[Federal Register Volume 82, Number 166 (Tuesday, August 29, 2017)]
[Proposed Rules]
[Pages 40963-40970]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18290]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 82, No. 166 / Tuesday, August 29, 2017 /
Proposed Rules
[[Page 40963]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R02-OAR-2017-0425, FRL-9967-04-Region 2]
Approval of Air Quality Implementation Plans; New York; Cross-
State Air Pollution Rule; NOX Annual and SO2 Group 1 Trading Programs
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
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SUMMARY: The Environmental Protection Agency (EPA) is proposing to
conditionally approve a revision to the New York State Implementation
Plan (SIP) addressing requirements of the Cross-State Air Pollution
Rule (CSAPR). Under the CSAPR, large electricity generating units in
New York are subject to Federal Implementation Plans (FIPs) requiring
the units to participate in CSAPR federal trading programs for annual
emissions of nitrogen oxides (NOX), ozone season emissions
of NOX, and annual emissions of sulfur dioxide
(SO2). This action proposes to conditionally approve into
New York's SIP the State's regulations that replace the default
allowance allocation provisions of the CSAPR federal trading programs
for annual NOX and SO2 emissions. At this time,
EPA is not taking action on the portion of New York's SIP submittal
addressing NOX ozone season emissions. EPA is proposing to
conditionally approve New York's regulations for annual NOX
and SO2 emissions because, while the submitted rules do not
fully conform to CSAPR, New York is in the process of making further
revisions to its rules and has provided a commitment to finalize and
submit them by December 29, 2017. Upon timely meeting of this
commitment, EPA will propose to convert the conditional approval of the
SIP revision to a full approval.
DATES: Comments must be received on or before September 28, 2017.
ADDRESSES: Submit your comments, identified by Docket ID number EPA-
R02-OAR-2017-0425, at http://www.regulations.gov. Follow the online
instructions for submitting comments. Once submitted, comments cannot
be edited or withdrawn. The EPA may publish any comment received to its
public docket. Do not submit electronically any information you
consider to be Confidential Business Information (CBI) or other
information whose disclosure is restricted by statute. Multimedia
submissions (audio, video, etc.) must be accompanied by a written
comment. The written comment is considered the official comment and
should include discussion of all points you wish to make. The EPA will
generally not consider comments or comment contents located outside of
the primary submission (i.e., on the web, cloud, or other file sharing
system). For additional submission methods, the full EPA public comment
policy, information about CBI or multimedia submissions, and general
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.
FOR FURTHER INFORMATION CONTACT: Kenneth Fradkin, Air Programs Branch,
Environmental Protection Agency, 290 Broadway, 25th Floor, New York,
New York 10007-1866, (212) 637-3702, or by email at
[email protected].
SUPPLEMENTARY INFORMATION:
Table of Contents
I. What is EPA's proposed action?
II. Background on CSAPR and CSAPR-Related SIP Revisions
III. Criteria for Approval of CSAPR-Related SIP Revisions
IV. New York's Submittal and EPA's Analysis
V. EPA's Proposed Action on New York's Submittal
VI. Incorporation by Reference
VII. Statutory and Executive Order Reviews
I. What is EPA's proposed action?
Pursuant to Section 110(k)(4) of the Clean Air Act (CAA), EPA is
proposing to conditionally approve portions of New York's December 1,
2015 SIP submittal concerning CSAPR \1\ trading programs for annual
emissions of NOX and SO2. Large Electric
Generating Units (EGUs) in New York are subject to CSAPR FIPs that
require the units to participate in the federal CSAPR NOX
Annual Trading Program and the federal CSAPR SO2 Group 1
Trading Program. CSAPR provides a process for the submission and
approval of SIP revisions to replace certain provisions of the CSAPR
FIPs while the remaining FIP provisions continue to apply. This type of
CSAPR SIP is termed an abbreviated SIP.
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\1\ Federal Implementation Plans; Interstate Transport of Fine
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR
48208 (August 8, 2011) (codified as amended at 40 CFR 52.38 and
52.39 and 40 CFR part 97).
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The New York State Department of Environmental Conservation (DEC)
amended portions of Title 6 of the New York Codes, Rules and
Regulations (6 NYCRR) in order to incorporate CSAPR requirements into
the State's rules and allow the DEC to allocate CSAPR allowances to
regulated entities in New York. 6 NYCRR Part 244, ``CAIR NOX
Annual Trading Program,'' has been repealed and replaced in its
entirety with a new rule, 6 NYCRR Part 244, ``Transport Rule
NOX Annual Trading Program.'' 6 NYCRR Part 245, ``CAIR
SO2 Trading Program,'' has also been repealed and replaced
in its entirety with a new rule, 6 NYCRR Part 245, ``Transport Rule
SO2 Group 1 Trading Program.'' Attendant revisions were made
to 6 NYCRR Part 200, ``General Provisions,'' to update the list of
referenced materials that are cited in the amended New York
regulations. EPA is proposing to conditionally approve into the SIP the
revised versions of 6 NYCRR Parts 200, 244 and 245.
This SIP revision is being proposed for conditional approval as
opposed to a full approval because of several deficiencies that must be
addressed as discussed in section IV of this notice. The proposed
conditional approval of portions of New York's SIP submittal is
conditioned on DEC meeting the commitment, articulated in its letters
dated July 14, 2016, March 4, 2017, and July 6, 2017, to make the
necessary revisions to 6 NYCRR Parts 200, 244, and 245 to meet the
requirements of the CAA and EPA's regulations for approval of an
abbreviated SIP revision to replace EPA's default allocations of CSAPR
emission allowances with state-determined allocations. The July 6, 2017
letter from DEC committed to submitting a SIP revision by December 29,
2017. The date supersedes the dates identified in the July 14, 2016,
and
[[Page 40964]]
March 24, 2017 letters.\2\ Once EPA determines that the DEC has
satisfied these conditions and EPA approves the revisions (after EPA
notice and comment), EPA shall remove the conditional approval and this
SIP revision will at that time receive full approval status. The
conditionally approved SIP submission will remain part of the SIP until
EPA takes further action. If New York fails to meet its commitment to
submit a revised SIP by December 29, 2017 [i.e., the date of commitment
from the state's July 6, 2017 letter], the conditional approval is
treated as a disapproval.
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\2\ In their July 6, 2017 letter, the DEC indicated they needed
additional time to complete their rulemaking.
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This action proposes to conditionally approve into New York's SIP
state-determined allowance allocation procedures for annual
NOX and SO2 allowances that would replace EPA's
default allocation procedures for the control periods in 2017 and
beyond. The proposed approval of this SIP revision does not alter any
provision of either the CSAPR NOX Annual Trading Program or
the CSAPR SO2 Group 1 Trading Program as applied to New York
units other than the allowance allocation provisions, and the FIP
provisions requiring those units to participate in the programs (as
modified by this SIP revision) remain in place.
New York also repealed 6 NYCRR Part 243, ``CAIR NOX
Ozone Season Trading Program,'' and replaced it in its entirety with a
new rule, 6 NYCRR Part 243, ``Transport Rule NOX Ozone
Season Trading Program,'' which was included in New York's December 1,
2015 SIP submittal. EPA is not proposing to act at this time on the
portion of New York's SIP submittal addressing 6 NYCRR Part 243. Since
New York's December 1, 2015 submission, EPA has finalized the CSAPR
Update rule \3\ to address Eastern states' interstate air pollution
mitigation obligations with regard to the 2008 Ozone National Ambient
Air Quality Standard (NAAQS). Among other things, starting in 2017 the
CSAPR Update requires New York EGUs to participate in the new CSAPR
NOX Ozone Season Group 2 Trading Program instead of the
earlier CSAPR NOX Ozone Season Trading Program (now renamed
the ``Group 1'' program) and replaces the ozone season budget for New
York with a lower budget developed to address the revised and more
stringent 2008 Ozone NAAQS. In DEC's July 14, 2016 commitment letter to
EPA, New York indicated that the State would revise 6 NYCRR Part 243 to
conform with the final CSAPR Update. For this reason, EPA is proposing
to act at this time only on 6 NYCRR Parts 200, 244 and 245.
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\3\ 81 FR 74504 (October 26, 2016).
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Section II of this document summarizes relevant aspects of the
CSAPR federal trading programs and FIPs as well as the range of
opportunities states have to submit SIP revisions to modify or replace
the FIP requirements while continuing to rely on CSAPR's trading
programs to address the states' obligations to mitigate interstate air
pollution. Section III describes the specific criteria for approval of
such SIP revisions. Section IV contains EPA's analysis of New York's
SIP submittal, and Section V sets forth EPA's action on the submittal.
II. Background on CSAPR and CSAPR-Related SIP Revisions
EPA issued CSAPR in July 2011 to address the requirements of CAA
section 110(a)(2)(D)(i)(I) concerning interstate transport of air
pollution. As amended (including the 2016 CSAPR Update), CSAPR requires
27 Eastern states to limit their statewide emissions of SO2
and/or NOX in order to mitigate transported air pollution
unlawfully impacting other states' ability to attain or maintain four
NAAQS: The 1997 annual PM2.5 NAAQS, the 2006 24-hour
PM2.5 NAAQS, the 1997 Ozone NAAQS, and the 2008 Ozone NAAQS.
The CSAPR emissions limitations are defined in terms of maximum
statewide ``budgets'' for emissions of annual SO2, annual
NOX, and/or ozone-season NOX by each covered
state's large EGUs. The CSAPR state budgets are implemented in two
phases of generally increasing stringency, with the Phase 1 budgets
applying to emissions in 2015 and 2016 and the Phase 2 (and CSAPR
Update) budgets applying to emissions in 2017 and later years. As a
mechanism for achieving compliance with the emissions limitations,
CSAPR establishes five federal emissions trading programs: A program
for annual NOX emissions, two geographically separate
programs for annual SO2 emissions, and two geographically
separate programs for ozone-season NOX emissions. CSAPR also
establishes FIP requirements applicable to the large EGUs in each
covered state. The CSAPR FIP provisions require each state's EGUs to
participate in up to three of the five CSAPR trading programs.
CSAPR includes provisions under which states may submit and EPA
will approve SIP revisions to modify or replace the CSAPR FIP
requirements while allowing states to continue to meet their transport-
related obligations using either CSAPR's federal emissions trading
programs or state emissions trading programs integrated with the
federal programs.\4\ Through such a SIP revision, a state may replace
EPA's default provisions for allocating emission allowances among the
state's units, employing any state-selected methodology to allocate or
auction the allowances, subject to timing criteria and limits on
overall allowance quantities. In the case of CSAPR's federal trading
programs for ozone-season NOX emissions (or integrated state
trading programs), a state may also expand trading program
applicability to include certain smaller EGUs.\5\ If a state wants to
replace CSAPR FIP requirements with SIP requirements under which the
state's units participate in a state trading program that is integrated
with and identical to the federal trading program even as to the
allocation and applicability provisions, the state may submit a SIP
revision for that purpose as well. However, no emissions budget
increases or other substantive changes to the trading program
provisions are allowed. A state whose units are subject to multiple
CSAPR FIPs and federal trading programs may submit SIP revisions to
modify or replace either some or all of those FIP requirements.
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\4\ See 40 CFR 52.38, 52.39. States also retain the ability to
submit SIP revisions to meet their transport-related obligations
using mechanisms other than the CSAPR federal trading programs or
integrated state trading programs.
\5\ States covered by both the CSAPR Update and the
NOX SIP Call have the additional option to expand
applicability under the CSAPR NOX Ozone Season Group 2
Trading Program to include non-EGUs that would have participated in
the former NOX Budget Trading Program.
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States can submit two basic forms of CSAPR-related SIP revisions
effective for emissions control periods in 2017 or later years.\6\
Specific criteria for approval of each form of SIP revision are set
forth in the CSAPR regulations, as described in section III below.
Under the first alternative--an ``abbreviated'' SIP revision--a state
may submit a SIP revision that upon approval replaces the default
allowance allocation and/or applicability provisions of a CSAPR federal
trading program for the state.\7\ Approval of an abbreviated SIP
revision leaves the corresponding CSAPR FIP and all other provisions of
the relevant federal trading program in place for the state's units.
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\6\ CSAPR also provides for a third, more streamlined form of
SIP revision that is effective only for control periods in 2016 and
is not relevant here. See Sec. 52.38(a)(3), (b)(3), (b)(7); Sec.
52.39(d), (g).
\7\ Sec. 52.38(a)(4), (b)(4), (b)(8); Sec. 52.39(e), (h).
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Under the second alternative--a ``full'' SIP revision--a state may
submit a SIP revision that upon approval
[[Page 40965]]
replaces a CSAPR federal trading program for the state with a state
trading program integrated with the federal trading program, so long as
the state trading program is substantively identical to the federal
trading program or does not substantively differ from the federal
trading program except as discussed above with regard to the allowance
allocation and/or applicability provisions.\8\ For purposes of a full
SIP revision, a state may either adopt state rules with complete
trading program language, incorporate the federal trading program
language into its state rules by reference (with appropriate conforming
changes), or employ a combination of these approaches.
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\8\ Sec. 52.38(a)(5), (b)(5), (b)(9); Sec. 52.39(f), (i).
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The CSAPR regulations identify several important consequences and
limitations associated with approval of a full SIP revision. First,
upon EPA's approval of a full SIP revision as correcting the deficiency
in the state's SIP that was the basis for a particular set of CSAPR FIP
requirements, the obligation to participate in the corresponding CSAPR
federal trading program is automatically eliminated for units subject
to the state's jurisdiction without the need for a separate EPA
withdrawal action, so long as EPA's approval of the SIP is full and
unconditional.\9\ Second, approval of a full SIP revision does not
terminate the obligation to participate in the corresponding CSAPR
federal trading program for any units located in any Indian country
within the borders of the state, and if and when a unit is located in
Indian country within a state's borders, EPA may modify the SIP
approval to exclude from the SIP, and include in the surviving CSAPR
FIP instead, certain trading program provisions that apply jointly to
units in the state and to units in Indian country within the state's
borders.\10\ Finally, if at the time a full SIP revision is approved
EPA has already started recording allocations of allowances for a given
control period to a state's units, the federal trading program
provisions authorizing EPA to complete the process of allocating and
recording allowances for that control period to those units will
continue to apply, unless EPA's approval of the SIP revision provides
otherwise.\11\
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\9\ Sec. 52.38(a)(6), (b)(10(i); Sec. 52.39(j).
\10\ Sec. 52.38(a)(5)(iv)-(v), (a)(6), (b)(5)(v)-(vi),
(b)(9)(vi)-(vii), (b)(10)(i); Sec. 52.39(f)(4)-(5), (i)(4)-(5),
(j).
\11\ Sec. 52.38(a)(7), (b)(11)(i); Sec. 52.39(k).
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III. Criteria for Approval of CSAPR-Related SIP Revisions
Each CSAPR-related abbreviated or full SIP revision must meet the
following general submittal criteria:
Timeliness and completeness of SIP submittal. If a state
wants to replace the default allowance allocation or applicability
provisions of a CSAPR federal trading program, the complete SIP
revision must be submitted to EPA by December 1 of the year before the
deadlines described below for submitting allocation or auction amounts
to EPA for the first control period for which the state wants to
replace the default allocation and/or applicability provisions.\12\
This SIP submission deadline is inoperative in the case of a SIP
revision that seeks only to replace a CSAPR FIP and federal trading
program with a SIP and a substantively identical state trading program
integrated with the federal trading program. The SIP submittal
completeness criteria in section 2.1 of appendix V to 40 CFR part 51
also apply.
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\12\ 40 CFR 52.38(a)(4)(ii), (a)(5)(vi), (b)(4)(iii),
(b)(5)(vii), (b)(8)(iv), (b)(9)(viii); Sec. 52.39(e)(2), (f)(6),
(h)(2), (i)(6).
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In addition to the general submittal criteria, a CSAPR-related
abbreviated or full SIP seeking to address the allocation or auction of
emission allowances must meet the following further criteria:
Methodology covering all allowances potentially requiring
allocation. For each federal trading program addressed by a SIP
revision, the SIP revision's allowance allocation or auction
methodology must replace both the federal program's default allocations
to existing units \13\ at 40 CFR 97.411(a), 97.511(a), 97.611(a),
97.711(a), or 97.811(a) as applicable, and the federal trading
program's provisions for allocating allowances from the new unit set-
aside (NUSA) for the state at 40 CFR 97.411(b)(1) and 97.412(a),
97.511(b)(1) and 97.512(a), 97.611(b)(1) and 97.612(a), 97.711(b)(1)
and 97.712(a), or 97.811(b)(1) and 97.812(a), as applicable.\14\ In the
case of a state with Indian country within its borders, while the SIP
revision may neither alter nor assume the federal program's provisions
for administering the Indian country NUSA for the state, the SIP
revision must include procedures addressing the disposition of any
otherwise unallocated allowances from an Indian country NUSA that may
be made available for allocation by the state after EPA has carried out
the Indian country NUSA allocation procedures.\15\
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\13\ In the context of the approval criteria for CSAPR-related
SIP revisions, an ``existing unit'' is a unit for which EPA has
determined default allowance allocations (which could be allocations
of zero allowances) in the rulemakings establishing and amending
CSAPR. A spreadsheet showing EPA's default allocations to existing
units is posted at www.epa.gov/crossstaterule/techinfo.html.
\14\ Sec. 52.38(a)(4)(i), (a)(5)(i), (b)(4)(ii), (b)(5)(ii),
(b)(8)(iii), (b)(9)(iii); Sec. 52.39(e)(1), (f)(1), (h)(1), (i)(1).
\15\ See Sec. Sec. 97.412(b)(10)(ii), 97.512(b)(10)(ii),
97.612(b)(10)(ii), 97.712(b)(10)(ii), 97.812(b)(10)(ii).
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Assurance that total allocations will not exceed the state
budget. For each federal trading program addressed by a SIP revision,
the total amount of allowances auctioned or allocated for each control
period under the SIP revision (prior to the addition by EPA of any
unallocated allowances from any Indian country NUSA for the state)
generally may not exceed the state's emissions budget for the control
period less the sum of the amount of any Indian country NUSA for the
state for the control period and any allowances already allocated to
the state's units for the control period and recorded by EPA.\16\ Under
its SIP revision, a state is free to not allocate allowances to some or
all potentially affected units, to allocate or auction allowances to
entities other than potentially affected units, or to allocate or
auction fewer than the maximum permissible quantity of allowances and
retire the remainder. Under the CSAPR NOX Ozone Season Group
2 Trading Program only, additional allowances may be allocated if the
state elects to expand applicability to non-EGUs that would have been
subject to the former NOX Budget Trading Program established
for compliance with the NOX SIP Call.\17\
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\16\ Sec. 52.38(a)(4)(i)(A), (a)(5)(i)(A), (b)(4)(ii)(A),
(b)(5)(ii)(A), (b)(8)(iii)(A), (b)(9)(iii)(A); Sec. 52.39(e)(1)(i),
(f)(1)(i), (h)(1)(i), (i)(1)(i).
\17\ Sec. 52.38(b)(8)(iii)(A). (b)(9)(iii)(A).
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Timely submission of state-determined allocations to EPA.
The SIP revision must require the state to submit to EPA the amounts of
any allowances allocated or auctioned to each unit for each control
period (other than allowances initially set aside in the state's
allocation or auction process and later allocated or auctioned to such
units from the set-aside amount) by the following deadlines.\18\ Note
that the submission deadlines differ for amounts allocated or auctioned
to units considered existing units for CSAPR purposes and amounts
allocated or auctioned to other units.
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\18\ Sec. 52.38(a)(4)(i)(B)-(C), (a)(5)(i)(B)-(C),
(b)(4)(ii)(B)-(C), (b)(5)(ii)(B)-(C), (b)(8)(iii)(B)-(C),
(b)(9)(iii)(B)-(C); Sec. 52.39(e)(1)(ii)-(iii), (f)(1)(ii)-(iii),
(h)(1)(ii)-(iii), (i)(1)(ii)-(iii).
[[Page 40966]]
CSAPR NOX Annual, CSAPR NOX Ozone Season Group 1, CSAPR SO2 Group 1, and
CSAPR SO2 Group 2 Trading Programs
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Deadline for
Year of the submission to EPA
Units control period of allocations or
auction results
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Existing........................ 2017 and 2018..... June 1, 2016.
2019 and 2020..... June 1, 2017.
2021 and 2022..... June 1, 2018.
2023 and later June 1 of the
years. fourth year
before the year
of the control
period.
Other........................... All years......... July 1 of the year
of the control
period.
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CSAPR NOX Ozone Season Group 2 Trading Program
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Deadline for
Year of the submission to EPA
Units control period of allocations or
auction results
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Existing........................ 2019 and 2020..... June 1, 2018.
2021 and 2022..... June 1, 2019.
2023 and 2024..... June 1, 2020.
2025 and later June 1 of the
years. fourth year
before the year
of the control
period.
Other........................... All years......... July 1 of the year
of the control
period.
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No changes to allocations already submitted to EPA or
recorded. The SIP revision must not provide for any change to the
amounts of allowances allocated or auctioned to any unit after those
amounts are submitted to EPA or any change to any allowance allocation
determined and recorded by EPA under the federal trading program
regulations.\19\
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\19\ Sec. 52.38(a)(4)(i)(D), (a)(5)(i)(D), (b)(4)(ii)(D),
(b)(5)(ii)(D), (b)(8)(iii)(D), (b)(9)(iii)(D); Sec.
52.39(e)(1)(iv), (f)(1)(iv), (h)(1)(iv), (i)(1)(iv).
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No other substantive changes to federal trading program
provisions. The SIP revision may not substantively change any other
trading program provisions, except in the case of a SIP revision that
also expands program applicability as described below.\20\ Any new
definitions adopted in the SIP revision (in addition to the federal
trading program's definitions) may apply only for purposes of the SIP
revision's allocation or auction provisions.\21\
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\20\ Sec. 52.38(a)(4), (a)(5), (b)(4), (b)(5), (b)(8), (b)(9);
Sec. 52.39(e), (f), (h), (i).
\21\ Sec. 52.38(a)(4)(i), (a)(5)(ii), (b)(4)(ii), (b)(5)(iii),
(b)(8)(iv), (b)(9)(iv); Sec. 52.39(e)(1), (f)(2), (h)(1), (i)(2).
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In addition to the general submittal criteria, a CSAPR-related
abbreviated or full SIP revision seeking to expand applicability under
their integrated state trading programs (which is allowed for CSAPR's
NOX ozone season programs only) must meet the following
further criteria:
Only EGUs with nameplate capacity of at least 15 MWe. The
SIP revision may expand applicability only to additional fossil fuel-
fired boilers or combustion turbines serving generators producing
electricity for sale, and only by lowering the generator nameplate
capacity threshold used to determine whether a particular boiler or
combustion turbine serving a particular generator is a potentially
affected unit. The nameplate capacity threshold adopted in the SIP
revision may not be less than 15 MWe.\22\ In addition or alternatively,
applicability may be extended to non-EGUs that would have been subject
to the former NOX Budget Trading Program established for
compliance with the NOX SIP Call.\23\
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\22\ Sec. 52.38(b)(4)(i), (b)(5)(i), (b)(8)(i), (b)(9)(i).
\23\ Sec. 52.38(b)(8)(ii), (b)(9)(ii).
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No other substantive changes to federal trading program
provisions. The SIP revision may not substantively change any other
trading program provisions, except in the case of a SIP revision that
also addresses the allocation or auction of emission allowances as
described above.\24\
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\24\ Sec. 52.38(b)(4), (b)(5), (b)(8), (b)(9).
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In addition to the general submittal criteria and the other
applicable criteria described above, a CSAPR-related full SIP revision
must meet the following further criteria:
Complete, substantively identical trading program
provisions. The SIP revision must adopt complete state trading program
regulations substantively identical to the complete federal trading
program regulations at 40 CFR 97.402 through 97.435, 97.502 through
97.535, 97.602 through 97.635, 97.702 through 97.735, or 97.802 through
97.835, as applicable, except as described above in the case of a SIP
revision that seeks to replace the default allowance allocation and/or
applicability provisions.\25\
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\25\ Sec. 52.38(a)(5), (b)(5), (b)(9); Sec. 52.39(f), (i).
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Only non-substantive substitutions for the term ``State.''
The SIP revision may substitute the name of the state for the term
``State'' as used in the federal trading program regulations, but only
to the extent that EPA determines that the substitutions do not
substantively change the trading program regulations.\26\
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\26\ Sec. Sec. 52.38(a)(5)(iii), (b)(5)(iv), (b)(9)(v);
52.39(f)(3), (i)(3).
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Exclusion of provisions addressing units in Indian
country. The SIP revision may not impose requirements on any unit in
any Indian country within the state's borders and must not include the
federal trading program provisions governing allocation of allowances
from any Indian country NUSA for the state.\27\
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\27\ Sec. Sec. 52.38(a)(5)(iv), (b)(5)(v), (b)(9)(vi);
52.39(f)(4), (i)(4).
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IV. New York's Submittal and EPA's Analysis
A. New York's SIP Submittal
On December 1, 2015, New York submitted to EPA an abbreviated SIP
revision that, if approved, would replace the default allowance
allocation provisions of the CSAPR SO2 Group 1, CSAPR
NOX Annual, and CSAPR NOX Ozone Season Trading
Programs for the state's EGUs for the control periods in 2017 and
beyond with provisions establishing state-determined allocations for
those control periods but would leave the corresponding CSAPR FIPs and
all other provisions of the trading programs in place.
The SIP submittal includes the following adopted state rules: 6
NYCRR Part 243, ``Transport Rule NOX Ozone Season Trading
Program,'' 6 NYCRR Part 244, ``Transport Rule NOX Annual
Trading Program,'' and 6 NYCRR Part 245, ``Transport Rule
SO2 Trading Program.'' Previous versions of the rules
developed for state participation in the Clean Air Interstate Rule \28\
(CAIR), i.e., 6 NYCRR Part 243, ``CAIR NOx Ozone Season Trading
Program,'' 6 NYCRR Part 244, ``CAIR NOX Annual Trading
Program,'' and 6 NYCRR Part 245, ``CAIR SO2 Trading
Program,'' have been repealed and replaced in their entirety with the
new rules. Attendant revisions were made to 6 NYCRR Part 200, ``General
Provisions,'' to update the list of referenced material that are cited
in the amended New York regulations. The regulations were adopted on
November 10, 2015, and effective on December 12, 2015.
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\28\ 70 FR 25162 (May 12, 2005).
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As discussed in section I, EPA is not acting at this time on the
portion of New York's SIP submittal addressing 6 NYCRR Part 243, which
will be addressed in another rulemaking at a later date. In this
rulemaking, EPA is addressing NYCRR Parts 244, 245, and 200.
[[Page 40967]]
New York's Parts 244 and Part 245 allow the State to replace the
provisions of the CSAPR NOX Annual and SO2 Group
1 trading program allocation methodology with its own methodology.
Parts 244 and 245 apply to units that serve an electrical generator
with a nameplate capacity equal to or greater than 25 megawatts of
electrical output and sell any amount of electricity. The control
periods for Parts 244 and 245 run from January 1 to December 31. DEC
would allocate allowances for control periods beginning on or after
January 1, 2017.
For existing units, New York's allocation methodology is based on
the average of recent emissions (i.e., the average of the 3 last years
for which data is available) from all New York Transport Rule units.
Five percent of the statewide budgets for annual emissions of
SO2 and NOX would be set aside for new units, and
the remainder of the statewide budgets, but at least ten percent, will
be allocated to the Energy Efficiency and Renewable Energy Technology
(EERET) account. If the allocation to the EERET account would be less
than the prescribed minimum after allocations to existing units based
on the 3-year average of emissions and an allocation of five percent to
the new unit set-aside, allocations to existing units would be reduced
proportionally by the amounts necessary to ensure that ten percent of
the budget is allocated to the EERET account.
The DEC will distribute all allowances at no cost with the
exception of allowances held in the EERET account, which will be
administered by the New York State Energy Research and Development
Authority (NYSERDA). The sale of allowances by NYSERDA will be used to
fund energy efficiency projects, renewable energy, or clean energy
technology. Any EERET allowances that are not sold or distributed by
NYSERDA within 12 months of the initial allocation to the EERET account
will be returned to the DEC for retirement or reallocation.
As discussed more fully below, in a July 14, 2016 letter to EPA,
DEC committed to revising 6 NYCRR Parts 244 and 245, and submitting a
revised SIP submittal no later than July 14, 2017 to address EPA
comments provided to the DEC via email on June 2, 2016. In the July 14,
2016 letter to EPA, DEC committed to revising the regulations in
accordance with an enclosed document entitled ``NYSDEC Responses to EPA
Comments on New York's Annual CSAPR Rules.'' In a November 28, 2016
email to DEC, EPA identified additional deficiencies. In a March 24,
2017 letter to EPA, DEC indicated that the State had commenced the
regulatory process to correct additional deficiencies identified by EPA
and committed to complete that process and submit a SIP revision by
September 15, 2017. In a July 6, 2017 letter, DEC revised the date for
correcting deficiencies and submitting a SIP revision to December 29,
2017.
New York's December 1, 2015 SIP submission, and July 14, 2016,
March 24, 2017, and July 6, 2017 commitment letters to EPA, as well as
EPA's comments provided to the DEC on June 2, 2016, and November 28,
2016 can be found in the electronic docket for this proposed action at
www.regulations.gov.
B. EPA's Analysis of New York's Submittal
1. Timeliness and Completeness of New York's SIP Submittal
New York's SIP revision seeks to establish state-determined
allocations of CSAPR NOX Annual and SO2 Group 1
allowances, starting with the control periods in 2017. Under 40 CFR
52.38(a)(4)(i)(B) and 52.39(e)(1)(ii), the deadline for submission of
state-determined allocations for the 2017 and 2018 control periods is
June 1, 2016, which under 52.38(a)(4)(ii) and 52.39(e)(2) makes
December 1, 2015, the deadline for submission to EPA of a complete SIP
revision establishing state-determined allocations for those control
periods. New York submitted its SIP revision to EPA by letter dated and
delivered electronically on December 1, 2015, and EPA has determined
that the submittal complies with the applicable minimum completeness
criteria of 40 CFR part 51, Appendix V, Section 2.1. Because the New
York SIP revision was timely submitted and meets the applicable
completeness criteria, it meets the criteria under 40 CFR
52.38(a)(4)(ii) and 52.39(e)(2).
2. Methodology Covering All Allowances Potentially Requiring Allocation
Sections 244.3 through 244.6, and 245.3 through 245.6 of the New
York rules provide the allocation methodology adopted by New York in
the SIP revision. Sections 244.3 through 244.6 replace the provisions
of 40 CFR 97.411(a), 97.411(b)(1), and 97.412(a) for allocations of
NOX Annual allowances; Sec. Sec. 245.3 through 245.6
replace the provisions of 40 CFR 97.611(a), 97.611(b)(1), and 97.612(a)
for allocations of SO2 Group 1 allowances. New York's
methodology addresses allocation of allowances that under the default
allocation provisions for the Federal trading programs would be
allocated to existing units as well as allowances that would be
allocated to new units from the new unit set-asides established for New
York under the Federal trading programs.
Several provisions of New York's allocation methodology are
inconsistent with the CSAPR SIP approval criteria, including as
follows:
Sections 244.4(b) and 245.4(b) indicate that if the DEC
fails to submit allowance allocations, EPA will, for the applicable
control period, allocate the allowances based on EGUs' proportional
shares of the allocations for the previous control period. CSAPR rules
do not allow a SIP revision under which EPA would be required to
compute new allocations on a state's behalf.
New York's rules do not include provisions for the
disposition of any otherwise unallocated Indian country new unit set-
aside allowances made available to the State for reallocation.
EPA believes there is a lack of clarity regarding when
EGUs would be considered ``existing'' or ``new'' units for purposes of
determining whether they would receive allocations under Sec. Sec.
244.3 and 245.3 or under Sec. Sec. 244.5 and 245.5, respectively, and
also which years of emissions data would be used to determine their
allocations. For example, given EPA's understanding that New York
generally intends for covered EGUs to be eligible to receive allowance
allocations for each year of the programs either as existing units or
as new units, the provisions in Sec. Sec. 244.3(b)(2) and 245.3(b)(2)
basing allowance allocations to existing units on three years of
historical emissions data, combined with the requirements under 40 CFR
52.38(a)(4)(i)(B) and 52.39(e)(1)(ii) for New York to submit its
allocations for existing units to EPA up to four years in advance, are
inconsistent with the provisions in Sec. Sec. 244.5(a)(3) and
245.5(a)(3) stating that EGUs may receive allocations from the new unit
set-asides for no more than four years. In addition, Sec. Sec.
244.5(a) and 245.5(a) describe EGUs commencing operation after May 1,
2010 as eligible to receive allocations from the new unit set-asides,
but that date appears to be irrelevant under the procedures set forth
in the other rule provisions.
3. Assurance That Total Allocations Will Not Exceed the State Budget
Sections 244.3, Transport Rule NOX Annual Trading
Program budgets, and 245.3, Transport Rule SO2 Group 1
Trading Program budgets, set forth the total amounts of CSAPR
NOX Annual allowances and CSAPR SO2 Group 1
allowances to be allocated to New York
[[Page 40968]]
units for each control period under the state trading programs.
Sections 244.3 and 245.3 provide incorrect citations, and therefore
incorrect CSAPR Phase 2 state budgets, for New York. Part 244 cites the
North Carolina NOX Annual budget at 40 CFR 97.410(a)(15),
which is 41,553 tons, instead of the New York NOX Annual
budget at 40 CFR 97.410(a)(14), which is 21,722 tons. Part 245 cites
the West Virginia SO2 Group 1 budget at 40 CFR
97.610(a)(15), which is 75,688 tons, instead of the New York
SO2 Group 1 budget at 40 CFR 610(a)(9), which is 27,556
tons. In addition, New York's rules do not exclude the amounts of the
Indian country new unit set-asides for New York (22 tons under the NOx
Annual Trading Program and 28 tons under the SO2 Group 1
Trading Program) from the total amounts of allowances to be allocated
by the State. As such, New York's rules do not currently provide
assurance that total allocations will not exceed the amounts of New
York's budgets under the Federal trading program rules. However, as
noted below, on November 30, 2015, New York submitted allocations for
existing units to EPA for the 2017 and 2018 control periods in
accordance with the intent of its rules. Those allocation amounts were
based on the correct New York budget amounts, not the higher budget
amounts indicated by the incorrect CFR references in the state rules.
Further, in response to EPA's comments on the SIP submission, New York
subsequently submitted slightly revised allocations that properly
exclude the amounts of the Indian country new unit set-asides from the
total amounts allocated. On July 27, 2017, New York also submitted
allocations for existing units to EPA for the 2019 and 2020 control
periods that were based on the correct budget amounts. In light of the
fact that the actual allocations submitted do not exceed the amounts of
New York's budgets, EPA believes that the incorrect rule provisions do
not preclude conditional approval of the SIP submission while New York
works to correct the errors.
4. Timely Submission of State-Determined Allocations to EPA
Sections 244.4 and 245.4 provide for allowance allocations for
existing units to be submitted to EPA for the 2017 and 2018 control
periods by December 1, 2015. New York in fact submitted such
allocations to EPA on November 30, 2015 (and later adjusted the
allocations slightly in order to address EPA's comments on the SIP
submission). Sections 244.5(a)(7), and 245.5(a)(7) indicate that the
DEC will submit State-determined NUSA allocations to the EPA by October
31 of the control period.
The submission deadline of December 1, 2015 precedes the June 1,
2016 deadline discussed in section III above for existing units for the
2017 and 2018 control periods. New York, however, has not addressed
intended deadlines to submit allocations to existing units for future
control periods beyond 2018. New York's SIP revision meets the criteria
under 40 CFR 52.38(a)(4)(i)(B) and 52.39(e)(1)(ii) for the 2017 and
2018 control periods only. EPA notes that New York's revised rules must
conform with the requirements in 40 CFR 52.38(a)(4)(i)(B) and
52.39(e)(1)(ii), which require allocations to be submitted up to four
years in advance of the control period for future years.
In sections 244.5(a)(7), and 245.5(a)(7) New York has included an
annual deadline of October 31st of the year of the control period for
submission of NUSA allocations to EPA. The October 31st date is beyond
the July 1st annual submission deadline for amounts allocated or
auctioned to units other than existing units (also discussed in section
III of this notice). New York's SIP revision therefore does not meet
the timing requirements for annual submission of NUSA allocations under
40 CFR 52.38(a)(4)(i)(C) and 52.39(e)(1)(iii).
5. No Changes to Allocations Already Submitted to EPA or Recorded
The New York rules include no provisions allowing alteration of
allocations after the allocation amounts have been provided to EPA and
no provisions allowing alteration of any allocations made and recorded
by EPA under the federal trading program regulations, thereby meeting
the condition under 40 CFR 52.38(a)(4)(i)(D) and 52.39(e)(1)(iv).
6. No Other Substantive Changes to Federal Trading Program Provisions
It is apparent from the overall design of New York's rules that
they are intended only to establish State-determined allowance
allocation procedures and otherwise to coordinate with the federal
trading program rules. However, in their current form the rules contain
a number of provisions that require revision in order to not
substantively modify the federal trading program provisions, including:
As mentioned previously in section II of this notice,
under an ``abbreviated'' SIP revision, a state may replace only the
allowance allocation and/or applicability provisions of a CSAPR federal
trading program. However, the applicability sections of the New York's
NOX Annual and SO2 Group 1 rules, specifically
Sec. Sec. 244.1(a) and 245.1(a), incorporate almost the entire CSAPR
NOX Annual and SO2 Group 1 regulations, not just
the provisions related to allocations. New York's 244.1(a) incorporates
40 CFR Sections 97.401 through 97.410 and 97.413 through 97.435. New
York's 245.1(a) incorporates 40 CFR Sections 97.601 through 97.610 and
97.613 through 97.635. Similarly, in Sec. Sec. 244.2 and 245.2,
certain terms used throughout the trading programs, including
``Administrator'' and ``Designated representative,'' are defined only
with reference to New York's rules when they should be defined with
reference to the federal regulations.
New York's 6 NYCRR Sec. Sec. 244.1(d)(2) and 245.1(d)(2),
include provisions for DEC to respond to petitions for determinations
of applicability. Under 40 CFR 97.404 and 97.604, responding to
petitions for determinations of applicability is an EPA responsibility.
New York's rules use the term ``Transport Rule'' in Parts
244 and 245 instead of the term ``TR'' used in the CSAPR regulations as
originally promulgated (i.e., ``Transport Rule NOX annual
allowances'' instead of ``TR NOX Annual allowances''). In
the CSAPR Update, EPA changed ``TR'' to ``CSAPR'' throughout the
regulations for all the CSAPR trading programs. New York should update
its rules to replace ``Transport Rule'' with ``TR'', or preferably with
``CSAPR'' to reflect the nomenclature changes from the CSAPR
Update.\29\
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\29\ 81 FR 74504 (October 26, 2016).
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EPA has identified several additional instances of
incorrect cross-references in Parts 244, 245, and 200, as well as
technical corrections needed to Parts 244, and 245, and 200 to reflect
the changes from the CSAPR Update. The specific instances are
identified in EPA's comments, which are available in the docket.
Except as noted above, EPA has determined that the SIP revision
meets the requirements of 40 CFR 52.38(a)(4) and 52.39(e) by making no
substantive changes to the Federal trading program regulations beyond
the provisions addressing allowance allocations.
V. EPA's Proposed Action on New York's Submittal
The EPA is proposing to conditionally approve the New York SIP
revision submitted on December 1, 2015 concerning allocations to New
York units of CSAPR NOX Annual allowances and CSAPR
SO2 Group 1 allowances for
[[Page 40969]]
the control periods in 2017 and 2018, and future control periods beyond
2018. This rule proposes to conditionally approve into the New York SIP
amendments to 6 NYCRR Parts 244 and 245 that incorporate CSAPR
requirements into the State rules, and allows the DEC to allocate CSAPR
allowances to regulated entities in New York. EPA is also proposing to
conditionally approve the attendant revisions to 6 NYCRR Part 200 to
update the list of referenced materials cited in the amended New York
regulations.
The proposed conditional approval of Parts 200, 244, and 245 is
based upon DEC's commitment to make the necessary changes, identified
in the July 14, 2016, March 4, 2017, and July 6, 2017 commitment
letters, to New York's 6 NYCRR Part 244, ``Transport Rule
NOX Annual Trading Program,'' Part 245, ``Transport Rule
SO2 Group 1 Trading Program,'' and Part 200, ``General
Provisions.'' See section IV B. of this notice concerning New York's
budget, allowance allocation methodology, timing of submission of
allocations, replaceable provisions of a CSAPR federal trading program
under an abbreviated SIP, applicability determinations, and other
substantive changes to the CSAPR Federal trading program regulations.
Following the conditional approval of Part 200, Part 244, and Part
245, allocations of CSAPR NOX Annual allowances and CSAPR
SO2 Group 1 allowances will be made according to the
provisions of New York's SIP (as modified by the DEC's July 14, 2016,
March 24, 2017, and July 6, 2017 commitment letters to EPA) instead of
40 CFR 97.411(a), 97.411(b)(1), 97.412(a), 97.611(a), 97.611(b)(1), and
97.612(a). EPA's action on this SIP revision does not alter any
provisions of the Federal CSAPR NOX Annual Trading Program
and the Federal CSAPR SO2 Group 1 Trading Program as applied
to New York units other than the allowance allocation provisions, and
the FIPs requiring the units to participate in the programs (as
modified by this SIP revision) remain in place. EPA is proposing to
conditionally approve Part 200, Part 244 and Part 245 because New
York's rules (when modified by the DEC as indicated in its July 14,
2016, March 24, 2017, and July 6, 2017 commitment letters to EPA) will
meet the requirements of the CAA and EPA's regulations for an
abbreviated SIP revision and will replace EPA's default allocations of
CSAPR emission allowances with state-determined allocations, as
discussed in section IV.B above.
Under CAA section 110(k)(4), the EPA may approve a SIP revision
based on a commitment by a State to adopt specific enforceable measures
by a date certain, but not later than one year after the date of final
conditional approval. If the State fails to meet its commitment to
submit a revised SIP by December 29, 2017 [i.e., the date of commitment
from the state's July 6, 2017 letter], or if the EPA finds the State's
revisions to be incomplete, or the EPA disapproves the State's
revisions, the conditional approval will, by operation of law, become a
disapproval. EPA would notify the State by letter that such action has
occurred. At that time, the SIP revisions in question would not be part
of the approved SIP. If that were to occur, EPA would subsequently
publish a document in the Federal Register notifying the public that
the conditional approval automatically converts to a disapproval.\30\
If, however, the State meets its commitment within the applicable
timeframe, EPA would subsequently publish in the Federal Register a
document notifying the public that EPA intends to convert the
conditional approval to a full approval.
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\30\ In the event the conditional approval automatically reverts
to a disapproval, the validity of allocations made pursuant to the
SIP revision before the date of such reversion would not be
affected.
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Because a FIP already in place satisfies New York's obligations to
mitigate interstate transport air pollution, should a disapproval
become finalized as noted above, the EPA will not be required to take
further action. Additionally, since the SIP submission is not required
in response to a SIP call under CAA section 110(k)(5), mandatory
sanctions under CAA section 179 would not apply because the
deficiencies are not with respect to a submission that is required
under CAA title I part D.
VI. Incorporation By Reference
In this rule, the EPA is proposing action that will involve
adoption of regulatory text that includes incorporation by reference.
In accordance with requirements of 1 CFR 51.5, the EPA is proposing to
incorporate by reference revisions to 6 NYCRR Parts 200, 244, and 245
as previously discussed. The EPA has made, and will continue to make,
these materials generally available through www.regulations.gov, and/or
at the EPA Region 2 Office (please contact the person identified in the
For Further Information Contact section of this preamble for more
information).
VII. Statutory and Executive Order Reviews
Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the CAA and
applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a).
Thus, in reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the 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. 3501 et seq.);
is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
is not 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, 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
[[Page 40970]]
preempt tribal law. Thus Executive Order 13175 does not apply to this
action.
List of Subjects in 40 CFR Part 52
Environmental protection, Administrative practice and procedure,
Air pollution control, Incorporation by reference, Intergovernmental
relations, Nitrogen Dioxide, Ozone, Particulate matter, Reporting and
recordkeeping requirements, Sulfur oxides.
Authority: 42 U.S.C. 7401 et seq.
Dated: August 18, 2017.
Catherine R. McCabe,
Acting Regional Administrator, Region 2.
[FR Doc. 2017-18290 Filed 8-28-17; 8:45 am]
BILLING CODE 6560-50-P