Federal Register Vol. 80, No.78,

The Workforce Innovation and Opportunity Act (WIOA) (Pub. L. 113-128), signed into law on July 22, 2014, made significant changes to the Rehabilitation Act of 1973 (Rehabilitation Act). As a result, in the separate NPRM (80 FR 21059, April 16, 2015), the Secretary proposes to amend parts 361 and 363 of title 34 of the Code of Federal Regulations (CFR). These parts, respectively, implement the:

• State Vocational Rehabilitation (VR) Services program; and

• State Supported Employment Services program.

In addition, WIOA added section 511 to title V of the Act. Section 511 limits the payment of subminimum wages to individuals with disabilities by employers holding special wage certificates under the Fair Labor Standards Act (FLSA). Although the Department of Labor administers the FLSA, some requirements of section 511 fall under the purview of the Department of Education. Therefore, the Secretary proposes to add a new part 397 to title 34 of the CFR to implement those particular provisions.

The proposed changes are further described under the Summary of Proposed Changes and Significant Proposed Regulations sections of the separate NPRM related to 34 CFR parts 361, 363, and 397.

Announcement of Public Meetings: The Office of Special Education and Rehabilitative Services will hold two public meetings during April and May of 2015. The meetings will provide the public with the opportunity to present public comments on only the separate NPRM amending 34 CFR parts 361, 363, and 397, which is the NPRM associated with Docket ID ED-2015-OSERS-0001. It is likely that each participant will be limited to five minutes. Speakers may also submit written comments at the public meetings. In addition, the Department will accept written comments through www.regulations.gov, as explained in the separate NPRM. This notice provides specific information about dates, locations, and times of these meetings in the ADDRESSES section.

Accessible Format: Individuals with disabilities may obtain this document in an alternative format (e.g., Braille, large print, audiotape, or compact disc) on request to the contact person listed under FOR FURTHER INFORMATION CONTACT.

Assistance to Individuals with Disabilities at the Public Meetings: The meeting sites are accessible to individuals with disabilities, and sign language interpreters will be available. If you will need an accommodation or auxiliary aid other than a sign language interpreter in order to participate in the meeting (e.g., other interpreting service such as oral, cued speech, or tactile interpreter; assistive listening device; or materials in accessible format), please contact the person listed under FOR FURTHER INFORMATION CONTACT at least two weeks before the scheduled meeting date. Although we will attempt to meet a request we receive after this date, we may not be able to make available the requested accommodation or auxiliary aid because of insufficient time to arrange it.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.thefederalregister.org/fdsys. At this site you can view this document, as well as all other documents of this Department published in the Federal Register, in text or Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at this site.

You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature of this site, you can limit your search to documents published by the Department.

These proposed changes to the CFR support the ongoing effort of the Postal Service (USPS) to collect the appropriate revenue on mail pieces in a more automated fashion. Presently the system relies on a manual process to weigh and rate pieces and collect at the point of induction or at the point of delivery. The USPS is upgrading mail processing equipment to validate postage paid on individual pieces and working with the PC Postage Providers to make corrections to the postage paid collecting additional revenue when appropriate with an electronic process. The PC Postage Providers will have piece level information and interface with the customers to make the needed postage corrections. Customers will have the opportunity to appeal the process in an electronic format. The USPS will be the final decision maker in all disputes.

Accordingly, for the reasons stated, 39 CFR part 501 is proposed to be amended as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This SUPPLEMENTARY INFORMATION section is arranged as follows:

When submitting comments, remember to:

1. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

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

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

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

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

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

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

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

Regional haze is a visibility impairment that is caused by the cumulative emissions of fine particles (PM2.5) (e.g., sulfates, nitrates, organic carbon, elemental carbon and dust) and their precursors (sulfur dioxide (SO2), nitrogen oxides (NOX), and in some cases ammonia and volatile organic compounds) from numerous sources over a wide geographic area. Fine particulate precursors react in the atmosphere to form PM2.5. Aerosol PM2.5 reduces the clarity and distance one can see by scattering and absorbing light.

The visibility protection program under sections 169A, 169B, and 110(a)(2)(J) of the Clean Air Act (CAA) is designed to protect visibility in national parks and wilderness areas (Class I areas). On December 2, 1980, EPA promulgated regulations, known as “reasonably attributable visibility impairment (RAVI),” to address visibility impairment in Class I areas that is reasonably attributable to a single source or small group of sources. On July 1, 1999, EPA promulgated the Regional Haze Rule which revised existing visibility regulations to incorporate provisions addressing regional haze impairment. EPA's Regional Haze Rule, as codified in Title 40 Code of Federal Regulations part 51.308 (40 CFR 51.308), requires states to submit regional haze SIPs. Among other things, the regional haze SIPs must include provisions requiring certain sources to install and operate best available retrofit technology (BART).

At 40 CFR 51.308(e)(2), the Regional Haze Rule allows states to meet BART requirements by mandating alternative measures in lieu of mandating source-specific BART, so long as the alternative measures provide better visibility protection. Given the regional nature of visibility impairment, an alternative that results in lower emissions of SO2 and NOX will generally provide better visibility protection. Thus, in the absence of a difference in the spatial distribution of emissions, a modeling analysis is generally not necessary to be able to conclude that an alternative strategy with lower SO2 and NOX emissions provides better visibility protection.

On June 24, 2011, Illinois submitted a plan to address the requirements of the Regional Haze Rule, as codified at 40 CFR 51.308. EPA approved Illinois' regional haze SIP on July 6, 2012 (77 FR 39943). In its approval, EPA determined that the emission reductions from sources included in the Illinois plan are significantly greater than even conservative definitions of BART applied to BART subject units (77 FR 39945). EPA also addressed whether the Illinois plan, achieving greater emission reductions overall than the application of BART on BART-subject units, can also be expected to achieve greater visibility protection than application of BART on BART-subject units. Given that, in general, the Illinois power plants are substantial distances from any Class I area, and given that the averaging in Illinois' plan is only authorized within the somewhat limited region within which each utility's plants are located, EPA determined that a reallocation of emission reductions from one plant to another is unlikely to change the impact of those emission reductions significantly. Consequently, EPA concluded that the significantly greater emission reductions that Illinois required in its regional haze SIP will yield greater progress toward visibility protection as compared to the benefits of a conservative estimate of BART.

Among the rules approved in this action to meet BART requirements are Illinois Administrative Code rules: 35 Ill. Adm. Code 225.292: Applicability of the Combined Pollutant Standard; 35 Ill. Adm. Code 225.295 Combined Pollutant Standard: Emissions Standards for NOX and SO2; 35 Ill. Adm. Code 225.296 Combined Pollutant Standard: Control Technology Requirements for NOX, SO2, and PM emissions (except for paragraph 225.296(d)); and 35 Ill. Adm. Code 225 Appendix A.

Appendix A identifies the Midwest Generation Electric Generating Units (EGUs) specified for purposes of the combined pollutant standard (CPS). Section 225.292 provides that the owner or operator of specified EGUs in the CPS located at Fisk, Crawford, Joliet, Powerton, Waukegan, and Will County power plants may elect for all of those EGUs as a group to demonstrate compliance pursuant to the CPS. Section 225.295(b) establishes CPS group average annual SO2 emissions rates beginning in calendar year 2013 and continuing in each calendar year thereafter. Section 225.296(a)(1) requires Midwest Generation to install and have operational a flue gas desulfurization (FGD) system on Unit 7 of the Waukegan Generation Station or shut down the unit on or before December 31, 2013. Section 225.296(c)(1) requires that Midwest Generation replace the hot-side electrostatic precipitator (ESP) on Unit 7 at the Waukegan Generation Station with a cold-side ESP, install an appropriately designed fabric filter, or permanently shut down the unit on or before December 31, 2013. Section 225.296(a)(2) requires Midwest Generation to install and have operational a FGD system on Unit 8 of the Waukegan Generation Station or shut down the unit by December 31, 2014.

The Illinois Pollution Control Board (IPCB) granted Midwest Generation variances to Section 225.296(a)(1) and 225.296(c)(1) on August 23, 2012 and to Section 225.295(b) and Section 225.296(a)(2) on April 4, 2013. IEPA submitted these variances as revisions to the Illinois regional haze SIP on May 16, 2013, and August 18, 2014.

The variances granted by the IPCB and submitted by IEPA for approval change the requirements for Midwest Generation under the regional haze SIP as follows:

1. The IPCB granted Midwest Generation a variance from the average annual SO2 emission rates of 0.28 pounds per million Btu (lb/mmBtu) in 2015 and 0.195 lb/mmBtu in 2016 in Section 225.295(b) subject to numerous conditions including, but not limited to, the following condition: Midwest Generation CPS group must comply with a system-wide average annual SO2 emission rate of 0.38 lb/mmBtu from January 1, 2015 through December 31, 2016. The CPS group continues to be subject to the 2017, 2018, and 2019 system-wide average annual SO2 emission rates of 0.15 lb/mmBtu, 0.13 lb/mmBtu, and 0.11 lb/mmBtu, respectively, set forth in Section 225.295(b).

2. The IPCB granted Midwest Generation a variance from the December 31, 2013, deadline for installation and operation of control equipment on Unit 7 of the Waukegan Generation Station as required by Section 225.296(a)(1) and (c)(1) subject to, among other things, the following condition: Midwest Generation must either install the required pollution controls or permanently shut down Unit 7 at the Waukegan Generating Station on or before December 31, 2014.

3. The IPCB granted Midwest Generation a variance from the December 31, 2014 deadline for installation and operation of FGD equipment on Unit 8 at the Waukegan Generating Station as required by Section 225.296(a)(2) subject to, among other things, the following condition: Midwest Generation must install the required pollution controls or permanently shut down Unit 8 at the Waukegan Generating Station by May 31, 2015. Midwest Generation is not allowed to operate Waukegan Unit 8 from January 1, 2015, until completion of the installation of FGD equipment.

4. In addition to the conditions described above, the variances granted by the IPCB are subject to a number of other conditions including, but not limited to, the following conditions:

a. Midwest Generation must shut down the coal-fired unit at Fisk Generation Station on or before December 31, 2012.

b. Midwest Generation must cease operation of the coal-fired units at the Crawford Generating Station by April 4, 2013, and shut down the units on or before December 31, 2014.

c. Midwest Generation must install and have operational FGD equipment and related ESP upgrades at Powerton Unit 6 by December 31, 2014.

d. Midwest Generation must limit annual system-wide mass emissions of SO2 to no more than 57,000 tons in 2013, 54,000 tons in 2014, 39,000 tons in 2015, and 37,000 tons in 2016.

Midwest Generation ceased operation of the coal-fired boiler at Fisk on August 30, 2012, four months earlier than was required by the variance. Midwest Generation ceased operation at Crawford on August 28, 2012, seven months earlier than was required by the variance.

In evaluating the variances submitted by Illinois, EPA assessed the effect the variances would have on the emissions reductions expected under the CPS as currently approved into the regional haze SIP. Under the conditions of the currently approved regional haze SIP, the Midwest Generation CPS group would be expected to emit 190,181 tons of SO2 for the 2013-2016 time period. Under the variances, the Midwest Generation CPU group would be expected to emit 185,599 tons of SO2 over that same time period; 4,582 tons fewer than would be expected under the current SIP. Further, because Midwest Generation ceased operation at the Fisk and Crawford Generating stations in August of 2012, there were 1,983 tons of SO2 emissions reductions (734 tons at Fisk and 1,249 tons at Crawford) realized in 2012 that were not required by the SIP and an additional 8,563 tons of SO2 emissions reductions from Crawford beyond what was required in the SIP for the 2017-2018 time period. Over the entire 2012-2018 time period it is estimated that the variances result in 15,129 tons fewer SO2 emissions than were expected under the regional haze SIP.

In addition, under the conditions of the currently approved regional haze SIP, Unit 7 of the Waukegan Generation Station would be required to replace its hot-side ESP with a cold-side ESP, install an appropriately designed fabric filter, or permanently shut down by December 31, 2013. Because the variances allow this unit an additional year to install the required equipment, Unit 7 is projected to emit 157 tons of PM in 2014 rather than the 140 tons that was projected with the installation of a cold-side ESP. However, the variances also require the shutdown of Fisk and Crawford, which results in an estimated 1,579 ton reduction in PM emissions in 2014 from what was allowed at these sources under the CPS. Consequently, when taking into account the delay in the installation of a cold-side ESP at Waukegan Unit 7 and the shutdown of Fisk and Crawford, 1,562 fewer tons of PM emissions are expected in 2012 under the variances than were projected under the SIP. Over the entire 2012-2108 time period it is estimated that the variances result in 7,131 fewer tons of PM emissions than were expected under the regional haze SIP.

In addition, while the variances only modify the SO2 and PM requirements of the regional haze SIP, reductions in emissions of other pollutants can also be attributed to the variances. The April 4, 2013, IPCB order approving the variance notes that over the 2013-2016 time period, the variance will also result in 11,553 tons fewer of NOX, 183 pounds fewer of mercury and 22,266 tons fewer of greenhouse gasses.

Because the deadline for implementation of BART level controls is 2017 (within 5 years of approval of Illinois' SIP), EPA also evaluated 2017 emissions under the variance as compared to the 2017 emissions expected under the Illinois regional haze SIP. The variance does not revise the requirements of the Illinois regional haze SIP in 2017 and beyond, except that the current regional haze SIP would have allowed Crawford to operate in 2017 and 2018, thus requiring additional reductions under the variance. Therefore, the determination made in EPA's approval of the Illinois regional haze SIP, that emission reductions from sources included in the Illinois plan are significantly greater than even very conservative definitions of BART applied to BART subject units (77 FR 39945), continues to apply. In addition, for the reasons set forth in EPA's approval of the Illinois regional haze SIP (77 FR 39946) and summarized above, EPA continues to conclude that the significantly greater emission reductions required under the variance will yield greater progress toward visibility protection as compared to the benefits of a conservative estimate of BART.

In evaluating the approvability of the variances, EPA must also consider whether the SIP revision meets the requirements of section 110(l) of the CAA, 42 U.S.C. 7410(l). To be approved, a SIP revision must not interfere with any applicable requirement concerning attainment, reasonable further progress, or any other applicable requirement of the CAA. Currently, the SIP establishes CPS group average annual SO2 emissions rates for the Midwest Generation CPS group, beginning in 2013. The SIP allows flexibility in achieving these overall emissions rates, not specifying limits for individual sources. The variances will not result in any increase in SO2 emissions, but rather result in less SO2 emissions over the 2012-2018 time period, as well as greater cumulative SO2 emissions reductions every year throughout this time period.

The SIP does contain control technology requirements at Waukegan Unit 7, specifically the installation of FGD and a cold-side ESP which would be delayed a year under the variances, from December 31, 2013, to December 31, 2014. The Waukegan Generating Station is located in Lake County, which is designated as attainment for both SO2 and PM2.5, and the 12-month delay in the installation of this control equipment would not result in an increase in emissions at the source over current emissions levels. Further, overall SO2 and PM emissions in 2014 are lower under the variances than under the current SIP. In addition, the variances require the installation of FGD on Unit 6 at the Powerton Generation Station four years earlier than is currently required in the SIP. The Powerton Generation Station is located in the portion of Tazewell County that is designated nonattainment as part of the Pekin SO2 nonattainment area. This expedited installation of control equipment will aid in attainment planning for this nonattainment area.

The variances will not result in an increase in SO2 or PM emissions, but rather will result in lower SO2 and PM emissions overall and in 2017, the year that BART is required to be implemented in Illinois. In addition, reductions in NOX, mercury, and greenhouse gasses can also be attributed to the variances. Therefore, for all of the reasons discussed above, the variances will not interfere with attainment, reasonable further progress, or any other applicable requirement of the CAA.

EPA is proposing to approve the Midwest Generation variances submitted by IEPA on May 16, 2013, and August 18, 2014, as revisions to the Illinois regional haze SIP.

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 Illinois Pollution Control Board Order PCB 12-121, effective August 23, 2012 and Illinois Pollution Control Board Order PCB 13-24, effective April 4, 2013. 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, 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” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

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

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

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

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

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

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

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

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

In addition, the 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).

EPA is proposing to make a determination that the Liberty-Clairton Area has attained the 2006 24-hour PM2.5 NAAQS. This proposed “clean data determination” is based upon quality assured and certified ambient air monitoring data that show the area has monitored attainment of the 2006 24-hour PM2.5 NAAQS for the 2012-2014 monitoring period. If EPA finalizes this determination, the requirement for the Liberty-Clairton Area to submit an attainment demonstration, RACM, RFP, and contingency measures related to attainment of the 2006 24-hour PM2.5 NAAQS shall be suspended for so long as the area continues to attain that NAAQS. However, if finalized, this determination of attainment will not suspend Pennsylvania's other required statutory obligations including requirements for an emissions inventory and preconstruction permitting program for the Liberty-Clairton Area for the 2006 24-hour PM2.5 NAAQS. This final determination will not constitute a redesignation to attainment. The Liberty-Clairton Area will remain designated nonattainment for the 2006 24-hour PM2.5 NAAQS until such time as EPA determines that the Liberty-Clairton Area meets the CAA requirements for redesignation to attainment, including an approved maintenance plan under section 175A.

On July 16, 1997, EPA established an annual PM2.5 NAAQS at 15.0 micrograms per cubic meter (μg/m3) (hereafter referred to as “the 1997 annual PM2.5 NAAQS”), based on a 3-year average of annual mean PM2.5 concentrations (62 FR 38652, July 18, 1997). At that time, EPA also established a 24-hour standard of 65 μg/m3 (hereafter referred to as “the 1997 24-hour PM2.5 NAAQS”). See 40 CFR 50.7. The 1997 PM2.5 NAAQS were based on significant evidence and numerous health studies demonstrating that serious health effects are associated with exposures to particulate matter.

The process for designating areas following promulgation of a new or revised NAAQS is contained in section 107(d)(1) of the CAA. On January 5, 2005 (70 FR 944), EPA published its nonattainment area designations for the 1997 annual PM2.5 NAAQS based upon air quality monitoring data for calendar years 2001-2003. These designations, effective on April 5, 2005, included the Liberty-Clairton Area as a nonattainment area for the 1997 annual PM2.5 NAAQS. The Liberty-Clairton Area is comprised of the following portion of Allegheny County: the boroughs of Lincoln, Glassport, Liberty, and Port Vue and the City of Clairton. See 40 CFR 81.339 (Pennsylvania). The Liberty-Clairton Area is surrounded by, but separate and distinct from, the Pittsburgh-Beaver Valley PM2.5 nonattainment area.1

On September 21, 2006, EPA retained the 1997 annual PM2.5 NAAQS at 15.0 μg/m3 (hereby “the 2006 annual PM2.5 NAAQS”) based on a 3-year average of annual mean PM2.5 concentrations, and promulgated a new 24-hour standard of 35 μg/m3 based on a 3-year average of the 98th percentile of 24-hour concentrations (71 FR 61144, October 17, 2006). The revised 2006 24-hour PM2.5 standard (hereafter “the 2006 24-hour PM2.5 NAAQS”) became effective on December 18, 2006. See 40 CFR 50.13. The more stringent 2006 24-hour PM2.5 NAAQS is based on significant evidence and numerous health studies demonstrating that serious health effects are associated with short-term exposures to PM2.5 at this level.

Many petitioners challenged aspects of EPA's 2006 revisions to the PM2.5 NAAQS. See American Farm Bureau Federation and National Pork Producers Council, et al. v. EPA, 559 F.3d 512 (D.C. Cir. 2009). As a result of this challenge, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) remanded the 2006 annual PM2.5 NAAQS to EPA for further proceedings. The 2006 24-hour PM2.5 NAAQS was not affected by the remand and remains in effect.

On November 13, 2009, EPA published designations for the 2006 24-hour PM2.5 NAAQS (74 FR 58688), which became effective on December 14, 2009. In that action, EPA designated the Liberty-Clairton Area as nonattainment for the 2006 24-hour PM2.5 NAAQS, retaining the same geographical boundaries as for the 1997 annual PM2.5 NAAQS.

A nonattainment designation under the CAA triggers additional planning requirements for states to show attainment of the NAAQS in the nonattainment areas by a statutory attainment date, as specified in the CAA. Since 2005, EPA had implemented the 1997 and 2006 PM2.5 NAAQS based on the general implementation provisions of subpart 1 of Part D of Title I of the CAA (subpart 1). On January 4, 2013, in Natural Resources Defense Council v. EPA (NRDC v. EPA), the D.C. Circuit determined that EPA should be implementing its PM2.5 pollution standard under additional CAA requirements than those EPA had been following in subpart 1 and remanded to EPA the “Final Clean Air Fine Particle Implementation Rule” (1997 PM2.5 Implementation Rule) (72 FR 20586, April 25, 2007) and the “Implementation of the New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.5)” final rule (2008 NSR PM2.5 Rule).2 706 F.3d 428 (D.C. Cir. 2013). The D.C. Circuit found that the EPA erred in implementing the 1997 PM2.5 NAAQS solely pursuant to subpart 1, without consideration of the particulate matter specific provisions of subpart 4 of Part D of Title I of the CAA (subpart 4).

Although the D.C. Circuit declined to establish a deadline for EPA's response, EPA intends to respond promptly to the court's remand and to promulgate new generally applicable implementation regulations for the PM2.5 NAAQS in accordance with the requirements of subparts 1 and 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.

While the regulatory provisions of EPA's 1997 PM2.5 Implementation Rule do not explicitly apply to the 2006 24-hour PM2.5 NAAQS, EPA's underlying statutory interpretation has been the same for both standards. On March 2, 2012, EPA provided implementation guidance for the 2006 24-hour PM2.5 NAAQS which reaffirmed and continued the framework and policy approaches of the 1997 PM2.5 Implementation Rule.3 Thus, EPA believes that the Clean Data Policy provisions within the 1997 PM2.5 Implementation Rule are also applicable to the 2006 24-hour PM2.5 NAAQS. See 78 FR 49403 (August 14, 2013) (proposed determination that the Pittsburgh Area attained the 2006 24-hour PM2.5 NAAQS which discussed the application of the 1997 PM2.5 Implementation Rule's Clean Data Policy provisions to a determination of attainment for the 2006 standard). In addition, although the D.C. Circuit remanded the 1997 PM2.5 Implementation Rule to EPA, the D.C. Circuit's decision in NRDC v. EPA related to EPA's use of subpart 1 for CAA Part D requirements instead of subpart 1 and subpart 4, and the decision did not cast doubt on EPA's interpretation of certain statutory provisions underlying the Clean Data Policy nor cast any doubt on EPA's Clean Data Policy interpretation in the 1997 PM2.5 Implementation Rule. See NRDC v. EPA, 706 F.3d 428.

The statutory provisions in subpart 4 require EPA, among other things, to classify nonattainment areas for the PM2.5 NAAQS based on the severity of their pollution problem. Under EPA's prior approach to implementing the 1997 and 2006 PM2.5 standards according to subpart 1, EPA was not required to, and thus did not, identify any classifications for areas designated nonattainment. In contrast, subpart 4 of the CAA, at section 188, provides that all areas designated nonattainment are initially classified “by operation of law” as “Moderate” nonattainment areas, and they remain classified as Moderate nonattainment areas unless and until EPA later reclassifies them as Serious nonattainment areas or EPA determines that an area has not attained the PM2.5 NAAQS by the area's applicable attainment date. On April 25, 2014, EPA finalized a rule identifying the classification of all PM2.5 areas currently designated nonattainment for the 1997 and 2006 PM2.5 NAAQS as “Moderate,” consistent with subpart 4 of the CAA. See 79 FR 31566 (June 2, 2014). Consequently, the Liberty-Clairton Area was classified as Moderate for the 2006 24-hour PM2.5 NAAQS.

Under section 188(c)(1) of the CAA, a Moderate nonattainment area shall attain the PM2.5 NAAQS as expeditiously as practicable but no later than the end of the sixth calendar year after the area's designation to nonattainment. Because the designation of nonattainment areas for the 2006 24-hour PM2.5 NAAQS became effective on December 14, 2009, the presumptive sixth year attainment date for Moderate nonattainment areas would be no later than December 2015.

To determine attainment with a NAAQS, EPA commonly uses three calendar years of complete air quality data available for the nonattainment area. The criteria for determining if an area is attaining the 2006 24-hour PM2.5 NAAQS are set out in 40 CFR 50.13 and appendix N. In summary, the 2006 24-hour PM2.5 NAAQS is met when the 24-hour design value is less than or equal to 35 μg/m3. Three years of valid annual 98th percentile 24-hour average PM2.5 concentration values are required to produce a valid 24-hour PM2.5 design value. A year meets data completeness requirements when at least 75 percent of the scheduled sampling days for each quarter have valid data.

Under EPA's longstanding Clean Data Policy interpretation, a determination that a nonattainment area has attained the NAAQS suspends the state's obligation to submit attainment-related planning requirements of the CAA for so long as the area continues to attain the standard.4 These include requirements to submit an attainment demonstration, RFP, RACM, and contingency measures, because the purpose of these provisions is to help reach attainment, a goal which has already been achieved.

EPA incorporated its Clean Data Policy interpretation in both its 8-Hour Ozone Implementation Rule in 40 CFR 51.918 and in its 1997 PM2.5 Implementation Rule in 40 CFR 51.1004(c). See 72 FR 20585, 20665 (April 25, 2007). While the D.C. Circuit in its January 4, 2013 decision remanded the 1997 PM2.5 Implementation Rule, the Court did not address the merits of that regulation regarding our Clean Data Policy in 40 CFR 51.1004(c), nor cast any doubt on EPA's existing interpretation of the statutory provisions for the Clean Data Policy. In this section of the proposed rulemaking action, EPA is addressing the effect of a final determination of attainment under the Clean Data Policy for the Liberty-Clairton Area, as a moderate nonattainment area under subpart 4.

Over the past two decades, EPA has consistently applied its “Clean Data Policy” interpretation to attainment-related provisions of subparts 1, 2 and 4. The Clean Data Policy is the subject of several EPA memoranda such as the Seitz Memorandum and regulations. In addition, numerous individual rulemakings published in the Federal Register have applied the interpretation to a spectrum of NAAQS, including the 1-hour and 1997 ozone, coarse particulate matter (PM10), PM2.5, carbon monoxide (CO) and lead (Pb) standards. The D.C. Circuit has upheld the Clean Data Policy interpretation as embodied in EPA's 1997 8-Hour Ozone Implementation Rule, 40 CFR 51.918. 5 NRDC v. EPA, 571 F. 3d 1245 (D.C. Cir. 2009). Other U.S. Courts of Appeals that have considered and reviewed EPA's Clean Data Policy interpretation have upheld it and the rulemakings applying EPA's interpretation. Sierra Club v. EPA, 99 F.3d 1551 (10th Cir. 1996); Sierra Club v. EPA, 375 F. 3d 537 (7th Cir. 2004); Our Children's Earth Foundation v. EPA, N. 04-73032 (9th Cir. June 28, 2005) (memorandum opinion); and Latino Issues Forum, v. EPA, Nos. 06-75831 and 08-71238 (9th Cir.), Memorandum Opinion, March 2, 2009.

In light of the January 4, 2013 D.C. Circuit decision in NRDC v. EPA, EPA's Clean Data Policy interpretation under subpart 4 is set forth here, for the purpose of identifying the effects of a determination of attainment for the 2006 24-hour PM2.5 NAAQS for the Liberty-Clairton Area. EPA has previously articulated its Clean Data Policy interpretation under subpart 4 in implementing the PM10 standard. See, e.g., 75 FR 27944 (May 19, 2010) (determination of attainment of the PM10 standard in Coso Junction, California); 71 FR 6352 (February 8, 2006) (Ajo, Arizona Area); 71 FR 13021 (March 14, 2006) (Yuma, Arizona Area); 71 FR 40023 (July 14, 2006) (Weirton, West Virginia Area); 71 FR 44920 (August 8, 2006) (Rillito, Arizona Area); 71 FR 63642 (October 30, 2006) (San Joaquin Valley, California Area); 72 FR 14422 (March 28, 2007) (Miami, Arizona Area).

EPA has recently articulated as well its Clean Data Policy interpretation under subpart 4 in implementing the PM2.5 standard, including specifically the 2006 24-hour PM2.5 NAAQS. See 79 FR 25014 (May 2, 2014) (determination of attainment of the 2006 24-hour PM2.5 NAAQS in Pittsburgh-Beaver Valley Area, Pennsylvania) and 78 FR 63881 (October 25, 2013) (determination of attainment of the 1997 annual PM2.5 standard in Liberty-Clairton Area, Pennsylvania). Thus, EPA has established that, under subpart 4, an attainment determination suspends the obligations to submit an attainment demonstration, RACM, RFP contingency measures, and other measures related to attainment.

EPA initially set forth at length its rationale for applying the Clean Data Policy to PM10 under subpart 4 in EPA's proposed and final rulemaking actions determining that the San Joaquin Valley nonattainment area attained the PM10 standard. The Ninth Circuit upheld EPA's final rulemaking, and specifically EPA's Clean Data Policy, in the context of subpart 4. Latino Issues Forum v. EPA, supra. Nos. 06-75831 and 08-71238 (9th Cir.), Memorandum Opinion, March 2, 2009. In rejecting the petitioner's challenge to the Clean Data Policy under subpart 4 for PM10, the Ninth Circuit stated, “As the EPA explained, if an area is in compliance with PM10 standards, then further progress for the purpose of ensuring attainment is not necessary.”

The general requirements of subpart 1 apply in conjunction with the more specific requirements of subpart 4, to the extent they are not superseded or subsumed by the subpart 4 requirements. Subpart 1 contains general air quality planning requirements for areas designated as nonattainment. See section 172(c). Subpart 4, itself, contains specific planning and scheduling requirements for PM10 nonattainment areas, and under the Court's January 4, 2013 decision in NRDC v. EPA, these same statutory requirements also apply for PM2.5 nonattainment areas. EPA has longstanding general guidance that interprets the 1990 amendments to the CAA, making recommendations to states for meeting the statutory requirements for SIPs for nonattainment areas. See “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” (57 FR 13498, April 16, 1992) (General Preamble). In the General Preamble, EPA discussed the relationship of subpart 1 and subpart 4 SIP requirements, and pointed out that subpart 1 requirements were to an extent “subsumed by, or integrally related to, the more specific PM10 requirements.” Id. These subpart 1 requirements include, among other things, provisions for attainment demonstrations, RACM, RFP, emissions inventories, and contingency measures.

EPA has long interpreted the provisions of subpart 1 (sections 171 and 172) as not requiring the submission of RFP for an area already attaining the ozone NAAQS.6 For an area that is attaining, showing that the state will make RFP towards attainment “will, therefore, have no meaning at that point.” Id. See also 71 FR 40952 and 71 FR 63642 (proposed and final determination of attainment for San Joaquin Valley); 75 FR 13710 and 75 FR 27944 (proposed and final determination of attainment for Coso Junction).

Section 189(c)(1) of subpart 4 states that:

With respect to RFP, section 171(1) states that, for purposes of part D, RFP “means such annual incremental reductions in emissions of the relevant air pollutant as are required by this part or may reasonably be required by the Administrator for the purpose of ensuring attainment of the applicable NAAQS by the applicable date.” Thus, whether dealing with the general RFP requirement of section 172(c)(2), the ozone-specific RFP requirements of sections 182(b) and (c), or the specific RFP requirements for PM10 areas of part D, subpart 4, section 189(c)(1), the stated purpose of RFP is to ensure attainment by the applicable attainment date.

Although section 189(c) states that revisions shall contain milestones which are to be achieved until the area is redesignated to attainment, such milestones are designed to show reasonable further progress “toward attainment by the applicable attainment date,” as defined by section 171. Thus, it is clear that once the area has attained the standard, no further milestones are necessary or meaningful. This interpretation is supported by language in section 189(c)(3), which mandates that a state that fails to achieve a milestone must submit a plan that assures that the state will achieve the next milestone or attain the NAAQS if there is no next milestone. Section 189(c)(3) assumes that the requirement to submit and achieve milestones does not continue after attainment of the NAAQS.

In the General Preamble, EPA noted with respect to section 189(c) that the purpose of the milestone requirement “is `to provide for emission reductions adequate to achieve the standards by the applicable attainment date' (H.R. Rep.No. 490 101st Cong., 2d Sess. 267 (1990)).” (57 FR 13539, April 16, 1992). If an area has in fact attained the standard, the stated purpose of the RFP requirement will have already been fulfilled.7

Similarly, the requirements of section 189(c)(2) with respect to milestones no longer apply so long as an area has attained the standard. Section 189(c)(2) provides in relevant part that:

Where the area has attained the standard and there are no further milestones, there is no further requirement to make a submission showing that such milestones have been met. This is consistent with the position that EPA took with respect to the general RFP requirement of section 172(c)(2) in the April 16, 1992 General Preamble and also in the Seitz Memorandum with respect to the requirements of section 182(b) and (c). In the Seitz Memorandum, EPA also noted that section 182(g), the milestone requirement of subpart 2, which is analogous to provisions in section 189(c), is suspended upon a determination that an area has attained. The Seitz Memorandum, in citing additional provisions related to attainment demonstration and RFP requirements, stated:

This proposal addresses the following FRAQMD rules: 10.9, 3.14, 3.20, 3.21 and 3.22. In the Rules and Regulations section of this Federal Register, we are approving these local rules in a direct final action without prior proposal because we believe these SIP revisions are not controversial. If we receive adverse comments, however, we will publish a timely withdrawal of the direct final rule and address the comments in subsequent action based on this proposed rule. Please note that if we receive adverse comment on an amendment, paragraph or section of this rule and if that provision may be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of an adverse comment.

We do not plan to open a second comment period, so anyone interested in commenting should do so at this time. If we do not receive adverse comments, no further activity is planned. For further information, please see the direct final action.

The first air quality standards for PM2.5 were established on July 18, 1997 (62 FR 38652). EPA promulgated an annual standard at a level of 15 micrograms per cubic meter (μg/m3), based on a three-year average of annual mean PM2.5 concentrations (the 1997 annual PM2.5 NAAQS). In the same rulemaking action, EPA promulgated a 24-hour standard of 65 μg/m3, based on a three-year average of the 98th percentile of 24-hour concentrations.

On January 5, 2005 (70 FR 944), EPA published air quality area designations for the 1997 PM2.5 NAAQS. In that rulemaking action, EPA designated the Johnstown Area as nonattainment for the 1997 annual PM2.5 NAAQS. Id. at 1000. The Johnstown Area is comprised of Cambria County and portions of Indiana County (Township of West Wheatfield, Center, East Wheatfield, and Armagh Borough and Homer City Borough). See 40 CFR 81.339.

On October 17, 2006 (71 FR 61144), EPA retained the annual average standard at 15 μg/m3, but revised the 24-hour standard to 35 μg/m3, based again on the three-year average of the 98th percentile of 24-hour concentrations (the 2006 24-hour PM2.5 NAAQS). On November 13, 2009 (74 FR 58688), EPA published designations for the 2006 24-hour PM2.5 NAAQS, which became effective on December 14, 2009. In that rulemaking action, EPA designated the Johnstown Area as nonattainment for the 2006 24-hour PM2.5 NAAQS. The Johnstown Area is comprised of Cambria County and portions of Indiana County. See 40 CFR 81.339.

On September 25, 2009 (74 FR 48863) and March 29, 2012 (77 FR 18922), EPA made determinations that the Johnstown Area had attained the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively. Pursuant to 40 CFR 51.1004(c) and based on these determinations, the requirements for the Area to submit an attainment demonstration and associated reasonably available control measures (RACM), a reasonable further progress (RFP) plan, contingency measures, and other planning SIPs related to the attainment of either the 1997 annual or 2006 24-hour PM2.5 NAAQS were, and continue to be, suspended until such time as: the Area is redesignated to attainment for each standard, at which time the requirements no longer apply; or EPA determines that the Area has again violated any of the standards, at which time such plans are required to be submitted. On July 29, 2011 (76 FR 45424), EPA also determined, in accordance with section 179(c) of the CAA, that the Johnstown Area attained the 1997 annual PM2.5 NAAQS by its applicable attainment date of April 5, 2010.

On December 3, 2014, the Commonwealth of Pennsylvania, through the Pennsylvania Department of Environmental Protection (PADEP), formally submitted a request to redesignate the Johnstown Area from nonattainment to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS. Concurrently, PADEP submitted a combined maintenance plan for the Area as a SIP revision to ensure continued attainment throughout the Area over the next 10 years. The maintenance plan includes the 2017 and 2025 PM2.5 and NOX MVEBs for the Area for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. Also included in the maintenance plan is the 2007 comprehensive emissions inventory for both the 1997 annual and the 2006 24-hour PM2.5 NAAQS for PM2.5, NOX, sulfur dioxide (SO2), volatile organic compounds (VOCs), and ammonia (NH3).

In this proposed rulemaking action, EPA also addresses the effects of several decisions of the United States Court of Appeals for the District of Columbia (D.C. Circuit Court) and a decision of the United States Supreme Court: (1) The D.C. Circuit Court's August 21, 2012 decision to vacate and remand to EPA the Cross-State Air Pollution Control Rule (CSAPR); (2) the Supreme Court's April 29, 2014 reversal of the vacature of CSAPR, and remand to the D.C. Circuit Court; (3) the D.C. Circuit Court's October 23, 2014 decision to lift the stay of CSAPR; and (4) the D.C. Circuit Court's January 4, 2013 decision to remand to EPA two final rules implementing the 1997 annual PM2.5 NAAQS.

The CAA provides the requirements for redesignating a nonattainment area to attainment. Specifically, section 107(d)(3)(E) of the CAA allows for redesignation providing that: (1) EPA determines that the area has attained the applicable NAAQS; (2) EPA has fully approved the applicable implementation plan for the area under section 110(k); (3) EPA determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP and applicable Federal air pollution control regulations and other permanent and enforceable reductions; (4) EPA has fully approved a maintenance plan for the area as meeting the requirements of section 175A of the CAA; and (5) the state containing such area has met all requirements applicable to the area under section 110 and part D. Each of these requirements are discussed in Section V. of today's proposed rulemaking action.

EPA provided guidance on redesignations in the “SIPs; General Preamble for the Implementation of Title I of the CAA Amendments of 1990,” (57 FR 13498, April 16, 1992) (the General Preamble) and has provided further guidance on processing redesignation requests in the following documents: (1) “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (hereafter referred to as the 1992 Calcagni Memorandum); (2) “SIP Actions Submitted in Response to CAA Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992; and (3) “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994.

Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after approval of a redesignation of an area to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan demonstrating that attainment will continue to be maintained for the 10 years following the initial 10-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain such contingency measures, with a schedule for implementation, as EPA deems necessary to assure prompt correction of any future PM2.5 violations.

The 1992 Calcagni Memorandum provides additional guidance on the content of a maintenance plan. The Memorandum states that a maintenance plan should address the following provisions: (1) An attainment emissions inventory; (2) a maintenance demonstration showing maintenance for 10 years; (3) a commitment to maintain the existing monitoring network; (4) verification of continued attainment; and (5) a contingency plan to prevent or correct future violations of the NAAQS.

Under the CAA, states are required to submit, at various times, control strategy SIP revisions for nonattainment areas and maintenance plans for areas seeking redesignation to attainment for a given NAAQS. These emission control strategy SIP revisions (e.g., RFP and attainment demonstration SIP revisions) and maintenance plans also create MVEBs based on onroad mobile source emissions for the relevant criteria pollutants and/or their precursors, where appropriate, to address pollution from onroad transportation sources. The MVEBs are the portions of the total allowable emissions that are allocated to onroad vehicle use that, together with emissions from all other sources in the area, will provide attainment, RFP, or maintenance, as applicable. The budget serves as a ceiling on emissions from an area's planned transportation system. Under 40 CFR part 93, a MVEB for an area seeking a redesignation to attainment is established for the last year of the maintenance plan.

The maintenance plan for the Johnstown Area, comprised of Cambria County and portions of Indiana County in Pennsylvania, includes the 2017 and 2025 PM2.5 and NOX MVEBs for transportation conformity purposes. The transportation conformity determination for the Area is further discussed in Section V.C. of today's proposed rulemaking action and in a technical support document (TSD), “Adequacy Findings for the Motor Vehicle Emissions Budgets in the 1997 and 2006 PM2.5 National Ambient Air Quality Standard Maintenance Plan for the Johnstown, Pennsylvania 1997 and 2006 PM2.5 Nonattainment Area,” dated February 12, 2015, available on line at www.regulations.gov, Docket ID No. EPA-R03-OAR-2014-0902.

EPA is proposing to take several rulemaking actions related to the redesignation of the Johnstown Area to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. EPA is proposing to find that the Johnstown Area meets the requirements for redesignation of the 1997 annual and the 2006 24-hour PM2.5 NAAQS under section 107(d)(3)(E) of the CAA. EPA is thus proposing to approve Pennsylvania's request to change the legal designation of the Johnstown Area from nonattainment to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS. EPA is also proposing to approve the associated maintenance plan for the Johnstown Area as a revision to the Pennsylvania SIP for the 1997 annual and 2006 24-hour PM2.5 NAAQS, including the 2017 and 2025 PM2.5 and NOX MVEBs for the Area for transportation conformity purposes. Approval of the maintenance plan is one of the CAA criteria for redesignation of the Area to attainment for both NAAQS. Pennsylvania's combined maintenance plan is designed to ensure continued attainment of the 1997 annual and 2006 24-hour PM2.5 NAAQS in the Area for at least 10 years after redesignation.

EPA previously determined that the Johnstown Area attained both the 1997 annual and 2006 24-hour PM2.5 NAAQS (see 74 FR 48863 (September 25, 2009) and 77 FR 18922 (March 29, 2012)), and EPA is proposing to find that the Area continues to attain both NAAQS. EPA is also proposing to approve the 2007 comprehensive emissions inventory submitted with Pennsylvania's maintenance plan that includes an inventory of PM2.5, SO2, NOX, VOC, and NH3 for the Area as a revision to the Pennsylvania SIP for the 1997 annual and 2006 24-hour PM2.5 NAAQS in order to meet the requirements of section 172(c)(3) of the CAA. EPA's analysis of the proposed actions is provided in Section V. of today's proposed rulemaking.

The D.C. Circuit Court and the Supreme Court have issued a number of decisions and orders regarding the status of EPA's regional trading programs for transported air pollution, the Clean Air Interstate Rule (CAIR) and CSAPR, that impact this proposed redesignation action. In 2008, the D.C. Circuit Court initially vacated CAIR, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR, North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008). On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit Court's remand, EPA promulgated CSAPR, to address interstate transport of emissions and resulting secondary air pollutants and to replace CAIR.1 CSAPR requires substantial reductions of SO2 and NOX emissions from electric generating units (EGUs) in 28 states in the Eastern United States. Implementation of CSAPR was scheduled to begin on January 1, 2012, when CSAPR's cap-and-trade programs would have superseded the CAIR cap-and-trade programs. Numerous parties filed petitions for review of CSAPR, and on December 30, 2011, the D.C. Circuit Court issued an order staying CSAPR pending resolution of the petitions and directing EPA to continue to administer CAIR. EME Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. Dec. 30, 2011), Order at 2.

On August 21, 2012, the D.C. Circuit Court issued its ruling, vacating and remanding CSAPR to EPA and once again ordering continued implementation of CAIR. EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012). The D.C. Circuit Court subsequently denied EPA's petition for rehearing en banc. EME Homer City Generation, L.P. v. EPA, No. 11-1302, 2013 WL 656247 (D.C. Cir. Jan. 24, 2013), at *1. EPA and other parties then petitioned the Supreme Court for a writ of certiorari, and the Supreme Court granted the petitions on June 24, 2013. EPA v. EME Homer City Generation, L.P., 133 S. Ct. 2857 (2013).

On April 29, 2014, the Supreme Court vacated and reversed the D.C. Circuit Court's decision regarding CSAPR, and remanded that decision to the D.C. Circuit Court to resolve remaining issues in accordance with its ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014). EPA moved to have the stay of CSAPR lifted in light of the Supreme Court decision. EME Homer City Generation, L.P. v. EPA, Case No. 11-1302, Document No. 1499505 (D.C. Cir. filed June 26, 2014). In its motion, EPA asked the D.C. Circuit Court to toll CSAPR's compliance deadlines by three years, so that the Phase 1 emissions budgets apply in 2015 and 2016 (instead of 2012 and 2013), and the Phase 2 emissions budgets apply in 2017 and beyond (instead of 2014 and beyond). On October 23, 2014, the D.C. Circuit Court granted EPA's motion and lifted the stay of CSAPR which was imposed on December 30, 2011. EME Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. Oct. 23, 2014), Order at 3. On December 3, 2014, EPA issued an interim final rule to clarify how EPA will implement CSAPR consistent with the D.C. Circuit Court's order granting EPA's motion requesting lifting the stay and tolling the rule's deadlines. See 79 FR 71663 (December 3, 2014) (interim final rulemaking). Consistent with that rule, EPA began implementing CSAPR on January 1, 2015.

Because CAIR was promulgated in 2005 and incentivized sources and states to begin achieving early emission reductions, the air quality data examined by EPA in issuing a final determination of attainment for the Johnstown Area in 2009 (September 25, 2009, 74 FR 48863) and the air quality data from the Area since 2005 necessarily reflect reductions in emissions from upwind sources as a result of CAIR, and Pennsylvania included CAIR as one of the measures that helped to bring the Area into attainment. However, modeling conducted by EPA during the CSAPR rulemaking process, which used a baseline emissions scenario that “backed out” the effects of CAIR, see 76 FR 48223, projected that the counties in the Johnstown Area would have design values below the 1997 annual and the 2006 24-hour PM2.5 NAAQS for 2012 and 2014 without taking into account emission reductions from CAIR or CSAPR. See Appendix B of EPA's “Air Quality Modeling Final Rule Technical Support Document,” (Pages B-57 and B-86), which is available in the docket for this proposed rulemaking action. In addition, the 2011-2013 quality-assured, quality-controlled, and certified monitoring data for the Johnstown Area confirms that the PM2.5 design values for the Area remained well below the 1997 annual and 2006 24-hour PM2.5 NAAQS in 2013.

The status of CSAPR is not relevant to this redesignation. CSAPR was promulgated in June 2011, and the rule was stayed by the D.C. Circuit Court just six months later, before the trading programs it created were scheduled to go into effect. As stated previously, EPA began implementing CSAPR on January 1, 2015, subsequent to the emission reductions documented in the Commonwealth's December 3, 2014 request for redesignation. Therefore, the Area's attainment of the 1997 annual or the 2006 24-hour PM2.5 NAAQS cannot have been a result of any emission reductions associated with CSAPR. In summary, neither the status of CAIR nor the current status of CSAPR affects any of the criteria for proposed approval of this redesignation request for the Johnstown Area.

On January 4, 2013, in NRDC v. EPA, the D.C. Circuit Court remanded to EPA the “Final Clean Air Fine Particle Implementation Rule” (72 FR 20586, April 25, 2007) and the “Implementation of the New Source Review (NSR) Program for PM2.5” final rule (73 FR 28321, May 16, 2008) (collectively, 1997 PM2.5 Implementation Rule). 706 F.3d 428 (D.C. Cir. 2013). The D.C. Circuit Court found that EPA erred in implementing the 1997 annual PM2.5 NAAQS pursuant to the general implementation provisions of subpart 1 of part D of Title I of the CAA (subpart 1), rather than the particulate-matter-specific provisions of subpart 4 of part D of Title I (subpart 4).

Prior to the January 4, 2013 decision, the states had worked towards meeting the air quality goals of the 1997 and 2006 PM2.5 NAAQS in accordance with EPA regulations and guidance derived from subpart 1 of part D of Title I of the CAA. In response to the D.C. Circuit Court's remand, EPA took this history into account by setting a new deadline for any remaining submissions that may be required for moderate nonattainment areas as a result of the D.C. Circuit Court's decision regarding the applicability of subpart 4 of part D of Title I of the CAA.

On June 2, 2014 (79 FR 31566), EPA issued a final rule, “Identification of Nonattainment Classification and Deadlines for Submission of SIP Provisions for the 1997 and 2006 PM2.5 NAAQS” (the PM2.5 Subpart 4 Classification and Deadline Rule), which identifies the classification under subpart 4 as “moderate” for areas currently designated nonattainment for the 1997 annual and/or 2006 24-hour PM2.5 NAAQS. The rule set a deadline for states to submit attainment plans and meet other subpart 4 requirements. The rule specified December 31, 2014 as the deadline for states to submit any additional attainment-related SIP elements that may be needed to meet the applicable requirements of subpart 4 for areas currently designated nonattainment for the 1997 PM2.5 and/or 2006 PM2.5 NAAQS and to submit SIPs addressing the nonattainment NSR requirements in subpart 4.

As explained in detail in the following section, since Pennsylvania submitted its request to redesignate the Johnstown Area on December 3, 2014, any additional attainment-related SIP elements that may be needed for the Area to meet the applicable requirements of subpart 4 were not due at the time Pennsylvania submitted its request to redesignate the Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS.

In this proposed rulemaking action, EPA addresses the effect of the D.C. Circuit Court's January 4, 2013 ruling and the June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule on the redesignation request for the Area. EPA is proposing to determine that the D.C. Circuit Court's January 4, 2013 decision does not prevent EPA from redesignating the Area to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. Even in light of the D.C. Circuit Court's decision, redesignation for this Area is appropriate under the CAA and EPA's longstanding interpretations of the CAA's provisions regarding redesignation. EPA first explains its longstanding interpretation that requirements that are imposed, or that become due, after a complete redesignation request is submitted for an area that is attaining the standard, are not applicable for purposes of evaluating a redesignation request. Second, EPA then shows that, even if EPA applies the subpart 4 requirements to the redesignation request of the Area and disregards the provisions of its 1997 PM2.5 Implementation Rule recently remanded by the D.C. Circuit Court, Pennsylvania's request for redesignation of the Area still qualifies for approval. EPA's discussion also takes into account the effect of the D.C. Circuit Court's ruling and the June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule on the maintenance plan of the Area, which EPA views as approvable even when subpart 4 requirements are considered.

With respect to the 1997 PM2.5 Implementation Rule, the D.C. Circuit Court's January 4, 2013 ruling rejected EPA's reasons for implementing the PM2.5 NAAQS solely in accordance with the provisions of subpart 1, and remanded that matter to EPA, so that it could address implementation of the PM2.5 NAAQS under subpart 4 of part D of the CAA, in addition to subpart 1. For the purposes of evaluating Pennsylvania's December 3, 2014 redesignation request for the Area, to the extent that implementation under subpart 4 would impose additional requirements for areas designated nonattainment, EPA believes that those requirements are not “applicable” for the purposes of section 107(d)(3)(E) of the CAA, and thus EPA is not required to consider subpart 4 requirements with respect to the redesignation of the Area. Under its longstanding interpretation of the CAA, EPA has interpreted section 107(d)(3)(E) to mean, as a threshold matter, that the part D provisions which are “applicable” and which must be approved in order for EPA to redesignate an area include only those which came due prior to a state's submittal of a complete redesignation request. See 1992 Calcagni Memorandum. See also “SIP Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide (CO) NAAQS on or after November 15, 1992,” Memorandum from Michael Shapiro, Acting Assistant Administrator, Air and Radiation, September 17, 1993 (Shapiro memorandum); Final Redesignation of Detroit-Ann Arbor, (60 FR 12459, 12465-66, March 7, 1995); Final Redesignation of St. Louis, Missouri, (68 FR 25418, 25424-27, May 12, 2003); Sierra Club v. EPA, 375 F.3d 537, 541 (7th Cir. 2004) (upholding EPA's redesignation rulemaking applying this interpretation and expressly rejecting Sierra Club's view that the meaning of “applicable” under the statute is “whatever should have been in the plan at the time of attainment rather than whatever actually was in the plan and already implemented or due at the time of attainment”).2 In this case, at the time that Pennsylvania submitted its redesignation request for the Johnstown Area for the 1997 annual and the 2006 24-hour PM2.5 NAAQS, the requirements under subpart 4 were not due.3

EPA's view that, for purposes of evaluating the redesignation of the Area, the subpart 4 requirements were not due at the time Pennsylvania submitted the redesignation request is in keeping with the EPA's interpretation of subpart 2 requirements for subpart 1 ozone areas redesignated subsequent to the D.C. Circuit Court's decision in South Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d 882 (D.C. Cir. 2006). In South Coast, the D.C. Circuit Court found that EPA was not permitted to implement the 1997 8-hour ozone standard solely under subpart 1, and held that EPA was required under the statute to implement the standard under the ozone-specific requirements of subpart 2 as well. Subsequent to the South Coast decision, in evaluating and acting upon redesignation requests for the 1997 8-hour ozone standard that were submitted to EPA for areas under subpart 1, EPA applied its longstanding interpretation of the CAA that “applicable requirements,” for purposes of evaluating a redesignation, are those that had been due at the time the redesignation request was submitted. See, e.g., Proposed Redesignation of Manitowoc County and Door County Nonattainment Areas (75 FR 22047, 22050, April 27, 2010). In those rulemaking actions, EPA therefore did not consider subpart 2 requirements to be “applicable” for the purposes of evaluating whether the area should be redesignated under section 107(d)(3)(E) of the CAA.

EPA's interpretation derives from the provisions of section 107(d)(3) of the CAA. Section 107(d)(3)(E)(v) states that, for an area to be redesignated, a state must meet “all requirements `applicable' to the area under section 110 and part D.” Section 107(d)(3)(E)(ii) provides that EPA must have fully approved the “applicable” SIP for the area seeking redesignation. These two sections read together support EPA's interpretation of “applicable” as only those requirements that came due prior to submission of a complete redesignation request.

First, holding states to an ongoing obligation to adopt new CAA requirements that arose after the state submitted its redesignation request, in order to be redesignated, would make it problematic or impossible for EPA to act on redesignation requests in accordance with the 18-month deadline Congress set for EPA action in section 107(d)(3)(D). If “applicable requirements” were interpreted to be a continuing flow of requirements with no reasonable limitation, states, after submitting a redesignation request, would be forced continuously to make additional SIP submissions that in turn would require EPA to undertake further notice-and-comment rulemaking actions to act on those submissions. This would create a regime of unceasing rulemaking that would delay action on the redesignation request beyond the 18-month timeframe provided by the CAA for this purpose.

Second, a fundamental premise for redesignating a nonattainment area to attainment is that the area has attained the relevant NAAQS due to emission reductions from existing controls. Thus, an area for which a redesignation request has been submitted would have already attained the NAAQS as a result of satisfying statutory requirements that came due prior to the submission of the request. Absent a showing that unadopted and unimplemented requirements are necessary for future maintenance, it is reasonable to view the requirements applicable for purposes of evaluating the redesignation request as including only those SIP requirements that have already come due. These are the requirements that led to attainment of the NAAQS. To require, for redesignation approval, that a state also satisfy additional SIP requirements coming due after the state submits its complete redesignation request, and while EPA is reviewing it, would compel the state to do more than is necessary to attain the NAAQS, without a showing that the additional requirements are necessary for maintenance.

In the context of this redesignation, the timing and nature of the D.C. Circuit Court's January 4, 2013 decision in NRDC v. EPA, and EPA's June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule compound the consequences of imposing requirements that come due after the redesignation request is submitted. Pennsylvania submitted its redesignation request for the 1997 annual and 2006 24-hour PM2.5 NAAQS on December 3, 2014 for the Johnstown Area, which is prior to the deadline by which the area is required to meet the attainment plan and other requirements pursuant to subpart 4.

To require Pennsylvania's fully-complete and pending redesignation request for the 1997 annual and 2006 24-hour PM2.5 NAAQS to comply now with requirements of subpart 4 that the D.C. Circuit Court announced only in January 2013 and for which the December 31, 2014 deadline to comply occurred subsequent to EPA's receipt of Pennsylvania's December 3, 2014 redesignation request, would be to give retroactive effect to such requirements and provide Pennsylvania a unique and earlier deadline for compliance solely on the basis of submitting its redesignation request for the Area. The D.C. Circuit Court recognized the inequity of this type of retroactive impact in Sierra Club v. Whitman, 285 F.3d 63 (D.C. Cir. 2002),4 where it upheld the D.C. Circuit Court's ruling refusing to make retroactive EPA's determination that the areas did not meet their attainment deadlines. In that case, petitioners urged the D.C. Circuit Court to make EPA's nonattainment determination effective as of the date that the statute required, rather than the later date on which EPA actually made the determination. The D.C. Circuit Court rejected this view, stating that applying it “would likely impose large costs on States, which would face fines and suits for not implementing air pollution prevention plans . . . even though they were not on notice at the time.” Id. at 68. Similarly, it would be unreasonable to penalize Pennsylvania by rejecting its December 3, 2014 redesignation request for the Johnstown Area that EPA previously determined was attaining the 1997 annual and 2006 24-hour PM2.5 NAAQS and that met all applicable requirements known to be in effect at the time of the request. For EPA now to reject the redesignation request solely because Pennsylvania did not expressly address subpart 4 requirements which came due after receipt of such request, (and for which it had little to no notice), would inflict the same unfairness condemned by the D.C. Circuit Court in Sierra Club v. Whitman.

Even if EPA were to take the view that the D.C. Circuit Court's January 4, 2013 decision, or the June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule, requires that, in the context of a pending redesignation request for the 1997 annual and the 2006 24-hour PM2.5 NAAQS, which were submitted prior to December 31, 2014, subpart 4 requirements must be considered as being due and in effect, EPA proposes to determine that the Area still qualifies for redesignation to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. As explained subsequently, EPA believes that the redesignation request for the Area, though not expressed in terms of subpart 4 requirements, substantively meets the requirements of that subpart for purposes of redesignating the Area to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS.

With respect to evaluating the relevant substantive requirements of subpart 4 for purposes of redesignating the Area, EPA notes that subpart 4 incorporates components of subpart 1 of part D, which contains general air quality planning requirements for areas designated as nonattainment. See section 172(c). Subpart 4 itself contains specific planning and scheduling requirements for coarse particulate matter (PM10) 5 nonattainment areas, and under the D.C. Circuit Court's January 4, 2013 decision in NRDC v. EPA, these same statutory requirements also apply for PM2.5 nonattainment areas. EPA has longstanding general guidance that interprets the 1990 amendments to the CAA, making recommendations to states for meeting the statutory requirements for SIPs for nonattainment areas. See the General Preamble. In the General Preamble, EPA discussed the relationship of subpart 1 and subpart 4 SIP requirements, and pointed out that subpart 1 requirements were to an extent “subsumed by, or integrally related to, the more specific PM10 requirements” (57 FR 13538, April 16, 1992). The subpart 1 requirements include, among other things, provisions for attainment demonstrations, RACM, RFP, emissions inventories, and contingency measures.

For the purposes of this redesignation request, in order to identify any additional requirements which would apply under subpart 4, consistent with EPA's June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule, EPA is considering the areas to be “moderate” PM2.5 nonattainment areas. As EPA explained in its June 2, 2014 rule, section 188 of the CAA provides that all areas designated nonattainment areas under subpart 4 are initially to be classified by operation of law as “moderate” nonattainment areas, and remain moderate nonattainment areas unless and until EPA reclassifies the area as a “serious” nonattainment area. Accordingly, EPA believes that it is appropriate to limit the evaluation of the potential impact of subpart 4 requirements to those that would be applicable to moderate nonattainment areas. Sections 189(a) and (c) of subpart 4 apply to moderate nonattainment areas and include the following: (1) An approved permit program for construction of new and modified major stationary sources (section 189(a)(1)(A)); (2) an attainment demonstration (section 189(a)(1)(B)); (3) provisions for RACM (section 189(a)(1)(C)); and (4) quantitative milestones demonstrating RFP toward attainment by the applicable attainment date (section 189(c)).

The permit requirements of subpart 4, as contained in section 189(a)(1)(A), refer to and apply the subpart 1 permit provisions requirements of sections 172 and 173 to PM10, without adding to them. Consequently, EPA believes that section 189(a)(1)(A) does not itself impose for redesignation purposes any additional requirements for moderate areas beyond those contained in subpart 1.6 In any event, in the context of redesignation, EPA has long relied on the interpretation that a fully approved nonattainment NSR program is not considered an applicable requirement for redesignation, provided the area can maintain the standard with a prevention of significant deterioration (PSD) program after redesignation. A detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D NSR Requirements for Areas Requesting Redesignation to Attainment.” See also rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorain, Ohio (61 FR 20458, 20469-20470, May 7, 1996); Louisville, Kentucky (66 FR 53665, October 23, 2001); and Grand Rapids, Michigan (61 FR 31834-31837, June 21, 1996). With respect to the specific attainment planning requirements under subpart 4,7 when EPA evaluates a redesignation request under either subpart 1 or 4, any area that is attaining the PM2.5 NAAQS is viewed as having satisfied the attainment planning requirements for these subparts. For redesignations, EPA has for many years interpreted attainment-linked requirements as not applicable for areas attaining the standard. In the General Preamble, EPA stated that: “The requirements for RFP will not apply in evaluating a request for redesignation to attainment since, at a minimum, the air quality data for the area must show that the area has already attained. Showing that the State will make RFP towards attainment will, therefore, have no meaning at that point.”

The General Preamble also explained that: “[t]he section 172(c)(9) requirements are directed at ensuring RFP and attainment by the applicable date. These requirements no longer apply when an area has attained the standard and is eligible for redesignation. Furthermore, section 175A for maintenance plans . . . provides specific requirements for contingency measures that effectively supersede the requirements of section 172(c)(9) for these areas.” Id. EPA similarly stated in its 1992 Calcagni Memorandum that, “The requirements for reasonable further progress and other measures needed for attainment will not apply for redesignations because they only have meaning for areas not attaining the standard.”

It is evident that even if we were to consider the D.C. Circuit Court's January 4, 2013 decision in NRDC v. EPA, or the June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule, to mean that attainment-related requirements specific to subpart 4 were either due prior to Pennsylvania's December 3, 2014 redesignation request or became due subsequent to the December 3, 2014 redesignation request and must now be imposed retroactively,8 those requirements do not apply to areas that are attaining the 1997 annual and the 2006 24-hour PM2.5 NAAQS for the purpose of evaluating a pending request to redesignate the areas to attainment. EPA has consistently enunciated this interpretation of applicable requirements under section 107(d)(3)(E) since the General Preamble was published more than twenty years ago. Courts have recognized the scope of EPA's authority to interpret “applicable requirements” in the redesignation context. See Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004).

Moreover, even outside the context of redesignations, EPA has viewed the obligations to submit attainment-related SIP planning requirements of subpart 4 as inapplicable for areas that EPA determines are attaining the 1997 annual and 2006 24-hour PM2.5 NAAQS. EPA's prior “Clean Data Policy” rulemakings for the PM10 NAAQS, also governed by the requirements of subpart 4, explain EPA's reasoning. They describe the effects of a determination of attainment on the attainment-related SIP planning requirements of subpart 4. See “Determination of Attainment for Coso Junction Nonattainment Area,” (75 FR 27944, May 19, 2010). See also Coso Junction Proposed PM10 Redesignation, (75 FR 36023, 36027, June 24, 2010); Proposed and Final Determinations of Attainment for San Joaquin Nonattainment Area (71 FR 40952, 40954-55, July 19, 2006; and 71 FR 63641, 63643-47, October 30, 2006). In short, EPA in this context has also long concluded that to require states to meet superfluous SIP planning requirements is not necessary and not required by the CAA, so long as those areas continue to attain the relevant NAAQS.

As stated previously in this proposed rulemaking action, on September 25, 2009 (74 FR 48863) and March 29, 2012 (77 FR 18922), EPA made determinations that the Johnstown Area had attained the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively. Pursuant to 40 CFR 51.1004(c) and based on these determinations, the requirements for the Area to submit an attainment demonstration and associated RACM, RFP plan, contingency measures, and other planning SIPs related to the attainment of either the 1997 annual or 2006 24-hour PM2.5 NAAQS were, and continue to be, suspended until such time as: the Area is redesignated to attainment for each standard, at which time the requirements no longer apply; or EPA determines that the Area has again violated any of the standards, at which time such plans are required to be submitted. Under its longstanding interpretation, EPA is proposing to determine here that the Area meets the attainment-related plan requirements of subparts 1 and 4 for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. Thus, EPA is proposing to conclude that the requirements to submit an attainment demonstration under 189(a)(1)(B), a RACM determination under section 172(c)(1) and section 189(a)(1)(c), a RFP demonstration under 189(c)(1), and contingency measure requirements under section 172(c)(9) are satisfied for purposes of evaluating this redesignation request.

The D.C. Circuit Court in NRDC v. EPA remanded to EPA the two rules at issue in the case with instructions to EPA to re-promulgate them consistent with the requirements of subpart 4. EPA in this section addresses the D.C. Circuit Court's opinion with respect to PM2.5 precursors. While past implementation of subpart 4 for PM10 has allowed for control of PM10 precursors, such as NOX from major stationary, mobile, and area sources in order to attain the standard as expeditiously as practicable, section 189(e) of the CAA specifically provides that control requirements for major stationary sources of direct PM10 shall also apply to PM10 precursors from those sources, except where EPA determines that major stationary sources of such precursors “do not contribute significantly to PM10 levels which exceed the standard in the area.”

EPA's 1997 PM2.5 Implementation Rule, remanded by the D.C. Circuit Court, contained rebuttable presumptions concerning certain PM2.5 precursors applicable to attainment plans and control measures related to those plans. Specifically, in 40 CFR 51.1002, EPA provided, among other things, that a state was “not required to address VOC [and NH3] as . . . PM2.5 attainment plan precursor[s] and to evaluate sources of VOC [and NH3] emissions in the State for control measures.” EPA intended these to be rebuttable presumptions. EPA established these presumptions at the time because of uncertainties regarding the emission inventories for these pollutants and the effectiveness of specific control measures in various regions of the country in reducing PM2.5 concentrations. EPA also left open the possibility for such regulation of VOC and NH3 in specific areas where that was necessary.

The D.C. Circuit Court in its January 4, 2013 decision made reference to both section 189(e) and 40 CFR 51.1002, and stated that, “In light of our disposition, we need not address the petitioners' challenge to the presumptions in [40 CFR 51.1002] that VOCs and NH3 are not PM2.5 precursors, as subpart 4 expressly governs precursor presumptions.” NRDC v. EPA, at 27, n.10.

Elsewhere in the D.C. Circuit Court's opinion, however, the D.C. Circuit Court observed: “NH3 is a precursor to fine particulate matter, making it a precursor to both PM2.5 and PM10. For a PM10 nonattainment area governed by subpart 4, a precursor is presumptively regulated. See 42 § U.S.C. 7513a(e) [section 189(e)].” Id. at 21, n.7.

For a number of reasons, the redesignation of the Johnstown Area for the 1997 annual and the 2006 24-hour PM2.5 NAAQS is consistent with the D.C. Circuit Court's decision on this aspect of subpart 4. While the D.C. Circuit Court, citing section 189(e), stated that “for a PM10 area governed by subpart 4, a precursor is `presumptively' regulated,” the D.C. Circuit Court expressly declined to decide the specific challenge to EPA's 1997 PM2.5 Implementation Rule provisions regarding NH3 and VOC as precursors. The D.C. Circuit Court had no occasion to reach whether and how it was substantively necessary to regulate any specific precursor in a particular PM2.5 nonattainment area, and did not address what might be necessary for purposes of acting upon a redesignation request.

However, even if EPA takes the view that the requirements of subpart 4 were deemed applicable at the time the state submitted the redesignation request, and disregards the 1997 PM2.5 Implementation Rule's rebuttable presumptions regarding NH3 and VOC as PM2.5 precursors, the regulatory consequence would be to consider the need for regulation of all precursors from any sources in the Area to demonstrate attainment and to apply the section 189(e) provisions to major stationary sources of precursors. In the case of the Johnstown Area, EPA believes that doing so is consistent with proposing redesignation of the Area for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. The Area has attained the 1997 annual and the 2006 24-hour PM2.5 NAAQS without any specific additional controls of NH3 and VOC emissions from any sources in the Area.

Precursors in subpart 4 are specifically regulated under the provisions of section 189(e), which requires, with important exceptions, control requirements for major stationary sources of PM10 precursors.9 Under subpart 1 and EPA's prior implementation rule, all major stationary sources of PM2.5 precursors were subject to regulation, with the exception of NH3 and VOC. Thus, EPA must address here whether additional controls of NH3 and VOC from major stationary sources are required under section 189(e) of subpart 4 in order to redesignate the Area for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. As explained subsequently, EPA does not believe that any additional controls of NH3 and VOC are required in the context of this redesignation.

In the General Preamble, EPA discusses its approach to implementing section 189(e). See 57 FR 13538-13542. With regard to precursor regulation under section 189(e), the General Preamble explicitly stated that control of VOC under other CAA requirements may suffice to relieve a state from the need to adopt precursor controls under section 189(e). See 57 FR 13542. EPA in this rulemaking action, proposes to determine that the Pennsylvania SIP revision has met the provisions of section 189(e) with respect to NH3 and VOC as precursors. These proposed determinations are based on EPA's findings that: (1) The Johnstown Area contains no major stationary sources of NH3; and (2) existing major stationary sources of VOC are adequately controlled under other provisions of the CAA regulating the ozone NAAQS.10 In the alternative, EPA proposes to determine that, under the express exception provisions of section 189(e), and in the context of the redesignation of the Area, which is attaining the 1997 annual and the 2006 24-hour PM2.5 NAAQS, at present NH3 and VOC precursors from major stationary sources do not contribute significantly to levels exceeding the 1997 annual and the 2006 24-hour PM2.5 NAAQS in the Area. See 57 FR 13539-42.

EPA notes that its 1997 PM2.5 Implementation Rule provisions in 40 CFR 51.1002 were not directed at evaluation of PM2.5 precursors in the context of redesignation, but at SIP plans and control measures required to bring a nonattainment area into attainment of the 1997 annual PM2.5 NAAQS. By contrast, redesignation to attainment primarily requires the nonattainment area to have already attained due to permanent and enforceable emission reductions, and to demonstrate that controls in place can continue to maintain the standard. Thus, even if we regard the D.C. Circuit Court's January 4, 2013 decision as calling for “presumptive regulation” of NH3 and VOC for PM2.5 under the attainment planning provisions of subpart 4, those provisions in and of themselves do not require additional controls of these precursors for an area that already qualifies for redesignation. Nor does EPA believe that requiring Pennsylvania to address precursors differently than it has already would result in a substantively different outcome.

Although, as EPA has emphasized, its consideration here of precursor requirements under subpart 4 is in the context of a redesignation to attainment, EPA's existing interpretation of subpart 4 requirements with respect to precursors in attainment plans for PM10 contemplates that states may develop attainment plans that regulate only those precursors that are necessary for purposes of attainment in the area in question, i.e., states may determine that only certain precursors need be regulated for attainment and control purposes.11 Courts have upheld this approach to the requirements of subpart 4 for PM10.12 EPA believes that application of this approach to PM2.5 precursors under subpart 4 is reasonable. Because the Area has already attained the 1997 annual and the 2006 24-hour PM2.5 NAAQS with its current approach to regulation of PM2.5 precursors, EPA believes that it is reasonable to conclude in the context of this redesignation that there is no need to revisit an attainment control strategy with respect to the treatment of precursors. Even if the D.C. Circuit Court's decision is construed to impose an obligation, in evaluating this redesignation request, to consider additional precursors under subpart 4, it would not affect EPA's approval here of Pennsylvania's request for redesignation of the Johnstown Area for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. In the context of a redesignation, Pennsylvania has shown that the Area has attained both standards. Moreover, Pennsylvania has shown, and EPA proposes to determine, that attainment of the 1997 annual and the 2006 24-hour PM2.5 NAAQS in this Area is due to permanent and enforceable emission reductions on all precursors necessary to provide for continued attainment of the NAAQS. See Section V.A.3 of this proposed rulemaking action. It follows logically that no further control of additional precursors is necessary. Accordingly, EPA does not view the January 4, 2013 decision of the D.C. Circuit Court as precluding redesignation of the Area to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS at this time.

In summary, even if, prior to submitting its December 3, 2014 redesignation request submittal or subsequent to such submission and prior to December 31, 2014, Pennsylvania was required to address precursors for the Area under subpart 4 rather than under subpart 1, as interpreted in EPA's remanded 1997 PM2.5 Implementation Rule, EPA would still conclude that the Area had met all applicable requirements for purposes of redesignation in accordance with section 107(d)(3)(E)(ii) and (v) of the CAA.

EPA is proposing several rulemaking actions for the Johnstown Area: (1) To redesignate the Johnstown Area to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS; (2) to approve into the Pennsylvania SIP the associated maintenance plan for the 1997 annual and the 2006 24-hour PM2.5 NAAQS; and (3) to approve the 2007 comprehensive emissions inventory into the Pennsylvania SIP to satisfy the requirements of section 172(c)(3) of the CAA for the Area for the 1997 annual and the 2006 24-hour PM2.5 NAAQS, which is one of the CAA criteria for redesignation. EPA's proposed approval of the redesignation request and maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS are based upon EPA's determination that the Area continues to attain both standards, which EPA is proposing in this rulemaking action, and that all other redesignation criteria have been met for the Area. In addition, EPA is proposing to approve the 2017 and 2025 PM2.5 and NOX MVEBs included in the maintenance plan for the Area for transportation conformity purposes. The following is a description of how Pennsylvania's December 3, 2014 submittal satisfies the requirements of the CAA including specifically section 107(d)(3)(E) for the 1997 annual and 2006 24-hour PM2.5 NAAQS.

On September 25, 2009 (74 FR 48863) and July 29, 2011 (76 FR 45424), EPA determined that the Johnstown Area attained the 1997 annual PM2.5 NAAQS based on quality-assured and certified ambient air monitoring data for 2006-2008 and by its applicable attainment date of April 5, 2010 based on quality-assured and certified ambient air quality monitoring data for 2007-2009, respectively. In a separate rulemaking action dated March 29, 2012 (77 FR 18922), EPA determined that the Johnstown Area attained the 2006 24-hour PM2.5 NAAQS, based on quality-assured and certified ambient air quality monitoring data for 2008-2010. The basis and effect of these determinations of attainment for both the 1997 annual and 2006 24-hour PM2.5 NAAQS were discussed in the notices of the proposed (74 FR 38158 (July 31, 2009) and 77 FR 2941 (January 20, 2012), respectively) and final (74 FR 48863 and 77 FR 18922, respectively) rulemakings which determined the Area attained the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively.

EPA has reviewed the ambient air quality PM2.5 monitoring data in the Area consistent with the requirements contained in 40 CFR part 50, and recorded in EPA's Air Quality System (AQS) database, including quality-assured, quality-controlled, and state-certified data for the monitoring periods 2007-2009, 2008-2010, 2009-2011, 2010-2012, and 2011-2013. This data, provided in Tables 1 and 2, shows that the Area continues to attain the 1997 annual and 2006 24-hour PM2.5 NAAQS.

EPA's review of the monitoring data from 2007 through 2013 supports EPA's previous determinations that the Area has attained the 1997 annual and 2006 24-hour PM2.5 NAAQS, and that the Area continues to attain both standards. In addition, as discussed subsequently, with respect to the maintenance plan, Pennsylvania has committed to continue monitoring ambient PM2.5 concentrations in accordance with 40 CFR part 58. Thus, based upon analysis of currently available data, EPA is proposing to determine that the Johnstown Area continues to attain the 1997 annual and 2006 24-hour PM2.5 NAAQS.

In accordance with section 107(d)(3)(E)(v), the SIP revision for the 1997 annual and 2006 24-hour PM2.5 NAAQS for the Johnstown Area must be fully approved under section 110(k) and all the requirements applicable to the Area under section 110 of the CAA (general SIP requirements) and part D of Title I of the CAA (SIP requirements for nonattainment areas) must be met.

Section 110(a)(2) of Title I of the CAA delineates the general requirements for a SIP, which include enforceable emissions limitations and other control measures, means, or techniques, provisions for the establishment and operation of appropriate devices necessary to collect data on ambient air quality, and programs to enforce the limitations. The general SIP elements and requirements set forth in section 110(a)(2) include, but are not limited to, the following: (1) submittal of a SIP that has been adopted by the state after reasonable public notice and hearing; (2) provisions for establishment and operation of appropriate procedures needed to monitor ambient air quality; (3) implementation of a minor source permit program and provisions for the implementation of part C requirements (PSD); (4) provisions for the implementation of part D requirements for NSR permit programs; (5) provisions for air pollution modeling; and (6) provisions for public and local agency participation in planning and emission control rule development.

Section 110(a)(2)(D) of the CAA requires that SIPs contain certain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision for various NAAQS, EPA has required certain states to establish programs to address transport of air pollutants in accordance with EPA's Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone (63 FR 57356, October 27, 1998), also known as the NOX SIP Call; amendments to the NOX SIP Call (64 FR 26298, May 14, 1999 and 65 FR 11222, March 2, 2000), CAIR (70 FR 25162, May 12, 2005) and CSAPR. However, section 110(a)(2)(D) requirements for a state are not linked with a particular nonattainment area's designation and classification in that state. EPA believes that the requirements linked with a particular nonattainment area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. The transport SIP submittal requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area in the state. Thus, EPA does not believe that these requirements are applicable requirements for purposes of redesignation.

In addition, EPA believes that the other section 110(a)(2) elements not connected with nonattainment plan submissions and not linked with an area's attainment status are not applicable requirements for purposes of redesignation. The Area will still be subject to these requirements after it is redesignated. EPA concludes that the section 110(a)(2) and part D requirements which are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request, and that section 110(a)(2) elements not linked to the area's nonattainment status are not applicable for purposes of redesignation. This approach is consistent with EPA's existing policy on applicability of conformity (i.e., for redesignations) and oxygenated fuels requirement. See Reading, Pennsylvania, proposed and final rulemakings (61 FR 53174, October 10, 1996), (62 FR 24826, May 7, 1997); Cleveland-Akron-Lorain, Ohio final rulemaking (61 FR 20458, May 7, 1996); and Tampa, Florida, final rulemaking (60 FR 62748, December 7, 1995). For additional discussion on this issue, see the Cincinnati, Ohio redesignation (65 FR at 37890, June 19, 2000) and the Pittsburgh-Beaver Valley, Pennsylvania redesignation (66 FR at 53099, October 19, 2001).

EPA has reviewed the Pennsylvania SIP and has concluded that it meets the general SIP requirements under section 110(a)(2) of the CAA to the extent they are applicable for purposes of redesignation. EPA has previously approved provisions of Pennsylvania's SIP addressing section 110(a)(2) requirements, including provisions addressing PM2.5. See 77 FR 58955 (September 25, 2012) (approving infrastructure submittals for 1997 and 2006 PM2.5 NAAQS). These requirements are, however, statewide requirements that are not linked to the PM2.5 nonattainment status of the Area. Therefore, EPA believes that these SIP elements are not applicable requirements for purposes of review of the Commonwealth's PM2.5 redesignation request.

Subpart 1 sets forth the basic nonattainment plan requirements applicable to PM2.5 nonattainment areas. Under section 172, states with nonattainment areas must submit plans providing for timely attainment and must meet a variety of other requirements.

EPA's longstanding interpretation of the nonattainment planning requirements of section 172 is that once an area is attaining the NAAQS, those requirements are not “applicable” for purposes of section 107(d)(3)(E)(ii) and therefore need not be approved into the SIP before EPA can redesignate the area. In the 1992 General Preamble for Implementation of Title I, EPA set forth its interpretation of applicable requirements for purposes of evaluating redesignation requests when an area is attaining a standard. See 57 FR 13498, 13564 (April 16, 1992). EPA noted that the requirements for RFP and other measures designed to provide for attainment do not apply in evaluating redesignation requests because those nonattainment planning requirements “have no meaning” for an area that has already attained the standard. Id. This interpretation was also set forth in the 1992 Calcagni Memorandum. EPA's understanding of section 172 also forms the basis of its Clean Data Policy, which was articulated with regard to PM2.5 in 40 CFR 51.1004(c), and suspends a state's obligation to submit most of the attainment planning requirements that would otherwise apply, including an attainment demonstration and planning SIPs to provide for RFP, RACM, and contingency measures under section 172(c)(9).13 Courts have upheld EPA's interpretation of section 172(c)(1)'s “reasonably available” control measures and control technology as meaning only those controls that advance attainment, which precludes the need to require additional measures where an area is already attaining. NRDC v. EPA, 571 F.3d 1245, 1252 (D.C. Cir. 2009); Sierra Club v. EPA, 294 F.3d 155, 162 (D.C. Cir. 2002); Sierra Club v. EPA, 314 F.3d 735, 744 (5th Cir. 2002).

Therefore, because attainment has been reached for the 1997 annual and 2006 24-hour PM2.5 NAAQS in the Johnstown Area (see September 25, 2009 (74 FR 48863) and March 29, 2012 (77 FR 18922)), no additional measures are needed to provide for attainment, and section 172(c)(1) requirements for an attainment demonstration and RACM are no longer considered to be applicable for purposes of redesignation as long as the Area continues to attain each standard until redesignation. Section 172(c)(2)'s requirement that nonattainment plans contain provisions promoting RFP toward attainment is also not relevant for purposes of redesignation because EPA has determined that the Johnstown Area has monitored attainment of the 1997 annual and 2006 24-hour PM2.5 NAAQS. In addition, because the Johnstown Area has attained the 1997 annual and 2006 24-hour PM2.5 NAAQS and is no longer subject to a RFP requirement, the requirement to submit the section 172(c)(9) contingency measures is not applicable for purposes of redesignation. Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the NAAQS. Because attainment has been reached, no additional measures are needed to provide for attainment.

The requirement under section 172(c)(3) of the CAA was not suspended by EPA's clean data determination for the 1997 annual and 2006 24-hour PM2.5 NAAQS and is the only remaining requirement under section 172 to be considered for purposes of redesignation of the Area. Section 172(c)(3) of the CAA requires submission and approval of a comprehensive, accurate, and current inventory of actual emissions. To satisfy the 172(c)(3) requirement for the 1997 annual and 2006 24-hour PM2.5 NAAQS, Pennsylvania's December 3, 2014 redesignation request and maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS contains a 2007 comprehensive emissions inventory. The 2007 emissions inventory was the most current accurate and comprehensive emissions inventory of PM2.5, NOX, SO2, VOC, and NH3 for the Area when the Area attained the 1997 annual and 2006 24-hour PM2.5 NAAQS. Thus, as part of this rulemaking action, EPA is proposing to approve Pennsylvania's 2007 comprehensive emissions inventory for the 1997 annual and the 2006 24-hour PM2.5 NAAQS as satisfying the requirement of section 172(c)(3) of the CAA for both standards. Final approval of the 2007 base year emissions inventory will satisfy the emissions inventory requirement under section 172(c)(3) of the CAA for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. The 2007 comprehensive emissions inventory addresses the general source categories of point sources, area sources, on-road mobile sources, and non-road mobile sources. A summary of the 2007 comprehensive emissions inventory is shown in Table 3. For more information on EPA's analysis of the 2007 emissions inventory, see the TSD prepared by EPA Region III Office of Air Monitoring and Analysis dated March 3, 2015, “TSD for the Redesignation Request and Maintenance Plan for the Johnstown 1997 and 2006 PM2.5 Nonattainment Area” (Inventory TSD), available in the docket for this rulemaking action at www.regulations.gov. See Docket ID No. EPA-R03-OAR-2014-0902.

Section 172(c)(4) of the CAA requires the identification and quantification of allowable emissions for major new and modified stationary sources in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA has determined that, since PSD requirements will apply after redesignation, areas being redesignated need not comply with the requirement that a nonattainment NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D NSR. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Nevertheless, Pennsylvania currently has an approved NSR program codified in Pennsylvania's regulations at 25 Pa. Code 127.201 et seq. See 77 FR 41276 (July 13, 2012) (approving NSR program into the SIP). See also 49 FR 33127 (August 21, 1984) (approving Pennsylvania's PSD program which incorporates by reference the Federal PSD program at 40 CFR 52.21). However, Pennsylvania's PSD program will become effective in the Johnstown Area upon redesignation to attainment.

Section 172(c)(7) of the CAA requires the SIP to meet the applicable provisions of section 110(a)(2). As noted previously, EPA believes the Pennsylvania SIP meets the requirements of section 110(a)(2) that are applicable for purposes of redesignation.

Section 175A requires a state seeking redesignation to attainment to submit a SIP revision to provide for the maintenance of the NAAQS in the area “for at least 10 years after the redesignation.” On December 3, 2014, in conjunction with its request to redesignate the Johnstown Area to attainment status, Pennsylvania submitted a SIP revision to provide for maintenance of the 1997 annual and 2006 24-hour PM2.5 NAAQS in the Johnstown Area for at least 10 years after redesignation, throughout 2025. Pennsylvania is requesting that EPA approve the maintenance plan to meet the requirements of section 175A of the CAA for both NAAQS. Once approved, the maintenance plan for the Area will ensure that the SIP for Pennsylvania meets the requirements of the CAA regarding maintenance of the 1997 annual and 2006 24-hour PM2.5 NAAQS for the Area. EPA's analysis of the maintenance plan is provided in Section V.B. of this proposed rulemaking action.

Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that Federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs, and projects that are developed, funded or approved under Title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other Federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability which EPA promulgated pursuant to its authority under the CAA. EPA approved Pennsylvania's transportation conformity SIP requirements on April 29, 2009 (74 FR 19541).

EPA interprets the conformity SIP requirements as not applying for purposes of evaluating a redesignation request under CAA section 107(d) because state conformity rules are still required after redesignation, and Federal conformity rules apply where state rules have not been approved. See Wall v. EPA, 265 F. 3d 426 (6th Cir. 2001) (upholding this interpretation) and 60 FR 62748 (December 7, 1995) (discussing Tampa, Florida).

Thus, for purposes of redesignating to attainment the Johnstown Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS, EPA proposes that upon final approval of the 2007 comprehensive emissions inventory as proposed in this rulemaking action, Pennsylvania will meet all the applicable SIP requirements under part D of Title I of the CAA for purposes of redesignating the Area to attainment for both the 1997 annual and 2006 24-hour PM2.5 NAAQS.

Upon final approval of the 2007 comprehensive emissions inventory as proposed in this rulemaking action, EPA will have fully approved all applicable requirements of Pennsylvania's SIP for the Johnstown Area for purposes of redesignation to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS in accordance with section 110(k) of the CAA.

For redesignating a nonattainment area to attainment, section 107(d)(3)(E)(iii) requires EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP and applicable Federal air pollution control regulations and other permanent and enforceable reductions. Pennsylvania has calculated the change in emissions between 2005, a year showing nonattainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS in the Johnstown Area, and 2007, one of the years for which the Area monitored attainment for both standards.

A summary of the emissions reductions of PM2.5, NOX, SO2, VOC, and NH3 from 2005 to 2007 in the Johnstown Area, submitted by PADEP, is provided in Table 4. For more information on EPA's analysis of the 2005 and 2007 emissions inventories, see EPA's Inventory TSD dated March 3, 2015 available in the docket for this proposed rulemaking action.

The reduction in emissions and the corresponding improvement in air quality from 2005 to 2007 for the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively, in the Johnstown Area can be attributed to a number of regulatory control measures that have been implemented in the Area and contributing areas in recent years.

Reductions in PM2.5 precursor emissions have occurred statewide and in upwind states as a result of Federal emission control measures, with additional emission reductions expected to occur in the future.

PM2.5 concentrations in the Johnstown Area are impacted by the transport of sulfates and nitrates, and the Area's air quality is strongly affected by regulation of SO2 and NOX emissions from power plants.

NO X SIP Call—On October 27, 1998 (63 FR 57356), EPA issued the NOX SIP Call requiring the District of Columbia and 22 states to reduce emissions of NOX, a precursor to ozone pollution.14 Affected states were required to comply with Phase I of the SIP Call beginning in 2004 and Phase II beginning in 2007. Emission reductions resulting from regulations developed in response to the NOX SIP Call are permanent and enforceable. By imposing an emissions cap regionally, the NOX SIP Call reduced NOX emissions from large EGUs and large non-EGUs such as industrial boilers, internal combustion engines, and cement kilns. In response to the NOX SIP Call, Pennsylvania adopted its NOX Budget Trading Program regulations for EGUs and large industrial boilers, with emission reductions starting in May 2003. Pennsylvania's NOX Budget Trading Program regulation was approved into the Pennsylvania SIP on August 21, 2001 (66 FR 43795). To meet other requirements of the NOX SIP Call, Pennsylvania adopted NOX control regulations for cement plants and internal combustion engines, with emission reductions starting in May 2005. These regulations were approved into the Pennsylvania SIP on September 29, 2006 (71 FR 57428).

CAIR—As previously noted, CAIR (70 FR 25162, May 12, 2005) created regional cap-and-trade programs to reduce SO2 and NOX emissions in 27 eastern states, including Pennsylvania. EPA approved the Commonwealth's CAIR regulation, codified in 25 Pa. Code Chapter 145, Subchapter D, into the Pennsylvania SIP on December 10, 2009 (74 FR 65446). In 2009, the CAIR ozone season NOX trading program superseded the NOX Budget Trading Program, although the emission reduction obligations of the NOX SIP Call were not rescinded. See 40 CFR 51.121(r) and 51.123(aa). EPA promulgated CSAPR to replace CAIR as an emission trading program for EGUs. As discussed previously, pursuant to the D.C. Circuit Court's October 23, 2014 Order, the stay of CSAPR has been lifted and implementation of CSAPR commenced in January 2015. EPA expects that the implementation of CSAPR will preserve the reductions achieved by CAIR and result in additional SO2 and NOX emission reductions throughout the maintenance period.

These emission control requirements result in lower NOX emissions from new cars and light duty trucks, including sport utility vehicles. The Federal rules were phased in between 2004 and 2009. EPA estimated that, after phasing in the new requirements, the following vehicle NOX emission reductions will have occurred nationwide: Passenger cars (light duty vehicles) (77 percent); light duty trucks, minivans, and sports utility vehicles (86 percent); and larger sports utility vehicles, vans, and heavier trucks (69 to 95 percent). Some of the emissions reductions resulting from new vehicle standards occurred during the 2008-2010 attainment period; however, additional reductions will continue to occur throughout the maintenance period as new vehicles replace older vehicles. EPA expects fleet wide average emissions to decline by similar percentages as new vehicles replace older vehicles.

EPA issued the Heavy-Duty Diesel Engine Rule in July 2000. This rule included standards limiting the sulfur content of diesel fuel, which went into effect in 2004. A second phase took effect in 2007 which reduced PM2.5 emissions from heavy-duty highway engines and further reduced the highway diesel fuel sulfur content to 15 parts per million (ppm). Standards for gasoline engines were phased in starting in 2008. The total program is estimated to achieve a 90 percent reduction in direct PM2.5 emissions and a 95 percent reduction in NOX emissions for new engines using low sulfur diesel fuel.

On June 29, 2004 (69 FR 38958), EPA promulgated the Nonroad Diesel Rule for large nonroad diesel engines, such as those used in construction, agriculture, and mining, to be phased in between 2008 and 2014. The rule phased in requirements for reducing the sulfur content of diesel used in nonroad diesel engines. The reduction in sulfur content prevents damage to the more advanced emission control systems needed to meet the engine standards. It will also reduce fine particulate emissions from diesel engines. The combined engine standards and the sulfur in fuel reductions will reduce NOX and PM emissions from large nonroad engines by over 90 percent, compared to current nonroad engines using higher sulfur content diesel.

In November 2002, EPA promulgated emission standards for groups of previously unregulated nonroad engines. These engines include large spark-ignition engines such as those used in forklifts and airport ground-service equipment; recreational vehicles using spark-ignition engines such as off-highway motorcycles, all-terrain vehicles, and snowmobiles; and recreational marine diesel engines. Emission standards from large spark-ignition engines were implemented in two tiers, with Tier 1 starting in 2004 and Tier 2 in 2007. Recreational vehicle emission standards are being phased in from 2006 through 2012. Marine diesel engine standards were phased in from 2006 through 2009. With full implementation of all of the nonroad spark-ignition engine and recreational engine standards, an overall 80 percent reduction in NOX is expected by 2020. Some of these emission reductions occurred by the 2002-2007 attainment period and additional emission reductions will occur during the maintenance period as the fleet turns over.

As required by the CAA, EPA developed Maximum Available Control Technology (MACT) Standards to regulate emissions of hazardous air pollutants from a published list of industrial sources referred to as “source categories.” The MACT standards have been adopted and incorporated by reference in Section 6.6 of Pennsylvania's Air Pollution Control Act and implementing regulations in 25 Pa. Code § 127.35 and are also included in Federally enforceable permits issued by PADEP for affected sources. The Industrial/Commercial/Institutional (ICI) Boiler MACT standards (69 FR 55217, September 13, 2004 and 76 FR 15554, February 21, 2011) are estimated to reduce emissions of PM, SO2, and VOCs from major source boilers and process heaters nationwide. Also, the Reciprocating Internal Combustion Engines (RICE) MACT will reduce NOX and PM emissions from engines located at facilities such as pipeline compressor stations, chemical and manufacturing plants, and power plants.

In 2002, Pennsylvania adopted the Heavy-Duty Diesel Emissions Control Program for model years starting in May 2004. The program incorporates California standards by reference and required model year 2005 and beyond heavy-duty diesel highway engines to be certified to the California standards, which were more stringent than the Federal standards for model years 2005 and 2006. After model year 2006, Pennsylvania required implementation of the Federal standards that applied to model years 2007 and beyond, discussed in the Federal measures section of this proposed rulemaking action. This program reduced emissions of NOX statewide.

Pennsylvania's Vehicle Emission I/M program was expanded into the Johnstown Area in early 2004 and applies to model year 1975 and newer gasoline-powered vehicles that are 9,000 pounds and under. The program, approved into the Pennsylvania SIP on October 6, 2005 (70 FR 58313), consists of annual on-board diagnostics and gas cap test for model year 1996 vehicles and newer, and an annual visual inspection of pollution control devices and gas cap test for model year 1995 vehicles and older. This program reduces emissions of NOX from affected vehicles.

Pennsylvania regulation “Chapter 130, Subpart B. Consumer products” established, effective January 1, 2005, VOC emission limits for numerous categories of consumer products, and applies statewide to any person who sells, supplies, offers for sale, or manufactures such consumer products on or after January 1, 2005 for use in Pennsylvania. It was approved into the Pennsylvania SIP on December 8, 2004 (69 FR 70895).

Pennsylvania adopted a regulation in 2010 to control VOC emissions from adhesives, sealants, primers and solvents. This regulation was approved into the Pennsylvania SIP on September 26, 2012 (77 FR 59090).

Based on the information summarized above, Pennsylvania has adequately demonstrated that the improvements in air quality in the Johnstown Area are due to permanent and enforceable emissions reductions. The reductions result from Federal and State requirements and regulation of precursors within Pennsylvania that affect the Johnstown Area.

On December 3, 2014, PADEP submitted a combined maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS, as required by section 175A of the CAA. EPA's analysis for proposing approval of the maintenance plan is provided in this section.

An attainment inventory is comprised of the emissions during the time period associated with the monitoring data showing attainment. PADEP determined that the appropriate attainment inventory year for the maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS is 2007, one of the years in the periods during which the Johnstown Area monitored attainment for both NAAQS. The 2007 emissions inventory submitted by PADEP that was included in the maintenance plan contains primary PM2.5 emissions (including condensables), SO2, NOX, VOC, and NH3.

In its redesignation request and maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS submitted on December 3, 2014, PADEP described the methods used for developing its 2007 emissions inventory. EPA reviewed the procedures used to develop the inventory and found them to be reasonable. EPA has reviewed the documentation provided by PADEP and found the 2007 emissions inventory to be approvable. For more information on EPA's analysis of the 2007 emissions inventory, see Appendices B-1 and C-1 of the Pennsylvania submittal and EPA's Inventory TSD dated March 3, 2015 available in the docket for this proposed rulemaking action.

Section 175A requires a state seeking redesignation to attainment to submit a SIP revision to provide for the maintenance of the NAAQS in the area “for at least 10 years after the redesignation.” EPA has interpreted this as a showing of maintenance “for a period of ten years following redesignation.” The Federal and State measures described in Section V.A.3 of this proposed rulemaking action demonstrate that the reductions in emissions from point, area, and mobile sources in the Area has occurred and will continue to occur through 2025. In addition, the following State and Federal regulations and programs ensure the continuing decline of SO2, NOX, PM2.5, and VOC emissions in the Area during the maintenance period and beyond:

Pennsylvania established NOX emission limits for the large industrial boilers that were previously subject to the NOX SIP Call, but were not subject to CAIR. For these units, Pennsylvania established an allowable ozone season NOX limit based on the unit's previous ozone season's heat input. A combined NOX ozone season emissions cap of 3,418 tons applies for all of these units.

EPA promulgated CSAPR to replace CAIR as an emission trading program for EGUs. As discussed previously, implementation of CSAPR commenced in January 2015. EPA expects that the implementation of CSAPR will preserve the reductions achieved by CAIR and result in additional SO2 and NOX emission reductions throughout the maintenance period.

On July 19, 2011 (76 FR 52558), EPA approved amendments to 25 Pa. Code Chapter 145 Subchapter C to further reduce NOX emissions from cement kilns. The amendments established NOX emission rate limits for long wet kilns, long dry kilns, and preheater and precalciner kilns that are lower by 35 percent to 63 percent from the previous limit of 6 pounds of NOX per ton of clinker that applied to all kilns. The amendments were effective on April 15, 2011.

Pennsylvania regulation 25 Pa. Code Chapter 130, Subchapter D for Adhesives, Sealers, Primers, and Solvents was approved into the Pennsylvania SIP on September 26, 2012 (77 FR 59090). The regulation established VOC content limits for various categories of adhesives, sealants, primers, and solvent, and became applicable on January 1, 2012.

Amendments to Pennsylvania regulation 25 Pa. Code Chapter 130, Subchapter B, Consumer Products, established, effective January 1, 2009, new or more stringent VOC standards for consumer products. This regulation applies statewide to any person who sells, supplies, offers for sale, or manufactures such consumer products on or after January 1, 2009 for use in Pennsylvania. The amendments were approved into the Pennsylvania SIP on October 18, 2010 (75 FR 63717).

The Pennsylvania Clean Vehicles Program (formerly, New Motor Vehicle Control Program) incorporates by reference the California Low Emission Vehicle program (CA LEVII), although it allowed automakers to comply with the NLEV program as an alternative to this program until Model Year (MY) 2006. The Clean Vehicles Program, codified in 25 Pa. Code Chapter 126, Subchapter D, was modified to require CA LEVII to apply to MY 2008 and beyond, and was approved into the Pennsylvania SIP on January 24, 2012 (77 FR 3386). The Clean Vehicles Program incorporates by reference the emission control standards of CA LEVII, which, among other requirements, reduces emissions of NOX by requiring that passenger car emission standards and fleet average emission standards also apply to light duty vehicles. Model year 2008 and newer passenger cars and light duty trucks are required to be certified for emissions by the California Air Resource Board (CARB), in order to be sold, leased, offered for sale or lease, imported, delivered, purchased, rented, acquired, received, titled or registered in Pennsylvania. In addition, manufacturers are required to demonstrate that the California fleet average standard is met based on the number of new light-duty vehicles delivered for sale in the Commonwealth. The Commonwealth's submittal for the January 24, 2012 rulemaking projected that, by 2025, the program will achieve approximately 36 tons more NOX reductions than Tier II for the counties in the Johnstown Area.

Two Pennsylvania regulations—the Diesel-Powered Motor Vehicle Idling Act (August 1, 2011, 76 FR 45705) and the Outdoor Wood-Fired Boiler regulation (September 20, 2011, 76 FR 58114)—were not included in the projection inventories, but may also assist in maintaining the standard. Also, the Tier 3 Motor Vehicle Emission and Fuel Standards (79 FR 23414, April 29, 2014) establishes more stringent vehicle emissions standards and will reduce the sulfur content of gasoline beginning in 2017. The fuel standard will achieve NOX reductions by further increasing the effectiveness of vehicle emission controls for both existing and new vehicles.

The emissions growth due to a new emissions source, development of natural gas resources from Marcellus Shale (and other deep formations), is included in the Area source inventory. PADEP requires annual emission reporting under 25 Pa. Code Chapter 135 (relating to reporting of sources) of unconventional natural gas development companies. The initial annual source reporting for unconventional natural gas operations began in 2012 for emissions during the 2011 calendar year. Emissions were projected to 2017 and 2025 based on the most recent emissions inventory reports available (2013 for compressor engines and 2012 for all other sources). See Appendix B-3 of Pennsylvania's submittal for more details on the methodology used for estimating Marcellus Shale development activity and for the emission totals by pollutant. Starting January 2015, Federal regulations (40 CFR part 60, subpart OOOO) require wells to capture gas at the wellhead. EPA estimates that VOC emissions from hydraulically fractured well completions will decrease by 95 percent as a result of this regulation.

The State and Federal regulations and programs described above ensure the continuing decline of SO2, NOX, PM2.5, and VOC emissions in the Johnstown Area during the maintenance period and beyond. A summary of the projected reductions from these measures from 2007 to 2025 is shown in Table 5. The future year inventory included potential emissions increases from natural gas activities.

Where the emissions inventory method of showing maintenance is used, its purpose is to show that emissions during the maintenance period will not increase over the attainment year inventory. See 1992 Calcagni Memorandum, pages 9-10. For a demonstration of maintenance, emissions inventories are required to be projected to future dates to assess the influence of future growth and controls; however, the demonstration need not be based on modeling. See Wall v. EPA, supra; Sierra Club v. EPA, supra. See also 66 FR 53099-53100 and 68 FR 25430-32. PADEP uses projection inventories to show that the Johnstown Area will remain in attainment and developed projection inventories for an interim year of 2017 and a maintenance plan end year of 2025 to show that future emissions of NOX, SO2, PM2.5, VOC, and NH3 will remain at or below the attainment year 2007 for the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively, throughout the Johnstown Area through the year 2025.

EPA has reviewed the documentation provided by PADEP for developing annual 2017 and 2025 emissions inventories for the Johnstown Area. See Appendix C-2 and C-3 of Pennsylvania's submittal. EPA has determined that the 2017 and 2025 projected emissions inventories provided by PADEP are approvable. For more information on EPA's analysis of the emissions inventories, see EPA's Inventory TSD dated March 3, 2015 available in the docket for this proposed rulemaking action.

Tables 6a through 6e provide a summary of the inventories in tpy for the 2007 attainment year, as compared to projected inventories for the 2017 interim year and the 2025 maintenance plan end year for the Area. The future year inventories include potential emissions increases from natural gas activities.

As shown in Tables 6a-6e, the projected levels for PM2.5, NOx, SO2, VOC, and NH3 are under the 2007 attainment levels for each of these pollutants. Pennsylvania has adequately demonstrated that the Area will continue to maintain the 1997 annual and 2006 24-hour PM2.5 NAAQS.

Pennsylvania's maintenance plan includes a commitment by PADEP to continue to operate its EPA-approved monitoring network, as necessary to demonstrate ongoing compliance with the NAAQS. Pennsylvania currently operates a PM2.5 monitor in the Johnstown Area. In its December 3, 2014 submittal, Pennsylvania stated that it will consult with EPA prior to making any necessary changes to the network and will continue to operate the monitoring network in accordance with the requirements of 40 CFR part 58.

To provide for tracking of the emission levels in the Area, PADEP will: (a) evaluate annually the vehicle miles travelled (VMT) data and the annual emissions reported from stationary sources to compare them with the assumptions used in the maintenance plan, and (b) evaluate the periodic emissions inventory for all PM2.5 precursors prepared every three years in accordance with EPA's Air Emissions Reporting Requirements (AERR) to determine whether there is an exceedance of more than ten percent over the 2007 inventories. Also, as noted in the previous subsection, PADEP will continue to operate its monitoring system in accordance with 40 CFR part 58 and remains obligated to quality-assure monitoring data and enter all data into the AQS in accordance with Federal requirements. PADEP will use this data, supplemented with additional data, as necessary, to assure continuing attainment in the Area.

The contingency plan provisions are designed to promptly correct any violation of the 1997 annual and/or the 2006 24-hour PM2.5 NAAQS that occurs in the Johnstown Area after redesignation. Section 175A of the CAA requires that a maintenance plan include such contingency measures as EPA deems necessary to ensure that a state will promptly correct a violation of the NAAQS that occurs after redesignation. The maintenance plan should identify the events that would “trigger” the adoption and implementation of a contingency measure(s), the contingency measure(s) that would be adopted and implemented, and the schedule indicating the time frame by which the state would adopt and implement the measure(s).

Pennsylvania's maintenance plan describes the procedures for the adoption and implementation of contingency measures to reduce emissions should a violation occur. Pennsylvania's contingency measures include a first level response and a second level response. A first level response is triggered when the annual mean PM2.5 concentration exceeds 15.5 μg/m3 in a single calendar year within the Area, when the 98th percentile 24-hour PM2.5 concentration exceeds 35.0 μg/m3 in a single calendar year within the Area, or when the periodic emissions inventory for the Area exceeds the attainment year inventory (2007) by more than ten percent. The first level response will consist of a study to determine if the emissions trends show increasing concentrations of PM2.5, and whether this trend is likely to continue. If it is determined through the study that action is necessary to reverse a trend of emissions increases, Pennsylvania will, as expeditiously as possible, implement necessary and appropriate control measures to reverse the trend.

A second level response will be prompted if the two-year average of the annual mean concentration exceeds 15.0 μg/m3 or if the two-year average of 98th percentile 24-hour PM2.5 concentration exceeds 35.0 μg/m3 within the Area. This would trigger an evaluation of the conditions causing the exceedance, whether additional emission control measures should be implemented to prevent a violation of the standard, and analysis of potential measures that could be implemented to prevent a violation. Pennsylvania would then begin its adoption process to implement the measures as expeditiously as practicable. If a violation of the PM2.5 NAAQS occurs, PADEP will propose and adopt necessary additional control measures in accordance with the implementation schedule in the maintenance plan.

Pennsylvania's candidate contingency measures include the following: (1) A regulation based on the Ozone Transport Commission (OTC) Model Rule to update requirements for consumer products; (2) a regulation based on the Control Techniques Guidelines (CTG) for industrial cleaning solvents; (3) voluntary diesel projects such as diesel retrofit for public or private local onroad or offroad fleets, idling reduction technology for Class 2 yard locomotives, and idling reduction technologies or strategies for truck stops, warehouses, and other freight-handling facilities; (4) promotion of accelerated turnover of lawn and garden equipment, focusing on commercial equipment; and (5) promotion of alternative fuels for fleets, home heating and agricultural use. Pennsylvania's rulemaking process and schedule for adoption and implementation of any necessary contingency measure is shown in the SIP submittals as being 18 months from PADEP's approval to initiate rulemaking. For all of the reasons discussed in this section, EPA is proposing to approve Pennsylvania's 1997 annual and 2006 24-hour PM2.5 maintenance plan for the Johnstown Area as meeting the requirements of section 175A of the CAA.

Section 176(c) of the CAA requires Federal actions in nonattainment and maintenance areas to “conform to” the goals of SIPs. This means that such actions will not cause or contribute to violations of a NAAQS, worsen the severity of an existing violation, or delay timely attainment of any NAAQS or any interim milestone. Actions involving Federal Highway Administration (FHWA) or Federal Transit Administration (FTA) funding or approval are subject to the transportation conformity rule (40 CFR part 93, subpart A). Under this rule, metropolitan planning organizations (MPOs) in nonattainment and maintenance areas coordinate with state air quality and transportation agencies, EPA, and the FHWA and FTA to demonstrate that their long range transportation plans and transportation improvement programs (TIP) conform to applicable SIPs. This is typically determined by showing that estimated emissions from existing and planned highway and transit systems are less than or equal to the MVEBs contained in the SIP.

On December 3, 2014, Pennsylvania submitted a SIP revision that contains the 2017 and 2025 PM2.5 and NOX onroad mobile source budgets for Cambria County and portions of Indiana County (Townships of West Wheatfield, Center, East Wheatfield, and Armagh Borough and Homer City Borough). Pennsylvania did not provide MVEBs for SO2, VOC, and NH3 because it concluded, consistent with the presumptions regarding these precursors in the Transportation Conformity Rule at 40 CFR 93.102(b)(2)(v), which predated and were not disturbed by the litigation on the 1997 PM2.5 Implementation Rule, that emissions of these precursors from motor vehicles are not significant contributors to the Area's PM2.5 air quality problem. EPA issued conformity regulations to implement the 1997 annual PM2.5 NAAQS in July 2004 and May 2005 (69 FR 40004, July 1, 2004 and 70 FR 24280, May 6, 2005). The D.C. Circuit Court's January 2013 decision does not affect EPA's proposed approval of the MVEBs for the Area. The MVEBs are presented in Table 8.

EPA's substantive criteria for determining adequacy of MVEBs are set out in 40 CFR 93.118(e)(4). Additionally, to approve the MVEBs, EPA must complete a thorough review of the SIP, in this case the PM2.5 maintenance plan, and conclude that with the projected level of motor vehicle and all other emissions, the SIPs will achieve its overall purpose, in this case providing for maintenance of the 1997 annual and 2006 24-hour PM2.5 NAAQS. EPA's process for determining adequacy of a MVEB consists of three basic steps: (1) Providing public notification of a SIP submission; (2) providing the public the opportunity to comment on the MVEB during a public comment period; and (3) EPA taking action on the MVEB.

In this proposed rulemaking action, EPA is also initiating the process for determining whether or not the MVEBs are adequate for transportation conformity purposes. The publication of this proposed rulemaking action starts a 30-day public comment period on the adequacy of the submitted MVEBs. This comment period is concurrent with the comment period on this proposed rulemaking action and comments should be submitted to the docket for this rulemaking. EPA may choose to make its determination on the adequacy of the budgets either in the final rulemaking on this maintenance plan and redesignation request or by informing Pennsylvania of the determination in writing, publishing a notice in the Federal Register and posting a notice on EPA's adequacy Web page (http://www.epa.gov/otaq/stateresources/transconf/adequacy.htm).15

EPA has reviewed the MVEBs and finds that the submitted MVEBs are consistent with the maintenance plan and meet the criteria for adequacy and approval in 40 CFR part 93, subpart A. Therefore, EPA is proposing to approve the 2017 and 2025 PM2.5 and NOX MVEBs for Cambria County and portions of Indiana County for transportation conformity purposes. Additional information pertaining to the review of the MVEBs can be found in the TSD dated February 12, 2015, “Adequacy Findings for the MVEBs in the 1997 and 2006 PM2.5 NAAQS Maintenance Plan for the Johnstown, Pennsylvania 1997 and 2006 PM2.5 Nonattainment Areas,” available on line at www.regulations.gov, Docket ID No. EPA-R03-OAR-2014-0902.

EPA is proposing to approve Pennsylvania's request to redesignate the Johnstown Area from nonattainment to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS. EPA has evaluated Pennsylvania's redesignation request and determined that the Area meets the redesignation criteria set forth in section 107(d)(3)(E) of the CAA. The monitoring data demonstrates that the Johnstown Area attained the 1997 annual and the 2006 24-hour PM2.5 NAAQS, as determined by EPA in prior rulemaking actions and, for reasons discussed herein, that it will continue to attain both NAAQS. Final approval of this redesignation request would change the designation of the Johnstown Area from nonattainment to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS. EPA is also proposing to approve the associated maintenance plan for the Johnstown Area as a revision to the Pennsylvania SIP for the 1997 annual and 2006 24-hour PM2.5 NAAQS because it meets the requirements of section 175A of the CAA as described previously in this proposed rulemaking. In addition, EPA is proposing to approve the 2007 emissions inventory as meeting the requirement of section 172(c)(3) of the CAA for both NAAQS. Furthermore, EPA is proposing to approve the 2017 and 2025 PM2.5 and NOX MVEBs for Cambria County and portions of Indiana County for transportation conformity purposes. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.

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

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

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 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 rule proposing to approve Pennsylvania's redesignation request, maintenance plan, 2007 emissions inventory for the 1997 annual and 2006 24-hour PM2.5 NAAQS, and MVEBs for transportation conformity purposes for the Johnstown Area for both NAAQS, does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

This is a summary of the Part 1 Request for Comment in GN Docket No. 12-268, WT Docket Nos. 14-170, 05-211, FCC 15-49, released on April 17, 2015. The complete text of this document, including any attachment, is available for public inspection and copying from 8 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday or from 8 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference Information Center, 445 12th Street SW., Room CY-A257, Washington, DC 20554. The Part 1 Request for Comment and related documents also are available on the Internet at the Commission's Web site: http://wireless.fcc.gov, or by using the search function for WT Docket No. 14-170 on the Commission's ECFS Web page at http://www.fcc.gov/cgb/ecfs/.

All filings in response to the Part 1 Request for Comment must refer to GN Docket No. 12-268 and WT Docket Nos. 14-170 and 05-211. The Commission strongly encourages parties to develop responses to the Part 1 Request for Comment that adhere to the organization and structure of the document.

• Electronic Filers: Comments may be filed electronically using the Internet by accessing the Federal Communication Commission's Electronic Comments Filing System (ECFS): http://www.fcc.gov/cgb/ecfs/. Follow the instructions for submitting comments.

• Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. Filings can be sent by hand or messenger delivery, by commercial overnight courier or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary Attn: WTB/ASAD, Office of the Secretary, Federal Communications Commission (FCC). All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to the FCC Headquarters at 445 12th Street SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. ET. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building. Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743. U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington, DC 20554.

Initial Paperwork Reduction Act of 1995 (PRA) Analysis:

This Part 1 Request for Comment contains proposed new or modified information collection requirements and seeks PRA comment. The Part 1 NPRM sought comment from the general public and the Office of Management and Budget on the information collection requirements contained therein, as required by the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it may “further reduce the information collection burden for small business concerns with fewer than 25 employees” in the light of the alternative proposals set forth in the Part 1 Request for Comment.

1. The Part 1 Request for Comment seeks additional comment on a number of proposed changes to the Commission's part 1 competitive bidding rules offered by commenters in response to the questions and proposals set forth in the Part 1 NPRM, 79 FR 68172, November 14, 2014. Specifically, the Commission seeks further, more detailed input on alternative proposals as well as questions posed and issues raised by commenters on how the Commission can meet its statutory obligation to ensure that small businesses, rural telephone companies, and businesses owned by members of minority groups and women (collectively, designated entities or DEs) have an opportunity to participate in the provision of spectrum-based services, while at the same time ensuring that there are adequate safeguards to protect against unjust enrichment to ineligible entities. The Commission also seeks further comment on commenters' other suggestions for amending the competitive bidding rules governing auction participation by former defaulters, commonly controlled entities, and entities with joint bidding arrangements in response to proposals advanced in the Part 1 NPRM. Soliciting further input on alternative proposals and exploring other issues raised in the record to date will provide a more complete record for the Commission to evaluate and act upon, as appropriate, the concerns raised in the Part 1 NPRM.

2. In the Part 1 NPRM, the Commission emphasized that “it remain mindful of its responsibility to ensure that benefits are provided only to qualifying entities,” and asked whether its proposals “provide adequate safeguards against unjust enrichment to ensure that bidding credits are awarded only to qualifying small businesses.” In discussing the Commission's proposed two-prong approach to evaluate attribution and establish eligibility for small business benefits, the Commission asked whether it should “take additional steps to assure that ineligible entities cannot exercise undue influence over a small business,” and also asked commenters to “offer any other suggestions the Commission should consider to revise its rules and reform its small business policies.”

3. After the Part 1 NPRM was released in October 2014, the Commission conducted an auction for 1,614 Advanced Wireless Service licenses in the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands (Auction 97), which closed on January 29, 2015. In order to allow interested parties an opportunity to take into account any “lessons learned” from Auction 97, the Wireless Telecommunications Bureau (WTB) extended the comment deadline for the Part 1 NPRM three times. Twenty-one parties submitted comments and fourteen parties submitted reply comments. Based on the issues raised in the Part 1 NPRM, several commenters offered alternative proposals, and suggested other policy considerations the Commission should weigh before amending its Part 1 rules. The Part 1 Request for Comment seeks additional comment on those proposals and suggestions.

4. In the Part 1 NPRM, the Commission sought comment on “find[ing] a reasonable balance between the competing goals of affording [designated] entities reasonable flexibility to obtain the capital necessary to participate in the provision of spectrum-based services and effectively preventing the unjust enrichment of ineligible entities.” The Part 1 NPRM proposed to modify the eligibility standard for small business benefits to provide small businesses greater opportunities to participate in a wide range of spectrum based services. Among other issues, the Part 1 NPRM sought comment on repealing the attributable material relationship (AMR) rule which, for the purposes of determining an entity's eligibility for small business benefits, attributes to the DE applicant the revenues of any entity with which it has one or more agreements for the lease or resale of, on a cumulative basis, more than 25 percent of the spectrum capacity of any individual license it holds. Likewise, the Part 1 NPRM revisited the policy underlying the AMR rule. In lieu of a bright-line test, the Commission proposed a more focused two-pronged approach to evaluate an entity's eligibility for benefits using its longstanding controlling interest and affiliation rules to determine whether an applicant: (1) Meets the applicable small business size standard, and (2) retains control over the spectrum associated with the licenses for which it seeks small business benefits. The Commission also proposed to modify the secondary market rules to make clear that DEs may fully benefit from the same de facto control standard for spectrum manager leasing as is applied to non-DE lessors.

5. Several commenters support the Commission's proposal to modify the DE eligibility standard by eliminating the AMR rule, stating that it will allow small businesses the flexibility needed to obtain the capital necessary to participate in the provision of spectrum-based services. Those commenters note, among other things, that the proposal relies on well-established Commission standards to evaluate de jure and de facto control with which licensees are familiar, and is coupled with effective unjust enrichment provisions to safeguard against abuse of small business benefits. The Commission invites additional comment on this proposal and related concerns. Specifically, parties supporting the elimination of the AMR rule should explain how eliminating or loosening the restriction will promote competition and ensure small business participation in spectrum-based services, while guarding against ineligible entities' acquiring small business benefits. Several other parties oppose the Commission's proposal to eliminate the AMR rule to replace it with a two-pronged control analysis, arguing that doing so would increase the likelihood that DE benefits might unfairly flow to ineligible entities or spectrum “speculators” in contravention of Congressional intent. Commenters advocating for alternative rule amendments for the DE eligibility rules and the award of benefits should specifically address how the Commission should consider relationships with and investment in a DE applicant, particularly in connection with any use of spectrum acquired with benefits.

6. Other parties argue that the AMR rule should not only be retained, but strengthened. For instance, some advocate that a DE should be prohibited from leasing more than 25 percent of its spectrum in the aggregate across one or more licenses. Another commenter argues that, if the AMR rule is retained, a DE should not be allowed to lease more than 25 percent of its total spectrum to any one wireless operator. In light of these and similar comments, the Commission seeks further comment on how much of a DE's spectrum it should be able to lease or resell without having to attribute the revenues of its lessees or resellers. Is there a different percentage threshold, either higher or lower, that would better serve the Commission's statutory goals? Should the Commission instead reinstate an absolute limit on the percentage of a DE's spectrum that it may lease or resell? If so, what should that limit be and why? Should any such limit affect DE eligibility as to any license, or only on a license-by-license basis? Should the Commission have different rules for licenses acquired by DEs without bidding credits? Should the Commission's rules regarding spectrum use agreements with DE's differ for those that have an equity interest in the DE? Commenters should also address how any proposed rule amendments for DE eligibility would impact the Commission's goal of providing small businesses with greater access to capital.

7. Further, some parties suggest that the Commission should consider whether to distinguish between pure spectrum leasing arrangements and network facilities-based wholesale arrangements when evaluating whether to retain the AMR rule. The Commission seeks further comment on this distinction and asks whether and how it should treat wholesale and resale agreements differently from lease arrangements for purposes of attributing revenues to a DE applicant. Commenters are also requested to discuss how the Commission should define “resale” and “wholesale agreements” for purposes of any such distinction, as well as for any other rule modifications it might consider, including if the Commission ultimately choose to retain the AMR rule, and the policy of requiring facilities-based service underlying the rule. Are there any potential advantages of distinguishing between agreements on the basis of the provision of facilities-based service? Are there any potential negative effects of such a distinction such that, on balance, it is preferable to retain the current AMR rule?

8. Some parties suggest that the AMR rule be retained, but modified to allow DEs to lease spectrum to rural carriers or other DEs without attribution and allow DEs that have acquired licenses without bidding credits to lease those licenses without attribution. In particular, Blooston Rural proposes that the AMR be retained with respect to spectrum licenses that are both acquired with bidding credits and leased to nationwide wireless providers. The Commission seeks comment on these proposals. Commenters are specifically invited to address how the proposed modifications will achieve the Commission's goals of facilitating small business participation in spectrum-based services and enhancing competition, while preventing ineligible entities from acquiring small business benefits and unjust enrichment. Is there a limit on the overall amount of spectrum that a DE should be permitted to lease to another DE or rural carrier? Should any such limit affect DE eligibility as to any license, or only on a license-by-license basis? Commenters are also invited to address whether the proposals regarding modifications to the DE eligibility rules and award of DE bidding credits negatively or positively affect auction revenues, and the extent to which 47 U.S.C. 309(j) permits consideration of any such effects.

9. With regard to the policy underlying the AMR rule, a number of parties suggest, however, that the Commission should continue to encourage DEs to provide facilities-based service. For instance, one party supports the elimination of the AMR rule, but states that DEs should be required to be facilities-based providers. Some commenters contend that any rule changes related to eligibility for small business benefits must continue to require an applicant seeking to utilize those benefits to be primarily a facilities-based provider. Other commenters support the Commission's proposal to reconsider requiring DEs to primarily provide facilities-based service directly to the public, and favor the elimination of the policy. The Commission invites further comment on the proposed change to this policy, including whether such a change would comply with the statute's directive that the Commission prescribes “ensur[ing] that small businesses, rural telephone companies, and businesses owned by members of minority groups and women are given the opportunity to participate in the provision of spectrum-based services.” Commenters are requested to discuss how a policy favoring facilities-based service affects the Commission's ability to prevent warehousing and unjust enrichment, and ensure that small business benefits flow to eligible entities. For instance, should the Commission automatically treat an entity that manages a DE's spectrum license utilization for provisioning services as a controlling interest of the DE? Additionally, the Commission seeks comment as to ways in which the Commission can implement the policy that DEs provide facilities-based services if the AMR rule is eliminated.

10. The record also includes numerous additional proposals that expand or offer alternative proposals for evaluating DE eligibility. The Commission seeks comment on the specific suggestions raised in the record and set forth below, and asks interested parties to provide specific details on how any proposed rule amendment would further its policy objectives of providing small businesses opportunities and preventing unjust enrichment of ineligible entities: (1) Modify the applicable attribution, controlling interest or affiliation rule to alter the types of equity arrangements available to a DE applicant, by: (i) “Attribut[ing] to a DE the revenues and spectrum of any spectrum holding entity that holds an interest, direct or indirect, equity or non-equity of more than 10 percent,” consistent with the spectrum attribution rules used to consider spectrum aggregation, (ii) Restricting larger nationwide and regional carriers, entities with a certain number of end-user customers, and/or other large companies from providing a material portion of the total capitalization of DE applicants or otherwise exercising control over such applicants as part of the definition of `material relationship;' (iii) “[A]dopting a rebuttable presumption that equity interests of 50 percent or more represent de facto control of the [DE] company;” (2) Adopt a 25 percent minimum equity requirement for DEs to “ensure that controlling interests are properly invested in their companies,” and provide that “any loans to achieve minimum equity thresholds should be negotiated at arms-length;” (3) Limit the total dollar amount of DE benefits that any DE (or group of affiliated DEs) may claim during any given auction, based on some multiple of its annual revenues, or a set cap of $32.5 million to “ensure that DEs cannot acquire spectrum in a manner that is wildly disproportionate to the concept of a small business;” (4) Limit the overall amount that a small business can bid in order to ensure that a DE is not able to “bid at levels that undercut the purpose of the DE program” and base such cap on some multiple of a small business gross revenue threshold in the Part 1 schedule, such as ten times the annual gross revenues; (5) Rather than capping DE benefits, adopt another limiting metric such as population, to tie bidding credits more closely to a typical business plan of a small business. Under this proposal, a DE applicant bidding on licenses covering a relatively small number of pops, such as in rural areas, would not be subject to a cap, but nationwide licenses or licenses covering high-value, metropolitan areas would be limited; (6) Narrow the scope of the affiliation rules to exclude individuals and entities whose revenues are currently attributable to a DE, such as directors and certain family members, including in-laws, siblings, step-siblings, and half-siblings, if they are unlikely to exercise control over the applicant entity unless the applicant has more than incidental business relationships with a particular relation; and (7) “[C]larify the affiliation rules to prevent rural telephone companies from losing [DE] status because they hold a fractional interest in a cellular partnership,” where the rural telephone company has no ability to control the partnership's day-to-day operations and/or strategy in any significant way.

11. In addressing proposals proffered in the record, commenters are requested to provide specific comment about how the proposals could be implemented and whether there are any alternative thresholds that would better meet the Commission's goals. For example, commenters should address whether and how any relevant terms should be defined and how the proposals should apply to existing DEs and those that will apply for benefits in the future. Are the existing standards for disclosable interest holders and affiliates appropriate for evaluating DE eligibility consistent with the Commission's policy objectives, or should the Commission modify its rules to include other non-controlling interests in a DE that may potentially cause unjust enrichment of ineligible entities or enable ineligible entities to exercise undue influence over a DE? Should there be a cap on the overall amount of money that non-controlling interests can contribute to a DE? Should there be a cap on, or a prohibition of, a non-controlling interest holder's use of spectrum for a license that has been acquired with DE benefits? For attribution purposes, is the revenue information the Commission uses to determine DE eligibility appropriate, or should the Commission consider other revenues such as sources of personal income? To what extent should an interest holder's revenues be attributed to a DE, for instance, should the attribution of revenues be based on the correlating percentage of the interest holder's equity contribution to the DE rather than all gross revenues? In advocating for particular changes, commenters should discuss how such changes or any resulting disclosure requirements could be implemented in the auction process, including the short-form application stage. To the extent that the proposals recommend incorporating specific percentages, thresholds, or procedures into the Commission's DE eligibility rules, commenters should explain how these approaches, or any other alternatives, would improve the Commission's DE program and better serve its statutory goals. Additionally, how should the Commission factor in the rising cost of acquiring spectrum licenses into any rule amendments that it consider?

12. On February 26, 2015, United States Senator Claire McCaskill sent a letter to Chairman Wheeler requesting that the Commission eliminate the “preferential” treatment for Alaska Native Corporations (ANCs) that do not meet the standard definition of a small business under the Commission's attribution rules. Under 47 CFR 1.2110(c)(5)(xi), small businesses affiliated with Indian tribes or ANCs are not required to include revenues of those Indian tribes or ANCs, other than gaming revenues, into their gross revenues for purposes of determining eligibility as a small business. In adopting this exemption, the Commission sought to ensure that its rules remained consistent with other Federal laws, policies, and regulations, and most notably the affiliation rules of the Small Business Administration. The Commission seeks comment on whether ANC revenues should be treated the same way as attributable revenues for purposes of DE eligibility. Additionally, the Commission seeks comment on whether its rules concerning Indian tribes or ANCs remain consistent with other Federal policies and practices, and whether and how to amend them. The Commission also seeks comment on whether its rules pertaining to ANCs increase the risk of unjust enrichment to some entities.

13. In the Part 1 NPRM, the Commission also sought comment on what safeguards it should consider to ensure that bidding credits are extended only to qualifying small businesses, noting that “[unjust enrichment] provisions will be as important as ever and that strong enforcement of [the Commission's] rules is critical.” The Commission sought comment on whether any changes were needed to strengthen the unjust enrichment rules and how best it can continue to scrutinize applications and proposed transactions to ensure that only eligible entities receive benefits, while not undermining the statutory directive to ensure that DEs are given the opportunity to participate in the provision of spectrum-based services.

14. Commenters are divided on whether the existing rules provide a sufficient safeguard to protect against unjust enrichment, while ensuring that DEs have an opportunity to participate in the provision of spectrum-based services. Several parties urge the Commission to retain the existing rules, noting that a longer unjust enrichment period would “hamper or eliminate the ability of DEs to raise and retain capital or operate their businesses with flexibility comparable to businesses in the rest of the industry.”

15. Other commenters urge the Commission to adopt stronger rules to provide a more meaningful deterrent to speculation and abuse. T-Mobile, for example, advocates that the unjust enrichment rules should be adjusted to: “(1) encompass the entire license term; and (2) require licensees that profit from the sale of a license obtained at a discount to repay that windfall profit [the sales price of the licenses above and beyond the auction bid price], plus interest.” T-Mobile further notes that, “in cases where spectrum is not available for use in the near term due to Federal Government or commercial incumbents, the Commission's existing holding periods . . . do not correspond with any rational benchmark for licensees to engage in a legitimate business.” To ensure that spectrum resources are made available to the public in a timely manner, T-Mobile advocates that the Commission should require DEs to show some evidence of build-out activity within one year of acquiring the license or upon clearing spectrum incumbents. In addition, Taxpayer Advocates urges the Commission to require a DE to pay back all or part of its bidding credit if it chooses to “lease or sell a significant portion of spectrum within the first five years of ownership.” Other commenters contend that more stringent requirements like these proposals will further impede small businesses' ability to acquire access to capital.

16. The Commission seeks comment on these alternative viewpoints. Specifically, the Commission seeks additional comment on whether to extend the unjust enrichment period for a specified number of years (e.g., 10 years), the entire license term or to link it to an interim construction milestone. Are there other alternatives the Commission should consider? For example, should the Commission revisit the percentage amounts associated with its unjust enrichment repayment schedule? Alternatively, should the Commission enhance its unjust enrichment rules as T-Mobile suggests to address concerns that the current unjust enrichment repayment rules are viewed as a “mere cost of doing business” by requiring repayment of any profit or some multiple of the bidding credit received? Commenters are also invited to address whether the DE benefits associated with any and all of a DE's licenses should be forfeited if it loses DE eligibility as to any one license. Finally, the Commission seeks comment on whether it should consider the proposal in the record to impose additional build-out and reporting obligations on DEs by requiring them to demonstrate “tangible steps toward deployment” within one year of acquiring license(s) or clearing incumbent spectrum users. Is one year an appropriate timeframe or should the Commission require demonstrations at additional benchmarks? Are there any other options the Commission should consider to prevent spectrum warehousing and promote expeditious build-out, e.g., require repayment of some percentage of a bidding credit if a DE fails to meet a benchmark? The Commission asks commenters to address any trade-offs related to these proposals, including the extent to which any implemented rule amendments would restrict a DE's ability to access capital, deter participation of ineligible entities in the DE program, and prevent unjust enrichment.

17. In the Part 1 NPRM, the Commission proposed to increase the gross revenues thresholds for defining the three tiers of small businesses, in order to reflect the changing nature of the wireless industry, including the overall increase in the size of wireless networks and the increasing capital costs to deploy them. Based upon the percentage increase in the Gross Domestic Product (GDP) price index from when the small business definitions were first adopted, the Commission proposed to adjust the three-year gross revenues thresholds from $3 million to $4 million for businesses potentially eligible for a 35 percent bidding credit; from $15 million to $20 million for business potentially eligible for a 25 percent bidding credit; and from $40 million to $55 million for businesses potentially eligible for a 15 percent bidding credit. The Commission also sought comment regarding the following: increasing the percentage amounts of bidding credits available to small businesses in 47 CFR 1.2110(f); adding additional small business definitions and associated tiers of bidding credit amounts; and offering bidding preferences based on criteria other than business size.

18. Many commenters support increasing the gross revenues thresholds by the proposed increments, citing the lack of DE participation in recent auctions, changes in capital markets, and the long period of time since the current thresholds were set. Some commenters further advocate that the Commission increase the revenue thresholds even more than proposed in the Part 1 NPRM. Several commenters support the continued use of gross revenues as the basis for analyzing business size, referring to the administrative workability of this metric. ARC proposes indexing the gross revenue tiers to the costs of auctioned spectrum on a MHz per pop basis. With respect to the credit percentages themselves, many commenters support increasing the credit percentages generally or across the board, and several support specific increases for the lowest threshold tier (the largest credit). On the other hand, CAGW opposes increasing the bidding credit percentages, arguing that such an increase “could lead to even more questionable affiliations between large and small companies.” Others suggest that bidding credit increases and expanding the eligibility for the DE program should not be implemented until the rules are revised and there is surety that ineligible entities will not benefit from bidding credits. How does this suggestion align with the Commission's proposals to address all issues at the same time in this proceeding?

19. The Commission invites comment on these views. Commenters should address implementation issues associated with any alternate approaches, and provide concrete data and analysis to demonstrate whether and how such approaches will better meet the Commission's statutory goals.

20. A number of commenters urge the Commission to consider bidding credits based on criteria other than business size. Several parties, for example, encourage the Commission to implement a bidding credit for rural telephone companies, ranging from 25 to 35 percent, to be awarded in addition to any small business bidding credit for which an applicant may qualify. Another commenter urged the Commission to re-examine its rules concerning the tribal land bidding credit. Other parties request that the Commission adopt bidding credits or other preference for parties that commit to serve rural, unserved and underserved areas. In addition at least one party advocates that the Commission's rules should remain focused on small businesses.

21. The Commission seeks specific, data-driven comment regarding these alternative suggestions, including associated implementation issues. Commenters are also requested to discuss how such proposals would advance the Commission's statutory objectives and why they would be preferable to other proposals.

22. The Commission specifically invites comment on the threshold percentages proposed with regard to the adoption of a bidding credit reserved for rural telephone companies, as well as the suggestion that such a bidding credit be cumulative with any small business bidding credit for which a rural telephone company may also qualify, possibly exceeding 50 percent. To what extent would a rural telephone company bidding credit better enable these entities to compete successfully for licenses at auction? Are the higher costs of service and lower population densities already reflected in the winning bid price for rural markets? In addition to the data submitted by Blooston Rural, commenters are invited to provide additional analyses to demonstrate the need for a rural bidding credit. Does the possibility of cumulating small business and rural telephone company bidding credits increase the risk of unjust enrichment or cause concern regarding other statutory provisions? Commenters are requested to address the extent to which a rural bidding credit may be duplicative of other Commission and Federal government programs designed to facilitate network expansion into rural, unserved, and underserved communities. Is there any way to properly monitor any targeted program or other programs run by the Commission or other agencies to prevent potential abuse? Should the Commission consider any additional obligations or responsibilities for entities that benefit from both a small business and rural bidding credit?

23. In the Part 1 NPRM, the Commission sought comment on suggestions that would enable the DE program to remain a viable mechanism for small businesses to gain flexibility to access capital, compete in auctions, and participate in new and innovative ways to provision services in a mature wireless industry. Several commenters provided suggestions in response to the Commission's inquiry stating that a review of alternatives is necessary to ascertain whether the current DE program is helpful or harmful to its intended beneficiaries. Many parties advocate for alternatives they contend would facilitate small business access to benefits in both the auction and secondary market contexts. For instance, AT&T suggests that providing “incentives for secondary market transactions or virtual networks,” may offer a more direct path for more valuable small businesses in the telecommunications industry and may be more effective than facilitating participation in auctions due to the cost of licenses and capital needed to build networks. Other incentives may include Blooston Rural's proposal which advocates for a change that would allow a winning bidder to deduct from the auction purchase price the pro rata portion of its winning bid payment of any area that is partitioned to a rural telephone company or cooperative. ARC would expand Blooston Rural's proposal to DEs and argues that this change would “benefit DEs by providing incentives for partitioning and promoting secondary market transactions.” Additionally, would strengthening the Commission's build-out requirements and improving processes to reclaim licenses provide opportunities for small businesses to gain access to spectrum and increase diversity of license holders? Interested parties should provide specific instances where they think improvements could be made and options the Commission could pursue.

24. The Commission seeks comment on these proposals. In particular, commenters should address whether and how Blooston Rural's proposal could be implemented in light of the Commission's rules prohibiting certain communications and payment timeframes. Are there alternative frameworks that the Commission should consider to promote a diverse telecommunications ecosystem, including incentives for secondary market transactions or virtual networks that could provide a more direct path into the industry for all entities, including DEs? Pursuant to the Commission's statutory objectives, what role(s) can and should small businesses play in the “provision of spectrum-based services” in today's telecommunications industry?

25. The Part 1 NPRM proposed to tailor the former defaulter rule by balancing concerns that the current application of the rule is overbroad against the Commission's continued need to ensure that auction bidders are financially reliable. Specifically, consistent with the terms of a general waiver it granted for Auction 97, the Commission proposed to exclude any cured default on any Commission license or delinquency on any non-tax debt owed to any Federal agency for which any of the following criteria are met: (1) The notice of the final payment deadline or delinquency was received more than seven years before the relevant short-form application deadline; (2) the default or delinquency amounted to less than $100,000; (3) the default or delinquency was paid within two quarters (i.e., 6 months) after receiving the notice of the final payment deadline or delinquency; or (4) the default or delinquency was the subject of a legal or arbitration proceeding and was cured upon resolution of the proceeding.

26. Nearly all of the commenters support the Commission's proposal, some with modest additions, noting that the proposed former defaulter rule strikes the right balance between ensuring that winning bidders are capable of meeting their financial obligations and limiting costly and overbroad application of the rule. AT&T suggests that the Commission should also “include an exemption based on an applicant's credit-rating,” because “applicants with an investment grade credit rating pose no meaningful risk of defaulting on a Commission obligation and thus should not be required to submit an additional 50 percent upfront payment penalty.” NTCH, however, suggests that the Commission eliminate the former defaulter rule altogether because it is ineffective, unneeded, and counterproductive. The Commission seeks comment on these alternative proposals. To the extent commenters support the proposal to eliminate the former defaulter rule altogether, the Commission seeks specific comment on how it can adequately ensure that bidders are capable of meeting their financial commitments.

27. The Part 1 NPRM proposed to codify the Commission's longstanding competitive bidding procedure that prohibits the same individual or entity from filing more than one short-form application, and to establish a new rule to prohibit entities that are exclusively controlled by a single individual or set of individuals from qualifying to bid on licenses in the same or overlapping geographic areas in a specific auction based on more than one short-form application. Commenters addressing this issue largely support the Commission's proposals, although some encourage the Commission to take a step further and consider whether to apply the proposals to entities with common, non-controlling interests. T-Mobile notes, for example, that “it is critical that the Commission also address the potential for coordinated bidding behavior by bidders that are linked by common attributable interests,” noting that otherwise these entities would “have unfair advantages in an auction and [could] manipulate bidding to the detriment of other participants and the public.” For example, Spectrum Financial implies that allowing an entity with ownership in more than one bidder which exceeds a certain percentage (e.g., 50% or more) to participate in an auction promotes collusion. To address this concern, one commenter recommends that the Commission “adopt a requirement in addition to its existing [47 CFR 1.2105's] rules [prohibiting certain communications] that individuals or entities listed as disclosable interest [  ] holders on more than one short-form application certify that they are not, and will not be, privy to, or involved in, the bidding strategy of more than one auction participant.” AT&T proposes that “each applicant should certify that it has not entered into any agreements with [any] other applicant regarding their bids or bidding strategy, and that they are not privy to any other applicant's bids or bidding strategy” in lieu of the current disclosure requirements under the Commission's rules. Commenters also suggest that applicants be limited in holding ownership interests in multiple auction applicants. If the Commission were to set an ownership limit, what is the appropriate limit? Should entities be restricted from having an interest (direct or indirect) in more than one applicant for a license in a geographic license area? Alternatively, would establishing a limit on financial investments that an entity may make in other auction participants address commenters' concerns? Should such entities be restricted from directing or participating directly in the bidding of more than one applicant, regardless of whether there is common control? The Commission seeks comment on these concerns and suggestions and any alternatives. In particular, commenters are invited to address what attribution standards the Commission should use in the context of any such rule. Finally, the Commission observes that the adoption of some of the alternatives by commenters may directly or indirectly conflict with other Part 1 competitive bidding rules. For instance, one commenter proposed an additional certification on certain prohibited communications for disclosable interest holders, which may conflict with an exception in the Commission's current rules on prohibiting certain communications. The Commission seeks comment on these potential conflicts and how to harmonize the proposals with its competitive bidding rules, while fulfilling its statutory goals.

28. In light of the evolution of the mobile wireless marketplace since the Commission last adopted joint bidding rules in 1994, the Part 1 NPRM proposed to prohibit joint bidding and other arrangements among nationwide providers, including agreements to participate in an auction through a newly formed joint entity. For purposes of the Commission's joint bidding rules, it proposed to distinguish nationwide providers from non-nationwide providers because of the increased likelihood that joint bidding arrangements between nationwide providers would lead to competitive harm or otherwise harm the public interest. In contrast, the Commission observed a reduced likelihood for competitive harm if non-nationwide providers entered into joint bidding agreements with other non-nationwide providers. Accordingly, the Commission tentatively concluded that it should continue to permit joint bidding arrangements among non-nationwide providers and asked commenters proposing any changes to the joint bidding rules for arrangements among non-nationwide providers to discuss why such changes are necessary. Additionally, the Commission sought comment on the policies and procedures that should apply to bidding arrangements between nationwide and non-nationwide providers. Finally, the Commission also sought comment on its analysis of the harms and benefits of joint bidding arrangements generally, and on whether its proposals “provide an effective framework for addressing the[se] relative harms and benefits.”

29. Commenters are divided on these proposals, with some offering additional recommendations. Sprint opposes prohibiting bidding arrangements between nationwide providers because such a rule would not account for differences in the relative market power of the four current nationwide providers. T-Mobile opposes instituting bright-line rules at all, advocating for adherence to the Commission's existing practice of addressing all bidding agreements on a case-by-case basis. RWA, ARC, and CCA support continuing to allow joint bidding by non-nationwide providers, with ARC arguing that such arrangements “can enable smaller companies to pool their resources and compete effectively for licenses that they would be unable to acquire on their own.” Likewise, RWA contends that “joint bidding arrangements can provide some small and rural wireless carriers with opportunities that might otherwise be unavailable due to limited financial resources.”

30. AT&T, Taxpayer Advocates, and T-Mobile contend that the Commission should place greater limitations on joint bidding than proposed in the Part 1 NPRM based upon perceived negative effects of non-nationwide providers using joint bidding arrangements in Auction 97. These commenters argue that certain bidders exploited the Commission's rules to the detriment of other bidders and the public interest. Accordingly, some of these commenters submit alternative proposals, which they believe are less likely to lead to competitive harm or otherwise harm the public interest. The Commission seeks comment on these alternative proposals: (1) Prohibit all joint bidding agreements between DEs and non-DEs; (2) Prohibit all joint bidding arrangements and require instead that entities seeking to coordinate their bidding activities form a bidding consortium or joint venture and divide the licenses acquired after the auction is over; (3) Prohibit all joint bidding arrangements between commonly controlled or affiliated entities; (4) Generally prohibit parties that are privy to others' bidding information during the auction from placing multiple coordinated bids on a common license; (5) Prohibit an individual from serving as an authorized bidder for more than one auction participant; (6) Permit bidding agreements between all providers in rural Partial Economic Areas where the providers involved have less than 45 MHz*pops of below-1-GHz spectrum; (7) Modify the definition of “joint bidding and other arrangements” to include only arrangements that are directly related to the coordination of bidding strategies or mechanics; (8) Require a more comprehensive certification concerning bidding agreements and bidding strategies in addition to, or in lieu of, current disclosure requirements, such as a requirement that all disclosable interest holders on more than one application certify that they do not have knowledge of the bidding strategy of more than one applicant; and (9) Implement a prior approval process for joint bidding arrangements before the short-form deadline, including how to implement the process in an efficient manner.

31. In addition, the Commission seeks to expand the record and request comment on the following proposals: (1) Prohibit parties to a joint bidding agreement from bidding separately on licenses in the same market; (2) Prohibit communications among joint bidders when bidding on licenses in any of the same markets; and (3) Prohibit any individual or entity from serving on more than one bidding committee.

32. The Commission requests comment on whether and how all of the proposals offered above would better protect against anti-competitive behavior—such as preserving bidding eligibility, and limiting bid exposure and distortion of demand—or other harms to the public interest. Commenters are also requested to address specifically how such proposals could be implemented to preserve auction integrity.

33. Requests for Ex Parte Meetings. This matter shall be treated as a “permit-but-disclose” proceeding in accordance with the ex parte rules, as set forth in paragraph 145 of the Part 1 NPRM. Persons making oral ex parte presentations are reminded that memoranda summarizing the presentations must contain summaries of the substance of the presentations and not merely a listing of the subjects discussed. More than a one- or two-sentence description of the views and arguments presented generally is required. Other requirements pertaining to oral and written presentations are set forth in 47 CFR 1.1206(b).

34. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Part 1 NPRM included an Initial Regulatory Flexibility Analysis (IRFA) exploring the potential impact on small entities of the Commission's proposals. 47 U.S.C. Section 309(j)(4)(D) of the Communications Act requires that when the Commission prescribes regulations in designing systems of competitive bidding, it shall “ensure that small businesses, rural telephone companies, and businesses owned by member of minority groups and women are given the opportunity to participate in the provision of spectrum-based services.” Consistent with this statutory objective, the Commission sought written public comment on the proposals in the Part 1 NPRM, including comment on the IRFA. Though numerous responses were directed at the small business aspects of the Part 1 NPRM, the Commission received no comments in direct response to the IRFA. This supplemental IRFA addresses the possible incremental significant economic impact on small entities of the alternative proposals in the Part 1 Request for Comment. Interested parties are invited to submit written public comments on this supplemental analysis. Any such comments must be filed in accordance with the same filing deadlines reflected in the “Dates” section of this publication and have a separate and distinct heading designating them as responses to this supplemental analysis. The Commission will send a copy of the Part 1 Request for Comment, including this supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration. In addition, the Part 1 Request for Comment and supplemental IRFA (or summaries thereof) will be published in the Federal Register.

35. Need for, and Objectives of, the Proposed Competitive Bidding Procedures. The Part 1 Request for Comment seeks additional comment on a number of specific changes to the Commission's Part 1 competitive bidding rules suggested by commenters in response to the questions and proposals set forth in the Part 1 NPRM. Specifically, it seeks comment on alternative proposals for evaluating DE eligibility for bidding credits and for updating other Part 1 competitive bidding rules governing auction participation by former defaulters, commonly controlled entities, and entities with joint bidding arrangements. The Part 1 Request for Comment continues to advance the Commission's statutory directive to ensure that small businesses, rural telephone companies, and businesses owned by members of minority groups and women (collectively, DEs) are given the opportunity to participate in the provision of spectrum-based services, and fulfill the commitment made in the BIA Report & Order. Soliciting further input on these alternative proposals will provide a more complete record to evaluate and act upon the concerns raised in the Part 1 NPRM.

36. The Part 1 Request for Comment seeks comment on the following alternative proposals that would modify the Commission's rules concerning DE eligibility: (1) Modify the attributable material relationship (AMR) rule to distinguish between pure spectrum leasing arrangements and network-based wholesale arrangements and/or to allow DEs to lease spectrum to rural carriers or other DEs without attribution; (2) Retain or eliminate the AMR rule and continue to require DEs to provide facilities-based service; (3) Eliminate the requirement that DEs provide facilities-based service; (4) Strengthen the AMR rule by prohibiting DEs from leasing more than 25 percent of their spectrum in the aggregate, across one or more licenses or to any one wireless operator; (5) Modify the applicable attribution, controlling interest, or affiliation rule to alter the types of equity arrangements available to a DE applicant, by: (i) attributing to a DE the revenues and spectrum of any spectrum holding entity that holds an interest, direct or indirect, equity or non-equity of more than 10 percent; (ii) restricting larger nationwide and regional carriers, entities with a certain number of end-user customers, and/or other large companies from providing a material portion of the total capitalization of DE applicants or otherwise exercising control over such applicants as part of the definition of “material relationship;” and (iii) adopting a rebuttable presumption that equity interests of 50 percent or more represent de facto control of the DE company; (6) Adopt a 25 percent minimum equity requirement for DEs and ensure that any loans to achieve minimum equity thresholds should be negotiated at arms-length; (7) Limit the total dollar amount of DE benefits that any DE (or group of affiliated DEs) may claim during any given auction, based on some multiple of its annual revenues, or a set cap of $32.5 million; alternatively, base this limit on some multiple times the applicable small business definition in the Part 1 schedule, or another metric like population to tie bidding credits more closely to a typical small business plan; (8) Narrow the scope of affiliation rules to exclude individuals and entities whose revenues are currently attributable to a DE if they are unlikely to exercise control over the applicant entity, such as directors and certain family members, including in-laws, siblings, step-siblings, and half-siblings, unless the applicant has more than incidental business relationships with a particular relation; (9) Clarify the affiliation rules to prevent rural telephone companies from losing DE status by holding a fractional interest in a cellular partnership where the rural telephone company has no control over the partnership's day-to-day operations and/or strategy; (10) Treat the revenues of Alaska Native Corporations the same way as attributable revenues for purposes of DE eligibility under the Commission's rules; (11) Retain the existing unjust enrichment rules or strengthen the rules by: (i) changing the unjust enrichment period to encompass the entire license term, for a specified number of years, or linking it to an interim construction milestone; and (ii) requiring licensees that profit from the sale of a license obtained at a discount to repay that windfall profit, plus interest, in addition to the bidding credit discount; (12) Require DEs to show some evidence of build-out activity within one year of acquiring the license or upon clearing spectrum incumbents and require repayment of some percentage of its bidding credit discount if it fails to meet the build-out milestone; (13) Adjust the percentage amounts associated with the Commission's unjust enrichment repayment schedule; (14) Require DEs to pay back all or part of its bidding credit if it chooses to lease or sell a significant portion of spectrum within the first five years of ownership; (15) Adjust the percentage amounts associated with the Commission's unjust enrichment repayment schedule; (16) Decline to increase the Part 1 NPRM's proposed gross revenue thresholds defining the three tiers of small business bidding credits and to increase the scale of the DE program prior to reform; (17) Modify the definition of small business for acquiring bidding credits by: (i) Increasing the gross revenue thresholds above the original proposed amounts in the Part 1 NPRM; (ii) indexing the gross revenue tiers to the costs of auctioned spectrum on a MHz per pop basis (rather than using the Gross Domestic Product price index); and (iii) increasing the bidding credit percentages across all three tiers or solely for the lowest tier (the largest credit); (18) Consider the adoption or review of other bidding preferences/types of credits by: (i) Adopting a bidding credit for rural telephone companies to be awarded in addition to any small business bidding credit for which an applicant may qualify; (ii) adopting a bidding credit for parties that commit to serve unserved and underserved areas; (iii) reviewing the tribal land biding credit; (iv) establishing a mechanism for a winning bidder to deduct from its auction purchase price the pro rata portion of its winning bid payment of any area partitioned to a rural telephone company or cooperative or any DE; and (v) adopting a “localism” bidding credit for any DE applicant with an 10% or greater interest holder that has been a resident of an unserved, underserved, or persistent poverty area for more than a year; and (19) Provide incentives for secondary market transactions or virtual networks.

37. The Part 1 Request for Comment also seeks comment on alternatives proposed for other Part 1 competitive bidding rules relating to former defaulters, commonly controlled entities, and entities with joint bidding arrangements. Specifically, these alternative proposals would: (1) Modify the former defaulter rule to include an exemption based on an applicant's investment grade rating or eliminate the former defaulter rule altogether; (2) Apply also, common, non-controlling entities to the Part 1 NPRM's proposed rule to prohibit commonly controlled entities from qualifying to bid on licenses in the same or overlapping geographic areas based on more than one short-form application; (3) Limit the ownership interests or financial investments an auction applicant may have in other auction applicants; (4) Adopt a requirement in addition to the Commission's existing 47 CFR 1.2105's rules that individuals or entities listed as disclosable interest holders on more than one short-form application certify that they are not, and will not be, privy to, or involved in, the bidding strategy of more than one auction participant; (5) Modify the Commission's rules governing the treatment of joint bidding arrangements by: (i) Prohibiting all joint bidding agreements between DEs and non-DEs and between commonly controlled or affiliated entities; (ii) prohibiting all joint bidding arrangements and requiring instead that entities seeking to coordinate their bidding activities form a bidding consortium or a joint venture and divide the licenses acquired after the auction is over; (iii) permitting bidding agreements between all providers in rural Partial Economic Areas where the providers involved have less than 45 MHz*pops of below-1-GHz spectrum; (iv) modifying the definition of “joint bidding and other arrangements” to include only arrangements that are directly related to the coordination of bidding strategies or mechanics; and (v) prohibiting parties to a joint bidding agreement from bidding separately on licenses in the same market and from communicating about bidding information when bidding on licenses in any of the same markets; (6) Prohibit parties that are privy to others' bidding information during the auction from placing multiple coordinated bids on a common license; (7) Prohibit an individual from serving as an authorized bidder for more than one auction participant; (8) Prohibit any individual or entity from serving on more than one bidding committee; and (9) Implement a prior approval process for joint bidding arrangements before the short-form deadline, including how to implement the process in an efficient manner.

38. Legal Basis for Proposed Rules. The Part 1 Request for Comment is adopted pursuant to sections 1, 4(i), 303(r), 309(j), 316 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 303(r), 309(j), 316.

39. Description and Estimate of the Number of Small Entities to which the Proposed Rules Will Apply. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by rules proposed in that rulemaking proceeding, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA. If adopted, the alternative proposals in the Part 1 Request for Comment may, over time, affect small entities that are not easily categorized at present. However, the alternative proposals described in the Part 1 Request for Comment will affect the same individuals and entities described in paragraphs 7 through 17 of the IRFA associated with the underlying Part 1 NPRM.

40. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities. The Part 1 Request for Comment seeks additional comment on a number of rule changes proposed by commenters that will affect reporting, recordkeeping, and other compliance requirements for small entities. However, the majority of these alternatives are outgrowths of the Part 1 NPRM's proposals and policies in which a description was previously provided under paragraphs 19 through 33 of the IRFA. To the extent the alternative proposals discussed in the Part 1 Request for Comment differ from the Part 1 NPRM, the Commission discusses these changes.

41. Eligibility for Bidding Credits. The proposals advanced by commenters in the proceeding would distinguish for purposes of establishing DE qualifications between pure spectrum leasing and network-based wholesale arrangements. Other new proposals would modify the attribution rules to restrict the types of equity arrangements available to a DE applicant, limit the amount of DE benefits that a DE may claim or the overall amount that a small business can bid, narrow the entities whose revenues are attributable to a DE, prevent certain rural telephone companies from losing DE status, treat ANC revenues the same way as attributable revenues, lengthen the unjust enrichment period, require licensees that profit from the sale of a DE license to repay such profit with interest, require forfeiture of DE benefits for all licenses if a DE forfeits DE eligibility for one license, and require DEs to show some evidence of build-out under the DE annual reporting requirement within one year of acquiring the license or upon clearing spectrum incumbents.

42. Bidding Credits. The Part 1 Request for Comment also seeks comments on alternative proposals that would include additional bidding credits for rural telephone companies, for companies committed to providing service to unserved or underserved areas, and for any DE applicant with a 10 percent or greater interest holder that has been a resident of an unserved, underserved, or persistent poverty area for more than a year. Another suggestion would establish an auction mechanism which would allow a winning bidder to deduct from its auction purchase price the pro rata portion of its winning bid payment of any area partitioned to a rural telephone company or cooperative, or any DE.

43. Other Part 1 Rules. In the Part 1 Request for Comment the Commission seeks comment on alternative suggestions to modify other Part 1 competitive bidding rules concerning former defaulters, commonly controlled entities, and entities with joint bidding agreements. With respect to the former defaulter rule, one commenter suggested that the Commission adopt an exemption based on an applicant's investment grade rating, while another commenter suggested eliminating the former defaulter rule altogether. In regards to the Part 1 NPRM's proposal concerning commonly controlled entities, several commenters urged the Commission to apply its proposal to entities with common, non-controlling interests as well. One commenter proposed that the Commission adopt a certification to prohibit certain communications on the Commission's short-form application, while another commenter submitted a similar proposal but would use the certification in lieu of the Commission's disclosure requirements.

44. The Commission received several alternative suggestions concerning joint bidding agreements and other arrangements. Several commenters opposed the Commission's proposal to prohibit bidding arrangements between nationwide providers; instead, these commenters advocated for adherence to the Commission's existing practice of analyzing bidding arrangements on a case-by-case basis. Other commenters urged the Commission to adopt proposals that would: (1) Prohibit joint bidding agreements between DEs and non-DEs and between commonly controlled or affiliated entities; (2) prohibit all joint bidding arrangements and require instead the formation of a bidding consortium or a joint venture which would divide the licenses acquired after the auction is over; (3) permitting bidding agreements between all providers in rural PEAs where the providers involved have less than 45 MHz*pops of below-1-GHz spectrum; (4) narrow the definition of “joint bidding agreement and other arrangements” to arrangements directly related to coordination of bidding strategies or mechanics; (5) prohibit parties to a joint bidding agreement from bidding separately on licenses in the same market and from communicating about bidding information when bidding on licenses in any of the same markets; (6) prohibit parties that are privy to others' bidding information during the auction from placing multiple coordinated bids on a common license; (7) prohibit an individual from serving as an authorized bidder for more than one auction participant; (8) prohibit any individual or entity from serving on more than one bidding committee; (9) implement a prior approval process for joint bidding arrangements before the short-form deadline, including how to implement the process in an efficient manner; and (10) limit an auction applicant's ownership interest or financial investment in other auction applicants.

45. Steps Taken To Minimize Significant Economic Impact on Small Entities, and Significant Alternatives Considered. The RFA requires an agency to describe any significant alternatives beneficial to small entities considered in reaching a proposed approach, which may include the following four alternatives (among others): (1) Establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) clarification, consolidation, or simplification for small entities of compliance and reporting requirements; (3) use of performance, rather than design, standards; and (4) an exemption for small entities.

46. Most of the alternative proposals in Part 1 Request for Comment correlate to the Part 1 NPRM's proposals and policies for modifying the Commission's Part 1 competitive bidding rules. As such, a description of the steps taken to minimize the significant economic impact and the alternatives considered for these proposals can be found under paragraphs 34 through 38 of the Part 1 NPRM's IRFA. To the extent that some of the alternative proposals may be distinguishable from the Part 1 NPRM, the Commission seeks additional comment on these suggestions to fully evaluate the alternatives raised in the record to date. In doing so, the Commission remains mindful of its statutory obligations which require the Commission to “ensure that small businesses, rural telephone companies, and businesses owned by members of minority groups and women are given the opportunity to participate in the provision of spectrum-based services.” The statute also directs the Commission to promote “economic opportunity and competition . . . by avoiding excessive concentration of licenses and by disseminating licenses among a wide variety of applicants, including small businesses.”

47. In Part 1 Request for Comment the Commission continues to explore alternative proposals for establishing DE eligibility and modifying other Part 1 competitive bidding rules. With respect to the DE rules concerning attribution and unjust enrichment, the Commission seeks to provide small businesses with the flexibility to engage in business ventures that include increased forms of leasing and other spectrum use agreements. In pursuing these goals, however, the Commission also remains mindful of its responsibility to ensure that DE benefits are provided only to qualifying entities. Accordingly, the Commission also aims to employ adequate safeguards against unjust enrichment.

48. As part of this proceeding, the Commissions took a fresh look at its bidding credit program since its inception in 1997 to ensure that it continues to be a viable mechanism for small businesses in light of the current wireless marketplace. The Commission's bidding credit program is the primary way it facilitates participation by small businesses at auction. As a general matter, most of the alternative proposals would provide small businesses with an economic benefit by providing a percentage discount on auction winning bids and therefore make it easier for small businesses to compete in auction and acquire spectrum licenses.