Federal Register Vol. 83, No.107,

On September 16, 2010, the Board amended its general lending rule to enable FCUs to offer PALs loans as an alternative to predatory payday loans.1 The Board intended to provide a regulatory framework so FCUs could be a viable alternative to high-cost payday lenders. The final rule permitted FCUs to charge a higher rate of interest for this type of loan if FCUs met certain conditions.

The term “payday loan” generally refers to a short-term loan with a relatively small principal amount that is intended to cover a borrower's expenses until his or her next payday, when the loan is to be repaid in full.2 Historically, these loans often have been made by lenders who charge high fees and sometimes engage in predatory lending practices. While some payday loan borrowers use these loans sparingly, many other borrowers find themselves in cycles where their loans “roll over” repeatedly, incurring even higher fees. Often, these borrowers are unable to break free from an unhealthy dependence on payday loans. While data on payday lending is incomplete, the Consumer Financial Protection Bureau (CFPB) estimates that in 2015 the revenue for the traditional payday lending industry was $3.6 billion and loan volume was approximately $23.6 billion in new loans per year.3

PALs I's current regulatory framework permits an FCU to charge an interest rate for PALs loans that is 1000 basis points above the general interest rate set by the Board for non-PALs loans, provided the FCU is making a closed-end loan 4 with the following conditions:

(1) The principal of the loan is not less than $200 or more than $1000;

(2) The loan has a minimum maturity term of one month and a maximum maturity term of six months;

(3) The FCU does not make more than three PALs loans in any rolling six-month period to any one borrower and makes no more than one PALs loan at a time to a borrower;

(4) The FCU must not roll over any PALs loan. The prohibition against roll-overs, however, does not apply to an extension of the loan term within the maximum loan term permitted by the rule, provided the FCU does not charge any additional fees or extend any new credit.

(5) The FCU fully amortizes the loan;

(6) The FCU sets a minimum length of membership requirement of at least one month;

(7) The FCU charges an application fee to all members applying for a new loan that reflects the actual costs associated with processing the application, but in no case may the application fee exceed $20; and

(8) The FCU includes, in its written lending policies, a limit on the aggregate dollar amount of loans made under § 701.21(c)(7)(iii) of a maximum of 20% of net worth and implements appropriate underwriting guidelines to minimize risk; for example, requiring a borrower to verify employment by producing at least two recent pay stubs.5

PALs I also includes a best practices section, which discusses topics to help ensure the product remains viable for the FCU and responsible for the borrower.6 The best practices section provides an FCU with guidance on implementing a PALs program, including: Program features, underwriting, and risk avoidance.

In the 2010 PALs I rulemaking, the Board indicated that, after one year, it would review the PALs loan data collected on the 5300 call reports and reevaluate the requirements of the rule.7 After conducting that review, the Board, at its September 2012 meeting, issued an ANPR seeking comments on specific aspects of PALs I, including the permissible application fee, interest rate, loan amounts, loan maturities, membership requirement, and the cap on the amount of loans made by an FCU. The Board also asked commenters to describe any payday alternative loan programs they were offering outside of PALs I.

In response, the Board received 27 comment letters from trade organizations, state credit union leagues, private citizens, consumer advocacy groups, a federal agency, lending networks, and FCUs. Generally, almost all of the commenters suggested at least one change to PALs I. There was, however, no general consensus among the commenters as to which aspects of the rule the Board should amend. The Board chose, at that time, not to undertake any changes to PALs I.

On the December 31, 2017, 5300 call report, 518 FCUs reported offering PALs loans. They reported 190,723 outstanding loans with an aggregate balance of $132.4 million. These figures represent a significant increase from 2012 when the Board issued the ANPR discussed above. Based on the 2012 5300 call report, approximately 386 FCUs offered PALs loans, totaling 38,749 PALs loans with an aggregate outstanding balance of approximately $13.5 million.8

The Board has recently revisited PALs I and the trends in PALs loans data, as presented above. The data shows a significant increase in the total dollar amount of PALs loans outstanding, but only a modest increase in the number of FCUs offering these loans. The Board wants to ensure that all FCUs that are interested in offering PALs loans are able to do so. The terms of PALs II loans are more flexible and the product is potentially more profitable for FCUs, which should increase interest. The Board notes that PALs II would not replace PALs I. Rather, PALs II would be an additional option FCUs could choose in making PALs loans to their members. An FCU could choose to make PALs I loans, PALs II loans, or both.

As noted above, PALs II will incorporate many of the features of PALs I, but will provide additional flexibility for FCUs in the areas of loan amount, membership requirement, loan term, and number of loans permitted. The Board notes, however, that PALs I loans and PALs II loans are distinct products that must satisfy all of the regulatory conditions applicable to the particular type of loan in order to be classified as such. For example, a $300 loan with a six-month maturity made to a person who has been a member for two-weeks is a PALs II loan because it meets all of the requirements for a PALs II loan, but it is not a PALs I loan because it does not meet the membership requirement of PALs I. As discussed below, this distinction is critical as it has implications for compliance with the CFPB's regulations. Of course, a loan that does not satisfy all of the conditions of either PALs I or PALs II is neither a PALs I nor a PALs II loan.

The Board is proposing to incorporate the following features from PALs I into PALs II. These features achieve a balance between consumer protection and safety and soundness for FCUs.

1. Permissible interest rate. The permissible interest rate for a loan under PALs II will be 1000 basis points above the established general interest rate ceiling, as set by the Board.

2. Loan structure. A PALs II loan must be a closed-end loan.

3. Permissible fees. An FCU may charge an application fee, provided it charges the fee to all members applying for a new loan and the fee reflects the actual costs associated with processing the application, but in no case may the application fee exceed $20.

4. Rollovers. An FCU may not roll over any PALs II loan, but it may extend the loan term up to the maximum 12 months permitted by the rule, if the loan was made with a lesser loan term, provided the FCU does not charge any additional fees or extend any new credit.

5. Aggregate lending cap. An FCU making PALs II loans must include in its written lending policies a limit on the aggregate dollar amount of loans made under this program of a maximum of 20% of net worth and implement appropriate underwriting guidelines to minimize risk.

6. Amortization. An FCU must amortize all PALs II loans and may not include balloon payments.

For the reasons discussed in each of the subsections below, the Board is proposing PALs II with certain features different from PALs I. The Board believes the different features in PALs II will encourage additional FCUs to offer PALs II loans as an alternative to predatory payday loans. In addition, these different features will help FCUs meet the specific demands of certain payday loan borrowers that may not be met by PALs I and provide borrowers with a safer, less expensive alternative to traditional payday loans.

1. Loan Amount. The Board is proposing to permit PALs II loans in amounts up to $2,000, which is significantly higher than PALs I loans. Also, PALs II would eliminate the minimum loan amount that is part of the PALs I program. The Board believes a higher maximum and no minimum loan amount will allow FCUs to better meet the demands of payday loan borrowers. Further, a higher loan amount may allow some borrowers to consolidate high-priced, traditional payday loans into one less expensive, consumer friendly PALs II loan.

2. Loan Term. Corresponding to the increase in permissible loan amount, the Board is proposing a maximum loan term of 12 months. This differs from the six-month maximum loan term for PALs I, and is directly correlated to the requirement that FCUs amortize PALs loans and the proposed higher PALs II loan limit. PALs II loans would retain the PALs I minimum term of one month to ensure borrowers have sufficient time to repay their loans and are not subjected to the typical two-week repayment period imposed by most traditional payday lenders. The Board notes that FCUs would be free to choose an appropriate loan term, provided the loan fully amortizes, but encourages FCUs to select loan terms that are in the best financial interests of borrowers.

3. Membership Requirement. The Board is proposing to impose no minimum length of membership requirement for a PALs II loan. Conversely, under PALs I, an FCU must set a minimum length of membership requirement of at least one month before lending to a borrower. The Board included the membership requirement in PALs I as a safety measure for FCUs. As noted in the final PALs I rule, the Board believed a minimum membership requirement of one month would build a meaningful relationship between the borrower and the FCU and help reduce the chance of a borrower defaulting on a PALs I loan.9 While the Board still encourages FCUs to consider a minimum membership requirement, the Board wants to provide FCUs with maximum flexibility to reach as many potential borrowers as possible in a safe and sound manner. Accordingly, PALs II does not impose a minimum length of membership requirement. Allowing FCUs to make loans without a minimum length of membership requirement will permit FCUs to assess their own risk tolerances and make loans to payday loan borrowers who need access to funds immediately and would otherwise turn to traditional payday lenders to meet that need. The Board reminds FCUs, however, that all borrowers must be members of the credit union, regardless of a length of membership requirement.

4. Number of Loans. The Board proposes no requirement in PALs II limiting an FCU to making only three PALs loans to a member in a rolling six-month period. This limitation is applicable to PALs I loans and permits FCUs to make one loan at a time to a particular borrower and no more than three in any rolling six-month period to that borrower. The Board proposes to remove the rolling six-month requirement for PALs II to provide maximum flexibility to FCUs to help meet the demand of borrowers in a safe and sound manner. Under this proposal, FCUs would still only be permitted to make one loan at a time to any one borrower, but would be able to make additional loans to that borrower with no time restrictions provided there is only one loan outstanding at a time to that borrower. The Board believes this will better enable FCUs to meet the demands of those borrowers who take out very small loans, repay them rapidly, and need additional loans within a six-month period.

The Board is proposing to create a new subsection in § 701.21(c)(7) that will contain the regulatory text for PALs II. The Board notes that the best practices and guidance that is applicable to the current PALs rule will also apply to PALs II.

On November 17, 2017, the CFPB passed its Payday Loan Rule, which, among other things, establishes consumer protections for certain credit products and deems certain practices to be abusive and unfair.10 These abusive and unfair practices include: (1) Failing to reasonably determine that consumers have the ability to repay a loan according to its terms; and (2) attempting to withdraw payments from a consumer's account after two consecutive payments attempts have failed. The Payday Loan Rule also includes registration and record retention requirements.

The Payday Loan Rule provides a “safe harbor” for any loan that is made by an FCU in compliance with all of the requirements in 12 CFR 701.21(c)(7)(iii), thereby fully exempting those loans from compliance with the Payday Loan Rule.11 The Board strongly supported the safe harbor for PAL loans made by FCUs and applauds the CFPB for recognizing that PALs loans made in conformity with 12 CFR 701.21(c)(7)(iii) of the NCUA's regulations are a responsible, safe, and non-abusive alternative to most traditional payday loans. Accordingly, so that FCUs may continue to avail themselves of the safe harbor from the Payday Loan Rule, the Board will maintain the current PALs rule unchanged, as PALs I.

To provide additional flexibility to FCUs, however, the Board is proposing PALs II as an additional option to serve members' needs in the payday lending space. The Board recognizes that PALs II loans will not qualify for the safe harbor from the CFPB's Payday Loan Rule. However, in the Payday Loan Rule, the CFPB also provided a partial exemption for “alternative loans.” The CFPB defines “alternative loans” as those loans that meet all of the requirements of the NCUA's current PALs rule, except that lenders are not required to have a minimum membership requirement or a limit on the number of loans they can provide to any one borrower in a six-month period.

While PALs II loans, therefore, will not qualify for the safe harbor, these loans can qualify for the alternative loans exemption under particular conditions. Specifically, to qualify as an “alternative loan” a PALs II loan must meet all of the requirements of PALs I, except FCUs are not required to have a minimum membership requirement or a restriction on the number of loans provided to a borrower in a six-month period. The Board believes this proposed change will provide FCUs with additional flexibilities while retaining a partial exemption from the CFPB's Payday Loan Rule.

In addition, the Board is also proposing to authorize additional flexibility in PALs II by raising the maximum amount of a permissible loan to $2,000 and increasing the maximum maturity to 12 months. PALs II loans that utilize these additional flexibilities, however, will not qualify for either the safe harbor or the exemption for “alternative loans.” The Board believes these additional flexibilities will allow an FCU to make a business decision in crafting a PALs program that takes into account the needs of its members and its ability to comply with the CFPB's Payday Loan Rule.

While the terms of PALs II in this proposal would provide FCUs with additional flexibility to meet the demands of borrowers, the Board is considering issuing an additional alternative PALs rule in the future. Before proposing any additional alternatives, however, the Board requests comment on the need and demand for additional alternatives.

Specifically, the Board s requests comment on whether to include some or all of the features of PALs II in PALs I. This option would make PALs I more flexible, but also would eliminate FCUs' safe harbor from the CFPB's Payday Loan Rule.

Also, the Board is considering creating an additional kind of PALs rule, defined as PALs III, which would be even more flexible than PALs II. Before proposing PALs III, however, the Board requests comment on whether there is demand for such a product, as well as what features and loan structures could be included in PALs III. The Board notes, however, that along with the flexibility of additional features in PALs III, FCUs would be subject to all aspects of the CFPB's Payday Loan Rule.

The Board poses the specific questions below for comment, but invites stakeholders to provide input of any kind on any aspect of a potential PALs III rule.

1. Should the Board propose a third alternative PALs rule and why?

2. Should the Board set the permissible interest rate for PALs III loans above that permitted for other PALs loans? If so, why and what legal justification supports a higher interest rate?

3. Should the Board increase in PALs III the maximum amount an FCU can charge for an application fee above that permitted for other PALs loans?

4. Should the Board allow FCUs to make more than one kind of PALs loan at a time to a borrower?

5. Should the Board set in PALs III the limit on the aggregate dollar amount of loans made above that permitted for other PALs loans?

6. Should the Board eliminate for PALs III the requirement that FCUs implement appropriate underwriting guidelines?

7. Should the Board set for PALs III the maximum loan amount above that permitted for other PALs loans?

8. Should the maturities for PALs III loans be longer than those permitted for other PALs loans?

9. Should the Board permit PALs III to include an open-end loan product?

a. If the Board permits an open-end product,12 should the Board allow FCUs to charge participation fees, provided the fees are not considered a finance charge under Regulation Z? 13

b. If the Board permits participation fees on an open-end PALs product, should the Board set a maximum cap on that fee, and, if so, what should the maximum amount be?

10. Should the Board require FCUs to conduct an ability to repay determination in PALs III similar to that required by the CFPB's Payday Loan Rule?

11. Should the Board prohibit FCUs from charging overdraft fees for PALs loan payments drawn against a member's account?

The Regulatory Flexibility Act requires the NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small credit unions (those under $100 million in assets). This proposal would provide a limited number of FCUs making PALs loans with additional flexibility to make such loans. The rule will not have a significant economic impact on a substantial number of small credit unions, and, therefore, a regulatory flexibility analysis is not required.

In accordance with the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501, et seq.) (PRA), the NCUA may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. For purposes of the PRA, an information collection may take the form of a reporting, recordkeeping, or a third-party disclosure requirement, referred to as a paperwork burden. The information collection requirements of § 701.21 of NCUA's regulations are assigned OMB control number 3133-0092 and this proposed rule would not impose any new burden.

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, the NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order. The proposed rule would not have substantial direct effects on the states, on the connection between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. The NCUA has determined that this proposed rule does not constitute a policy that has federalism implications for purposes of the executive order.

The NCUA has determined that this proposed rule would not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998).

For the reasons discussed above, the National Credit Union Administration proposes to amend 12 CFR part 701 as set forth below:

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0493; Product Identifier 2017-NM-141-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM based on those comments.

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

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0181, dated September 18, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Airbus Defense and Space S.A. Model CN-235, CN-235-100, CN-235-200, CN-235-300, and C-295 airplanes The MCAI states:

You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0493.

Airbus Defence and Space has issued Alert Operators Transmission (AOT) AOT-CN235-32-0001, Revision 2, dated October 26, 2016; and AOT AOT-C295-32-0001, Revision 2, dated October 26, 2016. This service information describes procedures for inspections for cracking of the door mechanism actuator shaft assemblies of the NLG, and corrective actions. These documents are distinct since they apply to different airplane models.

Airbus Defence and Space has also issued Service Bulletin 235-32-0031C, dated September 22, 2016. This service information describes procedures for modification of the NLG door latching mechanism.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

We estimate that this proposed AD affects 14 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

We estimate the following costs to do any necessary replacements that would be required based on the results of the proposed inspections. We have no way of determining the number of aircraft that might need these replacements:

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

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

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2018-0497; Product Identifier 2017-NM-140-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this NPRM. We will consider all comments received by the closing date and may amend this NPRM based on those comments.

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

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2017-0210, dated October 24, 2017 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A300 B4-603, B4-620, and B4-622 airplanes; Model A300 F4-605R airplanes; Model A300 C4-605R Variant F airplanes; and Model A300 B4-600R series airplanes. The MCAI states:

Related investigative actions include a rotating probe inspection for cracking. Corrective actions include replacing damaged fasteners, reaming and drilling holes, installing the next nominal fastener for oversized bore holes, and repairing cracks. You may examine the MCAI in the AD docket on the internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2018-0497.

This NPRM would not supersede AD 2014-20-18. Rather, we have determined that a stand-alone AD would be more appropriate to address the changes in the MCAI. This NPRM would require depending on airplane configuration, a modification of certain angle fitting attachment holes, inspections for cracking of certain holes of the internal lower angle fitting web, certain holes of the internal lower angle fitting horizontal splicing, the aft bottom panel, and the FR47/Rib 1 junction area. Accomplishment of the proposed modification and initial inspections would then terminate all of the requirements of AD 2014-20-18.

Airbus has issued the following service information.

• Service Bulletin A300-57-6049, Revision 8, dated July 4, 2017. This service information describes procedures for HFEC rotating probe inspections for cracking of certain holes of the internal lower angle fitting web.

• Service Bulletin A300-57-6086, Revision 6, dated July 4, 2017. This service information describes procedures for HFEC rotating probe inspections for cracking of certain holes in the internal lower angle fitting horizontal splicing (left-hand and right-hand sides) and for ultrasonic inspections for cracking of the aft bottom panel.

• Service Bulletin A300-57-6119, Revision 00, dated April 25, 2016. This service information describes procedures for ultrasonic and radiographic inspections for cracking of the FR47/Rib 1 junction area.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

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

We estimate that this proposed AD affects 65 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

We estimate that it would take about 1 work-hour per product to comply with the proposed reporting requirement in this proposed AD. The average labor rate is $85 per hour. Based on these figures, we estimate the cost of reporting the inspection results on U.S. operators to be $5,525, or $85 per product.

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this NPRM is 2120-0056. The paperwork cost associated with this NPRM has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this NPRM is mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW, Washington, DC 20591, ATTN: Information Collection Clearance Officer, AES-200.

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

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

This proposed AD is issued in accordance with authority delegated by the Executive Director, Aircraft Certification Service, as authorized by FAA Order 8000.51C. In accordance with that order, issuance of ADs is normally a function of the Compliance and Airworthiness Division, but during this transition period, the Executive Director has delegated the authority to issue ADs applicable to transport category airplanes to the Director of the System Oversight Division.

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

I. Background—Regulatory Authorities

The Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended, establishes a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the FD&C Act (21 U.S.C. 360c) established three categories (classes) of devices, reflecting the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval).

Devices that were not in commercial distribution prior to May 28, 1976 (generally referred to as postamendments devices), are automatically classified by section 513(f)(1) of the FD&C Act into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval unless, and until, the device is reclassified into class I or II, or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and 21 CFR part 807.

A postamendments device that has been initially classified in class III under section 513(f)(1) of the FD&C Act may be reclassified into class I or II under section 513(f)(3) of the FD&C Act. Section 513(f)(3) of the FD&C Act provides that FDA acting by order can reclassify the device into class I or II on its own initiative, or in response to a petition from the manufacturer or importer of the device. To change the classification of the device, the proposed new class must have sufficient regulatory controls to provide a reasonable assurance of the safety and effectiveness of the device for its intended use.

Reevaluation of the data previously before the Agency is an appropriate basis for subsequent action where the reevaluation is made in light of newly available regulatory authority (see Bell v. Goddard, 366 F.2d 177, 181 (7th Cir. 1966); Ethicon, Inc. v. FDA, 762 F. Supp. 382, 388-391 (D.D.C. 1991)), or in light of changes in “medical science” (Upjohn v. Finch, 422 F.2d 944, 951 (6th Cir. 1970)). Whether data before the Agency are old or new, the “new information” to support reclassification under 513(f)(3) must be “valid scientific evidence”, as defined in section 513(a)(3) of the FD&C Act and 21 CFR 860.7(c)(2). (See, e.g., General Medical Co. v. FDA, 770 F.2d 214 (D.C. Cir. 1985); Contact Lens Mfrs. Assoc. v. FDA, 766 F.2d 592 (DC Cir.1985), cert. denied, 474 U.S. 1062 (1986)). FDA relies upon “valid scientific evidence” in the classification process to determine the level of regulation for devices. To be considered in the reclassification process, the “valid scientific evidence” upon which the Agency relies must be publicly available. Publicly available information excludes trade secret and/or confidential commercial information, e.g., the contents of a pending PMA (see section 520(c) of the FD&C Act (21 U.S.C. 360j(c)).

In accordance with section 513(f)(3) of the FD&C Act, the Agency is proposing to reclassify medical image analyzers applied to mammography breast cancer, ultrasound breast lesions, radiograph lung nodules, and radiograph dental caries detection from class III into class II on the basis that there is sufficient information to establish special controls, in addition to general controls, to provide reasonable assurance of the safety and effectiveness of the device.

Section 510(m) of the FD&C Act provides that a class II device may be exempted from the 510(k) premarket notification requirements, if the Agency determines that premarket notification is not necessary to reasonably assure the safety and effectiveness of the device.

This proposed order covers medical image analyzers including computer-assisted/aided detection (CADe) devices for mammography breast cancer, ultrasound breast lesions, radiograph lung nodules, and radiograph dental caries detection that are assigned product code MYN. These postamendments devices are currently regulated as class III devices under section 513(f)(1) of the FD&C Act. FDA has experience reviewing and analyzing data and information for medical image analyzers since premarket approval of the first device for these uses in 1998. On June 26, 1998, the Center for Devices and Radiological Health (CDRH) approved the first CADe device included in this reclassification order. In the December 30, 1998, Federal Register notice (63 FR 71930), FDA announced a PMA approval order for R2 Technology, Inc. M 1000 Image Checker and the availability of the summary of safety and effectiveness data for the device. Since 1998, 11 devices have received premarket approval for the analysis of several modalities, including mammography, ultrasound, as well as chest and dental radiographs. Based upon our review experience and consistent with the FD&C Act and FDA's regulations, FDA believes that these devices should be reclassified from class III into class II because there is sufficient information to establish special controls that can provide reasonable assurance of the device's safety and effectiveness.

This proposed order does not apply to medical image analyzers/CADe devices currently classified under § 892.2050 (21 CFR 892.2050), Picture archiving and communication system. FDA has regulated other CADe devices intended to aid lung nodule and colon polyp detection from computed tomography images as class II devices under § 892.2050, Picture archiving and communication system and assigned the following product codes:

• NWE (Colon Computed Tomography System, Computer-Aided Detection);

• OEB (Lung Computed Tomography System, Computer-Aided Detection);

• OMJ (Chest X-Ray Computer Aided Detection).

There have been no recalls for class II CADe devices. As of the date of this proposal, FDA has received three recalls for class III devices and one Medical Device Report (MDR), however, in the past 10 years only one recall for the class III devices has been received due to distribution of the CADe device without PMA approval. None of these recalls were classified as a Class I recall. There were also no MDRs related to either the class III medical image analyzers or class II CADe devices in the past 10 years. This evidence suggests that the safety profiles for existing class III CADe devices are similar to the class II CADe, and consequently that our regulatory controls applied should be similar.

This proposed order applies to medical image analyzers including CADe devices for mammography breast cancer, ultrasound breast lesions, radiograph lung nodules, and radiograph dental caries detection that are currently regulated as class III devices as postamendment devices. These devices are intended to identify, mark, highlight, or in any other manner direct the clinicians' attention to portions of a radiology image that may reveal abnormalities during interpretation of patient radiology images by the clinicians. These devices incorporate pattern recognition and data analysis capabilities and operate on previously acquired radiology images, including mammography, radiograph, and ultrasound. These devices are not intended to replace the review by a qualified radiologist or to be used for triage. Furthermore, these devices are not intended to recommend diagnosis of any diseases.

The Radiological Devices Panel (the Panel) convened on March 4-5, 2008 (Ref. 1) and discussed issues relating to how medical image analyzers including CADe devices are used in clinical decisionmaking, how the performance of the devices should be evaluated, and the information needed to determine whether the device provides a reasonable assurance of its safety and effectiveness. Additional discussions were held regarding medical image analyzers for mammography and radiograph applications. Following the 2008 Panel Meeting, FDA convened a second meeting of the Panel on November 18, 2009. The 2009 Panel Meeting was asked to discuss two proposed draft guidances for the evaluation of medical image analyzers and the Agency's regulatory strategy for these devices (Ref. 2). Subsequently, the two draft guidance documents were finalized by FDA and were made public on July 3, 2012 (Refs. 3 and 4). The guidance document entitled “Clinical Performance Assessment: Considerations for Computer-Assisted Detection Devices Applied to Radiology Images and Radiology Device Data—Premarket Approval (PMA) and Premarket Notification [510(k)] Submissions” provides guidance regarding clinical performance assessment studies for CADe applied to radiology images and radiology device data. The guidance document entitled “Computer-Assisted Detection Devices Applied to Radiology Images and Radiology Device Data—Premarket Notification [510(k)] Submissions” provides guidance regarding premarket notification (510(k)) submissions for CADe applied to radiology images and radiology device data. These guidance documents describe clinical and non-clinical methods to evaluate the safety and effectiveness of CADe devices, including medical image analyzers covered by this proposed order. In addition to the two guidance documents, the Panel's discussion regarding the benefits and risks of medical image analyzers that were discussed at the 2008 and 2009 Panel meetings have been taken into consideration by the Agency when developing the proposed special controls provided in this proposed order below.

Since publication of these guidance documents, the Agency has gained considerable experience in reviewing medical image analyzers using the methods described in the aforementioned guidance documents. Further, as part CDRH's 2014-2015 strategic priority “Strike the Right Balance Between Premarket and Postmarket Data Collection,” a retrospective review of class III devices subject to a PMA was completed to determine whether or not, based on our current understanding of the technology, reclassification may be appropriate. During this retrospective review, FDA determined that sufficient information exists such that the risks of false positive and false negative results, misuse, and device failure can be mitigated, to establish special controls that, together with general controls, can provide a reasonable assurance of the safety and effectiveness of medical image analyzers and therefore proposes these devices be reclassified from class III to class II. On April 29, 2015, FDA published a notice in the Federal Register entitled “Retrospective Review of Premarket Approval Application Devices; Striking the Balance Between Premarket and Postmarket Data Collection” in which FDA announced plans to consider reclassifying medical image analyzers identified with the MYN product code from class III to class II (80 FR 23798). No adverse comments were received regarding our proposed intent for MYN.

In accordance with section 513(f)(3) of the FD&C Act and 21 CFR part 860, subpart C, FDA is proposing to reclassify postamendments medical image analyzers, including CADe devices for mammography breast cancer, ultrasound breast lesions, radiograph lung nodules, and radiograph dental caries detection, from class III into class II. FDA believes that there is sufficient information to establish special controls, in addition to general controls, that would effectively mitigate the risks to health identified in section V and provide reasonable assurance of the safety and effectiveness of these devices. Absent the special controls identified in this proposed order, general controls applicable to the device are insufficient to provide reasonable assurance of the safety and effectiveness of the device.

FDA is proposing to create a separate classification regulation for medical image analyzer devices that will be reclassified from class III to II. Under this proposed order, if finalized, the medical image analyzer devices will be identified as a prescription device. As such, the prescription device must satisfy prescription labeling requirements (see § 801.109 (21 CFR 801.109), Prescription devices). Prescription devices are exempt from the requirement for adequate directions for use for the layperson under section 502(f)(1) of the FD&C Act (21 U.S.C. 352) and § 801.5 (21 CFR 801.5), as long as the conditions of § 801.109 are met. In this proposed order, if finalized, the Agency has identified the special controls under section 513(a)(1)(B) of the FD&C Act that, together with general controls, will provide a reasonable assurance of the safety and effectiveness for medical image analyzer devices.

Section 510(m) of the FD&C Act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k) of the FD&C Act, if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, FDA has determined that premarket notification is necessary to provide reasonable assurance of safety and effectiveness and, therefore, does not intend to exempt these proposed class II devices from the premarket notification requirements. Persons who intend to market this type of device must submit to FDA a 510(k) and receive clearance prior to marketing the device.

This proposal, if finalized, will decrease regulatory burden on the medical device industry and will reduce private costs and expenditures required to comply with Federal Regulations. Specifically, regulated industry will no longer have to submit a PMA but can instead submit a 510(k) to the Agency for review prior to marketing their device. A 510(k) is a less-burdensome pathway to market a device which typically results in a more timely premarket review compared to a PMA and reduces the regulatory burden on industry in addition to providing more timely access of these types of devices to patients.

From the Panel discussions on March 4-5, 2008, and November 18, 2009, along with the peer-reviewed literature (Refs. 5-8) and FDA's experiences over the years in reviewing submissions for these devices and similar devices, FDA determined the probable risks to health associated with medical image analyzers including CADe devices for mammography breast cancer, ultrasound breast lesions, radiograph lung nodules, and radiograph dental caries detection are as follows: (1) False positive results may result in complications, such as incorrect management of the patient with possible adverse effects, and unnecessary additional radiology imaging and/or invasive procedures, such as biopsy; (2) false negative results could result in complications, including incorrect diagnosis and delay in disease management; (3) the device could be misused to analyze images from an unintended patient population or on images acquired with incompatible imaging hardware or incompatible image acquisition parameters, resulting in possibly lower device performance; (4) the device could be misused by not following the appropriate reading protocol, which may lead to lower sensitivity; and (5) device failure could result in the absence or delay of device output, or incorrect device output, which could likewise lead to inaccurate patient assessment.

After considering the information above, FDA has determined that all class III medical image analyzers currently approved by FDA should be reclassified into class II on the basis that special controls, in addition to general controls, can be established to provide reasonable assurance of the safety and effectiveness of the device. FDA believes that the risks to health associated with medical image analyzers applied to mammography breast cancer, ultrasound breast lesions, radiograph lung nodules, and radiograph dental caries detection can be mitigated with special controls and that these mitigations will provide a reasonable assurance of its safety and effectiveness. FDA's reasons for reclassification of these devices are as follows:

• The risk of false positive results and false negative results can be mitigated by demonstrating, through clinical performance assessment (e.g., reader studies), that reader performance improves when using the medical image analyzer. In instances where a medical image analyzer has the same intended use but has different technological characteristics compared to the legally marketed device (predicate), a performance comparison of the predicate and new device evaluating with the same assessment process on the same dataset that is representative of the intended population may be sufficient to demonstrate device safety and effectiveness. The risk of false positive results and false negative results can be further mitigated by special controls that require sufficient information in labeling to provide detailed instructions for use to the user and inform the user of the expected device performance on a dataset representative of the intended population.

• The risk associated with misuse of the medical image analyzers on an unintended population can be mitigated by specifying in the labeling and indications for use of the device the intended patient population for which the device has been demonstrated to be effective. This risk can be further mitigated by special controls that require informing intended users in the labeling of foreseeable situations in which the device is likely to fail or not to operate at its expected performance level.

• The risk associated with misuse of the medical image analyzer on images acquired from unintended image acquisition hardware or image acquisition parameters can be mitigated by special controls that require including in the device labeling specifications for compatible imaging hardware and imaging protocols.

• The risk resulting from not following the intended reading protocol can be mitigated by including in the labeling the indications for use of the device, by providing adequate instructions for use including a description of the intended reading protocol, and by special controls requiring that the device labeling provide a detailed description of user training that addresses appropriate reading protocols for the device.

• The risk of device failure can be mitigated by requiring design verification and validation testing, and special controls that require device operating instructions. This risk can be further mitigated by special controls that require informing users in the labeling of foreseeable situations in which the device is likely to fail or not to operate at its expected performance level.

FDA believes that the following special controls, in addition to general controls, are sufficient to mitigate the risks to health described in section V and provide a reasonable assurance of safety and effectiveness for these medical image analyzers:

• Design verification and validation must include detailed descriptions of image analysis algorithms, detailed descriptions of study protocols and datasets, results from performance testing demonstrating the device improves reader performance in the intended use population, standalone performance testing protocols and results, and appropriate software documentation. Performance testing ensures that the risk of false positive and false negative results is reduced.

• Labeling for the device must include detailed descriptions of the following: patient population, the intended reading protocol, the intended user and user training, device inputs and outputs, compatible imaging hardware and imaging protocols. In addition, the labeling for the device must also include applicable warnings, limitations, precautions, device operating instructions, and a detailed summary of the performance testing. Detailed instructions for use and expected device performance on a dataset representative of the intended population in labeling helps minimize the risk of false positive and false negative results. Labeling ensures proper use of the device, including warnings to inform users of foreseeable situations in which the device is likely to fail or not to operate at its expected performance level.

Table 1 shows how FDA believes the special controls set forth in the proposed order will mitigate each of the risks to health described in section V.

In addition, FDA is proposing to limit these devices to prescription use under § 801.109. Prescription devices are exempt from the requirement for adequate directions for use for the layperson under section 502(f)(1) of the FD&C Act and § 801.5, as long as the conditions of § 801.109 are met (referring to 21 U.S.C. 352(f)(1)). Under § 807.81, the device would continue to be subject to 510(k) notification requirements.

If this proposed order is finalized, medical image analyzers including CADe devices for mammography breast cancer, ultrasound breast lesions, radiograph lung nodules, and radiograph dental caries detection will be reclassified into class II. The reclassification will be codified in § 892.2070. FDA believes that adherence to the proposed special controls, in addition to the general controls, is necessary to provide a reasonable assurance of the safety and effectiveness of the devices. FDA intends to update the guidance document entitled “Clinical Performance Assessment: Considerations for Computer-Assisted Detection Devices Applied to Radiology Images and Radiology Device Data—Premarket Approval (PMA) and Premarket Notification [510(k)] Submissions” to make it consistent with this reclassification upon finalization of this proposed reclassification order.

The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA tentatively concludes that this proposed order contains no new collections of information. Therefore, clearance by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520) is not required. This proposed order refers to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by OMB under the PRA. The collections of information in 21 CFR part 807, subpart E have been approved under OMB control number 0910-0120 and the collections of information in 21 CFR part 801 have been approved under OMB control number 0910-0485.

FDA proposes that any final order based on this proposed order become effective 30 days after its date of publication in the Federal Register.

The following references are on display in the Dockets Management Staff (see ADDRESSES) and are available for viewing by interested persons between 9 a.m. and 4 p.m., Monday through Friday; they are also available electronically at https://www.regulations.gov. FDA has verified the website addresses, as of the date this document publishes in the Federal Register, but websites are subject to change over time.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 892 be amended as follows:

I. Background A. Regional Haze Plans and Their Relationship With CAIR and CSAPR

Section 169A(b)(2)(A) of the Clean Air Act (CAA or Act) requires states to submit regional haze plans that contain such measures as may be necessary to make reasonable progress towards the natural visibility goal, including a requirement that certain categories of existing major stationary sources built between 1962 and 1977 procure, install, and operate Best Available Retrofit Technology (BART) as determined by the state. Under the Regional Haze Rule (RHR), states are directed to conduct BART determinations for such “BART-eligible” sources that may be anticipated to cause or contribute to any visibility impairment in a Class I area. Rather than requiring source-specific BART controls, states also have the flexibility to adopt an emissions trading program or other alternative program as long as the alternative provides greater reasonable progress towards improving visibility than BART. See 40 CFR 51.308(e)(2). EPA provided states with this flexibility in the RHR, adopted in 1999, and further refined the criteria for assessing whether an alternative program provides for greater reasonable progress in two subsequent rulemakings. See 64 FR 35714 (July 1, 1999); 70 FR 39104 (July 6, 2005); 71 FR 60612 (October 13, 2006).

EPA demonstrated that CAIR would achieve greater reasonable progress than BART in revisions to the regional haze program made in 2005.1 See 70 FR 39104 (July 6, 2005). In those revisions, EPA amended its regulations to provide that states participating in the CAIR cap-and-trade programs pursuant to an EPA-approved CAIR SIP or states that remain subject to a CAIR FIP need not require affected BART-eligible electric generating units (EGUs) to install, operate, and maintain BART for emissions of SO2 and nitrogen oxides (NOX). As a result of EPA's determination that CAIR was “better-than-BART,” a number of states in the CAIR region, including South Carolina, relied on the CAIR cap-and-trade programs as an alternative to BART for EGU emissions of SO2 and NOX in designing their regional haze plans. These states also relied on CAIR as an element of a long-term strategy (LTS) for achieving their reasonable progress goals (RPGs) for their regional haze programs. However, in 2008, the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit) remanded CAIR to EPA without vacatur to preserve the environmental benefits provided by CAIR. North Carolina v. EPA, 550 F.3d 1176, 1178 (DC Cir. 2008). On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit's remand, EPA promulgated CSAPR to replace CAIR and issued FIPs to implement the rule in CSAPR-subject states.2 Implementation of CSAPR was scheduled to begin on January 1, 2012, when CSAPR would have superseded the CAIR program.

Due to the D.C. Circuit's 2008 ruling that CAIR was “fatally flawed” and its resulting status as a temporary measure following that ruling, EPA could not fully approve regional haze plans to the extent that they relied on CAIR to satisfy the BART requirement and the requirement for a LTS sufficient to achieve the state-adopted RPGs. On these grounds, EPA finalized a limited disapproval of South Carolina's regional haze plan on June 7, 2012 (77 FR 33642), and in the same action, promulgated a FIP to replace reliance on CAIR with reliance on CSAPR to address the deficiencies in South Carolina's regional haze plan. EPA finalized a limited approval of South Carolina's regional haze plan on June 28, 2012 (77 FR 38509), as meeting the remaining applicable regional haze requirements set forth in the CAA and the RHR.

In the June 7, 2012, limited disapproval action, EPA also amended the RHR to provide that participation by a state's EGUs in a CSAPR trading program for a given pollutant—either a CSAPR federal trading program implemented through a CSAPR FIP or an integrated CSAPR state trading program implemented through an approved CSAPR SIP revision—qualifies as a BART alternative for those EGUs for that pollutant. See 40 CFR 51.308(e)(4). Since EPA promulgated this amendment, numerous states covered by CSAPR have come to rely on the provision through either SIPs or FIPs.3

Numerous parties filed petitions for review of CSAPR in the D.C. Circuit, and on August 21, 2012, the court issued its ruling, vacating and remanding CSAPR to EPA and 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's vacatur of CSAPR was reversed by the United States Supreme Court on April 29, 2014, and the case was remanded to the D.C. Circuit to resolve remaining issues in accordance with the high court's ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014). On remand, the D.C. Circuit affirmed CSAPR in most respects, but invalidated without vacating some of the CSAPR budgets to a number of states. EME Homer City Generation, L.P. v. EPA, 795 F.3d 118 (D.C. Cir. 2015). The remanded budgets include the Phase 2 SO2 emissions budgets for Alabama, Georgia, South Carolina, and Texas and the Phase 2 ozone-season NOX budgets for 11 states. This litigation ultimately delayed implementation of CSAPR for three years, from January 1, 2012, when CSAPR's cap-and-trade programs were originally scheduled to replace the CAIR cap-and-trade programs, to January 1, 2015. Thus, the rule's Phase 2 budgets that were originally promulgated to begin on January 1, 2014, began on January 1, 2017.

On September 29, 2017 (82 FR 45481), EPA issued a final rule affirming the continued validity of the Agency's 2012 determination that participation in CSAPR meets the RHR's criteria for an alternative to the application of source-specific BART.4 EPA has determined that changes to CSAPR's geographic scope resulting from the actions EPA has taken or expects to take in response to the D.C. Circuit's budget remand do not affect the continued validity of participation in CSAPR as a BART alternative, because the changes in geographic scope would not have adversely affected the results of the air quality modeling analysis upon which EPA based the 2012 determination. EPA's September 29, 2017, determination was based, in part, on EPA's final action approving a SIP revision from Alabama (81 FR 59869 (August 31, 2016)) adopting Phase 2 annual NOX and SO2 budgets equivalent to the federally-developed budgets and on SIP revisions submitted by Georgia and South Carolina to also adopt Phase 2 annual NOX and SO2 budgets equivalent to the federally-developed budgets.5 Since that time, EPA has approved the SIP revisions from Georgia and South Carolina. See 82 FR 47930 (October 13, 2017) and 82 FR 47936 (October 13, 2017), respectively.

A portion of South Carolina's September 5, 2017, SIP submittal seeks to correct the deficiencies identified in the June 7, 2012, limited disapproval of its regional haze plan submitted on December 17, 2007, by replacing reliance on CAIR with reliance on CSAPR.6 EPA is proposing to approve South Carolina's request that EPA amend the State's regional haze plan by replacing its reliance on CAIR with CSAPR. EPA is proposing to approve the regional haze portion of the SIP submittal and amend the SIP accordingly.

By statute, plans meeting the requirements of sections 110(a)(1) and (2) of the CAA are to be submitted by states within three years (or less, if the Administrator so prescribes) after promulgation of a new or revised NAAQS to provide for the implementation, maintenance, and enforcement of the new or revised NAAQS. EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of sections 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Sections 110(a)(1) and (2) require states to address basic SIP elements such as for monitoring, basic program requirements, and legal authority that are designed to assure attainment and maintenance of the newly established or revised NAAQS. More specifically, section 110(a)(1) provides the procedural and timing requirements for infrastructure SIP submissions. Section 110(a)(2) lists specific elements that states must meet for the infrastructure SIP requirements related to a newly established or revised NAAQS. The contents of an infrastructure SIP submission may vary depending upon the data and analytical tools available to the state, as well as the provisions already contained in the state's implementation plan at the time in which the state develops and submits the submission for a new or revised NAAQS.

Section 110(a)(2)(D) has two components: 110(a)(2)(D)(i) and 110(a)(2)(D)(ii). Section 110(a)(2)(D)(i) includes four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), are provisions that prohibit any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS in another state (prong 1) and from interfering with maintenance of the NAAQS in another state (prong 2). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state (prong 3) or from interfering with measures to protect visibility in another state (prong 4). Section 110(a)(2)(D)(ii) requires SIPs to include provisions ensuring compliance with sections 115 and 126 of the Act, relating to interstate and international pollution abatement.

Through this action, EPA is proposing to convert the conditional approvals of the prong 4 portions of South Carolina's infrastructure SIP submissions for the 2008 8-hour Ozone, 2010 1-hour NO2, 2010 1-hour SO2, and 2012 annual PM2.5 NAAQS to full approvals, as discussed in section III of this notice.7 All other applicable infrastructure SIP requirements for these SIP submissions have been or will be addressed in separate rulemakings. A brief background regarding the NAAQS relevant to this proposal is provided below. For comprehensive information on these NAAQS, please refer to the Federal Register notices cited in the following subsections.

On June 2, 2010, EPA revised the 1-hour primary SO2 NAAQS to an hourly standard of 75 parts per billion (ppb) based on a 3-year average of the annual 99th percentile of 1-hour daily maximum concentrations. See 75 FR 35520 (June 22, 2010). States were required to submit infrastructure SIP submissions for the 2010 1-hour SO2 NAAQS to EPA no later than June 2, 2013. South Carolina submitted an infrastructure SIP submission for the 2010 1-hour SO2 NAAQS on May 8, 2014. This proposed action only addresses the prong 4 element of that submission.8

On January 22, 2010, EPA promulgated a new 1-hour primary NAAQS for NO2 at a level of 100 ppb, based on a 3-year average of the 98th percentile of the yearly distribution of 1-hour daily maximum concentrations. See 75 FR 6474 (February 9, 2010). States were required to submit infrastructure SIP submissions for the 2010 1-hour NO2 NAAQS to EPA no later than January 22, 2013. South Carolina submitted an infrastructure SIP submission for the 2010 1-hour NO2 NAAQS on April 30, 2014. This proposed action only addresses the prong 4 element of this submission.9

On December 14, 2012, EPA revised the annual primary PM2.5 NAAQS to 12 micrograms per cubic meter (μg/m3). See 78 FR 3086 (January 15, 2013). States were required to submit infrastructure SIP submissions for the 2012 PM2.5 NAAQS to EPA no later than December 14, 2015. South Carolina submitted an infrastructure SIP submission for the 2012 PM2.5 NAAQS on December 18, 2015. This proposed action only addresses the prong 4 element of that submission.10

On March 12, 2008, EPA revised the 8-hour Ozone NAAQS to 0.075 parts per million. See 73 FR 16436 (March 27, 2008). States were required to submit infrastructure SIP submissions for the 2008 8-hour Ozone NAAQS to EPA no later than March 12, 2011. South Carolina submitted an infrastructure SIP for the 2008 8-hour Ozone NAAQS on July 17, 2012. This proposed action only addresses the prong 4 element of that submission.11

CAA section 110(a)(2)(D)(i)(II) requires a state's implementation plan to contain provisions prohibiting sources in that state from emitting pollutants in amounts that interfere with any other state's efforts to protect visibility under part C of the CAA (which includes sections 169A and 169B). EPA most recently issued guidance for infrastructure SIPs on September 13, 2013 (2013 Guidance).12 The 2013 Guidance states that these prong 4 requirements can be satisfied by approved SIP provisions that EPA has found to adequately address any contribution of that state's sources that impacts the visibility program requirements in other states. The 2013 Guidance also states that EPA interprets this prong to be pollutant-specific, such that the infrastructure SIP submission need only address the potential for interference with protection of visibility caused by the pollutant (including precursors) to which the new or revised NAAQS applies.

The 2013 Guidance lays out how a state's infrastructure SIP submission may satisfy prong 4. One way that a state can meet the requirements is via confirmation in its infrastructure SIP submission that the state has an approved regional haze plan that fully meets the requirements of 40 CFR 51.308 or 51.309. 40 CFR 51.308 and 51.309 specifically require that a state participating in a regional planning process include all measures needed to achieve its apportionment of emission reduction obligations agreed upon through that process. A fully approved regional haze plan will ensure that emissions from sources under an air agency's jurisdiction are not interfering with measures required to be included in other air agencies' plans to protect visibility.

Alternatively, in the absence of a fully approved regional haze plan, a state may meet the requirements of prong 4 through a demonstration in its infrastructure SIP submission that emissions within its jurisdiction do not interfere with other air agencies' plans to protect visibility. Such an infrastructure SIP submission would need to include measures to limit visibility-impairing pollutants and ensure that the reductions conform with any mutually agreed regional haze RPGs for mandatory Class I areas in other states.

South Carolina's July 17, 2012, 2008 8-hour Ozone submission; April 30, 2014, 2010 1-hour NO2 submission; May 8, 2014, 2010 1-hour SO2 submission; and December 18, 2015, 2012 annual PM2.5 submission rely on the State having a fully approved regional haze plan to satisfy its prong 4 requirements.13 However, EPA has not fully approved South Carolina's regional haze plan, as the Agency issued a limited disapproval of the State's original regional haze plan on June 7, 2012, due to its reliance on CAIR.

On April 19, 2016, South Carolina submitted a commitment letter to EPA to submit a SIP revision that adopts provisions for participation in the CSAPR annual NOX and annual SO2 trading programs, including annual NOX and annual SO2 budgets that are at least as stringent as the budgets codified for South Carolina, and revises its regional haze plan to replace reliance on CAIR with CSAPR for certain regional haze provisions. In its letter, South Carolina committed to providing this SIP revision within one year of EPA's final conditional approval of the prong 4 portions of the infrastructure SIP revisions. On August 22, 2016 (81 FR 56512), EPA conditionally approved the prong 4 portion of South Carolina's infrastructure SIP submissions for the 2008 8-hour Ozone, 2010 1-hour NO2, 2010 1-hour SO2, and 2012 annual PM2.5 NAAQS based on this commitment letter from the State. In accordance with the State's April 19, 2016, commitment letter, South Carolina submitted a SIP revision on September 5, 2017, to adopt provisions for participation in the CSAPR annual NOX and annual SO2 trading programs and to replace reliance on CAIR with reliance on CSAPR for certain regional haze provisions. As noted above, EPA approved the portion of South Carolina's September 5, 2017, SIP revision adopting CSAPR. See 82 FR 47936 (October 13, 2017).

EPA is proposing to approve the regional haze portion of the State's September 5, 2017, SIP revision replacing reliance on CAIR with CSAPR, and to convert EPA's previous action on South Carolina's regional haze plan from a limited approval/limited disapproval to a full approval because final approval of this portion of the SIP revision would correct the deficiencies that led to EPA's limited approval/limited disapproval of the State's regional haze plan. Specifically, EPA's approval of the regional haze portion of South Carolina's September 5, 2017, SIP revision would satisfy the SO2 and NOX BART requirements and first implementation period SO2 reasonable progress requirements for EGUs formerly subject to CAIR and the requirement that a LTS include measures as necessary to achieve the state-adopted RPGs. Thus, EPA is also proposing to remove EPA's FIP for South Carolina which replaced reliance on CAIR with reliance on CSAPR to address the deficiencies identified in the limited disapproval of South Carolina's regional haze plan. Because a state may satisfy prong 4 requirements through a fully approved regional haze plan, EPA is therefore also proposing to convert the conditional approvals to full approvals of the prong 4 portion of South Carolina's July 17, 2012, 2008 8-hour Ozone submission; April 30, 2014, 2010 1-hour NO2 submission; May 8, 2014, 2010 1-hour SO2 submission; and December 18, 2015, 2012 annual PM2.5 submission.

As described above, EPA is proposing to take the following actions: (1) Approve the regional haze plan portion of South Carolina's September 5, 2017, SIP submission to change reliance from CAIR to CSAPR; (2) convert EPA's limited approval/limited disapproval of South Carolina's December 17, 2007, regional haze plan to a full approval; (3) remove EPA's FIP for South Carolina which replaced reliance on CAIR with reliance on CSAPR to address the deficiencies identified in the limited disapproval of South Carolina's regional haze plan; and (4) convert EPA's September 26, 2016, conditional approvals to full approvals of the prong 4 portion of South Carolina's July 17, 2012, 2008 8-hour Ozone submission; April 30, 2014, 2010 1-hour NO2 submission; May 8, 2014, 2010 1-hour SO2 submission; and December 18, 2015, 2012 annual PM2.5 submission. All other applicable infrastructure requirements for the infrastructure SIP submissions have been or will be addressed in separate rulemakings.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. See 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, these proposed actions merely propose to approve state law as meeting Federal requirements and remove a FIP, and do not impose additional requirements beyond those imposed by state law. For that reason, these proposed actions:

• Are not significant regulatory actions 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);

• Are not Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory actions because SIP approvals are exempted under Executive Order 12866;

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

• Are 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.);

• Do 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);

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

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

• Are not significant regulatory actions subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Are 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

• Do 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, these proposed actions for South Carolina do not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000) because they do not have substantial direct effects on an Indian Tribe. The Catawba Indian Nation Reservation is located within the boundary of York County, South Carolina. Pursuant to the Catawba Indian Claims Settlement Act, S.C. Code Ann. 27-16-120, “all state and local environmental laws and regulations apply to the [Catawba Indian Nation] and Reservation and are fully enforceable by all relevant state and local agencies and authorities.” However, EPA has determined that this proposed rule does not have substantial direct effects on an Indian Tribe because, as it relates to prong 4, this proposed action is not approving any specific rule, but rather proposing to determine that South Carolina's already approved SIP meets certain CAA requirements. As it relates to the regional haze SIP, the proposal to replace reliance on CAIR with reliance on CSAPR has no substantial direct effects because the reliance on CSAPR for regional haze purposes in South Carolina already existed through a FIP. EPA notes that these proposed actions will not impose substantial direct costs on Tribal governments or preempt Tribal law.

Throughout this document, wherever “we”, “us” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

On December 15, 2012, EPA promulgated the 2012 PM2.5 NAAQS, including a revision of the annual standard to 12.0 micrograms per cubic meter (µg/m3) based on a 3-year average of annual mean PM2.5 concentrations, and maintaining the current 24-hour (or daily) standard of 35 µg/m3 based on a 3-year average of the 98th percentile of 24-hour concentrations (78 FR 3086, January 15, 2013). EPA established the 2012 PM2.5 NAAQS based on significant evidence and numerous health studies demonstrating the serious health effects associated with exposures to PM2.5. The Cleveland, Ohio area was designated “Moderate” nonattainment for the 2012 PM2.5 NAAQS based on ambient monitoring data showing that the area was above the 12.0 µg/m3 standard. At the time of designations, the Cleveland area had a design value of 12.5 µg/m3 for the 2011-2013 monitoring period (80 FR 2206, January 15, 2015).

To provide guidance on the CAA requirements for state and tribal implementation plans to implement the 2012 PM2.5 NAAQS, EPA promulgated the “Fine Particle Matter National Ambient Air Quality Standard: State Implementation Plan Requirements; Final Rule” (81 FR 58010, August 24, 2016) (hereinafter, the “PM2.5 SIP Requirements Rule”). As part of the PM2.5 SIP Requirements Rule, EPA has interpreted the requirements of the CAA to allow the state to provide a “precursor demonstration” to EPA that supports the determination that one or more PM2.5 precursors need not be subject to control and planning requirements in a given nonattainment area. EPA has determined that sulfur dioxide (SO2), nitrogen oxides (NOX), volatile organic compounds (VOC) and ammonia (NH3) are precursors to PM, and thus the attainment plan requirements of subpart 4 initially apply equally to emissions of direct PM2.5 and all of its identified precursors. Section 189(e) of the CAA explicitly requires the control of major stationary sources of PM2.5 precursors, unless there is a demonstration to the satisfaction of the EPA Administrator that such major stationary sources do not contribute significantly to PM levels that exceed the standards in the area. Accordingly, a state can also provide a precursor demonstration for attainment planning purposes which finds that reducing a precursor does not significantly reduce PM2.5 concentrations, and therefore determines that controls are not needed for any sources of that precursor (not just major sources) for attainment purposes. EPA has long recognized the scientific basis for concluding that there are multiple precursors to PM10, and in particular to PM2.5 (Section III of Preamble of PM2.5 SIP Requirements Rule).

After Ohio's submission of the attainment plan by the CAA required date of October 14, 2016, EPA released a November 17, 2016 memorandum from Steve Page entitled “Draft PM2.5 Precursor Demonstration Guidance” (precursor guidance), which provides guidance to states on methods to evaluate if sources of a particular precursor contribute significantly to PM2.5 levels in the nonattainment area. The precursor guidance provides a detailed description of potential modeling approaches and presents possible thresholds to use in determining whether sources of a particular precursor contribute significantly to PM2.5 levels in the area. Although there is no explicit concentration which EPA has determined represents a significant contribution for PM2.5 precursor demonstrations, the precursor guidance suggests that a contribution level of 0.2 µg/m3, for annual average PM2.5, could be considered an air quality change that is “insignificant.” The specific methods and analysis utilized by Ohio regarding precursors are generally consistent with the PM2.5 SIP Requirements Rule and precursor guidance and are described in detail in the sections below regarding planning requirements and NNSR requirements.

With respect to the requirements for an attainment plan for the 2012 PM2.5 NAAQS, the general CAA part D nonattainment area planning requirements are found in subpart 1, and the Moderate area planning requirements specifically for particulate matter are found in subpart 4.

EPA utilizes a longstanding general guidance document that interprets the 1990 amendments to the CAA commonly referred to as the “General Preamble” (57 FR 13498, April 16, 1992). The General Preamble addresses the relationship between the subpart 1 and the subpart 4 requirements and provides recommendations to states for meeting statutory requirements for particulate matter attainment planning. Specifically, the General Preamble explains that requirements applicable to Moderate area attainment plan SIP submissions are set forth in subpart 4, but such SIP submissions must also meet the general attainment planning provisions in subpart 1, to the extent these provisions “are not otherwise subsumed by, or integrally related to,” the more specific subpart 4 requirements (57 FR 13538). Additionally, EPA finalized the PM2.5 SIP Requirements Rule to clarify our interpretations of the statutory requirements that apply to Moderate and “Serious” PM2.5 nonattainment areas under subparts 1 and 4.

The CAA requirements of subpart 1 for attainment plans include: (i) The section 172(c)(1) RACM/reasonably available control technology (RACT) and attainment demonstrations; (ii) the section 172(c)(2) requirement to demonstrate RFP; (iii) the section 172(c)(3) requirement for emission inventories; (iv) the section 172(c)(5) requirements for a NNSR permitting program; and (v) the section 172(c)(9) requirement for contingency measures.

The CAA subpart 4 requirements for Moderate areas are generally comparable with the subpart 1 requirements and include: (i) The section 189(a)(1)(A) NNSR permit program requirements; (ii) the section 189(a)(1)(B) requirements for attainment demonstration; (iii) the section 189(a)(1)(C) requirements for RACM; and (iv) the section 189(c) requirements for RFP and quantitative milestones. Section 189(e) also requires that states regulate major sources of PM2.5 precursors in a nonattainment area, unless EPA approves a demonstration excusing the state from regulating such sources. In addition, under subpart 4 Moderate areas must provide for attainment of the current PM2.5 annual standard as expeditiously as practicable but no later than the end of the 6th calendar year after designation, which is December 31, 2021.

OEPA, in coordination with the Lake Michigan Air Directors Consortium (LADCO), developed the attainment plan SIP submission for the Cleveland area. This plan was subsequently put through public process, adopted by the state, and submitted by the OEPA to EPA. This section describes the relevant contents of the 2012 PM2.5 NAAQS attainment plan SIP submission and EPA's rationale for proposing approval of the required SIP elements of RACM, attainment demonstration, emissions inventory, and precursor demonstrations for both NNSR and attainment planning purposes.

The 2012 PM2.5 attainment plan contains SIP provisions to address the requirements for a Moderate PM2.5 nonattainment area, including RACT/RACM, emissions inventory, modeling, attainment demonstration, transportation conformity and motor vehicle emissions budgets, RFP with quantitative milestones, and contingency measures. EPA is proposing to approve the RACM, emissions inventory, attainment demonstration, and precursor demonstrations for NNSR and attainment planning purposes, as fully meeting the requirements of the CAA and the applicable Federal regulations. Preliminary monitoring data indicate that the area is attaining the standard for the 2015-2017 design value period. If confirmed, certain planning requirements may be suspended per the clean data policy (40 CFR 51.1015(a)). EPA will continue to review other elements of the attainment plan submission in order to determine if they are necessary for the area to attain the standard and act on them accordingly.

Section 172(c)(3) of the CAA requires the development of an emissions inventory for nonattainment areas. In addition, the planning and associated modeling requirements set forth in CAA section 189(a) make the development of an accurate and up-to-date emissions inventory a critical element of any viable attainment plan. EPA guidance specifies the best practices for developing an emissions inventory for PM2.5 nonattainment areas per EPA's “Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter National Ambient Air Quality Standards (NAAQS) and Regional Haze Regulations” (EPA-454/B-07-002, April 2007). The 2012 PM2.5 NAAQS SIP submission contains planning inventories of emission sources and emission rates for the base year of 2011 and the projected attainment year of 2021. OEPA selected the year 2011 as the base year because it is one of the three years for which air quality data was used to designate the area as nonattainment. Additionally, OEPA and LADCO determined that high-quality emissions information was already available from the National Emissions Inventory (NEI) for 2011. LADCO developed the base year emissions inventory for the nonattainment area using the NEI, with additional information for on-road and nonroad mobile sources, marine, aircraft, and rail sources. Table 1 provides a summary of the annual 2011 emissions inventory for the Cleveland nonattainment area for direct PM2.5 and all PM2.5 precursors.

OEPA's submission included detailed information for the sources in the emissions inventory including facility name, ID, location, and emissions, as well as documentation on mobile source model inputs for both on-road and nonroad sources (See Docket submission and Appendix C).

EPA has reviewed the base-year emissions inventory and finds that it satisfies the CAA section 172(c)(3) requirement for a comprehensive, accurate and current inventory of actual 2011 emissions of the relevant pollutants for PM2.5 in the Cleveland area. Thus, EPA proposes to approve the base year emissions inventory in the SIP submission.

Section 189(a)(1)(B) requires that a PM2.5 Moderate area SIP contain either a demonstration that the plan will provide for attainment by the applicable attainment date, or a demonstration that attainment by such date is impracticable. In the attainment demonstration of the 2016 SIP submission, OEPA described how the attainment plan would provide for attainment of the 2012 PM2.5 NAAQS by the attainment date of December 31, 2021.

Using air quality modeling, an attainment demonstration must project that future air quality levels in the nonattainment area will be below the standard. OEPA and LADCO conducted modeling in accordance with EPA's April 2007 (and where appropriate, draft December 2014) “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze.” (attainment demonstration modeling guidance) (EPA-454/B-07-002, April 2007). OEPA modeling is also consistent with the November 2005 Appendix W requirement used at the time by OEPA and is still consistent with the updated January 2017 (82 FR 5182) “Guideline on Air Quality Models.” (CFR Title 40, Part 51, Appendix W.) In addition, OEPA submitted a precursor demonstration that is consistent with the recommendations contained in EPA's precursor guidance document released in November 2016. (“PM2.5 Precursor Demonstration Guidance,” memorandum issued by Steven Page, Director of EPA Office of Air Quality Planning and Standards, November 17, 2016).

Per the PM2.5 SIP Requirements Rule, the attainment demonstration modeling guidance provides recommendations that include: Developing a conceptual description of the problem to be addressed; developing a modeling/analysis protocol; selecting an appropriate model to support the demonstration; selecting appropriate meteorological episodes or time periods to model; choosing an appropriate area to model with appropriate horizontal/vertical resolution; generating meteorological and air quality inputs to the air quality model; generating emissions inputs to the air quality model; and, evaluating performance of the air quality model. After these steps are completed, the state can apply a model to simulate effects of future year emissions and candidate control strategies.

OEPA and LADCO calculated the baseline design value for PM2.5 using the procedures contained in appendix N to 40 CFR 50, “Interpretation of the National Ambient Air Quality Standards for Particulate Matter,” and EPA attainment demonstration modeling guidance. Ambient PM2.5 concentrations for the 2009-2013 time frame (a weighted average of the 2009-2011, 2010-2012, and 2011-2013 design value periods, as recommended by the Modeling Guidance) were used to calculate baseline design values ranging from 9.64-12.82 µg/m3 for the seven PM2.5 monitoring locations in the nonattainment area (see Table 2). Detailed methods for the baseline design value calculations are in Appendix B of the 2016 SIP submission (See Docket).

Next, OEPA and LADCO compiled base-year emission inventories (as discussed above) and projected emission inventories for the attainment year 2021. LADCO utilized emission inventories compiled by EPA for the years 2011, 2017, and 2025 as the starting point. EPA's 2011 emissions inventory (Version 2011eh) is based on the 2011 NEI, version 2 (2011NEIv2). The inventory uses hourly 2011 continuous emissions monitoring system (CEMS) data for electric generating units (EGUs) emissions, hourly on-road mobile emissions, and 2011 day-specific wild and prescribed fire data. Emissions include all criteria pollutants and precursors (CAPs), and a few hazardous air pollutants (HAPs). See EPA's Technical Support Document (EPA, 2015A) for a thorough description of the methodology used to develop the 2011 emissions inventory.

EPA projected future emission inventories for the years 2017 and 2025 based on the 2011 baseline inventory. The future-year scenarios incorporate current “on-the-books” regulations, and do not include any additional measures or controls. See, EPA (2015A) for a thorough description of the methodology used to project future emissions. For most emissions categories, LADCO developed the 2021 future-year emissions inventory by interpolating between EPA's 2017 and 2025 inventories. The interpolation was done for each model species at each model cell for every model hour. However, LADCO developed updated 2021 EGU emissions by using the Eastern Regional Technical Advisory Committee EGU Tool (ERTAC) and updated 2021 regional on-road mobile emissions using EPA's Motor Vehicle Emission Simulator (MOVES2014) and Ramboll-Environ emissions (See Appendix B and C for detailed discussion).

For EGU projections, Ohio and LADCO relied on the U.S. Energy Information Administration's “High Oil and Gas Resource” (See Docket for detailed discussion). The projected emissions inventory not only accounts for growth in economic sectors, but also includes emissions controls (existing or future regulations) that will impact sources in the area. In this case, OEPA and LADCO only modeled controls that have been promulgated, with no new future controls being added since OEPA has determined that additional RACT and RACM would not be necessary for expeditious attainment, and that current controls in the area are sufficient to meet the RACM requirement. For modeling purposes no additional RACM/RACT was applied to future year inventories.

The base-year and projected emission inventories were used in a photochemical grid model, the Comprehensive Air Quality Model with extensions (CAMx), to project the expected change from base-year to future year design values. The modeled attainment demonstration results in a predicted future-year concentration at each PM2.5 ambient monitor location within the Cleveland nonattainment area. The results from the CAMx modeling were then used as inputs to EPA's Modeled Attainment Test Software (MATS) to calculate the design values for each monitored location in the attainment year 2021 using information on current PM2.5 speciation. Modeled attainment year results show that the area is expected to meet the standard (all 2021 values at existing monitor locations are below 12.0 μg/m3) by the 2021 attainment date (See Table 2).

Based on the above, EPA is proposing to approve OEPA's demonstration of attainment for 2021 as meeting the statutory requirement in CAA 189(a)(1)(B).

The general SIP planning requirements for nonattainment areas under subpart 1 include CAA section 172(c)(1), which requires implementation of all RACM (including RACT). Section 172(c)(1) requires that attainment plans provide for the implementation of RACM (including RACT) to provide for attainment of the NAAQS. Therefore, what constitutes RACM and RACT is related to what is necessary for attainment, as well as expeditious attainment, in a given area.

Subpart 4 also requires states to develop attainment plans that evaluate potential control measures and impose RACM and RACT on sources within a Moderate nonattainment area that are necessary to expeditiously attain the NAAQS. Specifically, CAA section 189(a)(1)(C) requires that Moderate nonattainment plans provide for implementation of RACM and RACT no later than four years after the area is designated as nonattainment. As with subpart 1, the terms RACM and RACT are not defined within subpart 4. Nor do the provisions of subpart 4 specify how states are to meet the RACM and RACT requirements. However, EPA's longstanding guidance in the General Preamble provides recommendations for determining which control measures constitute RACM and RACT for purposes of meeting the statutory requirements of subpart 4 (57 FR 13540-13541).

For both RACM and RACT, EPA notes that an overarching principle is that if a given control measure is not needed to attain the relevant NAAQS in a given area as expeditiously as practicable, then that control measure would not be required as RACM or RACT because it would not be reasonable to impose controls that are not in fact needed for attainment purposes. Accordingly, a RACM and RACT analysis is a process to identify emission sources, evaluate potential emission controls, and impose those control measures and technologies that are reasonable and necessary to bring the area into attainment as expeditiously as practicable, but by no later than the statutory attainment date for the area.

EPA has long applied a policy that states must evaluate the combined effect of reasonably available control measures that, if implemented collectively, would advance the attainment date by at least one year and should be adopted. Since the area's preliminary data indicate that it will attain the NAAQs based on the 2015-2017 design value period, it is not necessary to implement additional controls. The data indicates that the area is attaining the standard with current Federal, state, and local permanent and enforceable measures.

OEPA provided a RACM and RACT analysis in Appendix E of the 2012 PM2.5 attainment plan SIP submission. Ohio has found that existing measures for PM2.5, SO2 and NOX for area sources, mobile sources and stationary sources constitute RACT/RACM (80 FR 68253; 81 FR 58402; 82 FR 16938). Some of the current controls for the area that are sufficient to meet the RACM/RACT requirement include: Existing PM2.5 and ozone RACT rules, mobile source controls, SO2 reductions from 2010 SO2 nonattainment areas including a large EGU in neighboring Lake County, Federal interstate transport rules, and regional haze.

OEPA provided an attainment analysis that consisted of: First, a modeling demonstration that the area would attain by the attainment date in 2021 with current on-the-books controls and measures; and second, a demonstration showing that by interpolating modeled future values from 2021 with 2016 design values at the monitored sites, the area would be attaining the standard in both 2020 (at 11.0 μg/m3) and 2019 (at 11.3 μg/m3) at the design value monitor prior to the 2021 statutory attainment date. The interpolation suggested that the area would attain at the end of 2017, similar to EPA modeling analysis discussed below, and is now verified by the preliminary 2015-2017 design values that indicate the area is likely attaining as of the end of 2017. In addition, the PM2.5 SIP Requirements Rule outlines the option for states to do an additional modeling demonstration to show that specific PM2.5 precursors are not significant contributors to PM2.5 levels that exceed the standard in the area. OEPA provided a precursor demonstration modeling analysis that was intended to demonstrate that emissions of NH3 and VOC are not significant PM2.5 precursors for attainment planning purposes.

For the precursor demonstration, OEPA and LADCO initially performed a “concentration-based” contribution analysis using speciated monitoring data to determine whether NH3 or VOC contribute significantly to PM2.5 concentrations in the area, based on monitored values alone. However, using the assumption suggested in the draft precursor demonstration guidance that all NH3 emissions are associated with the nitrate portion of PM2.5 mass, and that all VOC emissions are associated with the organic carbon portion of PM2.5 mass, the state could not determine that these precursors did not make a significant contribution.

Therefore, the state proceeded with a sensitivity analysis to determine the impact of reducing NH3 and VOC emissions on PM2.5 concentrations in the nonattainment area. OEPA and LADCO performed a modeled sensitivity analysis for attainment planning purposes using the 2021 attainment year concentrations at each monitor in the Cleveland area. LADCO applied a 40% emission reduction to anthropogenic sources of NH3 and VOC emissions for all source categories in the Cleveland nonattainment area. The OEPA submission indicated that the 40% comprehensive reduction was chosen because it was within the range of a previously published, comprehensive sensitivity analysis done in photochemical modeling which typically uses 30-50% when applying the reduction across all emission sectors—as done for this analysis.2

The submission was made by the state prior to the date that the precursor guidance was issued by EPA; however, the modeled reduction levels are still within the suggested range of 30-70% reductions found in the precursor guidance.

The results of the 2021 attainment planning sensitivity analyses show modeled impacts from reducing NH3 by 40% on PM2.5 concentrations at the monitors ranging from 0.10-0.21 µg/m3, and modeled impacts from reducing VOC ranging from 0.0-0.01 µg/m3. Although there is no explicit concentration which EPA has determined represents a significant contribution, the current draft precursor guidance suggests that a contribution level of 0.2 µg/m3 is an appropriate recommended threshold to identify an air quality change that is “insignificant” for annual average PM2.5. In this case, all modeled impacts for VOC emissions are well below the recommended threshold, and most of the modeled NH3 impacts are at or below the threshold as well, with only one ambient air quality monitor showing modeled ambient PM2.5 levels slightly above the recommended threshold (at 0.21 µg/m3).

EPA's precursor guidance noted that there may be cases where precursor emissions have an impact above the recommended contribution thresholds, yet do not “significantly contribute” to levels that exceed the standard in the area (pursuant to section 189(e)). Under the PM2.5 SIP Requirements Rule, the significance of a precursor's contribution is to be determined “based on the facts and circumstances of the area.” Air agencies may thus provide EPA with information related to other factors they believe should be considered in determining whether the contribution of emissions of a particular precursor to levels that exceed the NAAQS is “significant” or not. Such factors may include: The amount by which a precursor's contribution exceeds the recommended contribution thresholds; the severity of nonattainment at relevant monitors and/or grid cell locations in the area; trends in ambient speciation data and precursor emissions; and any other relevant information.

Based on a number of factors, in this case EPA believes that NH3 is not a significant precursor. The relevant factors include: The magnitude of the amount above the threshold is small compared to the total threshold amount (5% of the total threshold amount); the area continues to trend downward in both ambient monitoring data and emissions in direct PM2.5 and precursors; current preliminary monitoring data shows the area is attaining the standard; and additionally, this small amount of PM2.5 resulting from NH3 would not interfere with the area's ability to attain the standard, as evidenced by the fact that the preliminary 2015-2017 design value is 0.7 µg/m3 below the NAAQS. Regardless of the finding of significance for these precursors, the area is expected to attain (based on preliminary design values) with only current controls in place, and it would not be required to control any sources further. Additionally, the area has preliminary 2015-2017 data indicating that it has a three-year design value below the level of the NAAQS, so that any additional controls would not be implemented until well after the area has attained the standard.

Based on the above, EPA agrees with the determination by Ohio that for attainment planning purposes, additional controls on existing sources of NH3 and VOC emissions do not need to be imposed.

OEPA conducted a six-step RACM analysis that focused on direct PM2.5, NOX, and SO2: (1) Identify sources in the area for PM2.5, NOX, and SO2—that comprised over 90% of the emissions for each pollutant over all source categories; (2) identify potential control measures; (3) evaluate technological feasibility; (4) evaluate economic feasibility; (5) determine if the measures can be implemented within both four and five years; (6) evaluate the earliest practical year for attainment.

As detailed in OEPA's RACT/RACM analysis in Appendix E, many of the sources are already well controlled. The state then identified current controls for each source as well as any additional measures or controls that are potentially available to each of the identified sources using EPA's “Menu of Control Measures” document, available online at http://www.epa.gov/air/criteria.html and the RACT/BACT/LAER Clearinghouse (RBLC) at http://cfpub.epa.gov/rblc/. OEPA then determined if any of the identified controls were technologically or economically feasible using EPA's the method outlined in the PM2.5 SIP Requirements Rule, which can include factors such as a source's process and operating procedures, raw materials, physical plant layout, and potential environmental impacts such as increased water pollution, waste disposal and energy requirements (see 40 CFR 51.1009(a)(3)(i)).

In regard to area and mobile sources, a state may tailor the analysis to the considerations that are relevant to the local circumstances, such as the condition and extent of needed infrastructure, population size, and workforce type and habits, all of which may impact the availability of potential control measures in the area. (81 FR 58010)

OEPA also determined economic feasibility of each identified measure or technology. That analysis included consideration of the cost of reducing emissions in the area and the difference between the cost of an emissions reduction measure at a particular source in the area and the cost of emissions reduction measures that have been implemented at similar sources in the same or other areas.

OEPA determined that the technologically feasible measures that were identified were not economically feasible. For example, the state determined that the cost-effectiveness ranged from $5800 per ton to more than $40,000 per ton for measures that were found to be technologically feasible for major stationary sources. In addition, the highest costs of reductions were generally linked to controls of direct PM2.5, and OEPA has determined that reductions in direct PM2.5 would be the most effective at reducing the monitored concentrations in the Cleveland area. Thus, the state found that the most effective controls are not reasonable to implement based on cost.

Finally, OEPA analyzed the implementation time frame of controls within four years and the earliest applicable attainment date, which by interpolation would be the end of 2017, and determined that the area would attain the standard prior to the state rulemaking and implementation of additional controls in the area. In fact, the area has preliminary 2015-2017 data indicating that it has a three-year design value below the level of the NAAQS, making implementation of additional controls to achieve attainment moot.

As noted by OEPA, both the Federal and state “on the books” controls have led to additional control and will lead to additional emissions reductions in the future. Because of the historic nonattainment status of this area for both ozone and PM2.5, the Cleveland nonattainment area is one of the most well controlled areas in the state for pollutants contributing to formation of both PM2.5 and ozone. Ohio's current rules, current controls and the Federal “on the books” controls continue to satisfy RACT/RACM for the annual PM2.5 standard. Some of the current controls that are sufficient to meet the RACT/RACM requirement are Ohio's current RACT program found in Ohio Administrative Code (OAC) Chapter 3745-17, which controls NOX; rules under OAC Chapter 3745-18 which control SO2 sources for the state; and the inspection and maintenance program contained in OAC Chapter 3745-26, which reduces emissions of NOX and VOC from on-road vehicles. OEPA has determined that no additional controls are feasible to implement as RACM/RACT in the Cleveland area, and that current controls meet the requirement for RACM under 172(c)(1) and 189(a)(1)(C).

EPA finds OEPA's determination reasonable, and is proposing to approve OEPA's determination that current controls meet the RACM/RACT requirement and that additional controls are not reasonable for other sources in the area or necessary to expeditiously attain the NAAQS.

As noted above, the attainment demonstration modeling analysis reflecting 2021 projected emissions based on only current controls shows that projected 2021 air quality values at monitoring sites in the area range from 8.07-10.69 µg/m3, well below the standard. Monitoring data for the 2014-2016 design values show only one monitor in the area is above the standard at 12.2 µg/m3, and is trending downward. Interpolation between current and projected monitor values indicates that the area is likely to attain the standard with current controls by the end of the 2017 calendar year. Current, preliminary monitored design values for the years 2015-2017 shows the highest values being monitored in the Cleveland area is 11.3 μg/m3. EPA also conducted modeling in 2015 in support of regulatory initiatives regarding the revised ozone NAAQS and interstate transport (Appendix B), and these analyses also indicate that the Cleveland area will attain the PM2.5 NAAQS well before the outermost attainment date of December 31, 2021.

Based on the above, EPA is proposing to find that current controls on sources in the nonattainment area meet the requirements of section 172(c)(1) and section 189(a)(1)(C) of the CAA. Accordingly, EPA is proposing to approve current controls: Federal mobile source standards, transport rules, Regional Haze plans, and state VOC RACT rules as meeting the RACM/RACT provisions.

In addition to the attainment planning precursor demonstrations, which showed that neither existing sources of VOC nor existing sources of NH3 have a significant contribution to PM2.5 concentrations, OEPA provided an analysis for both VOC and NH3 intended to show that increases in emissions of these precursors that may result from new or modified sources would not make a significant contribution to PM2.5 concentrations in the area. This demonstration is intended to justify the state's determination that major stationary sources of these precursors do not need to be regulated under the NNSR program for the area. For NNSR permitting purposes, CAA section 189(e), as interpreted by the PM2.5 SIP Requirements Rule, provides an option for the state to provide a precursor demonstration intended to show that increases in emissions from potential new and existing major stationary sources of a particular precursor would not contribute significantly to levels that exceed the 2012 PM2.5 NAAQS in a particular nonattainment area. 40 CFR 51.1006(a)(3). In particular, EPA's regulations provide that a state choosing to submit an NNSR precursor demonstration should evaluate the sensitivity of PM2.5 levels in the nonattainment area to an increase in emissions of the precursor. If the state demonstrates that the estimated air quality changes determined through such an analysis are not significant, based on the facts and circumstances of the area, the state may use this information to identify new major stationary sources and major modifications of a precursor that will not be considered to contribute significantly to PM2.5 levels that exceed the standard in the nonattainment area under CAA section 189(e). Id. 51.1006(a)(3)(i). If EPA approves the state's NNSR precursor demonstration for a nonattainment area, major sources of the relevant precursor can be exempted from the NNSR major source permitting requirements for PM2.5 with respect to that precursor. Id. 51.1006(a)(3)(ii).

For NNSR permitting purposes, sensitivity analyses examine potential increases in emissions through a model simulation that evaluates the effect on PM2.5 concentrations in the area resulting from a given set of precursor emission increases from one or more new or modified stationary sources. Ohio's 2011 and 2021 comprehensive modeling inventories were used for this analysis. To help determine a theoretical growth scenario as a result of major source expansion (new or modified), Ohio first prepared inventories for VOC and NH3 for 2008 to 2014 for the entire State from Ohio's annual emissions reporting program. Ohio used inventories for the entire State in order to determine what types of major sources/source categories are likely to expand (new or modified) within the Cleveland area and at what magnitude (tons per year) those expansions are likely to occur. These inventories and the full detailed analysis are contained in Appendix F of Ohio's submission.

Consistent with EPA's regulation and draft guidance, OEPA and LADCO have performed sensitivity analyses of potential increases in emissions through a model simulation that evaluates the effect on PM2.5 concentrations in the nonattainment area (including unmonitored areas) resulting from a given set of hypothetical NH3 or VOC precursor emission increases from modified major stationary sources of the respective precursors in the nonattainment area. The inventories and the full detailed analysis are contained in Appendix F of Ohio's submission. For the NH3 analysis, Ohio assumed emissions increases at three existing locations of NH3 in the area, as these would be the most likely future areas of growth in the Cleveland area. EPA believes that the use of the historical inventories to predict growth is reflective of the future potential increases specific to the Cleveland area given the current types of facilities and their respective locations, the urban density and ability to expand or build, as well as the types of state regulation or other Federal requirements (such as National Emission Standards for Hazardous Air Pollutants) on facility types and controls required for other pollutants. EPA believes that this is an acceptable approach to estimating potential future growth.

In addition to the modeled emissions increases based on historical growth at sources, LADCO and OEPA did an additional NH3 modeling analysis (submitted July 18, 2017) based on a 100 tpy emissions increase (to represent major sources) in each modeled grid cell in the nonattainment area. EPA believes that this is a sufficiently conservative analysis that exceeds the level of actual potential NH3 emissions growth likely to occur in the area. Both of these approaches are consistent with suggested modeling in EPA's precursor guidance. Thus, EPA finds that this analysis serves as a reasonable evaluation of the sensitivity of PM2.5 concentrations to a large emissions increase across the spatial area.

For the VOC analysis, Ohio added 1,486 tpy of VOC emissions at 3 existing source locations where VOC emissions increases potentially could occur in the nonattainment area. Compared to the 2011 inventory, this represents a 75% increase in VOC emissions from existing stationary sources (EGU and non-EGU). Compared to the 2021 projected inventory, this represents an 80% increase in stationary source emissions. For the NH3 analysis, Ohio added 325 tpy of NH3 emissions (scenario 1) to 3 existing source locations where NH3 emissions increases potentially could occur in the nonattainment area. Compared to the 2011 inventory, this represents a 447% increase in NH3 emissions from existing stationary sources. Compared to the 2021 projected inventory, this represents a 449% increase in NH3 from stationary sources. The additional NH3 analysis (scenario 2) had a total emissions increase of 1,700 tpy, which is over 500% higher growth than the historical NH3 growth (scenario 1).

Ohio found the addition of the NH3 emissions (approximately 350 tpy) into the model based on historical growth (scenario 1) would result in a peak impact of 0.08 μg/m3, and the addition of the above VOC emissions would result in a peak impact of 0.02 μg/m3. The modeled impacts are well below the recommended significance contribution threshold of 0.2 μg/m3; for VOC it is an order of magnitude difference, and for NH3 the maximum value is less than half the recommended significant contribution threshold level. The results of NH3 modeling for scenario 2 indicate that, even with a conservatively large NH3 increase, the maximum impact was 0.24 μg/m3, which is only slightly above the recommended contribution threshold of 0.2 μg/m3.

While the increase is slightly above the recommended contribution threshold, EPA believes that it is reasonable to conclude that NH3 emissions from major stationary sources (in the context of a NNSR precursor demonstration) do not contribute significantly to PM2.5 concentrations in the nonattainment area for the following reasons: Historical growth of NH3 sources in the area are significantly less than what was modeled for scenario 2; the only likely future increases of NH3 emissions from major sources in the area are from the increased use of NH3 for EGU NOX control (ammonia slip) and would likely occur at existing EGUs (as modeled in scenario 1); the area continues to trend downward in both monitored PM2.5 concentrations and PM2.5 (direct and precursor) emissions; current preliminary monitoring data shows the area is attaining the standard; and, this small amount of additional ambient PM2.5 concentration, based on the modeling analysis, would therefore not interfere with the area's ability to attain the standard given that the current preliminary design value for 2015-2017 is 11.3 μg/m3; and the additional modeled increase of 0.24 μg/m3 would not impact the area's ability to attain or maintain the NAAQS.

Based on the results of the modeling demonstration and the additional factors described in this section, EPA is proposing to approve Ohio's determination that emissions increases of either VOC or NH3 from new and modified major stationary sources would not contribute significantly to PM2.5 levels that exceed the 2012 PM2.5 NAAQS in the Cleveland nonattainment area. Accordingly, new or modified major sources of VOC and NH3 may be exempted from the state's NNSR program requirements for PM2.5 in the Cleveland PM2.5 nonattainment area.

Ohio's attainment demonstration modeling, and precursor analysis for both attainment planning RACM and nonattainment NNSR determined that VOCs and NH3 do not significantly contribute to PM2.5 concentrations in the area. EPA finds that Ohio's analysis is reasonable and well supported. EPA is thus proposing to approve the following elements of the 2012 SIP submission: The base year 2011 emissions inventory to meet the section 172(c)(3) requirement for emission inventories; the demonstration of attainment for 2021 as meeting the statutory requirement in CAA 189(a)(1)(B); current controls as meeting RACM requirements of 172(c)(1) and 189(a)(1(C).

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);

• Is not an Executive Order 13771 (82 FR 9339, February 2, 2017) regulatory action because SIP approvals are exempted under Executive Order 12866;

• 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).

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

In the summer of 2011, the Ozone Transport Commission (OTC) updated its Architectural and Industrial Maintenance Model Rule, and in the spring of 2013, OTC updated its Consumer Products Model Rule. Connecticut subsequently revised its regulations at RCSA section 22a-174-40, “Consumer Products,” and section 22a-174-41, “Architectural and Industrial Maintenance Products—Phase 1,” and added section 22a-174-41, “Architectural and Industrial Maintenance Products—Phase 2,” which all became effective in the State of Connecticut on October 5, 2017. Connecticut submitted these regulations to EPA in a SIP revision dated October 18, 2017.

EPA last approved Connecticut's RCSA section 22a-174-40, “Consumer Products,” into the Connecticut SIP on June 9, 2014 (79 FR 32873) and last approved RCSA section 22a-174-41, “Architectural and Industrial Maintenance Products,” into the Connecticut SIP on August 22, 2012 (77 FR 50595).

Connecticut revised section 22a-174-40, “Consumer Products,” is based on the 2013 OTC Model Rule for Consumer Products. Connecticut's rule contains limits for more categories of consumer products than EPA's National Volatile Organic Compound Emission Standards for Consumer Products rule at 40 CFR part 59 subpart C (63 FR 48831, September 11, 1998). The regulation limits are also equal to, or more stringent than, those found in EPA's consumer products rule.

The consumer products listed in Section 22a-174-40 include items sold to retail consumers for household or automotive use, as well as products used in commercial and institutional settings, such as beauty shops, schools and hospitals. The regulation has VOC content limits for over one hundred categories. In addition to the VOC emissions limits, the regulation includes: Limits on toxic contaminants in antiperspirants and deodorants and other consumer products; requirements for charcoal lighter materials, aerosol adhesives and floor wax strippers; requirements for products containing ozone-depleting compounds; product labeling requirements; and record keeping, reporting and testing requirements.

Connecticut revised RCSA section 22a-174-41, “Architectural and Industrial Maintenance Products” renaming the section “Architectural and Industrial Maintenance Products—Phase 1,” and changing its applicability to only regulate AIM coatings manufactured through April 30, 2018. For AIM coatings manufactured on and after May 1, 2018, Connecticut added a new section 22a-174-41a “Architectural and Industrial Maintenance Products—Phase 2,” which contains a number of new coating categories and reduced VOC content limits for some existing coating categories, consistent with the 2011 OTC AIM model rule. The limits in the Connecticut AIM rules remain as stringent as, or more stringent than, those contained in the EPA's AIM rule at 40 CFR part 59 Subpart D (63 FR 48848; September 11, 1998).

Connecticut's revised RCSA sections 22a-174-40, 22a-174-41, and new section 22a-174-41a include additional and more stringent VOC emission controls than the previous SIP-approved version of the consumer product and AIM rules. Thus, the SIP revision satisfies the requirements of Section 110(l) of the CAA because the revision will not interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable requirement of the CAA. Accordingly, we are proposing to approve Connecticut's revised regulations into the Connecticut SIP.

EPA is proposing to approve and incorporate into the Connecticut SIP revised RCSA section 22a-174-40, “Consumer Products,” revised section 22a-174-41, “Architectural and Industrial Maintenance Products—Phase 1,” and new section 22a-174-41a “Architectural and Industrial Maintenance Products—Phase 2,” all of which became effective in the State of Connecticut on October 5, 2017.

EPA is soliciting public comments on the issues discussed in this notice or on other relevant matters. These comments will be considered before taking final action. Interested parties may participate in the Federal rulemaking procedure by submitting written comments to this proposed rule by following the instructions listed in the ADDRESSES section of this Federal Register.

In this rule, the 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, the EPA is proposing to incorporate by reference Connecticut RCSA sections 22a-174-40, 22a-174-41, and 22a-174-41a. The EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and in hard copy at the appropriate EPA office.

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

• Is not a significant regulatory action subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

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

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the 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).

On June 2, 2010, the EPA established a new primary 1-hour SO2 NAAQS of 75 parts per billion (ppb), based on a 3-year average of the annual 99th percentile of 1-hour daily maximum concentrations.1 The CAA requires states to submit, within 3 years after promulgation of a new or revised NAAQS, SIPs meeting the applicable “infrastructure” elements of sections 110(a)(1) and (2). One of these applicable infrastructure elements, CAA section 110(a)(2)(D)(i), requires SIPs to contain “good neighbor” provisions to prohibit certain adverse air quality effects on neighboring states due to interstate transport of pollution.

Section 110(a)(2)(D)(i) includes four distinct components, commonly referred to as “prongs,” that must be addressed in infrastructure SIP submissions. The first two prongs, which are codified in section 110(a)(2)(D)(i)(I), require SIPs to contain adequate provisions that prohibit any source or other type of emissions activity in one state from contributing significantly to nonattainment of the NAAQS in another state (prong 1) and from interfering with maintenance of the NAAQS in another state (prong 2). The third and fourth prongs, which are codified in section 110(a)(2)(D)(i)(II), require SIPs to contain adequate provisions that prohibit emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality in another state (prong 3) or from interfering with measures to protect visibility in another state (prong 4).

In this action, the EPA is proposing to approve the prong 1 and prong 2 portions of infrastructure SIP submissions submitted by: Colorado on July 17, 2013 and February 16, 2018; Montana on July 15, 2013; North Dakota on March 7, 2013; South Dakota on December 20, 2013; and Wyoming on March 6, 2015, as containing adequate provisions to ensure that air emissions in these states will not significantly contribute to nonattainment or interfere with maintenance of the 2010 SO2 NAAQS in any other state. All other applicable infrastructure SIP requirements for these SIP submissions have been addressed in separate rulemakings.

Although SO2 is emitted from a similar universe of point and nonpoint sources, interstate transport of SO2 is unlike the transport of fine particulate matter (PM2.5) or ozone, in that SO2 is not a regional pollutant and does not commonly contribute to widespread nonattainment over a large (and often multi-state) area. The transport of SO2 is more analogous to the transport of lead (Pb) because its physical properties result in localized pollutant impacts very near the emissions source. However, ambient concentrations of SO2 do not decrease as quickly with distance from the source as Pb because of the physical properties and typical release heights of SO2. Emissions of SO2 travel farther and have wider ranging impacts than emissions of Pb, but do not travel far enough to be treated in a manner similar to ozone or PM2.5. The approaches that the EPA has adopted for ozone or PM2.5 transport are too regionally focused and the approach for Pb transport is too tightly circumscribed to the source. SO2 transport is therefore a unique case and requires a different approach.

Given the physical properties of SO2, the EPA selected the “urban scale”—a spatial scale with dimensions from 4 to 50 kilometers (km) from point sources—given the usefulness of that range in assessing trends in both area-wide air quality and the effectiveness of large-scale pollution control strategies at such point sources.2 As such, the EPA utilized an assessment up to 50 km from point sources in order to assess trends in area-wide air quality that might impact downwind states.

As discussed in Section III of this proposed action, the EPA first reviewed each state's analysis to assess how the state evaluated the transport of SO2 to other states, the types of information used in the analysis and the conclusions drawn by the state. The EPA then conducted a weight of evidence analysis, including review of each state's submission and other available information, including air quality, emission sources and emission trends within the state and in neighboring states to which it could potentially contribute or interfere.3

In this section, we provide an overview of each state's 2010 SO2 transport analysis, as well as the EPA's evaluation of prongs 1 and 2 for each state. Table 1, below, shows emission trends for the five states addressed in this notice along with their neighboring states. The table will be referenced as part of the EPA's analysis for each state.4

Colorado conducted a weight of evidence analysis to examine whether SO2 emissions from Colorado adversely affect attainment or maintenance of the 2010 SO2 NAAQS in downwind states. Colorado evaluated potential air quality impacts on areas outside the State through an assessment of whether SO2 emissions from sources located within 50 km of Colorado's borders may have associated interstate transport impacts. Colorado's analysis included SO2 emissions information in the State, with specific focus on sources and counties located within 50 km of Colorado's borders. Among these sources, Colorado provided an in-depth analysis of the two sources emitting over 100 tons per year (tpy) of SO2; the Nucla Generating Station (47 km east of Utah border) and Rawhide Energy Station (15 km south of Wyoming border). Colorado also reviewed meteorological conditions at SO2 sources within 50 km of the State's border, and the distances from identified SO2 sources in Colorado to the nearest area that is not attaining the NAAQS or may have trouble maintaining the NAAQS in another state. Finally, Colorado reviewed mobile source emissions data from highway and off-highway vehicles in all of the Colorado counties which border other states. Based on this weight of evidence analysis, Colorado concluded that emissions within the State will not contribute to nonattainment or interfere with maintenance of the 2010 SO2 NAAQS in neighboring states.

The EPA proposes to find that Colorado's SIP meets the interstate transport requirements of CAA section 110(a)(2)(D)(i)(I), prong 1 for the 2010 SO2 NAAQS, as discussed below. We have analyzed the air quality, emission sources and emission trends in Colorado and neighboring states, i.e., Arizona, Kansas, Nebraska, New Mexico, Oklahoma, Utah and Wyoming. Based on that analysis, we propose to find that Colorado will not significantly contribute to nonattainment of the 2010 SO2 NAAQS in any other state.

We reviewed 2014-2016 SO2 design value concentrations at monitors with data sufficient to produce valid 1-hour SO2 design values for Colorado and neighboring states.5 In Table 2, below, we have included monitoring data from four scenarios: (1) All of the monitor data from Colorado; (2) the monitor with the highest SO2 level in each neighboring state; (3) the monitor in each neighboring state located closest to the Colorado border; and (4) all monitors in each neighboring state within 50 km of the border.

The EPA reviewed ambient air quality data in Colorado and neighboring states to see whether there were any monitoring sites, particularly near the Colorado border, with elevated SO2 concentrations that might warrant further investigation with respect to interstate transport of SO2 from emission sources near any given monitor. As shown, there are no violating design values in Colorado or neighboring states apart from in the Hayden, Arizona and Miami, Arizona areas. In Colorado's analysis, the state reviewed its potential impact on the Hayden and Miami, Arizona 2010 SO2 nonattainment areas, which are the only areas designated nonattainment in states bordering Colorado. Colorado noted the significant distance between its border and these nonattainment areas, as well as the larger distance between the nonattainment areas to the nearest major SO2 source in Colorado (Nucla Generating Station—582 km).

The data presented in Table 2, above, show that Colorado's network of SO2 monitors with data sufficient to produce valid 1-hour SO2 design values indicates that monitored 1-hour SO2 levels in Colorado are between 16% and 69% of the 75 ppb level of the NAAQS. As shown, there are no Colorado monitors located within 50 km of a neighboring state's border. Three monitors in neighboring states are located within 50 km of the Colorado border, and these monitors recorded SO2 design values ranging between 4% and 12% of the 2010 SO2 NAAQS. Thus, these air quality data do not, by themselves, indicate any particular location that would warrant further investigation with respect to SO2 emission sources that might significantly contribute to nonattainment in the neighboring states. However, because the monitoring network is not necessarily designed to find all locations of high SO2 concentrations, this observation indicates an absence of evidence of impact at these locations but is not sufficient evidence by itself of an absence of impact at all locations in the neighboring states. We have therefore also conducted a source-oriented analysis.

As noted, the EPA finds that it is appropriate to examine the impacts of emissions from stationary sources in Colorado in distances ranging from 0 km to 50 km from the facility, based on the “urban scale” definition contained in Appendix D to 40 CFR part 58, Section 4.4. Colorado assessed point sources up to 50 km from state borders to evaluate trends and SO2 concentrations in area-wide air quality. The list of sources of 100 tpy 7 or more of SO2 within 50 km from state borders, provided by Colorado, is shown in Table 3 below.

I. Background

Section 129 of the Clean Air Act (CAA or the Act) directs the Administrator to develop regulations under section 111(d) of the Act limiting emissions of nine air pollutants (particulate matter, carbon monoxide, dioxins/furans, sulfur dioxide, nitrogen oxides, hydrogen chloride, lead, mercury, and cadmium) from four categories of solid waste incineration units: Municipal solid waste; hospital, medical, and infectious solid waste; commercial and industrial solid waste; and other solid waste.

On December 1, 2000, EPA promulgated new source performance standards (NSPS) and EG to reduce air pollution from CISWI units, which are codified at 40 CFR part 60, subparts CCCC and DDDD, respectively. See 65 FR 75338. EPA revised the NSPS and EG for CISWI units on March 21, 2011. See 76 FR 15704. Following promulgation of the 2011 CISWI rule, EPA received petitions for reconsideration requesting that EPA reconsider numerous provisions in the rule. EPA granted reconsideration on certain issues and promulgated a CISWI reconsideration rule on February 7, 2013. See 78 FR 9112. Subsequently, EPA received petitions to further reconsider certain provisions of the 2013 NSPS and EG for CISWI units. On January 21, 2015, EPA granted reconsideration on four specific issues and finalized reconsideration of the CISWI NSPS and EG on June 23, 2016. See 81 FR 40956.

Section 129(b)(2) of the CAA requires states to submit to EPA for approval state plans and revisions that implement and enforce the EG—in this case, 40 CFR part 60, subpart DDDD. State plans and revisions must be at least as protective as the EG, and become federally enforceable upon approval by EPA. The procedures for adoption and submittal of state plans and revisions are codified in 40 CFR part 60, subpart B.

Florida submitted a state plan to implement and enforce the EG for existing CISWI units in the state 1 on February 6, 2014. On May 31, 2017, Florida submitted a revised plan, which was supplemented on December 19, 2017, and February 2, 2018. EPA has reviewed the revised plan for existing CISWI units in the context of the requirements of 40 CFR part 60, subparts B and DDDD. State plans must include the following nine essential elements: Identification of legal authority; identification of mechanism for implementation; inventory of affected facilities; emissions inventory; emission limits; compliance schedules; testing, monitoring, recordkeeping, and reporting; public hearing records; and, annual state progress reports on plan enforcement.

Under 40 CFR 60.26 and 60.2515(a)(9), an approvable state plan must demonstrate that the State has legal authority to adopt and implement the EG's emission standards and compliance schedule. In its submittal, Florida cites the following State law provisions for its authority to implement and enforce the plan: Florida Statutes (F.S.) Sec. 403.031 (definitions); F.S. Sec. 403.061 (promulgate air quality plans, adopt rules, take enforcement action, set standards, monitor air quality, require reporting, permitting, and implement the CAA); F.S. Sec. 403.087 and 403.0872 (permitting); F.S. Sec. 403.121 (judicial and administrative remedies), 403.131 injunctive relief), 403.141 (civil liability), and 403.161 (civil and criminal penalties); F.S. Sec. 403.201 (variances); F.S. Sec. 403.716 (operator training); and, F.S. Sec. 403.8055 (incorporation by reference of Federal standards). Florida also notes that it has adopted rules into the Florida Administrative Code to implement and enforce its air quality program. EPA has reviewed the cited authorities and has preliminarily concluded that the State has adequately demonstrated legal authority to implement and enforce the CISWI state plan in Florida.

Under 40 CFR 60.24(a), a state plan must include emission standards, defined at 40 CFR 60.21(f) as “a legally enforceable regulation setting forth an allowable rate of emissions into the atmosphere, or prescribing equipment specifications for control of air pollution emissions.” See also 40 CFR 60.2515(a)(8). Florida has adopted enforceable emission standards for affected CISWI units at Rule 62-204.800(9)(f). EPA has preliminarily concluded that the rule meets the emission standard requirement under 40 CFR 60.24(a).

Under 40 CFR 60.25(a) and 60.2515(a)(1), a state plan must include a complete source inventory of all CISWI units. Florida has identified affected units at five facilities: Titan Pennsuco, Argos Cement Newbery Kiln 1, Argos Cement Newberry Kiln 2, Suwannee American Cement, and American Cement Company LLC. Omission from this inventory of CISWI units does not exempt an affected facility from the applicable section 111(d)/129 requirements. EPA has preliminarily concluded that Florida has met the affected unit inventory requirements under 40 CFR 60.25(a) and 60.2515(a)(1).

Under 40 CFR 60.25(a) and 60.2515(a)(2), a state plan must include an emissions inventory of the pollutants regulated by the EG. Emissions from CISWI units may contain cadmium, carbon monoxide, dioxins/furans, hydrogen chloride, lead, mercury, nitrogen oxides, particulate matter, and sulfur dioxide. Florida submitted an emissions inventory for CISWI units as part of its state plan, which was supplemented on February 2, 2018. This emissions inventory contains CISWI unit emissions rates for each regulated pollutant. EPA has preliminarily concluded that Florida has met the emission inventory requirements of 40 CFR 60.25(a) and 60.2515(a)(2).

Under 40 CFR 60.24(a), 60.24(c), and 60.2515(a)(4), the state plan must include emission standards that are no less stringent than the EG. Florida has incorporated the emission standards from the EG by reference into its regulations at Rule 62-204.800(9)(f), F.A.C., with one exception: For units in the waste-burning kiln subcategory, Florida's state plan provides an equivalent production-based mercury emission limit of 58 pounds of mercury per million tons of clinker, rather than the concentration-based standard of 0.011 milligrams per dry standard cubic meter contained in Table 8 to subpart DDDD of part 60. See Rule 62-204.800(9)(f)(5), F.A.C.

Under 40 CFR 60.2515(b), EPA has the authority to approve plan requirements that deviate from the content of the EG, so long as the state demonstrates that the requirements are at least as protective. In the February 7, 2013 rule adopting the EG for existing CISWI units, EPA discussed its methodology for developing emission limits for the subcategories of sources subject to the rule. See 78 FR 9112 (February 7, 2013). Though we noted that the Agency was retaining an “emissions concentration basis for the standards,” we also expressed the standard for waste-burning kiln emission limits on a production basis. See id. at 9122-23. For those kilns, we noted that an equivalent production-based standard for mercury would be 58 pounds of mercury per million tons of clinker. See id. at 9122.

In other words, EPA has previously explained that the equivalent production-based emission limit of 58 pounds of mercury per million tons of clinker for waste-burning kilns is at least as protective as the standard contained in the EG. Because Florida's state plan imposes either this equivalent standard or the applicable EG on waste-burning kilns—and imposes the applicable EG on all other affected CISWI units—we have preliminarily concluded that Florida's CISWI plan satisfies the emissions limitations requirements of 40 CFR 60.24(c).

40 CFR 60.2515(a)(4) also requires a state plan to include operator training and qualification requirements, a waste management plan, and operating limits that are at least as protective as the EG. Florida's state plan incorporates these requirements from the EG at Rule 62-204.800(9)(f)(3)-(5). Thus, we have preliminarily concluded that Florida's state plan satisfies the requirements of 40 CFR 60.24(c) and 60.2515(a)(4).

Under 40 CFR 60.24(a), (c), and (e) and 40 CFR 60.2515(a)(3), each state plan must include a compliance schedule, which requires affected CISWI units to expeditiously comply with the state plan requirements. EPA has the authority to approve compliance schedule requirements that deviate from those imposed under the EG, so long as those are at least as protective as the EG. See 40 CFR 60.2515(b).

In the state plan at Rule 62-204.800(9)(f)(7), F.A.C., Florida generally requires that affected sources comply with the EG initial compliance requirements for CISWI units, which EPA has codified at 40 CFR 60.2700 through 40 CFR 60.2706. However, for waste-burning kilns complying with the production-based mercury emission limit, Florida's state plan requires compliance with the requirements applicable to Portland Cement Manufacturing Kilns, which are codified at 40 CFR part 63, subpart LLL. See Rule 62-204.800(9)(f)(7).

As noted above, EPA has authority to approve requirements that are at least as stringent as the EG. Here, we have preliminarily concluded that the state plan's compliance schedule requirements for waste-burning kilns contain all relevant elements of the EG, and also impose additional recordkeeping requirements that are necessary for the effective implementation and enforcement of the equivalent limit. For these reasons, we have preliminarily concluded that Florida's state plan satisfies the requirements of 40 CFR 60.24(a), (c), and (e) and 40 CFR 60.2515(a)(3).

Under 40 CFR 60.24(b)(2), 60.25(b), and 60.2515(a)(5), an approvable state plan must require that sources conduct testing, monitoring, recordkeeping, and reporting. Florida's state plan incorporates by reference the model rule provisions of the EG: For performance testing at Rule 62-204.800(9)(f)(6), F.A.C.; for monitoring at Rule 62-204.800(9)(f)(9), F.A.C.; and, for recordkeeping and reporting at Rule 62-204.800(9)(f)(10), F.A.C. In addition to these requirements, Florida imposes further monitoring, recordkeeping, and reporting requirements for waste-burning kilns operating under a production-based mercury emission limit. Because Florida's state plan imposes requirements that are at least as stringent as those imposed under Federal law for testing, monitoring, recordkeeping, and reporting, we have preliminarily concluded that Florida's CISWI plan satisfies the requirements of 40 CFR 60.24(b)(2), 60.25(b), and 60.2515(a)(5).

40 CFR 60.23 sets forth the public participation requirements for each state plan. The State must conduct a public hearing; make all relevant plan materials available to the public prior to the hearing; and provide notice of such hearing to the public, the Administrator of EPA, each local air pollution control agency, and, in the case of an interstate region, each state within the region. 40 CFR 60.2515(a)(6) requires each state plan include certification that the hearing was held, a list of witnesses and their organizational affiliations, if any, appearing at the hearing, and a brief written summary of each presentation or written submission. However, under 40 CFR 60.23(g), the Administrator may also approve alternative public participation procedures, so long as the procedures “in fact provide for adequate notice to and participation of the public.”

In its state plan submittal, as supplemented by its December 19, 2017 letter, Florida has requested approval of alternative public participation requirements for this and future state plan submittals. If approved, Florida intends to apply these modified public participation procedures to future state plans and state plan revisions. As Florida notes, the State published notice of the proposed revisions to the state plan in the Florida Administrative Register. In the notice, the State provided the public with an opportunity to submit comments and to request a public hearing, which would be held on February 21, 2017. Because Florida did not receive any comments or requests for hearing, however, the hearing was not held.

In these circumstances, we believe that Florida's procedures, although different from the procedures required under 40 CFR 60.23(c) and (d), provide for adequate notice to and participation of the public. We also note that the State's alternative procedures comply with the notice requirements for State Implementation Plan submittals under CAA section 110 and 40 CFR part 51. Thus, EPA is proposing in this action to approve Florida's alternative public participation procedures for this and future CAA section 111(d)/129 state plan submissions.

Under 40 CFR 60.25(e) and (f) and 40 CFR 60.2515(a)(7), the State must provide in its state plan for annual reports to EPA on progress in enforcement of the plan. Accordingly, Florida provides in its plan that it will submit reports on progress in plan enforcement to EPA on an annual (calendar year) basis, commencing with the first full reporting period after plan revision approval. EPA has preliminarily concluded that Florida's CISWI plan satisfies the requirements of 40 CFR 60.25(e) and (f) and 40 CFR 60.2515(a)(7).

Pursuant to CAA section 111(d), CAA section 129, and 40 CFR part 60, subparts B and DDDD, EPA is proposing to approve Florida's state plan for regulation of CISWI units as submitted on May 31, 2017, and supplemented on December 19, 2017, and February 2, 2018. In addition, EPA is proposing to amend 40 CFR part 62, subpart K to reflect this action.

Under the CAA, the Administrator is required to approve a 111(d)/129 plan submission that complies with the provisions of the CAA and applicable Federal regulations. In reviewing 111(d)/129 plan submissions, EPA's role is to approve state choices, provided they meet the criteria and objectives of the CAA and EPA's implementing regulations. 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 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).

In addition, this rule 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. It also 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). And it does not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because EPA is not proposing to approve the submitted plan to apply in Indian country located in the state, and because the submitted plan will not impose substantial direct costs on Tribal governments or preempt Tribal law.

EPA Region 8 announces its intent to delete the remaining portions of Davenport and Flagstaff Smelters Superfund Site from the National Priorities List (NPL) and requests public comment on this proposed action. The NPL constitutes Appendix B of 40 CFR part 300 which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to section 105 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in 40 CFR 300.425(e)(3) of the NCP, sites deleted from the NPL remain eligible for Fund-financed remedial actions if future conditions warrant such actions.

EPA will accept comments on the proposal to delete this Site for thirty (30) days after publication of this document in the Federal Register.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the Davenport and Flagstaff Smelters Superfund Site and demonstrates how it meets the deletion criteria.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the State, whether any of the following criteria have been met:

i. Responsible parties or other persons have implemented all appropriate response actions required;

ii. all appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

iii. the remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures in not appropriate.

Pursuant to CERCLA section 121(c) and the NCP, EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. EPA conducts such five-year reviews even if a site is deleted from the NPL. EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.

The following procedures apply to deletion of the Site:

(1) EPA consulted with the State before developing this Notice of Intent to Delete.

(2) EPA has provided the State 30 working days for review of this notice prior to publication of it today.

(3) In accordance with the criteria discussed above, EPA has determined that no further response is appropriate;

(4) The State of Utah, through the UDEQ, has concurred with deletion of the Site from the NPL.

(5) Concurrently with the publication of this Notice of Intent to Delete in the Federal Register, a notice is being published in a major local newspaper, Deseret News. The newspaper notice announces the 30-day public comment period concerning the Notice of Intent to Delete the Site from the NPL.

(6) The EPA placed copies of documents supporting the proposed deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.

If comments are received within the 30-day public comment period on this document, EPA will evaluate and respond appropriately to the comments before making a final decision to delete. If necessary, EPA will prepare a Responsiveness Summary to address any significant public comments received. After the public comment period, if EPA determines it is still appropriate to delete the Site, the Regional Administrator will publish a final Notice of Deletion in the Federal Register. Public notices, public submissions and copies of the Responsiveness Summary, if prepared, will be made available to interested parties and in the Site information repositories listed above.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for future response actions, should future conditions warrant such actions.

The following information provides EPA's rationale for deleting the Site from the NPL.

The 106-acre Davenport and Flagstaff Smelters Superfund Site (UTD988075719) is located 15 miles southeast of Salt Lake City at the mouth of Little Cottonwood Canyon. Constructed in the 1870s, the Davenport and the Flagstaff smelters treated ores from mines near Alta, Utah. Lead smelting was the dominant industrial activity at the Site. Lead and arsenic were the primary products associated with ore processing. At times copper, gold, silver, and other metals were also produced at the Site. Ore processing and disposal of waste products have resulted in contamination at the Site.

The EPA proposed the Davenport and Flagstaff Smelters Superfund Site on the National Priorities List (NPL) in January 2000 and finalized listing of the Site on April 30, 2003 (68 FR 23077). The EPA proposed the Site to the NPL based on studies conducted between 1992 and 2003 due to soil and sediments contaminated with lead and arsenic. Lead levels greater than 200,000 mg/kg were detected in an investigation conducted in 2000.

The Site is divided into three operable units. Operable Unit 1 (OU1) is the southern 28 acres of the Site. It is the location of the former Davenport Smelter and current location of residential properties. Operable Unit 2 (OU2) is the middle and western part of the Site, and is comprised of 29 acres of commercial and undeveloped land. Operable Unit 3 (OU3) is the northern 49 acres of the Site. The location of the former Flagstaff Smelter, which was once agricultural land, is now mostly residential. Wastes were present on the Site for many years and, in some locations, groundwater was in direct contact with visible slag without appreciable impact on groundwater. Concentrations of contaminants of concern (COCs) in groundwater are generally below federal maximum contamination limits (MCLs).

Because portions of OU1 was deleted from the NPL on August 20, 2004 under a Partial Deletion (69 FR 51583), the remaining portions of OU1, OU2 and OU3 are the focus of this deletion.

The former smelters were the suspected source of waste within OU1, OU2 and OU3. Analysis of sample data confirmed that soil contamination was caused by deliberate use of waste as fill and environmental factors transporting smelter waste. The 1999 Baseline Human Health Risk Assessment identified arsenic and lead as contaminants of concern. This Risk Assessment established the action levels of 600 mg/kg for lead and 126 mg/kg for arsenic for surface soils. EPA completed a Focused Feasibility Study (FS) in December 2001.

Prior to the signing of the Record on Decision (ROD) in 2009, a removal action in OU1 was conducted. While the majority of OU2 land was undeveloped, there were three residences and a restaurant within OU2. EPA issued a ROD for OU2 dated September 16, 2009, an Explanation of Significant Differences (ESD) dated July, 2012 and an ESD for OU1/OU3, dated November 11, 2015. These decision documents defined the remedy as follows:

• Soils on properties with principal threat wastes (wastes that fail TCLP and/or is a characteristic hazardous waste) required stabilization and disposal in a RCRA Subtitle C Hazardous Waste Landfill.

• Excavation of a minimum of 18 inches of soil of all properties was recommended for remediation of all residential properties that had soil lead levels which exceeded the established action levels of 600 mg/kg for lead and 126 mg/kg for arsenic.

• Hand excavation would be conducted around affected areas of native vegetation.

• Institutional Controls (ICs) to make sure the remedy is protective.

• Off-Site disposal of contaminated soils and backfill with clean soil.

• Due to physical restrictions presented by topography and existing utility structures, and to preserve mature vegetation to enhance the overall remedy performance, contamination at concentrations greater than action levels could be left in place.

• If removal of contaminated soils was not feasible due to steep slopes and existing structures, these soils remained after construction activities were completed if they did not pose a threat to human health.

The Remedial Action Objectives (RAOs), as amended, were to prevent unacceptable exposure risks to current and future human populations presented by contact, ingestion, or inhalation of smelter materials, associated contaminated materials, or COCs derived from the smelter wastes.

In 2004, an OU1 removal action addressed 26 residential properties. Remediation work for OU2 and OU3 was conducted in two removal actions. The contractor mobilized in August 2011. The pre-final inspection of the removal action was on November 16, 2011 and the final inspection on May 29, 2012. The OU2 Construction Completion Report was signed on September 24, 2012. Little Cottonwood Canyon Partners conducted a non-time critical removal action at OU3 under an agreement with the EPA and under oversight of the UDEQ. This action allowed for redevelopment of the agricultural land for residential use. Remediation work for OU3 began on April 26, 2006; the final inspection was conducted on September 6, 2006. The Final Close Out Report for OU3 is dated September 7, 2006. Site-wide, approximately a total of 137,000 tons were excavated and placed beneath an engineered soil and clay cap on-site. UDEQ was the lead agency for the remediation as defined in a cooperative agreement between EPA and UDEQ.

The Operations and Maintenance Plan consists of the following activities: inspection/observation during redevelopment construction; review of development construction plans and specification for conformance with cover requirements; storm water management and irrigation restrictions; and temporary stockpile and covering of soil and slag. Maintaining appropriate soil cover and drainage is a required operation and maintenance IC. The State is responsible for enforcing the cap and soil ICs.

The 2009 OU2 ROD required the establishment of ICs to prevent exposure to contaminated materials and to require State review of future changes to land use. ICs that support limited commercial and residential re-use were adopted by the City of Sandy. In addition, ICs for groundwater and surface water were established by the State to prohibit use as drinking water.

Statutory Five-Year Reviews (FYR) of the Site are required because hazardous substances remain on-Site above levels which allow for unlimited use and unrestricted exposure. Two FYRs were conducted, in 2012 and 2017. Both FYRs found the remedy at the Site to be protective. The 2017 FYR identified an issue of needing to clarify roles of local authorities with respect to ICs. The issue was resolved by ensuring Salt Lake County would monitor and enforce ICs. The next five-year review is scheduled to be completed by September 2022.

Major community involvement activities included establishing a local presence by meeting with local property owners and concerned citizens. Outreach efforts included community interviews, fact sheets, letters, flyers, door-to-door visits, public meetings, neighborhood meetings, public comment periods and website updates. The most recent interviews were conducted in the spring 2017 for the FYR. The EPA's Community Involvement criteria associated with 40 CFR 300.425(e)(4) require EPA to conduct interviews and/or gather community input.

Today, approximately seventy percent of the Site has been fully developed for residential and commercial land-use. The successful revitalization of this Site is sustainable, provides valuable reuse, and elevates the quality of life with revitalization for years to come.

The implemented Site-wide remedy achieves the RAOs specified in the September 2009 OU2 ROD and the April 25, 2005 OU1/OU3 ESD for all pathways of exposure. No further Superfund responses are needed to protect human health and the environment at the Site.

The NCP (40 CFR 300.425(e)) states that a site may be deleted from the NPL when no further response action is appropriate. EPA, in consultation with the State of Utah, has determined that all required response actions have been implemented and no further response action is appropriate.

On December 4, 2003, DHS published an interim final rule to establish the Department of Homeland Security Acquisition Regulation (HSAR). 68 FR 67867. On May 2, 2006, DHS published a final rule, which adopted the interim rule with some changes in response to public comment (HSAR final rule). 71 FR 25759. The HSAR final rule finalized, among other things, HSAR clause 3052.219-70, Small Business Subcontracting Reporting Plan (48 CFR 3052.219-70). HSAR clause 3052.219-70 requires contractors to: (a) Enter the information for the Subcontracting Report for Individual Contracts (formally the Standard Form 294 (SF-294)) and the Summary Subcontract Report (formally the Standard Form 295 (SF-295)) into the Electronic Subcontracting Reporting System (eSRS) at www.esrs.gov; and (b) include HSAR clause 3052.219.70 in all subcontracts that include the clause at (FAR) 48 CFR 52.219-9. The eSRS is a web-based system, which replaces the Standard Forms 294 and 295 as the mechanism for submitting reports required by the small business subcontracting program.

On June 16, 2010, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council issued a final rule amending the Federal Acquisition Regulation (FAR) to require contractors' small business subcontract reports be submitted using the eSRS, rather than Standard Forms 294 and 295. 75 FR 34260; FAR Case 2005-040. This change to the FAR was issued under Federal Acquisition Circular 2005-42 of June 16, 2010. 75 FR 34291. As a result of the FAR revision HSAR clause 3052.219-70 is no longer needed to provide guidance to contractors on the eSRS requirements. Therefore, DHS is proposing to remove HSAR clause 3052.219-70 and the cross-reference to it found in paragraph (a) of 48 CFR 3019.708-70.

In addition, DHS is proposing to amend the authority citation for part 3019 to conform the authority to the Positive Law Codification of Title 41, United States code, “Public Contracts”. The new codification of Title 41 was enacted on January 4, 2011.1

Executive Orders 13563 (“Improving Regulation and Regulatory Review”) and 12866 (“Regulatory Planning and Review”) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 13771 (“Reducing Regulation and Controlling Regulatory Costs”) directs agencies to reduce regulation and control regulatory costs and provides that “for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”

The Office of Management and Budget (OMB) has not designated this rule a “significant regulatory action,” under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it. OMB considers this rule to be an Executive Order 13771 deregulatory action. See OMB's Memorandum “Guidance Implementing Executive Order 13771, Titled `Reducing Regulation and Controlling Regulatory Costs'” (April 5, 2017). This rule is not a major rule under 5 U.S.C. 804.

There are no quantified costs or cost savings to this rule as it simply rescinds requirements that have already been shifted to the FAR. DHS believes there are non-monetized efficiency and streamlining benefits to this rule as it removes outdated provisions of the HSAR.

This action rescinds HSAR clause 3052.219-70 and, as such, DHS does not expect the proposed change to result in a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq.

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

The total hours and costs associated with existing HSAR clause 3052.219-70, as set forth in HSAR OMB Control Number, 1600-0003, Post-award Contract Information, are as follows:

Estimated Respondents: 11,885.

Average Responses Annually: 3.

Total Annual Responses: 35,655.

Estimated Hours: 12.

Total Hours: 427,860.

Hourly Rate: $67.86.

Total Costs: $29,034,579.60.

Therefore, DHS proposes to revise 48 CFR parts 3019 and 3052 as follows: