```

[Federal Register Volume 81, Number 72 (Thursday, April 14, 2016)]
[Rules and Regulations]
[Pages 22025-22032]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08039]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2015-0204; FRL-9944-16-Region 9]

Partial Approval and Partial Disapproval of Air Quality State 
Implementation Plans; California; South Coast; Moderate Area Plan for 
the 2006 PM2.5 NAAQS

AGENCY: U.S. Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is approving in part 
and disapproving in part State implementation plan (SIP) revisions

[[Page 22026]]

submitted by California to address moderate area Clean Air Act (CAA) 
requirements for the 2006 fine particulate (PM2.5) National 
Ambient Air Quality Standards (NAAQS) in the Los Angeles--South Coast 
air basin (South Coast) PM2.5 nonattainment area. These SIP 
revisions are the 2012 PM2.5 Plan, submitted February 13, 
2013, and the 2015 Supplement, submitted March 4, 2015. We are 
disapproving the Reasonably Available Control Measure, Reasonably 
Available Control Technology (RACM/RACT), and Reasonable Further 
Progress elements of the SIP revisions because of new information 
indicating that the 2010 RECLAIM program does not meet the RACM/RACT 
requirement for certain sources of emissions. The EPA is prepared to 
work with the State to correct this deficiency. We are not finalizing 
our proposed action on the District's ports-related commitment at this 
time.

DATES: This rule is effective on May 16, 2016.

ADDRESSES: The EPA has established docket number EPA-R09-OAR-2015-0204 
for this action. Generally, documents in the docket for this action are 
available electronically at http://www.regulations.gov or in hard copy 
at EPA Region IX, 75 Hawthorne Street, San Francisco, California 94105-
3901. While all documents in the docket are listed at http://www.regulations.gov, some information may be publicly available only at 
the hard copy location (e.g., copyrighted material, large maps, multi-
volume reports), and some may not be available in either location 
(e.g., confidential business information (CBI)). To inspect the hard 
copy materials, please schedule an appointment during normal business 
hours with the contact listed in the FOR FURTHER INFORMATION CONTACT 
section.

FOR FURTHER INFORMATION CONTACT: Wienke Tax, EPA Region 9, (415) 947-
4192, tax.wienke@epa.gov.

SUPPLEMENTARY INFORMATION:  Throughout this document, ``we,'' ``us'' 
and ``our'' refer to the EPA.

Table of Contents

I. Background Information
II. Public Comments and EPA Responses
III. Final Action
IV. Statutory and Executive Order Reviews

I. Background Information

    On October 20, 2015, we proposed to approve state implementation 
plan (SIP) revisions submitted by California to address Clean Air Act 
(CAA or Act) requirements for the 2006 24-hour fine particulate matter 
(PM2.5) national ambient air quality standards (NAAQS) in 
the Los Angeles-South Coast air basin (South Coast) Moderate 
PM2.5 nonattainment area. See 80 FR 63640 (October 20, 
2015). The SIP revisions that we proposed to approve are those portions 
of the ``Final 2012 Air Quality Management Plan (AQMP)'' that address 
attainment of the 2006 PM2.5 NAAQS (2012 PM2.5 
Plan), submitted February 13, 2013, and the ``Supplement to the 24-Hour 
PM2.5 State Implementation Plan for the South Coast Air 
Basin'' (2015 Supplement), submitted March 4, 2015. We refer to these 
submissions collectively herein as ``the Plan.'' The EPA proposed to 
approve the following elements of the Plan as satisfying applicable CAA 
requirements: (1) The 2008 base year emissions inventories; (2) the 
reasonably available control measures/reasonably available control 
technology demonstration; (3) the reasonable further progress 
demonstration; (4) the demonstration that attainment by the Moderate 
area attainment date of December 31, 2015 is impracticable; (5) the 
District's commitments to adopt and implement specific rules and 
measures on a specific schedule; and (6) the general conformity budgets 
for NOX and VOC for years 2013-2030 in the Plan.\1\
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    \1\ 80 FR 63640 (October 20, 2015) at 63660.
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    The EPA also proposed to reclassify the South Coast area, including 
Indian country within it, as a Serious nonattainment area for the 2006 
PM2.5 NAAQS, based on the EPA's determination that the area 
could not practicably attain this standard by the applicable Moderate 
area attainment date of December 31, 2015.
    On December 22, 2015, we finalized our proposal to reclassify the 
South Coast area from Moderate to Serious for the 2006 PM2.5 
NAAQS.\2\ As a result of that action, California is required to submit, 
by August 14, 2017, additional SIP revisions to satisfy the statutory 
requirements that apply to Serious PM2.5 nonattainment 
areas, including the requirements of subpart 4 of part D, title I of 
the Act. The Serious area plan must provide for attainment of the 2006 
PM2.5 NAAQS in the South Coast area as expeditiously as 
practicable, but no later than December 31, 2019, in accordance with 
the requirements of part D of title I of the Act.
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    \2\ 81 FR 1514 (January 13, 2016).
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    In our December 22, 2015 final action to reclassify the South Coast 
area as a Serious PM2.5 nonattainment area, we summarized 
and responded to public comments pertaining to the reclassification and 
its consequences and stated that we would, in a separate rulemaking, 
respond to comments pertaining to our proposed action on the submitted 
plan.\3\
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    \3\ Id.
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II. Public Comments and EPA Responses

    The EPA provided a 30-day period for public comment on our proposed 
rule. During this comment period, which ended on November 19, 2015, we 
received ten sets of public comments on our proposal. Comment letters 
were submitted by Earthjustice on behalf of the Center for Biological 
Diversity, Coalition for Clean Air, Communities for a Better 
Environment, East Yard Communities for Environmental Justice, and the 
Sierra Club (``Earthjustice''); the San Pedro Bay Ports (Ports of Los 
Angeles and Long Beach, or ``the Ports''); Maersk Agency USA; NAIOP, 
the Commercial Real Estate Development Association; the Los Angeles 
Area Chamber of Commerce; Burlington Northern Santa Fe and Union 
Pacific Railroads; the Pacific Merchant Shipping Association; the 
California Trucking Association; BizFed, the Los Angeles County 
Business Federation; and the Public Solar Power Coalition.\4\ Copies of 
these comment letters can be found in the docket.
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    \4\ All comment letters are in the docket for today's action at 
www.regulations.gov, docket ID EPA-R09-OAR-2015-0204.
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    Many of these comment letters address only our proposal to approve 
the South Coast Air Quality Management District's (SCAQMD or District) 
commitment to adopt a backstop measure related to ports and port-
related facilities in 2015, as part of our action on the 2012 
PM2.5 Plan and 2015 Supplement.\5\ Specifically, the 
comments from the following entities focus entirely on this ports-
related commitment: The San Pedro Bay Ports (Ports of Los Angeles and 
Long Beach, or ``the Ports''); Maersk Agency USA; NAIOP, the Commercial 
Real Estate Development Association; the Los Angeles Area Chamber of 
Commerce; Burlington Northern Santa Fe and Union Pacific Railroads; the 
Pacific Merchant Shipping Association; the California Trucking 
Association; and BizFed, the Los Angeles County Business Federation. 
Given the volume of these comments on the District's ports-related 
commitment, and the need for the EPA to further evaluate the

[[Page 22027]]

issues these comments raise, we are not finalizing our proposed action 
on the commitment at this time and will respond to all comments 
pertaining to this commitment in a separate rulemaking.\6\ We summarize 
and respond below to all other comments pertaining to our proposed 
action on the 2012 PM2.5 Plan and the 2015 Supplement.
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    \5\ See 80 FR at 63651 (October 20, 2015) (discussing District 
commitment to ``adopt backstop measures related to ports and port-
related facilities in 2015,'' also referred to as control measure 
IND-01, ``Backstop Measures for Indirect Sources of Emissions from 
Ports and Port-related Facilities'').
    \6\ The District's ports-related commitment is not a component 
of the February 13, 2013 plan submission that is the subject of a 
consent decree in Sierra Club, et al. v. EPA, No. 2:15-cv-3798-ODW 
(ASx) (C.D. CA.). See letter dated February 13, 2013, from James N. 
Goldstene, Executive Officer, CARB, to Jared Blumenfeld, Regional 
Administrator, EPA Region 9, with attachments, and CARB Resolution 
15-2, February 19, 2015; see also 80 FR 79338 (December 21, 2015).
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Comments Regarding RACM/RACT

    Comment 1. Earthjustice asserts that the 2012 PM2.5 Plan 
fails to meet minimum requirements for Reasonably Available Control 
Measures (RACM) because some sources covered under South Coast's 
NOX Regional Clean Air Incentives Market (RECLAIM) program 
have not installed control technologies that are economically feasible 
and readily available. Citing recent rulemaking documents from the 
District's December 4, 2015 amendments to the RECLAIM program,\7\ 
Earthjustice argues that the District itself has found that the current 
cap on NOX RECLAIM emissions is far above the level of 
emissions that would be generated if cost-effective and readily 
available technologies were implemented in the South Coast air basin. 
Earthjustice also argues that the 2 ton per day (tpd) reduction in the 
NOX RECLAIM cap (referred to as the NOX 
``shave'') included in the 2012 PM2.5 Plan falls short of 
what is actually feasible for certain sectors, where ``readily 
available technologies simply have not been installed because of too 
many credits in the NOX RECLAIM program.'' For example, 
Earthjustice quotes the District's statements in the ``Draft Final 
Socioeconomic Report For Proposed Amendments to Regulation XX--Regional 
Clean Air Incentive Market (RECLAIM) NOX RECLAIM'' 
(hereafter ``RECLAIM Socioeconomic Report'') indicating that the 
NOX RECLAIM program, as amended in 2005, has allowed 
numerous refineries to delay installation of selective catalytic 
reduction (SCR) controls that the District had identified as best 
available retrofit control technology (BARCT).\8\
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    \7\ On December 4, 2015, the SCAQMD adopted amendments to the 
RECLAIM program to implement BARCT for NOX emissions from 
various equipment by establishing RTC reduction targets and RTC 
adjustment factors for year 2016 and beyond (See SCAQMD Governing 
Board Resolution 15-25, December 4, 2015).
    \8\ BARCT is defined as ``an emission limitation that is based 
on the maximum degree of reduction achievable taking into account 
environmental, energy, and economic impacts by each class or 
category of source.'' California Health & Safety Code Section 40406.
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    Earthjustice acknowledges the EPA's policies allowing for cap and 
trade programs to satisfy RACT by ensuring emission reductions equal, 
in the aggregate, to the reductions expected from direct application of 
RACT on individual affected sources but asserts that, in this case, 
``EPA cannot simply conclude that a 2 tpd shave to the NOX 
RECLAIM program satisfies RACT because `RECLAIM [must] achieve[ ] 
reductions of NOX emissions from covered sources that are 
equivalent in the aggregate, to the reductions achieved by RACT-level 
controls.' '' At a minimum, according to Earthjustice, ``RACM requires 
an assessment of the NOX RECLAIM program in light of new 
information that the NOX RECLAIM program is woefully far 
from achieving reductions commensurate with `RACT-level controls.' '' 
Earthjustice concludes that the District can either amend its 
NOX RECLAIM program to make it equivalent to RACT-level 
controls or adopt direct controls to ensure that readily available and 
cost-effective pollution control equipment is installed on many sources 
that have not installed these controls.
    Response 1: The EPA has reevaluated the RACM/RACT demonstration in 
the 2012 PM2.5 Plan in light of the commenter's arguments 
and agrees that the Plan does not adequately address RACM/RACT for 
certain NOX emission sources covered by the RECLAIM program.
    The SCAQMD adopted the RECLAIM program in 1993 to reduce emissions 
from the largest stationary sources of NOX and 
SOX emissions through a market-based trading program that 
establishes annually declining NOX and SOX 
allocations (also called ``facility caps'') and allows covered 
facilities to comply with their facility caps by installing pollution 
control equipment, changing operations, or purchasing ``RECLAIM trading 
credits'' (RTCs) from the RECLAIM market.\9\ Section 40440 of the 
California Health and Safety Code requires the District to monitor 
advances in BARCT and periodically to reassess the overall facility 
caps to ensure that the facility caps are equivalent, in the aggregate, 
to BARCT emission levels imposed on affected sources. Facilities 
electing to enter RECLAIM are exempted from a number of SCAQMD 
prohibitory rules that otherwise apply to sources of NOX and 
SOX emissions in the South Coast.\10\
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    \9\ 2012 PM2.5 Plan, Appendix IV-A (``Stationary 
Source Control Measures'') at p. IV-A-13 (discussing CMB-01: Further 
NOX Reductions from RECLAIM--Phase I [NOX]).
    \10\ SCAQMD Rule 2001, as amended May 6, 2005, at section (j) 
(``Rule Applicability'').
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    Under longstanding EPA interpretation of the CAA, a market-based 
cap and trade program may satisfy RACT requirements by ensuring that 
the level of emission reductions resulting from implementation of the 
program will be equal, in the aggregate, to those reductions expected 
from the direct application of RACT on all affected sources within the 
nonattainment area.\11\ The EPA approved the RECLAIM program into the 
California SIP in June 1998 based in part on a conclusion that the 
NOX emission caps in the program satisfied the RACT 
requirements of CAA section 182(b)(2) and (f) for covered 
NOX emission sources in the aggregate.\12\ In 2005 and 2010, 
the District adopted revisions to the NOX RECLAIM program, 
which the EPA approved on August 29, 2006 and August 12, 2011, 
respectively, based in part on conclusions that the revisions continued 
to satisfy NOX RACT requirements.\13\ We refer to the 
NOX RECLAIM program as approved into the SIP as the ``2010 
RECLAIM program.''
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    \11\ 59 FR 16690 (April 7, 1994) and U.S. EPA, ``Improving Air 
Quality with Economic Incentive Programs,'' EPA-452/R-01-001 
(January 2001), at Section 16.7.
    \12\ 61 FR 57834 (November 8, 1996) and 63 FR 32621 (June 15, 
1998).
    \13\ 71 FR 51120 (August 29, 2006) and 76 FR 50128 (August 12, 
2011).
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    The recent SCAQMD rulemaking documents that Earthjustice cites call 
into question the efficacy of the 2010 RECLAIM program in ensuring 
NOX emission reductions equivalent to RACT-level controls on 
all affected sources. Specifically, according to a November 4, 2015 
draft staff report by the SCAQMD entitled ``Proposed Amendments to 
Regulation XX, Regional Clean Air Incentives Market (RECLAIM), 
NOX RECLAIM'' (hereafter ``Draft RECLAIM Staff Report''), 
between 2009 and 2013, the RECLAIM market contained 5-8 tons per day 
(tpd) of ``surplus'' RTCs that created a dampening effect on RTC 
prices, bringing average RTC prices down to a range of $1,162-$5,491 
per ton compared to the average cost-effectiveness of control range, 
which is $8,300-$13,000 per ton.\14\ As a result,

[[Page 22028]]

according to the District, RECLAIM facilities opted to purchase these 
low cost ``surplus'' RTCs to reconcile their emissions at the end of 
the compliance year instead of installing controls to reduce 
pollution.\15\ For example, refineries did not install any SCR control 
technologies in response to the 2005 NOX RECLAIM amendment 
even though SCAQMD staff had estimated about 51 SCRs would be installed 
by 2011.\16\ The Draft RECLAIM Staff Report indicates that SCR has been 
used successfully to control NOX emissions from various 
refinery operations and is considered a mature, commercially available, 
and cost-effective control technique for this source category.\17\ The 
District concluded in the Draft RECLAIM Staff Report that ``[r]emoving 
surplus RTCs is therefore critically important to ensure the 
effectiveness of the RECLAIM program and meet state law requirements to 
require the use of BARCT for existing sources.'' Likewise, in the 
RECLAIM Socioeconomic Report, the District stated that many of these 
unused ``excess'' RTCs were sold to operating RECLAIM facilities as a 
result of facility shutdowns and that ``[t]hese excess RTCs have been 
artificially depressing RTC prices and have induced RECLAIM facilities 
to delay the installation of cost-effective controls.'' \18\
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    \14\ South Coast Air Quality Management District, ``Proposed 
Amendments to Regulation XX, Regional Clean Air Incentives Market 
(RECLAIM), NOX RECLAIM'' (``Draft RECLAIM Staff 
Report''), November 4, 2015, at pp. 262-264.
    \15\ Id. at 264.
    \16\ Id. The RECLAIM Socioeconomic Report further states that 
despite a 7.7 tpd NOX RTC shave implemented during 2007-
2011 through the District's 2005 amendments to RECLAIM, only 4 tpd 
of actual NOX emission reductions resulted from this 
shave, most of which were due to facility shut-downs and not 
measures taken to reduce actual emissions by facilities in the 
program. South Coast Air Quality Management District, ``Draft Final 
Socioeconomic Report For Proposed Amendments to Regulation XX--
Regional Clean Air Incentive Market (RECLAIM) NOX 
RECLAIM'' (``RECLAIM Socioeconomic Report''), December 4, 2015, at 
pp. 1-2.
    \17\ See, e.g., Draft RECLAIM Staff Report at Appendix A, 
Appendix B, and Appendix C (discussing technical feasibility and 
cost-effectiveness estimates for SCR and other NOX 
control techniques at refinery fluid catalytic cracking units, 
refinery boilers and process heaters, and refinery gas turbines).
    \18\ RECLAIM Socioeconomic Report at pp. 1-2.
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    The 2012 PM2.5 Plan cites the 2010 RECLAIM program as 
the basis for the District's RACM/RACT determination for several 
NOX emission source categories, including cement kilns, 
boilers and process heaters at petroleum refineries, and other 
stationary combustion installations (e.g., steam generators and natural 
gas and/or oil-fired industrial/commercial/institutional boilers).\19\ 
The Plan also indicates that, for several source categories for which 
the District identified more stringent NOX controls 
implemented in other nonattainment areas,\20\ the District intended to 
reduce NOX emissions or conduct further study through 
``Control Measure CMB-01--Further NOX Reductions from 
RECLAIM,'' \21\ a measure that commits the District to achieve an 
additional 2 tpd of NOX emission reductions through a 2 tpd 
``shave'' to the RECLAIM NOX emission caps in 2015 if the 
South Coast area fails to attain the 2006 PM2.5 NAAQS by 
then.\22\ The 2012 PM2.5 Plan does not explain how either 
the 2010 RECLAIM program or the additional 2 tpd reduction (``shave'') 
to the NOX emission cap described in Control Measure CMB-01 
ensures that the level of NOX emission reductions resulting 
from implementation of the RECLAIM program is equal, in the aggregate, 
to those NOX emission reductions expected from the direct 
application of RACT on covered sources within the South Coast 
nonattainment area. The Plan does, however, state that there are 
approximately 8 tpd of ``excess'' NOX RTCs in the RECLAIM 
market, consistent with the District's findings in the Draft RECLAIM 
Staff Report and RECLAIM Socioeconomic Report.\23\
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    \19\ 2012 PM2.5 Plan, Appendix VI (``Reasonably 
Available Control Measures (RACM) Demonstration'') at pp. VI-13 to 
VI-17 and Table VI-5.
    \20\ For example, with respect to boilers and process heaters at 
refineries, the 2012 PM2.5 Plan indicates that 
NOX control measures implemented in the San Francisco Bay 
Area are more stringent than regulations implemented in the South 
Coast area. 2012 PM2.5 Plan, Appendix VI (``Reasonably 
Available Control Measures (RACM) Demonstration'') at pp. VI-13.
    \21\ Id.
    \22\ 2012 PM2.5 Plan, Appendix IV-A (``Stationary 
Source Control Measures'') at pp. IV-A-13 to IV-A-16 (discussing 
CMB-01: Further NOX Reductions from RECLAIM--Phase I 
[NOX]), as amended by 2015 Supplement at Table F-1.
    \23\ 2012 PM2.5 Plan, Appendix IV-A (``Stationary 
Source Control Measures'') at p. IV-A-14.
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    Given the information in the Plan about ``excess'' NOX 
RTCs in the 2010 RECLAIM program and the new information submitted by 
the commenters indicating that these excess RTCs have artificially 
depressed NOX RTC prices during the 2009-2013 period covered 
by the Plan, thus allowing RECLAIM facilities to avoid installing 
technically feasible and cost-effective NOX pollution 
control equipment during this period, and given the absence of a 
demonstration in the Plan to support a conclusion that the 2010 RECLAIM 
program ensures, in the aggregate, NOX emission reductions 
equivalent to RACT-level controls for these sources, we are 
disapproving the RACM/RACT demonstration in the Plan.
    Our proposal to find that the 2012 PM2.5 Plan and 2015 
Supplement satisfy the requirement for RFP in CAA section 172(c)(2) was 
based primarily on a conclusion that the Plan ``demonstrates that all 
RACM/RACT are being implemented as expeditiously as practicable and 
identifies projected emission levels for 2014 that reflect full 
implementation of the State's and District's RACM/RACT control strategy 
for the area.'' \24\ Our evaluation of whether the RACM/RACT measures 
would result in emissions reductions consistent with meeting the RFP 
requirement of the statute was thus dependent upon the approval of the 
Plan with respect to the RACM/RACT requirement. Because we are now 
disapproving the RACM/RACT demonstration in the Plan, we must also find 
that the Plan does not satisfy the statutory requirement for RFP for 
the 2006 PM2.5 NAAQS.
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    \24\ 80 FR at 63654 (October 20, 2015).
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    As a result of our December 22, 2015 final action reclassifying the 
South Coast area as Serious nonattainment for the 2006 PM2.5 
NAAQS, California is required to submit by August 14, 2017 a Serious 
Area plan for the South Coast area, including provisions to assure that 
the best available control measures (BACM) and best available control 
technology (BACT) for the control of direct PM2.5 and 
PM2.5 precursors shall be implemented no later than 4 years 
after the area is reclassified.\25\ We note that, to the extent the 
State and District intend to rely on the NOX RECLAIM program 
as part of the BACM demonstration in this new plan, the plan must 
include documentation sufficient to demonstrate that the NOX 
RECLAIM program ensures, in the aggregate, NOX emission 
reductions equivalent to BACT-level controls for covered facilities. If 
the State and District intend to the correct the deficiency in advance 
of the BACM submission due August 14, 2017, they may do so by 
submitting revisions to the NOX RECLAIM program together 
with documentation sufficient to demonstrate that the revised program 
ensures, in the aggregate, NOX emission reductions 
equivalent to RACT-level controls for covered facilities. Either type 
of SIP submission would, upon EPA approval, cure the deficiency in the 
Plan's RACM/RACT demonstration for the 2006 PM2.5 NAAQS.
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    \25\ 81 FR 1514 (January 13, 2016).
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    The Serious area plan for the 2006 PM2.5 NAAQS in the 
South Coast area that California is required to submit by August 14, 
2017 must also include plan provisions that provide for RFP

[[Page 22029]]

consistent with the requirements of CAA section 172(c)(2). A Serious 
area plan that satisfies the statutory RFP requirement for the 2006 
PM2.5 NAAQS in the South Coast would, upon EPA approval, 
cure the deficiency in the 2012 PM2.5 Plan's RFP provisions.
    Comment 2. Earthjustice argues that the RACM demonstration in the 
Plan impermissibly relies on mobile source measures that are not 
approved into the SIP and that the EPA continues to attempt to 
``illegally credit'' waiver measures even though these measures had not 
been proposed for SIP approval by the time of the EPA's proposed rule 
on the 2012 PM2.5 Plan. Earthjustice further asserts that 
these waiver measures have never been reviewed for compliance with SIP-
related requirements, and that the public has no ability to review and 
offer comment on the EPA's assessment of how these mobile source 
measures satisfy the CAA's RACM requirements. Citing Committee for a 
Better Arvin v. EPA, 786 F.3d 1169 (9th Cir. 2015) (hereafter ``CBA''), 
Earthjustice argues that the EPA's prior approvals of PM2.5 
plans for the South Coast and San Joaquin Valley nonattainment areas 
were remanded for failure to include the mobile source control measures 
upon which the plans relied and that it is, therefore, premature to 
conclude that the RACM requirement has been satisfied.
    Response 2. As we explained in our proposed rule, in response to 
the Ninth Circuit's decision in CBA, CARB adopted the necessary waiver 
measures as revisions to the California SIP and submitted them to the 
EPA on August 14, 2015.\26\ Our proposed rule for this action stated 
that the EPA intended to propose action on these waiver measures in a 
separate rulemaking and that, ``[o]nce approved as part of the SIP, the 
measures will be enforceable by the EPA or private citizens under the 
CAA.'' \27\ Our proposed rule also stated that the EPA was ``proposing 
to approve certain elements of the 2012 PM2.5 Plan and 2015 
Supplement in part based on our expectation that these waiver measures 
will soon become federally enforceable as a result of our approval of 
the measures as part of the SIP.'' \28\
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    \26\ 80 FR 63640 at 63652, n. 48 (citing letter dated August 14, 
2015, from Richard W. Corey, Executive Officer, California Air 
Resources Board, to Jared Blumenfeld, Regional Administrator, EPA 
Region 9).
    \27\ 80 FR at 63652.
    \28\ Id.
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    On November 12, 2015, the EPA proposed to approve the submitted 
waiver measures into the California SIP and provided a 30-day period 
for public comment on its proposal.\29\ As part of this proposed rule, 
the EPA evaluated the necessary waiver measures for compliance with 
SIP-related requirements and proposed to find that they fulfill all 
applicable CAA requirements. The EPA expects to finalize this action in 
the near term, at which point the waiver measures will become federally 
enforceable under the CAA.
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    \29\ 80 FR 69915 (November 12, 2015).
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    In the meantime, we agree with Earthjustice that the RACM/RACT 
demonstration in the 2012 PM2.5 Plan remains deficient 
pending the EPA's final action to approve the waiver measures on which 
it relies. Because we are disapproving the RACM/RACT demonstration in 
the 2012 PM2.5 Plan on other grounds, however (see Response 
1), this conclusion does not alter our action.

Comments Regarding Motor Vehicle Emissions Budgets

    Comment 3. Earthjustice asserts that the EPA's decision to not act 
on the motor vehicle emissions budgets (MVEBs) in the 2012 
PM2.5 plan is arbitrary and capricious. According to 
Earthjustice, the revised budgets in the 2012 PM2.5 Plan 
(2015 MVEBs) are significantly strengthened compared to the MVEBs for 
the 1997 PM2.5 NAAQS that the EPA approved in 2011 (2011 
MVEBs), which are ``outdated and less protective.'' For example, 
Earthjustice asserts that the 2015 MVEBs reflect more accurate 
emissions data as they are based on EMFAC2011 and transportation 
activity data from the Southern California Association of Governments' 
(SCAG's) adopted 2012 Regional Transportation Plan, whereas the 2011 
MVEBs relied on EMFAC2007, the prior transportation plan, and other 
outdated information. Additionally, Earthjustice claims that the 2011 
MVEBs were ``not sufficiently stringent because evidence shows the 
South Coast air basin has not attained the 1997 PM2.5 
standard'' and ``certainly are not sufficiently strong to meet the 2006 
PM2.5 standard and interim milestones to ensure attainment 
of this standard.''
    Earthjustice contends that it is arbitrary to allow the 2011 MVEBs 
to remain in place for the next transportation plan when revised 
budgets are available, especially in the South Coast where 
transportation emissions account for such a large amount of the 
PM2.5 and ozone pollution problems. Earthjustice further 
argues that it is critically important to have these revised budgets in 
place given the imminent 2016 transportation plan being prepared by 
SCAG.
    Response 3. We disagree with these comments.
    As we explained in our proposed rule, the 2015 Supplement, which 
CARB submitted in March 2015, revised the attainment demonstration in 
the 2012 PM2.5 Plan to identify December 31, 2015 as the 
applicable attainment date and included revised motor vehicle emission 
budgets (MVEBs) for 2015 for direct PM2.5, NOX, 
and VOC.\30\ In July 2015, however, the District submitted preliminary 
air quality monitoring data that indicated that attainment of the 2006 
PM2.5 NAAQS by the Moderate area attainment date (December 
31, 2015) was impracticable.\31\ Based on these air quality data, the 
District requested that the EPA treat the 2012 PM2.5 Plan 
and 2015 Supplement as a demonstration that attainment by the Moderate 
area attainment date is impracticable and that the EPA reclassify the 
South Coast air basin as a Serious nonattainment area for the 2006 
PM2.5 NAAQS.\32\ We therefore evaluated the 2012 
PM2.5 Plan and 2015 Supplement as a demonstration of 
impracticability under CAA section 189(a)(1)(B)(ii) and proposed to 
approve it based on a conclusion that it satisfies the statutory 
requirements for such demonstrations.
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    \30\ 80 FR 63640 at 63655 (October 20, 2015) (citing 2015 
Supplement, Attachment C at Table C-1).
    \31\ Id. at 63645 and 63652-53.
    \32\ Id.
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    Section 93.118(e)(4) of the conformity rule states that the EPA 
will not find a motor vehicle emissions budget in a submitted control 
strategy SIP to be adequate for transportation conformity purposes 
unless specific criteria are satisfied, including the requirement in 
paragraph (e)(4)(iv) that the motor vehicle emissions budget(s), when 
considered together with all other emissions sources, is consistent 
with applicable requirements for reasonable further progress, 
attainment, or maintenance, whichever is relevant to the SIP 
submission. The 2012 PM2.5 Plan and 2015 Supplement contain 
MVEBs only for the 2015 attainment year.\33\ The Plan does not 
demonstrate timely attainment and does not contain an approvable RFP 
demonstration or any RFP budgets. Because the Plan does not contain a 
control strategy that satisfies the requirements for RFP, attainment, 
or maintenance, the EPA cannot find that the MVEBs included with this 
plan meet the specific requirement in 40 CFR 93.118(e)(4)(iv)

[[Page 22030]]

that the budgets, when considered together with all other emissions 
sources, be consistent with applicable requirements for reasonable 
further progress, attainment, or maintenance. Therefore, we cannot find 
these MVEBs adequate for conformity purposes or approve them.
---------------------------------------------------------------------------

    \33\ 2015 Supplement, Attachment C, at Table C-1.
---------------------------------------------------------------------------

    Under 40 CFR 93.109(c)(2), in a nonattainment area that has no SIP-
approved or adequate MVEBs but does have approved or adequate MVEBs in 
an approved SIP or SIP submission for another NAAQS of the same 
pollutant, conformity determinations must satisfy the budget test as 
required by Sec.  93.118 using the approved or adequate MVEBs for that 
other NAAQS. The South Coast air basin has no SIP-approved or adequate 
MVEBs for the 2006 PM2.5 NAAQS but does have approved MVEBs 
in an approved SIP for the 1997 PM2.5 NAAQS, which is 
another NAAQS of the same pollutant (PM2.5). Therefore, 
until the EPA finds that a MVEB in a submitted control strategy SIP for 
the 2006 PM2.5 NAAQS is adequate for transportation 
conformity purposes, conformity determinations for the 2006 
PM2.5 NAAQS in the South Coast area must satisfy the budget 
test as required by Sec.  93.118 using the approved MVEBs for the 1997 
PM2.5 NAAQS. Upon the effective date of the EPA's finding 
that a MVEB in a submitted control strategy SIP for the 2006 
PM2.5 NAAQS is adequate for transportation conformity 
purposes, or upon the publication date of the EPA's approval of such a 
budget in the Federal Register, conformity determinations for the 2006 
PM2.5 NAAQS in the South Coast area will have to satisfy the 
budget test in Sec.  93.118 using such approved MVEBs for the 2006 
PM2.5 NAAQS.\34\
---------------------------------------------------------------------------

    \34\ 40 CFR 93.109(c)(1).
---------------------------------------------------------------------------

    In sum, because the 2012 PM2.5 Plan and 2015 Supplement 
do not contain a control strategy that satisfies the requirements for 
RFP, attainment, or maintenance, the EPA cannot find that the MVEBs 
included in the Plan are adequate for conformity purposes and cannot 
approve these budgets. Accordingly, we are taking no action on the 2015 
MVEBs included in the Plan. Because the South Coast air basin has no 
SIP-approved or adequate MVEBs for the 2006 PM2.5 NAAQS but 
does have approved MVEBs in an approved SIP for the 1997 
PM2.5 NAAQS, conformity determinations for the 2006 
PM2.5 NAAQS in the South Coast area must satisfy the budget 
test as required by Sec.  93.118 using the approved MVEBs for the 1997 
PM2.5 NAAQS, until the EPA finds that a MVEB in a submitted 
control strategy SIP for the 2006 PM2.5 NAAQS is adequate 
for transportation conformity purposes in the South Coast air basin.
    The EPA recently approved an updated version of the California 
EMFAC model (EMFAC2014) for use in SIP development and transportation 
conformity in California.\35\ Upon conclusion of the two-year grace 
period on December 14, 2017, EMFAC2014 will become the only approved 
motor vehicle emissions model for all new PM2.5 regional and 
hot-spot transportation conformity analyses across California.\36\ 
Although CARB has until August 14, 2017 to submit a Serious area plan 
for the 2006 PM2.5 NAAQS in the South Coast area,\37\ we 
encourage the State to submit this plan and revised MVEBs using 
EMFAC2014 before that date to ensure that conformity analyses for the 
2006 PM2.5 NAAQS in the South Coast air basin use the latest 
emission estimation model available consistent with the requirements of 
40 CFR 93.111.
---------------------------------------------------------------------------

    \35\ 80 FR 77337 (December 14, 2015).
    \36\ Id. at 77339.
    \37\ 81 FR 1514 at 1520 (January 13, 2016).
---------------------------------------------------------------------------

Other Comments

    Comment 4. We received three comments from Harvey Eder on behalf of 
the Public Solar Power Coalition (PSPC). The commenter states his 
intent to incorporate by reference material submitted to the EPA on 
behalf of PSPC in several prior EPA rulemaking actions, EPA and 
presidential statements concerning solar power, and several unspecified 
magazine and newspaper articles, but does not identify the purpose for 
which he intends to incorporate these materials by reference. The 
commenter suggests that EPA Control Techniques Guidelines (CTGs) and 
Alternative Control Techniques documents (ACTs) ``do not exist'' and 
that these would need to be developed ``before[] solar can be used as 
RACT/RACM.'' The commenter asserts that NOX is a precursor 
to both PM10 and PM2.5 as well as fine and ultra-
fine particulates.
    Additionally, the commenter asserts that it is reasonable to 
include solar power as a NOX control measure, and that the 
South Coast area needs a ``100% ITSC Immediate Total Solar Conversion 
Plan by 2020-2023.''
    Response 4: These comments fail to identify any specific issue that 
is germane to the EPA's proposed action on the 2012 PM2.5 
Plan and 2015 Supplement. To the extent the commenter intended to 
encourage additional evaluation of potential solar power installations 
that may reduce pollution in the South Coast area, the EPA encourages 
the commenter to participate in the regulatory processes carried out by 
the SCAQMD, CARB, and other State/local agencies involved in the 
development of air quality management plans in the South Coast. The EPA 
finds no basis in these comments to change its proposed action on the 
Plan.
    With respect to the commenter's request to incorporate material by 
reference, the EPA generally will not consider comments or comment 
contents located outside of the primary submission (i.e., on the web, 
cloud, or other file-sharing system). For the full EPA public comment 
policy, and general guidance on making effective comments, please visit 
http://www2.epa.gov/dockets/commenting-epa-dockets.

III. Final Action

    The EPA is taking final action to approve and disapprove SIP 
revisions submitted by the State of California to address attainment of 
the 2006 PM2.5 NAAQS in the South Coast PM2.5 
nonattainment area. These SIP revisions are the 2012 p.m.2.5 
Plan, submitted February 13, 2013, and the 2015 Supplement, submitted 
March 4, 2015.
    Under CAA section 110(k)(3), the EPA is approving the following 
elements of the 2012 PM2.5 Plan and 2015 Supplement:
    1. The 2008 base year emissions inventories as meeting the 
requirements of CAA section 172(c)(3);
    2. the demonstration that attainment by the Moderate area 
attainment date of December 31, 2015 is impracticable as meeting the 
requirements of CAA section 189(a)(1)(B)(ii);
    3. SCAQMD's commitments to adopt and implement specific rules and 
measures in accordance with the schedule provided in Chapter 4 of the 
2012 PM2.5 Plan as modified by Table F-1 in Attachment F to 
the 2015 Supplement, to achieve the emissions reductions shown therein, 
and to submit these rules and measures to CARB within 30 days of 
adoption for transmittal to the EPA as a revision to the SIP, as stated 
on pp. 7-8 of SCAQMD Governing Board Resolution 12-19 and modified by 
SCAQMD Governing Board Resolution 15-3, excluding all commitments 
pertaining to control measure IND-01 (Backstop Measures for Indirect 
Sources of Emissions from Ports and Port-Related Facilities); and
    4. the general conformity budgets for years 2013-2030 listed in 
Appendix III, p. III-2-53 of the 2012 PM2.5 Plan as

[[Page 22031]]

meeting the requirements of the CAA and the general conformity rule.
    Simultaneously, under CAA section 110(k)(3), the EPA is 
disapproving the following elements of the 2012 PM2.5 Plan 
and 2015 Supplement:
    1. The reasonably available control measures/reasonably available 
control technology (RACM/RACT) demonstration for failure to meet the 
requirements of CAA sections 172(c)(1) and 189(a)(1)(C); and
    2. the reasonable further progress demonstration for failure to 
meet the requirements of CAA section 172(c)(2).
    As a result of this disapproval, the offset sanction in CAA section 
179(b)(2) will apply in the South Coast PM2.5 nonattainment 
area 18 months after the effective date of this action and the highway 
funding sanctions in CAA section 179(b)(1) will apply in the area 6 
months after the offset sanction is imposed. Neither sanction will 
apply if California submits and the EPA approves, prior to the 
implementation of the sanctions, SIP revisions that correct the 
deficiencies identified in this final action. Additionally, this 
disapproval action triggers an obligation on the EPA to promulgate a 
federal implementation plan unless California corrects the 
deficiencies, and the EPA approves the related plan revisions, within 
two years of this final action.

IV. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at http://www2.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and was 
therefore not submitted to the Office of Management and Budget (OMB) 
for review.

B. Paperwork Reduction Act (PRA)

    This action does not impose an information collection burden under 
the PRA because this action does not impose additional requirements 
beyond those imposed by state law.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. This 
action will not impose any requirements on small entities beyond those 
imposed by state law.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain any unfunded mandate as described in 
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect 
small governments. This action does not impose additional requirements 
beyond those imposed by state law. Accordingly, no additional costs to 
State, local, or tribal governments, or to the private sector, will 
result from this action.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

F. Executive Order 13175: Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in 
Executive Order 13175, because the SIP is not approved to apply on any 
Indian reservation land or in any other area where the EPA or an Indian 
tribe has demonstrated that a tribe has jurisdiction, and will not 
impose substantial direct costs on tribal governments or preempt tribal 
law. Thus, Executive Order 13175 does not apply to this action.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that the EPA has reason to believe may disproportionately affect 
children, per the definition of ``covered regulatory action'' in 
section 2-202 of the Executive Order. This action is not subject to 
Executive Order 13045 because it does not impose additional 
requirements beyond those imposed by state law.

H. Executive Order 13211: Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This action is not subject to Executive Order 13211, because it is 
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the NTTAA directs the EPA to use voluntary 
consensus standards in its regulatory activities unless to do so would 
be inconsistent with applicable law or otherwise impractical. The EPA 
believes that this action is not subject to the requirements of section 
12(d) of the NTTAA because application of those requirements would be 
inconsistent with the CAA.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Population

    The EPA lacks the discretionary authority to address environmental 
justice in this rulemaking.

K. Congressional Review Act (CRA)

    This action is subject to the CRA, and the EPA will submit a rule 
report to each House of the Congress and to the Comptroller General of 
the United States. This action is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

L. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by June 13, 2016. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Ammonia, 
Incorporation by reference, Intergovernmental relations, Nitrogen 
dioxide, Particulate matter, Reporting and recordkeeping requirements, 
Sulfur dioxide, Volatile organic compounds.

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

    Dated: March 15, 2016.
Jared Blumenfeld,
Regional Administrator, EPA Region 9.
    Part 52, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

[[Page 22032]]

Subpart F--California

0
2. Section 52.220 is amended by adding paragraphs (c)(439)(ii)(B)(5) 
and (c)(471) to read as follows:

Sec.  52.220  Identification of plan.

* * * * *
    (c) * * *
    (439) * * *
    (ii) * * *
    (B) * * *
    (5) The following portions of the Final 2012 Air Quality Management 
Plan (December 2012): PM2.5-related portions of chapter 4 
(``Control Strategy and Implementation''); Appendix III (``Base and 
Future Year Emissions Inventory''); Appendix IV-A (``District's 
Stationary Source Control Measures''); and Appendix V (``Modeling and 
Attainment Demonstrations''). SCAQMD's commitments to adopt and 
implement specific rules and measures in accordance with the schedule 
provided in Chapter 4 of the 2012 PM2.5 Plan as modified by 
Table F-1 in Attachment F to the 2015 Supplement, to achieve the 
emissions reductions shown therein, and to submit these rules and 
measures to CARB within 30 days of adoption for transmittal to EPA as a 
revision to the SIP, as stated on pp. 7-8 of SCAQMD Governing Board 
Resolution 12-19 and modified by SCAQMD Governing Board Resolution 15-
3, excluding all commitments pertaining to control measure IND-01 
(Backstop Measures for Indirect Sources of Emissions from Ports and 
Port-Related Facilities).
* * * * *
    (471) The following plan was submitted on March 4, 2015, by the 
Governor's Designee.
    (i) [Reserved]
    (ii) Additional material.
    (A) South Coast Air Quality Management District.
    (1) ``2015 Supplement to the 24-Hour PM2.5 State 
Implementation Plan for the South Coast Air Basin'' (February 2015), 
excluding Attachment C (``New Transportation Conformity Budgets for 
2015''). SCAQMD's commitments to adopt and implement specific rules and 
measures in accordance with the schedule provided in Chapter 4 of the 
2012 PM2.5 Plan as modified by Table F-1 in Attachment F to 
the 2015 Supplement, to achieve the emissions reductions shown therein, 
and to submit these rules and measures to CARB within 30 days of 
adoption for transmittal to EPA as a revision to the SIP, as stated on 
pp. 7-8 of SCAQMD Governing Board Resolution 12-19 and modified by 
SCAQMD Governing Board Resolution 15-3, excluding all commitments 
pertaining to control measure IND-01 (Backstop Measures for Indirect 
Sources of Emissions from Ports and Port-Related Facilities).
    (2) SCAQMD Governing Board Resolution No. 15-3, dated February 6, 
2015.
    (B) State of California Air Resources Board.
    (1) CARB Resolution 15-2, dated February 19, 2015, ``Minor Revision 
to the South Coast Air Basin 2012 PM2.5 State Implementation 
Plan.''

0
3. Section 52.237 is amended by adding paragraph (a)(7) to read as 
follows:

Sec.  52.237  Part D disapproval.

    (a) * * *
    (7) The PM2.5-related portions of Appendix VI 
(``Reasonably Available Control Measures (RACM) Demonstration'') of the 
Final 2012 Air Quality Management Plan (December 2012), and Attachment 
D (``Updated RACM/RACT Analysis'') to the 2015 Supplement to the 24-
Hour PM2.5 State Implementation Plan for the South Coast Air 
Basin (January 2015).

[FR Doc. 2016-08039 Filed 4-13-16; 8:45 am]
 BILLING CODE 6560-50-P
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