This advance notice outlines the reform ideas for which OMB seeks public comment. These comments will assist OMB in its development in the coming months of a furtherFederal Registernotice, to be published for comment later this year, which would propose specific revisions to existing requirements. These reform ideas relate to, and could result in proposed revisions to the following government-wide issuances: OMB Circulars A-21, A-87, A-110, and A-122 (which have been placed in 2 CFR parts 220, 225, 215, and 230); Circulars A-89, A-102, and A-133; the guidance in Circular A-50 on Single Audit Act follow-up; and the Cost Principles for Hospitals at 45 CFR Part 74, Appendix E. As part of this ongoing review, OMB will consider the consolidation of currently-separate guidelines addressing related topics as well as the continued integration of guidelines into title 2 of the Code of Federal Regulations.

The reform ideas would be applicable to grants and cooperative agreements that involve state, local, and tribal governments as well as universities and nonprofit organizations. To the extent that current OMB circulars on cost principles cover all awards including contracts for these entities, reforms to cost principles will equally apply to all Federal awards including contracts, except for those contracts that that are subject to “full coverage” under the Cost Accounting Standards (CAS) as defined at 48 CFR 9903.201. CAS-covered contracts will continue to be subject to the relevant requirements under the Federal Acquisition Regulation (FAR). Single Audit Act requirements will continue to apply to all Federal awards including contracts, though cost reimbursement contracts may continue to be subject to additional audit requirements.

As the President made clear in Executive Order 13563 of January 18, 2011, onImproving Regulation andRegulatory Review(76 FR 3821; January 21, 2011;http://www.gpo.gov/fdsys/pkg/FR-2011-01-21/pdf/2011-1385.pdf), each Federal agency must “tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations” and, to that end, it is important that Federal agencies identify those “rules that may be outmoded, ineffective, insufficient, or excessively burdensome,” and “modify, streamline, expand, or repeal them in accordance with what has been learned.” The President reinforced his commitment in Executive Order 13579 of July 11, 2011 onRegulation and Independent Regulatory Agencies(76 FR 41587; July 14, 2011;http://www.gpo.gov/fdsys/pkg/FR-2011-07-14/pdf/2011-17953.pdf).

As in other areas involving Federal requirements, the President is committed to eliminating requirements in the financial assistance arena that are unnecessary and reforming those requirements that are overly burdensome. As part of this commitment, the President believes that the Federal government has an obligation to eliminate roadblocks to effective performance in carrying out and completing grants and cooperative agreements. Essential to this reform effort is reducing “red tape” that is attached to the more than $600 billion the Federal government spends annually in the form of grants and cooperative agreements. These awards provide important benefits and services to the public, and the awards go to state, local and tribal governments as well as to institutions of higher education and non-profit organizations. In order to ensure that the public receives the most value for the tax dollars spent, it is essential that these programs function as effectively and efficiently as possible, and that there be a high level of accountability to prevent waste, fraud, and abuse.

To this end, the President on February 28, 2011, issued hisMemorandum on Administrative Flexibility, Lower Costs, and Better Results for State, Local, and Tribal Governments,(Daily Comp. Pres. Docs.;http://www.gpo.gov/fdsys/pkg/DCPD-201100123/pdf/DCPD-201100123.pdf). In the Memorandum, the President explained that “Federal program requirements over the past several decades have sometimes been onerous, and they have not always contributed to better outcomes. With input from our State, local, and tribal partners, we can, consistent with law, reduce unnecessary regulatory and administrative burdens and redirect resources to services that are essential to achieving better outcomes at lower cost.” In addition to other actions, the President instructed the OMB Director to “[r]eview and where appropriate revise guidance concerning cost principles, burden minimizations, and audits for State, local, and tribal governments in order to eliminate, to the extent permitted by law, unnecessary, unduly burdensome, duplicative, or low-priority recordkeeping requirements and effectively tie such requirements to achievement of outcomes.”

At the same time that the Federal Government must remove unnecessary and overly burdensome requirements that interfere with efficient and effective program performance, another Presidential priority is “intensifying efforts to eliminate payment error, waste, fraud, and abuse” in Federal programs, as the President emphasized in Executive Order 13520 of November 20, 2009, on Reducing Improper Payments (74 FR 62201; November 25, 2009;http://www.gpo.gov/fdsys/pkg/FR-2009-11-25/pdf/E9-28493.pdf). Accordingly, as the President explained, it is important for Federal agencies “to more effectively tailor their methodologies for identifying and measuring improper payments to those programs, or components of programs, where improper payments are most likely to occur.” Moreover, the elimination of unnecessary and overly burdensome requirements can advance the goal of strengthened program integrity, by enabling resources to be focused on those activities that are most effective at reducing payment errors and eliminating waste, fraud and abuse. Accordingly, in his February 2011 Memorandum onAdministrative Flexibility, Lower Costs, and Better Results for State, Local, and Tribal Governments,the President directed Federal agencies to “[w]ork with State, local, and tribal governments to identify the best opportunities to realize efficiency, promote program integrity, and improve program outcomes, including opportunities, consistent with law, that reduce or streamline duplicative paperwork, reporting, and regulatory burdens and those that more effectively use Federal resources across multiple programs or States.”

The reform ideas described below are being considered as approaches for pursuing these objectives.

The purpose of this notice is to solicit public input on a range of ideas for reforming the requirements that govern the management of Federal financial assistance awards. OMB is interested in receiving broad public feedback on these ideas. Based on the feedback that is received, as well as on the ongoing discussions among Federal agencies (including their Inspectors General) as well as with other stakeholders, OMB in the coming months will develop a set of proposed amendments that, later this year, will be published for public comment in theFederal Register. The public comments on that proposed set of revisions will in turn be considered as OMB develops a final notice that will adopt a set of reforms. Following the implementation of these reforms, OMB will continue to monitor their impacts to evaluate whether (and the extent to which) the reforms are achieving their desired results, and OMB will consider making further modifications as appropriate.

In addition, OMB is considering implementing these reforms through the development and issuance of an integrated set of guidelines that would be contained in one consolidated circular, in which current administrative requirements that currently vary by type-of-recipient would be streamlined into one set of common requirements, while at the same time some provisions that vary among different types of recipients would be retained. The goal of such a streamlining would be to increase the consistency, and decrease the complexity, in how the Federal Government's financial assistance programs are administered. Among other benefits, this will make it easier for applicants and recipients of Federal awards to understand and implement these requirements.

The reform ideas outlined in this notice reflect input from a year of work by the Federal and non-Federal financial assistance community. In response to the President's direction that OMB and Federal agencies identify ways to make the oversight of Federal funds more effective and more efficient, OMB worked with the Office of Science and Technology Policy (OSTP) to convene meetings with both Federal and non-Federal stakeholders to discuss possible ideas for reform efforts. These meetings resulted in OMB receiving a series reform ideas at the end of August 2011 that have since been further developed as described below. In addition, over 150 comments were received from the university and research community. These comments are publicly available athttp://rbm.nih.gov/a21_task_force.htm.

On October 27, 2011, the OMB Director issued Memorandum M-12-01, Creation of the Council on Financial Assistance Reform(http://www.whitehouse.gov/sites/default/files/omb/memoranda/2012/m-12-01.pdf). To “create a more streamlined and accountable structure to coordinate financial assistance,” the Memorandum established the interagency Council on Financial Assistance Reform (COFAR) as a replacement for two Federal boards (the Grants Policy Council and the Grants Executive Board). The 10-member COFAR is composed of OMB's Office of Federal Financial Management (Co-Chair); the eight largest grant-making agencies, which are the Departments of Health and Human Services (a Co-Chair), Agriculture, Education, Energy, Homeland Security, Housing and Urban Development, Labor, and Transportation; and one additional rotating member to represent the perspectives of other agencies, which for the first two-year term is the National Science Foundation.

Since the COFAR's first meeting on November 4, 2011, it has worked to formulate and further develop reform ideas for consideration to streamline and improve financial management policy for Federal assistance awards. These reform ideas are presented below, in Part II of this notice. In Part III, specific questions are posed regarding these reform ideas, for which comments are especially invited, along with other comments.

OMB invites comments from the public on all issues addressed in this advance notice. We invite those interested in responding to answer all of the questions posed or to choose to respond only to those questions of greatest interest to them. This feedback will assist us in fully considering issues and developing policies. In addition, the public is invited to suggest additional reform ideas for our consideration. Finally, we should note that, as this is an advance notice, the fact that OMB is requesting public comment on a reform idea does not mean that OMB has concluded that the reform idea necessarily should be pursued. That is why public comment is being requested, so that OMB and Federal agencies (and other stakeholders) can have the benefit of the public's input, views and perspectives at this stage of the process, as we continue to evaluate these ideas for reform.

The reform ideas under discussion are outlined below in three main categories:

•Section A:reforms to audit requirements (Circulars A-133 and A-50)

•Section B:reforms to cost principles (Circulars A-21, A-87, and A-122, and the Cost Principles for Hospitals)

•Section C:reforms to administrative requirements (the government-wide Common Rule implementing Circular A-102; Circular A-110; and Circular A-89)

This section discusses ideas for changes that would be made to the audit guidance that is contained in Circular A-133 onAudits of States, Local Governments, and Non-Profit Organizationsand in Circular A-50 on Audit Follow-up. The following are ideas for reform that have been raised and discussed.

1.Concentrating audit resolution and oversight resources on higher dollar, higher risk awards.

Changing the Single Audit framework could enable agencies to focus their oversight and follow-up resources in the most efficient and effective way for targeting improper payments, waste, fraud, and abuse. The following oversight guidelines are an illustrative example of the form that a revised framework for the Single Audit requirement might take:

A.Entities that expend less than $1 million in Federal awardswould not be required to conduct a Single Audit. This would be an increase in the current threshold of $500,000, below which entities are currently not required to conduct Single Audits.

B.Entities that expend between $1 million and $3 million in Federal awardswould be required to undergo a more focused version of the Single Audit, which would differ from current Single Audit requirements in that once a major program determination has been made, auditors would review only two compliance requirements for those programs. Allowable and unallowable costs would always be one of the required compliance requirements, and agencies would have the discretion to select the second compliance requirement for each of their programs as they deem most appropriate. OMB would provide guidance to agencies that this second compliance requirement should be the one that, for the particular program, would best target the risk of improper payments or waste, fraud, and abuse.

C.Entities that expend more than $3 million in Federal awardswould undergo a full Single Audit. These Audits would be strengthened per the ideas in reforms 2-5 (below) to give agencies better tools to reduce improper payments and to eliminate waste, fraud, and abuse.

Raising the threshold for a Single Audit (from $500,000 to $1 million) would reduce the administrative burden for audited entities and for auditing agencies, allowing the agencies to concentrate their audit oversight and follow-up resources more closely on other entities that are higher-dollar and higher-risk. Focusing the Single Audit requirement (for entities expending between $1 million and $3 million) to two compliance requirements would enable agencies to tighten their scrutiny on the highest risk areas of program oversight while at the same time reducing the burden—for both agencies and recipients—associated with collecting and resolving audit findings in lower risk areas. This would narrow the scope of compliance-related information that agencies receive for entities expending below $3 million. Finally, maintaining the full Single Audit for entities expending more than $3 million would ensure that agencies still receive full Single Audit compliance information for higher dollar recipients, and that they will be able to shift more resources to provide the necessary level of oversight to those recipients.

2.Streamlining the universal compliance requirements in the Circular A-133 Compliance Supplement.

For all entities that undergo a full Single Audit, the universal compliance requirements listed in the Circular A-133 Compliance Supplement could be streamlined to focus on proper stewardship of Federal funds.

This could be done, for example, by emphasizing—in the universal compliance requirements—those elements that address improper payments, waste, fraud, abuse, and program performance, while streamlining other elements. Under this approach, a subset of compliance requirements would be targeted for increased testing, larger sample sizes, or lower levels of materiality. Examples of these could include: Allowable or unallowable activities and costs, eligibility, reporting, selection of subrecipients and subrecipient monitoring, special tests and provisions, period of availability of Federal funds, and compliance of procurement with suspension and debarment policies. At the same time, other compliance requirements could either be made optional for testing (depending on the material effect of that requirement on the program) or could have smaller sample sizes and higher levels of materiality. In addition, Federal agencies would have the ability, on aprogram-specific basis to place higher emphasis through the Compliance Supplement process on those elements (no longer universal) which the agency believes are relevant to prevent waste, fraud, or abuse.

Refocusing the Single Audit Compliance Supplement to reduce the number of types of compliance requirements tested would both reduce the audit burden on recipients and provide agencies with more risk-based audits. This refocusing of the Single Audit is intended to allow agencies to concentrate their audit resolution and oversight resources on the requirements most essential to managing waste, fraud, and abuse and reducing improper payments. This could result in a more focused audit that produces the findings needed to ensure accountability, while relieving the burden of audit work on issues that are secondary to the integrity of funds. Agencies could add back specific requirements under program specific tests and provisions where necessary. This would limit the types of compliance information that Federal agencies routinely receive from the Single Audit process.

3.Strengthening the guidance on audit follow-up for Federal awarding agencies.

This reform approach could include changes along the following lines:

• Requiring agencies to designate a senior accountable agency official to oversee the audit resolution process;

• Requiring agencies to implement audit-risk metrics including timeliness of report submission, number of audits that did not have an unqualified auditor opinion on major programs, and number of repeat audit findings;

• Encouraging agencies to engage in cooperative audit resolution with recipients; and

• Encouraging agencies to take a pro-active approach to resolving weaknesses and deficiencies, whether they are identified with single specific programs or cut across the systems of an audited recipient.

To improve audit follow-up, the Federal Government would digitize Single Audit reports into a searchable database to support analysis of audit results by Federal agencies and pass-through entities.

Strengthening audit resolution policies should result in agencies taking a more pro-active and collaborative approach towards following- up on audit findings, which should result in a decrease in audit findings and program risk over time. This collaborative approach would be envisioned more as a mediation process between agencies and recipients, with informal assistance as needed, rather than a more formal provision of training or technical assistance. As underlying programmatic weaknesses are resolved and repeat findings reduced, both recipients' and agencies' audit burdens will be lessened. This may require more resources from Federal agencies as they work to strike the right balance on pro-active oversight. A web-based searchable database of Single Audit findings will provide a key tool to improve the utility of audits.

4.Reducing burden on pass-through entities and subrecipients by ensuring across-agency coordination.

In order to reduce redundancy and burden, this reform idea would involve making more explicit the existing requirement that Federal awarding agencies are responsible for coordinating additional audits of a recipient entity with the Federal cognizant or oversight agency for audit for that entity. This would in no way impact the ability of Inspectors General to conduct audit work as deemed necessary in accordance with the Inspector General Act of 1978, as amended.

Ensuring that audits are coordinated across Federal agencies, and that agencies conduct audit follow-up for internal-control issues at those subrecipients which receive the majority of their Federal funds through direct Federal assistance, would reduce the number of subrecipients for which pass-through entities engage in follow-up efforts that could duplicate the Federal efforts.

5.Reducing burdens on pass-through entities and subrecipients from audit follow-up.

For those situations in which an entity receives a majority of its Federal funds through direct grants from the Federal government, and some Federal funds through subawards, the reform idea would be to require Federal agencies to conduct audit follow-up of the subawards for those audit findings regarding financial or internal control systems that are not specific to the program delivery of the subawards.

Such a change to Circular A-133 would be aimed at eliminating duplicative audit follow-up work performed by a pass-through entity without providing significant additional work to Federal agencies that already will be following-up on these same audit findings, as well as at simplifying the follow-up for the subrecipient. Pass-through entities that give subawards would no longer be required to resolve financial and internal control issues but could instead focus on the programmatic requirements of the subawards they make. Subrecipients would not be required to negotiate with both the Federal government and the pass-through entity over the same financial and control issues that affect both types of awards. However, once the Federal government has resolved the financial and control issues with the subrecipient, a pass-through entity that awarded a subaward would be responsible for audit follow-up monitoring of these general findings to ensure that the subrecipient complies with the audit resolution as it applies to the subgrants made by the primary grantee. The subrecipient's Federal awarding agency would perform a normal audit follow-up for the financial and control issues, issuing management decisions on these audit findings, and provide a process to make these management decisions and a Federal contact person readily available to the affected pass-through entities.

This section discusses ideas for changes that would be made to the OMB cost-principle circulars that have been placed at 2 CFR Parts 220, 225, and 215 (Circulars A-21,Cost Principles for Educational Institutions;Circular A-87,Cost Principles for State, Local and Indian Tribal Governments;and Circular A-122,Cost Principles for Non-Profit Organizations), and to the Cost Principles for Hospitals that are in the regulations of the Department of Health and Human Services at 45 CFR Part 75, Appendix E (Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals). The following are ideas for reform that have been raised and discussed.

1.Consolidating the cost principles into a single document, with limited variations by type of entity.

2.For indirect (“facilities and administrative”) costs, using flat rates instead of negotiated rates.

• One option would be to establish a mandatory flat rate that is discounted from the recipient's already negotiated rate. This approach could significantly reduce the burden associated with indirect cost rate calculation and negotiation, as well as reduce overall indirect costs.

• Another option would give recipients the option of accepting a flat rate or negotiating a rate. Recipients with a previously negotiated rate may have the additional option of accepting a discounted rate from their already negotiated rate. Recipients with a previously negotiated rate may have theadditional option of accepting a discounted rate from their already negotiated rate. Discounted rates could be maintained for up to a four-year period with minimal documentation, or raised through negotiation with full documentation.

Under both options, OMB would work with cognizant federal agencies and the HHS Division of Cost Allocation to develop a list of flat rates and discount factors by entity type. The aim of such approaches would be to reduce negotiation costs for agencies while reducing—for agencies, recipients, and subrecipients—the administrative burden associated with rate preparation and negotiations. Entities with CAS-covered contracts would still be required to use a negotiated rate for those contracts.

Establishing either a mandatory or optional flat indirect cost rate could reduce administrative burdens on recipients associated with documenting, justifying, negotiating, and maintaining support for a negotiated rate. This burden can be substantial depending on the extent to which an entity analyzes, documents, and negotiates a rate or group of rates. By setting the flat rate at a lower level than the negotiated rate would have been, this approach could also reduce indirect-costs expenses incurred by Federal agencies. OMB would continue to work with stakeholders to address potential challenges to implementation, including finding the right algorithms for setting the rates and reducing overall indirect costs.

One consideration here is the issue of whether Federal agencies would actually end up incurring additional indirect costs if each grantee had the option of choosing to use a flat rate or a negotiated rate. The concern here is that, through their choices, grantees would apply those rates that would result in the highest indirect cost reimbursement, with these increases in indirect costs thereby resulting in less funding being available for direct programmatic activities. OMB is seeking input on how to structure a reform approach in a way that would ensure a reduction in overall indirect costs.

3.Exploring alternatives to time-and-effort reporting requirements for salaries and wages.

This reform idea would involve working with the Federal grant and Inspector General (IG) communities to identify risks associated with justifications for salaries and wages and to identify possible alternative mechanisms for addressing those risks beyond current time-and-effort reporting requirements.

This would include consideration of the ideas described in existing pilots or development of new pilots to accountably document the allowability and allocability of salaries and wages charged to Federal awards as direct costs. The first three pilots under consideration are those of the Federal Demonstration Partnership (http://sites.nationalacademies.org/PGA/fdp/PGA_055834); the Department of Labor's Workforce Innovation Fund (http://www.doleta.gov/grants/find_grants.cfm); and the Department of Education's Request for Ideas (http://www.ed.gov/blog/2011/10/granting-administrative-flexibility-for-better-measures-of-success/).

Considering and developing pilot programs that provide alternatives to time-and-effort reporting could result in substantial reductions of the administrative burden currently associated with compliance, while enhancing compliance and stewardship. OMB will work with IGs and other stakeholders to ensure that any alternative provides appropriate levels of auditable and accountable information.

4.Expanding application of the Utility Cost Adjustment for research to more higher education institutions.

This reform idea would expand application of the 1.3% indirect (facilities and administration) costs adjustment for utility costs of research to more institutions of higher education.

The Utility Cost Adjustment (UCA) is currently provided to 65 institutions of higher education for research grants. Under this proposal, the UCA would be extended to other institutions that submit to their cognizant Federal agency a utility cost study justifying an increase in utility cost reimbursement and an approved plan to reduce their utility costs over time. OMB would work with Department of Defense's Office of Naval Research and the Department of Health and Human Services' Division of Cost Allocation to develop guidelines and a format for the cost studies to ensure standardization across entities.

Extending the opportunity to apply for the UCA to more institutions of higher education for research is aimed at resolving the equitable treatment concern that has been raised by those academic institutions that have not been offered this opportunity since the UCA became available to some institutions in 1998. This revision would address that concern while still ensuring cost accountability and reduced utility consumption by requiring a utility cost study (to be developed by OMB in coordination with DOD's Office of Naval Research and HHS' Division of Cost Allocation) as well as a plan to reduce utility costs in order for the adjustment to be approved. If all remaining institutions apply for and receive this adjustment, this revision could raise Federal indirect cost reimbursements for utility costs by up to approximately $80 million per year once fully implemented.

5.Charging directly allocable administrative support as a direct cost.

This reform idea would involve clarifying the circumstances under which institutions of higher education, and other entities where appropriate, may charge directly allocable administrative support as a direct cost. Included are project-specific activities such as managing substances/chemicals, data and image management, complex project management, and security.

This clarification would be aimed at ensuring that charges are appropriately classified in order to provide support for all of the costs directly associated with a Federal award, while reducing the burdens of securing special permission to purchase what have become routine supplies. This is not intended to result in a net cost increase, but rather to provide clarity in how allowable costs are routinely charged.

6.Including the cost of certain computing devices as allowable direct cost supplies.

This reform idea would involve explicitly including the cost of computing devices not otherwise subject to inventory controls (i.e. cost less than the organization's equipment threshold) as allowable direct cost supplies. Applicants for Federal awards would be required to document these items as a separate line-item in their budget requests, but would not be required to conduct the more stringent inventory controls in place for equipment.

This clarification would be aimed at ensuring that charges are appropriately classified in order to provide support for all of the costs directly associated with a Federal award, while reducing the burdens of securing special permission to purchase what have become routine supplies. This is not intended to result in a net cost increase, but rather to provide clarity in how allowable costs are routinely charged.

7.Clarifying the threshold for an allowable maximum residual inventory of unused supplies.

This reform idea would involve harmonizing cost principles with existing language in Circulars A-110 and A-102 to clarify that $5,000 is the threshold for an allowable maximum residual inventory of unused supplies that may be retained for use on anotherFederal award at no cost, as long as the cost was properly allocable to the original agreement at the time of purchase.

This clarification would be aimed at minimizing confusion about appropriate disposal or re-expensing of unused inventories at the conclusion of an award and at ensuring consistency in the application of the cost principles in the circulars.

8.Eliminating requirements to conduct studies of cost reasonableness for large research facilities.

This reform idea would involve eliminating requirements for institutions of higher education, and other entities where appropriate, to conduct studies of cost reasonableness for large research facilities. This would be aimed at reducing paperwork that is costly to generate and may yield information that is of minimal use to the awarding agency.

9.Eliminating restrictions on use of indirect costs recovered for depreciation or use allowances.

This reform idea would involve eliminating the restrictions on the use of the portion of indirect cost recoveries associated with depreciation or use allowances. This would be aimed at reducing paperwork that is costly to generate and may yield information that is of minimal use to the awarding agency.

10.Eliminating requirements to conduct a lease-purchase analysis for interest costs and to provide notice before relocating federally sponsored activities from a debt-financed facility.

This reform idea would involve eliminating requirements for institutions of higher education, and other entities where appropriate, to conduct a lease-purchase analysis to justify interest costs, and to notify the cognizant Federal agency prior to relocating federally sponsored activities from a facility financed by debt. This would be aimed at reducing paperwork that is costly to generate and may yield information that is of minimal use to the awarding agency.

11.Eliminate requirements that printed “help-wanted” advertising comply with particular specifications.

This reform idea would update the cost principles to reflect the media now used for those notices.

12.Allowing for the budgeting for contingency funds for certain awards.

This reform idea would involve clarifying that budgeting for contingency funds associated with a Federal award for the construction or upgrade of a large facility or instrument, or for IT systems, is an acceptable and necessary practice; that the method by which contingency funds are managed and monitored is at the discretion of the Federal funding agency. Contingency related amounts should not be included in recipient proposed budgets for specific awards or in the actual award documents; risk-adjusted total cost estimates should be based on verifiable supporting data consistent in compliance with Generally Accepted Accounting Principles (GAAP) and with standard project-management practices. Rebudgeting out of these funds would not be allowable.

Allowing recipients to budget for contingency funds is aimed at clarifying and harmonizing the rules on what is deemed standard project management practice and to encourage development of shared IT services. There could be some cost implications to projects if and when the contingency funds become necessary spending.

13.Requesting that the Cost Accounting Standards Board (CASB) consider increasing the minimum threshold for disclosure statements.

This reform idea would involve OMB requesting that the Cost Accounting Standards Board consider the following—

• Increasing the minimum threshold for institutions of higher education to file a disclosure statement of cost-accounting standards from $25 million to $50 million in Federal awards per year based on the average of the entity's most recent three years;

• Establish that the requirement no longer applies if an entity drops below that threshold and is not required to file under current Cost Accounting Standards Board (CASB) requirements described at 48 CFR 9903.202-1; and

• Remove exhibit A of Circular A-21 from future guidance.

OMB would also request that the CASB reassess its rule to increase the $25 million procurement contract threshold for institutions of higher education to conform to the $50 million threshold for other types of entities. OMB would also link the requirement to future adjustments to the CASB rule.

14.Allowing for excess or idle capacity for certain facilities, in anticipation of usage increases.

This reform idea would allow for excess or idle capacity in consolidated data centers, telecommunications, and public safety facilities. In order to consolidate data centers and operate in a cloud-based environment, data centers require excess capacity at their creation in order to accommodate increases in usage later on. Other telecommunications facilities and public safety projects have similar characteristics. Federal sharing of these costs would be contingent on the grantee providing a multi-year plan for reaching full capacity of the data center. The OMB cost principles currently do not address the excess or idle capacity in consolidated data centers.

15.Allowing costs for efforts to collect improper payment recoveries.

This reform idea would involve revising OMB guidelines to allow costs for expenses associated with the effort to collect improper payment recoveries or related activities, if such costs are specifically approved or directed by the awarding agency.

This change would be aimed at meeting the President's directive to improve the Federal government's ability to recover improper payments. While this could result in increased upfront costs to the agencies, the intention here is that awarding agencies would approve these costs only when the anticipated amount of recovered funding more than justifies the expense of collection.

16.Specifying that gains and/or losses due to speculative financing arrangements are unallowable.

This reform idea would involve specifying that gains and/or losses, related to debt arrangements on capital assets, due to speculative financing arrangements (such as hedges, derivatives, etc.) are unallowable. Due to the volatile nature of such instruments, all derivative and hedging instruments would be unallowable, including derivative and hedging instruments embedded in other contracts, whether used for risk management purposes, forecasting, calculations used for the preparation of proposals for federal funding (e.g., forecasting contingencies) or otherwise, and regardless of whether related to assets, liabilities, or expenses.

This change would be aimed at updating the cost principles to address all types of debt arrangements.

17.Providing non-profit organizations an example of the Certificate of Indirect Costs.

This reform idea would involve providing non-profit organizations an example of the required certification (Certificate of Indirect Costs) similar to the information that is already provided for state, local, and tribal governments. This would be aimed at providing uniformity in documentation requirements across different types of entities.

18.Providing non-profit organizations with an example of indirect cost proposal documentation requirements.

This reform idea would involve providing, for non-profit organizations, an example of indirect cost proposaldocumentation requirements that are similar to the information provided for state, local, and tribal governments. This would be aimed at providing uniformity in documentation requirements across different types of entities.

This section discusses ideas for changes that would replace the government-wide common rule implementing Circular A-102 onGrants and Cooperative Agreements with State and Local Governmentsand that would revise Circular A-110 onUniform Administrative Requirements for Grants and Other Agreements with Institutions of Higher Education, Hospitals and Other Non-Profit Organizations(2 CFR part 215) and Circular A-89 onCatalog of Federal Domestic Assistance.The following are ideas for reform that have been raised and discussed

1.Creating a consolidated, uniform set of administrative requirements.

This reform idea would involve consolidating the administrative requirements in OMB Circulars A-102 and A-110 into a uniform set of administrative requirements for all grant recipients. This uniform guidance would continue to include limited exceptions by type of recipient.

2.Requiring pre-award consideration of each proposal's merit and each applicant's financial risk.

This reform idea would involve requiring agency consideration of the merit of each proposal and the financial risk associated with each applicant prior to making an award. (Many agencies currently award grants based on merit review under current law and policy. The proposed change would be a reform in the sense that such merit-based review would be required for the first time in an OMB circular.) Indicators of risk would include past financial, internal control, and programmatic performance. The outcome of the review should affect award decisions, and risk assessment may also affect terms and conditions. This would formalize a “best practice” that is already conducted by many agencies, and agencies will continue to have the discretion to determine the format of the review. This reform would not apply to formula grants.

This change would be aimed at ensuring greater transparency in the award making process as well as higher quality of awarded projects, and at delivering improved results with less risk of waste, fraud, or abuse during implementation.

In evaluating risks, agencies would be required to consider factors that could include: Financial stability; quality of management and internal control systems and the ability to meet the management standards prescribed in the amended guidance; history of performance; Federal award Single Audit reports and findings for previous awards; and any other factors that may affect the applicant's ability to effectively implement statutory, regulatory, or other requirements imposed on recipients. Merit reviews may be implemented according to the individual practices of each agency. This reform would include explicit authority for agencies to modify award decisions as well as the terms and conditions of any award based on the findings of a risk review.

Articulating the requirement for this review in an OMB circular could ensure greater transparency in the award making process and higher quality of awarded projects. There may be some additional burden for agencies that do not currently conduct such reviews to incorporate them into their processes, and could also result in additional information collections from recipients.

3.Requiring agencies to provide 90-day notice of funding opportunities.

This reform idea would involve requiring Federal agencies to provide 90-day advance forecast of funding opportunities in an updated Catalog of Federal Financial Assistance (CFFA) that will replace the existing Catalog of Federal Domestic Assistance (CFDA). This would not affect the requirement to post actual notices of funding opportunities on Grants.gov.

This change would be aimed at providing applicants with additional time and information with which to prepare financial assistance applications, thereby improving the relevance and quality of proposals submitted to Federal agency programs. Exceptions to the 90-day notice requirement would include statutory obligations or exigent circumstances that dictate a shorter timeframe. The new enhanced CFFA will include both domestic and international funding priorities for grants, loans, insurance, and other types of financial assistance, including information about projected amounts of available funds and a summary of general eligibility requirements. These notices of intended priorities may change based on modifications to funding cycles and/or statutory authorities.

4.Providing a standard format for announcements of funding opportunities.

This reform idea would incorporate into circulars the existing requirement for certain categories of information to be published in announcements of public funding opportunities. See OMB Memorandum M-04-01 of October 15, 2003 (http://www.whitehouse.gov/omb/memoranda_fy04_m04-01), which announced theFederal Registernotice that OMB published at 68 FR 58146 (October 8, 2003).

Among other information, the opportunity announcement must include specific eligibility or qualification information and a clear description of all criteria used in agency review of applications for the grant opportunity. Further, agencies must disclose all terms and conditions that may be attached to the funded awards and general information regarding post-award reporting requirements, except for award specific terms and conditions determined during the pre-award process. Providing this level of transparency at the solicitation stage assists applicants in determining not only whether they are eligible and/or qualified for an award, but also the scope of recipient responsibilities associated with an award.

5.Reiterating that information collections are subject to Paperwork Reduction Act approval.

This reform idea would involve reiterating that information collection requests are limited to standardized data elements approved by OMB, as required under the Paperwork Reduction Act of 1995 (PRA), plus OMB-approved exceptions for all applications and reports.

Continued efforts at data standardization are intended to improve governmentwide program management; enhance transparency in Federal awards; and streamline and reduce the reporting burden, including the time necessary to comply with application and reporting requirements. For both applications and post-award reporting, there are current requirements that agencies use standard OMB-approved governmentwide information collections, with deviations approved by OMB on a limited basis. Continued data standardization will also support OMB and Federal agency efforts to develop a comprehensive, end-to-end grants reporting system that allows applicants and recipients to apply for and report on all Federal grants at one location. Approved collections would be designed to include necessary information for program measurement and monitoring. This reform would in some cases limit Federal agencies' ability to require unique informationcollections for particular program, except where required by statute.

The list below includes the questions about these reform ideas that address issues which are of greatest interest to OMB at this stage of the process. Comments addressing any other concerns, and other types of feedback, are also welcome.

In addition, as was explained at the beginning of this notice, the public comments received by OMB will be posted on OMB's Web site and athttp://www.regulations.gov. Accordingly, please do not include in your comments any confidential business information or information of a personal-privacy nature.

1. Which of these reform ideas would result in reduced or increased administrative burden to you or your organization?

2. Which of these reform ideas would be the most or least valuable to you or your organization?

3. Are there any of these reform ideas that you would prefer that OMB not implement?

4. Are there any reform ideas, beyond those included in this notice, that OMB should consider as a way to relieve administrative burden?

1. In general terms, how important are Single Audits to your entity or to entities you audit for subrecipient monitoring?

2. In general terms, what impacts would the following changes to the Single Audit framework have on your organization in administrative burden and in ability to provide oversight to subrecipients?

a. Increasing the Single Audit threshold to $1 million?

b. Requiring a more focused Single Audit (with only two compliance requirements) for any entity expending between $1 million and $3 million?

c. Requiring full Single Audits for any entity expending more than $3 million?

3. Should the Single Audit threshold(s) be increased, and if so, to what extent?

4. Which types of currently universal Single Audit compliance requirements do you think are most essential to identifying and mitigating waste, fraud, and abuse?

5. What processes or tools should the Federal Government implement in order to ensure better coordination in the Single Audit oversight by Federal agencies and pass-through agencies, including in the resolution of audit findings that cut across multiple agencies' programs?

1. On indirect cost rates:

a. Would administrative burden be reduced by having an indirect cost rate in place for 4 years?

b. Are there any existing Federal or state level statutory/regulatory/agency requirements that would prohibit recipients from using a “flat” indirect cost rate if it were proposed?

2. What are your views on the following types of indirect cost rates?

a. A flat rate

b. Longer term for negotiated rates to be in effect

c. A flat rate that would be a fixed percentage of the organization's already existing negotiated rate

3. In general terms, what would be the cost implications of implementing each of the following reforms, and/or of all of them together?

a. The proposed clarifications to allowable charges of directly allocable administrative support as a direct cost. As currently envisioned, reforms would clarify that project-specific activities such as managing substances/chemicals, data and image management, and security are allowable.

b. Allowing costs associated with recovery of improper payments.

c. Allowing excess capacity for telecommunications and public safety projects?

4. Would you be potentially interested in participating in a piloted alternative for time-and-effort reporting? Is there a permanent change to time-and-effort requirements that you recommend OMB consider?

5. If your organization is an educational institution that does not currently receive the Utility Cost Adjustment (UCA), what are the general factors that your organization would likely consider in deciding whether to conduct a cost study, and complete a plan to reduce utility costs, in order to justify receiving the UCA?

6. For organizations with CAS-covered contracts, are there differences between what is envisioned here and the standards for CAS-covered contracts in the FAR that you believe could be challenging to address?

1. What areas of past performance should be considered as part of a Federal agency assessment of recipient risk (e.g., fulfillment of statutory matching requirements, record of sound financial management practices with no significant or material findings or weaknesses, ability to meet established deadlines)?

2. What specific standards should be considered in Federal agencies' evaluation of merit prior to making Federal awards?

a. How should these be applied?

b. What elements and what source materials should be looked at?

3. With respect to the existing government-wide standard information collection requests (ICRs) for grant applications and grant reporting—

a. Do these ICRs provide necessary information to enable Federal agencies to review grant applications or to monitor the progress of grant awardees?

b. Are these ICRs unnecessarily burdensome and, if so, in what way(s)?

4. Should there be sets of standard data elements based on the type of assistance being provided (e.g. research, construction, social services, scholarships or aid program awards, etc.)?

5. Are there any system issues and associated costs that may arise as a result of implementing the new pre-award and post award requirements? In general, what is the rough order of relative magnitude of these costs?

Title III of Energy Policy and Conservation Act (EPCA) (42 U.S.C. 6291,et seq.;EPCA or “the Act”) sets forth a variety of provisions designed to improve energy efficiency. (All references to EPCA refer to the statute as amended through the Energy Independence and Security Act of 2007 (EISA 2007), Public Law 110-140 (Dec. 19, 2007).) Under EPCA, this program consists essentially of four parts: (1) Testing; (2) labeling; (3) Federal energy conservation standards; and (4) certification, compliance, and enforcement. Part B of Title III (42 U.S.C. 6291-6309) established the “Energy Conservation Program for Consumer Products Other Than Automobiles.” Part C of title III (42 U.S.C. 6311-6317), establishes an energy conservation program for certain industrial and commercial equipment.1 Although HID lamps are defined in 42 U.S.C. 6291(46), DOE is required to set standards for HID lamps in 42 U.S.C. 6317(a)(1). Therefore, DOE has determined that the provisions of Part C are applicable to HID lamps.

DOE published a positive final determination for specified HID lamps on July 1, 2010. 75 FR 37975. Pursuant to the positive final determination, DOE must establish testing requirements for the HID lamps specified in the determination. (42 U.S.C. 6317(a)(1)) As directed by EPCA, DOE must complete the HID lamps test procedure final rule within 30 months of the completion of the final determination (by January 1, 2013). DOE recently published a notice of proposed rulemaking (NOPR) for the HID lamp test procedures. 76 FR 77914 (December 15, 2011).

DOE must also complete the HID lamps energy conservation standards rulemaking within 18 months of the publication of the HID lamps test procedure final rule (by July 1, 2014). (42 U.S.C. 6317(b)) During the standards rulemaking, DOE will decide whether and at what level(s) to promulgate energy conservation standards. The decision, which will incorporate public participation, will be based on consideration of the technological feasibility, economic justification, and energy savings of specific potential standard levels as required by EPCA. (See, e.g.,42 U.S.C. 6295(o)-(p))

DOE has prepared a framework document to explain the issues, analyses, and processes it anticipates using for the development of potential energy conservation standards for HID lamps. Interested parties may obtain the framework document from DOE's Web site (http://www1.eere.energy.gov/buildings/appliance_standards/commercial/high_intensity_discharge_lamps.html). DOE will hold a public meeting in Washington, DC on the date specified in theDATESsection to discuss the analyses presented and issues identified in the framework document preparedfor the development of potential HID lamp energy conservation standards. At the public meeting, the Department will make a presentation, invite discussion on the rulemaking process as it applies to the covered products, and solicit comments, data, and information from participants and other interested parties. Participants can also attend the public meeting via webinar. Registration information, participant instructions, and information about the capabilities available to webinar participants will be published on the following Web site:https://www1.gotomeeting.com/register/221154352. Participants are responsible for ensuring their computer systems are compatible with the webinar software. The Department encourages those who wish to participate in the public meeting to obtain the framework document and to be prepared to discuss its contents.

Public meeting participants need not limit their comments to the issues identified in the framework document. The Department is also interested in receiving views concerning other relevant issues that participants believe would affect energy conservation standards for this equipment or that DOE should address in the NOPR. Furthermore, the Department welcomes all interested parties, regardless of whether they participate in the public meeting, to submit in writing by the date specified in theDATESsection, comments and information on matters addressed in the framework document and on other matters relevant to consideration of standards for HID lamps. At this time, DOE is tentatively considering setting standards based on the information included in the framework document. DOE will consider modifications to its approach based on the data and comments received in response to the framework document and public meeting.

The public meeting will be conducted in an informal, facilitated, conference style. There shall be no discussion of proprietary information, costs or prices, company market shares, or other commercial matters regulated by U.S. antitrust laws. A court reporter will record the proceedings of the public meeting, after which a transcript will be made available on DOE's Web site athttp://www1.eere.energy.gov/buildings/appliance_standards/commercial/high_intensity_discharge_lamps.html.

After the public meeting and the close of the comment period on the framework document, DOE will collect data, conduct the analyses as discussed in the framework document and at the public meeting, and review the comments received.

DOE considers public participation to be a very important part of the process for setting energy conservation standards. DOE actively encourages the participation and interaction of the public during the comment period in each stage of the rulemaking process. Beginning with the framework document, and during each subsequent public meeting and comment period, interactions with and between members of the public provide a balanced discussion of the issues to assist DOE in the standards rulemaking process. Accordingly, anyone who would like to participate in the public meeting, receive meeting materials, or be added to the DOE mailing list to receive future notices and information regarding this rulemaking on HID lamps should contact Ms. Brenda Edwards at (202) 586-2945, or via email at:Brenda.Edwards@ee.doe.gov.

We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments arefiled electronically, commenters should submit only one time.

We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued AD No. 2009-0078R1, dated June 30, 2009 (AD No. 2009-0078R1), which supersedes Emergency AD No. 2009-0078-E, dated April 1, 2009 (AD No. 2009-0078-E), to correct an unsafe condition for the Eurocopter model EC155B and EC155B1, all serial numbers up to and including 6892, fitted with a VIP 4-seat bench, part number (P/N) 365V85-0045-01 or 365V85-0046-01. EASA advises that Eurocopter identified an unsafe condition while performing customization work that involved the installation of the VIP 4-seat bench. During the installation work, Eurocopter determined that the load strength of the seat attachment hardware of the seat installation did not meet certification specifications. EASA advises that this condition, if not corrected, would lead to overloading of the seat structure at the attachment point during an emergency landing, which could result in the seat bench detaching from the floor fitting rails and potentially resulting in injury to the seat occupants.

These helicopters have been approved by the aviation authority of France and are approved for operation in the United States. Pursuant to our bilateral agreement with France, EASA, its technical representative, has notified us of the unsafe condition described in their AD. We are proposing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other products of these same type designs.

Eurocopter has issued Emergency Alert Service Bulletin (ASB) No. 04A009, Revision 1, dated June 24, 2009 (Emergency ASB No. 04A009R1) which revises Emergency Alert Service Bulletin No. 04A009, Revision 0, dated March 30, 2009 (Emergency ASB No. 04A009R0). Emergency ASB No. 04A009R0 specified revising the RFM to restrict the VIP 4-seat bench to a maximum of 3 occupants. It also specified converting the VIP 4-seat bench into a 3-seat bench at “the next flight-related inspection scheduled at 15 hours or 7 days,” whichever occurred first. EASA classified Emergency ASB No. 04A009R0 as mandatory to ensure the continued airworthiness of these helicopters and issued EASA Emergency AD No. 2009-0078-E.

Eurocopter has now developed optional terminating action. Eurocopter issued ASB No. 25-095, dated June 25, 2009 (ASB No. 25-095) that specifies installing new shims between the attachment rails and the cabin floor at the seat position to strengthen the attachment security of the seat using a rear VIP bench seat retrofit kit, P/N 365V08-0079-0171, or front VIP bench seat retrofit kit, P/N 365V08-0079-0271. Eurocopter also issued Emergency ASB No. 04A009R1, which retained the requirements of Emergency ASB No. 04A009R0, and also specified that helicopters equipped with the bench modification kits in accordance with ASB No. 25-095 had met the requirements of Emergency ASB No. 04A009R1. In response, EASA issued AD No. 2009-0078R1, which retained the requirements of Emergency AD No. 2009-0078-E, and added the optional terminating action of modifying the seat configuration to strengthen the attachment security of the seat using the bench modification kit. EASA also stated that after installing the bench modification kit, you could remove the RFM limitation of 3 occupants and reconfigure the 3-seat bench to a 4-seat bench.

This proposed AD would require the following actions:

• Before further flight, revise the Limitations section of the RFM by inserting the following statement into the Limitations section: “The VIP 4-seat bench, P/N 365V85-0045-01 or 365V85-0046-01, is limited to 3 passengers.” The change to the Limitations section of the RFM may be made in pen and ink, or by inserting a copy of the AD into the Limitations section of the RFM.

• Within the next 15 hours time-in-service (TIS), convert the VIP 4-seat bench into a 3-seat configuration.

• Instead of revising the Limitations section of the RFM and converting the VIP 4-seat bench into a 3-seat configuration, you may modify the rear VIP 4-seat bench by installing the shims contained in kit P/N 365V08-0079-0171 (which corresponds to modification 365V08-0079-01), or the front VIP 4-seat bench by installing the shims contained in kit P/N 365V08-0079-0271 (which corresponds to modification 365V08-0079-02). This action constitutes terminating action for the requirements of this proposed AD.

This proposed AD specifies that the conversion of the VIP 4-seat bench to a 3-seat bench must occur within 15 hours TIS, while the EASA AD specifies that compliance must occur within 15 hours TIS or 7 days, whichever occurs first. This proposed AD uses different P/Ns for the bench modification kits, because AD No. 2009-0078R1 and ASB No. 25-095 use different P/Ns for the same part, and this proposed AD uses the P/N in ASB No. 25-095.

We estimate that this proposed AD would affect 4 helicopters of U.S. registry. We estimate that it would take a negligible amount of work hours per helicopter to amend the Limitation section of the applicable RFM. We estimate it would take approximately 0.25 hour to convert the VIP 4-seat bench to a 3-seat bench at an average labor rate of $85 per work hour. Estimated labor costs for the conversion are approximately $21.25 per helicopter, and approximately $85 for the fleet. Based on these figures, we estimate the total cost impact of the proposed AD on U.S. operators to be $85, assuming that no helicopter has been previously modified with the rear VIP bench seat retrofit kit P/N 365V08-0079-0171 and the front VIP bench seat retrofit kit P/N 365V08-0079-0271.

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

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

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

For the reasons discussed, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

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

We prepared an economic evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

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

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under theADDRESSESsection. Include “Docket No. FAA-2012-0186; Directorate Identifier 2011-NM-268-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

We will post all comments we receive, without change, tohttp://www.regulations.gov,including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

The air data sensor heating system, when ON, heats the pitot probes that measure air pressure resulting from the airplane's motion through the air in order to provide airspeed indications to the flight crew. This heating prevents ice from forming inside the pitot probes, which would degrade or block the probes' ability to measure air pressure. The pitot heat switch, however, is not always set to ON. Although the existing ice protection system provides indication of activation to the flight crew, three reported incidents on Model 737 airplanes were attributed to failure to activate the air data sensor heating system. The affected airplanes do not have an automatic activation of the air data sensor heating system; pilots activate the system manually as a pretakeoff checklist item. Failure to activate the air data sensor heating system could result in ice formation on air data system sensors, which could lead to misleading airspeed data or loss of all airspeed indicating systems, and loss of control of the airplane.

We reviewed Boeing Alert Service Bulletin 737-30A1063, dated November 16, 2011. This service bulletin describes procedures for modifying the anti-icing system for the angle of attack sensor, the total air temperature, and the pitot probes. The modification involves the following:

• Changing the wires and replacing the P5-9 window/pitot heat module on the P5 overhead panel in the flight compartment (the modified P5-9 window/pitot heat module changes the current ON and OFF positions of the pitot heat switch to ON and AUTO);

• Replacing two circuit breakers; installing relay supports, relays, and decals; and changing wiring at the P18 circuit breaker panels in the flight compartment; and

• Changing the wiring at the E2-2 and E3-1 electronics shelves in the electrical/electronics compartment.

These modifications to the air data sensor heating system provide automatic activation of the heating system when the modified pitot heat switch is set to AUTO and either engine is running.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would require accomplishing the actions specified in the service information described previously.

We estimate that this proposed AD affects 1,025 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

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

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

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

For the reasons discussed above, I certify this proposed regulation:

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

(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),

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

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

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

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under theADDRESSESsection. Include “Docket No. FAA-2012-0184; Directorate Identifier 2011-NM-118-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

We will post all comments we receive, without change, tohttp://www.regulations.gov,including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2011-0079, dated May 5, 2011 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

Saab AB, Saab Aerosystems has issued Service Bulletins 2000-92-005, Revision 01, dated March 1, 2011; and 2000-92-006, Revision 01, dated August 18, 2010. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

Based on the service information, we estimate that this proposed AD would affect about 10 products of U.S. registry. We also estimate that it would take about 360 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $306,000, or $30,600 per product.

In addition, we estimate that any necessary follow-on actions would take about 40 work-hours and require parts costing $12,454, for a cost of $15,854 per product. We have no way of determining the number of products that may need these actions.

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

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

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

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

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

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

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

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under theADDRESSESsection. Include “Docket No. FAA-2012-0185; Directorate Identifier 2011-NM-001-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

We will post all comments we receive, without change, tohttp://www.regulations.gov,including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this proposed AD.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2010-0250, dated November 29, 2010 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

Airbus has issued the following service bulletins:

• Mandatory Service Bulletin A300-57-0249, Revision 02, dated June 18, 2010 (for Model A300-B4-103, B4-2C, and B4-203 airplanes).

• Mandatory Service Bulletin A300-57-0251, including Appendix 01, dated August 8, 2007 (for Model A300 B4-103, B4-203 and B4-2C airplanes).

• Service Bulletin A300-57-6106, Revision 02, dated June 18, 2010 (for Model A300 B4-601, B4-603, B4-605R, B4-620, B4-622, B4-622R, F4-605R, F4-622R, and C4-605R airplanes).

• Mandatory Service Bulletin A300-57-6107, including Appendix 01, dated August 8, 2007 (for Model A300 B4-601, B4-603, B4-605R, B4-620, B4-622, B4-622R, C4-605R, F4-605R, and F4-622R airplanes).

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

Although the MCAI allows further flight after cracks are found during compliance with the required action, paragraph (i) of this AD requires that you repair the cracks before further flight.

Based on the service information, we estimate that this proposed AD would affect about 165 products of U.S. registry. We also estimate that it would take about 3 work-hours per product to comply with the basic requirements of this proposed AD. The average laborrate is $85 per work-hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $42,075, or $255 per product.

In addition, we estimate that any necessary follow-on actions would take about 52 work-hours and require parts costing $4,590, for a cost of $9,010 per product. We have no way of determining the number of products that may need these actions.

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

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

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

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

2. Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979);

3. Will not affect intrastate aviation in Alaska; and

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

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

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

Comments Invited

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA Docket No. FAA 2012-0131 and Airspace Docket No. 12-ANM-2) and be submitted in triplicate to the Docket Management System (seeADDRESSESsection for address and phone number). You may also submit comments through the Internet athttp://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2012-0131 and Airspace Docket No. 12-ANM-2”. The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the Internet athttp://www.regulations.gov.Recently published rulemaking documents can also be accessed through the FAA's web page athttp://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see theADDRESSESsection for the address and phone number) between 9 a.m. and 5 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 1601 Lind Avenue SW., Renton, WA 98057.

Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking, (202) 267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by amending Class E surface airspace and Class E airspace extending upward from 700 feet above the surface at Rock Springs-Sweetwater County Airport, Rock Springs, WY. Airspace reconfiguration is necessary due to the decommissioning of the Rock Springs TACAN. Also, the geographic coordinates of the airport would be updated to coincide with the FAA's aeronautical database. This action would enhance the safety and management of IFR operations at Rock Springs-Sweetwater County Airport, Rock Springs, WY.

Class E airspace designations are published in paragraph 6002 and 6005, respectively, of FAA Order 7400.9V, dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in this Order.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106, describes the authority for the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would modify controlled airspace at Rock Springs-Sweetwater County Airport, Rock Springs, WY.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E. “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

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

Regional haze is visibility impairment that is produced by a multitude of sources and activities which are located across a broad geographic area and emit fine particles and their precursors (e.g.,sulfur dioxide, nitrogen oxides, and in some cases, ammonia and volatile organic compounds). Fine particle precursors react in the atmosphere to form fine particulate matter (PM2.5) (e.g.,sulfates, nitrates, organic carbon, elemental carbon, and soil dust), which also impair visibility by scattering and absorbing light. Visibility impairment reduces the clarity, color, and visible distance that one can see. PM2.5can also cause serious health effects and mortality in humans and contributes to environmental effects such as acid deposition.

Data from the existing visibility monitoring network, the “Interagency Monitoring of Protected Visual Environments” (IMPROVE) monitoring network, show that visibility impairment caused by air pollution occurs virtually all the time at most national park and wilderness areas. The average visual range in many Class I areas (i.e., national parks and memorial parks, wilderness areas, and international parks meeting certain size criteria) in the Western United States is 100-150 kilometers, or about one-half to two-thirds of the visual range that would exist without manmade air pollution. In most of the eastern Class I areas of the United States, the average visual range is less than 30 kilometers, or about one-fifth of the visual range that would exist under estimated natural conditions. See 64 FR 35715, (July 1, 1999).

In section 169A(a)(1) of the 1977 Amendments to the CAA, Congress created a program for protecting visibility in the nation's national parks and wilderness areas. This section of the CAA establishes as a national goal the “prevention of any future, and the remedying of any existing, impairment of visibility in mandatory Class IFederal areas1 which impairment results from manmade air pollution.” On December 2, 1980, EPA promulgated regulations to address visibility impairment in Class I areas that is “reasonably attributable” to a single source or small group of sources, i.e., “reasonably attributable visibility impairment” (RAVI). See 45 FR 80084 (Dec. 2, 1980). These regulations represented the first phase in addressing visibility impairment. EPA deferred action on regional haze that emanates from a variety of sources until monitoring, modeling and scientific knowledge about the relationships between pollutants and visibility impairment were improved.

Congress added section 169B to the CAA in 1990 to address regional haze issues. EPA promulgated a rule to address regional haze on July 1, 1999 (64 FR 35714), the Regional Haze Rule. The Regional Haze Rule revised the existing visibility regulations to integrate into the regulation provisions addressing regional haze impairment and established a comprehensive visibility protection program for Class I areas. The requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in EPA's visibility protection regulations at 40 CFR 51.300-309. Some of the main elements of the regional haze requirements are summarized in Section II. The requirement to submit a regional haze SIP applies to all 50 States, the District of Columbia and the Virgin Islands. Forty CFR 51.308(b) requires States to submit the first implementation plan addressing regional haze visibility impairment no later than December 17, 2007. On January 15, 2009, EPA found that 37 States, the District of Columbia and the U.S. Virgin Islands failed to submit this required implementation plan. See 74 FR 2392, (Jan. 15, 2009). In particular, EPA found that Rhode Island failed to submit a plan that met the requirements of 40 CFR 51.308. See 74 FR 2393. On August 7, 2009, RI DEM submitted revisions to the Rhode Island SIP to address regional haze as required by 40 CFR 51.308. EPA has reviewed Rhode Island's submittal and proposes to find that it is consistent with the requirements of 40 CFR 51.308 outlined in Section II.

Successful implementation of the regional haze program will require long-term regional coordination among States, tribal governments, and various federal agencies. As noted above, pollution affecting the air quality in Class I areas can be transported over long distances, even hundreds of kilometers. Therefore, to effectively address the problem of visibility impairment in Class I areas, States need to develop strategies in coordination with one another, taking into account the effect of emissions from one jurisdiction on the air quality in another.

Because the pollutants that lead to regional haze can originate from sources located across broad geographic areas, EPA has encouraged the States and Tribes across the United States to address visibility impairment from a regional perspective. Five regional planning organizations (RPOs) were developed to address regional haze and related issues. The RPOs first evaluated technical information to better understand how their States and Tribes impact Class I areas across the country, and then pursued the development of regional strategies to reduce emissions of PM2.5and other pollutants leading to regional haze.

The Mid-Atlantic/Northeast Visibility Union (MANE-VU) RPO is a collaborative effort of State governments, Tribal governments, and various federal agencies established to initiate and coordinate activities associated with the management of regional haze, visibility and other air quality issues in the Northeastern United States. Member State and Tribal governments include: Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Penobscot Indian Nation, Rhode Island, and Vermont.

Regional haze SIPs must assure reasonable progress towards the national goal of achieving natural visibility conditions in Class I areas. Section 169A of the CAA and EPA's implementing regulations require States to establish long-term strategies for making reasonable progress toward meeting this goal. Implementation plans must also give specific attention to certain stationary sources that were in existence on August 7, 1977, but were not in operation before August 7, 1962, and require these sources, where appropriate, to install Best Available Retrofit Technology (BART) controls for the purpose of eliminating or reducing visibility impairment. The specific regional haze SIP requirements are discussed in further detail below.

The RHR establishes the deciview (dv) as the principal metric for measuring visibility. This visibility metric expresses uniform changes in haziness in terms of common increments across the entire range of visibility conditions, from pristine to extremely hazy conditions. Visibility is determined by measuring the visual range (or deciview), which is the greatest distance, in kilometers or miles, at which a dark object can be viewed against the sky. The deciview is a useful measure for tracking progress in improving visibility, because each deciview change is an equal incremental change in visibility perceived by the human eye. Most people can detect a change in visibility at one deciview.2

The deciview is used in expressing Reasonable Progress Goals (RPGs) (which are interim visibility goals towards meeting the national visibility goal), defining baseline, current, and natural conditions, and tracking changes in visibility. The regional haze SIPs must contain measures that ensure “reasonable progress” toward the national goal of preventing and remedying visibility impairment in Class I areas caused by manmade air pollution by reducing anthropogenic emissions that cause regional haze. The national goal is a return to natural conditions, i.e., manmade sources of air pollution would no longer impair visibility in Class I areas.

To track changes in visibility over time at each of the 156 Class I areas covered by the visibility program and as part of the process for determining reasonable progress, States must calculate the degree of existing visibility impairment at each Class I area withinthe State at the time of each regional haze SIP submittal and periodically review progress every five years midway through each 10-year planning period. To do this, the RHR requires States to determine the degree of impairment (in deciviews) for the average of the 20 percent least impaired (“best”) and 20 percent most impaired (“worst”) visibility days over a specified time period at each of their Class I areas. In addition, States must also develop an estimate of natural visibility conditions for the purposes of comparing progress toward the national goal. Natural visibility is determined by estimating the natural concentrations of pollutants that cause visibility impairment and then calculating total light extinction based on those estimates. EPA has provided guidance to States regarding how to calculate baseline, natural, and current visibility conditions in documents titled, EPA'sGuidance for Estimating Natural Visibility conditions under the Regional Haze Rule,September 2003, (EPA-454/B-03-005, available atwww.epa.gov/ttncaaa1/t1/memoranda/rh_envcurhr_gd.pdf), (hereinafter referred to as “EPA's 2003 Natural Visibility Guidance”), andGuidance for Tracking Progress Under the Regional Haze Rule,September 2003 (EPA-454/B-03-004 located atwww.epa.gov/ttncaaa1/t1/memoranda/rh_tpurhr_gd.pdf)), (hereinafter referred to as “EPA's 2003 Tracking Progress Guidance”).

For the first regional haze SIPs that were due by December 17, 2007, “baseline visibility conditions” were the starting points for assessing “current” visibility impairment. Baseline visibility conditions represent the degree of impairment for the 20 percent least impaired days and 20 percent most impaired days at the time the regional haze program was established. Using monitoring data from 2000 through 2004, States are required to calculate the average degree of visibility impairment for each Class I area within the State, based on the average of annual values over the five year period. The comparison of initial baseline visibility conditions to natural visibility conditions indicates the amount of improvement necessary to attain natural visibility, while the future comparison of baseline conditions to the then current conditions will indicate the amount of progress made. In general, the 2000-2004 baseline period is considered the time from which improvement in visibility is measured.

The vehicle for ensuring continuing progress towards achieving the natural visibility goal is the submission of a series of regional haze SIPs from the States that establish RPGs for Class I areas for each (approximately) 10-year planning period. The RHR does not mandate specific milestones or rates of progress, but instead calls for States to establish goals that provide for “reasonable progress” toward achieving natural (i.e., “background”) visibility conditions for their Class I areas. In setting RPGs, States must provide for an improvement in visibility for the most impaired days over the (approximately) 10-year period of the SIP, and ensure no degradation in visibility for the least impaired days over the same period.

States have significant discretion in establishing RPGs, but are required to consider the following factors established in the CAA and in EPA's RHR: (1) The costs of compliance; (2) the time necessary for compliance; (3) the energy and non-air quality environmental impacts of compliance; and (4) the remaining useful life of any potentially affected sources. States must demonstrate in their SIPs how these factors are considered when selecting the RPGs for the best and worst days for each applicable Class I area. See 40 CFR 51.308(d)(1)(i)(A). States have considerable flexibility in how they take these factors into consideration, as noted in EPA's July 1, 2007 memorandum from William L. Wehrum, Acting Administrator for Air and Radiation, to EPA Regional Administrators, EPA Regions 1-10, entitledGuidance for Setting Reasonable Progress Goals under the Regional Haze Program(p. 4-2, 5-1)(EPA's Reasonable Progress Guidance). In setting the RPGs, States must also consider the rate of progress needed to reach natural visibility conditions by 2064 (referred to as the “uniform rate of progress” or the “glide path”) and the emission reduction measures needed to achieve that rate of progress over the 10-year period of the SIP. The year 2064 represents a rate of progress which States are to use for analytical comparison to the amount of progress they expect to achieve. In setting RPGs, each State with one or more Class I areas (“Class I State”) must also consult with potentially “contributing States,”i.e.,other nearby States with emission sources that may be contributing to visibility impairment at the Class I State's areas. See 40 CFR 51.308(d)(1)(iv).

Section 169A of the CAA directs States to evaluate the use of retrofit controls at certain larger, often uncontrolled, older stationary sources in order to address visibility impacts from these sources. Specifically, the CAA requires States to revise their SIPs to contain such measures as may be necessary to make reasonable progress towards the natural visibility goal, including a requirement that certain categories of existing stationary sources built between 1962 and 1977 procure, install, and operate the “Best Available Retrofit Technology” as determined by the State. (CAA 169A(b)(2)a)).3 States are directed to conduct BART determinations for such sources that may be anticipated to cause or contribute to any visibility impairment in a Class I area. Rather than requiring source-specific BART controls, States also have the flexibility to adopt an emissions trading program or other alternative program as long as the alternative provides greater reasonable progress towards improving visibility than BART.

On July 6, 2005, EPA published theGuidelines for BART Determinations Under the Regional Haze Ruleat Appendix Y to 40 CFR part 51 (hereinafter referred to as the “BART Guidelines”) to assist States in determining which of their sources should be subject to the BART requirements and in determining appropriate emission limits for each applicable source. In making a BART applicability determination for a fossil fuel-fired electric generating plant with a total generating capacity in excess of 750 megawatts (MW), a State must use the approach set forth in the BART Guidelines. A State is encouraged, but not required, to follow the BART Guidelines in making BART determinations for other types of sources.

States must address all visibility impairing pollutants emitted by a source in the BART determination process. The most significant visibility impairing pollutants are sulfur dioxide (SO2), nitrogen oxides (NOX), and particulate matter (PM). EPA has stated that States should use their best judgment in determining whether volatile organic compounds (VOCs), or ammonia (NH3) and ammonia compounds impair visibility in Class I areas.

The RPOs provided air quality modeling to the States to help them indetermining whether potential BART sources can be reasonably expected to cause or contribute to visibility impairment in a Class I area. Under the BART Guidelines, States may select an exemption threshold value for their BART modeling, below which a BART eligible source would not be expected to cause or contribute to visibility impairment in any Class I area. The State must document this exemption threshold value in the SIP and must state the basis for its selection of that value. Any source with emissions that model above the threshold value would be subject to a BART determination review. The BART Guidelines acknowledge varying circumstances affecting different Class I areas. States should consider the number of emission sources affecting the Class I areas at issue and the magnitude of the individual sources' impacts. Any exemption threshold set by the State should not be higher than 0.5 deciviews. See 70 FR 39161, (July 6, 2005).

In their SIPs, States must identify potential BART sources, described as “BART-eligible sources” in the RHR, and document their BART control determination analyses. The term “BART-eligible source” used in the BART Guidelines means the collection of individual emission units at a facility that together comprises the BART-eligible source. See 70 FR 39161, (July 6, 2005). In making BART determinations, section 169A(g)(2) of the CAA requires that States consider the following factors: (1) The costs of compliance; (2) the energy and non-air quality environmental impacts of compliance; (3) any existing pollution control technology in use at the source; (4) the remaining useful life of the source; and (5) the degree of improvement in visibility which may reasonably be anticipated to result from the use of such technology. States are free to determine the weight and significance to be assigned to each factor. See 70 FR 39170, (July 6, 2005).

A regional haze SIP must include source-specific BART emission limits and compliance schedules for each source subject to BART. Once a State has made its BART determination, the BART controls must be installed and in operation as expeditiously as practicable, but no later than five years after the date of EPA approval of the regional haze SIP, as required by CAA (section 169(g)(4)) and the RHR (40 CFR 51.308(e)(1)(iv)). In addition to what is required by the RHR, general SIP requirements mandate that the SIP must also include all regulatory requirements related to monitoring, recordkeeping, and reporting for the BART controls on the source. States have the flexibility to choose the type of control measures they will use to meet the requirements of BART.

Forty CFR 51.308(d)(3) of the RHR requires that States include a LTS in their SIPs. The LTS is the compilation of all control measures a State will use to meet any applicable RPGs. The LTS must include “enforceable emissions limitations, compliance schedules, and other measures as necessary to achieve the reasonable progress goals” for all Class I areas within, or affected by emissions from, the State. See 40 CFR 51.308(d)(3).

When a State's emissions are reasonably anticipated to cause or contribute to visibility impairment in a Class I area located in another State, the RHR requires the impacted State to coordinate with the contributing States in order to develop coordinated emissions management strategies. See 40 CFR 51.308(d)(3)(i). In such cases, the contributing State must demonstrate that it has included in its SIP all measures necessary to obtain its share of the emission reductions needed to meet the RPGs for the Class I area. The RPOs have provided forums for significant interstate consultation, but additional consultations between States may be required to sufficiently address interstate visibility issues. This is especially true where two States belong to different RPOs.

States should consider all types of anthropogenic sources of visibility impairment in developing their LTS, including stationary, minor, mobile, and area sources. At a minimum, States must describe how each of the seven factors listed below is taken into account in developing their LTS: (1) Emission reductions due to ongoing air pollution control programs, including measures to address RAVI; (2) measures to mitigate the impacts of construction activities; (3) emissions limitations and schedules for compliance to achieve the RPG; (4) source retirement and replacement schedules; (5) smoke management techniques for agricultural and forestry management purposes including plans as currently exist within the State for these purposes; (6) enforceability of emissions limitations and control measures; (7) the anticipated net effect on visibility due to projected changes in point, area, and mobile source emissions over the period addressed by the LTS. See 40 CFR 51.308(d)(3)(v).

As part of the RHR, EPA revised 40 CFR 51.306(c) regarding the LTS for RAVI to require that the RAVI plan must provide for a periodic review and SIP revision not less frequently than every three years until the date of submission of the State's first plan addressing regional haze visibility impairment, which was due December 17, 2007, in accordance with 40 CFR 51.308(b) and (c). On or before this date, the State must revise its plan to provide for review and revision of a coordinated LTS for addressing reasonably attributable and regional haze visibility impairment, and the State must submit the first such coordinated LTS with its first regional haze SIP. Future coordinated LTS's, and periodic progress reports evaluating progress towards RPGs, must be submitted consistent with the schedule for SIP submission and periodic progress reports set forth in 40 CFR 51.308(f) and 51.308(g), respectively. The periodic reviews of a State's LTS must report on both regional haze and RAVI impairment and must be submitted to EPA as a SIP revision.

Forty CFR 51.308(d)(4) of the RHR includes the requirement for a monitoring strategy for measuring, characterizing, and reporting of regional haze visibility impairment that is representative of all mandatory Class I Federal areas within the State. The strategy must be coordinated with the monitoring strategy required in 40 CFR 51.305 for RAVI. Compliance with this requirement may be met through participation in the IMPROVE network. The monitoring strategy is due with the first regional haze SIP, and it must be reviewed every five years. The monitoring strategy must also provide for additional monitoring sites if the IMPROVE network is not sufficient to determine whether RPGs will be met.

The SIP must also provide for the following:

• Procedures for using monitoring data and other information in a State with mandatory Class I areas to determine the contribution of emissions from within the State to regional haze visibility impairment at Class I areas both within and outside the State;

• Procedures for using monitoring data and other information in a State with no mandatory Class I areas to determine the contribution of emissions from within the State to regional hazevisibility impairment at Class I areas in other States;

• Reporting of all visibility monitoring data to the Administrator at least annually for each Class I area in the State, and where possible, in electronic format;

• Developing a statewide inventory of emissions of pollutants that are reasonably anticipated to cause or contribute to visibility impairment in any Class I area. The inventory must include emissions for a baseline year, emissions for the most recent year for which data are available, and estimates of future projected emissions. A State must also make a commitment to update the inventory periodically; and

• Other elements, including reporting, recordkeeping, and other measures necessary to assess and report on visibility.

Forty CFR 51.308(f) of the RHR requires control strategies to cover an initial implementation period extending to the year 2018, with a comprehensive reassessment and revision of those strategies, as appropriate, every 10 years thereafter. Periodic SIP revisions must meet the core requirements of 40 CFR 51.308(d) with the exception of BART. The BART provisions of 40 CFR 51.308(e), as noted above, apply only to the first implementation period. Periodic SIP revisions will assure that the statutory requirement of reasonable progress will continue to be met.

The RHR requires that States consult with FLMs before adopting and submitting their SIPs. See 40 CFR 51.308(i). States must provide FLMs an opportunity for consultation, in person and at least 60 days prior to holding any public hearing on the SIP. This consultation must include the opportunity for the FLMs to discuss their assessment of impairment of visibility in any Class I area and to offer recommendations on the development of the RPGs and on the development and implementation of strategies to address visibility impairment. Further, a State must include in its SIP a description of how it addressed any comments provided by the FLMs. Finally, a SIP must provide procedures for continuing consultation between the State and FLMs regarding the State's visibility protection program, including development and review of SIP revisions, five-year progress reports, and the implementation of other programs having the potential to contribute to impairment of visibility in Class I areas.

On August 7, 2009, RI DEM's Office of Air Resources submitted revisions to the Rhode Island SIP to address regional haze as required by EPA's RHR, specifically 40 CFR 51.308. EPA has reviewed Rhode Island's submittal and is proposing to find that it is consistent with the requirements of 40 CFR 51.308 as outlined in Section II. A detailed analysis follows.

Rhode Island is responsible for developing a regional haze SIP which addresses Rhode Island's impact on any nearby Class I areas. As Rhode Island has no Class I areas within its borders, Rhode Island is not required to address the following Regional Haze SIP elements: (a) calculation of baseline and natural visibility conditions, (b) establishment of reasonable progress goals, (c) monitoring requirements and (d) RAVI requirements.

In addition, Rhode Island evaluated the major point sources in the State and determined that none meet the criteria (as discussed in Section II.D) to be considered BART eligible. EPA is proposing to approve RI DEM's determination that there are no BART-eligible sources in Rhode Island.

Rhode Island is a member of the MANE-VU RPO. The MANE-VU RPO contains seven Class I areas in four States: Moosehorn Wilderness Area, Acadia National Park, and Roosevelt/Campobello International Park in Maine; Presidential Range/Dry River Wilderness Area and Great Gulf Wilderness Area in New Hampshire; Brigantine Wilderness Area in New Jersey; and Lye Brook Wilderness Area in Vermont.

Through source apportionment modeling, MANE-VU assisted States in determining their contribution to the visibility impairment of each Class I area in the MANE-VU region. Rhode Island and the other MANE-VU States adopted a weight-of-evidence approach which relied on several independent methods for assessing the contribution of different sources and geographic source regions to regional haze in the northeastern and mid-Atlantic portions of the United States. Details about each technique can be found in the NESCAUM DocumentContributions to Regional Haze in the Northeast and Mid-Atlantic United States,August 2006 (hereinafter referred to as the “Contribution Report”).4

The source apportionment modeling demonstrated that the contribution of Rhode Island emissions to total sulfate (the main contributor to visibility impairment in the Northeast) was consistently determined to be no more than 0.31% of the total sulfate at any Class I area. This finding was consistently predicted by different assessment techniques that are based on the application of disparate chemical, meteorological and physical principles. The greatest modeled contribution from Rhode Island for each of the MANE-VU Class I areas was 0.31% sulfate at Acadia National Park, 0.22% sulfate at Moosehorn Wilderness Area and Roosevelt Campobello International Park, 0.11% sulfate at Great Gulf Wilderness Area and Presidential Range—Dry River Wilderness Area, 0.08% sulfate at Lye Brook Wilderness Area, and 0.14% at Brigantine Wilderness Area. The impact of sulfate on visibility is discussed in greater detail below.

The MANE-VU Class I States determined that any State contributing at least 2% of the total sulfate observed on the 20 percent worst visibility days in 2002 were contributors to visibility impairment at the Class I area. Connecticut, Rhode Island, Vermont, and the District of Columbia were determined to contribute less than 2% of sulfate at any of the Class I areas in the Northeast.

EPA is proposing to find that RI DEM has adequately demonstrated that emissions from Rhode Island sources do not cause or contribute to visibility impairment in nearby Class I Areas.

As described in Section II.E of this action, the LTS is a compilation of State-specific control measures relied on by the State to obtain its share of emission reductions to support the RPGs established by Maine, New Hampshire, Vermont, and New Jersey, the nearby Class I area States. Rhode Island's LTS for the first implementation period addresses the emissions reductions from federal, State, and local controls that take effect in the State from the baseline period starting in 2002 until 2018. Rhode Island participated in the MANE-VU regional strategy development process and supported a regional approach towards deciding which control measures to pursue for regional haze, which was based on technical analyses documented in the following reports: (a) The Contribution Report; (b) Assessment of Reasonable Progress for Regional Haze in MANE-VU Class I Areas(available atwww.marama.org/visibility/RPG/FinalReport/RPGFinalReport_070907.pdf); (c)Five-Factor Analysis of BART-Eligible Sources: Survey of Options for Conducting BART Determinations(available atwww.nescaum.org/documents/bart-final-memo-06-28-07.pdf); and (d)Assessment of Control Technology Options for BART-Eligible Sources: Steam Electric Boilers, Industrial Boilers, Cement Plants and Paper, and Pulp Facilities(available atwww.nescaum.org/documents/bart-control-assessment.pdf).

The State-wide emissions inventories used by MANE-VU in its regional haze technical analyses were developed by MARAMA for MANE-VU with assistance from Rhode Island. The 2018 emissions inventory was developed by projecting 2002 emissions forward based on assumptions regarding emissions growth due to projected increases in economic activity and emissions reductions expected from federal and State regulations. MANE-VU's emissions inventories included estimates of NOX, coarse particulate matter (PM10), PM2.5, and SO2, VOC, and NH3. The BART guidelines direct States to exercise judgment in deciding whether VOC and NH3impair visibility in their Class I area(s). As discussed further in Section III.B.3 below, MANE-VU demonstrated that anthropogenic emissions of sulfates are the major contributor to PM2.5mass and visibility impairment at Class I areas in the Northeast and Mid-Atlantic region. It was also determined that the total ammonia emissions in the MANE-VU region are extremely small.

MANE-VU developed emissions inventories for four inventory source classifications: (1) Stationary point sources, (2) stationary area sources, (3) non-road mobile sources, and (4) on-road mobile sources. The New York Department of Environmental Conservation also developed an inventory of biogenic emissions for the entire MANE-VU region. Stationary point sources are those sources that emit greater than a specified tonnage per year, depending on the pollutant, with data provided at the facility level. Stationary area sources are those sources whose individual emissions are relatively small, but due to the large number of these sources, the collective emissions from the source category could be significant. Non-road mobile sources are equipment that can move but do not use the roadways. On-road mobile source emissions are automobiles, trucks, and motorcycles that use the roadway system. The emissions from these sources are estimated by vehicle type and road type. Biogenic sources are natural sources like trees, crops, grasses, and natural decay of plants. Stationary point sources emission data is tracked at the facility level. For all other source types, emissions are summed on the county level.

There are many federal and State control programs being implemented that MANE-VU and Rhode Island anticipate will reduce emissions between the baseline period and 2018. Emission reductions from these control programs in the MANE-VU region were projected to achieve substantial visibility improvement by 2018 at all of the MANE-VU Class I areas. To assess emissions reductions from ongoing air pollution control programs, BART, and reasonable progress goals, MANE-VU developed 2018 emissions projections called “Best and Final.” The emissions inventory provided by the State of Rhode Island for the Best and Final 2018 projections is based on expected control requirements.

Rhode Island relied on emission reductions from the following ongoing and expected air pollution control programs as part of the State's long term strategy. For electrical generating units (EGUs), Rhode Island relied on Air Pollution Control (APC) Regulations Numbers 38 and 41 which limit NOXemissions from all EGUs. The State also relied on source specific permit restrictions limiting the sulfur content of fuel oil to 0.05% at Dominion Energy Manchester Street, 0.0015% at Ocean State Power and 0.2% at Pawtucket Power. Rhode Island also relied on the following controls on non-EGU point sources in estimating 2018 emissions inventories: NOXSIP Call Phases I and II; NOXReasonably Available Control Technology (RACT) in 1-hour Ozone SIP; NOXOzone Transport Commission (OTC) 2001 Model Rule for Industrial, Commercial, and Institutional (ICI) Boilers; VOC 2-year, 4-year, 7-year and 10-year Maximum Achievable Control Technology (MACT) Standards; Combustion Turbine and Reciprocating Internal Combustion Engine (RICE) MACT; and Industrial Boiler/Process Heater MACT (also known as the Industrial Boiler MACT).

On July 30, 2007, the U.S. Court of Appeals for the District of Columbia vacated and remanded the Industrial Boiler MACT Rule.NRDCv.EPA, 489F.3d 1250 (DC Cir. 2007). This MACT was vacated since it was directly affected by the vacatur and remand of the Commercial and Industrial Solid Waste Incinerator (CISWI) definition rule. EPA proposed a new Industrial Boiler MACT rule to address the vacatur on June 4, 2010 (75 FR 32006) and issued a final rule on March 21, 2011 (76 FR 15608). On May 18, 2011, EPA stayed the effective date of the Industrial Boiler MACT pending review by the DC Circuit or the completion of EPA's reconsideration of the rule. See 76 FR 28662.

On December 2, 2011, EPA issued a proposed reconsideration of the MACT standards for existing and new boilers at major (76 FR 80598) and area (76 FR 80532) source facilities, and for Commercial and Industrial Solid Waste Incinerators (76 FR 80452). On January 9, 2012, the U.S. District Court for the District of Columbia vacated EPA's stay of the effectiveness date of the Industrial Boiler MACT, reinstating the original effective date and therefore requiring compliance with the current rule in 2014.Sierra Clubv.Jackson,Civ. No. 11-1278, slip op. (D.D.C. Jan. 9, 2012).

Even though Rhode Island's modeling is based on the old Industrial Boiler MACT limits Rhode Island's modeling conclusions are unlikely to be affected because the expected reductions in SO2and PM resulting from the vacated MACT rule are a relatively small component of the Rhode Island inventory and the expected emission reductions from the final MACT rule are comparable to those modeled. In addition, the new MACT rule requires compliance by 2014 and therefore the expected emission reductions will be achieved prior to the end of the first implementation period in 2018. Thus, EPA does not expect that differences between the old and revised Industrial Boiler MACT emission limits would affect the adequacy of the existing Rhode Island regional haze SIP. If there is a need to address discrepancies between projected emissions reductions from the old Industrial Boiler MACT and the Industrial Boiler MACT finalized in March 2011, we expect Rhode Island to do so in their 5-year progress report.

Controls on area sources expected by 2018 include: the OTC VOC rules for consumer products (APC Regulation No. 31); architectural and industrial maintenance coatings (APC Regulation No. 33) and solvent cleaning (APC Regulation No. 36); mobile equipment repair and refinishing APC Regulation No. 30); VOC control measures for adhesive and sealants (APC Regulation No. 44); VOC control measures for emulsified and cutback asphalt paving (APC Regulation No. 25); and VOCcontrol measures for portable fuel containers (contained in EPA's Mobile Source Air Toxics rule).

Controls on mobile sources expected by 2018 include: enhanced safety inspection program (Rhode Island Motor Vehicle Safety and Emissions Control Regulation No. 1); on-board diagnostics testing for 1996 and new vehicles (APC Regulation No. 34); Federal On-Board Refueling Vapor Recovery (ORVR) Rule; Federal Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Requirements; Federal Heavy-Duty Diesel Engine Emission Standards for Trucks and Buses; and Federal Emission Standards for Large Industrial Spark-Ignition Engines and Recreation Vehicles.

Controls on non-road sources expected by 2018 include the following federal regulations: Control of Air Pollution: Determination of Significance for Nonroad Sources and Emission Standards for New Nonroad Compression Ignition Engines at or above 37 kilowatts (59 FR 31306, June 17, 1994); Control of Emissions of Air Pollution from Nonroad Diesel Engines (63 FR 56967, Oct. 23, 1998); Control of Emissions from Nonroad Large Spark-Ignition Engines and Recreational Engines (67 FR 68241, Nov. 8, 2002); and Control of Emissions of Air Pollution from Nonroad Diesel Engines and Fuels (69 FR 38958, June 29, 2004).

Tables 1 and 2 are summaries of the 2002 baseline and 2018 estimated emissions inventories for Rhode Island. The 2018 estimated emissions include emissions growth as well as emission reductions due to ongoing emission control strategies and reasonable progress goals.

MANE-VU performed modeling for the regional haze LTS for the 11 Mid-Atlantic and Northeast States and the District of Columbia. The modeling analysis is a complex technical evaluation that began with selection of the modeling system. MANE-VU used the following modeling system:

• Meteorological Model: The Fifth-Generation Pennsylvania State University/National Center for Atmospheric Research (NCAR) Mesoscale Meteorological Model (MM5) version 3.6 is a nonhydrostatic, prognostic meteorological model routinely used for urban- and regional-scale photochemical, PM2.5, and regional haze regulatory modeling studies.

• Emissions Model: The Sparse Matrix Operator Kernel Emissions (SMOKE) version 2.1 modeling system is an emissions modeling system that generates hourly gridded speciated emission inputs of mobile, non-road mobile, area, point, fire, and biogenic emission sources for photochemical grid models.

• Air Quality Model: The EPA's Models-3/Community Multiscale Air Quality (CMAQ) version 4.5.1 is a photochemical grid model capable of addressing ozone, PM, visibility and acid deposition at a regional scale.

• Air Quality Model: The Regional Model for Aerosols and Deposition (REMSAD), is a Eulerian grid model that was primarily used to determine the attribution of sulfate species in the Eastern US via the species-tagging scheme.

• Air Quality Model: The California Puff Model (CALPUFF), version 5 is a non-steady-state Lagrangian puff model used to access the contribution of individual States' emissions to sulfate levels at selected Class I receptor sites.

CMAQ modeling of regional haze in the MANE-VU region for 2002 and 2018 was carried out on a grid of 12x12 kilometer (km) cells that covers the 11 MANE-VU States (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont) and the District of Columbia and States adjacent to them. This grid is nested within a larger national CMAQ modeling grid of 36x36 km grid cells that covers the continental United States, portions of Canada and Mexico, and portions of the Atlantic and Pacific Oceans along the east and west coasts. Selection of a representative period of meteorology is crucial for evaluating baseline air quality conditions and projecting future changes in air quality due to changes in emissions of visibility-impairing pollutants. MANE-VU conducted an in-depth analysis which resulted in the selection of the entire year of 2002 (January 1-December 31) as the best period of meteorology available for conducting the CMAQ modeling. TheMANE-VU States' modeling was developed consistent with EPA'sGuidance on the Use of Models and OtherAnalyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM 2.5, and Regional Haze,April 2007 (EPA-454/B-07-002, available atwww.epa.gov/scram001/guidance/guide/final-03-pm-rh-guidance.pdf), and EPA document,Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Quality Standards (NAAQS) and Regional Haze Regulations,August 2005 and updated November 2005 (EPA-454/R-05-001, available atwww.epa.gov/ttnchie1/eidocs/eiguid/index.html) (hereinafter referred to as “EPA's Modeling Guidance”).

MANE-VU examined the model performance of the regional modeling for the areas of interest before determining whether the CMAQ model results were suitable for use in the regional haze assessment of the LTS and for use in the modeling assessment. The modeling assessment predicts future levels of emissions and visibility impairment used to support the LTS and to compare predicted, modeled visibility levels with those on the uniform rate of progress. In keeping with the objective of the CMAQ modeling platform, the air quality model performance was evaluated using graphical and statistical assessments based on measured ozone, fine particles, and acid deposition from various monitoring networks and databases for the 2002 base year. MANE-VU used a diverse set of statistical parameters from the EPA's Modeling Guidance to stress and examine the model and modeling inputs. Once MANE-VU determined the model performance to be acceptable, MANE-VU used the model to assess the 2018 RPGs using the current and future year air quality modeling predictions, and compared the RPGs to the uniform rate of progress.

In accordance with 40 CFR 51.308(d)(3), the State of Rhode Island provided the appropriate supporting documentation for all required analyses used to determine the State's LTS. The technical analyses and modeling used to develop the glide path and to support the LTS are consistent with EPA's RHR, and interim and final EPA Modeling Guidance. EPA is proposing to find the MANE-VU technical modeling to support the LTS and determine visibility improvement for the uniform rate of progress acceptable because the modeling system was chosen and used according to EPA Modeling Guidance. EPA agrees with the MANE-VU model performance procedures and results, and that the CMAQ is an appropriate tool for the regional haze assessments for the Rhode Island LTS and regional haze SIP.

An important step toward identifying reasonable progress measures is to identify the key pollutants contributing to visibility impairment at each Class I area. To understand the relative benefit of further reducing emissions from different pollutants, MANE-VU developed emission sensitivity model runs using CMAQ to evaluate visibility and air quality impacts from various groups of emissions and pollutant scenarios in the Class I areas on the 20 percent worst visibility days.

Regarding which pollutants are most significantly impacting visibility in the MANE-VU region, MANE-VU's contribution assessment demonstrated that sulfate is the major contributor to PM2.5mass and visibility impairment at Class I areas in the Northeast and Mid-Atlantic Region. Sulfate particles commonly account for more than 50 percent of particle-related light extinction at northeastern Class I areas on the clearest days and for as much as, or more than, 80 percent on the haziest days. For example, at the Brigantine National Wildlife Refuge Class I area (the MANE-VU Class I area with the greatest visibility impairment), on the 20 percent worst visibility days in 2000-2004, sulfate accounted for 66 percent of the particle extinction. After sulfate, organic carbon (OC) consistently accounts for the next largest fraction of light extinction. Organic carbon accounted for 13 percent of light extinction on the 20 percent worst visibility days for Brigantine, followed by nitrate that accounts for 9 percent of light extinction.

The emissions sensitivity analyses conducted by MANE-VU predict that reductions in SO2emissions from EGU and non-EGU industrial point sources will result in the greatest improvements in visibility in the Class I areas in the MANE-VU region, more than any other visibility-impairing pollutant. As a result of the dominant role of sulfate in the formation of regional haze in the Northeast and Mid-Atlantic Region, MANE-VU concluded that an effective emissions management approach would rely heavily on broad-based regional SO2control efforts in the eastern United States.

Since the State of Rhode Island does not have a Class I area, it is not required to establish RPGs. However, as a MANE-VU member State, Rhode Island adopted the “Statement of MANE-VU Concerning a Request for a Course of Action by States Within MANE-VU Toward Assuring Reasonable Progress” on June 7, 2007. This document included four emission management strategies that will provide for reasonable progress towards achieving natural visibility at the MANE-VU Class I areas. These emission management strategies are collectively known as the MANE-VU “Ask,” and include: (a) Timely implementation of BART requirements; (b) a 90 percent reduction in SO2emissions from each of the EGU stacks identified by MANE-VU comprising a total of 167 stacks5 ; (c) adoption of a low sulfur fuel oil strategy; and (d) continued evaluation of other control measures to reduce SO2and NOXemissions.

Rhode Island does not have any BART eligible units, nor does it have any EGU stacks identified by MANE-VU as a top contributor to visibility impairment in any of the MANE-VU Class I areas.

The MANE-VU low sulfur fuel oil strategy includes: Phase I reduction of distillate oil to 0.05% sulfur by weight (500 parts per million (ppm)) by no later than 2014; Phase II reductions of #4 residual oil to 0.25% sulfur by weight by no later than 2018; #6 residual oil to 0.5% sulfur by weight by no later than 2018; and further reduce the sulfur content of distillate oil to 15 ppm by 2018.

The expected reduction in SO2emissions by 2018 from the MANE-VU “Ask” will yield corresponding reductions in sulfate aerosol, the main culprit in fine-particle pollution and regional haze. For Rhode Island, the MANE-VU analysis demonstrates that the reduction of the sulfur content in fuel oil will lead to an average reduction of 0.25-0.36 μg/m3in the 24 hour PM2.5concentration within the State, improving health and local visibility. In addition, the use of low sulfur fuels will result in cost savings to owners/operators of residential furnaces and boilers due to reduced maintenance costs and extended life of the units.

In its August 7, 2009 SIP submittal, Rhode Island states that “RI DEM intends to adopt the low-sulfur fuel oil requirements by January 1, 2012 and will have a compliance date of 2014 for Phase I and 2018 for Phase II.” RI DEM continues to work toward the adoption of this regulation. However, in a letter dated January 31, 2012, RI DEM informed EPA that they do notanticipate being able to adopt the low-sulfur fuel oil requirements before the end of 2012. RI DEM articulated that they are still committed to adopting the low-sulfur oil requirements but cannot do so on the time line of their original commitment.

EPA is today proposing approval of the Rhode Island Regional Haze SIP for the first implementation period without inclusion of an adopted low sulfur fuel oil regulation.6 As described in Section III.A of this notice, Rhode Island neither causes nor contributes to visibility impairment in the closest Class I areas located in New Jersey, Vermont, New Hampshire, and Maine. For each of these Class I areas, the contribution of Rhode Island's emissions to total sulfate is less than the 2% threshold set by the MANE-VU States to determine whether any State contributed to visibility impairment. While the SO2reductions being achieved by Rhode Island are somewhat less than the statewide reductions that were projected to result from adoption of a low-sulfur fuel oil strategy by 2012, this shortfall is not anticipated to interfere with the ability of other States to meet their respective reasonable progress goals. All emissions from Rhode Island contribute no more than 0.31% of total sulfate at any Class I area. We encourage adoption of a low-sulfur fuel oil strategy by Rhode Island as such a strategy will have local air quality and some, limited visibility benefits, however, we do not believe it is a necessary component of an approvable Regional Haze SIP for Rhode Island for the first implementation period.

Forty CFR 51.308(d)(3)(v) requires States to consider the following factors in developing the long term strategy:

a. Emission reductions due to ongoing air pollution control programs, including measures to address reasonably attributable visibility impairment;

b. Measures to mitigate the impacts of construction activities;

c. Emission limitations and schedules for compliance to achieve the reasonable progress goal;

d. Source retirement and replacement schedules;

e. Smoke management techniques for agricultural and forestry management purposes including plans as currently exist within the State for these purposes;

f. Enforceability of emissions limitations and control measures; and

g. The anticipated net effect on visibility due to projected changes in point area, and mobile source emissions over the period addressed by the long term strategy.

Since Rhode Island does not contain any Class I areas, the State is not required to address RAVI, nor has any Rhode Island source been identified as subject to RAVI. A list of Rhode Island's ongoing air pollution control programs is included in Section III.B.1.

The Regional Haze Rule requires Rhode Island to consider measures to mitigate the impacts of construction activities on regional haze. MANE-VU's consideration of control measures for construction activities is documented in “Technical Support Document on Measures to Mitigate the Visibility Impacts of Construction Activities in the MANE-VU Region, Draft, October 20, 2006.”7

The construction industry is already subject to requirements for controlling pollutants that contribute to visibility impairment. For example, federal regulations require the reduction of SO2emissions from construction vehicles. At the State level, Rhode Island Air Pollution Control Regulation Number 5, “Fugitive Dust” regulates dust from construction and demolition activities. Section 5.3 of that regulation states, “No person shall cause or permit any materials, including but not limited to sand, gravel, soil, aggregate and any other organic or inorganic solid matter capable of releasing dust, to be handled, transported, mined, quarried, stored or otherwise utilized in any way so as to cause airborne particulate matter to travel beyond the property line of the emission source without taking adequate precautions to prevent particulate matter from becoming airborne.”

MANE-VU's Contribution Report found that, from a regional haze perspective, crustal material generally does not play a major role. On the 20 percent best-visibility days during the 2000-2004 baseline period, crustal material accounted for 6 to 11 percent of the particle-related light extinction at the MANE-VU Class I Areas. On the 20 percent worst-visibility days, however, the contribution was reduced to 2 to 3 percent. Furthermore, the crustal fraction is largely made up of pollutants of natural origin (e.g., soil or sea salt) that are not targeted under the Regional Haze Rule. Nevertheless, the crustal fraction at any given location can be heavily influenced by the proximity of construction activities; and construction activities occurring in the immediate vicinity of MANE-VU Class I area could have a noticeable effect on visibility.

For this regional haze SIP, Rhode Island concluded that its current regulations are currently sufficient to mitigate the impacts of construction activities. Any future deliberations on potential control measures for construction activities and the possible implementation will be documented in the first regional haze SIP progress report in 2012. EPA proposes to find that Rhode Island has adequately addressed measures to mitigate the impacts of construction activities.

In addition to the existing CAA control requirements discussed in Section III.B.1, Rhode Island has committed to adopt a low sulfur fuel oil strategy consistent with the MANE-VU “Ask” by the end of 2012. It is expected that the compliance date for Phase I will be in 2014 and the compliance date for Phase II will be in 2018. As described in Section III.B.4 above, we do not believe inclusion of the low sulfur oil strategy is a necessary component of an approvable Region Haze SIP for Rhode Island. Therefore, EPA is proposing to determine that Rhode Island has satisfactorily considered emission limitations and schedules as part of the LTS.

Forty CFR 51.308(d)(3)(v)(D) of the Regional Haze Rule requires Rhode Island to consider source retirement and replacement schedules in developing the long term strategy. Source retirement and replacement were considered in developing the 2018 emissions. The sources in Rhode Island that were shut down after the 2002 base year and therefore were not included in the 2018 inventory are: Albin, Display World, Clariant Corporation, Leviton, CCL Custom Manufacturing, EasternButcher Block, Fiber Mark, Metal Recycling Company Incorporated, Slater Dye Works in Cumberland, Slater Dye Works in Pawtucket, and Charbert Incorporated. EPA is proposing to determine that Rhode Island has satisfactorily considered source retirement and replacement schedules as part of the LTS.

The Regional Haze Rule requires States to consider smoke management techniques related to agricultural and forestry management in developing the long-term strategy. MANE-VU's analysis of smoke management in the context of regional haze is documented in “Technical Support Document on Agricultural and Smoke Management in the MANE-VU Region, September 1, 2006.”8

Rhode Island does not currently have a Smoke Management Program (SMP). However, SMPs are required only when smoke impacts from fires managed for resources benefits contribute significantly to regional haze. The emissions inventory presented in the above-cited document indicates that agricultural, managed and prescribed burning emissions are very minor; the inventory estimates that, in Rhode Island, those emissions from those source categories totaled 7.8 tons of PM10, 6.7 tons of PM2.5and 0.5 tons of SO2in 2002, which constitute 0.08%, 0.2% and 0.006% of the total inventory for these pollutants, respectively.

Source apportionment results show that wood smoke is a moderate contributor to visibility impairment at some Class I areas in the MANE-VU region; however, smoke is not a large contributor to haze in MANE-VU Class I areas on either the 20% best or 20% worst visibility days. Moreover, most of wood smoke is attributable to residential wood combustion.9 Therefore, it is unlikely that fires for agricultural or forestry management cause large impacts on visibility in any of the Class I areas in the MANE-VU region. On rare occasions, smoke from major fires degrades air quality and visibility in the MANE-VU area. However, these fires are generally unwanted wildfires that are not subject to SMPs. EPA proposes to approve Rhode Island's decision that an Agricultural and Forestry Smoke Management Plan to address visibility impairment is not required at this time.

All emission limitations included as part of Rhode Island's Regional Haze SIP are currently federally enforceable. EPA is proposing to find that Rhode Island has adequately addressed the enforceability of emission limitations and control measures.

MANE-VU used the best and final emission inventory to model progress expected toward the goal of natural visibility conditions for the first regional haze planning period. All of the MANE-VU Class I areas are expected to achieve greater progress toward the natural visibility goal than the uniform rate of progress, or the progress expected by extrapolating a trend line from current visibility conditions to natural visibility conditions.10

In summary, EPA is proposing to find that Rhode Island has adequately addressed the LTS regional haze requirements.

On May 10, 2006, the MANE-VU State Air Directors adopted the Inter-RPO State/Tribal and FLM Consultation Framework that documented the consultation process within the context of regional phase planning, and was intended to create greater certainty and understanding among RPOs. MANE-VU States held ten consultation meetings and/or conference calls from March 1, 2007 through March 21, 2008. In addition to MANE-VU members attending these meetings and conference calls, participants from the Visibility Improvement State and Tribal Association of the Southeast (VISTAS) RPO, Midwest RPO, and the relevant Federal Land Managers were also in attendance. In addition to the conference calls and meeting, the FLMs were given the opportunity to review and comment on each of the technical documents developed by MANE-VU.

On January 26, 2009, Rhode Island submitted a draft Regional Haze SIP to the relevant FLMs for review and comment pursuant to 40 CFR 51.308(i)(2). The FLMs provided comments on the draft Regional Haze SIP in accordance with 40 CFR 51.308(i)(3). The comments received from the FLMs were addressed and incorporated in Rhode Island's SIP revision. Most of the comments were requests for additional detail as to various aspects of the SIP. These comments and Rhode Island's response to comments can be found in the docket for this proposed rulemaking.

On July 30, 2009, Rhode Island proposed its Regional Haze SIP for public hearing and no comments were received. To address the requirement for continuing consultation procedures with the FLMs under 40 CFR 51.308(i)(4), Rhode Island commits in their SIP to ongoing consultation with the FLMs on emission strategies, major new source permits, assessments or rulemaking concerning sources identified as probable contributors to visibility impairment, any changes to the monitoring strategy, work on the periodic revisions to the SIP, and ongoing communications regarding visibility impairment.

EPA is proposing to find that Rhode Island has addressed the requirements for consultation with the Federal Land Managers.

Consistent with the requirements of 40 CFR 51.308(g), Rhode Island has committed to submitting a report on reasonable progress (in the form of a SIP revision) to the EPA every five years following the initial submittal of its regional haze SIP. The reasonable progress report will evaluate the progress made towards the RPGs for the MANE-VU Class I areas, located in Maine, New Hampshire, Vermont, and New Jersey.

Forty CFR 51.308(f) requires the RI DEM to submit periodic revisions to its Regional Haze SIP by July 31, 2018, and every ten years thereafter. RI DEM acknowledges and agrees to comply with this schedule.

Pursuant to 40 CFR 51.308(d)(4)(v), RI DEM will also make periodic updates to the Rhode Island emissions inventory. RI DEM proposes to complete these updates to coincide with the progress reports. Actual emissions will be compared to projected modeled emissions in the progress reports.

Lastly, pursuant to 40 CFR 51.308(h), RI DEM will submit a determination of adequacy of its regional haze SIP revision whenever a progress report is submitted. Rhode Island's regional haze SIP states that, depending on the findings of its five-year review, RhodeIsland will take one or more of the following actions at that time, whichever actions are appropriate or necessary:

• If Rhode Island determines that the existing State Implementation Plan requires no further substantive revision in order to achieve established goals for visibility improvement and emissions reductions, RI DEM will provide to the EPA Administrator a negative declaration that further revision of the existing plan is not needed.

• If Rhode Island determines that its implementation plan is or may be inadequate to ensure reasonable progress as a result of emissions from sources in one or more other State(s) which participated in the regional planning process, Rhode Island will provide notification to the EPA Administrator and to those other State(s). Rhode Island will also collaborate with the other State(s) through the regional planning process for the purpose of developing additional strategies to address any such deficiencies in Rhode Island's plan.

• If Rhode Island determines that its implementation plan is or may be inadequate to ensure reasonable progress as a result of emissions from sources in another country, Rhode Island will provide notification, along with available information, to the EPA Administrator.

• If Rhode Island determines that the implementation plan is or may be inadequate to ensure reasonable progress as a result of emissions from sources within the State, Rhode Island will revise its implementation plan to address the plan's deficiencies within one year from this determination.

EPA is proposing approval of Rhode Island's August 7, 2009 SIP revision as meeting the applicable requirements of the Regional Haze Rule found in 40 CFR 51.308.

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

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

Regional haze is visibility impairment that is produced by a multitude of sources and activities which are located across a broad geographic area and emit fine particles and their precursors (e.g., sulfur dioxide, nitrogen oxides, and in some cases, ammonia and volatile organic compounds). Fine particle precursors react in the atmosphere to form fine particulate matter (PM2.5) (e.g., sulfates, nitrates, organic carbon, elemental carbon, and soil dust), which also impair visibility by scattering and absorbing light. Visibility impairment reduces the clarity, color, and visible distance that one can see. PM2.5can also cause serious health effects and mortality in humans and contributes to environmental effects such as acid deposition.

Data from the existing visibility monitoring network, the “Interagency Monitoring of Protected Visual Environments” (IMPROVE) monitoring network, show that visibility impairment caused by air pollution occurs virtually all the time at most national park and wilderness areas. The average visual range in many Class I areas (i.e., national parks and memorial parks, wilderness areas, and international parks meeting certain size criteria) in the Western United States is 100-150 kilometers, or about one-half to two-thirds of the visual range that would exist without manmade air pollution. In most of the eastern Class I areas of the United States, the average visual range is less than 30 kilometers, or about one-fifth of the visual rangethat would exist under estimated natural conditions. See 64 FR 35715, (July 1, 1999).

In section 169A(a)(1) of the 1977 Amendments to the CAA, Congress created a program for protecting visibility in the nation's national parks and wilderness areas. This section of the CAA establishes as a national goal the “prevention of any future, and the remedying of any existing, impairment of visibility in mandatory Class I Federal areas1 which impairment results from manmade air pollution.” On December 2, 1980, EPA promulgated regulations to address visibility impairment in Class I areas that is “reasonably attributable” to a single source or small group of sources, i.e., “reasonably attributable visibility impairment” (RAVI). See 45 FR 80084, (Dec. 2, 1980). These regulations represented the first phase in addressing visibility impairment. EPA deferred action on regional haze that emanates from a variety of sources until monitoring, modeling and scientific knowledge about the relationships between pollutants and visibility impairment were improved.

Congress added section 169B to the CAA in 1990 to address regional haze issues. EPA promulgated a rule to address regional haze on July 1, 1999 (64 FR 35714), the Regional Haze Rule. The Regional Haze Rule revised the existing visibility regulations to integrate into the regulation provisions addressing regional haze impairment and established a comprehensive visibility protection program for Class I areas. The requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in EPA's visibility protection regulations at 40 CFR 51.300-309. Some of the main elements of the regional haze requirements are summarized in Section II. The requirement to submit a regional haze SIP applies to all 50 States, the District of Columbia and the Virgin Islands. Forty CFR 51.308(b) requires States to submit the first implementation plan addressing regional haze visibility impairment no later than December 17, 2007. On January 15, 2009, EPA found that 37 States, the District of Columbia and the U.S. Virgin Islands failed to submit this required implementation plan. See 74 FR 2392 (Jan. 15, 2009). In particular, EPA found that New Hampshire failed to submit a plan that met the requirements of 40 CFR 51.308. See 74 FR 2393. On January 14, 2011, the Air Resources Division of the New Hampshire Department of Environmental Services (NHDES) submitted revisions to the New Hampshire State Implementation Plan (SIP) to address regional haze as required by 40 CFR 51.308. A revision to this submittal was made on August 26, 2011. EPA has reviewed New Hampshire's submittal and is proposing to find that it is consistent with the requirements of 40 CFR 51.308 as outlined in Section II.

Successful implementation of the regional haze program will require long-term regional coordination among States, tribal governments and various federal agencies. As noted above, pollution affecting the air quality in Class I areas can be transported over long distances, even hundreds of kilometers. Therefore, to effectively address the problem of visibility impairment in Class I areas, States need to develop strategies in coordination with one another, taking into account the effect of emissions from one jurisdiction on the air quality in another.

Because the pollutants that lead to regional haze can originate from sources located across broad geographic areas, EPA has encouraged the States and Tribes across the United States to address visibility impairment from a regional perspective. Five regional planning organizations (RPOs) were developed to address regional haze and related issues. The RPOs first evaluated technical information to better understand how their States and Tribes impact Class I areas across the country, and then pursued the development of regional strategies to reduce emissions of PM2.5and other pollutants leading to regional haze.

The Mid-Atlantic/Northeast Visibility Union (MANE-VU) RPO is a collaborative effort of State governments, tribal governments, and various federal agencies established to initiate and coordinate activities associated with the management of regional haze, visibility and other air quality issues in the Northeastern United States. Member State and Tribal governments include: Connecticut, Delaware, the District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Penobscot Indian Nation, Rhode Island, and Vermont.

Regional haze SIPs must assure reasonable progress towards the national goal of achieving natural visibility conditions in Class I areas. Section 169A of the CAA and EPA's implementing regulations require States to establish long-term strategies for making reasonable progress toward meeting this goal. Implementation plans must also give specific attention to certain stationary sources that were in existence on August 7, 1977, but were not in operation before August 7, 1962, and require these sources, where appropriate, to install Best Available Retrofit Technology (BART) controls for the purpose of eliminating or reducing visibility impairment. The specific regional haze SIP requirements are discussed in further detail below.

The RHR establishes the deciview (dv) as the principal metric for measuring visibility. This visibility metric expresses uniform changes in haziness in terms of common increments across the entire range of visibility conditions, from pristine to extremely hazy conditions. Visibility is determined by measuring the visual range (or deciview), which is the greatest distance, in kilometers or miles, at which a dark object can be viewed against the sky. The deciview is a useful measure for tracking progress in improving visibility, because each deciview change is an equal incremental change in visibility perceived by the human eye. Most people can detect a change in visibility at one deciview.2

The deciview is used in expressing Reasonable Progress Goals (RPGs) (which are interim visibility goals towards meeting the national visibility goal), defining baseline, current, and natural conditions, and tracking changesin visibility. The regional haze SIPs must contain measures that ensure “reasonable progress” toward the national goal of preventing and remedying visibility impairment in Class I areas caused by manmade air pollution by reducing anthropogenic emissions that cause regional haze. The national goal is a return to natural conditions, i.e., manmade sources of air pollution would no longer impair visibility in Class I areas.

To track changes in visibility over time at each of the 156 Class I areas covered by the visibility program and as part of the process for determining reasonable progress, States must calculate the degree of existing visibility impairment at each Class I area within the State at the time of each regional haze SIP submittal and periodically review progress every five years midway through each 10-year planning period. To do this, the RHR requires States to determine the degree of impairment (in deciviews) for the average of the 20 percent least impaired (“best”) and 20 percent most impaired (“worst”) visibility days over a specified time period at each of their Class I areas. In addition, States must also develop an estimate of natural visibility conditions for the purposes of comparing progress toward the national goal. Natural visibility is determined by estimating the natural concentrations of pollutants that cause visibility impairment and then calculating total light extinction based on those estimates. EPA has provided guidance to States regarding how to calculate baseline, natural and current visibility conditions in documents titled,Guidance for Estimating Natural Visibility Conditions Under the Regional Haze Rule,September 2003, (EPA-454/B-03-005) available atwww.epa.gov/ttncaaa1/t1/memoranda/rh_envcurhr_gd.pdf(hereinafter referred to as “EPA's 2003 Natural Visibility Guidance”), andGuidance for Tracking Progress Under the Regional Haze Rule,September 2003 (EPA-454/B-03-004), available atwww.epa.gov/ttncaaa1/t1/memoranda/rh_tpurhr_gd.pdf(hereinafter referred to as “EPA's 2003 Tracking Progress Guidance”).

For the first regional haze SIPs that were due by December 17, 2007, “baseline visibility conditions” were the starting points for assessing “current” visibility impairment. Baseline visibility conditions represent the degree of impairment for the 20 percent least impaired days and 20 percent most impaired days at the time the regional haze program was established. Using monitoring data from 2000 through 2004, States are required to calculate the average degree of visibility impairment for each Class I area within the State, based on the average of annual values over the five year period. The comparison of initial baseline visibility conditions to natural visibility conditions indicates the amount of improvement necessary to attain natural visibility, while the future comparison of baseline conditions to the then current conditions will indicate the amount of progress made. In general, the 2000-2004 baseline period is considered the time from which improvement in visibility is measured.

The vehicle for ensuring continuing progress towards achieving the natural visibility goal is the submission of a series of regional haze SIPs from the States that establish RPGs for Class I areas for each (approximately) 10-year planning period. The RHR does not mandate specific milestones or rates of progress, but instead calls for States to establish goals that provide for “reasonable progress” toward achieving natural (i.e., “background”) visibility conditions for their Class I areas. In setting RPGs, States must provide for an improvement in visibility for the most impaired days over the (approximately) 10-year period of the SIP, and ensure no degradation in visibility for the least impaired days over the same period.

States have significant discretion in establishing RPGs, but are required to consider the following factors established in the CAA and in EPA's RHR: (1) The costs of compliance; (2) the time necessary for compliance; (3) the energy and non-air quality environmental impacts of compliance; and (4) the remaining useful life of any potentially affected sources. States must demonstrate in their SIPs how these factors are considered when selecting the RPGs for the best and worst days for each applicable Class I area. See 40 CFR 51.308(d)(1)(i)(A). States have considerable flexibility in how they take these factors into consideration, as noted in EPA's July 1, 2007 memorandum from William L. Wehrum, Acting Administrator for Air and Radiation, to EPA Regional Administrators, EPA Regions 1-10, entitledGuidance for Setting Reasonable Progress Goals under the Regional Haze Program(p. 4-2, 5-1)(EPA's Reasonable Progress Guidance). In setting the RPGs, States must also consider the rate of progress needed to reach natural visibility conditions by 2064 (referred to as the “uniform rate of progress” or the “glide path”) and the emission reduction measures needed to achieve that rate of progress over the 10-year period of the SIP. The year 2064 represents a rate of progress which States are to use for analytical comparison to the amount of progress they expect to achieve. In setting RPGs, each State with one or more Class I areas (“Class I State”) must also consult with potentially “contributing States,” i.e., other nearby States with emission sources that may be contributing to visibility impairment at the Class I State's areas. See 40 CFR 51.308(d)(1)(iv).

Section 169A of the CAA directs States to evaluate the use of retrofit controls at certain larger, often uncontrolled, older stationary sources in order to address visibility impacts from these sources. Specifically, the CAA requires States to revise their SIPs to contain such measures as may be necessary to make reasonable progress towards the natural visibility goal, including a requirement that certain categories of existing stationary sources built between 1962 and 1977 procure, install, and operate the “Best Available Retrofit Technology” as determined by the State. (CAA 169A(b)(2)a)).3 States are directed to conduct BART determinations for such sources that may be anticipated to cause or contribute to any visibility impairment in a Class I area. Rather than requiring source-specific BART controls, States also have the flexibility to adopt an emissions trading program or other alternative program as long as the alternative provides greater reasonable progress towards improving visibility than BART.

On July 6, 2005, EPA published theGuidelines for BART Determinations Under the Regional Haze Ruleat Appendix Y to 40 CFR part 51 (hereinafter referred to as the “BART Guidelines”) to assist States in determining which of their sources should be subject to the BART requirements and in determining appropriate emission limits for each applicable source. In making a BART applicability determination for a fossil fuel-fired electric generating plant with a total generating capacity in excess of 750 megawatts (MW), a State must use the approach set forth in the BART Guidelines. A State is encouraged, but not required, to follow the BART Guidelines in making BARTdeterminations for other types of sources.

States must address all visibility impairing pollutants emitted by a source in the BART determination process. The most significant visibility impairing pollutants are sulfur dioxide (SO2), nitrogen oxides (NOX), and particulate matter (PM). EPA has stated that States should use their best judgment in determining whether volatile organic compounds (VOCs), or ammonia (NH3) and ammonia compounds impair visibility in Class I areas.

The RPOs provided air quality modeling to the States to help them in determining whether potential BART sources can be reasonably expected to cause or contribute to visibility impairment in a Class I area. Under the BART Guidelines, States may select an exemption threshold value for their BART modeling, below which a BART eligible source would not be expected to cause or contribute to visibility impairment in any Class I area. The State must document this exemption threshold value in the SIP and must state the basis for its selection of that value. Any source with emissions that model above the threshold value would be subject to a BART determination review. The BART Guidelines acknowledge varying circumstances affecting different Class I areas. States should consider the number of emission sources affecting the Class I areas at issue and the magnitude of the individual sources' impacts. Any exemption threshold set by the State should not be higher than 0.5 deciviews. See 70 FR 39161 (July 6, 2005).

In their SIPs, States must identify potential BART sources, described as “BART-eligible sources” in the RHR, and document their BART control determination analyses. The term “BART-eligible source” used in the BART Guidelines means the collection of individual emission units at a facility that together comprises the BART-eligible source. See 70 FR 39161 (July 6, 2005). In making BART determinations, section 169A(g)(2) of the CAA requires that States consider the following factors: (1) The costs of compliance; (2) the energy and non-air quality environmental impacts of compliance; (3) any existing pollution control technology in use at the source; (4) the remaining useful life of the source; and (5) the degree of improvement in visibility which may reasonably be anticipated to result from the use of such technology. States are free to determine the weight and significance to be assigned to each factor. See 70 FR 39170 (July 6, 2005).

A regional haze SIP must include source-specific BART emission limits and compliance schedules for each source subject to BART. Once a State has made its BART determination, the BART controls must be installed and in operation as expeditiously as practicable, but no later than five years after the date of EPA approval of the regional haze SIP, as required by CAA (section 169(g)(4)) and the RHR (40 CFR 51.308(e)(1)(iv)). In addition to what is required by the RHR, general SIP requirements mandate that the SIP must also include all regulatory requirements related to monitoring, recordkeeping, and reporting for the BART controls on the source. States have the flexibility to choose the type of control measures they will use to meet the requirements of BART.

Forty CFR 51.308(d)(3) of the RHR requires that States include a LTS in their SIPs. The LTS is the compilation of all control measures a State will use to meet any applicable RPGs. The LTS must include “enforceable emissions limitations, compliance schedules, and other measures as necessary to achieve the reasonable progress goals” for all Class I areas within, or affected by emissions from, the State. See 40 CFR 51.308(d)(3).

When a State's emissions are reasonably anticipated to cause or contribute to visibility impairment in a Class I area located in another State, the RHR requires the impacted State to coordinate with the contributing States in order to develop coordinated emissions management strategies. See 40 CFR 51.308(d)(3)(i). In such cases, the contributing State must demonstrate that it has included in its SIP all measures necessary to obtain its share of the emission reductions needed to meet the RPGs for the Class I area. The RPOs have provided forums for significant interstate consultation, but additional consultations between States may be required to sufficiently address interstate visibility issues. This is especially true where two States belong to different RPOs.

States should consider all types of anthropogenic sources of visibility impairment in developing their LTS, including stationary, minor, mobile, and area sources. At a minimum, States must describe how each of the seven factors listed below is taken into account in developing their LTS: (1) Emission reductions due to ongoing air pollution control programs, including measures to address RAVI; (2) measures to mitigate the impacts of construction activities; (3) emissions limitations and schedules for compliance to achieve the RPG; (4) source retirement and replacement schedules; (5) smoke management techniques for agricultural and forestry management purposes including plans as currently exist within the State for these purposes; (6) enforceability of emissions limitations and control measures; (7) the anticipated net effect on visibility due to projected changes in point, area, and mobile source emissions over the period addressed by the LTS. See 40 CFR 51.308(d)(3)(v).

As part of the RHR, EPA revised 40 CFR 51.306(c) regarding the LTS for RAVI to require that the RAVI plan must provide for a periodic review and SIP revision not less frequently than every three years until the date of submission of the State's first plan addressing regional haze visibility impairment, which was due December 17, 2007, in accordance with 40 CFR 51.308(b) and (c). On or before this date, the State must revise its plan to provide for review and revision of a coordinated LTS for addressing reasonably attributable and regional haze visibility impairment, and the State must submit the first such coordinated LTS with its first regional haze SIP. Future coordinated LTS's, and periodic progress reports evaluating progress towards RPGs, must be submitted consistent with the schedule for SIP submission and periodic progress reports set forth in 40 CFR 51.308(f) and 51.308(g), respectively. The periodic reviews of a State's LTS must report on both regional haze and RAVI impairment and must be submitted to EPA as a SIP revision.

Forty CFR 51.308(d)(4) of the RHR includes the requirement for a monitoring strategy for measuring, characterizing, and reporting of regional haze visibility impairment that is representative of all mandatory Class I Federal areas within the State. The strategy must be coordinated with the monitoring strategy required in 40 CFR 51.305 for RAVI. Compliance with this requirement may be met through participation in the IMPROVE network. The monitoring strategy is due with the first regional haze SIP, and it must be reviewed every five years. The monitoring strategy must also provide for additional monitoring sites if the IMPROVE network is not sufficient to determine whether RPGs will be met.

The SIP must also provide for the following:

• Procedures for using monitoring data and other information in a State with mandatory Class I areas to determine the contribution of emissions from within the State to regional haze visibility impairment at Class I areas both within and outside the State;

• Procedures for using monitoring data and other information in a State with no mandatory Class I areas to determine the contribution of emissions from within the State to regional haze visibility impairment at Class I areas in other States;

• Reporting of all visibility monitoring data to the Administrator at least annually for each Class I area in the State, and where possible, in electronic format;

• Developing a statewide inventory of emissions of pollutants that are reasonably anticipated to cause or contribute to visibility impairment in any Class I area. The inventory must include emissions for a baseline year, emissions for the most recent year for which data are available, and estimates of future projected emissions. A State must also make a commitment to update the inventory periodically; and

• Other elements, including reporting, recordkeeping, and other measures necessary to assess and report on visibility.

Forty CFR 51.308(f) of the RHR requires control strategies to cover an initial implementation period extending to the year 2018, with a comprehensive reassessment and revision of those strategies, as appropriate, every 10 years thereafter. Periodic SIP revisions must meet the core requirements of 40 CFR 51.308(d) with the exception of BART. The BART provisions of 40 CFR 51.308(e), as noted above, apply only to the first implementation period. Periodic SIP revisions will assure that the statutory requirement of reasonable progress will continue to be met.

The RHR requires that States consult with FLMs before adopting and submitting their SIPs. See 40 CFR 51.308(i). States must provide FLMs an opportunity for consultation, in person and at least 60 days prior to holding any public hearing on the SIP. This consultation must include the opportunity for the FLMs to discuss their assessment of impairment of visibility in any Class I area and to offer recommendations on the development of the RPGs and on the development and implementation of strategies to address visibility impairment. Further, a State must include in its SIP a description of how it addressed any comments provided by the FLMs. Finally, a SIP must provide procedures for continuing consultation between the State and FLMs regarding the State's visibility protection program, including development and review of SIP revisions, five-year progress reports, and the implementation of other programs having the potential to contribute to impairment of visibility in Class I areas.

On January 29, 2010, NHDES's Air Resources Division submitted revisions to the New Hampshire SIP to address regional haze as required by 40 CFR 51.308. Amended SIP revisions were submitted on January 14, 2011, and August 26, 2011. EPA has reviewed New Hampshire's submittals and is proposing to find that it is consistent with the requirements of 40 CFR 51.308 as outlined in Section II. A detailed analysis follows.

New Hampshire is responsible for developing a regional haze SIP which addresses visibility in New Hampshire's two Class I areas. These areas are the Great Gulf Wilderness and the Presidential Range—Dry River Wilderness, both located within the White Mountains National Forest. The State must also address New Hampshire's impact on any other nearby Class I areas.

New Hampshire is home to two Class I areas: (1) Great Gulf Wilderness Area (Great Gulf); and (2) Presidential Range—Dry River Wilderness Area (Dry River).

In addition to these areas, the MANE-VU RPO contains five other Class I areas in three States: Lye Brook Wilderness Area in Vermont; Acadia National Park, Moosehorn Wilderness Area and Roosevelt Campobello International Park in Maine; and the Brigantine Wilderness Area in New Jersey.

The New Hampshire regional haze SIP establishes RPGs for visibility improvement at its Class I areas and a LTS to achieve those RPGs within the first regional haze implementation period ending in 2018. In developing the RPG for each Class I area, New Hampshire considered both emission sources inside and outside of New Hampshire that may cause or contribute to visibility impairment in New Hampshire's Class I area. The State also identified and considered emission sources within New Hampshire that may cause or contribute to visibility impairment in Class I areas in neighboring States as required by 40 CFR 51.308(d)(3). The MANE-VU RPO worked with the State in developing the technical analyses used to make these determinations, including State-by-State contributions to visibility impairment in specific Class I areas, which included the two areas in New Hampshire and those areas affected by emissions from New Hampshire.

As required by the RHR and in accordance with EPA's 2003 Natural Visibility Guidance, New Hampshire calculated baseline/current and natural conditions for its Class I areas.

Natural background refers to visibility conditions that existed before human activities affected air quality in the region. The national goal, as set out in the Clean Air Act, is a return to natural visibility conditions.

Estimates of natural visibility conditions are based on annual average concentrations of fine particle components. The IMPROVE4 equation is a formula for estimating light extinction from species measured by the IMPROVE monitors. As documented in EPA's 2003 Natural Visibility Guidance, EPA determined, with concurrence from the IMPROVE Steering Committee, that States may use a “refined approach” to the then current IMPROVE formula to estimate the values that characterize the natural visibility conditions of the Class I areas. The purpose of the refinement to the “old IMPROVE equation” is to provide more accurate estimates of the various factors that affect the calculation of light extinction. The new IMPROVE equation takes into account the most recent review of the science5 andaccounts for the effect of particle size distribution on light extinction efficiency of sulfate, nitrate, and organic carbon. It also adjusts the mass multiplier for organic carbon (particulate organic matter) by increasing it from 1.4 to 1.8. New terms are added to the equation to account for light extinction by sea salt and light absorption by gaseous nitrogen dioxide. Site-specific values are used for Rayleigh scattering (scattering of light due to atmospheric gases) to account for the site-specific effects of elevation and temperature. Separate relative humidity enhancement factors are used for small and large size distributions of ammonium sulfate and ammonium nitrate and for sea salt. The terms for the remaining contributors, elemental carbon (light-absorbing carbon), fine soil, and coarse mass terms, do not change between the original and new IMPROVE equations. New Hampshire opted to use this refined approach, referred to as the “new IMPROVE equation,” for its two areas.

Natural visibility conditions using the new IMPROVE equation were calculated separately for each Class I area by MANE-VU. EPA is proposing to find that the best and worst 20 percent natural visibility values for Great Gulf and Dry River (shown in Table 1) were calculated using the EPA guidelines.

Great Gulf and Dry River do not contain an IMPROVE monitor. In cases where onsite monitoring is not available, 40 CFR 51.308(d)(2)(i) requires States to use the most representative monitoring available for the 2000-2004 period to establish baseline visibility conditions, in consultation with EPA. New Hampshire used, and EPA concurs with the use of, 2000-2004 data from the IMPROVE monitor located at Camp Dodge in Pinkham Notch, New Hampshire as representative of Great Gulf and Dry River. The Camp Dodge IMPROVE monitor is adjacent to the Great Gulf area.

As explained in Section II.B, for the first regional haze SIP, baseline visibility conditions are the same as current conditions. A five-year average of the 2000-2004 monitoring data was calculated for each of the 20 percent worst and 20 percent best visibility days for Great Gulf and Dry River. IMPROVE data records for the period 2000-2004 meet the EPA requirements for data completeness. See page 2-8 of EPA's 2003 Tracking Progress Guidance.

For the New Hampshire Class I areas, baseline visibility conditions on the 20 percent worst days are 22.8 deciviews at Great Gulf and Dry River. Natural visibility conditions for these areas are estimated to be 12.0 dv on the 20 percent worst visibility days. The natural and background conditions for Great Gulf and Dry River for both the 20 percent worst and 20 percent best days are presented in Table 1 below.

In setting the RPGs, New Hampshire considered the uniform rate of progress needed to reach natural visibility conditions by 2064 (“glide path”) and the emission reduction measures needed to achieve that rate of progress over the period of the SIP to meet the requirements of 40 CFR 51.308(d)(1)(i)(B). As explained in EPA's Reasonable Progress Guidance document, the uniform rate of progress is not a presumptive target, and RPGs may be greater, lesser, or equivalent to the glide path.

For Great Gulf and Dry River, the overall visibility improvement necessary to reach natural conditions is the difference between the baseline visibility of 22.8 dv and natural background visibility of 12.0 dv, or an improvement of 10.8 dv for the 20 percent worst visibility days. New Hampshire must also ensure no degradation in visibility for the best 20 percent visibility days over the same period in accordance with 40 CFR 51.308(d)(1).

New Hampshire's SIP submittal presents two graphs, one for the 20 percent best days, and one for the 20 percent worst days, for its Class I areas. New Hampshire constructed the graphs for the worst days (i.e., the glide path) in accordance with EPA's 2003 Tracking Progress Guidance by plotting a straight graphical line from the baseline level of visibility impairment for 2000-2004 to the level of natural visibility conditions in 2064. For the best days, the graph includes a horizontal, straight line spanning from baseline conditions in 2004 out to 2018 to depict no degradation in visibility over the implementation period of the SIP. New Hampshire's SIP shows that the State's RPG for its Class I areas provide for improvement in visibility for the 20 percent worst days over the period of the implementation plan and ensure no degradation in visibility for the 20 percent best visibility days over the same period in accordance with 40 CFR 51.308(d)(1).

As a State containing two Class I areas, 40 CFR 51.308(d)(1) of the RHR requires New Hampshire to develop the reasonable progress goals for visibility improvement during the first planning period.

An important step toward identifying reasonable progress measures is to identify the key pollutants contributing to visibility impairment at each Class I area. To understand the relative benefit of further reducing emissions from different pollutants, MANE-VU developed emission sensitivity model runs using EPA's Community Multiscale Air Quality (CMAQ) air quality model6 to evaluate visibility and air quality impacts from various groups of emissions and pollutant scenarios in the Class I areas on the 20 percent worst visibility days.

Regarding which pollutants are most significantly impacting visibility in the MANE-VU region, MANE-VU's contribution assessment demonstrated that sulfate is the major contributor to PM2.5mass and visibility impairment at Class I areas in the Northeast and Mid-Atlantic Region.7 Sulfate particles commonly account for more than 50 percent of particle-related light extinction at northeastern Class I areas on the clearest days and for as much as, or more than, 80 percent on the haziest days. For example, at the Brigantine National Wildlife Refuge Class I area (the MANE-VU Class I area with the greatest visibility impairment), on the 20 percent worst visibility days in 2000 through 2004, sulfate accounted for 66 percent of the particle extinction. After sulfate, organic carbon (OC) consistently accounts for the next largest fraction of light extinction. Organic carbon accounted for 13 percent of light extinction on the 20 percent worst visibility days for Brigantine, followed by nitrate that accounts for 9 percent of light extinction.

The emissions sensitivity analyses conducted by MANE-VU predict that reductions in SO2emissions from EGU and non-EGU industrial point sources will result in the greatest improvements in visibility in the Class I areas in the MANE-VU region, more than any other visibility-impairing pollutant. As a result of the dominant role of sulfate in the formation of regional haze in the Northeast and Mid-Atlantic Region, MANE-VU concluded that an effective emissions management approach would rely heavily on broad-based regional SO2control efforts in the eastern United States.

Through source apportionment modeling, MANE-VU assisted States in determining their contribution to the visibility impairment of each Class I area in the MANE-VU region. New Hampshire and the other MANE-VU States adopted a weight-of-evidence approach which relied on several independent methods for assessing the contribution of different sources and geographic source regions to regional haze in the northeastern and mid-Atlantic portions of the United States. Details about each technique can be found in the NESCAUM DocumentContributions to Regional Haze in the Northeast and Mid-Atlantic United States,August 2006 (hereinafter referred to as “Contribution Report”).8

The MANE-VU Class I States determined that any State contributing at least 2% of the total sulfate observed on the 20 percent worst visibility days in 2002 were contributors to visibility impairment at the Class I area. Connecticut, Rhode Island, Vermont, and the District of Columbia were determined to contribute less than 2% of sulfate at any of the Northeast Class I areas. States found to contribute 2% or more of the sulfate at any of the MANE-VU Class I areas were: Georgia, Illinois, Indiana, Kentucky, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, and West Virginia.

The contribution of New Hampshire emissions to the total sulfate was determined to contribute to the visibility impairment in not only the New Hampshire Class I areas (3.95% of total sulfate), but Acadia National Park in Maine as well (2.25% of total sulfate). The impact of sulfate on visibility is discussed in greater detail below.

EPA is proposing to find that NHDES has adequately demonstrated that emissions from New Hampshire sources contribute to visibility impairment in nearby Class I Areas.

In developing the 2018 reasonable progress goal, New Hampshire relied primarily upon the information and analysis developed by MANE-VU to meet this requirement. Based on the Contribution Report, MANE-VU focused on SO2as the dominant contributor to visibility impairment at all MANE-VU Class I areas during all seasons. In addition, the Contribution Report found that only 25 percent of the sulfate at the MANE-VU Class I areas originate in the MANE-VU States. Sources in the Midwest and Southeast regions were responsible for 15 to 25 percent, respectively. Point sources dominated the inventory of SO2emissions. Therefore, MANE-VU's strategy includes additional measures to control sources of SO2both within the MANE-VU region and in other States that were determined to contribute to regional haze at the MANE-VU Class I Areas.

Based on information from the Contribution Report and additional emission inventory analysis, MANE-VU and New Hampshire identified the following source categories for further examination for reasonable controls:

• Coal and oil-fired Electrical Generating Units (EGUs);

• Point and area source industrial, commercial and institutional boilers;

• Cement and Lime Kilns;

• Heating Oil; and

• Residential wood combustion.

As discussed in Section II.C above, New Hampshire must consider the following factors in developing the RPGs: (1) The cost of compliance; (2) the time necessary for compliance; (3) the energy and non-air quality environmental impacts of compliance; and (4) the remaining useful life of any potentially affected sources. MANE-VU's four factor analysis can be found in “Assessment of Reasonable Progress for Regional Haze in MANE-VU Class I Areas,”July 9, 2007, otherwise known as the Reasonable Progress Report.9

New Hampshire and the other MANE-VU States reviewed the Reasonable Progress Report, consulted with one another about possible control measures, and agreed to the following measures as recommended strategies for making reasonable progress: implementation of BART requirements; a 90 percent reduction in SO2emissions from 167 EGU emission points10 (or if it is infeasible to achieve that level of reduction from a unit, alternative measures will be pursued in such State); and a low sulfur fuel oil strategy. These measures are collectively known as the MANE-VU “Ask.”

MANE-VU used model projections to calculate the RPG for the Class I areas in the MANE-VU region. The projected improvement in visibility due to emission reductions expected by the end of the first period, 2018, is shown in Table 2.

At the time of MANE-VU modeling (discussed in further detail in Section III.E.2), some of the other States with sources potentially impacting visibility, in the Class I areas in both New Hampshire and the rest of the MANE-VU domain, had not yet made final control determinations for BART, and thus, these controls are not included in the modeling prepared by MANE-VU and used by New Hampshire. This is a conservative approach because additional emission reductions could result from the application of BART controls. The modeling conducted by MANE-VU demonstrates that the 2018 control scenario (2018 projection) provides for an improvement in visibility greater than the uniform rate of progress for the New Hampshire Class I areas for the most impaired days over the period of the implementation plan and ensures no degradation in visibility for the least impaired days over the same period.

Consistent with EPA guidance at the time, the MANE-VU modeling included reductions from the Clean Air Interstate Rule (CAIR) in estimating the RPGs for 2018. The regional haze provisions specify that a State may not adopt a RPG that represents less visibility improvement than is expected to result from other CAA requirements during the implementation period. See 40 CFR 51.308(d)(1)(vi). Therefore, in estimating the RPGs for 2018, many States took into account emission reductions anticipated from CAIR. MANE-VU initially reduced emissions from highest impacting 167 EGUs by ninety percent. However, many of the units targeted for the 90% reduction were part of the CAIR program. Since the 90% reduction was larger, in total tons of emissions reduced, than the reductions expected from CAIR, MANE-VU added the excess emissions back into the inventory to account for trading of the emission credits across the modeling domain. This way, MANE-VU States would not overestimate the emission reductions or the related visibility improvement if States used the CAIR program as their response to the MANE-VU's “Ask” of ninety percent reduction from the 167 EGUs in the eastern United States.

The RPGs for Great Gulf and Dry River in New Hampshire are based on modeled projections of future emissions that were developed using the best available information at the time the analysis was completed. While MANE-VU's emission inventory used for modeling included estimates of future emission growth, projections can change as additional information regarding future conditions becomes available. It would be both impractical and resource-intensive to require a State to continually adjust the RPG every time an event affecting these future projections changed. EPA recognized the problems of a rigid requirement to meet a long-term goal based on modeled projections of future visibility conditions, and addressed the uncertainties associated with RPGs in several ways. EPA made clear in the RHR that the RPG is not a mandatory standard which must be achieved by a particular date. See 64 FR 35733. At the same time, EPA established a requirement for a five-year, midcourse review and, if necessary, correction of the States' regional haze plans. See 40 CFR 52.308(g). In particular, the RHR calls for a five-year progress review after submittal of the initial regional haze plan. The purpose of this progress review is to assess the effectiveness of emission management strategies in meeting the RPG and to provide an assessment of whether current implementation strategies are sufficient for the State or affected States to meet their RPGs. If a State concludes, based on its assessment, that the RPGs for a Class I area will not be met, the RHR requires the State to take appropriate action. See 40 CFR 52.308(h). The nature of the appropriate action will depend on the basis for the State's conclusion that the current strategies are insufficient to meet the RPGs. In its SIP submittal, New Hampshire commits to the midcourse review and submitting revisions to the regional haze plan where necessary. Therefore, EPA is proposing to approve New Hampshire's RPG for the first regional haze planning period irrespective of the status of CAIR and irrespective of the associated issues regarding the adequacy of other State's plans. For similar reasons, EPA believes the approvability of the New Hampshire plan is not affected by the status of the Cross State Air Pollution Rule, which was promulgated on August 8, 2011 (76 FR 48208), and stayed on December 30, 2011. (EME Homer City Generation, L.P. v. EPA, Civ. No. 11-1302, slip op. (DC Cir. Dec. 30, 2011), available atwww.epa.gov/airtransport/pdfs/CourtDecision.pdf.)

Determining BART-eligible sources is the first step in the BART process. The New Hampshire BART-eligible sources were identified in accordance with the methodology in Appendix Y of the Regional Haze Rule,Guidelines for BART Determinations Under the Regional Haze Rule, Part II, How to Identify BART-Eligible Sources.See 70 FR 39158. This guidance consists of the following criteria:

• The unit falls into one of the listed source categories;

• The unit was constructed or reconstructed between 1962 and 1977; and

• The unit has the potential to emit over 250 tons per year of sulfur dioxide, nitrogen oxides, particulate matter, volatile organic compounds, or ammonia.

The BART Guidelines requires States to address SO2, NOX, and particulate matter. States are allowed to use their best judgment in deciding whether VOC or ammonia emissions from a source are likely to have an impact on visibility in the area. The State of New Hampshire addressed SO2, NOX, and used particulate matter less than 10 microns in diameter (PM10) as an indicator for particulate matter to identify BART eligible units, as the BART Guidelines require. Consistent with the BART Guidelines, the State of New Hampshire did not evaluate emissions of VOCs and ammonia in BART determinations due to the lack of impact on visibility in the area due to anthropogenic sources. The majority of VOC emissions in New Hampshire are biogenic in nature, especially near the New Hampshire Class I areas. Therefore, the ability to further reduce total ambient VOC concentrations at Class I areas islimited. Point, area, and mobile sources of VOCs in New Hampshire are already comprehensively controlled as part of ozone attainment and maintenance strategy. In respect to ammonia, the overall ammonia inventory is very uncertain, but the amount of anthropogenic emissions at sources that were BART-eligible is relatively small, and no additional sources were identified that had greater than 250 tons per year ammonia and required a BART analysis.

The identification of BART sources in New Hampshire was undertaken as part of a multi-State analysis conducted by the Northeast States for Coordinated Air Use Management (NESCAUM). NESCAUM worked with NH DES licensing engineers to review all sources and determine their BART eligibility. NH DES identified two sources as BART-eligible. These sources are listed below.

New Hampshire, working with MANE-VU, found that every MANE-VU State with BART-eligible sources contributes to visibility impairment at one or more Class I areas to a significant degree (see the Contribution Report). According to Section III of the 2005 Regional Haze Rule, once the State has compiled its list of BART-eligible sources, it needs to determine whether to make BART determinations for all of the sources or to consider exempting some of them from BART because they may not reasonably be anticipated to cause or contribute to any visibility impairment in a Class I area. Because both of the BART-eligible sources in New Hampshire contribute to visibility impairment to a significant degree, they are both subject to BART.

Forty CFR 51.308(e)(1)(ii)(A) requires that, for each BART-eligible source within the State, any BART determination must be based on an analysis of the best system of continuous emission control technology available and the associated emission reductions achievable. In addition to considering available technologies, this analysis must evaluate five specific factors for each source: (1) The costs of compliance; (2) the energy and non-air quality environmental impacts of compliance; (3) any existing pollution control technology in use at the source; (4) the remaining useful life of the source; and (5) the degree of visibility improvement which may reasonably be anticipated from the use of BART.

To address the fifth factor, the degree of visibility improvement which may be reasonably anticipated from the use of BART, NH DES conducted California Puff Model (CALPUFF) and CALGRID photochemical grid11 modeling analyses to assess the visibility effects of BART controls for both PSNH Merrimack Station Unit MK2 and PSNH Newington Station Unit NT1. For theses analyses, NH DES ran the CALPUFF model for each unit under uncontrolled (current allowable) and controlled conditions (post-control scenarios being assessed). Results were tabulated for the average of the 20% worst natural visibility days at each nearby Class I area and the 20% worst baseline visibility modeled day at each nearby Class I area. For any pair of control levels evaluated, the difference in the level of impairment predicted is the degree of improvement in visibility expected.

The following section discusses the BART determinations for sources in New Hampshire.

i. Background

PSNH Merrimack Station has two coal-fired steam-generating boilers. Only one of the boilers (MK2) is subject to BART, the other unit (MK1) was put into operation prior to 1962.

Unit MK2 is a wet bottom, cyclone-type boiler with a heat input rating of 3,473 MMBtu/hr and an electrical output of 320 MW. The unit is currently equipped with selective catalytic reduction (SCR) for NOXcontrol, and two electrostatic precipitators (ESPs) operated in series to capture particulate matter (PM) in the flue gases.

(1) PM BART Review:PM levels are currently controlled with two dry ESPs in combination with fly ash reinjection. These existing ESPs were previously upgraded to include state-of-the-art electronic controls. Adding a third ESP was found to be unreasonable due to space limitations. The current permit limit for this unit is 0.227 lb of total suspended particulate (TSP)/million british thermal unit (MMBtu). Limited stack tests indicate that the actuall TSP emission rate is much lower, averaging 0.034 lb TSP/MMBtu. The NH DES model scenario of upgrading the current ESPs to 90% control resulted in a visibility improvement of 0.16 dv at Acadia, 0.12 dv at Great Gulf, and 0.03 dv at Lye Brook.

NH DES determined that the installation of additional PM controls is unlikely to result in substantial visibility improvement. However, based on the limited available stack test data, NH DES determined that the current emission limit of 0.227 lb/MMBtu was not reflective of the performance capabilities of the control equipment. The MANE-VU recommended particulate matter limit for non-CAIR EGUs is 0.02-0.04 lb/MMBtu.12 New Hampshire has adopted a new regulation13 which places Units MK1 and MK2 within a regulatory “bubble” for the purposes of TSP compliance. The revised emission limit is 0.08 lb TSP/MMBtu for both Units MK1 and MK2. New Hampshire defined this level of control as BART.