that current and future importing facilities have and maintain the appropriate biosafety measures for working safely with imported infectious agents by inspecting these facilities. HHS/CDC's belief in the importance of including a requirement that importers are subject to an inspection to verify the implementation of appropriate biosafety measures is based on our eight years of experience in the area of select agent regulatory oversight. While 100% of entities registered for the possession, use, or transfer of select agents and toxins (42 CFR part 73) had appropriately filled out their application and had an adequate written biosafety plan, HHS/CDC identified, through its Select Agent Program inspection program, specific biosafety measure implementation issues in 81 of the 316 the entities inspected by HHS/CDC since 2003. Some of the biosafety measure implementation issues were serious enough to require the suspension of registration or other restrictions on biological work at these facilities. USDA/APHIS has a similar experience with those Select Agent entities for which it has principle oversight. Thus, we have learned from inspecting entities registered with the HHS/CDC's Select Agent Program that the “trust” approach to accepting information received from paperwork is ineffective. We found that the information provided in the paperwork did not always match the biosafety practices that are employed by the facility. As such, we believe that HHS/CDC's Permitting Program should adopt a parallel program to verify biosafety measures.

We also anticipate that there will be no cost to CDC to implement these recommended changes since we already review documents regarding biosafety and have a staff of fully trained and experienced biosafety inspectors. Finally, we believe the projected travel costs to perform these inspections will be at no additional cost to CDC since we plan to coordinate these inspections with those we are already conducting under the Federal Select Agent Inspection Program.

Under the Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) (5 U.S.C. 601et seq.), agencies must consider the impact of regulations on small entities and analyze regulatory options that would minimize a rule's impacts on these entities. Alternatively, the agency head may certify that the proposed rule will not have a significant economic impact on a substantial number of small entities. As discussed above, CDC does not anticipate that this NPRM will have a significant economic impact on a substantial number of small businesses and other small entities. Of the entities impacted by this rule, CDC estimates that approximately 100 applications received out of 2000 applications are from small businesses. U.S. Small Business Administration defines a small business concern as one that is independently owned and operated, is organized for profit, and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period. For example, annual receipts may not exceed $2.5 to $21.5 million for services provided or maximum number of employees may range from 100 to 500 depending on the particular product being provided. Based on this definition, we did not consider universities or major pharmaceutical companies as small businesses. CDC would be interested in comments concerning the cost and burden of this proposed rule, especially from an importer that might be considered a small business or entity or from the private sector.

In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.), HHS/CDC has determined that the information collection and recordkeeping requirements included in this proposed rule are already approved by OMB under OMB control number 0920-0199, expiration 1/31/2014. There are no new information collection or recordkeeping requirements in the proposed rule.

In the past, CDC has denied applications for permits. Thus, in this rule, CDC proposes to provide applicants with an opportunity for a written appeal in the event that the CDC Director denies a request for a permit to import infectious biological agents, infectious material, or vectors under this part. Under the proposal, an applicant who wishes to make such an appeal would have 30 calendar days after receiving the denial to submit the appeal in writing to the CDC Director. The appeal must state the factual basis for the appeal and provide any supporting documentations to justify the appeal (e.g.,documents that demonstrate the facility has the appropriate biosafety measures in place for working safely with requested imported material). CDC would then issue a written response, which would then constitute final agency action. CDC estimates the time to prepare and submit such a request is 4 hours. CDC invites comments on this process.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform, and Executive Order 13132, Federalism. This rule: (1) Preempts all State and local laws and regulations that are in conflict with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

Pursuant to Presidential Memorandum of June 1, 1998 Plain Language in Government Writing (63 FR 31885), Executive Departments and Agencies are directed to use plain language in all proposed and final rules. CDC believes it has used plain language in drafting of the proposed rule and would welcome any comment from the public in this regard.

For the reasons stated in the preamble, the Centers for Disease Control and Prevention, U.S. Department of Health and Human Services, proposes to amend 42 CFR part 71, subpart F, as follows:

DoD, GSA, and NASA are proposing to amend the Federal Acquisition Regulation (FAR) to add a new subpart 24.3, entitled “Privacy Training,” and related clause to ensure that contractors identify employees who require access to a Government system of records, handle personally identifiable information, or design, develop, maintain, or operate a system of records on behalf of the Federal Government, and who, therefore, are required to complete privacy training initially upon award of the procurement and at least annually thereafter. In addition, contractors are required to keep records indicating that employees have completed the required training and, upon request, provide those records to the Government. This rule does not apply to commercial items.

These requirements are consistent with subsection (e), Agency requirements, and subsection (m), Government contractors, of the Privacy Act of 1974, 5 U.S.C. 552a. Other applicable authorities that address the responsibility for Federal agencies to ensure that Government and contractor personnel are instructed on compliance requirements with the laws, rules, and guidance pertaining to handling and safeguarding personally identifiable information include the E-Government Act of 2002, the Federal Information Security Management Act (FISMA) of 2002, and Federal guidance from the Office of Management and Budget (OMB),e.g.,OMB Memorandum M-07-16, entitled “Safeguarding Against and Responding to the Breach of Personally Identifiable Information,” issued May 22, 2007; OMB Memorandum M-10-23, entitled “Guidance for Agency Use of Third-Party Web sites and Applications,” issued June 25, 2010 (this memorandum contains the most current definition of personally identifiable information, and clarifies the definition provided in M-07-16); and OMB Circular No. A-130, entitled “Management of Federal Information Resources,” which address significant requirements for safeguarding and handling personally identifiable information and reporting any theft, loss, or compromise of such information. In addition, FAR subpart 24.1 requires that Federal agencies contracting for the design, development, or operation of a system of records on individuals must extend all Privacy Act safeguards to the contractor and its employees working on the contract.

Minimum requirements for privacy training are proposed for the coverage in order to ensure consistency across the Government. For example, any privacy training must address the protection of privacy, in accordance with the Privacy Act (5 U.S.C. 552a), and the handling and safeguarding of personally identifiable information. The proposed FAR text includes seven mandatory elements of the privacy training, including any agency-specific requirements. Many agencies currently require that designated contractor employees complete agency-developed privacy training, but, in some circumstances, an agency may provide a contractor with the Privacy Act requirements and have the contractor develop the training package. While the use of an agency-developed privacy training package is the most common approach, and the approach embodied in the clause at FAR 52.224-XX, Privacy Training, the proposed FAR language provides an Alternate I to the FAR clause for those cases where the agency prefers to have the contractor create the privacy training package. Additionally, the proposed FAR language provides an Alternate II to the FAR clause for those instances when it's determined to be in the best interest of the Government for a contractor employee to attend agency-provided privacy training.

Under the proposed FAR rule, a contractor employee who requires access to a Government system of records will be granted or allowed to retain such access only if the individual has (1) Completed privacy training and (2) met all other applicable agency requirements.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is a significant regulatory action and, therefore, was subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

The change may have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act 5 U.S.C. 601,et seq.The Initial Regulatory Flexibility Analysis (IRFA) is summarized as follows:

The Regulatory Secretariat will be submitting a copy of the Interim Regulatory Flexibility Analysis (IRFA) to the Chief Counsel for Advocacy of the Small Business Administration. A copy of the IRFA may be obtained from the Regulatory Secretariat. DoD, GSA and NASA invite comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD, GSA, and NASA will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (FAR Case 2010-013) in correspondence.

The Paperwork Reduction Act (44 U.S.C. chapter 35) applies. The proposed rule contains information collection requirements. Accordingly, the Regulatory Secretariat has submitted a request for approval of a new information collection requirement concerning “Privacy Training” to the Office of Management and Budget.

A. Public reporting burden for this collection of information is estimated to average one hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. The recordkeeping requirements are minor, and records generally will be retained within the contractor's organization. While a contractor is required to identify its employees who require initial privacy training and annual privacy training thereafter, there is no requirement to collect this information in a particular format or provide it to the Government, other than on an exception basis,i.e.,when there is an indication that the contractor is not complying with the training requirements.

The annual reporting burden is estimated as follows:

B. Request for Comments Regarding Paperwork Burden.

Submit comments, including suggestions for reducing this burden, not later than December 13, 2011 to: FAR Desk Officer, OMB, Room 10102, NEOB, Washington, DC 20503, and a copy to the General Services Administration, Regulatory Secretariat (MVCB), ATTN: Hada Flowers, 1275 First Street, NE., 7th Floor, Washington, DC 20417.

Public comments are particularly invited on: whether this collection of information is necessary for the proper performance of functions of the FAR, and will have practical utility; whether our estimate of the public burden of this collection of information is accurate, and based on valid assumptions and methodology; ways to enhance the quality, utility, and clarity of the information to be collected; and ways in which we can minimize the burden of the collection of information on those who are to respond, through the use of appropriate technological collection techniques or other forms of information technology.

Requester may obtain a copy of the supporting statement from the General Services Administration, Regulatory Secretariat (MVCB), Attn: Hada Flowers, 1275 First Street, NE., 7th Floor, Washington, DC 20417. Please cite OMB Control Number 9000-0182, FAR Case 2010-013, Privacy Training, in correspondence.

Therefore, DoD, GSA, and NASA propose amending 48 CFR parts 24 and 52 as set forth below:

1. The authority citation for 48 CFR parts 24 and 52 continues to read as follows:

The purpose of the hearing is to receive oral comments in response to a notice of proposed rulemaking (NPRM) proposing amendment of the regulations requiring certain railroads to implement PTC systems.See76 FR 52918 (Aug. 24, 2011). Interested parties are invited to present oral statements and to proffer information and views at the hearing. The hearing will be informal and will be conducted by a representative designated by FRA in accordance with FRA's Rules of Practice (49 CFR 211.25). The hearing will be a non-adversarial proceeding; therefore, there will be no cross examination of persons presenting statements or proffering evidence. An FRA representative will make an opening statement outlining the scope of the hearing. After all initial statements have been completed; those persons wishing to make a brief rebuttal will be given the opportunity to do so in the same order in which the initial statements were made. Additional procedures, as necessary for the conduct of the hearing, will be announced at the hearing. A transcript of the discussions will be made part of the public docket in this proceeding.

Public Participation Procedures.Any person wishing to participate in the public hearing should notify FRA by mail or at the address or fax number provided in the Attendance section of this notice at least five working days prior to the date of the hearing and submit three copies of the oral statement that he or she intends to make at the proceeding. The notification should identify the party the person represents, the particular subject(s) the person plans to address, and the time requested. The notification should also provide the Docket Clerk with the participant's mailing address and other contact information. FRA reserves the right to limit participation in the hearing of persons who fail to provide such notification. FRA reserves the right to limit the duration of presentations if necessary to afford all persons with the opportunity to speak.

Extension of Comment Period.A public hearing has been scheduled after the close of the comment period specifically provided for in the notice of proposed rulemaking. To accommodate the public hearing and to afford interested parties the opportunity to submit comments in response to views or information provided at the public hearing, FRA is extending the comment period in this proceeding to November 25, 2011.