80_FR_51310 80 FR 51147 - Revision to the California State Implementation Plan; San Joaquin Valley; Demonstration of Creditable Emission Reductions from Economic Incentive Programs

80 FR 51147 - Revision to the California State Implementation Plan; San Joaquin Valley; Demonstration of Creditable Emission Reductions from Economic Incentive Programs

ENVIRONMENTAL PROTECTION AGENCY

Federal Register Volume 80, Issue 163 (August 24, 2015)

Page Range51147-51151
FR Document2015-20749

The Environmental Protection Agency (EPA) is proposing to approve a demonstration of creditable emission reductions submitted by California for approval into the San Joaquin Valley (SJV) portion of the California State Implementation Plan (SIP). This SIP submittal demonstrates that certain state mobile source incentive funding programs have achieved specified amounts of reductions in emissions of nitrogen oxides (NO<INF>X</INF>) and fine particulate matter (PM<INF>2.5</INF>) in the SJV area by 2014. The effect of this action would be to approve these amounts of emission reductions for credit toward an emission reduction commitment in the California SIP. We are taking comments on this proposal and plan to follow with a final action.

Federal Register, Volume 80 Issue 163 (Monday, August 24, 2015)
[Federal Register Volume 80, Number 163 (Monday, August 24, 2015)]
[Proposed Rules]
[Pages 51147-51151]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-20749]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2015-0489; FRL-9932-74-Region 9]


Revision to the California State Implementation Plan; San Joaquin 
Valley; Demonstration of Creditable Emission Reductions from Economic 
Incentive Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve a demonstration of creditable emission reductions submitted by 
California for approval into the San Joaquin Valley (SJV) portion of 
the California State Implementation Plan (SIP). This SIP submittal 
demonstrates that certain state mobile source incentive funding 
programs have achieved specified amounts of reductions in emissions of 
nitrogen oxides (NOX) and fine particulate matter 
(PM2.5) in the SJV area by 2014. The effect of this action 
would be to approve these amounts of emission reductions for credit 
toward an emission reduction commitment in the California SIP. We are 
taking comments on this proposal and plan to follow with a final 
action.

DATES: Written comments must be received on or before September 23, 
2015.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R09-OAR-2015-0489, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. Email: [email protected]
    3. Mail or deliver: Andrew Steckel (AIR-4), U.S. Environmental 
Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 
94105-3901. Deliveries are only accepted during the Regional Office's 
normal hours of operation.
    Instructions: All comments will be included in the public docket 
without change and may be made available online at http://www.regulations.gov, including any personal information provided, 
unless the comment includes Confidential Business Information (CBI) or 
other information whose disclosure is restricted by statute. 
Information that you consider CBI or otherwise protected should be 
clearly identified as such and should not be submitted through http://www.regulations.gov or email. http://www.regulations.gov is an 
anonymous access system, and EPA will not know your identity or contact 
information unless you provide it in the body of your comment. If you 
send email directly to EPA, your email address will be automatically 
captured and included as part of the public comment. If EPA cannot read 
your comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment.
    Docket: Generally, documents in the docket for this action are 
available electronically at www.regulations.gov and in hard copy at EPA 
Region IX, 75 Hawthorne Street, San Francisco, California. While all 
documents in the docket are listed at www.regulations.gov, some 
information may be publicly available only at the hard copy location 
(e.g., copyrighted material, large maps), and some may not be publicly 
available in either location (e.g., CBI). To inspect the hard copy 
materials, please schedule an appointment during normal business hours 
with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

FOR FURTHER INFORMATION CONTACT: Idalia Perez, EPA Region IX, 
[email protected], (415) 972-3248.

SUPPLEMENTARY INFORMATION: Throughout this document, ``we'', ``us'' and 
``our'' refer to EPA.

Table of Contents

I. Background
II. The State's Submittal
III. EPA's Evaluation of the State's Submittal
    A. SIP Procedural Requirements
    B. EPA Policy on Economic Incentives
    C. Sections 110(l) and 193 of the Act
IV. Proposed Action and Public Comment
V. Statutory and Executive Order Reviews

I. Background

    On July 18, 1997, EPA established new national ambient air quality 
standards (NAAQS) for particles less than or equal to 2.5 micrometers 
([micro]m) in diameter (PM2.5), including an annual standard 
of 15.0 micrograms per cubic meter ([micro]g/m\3\) based on a 3-year 
average of annual mean PM2.5 concentrations, and a 24-hour 
(daily) standard of 65 [micro]g/m\3\ based on a 3-year average of 98th 
percentile 24-hour PM2.5 concentrations.\1\ EPA established 
these standards after considering substantial evidence from numerous 
health studies demonstrating that serious health effects are associated 
with exposures to PM2.5 concentrations above these levels.
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    \1\ 62 FR 36852 (July 18, 1997) and 40 CFR 50.7. Effective 
December 18, 2006, EPA strengthened the 24-hour PM2.5 
NAAQS by lowering the level to 35 [micro]g/m\3\. 71 FR 61144 
(October 17, 2006) and 40 CFR 50.13. Effective March 18, 2013, EPA 
strengthened the annual PM2.5 NAAQS by lowering the level 
to 12 [micro]g/m\3\. 78 FR 3086 (January 15, 2013) and 40 CFR 50.18. 
In this preamble, all references to the PM2.5 NAAQS, 
unless otherwise specified, are to the 1997 24-hour standard (65 
[micro]g/m\3\) and annual standard (15.0 [micro]g/m\3\) as codified 
in 40 CFR 50.7.
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    Following promulgation of a new or revised NAAQS, EPA is required 
under Clean Air Act (CAA) section 107(d) to designate areas throughout 
the nation as attaining or not attaining the NAAQS. On January 5, 2005, 
EPA published initial air quality designations for the 1997 annual and 
24-hour PM2.5 NAAQS, using air quality monitoring data for 
the three-year periods of 2001-2003 and 2002-2004.\2\ These 
designations became effective April 5, 2005.\3\ EPA designated the San 
Joaquin Valley (SJV) area \4\ as nonattainment for both the 1997 annual 
PM2.5 standard (15.0 [micro]g/m\3\) and the 1997 24-hour 
PM2.5 standard (65 [micro]g/m\3\).\5\
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    \2\ 70 FR 944 (January 5, 2005).
    \3\ Id.
    \4\ The SJV area encompasses over 23,000 square miles and 
includes all or part of eight counties in California's central 
valley: San Joaquin, Stanislaus, Merced, Madera, Fresno, Tulare, 
Kings, and Kern. For a precise description of the geographic 
boundaries of the San Joaquin Valley nonattainment area, see 40 CFR 
81.305.
    \5\ 40 CFR 81.305.
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    Between 2007 and 2011, California made six SIP submittals to 
address nonattainment area planning

[[Page 51148]]

requirements for the 1997 PM2.5 NAAQS in the SJV.\6\ We 
refer to these submittals collectively as the ``2008 PM2.5 
Plan.'' On November 9, 2011, EPA approved all elements of the 2008 
PM2.5 Plan except for the contingency measures, which EPA 
disapproved.\7\ As part of this action, EPA approved, inter alia, 
commitments by the California Air Resources Board (CARB) and the 
SJVUAPCD to achieve specific amounts of NOX and 
PM2.5 emission reductions by 2014.\8\ In July 2013, the 
State submitted a revised PM2.5 contingency measure plan for 
the SJV, which EPA fully approved in May 2014.\9\
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    \6\ 76 FR 69896 at n. 2 (November 9, 2011).
    \7\ Id. at 69924.
    \8\ 76 FR 69896, 69926 (codified at 40 CFR 
52.220(c)(356)(ii)(B)(2) and 52.220(c)(392)(ii)(A)(2)).
    \9\ 79 FR 29327 (May 22, 2014).
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    On May 20, 2015, the Ninth Circuit Court of Appeals issued its 
decision in a challenge to EPA's November 9, 2011 action on the 2008 
PM2.5 Plan.\10\ In Committee for a Better Arvin et. al v. 
EPA (Case Nos. 11-73924 and 12-71332) (CBA), the court held that EPA 
violated the CAA by approving the 2008 PM2.5 Plan even 
though the plan did not include certain state-adopted mobile source 
emission standards on which the plan relied to achieve its emission 
reduction goals.\11\ The CBA court remanded EPA's action on the 2008 
PM2.5 Plan for further proceedings consistent with the 
decision but did not vacate EPA's action.\12\ Thus, absent an EPA 
rulemaking to withdraw or revise the Agency's November 2011 approval of 
the emission reduction commitments in the 2008 PM2.5 Plan, 
these commitments remain enforceable components of the California 
SIP.\13\
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    \10\ Committee for a Better Arvin et al v. EPA, Case Nos. 11-
73924 and 12-71332, 2015 U.S. App. LEXIS 8295 (9th Cir. 2015).
    \11\ Id.
    \12\ Id.
    \13\ See n. 8, supra.
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II. The State's Submittal

    CARB adopted the ``Report on Reductions Achieved from Incentive-
based Emission Reduction Measures in the San Joaquin Valley'' (Emission 
Reduction Report) on October 24, 2014 and submitted it to EPA as a 
revision to the California SIP on November 17, 2014. On May 17, 2015, 
the Emission Reduction Report submittal became complete by operation of 
law under CAA section 110(k)(1)(B).
    The purpose of the Emission Reduction Report is to demonstrate that 
certain mobile source incentive funding programs implemented in the SJV 
area have achieved specified amounts of NOX and 
PM2.5 emission reductions by January 1, 2014 and to thereby 
satisfy a portion of the 2014 emission reduction commitments approved 
into the SIP as part of EPA's November 2011 action on the 2008 
PM2.5 Plan.\14\ Specifically, the Emission Reduction Report 
documents the State's bases for concluding that a total of 2,286 
incentive projects implemented in the SJV pursuant to the Carl Moyer 
Memorial Air Quality Standards Attainment Program (Carl Moyer Program) 
and the Proposition 1B: Goods Movement Emission Reduction Program (Prop 
1B Program) have achieved a total of 7.8 tons per day (tpd) of 
NOX emission reductions and 0.2 tpd of PM2.5 
emission reductions in the SJV, which may be credited toward the 
State's 2014 emission reduction commitment.\15\
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    \14\ Emission Reduction Report at 1-2.
    \15\ Emission Reduction Report at 24, Table 3 (``Total 2014 
Incentive-Based Emission Reductions''), Appendix H.1 (``SIP 
Creditable Incentive Projects in the San Joaquin Valley (Moyer 
Program)'') and Appendix H.2 (``SIP Creditable Incentive Projects in 
the San Joaquin Valley (Prop 1B)'').
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    The SIP submittal for the Emission Reduction Report includes eight 
appendices containing documentation to support the State's conclusions. 
First, Appendix A through Appendix E contain relevant excerpts from the 
Carl Moyer Program and Prop 1B Program guidelines \16\ that apply to 
specifically identified types of incentive projects. Table 1 identifies 
the selected project types and relevant portions of the incentive 
program guidelines that govern their implementation.
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    \16\ Under both the Carl Moyer Program and the Prop 1B Program, 
CARB adopts or approves program ``guidelines'' that specify, among 
other things, terms and conditions that must apply to each grant of 
incentive funds to an applicant. See California Health & Safety Code 
sections 44275 et seq. (establishing Carl Moyer Program) and 39625 
et seq. (establishing Prop 1B Program).

                                 Table 1
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                                        Applicable guideline  (relevant
             Project type                          portions)
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Carl Moyer Program: Off-road           The Carl Moyer Program
 equipment repower, replacement, and    Guidelines, Approved Revision
 retrofit projects.                     2005, part I, ``Program Overview
                                        and Administrative
                                        Requirements,'' and part II,
                                        chapter 5, ``Compression-
                                        Ignition Off-Road Equipment''.
                                       The Carl Moyer Program
                                        Guidelines, Approved Revision
                                        2008, part I, chapter 5, ``Off-
                                        Road Compression-Ignition
                                        Equipment,'' and Part III,
                                        ``Program Administration''.
                                       The Carl Moyer Program
                                        Guidelines, Approved Revisions
                                        2011, part I, chapter 3,
                                        ``Program Administration,'' and
                                        chapter 7, ``Off-Road
                                        Compression-Ignition
                                        Equipment''.
Carl Moyer Program: Portable and       The Carl Moyer Program
 stationary agricultural source         Guidelines, Approved Revision
 repower projects.                      2005, part I, ``Program Overview
                                        and Administrative
                                        Requirements,'' and part II,
                                        chapter 10, ``Agricultural
                                        Sources''.
                                       The Carl Moyer Program
                                        Guidelines, Approved Revision
                                        2008, part I, chapter 10,
                                        ``Agricultural Sources,'' and
                                        Part III, ``Program
                                        Administration''.
                                       The Carl Moyer Program
                                        Guidelines, Approved Revisions
                                        2011, part I, chapter 3,
                                        ``Program Administration,'' and
                                        chapter 10, ``Portable and
                                        Stationary Agricultural
                                        Sources''.
Prop 1B Program: On-road vehicle       Proposition 1B: Goods Movement
 replacement projects.                  Emission Reduction Program,
                                        Final Guidelines for
                                        Implementation, 2008, Section
                                        II, ``ARB Program
                                        Administration,'' Section III,
                                        ``Local Agency Project,''
                                        Section IV, ``General Equipment
                                        Project Requirements,'' and
                                        appendix A, ``Trucks Serving
                                        Ports and Intermodal Rail
                                        Yards''.
                                       Proposition 1B: Goods Movement
                                        Emission Reduction Program,
                                        Final Guidelines for
                                        Implementation, 2008, Section
                                        II, ``ARB Program
                                        Administration,'' Section III,
                                        ``Local Agency Project,''
                                        Section IV, ``General Equipment
                                        Project Requirements,'' and
                                        appendix B, ``Other Heavy Duty
                                        Diesel Trucks''.

[[Page 51149]]

 
                                       Proposition 1B: Goods Movement
                                        Emission Reduction Program,
                                        Final Guidelines for
                                        Implementation, 2010, Section
                                        II, ``ARB Program
                                        Administration,'' Section III,
                                        ``Local Agency Project
                                        Proposal,'' Section IV, ``Local
                                        Agency Project Implementation,''
                                        Section V, ``State Agency
                                        Project Implementation,''
                                        Section VI, ``General Equipment
                                        Project Requirements,'' and
                                        appendix A, ``Heavy Duty Diesel
                                        Trucks''.
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Source: Emission Reduction Report at 5, 10, 14, and 17.

    Second, Appendix F and Appendix G contain CARB's demonstrations 
that the identified portions of the Carl Moyer Program and Prop 1B 
Program guidelines adequately address EPA's recommended ``integrity 
elements'' by ensuring that the resulting emission reductions are 
quantifiable, surplus, enforceable, and permanent.\17\ We refer to 
these analyses as the State's ``integrity demonstrations'' for these 
components of the Carl Moyer Program and Prop 1B Program.
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    \17\ Under longstanding EPA guidance, emission reductions 
achieved through economic incentives and other nontraditional 
emission reduction measures must be quantifiable, surplus, 
enforceable, and permanent in order to qualify for SIP emission 
reduction credit under the CAA. See, e.g., ``Guidance on 
Incorporating Voluntary Mobile Source Emission Reduction Programs in 
State Implementation Plans (SIPs),'' October 24, 1997 (``1997 
VMEP'') at 6-7; ``Improving Air Quality with Economic Incentive 
Programs,'' U.S. EPA, Office of Air and Radiation, January 2001 
(EPA-452/R-01-001) (``2001 EIP Guidance'') at section 4.1; 
``Incorporating Emerging and Voluntary Measures in a State 
Implementation Plan,'' September 2004 (``2004 Emerging and Voluntary 
Measures Guidance'') at 3-4; and ``Diesel Retrofits: Quantifying and 
Using Their Emission Benefits in SIPs and Conformity,'' February 
2014 (``2014 Diesel Retrofits Guidance'') at 27-29.
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    Third, Appendix H lists each of the 832 Carl Moyer Program projects 
and 1,454 Prop 1B Program projects funded pursuant to the identified 
program guidelines that the State has relied upon in the Emission 
Reduction Report. For each of these projects, Appendix H identifies the 
``equipment project ID,'' contract term (project life), post-inspection 
date, adoption year of the applicable incentive program guideline, and 
NOX and/or PM2.5 emission reductions achieved in 
2014, in pounds per year (lbs/yr).
    The Carl Moyer Program is a California grant program established in 
1998 that provides funding to encourage the voluntary purchase of 
cleaner-than-required engines, equipment, and other emission reduction 
technologies.\18\ In its first 12 years, the Carl Moyer Program 
provided over $680 million in state and local funds to reduce air 
pollution from equipment statewide, e.g., by replacing older trucks 
with newer, cleaner trucks, retrofitting controls on existing engines, 
and encouraging the early retirement of older, more polluting 
vehicles.\19\
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    \18\ See generally CARB, ``The Carl Moyer Program Guidelines, 
Approved Revisions 2011,'' Release Date: February 8, 2013, at 
Chapter 1 (available electronically at http://www.arb.ca.gov/msprog/moyer/moyer.htm).
    \19\ Id.
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    The Prop 1B Program is a California grant program established in 
2007, as a result of State bond funding approved by voters, which 
provides $1 billion in funding to CARB to reduce air pollution 
emissions and health risks from freight movement along California's 
priority trade corridors. Under the enabling legislation (California 
Senate Bill 88 and Assembly Bill 201 (2007)), CARB awards grants to 
fund projects proposed by local agencies that are involved in freight 
movement or air quality improvements associated with goods movement 
activities. Upon receipt of such grants, the local agencies are then 
responsible for providing financial incentives to owners of equipment 
used in freight movement to upgrade to cleaner technologies, consistent 
with program guidelines adopted by CARB.\20\
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    \20\ See generally ``Strategic Growth Plan Bond Accountability, 
Goods Movement Emission Reduction Program,'' Approved February 27, 
2008 (available at http://www.arb.ca.gov/bonds/gmbond/docs/gm_accountability_with_links_2-27-08.pdf).
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III. EPA's Evaluation of the State's Submittal

A. SIP Procedural Requirements

    Sections 110(a)(2) and 110(l) of the Act require that revisions to 
a SIP be adopted by the State after reasonable notice and public 
hearing. EPA has promulgated specific procedural requirements for SIP 
revisions in 40 CFR part 51, subpart F. These requirements include 
publication of notices, by prominent advertisement in the relevant 
geographic area, of a public hearing on the proposed revisions, a 
public comment period of at least 30 days, and an opportunity for a 
public hearing.
    CARB's November 17, 2014 SIP submittal includes public process 
documentation for the Emission Reduction Report, including 
documentation of a duly noticed public hearing held by the State on 
October 24, 2014. On October 24, 2014, CARB adopted the Emission 
Reduction Report as a revision to the California SIP and submitted it 
to EPA on November 17, 2014 for action pursuant to CAA section 110(k) 
of the Act. We find that the process followed by CARB in adopting the 
Emission Reduction Report complies with the procedural requirements for 
SIP revisions under CAA section 110 and EPA's implementing regulations.

B. EPA Policy on Economic Incentives

    The CAA explicitly provides for the use of economic incentives as 
one tool for states to use to achieve attainment of the NAAQS.\21\ 
Economic incentive programs (EIPs) use market-based strategies to 
encourage the reduction of emissions from stationary, area, and/or 
mobile sources in an efficient manner. EPA has promulgated regulations 
for statutory EIPs required under section 182(g) of the Act and has 
issued guidance for discretionary EIPs.\22\ In light of the increasing 
incremental cost associated with further stationary and mobile source 
emission reductions and the difficulty of identifying such additional 
sources of emissions reductions in many areas, EPA encourages 
innovative approaches to reducing emissions through EIPs and other 
nontraditional measures and programs, including ``voluntary'' and 
``emerging'' measures.\23\
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    \21\ See, e.g., CAA section 110(a)(2)(A) (requiring that each 
SIP ``include enforceable emission limitations and other control 
measures, means, or techniques (including economic incentives such 
as fees, marketable permits, and auctions of emissions rights), as 
well as schedules and timetables for compliance, as may be necessary 
or appropriate to meet the applicable requirements of [the Act]''); 
see also sections 172(c)(6), 183(e)(4).
    \22\ See 59 FR 16690 (April 7, 1994) (codified at 40 CFR part 
51, subpart U) and 2001 EIP Guidance.
    \23\ See generally 1997 VMEP; 2004 Emerging and Voluntary 
Measures Guidance; 2014 Diesel Retrofits Guidance; and ``Guidance on 
Incorporating Bundled Measures in a State Implementation Plan,'' 
August 16, 2005 (``2005 Bundled Measures Guidance'').
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    We provide below a summary of our evaluation of the Emission 
Reduction Report and related incentive program

[[Page 51150]]

guidelines. Our Technical Support Document (TSD) contains a more 
detailed evaluation of the SIP submittal.
1. Programmatic ``integrity elements''
    Where a State relies upon a discretionary EIP or other 
nontraditional emission reduction measure in a SIP submittal, EPA 
evaluates the programmatic elements of the measure to determine whether 
the resulting emission reductions are quantifiable, surplus, 
enforceable and permanent.\24\ These four fundamental ``integrity 
elements,'' which apply to all discretionary EIPs and other innovative 
measures relied on for SIP purposes, are designed to ensure that such 
measures satisfy the applicable requirements of the Act.\25\ EPA has 
generally defined the four fundamental integrity elements for 
discretionary EIPs and other innovative emission reduction programs as 
follows:
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    \24\ See, e.g., 2001 EIP Guidance at section 4.1.
    \25\ See, e.g., 2001 EIP Guidance at section 4.1; 1997 VMEP at 
6-7; 2004 Emerging and Voluntary Measures Guidance at 3-4; and 2014 
Diesel Retrofits Guidance at 27-29.
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     Quantifiable: emission reductions are quantifiable if they 
can be measured in a manner that is reliable and replicable by 
different users;
     Surplus: Emission reductions are surplus if they are not 
otherwise required by or assumed in a SIP-related program (e.g., an 
attainment or reasonable further progress plan or a transportation 
conformity demonstration), any other adopted State air quality program, 
a consent decree, or a federal rule designed to reduce emission of a 
criteria pollutant or its precursors (e.g., a new source performance 
standard or federal mobile source requirement); additionally, emission 
reductions are ''surplus'' only for the remaining useful life of the 
vehicle, engine, or equipment being replaced.
     Enforceable: emission reductions and other required 
actions are enforceable if they are independently verifiable; program 
violations are defined; those liable can be identified; the State and 
EPA may apply penalties and secure appropriate corrective action where 
applicable; citizens have access to all emissions-related information 
obtained from participating sources; citizens may file suit against a 
responsible entity for violations; and the required reductions/actions 
are practicably enforceable consistent with EPA guidance on practical 
enforceability.
     Permanent: emission reductions are permanent if the State 
and EPA can ensure that the reductions occur for as long as they are 
relied upon in the SIP. The time period that the emission reductions 
are used in the SIP can be no longer than the remaining useful life of 
the retrofitted or replaced engine, vehicle, or equipment.\26\
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    \26\ See 2001 EIP Guidance at Section 4.1; 1997 VMEP at 6-7; 
2004 Emerging and Voluntary Measures Guidance at 3-4; and 2014 
Diesel Retrofits Guidance at 27-29.
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    The Emission Reduction Report documents CARB's bases for concluding 
that the portions of the incentive program guidelines identified in 
Table 1 adequately address each of these integrity elements. First, 
with respect to quantification, the Emission Reduction Report 
references and describes the formulas that the guidelines require 
applicants to use to determine annual emissions (i.e., baseline 
emissions, based on existing equipment or new equipment certified by 
CARB to current emission standards) and annual emission reductions 
(i.e., the difference between baseline emissions and reduced emissions 
from new/upgraded equipment).\27\ These requirements ensure that 
program participants will calculate emission reductions reliably, using 
widely available methods and assumptions, and in a manner that can be 
replicated by different users.
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    \27\ Emission Reduction Report at 7-8, 11-12, 15, 19-20, 
Appendix F, and Appendix G.
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    Second, with respect to additionality (i.e., ensuring that 
reductions are ``surplus'' or non-duplicative to existing 
requirements), the Emission Reduction Report references and describes 
the provisions in the guidelines that prohibit the use of program funds 
for emission reductions that are required by any federal, state or 
local regulation or other legal mandate and requirements to ensure that 
equipment or engines being replaced are still in usable form and would 
not have been replaced by normal fleet turnover.\28\ These provisions 
ensure that projects funded under these guidelines will achieve 
emission reductions that are not otherwise required by or assumed in a 
SIP-related program and that are surplus to federal, state, and local 
requirements.
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    \28\ Emission Reduction Report at 9, 12, 15-16, 20, Appendix F, 
and Appendix G.
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    Third, with respect to enforceability, the Emission Reduction 
Report references and describes the funding criteria in the guidelines 
that are designed to ensure that emission reductions will be 
independently verifiable and practicably enforceable by CARB and the 
District, including detailed requirements for project applications, 
contracts, pre- and post-project inspections, and recordkeeping and 
reporting by both the grantees and the implementing local agencies.\29\ 
These requirements ensure that emission reductions can be independently 
verified, that the public has access to emissions-related information, 
and that required actions are practicably enforceable consistent with 
EPA guidance on practical enforceability.
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    \29\ Emission Reduction Report at 6-7, 10-11, 15, 17-19, 
Appendix F, and Appendix G.
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    Finally, with respect to permanence, the Emission Reduction Report 
references and describes requirements in the guidelines for program 
applicants to demonstrate that both the baseline (old) and replacement 
(new/upgraded) equipment are used similarly in the nonattainment area 
and to document the destruction of the baseline (old) equipment, as 
well as requirements to identify in each contract the timeframe during 
which the State/District attribute emission reductions to the 
project.\30\ These requirements ensure that emission reduction 
calculations are based on reasonable assumptions concerning equipment/
vehicle activity; that baseline (old) equipment and vehicles do not 
continue in operation; and that EPA and the public can determine 
whether emission reductions attributed to a project adequately cover 
the period for which those reductions are relied upon in a SIP.
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    \30\ Emission Reduction Report at 9-10, 13-14, 16, 21-22, 
Appendix F, and Appendix G.
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    Based on these evaluations, we find that the portions of the Carl 
Moyer Program and Prop 1B Program guidelines identified in Table 1 
establish emission reduction quantification protocols, grant 
conditions, recordkeeping and reporting obligations, and other 
requirements that adequately address EPA's recommended integrity 
elements for economic incentive programs.
2. Enforceable Commitment
    Where a State relies on a discretionary EIP or other voluntary 
measure to satisfy an attainment planning requirement under the CAA 
(e.g., to demonstrate that specific amounts of emission reductions will 
occur by a future milestone date), the State must take responsibility 
for assuring that SIP emission reduction requirements are met through 
an enforceable commitment, which becomes federally enforceable upon 
approval into the SIP.\31\ The purpose of the Emission Reduction 
Report, however, is to demonstrate that a portion of the emission 
reductions required under a previously-approved

[[Page 51151]]

SIP commitment have in fact been achieved, not to satisfy a future 
emission reduction requirement. Accordingly, it is not necessary to 
require the State to submit additional commitments for this purpose.
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    \31\ See, e.g., 1997 VMEP at 4-7; 2004 Emerging and Voluntary 
Measures Guidance at 8-12; and 2005 Bundled Measures Guidance at 7-
12.
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C. Sections 110(l) and 193 of the Act

    Section 110(l) of the CAA prohibits EPA from approving any SIP 
revision that would interfere with any applicable requirement 
concerning attainment and RFP or any other applicable CAA requirement. 
The Emission Reduction Report documents CARB's bases for concluding 
that specific incentive projects implemented by January 1, 2014, in 
accordance with the identified portions of the Carl Moyer Program and 
Prop 1B Program guidelines, have achieved a total of 7.8 tpd of 
NOX emission reductions and 0.2 tpd of PM2.5 
emission reductions in the SJV area which may be credited toward the 
State's 2014 emission reduction commitment in the 2008 PM2.5 
Plan. These calculations of emission reductions are based on actions 
taken by grantees before January 1, 2014 which reduced emissions of 
NOX and PM2.5 in the SJV (e.g., through 
replacement of older, higher-polluting vehicles operating in the SJV 
area with newer, cleaner vehicles). The Emission Reduction Report does 
not establish or revise any emission limitation, control measure, or 
other requirement in the applicable SIP. We propose to determine that 
our approval of the Emission Reduction Report would comply with CAA 
section 110(l) because the proposed SIP revision would not interfere 
with the on-going process for ensuring that requirements for attainment 
of the NAAQS and other CAA provisions are met.
    Section 193 of the Act does not apply to this proposed action 
because the Emission Reduction Report does not modify any SIP-approved 
control requirement in effect before November 15, 1990.

IV. Proposed Action and Public Comment

    Under section 110(k)(3) of the Act, EPA is proposing to fully 
approve the submitted Emission Reduction Report and, based on CARB's 
documentation therein of actions taken by grantees in accordance with 
the identified incentive program guidelines, to approve 7.8 tpd of 
NOX emission reductions and 0.2 tpd of PM2.5 
emission reductions for credit toward the State's 2014 emission 
reduction commitment in the 2008 PM2.5 Plan.
    We will accept comments from the public on this proposed action 
until the date noted in the DATES section above.

V. 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 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 Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     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, the SIP is not approved to apply on any Indian 
reservation land or in any other area where EPA or an Indian tribe has 
demonstrated that a tribe has jurisdiction. In those areas of Indian 
country, the proposed rule does not have tribal implications and will 
not impose substantial direct costs on tribal governments or preempt 
tribal law as specified by Executive Order 13175 (65 FR 67249, November 
9, 2000).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Particulate 
matter, Reporting and recordkeeping requirements.

    Authority:  42 U.S.C. 7401 et seq.

    Dated: August 6, 2015.
Jared Blumenfeld,
Regional Administrator, Region IX.
[FR Doc. 2015-20749 Filed 8-21-15; 8:45 am]
 BILLING CODE 6560-50-P



                                                                        Federal Register / Vol. 80, No. 163 / Monday, August 24, 2015 / Proposed Rules                                                    51147

                                                 confidentiality, please refer to 21 CFR                 SIP. We are taking comments on this                   SUPPLEMENTARY INFORMATION:
                                                 10.20.                                                  proposal and plan to follow with a final              Throughout this document, ‘‘we’’, ‘‘us’’
                                                                                                         action.                                               and ‘‘our’’ refer to EPA.
                                                 C. Information Identifying the Person
                                                 Submitting the Comment                                  DATES: Written comments must be                       Table of Contents
                                                                                                         received on or before September 23,                   I. Background
                                                   Please note that your name, contact
                                                                                                         2015.                                                 II. The State’s Submittal
                                                 information, and other information                                                                            III. EPA’s Evaluation of the State’s Submittal
                                                 identifying you will be posted on                       ADDRESSES:    Submit your comments,                      A. SIP Procedural Requirements
                                                 http://www.regulations.gov if you                       identified by Docket ID Number EPA–R                     B. EPA Policy on Economic Incentives
                                                 include that information in the body of                 09–OAR–2015–0489, by one of the                          C. Sections 110(l) and 193 of the Act
                                                 your comments. For electronic                           following methods:                                    IV. Proposed Action and Public Comment
                                                 comments submitted to http://                                                                                 V. Statutory and Executive Order Reviews
                                                                                                            1. http://www.regulations.gov: Follow
                                                 www.regulations.gov, FDA will post the                  the on-line instructions for submitting               I. Background
                                                 body of your comment on http://                         comments.
                                                 www.regulations.gov along with your                                                                              On July 18, 1997, EPA established
                                                                                                            2. Email: steckel.andrew@epa.gov                   new national ambient air quality
                                                 State/province and country (if
                                                 provided), the name of your                                3. Mail or deliver: Andrew Steckel                 standards (NAAQS) for particles less
                                                 representative (if any), and the category               (AIR–4), U.S. Environmental Protection                than or equal to 2.5 micrometers (mm) in
                                                 identifying you (e.g., individual,                      Agency, Region IX, 75 Hawthorne                       diameter (PM2.5), including an annual
                                                 consumer, academic, industry). For                      Street, San Francisco, CA 94105–3901.                 standard of 15.0 micrograms per cubic
                                                                                                         Deliveries are only accepted during the               meter (mg/m3) based on a 3-year average
                                                 written submissions submitted to the
                                                                                                         Regional Office’s normal hours of                     of annual mean PM2.5 concentrations,
                                                 Division of Dockets Management, FDA
                                                                                                         operation.                                            and a 24-hour (daily) standard of 65 mg/
                                                 will post the body of your comments on
                                                                                                            Instructions: All comments will be                 m3 based on a 3-year average of 98th
                                                 http://www.regulations.gov, but you can
                                                                                                         included in the public docket without                 percentile 24-hour PM2.5
                                                 put your name and/or contact
                                                                                                         change and may be made available                      concentrations.1 EPA established these
                                                 information on a separate cover sheet
                                                                                                         online at http://www.regulations.gov,                 standards after considering substantial
                                                 and not in the body of your comments.
                                                                                                         including any personal information                    evidence from numerous health studies
                                                   Dated: August 18, 2015.                                                                                     demonstrating that serious health effects
                                                                                                         provided, unless the comment includes
                                                 Leslie Kux,                                             Confidential Business Information (CBI)               are associated with exposures to PM2.5
                                                 Associate Commissioner for Policy.                      or other information whose disclosure is              concentrations above these levels.
                                                 [FR Doc. 2015–20759 Filed 8–21–15; 8:45 am]             restricted by statute. Information that                  Following promulgation of a new or
                                                 BILLING CODE 4164–01–P                                  you consider CBI or otherwise protected               revised NAAQS, EPA is required under
                                                                                                         should be clearly identified as such and              Clean Air Act (CAA) section 107(d) to
                                                                                                         should not be submitted through http://               designate areas throughout the nation as
                                                                                                         www.regulations.gov or email. http://                 attaining or not attaining the NAAQS.
                                                 ENVIRONMENTAL PROTECTION
                                                                                                         www.regulations.gov is an anonymous                   On January 5, 2005, EPA published
                                                 AGENCY
                                                                                                                                                               initial air quality designations for the
                                                                                                         access system, and EPA will not know
                                                 40 CFR Part 52                                                                                                1997 annual and 24-hour PM2.5 NAAQS,
                                                                                                         your identity or contact information
                                                                                                                                                               using air quality monitoring data for the
                                                 [EPA–R09–OAR–2015–0489; FRL–9932–74–                    unless you provide it in the body of
                                                                                                                                                               three-year periods of 2001–2003 and
                                                 Region 9]                                               your comment. If you send email
                                                                                                                                                               2002–2004.2 These designations became
                                                                                                         directly to EPA, your email address will
                                                                                                                                                               effective April 5, 2005.3 EPA designated
                                                 Revision to the California State                        be automatically captured and included
                                                                                                                                                               the San Joaquin Valley (SJV) area 4 as
                                                 Implementation Plan; San Joaquin                        as part of the public comment. If EPA
                                                                                                                                                               nonattainment for both the 1997 annual
                                                 Valley; Demonstration of Creditable                     cannot read your comment due to
                                                                                                                                                               PM2.5 standard (15.0 mg/m3) and the
                                                 Emission Reductions from Economic                       technical difficulties and cannot contact
                                                                                                                                                               1997 24-hour PM2.5 standard (65 mg/
                                                 Incentive Programs                                      you for clarification, EPA may not be                 m3).5
                                                                                                         able to consider your comment.                           Between 2007 and 2011, California
                                                 AGENCY:  Environmental Protection
                                                 Agency (EPA).                                              Docket: Generally, documents in the                made six SIP submittals to address
                                                                                                         docket for this action are available                  nonattainment area planning
                                                 ACTION: Proposed rule.                                  electronically at www.regulations.gov
                                                 SUMMARY:   The Environmental Protection                 and in hard copy at EPA Region IX, 75                   1 62 FR 36852 (July 18, 1997) and 40 CFR 50.7.


                                                 Agency (EPA) is proposing to approve a                  Hawthorne Street, San Francisco,                      Effective December 18, 2006, EPA strengthened the
                                                                                                         California. While all documents in the                24-hour PM2.5 NAAQS by lowering the level to 35
                                                 demonstration of creditable emission                                                                          mg/m3. 71 FR 61144 (October 17, 2006) and 40 CFR
                                                 reductions submitted by California for                  docket are listed at                                  50.13. Effective March 18, 2013, EPA strengthened
                                                 approval into the San Joaquin Valley                    www.regulations.gov, some information                 the annual PM2.5 NAAQS by lowering the level to
                                                                                                         may be publicly available only at the                 12 mg/m3. 78 FR 3086 (January 15, 2013) and 40
                                                 (SJV) portion of the California State                                                                         CFR 50.18. In this preamble, all references to the
                                                 Implementation Plan (SIP). This SIP                     hard copy location (e.g., copyrighted                 PM2.5 NAAQS, unless otherwise specified, are to
                                                 submittal demonstrates that certain state               material, large maps), and some may not               the 1997 24-hour standard (65 mg/m3) and annual
                                                 mobile source incentive funding                         be publicly available in either location              standard (15.0 mg/m3) as codified in 40 CFR 50.7.
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                                                 programs have achieved specified                        (e.g., CBI). To inspect the hard copy                   2 70 FR 944 (January 5, 2005).
                                                                                                                                                                 3 Id.
                                                 amounts of reductions in emissions of                   materials, please schedule an
                                                                                                                                                                 4 The SJV area encompasses over 23,000 square
                                                 nitrogen oxides (NOX) and fine                          appointment during normal business
                                                                                                                                                               miles and includes all or part of eight counties in
                                                 particulate matter (PM2.5) in the SJV area              hours with the contact listed in the FOR              California’s central valley: San Joaquin, Stanislaus,
                                                 by 2014. The effect of this action would                FURTHER INFORMATION CONTACT section.                  Merced, Madera, Fresno, Tulare, Kings, and Kern.
                                                                                                                                                               For a precise description of the geographic
                                                 be to approve these amounts of emission                 FOR FURTHER INFORMATION CONTACT:                      boundaries of the San Joaquin Valley nonattainment
                                                 reductions for credit toward an emission                Idalia Perez, EPA Region IX, perez.                   area, see 40 CFR 81.305.
                                                 reduction commitment in the California                  idalia@epa.gov, (415) 972–3248.                         5 40 CFR 81.305.




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                                                 51148                   Federal Register / Vol. 80, No. 163 / Monday, August 24, 2015 / Proposed Rules

                                                 requirements for the 1997 PM2.5 NAAQS                     PM2.5 Plan for further proceedings                    part of EPA’s November 2011 action on
                                                 in the SJV.6 We refer to these submittals                 consistent with the decision but did not              the 2008 PM2.5 Plan.14 Specifically, the
                                                 collectively as the ‘‘2008 PM2.5 Plan.’’                  vacate EPA’s action.12 Thus, absent an                Emission Reduction Report documents
                                                 On November 9, 2011, EPA approved all                     EPA rulemaking to withdraw or revise                  the State’s bases for concluding that a
                                                 elements of the 2008 PM2.5 Plan except                    the Agency’s November 2011 approval                   total of 2,286 incentive projects
                                                 for the contingency measures, which                       of the emission reduction commitments                 implemented in the SJV pursuant to the
                                                 EPA disapproved.7 As part of this                         in the 2008 PM2.5 Plan, these                         Carl Moyer Memorial Air Quality
                                                 action, EPA approved, inter alia,                         commitments remain enforceable                        Standards Attainment Program (Carl
                                                 commitments by the California Air                         components of the California SIP.13                   Moyer Program) and the Proposition 1B:
                                                 Resources Board (CARB) and the                            II. The State’s Submittal                             Goods Movement Emission Reduction
                                                 SJVUAPCD to achieve specific amounts                                                                            Program (Prop 1B Program) have
                                                 of NOX and PM2.5 emission reductions                         CARB adopted the ‘‘Report on                       achieved a total of 7.8 tons per day (tpd)
                                                 by 2014.8 In July 2013, the State                         Reductions Achieved from Incentive-                   of NOX emission reductions and 0.2 tpd
                                                 submitted a revised PM2.5 contingency                     based Emission Reduction Measures in                  of PM2.5 emission reductions in the SJV,
                                                 measure plan for the SJV, which EPA                       the San Joaquin Valley’’ (Emission                    which may be credited toward the
                                                                                                           Reduction Report) on October 24, 2014
                                                 fully approved in May 2014.9                                                                                    State’s 2014 emission reduction
                                                                                                           and submitted it to EPA as a revision to
                                                   On May 20, 2015, the Ninth Circuit                                                                            commitment.15
                                                                                                           the California SIP on November 17,
                                                 Court of Appeals issued its decision in                   2014. On May 17, 2015, the Emission                     The SIP submittal for the Emission
                                                 a challenge to EPA’s November 9, 2011                     Reduction Report submittal became                     Reduction Report includes eight
                                                 action on the 2008 PM2.5 Plan.10 In                       complete by operation of law under                    appendices containing documentation
                                                 Committee for a Better Arvin et. al v.                    CAA section 110(k)(1)(B).                             to support the State’s conclusions. First,
                                                 EPA (Case Nos. 11–73924 and 12–                              The purpose of the Emission                        Appendix A through Appendix E
                                                 71332) (CBA), the court held that EPA                     Reduction Report is to demonstrate that               contain relevant excerpts from the Carl
                                                 violated the CAA by approving the 2008                    certain mobile source incentive funding               Moyer Program and Prop 1B Program
                                                 PM2.5 Plan even though the plan did not                   programs implemented in the SJV area                  guidelines 16 that apply to specifically
                                                 include certain state-adopted mobile                      have achieved specified amounts of                    identified types of incentive projects.
                                                 source emission standards on which the                    NOX and PM2.5 emission reductions by                  Table 1 identifies the selected project
                                                 plan relied to achieve its emission                       January 1, 2014 and to thereby satisfy a              types and relevant portions of the
                                                 reduction goals.11 The CBA court                          portion of the 2014 emission reduction                incentive program guidelines that
                                                 remanded EPA’s action on the 2008                         commitments approved into the SIP as                  govern their implementation.

                                                                                                                               TABLE 1
                                                                                                                                                   Applicable guideline
                                                                  Project type                                                                      (relevant portions)

                                                 Carl Moyer Program: Off-road equipment              The Carl Moyer Program Guidelines, Approved Revision 2005, part I, ‘‘Program Overview and Admin-
                                                   repower, replacement, and retrofit                  istrative Requirements,’’ and part II, chapter 5, ‘‘Compression-Ignition Off-Road Equipment’’.
                                                   projects.
                                                                                                     The Carl Moyer Program Guidelines, Approved Revision 2008, part I, chapter 5, ‘‘Off-Road Compres-
                                                                                                       sion-Ignition Equipment,’’ and Part III, ‘‘Program Administration’’.
                                                                                                     The Carl Moyer Program Guidelines, Approved Revisions 2011, part I, chapter 3, ‘‘Program Adminis-
                                                                                                       tration,’’ and chapter 7, ‘‘Off-Road Compression-Ignition Equipment’’.
                                                 Carl Moyer Program: Portable and sta-               The Carl Moyer Program Guidelines, Approved Revision 2005, part I, ‘‘Program Overview and Admin-
                                                   tionary agricultural source repower                 istrative Requirements,’’ and part II, chapter 10, ‘‘Agricultural Sources’’.
                                                   projects.
                                                                                                     The Carl Moyer Program Guidelines, Approved Revision 2008, part I, chapter 10, ‘‘Agricultural
                                                                                                       Sources,’’ and Part III, ‘‘Program Administration’’.
                                                                                                     The Carl Moyer Program Guidelines, Approved Revisions 2011, part I, chapter 3, ‘‘Program Adminis-
                                                                                                       tration,’’ and chapter 10, ‘‘Portable and Stationary Agricultural Sources’’.
                                                 Prop 1B Program: On-road vehicle re-                Proposition 1B: Goods Movement Emission Reduction Program, Final Guidelines for Implementation,
                                                   placement projects.                                 2008, Section II, ‘‘ARB Program Administration,’’ Section III, ‘‘Local Agency Project,’’ Section IV,
                                                                                                       ‘‘General Equipment Project Requirements,’’ and appendix A, ‘‘Trucks Serving Ports and Inter-
                                                                                                       modal Rail Yards’’.
                                                                                                     Proposition 1B: Goods Movement Emission Reduction Program, Final Guidelines for Implementation,
                                                                                                       2008, Section II, ‘‘ARB Program Administration,’’ Section III, ‘‘Local Agency Project,’’ Section IV,
                                                                                                       ‘‘General Equipment Project Requirements,’’ and appendix B, ‘‘Other Heavy Duty Diesel Trucks’’.
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                                                   6 76 FR 69896 at n. 2 (November 9, 2011).                 12 Id.                                                 16 Under both the Carl Moyer Program and the

                                                   7 Id.                                                     13 See  n. 8, supra.                                Prop 1B Program, CARB adopts or approves
                                                        at 69924.
                                                   8 76 FR 69896, 69926 (codified at 40 CFR                   14 Emission Reduction Report at 1–2.               program ‘‘guidelines’’ that specify, among other
                                                                                                              15 Emission Reduction Report at 24, Table 3        things, terms and conditions that must apply to
                                                 52.220(c)(356)(ii)(B)(2) and 52.220(c)(392)(ii)(A)(2)).
                                                   9 79 FR 29327 (May 22, 2014).                           (‘‘Total 2014 Incentive-Based Emission                each grant of incentive funds to an applicant. See
                                                   10 Committee for a Better Arvin et al v. EPA, Case
                                                                                                           Reductions’’), Appendix H.1 (‘‘SIP Creditable         California Health & Safety Code sections 44275 et
                                                                                                           Incentive Projects in the San Joaquin Valley (Moyer   seq. (establishing Carl Moyer Program) and 39625
                                                 Nos. 11–73924 and 12–71332, 2015 U.S. App.                Program)’’) and Appendix H.2 (‘‘SIP Creditable
                                                 LEXIS 8295 (9th Cir. 2015).                                                                                     et seq. (establishing Prop 1B Program).
                                                                                                           Incentive Projects in the San Joaquin Valley (Prop
                                                   11 Id.                                                  1B)’’).



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                                                                        Federal Register / Vol. 80, No. 163 / Monday, August 24, 2015 / Proposed Rules                                                     51149

                                                                                                                     TABLE 1—Continued
                                                                                                                                                  Applicable guideline
                                                                  Project type                                                                     (relevant portions)

                                                                                                    Proposition 1B: Goods Movement Emission Reduction Program, Final Guidelines for Implementation,
                                                                                                      2010, Section II, ‘‘ARB Program Administration,’’ Section III, ‘‘Local Agency Project Proposal,’’ Sec-
                                                                                                      tion IV, ‘‘Local Agency Project Implementation,’’ Section V, ‘‘State Agency Project Implementation,’’
                                                                                                      Section VI, ‘‘General Equipment Project Requirements,’’ and appendix A, ‘‘Heavy Duty Diesel
                                                                                                      Trucks’’.
                                                    Source: Emission Reduction Report at 5, 10, 14, and 17.


                                                    Second, Appendix F and Appendix G                    local funds to reduce air pollution from               hearing held by the State on October 24,
                                                 contain CARB’s demonstrations that the                  equipment statewide, e.g., by replacing                2014. On October 24, 2014, CARB
                                                 identified portions of the Carl Moyer                   older trucks with newer, cleaner trucks,               adopted the Emission Reduction Report
                                                 Program and Prop 1B Program                             retrofitting controls on existing engines,             as a revision to the California SIP and
                                                 guidelines adequately address EPA’s                     and encouraging the early retirement of                submitted it to EPA on November 17,
                                                 recommended ‘‘integrity elements’’ by                   older, more polluting vehicles.19                      2014 for action pursuant to CAA section
                                                 ensuring that the resulting emission                       The Prop 1B Program is a California                 110(k) of the Act. We find that the
                                                 reductions are quantifiable, surplus,                   grant program established in 2007, as a                process followed by CARB in adopting
                                                 enforceable, and permanent.17 We refer                  result of State bond funding approved                  the Emission Reduction Report
                                                 to these analyses as the State’s ‘‘integrity            by voters, which provides $1 billion in                complies with the procedural
                                                 demonstrations’’ for these components                   funding to CARB to reduce air pollution                requirements for SIP revisions under
                                                 of the Carl Moyer Program and Prop 1B                   emissions and health risks from freight                CAA section 110 and EPA’s
                                                 Program.                                                movement along California’s priority                   implementing regulations.
                                                    Third, Appendix H lists each of the                  trade corridors. Under the enabling
                                                 832 Carl Moyer Program projects and                     legislation (California Senate Bill 88 and             B. EPA Policy on Economic Incentives
                                                 1,454 Prop 1B Program projects funded                   Assembly Bill 201 (2007)), CARB                           The CAA explicitly provides for the
                                                 pursuant to the identified program                      awards grants to fund projects proposed                use of economic incentives as one tool
                                                 guidelines that the State has relied upon               by local agencies that are involved in                 for states to use to achieve attainment of
                                                 in the Emission Reduction Report. For                   freight movement or air quality                        the NAAQS.21 Economic incentive
                                                 each of these projects, Appendix H                      improvements associated with goods                     programs (EIPs) use market-based
                                                 identifies the ‘‘equipment project ID,’’                movement activities. Upon receipt of                   strategies to encourage the reduction of
                                                 contract term (project life), post-                     such grants, the local agencies are then               emissions from stationary, area, and/or
                                                 inspection date, adoption year of the                   responsible for providing financial                    mobile sources in an efficient manner.
                                                 applicable incentive program guideline,                 incentives to owners of equipment used                 EPA has promulgated regulations for
                                                 and NOX and/or PM2.5 emission                           in freight movement to upgrade to                      statutory EIPs required under section
                                                 reductions achieved in 2014, in pounds                  cleaner technologies, consistent with                  182(g) of the Act and has issued
                                                 per year (lbs/yr).                                      program guidelines adopted by CARB.20                  guidance for discretionary EIPs.22 In
                                                    The Carl Moyer Program is a                                                                                 light of the increasing incremental cost
                                                                                                         III. EPA’s Evaluation of the State’s
                                                 California grant program established in                                                                        associated with further stationary and
                                                                                                         Submittal
                                                 1998 that provides funding to encourage                                                                        mobile source emission reductions and
                                                 the voluntary purchase of cleaner-than-                 A. SIP Procedural Requirements                         the difficulty of identifying such
                                                 required engines, equipment, and other                    Sections 110(a)(2) and 110(l) of the                 additional sources of emissions
                                                 emission reduction technologies.18 In its               Act require that revisions to a SIP be                 reductions in many areas, EPA
                                                 first 12 years, the Carl Moyer Program                  adopted by the State after reasonable                  encourages innovative approaches to
                                                 provided over $680 million in state and                 notice and public hearing. EPA has                     reducing emissions through EIPs and
                                                                                                         promulgated specific procedural                        other nontraditional measures and
                                                    17 Under longstanding EPA guidance, emission
                                                                                                         requirements for SIP revisions in 40                   programs, including ‘‘voluntary’’ and
                                                 reductions achieved through economic incentives
                                                 and other nontraditional emission reduction             CFR part 51, subpart F. These                          ‘‘emerging’’ measures.23
                                                 measures must be quantifiable, surplus,                 requirements include publication of                       We provide below a summary of our
                                                 enforceable, and permanent in order to qualify for      notices, by prominent advertisement in                 evaluation of the Emission Reduction
                                                 SIP emission reduction credit under the CAA. See,       the relevant geographic area, of a public              Report and related incentive program
                                                 e.g., ‘‘Guidance on Incorporating Voluntary Mobile
                                                 Source Emission Reduction Programs in State             hearing on the proposed revisions, a
                                                 Implementation Plans (SIPs),’’ October 24, 1997         public comment period of at least 30                      21 See, e.g., CAA section 110(a)(2)(A) (requiring

                                                 (‘‘1997 VMEP’’) at 6–7; ‘‘Improving Air Quality with    days, and an opportunity for a public                  that each SIP ‘‘include enforceable emission
                                                 Economic Incentive Programs,’’ U.S. EPA, Office of                                                             limitations and other control measures, means, or
                                                                                                         hearing.                                               techniques (including economic incentives such as
                                                 Air and Radiation, January 2001 (EPA–452/R–01–
                                                 001) (‘‘2001 EIP Guidance’’) at section 4.1;              CARB’s November 17, 2014 SIP                         fees, marketable permits, and auctions of emissions
                                                 ‘‘Incorporating Emerging and Voluntary Measures         submittal includes public process                      rights), as well as schedules and timetables for
                                                 in a State Implementation Plan,’’ September 2004        documentation for the Emission                         compliance, as may be necessary or appropriate to
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                                                 (‘‘2004 Emerging and Voluntary Measures                                                                        meet the applicable requirements of [the Act]’’); see
                                                                                                         Reduction Report, including                            also sections 172(c)(6), 183(e)(4).
                                                 Guidance’’) at 3–4; and ‘‘Diesel Retrofits:
                                                 Quantifying and Using Their Emission Benefits in        documentation of a duly noticed public                    22 See 59 FR 16690 (April 7, 1994) (codified at 40

                                                 SIPs and Conformity,’’ February 2014 (‘‘2014 Diesel                                                            CFR part 51, subpart U) and 2001 EIP Guidance.
                                                 Retrofits Guidance’’) at 27–29.                           19 Id.                                                  23 See generally 1997 VMEP; 2004 Emerging and
                                                    18 See generally CARB, ‘‘The Carl Moyer Program        20 See generally ‘‘Strategic Growth Plan Bond        Voluntary Measures Guidance; 2014 Diesel Retrofits
                                                 Guidelines, Approved Revisions 2011,’’ Release          Accountability, Goods Movement Emission                Guidance; and ‘‘Guidance on Incorporating
                                                 Date: February 8, 2013, at Chapter 1 (available         Reduction Program,’’ Approved February 27, 2008        Bundled Measures in a State Implementation Plan,’’
                                                 electronically at http://www.arb.ca.gov/msprog/         (available at http://www.arb.ca.gov/bonds/gmbond/      August 16, 2005 (‘‘2005 Bundled Measures
                                                 moyer/moyer.htm).                                       docs/gm_accountability_with_links_2-27-08.pdf).        Guidance’’).



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                                                 51150                  Federal Register / Vol. 80, No. 163 / Monday, August 24, 2015 / Proposed Rules

                                                 guidelines. Our Technical Support                       The time period that the emission                     the implementing local agencies.29
                                                 Document (TSD) contains a more                          reductions are used in the SIP can be no              These requirements ensure that
                                                 detailed evaluation of the SIP submittal.               longer than the remaining useful life of              emission reductions can be
                                                                                                         the retrofitted or replaced engine,                   independently verified, that the public
                                                 1. Programmatic ‘‘integrity elements’’
                                                                                                         vehicle, or equipment.26                              has access to emissions-related
                                                    Where a State relies upon a                             The Emission Reduction Report                      information, and that required actions
                                                 discretionary EIP or other nontraditional               documents CARB’s bases for concluding                 are practicably enforceable consistent
                                                 emission reduction measure in a SIP                     that the portions of the incentive                    with EPA guidance on practical
                                                 submittal, EPA evaluates the                            program guidelines identified in Table 1              enforceability.
                                                 programmatic elements of the measure                    adequately address each of these                        Finally, with respect to permanence,
                                                 to determine whether the resulting                      integrity elements. First, with respect to            the Emission Reduction Report
                                                 emission reductions are quantifiable,                   quantification, the Emission Reduction                references and describes requirements
                                                 surplus, enforceable and permanent.24                   Report references and describes the                   in the guidelines for program applicants
                                                 These four fundamental ‘‘integrity                      formulas that the guidelines require                  to demonstrate that both the baseline
                                                 elements,’’ which apply to all                          applicants to use to determine annual                 (old) and replacement (new/upgraded)
                                                 discretionary EIPs and other innovative                 emissions (i.e., baseline emissions,                  equipment are used similarly in the
                                                 measures relied on for SIP purposes, are                based on existing equipment or new                    nonattainment area and to document the
                                                 designed to ensure that such measures                   equipment certified by CARB to current                destruction of the baseline (old)
                                                 satisfy the applicable requirements of                  emission standards) and annual                        equipment, as well as requirements to
                                                 the Act.25 EPA has generally defined the                                                                      identify in each contract the timeframe
                                                                                                         emission reductions (i.e., the difference
                                                 four fundamental integrity elements for                                                                       during which the State/District attribute
                                                                                                         between baseline emissions and
                                                 discretionary EIPs and other innovative                                                                       emission reductions to the project.30
                                                                                                         reduced emissions from new/upgraded
                                                 emission reduction programs as follows:                                                                       These requirements ensure that
                                                    • Quantifiable: emission reductions                  equipment).27 These requirements
                                                                                                         ensure that program participants will                 emission reduction calculations are
                                                 are quantifiable if they can be measured                                                                      based on reasonable assumptions
                                                 in a manner that is reliable and                        calculate emission reductions reliably,
                                                                                                         using widely available methods and                    concerning equipment/vehicle activity;
                                                 replicable by different users;                                                                                that baseline (old) equipment and
                                                    • Surplus: Emission reductions are                   assumptions, and in a manner that can
                                                                                                         be replicated by different users.                     vehicles do not continue in operation;
                                                 surplus if they are not otherwise                                                                             and that EPA and the public can
                                                 required by or assumed in a SIP-related                    Second, with respect to additionality              determine whether emission reductions
                                                 program (e.g., an attainment or                         (i.e., ensuring that reductions are                   attributed to a project adequately cover
                                                 reasonable further progress plan or a                   ‘‘surplus’’ or non-duplicative to existing            the period for which those reductions
                                                 transportation conformity                               requirements), the Emission Reduction                 are relied upon in a SIP.
                                                 demonstration), any other adopted State                 Report references and describes the                      Based on these evaluations, we find
                                                 air quality program, a consent decree, or               provisions in the guidelines that                     that the portions of the Carl Moyer
                                                 a federal rule designed to reduce                       prohibit the use of program funds for                 Program and Prop 1B Program
                                                 emission of a criteria pollutant or its                 emission reductions that are required by              guidelines identified in Table 1
                                                 precursors (e.g., a new source                          any federal, state or local regulation or             establish emission reduction
                                                 performance standard or federal mobile                  other legal mandate and requirements to               quantification protocols, grant
                                                 source requirement); additionally,                      ensure that equipment or engines being                conditions, recordkeeping and reporting
                                                 emission reductions are ’’surplus’’ only                replaced are still in usable form and                 obligations, and other requirements that
                                                 for the remaining useful life of the                    would not have been replaced by                       adequately address EPA’s recommended
                                                 vehicle, engine, or equipment being                     normal fleet turnover.28 These                        integrity elements for economic
                                                 replaced.                                               provisions ensure that projects funded                incentive programs.
                                                    • Enforceable: emission reductions                   under these guidelines will achieve
                                                 and other required actions are                          emission reductions that are not                      2. Enforceable Commitment
                                                 enforceable if they are independently                   otherwise required by or assumed in a                    Where a State relies on a discretionary
                                                 verifiable; program violations are                      SIP-related program and that are surplus              EIP or other voluntary measure to satisfy
                                                 defined; those liable can be identified;                to federal, state, and local requirements.            an attainment planning requirement
                                                 the State and EPA may apply penalties                      Third, with respect to enforceability,             under the CAA (e.g., to demonstrate that
                                                 and secure appropriate corrective action                the Emission Reduction Report                         specific amounts of emission reductions
                                                 where applicable; citizens have access                  references and describes the funding                  will occur by a future milestone date),
                                                 to all emissions-related information                    criteria in the guidelines that are                   the State must take responsibility for
                                                 obtained from participating sources;                    designed to ensure that emission                      assuring that SIP emission reduction
                                                 citizens may file suit against a                        reductions will be independently                      requirements are met through an
                                                 responsible entity for violations; and the              verifiable and practicably enforceable by             enforceable commitment, which
                                                 required reductions/actions are                         CARB and the District, including                      becomes federally enforceable upon
                                                 practicably enforceable consistent with                 detailed requirements for project                     approval into the SIP.31 The purpose of
                                                 EPA guidance on practical                               applications, contracts, pre- and post-               the Emission Reduction Report,
                                                 enforceability.                                         project inspections, and recordkeeping                however, is to demonstrate that a
                                                    • Permanent: emission reductions are                 and reporting by both the grantees and                portion of the emission reductions
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                                                 permanent if the State and EPA can                                                                            required under a previously-approved
                                                 ensure that the reductions occur for as                   26 See 2001 EIP Guidance at Section 4.1; 1997
                                                 long as they are relied upon in the SIP.                VMEP at 6–7; 2004 Emerging and Voluntary                29 Emission Reduction Report at 6–7, 10–11, 15,

                                                                                                         Measures Guidance at 3–4; and 2014 Diesel             17–19, Appendix F, and Appendix G.
                                                   24 See, e.g., 2001 EIP Guidance at section 4.1.       Retrofits Guidance at 27–29.                            30 Emission Reduction Report at 9–10, 13–14, 16,
                                                   25 See,                                                 27 Emission Reduction Report at 7–8, 11–12, 15,     21–22, Appendix F, and Appendix G.
                                                           e.g., 2001 EIP Guidance at section 4.1;
                                                 1997 VMEP at 6–7; 2004 Emerging and Voluntary           19–20, Appendix F, and Appendix G.                      31 See, e.g., 1997 VMEP at 4–7; 2004 Emerging

                                                 Measures Guidance at 3–4; and 2014 Diesel                 28 Emission Reduction Report at 9, 12, 15–16, 20,   and Voluntary Measures Guidance at 8–12; and
                                                 Retrofits Guidance at 27–29.                            Appendix F, and Appendix G.                           2005 Bundled Measures Guidance at 7–12.



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                                                                        Federal Register / Vol. 80, No. 163 / Monday, August 24, 2015 / Proposed Rules                                                 51151

                                                 SIP commitment have in fact been                          We will accept comments from the                    Indian tribe has demonstrated that a
                                                 achieved, not to satisfy a future                       public on this proposed action until the              tribe has jurisdiction. In those areas of
                                                 emission reduction requirement.                         date noted in the DATES section above.                Indian country, the proposed rule does
                                                 Accordingly, it is not necessary to                                                                           not have tribal implications and will not
                                                                                                         V. Statutory and Executive Order
                                                 require the State to submit additional                                                                        impose substantial direct costs on tribal
                                                                                                         Reviews
                                                 commitments for this purpose.                                                                                 governments or preempt tribal law as
                                                                                                            Under the Clean Air Act, the                       specified by Executive Order 13175 (65
                                                 C. Sections 110(l) and 193 of the Act                   Administrator is required to approve a                FR 67249, November 9, 2000).
                                                                                                         SIP submission that complies with the
                                                   Section 110(l) of the CAA prohibits                                                                         List of Subjects in 40 CFR Part 52
                                                                                                         provisions of the Act and applicable
                                                 EPA from approving any SIP revision
                                                                                                         Federal regulations. 42 U.S.C. 7410(k);                 Environmental protection, Air
                                                 that would interfere with any applicable
                                                                                                         40 CFR 52.02(a). Thus, in reviewing SIP               pollution control, Incorporation by
                                                 requirement concerning attainment and
                                                                                                         submissions, EPA’s role is to approve                 reference, Intergovernmental relations,
                                                 RFP or any other applicable CAA                         state choices, provided that they meet                Nitrogen dioxide, Particulate matter,
                                                 requirement. The Emission Reduction                     the criteria of the Clean Air Act.                    Reporting and recordkeeping
                                                 Report documents CARB’s bases for                       Accordingly, this proposed action                     requirements.
                                                 concluding that specific incentive                      merely approves state law as meeting
                                                 projects implemented by January 1,                                                                              Authority: 42 U.S.C. 7401 et seq.
                                                                                                         Federal requirements and does not
                                                 2014, in accordance with the identified                 impose additional requirements beyond                   Dated: August 6, 2015.
                                                 portions of the Carl Moyer Program and                  those imposed by state law. For that                  Jared Blumenfeld,
                                                 Prop 1B Program guidelines, have                        reason, this proposed action:                         Regional Administrator, Region IX.
                                                 achieved a total of 7.8 tpd of NOX                         • Is not a significant regulatory action           [FR Doc. 2015–20749 Filed 8–21–15; 8:45 am]
                                                 emission reductions and 0.2 tpd of                      subject to review by the Office of                    BILLING CODE 6560–50–P
                                                 PM2.5 emission reductions in the SJV                    Management and Budget under
                                                 area which may be credited toward the                   Executive Orders 12866 (58 FR 51735,
                                                 State’s 2014 emission reduction                         October 4, 1993) and 13563 (76 FR 3821,               ENVIRONMENTAL PROTECTION
                                                 commitment in the 2008 PM2.5 Plan.                      January 21, 2011);                                    AGENCY
                                                 These calculations of emission                             • does not impose an information
                                                 reductions are based on actions taken by                collection burden under the provisions                40 CFR Part 52
                                                 grantees before January 1, 2014 which                   of the Paperwork Reduction Act (44                    [EPA–R07–OAR–2015–0556; FRL–9932–94–
                                                 reduced emissions of NOX and PM2.5 in                   U.S.C. 3501 et seq.);                                 Region 7]
                                                 the SJV (e.g., through replacement of                      • is certified as not having a
                                                 older, higher-polluting vehicles                        significant economic impact on a                      Approval and Promulgation of Air
                                                 operating in the SJV area with newer,                   substantial number of small entities                  Quality Implementation Plans; State of
                                                 cleaner vehicles). The Emission                         under the Regulatory Flexibility Act (5               Missouri; Cross-State Air Pollution
                                                 Reduction Report does not establish or                  U.S.C. 601 et seq.);                                  Rule
                                                 revise any emission limitation, control                    • does not contain any unfunded
                                                 measure, or other requirement in the                    mandate or significantly or uniquely                  AGENCY:  Environmental Protection
                                                 applicable SIP. We propose to                           affect small governments, as described                Agency (EPA).
                                                 determine that our approval of the                      in the Unfunded Mandates Reform Act                   ACTION: Proposed rule.
                                                 Emission Reduction Report would                         of 1995 (Pub. L. 104–4);
                                                 comply with CAA section 110(l)                             • does not have Federalism                         SUMMARY:   The Environmental Protection
                                                 because the proposed SIP revision                       implications as specified in Executive                Agency (EPA) is proposing to approve
                                                 would not interfere with the on-going                   Order 13132 (64 FR 43255, August 10,                  revisions to the State Implementation
                                                 process for ensuring that requirements                  1999);                                                Plan (SIP) submitted by the State of
                                                 for attainment of the NAAQS and other                      • is not an economically significant               Missouri in a letter dated March 30,
                                                 CAA provisions are met.                                 regulatory action based on health or                  2015. This SIP revision provides
                                                                                                         safety risks subject to Executive Order               Missouri’s state-determined allowance
                                                   Section 193 of the Act does not apply                                                                       allocations for existing electric
                                                                                                         13045 (62 FR 19885, April 23, 1997);
                                                 to this proposed action because the
                                                                                                            • is not a significant regulatory action           generating units (EGUs) in the state for
                                                 Emission Reduction Report does not                                                                            the 2016 control period and replaces
                                                                                                         subject to Executive Order 13211 (66 FR
                                                 modify any SIP-approved control                                                                               certain allowance allocations for the
                                                                                                         28355, May 22, 2001);
                                                 requirement in effect before November                      • is not subject to requirements of                2016 control periods established by EPA
                                                 15, 1990.                                               Section 12(d) of the National                         under the Cross-State Air Pollution Rule
                                                 IV. Proposed Action and Public                          Technology Transfer and Advancement                   (CSAPR). The CSAPR addresses the
                                                 Comment                                                 Act of 1995 (15 U.S.C. 272 note) because              ‘‘good neighbor’’ provision of the Clean
                                                                                                         application of those requirements would               Air Act (CAA or Act) that requires states
                                                   Under section 110(k)(3) of the Act,                   be inconsistent with the Clean Air Act;               to reduce the transport of pollution that
                                                 EPA is proposing to fully approve the                   and                                                   significantly affects downwind air
                                                 submitted Emission Reduction Report                        • does not provide EPA with the                    quality. In this action EPA is proposing
                                                 and, based on CARB’s documentation                      discretionary authority to address, as                to approve Missouri’s SIP revision,
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                                                 therein of actions taken by grantees in                 appropriate, disproportionate human                   incorporating the state-determined
                                                 accordance with the identified incentive                health or environmental effects, using                allocations for the 2016 control periods
                                                 program guidelines, to approve 7.8 tpd                  practicable and legally permissible                   into the SIP, and amending the
                                                 of NOX emission reductions and 0.2 tpd                  methods, under Executive Order 12898                  regulatory text of the CSAPR Federal
                                                 of PM2.5 emission reductions for credit                 (59 FR 7629, February 16, 1994).                      Implementation Plan (FIP) to reflect this
                                                 toward the State’s 2014 emission                           In addition, the SIP is not approved               approval and inclusion of the state-
                                                 reduction commitment in the 2008                        to apply on any Indian reservation land               determined allocations. EPA is
                                                 PM2.5 Plan.                                             or in any other area where EPA or an                  proposing to take direct final action to


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Document Created: 2015-12-15 10:55:06
Document Modified: 2015-12-15 10:55:06
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesWritten comments must be received on or before September 23, 2015.
ContactIdalia Perez, EPA Region IX, [email protected], (415) 972-3248.
FR Citation80 FR 51147 
CFR AssociatedEnvironmental Protection; Air Pollution Control; Incorporation by Reference; Intergovernmental Relations; Nitrogen Dioxide; Particulate Matter and Reporting and Recordkeeping Requirements

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