Federal Register / Vol. 77, No. 148 / Wednesday, August 1, 2012 / Proposed Rules 45523 

reimbursement from a payor (the 

employer, its agent, or a third party) for 

expenses the employee pays or incurs; 

and 

(2) For purposes of paragraph 

(f)(2)(iv)(C) of this section, an 

arrangement under which an 

independent contractor receives an 

advance, allowance, or reimbursement 

from a client or customer for expenses 

the independent contractor pays or 

incurs if either— 

(a) A written agreement between the 

parties expressly states that the client or 

customer will reimburse the 

independent contractor for expenses 

that are subject to the limitations on 

deductions in paragraphs (a) through (e) 

of this section and section 274(n)(1); or 

(b) A written agreement between the 

parties expressly identifies the party 

subject to the limitations. 

(E) Examples. The following examples 

illustrate the application of this 

paragraph (f)(2)(iv). 

Example 1. (i) Y, an employee, performs 

services under an arrangement in which L, an 

employee leasing company, pays Y a per 

diem allowance of $10x for each day that Y 

performs services for L’s client, C, while 

traveling away from home. The per diem 

allowance is a reimbursement of travel 

expenses for food and beverages that Y pays 

in performing services as an employee. L 

enters into a written agreement with C under 

which C agrees to reimburse L for any 

substantiated reimbursements for travel 

expenses, including meals, that L pays to Y. 

The agreement does not expressly identify 

the party that is subject to the deduction 

limitations. Y performs services for C while 

traveling away from home for 10 days and 

provides L with substantiation that satisfies 

the requirements of section 274(d) of $100x 

of meal expenses incurred by Y while 

traveling away from home. L pays Y $100x 

to reimburse those expenses pursuant to their 

arrangement. L delivers a copy of Y’s 

substantiation to C. C pays L $300x, which 

includes $200x compensation for services 

and $100x as reimbursement of L’s payment 

of Y’s travel expenses for meals. Neither L 

nor C treats the $100x paid to Y as 

compensation or wages. 

(ii) Under paragraph (f)(2)(iv)(D)(1) of this 

section, Y and L have established a 

reimbursement or other expense allowance 

arrangement for purposes of paragraph 

(f)(2)(iv)(B) of this section. Because the 

reimbursement payment is not treated as 

compensation and wages paid to Y, under 

section 274(e)(3)(A) and paragraph 

(f)(2)(iv)(B)(1) of this section, Y is not subject 

to the section 274 deduction limitations. 

Instead, under paragraph (f)(2)(iv)(B)(2) of 

this section, L, the payor, is subject to the 

section 274 deduction limitations unless L 

can meet the requirements of section 

274(e)(3)(B) and paragraph (f)(2)(iv)(C) of this 

section. 

(iii) Because the agreement between L and 

C expressly states that C will reimburse L for 

expenses for meals incurred by employees 

while traveling away from home, under 

paragraph (f)(2)(iv)(D)(2)(a) of this section, L 

and C have established a reimbursement or 

other expense allowance arrangement for 

purposes of paragraph (f)(2)(iv)(C) of this 

section. L accounts to C for C’s 

reimbursement in the manner required by 

section 274(d) by delivering to C a copy of 

the substantiation L received from Y. 

Therefore, under section 274(e)(3)(B) and 

paragraph (f)(2)(iv)(C)(2) of this section, C 

and not L is subject to the section 274 

deduction limitations. 

Example 2. (i) The facts are the same as 

in Example 1 except that, under the 

arrangements between Y and L and between 

L and C, Y provides the substantiation of the 

expenses directly to C, and C pays the per 

diem directly to Y. 

(ii) Under paragraph (f)(2)(iv)(D)(1) of this 

section, Y and C have established a 

reimbursement or other expense allowance 

arrangement for purposes of paragraph 

(f)(2)(iv)(C) of this section. Because Y 

substantiates directly to C and the 

reimbursement payment was not treated as 

compensation and wages paid to Y, under 

section 274(e)(3)(A) and paragraph 

(f)(2)(iv)(C)(1) of this section Y is not subject 

to the section 274 deduction limitations. 

Under paragraph (f)(2)(iv)(C)(2) of this 

section, C, the payor, is subject to the section 

274 deduction limitations. 

Example 3. (i) The facts are the same as 

in Example 1, except that the written 

agreement between L and C expressly 

provides that the limitations of this section 

will apply to C. 

(ii) Under paragraph (f)(2)(iv)(D)(2)(b) of 

this section, L and C have established a 

reimbursement or other expense allowance 

arrangement for purposes of paragraph 

(f)(2)(iv)(C) of this section. Because the 

agreement provides that the 274 deduction 

limitations apply to C, under section 

274(e)(3)(B) and paragraph (f)(2)(iv)(C) of this 

section, C and not L is subject to the section 

274 deduction limitations. 

Example 4. (i) The facts are the same as in 

Example 1, except that the agreement 

between L and C does not provide that C will 

reimburse L for travel expenses. 

(ii) The arrangement between L and C is 

not a reimbursement or other expense 

allowance arrangement within the meaning 

of section 274(e)(3)(B) and paragraph 

(f)(2)(iv)(D)(2) of this section. Therefore, even 

though L accounts to C for the expenses, L 

is subject to the section 274 deduction 

limitations. 

(F) Effective/applicability date. This 

paragraph (f)(2)(iv) applies to expenses 

paid or incurred in taxable years 

beginning after the date these 

regulations are published as final 

regulations in the Federal Register. 

* * * * * 

Par. 3. Section 1.274–8 is revised to 

read as follows: 

§ 1.274–8 Effective/applicability date. 

Except as provided in §§ 1.274–2(a), 

1.274–2(e), 1.274–2(f)(2)(iv)(F) and 

1.274–5, §§ 1.274–1 through 1.274–7 

apply to taxable years ending after 

December 31, 1962. 

Steven T. Miller, 

Deputy Commissioner for Services and 

Enforcement. 

[FR Doc. 2012–18691 Filed 7–31–12; 8:45 am] 

BILLING CODE 4830–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R03–OAR–2011–0927; FRL–9709–6] 

Approval and Promulgation of Air 

Quality Implementation Plans; Virginia; 

Prevention of Significant Deterioration 

and Nonattainment New Source 

Review; Fine Particulate Matter (PM2.5) 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to approve 

revisions to the Virginia State 

Implementation Plan (SIP), submitted 

by the Virginia Department of 

Environmental Quality (VADEQ) on 

August 25, 2011. These revisions 

pertaining to Virginia’s Prevention of 

Significant Deterioration (PSD) and 

nonattainment New Source Review 

(NSR) programs incorporate 

preconstruction permitting regulations 

for fine particulate matter (PM2.5) into 

the Virginia SIP. A previous PSD 

program approval of Virginia’s Chapter 

80, Article 8 regulations was provided 

to the Commonwealth as a ‘‘limited 

approval’’ for reasons that will not deny 

this action as being fully approved. In 

addition, EPA is proposing to approve 

these revisions and portions of other 

related submissions for the purpose of 

determining that Virginia has met its 

statutory obligations with respect to the 

infrastructure requirements of the Clean 

Air Act (CAA) which relate to Virginia’s 

PSD permitting program and are 

necessary to implement, maintain, and 

enforce the 1997 8-hour ozone and 

PM2.5 National Ambient Air Quality 

Standards (NAAQS), the 2006 PM2.5

NAAQS, and the 2008 lead NAAQS. 

EPA is proposing to approve these 

revisions in accordance with the 

requirements of the Clean Air Act 

(CAA). 

DATES: Written comments must be 

received on or before August 31, 2012. 

ADDRESSES: Submit your comments, 

identified by Docket ID Number EPA– 

R03–OAR–2011–0927 by one of the 

following methods: 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

45524 Federal Register / Vol. 77, No. 148 / Wednesday, August 1, 2012 / Proposed Rules 

A. www.regulations.gov. Follow the 

on-line instructions for submitting 

comments. 

B. Email: cox.kathleen@epa.gov. 

C. Mail: EPA–R03–OAR–2011–0927, 

Ms. Kathleen Cox, Associate Director, 

Office of Permits and Air Toxics, 

Mailcode 3AP10, U.S. Environmental 

Protection Agency, Region III, 1650 

Arch Street, Philadelphia, Pennsylvania 

19103. 

D. Hand Delivery: At the previouslylisted EPA Region III address. Such 

deliveries are only accepted during the 

Docket’s normal hours of operation, and 

special arrangements should be made 

for deliveries of boxed information. 

Instructions: Direct your comments to 

Docket ID No. EPA–R03–OAR–2011– 

0927. EPA’s policy is that all comments 

received will be included in the public 

docket without change, and may be 

made available online at 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through www.regulations.gov 

or email. The www.regulations.gov Web 

site is an ‘‘anonymous access’’ system, 

which means EPA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an email 

comment directly to EPA without going 

through www.regulations.gov, your 

email address will be automatically 

captured and included as part of the 

comment that is placed in the public 

docket and made available on the 

Internet. If you submit an electronic 

comment, EPA recommends that you 

include your name and other contact 

information in the body of your 

comment and with any disk or CD–ROM 

you submit. If EPA cannot read your 

comment due to technical difficulties 

and cannot contact you for clarification, 

EPA may not be able to consider your 

comment. Electronic files should avoid 

the use of special characters, any form 

of encryption, and be free of any defects 

or viruses. 

Docket: All documents in the 

electronic docket are listed in the 

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available, i.e., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

is not placed on the Internet and will be 

publicly available only in hard copy 

form. Publicly available docket 

materials are available either 

electronically in www.regulations.gov or 

in hard copy during normal business 

hours at the Air Protection Division, 

U.S. Environmental Protection Agency, 

Region III, 1650 Arch Street, 

Philadelphia, Pennsylvania 19103. 

Copies of the State submittal are 

available at the Virginia Department of 

Environmental Quality, 629 East Main 

Street, Richmond, Virginia 23219. 

FOR FURTHER INFORMATION CONTACT: Mr. 

David Talley, (215) 814–2117, or by 

email at talley.david@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Throughout this document, whenever 

‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean 

EPA. On August 25, 2011, VADEQ 

submitted a formal revision to its State 

Implementation Plan (SIP) (the August 

2011 SIP submission). The SIP revision 

consists of amendments to major NSR 

permitting regulations under the 

Virginia Administrative Code (VAC), 

specifically Articles 8 and 9 of 9VAC5 

Chapter 80. This SIP revision generally 

pertains to two federal rulemaking 

actions regarding PM2.5. The first is the 

‘‘Implementation of the New Source 

Review (NSR) Program for Particulate 

Matter less than 2.5 Micrometers 

(PM2.5)’’ (NSR PM2.5 Rule), which was 

promulgated on May 16, 2008 (73 FR 

28321). The second is the ‘‘Prevention 

of Significant Deterioration (PSD) for 

Particulate Matter less than 2.5 

Micrometers (PM2.5)—Increments, 

Significant Impact Levels (SILs) and 

Significant Monitoring Concentration 

(SMC)’’ (PSD PM2.5 Rule), which was 

promulgated on October 20, 2010 (75 FR 

64864). 

Whenever a new or revised NAAQS is 

promulgated, section 110(a) of the CAA 

imposes obligations upon states to 

submit SIP revisions that provide for the 

implementation, maintenance, and 

enforcement of the new or revised 

NAAQS within three years following 

the promulgation of such NAAQS—the 

so called infrastructure SIP revisions. 

Although states typically have met 

many of the basic program elements 

required in section 110(a)(2) through 

earlier SIP submissions in connection 

with previous PM standards, states 

(including all the EPA Region III states) 

were still required to submit SIP 

revisions that address section 110(a)(2) 

for the 1997 and 2006 PM2.5 NAAQS. In 

addition to the August 2011 SIP 

submission, Virginia has previously 

submitted SIP revisions addressing 

requirements set forth in CAA Section 

110(a)(2) for the 1997 and 2006 PM2.5

NAAQS, as well as the 1997 ozone and 

2008 lead NAAQS. Because these SIP 

submissions addressed Virginia’s 

compliance with CAA section 110(a)(2), 

these SIP submissions are referred to as 

infrastructure SIP submissions. These 

previous submittals, as well as a 

technical support document (TSD), are 

included in the docket for today’s 

action. The TSD contains a detailed 

discussion of these submittals and their 

relationship to the requirements of CAA 

section 110(a)(2). 

A. Fine Particulate Matter and the 

NAAQS 

On July 18, 1997, EPA revised the 

NAAQS for particulate matter (PM) to 

add new standards for fine particles, 

using PM2.5 as the indicator. Previously, 

EPA used PM10 (inhalable particles 

smaller than or equal to 10 micrometers 

in diameter) as the indicator for the PM 

NAAQS. EPA established health-based 

(primary) annual and 24-hour standards 

for PM2.5, setting an annual standard at 

a level of 15 micrograms per cubic meter 

(mg/m3) and a 24-hour standard at a 

level of 65 mg/m3 (62 FR 38652). At the 

time the 1997 primary standards were 

established, EPA also established 

welfare-based (secondary) standards 

identical to the primary standards. The 

secondary standards are designed to 

protect against major environmental 

effects of PM2.5, such as visibility 

impairment, soiling, and materials 

damage. On October 17, 2006, EPA 

revised the primary and secondary 

NAAQS for PM2.5. In that rulemaking, 

EPA reduced the 24-hour NAAQS for 

PM2.5 to 35 mg/m3 and retained the 

existing annual PM2.5 NAAQS of 15 mg/ 

m3 (71 FR 61236). 

B. Implementation of NSR Requirements 

for PM2.5—the NSR PM2.5 Rule 

On May 16, 2008, EPA finalized a rule 

(the NSR PM2.5 Rule) to implement the 

1997 p.m.2.5 NAAQS, including changes 

to the NSR program (73 FR 28321). The 

2008 NSR PM2.5 Rule revised the NSR 

program requirements to establish the 

framework for implementing 

preconstruction permit review for the 

PM2.5 NAAQS in both attainment and 

nonattainment areas. The 2008 NSR 

PM2.5 Rule also established the 

following NSR requirements to 

implement the PM2.5 NAAQS: (1) 

Require NSR permits to address directly 

emitted PM2.5 and precursor pollutants; 

(2) establish significant emission rates 

for direct PM2.5 and precursor pollutants 

(including sulfur dioxide (SO2) and 

oxides of nitrogen (NOX); (3) establish 

PM2.5 emission offsets; and (4) require 

states to account for gases that condense 

to form particles (condensables) in PM2.5

emission limits. 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 77, No. 148 / Wednesday, August 1, 2012 / Proposed Rules 45525 

Additionally, the 2008 final rule 

authorized states to adopt provisions in 

their nonattainment NSR rules that 

would allow major stationary sources 

and major modifications which will be 

located, or take place in, areas 

designated nonattainment for PM2.5 to 

offset emissions increases of direct 

PM2.5 emissions or PM2.5 precursors 

with reductions of either direct PM2.5

emissions or PM2.5 precursors in 

accordance with offset ratios contained 

in the approved SIP for the applicable 

nonattainment area. The inclusion, in 

whole or in part, of the interpollutant 

offset provisions for PM2.5 is 

discretionary on the part of the states. In 

the preamble to the 2008 final rule, EPA 

included preferred or presumptive offset 

ratios, applicable to specific PM2.5

precursors that states may adopt in 

conjunction with the new interpollutant 

offset provisions for PM2.5, and for 

which the state could rely on the EPA’s 

technical work to demonstrate the 

adequacy of the ratios for use in any 

PM2.5 non attainment area. 

Alternatively, the preamble indicated 

that states may adopt their own ratios, 

subject to the EPA’s approval, that 

would have to be substantiated by 

modeling or other technical 

demonstrations of the net air quality 

benefit for ambient PM2.5

concentrations. The preferred ratios 

were subsequently the subject of a 

petition for reconsideration, which the 

Administrator granted. EPA continues 

to support the basic policy that sources 

may offset increases in emissions of 

direct PM2.5 or of any PM2.5 precursor in 

a PM2.5 nonattainment area with actual 

emissions reductions in direct PM2.5 or 

PM2.5 precursors in accordance with 

offset ratios as approved in the SIP for 

the applicable nonattainment area. 

However, we no longer consider the 

preferred ratios set forth in the preamble 

to the 2008 final rule for PM2.5 NSR 

implementation to be presumptively 

approvable. Instead, any ratio involving 

PM2.5 precursors adopted by the state for 

use in the interpollutant offset program 

for PM2.5 nonattainment areas must be 

accompanied by a technical 

demonstration that shows the net air 

quality benefits of such ratio for the 

PM2.5 nonattainment area in which it 

will be applied. 

C. PSD PM2.5 Rule 

On October 20, 2010 (75 FR 64865), 

EPA promulgated the final ‘‘Prevention 

of Significant Deterioration (PSD) for 

Particulate Matter less than 2.5 

Micrometers (PM2.5)—Increments, 

Significant Impact Levels (SILs) and 

Significant Monitoring Concentration 

(SMC)’’ (PSD PM2.5 Rule). That 

rulemaking finalized certain program 

provisions under the regulations to 

prevent significant deterioration of air 

quality due to emissions of PM2.5 (i.e., 

under the PM2.5 PSD regulations). This 

final rule supplemented the final 

implementation rule for PM2.5, known as 

the Clean Air Fine Particle 

Implementation Rule (CAFPIR) that we 

promulgated on April 25, 2007 (72 FR 

20586), and the PM2.5 NSR 

Implementation Rule that we 

promulgated on May 16, 2008 (73 

FR28321). Together, these three rules 

established a regulatory framework for 

implementation of a PM2.5 program in 

any area. This final rule established 

increments, SILs, and an SMC for PM2.5

to facilitate ambient air quality 

monitoring and modeling under the PSD 

regulations for areas designated 

attainment or unclassifiable for PM2.5. 

D. Infrastructure Requirements Relating 

to Virginia’s PSD Permit Program 

As stated earlier, Virginia’s PSD and 

nonattainment programs are currently 

operating under a limited SIP approval. 

However, EPA has previously 

determined that this limited approval 

will not impair Virginia’s ability to 

enforce its PSD and nonattainment NSR 

provisions in a manner consistent with 

federal requirements (See Section III, 

below). With the addition of the PM2.5

requirements described above, 

Virginia’s nonattainment NSR and PSD 

programs contain all of the emission 

limitations and control measures and 

other program elements required by 40 

CFR 51.165 and 40 CFR 51.166 related 

to the PM2.5 NAAQS. Therefore, we are 

also proposing to approve the August 

25, 2011 SIP submittal and the relevant 

portions of Virginia’s infrastructure SIP 

submittals relating to the PSD permit 

program under CAA sections 

110(a)(2)(C), (D)(i)(II), and (J) for the 

1997 p.m.2.5, 2006 p.m.2.5, and 2008 lead 

NAAQS. EPA is also proposing to 

approve the relevant portion of 

Virginia’s infrastructure submittal 

relating to the PSD permit program 

pursuant to CAA section 

110(a)(2)(D)(i)(II) for the 1997 ozone 

NAAQS. Additionally, Virginia has met 

its obligations with respect to the 

visibility requirements of section 

110(a)(2)(D)(i)(II) by virtue of its 

Regional Haze SIP, which EPA took 

final action to approve on March 23, 

2012 (77 FR 16397). Therefore, EPA is 

also proposing to approve the portions 

of Virginia’s infrastructure submittals 

related to the visibility requirements of 

section 110(a)(2)(D)(i)(II) for the 1997 

ozone, 1997 p.m.2.5, 2006 p.m.2.5, and 

2008 lead NAAQS. As already noted, 

the TSD for this action contains a 

detailed discussion of the relevant 

submissions and EPA’s rationale for 

making this determination. 

II. Summary of SIP Revision 

The SIP revision submitted by 

VADEQ consists of amendments to the 

major NSR permitting regulations of 

Articles 8 and 9 of 9VAC5 Chapter 80. 

The revision fulfills the federal program 

requirements established by the EPA 

rulemaking actions discussed above. 

The amendments establish the major 

source threshold, significant emission 

rate and offset ratios for PM2.5, and 

establish an allowance for interpollutant 

trading for offsets and NSR applicability 

to PM2.5 precursor pollutants, pursuant 

to the May 2008 NSR PM2.5 Rule. In 

addition, the amendments add 

maximum allowable increases in 

ambient pollutant concentrations 

(increments) pursuant to the October 

2010 PSD PM2.5 Rule. Several minor 

administrative revisions were made as 

well. 

The amendments submitted by 

VADEQ for approval into the SIP were 

adopted by the State Air Pollution 

Control Board on June 10, 2011, and 

effective on August 17, 2011. They 

include revisions to the general 

definitions under Chapter 10 of 9VAC5 

(specifically 9VAC5–10–30), as well as 

to Articles 8 (PSD) and 9 (nonattainment 

NSR) under Chapter 80 of 9VAC5. The 

following regulations under Article 8 

are revised: 9VAC5–80–1615 

(Definitions), 9VAC5–80–1635 (Ambient 

Air Increments), and 9VAC5–80–1765 

(Sources Affecting Federal Class I 

Areas—Additional Requirements). 

Under Article 9, the regulations at 

9VAC5–80–2010 (Definitions) and 

9VAC5–80–2120 (Offsets) have been 

amended. Based upon EPA’s review of 

the revisions submitted by Virginia for 

approval into the SIP, we find these 

revisions consistent with their federal 

counterparts. 

The revisions submitted by the State 

of Virginia to address the new PSD 

requirements for PM2.5 pursuant to the 

EPA’s October 20, 2010 final rule 

include the regulatory text at 40 CFR 

51.166(k)(2), concerning the 

implementation of SILs for PM2.5. (See, 

9VAC5–80–1715 (Source Impact 

Analysis)). We stated in the preamble to 

the 2010 final rule that we do not 

consider the SILs to be a mandatory SIP 

element, but regard them as 

discretionary on the part of permitting 

authority for use in the PSD permitting 

process. Nevertheless, the PM2.5 SILs are 

currently the subject of litigation before 

the U.S. Court of Appeals (DC Circuit). 

In response to that litigation, the EPA 

has requested that the Court remand and 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

45526 Federal Register / Vol. 77, No. 148 / Wednesday, August 1, 2012 / Proposed Rules 

vacate the regulatory text in the EPA’s 

PSD regulations at paragraph (k)(2) of 

section 51.166 so that the EPA can make 

necessary rulemaking revisions to that 

text. 

In light of EPA’s request for remand 

and vacatur and our acknowledgement 

of the need to revise the regulatory text 

presently contained at paragraph (k)(2) 

of sections 51.166 and 52.21, we do not 

believe that it is appropriate at this time 

to approve that portion of the State’s SIP 

revision that contains the affected 

regulatory text in the State’s PSD 

regulations, specifically new paragraph 

A.2 of 9VAC5–80–1715. Instead, we are 

taking no action at this time with regard 

to that specific provision contained in 

the SIP revision. 

III. General Information Pertaining to 

SIP Submittals From the 

Commonwealth of Virginia 

In 1995, Virginia adopted legislation 

that provides, subject to certain 

conditions, for an environmental 

assessment (audit) ‘‘privilege’’ for 

voluntary compliance evaluations 

performed by a regulated entity. The 

legislation further addresses the relative 

burden of proof for parties either 

asserting the privilege or seeking 

disclosure of documents for which the 

privilege is claimed. Virginia’s 

legislation also provides, subject to 

certain conditions, for a penalty waiver 

for violations of environmental laws 

when a regulated entity discovers such 

violations pursuant to a voluntary 

compliance evaluation and voluntarily 

discloses such violations to the 

Commonwealth and takes prompt and 

appropriate measures to remedy the 

violations. Virginia’s Voluntary 

Environmental Assessment Privilege 

Law, Va. Code Sec. 10.1–1198, provides 

a privilege that protects from disclosure 

documents and information about the 

content of those documents that are the 

product of a voluntary environmental 

assessment. The Privilege Law does not 

extend to documents or information that 

(1) generated or developed before the 

commencement of a voluntary 

environmental assessment; (2) prepared 

independently of the assessment 

process; (3) demonstrate a clear, 

imminent and substantial danger to the 

public health or environment; or (4) are 

required by law. 

On January 12, 1998, the 

Commonwealth of Virginia Office of the 

Attorney General provided a legal 

opinion that states that the Privilege 

Law, Va. Code § 10.1–1198, precludes 

granting a privilege to documents and 

information ‘‘required by law,’’ 

including documents and information 

‘‘required by Federal law to maintain 

program delegation, authorization or 

approval,’’ since Virginia must ‘‘enforce 

Federally authorized environmental 

programs in a manner that is no less 

stringent than their Federal 

counterparts. * * *’’ The opinion 

concludes that ‘‘[r]egarding § 10.1–1198, 

therefore, documents or other 

information needed for civil or criminal 

enforcement under one of these 

programs could not be privileged 

because such documents and 

information are essential to pursuing 

enforcement in a manner required by 

Federal law to maintain program 

delegation, authorization or approval.’’ 

Virginia’s Immunity law, Va. Code Sec. 

10.1–1199, provides that ‘‘[t]o the extent 

consistent with requirements imposed 

by Federal law,’’ any person making a 

voluntary disclosure of information to a 

state agency regarding a violation of an 

environmental statute, regulation, 

permit, or administrative order is 

granted immunity from administrative 

or civil penalty. The Attorney General’s 

January 12, 1998 opinion states that the 

quoted language renders this statute 

inapplicable to enforcement of any 

Federally authorized programs, since 

‘‘no immunity could be afforded from 

administrative, civil, or criminal 

penalties because granting such 

immunity would not be consistent with 

Federal law, which is one of the criteria 

for immunity.’’ 

Therefore, EPA has determined that 

Virginia’s Privilege and Immunity 

statutes will not preclude the 

Commonwealth from enforcing its PSD 

and nonattainment NSR programs 

consistent with the Federal 

requirements. In any event, because 

EPA has also determined that a state 

audit privilege and immunity law can 

affect only state enforcement and cannot 

have any impact on Federal 

enforcement authorities, EPA may at 

any time invoke its authority under the 

CAA, including, for example, sections 

113, 167, 205, 211 or 213, to enforce the 

requirements or prohibitions of the state 

plan, independently of any state 

enforcement effort. In addition, citizen 

enforcement under section 304 of the 

CAA is likewise unaffected by this, or 

any, state audit privilege or immunity 

law. 

IV. Proposed Action 

Based upon EPA’s review of the 

August 25, 2011 submittal, we find the 

regulations consistent with their Federal 

counterparts. Only the increment 

portion of the October 20, 2010 p.m.2.5

rule is a required PSD program element. 

Therefore, EPA is proposing to approve 

Virginia’s SIP revision, with the 

exception of the portion of the revision 

which relates to the SILs, upon which 

we are taking no action. Additionally, in 

light of this SIP revision, EPA is 

proposing to approve the portions of 

Virginia’s prior infrastructure submittals 

related to the PSD program which were 

not approved as part of our October 11, 

2011 action (See, 76 FR 62635) as 

follows: (1) We are proposing to approve 

the portions of the December 13, 2007 

submittal which address the section 

110(a)(2)(D)(i)(II) requirements related 

to Virginia’s PSD program for the 1997 

ozone NAAQS; (2) We are proposing to 

approve the portions of the July 10, 

2008 and September 2, 2008 submittals 

which address the requirements of 

sections 110(a)(2)(C), (D)(i)(II), and (J) 

which relate to Virginia’s PSD program 

for the 1997 p.m.2.5 NAAQS; (3) We are 

proposing to approve the portions of the 

April 1, 2011 submittal which address 

the requirements of sections 

110(a)(2)(C), (D)(i)(II), and (J) which 

relate to Virginia’s PSD program for the 

2006 p.m.2.5 NAAQS; (4) We are 

proposing to approve the portions of the 

March 9, 2012 submittal which address 

the requirements of sections 

110(a)(2)(C), (D)(i)(II), and (J) which 

relate to Virginia’s PSD program for the 

2008 lead NAAQS; 5) We are proposing 

to approve the portions of the November 

13, 2007 submittal which address the 

requirements of sections 110(a)(2)(D)(i) 

which relate to Virginia’s PSD program 

for the 1997 ozone and 1997 p.m.2.5

NAAQS; and 6) Because Virginia has 

met its obligations with respect to the 

visibility requirements of section 

110(a)(2)(D)(i)(II) by virtue of its 

Regional Haze SIP, which EPA took 

final action to approve on March 23, 

2012 (77 FR 16397), EPA is also 

proposing to approve the portions of 

Virginia’s previous infrastructure 

submittals related to the visibility 

requirements of section 

110(a)(2)(D)(i)(II) for the 1997 ozone, 

1997 p.m.2.5, 2006 p.m.2.5, and 2008 lead 

NAAQS. 

V. Statutory and Executive Order 

Reviews 

Under the CAA, the Administrator is 

required to approve a SIP submission 

that complies with the provisions of the 

CAA and applicable Federal regulations. 

42 U.S.C. 7410(k); 40 CFR 52.02(a). 

Thus, in reviewing SIP submissions, 

EPA’s role is to approve state choices, 

provided that they meet the criteria of 

the CAA. Accordingly, this action 

merely proposes to approve state law as 

meeting Federal requirements and does 

not impose additional requirements 

beyond those imposed by state law. For 

that reason, this action: 

mstockstill on DSK4VPTVN1PROD with PROPOSALS

Federal Register / Vol. 77, No. 148 / Wednesday, August 1, 2012 / Proposed Rules 45527 

• Is not a ‘‘significant regulatory 

action’’ subject to review by the Office 

of Management and Budget under 

Executive Order 12866 (58 FR 51735, 

October 4, 1993); 

• Does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act (44 

U.S.C. 3501 et seq.); 

• Is certified as not having a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

U.S.C. 601 et seq.); 

• Does not contain any unfunded 

mandate or significantly or uniquely 

affect small governments, as described 

in the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4); 

• Does not have Federalism 

implications as specified in Executive 

Order 13132 (64 FR 43255, August 10, 

1999); 

• Is not an economically significant 

regulatory action based on health or 

safety risks subject to Executive Order 

13045 (62 FR 19885, April 23, 1997); 

• Is not a significant regulatory action 

subject to Executive Order 13211 (66 FR 

28355, May 22, 2001); 

• Is not subject to requirements of 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act of 1995 (15 U.S.C. 272 note) because 

application of those requirements would 

be inconsistent with the CAA; and 

• Does not provide EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

In addition, this proposed rule 

pertaining to NSR requirements for 

PM2.5 does not have tribal implications 

as specified by Executive Order 13175 

(65 FR 67249, November 9, 2000), 

because the SIP is not approved to apply 

in Indian country located in the state, 

and EPA notes that it will not impose 

substantial direct costs on tribal 

governments or preempt tribal law. 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Carbon monoxide, 

Intergovernmental relations, Lead, 

Nitrogen dioxide, Ozone, Particulate 

matter, Reporting and recordkeeping 

requirements, Sulfur oxides, Volatile 

organic compounds. 

Dated: July 23, 2012. 

W.C. Early, 

Acting Regional Administrator, Region III. 

[FR Doc. 2012–18800 Filed 7–31–12; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R03–OAR–2012–0381; FRL–9709–7] 

Approval and Promulgation of Air 

Quality Implementation Plans; 

Delaware; Requirements for 

Prevention of Significant Deterioration 

and Nonattainment New Source 

Review; Fine Particulate Matter (PM2.5) 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to approve 

a State Implementation Plan (SIP) 

revision submitted by the State of 

Delaware on March 14, 2012. This SIP 

revision pertaining to Delaware’s 

Prevention of Significant Deterioration 

(PSD) and nonattainment New Source 

Review (NSR) programs incorporates 

preconstruction permitting 

requirements for fine particulate matter 

(PM2.5) into the Delaware SIP. In 

addition, EPA is proposing to approve 

SIP revisions and portions of SIP 

submissions for the purpose of 

determining that Delaware has met its 

statutory obligations with respect to the 

infrastructure requirements of the Clean 

Air Act (CAA) which relate to 

Delaware’s PSD permitting program and 

are necessary to implement, maintain, 

and enforce the1997 PM2.5 and ozone 

NAAQS, the 2006 PM2.5 NAAQS, and 

the 2008 lead NAAQS. EPA is 

approving these revisions in accordance 

with the requirements of the Clean Air 

Act (CAA). 

DATES: Written comments must be 

received on or before August 31, 2012. 

ADDRESSES: Submit your comments, 

identified by Docket ID Number EPA– 

R03–OAR–2012–0381 by one of the 

following methods: 

A. www.regulations.gov. Follow the 

on-line instructions for submitting 

comments. 

B. Email: cox.kathleen@epa.gov. 

C. Mail: EPA–R03–OAR–2012–0381, 

Kathleen Cox, Associate Director, Office 

of Permits and Air Toxics, Mailcode 

3AP10, U.S. Environmental Protection 

Agency, Region III, 1650 Arch Street, 

Philadelphia, Pennsylvania 19103. 

D. Hand Delivery: At the previouslylisted EPA Region III address. Such 

deliveries are only accepted during the 

Docket’s normal hours of operation, and 

special arrangements should be made 

for deliveries of boxed information. 

Instructions: Direct your comments to 

Docket ID No. EPA–R03–OAR–2012– 

0381. EPA’s policy is that all comments 

received will be included in the public 

docket without change, and may be 

made available online at 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through www.regulations.gov 

or email. The www.regulations.gov Web 

site is an ‘‘anonymous access’’ system, 

which means EPA will not know your 

identity or contact information unless 

you provide it in the body of your 

comment. If you send an email 

comment directly to EPA without going 

through www.regulations.gov, your 

email address will be automatically 

captured and included as part of the 

comment that is placed in the public 

docket and made available on the 

Internet. If you submit an electronic 

comment, EPA recommends that you 

include your name and other contact 

information in the body of your 

comment and with any disk or CD–ROM 

you submit. If EPA cannot read your 

comment due to technical difficulties 

and cannot contact you for clarification, 

EPA may not be able to consider your 

comment. Electronic files should avoid 

the use of special characters, any form 

of encryption, and be free of any defects 

or viruses. 

Docket: All documents in the 

electronic docket are listed in the 

www.regulations.gov index. Although 

listed in the index, some information is 

not publicly available, i.e., CBI or other 

information whose disclosure is 

restricted by statute. Certain other 

material, such as copyrighted material, 

is not placed on the Internet and will be 

publicly available only in hard copy 

form. Publicly available docket 

materials are available either 

electronically in www.regulations.gov or 

in hard copy during normal business 

hours at the Air Protection Division, 

U.S. Environmental Protection Agency, 

Region III, 1650 Arch Street, 

Philadelphia, Pennsylvania 19103. 

Copies of the State submittal are 

available at the Delaware Department of 

Natural Resources and Environmental 

Control, 89 Kings Highway, P.O. Box 

1401, Dover, Delaware 19903. 

FOR FURTHER INFORMATION CONTACT: 

Gerallyn Duke, (215) 814–2084, or by 

email at duke.gerallyn@epa.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Throughout this document, whenever 

‘‘we,’’ ‘‘us,’’ or ‘‘our’’ is used, we mean 

mstockstill on DSK4VPTVN1PROD with PROPOSALS