```

[Federal Register Volume 78, Number 12 (Thursday, January 17, 2013)]
[Proposed Rules]
[Pages 3867-3877]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-00951]

=======================================================================
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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2012-0700; FRL-9771-5]

Approval and Promulgation of Implementation Plans; Kentucky; 
110(a)(1) and (2) Infrastructure Requirements for the 2008 8-Hour Ozone 
National Ambient Air Quality Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve in part, conditionally approve in 
part, and disapprove in part, the July 17, 2012, State Implementation 
Plan (SIP) submission provided by the Commonwealth of Kentucky, through 
the Division of Air Quality (DAQ) of the Kentucky Energy and 
Environment Cabinet. Kentucky DAQ submitted the July 17, 2012, SIP 
submission as a replacement to its original September 8, 2009, SIP 
submission. Specifically, this proposal pertains to the Clean Air Act 
(CAA or Act) requirements for the 2008 8-hour ozone national ambient 
air quality standards (NAAQS) infrastructure SIP. The CAA requires that 
each state adopt and submit a SIP for the implementation, maintenance, 
and enforcement of each NAAQS promulgated by EPA, which is commonly 
referred to as an ``infrastructure'' SIP. Kentucky DAQ made a SIP 
submission demonstrating that the Kentucky SIP contains provisions that 
ensure the 2008 8-hour ozone NAAQS are implemented, enforced, and 
maintained in the Commonwealth (hereafter referred to as 
``infrastructure submission''). EPA is now proposing three related 
actions on Kentucky DAQ's infrastructure SIP submission. First, EPA is 
proposing to determine that Kentucky DAQ's infrastructure submission, 
provided to EPA on July 17, 2012, satisfies certain required 
infrastructure elements for the 2008 8-hour ozone NAAQS. Second, with 
respect to the infrastructure requirements related to specific 
prevention of significant deterioration (PSD) requirements, EPA is 
proposing to approve, in part and conditionally approve in part, the 
infrastructure SIP submission based on a December 19, 2012, Kentucky 
DAQ commitment to submit specific enforceable measures for approval 
into the SIP to address specific PSD program deficiencies. Third, EPA 
is proposing to disapprove Kentucky DAQ's infrastructure SIP submission 
with respect to certain interstate transport requirements for the 2008 
8-hour ozone NAAQS because the submission does not address the 
statutory provisions with respect to the relevant NAAQS and thus does 
not satisfy the criteria for approval. The CAA requires EPA to act on 
this portion of the SIP submission even though under a recent court 
decision (which is not yet final as EPA has requested rehearing), 
Kentucky DAQ was not yet required to submit a SIP submission to address 
these interstate transport requirements. Moreover, under that same 
court decision, this disapproval does not trigger an obligation for EPA 
to promulgate a Federal Implementation plan (FIP) to address these 
interstate transport requirements.

DATES: Written comments must be received on or before February 7, 2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2012-0700, by one of the following methods:
    1. www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. Email: R4-RDS@epa.gov.
    3. Fax: (404) 562-9140.
    4. Mail: ``EPA-R04-OAR-2012-0700,'' Regulatory Development Section, 
Air Planning Branch, Air, Pesticides and Toxics Management Division, 
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., 
Atlanta, Georgia 30303-8960.
    5. Hand Delivery or Courier: Lynorae Benjamin, Regulatory 
Development Section, Air Planning Branch, Air, Pesticides and Toxics 
Management Division, U.S. Environmental Protection Agency, Region 4, 61 
Forsyth Street SW., Atlanta, Georgia 30303-8960. Such deliveries are 
only accepted during the Regional Office's normal hours of operation. 
The Regional Office's official hours of business are Monday through 
Friday, 8:30 to 4:30, excluding federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R04-OAR-
2012-0700. 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 through www.regulations.gov or 
email, information that you consider to be CBI or otherwise protected. 
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. For additional 
information about EPA's public docket visit the EPA Docket Center 
homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the electronic docket are listed in the 
www.regulations.gov index. Although listed in the index, some 
information is

[[Page 3868]]

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 
at the Regulatory Development Section, Air Planning Branch, Air, 
Pesticides and Toxics Management Division, U.S. Environmental 
Protection Agency, Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 
30303-8960. EPA requests that if at all possible, you contact the 
person listed in the FOR FURTHER INFORMATION CONTACT section to 
schedule your inspection. The Regional Office's official hours of 
business are Monday through Friday, 8:30 to 4:30, excluding federal 
holidays.

FOR FURTHER INFORMATION CONTACT: Nacosta C. Ward, Regulatory 
Development Section, Air Planning Branch, Air, Pesticides and Toxics 
Management Division, U.S. Environmental Protection Agency, Region 4, 61 
Forsyth Street SW., Atlanta, Georgia 30303-8960. The telephone number 
is (404) 562-9140. Ms. Ward can also be reached via electronic mail at 
ward.nacosta@epa.gov.

Table of Contents

I. Background and Overview
II. What elements are required under sections 110(a)(1) and (2)?
III. Scope of Infrastructure SIPs
IV. What is EPA's analysis of how the Commonwealth of Kentucky 
addressed the elements of sections 110(a)(1) and (2) 
``infrastructure'' provisions?
V. Proposed Action
VI. Statutory and Executive Order Reviews

I. Background and Overview

    On March 27, 2008, EPA promulgated a revised NAAQS for ozone based 
on 8-hour average concentrations. EPA revised the level of the 8-hour 
ozone NAAQS to 0.075 parts per million (ppm). See 77 FR 16436. Pursuant 
to section 110(a)(1) of the CAA, states are required to submit SIPs 
meeting the applicable requirements of section 110(a)(2) within three 
years after promulgation of a new or revised NAAQS or within such 
shorter period as EPA may prescribe. Section 110(a)(2) requires states 
to address basic SIP elements such as requirements for monitoring, 
basic program requirements and legal authority that are designed to 
assure attainment and maintenance of the NAAQS. States were required to 
submit such SIPs for the 2008 8-hour ozone NAAQS to EPA no later than 
March 2011.
    Midwest Environmental Defense and Sierra Club filed a complaint in 
federal court on November 20, 2011, alleging EPA's failure to issue 
findings of failure to submit related to the infrastructure 
requirements for the 2008 8-hour ozone NAAQS. On December 13, 2011, and 
March 6, 2012, Midwest Environmental Defense and Sierra Club filed 
amended complaints alleging that EPA had failed to promulgate PSD 
regulations required with respect to the 2008 8-hour ozone NAAQS within 
two years, alleging that EPA had failed to approve or disapprove SIP 
submittals, and removing claims regarding states that had by that time 
submitted infrastructure SIPs for the 2008 8-hour ozone NAAQS, 
respectively. Kentucky was among the states named in the November 2011 
complaint, and in the December 2011, and March 2012, amended 
complaints. Specifically, the plaintiffs claimed that EPA had failed to 
perform a mandatory duty under section 110(k) to take action upon 
Kentucky's 2008 8-hour ozone infrastructure SIP addressing sections 
110(a)(2)(A)-(H) and (J)-(M) by no later than March 8, 2011.
    Kentucky DAQ's infrastructure submission for the 2008 8-hour ozone 
NAAQS was originally received by EPA on September 8, 2009. Kentucky 
DAQ's September 8, 2009, SIP revision became complete by operation of 
law on March 8, 2010, and thus under CAA section 110(k)(2) EPA was 
required to take action on this SIP revision no later than March 8, 
2011. On July 17, 2012, Kentucky DAQ withdrew its September 8, 2009, 
submission and concurrently provided a new submission to satisfy the 
infrastructure requirements for the 2008 8-hour ozone NAAQS.\1\
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    \1\ EPA understands that Kentucky believed, based upon the 2006 
24-hour PM2.5 Infrastructure Guidance (the most current 
infrastructure guidance at the time), it did not need to hold a 
public hearing for its original letter certification for the 2008 8-
hour ozone NAAQS infrastructure SIP (dated September 8, 2009). EPA 
further understands that, following the publication of EPA's 
Infrastructure Guidance for the 2008 Lead NAAQS, Kentucky decided to 
undergo public notice and comment for its 2008 8-hour ozone NAAQS 
infrastructure SIP. Following that public review and comment, on 
July 17, 2012, Kentucky withdrew its original infrastructure 
submission, and provided EPA with a new, publically noticed 
infrastructure submission.
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    On December 7, 2012, EPA was ordered by the U.S. District Court for 
the Northern District of California (hereafter also referred to as the 
``district court'') to ``sign a final rule or rules taking final action 
on the 2008 ozone NAAQS Infrastructure SIP submittals from Kentucky 
(submittal dated 9/8/2009, revised 7/17/2012) * * * by no later than 3/
4/2013.'' EPA does not agree that the July 17, 2012, submission 
``revised'' the earlier September 8, 2009, infrastructure submission. 
Instead, according to the transmittal letter from Kentucky DAQ, the 
latter submission was a new infrastructure submission sent to EPA to 
completely replace the earlier September 8, 2009, submission which 
Kentucky DAQ withdrew. The July 17, 2012, infrastructure submission and 
accompanying transmittal letter are available in the docket for today's 
action. Although Kentucky DAQ clearly stated its intention to replace 
the original September 8, 2009, submission with the July 17, 2012, 
submission, EPA interprets the district court order as requiring EPA to 
act on both infrastructure SIP submittals and to treat the July 17, 
2012, submission merely as a revision to the original September 8, 
2009, submission, and EPA is proposing to do so in this notice. EPA 
views the actions proposed today as steps toward satisfying the 
requirements of the December 7, 2012, district court order regarding 
Kentucky DAQ's infrastructure submission.
    On December 19, 2012, Kentucky DAQ submitted a request for 
conditional approval of the infrastructure SIP submission with respect 
to the PSD requirements of sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) 
(hereafter referred to as prong 3 of section 110(a)(2)(D)(i)),\2\ and 
110(a)(2)(J) to address deficiencies in the infrastructure SIP 
concerning the fine particulate matter (PM2.5 ) PSD 
requirements for these elements. Today's action proposes conditional 
approval of the Commonwealth's infrastructure SIP submission, 
consistent with section 110(k)(4) of the CAA, for the portions of the 
submission related to PSD requirements based upon a commitment by 
Kentucky DAQ to submit the necessary SIP revisions with specific 
enforceable measures to address PM2.5 PSD requirements. EPA 
notes that these requirements are part of the structural requirements 
for the PSD program that are relevant for purposes of infrastructure 
SIPs for the 2008 8-hour ozone NAAQS.
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    \2\ Section 110(a)(2)(D)(i) includes four requirements referred 
to as prongs 1 through 4. Prongs 1 and 2 appear in section 
110(a)(2)(D)(i)(I); prongs 3 and 4 appear in section 
110(a)(2)(D)(i)(II).
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    Kentucky DAQ's July 17, 2012, infrastructure SIP submission for the 
2008 8-hour ozone NAAQS also addressed CAA section 110(a)(2)(D)(i)(I), 
which requires that SIPs contain adequate provisions prohibiting any 
source or other type of emissions activity in one state from 
contributing significantly to nonattainment maintenance of the NAAQS in 
another

[[Page 3869]]

state. In its submission, Kentucky DAQ asserts that section 
110(a)(2)(D)(i)(I) is satisfied by the Commonwealth's previously 
approved SIP revision to meet the Clean Air Interstate Rule (CAIR) 
requirements.
    CAIR was promulgated by EPA in 2005 to address, for certain states, 
the requirements of CAA section 110(a)(2)(D)(i)(I) with respect to the 
1997 8-hour ozone and 1997 annual PM2.5 NAAQS. See 70 FR 
25162. In 2008, the U.S. Court of Appeals for the D.C. Circuit granted 
several petitions for review of CAIR; however, the D.C. Circuit 
ultimately decided to leave CAIR in place to preserve the environmental 
values of the rule while EPA promulgated a new rule to replace it. 
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), as modified on 
rehearing, 550 F.3d 1176 (D.C. Cir. 2008). In 2011, EPA promulgated the 
Cross-State Air Pollution Rule (CSAPR) to replace CAIR and to address, 
for certain states, the requirements of 110(a)(2)(D)(i)(I) with respect 
to the 1997 8-hour ozone, the 1997 annual PM2.5 NAAQS and 
the 2006 24-hour PM2.5 NAAQS. See 76 FR 48208. Neither CAIR 
nor CSAPR addressed the requirements of 110(a)(2)(D)(i)(I) with respect 
to the 2008 8-hour ozone NAAQS.
    In August of 2012, a panel of the U.S. Court of Appeals for the 
D.C. Circuit issued a decision to vacate CSAPR. See EME Homer City 
Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012). This decision 
addressed the requirements of 110(a)(2)(D)(i)(I). The EME Homer City 
panel decision vacated CSAPR and ordered EPA to continue implementing 
CAIR. The D.C. Circuit has not yet issued the final mandate in EME 
Homer City as EPA (as well as several interveners) petitioned for 
rehearing en banc, asking the full court to review the decision. 
Nonetheless, while rehearing proceedings are pending, EPA intends to 
act in accordance with the panel opinion in EME Homer City opinion.
    Several aspects of the EME Homer City opinion are potentially 
relevant to this proposal. First, the opinion concludes that a section 
110(a)(2)(D)(i)(I) SIP submission cannot be considered a ``required'' 
SIP submission until EPA has defined a state's obligations pursuant to 
that section. See EME Homer City, 696 F.3d at 32 (``A SIP logically 
cannot be deemed to lack a `required submission' or deemed to be 
deficient for failure to meet the good neighbor obligation before EPA 
quantifies the good neighbor obligation.'') EPA historically has 
interpreted section 110(a)(1) of the CAA as establishing the required 
submittal date for SIPs addressing all of the ``interstate transport'' 
requirements in section 110(a)(2)(D), including the provisions in 
section 110(a)(2)(D)(i)(I) regarding significant contribution to 
nonattainment and interference with maintenance. However, at this time 
in light of the EME Homer City opinion, EPA is not treating the section 
110(a)(2)(D)(i)(I) SIP submission from Kentucky DAQ as a required SIP 
submission. Second, the EME Homer City opinion provides that EPA does 
not have authority to promulgate a FIP to address the requirements of 
section 110(a)(a)(2)(D)(i)(I) until EPA has identified emissions in a 
state that significantly contribute to nonattainment or interfere with 
maintenance of the NAAQS in another state and given the state an 
opportunity to submit a SIP to address those emissions. EME Homer City, 
696 F.3d at 28.
    As explained in greater detail below, in this action, EPA is 
proposing to disapprove Kentucky DAQ's SIP submission as it relates to 
section 110(a)(2)(D)(i)(I) because the submission does not address the 
statutory provisions with respect to the relevant NAAQS and thus does 
not satisfy the criteria for approval presented in CAA section 
110(k)(3). EPA must act on the 110(a)(2)(D)(i)(I) SIP submission from 
the Commonwealth because, even if the submission is not considered to 
be ``required,'' section 110(k)(2) of the CAA requires EPA to act on 
all SIP submissions. However, unless the EME Homer City decision is 
reversed or otherwise modified by the D.C. Circuit, any final 
disapproval would not obligate the Commonwealth to take any action or 
make a new SIP submission. Nor would it trigger an obligation for EPA 
to promulgate a FIP to address these interstate transport requirements.
    Kentucky DAQ's July 17, 2012, 2008 8-hour infrastructure submission 
also addressed sections 110(a)(2)(A)-(B); (D)(i) prong 4;(E)-(H); other 
sub-elements of (J); and (K)-(M). Today, EPA is proposing to fully 
approve these elements of the Commonwealth's submission for the reasons 
explained below.

II. What elements are required under sections 110(a)(1) and (2)?

    Section 110(a) of the CAA requires states to submit SIPs to provide 
for the implementation, maintenance, and enforcement of a new or 
revised NAAQS within three years following the promulgation of such 
NAAQS, or within such shorter period as EPA may prescribe. Section 
110(a) imposes the obligation upon states to make a SIP submission to 
EPA for a new or revised NAAQS, but the contents of that submission may 
vary depending upon the facts and circumstances. In particular, the 
data and analytical tools available at the time the state develops and 
submits the SIP for a new or revised NAAQS affects the content of the 
submission. The contents of such SIP submissions may also vary 
depending upon what provisions the state's existing SIP already 
contains. In the case of the 2008 8-hour ozone NAAQS, states typically 
have met the basic program elements required in section 110(a)(2) 
through earlier SIP submissions in connection with the 1997 8-hour 
ozone NAAQS.
    More specifically, section 110(a)(1) provides the procedural and 
timing requirements for SIPs. Section 110(a)(2) lists specific elements 
that states must meet for ``infrastructure'' SIP requirements related 
to a newly established or revised NAAQS. As mentioned above, these 
requirements include basic SIP elements such as requirements for 
monitoring, basic program requirements and legal authority that are 
designed to assure attainment and maintenance of the NAAQS. The 
requirements that are the subject of this proposed rulemaking are 
summarized below.\3\
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    \3\ Two elements identified in section 110(a)(2) are not 
governed by the three year submission deadline of section 110(a)(1) 
because SIPs incorporating necessary local nonattainment area 
controls are not due within three years after promulgation of a new 
or revised NAAQS, but rather due at the time the nonattainment area 
plan requirements are due pursuant to section 172. These 
requirements are: (1) Submissions required by section 110(a)(2)(C) 
to the extent that subsection refers to a permit program as required 
in part D Title I of the CAA; and (2) submissions required by 
section 110(a)(2)(I) which pertain to the nonattainment planning 
requirements of part D, Title I of the CAA. Today's proposed 
rulemaking does not address infrastructure elements related to 
section 110(a)(2)(I) or the nonattainment planning requirements of 
110(a)(2)(C).
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     110(a)(2)(A): Emission limits and other control measures.
     110(a)(2)(B): Ambient air quality monitoring/data system.
     110(a)(2)(C): Program for enforcement of control 
measures.\4\
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    \4\ This rulemaking only addresses requirements for this element 
as they relate to attainment areas.
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     110(a)(2)(D): Interstate transport.\5\
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    \5\ As explained above, EPA at this time is not treating the 
110(a)(2)(D)(i)(I) SIP submission from Kentucky DAQ as a required 
SIP submission. The portions of the SIP submission relating to 
110(a)(2)(D)(i)(II) and 110(a)(2)(D)(ii), in contrast, are required, 
and are being acted upon by EPA in today's proposed rulemaking.
---------------------------------------------------------------------------

     110(a)(2)(E): Adequate resources.
     110(a)(2)(F): Stationary source monitoring system.
     110(a)(2)(G): Emergency power.
     110(a)(2)(H): Future SIP revisions.

[[Page 3870]]

     110(a)(2)(I): Areas designated nonattainment and meet the 
applicable requirements of part D.\6\
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    \6\ As mentioned above, this element is not relevant to today's 
proposed rulemaking.
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     110(a)(2)(J): Consultation with government officials; 
public notification; and PSD and visibility protection.
     110(a)(2)(K): Air quality modeling/data.
     110(a)(2)(L): Permitting fees.
     110(a)(2)(M): Consultation/participation by affected local 
entities.

III. Scope of Infrastructure SIPs

    EPA notes that this rulemaking does not address four substantive 
issues that are not integral to the Commonwealth's infrastructure SIP 
submission. These four issues are: (i) Existing provisions related to 
excess emissions during periods of start-up, shutdown, or malfunction 
at sources (SSM), that may be contrary to the CAA and EPA's policies 
addressing such excess emissions; (ii) existing provisions related to 
``director's variance'' or ``director's discretion'' that purport to 
permit revisions to SIP approved emissions limits with limited public 
process or without requiring further approval by EPA, that may be 
contrary to the CAA (director's discretion); (iii) existing provisions 
for minor source new source review (NSR) programs that may be 
inconsistent with the requirements of the CAA and EPA's regulations 
that pertain to such programs (minor source NSR); and, (iv) existing 
provisions for PSD programs that may be inconsistent with current 
requirements of EPA's ``Final NSR Improvement Rule,'' 67 FR 80186 
(December 31, 2002), as amended by 72 FR 32526 (June 13, 2007) (NSR 
Reform).
    Instead, EPA has indicated that it has other authority to address 
any such existing SIP defects in other rulemakings, as appropriate. A 
detailed rationale for why these four substantive issues are not part 
of the scope of infrastructure SIP rulemakings can be found in EPA's 
August 3, 2012, proposed rule entitled, ``Approval and Promulgation of 
Implementation Plans; Kentucky; 110(a)(1) and (2) Infrastructure 
Requirements for the 1997 annual and 2006 24-hour Fine Particulate 
Matter National Ambient Air Quality Standards'' in the section 
entitled, ``Scope of Infrastructure SIPs'' (See 77 FR 46352).

IV. What is EPA's analysis of how the Commonwealth of Kentucky 
addressed the elements of sections 110(a)(1) and (2) ``infrastructure'' 
provisions?

    Kentucky DAQ's infrastructure submission addresses the provisions 
of sections 110(a)(1) and (2) as described below.
    1. 110(a)(2)(A): Emission limits and other control measures: 
Kentucky DAQ's infrastructure submission provides an overview of the 
provisions of the Kentucky Air Regulations relevant to air quality 
control regulations. The regulations described below have been 
federally approved in the Kentucky SIP and include enforceable emission 
limitations and other control measures. Chapter 50--Division for Air 
Quality; General Administrative Procedures of the Kentucky Air 
Regulations generally authorizes the Kentucky Energy and Environment 
Cabinet to adopt rules for the control of air pollution, including 
those necessary to obtain EPA approval under section 110 of the CAA and 
details the authority and means with which DAQ can require testing and 
emissions verification. Chapter 51--Attainment and Maintenance of the 
National Ambient Air Quality Standards, also includes references to 
rules adopted by Kentucky DAQ to control air pollution, including ozone 
precursors. Chapter 53--Ambient Air Quality Standards, serves to 
establish the requirements for the prevention, abatement, and control 
of air pollution. EPA has made the preliminary determination that the 
provisions contained in these chapters and the Commonwealth's practices 
are adequate to demonstrate enforceable emission limitations and other 
control measures for the 2008 8-hour ozone NAAQS in Kentucky. 
Accordingly, EPA is proposing to approve Kentucky DAQ's infrastructure 
SIP submission with respect to section 110(a)(2)(A).
    In this action, EPA is not proposing to approve or disapprove any 
existing state provisions with regard to excess emissions during SSM of 
operations at a facility. EPA believes that a number of states have SSM 
provisions which are contrary to the CAA and existing EPA guidance, 
``State Implementation Plans: Policy Regarding Excess Emissions During 
Malfunctions, Startup, and Shutdown'' (September 20, 1999), and the 
Agency plans to address such state regulations in the future. In the 
meantime, EPA encourages any state having deficient SSM provisions to 
take steps to correct them as soon as possible.
    Additionally, in this action, EPA is not proposing to approve or 
disapprove any existing state rules with regard to director's 
discretion or variance provisions. EPA believes that a number of states 
have such provisions which are contrary to the CAA and existing EPA 
guidance (52 FR 45109, November 24, 1987), and the Agency plans to take 
action in the future to address such state regulations. In the 
meantime, EPA encourages any state having a director's discretion or 
variance provision which is contrary to the CAA and EPA guidance to 
take steps to correct the deficiency as soon as possible.
    2. 110(a)(2)(B) Ambient air quality monitoring/data system: Chapter 
50:050--Monitoring, Chapter 51:010--Attainment status designations, and 
Chapter 53--Ambient Air Quality Standards, along with the 
Commonwealth's Network Description and Ambient Air Monitoring Network 
Plan, provide for an ambient air quality monitoring network in 
Kentucky. Annually, EPA approves the ambient air monitoring network 
plan for the state agencies. On May 25, 2012, the Commonwealth of 
Kentucky submitted its plan to EPA, which also included the Louisville-
Jefferson County local monitoring program. On June 29, 2012, EPA 
approved the Commonwealth's monitoring network plan. The Commonwealth's 
approved monitoring network plan can be accessed at www.regulations.gov 
using Docket ID No. EPA-R04-OAR-2012-0700. EPA has made the preliminary 
determination that the Commonwealth's SIP and practices are adequate 
for the ambient air quality monitoring and data system related to the 
2008 8-hour ozone NAAQS. Accordingly, EPA is proposing to approve 
Kentucky DAQ's infrastructure SIP submission with respect to section 
110(a)(2)(B).
    3. 110(a)(2)(C) Program for enforcement of control measures 
including review of proposed new sources: Chapter 51--Attainment and 
Maintenance of the National Ambient Air Quality Standards, describes 
the permit requirements for new major sources or major modifications of 
existing sources in areas classified as attainment or unclassifiable 
under section 107(d)(1)(A)(ii) or (iii) of the CAA. These requirements 
are designed to ensure that sources in areas attaining the NAAQS at the 
time of designations prevent any significant deterioration in air 
quality. Chapter 51 also sets the permitting requirements for areas in 
or around nonattainment areas and a description of the Commonwealth's 
statutory authority to enforce regulations relating to attainment and

[[Page 3871]]

maintenance of the 2008 8-hour ozone NAAQS.
    At present, there are four SIP revisions that are relevant to EPA's 
review of Kentucky DAQ's infrastructure SIP submission for the 2008 8-
hour ozone NAAQS in connection with the current PSD-related 
infrastructure requirements. See sections 110(a)(2)(C), prong 3 of 
110(a)(2)(D)(i), and 110(a)(2)(J) of the CAA. The EPA regulations that 
require these SIP revisions are: (1) ``Final Rule To Implement the 8-
Hour Ozone National Ambient Air Quality Standard--Phase 2; Final Rule'' 
(November 29, 2005, 70 FR 71612) (hereafter referred to as the ``Phase 
II Rule''); (2) ``Prevention of Significant Deterioration and Title V 
Greenhouse Gas [GHG] Tailoring Rule; Final Rule'' (June 3, 2010, 75 FR 
31514) (hereafter referred to as the ``GHG Tailoring Rule''); (3) 
``Implementation of the New Source Review Program for Particulate 
Matter Less Than 2.5 Micrometers; Final Rule'' (May 16, 2008, 73 FR 
28321) (hereafter referred to as the ``NSR PM2.5 Rule''); 
and, (4) ``Final Rule on 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); Final Rule'' (October 20, 
2010, 75 FR 64864) (hereafter referred to as the``PM2.5 PSD 
Increment-SILs-SMC Rule (only as it relates to PM2.5 
Increments)'').
    The first revision to the Kentucky SIP (Phase II Rule revisions) 
was submitted by Kentucky DAQ on February 4, 2010. Kentucky DAQ's 
submittal addressed the structural PSD program revisions required by 
the Phase II Rule, including requirements to include nitrogen oxides 
(NOX) as an ozone precursor for permitting purposes for PSD 
and nonattainment NSR. EPA published a final action approving Kentucky 
DAQ's revisions which incorporate NOX as an ozone precursor 
on September 15, 2010. See 75 FR 55988. Thus, EPA has preliminarily 
determined that the infrastructure SIP submission is approvable with 
respect to this issue.
    The second revision to the Kentucky SIP pertains to revisions to 
the PSD program promulgated in the GHG Tailoring Rule, submitted to EPA 
by Kentucky DAQ on December 13, 2010. EPA published a final action to 
approve revisions to Kentucky DAQ's SIP related to GHG regulations on 
December 29, 2010. See 75 FR 81868. The revisions include two 
significant changes impacting the regulation of GHGs under the 
Commonwealth's NSR/PSD program: (1) They provide the Commonwealth with 
authority to issue PSD permits governing GHGs, and (2) they establish 
appropriate emission thresholds for determining which new stationary 
sources and modification projects become subject to Kentucky DAQ's PSD 
permitting requirements for its GHG emissions. Thus, EPA has 
preliminarily determined that the infrastructure SIP submission is 
approvable with respect to this issue.
    The third revision to the Kentucky SIP pertains to the adoption of 
PSD and Nonattainment New Source Review (NNSR) requirements related to 
the implementation of the NSR PM2.5 Rule approved in EPA's 
May 16, 2008, final rule. The fourth revision to the Kentucky SIP 
pertains to PM2.5 PSD Increment-SILs-SMC Rule approved in 
EPA's October 20, 2010, final rule (only as it relates to 
PM2.5 Increments). Currently, Kentucky DAQ's SIP does not 
contain provisions to address these structural PSD requirements and 
thus the infrastructure SIP submission is deficient with respect to 
these requirements.
    On December 19, 2012, however, Kentucky DAQ submitted a commitment 
letter to EPA requesting conditional approval of the infrastructure SIP 
submission for the 2008 8-hour ozone NAAQS to address outstanding 
requirements related to the NSR PM2.5 Rule and 
PM2.5 PSD Increment-SILs-SMC Rule (only as it relates to 
PM2.5 Increments).\7\ In its December 19, 2012, letter, 
Kentucky DAQ described the specific rules that it is developing to 
address outstanding requirements related to the NSR PM2.5 
Rule and PM2.5 PSD Increment-SILs-SMC Rule (only as it 
relates to PM2.5 Increments), provided its intended schedule 
and process to address the requirements, and committed to adopt these 
specific enforceable provisions to address the requirements.\8\ 
Further, Kentucky DAQ has committed to submitting these SIP revisions 
to EPA for incorporation into the Kentucky SIP by no later than one 
year from the publication date of EPA's final conditional approval 
action of the infrastructure SIP for this requirement. Failure by the 
Commonwealth to adopt these provisions and submit them to EPA for 
incorporation into the SIP within one year from the publication date of 
EPA's final conditional approval action would result in this proposed 
conditional approval being treated as a disapproval. Should that occur, 
EPA would provide the public with notice of such a disapproval in the 
Federal Register.\9\ Based on Kentucky DAQ's commitment, EPA is 
proposing to conditionally approve the Commonwealth's infrastructure 
SIP submission as it relates to PSD requirements related to 
110(a)(2)(C) in accordance with section 110(k)(4) of the Act.
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    \7\ The December 19, 2012, commitment letter submitted to EPA by 
Kentucky DAQ can be accessed at www.regulations.gov using Docket ID 
No. EPA-R04-OAR-2012-0700.
    \8\ The December 19, 2012, comment letter references Kentucky's 
June 19, 2012, submittal to EPA of the proposed regulatory 
amendments that the Commonwealth will submit to meet the applicable 
requirements of the NSR PM2.5 Rule and PM2.5 
PSD Increment-SILs-SMC Rule. Accordingly, EPA's proposed conditional 
approval related to these requirements as they pertain to sections 
110(a)(2)(C) and (J), and prong 3 of section 110(a)(2)(D)(i), is 
based upon the Commonwealth's commitment to submit the specific 
enforceable provisions as described in the December 19, 2012, 
commitment letter. This letter references the June 19, 2012, 
proposed regulatory amendments which Kentucky commits to incorporate 
into the SIP consistent with requirements of section 110(k)(4). The 
June 19, 2012, submittal is included in the docket for today's 
proposed rulemaking.
    \9\ EPA notes that pursuant to section 110(k)(4), a conditional 
approval is treated as a disapproval in the event that a State fails 
to comply with its commitment. Notification of this disapproval 
action in the Federal Register is not subject to public notice and 
comment.
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    EPA has preliminarily determined that the Kentucky SIP meets the 
relevant PSD program requirements, with the exception of those SIP 
revisions described in the commitment letter. Accordingly, in this 
action EPA is proposing to approve the infrastructure SIP submission as 
meeting the applicable requirements of section 110(a)(2)(C), but for 
the remaining narrow issues related to the NSR PM2.5 Rule 
and PM2.5 PSD Increment-SILs-SMC Rule. In addition, EPA is 
proposing to conditionally approve Kentucky DAQ's infrastructure SIP 
submission for the 2008 8-hour ozone NAAQS with respect to these 
specific issues related to NSR PM2.5 Rule and 
PM2.5 PSD Increment-SILs-SMC Rule based upon the 
Commonwealth's commitment letter.
    EPA is not proposing to approve or disapprove the Commonwealth's 
existing minor NSR program itself to the extent that it is inconsistent 
with EPA's regulations governing this program because this is not 
germane in the context of acting on an infrastructure SIP submission. 
EPA believes that a number of states may have minor NSR provisions that 
are contrary to the existing EPA regulations for this program. EPA 
intends to work with states to reconcile state minor NSR programs with 
EPA's regulatory provisions for the program. The statutory requirements 
of section 110(a)(2)(C) provide for considerable flexibility in 
designing minor NSR

[[Page 3872]]

programs, and EPA believes it may be time to revisit the regulatory 
requirements for this program to give the states an appropriate level 
of flexibility to design a program that meets their particular air 
quality concerns, while assuring reasonable consistency across the 
country in protecting the NAAQS with respect to new and modified minor 
sources. EPA has made the preliminary determination that Kentucky's SIP 
and practices are adequate for program enforcement of control measures 
including review of proposed new sources related to the 2008 8-hour 
ozone NAAQS.
    4. 110(a)(2)(D)(i) and (ii) Interstate and International transport 
provisions: 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 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 
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 interfering with measures required to prevent significant 
deterioration of air quality in another state (``prong 3''), or to 
protect visibility in another state (``prong 4''). Section 
110(a)(2)(D)(ii) requires SIPs to include provisions insuring 
compliance with sections 115 and 126 of the Act, relating to interstate 
and international pollution abatement. EPA's analysis of Kentucky DAQ's 
infrastructure submission with regard to the requirements of 
110(a)(2)(D) is as follows:
    110(a)(2)(D)(i)(I): With regard to section 110(a)(2)(D)(i)(I) 
(prongs 1 and 2), EPA is proposing to disapprove Kentucky DAQ's 
infrastructure submission for this subsection. In its submission, 
Kentucky DAQ provides that section 110(a)(2)(D)(i)(I) is met through 
the Commonwealth's approved regulations to meet the Clean Air 
Interstate Rule (CAIR) requirements. However, CAIR was promulgated 
before the 2008 8-hour ozone NAAQS were promulgated, and CAIR did not, 
in any way, address interstate transport requirements related to the 
2008 8-hour ozone NAAQS. The submission from Kentucky DAQ thus does not 
purport to address the requirements of section 110(a)(2)(D)(i)(I) with 
respect to the relevant NAAQS. As such, it does not appear to be 
complete with respect to this element. Nonetheless as the submission 
has become complete by operation of law, EPA is obligated to act on it 
pursuant to CAA section 110(k)(2). Because the submission does not 
address the requirements with respect to the relevant NAAQS and relies 
exclusively on the CAIR--a rule that was promulgated to address the 
requirements of 110(a)(2)(D)(i)(I) with respect to earlier NAAQS and 
found insufficient to do so \10\--EPA is proposing to disapprove the 
submission with regard to the requirements of 110(a)(2)(D)(i)(I).
---------------------------------------------------------------------------

    \10\ Moreover, in its decision granting the petitions for review 
of CAIR, the D.C. Circuit held that compliance with CAIR did not 
constitute compliance with section 110(a)(2)(D)(i)(I) even for the 
NAAQS that were addressed by CAIR--namely the 1997 ozone and 1997 
annual PM2.5 NAAQS. See North Carolina v. EPA, 531 F.3d 
896 (D.C. Cir. 2008).
---------------------------------------------------------------------------

    If the opinion in EME Homer City is neither reversed nor modified 
as a result of the pending petitions for rehearing, disapproval of the 
Kentucky SIP submission as proposed herein will neither obligate the 
Commonwealth to make a new SIP submission nor trigger EPA's obligation 
to promulgate a FIP to address the requirements of 110(a)(2)(D)(i)(I) 
for Kentucky. The D.C. Circuit's recent opinion in EME Homer City 
concluded that EPA cannot promulgate a FIP to address the requirements 
of 110(a)(2)(D)(i)(I) for a state until sometime after EPA has 
quantified the emissions that must be prohibited under that provision. 
See EME Homer City, 696 F.3d at 28 (``explaining that EPA must, after 
quantifying state's obligations under section 110(a)(2)(D)(i)(I) give 
states an initial opportunity to implement the obligations through 
SIPs''). For this reason, unless the EME Homer City opinion is reversed 
or modified, the disapproval proposed herein by itself will not trigger 
any FIP obligation under CAA section 110(c). Thus, EPA disapproval of 
the infrastructure SIP submission cannot be said to start a ``FIP 
clock''--that is activation of the two year deadline for EPA to 
promulgate a FIP pursuant to CAA section 110(c). Moreover, and unless 
the portion of the EME Homer City opinion holding that 
110(a)(2)(D)(i)(I) SIPs are not required SIP submissions until EPA 
defines state's obligations pursuant to that section is reversed or 
otherwise modified, any final disapproval of the section 
110(a)(2)(D)(i)(I) portion of the infrastructure SIP submittal will not 
require Kentucky DAQ to take any additional action related to the 
requirements of 110(a)(2)(D)(i)(I) for the 2008 8-hour ozone NAAQS.
    110(a)(2)(D)(i)(II)--prong 3: With regard to prong 3 of section 
110(a)(2)(D)(i), this requirement may be met by the state's 
confirmation in an infrastructure SIP submission that new major sources 
and major modifications in the state are subject to a PSD program 
meeting all the current structural requirements of part C of title I of 
the CAA or (if the state contains a nonattainment area for the relevant 
pollutant) to a NNSR program that implements the 2008 8-hour ozone 
NAAQS. As discussed in more detail with respect to section 
110(a)(2)(C), Kentucky's SIP contains provisions for the Commonwealth's 
PSD program that reflect relevant SIP revisions most of the structural 
PSD requirements.\11\ There are, however, additional relevant PSD 
program revisions that EPA considers relevant to action on the 
infrastructure SIP submission for the 2008 8-hour ozone NAAQS. On 
December 19, 2012, Kentucky DAQ submitted a letter to EPA with a 
schedule and commitment to make the necessary SIP revisions to include 
specific enforceable provisions to address the deficiency in the 
infrastructure SIP submission with respect to the structural 
requirements for PSD programs required by the NSR PM2.5 Rule 
and the PM2.5 PSD Increment-SILs-SMC Rule.
---------------------------------------------------------------------------

    \11\ See: (1) EPA's approval of Kentucky's PSD/NSR regulations 
which address the Ozone Implementation NSR Update requirements and 
(2) EPA's approval of Kentucky's PSD GHG Tailoring Rule revisions 
which addresses the thresholds for GHG permitting applicability in 
Kentucky. For additional detailed information on these requirements, 
see section 3 above.
---------------------------------------------------------------------------

    EPA has preliminarily determined that the Kentucky SIP meets the 
relevant PSD program requirements, but for those SIP revisions 
described in the December 19, 2012, commitment letter. Accordingly, in 
this action EPA is proposing to approve the infrastructure SIP 
submission as meeting the applicable requirements of prong 3 of section 
110(a)(2)(D)(i), but for the remaining narrow issues related to the NSR 
PM2.5 Rule and PM2.5 PSD Increment-SILs-SMC Rule. 
In addition, based on the Commonwealth's commitment, EPA is proposing 
to conditionally approve the Commonwealth's SIP infrastructure 
submission with respect to prong 3 of section 110(a)(2)(D)(i) 
consistent with section 110(k)(4) of the Act.
    110(a)(2)(D)(i)(II)--prong 4: Prong 4 of section 110(a)(2)(D)(i) 
requires that SIPs include provisions prohibiting any source or other 
type of emissions activity in one state from interfering

[[Page 3873]]

with measures to protect visibility in another state. In describing how 
its submission meets this requirement, the Commonwealth referred to 
EPA-approved provisions requiring electric generating units (EGUs) in 
Kentucky DAQ to comply with CAIR and to the limited approval and 
limited disapproval of Kentucky DAQ's regional haze SIP. Although 
Kentucky DAQ's regional haze SIP has not been fully approved, EPA 
believes that the infrastructure SIP submission together with 
previously approved SIP provisions, specifically those provisions that 
require EGUs to comply with CAIR and the additional measures in the 
regional haze SIP addressing best available retrofit technology (BART) 
and reasonable progress requirements for other sources or pollutants, 
are adequate to demonstrate compliance with prong 4, thus, EPA is 
proposing to fully approve this aspect of the submission.
    Kentucky DAQ's regional haze SIP relied on the Commonwealth's 
previous incorporation of the CAIR into the EPA-approved SIP for 
Kentucky as an alternative to the requirement that the regional haze 
SIPs provide for source-specific BART emission limits for sulfur 
dioxide (SO2) and NOX emissions from EGUs. At the 
time the Commonwealth's regional haze SIP was being developed, the 
Commonwealth's reliance on CAIR was fully consistent with EPA's 
regulations. CAIR, as originally promulgated, requires significant 
reductions in emissions of SO2 and NOX to limit 
the interstate transport of these pollutants, and EPA's determination 
that states could rely on CAIR as an alternative to requiring BART for 
CAIR-subject EGUs had specifically been upheld in Utility Air 
Regulatory Group v. EPA, 471 F.3d 1333 (D.C. Cir. 2006). Moreover, the 
states with Class I areas affected by emissions from sources in 
Kentucky had adopted reasonable progress goals for visibility 
protection that were consistent with the EGU emission limits resulting 
from CAIR.
    In 2008, however, the D.C. Circuit remanded CAIR back to EPA. See 
North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008). The court found 
CAIR to be inconsistent with the requirements of the CAA, see North 
Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded 
the rule to EPA without vacatur because it found that ``allowing CAIR 
to remain in effect until it is replaced by a rule consistent with [the 
court's] opinion would at least temporarily preserve the environmental 
values covered by CAIR.'' North Carolina, 550 F.3d at 1178.
    After the remand of CAIR by the D.C. Circuit and the promulgation 
by EPA of a new rule--CSAPR--to replace CAIR, EPA issued a limited 
disapproval of Kentucky DAQ's regional haze SIP (and other states' 
regional haze SIPs that relied similarly on CAIR) because EPA believed 
that full approval of the SIP was not appropriate in light of the 
court's remand of CAIR and the uncertain but limited remaining period 
of operation of CAIR. EPA finalized a limited approval of the regional 
haze SIP, indicating that except for its reliance on CAIR, the SIP met 
CAA requirements for the first planning period of the regional haze 
program. See 77 FR 19098 (March 30, 2012).\12\ EPA also finalized a 
limited FIP for Kentucky, which merely substituted reliance on EPA's 
more recent Transport Rule's (also known as CSAPR) NOX and 
SO2 trading programs for EGUs for the SIP's reliance on 
CAIR. See 77 FR 33642, June 7, 2012.
---------------------------------------------------------------------------

    \12\ Under CAA sections 301(a) and 110(k)(6) and EPA's long-
standing guidance, a limited approval results in approval of the 
entire SIP submittal, even of those parts that are deficient and 
prevent EPA from granting a full approval of the SIP revision. 
Processing of State Implementation Plan (SIP) Revisions, EPA 
Memorandum from John Calcagni, Director, Air Quality Management 
Division, OAQPS, to Air Division Directors, EPA Regional Offices I-
X, September 7, 1992, (1992 Calcagni Memorandum) located at http://www.epa.gov/ttn/caaa/t1/memoranda/siproc.pdf.
---------------------------------------------------------------------------

    Since the above-described developments with regard to Kentucky 
DAQ's regional haze SIP, the situation has changed. In August 2012, the 
DC Circuit issued a decision to vacate CSAPR. See EME Homer City , 696 
F.3d 7. In this decision, the court ordered EPA to ``continue 
administering CAIR pending the promulgation of a valid replacement.'' 
Thus, EPA has been ordered by the court to develop a new rule, and to 
continue implementing CAIR in the meantime, and the opinion makes clear 
that after promulgating that new rule EPA must provide states an 
opportunity to draft and submit SIPs to implement that rule. 
Implementation of CAIR thus cannot be replaced until EPA has 
promulgated a final rule through a notice-and-comment rulemaking 
process; states have had an opportunity to draft and submit SIPs; EPA 
has reviewed the SIPs to determine if they can be approved; and EPA has 
taken action on the SIPs, including promulgating a FIP, if appropriate.
    EPA has filed a petition for rehearing of the court's decision on 
the Transport Rule. However, based on the current direction from the 
court to continue administering CAIR, EPA believes that it is 
appropriate to rely on CAIR emission reductions as permanent and 
enforceable for purposes of assessing the adequacy of Kentucky DAQ's 
infrastructure SIP with respect to prong 4 while a valid replacement 
rule is developed and until implementation plans complying with any new 
rule are submitted by the states and acted upon by EPA or until the 
court case is resolved in a way that provides different direction 
regarding CAIR and CSAPR. In addition, EPA believes that based on the 
court's decision on CSAPR it would be appropriate to propose to rescind 
its limited disapproval of Kentucky DAQ's regional haze SIP and propose 
a full approval, but EPA is not proceeding to do so at this time 
because of the possibility that an en banc review of the court's 
decision may have a different outcome that could bear on such action on 
the regional haze SIP.
    As neither the Commonwealth nor EPA has taken any action to remove 
CAIR from the Kentucky SIP, CAIR remains part of the EPA-approved SIP 
and can be considered in determining whether the SIP as a whole meets 
the requirement of prong 4 of 110(a)(2)(D)(i). EPA is proposing to 
approve the infrastructure SIP submission with respect to prong 4 
because Kentucky's regional haze SIP which EPA has given a limited 
approval in combination with its SIP provisions to implement CAIR 
adequately prevent sources in Kentucky from interfering with measures 
adopted by other states to protect visibility during the first planning 
period. While EPA is not at this time proposing to change the March 30, 
2012, limited approval and limited disapproval of Kentucky DAQ's 
regional haze SIP, EPA expects to propose an appropriate action 
regarding Kentucky DAQ's regional haze SIP upon final resolution of EME 
Homer City.
    110(a)(2)(D)(ii): With regard to 110(a)(2)(D)(ii), Chapter 51:017--
Prevention of significant deterioration of air quality of the Kentucky 
Air Regulations outlines how Kentucky DAQ will notify neighboring 
states of potential impacts from new or modified sources. The Kentucky 
SIP also includes federally approved regulations that satisfy the 
requirements for the NOx SIP Call. See 67 FR 17624 (April 11, 2002). 
Further, EPA is unaware of any pending obligations for the Commonwealth 
pursuant to sections 115 or 126 of the CAA. EPA has made the 
preliminary determination that Kentucky DAQ's SIP and practices are 
adequate for insuring compliance with the applicable requirements 
relating to interstate and international pollution abatement for the 
2008 8-hour ozone NAAQS. Accordingly, EPA is proposing to approve 
Kentucky DAQ's infrastructure SIP submission with respect to section 
110(a)(2)(D)(ii).

[[Page 3874]]

    5. 110(a)(2)(E) Adequate resources: Section 110(a)(2)(E) requires 
that each implementation plan provide (i) necessary assurances that the 
State will have adequate personnel, funding, and authority under state 
law to carry out its implementation plan, (ii) that the State comply 
with the requirements respecting State Boards pursuant to section 128 
of the Act, and (iii) necessary assurances that, where the State has 
relied on a local or regional government, agency, or instrumentality 
for the implementation of any plan provision, the State has 
responsibility for ensuring adequate implementation of such plan 
provisions. EPA is proposing to approve Kentucky DAQ's SIP as meeting 
the requirements of sub-elements 110(a)(2)(E)(i), (ii) and (iii).
    In support of EPA's proposal to approve elements 110(a)(2)(E)(i) 
and (iii), Kentucky DAQ's infrastructure submission demonstrates that 
it is responsible for promulgating rules and regulations for the NAAQS, 
emissions standards general policies, a system of permits, fee 
schedules for the review of plans, and other planning needs. As 
evidence of the adequacy of Kentucky DAQ's resources with respect to 
sub-elements (i) and (iii), EPA submitted a letter to Kentucky DAQ on 
March 14, 2012, outlining 105 grant commitments and current status of 
these commitments for fiscal year 2011. The letter EPA submitted to 
Kentucky DAQ can be accessed at www.regulations.gov using Docket ID No. 
EPA-R04-OAR-2012-0700. Annually, states update these grant commitments 
based on current SIP requirements, air quality planning, and applicable 
requirements related to the NAAQS. There were no outstanding issues in 
relation to the SIP for fiscal year 2011, therefore, Kentucky DAQ's 
grants were finalized and closed out. EPA has made the preliminary 
determination that Kentucky has adequate resources for implementation 
of the 2008 8-hour ozone NAAQS. In addition, the requirements of 
110(a)(2)(E)(i) and (iii) are met when EPA performs a completeness 
determination for each SIP submittal. This determination ensures that 
each submittal provides evidence that adequate personnel, funding, and 
legal authority under state law has been used to carry out the state's 
implementation plan and related issues. Kentucky DAQ's authority is 
included in all prehearings and final SIP submittal packages for 
approval by EPA. EPA has made the preliminary determination that 
Kentucky has adequate resources for implementation of the 2008 8-hour 
ozone NAAQS. Accordingly, EPA is proposing to approve Kentucky DAQ's 
infrastructure SIP submission with respect to section 110(a)(2)(E)(i) 
and (iii).
    Section 110(a)(2)(E)(ii) requires that the Commonwealth comply with 
section 128 of the CAA. Section 128 requires that: 1) The majority of 
members of the state board or body which approves permits or 
enforcement orders represent the public interest and do not derive any 
significant portion of their income from persons subject to permitting 
or enforcement orders under the CAA; and 2) any potential conflicts of 
interest by such board or body, or the head of an executive agency with 
similar, powers be adequately disclosed. Kentucky DAQ's July 17, 2012, 
infrastructure SIP submission adequately demonstrated that Kentucky's 
SIP meets the applicable section 128 requirements pursuant to section 
110(a)(2)(E)(ii).
    For purposes of section 128(a)(1), Kentucky has no boards or bodies 
with authority over air pollution permits or enforcement actions. Such 
matters are instead handled by the Director of Division for Air 
Quality. As such, a ``board or body'' is not responsible for approving 
permits or enforcement orders in Kentucky, and the requirements of 
section 128(a)(1) are not applicable. For purposes of section 
128(a)(2), Kentucky DAQ's SIP has recently been updated. On October 3, 
2012,, EPA finalized approval of Kentucky DAQ's July 17, 2012, SIP 
revision requesting incorporation of KRS Chapters 11A.020, 11A.030, 
11A.040 and Chapters 224.10-020 and 224.10-100 into the SIP to address 
sub-element 110(a)(2)(E)(ii). See 77 FR 60307. With the incorporation 
of these regulations into the Kentucky SIP, EPA has made the 
preliminary determination that the Commonwealth has adequately 
addressed the requirements of section 128(a)(2), and accordingly has 
met the requirements of section 110(a)(2)(E)(ii) with respect to 
infrastructure SIP requirements. Thus, EPA is proposing approval of 
Kentucky DAQ's infrastructure SIP submission for the 2008 8-hour ozone 
NAAQS with respect to this requirement as well.
    6. 110(a)(2)(F) Stationary source monitoring system: Chapter 50--
General Administrative Procedures of the Kentucky Air Regulations 
describes how the major source and minor source emission inventory 
programs collect emission data throughout the Commonwealth (including 
Jefferson County) and ensure the quality of such data. Additionally, 
the Commonwealth is required to submit emissions data to EPA for 
purposes of the National Emissions Inventory (NEI). The NEI is EPA's 
central repository for air emissions data. EPA published the Air 
Emissions Reporting Rule (AERR) on December 5, 2008, which modified the 
requirements for collecting and reporting air emissions data (73 FR 
76539). The AERR shortened the time states had to report emissions data 
from 17 to 12 months, giving states one calendar year to submit 
emissions data. All states are required to submit a comprehensive 
emissions inventory every three years and report emissions for certain 
larger sources annually through EPA's online Emissions Inventory 
System. States report emissions data for the six criteria pollutants 
and the precursors that form them--NOX, SO2, 
lead, carbon monoxide, particulate matter, and volatile organic 
compounds. Many states also voluntarily report emissions of hazardous 
air pollutants. the Commonwealth made its latest update to the NEI on 
March 14, 2012. EPA compiles the emissions data, supplementing it where 
necessary, and releases it to the general public through the Web site 
http://www.epa.gov/ttn/chief/eiinformation.html. EPA has made the 
preliminary determination that Kentucky's SIP and practices are 
adequate for the stationary source monitoring systems related to the 
2008 8-hour ozone NAAQS. Accordingly, EPA is proposing to approve 
Kentucky DAQ's infrastructure SIP submission with respect to section 
110(a)(2)(F).
    7. 110(a)(2)(G) Emergency power: Kentucky's infrastructure 
submission provides an overview of the Kentucky Air Regulations, 
specifically Chapter 55--Emergency Episodes, which identifies air 
pollution emergency episodes and preplanned abatement strategies. The 
episode criteria specified in this chapter for ozone are based on a 1-
hour average ozone level at a monitoring site. These criteria have 
previously been approved by EPA. EPA has made the preliminary 
determination that these criteria are adequate to address ozone 
emergency episodes for the 2008 8-hour ozone NAAQS. As a result, EPA 
has made the preliminary determination that Kentucky DAQ's SIP and 
practices are adequate for emergency powers related to the 2008 8-hour 
ozone NAAQS. Accordingly, EPA is proposing to approve Kentucky DAQ's 
infrastructure SIP submission with respect to section 110(a)(2)(G).
    8. 110(a)(2)(H) Future SIP revisions: As previously discussed, 
Kentucky's DAQ is responsible for adopting air quality rules and 
revising SIPs as needed to attain or maintain the NAAQS. Kentucky DAQ 
has the ability and authority to respond to calls for SIP

[[Page 3875]]

revisions, and has provided a number of SIP revisions over the years 
for implementation of the NAAQS.
    Kentucky has one area, Cincinnati, OH-KY-IN, that is designated as 
nonattainment for the 2008 8-hour ozone NAAQS. This area is classified 
as marginal nonattainment area and therefore no attainment 
demonstration SIPs are required. Section 182(a) of the CAA does require 
that, for marginal areas, states must submit Base Year Emissions 
Inventory SIPs, Periodic Emission Inventory SIPs, Emission Statement 
SIPs, and possibly SIP updates to their NSR program. While the CAA 
requires these types of SIPs for marginal areas, the specific 
requirements and compliance dates for these SIPs, as they relate to the 
2008 8-hour ozone NAAQS, are not yet established but are expected to be 
addressed in the upcoming Implementation Rule for the 2008 Ozone NAAQS 
SIP Requirements. Kentucky DAQ has provided SIP revisions for both the 
1-hour ozone and 1997 8-hour ozone NAAQS. EPA has made the preliminary 
determination that Kentucky DAQ's SIP and practices adequately 
demonstrate a commitment to provide future SIP revisions related to the 
2008 8-hour ozone NAAQS when necessary. Accordingly, EPA is proposing 
to approve Kentucky DAQ's infrastructure SIP submission with respect to 
section 110(a)(2)(H).
    9. 110(a)(2)(J): EPA is proposing to approve in part, and 
conditionally approve in part, the Commonwealth's infrastructure SIP 
for the 2008 8-hour ozone NAAQS with respect to the requirements in 
section 110(a)(2)(J) to include a program in the SIP that provides for 
meeting the applicable consultation requirements of section 121, the 
public notification requirements of section 127, and the PSD and 
visibility protection requirements of part C of the Act.
    110(a)(2)(J) (121 consultation) Consultation with government 
officials: Kentucky Air Regulations Chapter 50--Division for Air 
Quality; General Administrative Procedures of the Kentucky Air 
Regulations, and Chapter 51--Attainment and Maintenance of the National 
Ambient Air Quality Standards, provide for consultation with government 
officials whose jurisdictions might be affected by SIP development 
activities. More specifically, Kentucky DAQ adopted state-wide 
consultation procedures for the implementation of transportation 
conformity which includes the consideration of the development of 
mobile inventories for SIP development. Required partners covered by 
Kentucky DAQ's consultation procedures include federal, state, and 
local transportation and air quality agency officials. Additionally, 
Kentucky DAQ submitted a regional haze plan which outlines its 
consultation practices with Federal Land Managers. EPA has made the 
preliminary determination that Kentucky DAQ's SIP and practices 
adequately demonstrate consultation with government officials related 
to the 2008 8-hour ozone NAAQS when necessary. Accordingly, EPA is 
proposing to approve Kentucky DAQ's infrastructure SIP submission with 
respect to section 110(a)(2)(J) (121 consultation).
    110(a)(2)(J) (127 public notification) Public notification: The 
Commonwealth's emergency episode provisions provide for notification to 
the public when the NAAQS, including the ozone NAAQS, are exceeded. See 
also the discussion above in regarding section 110(a)(2)(G). 
Additionally, the Commonwealth reports daily air quality information on 
its Web site at http://air.ky.gov/Pages/AirQualityIndexMonitoring.aspx 
to inform the public on the existing air quality within the 
Commonwealth. EPA has made the preliminary determination that Kentucky 
DAQ's SIP and practices adequately demonstrate the Commonwealth's 
ability to provide public notification related to the 2008 8-hour ozone 
NAAQS when necessary. Accordingly, EPA is proposing to approve Kentucky 
DAQ's infrastructure SIP submission with respect to section 
110(a)(2)(J) (127 public notification).
    110(a)(2)(J) (PSD) PSD: Kentucky DAQ demonstrates its authority to 
regulate new and modified sources of ozone to assist in the protection 
of air quality in Kentucky. Chapter 51--Attainment and Maintenance of 
the National Ambient Air Quality Standards, describes the permit 
requirements for new major sources or major modifications of existing 
sources in areas classified as attainment or unclassifiable under 
section 107(d)(1)(A)(ii) or (iii) of the CAA. These permitting 
requirements are designed to ensure that sources in areas attaining the 
NAAQS at the time of designations prevent any significant deterioration 
in air quality. Chapter 51 also sets the permitting requirements for 
areas in or around nonattainment areas. Accordingly, this portion of 
element (J) also requires compliance with the Phase II Rule, the ``GHG 
Tailoring Rule'', the NSR PM2.5 Rule, and the 
PM2.5 PSD Increment-SILs-SMC Rule. Two of these SIP 
revisions \13\ have been approved into the Kentucky SIP and address 
requisite requirements of the PSD-related requirement of infrastructure 
element 110(a)(2)(J). As with infrastructure elements 110(a)(2)(C), and 
prong 3 of 110(a)(2)(D)(i), EPA has preliminarily determined that 
Kentucky DAQ's infrastructure SIP submission does not fully meet 
element 110(a)(2)(J). Kentucky DAQ's SIP does not include provisions to 
meet relevant requirements for NSR/PSD program related to the NSR 
PM2.5 Rule and PM2.5 PSD Increment-SILs-SMC Rule 
(only as it relates to PM2.5 Increments). As noted above, on 
December 19, 2012, Kentucky DAQ submitted a letter to EPA providing a 
schedule to address outstanding PSD program requirements promulgated in 
the NSR PM2.5 Rule and PM2.5 PSD Increment-SILs-
SMC Rule and committed to provide specific enforceable provisions for 
incorporation into the SIP to address the outstanding requirements. EPA 
has preliminarily determined that the Kentucky SIP meets the relevant 
PSD program requirements, with the exception of those SIP revisions 
described in the December 19, 2012, commitment letter. Accordingly, in 
this action EPA is proposing to approve the infrastructure SIP 
submission as meeting the applicable requirements of section 
110(a)(2)(J) (PSD), with the exception of the remaining issues related 
to the NSR PM2.5 Rule and PM2.5 PSD Increment-
SILs-SMC Rule. In addition, EPA is proposing to conditionally approve 
Kentucky DAQ's infrastructure SIP submission for the 2008 8-hour ozone 
NAAQS with respect to these specific issues related to NSR 
PM2.5 Rule and PM2.5 PSD Increment-SILs-SMC Rule 
based upon the Commonwealth's commitment letter.
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    \13\ (1) EPA's approval of Kentucky's PSD/NSR regulations which 
address the Ozone Implementation NSR Update requirements promulgated 
in the Phase II Rule and (2) EPA's approval of Kentucky's PSD GHG 
Tailoring Rule revisions which addresses the thresholds for GHG 
permitting applicability in Kentucky.
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    110(a)(2)(J) Visibility protection: With regard to the visibility 
protection aspect of 110(a)(2)(J), EPA recognizes that states are 
subject to visibility and regional haze program requirements under part 
C of the Act (which includes sections 169A and 169B). In the event of 
the establishment of a new NAAQS, however, the visibility and regional 
haze program requirements under part C do not change. Thus, EPA finds 
that there are no applicable visibility obligations under part C 
``triggered'' under section 110(a)(2)(J) when a new NAAQS becomes 
effective. Kentucky DAQ has submitted SIP revisions to satisfy the 
requirements of the CAA

[[Page 3876]]

Section 169A and 169B, and the regional haze and BART rules contained 
in 40 CFR 51.308. On March 30, 2012, EPA published a final rulemaking 
regarding Kentucky DAQ's regional haze program, consisting of a limited 
approval and a limited disapproval. See 77 FR 19098. In EPA's view, the 
current status of Kentucky DAQ's regional haze SIP as having not been 
fully approved is not a bar to full approval of the infrastructure SIP 
submission with respect to the visibility protection aspect of 
110(a)(2)(J), and EPA is proposing to fully approve the infrastructure 
SIP for this aspect. While EPA is not at this time proposing to change 
the March 30, 2012, limited approval and limited disapproval of 
Kentucky DAQ's Regional haze SIP itself, EPA expects to address the 
approval status of the regional haze SIP upon final resolution of EME 
Homer City.
    10. 110(a)(2)(K) Air quality and modeling/data: Kentucky DAQ 
conducts air quality modeling and reports the results of such modeling 
to EPA as set forth in Kentucky Air Regulations Chapter 50:040--Air 
Quality Models. This regulation provides for the use of ambient ozone 
monitoring is used, in conjunction with pre- and post-construction 
ambient air monitoring, to track local and regional scale changes in 
ozone concentrations. Additionally, the Commonwealth supports a 
regional effort to coordinate the development of emissions inventories 
and conduct regional modeling for several NAAQS, including the 2008 8-
hour ozone NAAQS, for the Southeastern states. Taken as a whole, the 
Commonwealth's air quality regulations demonstrate that the Kentucky 
DAQ has the authority to provide relevant data for the purpose of 
predicting the effect on ambient air quality of the 8-hour ozone NAAQS. 
EPA has made the preliminary determination that Kentucky DAQ's SIP and 
practices adequately demonstrate the Commonwealth's ability to provide 
for air quality and modeling, along with analysis of the associated 
data, related to the 2008 8-hour ozone NAAQS when necessary. 
Accordingly, EPA is proposing to approve Kentucky DAQ's infrastructure 
SIP submission with respect to section 110(a)(2)(K).
    11. 110(a)(2)(L) Permitting fees: Kentucky DAQ addresses the review 
of construction permits as previously discussed in 110(a)(2)(C) above. 
Permitting fees are collected through the Commonwealth's title V fees 
program, which has been federally approved. EPA has made the 
preliminary determination that Kentucky DAQ's SIP and practices 
adequately provide for permitting fees related to the 2008 8-hour ozone 
NAAQS when necessary. Accordingly, EPA is proposing to approve Kentucky 
DAQ's infrastructure SIP submission with respect to section 
110(a)(2)(L).
    12. 110(a)(2)(M) Consultation/participation by affected local 
entities: The Kentucky DAQ coordinates with local governments affected 
by the SIP. More specifically, Kentucky DAQ adopted state-wide 
consultation procedures for the implementation of transportation 
conformity which includes the consideration of the development of 
mobile inventories for SIP development and the requirements that link 
transportation planning and air quality planning in nonattainment and 
maintenance areas. EPA approved these procedures in Chapter 50:066 
Conformity of transportation plans, programs, and projects (Amendment) 
on April 21, 2010 (75 FR 20180). Required partners covered by Kentucky 
DAQ's consultation procedures include federal, state, and local 
transportation and air quality agency officials. The state and local 
transportation agency officials are most directly impacted by 
transportation conformity requirements and are required to provide 
public involvement for their activities including the analysis of how 
the Commonwealth meets transportation conformity requirements. 
Additionally, Chapter 65--Mobile Source-Related Emissions also 
discusses consultation related activities specifically related to 
mobile sources. EPA has made the preliminary determination that 
Kentucky DAQ's SIP and practices adequately demonstrate consultation by 
affected local entities related to the 2008 8-hour ozone NAAQS when 
necessary. Accordingly, EPA is proposing to approve Kentucky DAQ's 
infrastructure SIP submission with respect to section 110(a)(2)(J) (127 
public notification).

V. Proposed Action

    EPA is proposing to approve in part, conditionally approve in part, 
and disapprove in part, Kentucky DAQ's July 17, 2012, SIP revision 
submitted to satisfy infrastructure requirements for the 2008 8-hour 
ozone NAAQS. These proposed actions to approve in part, conditionally 
approve in part, and disapprove in part the Commonwealth of Kentucky's 
infrastructure submission are consistent with sections 110(k)(3) and 
110(k)(4) of the CAA.
    First, EPA is proposing to approve Kentucky DAQ's infrastructure 
submission with regard to sections 110(a)(2)(A); (B); (D)(i) prong 4; 
(E)-(H); (J) with the exception of the PSD element; and (K)-(M). EPA 
has made the preliminary determination that Kentucky DAQ's July 17, 
2012, SIP revision meets the infrastructure requirements for the 2008 
8-hour ozone NAAQS for all the pertinent sections for 110(a)(2) with 
the exception of portions of sections 110(a)(2)(C), prong 3 of 
110(a)(2)(D)(i), and 110(a)(2)(J), related to the SIP revisions 
identified in the commitment letter described above; and with the 
exception of section 110(a)(2)(D)(i)(I).
    Second, EPA has preliminarily determined that the Kentucky SIP 
meets the relevant PSD program requirements of sections 110(a)(2)(C), 
prong 3 of 110(a)(2)(D)(i), and 110(a)(2)(J), with the exception of 
those SIP revisions described in the December 19, 2012, commitment 
letter described above. Accordingly, in this action EPA is proposing to 
approve the infrastructure SIP submission as meeting the applicable 
requirements of these sections, with the exception of the remaining 
issues related to the NSR PM2.5 Rule and PM2.5 
PSD Increment-SILs-SMC Rule. In addition, EPA is proposing to 
conditionally approve Kentucky DAQ's infrastructure SIP submission for 
the 2008 8-hour ozone NAAQS with respect to these specific issues 
related to NSR PM2.5 Rule and PM2.5 PSD 
Increment-SILs-SMC Rule based upon the Commonwealth's commitment 
letter.
    Third, EPA is proposing to disapprove Kentucky DAQ's infrastructure 
submission as it relates to 110(a)(2)(D)(i)(I) (i.e. prongs 1 and 2 of 
110(a)(2)(D)(i)) because the Commonwealth's submission does not address 
the statutory provisions with respect to the relevant NAAQS and thus 
does not satisfy the criteria for approval. EPA notes, that unless the 
EME Homer City decision is reversed or otherwise modified, the 
disapproval proposed herein will not require promulgation of a FIP for 
Kentucky related to the requirements of 110(a)(2)(D)(i)(I) for the 2008 
8-hour ozone NAAQS. Also as EPA is not at this time treating the 
110(a)(2)(D)(i)(I) SIP submission as a required submission, no further 
action will be required on the part of Kentucky related to the 
requirements of 110(a)(2)(D)(i)(I) for the 2008 8-hour ozone NAAQS.

VI. 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,

[[Page 3877]]

provided that they meet the criteria of the CAA. Accordingly, this 
proposed action merely approves state law as meeting federal 
requirements and does not impose additional requirements beyond those 
imposed by Commonwealth law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule 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 Commonwealth, 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, Incorporation by 
reference, Intergovernmental relations, Nitrogen dioxide, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Volatile 
organic compounds.

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

    Dated: January 10, 2013.
A. Stanley Meiburg,
Acting Regional Administrator, Region 4.
[FR Doc. 2013-00951 Filed 1-16-13; 8:45 am]
BILLING CODE 6560-50-P
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