Federal Register Vol. 80, No.52,

Executive Order 12866

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

Pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the collections of information in this rule have been approved by the Office of Management and Budget (OMB) under control number 0563-0055.

FCIC is committed to complying with the E-Government Act of 2002, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. The regulation does not require any more action on the part of the small entities than is required on the part of large entities. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have an impact on small entities, and, therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983.

This proposed rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. Interpretations of statutory and regulatory provisions are matters of general applicability and, therefore, no administrative appeals process is available and judicial review may only be brought to challenge the interpretation after seeking a determination of appealability by the Director of the National Appeals Division in accordance with 7 CFR part 11. Interpretations of procedure or policy provisions not codified in the Code of Federal Regulations are administratively appealable and the appeal provisions published at 7 CFR part 11 must be exhausted before any action for judicial review may be brought against FCIC.

This action is not expected to have a significant economic impact on the quality of the human environment, health, or safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

FCIC proposes to revise the General and Administrative Regulations Subpart X—Interpretations of Statutory and Regulatory Provisions to provide requestors with information on how to request a final agency determination and an interpretation of procedures or policy provisions not codified in the Code of Federal Regulations within one administrative regulation. There are provisions in policies not codified in the Code of Federal Regulations that are identical to those in the Common Crop Insurance Basic Provisions (Basic Provisions) or Crop Provisions codified in the Code of Federal Regulations. In such instances, the requestor sought an interpretation of the applicable provision in the Basic Provisions and that interpretation was applicable to all policies that contained an identical provision. Nothing in this rule changes this process. However, there are numerous policies with provisions that are not codified in the Code of Federal Regulations in any policy. For these policy provisions, this rule provides a mechanism to obtain an interpretation of such provision.

The rule will also clarify existing provisions, eliminate redundancies, remove or update obsolete references, simplify the regulation to address final agency determinations and interpretations of procedures or policy provisions not codified in the Code of Federal Regulations in the same regulation, simplify program administration, and improve clarity of the requestor and FCIC obligations. The proposed rule also incorporates the information formerly contained in Manager's Bulletin MGR-05-018 into subpart X for efficiency and ease of use. Manager's Bulletin MGR-05-018 currently provides criteria for requesting an interpretation of procedures when a requestor seeks an interpretation of the meaning or applicability of procedure used in administering the Federal crop insurance program. Accordingly, Manager's Bulletin MGR-05-018 will no longer be used upon issuance of the final rule to this proposed rule.

The proposed rule amends the language to be consistent where possible and revises the regulation in plain language for ease of readability by the requestor.

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation proposes to amend 7 CFR part 400 as follows:

I. Obtaining Information and Submitting Comments A. Obtaining Information

Please refer to Docket ID NRC-2009-0279 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document by any of the following methods:

• Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2009-0279.

• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “ADAMS Public Documents” and then select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected]. The ANPR document is available in ADAMS under Accession No. ML14183B023.

• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

Please include Docket ID NRC-2009-0279 in your comment submission.

The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at http://www.regulations.gov as well as enter the comment submissions into ADAMS. The NRC does not routinely edit comment submissions to remove identifying or contact information.

If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.

On July 25, 2014 (79 FR 43284), the NRC published for comment an ANPR to obtain input from members of the public on the development of a draft regulatory basis. The draft regulatory basis would identify potential changes to the NRC's current radiation protection regulations. The potential changes, if implemented, would achieve a closer alignment between the NRC's radiation protection regulations and the recommendations in ICRP Publication 103 (2007). The ANPR identifies specific questions and issues with respect to a possible revision of the NRC's radiation protection requirements. Comments, including responses to the specific questions, will be considered by the NRC staff when it develops the draft regulatory basis.

The Part 20 of Title 10 of the Code of Federal Regulations (10 CFR) ANPR public comment period was originally scheduled to close on November 24, 2014, after a 120-day comment period. In response to several requests from members of the public received throughout November 2014, the NRC extended the public comment period on the ANPR, by an additional 120 days, to March 24, 2015 (79 FR 69065; November 20, 2014).

In response to a second request, dated February 18, 2015, from several members of the public, the NRC is now extending the public comment period by an additional 90 days. The deadline for submitting comments is now extended from March 24, 2015, to June 22, 2015.

I. Background Information

Early Stage Small Business Investment Company Initiative. In the Small Business Investment Act of 1958 (the Act), Congress created the Small Business Investment Company (SBIC) program to “stimulate and supplement the flow of private equity capital and long-term loan funds which small-business concerns need for the sound financing of their business operations and for their growth, expansion, and modernization, and which are not available in adequate supply. * * *” 15 U.S.C. 661. Congress intended that the program “be carried out in such manner as to insure the maximum participation of private financing sources.” Id. In accordance with that policy, the U.S. Small Business Administration (SBA), through the SBIC program, does not invest directly in small businesses, but provides leverage to SBICs, privately-owned and professionally managed for-profit investment funds licensed by SBA, by guaranteeing the payment of debentures issued by SBICs (Debentures). These SBICs in turn make loans to, and investments in, qualifying small businesses.

Since Fiscal Year (FY) 2000, the SBIC Debenture program has operated at zero subsidy cost, meaning that expected losses to the program's portfolio must be fully recouped through the collection of SBIC leverage fees in order to keep the program at zero subsidy cost to the taxpayer. By statute, SBIC leverage fees include a 1% commitment fee, a 2% draw fee, and an annual charge set at the time of commitment and paid on outstanding leverage in conjunction with interest payments. 15 U.S.C. 683(i). The annual charge is formulated each year to keep the program at zero subsidy cost, but may not, by statute, exceed 1.38%. 15 U.S.C. 683(b). Because the standard Debenture (Current Pay Debenture) requires semi-annual interest payments, most SBICs structure their investments as loans or mezzanine debt to finance later stage small businesses with positive operating cash flow so that they can meet requisite interest payments.

On April 27, 2012, SBA published a final rule (77 FR 25042) to define a new sub-category of SBICs as part of President Obama's Start-up America initiative. SBA's intent was to license over a 5-year period (fiscal years 2012 through 2016) venture funds focused on early stage businesses and to guarantee Debentures in an amount up to one-half of each fund's total capitalization. SBA allocated $1 billion of its SBIC Debenture leverage authorization over these years to this effort.

Although SBA has received 58 applications to the Early Stage SBIC program, to date, SBA has only licensed 5 Early Stage SBICs due to the quality of the application pool and SBA's rigorous licensing standards. SBA is seeking input on whether a market need for the program remains and, if so, what changes should SBA consider in order to attract Early Stage fund managers with successful track records.

Early Stage SBIC Key Requirements Summary. Current regulations identify special requirements for Early Stage SBICs to manage the risk associated with these funds investing in seed and early stage businesses, including the following:

(1) Licensing Process—§ 107.310: SBA uses a call process rather than accepting rolling applications as in the regular SBIC program.

(2) Required Investments—§ 107.1120(k): Early Stage SBICs must invest at least 50% of aggregate financing dollars into Early Stage companies, as defined in § 107.50, but generally defined as companies that have not yet achieved positive operating cash flow as of the date of the initial investment.

(3) Minimum Regulatory Capital—§ 107.210(3): Early Stage SBICs must have at least $20 million in Regulatory Capital (qualifying Private Capital as defined in § 107.50).

(4) Leverage:

(a) Maximum Leverage—§ 107.1150: Early Stage SBICs may qualify for leverage up to 100% of Regulatory Capital (also called “one tier of leverage”), not to exceed $50 million.

(b) SBA Leverage Fees—§ 107.1130: All SBICs issuing Debentures, including Early Stage SBICs, must pay 3% in up-front fees (1% at commitment and 2% at draw) and an additional SBA fee, not to exceed 1.38 percent per annum, on outstanding Debentures paid at the same time as interest.

(c) Type of Leverage: Early Stage SBICs may choose from two types of leverage both with ten year maturities and subject to Early Stage Distribution rules:

(i) Early Stage Current Pay Debenture: Requires quarterly payments for interest and SBA annual fees. Early Stage SBICs choosing to use the Current Pay Debenture are required to maintain a 5-year interest reserve per § 107.1181. The interest reserve may include unfunded commitments or cash reserves which could be funded from Debenture proceeds. The interest reserve is intended to provide a pool of funds from which Early Stage SBICs can pay interest and annual fees while their investments mature.

(ii) Discounted/Accruing Debenture: Debenture issued at a discount of 5 years of annual fees and interest charges, so that the amount owed accrues over a 5-year period to face value. After the 5-year period, quarterly payments for interest and annual fees must be paid on an ongoing basis.

(5) Distribution Rules—§ 107.1180: Before an Early Stage SBIC with outstanding leverage may distribute to its investors, it must first pay all required SBA interest and charges and any leverage principal due at maturity. After those payments are made, if the Early Stage SBIC's capital impairment percentage, defined in § 107.1840, is 50 percent or more, and the SBIC's leverage ratio (defined as outstanding leverage to Leverageable Capital) exceeds 0.5, it must repay all outstanding SBIC Debentures before distributing to private investors. Otherwise, the Early Stage SBIC must repay SBA leverage, at a minimum, pro rata (in proportion) with any distributions returned to private investors on a cumulative basis.

(6) Restrictions on Third-Party Debt—§ 107.565: Early Stage SBICs must seek SBA's prior written approval before incurring any third-party debt, except for accounts payable from routine business operations.

(7) Capital Impairment Percentage (CIP) §§ 107.1830-1850: CIP is the primary financial metric SBA uses to evaluate an SBIC's ability to repay its leverage. CIP measures the losses incurred by an SBIC relative to its Regulatory Capital. If an SBIC exceeds its maximum allowable CIP, SBA has the right to, among other things, declare the entire indebtedness of the SBIC's Debentures immediately due and payable; and institute proceedings for the appointment of SBA as receiver of the SBIC. Because Early Stage SBICs are limited to one tier of leverage, the maximum allowable CIP ranges from 45% to 70%, depending on the percentage of equity. If the percentage of equity investments at cost exceeds 67%, the maximum allowable CIP would be 70%.

(1) Market Need. According to data from PricewaterhouseCoopers Moneytree (https://www.pwcmoneytree.com/), financings to seed and early stage companies by venture funds has grown from $2.16 billion in the first quarter of calendar year 2012 to over $4 billion in the second quarter of calendar year 2014, the highest amount in any quarter since 2000. As a federal credit program, SBA seeks to direct capital to gaps in the marketplace. Given the growth in early stage financings since 2012, SBA is trying to determine whether it should continue to license Early Stage SBICs past 2016. SBA is seeking input from the public with regard to the following questions:

(a) Are there barriers preventing promising early stage small businesses from being financed, and, if so, what are the barriers?

(b) Are there gaps in the financial markets with regard to financing early stage or seed companies in the United States? If so, what evidence exists to identify and verify these gaps?

(c) If there are no or limited gaps in the financial markets for early stage and seed companies in the United States, should SBA continue the Early Stage SBIC program past 2016, but issue a call for Early Stage SBIC applications only if and when identifiable market gaps occur? If so, what evidence should SBA use to identify declining market conditions or gaps in the market?

(2) Targeted Early Stage SBIC Participants. The Early Stage SBIC initiative focused on more established and traditional early stage venture funds to participate in the program because these funds' investment strategy effectively utilizes SBA's leverage to finance small businesses. SBA recognizes that many early stage and seed businesses may obtain capital from other sources than traditional early stage/seed venture funds. Accelerator funds, incubators, angel investment funds or other types of similar funds—venture capital funds that generally make a substantial number of relatively small-dollar equity investments in seed and early stage businesses—have not demonstrated significant interest in SBA's Early Stage SBIC initiative. Could these funds effectively utilize Debenture leverage as part of their investment strategy in a way that would not increase the risk profile of the SBIC program. What changes to the Early Stage SBIC program would SBA need to make in order to attract qualified funds that use this investment strategy? Would the minimum regulatory capital need to be changed? Would the leverage terms need to be changed? What data is available to assess the risk associated with these types of funds?

(1) Fund-Level Debt Versus Equity. Based on discussions with early stage fund managers and limited partners, SBA understands that most early stage funds would prefer equity rather than fund-level debt. However, SBA is only authorized to guarantee SBIC Debentures for its licensed funds. SBA also recognizes the potential mismatch between Debenture leverage and early stage portfolio company cash flows. Because most early stage portfolio companies do not have the cash flow to service debt, most early stage financings are structured as equity. SBA tried to compensate for this in the Early Stage SBIC program by implementing a discounted debenture in which leverage is issued at a discount and interest and charges accrue for 5 years before the fund would be required to make payments on a quarterly basis. Alternatively, Early Stage SBICs could use the Current Pay Debenture and pay interest and charges on a quarterly basis using the required interest reserve.

SBA has heard from members of the venture capital industry that many early stage funds are not interested in leverage. SBA seeks input from the public on whether fund-level debt is of use to early stage fund managers or whether concerns exist with regard to current SBIC Early Stage Debenture leverage terms.

(2) Early Stage SBIC Leverage Terms. Early Stage SBICs are expected to have significantly higher losses than regular SBICs, due to the risk associated with their portfolios. SBA structured the Early Stage SBIC program so that it could be run with minimum impact to the regular SBIC Debenture program. This includes limiting the amount of Early Stage leverage as a percentage of the overall SBIC portfolio. Key Early Stage SBIC requirements are summarized in Section I of this ANPRM. SBA seeks input from the public to identify how Early Stage SBIC requirements could be improved without increasing SBA's credit risk. In particular, SBA has the following questions:

(a) Minimum Regulatory Capital: Currently, Early Stage SBICs must have at least $20 million in Regulatory Capital. Should SBA modify this Regulatory Capital requirement in order to improve the number of qualified applicants to the program?

(b) Maximum Leverage: SBA set the maximum leverage for Early Stage SBICs at $50 million based on its overall allocation of $200 million per year, in order to provide some level of portfolio diversification. Should SBA increase the maximum leverage available to Early Stage SBICs, for example, to $100 million, approximately half of any year's allocation?

(c) Maximum Leverage Ratio: Currently, SBA provides up to one tier of leverage, not to exceed the maximum, in order to limit its credit risk. Should SBA lower the maximum leverage ratio to help further reduce its credit risk? What maximum leverage ratio is appropriate?

(d) Interest Reserve: If Early Stage SBICs use the Current Pay Debenture, they must maintain a 5-year interest reserve to make interest and annual charge payments. SBA set this interest reserve to make sure that Early Stage SBICs would have sufficient funds to make required interest payments for the first 5 years and to lower the overall loss rate. Would removing the interest reserve attract more qualified applicants? If so, since the interest reserve was put in place to mitigate SBA's risk and limit the increase to the SBIC Debenture annual charge, what actions should SBA consider to help mitigate SBA's risk?

(3) Other Early Stage SBIC Regulations. SBA invites comments on other aspects of Early Stage regulations, including the following:

(a) Licensing Process: Would a rolling licensing process (where SBA accepts applications throughout the year) versus the Early Stage Call process, identified in § 107.310, be preferred and/or attract more qualified applicants to the program?

(b) Third-Party Debt: Do third-party debt restrictions identified in § 107.565 detract from the program and what changes could be made to achieve the same credit risks for SBA?

(4) Other SBIC Regulations and Guidelines. SBA also invites comments on other SBIC regulatory requirements as identified in 13 CFR part 107 that may be of particular concern to Early Stage SBIC applicants. For example, some Early Stage SBICs and potential applicants have indicated concerns with SBA's Valuation Guidelines (http://www.sba.gov/content/valuation-guidelines-sbics). SBA is interested in feedback as to what those concerns are and what changes industry members would recommend.

EPA granted full approval of the Pennsylvania Title V Operating Permits Program on July 30, 1996. See 61 FR 39597. Under 40 CFR 70.9(a) and (b), an approved state title V operating permits program must require that the owners or operators of part 70 sources pay annual fees, or the equivalent over some other period, that are sufficient to cover the permit program costs and ensure that any fee required under 40 CFR 70.9 is used solely for permit program costs. The fee schedule must result in the collection and retention of revenues sufficient to cover the permit program costs.

Pennsylvania's initial title V permit emission fee, established in 1994 at 25 PA Code 127.705, was $37 per ton of regulated pollutant per title V facility. Pennsylvania's fee has been increased each year since 1994 by the percentage, if any, by which the Consumer Price Index (CPI) for the most recent calendar year exceeded the CPI for the previous calendar year. Under that regulatory framework, the annual emission fee for emissions occurring in calendar year 2012 was $57.50 per ton of regulated pollutant for emissions of up to 4,000 tons of each regulated pollutant. The fee structure has not been revised since 1994.

Pennsylvania has determined that title V annual emission fee revenues collected are no longer sufficient to cover title V program costs. Installation of air pollution control technology over the past two decades on major stationary sources, the retirement or curtailment of operations by major sources, and the conversion at many major facilities from burning coal or oil to burning natural gas have resulted in decreased emission of regulated pollutants that are subject to annual emission fees, and revenues collected have been decreasing as a result. The decline in interest rates paid on savings account balances used by the Commonwealth to manage permit fees collected also has affected the funds available to Pennsylvania, as the investments earn less interest in the current economy compared to the early years of the title V program. Pursuant to 40 CFR 70.4(i)(2), when EPA receives a title V program revision, EPA will publish its proposed approval or disapproval in the Federal Register and provide opportunity for comment.

In the February 11, 2014 program revision, Pennsylvania has included revised 25 PA Code 127.705 which Pennsylvania has amended to increase Pennsylvania's annual emission fees. Fees are increased to $85 per ton of emissions for emissions from title V sources of up to 4,000 tons of each regulated pollutant. The provisions for increasing the annual emissions fees in response to increases in the CPI at 25 PA Code 127.705(d) remain unchanged. The revised fees are designed to cover all reasonable costs required to develop and administer the title V program as required by 40 CFR 70.9(a) and (b). These costs include those for activities such as reviewing and processing plan approvals and operating permits, conducting inspections, responding to complaints and pursuing enforcement actions, emissions and ambient air monitoring, preparing applicable regulations and guidance, modeling, analyses, demonstrations, emission inventories, and tracking emissions.

Without this fee increase, Pennsylvania anticipates funds will not be sufficient to sustain the title V permitting program beginning fiscal years 2015-2016. If funds become insufficient to sustain the title V permitting program in Pennsylvania, EPA may determine that Pennsylvania has not taken “significant action to assure adequate administration and enforcement of the Program” and take subsequent required action under 40 CFR 70.10(b) and(c) as well as impose mandatory and discretionary sanctions under the CAA.

The February 11, 2014 Title V Operating Permit Program revision consists of amendments to Pennsylvania's rules which establish annual emission fees under title V of the CAA. This rulemaking proposes approval of the increase to the annual title V fees paid by the owner or operator of a title V facility from $57.50 per ton of regulated air pollutant to $85 per ton because the revision meets requirements in 40 CFR 70.9 for sufficient title V fees to cover permit program costs. The emission fees apply to emissions up to 4,000 tons of any regulated pollutant. The proposed revision does not establish a fee structure for carbon dioxide or other greenhouse gases (GHGs). EPA's rules do not mandate revisions to state title V programs to account for GHG emissions.

Pursuant to 40 CFR 70.4(i)(2), EPA is proposing to approve the Pennsylvania Title V Operating Program revision submitted on February 11, 2014 to increase the annual title V fees paid by the owners or operators of all title V facilities throughout Pennsylvania, including Allegheny and Philadelphia Counties, from $57.50 per ton of regulated air pollutant to $85 per ton. The revision meets requirements in 40 CFR 70.9. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.

This proposed action merely proposes to approve state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. For that reason, this proposed action:

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

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

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

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

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

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

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

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

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

In addition, this proposed rule related to Pennsylvania title V fees does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the program is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

Throughout this document wherever “we”, “us” or “our” is used, it is intended to refer to the EPA.

Section 110 of the Clean Air Act (CAA) specifies the general requirements for states to submit SIPs to implement, maintain and enforce the National Ambient Air Quality Standards (NAAQS) and the EPA's actions regarding approval of those SIPs. On July 1, 2014 and October 24, 2014, the Alaska Department of Environmental Conservation (ADEC), on behalf of the Governor of Alaska, submitted SIP revisions to the EPA to account for regulatory updates effective October 6, 2013 and November 9, 2014, respectively. These revisions update Alaska Administrative Code Title 18 Environmental Conservation, Chapter 50 Air Quality Control (18 AAC 50) to reflect the adoption by reference of Federal regulations and definitions into the Alaska SIP, and edit associated cross-references to definitions. The revisions also clarify stationary source permitting rules governing owner-requested emission limits, and update the SIP to reflect the redesignation of the Eagle River area of Anchorage to attainment for particulate matter with an aerodynamic diameter less than or equal to a nominal 10 micrometers (PM10).

We note that this action does not address the portions of the July 1, 2014, and October 24, 2014, SIP submittals related to Alaska's nonattainment new source review permitting program. The nonattainment new source review permitting rule updates submitted as part of these revisions were approved in a previous action on January 7, 2015 (80 FR 832). In this action, we are proposing to approve the remainder of the revisions to the Alaska SIP submitted on July 1, 2014 and October 24, 2014. Please see below for our evaluation.

On January 7, 2013, the EPA approved the maintenance plan submitted by ADEC for the Eagle River PM10 nonattainment area and its accompanying request to redesignate the area to attainment for the PM10 NAAQS (78 FR 900). The redesignation became effective on March 8, 2013. Accordingly, in the July 1, 2014, submittal, ADEC revised 18 AAC 50.015 “Air Quality Designations, Classifications, and Control Regions” to reflect the change. We are proposing to approve the revision to this rule.

In the July 1, 2014, submittal, ADEC revised and submitted changes to 18 AAC 50.040 “Federal Standards Adopted by Reference” to update the citation dates incorporating by reference certain Federal requirements into the Alaska SIP. Specifically, ADEC submitted the updated adoption by reference of 40 CFR part 51, Appendix W “Guideline on Air Quality Models” revised as of July 1, 2012. We are proposing to approve this revision as consistent with Federal requirements.

ADEC also submitted the updated incorporation by reference of Federal PSD permitting regulations at 40 CFR 51.166 and 40 CFR 52.21, revised as of April 1, 2013, which are referenced in ADEC's major source permitting rules in 18 AAC Chapter 50, Article 3, and relied on to implement ADEC's SIP-approved PSD permitting program. ADEC excluded from its submittal certain PSD permitting provisions in 40 CFR 51.166 and 40 CFR 52.21 that have been vacated by recent Court decisions, and those provisions are therefore not before the EPA for approval. Specifically, in response to the Court vacatur of the EPA PM2.5 significant monitoring concentration (SMC) and significant impact level (SIL) regulations, ADEC did not submit to the EPA for approval the provisions in the Alaska SIP impacted by the Court decision (18 AAC 50.040(h)(7) and (9)). ADEC's July 1, 2014, submittal cover letter confirms that ADEC intends to act in accordance with the Court vacatur, and that, although these provisions have not yet been repealed and remain in effect as a matter of State law, ADEC will not apply either the PM2.5 SMC provisions at 40 CFR 51.166(i)(5)(i)(c) and 52.21 (i)(5)(i)(c), or the PM2.5 SIL provisions at 40 CFR 51.166(k)(2) and 52.21(k)(2) in implementing the State new source permitting program. For a more detailed discussion of this issue, please see our previous action addressing revisions to the State PSD program (proposed May 5, 2014, 79 FR 25533; finalized September 19, 2014, 79 FR 56268).

ADEC also excluded from its submittals the greenhouse gas (GHG) regulatory provision at 40 CFR 52.21(b)(49)(v) that was recently vacated by the Supreme Court and that is adopted by reference in 18 AAC 50.040(h)(4), effective October 6, 2013. On June 3, 2010, the EPA revised Federal PSD permitting rules addressing the application of the requirements to GHG emissions (GHG Tailoring Rule) (75 FR 31514). However, on June 23, 2014, the Supreme Court, in Utility Air Regulatory Group v. Environmental Protection Agency, 1 issued a decision addressing the application of PSD permitting requirements to GHG emissions. The Court said that the EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source (or modification thereof) required to obtain a PSD permit. The Court also said that the EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limitations on GHG emissions based on the application of best available control technology. In order to act consistently with its understanding of the Court's decision pending further judicial action before the U.S. Court of Appeals for the District of Columbia to effectuate the decision, the EPA is not continuing to apply the EPA regulations that would require that SIPs include permitting requirements that the Supreme Court found impermissible. Specifically, the EPA is not applying the requirement that a state's SIP-approved PSD program require that sources obtain PSD permits when GHGs are the only pollutant (i) that the source emits or has the potential to emit above the major source thresholds, or (ii) for which there is a significant emissions increase and a significant net emissions increase from a modification (e.g. 40 CFR 51.166(b)(48)(v)).

The EPA anticipates a need to revise Federal PSD rules in light of the Supreme Court decision. In addition, the EPA anticipates that many states will revise their existing SIP-approved PSD programs in light of the Supreme Court's decision. The timing and content of subsequent EPA actions with respect to the EPA regulations is expected to be informed by additional legal processes before the D.C. Circuit. The EPA is not expecting states to have revised their existing PSD program regulations at this juncture, before the D.C. Circuit has addressed these issues and before the EPA has revised its regulations at 40 CFR 51.166 and 52.21. However, the EPA is evaluating PSD program submissions to assure that state programs correctly address GHGs, consistent with the Supreme Court's decision. Because ADEC has excluded from its SIP submission the GHG Tailoring Rule provision that was vacated by the Supreme Court, that provision is not before the EPA for action.

For the reasons discussed above, we are proposing to determine that the updated incorporation by reference of Federal requirements in 18 AAC 50.040(h) is consistent with CAA requirements for SIP-approved PSD permitting programs.

We note that in both the July 1, 2014, and October 24, 2014, submittals, ADEC included changes to 18 AAC 50.040(i) related to Alaska's nonattainment new source review permitting program. These changes were previously approved on January 7, 2015 (80 FR 832).

The July 1, 2014, submittal included a revised version of 18 AAC 50.225 “Owner-Requested Limits,” effective October 6, 2013, that removed paragraph (b)(7). Paragraph (a) of 18 AAC 50.225 specifies that an owner-requested limit under this provision may be requested “to avoid all permitting obligations under AS 46.14.130 [Stationary sources requiring permits].” Paragraph (b)(7) of 18 AAC 50.225 stated that, “if applying all limits does not avoid all permit classifications under AS 46.14 and this chapter, the owner or operator shall submit to the department “a description, and if necessary an application, for the remaining classifications[.]” In the July 1, 2014, submittal, ADEC stated that in 18 AAC 50.225, paragraph (b)(7) contradicts paragraph (a) and that the repeal of (b)(7) merely clarifies the requirements for obtaining owner-requested limits. As explained by ADEC, the State's interpretation of 18 AAC 50.225 is that a source is only eligible to apply for an owner-requested limit under 18 AAC 50.225 to avoid all stationary source permitting obligations under AS 46.14.130. AS 46.14.130 “Stationary sources requiring permits” is the Alaska statute requiring both title I major new source construction permits and title V major source operating permits.2 If all obligations for major new source construction permitting cannot be avoided by requesting an emission limit on the source, then the owner or operator may not apply for an owner requested limit (ORL) under 18 AAC 50.225, but could instead request an ORL in a permit issued under 18 AAC 508 “Minor Permits Requested by the Owner or Operator.” This provision allows an owner or operator to request a minor permit from the department for “establishing an owner requested limit (ORL) to avoid one or more permit classifications under AS 46.14.130 at a stationary source that will remain subject to at least one permit classification. . .”

In the July 1, 2014, submittal ADEC asserted that “there is no relaxation of the regulations, as the two types of ORLs allow the applicant to avoid permitting classifications depending on their particular situation.”

We agree with ADEC that the provision at 18 AAC 50.225(b)(7) is potentially confusing and contradictory and that the repeal of that provision clarifies when each of the two provisions authorizing owner-requested limits (18 AAC 50.225 and 18 AAC 50.508) are applicable to owners and operators of stationary sources seeking an emission limit to avoid major permitting obligations. We therefore propose to approve the revision to 18 AAC 50.225.

In the July 1, 2014, submittal, ADEC revised this provision to reference the definition of fugitive emissions in 18 AAC 50.990 “Definitions” rather than the statutory definition in AS 46.14.990. The definition of “fugitive emissions” at 18 AAC 50.990(40) states that the term has the meaning given in 40 CFR 51.166(b)(20) in the Federal PSD regulations. This definition is approvable because the PSD definition of “fugitive emissions” in 40 CFR 51.166(b)(20) is identical to the definition of the same term in 40 CFR 51.301 “Definitions” for purposes of 40 CFR part 51, subpart P “Protection of Visibility.”

The October 24, 2014, submittal revised 18 AAC 50.502 “Minor Permits for Air Quality Protection” to add paragraph (h)(5). This paragraph defines “regulated NSR pollutant” for new sources seeking minor permits under 18 AAC 50.502 by adopting by reference the Federal definition of “regulated NSR pollutant” at 40 CFR 52.21(b)(50). This is not a substantive change to Alaska's minor NSR program because this definition was previously included in 18 AAC 50.900.

The July 1, 2014, submittal revised the definition of “fugitive emissions” at 18 AAC 50.990(40) to have the meaning given in 40 CFR 51.166(b)(20), as revised as of July 1, 2012. The October 24, 2014, submittal repealed the definition of “regulated NSR pollutant” at 18 AAC 50.990(92). This action does not address these changes because we previously approved them on January 7, 2015 (80 FR 832).

The July 1, 2014, submittal also updated the citation date for the incorporation by reference of the Federal definition of “volatile organic compound” (VOC). The submittal revised 18 AAC 50.990(121) to define “VOC” as the meaning given in 40 CFR 51,100(s) as of April 18, 2013. We note that the Federal definition has been revised since April 18, 2013. Specifically, on October 22, 2013, the EPA removed constituents from the definition of VOC (78 FR 62451). While the definition in Alaska's rule is not identical to the Federal definition, the Alaska definition is more stringent and therefore approvable.

The EPA is proposing to approve and incorporate by reference into the Alaska SIP changes to the following provisions submitted on July 1, 2014 and October 24, 2014:

• 18 AAC 50.015 “Air Quality Designations, Classifications, and Control Regions” (State effective 10/6/2013);

• 18 AAC 50.040 “Federal Standards Adopted by Reference” (State effective 10/6/2013);

• 18 AAC 50.225 “Owner-Requested Limits” (State effective 10/6/2013);

• 18 AAC 50.260 “Guidelines for Best Available Retrofit Technology under the Regional Haze Rule” (State effective 10/6/2013);

• 18 AAC 50.502 “Minor Permits for Air Quality Protection” (State effective 11/9/2014); and

• 18 AAC 50.990 “Definitions” (State effective 11/9/2014).

We have made the preliminary determination that the submitted SIP revisions are approvable because they are consistent with section 110 and part C of title I of the CAA. We note that this action does not address the submitted revisions related to Alaska's nonattainment NSR permitting program because we approved those changes on January 7, 2015 (80 FR 832).

In this rule, the EPA is proposing to include in a final rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the provisions described above in Section III. Proposed Action. The EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the CAA and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the CAA. 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 it does not involve technical standards; and

• does not provide the 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 the EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), nor will it impose substantial direct costs on tribal governments or preempt tribal law.

On March 12, 2008, EPA revised both the primary and secondary NAAQS for ozone to a level of 0.075 parts per million (ppm) (annual fourth-highest daily maximum 8-hour average concentration, averaged over three years) to provide increased protection of public health and the environment. 73 FR 16436 (March 27, 2008).1 The 2008 ozone NAAQS retains the same general form and averaging time as the 0.08 ppm NAAQS set in 1997, but is set at a more protective level. On May 21, 2012 (77 FR 30088), effective July 20, 2012, EPA designated as nonattainment any area that was violating the 2008 8-hour ozone NAAQS based on the three most recent years (2008-2010) of air monitoring data. The Baltimore Area (specifically, Anne Arundel County, Baltimore City, Baltimore County, Carroll County, Harford County, and Howard County) was designated as a moderate ozone nonattainment area. See 40 CFR 81.321. Moderate areas are required to attain the 2008 8-hour ozone NAAQS by no later than six years after the effective date of designations, or July 20, 2018. See 40 CFR 51.903. Air quality monitoring data from the 2012-2014 monitoring period indicate that the Baltimore Area is now attaining the 2008 8-hour ozone NAAQS.

Under the provisions of EPA's ozone implementation rule (40 CFR 51.918), if EPA issues a determination that an area is attaining the relevant standard (through a rulemaking that includes public notice and comment), it will suspend the area's obligations to submit an attainment demonstration, RACM, RFP, contingency measures and other planning requirements related to attainment of the 2008 8-hour ozone NAAQS for as long as the area continues to attain the standard. This suspension remains in effect until such time, if ever, that EPA (i) redesignates the area to attainment at which time those requirements no longer apply, or (ii) subsequently determines that the area has violated the 2008 8-hour ozone NAAQS. Although these requirements are suspended, EPA is not precluded from acting upon these elements at any time if submitted to EPA for review and approval. The determination of attainment is not equivalent to a redesignation under section 107(d)(3) of the CAA. The designation status of the Baltimore Area will remain nonattainment for the 2008 8-hour ozone NAAQS until such time as EPA determines that the Area meets the CAA requirements for redesignation to attainment, including an approved maintenance plan. Additionally, the determination of attainment is separate from, and does not influence or otherwise affect, any future designation determination or requirements for the Baltimore Area based on any new or revised ozone NAAQS, and it remains in effect regardless of whether EPA designates this Area as a nonattainment area for purposes of any new or revised ozone NAAQS.

For ozone, an area may be considered to be attaining the 2008 8-hour ozone NAAQS if there are no violations, as determined in accordance with 40 CFR part 50, based on three complete, consecutive calendar years of quality-assured ambient air monitoring data. Under EPA regulations at 40 CFR part 50, the 2008 8-hour ozone NAAQS is attained when the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations at an ozone monitor is less than or equal to 0.075 ppm. See 40 CFR part 50, appendix P. This 3-year average is referred to as the design value. When the design value is less than or equal to 0.075 ppm at each monitor within the area, then the area is attaining the NAAQS. Also, the data completeness requirement is met when the average percent of days with valid ambient monitoring data is greater than or equal to 90 percent (%), and no single year has less than 75% data completeness as determined in appendix P of 40 CFR part 50. The data must be collected and quality-assured in accordance with 40 CFR part 58, and recorded in the EPA Air Quality System (AQS).

EPA has reviewed the complete, quality-assured and certified ozone ambient air monitoring data for the monitoring period for 2012-2014 for the Baltimore Area. The design values for each monitor for the years 2012-2014 are less than or equal to 0.075 ppm, and all monitors meet the data completeness requirements (see Table 1). Based on this 2012-2014 data from the AQS database and consistent with the requirements contained in 40 CFR part 50, EPA has concluded that this Area attained the 2008 8-hour ozone NAAQS.

The data in Table 1 are available in EPA's AQS database. The AQS report with this data is available in the docket for this rulemaking under docket number EPA-R03-OAR-2014-0884 and available online at www.regulations.gov, docket number EPA-R03-OAR-2014-0884.

EPA is proposing to make a determination that the Baltimore Area has attained the 2008 8-hour ozone NAAQS. This proposed determination is based upon complete, quality-assured, and certified ambient air monitoring data that show the Baltimore Area has monitored attainment of the 2008 8-hour ozone NAAQS for the 2012-2014 monitoring period. Once this proposal is final, the requirement for this Area to submit an attainment demonstration, RACM, a RFP plan, contingency measures, and other planning requirements related to attainment of the 2008 8-hour ozone NAAQS shall be suspended for so long as the Baltimore Area continues to attain the 2008 8-hour ozone NAAQS. Although these requirements are suspended, EPA is not precluded from acting upon these elements at any time if submitted to EPA for review and approval. Finalizing this determination does not constitute a redesignation of the Baltimore Area to attainment for the 2008 8-hour ozone NAAQS under CAA section 107(d)(3). This determination of attainment also does not involve approving any maintenance plan for the Baltimore Area and does not determine that the Baltimore Area has met all the requirements for redesignation under the CAA, including that the attainment be due to permanent and enforceable measures. Therefore, the designation status of the Baltimore Area will remain nonattainment for the 2008 8-hour ozone NAAQS until such time as EPA takes final rulemaking action to determine that such Area meets the CAA requirements for redesignation to attainment. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.

This action proposes to make an attainment determination based on air quality data and would, if finalized, result in the suspension of certain Federal requirements and would not impose any additional requirements. For that reason, this proposed action:

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

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

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

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

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

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

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

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

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

In addition, this proposed rule, concerning a determination of attainment for the 2008 ozone NAAQS for the Baltimore Area, does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the State Implementation Plan (SIP) is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

Throughout this document, the terms “we,” “us,” and “our” refer to EPA.

For the purpose of this document, we are giving meaning to certain words or initials as follows:

On July 28, 2011 and October 29, 2012, ADEQ submitted revisions to the ADEQ portion of the Arizona SIP. On May 16, 2014, ADEQ supplemented the July 28, 2011 submittal. On September 6, 2013, July 2, 2014, and February 16, 2015, ADEQ supplemented the October 29, 2012 submittal. Collectively, these submittals generally comprise ADEQ's current program for preconstruction review and permitting of new or modified stationary sources under ADEQ's jurisdiction in Arizona (as described below).1 The NSR SIP revisions that are the subject of this action, 2 referred to herein as the “NSR SIP submittal” represent a comprehensive revision to ADEQ's preconstruction review and permitting program and are intended to satisfy the requirements under both part C (prevention of significant deterioration) (PSD) and part D (nonattainment new source review) of title I of the Act as well as the general preconstruction review requirements under section 110(a)(2)(C) of the Act.3 The preconstruction review and permitting programs are often collectively referred to as “New Source Review” (NSR).

The proposed revisions to the SIP that are subject to this action cover those areas of Arizona where ADEQ has jurisdiction. Currently, ADEQ has permitting jurisdiction for the following stationary source categories in all areas of Arizona: Smelting of metal ores, coal-fired electric generating stations, petroleum refineries, Portland cement plants, and portable sources. ADEQ also has permitting jurisdiction for major and minor sources in the following counties: Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Mohave, Navajo, Santa Cruz, Yavapai, and Yuma. Finally, ADEQ has permitting jurisdiction over major sources in Pinal County 4 and the Rosemont Copper Mine in Pima County.

Table 1 lists the rules we are proposing for approval in today's action with the corresponding effective dates and submittal dates. The submitted rules are from the Arizona Administrative Code, Title 18—Environmental Quality, Chapter 2—Department of Environmental Quality—Air Pollution Control, Articles 1, 2, 3, and 4. The submitted statutory provision is from Title 49 of the Arizona Revised Statutes, Chapter 1, Article 1.

On December 28, 2012, April 29, 2013, and December 2, 2014, ADEQ's July 28, 2011, October 29, 2012, and July 2, 2014 submittals, respectively, were deemed complete by operation of law to meet the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review. Each of these submittals includes evidence of public notice and adoption of the regulation. Our technical support document (TSD) provides additional background information on each of the submitted rules.

EPA has not approved significant revisions or updates to ADEQ's SIP-approved NSR program since the 1980s. The existing SIP-approved NSR program for new or modified stationary sources under ADEQ's jurisdiction generally consists of the rules identified below in Table 2 that we are proposing to supersede in or delete from the Arizona SIP. Collectively, these regulations established the NSR requirements for both major and minor stationary sources under ADEQ jurisdiction in Arizona, including requirements for the generation and use of emission reduction credits in nonattainment areas.

Consistent with ADEQ's stated intent to have the submitted NSR rules replace the existing NSR program in the SIP, EPA's approval of the regulations identified above in Table 1 generally would have the effect of superseding our prior approval of the current SIP-approved NSR program.5 Table 2 lists the existing rules in the Arizona SIP that would be superseded or removed from the Arizona SIP as a result of our proposed action. If EPA were to take final action as proposed herein, these rules generally would be replaced in, or otherwise deleted from, the SIP by the submitted set of rules listed in Table 1.

The purpose of this proposed rule is to present our evaluation under the CAA and EPA's regulations of rules and statutory provisions submitted by ADEQ on July 28, 2011, October 29, 2012, and July 2, 2014, which are identified in Table 1. We provide our reasoning in general terms below, and include our more detailed analysis in the TSD, which is available in the docket for this proposed rulemaking.

EPA has reviewed the provisions submitted by ADEQ that are the subject of this action, including those governing NSR for stationary sources under ADEQ jurisdiction for compliance with the CAA's general requirements for SIPs in CAA section 110(a)(2), EPA's regulations for stationary source permitting programs in 40 CFR part 51, sections 51.160 through 51.166, and the CAA requirements for SIP revisions in CAA section 110(l) and 193.6

With respect to procedures, CAA sections 110(a) and 110(l) 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.

Based on our review of the public process documentation included in the July 28, 2011, October 29, 2012 and July 2, 2014 submittals, we find that ADEQ has provided sufficient evidence of public notice and opportunity for comment and public hearings prior to adoption and submittal of these rules to EPA.

With respect to substantive requirements, we have generally reviewed the ADEQ provisions that are the subject of our current action in accordance with the CAA and applicable regulatory requirements, focusing primarily on those that apply to: (1) General preconstruction review programs, including for minor sources, under section 110(a)(2)(C) of the Act; (2) PSD permit programs under part C of title I of the Act; and (3) Nonattainment NSR permit programs under part D of title I of the Act (NA-NSR). For the most part, ADEQ's submittal satisfies applicable CAA requirements, specifically including the applicable requirements for these three preconstruction review programs and would strengthen the applicable SIP by updating the regulations and adding requirements to address new or revised NSR permitting and other requirements promulgated by EPA, but the submitted rules also contain specific deficiencies that prevent full approval. Below, we discuss generally our evaluation of ADEQ's submittal and the deficiencies that are the basis for our proposed action on these rules. Our TSD contains a more detailed evaluation as well as additional recommendations for program improvements.

Section 110(a)(2)(C) requires each SIP to include a program for the regulation of the modification and construction of any stationary source within the areas covered by the plan as necessary to assure attainment and maintenance of the National Ambient Air Quality Standards (NAAQS). In addition to the permit programs required under parts C and D of the CAA for PSD sources and nonattainment NSR sources, respectively, which are discussed below, EPA's regulations at 40 CFR 51.160-51.164 provide general programmatic requirements to implement this statutory mandate commonly referred to as the “minor NSR program.” These minor NSR program regulations impose requirements for SIP approval of State and local programs that are more general in nature as compared with the specific statutory and regulatory requirements for PSD and NA-NSR permitting programs. Under EPA's regulations governing the minor NSR program, States and local air agencies retain a level of discretion to define the types and sizes of sources subject to the program, whereas under the PSD and nonattainment NSR permitting programs, the sources subject to regulation are specified by EPA regulations. The substantive requirements for the preconstruction review and permitting of minor stationary sources under ADEQ jurisdiction are ADEQ rules R18-2-302.01 and R18-2-334. These rules, and other administrative rules included in the minor NSR portion of the SIP submittal, satisfy most of the statutory and regulatory requirements for minor NSR programs, but these rules also contain several deficiencies that form the basis for our proposed limited disapproval, as discussed below.

We are proposing a limited approval and limited disapproval of ADEQ's minor NSR program because it is not fully consistent with the requirements of 40 CFR 51.160, 40 CFR 51.161, 40 CFR 51.163 and 40 CFR 51.164, as described below. We find that approval of ADEQ's updated minor NSR program will substantially strengthen the SIP overall, as the submitted minor NSR program generally has more extensive requirements for minor sources and non-major modifications than ADEQ's current SIP-approved program and lower permitting thresholds that will provide additional mechanisms for protecting the NAAQS, as well as updating the SIP with current State regulations for minor sources and non-major modifications. However, specific provisions of the minor NSR program submittal are inconsistent with federal minor NSR program requirements, and these deficiencies must be addressed before we can fully approve ADEQ's minor NSR program into the SIP. The deficiencies that we have identified with ADEQ's minor NSR program that provide the basis for our limited approval and limited disapproval are described below.

40 CFR 51.160 requires that each NSR program contain certain legally enforceable procedures. We have identified several deficiencies with ADEQ's program as it pertains to these requirements.

First, as required by 40 CFR 51.160(a), ADEQ's permitting procedures are not enforceable in all instances. ADEQ's program allows certain sources to begin construction when a “proposed final permit” is issued by ADEQ, rather than preventing construction until a final permit has been issued. See R18-2-101(114), R18-2-302(G), R18-2-334(B), R18-2-402(C). The definition for “proposed final permit” in R18-2-101 does not specify that such an action is a final decision for NSR purposes. As a result, the program does not provide ADEQ with clear authority to prevent construction or modification before it issues a final decision on the request for authority to construct as is required per 40 CFR 51.160(a) and (b). ADEQ has clarified that, in effect, under ADEQ's rules, a proposed final permit is treated as a final authorization to construct, and that it will treat proposed final permit as a final, appealable agency action under Arizona law.7 Nevertheless, a revision to ADEQ's NSR program is necessary to ensure that these types of permit actions clearly serve as a final authority to construct in order to satisfy the federal NSR program requirement that the agency be able to prevent construction until and unless it has issued a final decision on the request for authority to construct.

Second, ADEQ's program does not contain adequate enforceable procedures to ensure compliance by sources subject to review under its NSR program with the NAAQS as required by 40 CFR 51.160(a)(2) and (b)(2). Although NAAQS is a defined term in ADEQ's regulations, see R18-2-101(85), ADEQ's NSR program generally does not refer to the NAAQS and instead generally references the State's ambient air standards in Article 2 of ADEQ's air program. See R18-2-302.01, R18-2-334, and R18-2-406.8 Also, in some instances, ADEQ's NSR regulations simply refer to Arizona ambient air quality standards with no specific reference to Article 2, which makes the applicable standards ambiguous.9 See R18-2-218, R18-2-406, and R18-2-407. In some instances, ADEQ's NSR program does not ensure that a source would not interfere with attainment or maintenance of the NAAQS in neighboring areas outside ADEQ's permitting jurisdiction, as is required under 40 CFR 51.160(a) and (b), as the State air standards are not generally applicable in neighboring States,10 and the NSR Program submittal does not demonstrate that they are applicable in neighboring States for purposes of ADEQ's NSR program. See R18-2-302.01(C); R18-2-334(C)(2), (F), and (G); and R18-2-406(A)(5)(a) and (b). Also, for minor sources subject to permitting under R18-2-334, the rule does not meet these federal requirements as it does not require ADEQ to evaluate whether the project under review will interfere with attainment or maintenance of the NAAQS in all cases, and instead allows sources to apply reasonably available control technology (RACT) in lieu of such an evaluation and, in some cases, appears to allow sources with lower levels of emissions to avoid both substantive NAAQS review and RACT requirements. See R18-2-334(C)(1)(a)-(b). ADEQ has not demonstrated that this approach ensures that all sources subject to review under its NSR program will not interfere with attainment or maintenance of the NAAQS. While R18-2-334(G) allows Director's discretion to require a NAAQS analysis on a case-by-case basis, we find this discretion too great to ensure compliance with this requirement. Finally, R18-2-302.01(C)(4) needs to include a reference to “or maintenance” of a standard, instead of just “attainment of a standard.”

Third, for sources subject to ADEQ's registration program at R18-2-302.01, ADEQ has not demonstrated that its NSR program meets the requirement to ensure that sources subject to NSR review comply with the applicable portions of the control strategy as required by 40 CFR 51.160(b)(1).

Fourth, ADEQ's registration program in R18-2-302.01 does not contain enforceable procedures for the owner or operator to submit the necessary information for ADEQ to determine whether a source will violate the applicable control strategy or interfere with attainment or maintenance of the NAAQS as required by 40 CFR 51.160(c). R18-2-302.01(A)(3) requires applicants to calculate a source's uncontrolled potential to emit, but then references provisions in another rule, R18-2-327(C), that are used to calculate “actual” emissions. As such, ADEQ's program contains conflicting procedures for calculating potential emissions. In addition, rule R18-2-327, is not in the Arizona SIP, and has not been submitted to EPA for SIP approval.

Fifth, ADEQ's program does not meet the requirement that the applicant submit information related to the nature and amounts of emissions, for certain kinds of emissions units as required by 40 CFR 51.160(c)(1). For Class I and Class II permits, R18-2-304(E)(9) allows sources to avoid providing emission information for “insignificant activities,” as defined in R18-2-101(68). The term “insignificant activities” is generally associated with the title V program. Many of the activities listed in ADEQ's definition of insignificant activity are activities that would not be expected to emit regulated NSR pollutants. However, this is not true for all activities, such as those listed under R18-2-101(68)(a-c) that include liquid storage tanks, combustion engines, and “low-emitting processes.”

Sixth, for sources subject to R18-2-302.01, ADEQ's program does not meet the requirement in 40 CFR 51.160(d) that its procedures provide that approval of construction or modification will not affect the responsibility of the owner or operator to comply with applicable portions of the control strategy.

Finally, for sources subject to ADEQ's registration program under R18-2-302.01, ADEQ's program does not meet the requirement to use Appendix W to 40 CFR part 51 for air quality modeling as required by 40 CFR 51.160(f)(1).

40 CFR 51.160(e) requires ADEQ's submittal to provide a basis for the types and sizes of facilities, buildings, structures, or installations that will be subject to review under 40 CFR 51.160. Such exclusions are appropriate so long as such sources and modifications are not environmentally significant, consistent with the de minimis exemption criteria set forth in Ala. Power Co. v. Costle, 636 F.2d 323, at 360-361 (D.C. Cir. 1979). Here, we discuss our evaluation of the basis provided by ADEQ for the types and sizes of facilities, buildings, structures or installations it will subject to review under its minor NSR program. Historically, ADEQ's minor NSR program required permitting of minor sources and non-major modifications causing an increase in potential emissions of a criteria pollutant at or above the significant emission rates under the PSD program in 40 CFR 51.166(b)(23)(i). In a May 22, 1996 letter to ADEQ, EPA Region 9 indicated that the significant emission rates used by ADEQ for its minor NSR permitting program did not represent an acceptable threshold for applying the basic preconstruction requirements for minor NSR purposes. To address EPA's concerns, ADEQ assessed other potential permitting thresholds for its minor NSR program and selected revised thresholds for its minor NSR program following this assessment. A detailed analysis of ADEQ's assessment is provided in our TSD. ADEQ's new minor NSR program established a minimum preconstruction review threshold for new or modified stationary sources with potential emissions or emissions increases of: 50 tons per year (tpy) of carbon monoxide; 20 tpy of NOX, SO2, and VOC; 7.5 tpy for PM10; 5 tpy for PM2.5; and 0.3 tpy for lead. We find ADEQ's general approach to meeting 40 CFR 51.160(e) acceptable. We are proposing a limited disapproval of ADEQ's minor NSR program based in part on the following issues concerning the approach:

First, ADEQ's submittal does not provide a clear basis for concluding that the exemption thresholds selected by ADEQ will ensure a sufficient percentage of minor sources are subject to review in nonattainment areas. As ADEQ points out in its submittal, ADEQ's analysis is based on data for Maricopa County 11 , which has lower NSR permitting thresholds than the exemption thresholds adopted by ADEQ due to Maricopa County's local air quality problems. In addition, (1) some of the other permitting programs in Table 3 above have lower permitting thresholds in nonattainment areas than those applicable in attainment areas under their jurisdiction; (2) in looking at a similar analysis of minor source emissions for another permitting program in Region 9, which has local air quality problems, the permitting agency generally set thresholds that include a larger percentage of emissions in the NSR program than the percentage included in ADEQ's program 12 ; and (3) typically, nonattainment areas have more control requirements that apply to smaller minor sources, as compared to attainment areas. As such, ADEQ's basis does not clearly address how its adopted preconstruction review exemption thresholds adequately address nonattainment areas.13

Second, while EPA agrees that, in general, certain types of equipment may be exempted from the minor NSR program, ADEQ must provide a basis under 40 CFR 51.160(e) to demonstrate that regulation of the equipment exempted in R18-2-302(C) and A.R.S. § 49-426(B) is not needed for ADEQ's program to meet federal NSR requirements for attainment and maintenance of the NAAQS or review for compliance with the control strategy. Such demonstration must address: (1) An explanation of whether the regulatory exemption in R18-2-302(C) for “agricultural equipment used in normal farm operations” constitutes an interpretation or refinement of the exemption for such sources in A.R.S. § 49-426(B), and how the two provisions apply to ADEQ's NSR program; (2) Identification of the types of equipment ADEQ considers to be “agricultural equipment used in normal farm operations” and whether this type of equipment could potentially be expected to occur at a stationary source subject to title V of the Act, 40 CFR parts 60, 61, or 63, or major NSR, and, if so, whether such equipment is subject to NSR review at such sources; (3) ADEQ's basis for determining that “agricultural equipment used in normal farm operations” does not need to be regulated as part of ADEQ's minor NSR program under 40 CFR 51.160(e); and (4) ADEQ's interpretation of the exemption for fuel burning equipment in A.R.S. § 49-426(B) and how it does, or does not, apply in the context of its major and minor NSR programs, and, to the extent such equipment is not subject to NSR review, ADEQ's basis for determining that equipment exempted under this provision does not need to be reviewed as part of ADEQ's minor NSR program under 40 CFR 51.160(e).

Finally, ADEQ's minor NSR program sets a permitting exemption threshold for PM2.5 of 5 tons per year, but ADEQ's analysis does not provide a basis for this threshold.

40 CFR 51.161 requires that each NSR program contain certain procedures related to public participation. We have identified several deficiencies with ADEQ's program as it pertains to these requirements.

First, ADEQ's program does not ensure that NSR review for all minor sources regulated under ADEQ's NSR program, as ADEQ defines it pursuant to 40 CFR 51.160(e), is subject to public notice and comment consistent with 40 CFR 51.161(a). 40 CFR 51.161(a) requires that the program under 51.160 provide for public comment on the information submitted by owners or operators. In addition, the public information must include ADEQ's analysis of the effects of construction or modification on ambient air, including ADEQ's proposed approval or disapproval. ADEQ's program does not meet this requirement because: (1) “modification” of existing sources that become subject to the registration program under R18-2-302.01 (currently only “construction” of a source) are not subject to public notice (see R18-2-302.01(B)(3)); (2) R18-2-334(G) exempts most modifications from public notice; (3) R18-2-330 does not clearly define which public notice requirements apply to registrations; and (4) public participation does not appear to be required for a proposed disapproval of an application for any portion of ADEQ's NSR program (registration, minor NSR, or major NSR).

Second, ADEQ's registration program at R18-2-302.01(F) does not contain the necessary enforceable procedures for sources taking “elective limits” to limit their potential to emit in a manner that allows the source to avoid the public participation requirements in 40 CFR 51.161(a), while otherwise being subject to the registration program. See R18-2-302.01(B)(3)(b) and R18-2-302(E)(1). While ADEQ's rule contains requirements for monitoring, recordkeeping, and reporting of elective limits, these requirements are not sufficiently enforceable for purposes of limiting the source's potential to emit, and thereby avoiding public notice, as well other substantive requirements of ADEQ's minor NSR program when issuing a registration. In order to meet practical enforceability requirements for limiting the potential to emit (PTE), R18-2-302.01(F) must also contain (1) a technically accurate limitation and the portions of the source subject to the limitation and (2) the time period for the limitations (hourly, daily, monthly, etc.). Further, if the limitation is over a period longer than daily, R18-2-302.01(F) must specify when to compile daily records to show compliance with the elected limit. Additional detail on this issue is provided in our TSD.

Third, ADEQ's NSR program does not ensure, for all sources subject to NSR review, the availability for public inspection, in at least one location in the area affected, of the information submitted by the owner or operator and of ADEQ's analysis on the effect on air quality as required by this federal regulation. R18-2-330(D)(11) requires the public notice to identify the nearest ADEQ office where documents can be inspected, but there are only two department offices for ADEQ. See 40 CFR 51.161(b)(1). We do not interpret this provision as meeting the requirement to make information available in the “area affected.” In addition, the public notice requirements do not make reference to providing ADEQ's analysis for public inspection. Potentially, this is covered by “all other materials available to the Director that are relevant to the permit decision”.14 But it is not clear that ADEQ would interpret this to mean the Director's own analysis.

Finally, ADEQ's NSR program does provide notice to the necessary parties in 40 CFR 51.161(d) for sources required to obtain registrations under R18-2-302.01.

40 CFR 51.163 requires each NSR program to include administrative procedures that will be followed in making the determinations specified in 40 CFR 51.160(a). While ADEQ's program generally meets the requirements of this provision, ADEQ's submittal contains references to other ADEQ rules, R18-2-317 and R18-2-317.02, which are not in the SIP and have not been submitted for SIP approval. See R18-2-306.02(D), R18-2-319(I), R18-2-304(J), R18-2-306(A), and R18-2-306.02(D).

40 CFR 51.164 requires that each NSR program contain certain provisions related to good engineering practice for stack heights. In addition to reviewing ADEQ's submittal as compared with the NSR program requirements of 40 CFR 51.164, we also reviewed ADEQ's submittal as it relates to certain general SIP program requirements in 40 CFR 51.100 and 51.118. The stack height provisions in the NSR program rely on the general stack height provisions in 40 CFR 51.118(b), which in turn references the definitions in 40 CFR 51.100(hh) through (kk). We have identified several deficiencies with ADEQ's program as it pertains to these requirements.

First, ADEQ's submittal does not meet the public hearing requirements in 40 CFR 51.164 and 51.118(a). While R18-2-332(E) contains a reference to holding a public hearing, when required, the provision references ADEQ's public hearing provision in R18-1-402. R18-1-402 is not in the SIP and has not been submitted for SIP approval.

Second, ADEQ's submittal does not contain language that meets the exception in 40 CFR 51.118(b): “except where pollutants are being emitted from such stacks or using such dispersion techniques by sources, as defined in section 111(a)(3) of the Clean Air Act, which were constructed, or reconstructed, or for which major modifications, as defined in §§ 51.165(a)(1)(v)(A), 51.166(b)(2)(i) and 52.21(b)(2)(i), were carried out after December 31, 1970.” In addition, R18-2-332(A)(3) incorrectly references July 1, 1975 instead of July 1, 1957 as that date appears in 40 CFR 51.118(b).

Third, ADEQ's submittal does not contain a requirement that owners or operators seeking to rely on the equation in 40 CFR 51.100(ii)(2)(i) produce evidence that the equation was actually relied on in establishing an emission limitation. See R18-2-332(B)(2).

Finally, ADEQ's submittal contains a provision at R18-2-332(D) that provides additional provisions for sources “seeking credit because of plume impaction which results in concentrations in violation of national ambient air quality standards or applicable maximum allowable increases.” This provision is not contained in the federal regulations and appears to allow for the use of stack heights beyond GEP stack height, as defined in 40 CFR 51.100(ii).

In sum, while we have identified several disapproval issues with ADEQ's minor NSR program requirements as they correspond to federal minor NSR program requirements, compared to the existing SIP, approving ADEQ's minor NSR program into the Arizona SIP nonetheless represents a significant overall strengthening of ADEQ's NSR program, as discussed above. Thus, we are proposing a limited approval and limited approval of ADEQ's minor NSR program submittal.

Part C of title I of the Act contains the provisions for the prevention of significant deterioration (PSD) of air quality in areas designated “attainment” or “unclassifiable” for the NAAQS, including preconstruction permit requirements for new major sources or major modifications proposing to construct in such areas. EPA's regulations for SIP-approved PSD permit programs are found in 40 CFR 51.166.

ADEQ rules R18-2-402 and R18-2-406 contain the substantive requirements for review and permitting of PSD sources under ADEQ's jurisdiction. These regulations satisfy most of the statutory and regulatory requirements for PSD permit programs, but these and other rules in the NSR SIP submittal contain several deficiencies that form the basis for our proposed limited disapproval, or proposed disapprovals as discussed below.

Although ADEQ's submittal meets most PSD program requirements, we are proposing to disapprove two specific aspects of ADEQ's PSD program. The ADEQ rule provisions that we are proposing to disapprove are directly comparable to federal PSD rule provisions that have been vacated by federal courts, and we find that they are separable from the remainder of ADEQ's PSD program. Accordingly, we find these provisions suitable for disapproval at this time. These provisions are described below in Sections II.C.8 and 9.

For the remainder of ADEQ's PSD program submittal, we are proposing limited approval and limited disapproval. We find that approval of ADEQ's updated PSD program, aside from the two aspects that are separable and will be disapproved as mentioned above, will substantially strengthen the SIP overall, particularly as the current SIP-approved PSD program is significantly out of date when compared with current federal PSD regulatory requirements as well as current State regulations. See our discussion in Section G below. However, specific provisions of the PSD SIP program submittal are inconsistent with PSD program requirements, and these deficiencies must be addressed before we can fully approve ADEQ's PSD program. The deficiencies that we have identified with ADEQ's PSD program that provide the basis for our limited disapproval are described below in Sections II.C.1 through 7.

First, ADEQ's submittal often refers to Articles 9 and/or 11 of ADEQ's regulations where the federal regulations refer to 40 CFR parts 60, 61, or 63; or, similarly, sections 111 or 112 of the Act. See R18-2-101(53)(a), (122)(b); R18-2-401(10); R18-2-402(G)(2); and R18-2-406(A)(4). Articles 9 and 11 are where ADEQ incorporates by reference the federal regulations in 40 CFR part 60, 61, and 63 (which EPA implements under sections 111 and 112 of the Act). However, these Articles are not in the SIP, have not been submitted for SIP approval, and do not contain provisions equivalent to all of the subparts in parts 60, 61, and 63. See 40 CFR 51.166(b)(1)(iii)(aa), (b)(12), (b)(16)(i), (b)(17), (b)(47)(ii)(c), (b)(49)(ii), (i)(1)(ii)(aa), and (j).

Second, ADEQ's submittal uses the term “increment” or “incremental ambient standard,” but does not specifically define these terms or otherwise identify what is meant by these terms. While the PSD program does not specifically define the term “increment” either, the term is introduced at 40 CFR 51.166(c)—Ambient air increments and other measures. (emphasis added) 40 CFR 51.166(c) then goes on to identify the specific increment values as “maximum allowable increases.” ADEQ appears to have taken the approach of using the term “maximum allowable increase” to refer to the increments, which is acceptable. ADEQ adopted the increments, or maximum allowable increases, in R18-2-218—Limitation of Pollutants in Classified Attainment Areas. However, in other rules ADEQ uses “increment” or “incremental ambient standard” where it appears the intent is to refer to the increments established in R18-2-218 and identified in ADEQ's rules as the “maximum allowable increases.” See R18-2-406(E), R18-2-412(G)(b), R18-2-101(51), R18-2-319, R18-2-320.

Third, on January 15, 2013, EPA issued a final rule revising the NAAQS for PM2.5 for the annual averaging period, lowering the level of the NAAQS from 15.0 to 12.0 mg/m3, effective March 18, 2013 (see 78 FR 3086). This new NAAQS is required to be implemented for PSD sources (unless otherwise grandfathered under provisions at 40 CFR 51.166(i)(10)) beginning with the effective date of the NAAQS. However, ADEQ's PSD program does not provide for the review of new or modified sources for compliance with this new NAAQS as required in 40 CFR 51.166(b)(2)(iii)(i)(2), (b)(35), (d), (g)(3)(iii), (k), and (m)(1). Instead, ADEQ's PSD program currently references state ambient air quality standards, which are set at levels that are equivalent to all of the current NAAQS, except for this newly adopted PM2.5 NAAQS. See R18-2-218(F)(b)(ii), R18-2-401(25), R18-2-406(A) and R18-2-407(B). Because of the general approach used in ADEQ's NSR program with respect to incorporating the NAAQS, i.e., the program's reference to state air quality standards instead of the NAAQS, any changes EPA makes to the NAAQS will not be included in ADEQ's program until ADEQ revises its air quality standards rules to adopt the revised NAAQS as state air quality standards. This does not relieve any owner or operator from the requirement to comply with all NAAQS at the time a final PSD permit is issued, including the recently revised new PM2.5 NAAQS (unless otherwise grandfathered under 40 CFR 51.166). See CAA section 165(a)(3).

Fourth, R18-2-406(A) contains a reference to R18-2-408, but R18-2-408 is not in the SIP and has not been submitted for SIP approval.

Fifth, ADEQ's submittal allows a source at R18-2-302(G) and R18-2-402(C) to begin actual construction upon the issuance of a proposed final permit. As previously discussed, ADEQ's program is ambiguous as to whether a proposed final permit, as defined in R18-2-101(114), constitutes final action by the Director. While ADEQ has issued guidance clarifying that it treats “proposed final permits” as final actions for purposes of preconstruction permitting 15 , to obtain full PSD program approval, ADEQ's regulations must make clear that a source may not begin actual construction before a final determination on a PSD permit application is made by the Director.

Sixth, ADEQ's NSR submittal contains provisions that allow for exclusions from increment consumption, for certain temporary emissions, that do not conform to the requirements in the analogous federal rule. First, ADEQ's rule at R18-2-218(F)(5) requires only the ADEQ Director's approval for temporary emissions beyond two years, but the federal program requirements at 40 CFR 51.166(f)(i)(v) and 51.166(f)(4) require the Administrator's approval to allow temporary emissions that exceed two years. In addition, ADEQ's program language does not reference a specific time period beyond two years that it would allow for exclusions from increment consumption, which is not consistent with the federal regulation's requirement at 40 CFR 51.166(f)(4) that the time for such exclusions be specified in the plan. Finally, the provision at R18-2-218(F)(5)(b)(ii), which references the state ambient air quality standards, must be applied to “any” air quality control region. As currently written this provision does not clearly apply to areas outside of Arizona where Arizona's standards would not generally apply.

Seventh, ADEQ's submittal contains a provision at R18-2-406(E) providing an exemption for certain portable stationary sources with a prior permit that contains requirements equivalent to the PSD requirements in 40 CFR 51.166 (j) through (r), as allowed by 40 CFR 51.166(i)(1)(iii). However, ADEQ's rule at R18-2-406(E) is worded broadly to also allow an exemption for portable sources that have been permitted under Article 4 of ADEQ's regulations, which also includes nonattainment NSR permits and PAL permits. We do not interpret this federal exemption as generally applying to such permits, as it is not clear that such permits contain requirements “equivalent” to those in 40 CFR 51.166(j) through (r).

Eight, ADEQ's submittal contains conditions generally meeting the requirements of 40 CFR 51.166(k)(1) in rule R18-2-406(A)(5)(a). However, R18-2-406(A)(5) contains an “or” between subsections (a) and (b) that could be interpreted as allowing a source to demonstrate it will not contribute to an increase above the significance levels in an adjacent nonattainment area in lieu of the demonstration required by R18-2-406(A)(5)(a). The provisions of subsection (b) relate to requirements under a different portion of the NSR program—specifically under 40 CFR 51.165. As such, it is likely ADEQ would interpret subsections (a) and (b) as separate requirements with which a source must demonstrate compliance. Nevertheless, the potential for misinterpretation of this substantive requirement of the PSD program provides a basis for our limited disapproval of the PSD program submittal. In addition, R18-2-406(A)(5)(a) requires that a person applying for a PSD permit demonstrate that the project would not cause a violation of any maximum allowable increase over the baseline concentration in “any attainment or unclassifiable area.” However, ADEQ's definition for “attainment area” in the SIP at R18-2-101(19) limits attainment areas to those “in the state.” In addition, as discussed previously, it is not clear that ADEQ's references to the state's ambient air standards would apply in areas outside of Arizona.

Ninth, ADEQ's submittal includes R18-2-406(A)(6)(b), which specifies that the use of a modified or substituted model must be subject to public notice and the opportunity for public comment, but neither the rule nor the submittal makes clear the procedures that would be used for notice and comment for this purpose or demonstrates that such procedures would be consistent with 40 CFR 51.102, as required by 40 CFR 51.166(l)(2).

Tenth, ADEQ's PSD SIP submittal does not appear to specifically address the requirements of 40 CFR 51.166(n)(1) and (3), which require that the SIP must require that (1) the owner or operator of a proposed source or modification shall submit all information necessary to perform any analysis or make any determination required under procedures established in accordance with 40 CFR 51.166, and (2) upon request of the state, the owner or operator shall also provide specified information concerning air quality impacts and growth. ADEQ's submittal at R18-2-304, R18-2-402(G) and R18-2-407 identifies the information necessary for a complete application under this program and requires applicants to respond to deficiencies in the application, but these provisions do not appear to fully address the requirements of 40 CFR 51.166(n)(1) and (3).

Eleventh, ADEQ's submittal contains an apparent typographical error in R18-2-402(F)(1)(c), which includes a cross-reference to R18-2-401(20)(b)(iii) rather than R18-2-401(20)(b)(iv). See 40 CFR 51.166(r)(6).

Finally, ADEQ's submittal does not require owners or operators to make information required under 40 CFR 51.166(r)(6) available for review upon request by the Director or the general public pursuant to the requirements in 40 CFR 70.4(b)(3)(viii) as is required by 40 CFR 51.166(r)(7).

40 CFR 51.166(e) contains provisions related to restrictions on area classifications (Class I, II, or II). We have identified several deficiencies in ADEQ's program with respect to these provisions.

First, ADEQ's submittal contains requirements for area classifications in R18-2-217. However, ADEQ's submittal does not completely meet the requirements of 40 CFR 51.166(e) and section 162(a) of the Act, which require certain areas in existence on August 7, 1977 to be designated as Class I areas. Such designations apply to any boundary changes made to those Class I areas after August 7, 1977. While ADEQ generally includes this requirement at R18-2-217(B), its rule limits such boundary changes to those made prior to March 12, 1993.

Second, ADEQ's NSR submittal at R18-2-217 does not contain a provision consistent with the federal regulatory requirement for Class I area redesignations prior to August 7, 1977 in rule R18-2-217 or elsewhere as required by 40 CFR 51.166(e)(2). Even if it is the case that there are no areas in Arizona that were redesignated Class I prior to August 7, 1977, ADEQ's program must recognize Class I area designations under this provision that may have been made in other states for which sources within ADEQ may have an impact. See 40 CFR 51.166(e)(2).

Finally, ADEQ's NSR submittal does not include a provision that is fully consistent with 40 CFR 51.166(e)(3). While ADEQ's rules generally meet this requirement at R18-2-217(D), this rule does not fully meet the requirements of 40 CFR 51.166(e)(3) because (1) it is not clear what is meant in ADEQ's rule by “all other areas” and (2) it does not contain a provision that ensures that ADEQ recognizes federal legislation that specified the area classification of a particular area.

40 CFR 51.166(g) contains provisions allowing certain areas classified as Class I, II, or III to be redesignated to another classification. We have identified several deficiencies in ADEQ's program with these provisions.

First, ADEQ's submittal contains provisions at R18-2-217(A) identifying that attainment and unclassifiable areas in the State shall be designated as Class I, II, or III. However, this portion of the PSD program applies to all areas of the State. That is, all areas of the State must be designated as Class I, II, or III irrespective of their attainment designation under Section 107 of the Act. See 40 CFR 51.166(g)(1).

Second, ADEQ's submittal contains provisions at R18-2-217(E) for allowing the state to redesignate certain areas, but the submittal does not adequately meet the public participation requirements specified in the federal regulation at 40 CFR 51.166(g)(2)(i), which requires a public hearing consistent with the procedures in 40 CFR 51.102. ADEQ's redesignation provisions do not specify the public hearing procedures that will be used. See 40 CFR 51.166(g)(2)(i).

Third, ADEQ's provisions for redesignating areas to Class III do not clearly identify which areas may be designated as Class III as specified in 40 CFR 51.166(g)(3).

Fourth, R18-2-217(E) allows for the redesignation to be approved by the Governor or the Governor's designee. However, the federal program at 40 CFR 51.166(g)(3)(ii) specifically requires the Governor's approval and does not allow for this approval to be delegated. See 40 CFR 51.166(g)(3)(ii).

Fifth, R18-2-217(F)(4) contains a reference to “maximum allowable concentration” which appears to refer to R18-2-218(E). However, R18-2-218(E) references the “ambient air quality standards in this Article.” The state's ambient air quality standards do not generally apply in areas outside of Arizona, and ADEQ's NSR submittal does not demonstrate that they would apply outside of Arizona for purposes of R18-2-217(F)(4). See 40 CFR 51.166(g)(3)(iii).

Finally, ADEQ's provisions do not clearly require that a permit application that can only be approved if an area is redesignated to Class III, and material submitted as part of that application, must be available for public inspection prior to the public hearing on the redesignation to Class III. See 40 CFR 51.166(g)(3)(iv).

40 CFR 51.166(p) contains additional requirements related to protection of Federal Class I areas. We have identified several deficiencies in ADEQ's program with these provisions.

First, ADEQ's submittal does not address the requirements of 40 CFR 51.166(p)(1), but they are generally addressed by existing SIP requirements in R9-3-304(H). However, the existing SIP only requires application information to be submitted to the Federal Land Manager, and does not require that this information be provided to EPA as required by this provision. Consistent with 40 CFR 51.166(p)(2), the Federal Land Manager works in consultation with EPA on the protection of Class I lands.

Second, ADEQ's submittal does not address the requirement under 40 CFR 51.166(p)(3), but it is addressed by the existing SIP requirement in R9-3-304(H)(1). However, the existing SIP contains outdated maximum allowable increases that must be updated. See 40 CFR 51.166(p)(3).

Finally, ADEQ's submittal generally includes the provisions of 40 CFR 51.166(p)(4) at R18-2-406(F)(2), but contains the phrase “no significant adverse impacts,” which is inconsistent with the federal regulation which requires a demonstration of “no adverse impacts.” The addition of the word “significant” is somewhat ambiguous in this context, but appears to allow variances under circumstances not allowed under the analogous federal regulation.

40 CFR 51.166(q) contains several specific public participation requirements for issuing PSD permits. We have identified several public participation deficiencies in ADEQ's program.

First, ADEQ's submittal does not ensure that materials available during the public comment period are available in each region in which the proposed source would be constructed as required by 40 CFR 51.166(q)(2)(ii). While ADEQ's program at R18-2-330(D)(11) requires these materials to be available at the nearest Department office, ADEQ only has two Department offices. As such, it is not clear that in all instances the public affected by a proposed project would have reasonable access in their region to the materials specified in 40 CFR 51.166(q)(2)(ii).

Second, ADEQ's submittal does not require ADEQ to notify the public of (1) the degree of increment consumption that is expected from the source or modification, or (2) the Director's preliminary determination, as required by 40 CFR 51.166(q)(2)(iii).

Third, ADEQ's submittal does not require ADEQ to make the public comments and the written notification of its final determination available in the same location as the preliminary documents as required by 40 CFR 51.166(q)(2)(vi) and (viii).

Finally, ADEQ's submittal requires the Director to take final action on an application within one year of receipt of a complete application—R18-2-402(I)(3). See 40 CFR 51.166(q)(2)(vii). However, ADEQ's program also indicates that a source may begin actual construction once a “proposed final permit” is obtained. See R18-2-402(C) and R18-2-302(G). ADEQ's regulations are ambiguous as to whether a proposed final permit, as defined in R18-2-101(114), constitutes final action by the Director that is subject to administrative and/or judicial review. As EPA has stated previously in the context of our actions on other State SIP submittals, we interpret the CAA to require an opportunity for judicial review of a decision to grant or deny a PSD permit, whether issued by EPA or by a State under a SIP-approved or delegated PSD program. 77 FR 65305, 65306, Oct. 26, 2012 (EPA's approval of the San Joaquin Valley Unified Air Pollution Control District's PSD program into the California SIP); see also 61 FR 1880, 1882. Jan. 24, 1996 (EPA's proposed disapproval of Virginia's PSD program SIP revision due to State law standing requirements that limited judicial review); 72 FR 72617, 72619, Dec. 21, 2007 (in approving South Dakota's PSD program, EPA stated that it interprets the CAA and regulations to require at minimum an opportunity for state judicial review of PSD permits). EPA continues to interpret the relevant provisions of the Act as described in these prior rulemaking actions. While ADEQ has issued guidance clarifying that it treats “proposed final permits” as “appealable agency actions,” under Arizona law,16 in order to obtain full PSD program approval, ADEQ's regulations must make clear that a source may not begin actual construction before a final determination on a PSD permit application is made by the Director, which would be subject to administrative and/or judicial review.

ADEQ's rules contain provisions for using plantwide applicability limits (PALs) in R18-2-412. We have identified the following deficiencies with ADEQ's PALs provisions program as they relate to the PSD program.

First, neither the ADEQ regulatory provisions for PALs at R18-2-412 nor the ADEQ regulatory definitions in R18-2-401 that apply in the context of major sources and major modifications contain a definition for major emissions unit as is required by 40 CFR 51.166(w)(2)(iv). (This term is also not included in the definitions at R18-2-101 or R18-2-301 that ADEQ submitted for approval as part of this action.)

Second, ADEQ's PAL provision for calculating baseline emissions at R18-2-412(B)(2) does not specify that baseline actual emissions are to include emissions associated not only with operation of the unit, but also emissions associated with startup, shutdown and malfunction, as is required by 40 CFR 51.166(w)(3)(ii).

Third, ADEQ's PAL provisions at R18-2-412(H) contain an incorrect reference to (H)(4) instead of the definition for major modification, and R18-2-412(H)(5) uses “eliminated” where the federal regulation uses “established.” See 40 CFR 51.166(w)(9).

Finally, ADEQ's PAL renewal provisions at R18-2-412(I)(1) must contain a reference to subsection (D) of R18-2-412 instead of (F). In addition, R18-2-(I)(4)(a) must reference subsection (E) of R18-2-412. See 40 CFR 51.166(w)(10).

ADEQ's submittal contains definitions applicable to the PSD program that do not fully meet the requirements of 40 CFR 51.166(b)(1), which requires each State plan to contain specific definitions for the PSD program. Deviations from the wording are approvable if the State specifically demonstrates that the submitted definition is more stringent, or at least as stringent, in all respects as the corresponding definition in 40 CFR 51.166(b). We have carefully reviewed the definitions used in ADEQ's PSD program as compared with the federal PSD definitions in 40 CFR 51.166(b) and have found that, generally, ADEQ's submittal contains the definitions necessary to implement a PSD program. However, a number of ADEQ's definitions do not meet the requirements of 40 CFR 51.166(b)(1) because their wording deviates from the wording in the corresponding federal regulatory definitions in 40 CFR 51.166(b)(1) in a manner that may be less stringent than the federal definitions, and the State has not demonstrated otherwise.

Major stationary source at 40 CFR 51.166(b)(1)—language from subparagraph 40 CFR 51.166(b)(1)(i)(c) not included in the definition at R18-2-101(75). See also discussion below of the definition of “stationary source” in 40 CFR 51.166(b)(5).

Net emissions increase at 40 CFR 51.166(b)(3)—ADEQ's definition at R18-2-101(87)(c) identifies that an increase or decrease in actual emissions is creditable only to the extent that the Director has not relied on it in issuing a permit. However, this definition is broader than the definition in the PSD program, which only specifies that the reviewing authority has not relied on the increase or decrease in issuing a PSD permit. In some respects this makes ADEQ's definition more stringent (decreases), but in other respects less stringent (increases). In addition, the equivalent of paragraph 40 CFR 51.166(b)(3)(viii) is not included in ADEQ's definition at R18-2-101(87).

Stationary source at 40 CFR 51.166(b)(5)—the federal regulation at 40 CFR 51.166(b)(5) defines this term as “any building, structure, facility or installation which emits or may emit a regulated NSR pollutant,” with “regulated NSR pollutant” also being a federally defined term at 40 CFR 51.166(b)(49), whereas ADEQ's regulation at R18-2-101(39) defines “stationary source” as “any building, structure, facility or installation subject to regulation pursuant to A.R.S. § 49-426(A) which emits or may emit any air pollutant,” with “air pollutant” being an undefined term in ADEQ's regulation. We note that A.R.S. § 49-426(A) provides a cross-reference to certain exemptions from permitting identified in A.R.S. § 49-426(B), specifically agricultural equipment used in normal farm operations and certain fuel burning equipment, which do not appear to be consistent with the federal PSD definition. The federal definition for stationary source is very broad and does not exclude these source categories. We agree that it is acceptable for ADEQ to limit its NSR program to certain kinds of stationary sources, as specified in 40 CFR 51.160(e), but the federal definition for a stationary source in the context of the PSD program is not the appropriate place for such an exclusion, as it does not allow exclusions for certain source categories.

Major source baseline date at 40 CFR 51.166(b)(14)—language equivalent to paragraph 40 CFR 51.166(b)(14)(iv) is not included at ADEQ's definition in R18-2-218(B)(1).

Baseline area 40 CFR 51.166(b)(15)—ADEQ's definition at R18-2-218(D) contains an incorrect reference to R18-2-217 rather than referring to section 107(d)(1)(A)(ii) or (iii) of the Act or the equivalent; also, language equivalent to that in paragraph 40 CFR 51.166(b)(15)(iii) is not included.

Allowable emissions at 40 CFR 51.166(b)(16)—ADEQ's definition at R18-2-101(13)(b) does not include the “future compliance date” language that is in 40 CFR 51.166(b)(16)(ii) and ADEQ has not demonstrated that its regulatory language is at least as stringent as the federal definition.

Federally enforceable at 40 CFR 51.166(b)(17)—ADEQ's definition at R18-2-101(53)(d) identifies that requirements included in permits pursuant to R18-2-306.01 or R18-2-306.02 are included in the definition of federally enforceable requirements, but excludes those requirements that are identified as “enforceable only by the state.” With this action, we approving R18-2-306.01 and R18-2-306.02 into the SIP, making requirements pursuant to these rules federally enforceable. As such, ADEQ does not have the discretion to identify some of those requirements as only enforceable by the state.

Complete at 40 CFR 51.166(b)(22)—ADEQ's definition at R18-2-401(4) is missing the second sentence of the federal definition.

Significant at 40 CFR 51.166(b)(23)- ADEQ definition at R18-2-101(130)(e) uses “milligrams” instead of “micrograms” as required in paragraph 40 CFR 51.166(b)(23)(iii).

Projected actual emissions at 40 CFR 51.166(b)(40)—ADEQ's definition at R18-2-401(20)(b)(iii) does not specifically require inclusion of emissions from malfunctions in the determination of projected actual emissions, and exempts emissions from a shutdown associated with a malfunction from such determination, while the federal definition at 40 CFR 51.166(b)(40)(ii)(b) requires that emissions from both shutdowns and malfunctions be included.

Subject to regulation at 40 CFR 51.166(b)(48)—this definition is not included in ADEQ's NSR SIP submittal. ADEQ did not adopt a definition for the term “subject to regulation” or include such definition as part of the NSR SIP submittal, presumably because the federal definition of the term contains the requirements of the Greenhouse Gas (GHG) Tailoring Rule, and GHGs cannot be regulated under Arizona state law.17 We note, however, that while the GHG program requirements are contained as part of the definition of the term “subject to regulation,” the federal definition of this term also contains non-GHG-specific program elements for determining when a pollutant is “subject to regulation.” As such, ADEQ must add a definition to its PSD regulations to address these elements of the term “subject to regulation” in order to obtain full program approval.

Regulated NSR pollutant at 40 CFR 51.166(b)(49)—ADEQ's regulatory definition at R18-2-101(122) does not include the final two sentences of 40 CFR 51.166(b)(49)(i)(a)or the language at 40 CFR 51.166(b)(49)(iv); ADEQ's definition also includes an incorrect cross-reference to hazardous air pollutants listed under R18-2-1101 that is not consistent with the requirements in 40 CFR 51.166(b)(49)(v); and ADEQ's regulatory definition needs to update the July 1, 2010 date in the cross-reference to CAA section 108.

On January 22, 2013, the U.S. DC Circuit Court of Appeals in Sierra Club v. EPA, 705 F.3d 458, vacated the parts of two federal PSD rules (40 CFR 51.166(i)(5)(i)(c) and 40 CFR 52.21(i)(5)(i)(c)) establishing a PM2.5 significant monitoring concentration (SMC), finding that EPA was precluded from using the PM2.5 SMC to exempt permit applicants from the statutory requirement to compile and submit preconstruction monitoring data as part of a complete PSD application. On December 9, 2013, revisions to 40 CFR 51.166 and 52.21 were published in the Federal Register to remove these vacated rule elements, effective as of that date. See 78 FR 73698.

ADEQ's submittal at R18-2-407(H)(1)(c) contains the equivalent of the PM2.5 SMC that was vacated by the Court of Appeals and which has been removed from the federal PSD regulations. As the Court of Appeals found application of this SMC impermissible, and because ADEQ's regulation incorporating this SMC is a separable portion of ADEQ's PSD program, we are proposing a partial disapproval of ADEQ's submitted PSD program, to disapprove R18-2-407(H)(1)(c).

ADEQ's submittal contains a definition for basic design parameter at R18-2-401(3) that reflects the definition that EPA originally developed as part of its Equipment Replacement Provisions. See 68 FR 61248 Oct. 27, 2003. However, the definition for basic design parameter, and other elements related to the Equipment Replacement Provisions, were vacated by the DC Circuit Court of Appeals in State of New York v. EPA, 443 F.3d 880 (D.C. Cir. 2006). While the federal PSD regulations still contain a reference to “basic design parameter,” this term is no longer specifically defined under the federal PSD regulations, and application of the definition contained in the Equipment Replacement Provisions that were vacated by the Court of Appeals is inconsistent with federal PSD requirements. As the Court of Appeals found this Equipment Replacement Provisions and, therefore, this definition, impermissible, and because ADEQ's regulation incorporating this definition is a separable portion of ADEQ's PSD program, we are proposing a partial disapproval of ADEQ's submitted PSD program, to disapprove R18-2-401(3).

Part D of title I of the Act contains the general requirements for areas designated “nonattainment” for the NAAQS, including preconstruction permit requirements for new major sources or major modifications proposing to construct in such nonattainment areas, commonly referred to as “Nonattainment New Source Review” or “NA-NSR.” EPA's regulations for NA-NSR permit programs are found in 40 CFR 51.165. Most areas under ADEQ's jurisdiction are currently designated as “attainment” or “unclassifiable/attainment” for all NAAQS pollutants. However, there are some areas under ADEQ's jurisdiction that are nonattainment and warrant a NA-NSR program. See 40 CFR 81.303.

R18-2-402 through 405 contain the substantive NA-NSR requirements for review and permitting of major sources and major modifications in nonattainment areas under ADEQ jurisdiction in Arizona. These regulations satisfy most of the statutory and regulatory requirements for NA-NSR permit programs, but these rules contain several deficiencies that that do not allow us to fully approve the NA-NSR program submittal that is the subject of this action, as discussed below.

Although ADEQ's NA-NSR program submittal meets most NA-NSR program requirements, we are proposing to disapprove one specific aspect of ADEQ's NA-NSR program relating to the definition of “basic design parameter.” The ADEQ rule provision that we are proposing to disapprove is directly comparable to a federal NA-NSR rule provision that has been vacated by a federal court, and we find that it is separable from the remainder of ADEQ's NA-NSR program. Accordingly, we find this provision suitable for disapproval at this time. This issue is described in more detail below in Section II.D.4.

For most of the remainder of ADEQ's NA-NSR program submittal, we are proposing limited approval and limited disapproval. We find that approval of ADEQ's updated NA-NSR program, aside from the aspect that is separable and is proposed for disapproval as mentioned above, will substantially strengthen the SIP overall, particularly as the current SIP-approved NA-NSR program is significantly out of date when compared with current federal NA-NSR regulatory requirements as well as current State regulations. See our discussion in Section G below. However, specific provisions of the NA-NSR SIP program submittal are inconsistent with NA-NSR program requirements, and these deficiencies must be addressed before we can fully approve ADEQ's NA-NSR program into the SIP. The deficiencies that we have identified with ADEQ's NA-NSR program that provide the basis for our limited approval and limited disapproval are described immediately below in Sections II.D.1 through 3.18

First, as discussed above with respect to ADEQ's PSD program submittal, ADEQ's NA-NSR program submittal often refers to Articles 9 and/or 11 of ADEQ's regulations where the federal regulations refer to 40 CFR parts 60, 61, or 63; or, similarly, sections 111 or 112 of the Act. See R18-2-101(122)(b); R18-2-401(10); R18-2-402(G)(2); and R18-2-406(A)(4). Articles 9 and 11 are where ADEQ incorporates by reference the federal regulations in 40 CFR parts 60, 61, and 63 (which EPA implements under sections 111 and 112 of the Act). However, these Articles are not in the SIP, have not been submitted for SIP approval, and do not necessarily contain provisions equivalent to all of the subparts in parts 60, 61, and 63. See 40 CFR 51.165(a)(1)(xiii)—lowest achievable emission rate, (a)(1)(xxxvii)—regulated NSR pollutant, and (a)(1)(xl)—best available control technology.

Second, the nonattainment NSR program requirements at 40 CFR 51.165(a)(2) require each plan to have a preconstruction review program to satisfy the requirements of sections 172(c) and 173 of the Act. However, as previously discussed in this preamble, ADEQ's submittal allows a source at R18-2-302(G) and R18-2-402(C) to begin actual construction upon the issuance of a proposed final permit. ADEQ's program is ambiguous as to whether a proposed final permit, as defined in R18-2-101(114), constitutes final action by the Director. While ADEQ has issued guidance clarifying that it treats “proposed final permits” as final actions for purposes of preconstruction permitting,19 to obtain full NA-NSR program approval, ADEQ's regulations must make clear that a source may not begin actual construction before a final determination on an NA-NSR permit application is made by the Director.

Third, 40 CFR 51.165(a)(3)(ii)(G) requires that credit for emission reductions can be claimed only to the extent that the reviewing authority has not relied on it in issuing any permit under regulations approved pursuant to 40 CFR 51 subpart I or the State has not relied on it in demonstration of attainment or reasonable further progress. ADEQ's NSR submittal generally addresses this requirement at R18-2-404(H), but also needs to include references to rules R18-2-302.01 and R18-2-334, which are to be approved as part of ADEQ's NSR regulations under Subpart I.

Fourth, ADEQ's submittal contains an apparent typographical error in R18-2-402(F)(1)(c), which includes a cross-reference to R18-2-401(20)(b)(iii) rather than R18-2-401(20)(b)(iv). This error must be corrected to ensure that the requirement in 40 CFR 51.165(a)(6)(i)(c) for owners and operators to document and maintain a record of certain applicability-related information is satisfied.

Fifth, ADEQ's submittal does not require owners or operators to make information required under 40 CFR 51.165(a)(6) available for review upon request by the Director or the general public pursuant to the requirements in 40 CFR 70.4(b)(3)(viii) as is required by 40 CFR 51.165(a)(7).

Sixth, 40 CFR 51.165(a)(9)(i) requires that increases in emissions shall be offset by reductions in emissions using a ratio of emission decreases to emission increases of at least 1 to 1. ADEQ's NA-NSR submittal contains this requirement at R18-2-404(A), but could be interpreted as establishing the ratio as increases to decreases, instead of decreases to increases—“emission increases shall be offset by emission decreases at a ratio of at least 1 to 1.” In addition, R18-2-404(A) refers to additional offset requirements in R18-2-405, but does not refer to the offset requirement in R18-2-404(J).

Seventh, 40 CFR 51.165(a)(11) requires emission offsets to be obtained for the same regulated NSR pollutant, unless interprecursor offsetting is permitted for a particular pollutant, as further specified in the rule. ADEQ's NA-NSR SIP submittal does not address interprecursor offsets, and it is not required to, but the submittal does not contain a specific requirement that offsets must be for the same regulated pollutant.

Eighth, 40 CFR 51.165(b) requires that ADEQ have a preconstruction program that satisfies the requirements of section 110(a)(2)(D)(i) of the Act for any new major stationary source or major modification that would locate in an attainment area, but would cause or contribute to a violation of a NAAQS in any adjacent area. ADEQ's program contains provisions for 40 CFR 51.165(b) at R18-2-406(A)(5)(a)-(b) that generally meet this requirement. However, ADEQ's regulations at R18-2-406(A)(5)(b) refer to the “Arizona primary or secondary ambient air quality standards,” which is not a defined term, whereas the analogous federal program provisions refer to the NAAQS. As a result, ADEQ's program does not fully meet the requirements in 40 CFR 51.165(b)(1) and (2) as ADEQ's regulations do not make clear which standards are being referred to, and the submittal does not demonstrate that such standards would apply to areas outside of Arizona for purposes of ADEQ's NSR review. Similarly, ADEQ's regulation at R18-2-406(A)(5)(a) references the state's ambient air quality standards in Article 2, which would not clearly apply to areas outside of Arizona.

Finally, Section 173(a)(4) of the Act requires that NA-NSR permit programs shall provide that permits to construct and operate may be issued if “the Administrator has not determined that the applicable implementation plan is not being adequately implemented for the nonattainment area in which the proposed source is to be constructed or modified.” However, ADEQ's program does not contain a provision that would prohibit the issuance of NA-NSR permits in areas where the Administrator has made this determination or that requires that ADEQ conduct a review to ensure that this requirement is met. To obtain full program approval, ADEQ must add a provision to its NA-NSR program requirements that ensures compliance with CAA section 173(a)(4).

ADEQ's rules contain provisions for using plantwide applicability limits (PALs) in R18-2-412. We have identified the following deficiencies with ADEQ's PALs provisions program as they relate to the NA-NSR program.

First, ADEQ's provision for PALs does not specify that modifications under a PAL do not need approval through the nonattainment major NSR program. Only the PSD program is mentioned. ADEQ's submittal does not contain a definition for nonattainment major NSR program (see 40 CFR 51.165(a)(1)(xxx)). ADEQ should either add this definition or considering referencing R18-2-403. See 40 CFR 51.165(f)(1)(iii)(B).

Second, neither the ADEQ regulatory provisions for PALs at R18-2-412 nor the ADEQ regulatory definitions in R18-2-401 that apply in the context of major sources and major modifications contain a definition for major emissions unit as is required by 40 CFR 51.165(f)(2)(iv).

Third, ADEQ's PAL provision for calculating baseline emissions at R18-2-412(B)(2) does not specify that baseline actual emissions are to include emissions associated not only with operation of the unit, but also emissions associated with startup, shutdown and malfunction, as is required by 40 CFR 51.165(f)(3)(ii).

Fourth, ADEQ's PAL provisions at R18-2-412(H) contain an incorrect reference to R18-2-412(H)(4) instead of the definition for major modification, and R18-2-412(H)(5) uses “eliminated” where the federal regulation uses “established.” See 40 CFR 51.165(f)(9).

Finally, ADEQ's program contains incorrect cross-references in meeting the requirements of 40 CFR 51.165(f)(1), as follows: ADEQ's PAL renewal provisions at R18-2-412(I)(1) must contain a reference to subsection (D) of R18-2-412 instead of (F), and R18-2-(I)(4)(a) must reference subsection (E) of R18-2-412.

ADEQ's submittal contains definitions applicable to the nonattainment NSR program that do not fully meet the requirements of 40 CFR 51.165(a)(1), which requires each State plan to contain specific definitions for the nonattainment NSR program. Deviations from the wording are approvable if the State specifically demonstrates that the submitted definition is more stringent, or at least as stringent, in all respects as the corresponding definition in 40 CFR 51.165(a)(1). We have carefully reviewed the definitions used in ADEQ's nonattainment NSR program as compared with the federal PSD definitions in 40 CFR 51.165(a)(1) and have found that generally, ADEQ's submittal contains the definitions necessary to implement a NA-NSR program. However, a number of ADEQ's definitions do not meet the requirements of 40 CFR 51.165(a)(1) because their wording deviates from the wording in the corresponding federal regulatory definitions in 40 CFR 51.165(a)(1) in a manner that may be less stringent than the federal definitions, and the State has not demonstrated otherwise.

Stationary source at 40 CFR 51.165(a)(1)(i)—the federal regulation at 40 CFR 51.165(a)(1)(i) defines this term as “any building, structure, facility or installation which emits or may emit a regulated NSR pollutant,” with “regulated NSR pollutant” also being a federally defined term at 40 CFR 51.165(a)(1)(xxxvii), whereas ADEQ's regulation at R18-2-101(139) defines “stationary source” as “any building, structure, facility or installation subject to regulation pursuant to A.R.S. § 49-426(A) which emits or may emit any air pollutant,” with “air pollutant” being an undefined term in ADEQ's regulation. However, A.R.S. § 49-426(A) provides a cross-reference to certain exemptions from permitting identified in A.R.S. § 49-426(B), specifically agricultural equipment used in normal farm operations and certain fuel burning equipment, which do not appear to be consistent with federal NA-NSR definition. The federal definition of stationary source at 40 CFR 51.165(a)(1)(i) is very broad and does not exclude these source categories from the definition. We agree that it is acceptable for ADEQ to limit its NSR program to certain kinds of stationary sources, as discussed in detail above with respect to 40 CFR 51.160(e), but the federal definition for a stationary source in the context of the major NA-NSR program is not the appropriate place for such an exclusion, as it does not allow exclusions for certain source categories. ADEQ must demonstrate that its definition of stationary source is at least as stringent as the federal definition at 40 CFR 51.165(a)(1)(i) in all respects.

Major stationary source at 40 CFR 51.165(a)(1)(iv)—language from subparagraph 40 CFR 51.165(a)(1)(iv)(A)(3) not included in the definition at R18-2-101(75); also see comments above on definition of “stationary source” in 40 CFR 51.165(a)(1)(i).

Net emissions increase at 40 CFR 51.165(a)(1)(vi)—The requirement of paragraph 40 CFR 51.165(a)(1)(vi)(E)(3) is not met because not all requirements to be approved under subpart I are listed (i.e., R18-2-302.01) in the definition at R18-2-101(87). In addition, the equivalent of paragraph 40 CFR 51.165(a)(1)(vi)(G) is not included in ADEQ's definition at R18-2-101(87).

Significant at 40 CFR 51.165(a)(1)(x)—ADEQ's definition at R18-2-101(130)(b) refers to R18-2-405 for determining significant emissions in serious and severe ozone nonattainment areas. The definition for “significant” at R18-2-405(B) does not use the term “net emissions increase,” which is a term defined by the federal regulations at 40 CFR 51.165(a)(1)(vi).

Allowable emissions at 40 CFR 51.165(a)(1)(xi)—ADEQ's definition at R18-2-101(13)(b) does not include the “future compliance date” language that is in 40 CFR 51.165(a)(1)(xi)(B) and (C) and ADEQ has not demonstrated that its regulatory language is at least as stringent as the federal definition.

Federally enforceable at 40 CFR 51.165(a)(1)(xiv)—ADEQ's definition at R18-2-101(53)(d) identifies that requirements included in permits pursuant to R18-2-306.01 or R18-2-306.02 are included in the definition of federally enforceable requirements, but excludes those requirements that are identified as “enforceable only by the state.” With this action, we are approving R18-2-306.01 and R18-2-306.02 into the SIP, making requirements pursuant to these rules federally enforceable. As such, ADEQ does not have the discretion to identify some of those requirements as only enforceable by the state.

Regulated NSR pollutant at 40 CFR 51.165(a)(1)(xxxvii)—ADEQ's definition is missing this language from paragraph 40 CFR 51.165(a)(1)(xxxvii)(C): “provided that such constituent or precursor pollutant may only be regulated under NSR as part of regulation of the general pollutant” at R18-2-101(122)(a).

Projected actual emissions at 40 CFR 51.165(a)(1)(xxviii)—ADEQ's definition at R18-2-401(20)(b)(iii) does not specifically require inclusion of emissions from malfunctions in the determination of projected actual emissions, and exempts emissions from a shutdown associated with a malfunction from such determination, while the federal definition at 40 CFR 51.165(a)(1)(xxxvii)(C) requires that emissions from both shutdowns and malfunctions be included.

ADEQ's submittal contains a definition for basic design parameter at R18-2-401(3) that reflects the definition that EPA originally developed as part of its Equipment Replacement Provisions. See 68 FR 61248, Oct. 27, 2003. However, the definition for basic design parameter, and other elements related to the Equipment Replacement Provisions, were vacated by the DC Circuit Court of Appeals in State of New York v. EPA, 443 F.3d 880 (D.C. Cir. 2006). While the federal NA-NSR regulations still contain a reference to “basic design parameter,” this term is no longer specifically defined under the federal NA-NSR regulations, and application of the definition contained in the Equipment Replacement Provisions that were vacated by the Court of Appeals is inconsistent with federal NA-NSR requirements. As the Court of Appeals found this Equipment Replacement Provisions and, therefore, this definition, impermissible, and because ADEQ's regulation incorporating this definition is a separable portion of ADEQ's NA-NSR program, we are proposing a partial disapproval of ADEQ's submitted NA-NSR program, to disapprove R18-2-401(3).

On January 4, 2013, the U.S. Court of Appeals for the District of Columbia Circuit, in Natural Resources Defense Council v. EPA,20 issued a decision that remanded the EPA's 2007 and 2008 rules implementing the 1997 PM2.5 NAAQS. EPA's 2008 implementation rule addressed by the court decision, “Implementation of New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5)” (the 2008 NSR PM2.5 Rule),21 promulgated NSR requirements for implementation of PM2.5 in both nonattainment areas (under the NA-NSR program) and attainment/unclassifiable areas (under the PSD program). The Court of Appeals found that EPA erred in implementing the PM2.5 NAAQS in these rules for nonattainment areas solely pursuant to the general implementation provisions of subpart 1 of part D of title I of the CAA, rather than pursuant to the additional implementation provisions specific to particulate matter nonattainment areas in subpart 4. The Court of Appeals ordered the EPA to “repromulgate these rules pursuant to Subpart 4 consistent with this opinion.” 706 F.3d at 437. Although the Court of Appeals declined to establish a deadline for EPA's response to the remand, EPA intends to promulgate new generally applicable implementation regulations for the PM2.5 NAAQS in accordance with the requirements of subpart 4. In the interim, however, states and EPA still need to proceed with implementation of the PM2.5 NAAQS in a timely and effective fashion in order to meet statutory obligations under the CAA and to assure the protection of public health intended by those NAAQS.

ADEQ's NSR SIP submittal generally includes requirements for the PM2.5 NA-NSR program consistent with the provisions promulgated in the 2008 NSR PM2.5 Rule. Specifically, ADEQ's NSR SIP submittal includes the PM2.5 significant emission rates at R18-2-101(130), regulation of certain PM2.5 precursors (SO2 and NOX) at R18-2-101(130), the regulation of PM10 and PM2.5 condensable emissions at R18-2-101(122)(f), and the emissions offset requirements at R18-2-403(A)(3). Separate and aside from the issues identified above that have resulted in our proposing limited approval and limited disapproval of ADEQ's NA-NSR submittal, EPA has determined that it is not prepared at this time to grant full approval to ADEQ's NSR SIP submittal as to the PM2.5 NA-NSR program requirements, in light of the Court's remand of the 2008 NSR PM2.5 Rule, and for the reasons explained below.

EPA is in the process of evaluating the requirements of subpart 4 as they pertain to NA-NSR. In particular, subpart 4 includes section 189(e) of the CAA, which requires the control of major stationary sources of PM10 precursors (and hence under the court decision, PM2.5 precursors) “except where the Administrator determines that such sources do not contribute significantly to PM-10 levels which exceed the standard in the area.” Although ADEQ's NSR SIP submittal does include regulation of SO2 and NOX as PM2.5 precursors, it does not include the regulation of VOCs or ammonia. Nor does the NSR SIP submittal include a demonstration as to whether or not the regulation of VOCs or ammonia is necessary under section 189(e). The evaluation of which precursors need to be controlled to achieve the standard in a particular area is typically conducted in the context of the state's preparing and the EPA's reviewing an area's attainment plan SIP. In this case, there are two designated PM2.5 nonattainment areas in Arizona, the Nogales (portion of Santa Cruz County, AZ) and West Central Pinal (portion of Pinal County, AZ) areas. Both are designated nonattainment for the 2006 annual PM2.5 NAAQS. However, on January 7, 2013 and September 4, 2013, EPA finalized determinations of attainment for these areas, respectively (78 FR 887 and 78 FR 54394), which suspended the requirement for the state to submit, among other things, an attainment plan SIP for the area.22 Accordingly, PM2.5 attainment plans for SIP approval are not currently before Region 9 for these areas. As Region 9 does not have before it the state's analysis as to which precursors need to be controlled in these areas pursuant to section 189(e) of the Act, as would be generally contained in an attainment plan SIP, it cannot fully approve as complying with the CAA a nonattainment NSR SIP that only addresses a subset of the scientific PM2.5 precursors recognized by EPA.

On the other hand, while ADEQ's submittal may not yet contain all of the elements necessary to satisfy the CAA requirements when evaluated under subpart 4, the NA-NSR SIP submittal represents a considerable strengthening of the currently approved Arizona SIP, which does not address NSR permitting for PM2.5 at all. Therefore, EPA is proposing to grant limited approval to the PM2.5 NA-NSR provisions in ADEQ's NSR submittal for the Nogales and West Central Pinal PM2.5 nonattainment areas.

For the reasons explained above, EPA is not evaluating at this time whether ADEQ's NA-NSR submittal will require additional revisions relating to PM2.5 to satisfy the subpart 4 requirements. Once EPA re-promulgates the Federal PM2.5 regulations with respect to NA-NSR permitting in response to the Court's remand, EPA will consider whether a limited disapproval should also be proposed for ADEQ's PM2.5 NA-NSR program based on this issue.

In addition, section 189(e) of the CAA requires that ADEQ's NSR program for PM10 nonattainment areas apply to major stationary sources of PM10 precursors, except where the Administrator determines that such sources do not contribute significantly to PM10 levels which exceed the standard in the area. As discussed below, we have identified one area under ADEQ's jurisdiction, the West Pinal PM10 nonattainment area, for which we are proposing a limited approval with respect to PM10 under section 189(e) of the Act.

On September 4, 2013, the West Pinal area was redesignated to nonattainment for the 1987 p.m.10 standard. ADEQ's NSR SIP submittal generally includes NA-NSR requirements for PM10 nonattainment areas such as the PM10 significant emission rate at R18-2-101(130), the regulation of PM10 and PM2.5 condensable emissions at R18-2-101(122)(f), and the emissions offset requirements at R18-2-403(A)(3). However, separate and aside from the issues identified above that have resulted in our proposing limited approval and limited disapproval of ADEQ's NA-NSR submittal, EPA has determined that it is not prepared at this time to grant full approval to ADEQ's NSR SIP submittal as to the PM10 nonattainment NSR program requirements for the West Pinal nonattainment area. The evaluation of which precursors need to be controlled to achieve the standard in a particular area is typically conducted in the context of the state's preparing and the EPA's reviewing of an area's attainment plan SIP. On February 19, 2014, ADEQ withdrew from EPA's consideration the Arizona State Implementation Plan Revision for the West Pinal County PM10 Nonattainment Area (submitted on December 30, 2013). Accordingly, a PM10 attainment plan for West Pinal is not currently before Region 9. As such, Region 9 does not have before it the state's analysis as to which precursors need to be controlled in this area pursuant to section 189(e) of the Act, as would be generally contained in an attainment plan SIP, and cannot fully approve as complying with the CAA a nonattainment NSR SIP that does not address scientific PM10 precursors recognized by EPA.

While ADEQ's submittal may not yet contain all of the elements necessary to satisfy the CAA NA-NSR requirements when evaluated under subpart 4, the proposed revisions to ADEQ's NA-NSR program represent a considerable strengthening of the currently approved Arizona SIP, which does not address NSR requirements for PM10 at all. Therefore, EPA is proposing to grant limited approval to the PM10 NA-NSR provisions in ADEQ's NSR submittal as they apply to the West Pinal nonattainment area. Once ADEQ submits a new PM10 attainment plan for this area, EPA will consider whether a limited disapproval should also be proposed based on this issue.

In addition to ADEQ's NSR SIP submittal, we are taking action on rules R18-2-311 and R18-2-312. These rules were submitted to EPA for SIP approval in a separate submittal on July 28, 2011. We delayed acting on rules R18-2-311 and R18-2-312 in a previous action, and are therefore now evaluating and taking action on the rules. We are also taking action on A.R.S. § 49-107, an Arizona statutory provision concerning local delegation of state authority.

First, ADEQ's rule R18-2-311 specifies the test methods and procedures which can be used to determine compliance with requirements established under ADEQ's air program. On October 19, 1984, EPA approved an earlier version of this rule into the SIP.23 See 49 FR 41026. The current submittal, adopted effective November 15, 1993, renumbers the earlier rule and expands on the previous version by listing additional test methods that may be used to determine compliance. While the current rule improves on the earlier version, we cannot recommend it for full approval into the SIP. We are proposing a limited disapproval because Section D of the rule allows the State to approve alternatives to the applicable SIP without EPA approval, in conflict with the requirements of CAA sections 110(a)(2)(A) and 110(i).24

Second, ADEQ's rule R18-2-312 requires stationary sources to conduct a performance test within 60 days of achieving the capability to operate at its maximum production rate, but no later than 180 days after initial start-up. The rule also specifies that testing shall be conducted under such conditions specified by State, including, but not limited to appropriate test methods, notification to the State, data reduction, records, and number of test runs. On April 23, 1982 (47 FR 17485) EPA approved a version of this rule into the SIP.25 The current submittal, adopted effective November 15, 1993, renumbers the earlier rule and expands on the previous version by including conditions when a test may be stopped and allows compliance to be determined with continuous emission monitoring as long as the applicable quality assurance procedures are followed. While the current rule improves on the earlier version, we cannot recommend it for full approval into the SIP. We are proposing a limited disapproval because Section B of the rule allows the State to approve the use of equivalent and alternative test methods without EPA approval, in conflict with CAA sections 110(a)(2)(A) and 110(i).26

Throughout this document “we,” “us,” or “our” refer to EPA. This section provides additional information by addressing the following:

EPA is proposing to approve the SIP revision submitted by the state of Missouri for 10 CSR 10-6.060, “Construction Permits Required”. On October 3, 2013, EPA received a request to amend the SIP to incorporate by reference all sections of title 40 part 52.21 of the Code of Federal Regulations (CFR) except for subsections (a), (q) and (s) through July 1, 2012. Missouri is also requesting to amend the SIP to incorporate by reference EPA's July 12, 2012, final rule finalizing PALs for GHGs (77 FR 41051) and EPA's October 25, 2012, final rule amending the definition of “Regulated NSR Pollutant” concerning condensable particulate matter (77 FR 65107). In Missouri's letter to EPA, Missouri also requested to amend the SIP to incorporate EPA's May 18, 2011, rule repealing the grandfathering provisions for particulate matter less than 2.5 micrometers (PM2.5) under the PSD program, but because the state has an already approved PSD program which incorporates by reference the provisions of 40 CFR 52.21 through July 1, 2011, Missouri's Federally approved program already incorporates this action. Other revisions to Missouri's rule which we are proposing to take action on include clarifying the requirements for conducting an air quality analysis in section 5, De Minimis Permits and making minor administrative clarifications as well as revising the notification period for initial start-up in section 6, General Permits.

Missouri implements its PSD program by incorporating by reference section 52.21 of the CFR in its rule 10 CSR 10-6.060, “Construction Permits Required”. In a previous action on June 21, 2013, EPA approved the most recent amendment to Missouri's PSD program (78 FR 37457). Missouri's currently approved PSD program incorporates by reference (IBR) the Federal regulations as promulgated July 1, 2011, in the CFR, and incorporates the July 20, 2011, rule “Deferral for CO2 Emissions from Bioenergy and Other Biogenic Sources under the Prevention of Significant Deterioration and Title V Programs” (“Biomass Deferral” 76 FR 43490). Missouri's currently approved PSD program contains a number of important required elements, including those related to the 2008 “Implementation of New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5)” (2008 NSR PM2.5 Rule; 73 FR 28321). For PSD sources in Missouri, PSD permits must address direct PM2.5 emissions as well as precursor emissions (including sulfur dioxide (SO2) and oxides of nitrogen (NOX)), establish significant emission rates for PM2.5 and precursor emissions, and establish the requirement to account for condensable particulate matter. On January 4, 2013, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit), in Natural Resources Defense Council v. EPA, issued a decision that remanded the EPA's rules implementing the 1997 PM2.5 NAAQS.1 The court's remand of the 2008 NSR PM2.5 Rule is relevant to this final rulemaking. This rule promulgated NSR requirements for implementation of PM2.5 in both nonattainment areas (nonattainment NSR) and attainment/unclassifiable areas (PSD). The D.C. Circuit found that EPA erred in implementing the PM2.5 NAAQS pursuant to the general implementation provisions of subpart 1 of part D of title 1 of the CAA, rather than pursuant to the additional implementation provisions specific to particulate matter nonattainment areas in subpart 4. The Court ordered EPA to “repromulgate these rules pursuant to Subpart 4 consistent with this opinion.” (Id. at 437). However, as the requirements of subpart 4 only pertain to nonattainment areas, it is EPA's position that the portions of the 2008 NSR PM2.5 Rule that address requirements for PM2.5 in attainment and unclassifiable areas are not affected by the D.C. Circuit's opinion in NRDC v. EPA. Moreover, EPA does not anticipate the need to revise any PSD requirements promulgated in the 2008 NSR PM2.5 Rule in order to comply with the court's decision. Accordingly, EPA's approval of Missouri's SIP as to the PSD requirements promulgated by the 2008 NSR PM2.5 Rule does not conflict with the D.C. Circuit's opinion.

On October 20, 2010, EPA promulgated additional PSD regulations relating to PM2.5: “Prevention of Significant Deterioration (PSD) for Particulate Matter Less than 2.5 Micrometers (PM2.5)—Increments, Significant Impact Levels (SILs), and Significant Monitoring Concentrations (SMC)” (2010 PSD PM2.5 Rule, 73 FR 64864). On January 22, 2013, the D.C. Circuit, in Sierra Club v. EPA, issued a judgment that, inter alia, vacated and remanded the SIL provisions at section 52.21(k)(2). Additionally, the D.C. Circuit vacated the SMC provisions at section 52.21(i)(5)(i)(c).2 In response to the D.C. Circuit's decision, EPA took final action on December 9, 2013, to remove the SIL provisions from the Federal PSD regulations, and to revise the SMC for PM2.5 to zero (78 FR 73698). On March 19, 2013, and October 21, 2013, Missouri submitted additional information to amend their September 5, 2012, SIP submission to clarify that they no longer intended to include the PM2.5 SILs and SMC provisions (see 78 FR 37457, June 21, 2013, for more information). Specifically, Missouri Department of Natural Resources (MDNR) will not apply either the PM2.5 SILs provisions at 40 CFR 51.166(k)(2) and 52.21(k)(2), or the PM2.5 SMC provisions at 40 CFR 51.166(i)(5)(i)(c) to pending or future PSD permit actions. It is the state's intent that PM2.5 will remain on the list of pollutants but that the associated concentration level would be blank or zero. In other words, pre-construction monitoring will continue to apply but without de minimis thresholds. Therefore, the provisions with which the court took issue are not in effect in Missouri.

On June 23, 2014, the United States Supreme Court, in Utility Air Regulatory Group v. Environmental Protection Agency, issued a decision addressing the application of PSD permitting requirements to greenhouse gas (GHG) emissions.3 The Supreme Court said that the EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source (or modification thereof) required to obtain a PSD permit. The Court also said that EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limitations on GHG emissions based on the application of Best Available Control Technology (BACT). In order to act consistently with its understanding of the Court's decision pending further judicial action before the D.C. Circuit to effectuate the decision, the EPA is not continuing to apply EPA regulations that would require that SIPs include permitting requirements that the Supreme Court found impermissible. Specifically, EPA is not applying the requirement that a state's SIP-approved PSD program require that sources obtain PSD permits when GHGs are the only pollutant, (i) that the source emits or has the potential to emit above the major source thesholds, or (ii) for which there is a significant emissions increase and a significant net emissions increase from a modification (e.g. 40 CFR 51.166(b)(48)(v)).

EPA anticipates a need to revise Federal PSD rules in light of the Supreme Court opinion. In addition, EPA anticipates that many states will revise their existing SIP-approved PSD programs in light of the Supreme Court's decision. This can be accomplished as soon as EPA revises the Federal PSD rules in states that allow future revisions to the Federal PSD program to be automatically incorporated into the SIP. The timing and content of subsequent EPA actions with respect to the EPA regulations is expected to be informed by additional legal processes before the D.C. Circuit. EPA is not expecting states to have revised their existing PSD program regulations at this juncture, before the D.C. Circuit has addressed these issues and before EPA has revised its regulations at 40 CFR 51.166. However, EPA is evaluating PSD program submissions to assure that the state's program correctly addresses GHGs consistent with the Supreme Court's decision.

Missouri's existing approved SIP contains the GHG permitting requirements reflected in 40 CFR 52.21 after EPA issued the Tailoring Rule. As a result, the PSD permitting program in Missouri previously approved by EPA into the SIP continues to require that PSD permits (otherwise required based on emissions of pollutants other than GHGs) contain limitations on GHG emissions based on the application of BACT when sources emit or increase greenhouse gases in the amount of 75,000 tons per year (measured as carbon dioxide equivalent). Although the approved Missouri PSD permitting program may also currently contain provisions that are no longer necessary in light of the Supreme Court decision, this does not prevent EPA from approving the submission addressed in this rule. Missouri's 2013 SIP submission does not add any GHG permitting requirements that are inconsistent with the Supreme Court decision. While this submission incorporates all of section 52.21 for completeness, except for subsections (a), (q) and (s), the submission mostly reincorporates PSD permitting requirements for GHG's that are already in the Missouri SIP.

This proposed revision does add to the Missouri SIP the elements of EPA's July 12, 2012, rulemaking, Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule Step 3 and GHG Plantwide Applicability Limits, “Step 3 Tailoring Rule” (77 FR 41051), which implements Step 3 of the phase in of PSD permitting requirements for GHGs. This rule became effective on August 13, 2012. Specifically, the incorporation of the Step 3 rule provisions will allow GHG-emitting sources to obtain plantwide applicability limits (PALs) for their GHG-emitting sources on a carbon dioxide equivalent (CO2e) basis. The GHG PAL provisions, as currently written, include some provisions that may no longer be appropriate in light of the Supreme Court decision. Since the Supreme Court has determined that sources and modifications may not be defined as “major” solely on the basis of the level of GHGs emitted or increased, PALs for GHGs may no longer have value in some situations where a source might have triggered PSD based on GHG emissions alone. However, PALs for GHGs may still have a role to play in determining whether a modification that triggers PSD for a pollutant other than GHGs should also be subject to BACT for GHGs. These provisions, like the other GHG provisions discussed previously, will likely be revised pending further legal action. However, these provisions do not add new requirements for sources or modifications that only emit or increase GHGs above the major source threshold or the 75,000 tpy GHG level in section 52.21(b)(49)(iv). Rather, the PALs provisions provide increased flexibility to sources that wish to address their GHG emissions in a PAL. Since this flexibility may still be valuable to sources in at least one context described above, we believe that it is appropriate to approve these provisions into the Missouri SIP at this juncture.

EPA is proposing to revise Missouri's SIP to incorporate by reference EPA's October 25, 2012 rule, “Implementation of the New Source Review Program for Condensable Particulate Matter”. This revision is appropriate and necessary to ensure that the inadvertent error which was contained in EPA's 2008 rule, which was previously SIP approved in the Missouri rule (78 FR 37457) is corrected. EPA's 2008 rule, “Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers (PM2.5).” See 73 FR 28321 (May 16, 2008), inadvertently included a requirement to consider condensable PM when measuring one of the emissions-related indicators for PM known as “particulate matter emissions” in the context of the PSD and NSR regulations. EPA's 2012 rule corrects the error in the 2008 rule and therefore it is appropriate and necessary to incorporate by reference the 2012 rule and related corrections to the definition of “particulate matter emissions.”

As stated above, Missouri's incorporation by reference of all sections of title 40 section 52.21 of the CFR except for subsections (a), (q) and (s) and EPA's July 12, 2012, final rule on PALs for GHGs (77 FR 41051) and EPA's October 25, 2012, final rule amending the definition of “Regulated NSR Pollutant” concerning condensable particulate matter (77 FR 65107) are appropriate even in light of recent court actions and ensure that the state PSD program is in agreement with Federal requirements. Missouri also requested to amend the SIP to incorporate EPA's May 18, 2011, rule repealing the grandfathering provisions for PM2.5 under the PSD program, but because the state has an already approved PSD program which incorporates by reference the provisions of 40 CFR 52.21 through July 1, 2011, Missouri's Federally approved program already incorporates this action.

Additional revisions include, in paragraph (5)(D)(1) of the rule, Missouri is adding subparagraphs A. and B. which provide clear and specific requirements for when an air quality analysis is required for De Minimis permits. In (5)(D)(2) of the rule, Missouri is adding subparagraphs A., B., and C. which provide clear and specific requirements for when the director may require an air quality analysis. These revisions strengthen Missouri's PSD program.

MDNR is making minor administrative edits to subsections (6)(A) and (6)(A)(2). In (6)(E)(1)(A) Missouri is modifying the notification period for initial equipment start-up. This revision shortens the timeframe for which notification is provided to the state prior to initial start-up.

The state submission has met the public notice requirements for SIP submissions in accordance with 40 CFR 51.102. The submission also satisfies the completeness criteria of 40 CFR part 51, appendix V. In addition, as explained above, the revision meets the substantive SIP requirements of the CAA, including section 110 and implementing regulations. MDNR received five (5) comments from one source: The U.S. Environmental Protection Agency. Missouri responded to each of the comments and made revisions to the rule as appropriate. Overall, these actions strengthen the Missouri SIP, by ensuring the state PSD program incorporates recent Federal PSD updates. These revisions do not negatively impact air quality, nor relax the SIP.

EPA is proposing to approve the revisions to the SIP. These revisions update the construction permits rule to incorporate by reference recent EPA actions related to PALs for GHGs, and amend the definition of “Regulated NSR Pollutant.” Other revisions include modifying the notification period for initial equipment start-up and clarifying de minimis permit air quality analysis requirements.

We are processing this rule as a proposed action because we are soliciting comments on this proposed action. Final rulemaking will occur after consideration of any comments.

In this rule, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference Missouri 10 CSR 10-6.060 “Construction Permits Required” described in the proposed amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

Under the CAA, 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 CAA. Accordingly, this 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 action:

• Is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 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 CAA; and

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

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 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).

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by May 18, 2015. Filing a petition for reconsideration by the Administrator of this proposed rule does not affect the finality of this rulemaking for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectivess of such future rule or action. This proposed action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

For the reasons stated in the preamble, EPA proposes to amend 40 CFR part 52 as set forth below:

The Council manages West Coast ocean salmon fisheries under the Pacific Coast Salmon Fishery Management Plan (FMP). The FMP has long used stock-specific conservation objectives to manage fishery impacts to Council-managed salmon stocks. Conservation objectives are, generally, fixed quantities intended to provide the necessary guidance during the course of the annual preseason planning process to establish salmon fishing seasons that achieve optimum yield. Under the FMP, conservation objectives can be added or changed either through a plan amendment or notice and comment rulemaking if a comprehensive technical review of the best scientific information available provides evidence that, in the view of the Salmon Technical Team (STT), Scientific and Statistical Committee (SSC), and the Council, justifies a modification (FMP section 3.2.2).

In 2009, NMFS amended the guidelines for National Standard 1 (NS1) of the Magnuson-Stevens Fishery Conservation and Management Act (MSA) at 50 CFR 600.310 to provide guidance on how to comply with new annual catch limit (ACL) and accountability measure requirements for ending overfishing of fisheries managed by Federal fishery management plans, including status determination criteria (SDC) (74 FR 3204). Amendment 16 to the FMP (76 FR 81851) defined a suite of reference points for salmon, consistent with the revised NS1 guidelines. In the FMP, SDC are defined in terms of quantifiable, biologically-based reference points, or population parameters, including: maximum sustainable yield (MSY), MSY fishing mortality rate (FMSY), MSY spawner abundance (SMSY), minimum stock size threshold (MSST), and maximum fishery mortality threshold (MFMT, generally equal to FMSY). Under the FMP, changes to SDC can be made without a plan amendment if a comprehensive technical review of the best scientific information available provides evidence that, in the view of the STT, SSC, and the Council, a modification of the values of the SDC is justified (FMP section 3.1.7).

As part of the 2014 methodology review, the Council and its advisory bodies considered new information on three stocks of salmon (Southern Oregon coastal Chinook salmon, Grays Harbor fall Chinook salmon, and Willapa Bay natural coho) to make a determination on whether changes to reference points for these stocks were warranted. A joint methodology review was conducted by the STT, SSC, and the Model Evaluation Workgroup at the Council offices in Portland, OR, October 21-23, 2014. The results of the methodology review were presented at the Council meeting in Costa Mesa, CA, November 12-19, 2014. Both the methodology review and the Council meeting were open to the public and were announced in the Federal Register (79 FR 59741, October 3, 2014 and 79 FR 63900, October 27, 2014). Documents considered by the Council are available on the Council Web site (http://www.pcouncil.org/resources/archives/briefing-books/november-2014-briefing-book/#salmonNov2014). The Council transmitted their recommended changes to NMFS in a letter dated January 23, 2015. This proposed rule describes the reference point updates that are being proposed for implementation in the FMP in developing annual management measures beginning in 2015.

The Southern Oregon coastal Chinook salmon stock, a component of the Southern Oregon Northern California Chinook stock complex, is an aggregate of natural and hatchery fall and spring Chinook salmon populations in Oregon streams south of the Elk River (e.g., Rogue River, Pistol River, and Chetco River), plus spring Chinook salmon from the Umpqua River. Rogue River fall Chinook are used to indicate relative abundance of Southern Oregon coastal Chinook salmon. The current conservation objective for this stock is 60-90 fish per mile in three standard index areas. At the 2014 methodology review, the Oregon Department of Fish and Wildlife (ODFW) provided an analysis that was used by the State of Oregon in 2013 to adopt new State management objectives for Rogue River fall Chinook. The analysis used a Ricker spawner-recruit relationship for Rogue River fall Chinook that included smolt survival and mean summer flow covariates. ODFW proposed that the Council adopt their conservation objective and reference points for Southern Oregon coastal Chinook salmon in the FMP, while keeping this stock as a component of the Southern Oregon Northern California stock complex (where Klamath River fall Chinook is the indicator stock). ODFW's spawner-recruit analysis resulted in an SMSY point estimate of 34,992 and FMSY of 54 percent. ODFW used the 75th percentile of the SMSY posterior distribution (36,880 natural-area spawners) as an estimate of SMSY to determine an MSST of 18,440 natural-origin spawners (MSST = 0.5 * 36,880). ODFW also proposed a stock conservation objective of 41,000 naturally-produced adults passing Huntley Park in the Rogue River, near Gold Beach, OR.

The STT and SSC evaluated ODFW's analysis and recommended that the Council adopt ODFW's proposed values as described above. The SSC recommended ODFW's proposed values for SMSY and FMSY but noted that the choice of MSST, above 50 percent of SMSY, was a policy decision. Based on information from the 2014 methodology review and the advisory body recommendations, the Council adopted the following reference point value updates for southern Oregon coastal Chinook salmon and NMFS proposes to implement them:

During the 2014 methodology review, Washington Department of Fish and Wildlife (WDFW) staff presented a spawner-recruit analysis for Grays Harbor fall Chinook salmon. The analysis produced an estimated SMSY of 13,326 for the Chehalis and Humptulips Rivers combined (9,753 and 3,573, respectively). This estimate is slightly lower than the current management objective of 14,600 natural-area spawners, which was adopted in 1979 based on available spawning habitat. The new SMSY estimate of 13,326 is currently being used by the Pacific Salmon Commission; adoption by the Council provides consistency between the FMP and the Pacific Salmon Treaty. The STT and SSC agreed that WDFW's estimate of SMSY represents the best available science, and recommended that the Council adopt this estimate of SMSY, and associated reference points developed by the STT, for the salmon FMP.

Based on information from the 2014 methodology review and the advisory body recommendations, the Council adopted the recommended stock productivity methodology and the resulting SMSY value. However, the Council's action was not explicit with respect to the values for the associated reference points, specifically MSST and MFMT. The Council and NMFS use MSST to determine if a stock is overfished, and MFMT to determine if overfishing is occurring. Because it is necessary to make determinations as to whether the Grays Harbor fall Chinook salmon stock is overfished or experiencing overfishing in preparation for the development of the 2015 management measures, NMFS is proposing to implement values for MSST and MFMT based on the recommendations of the STT, pursuant to NMFS' independent rulemaking authority (18 U.S.C. 1855(d)). Should the Council choose to adopt a different value for MSST or MFMT, NMFS will determine the appropriate process for considering those values. The FMP states that MSST is generally defined as 0.5 * SMSY or 0.75 * SMSY, although there are some exceptions. Currently, MSST for Grays Harbor fall Chinook is MSST = 0.5 * SMSY. Applying the same approach to the proposed SMSY value of 13,326 results in an MSST of 6,663 natural-area spawners. Applying the spawner-recruit parameter estimates from WDFW's analysis, as recommended by the STT as the best available science, yields an MFMT of 63 percent. Therefore, based on the recommendation of the Council and the advisory bodies, NMFS proposes the following reference point value updates for Grays Harbor fall Chinook salmon:

The Willapa Bay natural coho salmon stock was added to the FMP under Amendment 16, but without a conservation objective and other reference point values. WDFW's habitat-based escapement goal (i.e., adult salmon escaping the fishery to return to freshwater habitat for spawning) for this stock is 13,090 natural-origin fish. The STT performed a spawner-recruit analysis, which produced an estimated SMSY of 17,200 natural-area spawners, and an FMSY of 74 percent. The STT recommended that the Council adopt reference points for this stock based on this analysis. The STT's recommendation also included an MFMT of 74 percent, a MSST of 8,600 natural-area spawners (MSST = 0.5 * SMSY), and annual catch limit calculated on the basis of FACL = 0.95 * FMSY = 71 percent. The SSC supported these recommendations.

Based on information from the 2014 methodology review and the advisory body recommendations, the Council adopted the recommended stock productivity methodology and the resulting SMSY and MFMT values. However, the Council's action was not explicit with respect to the value for MSST. The Council and NMFS use MSST to determine if a stock is overfished. Because it is necessary to determine whether the Willapa Bay natural coho stock is overfished, in preparation for the development of the 2015 management measures, NMFS is proposing to implement a value for MSST based on the recommendations of the STT, pursuant to NMFS' independent rulemaking authority (18 U.S.C. 1855(d)). Should the Council choose to adopt a different value for MSST, it should confer with NMFS regarding the appropriate process for addressing this value. As noted above, the FMP states that MSST is generally defined as 0.5 * SMSY or 0.75 * SMSY. The Council has generally applied a policy of MSST = 0.5* SMSY. Applying this approach to the proposed SMSY value of 17,200 results in an MSST of 8,600 natural-area spawners. Therefore, based on the recommendation of the Council and the advisory bodies, NMFS proposes the following reference point values for Willapa Bay natural coho:

In addition, because Willapa Bay natural coho is not managed under an international agreement, listed under the ESA, or designated as a hatchery stock, the FMP requires that it be managed with an ACL (FMP sections 3.3.3 and 3.3.4). Because it is not part of a stock complex, it will be managed using an individual stock ACL. The Council and NMFS will determine the ACL annually, based on annual abundance projections and the appropriate formula set forth in the FMP (FMP section 3.3.4). Because the Council has recommended, and NMFS proposes to adopt, a directly estimated value for FMSY, Willapa Bay natural coho is a Tier 1 stock for purposes of determining the acceptable biological catch (ABC) and the ACL. According to the FMP, for a Tier 1 stock, FABC = FMSY * 0.95, FABC = FACL, and FACL is applied to the projected annual abundance to determine the ACL escapement level for the year (FMP sections 3.3.3 and 3.3.4).

As noted earlier, the Council is expected to address the reference points for Willapa Bay natural coho salmon that were not explicit in its prior action at its March meeting. It is possible that it could recommend values for MSST that are different from those proposed above. Were this to occur, the recommended values would likely be 0.75 * SMSY or between that value and 0.5 * SMSY, based on the definition of MSST set forth in the FMP.

Pursuant to section 304(b)(1)(A) of the MSA, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the Pacific Salmon Fishery Management Plan, the MSA, and other applicable law, subject to further consideration after public comment. As described above, NMFS is proposing portions of this rule according to section 305(d) of the MSA.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866.

The West Coast Regional Administrator has determined that the actions of this proposed rule qualify for categorical exclusion from further NEPA analysis under NAO 216-6.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this proposed rule, if adopted, would not have a significant economic impact on a substantial number of small entities.

The purpose of the Regulatory Flexibility Act (RFA) is to relieve small businesses, small organizations, and small governmental entities of burdensome regulations and record-keeping requirements. Major goals of the RFA are: (1) To increase agency awareness and understanding of the impact of their regulations on small business, (2) to require agencies communicate and explain their findings to the public, and (3) to encourage agencies to use flexibility and to provide regulatory relief to small entities. The RFA emphasizes predicting impacts on small entities as a group distinct from other entities and the consideration of alternatives that may minimize the impacts while still achieving the stated objective of the action. An initial regulatory flexibility analysis (IRFA) is conducted unless it is determined that an action will not have a “significant economic impact on a substantial number of small entities.”

The objective of this proposed rule is to update management reference points for three stocks of salmon under the FMP. This proposed rule would impact vessels harvesting salmon from the ocean troll fishery. The following fishery information is found in the Council's Review of 2013 Ocean Salmon Fisheries Stock Assessment and Fisheries Evaluation Document. In 2013, there were 2,270 permits issued for this fishery, with a total ex-vessel value of $34.1 million. Of the 2,270 permits, only 1,177 actually landed salmon all within the states of California, Oregon and Washington. In California, 670 vessels landed salmon for an ex-vessel value of $23.6 million; in Oregon, 399 vessels landed salmon for an ex-vessel value of $7.6 million; and in Washington, 108 vessels landed salmon for an ex-vessel value of $2.8 million. Treaty Indian ocean fisheries landed salmon with an ex-vessel value of $6.4 million.

On June 12, 2014, the Small Business Administration (SBA) issued an interim final rule revising the small business size standards for several industries effective July 14, 2014 (79 FR 33467 (June 12, 2014)). The rule increased the size standard from $19.0 to $20.5 million for finfish fishing, from $5 to $5.5 million for shellfish fishing, and from $7.0 million to $7.5 million for other marine fishing, for-hire businesses, and marinas. Based on this size standard, all 1,177 vessels that landed salmon from the ocean troll fishery are considered small under the Small Business Administration approved definition of a small fish harvester. Therefore, there are no disproportionate impacts between small and large vessels. Furthermore, there are no disproportionate impacts based on homeport, gear type, or vessel size from the promulgation of this proposed rule.

This proposed rule would not result in any immediate impacts on revenues or costs for the small entities participating in the Pacific salmon fishery; the updated management reference point values will be considered within the overall suite of criteria that are used to frame the annual management measures. The management reference points are used to set Council management goals, identify when overfishing is occurring, and identify when a stock is overfished. These values all have the potential to impact how annual salmon management measures are structured, specifically what constraints are needed to manage impacts. However, the salmon fishery impacts a large number of stocks, and the fishery as a whole must be managed to meet management goals for every stock. Depending on abundance projections for a given year, meeting management goals for a few particularly limiting stocks typically results in fisheries that are not limited by management goals for the remaining stocks. Therefore, the proposed changes would only impact fishery revenues in years when any of the three affected salmon stocks are constraining to fisheries, which is unlikely based on historical data.

As a result, an IRFA is not required and none has been prepared. NMFS will conduct the appropriate analyses for any subsequent rulemakings stemming from this proposed rule.

This proposed rule would not establish any new reporting or recordkeeping requirements. This proposed rule does not include a collection of information. No Federal rules have been identified that duplicate, overlap, or conflict with this action.

This action is not expected to have adverse effects on any species listed under the Endangered Species Act (ESA) or designated critical habitat. This action modifies reference points used in the setting of annual management measures for West Coast salmon fisheries. NMFS has current ESA biological opinions that cover fishing under annual regulations adopted under the FMP on all listed salmon species. NMFS reiterates their consultation standards for all ESA-listed salmon and steelhead species in their annual Guidance letter to the Council. Some of NMFS past biological opinions have found no jeopardy, and others have found jeopardy, but provided reasonable and prudent alternatives to avoid jeopardy. The annual management measures are designed to be consistent with the biological opinions that found no jeopardy, and with the reasonable and prudent alternatives in the jeopardy biological opinions. The Council's recommended management measures, which will be consistent with the reference points proposed here, therefore comply with NMFS' consultation standards and guidance for all listed salmon species which may be affected by Council fisheries. In some cases, the recommended measures are more restrictive than NMFS' ESA requirements.

In 2009, NMFS consulted on the effects of fishing under the Salmon FMP on the endangered Southern Resident Killer Whale Distinct Population Segment (SRKW) and concluded the salmon fisheries were not likely to jeopardize SRKW. Annual salmon management measures are designed to be consistent with the terms of that biological opinion.

This proposed rule was developed after meaningful collaboration with the affected tribes, through the Council process. Under the MSA at 16 U.S.C. 1852(b)(5), one of the voting members of the Council must be a representative of an Indian Tribe with Federally recognized fishing rights from the area of the Council's jurisdiction.