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[Federal Register Volume 81, Number 125 (Wednesday, June 29, 2016)]
[Rules and Regulations]
[Pages 42256-42263]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15040]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R07-OAR-2016-0303; FRL-9948-13-Region 7]

Approval and Promulgation of Air Quality Implementation Plans; 
State of Kansas; Cross-State Air Pollution Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking direct 
final action to approve a December 1, 2015, State Implementation Plan 
(SIP) submittal from Kansas concerning allocations of Cross-State Air 
Pollution Rule (CSAPR) emission allowances. Under CSAPR, large 
electricity generating units in Kansas are subject to a Federal 
Implementation Plan (FIP) requiring the units to participate in CSAPR's 
Federal trading program for annual emissions of nitrogen oxides 
(NOX). This action approves Kansas's adoption into its SIP 
of state regulations establishing state-determined allocations to 
replace EPA's default allocations to Kansas units of CSAPR allowances 
for annual NOX emissions for 2017 through 2019. EPA is 
approving the SIP revision because it meets the requirements of the 
Clean Air Act (CAA) and EPA's regulations for approval of an 
abbreviated SIP revision replacing EPA's default allocations of CSAPR 
emission allowances with state-determined allocations. Approval of this 
SIP revision does not alter any provision of CSAPR's Federal trading 
program for annual NOX emissions as applied to Kansas units 
other than the allowance allocation provisions, and the FIP requiring 
the units to participate in the trading program (as modified by the SIP 
revision) remains in place. The approval is being issued as a direct 
final rule without a prior proposed rule because EPA views it as 
uncontroversial and does not anticipate adverse comment.

DATES: This direct final rule will be effective August 15, 2016, 
without further notice, unless EPA receives adverse comment by July 29, 
2016. If EPA receives adverse comment, we will publish a timely 
withdrawal of the direct final rule in the Federal Register informing 
the public that the rule will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-
OAR-2016-0303, to http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. EPA may publish any comment 
received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points

[[Page 42257]]

you wish to make. EPA will generally not consider comments or comment 
contents located outside of the primary submission (i.e., on the web, 
cloud, or other file sharing system). For additional submission 
methods, the full EPA public comment policy, information about CBI or 
multimedia submissions, and general guidance on making effective 
comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Mr. Larry Gonzalez, Air Planning and 
Development Branch, Air and Waste Management Division, EPA Region 7, 
11201 Renner Boulevard, Lenexa KS 66219; telephone number: (913) 551-
7041; email address: Gonzalez.larry@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document ``we,'' ``us,'' or 
``our'' refer to EPA. This section provides additional information by 
addressing the following:

I. What is being addressed in this document?
II. Background on CSAPR and CSAPR-Related SIP Revisions
III. Conditions for Approval of CSAPR-Related SIP Revisions
IV. Kansas's SIP Submittal and EPA's Analysis
    A. Kansas's SIP Submittal
    B. EPA's Analysis of Kansas' Submittal
    1. Timeliness and Completeness of SIP Submittal
    2. Methodology Covering All Allowances Potentially Requiring 
Allocation
    3. Assurance That Total Allocations Will Not Exceed the State 
Budget
    4. Timely Submission of State-Determined Allocations to EPA
    5. No Changes to Allocations Already Submitted to EPA or 
Recorded
    6. No Other Substantive Changes to Federal Trading Program 
Provisions
V. EPA's Action on Kansas' Submittal

I. What is being addressed in this document?

    EPA is taking direct final action to approve a revision to the SIP 
for Kansas concerning allocations of allowances used in the CSAPR \1\ 
Federal trading program for annual emissions of NOX. Large 
electricity generating units in Kansas are subject to a CSAPR FIP that 
requires the units to participate in the Federal CSAPR NOX 
Annual Trading Program.\2\ Each of CSAPR's Federal trading programs 
includes default provisions governing the allocation among 
participating units of emission allowances used for compliance under 
that program. CSAPR also provides a process for the submission and 
approval of SIP revisions to replace EPA's default allocations with 
state-determined allocations.
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    \1\ Federal Implementation Plans; Interstate Transport of Fine 
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR 
48208 (August 8, 2011), (codified as amended at 40 CFR 52.38 and 
52.39 and subparts AAAAA through DDDDD of 40 CFR part 97).
    \2\ EPA has proposed to replace the terms ``Transport Rule'' and 
``TR'' in the text of the Code of Federal Regulations with the 
updated terms ``Cross-State Air Pollution Rule'' and ``CSAPR.'' 80 
FR 75706, 75759 (December 3, 2015). Except where otherwise noted, 
EPA uses the updated terms here.
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    The SIP revision approved in this action incorporates into Kansas' 
SIP state regulations establishing state-determined allowance 
allocations to replace EPA's default allocations to Kansas units of 
CSAPR NOX Annual allowances issued for the control periods 
in 2017 through 2019. EPA is approving the SIP revision because it 
meets the requirements of the CAA and EPA's regulations for approval of 
an abbreviated SIP revision replacing EPA's default allocations of 
CSAPR emission allowances with state-determined allocations. Approval 
of this SIP revision does not alter any provision of the CSAPR 
NOX Annual Trading Program as applied to Kansas units other 
than the allowance allocation provisions, and the FIP requiring those 
units to participate in the program (as modified by this SIP revision) 
remains in place. Because the SIP revision addresses only the control 
periods in 2017 through 2019, absent submission and approval of a 
further SIP revision, allocations of CSAPR NOX Annual 
allowances for control periods in 2020 and later years will be made 
pursuant to the default allocation provisions.
    Large electricity generating units in Kansas are also subject to an 
additional CSAPR FIP requiring them to participate in the Federal CSAPR 
SO2 Group 2 Trading Program. Kansas's SIP submittal does not 
seek to replace the default allocations of CSAPR SO2 Group 2 
allowances to Kansas units. Approval of this SIP revision concerning 
another CSAPR trading program has no effect on the CSAPR SO2 
Group 2 Trading Program as applied to Kansas units, and the FIP 
requiring the units to participate in that program remains in place.
    Section II of this document summarizes relevant aspects of the 
CSAPR Federal trading programs and FIPs as well as the range of 
opportunities states have to submit SIP revisions to modify or replace 
the FIP requirements while continuing to rely on CSAPR's trading 
programs to address the states' obligations to mitigate interstate air 
pollution. Section III describes the specific conditions for approval 
of such SIP revisions. Section IV contains EPA's analysis of Kansas' 
SIP submittal, and section V sets forth EPA's action on the submittal.
    We are publishing this direct final rule without a prior proposed 
rule because we view this as a noncontroversial action and anticipate 
no adverse comment. However, in the Proposed Rules section of this 
Federal Register, we are publishing a separate document that will serve 
as the proposed rule to approve the SIP revision if adverse comments 
are received on this direct final rule. We will not institute a second 
comment period on this action. Any parties interested in commenting 
must do so at this time. For further information about commenting on 
this rule, see the ADDRESSES section of this document. If EPA receives 
adverse comment, we will publish a timely withdrawal in the Federal 
Register informing the public that this direct final rule will not take 
effect. We will address all public comments in any subsequent final 
rule based on the proposed rule.

II. Background on CSAPR and CSAPR-Related SIP Revisions

    EPA issued CSAPR in July 2011 to address the requirements of CAA 
section 110(a)(2)(D)(i)(I) concerning interstate transport of air 
pollution. As amended, CSAPR requires twenty-eight Eastern states to 
limit their statewide emissions of SO2 and/or NOX 
in order to mitigate transported air pollution unlawfully impacting 
other states' ability to attain or maintain three National Ambient Air 
Quality Standards (NAAQS): The 1997 ozone NAAQS, the 1997 annual fine 
particulate matter (PM2.5) NAAQS, and the 2006 24-hour 
PM2.5 NAAQS. The emissions limitations are defined in terms 
of maximum statewide ``budgets'' for emissions of annual 
SO2, annual NOX, and/or ozone-season 
NOX by each covered state's large electricity generating 
units. The budgets are implemented in two phases of generally 
increasing stringency, with the Phase 1 budgets applying to emissions 
in 2015 and 2016 and the Phase 2 budgets applying to emissions in 2017 
and later years. As a mechanism for achieving compliance with the 
emissions limitations, CSAPR established four Federal emissions trading 
programs: A program for annual NOX emissions, a program for 
ozone-season NOX emissions, and two geographically separate 
programs for annual SO2 emissions. CSAPR also established up 
to three FIPs applicable to the large electricity generating units in 
each covered state. Each CSAPR FIP requires a state's units to 
participate in one of the four CSAPR trading programs.

[[Page 42258]]

    CSAPR includes provisions under which states may submit and EPA 
will approve SIP revisions to modify or replace the CSAPR FIP 
requirements while allowing states to continue to meet their transport-
related obligations using either CSAPR's Federal emissions trading 
programs or state emissions trading programs integrated with the 
Federal programs.\3\ Through such a SIP revision, a state may replace 
EPA's default provisions for allocating emission allowances among the 
state's units, employing any state-selected methodology to allocate or 
auction the allowances, subject to timing conditions and limits on 
overall allowance quantities. In the case of CSAPR's Federal trading 
program for ozone-season NOX emissions (or an integrated 
state trading program), a state may also expand trading program 
applicability to include certain smaller electricity generating units. 
However, no emissions budget increases or other substantive changes to 
the trading program provisions are allowed. If a state wants to replace 
CSAPR FIP requirements with SIP requirements under which the state's 
units participate in a state trading program that is integrated with 
and identical to the federal trading program even as to the allocation 
and applicability provisions, the state may submit a SIP revision for 
that purpose as well. A state whose units are subject to multiple CSAPR 
FIPs and Federal trading programs may submit SIP revisions to modify or 
replace the requirements under either some or all of those FIPs.
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    \3\ See 40 CFR 52.38, 52.39. States also retain the ability to 
submit SIP revisions to meet their transport-related obligations 
using mechanisms other than the CSAPR Federal trading programs or 
integrated state trading programs.
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    States can submit two basic forms of CSAPR-related SIP revisions 
effective for emissions control periods in 2017 or later years.\4\ 
Specific conditions for approval of each form of SIP revision are set 
forth in the CSAPR regulations, as described in section III below. 
Under the first alternative--an ``abbreviated'' SIP revision--a state 
may submit a SIP revision that upon approval replaces the default 
allowance allocation and/or applicability provisions of a CSAPR Federal 
trading program for the state.\5\ Approval of an abbreviated SIP 
revision leaves the corresponding CSAPR FIP and all other provisions of 
the relevant Federal trading program in place for the state's units.
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    \4\ CSAPR also provides for a third, more streamlined form of 
SIP revision that is effective only for control periods in 2016 and 
is not relevant here. See Sec.  52.38(a)(3), (b)(3); Sec.  52.39(d), 
(g).
    \5\ Sec.  52.38(a)(4), (b)(4); Sec.  52.39(e), (h).
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    Under the second alternative--a ``full'' SIP revision--a state may 
submit a SIP revision that upon approval replaces a CSAPR Federal 
trading program for the state with a state trading program integrated 
with the Federal trading program, so long as the state trading program 
is substantively identical to the Federal trading program or does not 
substantively differ from the Federal trading program except as 
discussed above with regard to the allowance allocation and/or 
applicability provisions.\6\ For purposes of a full SIP revision, a 
state may either adopt state rules with complete trading program 
language, incorporate the Federal trading program language into its 
state rules by reference (with appropriate conforming changes), or 
employ a combination of these approaches.
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    \6\ Sec.  52.38(a)(5), (b)(5); Sec.  52.39(f), (i).
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    The CSAPR regulations identify several important consequences and 
limitations associated with approval of a full SIP revision. First, 
upon EPA's approval of a full SIP revision as correcting the deficiency 
in the state's SIP that was the basis for a particular CSAPR FIP, the 
obligation to participate in the corresponding CSAPR Federal trading 
program is automatically eliminated for units subject to the state's 
jurisdiction without the need for a separate EPA withdrawal action, so 
long as EPA's approval of the SIP is full and unconditional.\7\ Second, 
approval of a full SIP revision does not terminate the obligation to 
participate in the corresponding CSAPR Federal trading program for any 
units located in any Indian country within the borders of the state, 
and if and when a unit is located in Indian country within a state's 
borders, EPA may modify the SIP approval to exclude from the SIP, and 
include in the surviving CSAPR FIP instead, certain trading program 
provisions that apply jointly to units in the state and to units in 
Indian country within the state's borders.\8\ Finally, if at the time a 
full SIP revision is approved EPA has already started recording 
allocations of allowances for a given control period to a state's 
units, the Federal trading program provisions authorizing EPA to 
complete the process of allocating and recording allowances for that 
control period to those units will continue to apply, unless EPA's 
approval of the SIP revision provides otherwise.\9\
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    \7\ Sec.  52.38(a)(6), (b)(6); Sec.  52.39(j).
    \8\ Sec.  52.38(a)(5)(iv)-(v), (a)(6), (b)(5)(v)-(vi), (b)(6); 
Sec.  52.39(f)(4)-(5), (i)(4)-(5), (j).
    \9\ Sec.  52.38(a)(7), (b)(7); Sec.  52.39(k).
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    Certain CSAPR Phase 2 emissions budgets have been remanded to EPA 
for reconsideration.\10\ However, the CSAPR trading programs remain in 
effect and all CSAPR emissions budgets likewise remain in effect 
pending EPA final action to address the remands. Neither of the CSAPR 
emissions budgets applicable to Kansas units has been remanded.
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    \10\ EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 138 
(D.C. Cir. 2015).
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    In 2015, EPA proposed to update CSAPR to address Eastern states' 
interstate air pollution mitigation obligations with regard to the 2008 
ozone NAAQS. Among other things, the proposed rule would establish a 
FIP requiring Kansas units to participate in the CSAPR NOX 
Ozone Season Trading Program and would make technical corrections and 
nomenclature changes throughout the CSAPR regulations, including the 
CSAPR FIPs at 40 CFR part 52 and the CSAPR Federal trading program 
regulations for annual NOX, ozone-season NOX, and 
SO2 emissions at 40 CFR part 97.\11\
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    \11\ 80 FR 75706, 75710, 75757 (December 3, 2015).
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III. Conditions for Approval of CSAPR-Related SIP Revisions

    Each CSAPR-related abbreviated or full SIP revision must meet the 
following general submittal conditions:
     Timeliness and completeness of SIP submittal. If a state 
wants to replace the default allowance allocation or applicability 
provisions of a CSAPR Federal trading program, the complete SIP 
revision must be submitted to EPA by December 1 of the year before the 
deadlines described below for submitting allocation or auction amounts 
to EPA for the first control period for which the state wants to 
replace the default allocation and/or applicability provisions.\12\ 
(This SIP submission deadline is inoperative in the case of a SIP 
revision that seeks only to replace a CSAPR FIP and Federal trading 
program with a SIP and a substantively identical state trading program 
integrated with the Federal trading program.) The SIP submittal 
completeness criteria in section 2.1 of appendix V to 40 CFR part 51 
also apply.
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    \12\ 40 CFR 52.38(a)(4)(ii), (a)(5)(vi), (b)(4)(iii), 
(b)(5)(vii); Sec.  52.39(e)(2), (f)(6), (h)(2), (i)(6).
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    In addition to the general submittal conditions, a CSAPR-related 
abbreviated or full SIP seeking to address the allocation or auction of 
emission allowances must meet the following further conditions:

[[Page 42259]]

     Methodology covering all allowances potentially requiring 
allocation. For each Federal trading program addressed by a SIP 
revision, the SIP revision's allowance allocation or auction 
methodology must replace both the Federal program's default allocations 
to existing units \13\ at 40 CFR 97.411(a), 97.511(a), 97.611(a), or 
97.711(a), as applicable, and the Federal trading program's provisions 
for allocating allowances from the new unit set-aside (NUSA) for the 
state at 40 CFR 97.411(b)(1) and 97.412(a), 97.511(b)(1) and 97.512(a), 
97.611(b)(1) and 97.612(a), or 97.711(b)(1) and 97.712(a), as 
applicable.\14\ In the case of a state with Indian country within its 
borders, while the SIP revision may neither alter nor assume the 
Federal program's provisions for administering the Indian country NUSA 
for the state, the SIP revision must include procedures addressing the 
disposition of any otherwise unallocated allowances from an Indian 
country NUSA that may be made available for allocation by the state 
after EPA has carried out the Indian country NUSA allocation 
procedures.\15\
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    \13\ In the context of the approval conditions for CSAPR-related 
SIP revisions, an ``existing unit'' is a unit for which EPA has 
determined default allowance allocations (which could be allocations 
of zero allowances) in the rulemakings establishing and amending 
CSAPR. A spreadsheet showing EPA's default allocations to existing 
units is posted at www.epa.gov/crossstaterule/techinfo.html.
    \14\ Sec.  52.38(a)(4)(i), (a)(5)(i), (b)(4)(ii), (b)(5)(ii); 
Sec.  52.39(e)(1), (f)(1), (h)(1), (i)(1).
    \15\ See Sec. Sec.  97.412(b)(10)(ii), 97.512(b)(10)(ii), 
97.612(b)(10)(ii), 97.712(b)(10)(ii).
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     Assurance that total allocations will not exceed the state 
budget. For each Federal trading program addressed by a SIP revision, 
the total amount of allowances auctioned or allocated for each control 
period under the SIP revision (prior to the addition by EPA of any 
unallocated allowances from any Indian country NUSA for the state) may 
not exceed the state's emissions budget for the control period less the 
sum of the amount of any Indian country NUSA for the state for the 
control period and any allowances already allocated to the state's 
units for the control period and recorded by EPA.\16\ Under its SIP 
revision, a state is free to not allocate allowances to some or all 
potentially affected units, to allocate or auction allowances to 
entities other than potentially affected units, or to allocate or 
auction fewer than the maximum permissible quantity of allowances and 
retire the remainder.
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    \16\ Sec.  52.38(a)(4)(i)(A), (a)(5)(i)(A), (b)(4)(ii)(A), 
(b)(5)(ii)(A); Sec.  52.39(e)(1)(i), (f)(1)(i), (h)(1)(i), 
(i)(1)(i).
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     Timely submission of state-determined allocations to EPA. 
The SIP revision must require the state to submit to EPA the amounts of 
any allowances allocated or auctioned to each unit for each control 
period (other than allowances initially set aside in the state's 
allocation or auction process and later allocated or auctioned to such 
units from the set-aside amount) by the following deadlines.\17\ Note 
that the submission deadlines differ for amounts allocated or auctioned 
to units considered existing units for CSAPR purposes and amounts 
allocated or auctioned to other units.
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    \17\ Sec.  52.38(a)(4)(i)(B)-(C), (a)(5)(i)(B)-(C), 
(b)(4)(ii)(B)-(C), (b)(5)(ii)(B)-(C); Sec.  52.39(e)(1)(ii)-(iii), 
(f)(1)(ii)-(iii), (h)(1)(ii)-(iii), (i)(1)(ii)-(iii).

------------------------------------------------------------------------
                                                        Deadline for
                                   Year of the      submission to EPA of
             Units                control period       allocations or
                                                      auction results
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Existing......................  2017 and 2018....  June 1, 2016.
                                2019 and 2020....  June 1, 2017.
                                2021 and 2022....  June 1, 2018.
                                2023 and later     June 1 of the fourth
                                 years.             year before the year
                                                    of the control
                                                    period.
Other.........................  All years........  July 1 of the year of
                                                    the control period.
------------------------------------------------------------------------

     No changes to allocations already submitted to EPA or 
recorded. The SIP revision must not provide for any change to the 
amounts of allowances allocated or auctioned to any unit after those 
amounts are submitted to EPA or any change to any allowance allocation 
determined and recorded by EPA under the Federal trading program 
regulations.\18\
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    \18\ Sec.  52.38(a)(4)(i)(D), (a)(5)(i)(D), (b)(4)(ii)(D), 
(b)(5)(ii)(D); Sec.  52.39(e)(1)(iv), (f)(1)(iv), (h)(1)(iv), 
(i)(1)(iv).
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     No other substantive changes to Federal trading program 
provisions. The SIP revision may not substantively change any other 
trading program provisions, except in the case of a SIP revision that 
also expands program applicability as described below.\19\ Any new 
definitions adopted in the SIP revision (in addition to the Federal 
trading program's definitions) may apply only for purposes of the SIP 
revision's allocation or auction provisions.\20\
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    \19\ Sec.  52.38(a)(4), (a)(5), (b)(4), (b)(5); Sec.  52.39(e), 
(f), (h), (i).
    \20\ Sec.  52.38(a)(4)(i), (a)(5)(ii), (b)(4)(ii), (b)(5)(iii); 
Sec.  52.39(e)(1), (f)(2), (h)(1), (i)(2).
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    In addition to the general submittal conditions, a CSAPR-related 
abbreviated or full SIP revision seeking to expand applicability under 
the CSAPR NOX Ozone Season Trading Program (or an integrated 
state trading program) must meet the following further conditions:
     Only electricity generating units with nameplate capacity 
of at least 15 MWe. The SIP revision may expand applicability only to 
additional fossil fuel-fired boilers or combustion turbines serving 
generators producing electricity for sale, and only by lowering the 
generator nameplate capacity threshold used to determine whether a 
particular boiler or combustion turbine serving a particular generator 
is a potentially affected unit. The nameplate capacity threshold 
adopted in the SIP revision may not be less than 15 MWe.\21\
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    \21\ Sec.  52.38(b)(4)(i), (b)(5)(i).
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     No other substantive changes to Federal trading program 
provisions. The SIP revision may not substantively change any other 
trading program provisions, except in the case of a SIP revision that 
also addresses the allocation or auction of emission allowances as 
described above.\22\
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    \22\ Sec.  52.38(b)(4), (b)(5).
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    In addition to the general submittal conditions and the other 
applicable conditions described above, a CSAPR-related full SIP 
revision must meet the following further conditions:
     Complete, substantively identical trading program 
provisions. The SIP revision must adopt complete state trading program 
regulations substantively identical to the complete Federal trading 
program regulations at 40 CFR 97.402 through 97.435, 97.502 through 
97.535, 97.602 through 97.635, or 97.702 through 97.735, as applicable, 
except as described above in the case of a SIP revision that seeks to 
replace the default allowance allocation and/or applicability 
provisions.
     Only non-substantive substitutions for the term ``State.'' 
The SIP revision may substitute the name of the state for the term 
``State'' as used in the Federal trading program regulations, but only 
to the extent that EPA determines that the substitutions do not 
substantively

[[Page 42260]]

change the trading program regulations.\23\
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    \23\ Sec.  52.38(a)(5)(iii), (b)(5)(iv); Sec.  52.39(f)(3), 
(i)(3).
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     Exclusion of provisions addressing units in Indian 
country. The SIP revision may not include references to or impose 
requirements on any unit in any Indian country within the state's 
borders and must not include the Federal trading program provisions 
governing allocation of allowances from any Indian country NUSA for the 
state.\24\
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    \24\ Sec.  52.38(a)(5)(iv), (b)(5)(v); Sec.  52.39(f)(4), 
(i)(4).
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IV. Kansas's SIP Submittal and EPA's Analysis

A. Kansas's SIP Submittal

    In the CSAPR rulemaking, EPA determined that air pollution 
transported from Kansas unlawfully affected other states' ability to 
attain or maintain the 2006 24-hour PM2.5 NAAQS.\25\ Kansas 
units meeting the CSAPR applicability criteria are consequently subject 
to CSAPR FIPs that require participation in the CSAPR NOX 
Annual Trading Program and the CSAPR SO2 Group 2 Trading 
Program.\26\
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    \25\ 76 FR 48208, 48213 (August 8, 2011).
    \26\ 40 CFR 52.38(a)(2); Sec.  52.39(c); Sec.  52.882(a); Sec.  
52.883.
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    On December 1, 2015, Kansas submitted to EPA an abbreviated SIP 
revision that, if approved, would replace the default allowance 
allocation provisions of the CSAPR NOX Annual Trading 
Program for the state's EGUs for the control periods in 2017 through 
2019 with provisions establishing state-determined allocations for 
those control periods but that would leave the corresponding CSAPR FIP 
and all other provisions of that trading program in place. The SIP 
submittal generally consists of a duly adopted state rule, K.A.R. 28-
19-274 (Nitrogen oxides; allocations), which in turn adopts by 
reference a document entitled ``TR NOX annual allowance 
allocations for 2017, 2018, and 2019,'' dated July 17, 2015. The latter 
document contains tables establishing fixed amounts of allowances to be 
allocated to specified Kansas electricity generating units under the 
provisions of the state rule. For each of the years 2017, 2018, and 
2019, there is a table with allocations of all allowances in the Kansas 
budget other than allowances in the Indian country NUSA for Kansas. For 
each of those years there is a second table with potential allocations 
to the same units of otherwise unallocated allowances from the Indian 
country NUSA for Kansas if all of those allowances should be made 
available by EPA for state allocation. The rule also includes 
provisions for computing potential allocations to the same units of 
otherwise unallocated allowances from the Indian country NUSA for 
Kansas if some but not all of those allowances should be made available 
by EPA for state allocation. Finally, the rule includes provisions 
defining several terms used either in the rule's allocation provisions 
or in other definitions.
    The SIP revision was submitted to EPA by a letter from the Kansas 
Secretary of Health and Environment acting as the designated 
representative of the Governor of Kansas. The letter describes steps 
taken by Kansas to provide public notice prior to adoption of the state 
rule. The letter also indicates that paragraphs 28-19-274(a)(2)(A) and 
(B) of the Kansas rule, which contain definitions of certain terms 
differing from the definitions of the same terms in the Federal trading 
program regulations, are excluded from the SIP submittal.
    EPA has previously approved a separate Kansas SIP revision 
replacing the default allowance allocation provisions of the CSAPR 
NOX Annual Trading Program for Kansas existing units for the 
control period in 2016.\27\ At this time, Kansas has not submitted any 
SIP revision to modify or replace the CSAPR FIP that requires the 
state's units to participate in the CSAPR SO2 Group 2 
Trading Program.
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    \27\ 80 FR 50789 (August 21, 2015).
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B. EPA's Analysis of Kansas's Submittal

1. Timeliness and Completeness of SIP Submittal
    Kansas' SIP revision seeks to establish state-determined 
allocations of CSAPR NOX Annual allowances for the control 
periods in 2017, 2018, and 2019. Under 40 CFR 52.38(a)(4)(i)(B), the 
deadline for submission of state-determined allocations for the 2017 
and 2018 control periods is June 1, 2016, which under Sec.  
52.38(a)(4)(ii) makes December 1, 2015 the deadline for submission to 
EPA of a complete SIP revision establishing state-determined 
allocations for those control periods. Kansas submitted its SIP 
revision to EPA by a letter dated and delivered electronically on 
December 1, 2015, and EPA has determined that the submittal complies 
with the applicable minimum completeness criteria in section 2.1 of 
appendix V to 40 CFR part 51. Because Kansas's SIP revision was timely 
submitted and meets the applicable completeness criteria, it meets the 
condition under 40 CFR 52.38(a)(4)(ii) for timely submission of a 
complete SIP revision.
2. Methodology Covering All Allowances Potentially Requiring Allocation
    Paragraph 28-19-274(c) of the Kansas rule provides that the 
allowance allocation methodology adopted by Kansas in the SIP revision 
replaces the provisions of 40 CFR 97.411(a), thereby addressing all 
allowances that under the default allocation provisions for the Federal 
trading program would be allocated to units considered existing units 
for CSAPR purposes (prior to allocation of any otherwise unallocated 
allowances from the NUSA or Indian country NUSA for Kansas). The same 
Kansas rule paragraph also provides that the state's allocation 
methodology replaces the provisions of 40 CFR 97.411(b)(1) and 
97.412(a), thereby addressing allocation of allowances in the NUSA 
established for Kansas under the Federal trading program. In addition, 
paragraphs 28-19-274(d) and (e) of the Kansas rule provide procedures 
addressing any otherwise unallocated allowances from the Indian country 
NUSA for Kansas that may be made available for allocation by the state 
after EPA has carried out the Indian country NUSA allocation 
procedures. Collectively, the allocation provisions in the Kansas rule 
therefore enable Kansas' SIP revision to meet the condition under 40 
CFR 52.38(a)(4)(i) that the state's allocation or auction methodology 
must cover all allowances potentially requiring allocation by the 
state.
3. Assurance That Total Allocations Will Not Exceed the State Budget
    Paragraph 28-19-274(d) of the Kansas rule provides for allowance 
allocations to be made in fixed amounts set forth in tables adopted by 
reference into the state rules. For each of the three control periods 
for which the rule allocates allowances, there is a table providing 
allocations for the allowances that absent this SIP revision would be 
allocated pursuant to 40 CFR 97.411(a), 97.411(b)(1), and 97.412(a). 
For each of the control periods, the sum of the fixed amounts allocated 
according to these tables is 31,323 allowances, which is equal to the 
Kansas budget for the control period (31,354 tons) less the amount of 
the Indian country NUSA for Kansas (31 tons).\28\ EPA has not yet 
allocated or recorded CSAPR allowances for the 2017 through 2019 
control periods. The allocation methodology in Kansas's SIP revision 
therefore meets the condition under 40 CFR 52.38(a)(4)(i)(A) that the 
total

[[Page 42261]]

amount of allowances allocated under the SIP revision (before the 
addition of any otherwise unallocated allowances from an Indian country 
NUSA) may not exceed the state's budget for the control period less the 
amount of the Indian country NUSA for the state and any allowances 
already allocated and recorded by EPA.
---------------------------------------------------------------------------

    \28\ See 40 CFR 97.410(a)(6)(iv), (a)(6)(vi).
---------------------------------------------------------------------------

    While the Kansas rule also has provisions providing potential 
allocations of allowances from the Indian country NUSA for Kansas, 
under paragraph 28-19-274(b) of the Kansas rule the only allowances 
available for allocation under those provisions are otherwise 
unallocated allowances that EPA has made available from the Indian 
country NUSA for state allocation after having carried out the Indian 
country NUSA allocation procedures. The total of the allowances 
allocated under the SIP revision and any allowances allocated by EPA 
from the Indian country NUSA for Kansas therefore will not exceed the 
state budget, consistent with the purpose of 40 CFR 52.38(a)(4)(i)(A).
4. Timely Submission of State-Determined Allocations to EPA
    The state-determined allowance allocations established by the 
Kansas rule for each of the three control periods covered by the rule 
are included in tables that have been adopted by reference into the 
state rule and that were provided to EPA as part of the SIP submittal 
on December 1, 2015. As noted above, in the case of a SIP revision 
seeking to allocate allowances starting with the 2017 control period, 
the earliest deadline for submission to EPA of the state-determined 
allocations is June 1, 2016. Kansas' SIP revision therefore meets the 
conditions under 40 CFR 52.38(a)(4)(i)(B) and (C) requiring that the 
SIP revision provide for submission of state-determined allowance 
allocations to EPA by the deadlines specified in those provisions.
5. No Changes to Allocations Already Submitted to EPA or Recorded
    The Kansas rule includes no provision allowing alteration of 
allocations after the allocation amounts have been provided to EPA and 
no provision allowing alteration of any allocations made and recorded 
by EPA under the Federal trading program regulations, thereby meeting 
the condition under 40 CFR 52.38(a)(4)(i)(D).
6. No Other Substantive Changes to Federal Trading Program Provisions
    Besides the provisions addressing allowance allocations discussed 
above, the Kansas rule includes a number of provisions defining terms 
used either in the rule's allocation provisions or in other 
definitions. In paragraph 28-19-274(a)(1), the rule adopts by reference 
several terms defined in 40 CFR 97.402, and in paragraph 28-19-274(b), 
the rule defines a new term ``Indian country new unit set-aside 
allowance'' that is used only in the Kansas rule for purposes of 
allowance allocations. These provisions do not make substantive changes 
to the Federal trading program provisions.\29\
---------------------------------------------------------------------------

    \29\ EPA has proposed to make certain technical corrections to 
the CSAPR FIP and Federal trading program regulations in order to 
more accurately reflect EPA's intent as described in the CSAPR 
rulemaking and has also proposed to replace ``TR'' with ``CSAPR'' 
throughout the regulations (for example, ``TR NOX Annual 
unit'' would become ``CSAPR NOX Annual unit''). See 80 FR 
75706, 75758. Because the proposed technical corrections merely 
clarify and do not change EPA's interpretations, where the proposed 
corrections would apply to a provision incorporated by reference in 
the Kansas rule, EPA would interpret the Kansas rule as reflecting 
the corrections. Further, EPA anticipates that if the proposed 
nomenclature updates are finalized, the final CSAPR Federal 
regulations would explicitly provide that terms that include 
``CSAPR'' encompass otherwise identical terms in approved SIP 
revisions that include ``TR''.
---------------------------------------------------------------------------

    Paragraphs 28-19-274(a)(2)(A) and (B) of the Kansas rule adopt 
definitions of ``administrator'', ``State'', and ``permitting 
authority'' that substantively differ from the definitions of these 
terms in the Federal trading program regulations. While these terms are 
not used directly in the Kansas rule, they are used in the Federal 
trading program definitions of some of the other terms that are adopted 
by reference under paragraph 28-19-274(a)(1). Inclusion of the Kansas 
rule's definitions of ``administrator'', ``State'', and ``permitting 
authority'' in the SIP revision therefore would cause the meanings of 
those other adopted terms as used in the Kansas rule to substantively 
differ from the meanings of the same terms as used in the Federal 
trading program regulations. After being advised of these differences 
by EPA, Kansas elected to exclude the provisions of paragraphs 28-19-
274(a)(2)(A) and (B) of the Kansas rule from the SIP revision, as the 
state's letter submitting the SIP revision makes clear. (Without the 
excluded provisions, the rule remains fully functional for its intended 
purpose of allocating CSAPR allowances among the state's units.) 
Considering Kansas' SIP revision without the excluded rule provisions, 
EPA has determined that the SIP revision meets the condition under 40 
CFR 52.38(a)(4) of making no substantive changes to the Federal trading 
program regulations beyond the provisions addressing allowance 
allocations.

V. EPA's Action on Kansas' Submittal

    EPA is taking direct final action to approve the revision to 
Kansas' SIP submitted on December 1, 2015 concerning allocations to 
Kansas units of CSAPR NOX Annual allowances for the control 
periods in 2017, 2018, and 2019. This SIP revision adopts into the SIP 
the rule codified in Kansas' regulations at K.A.R. 28-19-274 excluding 
paragraphs 28-19-274(a)(2)(A) and (B). The Kansas rule in turn 
incorporates a document entitled ``TR NOX annual allowance 
allocations for 2017, 2018, and 2019,'' dated July 17, 2015, which 
contains tables setting forth state-determined allowance allocations to 
individual Kansas units. Following this approval, allocations of these 
allowances will be made according to the provisions of Kansas' SIP 
instead of CSAPR's default allocation provisions at 40 CFR 97.411(a), 
97.411(b)(1), and 97.412(a). Approval of this SIP revision does not 
alter any provision of the Federal CSAPR NOX Annual Trading 
Program as applied to Kansas units other than the allowance allocation 
provisions, and the FIP requiring the units to participate in that 
program (as modified by this SIP revision) remains in place. EPA is 
approving the SIP revision because it meets the requirements of the CAA 
and EPA's regulations for approval of an abbreviated SIP revision 
replacing EPA's default allocations of CSAPR emission allowances with 
state-determined allocations, as discussed in section IV above. Because 
the SIP revision addresses only the control periods in 2017 through 
2019, absent submission and approval of a further SIP revision, 
allocations of CSAPR NOX Annual allowances for control 
periods in 2020 and later years will be made pursuant to the default 
allocation provisions.
    Large electricity generating units in Kansas are also subject to an 
additional CSAPR FIP requiring them to participate in the Federal CSAPR 
SO2 Group 2 Trading Program. Kansas's SIP submittal does not 
seek to replace the default allocations of CSAPR SO2 Group 2 
allowances to Kansas units. Approval of this SIP revision concerning 
another CSAPR trading program has no effect on the Federal CSAPR 
SO2 Group 2 Trading Program as applied to Kansas units, and 
the FIP requiring the units to participate in that program remains in 
place.

Incorporation by Reference

    In this rule, EPA is finalizing regulatory text that includes 
incorporation by reference. In

[[Page 42262]]

accordance with requirements of 1 CFR 51.5, EPA is finalizing the 
incorporation by reference of the Kansas Cross-State Air Pollution 
Regulations described in the direct final amendments to 40 CFR part 52 
set forth below. EPA has made, and will continue to make, these 
documents generally available electronically through 
www.regulations.gov and at the appropriate EPA office (see the 
ADDRESSES section of this preamble for more information).

Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
action merely approves state law as meeting Federal requirements and 
does not impose additional requirements beyond those imposed by state 
law. For that reason, this action:
     Is not a significant regulatory action 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 this rulemaking does not involve technical standards; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land or 
in any other area where EPA or an Indian tribe has demonstrated that a 
tribe has jurisdiction. In those areas of Indian country, the rule does 
not have tribal implications and will not impose substantial direct 
costs on tribal governments or preempt tribal law as specified by 
Executive Order 13175 (65 FR 67249, November 9, 2000).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this action and 
other required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by August 29, 2016. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this action for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. This action may not be challenged later in proceedings to 
enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Incorporation by reference, Intergovernmental 
relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur oxides.

    Dated: June 16, 2016.
Mark Hague,
Regional Administrator, Region 7.
    For the reasons stated in the preamble, EPA amends 40 CFR part 52 
as set forth below:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart R--Kansas

0
2. Amend Sec.  52.870(c), by adding entry 28-19-274, in numerical 
order, under the subheading entitled ``General Provisions'' to read as 
follows:

Sec.  52.870  Identification of plan.

* * * * *
    (c) * * *

[[Page 42263]]

                                         EPA-Approved Kansas Regulations
----------------------------------------------------------------------------------------------------------------
                                                            State
        Kansas citation                  Title         effective date    EPA approval date       Explanation
----------------------------------------------------------------------------------------------------------------
       Kansas Department of Health and Environment Ambient Air Quality Standards and Air Pollution Control
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                               General Provisions
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
K.A.R. 28-19-274...............  Nitrogen Oxide               11/6/15  6/29/16 and [Insert   Approval of EGU-
                                  allocations.                          Federal Register      specific NOX
                                                                        citation].            allocations does
                                                                                              not include KAR 28-
                                                                                              19-274(a)(2)(A)
                                                                                              and (a)(2)(B).
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 2016-15040 Filed 6-28-16; 8:45 am]
 BILLING CODE 6560-50-P
```