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Page 1 of 29 ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 5 2 and 9 7 [ EPA-HQ-OAR- 2009 - 0491 ; FRL - ]

[RIN ] Inclusion of Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin in the Federal Implementation Plans to Reduce

Interstate Transport of Ozone

AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule. SUMMARY: In this supplemental notice of proposed rulemaking (SNPR), EPA is providing an opportunity for public comment on our conclusion that Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin s ignificantly contribute to downwind nonattainment or interfere with maintenance of the 1997 ozone National Ambient Air Quality Standards (NAAQS)in other states, and the related conclusion that these six states should be covered by the ozone season NO x prog ram created in the Transport Rule ( Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone ) . In addition, this notice identifies the ozone season NO x budgets, associated variability limits, and allowance allocation s that would be used for each state if EPA takes final action to include the named states in the Transport Rule ozone season NO x program. DATES: Comments must be received on or before August 8, 2011. A publ i c hearing, if requested, will be held in Washi ngton, D.C. on July 21, 2011 , beginning at 9:00 a.m. If a public*** E.O. 12866 Review

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Page 2 of 29 hearing is requested, the comment period will remain open until August 22, 2011 . ADDRESSES: Submit your comments, identified by Docket ID No. OAR
- EPA

– HQ

– OAR

– 2009

– 0491 , by one of the followi ng methods: • Federal eRulemaking Portal: http://www.regulations.gov . Follow the on
- line instructions for submitting comments. • Agency Website: http://www.epa.gov/edocket
. EDOCKET, EPA’s electronic public docket and comment system, is EPA’s preferred meth od for receiving comments. Follow the on
- line instructions for submitting comments. • E
-mail: A

- and
- R
- Docket@epa.gov. • Fax: (202) 566

- 1741. • Mail: Air Docket, Environmental Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW, Washington, DC 20 460. Please include a total of two copies. • Hand Delivery: EPA Docket Center (Air Docket), U.S. Environmental Protection Agency, 1301 Constitution Avenue, NW, Room B102, Washington, DC 20004. Such deliveries are only accepted during the Docket’s normal ho urs of operation, and special arrangements should be made for deliveries of boxed information. Instructions: Direct your comments to Docket ID No. EPA

– HQ

– OAR

– 2009

– 0491 . The EPA's policy is that all comments received will be included in the public docket wi thout change and may be made available online at http://www.epa.gov/edocket , including any personal information provided, unless the comment includes information claimed to be Confidential*** E.O. 12866 Review

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Page 3 of 29 Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through EDOCKET, regulations.gov, or e

-mail. The EPA EDOCKET and the Federal regulations.gov websites are “anonymous access” systems, 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 e
-mail comment directly to EPA without going through EDOCKET or regulations.gov, your e

-mail address wi ll be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD

- ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. Docket : All documents in the docket are listed in the EDOCKET index at http://www.epa.gov/edocket
. ( Docket ID No.OAR
- EPA

– HQ

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– 0491 in its entirety is incorporated by referen ce into this SNPR. ) Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in EDOCKET or in hard copy at the Air Docket,EPA/DC, EPA West, Room B102, 1301 Constitution*** E.O. 12866 Review

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Page 4 of 29 Ave., NW, Washington , DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566

- 1744, and the telephone number for the Air Docket is (202) 566

- 1742. This Docket Facility is open f rom 8:00 a.m. to 5:30 p.m., Monday through Friday, excluding legal holidays. The Docket telephone number is (929)566

- 1742, fax (202) 566

- 1741.

FOR FURTHER INFORMATION CONTACT : Questions concerning today's action should be addressed to Ms. Doris Price, Cle an Air Markets Division, Office of Atmospheric Programs, Mail Code 6204J, Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; telephone number: (202) 343

- 9 067 ; fax number: (202) 343

- 23 56 ; e -mail address: price.doris@epa.gov .
SUPPLEMENTARY INFORMATION : PUBLIC HEARING A public hearing, if requested, will be held in Washington D.C. on July 21, 2011, beginning at 9:00 a.m. If you wish to request a hearing and present testimony or attend the hearing, you should notify, on or b efore July 1 4 , 2011, Ms. Doris P rice , Clean Air Markets Division, Office of Atmospheric Programs, Mail Code 6204J, Environmental Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460; telephone number: (202) 343

- 9 067 ; fax number: (202) 343

- 23 56 ; e -mail address: price.doris@epa.gov . Oral testimony will be limited to 5 minutes each. The hearing will be strictly limited to the subject matter of the proposal, the scope of which is*** E.O. 12866 Review

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Page 5 of 29 discussed below. Any member of the public may file a written sta tement by the close of the comment period. Written statements (duplicate copies preferred) should be submitted to Docket ID No. EPA

– HQ

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– 2009

– 0491 , at the address listed above for submitted comments. The hearing location and schedule, including lists of speakers, will be posted on EPA's webpage at http://www.epa.gov/ airtransport . A verbatim transcript of the hearing and written statements will be made available for copying during normal working hours at the Office of Air and Radiation Docket and Informati on Center at the address listed for inspection for documents. If no requests for a public hearing are received by close of business on July 1 4 , 2011 , a hearing will not be held and this announcement will be made on the webpage at the address shown above. Glossary of Terms and Abbreviations The following are abbreviations of terms used in this SNPR: CFR Code of Federal Regulations EGU Electric Generating Unit FIP Federal Implementation Plan FR Federal Register EPA U.S. Environmental Protection Agency ICR In formation Collection Request NAAQS National Ambient Air Quality Standards NODA Notice of Data Availability NOX Nitrogen Oxides SIP State Implementation Plan OMB Office of Management and Budget PM2.5 Fine Particulate Matter, Less Than 2.5 Micrometers*** E.O. 12866 Review

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Page 6 of 29 PM Particulate Matter RIA Regulatory Impact Analysis SNPR Supplemental Notice of Proposed Rulemaking SO 2 Sulfur Dioxide TSD Technical Support Document Outline I. Today’s Proposal

A. Application of Methodologies to Identify Nonattainment and Maintenance Receptors and to Determine Significant Contribution and Interference w ith Maintenance B. Ozone Season NO x Emission Budgets for Six States C. Allowance Allocations to Covered Units in Each of the S ix S tates D. Implementation E. Expected Effects of the Proposed Action II. S tatutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks H. Executive Order 13211: Actions That Significantly Affect Energy Suppl y, Distribution or Use I. National Technology Transfer Advancement Act*** E.O. 12866 Review

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Page 7 of 29 J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low
- Income Populations Appendix A: Proposed Unit

- Level Ozone Season NO x Allowance All ocations to Existing Units i n Six States I. Today’s Proposal In this supplemental notice of proposed rulemaking (SNPR), EPA is providing an opportunity for public comment on its conclusion that Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wiscons in significantly contribute to nonattainment or interfere with maintenance of the 1997 ozone National Ambient Air Quality Standards (NAAQS) in other states, and the related conclusion that these six states should be covered by the Transport Rule 1 ozone sea son NOX program. In addition, this notice identifies the ozone
season NOX budgets, associated variability limits, and allowance allocations that would be used for each state if EPA takes final action to include the named states in the Transport Rule ozon e season NOX program. Note that EPA is not taking comment on or reopening any aspect of the final Transport Rule through this notice . EPA is taking action , simultaneously with this proposal , to finalize ozone season NOX emission reduction requirements for 20 covered states in a final rule entitled Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone , which was proposed on July 6,

1 Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone : Final Rule . Available on the Web at http://www.epa.gov/airtransport
.*** E.O. 12866 Review

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Page 8 of 29 2010. 2 In that final rule , EPA is also finalizing annual NO x and annual SO 2 state emission reduction requirements to eliminate significant contribution to nonattainment and interference with maintenance for the annual (1997) fine particulate NAAQS and the 2006 24

- hour fine particulate NAAQS. This action proposes the inclusion of six additional states (Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin) in the Transport Rule ozone season NOX p rogram. Analyses conducted by EPA for the final Transport Rule demonstrate that these six states significantly contribute to nonattainment o r interfere with maintenance of the 1997 ozone NAAQS in another state. The modeling for the final Transport Rule identifies two maintenance areas for the 1997 ozone NAAQS that were not identified in the proposal : Allegan County, MI and Harford County ( ne ar Baltimore), MD. Five of the states covered in this SNPR are linked only to these newly identified ozone maintenance receptors . Consequently, if EPA had not identified these receptors as ozone maintenance receptors , the states would not be covered by the Transport Rule ozone
season NOX program . These five states are Iowa, Kansas, Oklahoma, and Wisconsin (all linked only to Allegan County ) and Michigan (linked only to Harford County ). The sixth state, Missouri, is linked to Harris County, TX, Brazoria County, TX, and Allegan County, MI. Three of these states (Iowa, Missouri, and Wisconsin) were not included in the proposed Transport Rule ozone season NO x program. The modeling for the final Transport Rule

2 75 FR 45210 (August 2, 2010).*** E.O. 12866 Review

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Page 9 of 29 demonstrates that these three states significantly contribute to nonattainment or interfere with maintenance for the 1997 ozone NAAQS in another state. EPA is taking comment on whether the final methodologies for determining if a state significantly contributes to nonattainment or interferes with maintenance has been correctly applied to Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin with respect to the 1997 ozone NAAQS. In this notice, EPA is proposing to include the six states identified above in the Transport Rule ozone season NOX program . Five of the six states covered by this proposal
-- Iowa , Kansas, Michigan, Missouri, and Wisconsin

-

- are included in the final Transport Rule for PM2.5 but not for ozone 3

. The sixth state, Oklahoma , is not currently included in any part of the final Tran sport Rule. In this notice, EPA is taking comment only on its conclusions with respect to the inclusion of these i ndividual states in the ozone season NO x program as specifically described below. In this notice, EPA is not taking comment on any aspect of the final Transport Rule, including any aspect of the methodology used to identify receptors for nonattainment ; the methodology used to identify receptors for maintenance ; the methodology used to identify any specific state’s significant contribution and in terference with maintenance ; the methodologies used to establish state budgets, variability limits, and state assurance levels; or the methodolog ies used to allocate allowances to existing units, to establish new unit set

- asides and Indian country new unit set
- asides , or to

3 States covered by the Transport Rule for PM2.5 are required to limit their annual emissions of NO x .*** E.O. 12866 Review

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Page 10 of 29 allocate allowances in these set

- asides . EPA provided an adequate opportunity for public comment on all of these issues during the comment period for the proposed Transport Rule and during the comment period s for the a ssociated Notice s o f Data Availability (NODAs ) . 4 EPA received numerous comments on the proposed Transport Rule and on the associated NODAs and considered all comments received during the comment period s for the se actions before finalizing the Transport Rule. EPA is also no t taking comment on the emissions inventories used for the final Transport Rule modeling, including the emissions inventories for the six states identified above. EPA provided ample opportunity for comment on these inventories during the comment period fo r the proposed Transport Rule and the comment periods for the NODAs associated with that proposal . Inventories for all states

4 Notice of Data Availability Supporting Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone ( 75 FR 53613 ; September 1, 201 0 ). This NODA provided additional information on an updated version of the power sector modeling platform and data inputs EPA proposed to use to support the final Transport Rule. Notice of Data Availability Supporting Feder al I mplementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone: Revisions to Emission Inventories ( 75 FR 66055; October 27, 2010). Notice of Data Availability for Federal Implementation Plans to Reduce Interstate Transport of Fine Particulate Matter and Ozone: Request for Comment on Alternative Allocations, Calculation of Assurance Provision Allowance Surrender Requirements, New

- Unit Allocations in Indian Country, and Allocations by States ( 76 FR 1109 ; January 7, 2011).*** E.O. 12866 Review

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Page 11 of 29 included in the modeling domain were made available for public comment during that process. EPA made numerous changes to these i nventories in response to public comment s . Furthermore, the public had an incentive to comment on the inventories for these six states, not only because these inventories affect the modeling for all states in the modeling domain, but also because EPA was proposing to include all six states in at least one of the Transport Rule trading programs and the inventories were used for allocating the existing

- unit portion of state emissions budgets to covered units . The three states covered by this SNPR that
were not included in the ozone season program in the proposed Transport Rule (Iowa, Missouri , and Wisconsin ) were covered for the annual PM2.5 program and therefore had reason to look closely at the unit and NO x emissions data EPA made available in the proposa l and the NODAs.

A. Application of Methodolog ies to Identify Nonattainment and Maintenance Receptors and to Determine Significant Contribution and Interference with Maintenance In this SNPR , EPA is providing an opportunity for public comment on our conc lusion that Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin significantly contribute to nonattainment or interfere with maintenance of the 1997 ozone NAAQS in another state . As noted above, EPA is not taking comment on the methodolog ies to ident ify nonattainment and maintenance receptors and to determine significant contribution and interference with maintenance, which were finalized in the Transport Rule. Rather, we are accepting comment on the conclusion that application of these methodolog ies demonstrates that these six states should be*** E.O. 12866 Review

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Page 12 of 29 included in the Transport Rule ozone season NOX program . As described in detail in the preamble to the final Transport Rule, sections V.C , “Air Quality Modeling to Identify Downwind Nonattainment and Maintenan ce Receptors , ” and V.D ,
“ Pollution Transport from Upwind States , ” and in the Technical Support Document “Air Quality Modeling” for the final Transport Rule , application of the Transport Rule methodolog ies identifies Allegan County, MI, and Harford County, MD , as ozone maintenance receptors. In addition, application of the Transport Rule methodologies shows that Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin all significantly contribute to nonattainment or interfere with maintenance of the 1997 o zone NAAQS in another state. EPA requests comment on whether there are errors in the Agency’s application of the Transport Rule methodolog ies with respect to the two receptors and the six states identified above.

B. Ozone Season NO x Emission Budgets for Six States In this SNPR, E PA is also proposing state ozone season NO x emissions budgets for covered units (generally large electric generating units) in Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin. The applicability provisions for determinin g c overed units in the named six states for the Transport Rule ozone season NO x program are the same as those described in section VII.B , “Applicability,” of the preamble to the final Transport Rule. As noted above, EPA is not taking comment on the methodologies used to establish state budgets, variability limits, or state assurance levels. Rather, in this section,
we are requesting comment on the state ozone season NOX emissions budgets calculated using these methodologies.*** E.O. 12866 Review

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Page 13 of 29 These budgets are presented i n Table I.B
- 1 . The associated variability limits and state assurance levels are presented in Table I.B

- 2 . Table I.B - 1: Ozone Season NOx State Emissions Budgets for Electric Generating Units before Accounting for Variability* (tons) 2012 - 2013 2014 and

beyond Iowa 16,532 16,207 Kansas 13,536 10,998 Michigan 25,752 24,727 Missouri 22,762 21,073 Oklahoma 21,835 21,835 Wisconsin 13,704 13,216 Note
- These state emissions budgets apply to emissions from electric generating units greater than 25 MW and covered by the Transport Rule Program. * The impact of variability on budgets is discussed in Federal Implementation Plans to Reduce Interstate Transport of Fine Par ticulate Matter and Ozone: Final Rule, section VI.E . Table I.B - 2: Variability Limits and State Assurance Levels

for Ozone Season NOx Emissions

(tons)

2012 - 2013 2014 and

beyond 2012 -

2013 2014 and

beyond Iowa 1,653 1,621 18,185 17,828 Kansas 1,353 1,100 14,889 12,098 Michigan 2,575 2,472 28,327 27,199 Missouri 2,276 2,107 25,038 23,180 Oklahoma 2,184 2,184 24,019 24,019 Wisconsin 2,056 1,982 15,760 15,198 Emissions Variability Limit (tons) State Emissions

Assurance Level (tons)

Note: Variability limits and assurance levels apply to each state’s emissions from covered sources, as defined by Federal Implementation Plans to Reduce Interstate*** E.O. 12866 Review

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Page 14 of 29 Transport of Fine Particulate Matter and Ozone: Final Rule . C. Allocation of Allowances to Covered Units in Each of the Six States EPA is proposing to allocate ozone season NO x allowances to covered units in Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin using the methodology and procedures used for allocations to units covered by the Transport Rule ozone season NO x program. These are specified in section VII.D, ”Allocation of Emis sion Allowances,” of the preamble to the final Transport Rule. Appendix A to this proposal presents the proposed unit

- level allocations of ozone season NO x allowance s to existing covered units in each of the six states and the supporting data. EPA is taki ng comment only on the data inputs (e.g., corrections to the heat input value used for any particular unit) used in applying the allowance allocation methodology for existing units and on the resulting existing

- unit allocations that we are proposing for the six states involved . EPA provided ample opportunity for comment on the methodolog ies used for allowance allocation and for establishing the set

- asides both in the public comment period following the rule proposal and through the January 7, 2011 NODA. As discussed in section VII.D.1, “Allocations to Existing Units” of the preamble to the final Transport Rule, EPA has carefully evaluated and responded to numerous comments on this issue . These public comments were taken into account when finalizing the Tran sport Rule. 5

5 EPA made some corrections to heat input data based on comments received from sources correcting such data.*** E.O. 12866 Review

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Page 15 of 29 EPA is proposing that new unit set
- asides for allowance allocations to new units be created and implemented for each of these six states in the same manner as for the other 20 states covered in the Transport Rule ozone season NO x program . This approach is described in section VII.D.2, “Allocations to New Units,” of the preamble to the final Transport Rule. Table I.C
- 1 shows the proposed new allocation percentages for ozone season NOX allowances for these states. As noted above, EPA is taki ng comment only on the application of the new unit set

- aside methodology to these states and on the resulting set

- asides that we are proposing (i.e., whether the percentages for the set
- asides
are calculated properly) . EPA provided ample opportunity for
comment on the new unit set

- aside methodology in the public comment period following the rule proposal. Table I.C - 1: State New Unit Set-Asides as a Percent of State

Ozone Season NOx Emission BudgetsOzoneseason NOx Iowa 2% Kansas 2% Michigan 2% Missouri 3% Oklahoma 2% Wisconsin 6% As described in section VII.D.2, “Allocations to New Units,” of the preamble to the final Transport Rule, EPA is providing a mechanism to make allowances available in the future for new units built in Indian country. Table I.C

- 2 shows the new unit set

- asides EPA is proposing for states which have areas of In dian country within their boundaries. Under the final transport Rule, EPA will administer these*** E.O. 12866 Review

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Page 16 of 29 Indian country new unit set

- asides regardless of whether a state replaces its Transport Rule FIP with an approved SIP. EPA is proposing to use the same mechani sm for the states covered in this SNPR. EPA is taking comment only on the application of the Indian country new unit set

- aside methodology to these states and on the resulting set

- asides that we are proposing. EPA provided ample opportunity for comment on the methodologies for Indian country new unit set

asides through the January 7, 2011 NODA.

Table I. C - 2: New Unit Set-Aside Allowances for

Indian Country (tons)
For Ozone Season NOx in 2012 For Ozone

Season NOx in 2014 Iowa 17 16 Kansas 14 11 Michigan 26 25 Oklahoma 22 22 Wisconsin 14 13

D. Implementation EPA is proposing that implementation of emission requirements for the six states addressed in this SNPR be identical to those for the other states covered by the Transport Rule ozone season NOX program. Refer to section IV.C
- 2, “FIP Authority for Each State and NAAQS Covered,” in the preamble to the final Transport Rule for a general discussion of EPA’s legal responsibility and authority to impose Federal Implementation Plans (FIPs) in certain circumstances where State Implementation Plans (SIPs) are deficient. The TSD “Status of 110(a)(2)(D)(i)(I) SIPs for*** E.O. 12866 Review

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Page 17 of 29 Iowa, Kansas, Mich igan, Missouri, Oklahoma, Wisconsin with Respect to the 1997 Ozone NAAQS” identifies each action taken by EPA with respect to the 110(a)(2)(D)(i)(I) SIP requirements for the named states with respect to the 1997 ozone NAAQS. This TSD demonstrates that EPA has authority and a legal obligation to promulgate each FIP proposed in this SNPR. To be consistent and synchronize with the other states covered by the Transport Rule ozone season NO x program, EPA has not adjusted the timing for compliance with the ozon e FIPS for these states. 6 EPA expects to finalize this rulemaking on or before November 1, 201 1 ; the ozone season for 2012 does not begin until May 1, 2012. This will allow
an approximately six

-month lead time before the start of the 2012 ozone season. The vast majority of covered sources already have combustion controls installed; therefore, EPA expects that only a small number of sources will need to install combustion controls to comply, and the total number of installations is practical to achieve wit hin the time period for additional construction. I ndividual sources may comply through other measures (such as purchasing additional

6 As explained in the TSD, E PA proposed a SIP call requiring Kansas to address its deficiency for the 1997 Ozone NAAQS 110(a)(2)(D)(i) (I) requirements (76 FR 763). EPA intends to finalize the SIP call concurrent with the finalization of this action . This will enable Kansas to use the same remedy as the other states covered by the final Transport Rule ozone season NO x program . ( Specifically, Kans a s may request
-- through a letter submitted to EPA within three weeks of the final SIP call

-- that the Kans a s ozone FIP be implemented at the same time as the other states .)*** E.O. 12866 Review

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Page 18 of 29 allowances) in the event that it takes a particular source more than six months for installation of a given combustion cont rol. EPA’s rationale for determining that this lead time is sufficient is described in detail in section VII.C “Compliance Deadlines” of the preamble to the final Transport Rule. EPA is also not proposing to alter the compliance deadlines or deadline s for submission of SIPs to replace the
ozone FIPs for these six states. The submission deadlines and process for the six states covered by this SNPR, as well as the rationale behind them, can be found in section X

“ Transport Rule State Implementation Plan s ” of the preamble to the final Transport Rule.
E. Expected Effects of the Proposed Action This proposal is projected to limit ozone season NOX emissions in Iowa, Kansas, Michigan, Missouri, Oklahoma, and Kansas beginning in 2012 . The impacts of the Tran sport Rule inclusive of this proposal are discussed in section VIII of the preamble to the final T ransport Rule. Table VIII
-A.5 shows the state
-by
- state ozone season NOX emissions reductions (compared to the base case) expected in both 2012 and 2014. Ove rall ozone improvements, including these states and others, are displayed in Table VIII

- B
- 2 and are discussed in greater detail in the Air Quality Modeling TSD. 7 Overall benefits of the T ransport Rule are discussed in section VIII

7 The TSD for Federal Implementation Plans to Reduce Interstate Transport of Fine Particul ate Matter and Ozone: Final Rule is incorporated in its entirety by reference into this SNPR.*** E.O. 12866 Review

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Page 19 of 29 of the preamble to the f inal T ransport Rule and in the Regulatory Impact Analysis to the final Transport Rule.

III. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review Un der Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency must determine whether a regulatory action is "significant" and therefore subject to Office of Management and Budget (OMB) review and the requirements of the Executive Order. The Order de fines "significant Regulatory action" as one that is likely to result in a rule that may: 1. Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy,
a s ector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities; 2. Create a serious inconsistency or otherwise interfere
w ith an action taken or planned by another agency; 3. Materially alter the budgetary impact of entitleme nts, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or 4. Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. In view of it s important policy implications and p otential effect on the economy of over $100 million, the Transport Rule program inclusive of this proposal has been judged to be an economically “significant regulatory action”*** E.O. 12866 Review

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Page 20 of 29 within the meaning of the Executive Order. Accordingly, EPA submitted the final Transport Rule and this SNPR to OMB for review under EO 12866 and EO 13563 (76 FR 3821, January 21, 2011) . In addition, EPA prepared an analysis of the potential costs and benefits for the Transport Rule p rogram inclu sive of this proposal. This analysis is contained in the Regulatory Impact Analysis (RIA) for the Transport Rule. The RIA available in the docket describes in detail the empirical basis for EPA’s assumptions and characterizes the various sources of unce rtainties affecting the estimates below. In doing this , EPA adheres to EO 13563, “Improving Regulation and Regulatory Review,” (76 FR 3,821, January 21, 2011), which is a supplement to EO 12 866. For additional information on how EPA’s benefit

- cost analyse s conform to the requirements of EO 13563 , please see section XII.A of the preamble to the final Transport Rule . EPA believes that there is no impact to the economy beyond that which is reported in the final Transport Rule .
1. What Economic Analyses Were Con ducted for the Rulemaking? The analyses conducted for the Transport Rule p rogram inclusive of this proposal provide several important analyses of impacts on public welfare. These include an analysis of the social benefits, social costs, and net benefits of the regulatory scenario. The economic analyses also address issues involving small business impacts, unfunded mandates (including impacts for Tribal governments), and energy impacts.*** E.O. 12866 Review

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Page 21 of 29 2. What Are the Benefits and Costs of the Transport Rule Program ?
The benefit

- cost analysis shows that substantial net economic benefits to society are likely to be achieved due to reduction in emissions and improvements in ozone and PM2.5 ambient concentrations r esulting from the Transport Rule p rogram inclusive of this proposal. For more information on the costs and benefits for the Transport Rule p rogram inclusive of this proposal, please refer to Table VIII.C

- 4 of the preamble to the final Transport Rule . B. Paperwork Reduction Act EPA is required to document the informat ion collection burden imposed by the Transport Rule program on industry, States, and EPA in an information collection request (ICR). The ICR describes the information collection requirements associated with the final Transport Rule p rogram inclusive of th is proposal and estimates the incremental costs of compliance with all such requirements, such as the requirement for industry to monitor, record, and report emissions data to EPA. The ICR for the final Transport Rule P rogram inclusive of this proposal has been submitted for approval to OMB under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and the information collection requirements it documents are not enforceable until such approval has been granted. An ICR was also submitted to OMB in support o f the proposed Transport Rule; no adverse comment was received by EPA on either the information collection requirements or their associated cost estimates as described in that document.*** E.O. 12866 Review

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Page 22 of 29 EPA believes that there are no information collection requirements or burden beyond those reported in the Transport Rule program inclusive of this proposal .
C. Regulatory Flexibility Act The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to noti ce and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include smal l businesses, small organizations, and small governmental jurisdictions. After considering the economic impacts of the Transport Rule program inclusive of this proposal on small entities, as described in section XII.C of the preamble to the final Transport Rule, EPA certifies that this action will not have a significant economic impact on a substantial number of small entities (No SISNOSE). This certification is based on the economic impact of the final Transport Rule and this proposal if finalized on all a ffected small entities across all industries affected. EPA believes that the provisions of the Regulatory Flexibility Act are covered by and reported in section XII.C of the preamble to the f inal Transport Rule .
D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531

- 1538, requires federal agencies, unless otherwise prohibited by law, to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. The Tran sport Rule program incl usive*** E.O. 12866 Review

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Page 23 of 29 of this proposal contains a Federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the private sector in any one year. Accordingly, EPA has prepar ed under section 202 of the UMRA a written statement that is summarized in section XII.D of the preamble to the final Transport Rule. Consistent with the intergovernmental consultation provisions of section 204 of the UMRA, EPA held consultations with the governmental entities affected by the final Transport Rule and this proposal if finalized . As detailed in section XII.D of the preamble to the final Transport Rule, EPA participated in informational calls with the Environmental Council of the States (ECOS ) and the National Governors Association to provide information about the January 7 , 2011 NODA 8 directly to state and local officials and conducted consultations with federally recognized tribes prior to finalizing the final Transport Rule and issuing this SNPR for inclusion of six additional states (of which f ive

—- Iowa, Kansas, Michigan, Oklahoma, and Wisconsin

—- have Indian country within their boundaries ). EPA believes that no unfunded mandates have been created by the Transport Rule program inclusive of this proposal. Neither the final Transport Rule no r the provisions in this SNPR have regulatory requirements that might significantly or uniquely affect small governments .
E. Executive Order 13132: Federalism As described in section XII.E of the preamble to the final Transport Rule, EPA has concluded that the Transport

8 76 FR 1109 (January 7, 2011).*** E.O. 12866 Review

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Page 24 of 29 Rule program inclusive of this proposal does not have federalism implications. Thus, Executive Order 13132 does not apply to the final Transport Rule o r to this SNPR.
F. Executive Order 13 175: Consultation and Coordination with Indian Tribal Governments Under Executive Order 13175 (65 FR 67249, November 9, 2000), EPA may not issue a regulation that has tribal implications, that imposes substantial direct compliance costs, and that is not re quired by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by tribal governments, or EPA consults with tribal officials early in the process of developing the proposed regulation and develops a tribal summary impact statement. As described in section XII.F of the preamble to the final Transport Rule, EPA believes that there has been proper consultation and coordination with Indian t ribal governments for the Transport Rule program inclusive of th is proposal. As required by section 7(a) of the Executive Order, EPA’s Tribal Consultation Official has certified that the requirements of the Executive Order have been met in a meaningful and timely manner. A copy of the certification is included in the docket for the final Transport Rule . G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks Executive Order 13045 (62 FR 19,885, April 23, 1997) applies to any rule that: 1) is determined to be “economically significant” as defined under EO 12866, and 2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on*** E.O. 12866 Review

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Page 25 of 29 children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of this planned rule on children, and explain why this planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. As described in section XII.G of the preamble to t he finale Transport Rule, the Transport Rule program inclusive of this proposal is not subject to Executive Order 13045 because it does not involve decisions that increase environmental health or safety risks that may disproportionately affect children. The EPA believes that the emissions reductions from the strategies in the Transport Rule program inclusive of this proposal will further improve air quality and will further improve children’s health.
H. Executive Order 13211: Actions that Significantly A ffect Energy Supply, Distribution, or Use Executive Order 13211 (66 FR 28355, May 22, 2001) provides that agencies shall prepare and submit to the Administrator of the Office of Regulatory Affairs, OMB, a Statement of Energy Effects for certain actions ide ntified as “significant energy actions.” Section 4(b) of Executive Order 13211 defines “significant energy action” as “any action by an agency (normally published in the Federal Register ) that promulgates or is expected to lead to the promulgation of a fi nal rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1) (i) that is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy;*** E.O. 12866 Review

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Page 26 of 29 or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action.” This rule is a significant regulatory action under Executive Order 12866, and this rule is likely to have a significant adverse effect on the supply, distribution, or use of energy. EPA prepared a Statement of Energy Effects for the transpo rt Rule program inclusive of this proposal which appears in section XII.H of the preamble to the final Transport Rule. EPA believes that there is no impact to the energy supply beyond that which is reported for the Transport Rule program inclusive of this proposal in the final Transport Rule .
I. National Technology Transfer Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (‘‘NTTAA’’), Public Law 104

– 113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by volun tary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards. As described in section XII.I of the preamble to the final Transpor t Rule, the Transport Rule program inclusive of this proposal will require all sources to meet the applicable monitoring*** E.O. 12866 Review

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Page 27 of 29 requirements of 40 CFR part 75. Part 75 already incorporates a number of voluntary consensus standards.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low

- Income Populations Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal age ncies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority, low

- income, and Tribal populations in the United States. During development of this Transport Rule program inclusive of this proposal, EPA considered its impacts on low

- income, minority, and tribal communities in sever al ways and provided multiple opportunities for these communities to meaningfully participate in the rulemaking process. As described in section XII.J of the preamble to the final transport Rule, EPA believes that the final remedy in the Transport Rule pr ogram inclusive of this proposal addresses potential environmental justice concerns about localized hot spots and reduces ambient concentrations of pollution where they are most needed by sensitive and vulnerable populations . EPA believes that the vast maj ority of communities and individuals in areas covered by the Transport Rule program inclusive of this proposal, including numerous low

- income, minority, and tribal individuals and communities in both rural areas and inner cities in the eastern and central U.S.,*** E.O. 12866 Review

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Page 28 of 29 will see significant improvements in air quality and resulting improvements in health. EPA’s assessment of the effects of the final Transport Rule program inclusive of this proposal on these communities is detailed in section XII.J of the preamble to the final Transport Rule. Based on this assessment, EPA concludes that we do not expect disproportionately high and adverse human health or environmental effects on minority, low

- income, or tribal populations in the United States as a result of implementi ng the Transport Rule program inclusive of this proposal.*** E.O. 12866 Review

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Page 29 of 29 Inclusion of Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin in the Federal Implementation Plans to Reduce Interstate Transport of Ozone

—Page 29 of 29 List of Subjects in 40 CFR Part 52 Administrative practice and procedure, Air pollution control, Intergovernmental relations, Nitrogen oxides, Ozone, Particulate matter, Regional haze, Reporting and recordkeeping requirements, Sulfur dioxide. List of Subjects in 40 CFR Part 97 Administrat ive practice and procedure, Air pollution control, Electric utilities, Nitrogen oxides, Reporting and recordkeeping requirements, Sulfur dioxide.

___________________________________ Dated:

___________________________________ Lisa P. Jackson, Administrator