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data substitution was conducted. The 24-hour mean was recalculated, and the resulting 2009–2011 PM 2.5 24-hour design value with data substitution is 27

mg/m 3 . The Air Lab monitor has a preliminary 2009–2011 PM 2.5 24-hour design value of 24 mg/m 3 . The monitor had one incomplete quarter during the first quarter of 2010, and PM 10 data
substitution was conducted. The 24- hour mean was recalculated, and the resulting 2009–2011 PM 2.5 24-hour design value with data substitution is 29

mg/m 3 . Because the design values with
data substitution are below the 35 mg/m 3 standard, both monitors are considered to be attaining the 2006 24-hour NAAQS. The official design values of
the monitors are 24 mg/m 3 and 24 mg/m 3

, respectively. On the basis of this review, EPA is proposing to determine that the
Knoxville Area has attained the 2006
24-hour PM 2.5 NAAQS.

C. Has the Knoxville Area met the 2006
24-hour PM 2.5 air quality standard?

EPA has reviewed the ambient air monitoring data for PM 2.5 , consistent with the requirements contained in 40 CFR part 50 and recorded the data in the EPA AQS database, for the Knoxville
Area. Based on EPA’s review of the data for 2009–2011, EPA proposes to
determine that the Area attained the
2006 24-hour PM 2.5 NAAQS.

V. What is the effect of these actions?

If these proposed determinations of attaining data are made final, the requirements for the Knoxville Area to
submit attainment demonstrations and associated RACM, RFP plans, contingency measures, and any other planning SIPs related to attainment of
either the 1997 annual or the 2006 24-
hour PM 2.5 NAAQS would be suspended for so long as the Area continues to attain the applicable PM 2.5 NAAQS. See 40 CFR 51.1004(c). Notably, as described below, any such determination would not be equivalent to the redesignation of the Area to
attainment for the 1997 annual or 2006
24-hour PM 2.5 NAAQS.

If these proposed rulemakings are finalized and EPA subsequently determines, after notice-and-comment rulemaking in the Federal Register , that
the Area has violated either the 1997
annual or 2006 24-hour PM 2.5 NAAQS, the basis for the suspension of the specific requirements would no longer
exist for the Knoxville Area for the NAAQS (i.e, the 1997 annual or the 2006 24-hour NAAQS) which was violated, and the Area would thereafter have to address the applicable requirements for that particular NAAQS. See 40 CFR 51.1004(c). Finalizing these proposed actions would not constitute a redesignation of
the Area to attainment of the 1997
annual or 2006 24-hour PM 2.5 NAAQS under section 107(d)(3) of the CAA. Further, finalizing these proposed actions does not involve approving a maintenance plan for the Area as required under section 175A of the CAA, nor would it find that the Area has met all other requirements for redesignation. Even if EPA finalizes the proposed actions, the designation status
of the Knoxville Area would remain
nonattainment for the 1997 annual and
2006 24-hour PM 2.5 NAAQS until such
time as EPA determines that the Area meets the CAA requirements for redesignation to attainment and takes action to redesignate the Area.

If the Knoxville Area continues to
monitor attainment of the 1997 annual

PM 2.5 NAAQS, the requirements for the
Knoxville Area to submit an attainment demonstration and associated RACM, RFP plan, contingency measures, and any other planning SIPs related to
attainment of the 1997 annual PM 2.5 NAAQS will remain suspended. Further, if the Knoxville Area continues
to monitor attainment of the 2006 24-
hour PM 2.5 NAAQS, the requirements
for the Knoxville Area to submit an
attainment demonstration and associated RACM, RFP plan, contingency measures, and any other planning SIPs related to attainment of
the 2006 24-hour PM 2.5 NAAQS will remain suspended.

VI. Statutory and Executive Order

Reviews

These actions propose to make determinations of attaining data based on air quality, and would, if finalized, result in the suspension of certain federal requirements, and it would not impose additional requirements beyond those imposed by state law. For that reason, these proposed actions:

• Are not ‘‘significant regulatory actions’’ subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Do not impose an information collection burden under the provisions of the Paperwork Reduction Act (44

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

• Are certified as not having a significant economic impact on a
substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Do not contain any unfunded mandate or significantly or uniquely affect small governments, as described
in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4); • Do not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Are not economically significant regulatory actions based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Are not significant regulatory actions subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Are not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Do not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994). In addition, these proposed 1997 annual
and 2006 24-hour PM 2.5 NAAQS
determinations for the Knoxville Area do not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose
substantial direct costs on tribal governments or preempt tribal law. For purposes of judicial review, the two determinations proposed by today’s
action are severable from one another.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Particulate matter, Reporting and recordkeeping requirements.

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

Dated: May 17, 2012.
A. Stanley Meiburg,
Acting Regional Administrator, Region 4.

[FR Doc. 2012–13715 Filed 6–5–12; 8:45 am]

**BILLING CODE 6560–50–P**

**ENVIRONMENTAL PROTECTION**
**AGENCY**

**40 CFR Part 52**

**[EPA–R04–OAR–2011–0227; FRL–9681–7]**

**Approval and Promulgation of Implementation Plans; Kentucky;**  **Approval of Revisions to the Jefferson County Portion of the Kentucky SIP;**  **New Source Review; Prevention of Significant Deterioration** 

**AGENCY :**  Environmental Protection Agency (EPA).

**ACTION :**  Proposed rule.


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**SUMMARY :**  EPA is proposing to approve multiple revisions to the Jefferson County portion of the Kentucky State Implementation Plan (SIP), submitted by the Commonwealth of Kentucky, through the Kentucky Division for Air Quality (KDAQ), to EPA in two submittals dated June 1, 2009, and February 8, 2011. These proposed revisions were submitted by KDAQ on
behalf of the Louisville Metro Air Pollution Control District (LMAPCD), (also referred to as Jefferson County) and
modifies the LMAPCD New Source Review (NSR) Prevention of Significant Deterioration (PSD) permitting regulations. The proposed revisions incorporate by reference (IBR) federal NSR PSD requirements promulgated in the Greenhouse Gas (GHG) Tailoring Rule (hereafter referred to as the ‘‘GHG Tailoring Rule’’), requirements for the fine particulate matter (also known as

PM 2.5 ) national ambient air quality standards (NAAQS) as amended in

EPA’s 2008 NSR PM 2.5 Implementation Rule (hereafter referred to as the ‘‘NSR

PM 2.5 Rule’’), the 1997 8-Hour Ozone NAAQS Implementation Rule NSR Update Phase II (hereafter referred to as the ‘‘Phase II Rule’’), and the 2002 NSR Reform Rule, into the Jefferson County portion of the Kentucky SIP. EPA is proposing approval of Jefferson County’s June 1, 2009, and February 8, 2011, SIP revisions because the Agency
has determined that these SIP revisions
are in accordance with the Clean Air Act (CAA or Act) and EPA regulations regarding the PSD permitting program.

**DATES :**  Comments must be received on or before July 6, 2012.

**ADDRESSES :**  Submit your comments, identified by Docket ID No. EPA–R04– OAR–2011–0227 by one of the following
methods:

1. www.regulations.gov: Follow the on-line instructions for submitting

comments.

2. Email: R4-RDS@epa.gov.

3. Fax: (404) 562–9019.

4. Mail: EPA–R04–OAR–2011–0227, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303–8960.

5. Hand Delivery or Courier: Lynorae Benjamin, Chief, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303–8960. Such deliveries are only accepted during the Regional Office’s normal hours of operation. The Regional Office’s official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays.

Instructions: Direct your comments to
Docket ID No. ‘‘EPA–R04–OAR–2011– 0227.’’ EPA’s policy is that all
comments received will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless
the comment includes information
claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit through www.regulations.gov or email, information that you consider to be CBI or otherwise protected. The www.regulations.gov Web site is an ‘‘anonymous access’’ system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to EPA without going through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your
name and other contact information in the body of your comment and with any disk or CD–ROM you submit. If EPA cannot read your comment due to
technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment.
Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or
viruses. For additional information about EPA’s public docket visit the EPA Docket Center homepage at http:// www.epa.gov/epahome/dockets.htm.

Docket: All documents in the
electronic docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, i.e., CBI or other
information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket
materials are available either electronically in www.regulations.gov or in hard copy at the Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303–8960. EPA requests that if at all possible, you contact the person listed in the **FOR**

**FURTHER INFORMATION CONTACT** section to schedule your inspection. The Regional
Office’s official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays.

**FOR FURTHER INFORMATION CONTACT :**  For information regarding the Jefferson County portion of the Kentucky SIP, contact Ms. Twunjala Bradley, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303–8960. Ms. Bradley’s telephone number is (404) 562–9352; email address: bradley.twunjala@epa.gov. For information regarding the GHG Tailoring Rule, 2002 NSR Reform and

NSR PM 2.5 Rule, contact Yolanda Adams, Air Permits Section, at the same address above. Ms. Adams’ telephone number is (404) 562–9214; email
address: adams.yolanda@epa.gov. For information regarding the Phase II Rule and ozone NAAQS, contact Jane Spann, Regulatory Development Section, at the same address above. Ms. Spann’s telephone number is (404) 562–9029;
email address: spann.jane@epa.gov. For information regarding the PM 2.5 NAAQS, contact Mr. Joel Huey, Regulatory Development Section, at the same address above. Mr. Huey’s telephone number is (404) 562–9104;
email address: huey.joel@epa.gov.

**SUPPLEMENTARY INFORMATION :** 

Table of Contents

I. What actions are proposed in this notice?II. What is EPA’s proposed action for GHGemitting sources?

III. What is EPA’s proposed action for the

NSR PM 2.5 Rule?

IV. What is EPA’s proposed action for the
Phase II Rule?

V. What are EPA’s proposed actions for NSR Reform and Reasonable Possibility?

VI. What is EPA’s proposed action for the
automatic rescission clause?

VII. Proposed Actions VIII. Statutory and Executive Order

Reviews

I. What actions are proposed in this

notice?

On June 1, 2009, and February 8, 2011, the Commonwealth of Kentucky through the KDAQ (and on behalf of LMAPCD) submitted two SIP revisions to EPA for approval into the Jefferson County portion of the Kentucky SIP to adopt federal NSR PSD permitting requirements. The SIP revisions consist of changes to the LMAPCD Air Quality Regulations, Regulation 2 Permit Requirements: Regulation 2.05— Prevention of Significant Deterioration


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1 With respect to the NSR PM 2.5 Rule, Phase II Rule and NSR Reform, Jefferson County’s SIP revisions only address PSD requirements at Regulation 2.05. The nonattainment NSR (NNSR) provisions for Jefferson County (Regulation 2.04) for these provisions are still under development by

LMAPCD. 2 On March 31, 2010, EPA stayed the Fugitive Emissions Rule (73 FR 77882) for 18 months to October 3, 2011, to allow the Agency time to propose, take comment and issue a final action regarding the inclusion of fugitive emissions in NSR applicability determinations. This stay was established as a result of EPA granting the Natural Resource Defense Council’s petition for reconsideration on the original Fugitive Emissions

Rule. See 73 FR 77882 (December 19, 2008). On March 30, 2011 (76 FR 17548), EPA proposed an interim rule which superseded the March 31, 2010, stay and clarified and extended the stay of the Fugitive Emission Rule until EPA completes its reconsideration. The interim rule simply reverts the CFR text back to the language that existed prior to the Fugitive Emissions Rule changes in the December 19, 2008, rulemaking. EPA plans to issue a final rule affirming the interim rule as final. The final rule will remain in effect until EPA completes

its reconsideration. 3 The GHG Tailoring Rule also applies to the title V program, which requires operating permits for existing sources. However, today’s action does not affect LMAPCD’s title V program.

4 ‘‘Endangerment and Cause or Contribute Finding for Greenhouse Gases Under Section 202(a) of the Clean Air Act.’’ 74 FR 66496 (December 15, 2009).

5 ‘‘Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting Programs.’’ 75 FR 17004 (April 2, 2010).

6 ‘‘Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule.’’ 75 FR 25324 (May 7, 2010). of Air Quality and address several NSR PSD permitting requirements promulgated at 40 CFR 52.21. Specifically, the June 1, 2009, SIP revision: (1) Incorporates provisions for implementing the PSD program for the

PM 2.5 NAAQS as promulgated in the

NSR PM 2.5 Rule, 1 73 FR 28321 (May 16, 2008); (2) adopts PSD provisions related to the implementation of the 1997 8- hour ozone Phase II Rule including nitrogen oxides (NO X) as a precursor to ozone, 70 FR 71612 (November 29, 2005); and (3) adopts federal PSD regulations established in the 2002 NSR Reform Rules, 67 FR 80186 (December 31, 2002) and the NSR Reasonable Possibility Rule, 72 FR 72607 (December 21, 2007). These PSD permitting provisions became effective in Jefferson County on May 20, 2009. The February 8, 2011, SIP revision provides Jefferson County with the authority to regulate GHG under its PSD program and establishes appropriate emission thresholds for determining which new stationary sources and modification projects become subject to LMAPCD’s PSD permitting requirements for their GHG emissions as promulgated in the GHG Tailoring Rule, 75 FR 31514 (June 3, 2010). These GHG PSD applicability provisions became effective in Jefferson County on November 17, 2010. In addition, the February 8, 2011, submittal adopts a provision that would automatically render Jefferson County’s Regulation 2.05 or a portion thereof
invalid in the wake of certain court decisions or other events (the ‘‘automatic rescission clause’’). Approval of Jefferson County’s GHG permitting regulations also includes a proposal to simultaneously rescind the federal implementation plan (FIP) that EPA promulgated on January 14, 2011.

See 76 FR 2581. For more information on the Jefferson County FIP see Section II of this rulemaking. Pursuant to section 110 of the CAA, EPA is proposing to approve these changes into the Jefferson County portion of the Kentucky SIP.

In addition to incorporating the changes discussed above, Jefferson County’s SIP revisions also include PSD permitting provisions that: (1) Exclude facilities that produce ethanol through a natural fermentation process from the definition of ‘‘chemical process plants’’ in the major NSR source permitting program as amended in the Ethanol Rule, 72 FR 24060 (May 1, 2007); and (2) IBR changes pursuant to EPA’s Fugitive Emissions Rule, 73 FR 77882 (December 19, 2008). 2 In today’s proposed rulemaking, EPA is not proposing to take action on LMAPCD’s changes to its PSD regulations to adopt provisions promulgated in the Ethanol Rule nor is EPA proposing to take action on LMAPCD’s changes to incorporate the provisions of the Fugitive Emission
Rule.

LMAPCD IBR the federal PSD permitting requirements found at 40 CFR 52.21 to update its permitting program at Regulation 2.05. Jefferson County’s practice for revising its PSD regulations is to IBR into its SIP the
version of the Code of Federal Regulations (at 40 CFR 52.21) that is in effect as of a specified date. LMAPCD’s Regulation 2.05 contains the preconstruction review program that provides for the prevention of significant deterioration of ambient air quality as required under part C of title I of the CAA (the PSD program). Jefferson County’s June 1, 2009, SIP revision, which provided version 9 of LMAPCD’s Regulation 2.05, IBR the federal PSD regulations as set forth at 40 CFR 52.21, and as amended as of July 1, 2008. Subsequently, the February 8, 2011, SIP revision, which provided version 10 of LMAPCD’s Regulation 2.05, IBR federal PSD regulations as set forth at 40 CFR 52.21, and as amended as of July 1, 2010, thereby superseding version 9 of Regulation 2.05. Throughout this rulemaking, EPA will refer to the June 1, 2009, and February 8, 2011, SIP revisions as the ‘‘Jefferson County’s SIP revisions.’’

II. What is EPA’s proposed action for GHG-emitting sources?

On February 8, 2011, KDAQ submitted a request to EPA to approve changes to the Jefferson County portion of the Kentucky SIP to incorporate federal requirements for NSR PSD permitting. These adopted rules became effective in Jefferson County on November 17, 2010. These amendments provide Jefferson County with the authority to regulate GHG under its PSD program and establish PSD applicability
thresholds for GHG emissions in LMAPCD’s PSD regulations at the same
emissions thresholds and in the same timeframes as those specified by EPA in the GHG Tailoring Rule. By incorporating the GHG Tailoring Rule thresholds into the Jefferson County portion of the Kentucky SIP, KDAQ is ensuring that smaller GHG sources emitting less than these thresholds will not be subject to PSD permitting requirements for their GHG emissions. In today’s action, pursuant to section 110 of the CAA, EPA is proposing to approve these changes into the Jefferson County portion of the Kentucky SIP. 3 Approval of Jefferson County’s GHG permitting regulations also includes a proposal to simultaneously rescind the FIP that EPA promulgated on January

14, 2011. See 76 FR 2581. More information regarding Jefferson County’s
FIP is summarized below. This section briefly summarizes EPA’s GHG-related actions that provide the background for today’s proposed action. More detailed discussion of the background is found in the preambles for those actions cited
herein.

A. Background

EPA has recently undertaken a series of actions pertaining to the regulation of GHGs that, although for the most part are distinct from one another, establish the overall framework for today’s final action on the Jefferson County portion of the Kentucky SIP. Four of these actions include, as they are commonly called, the ‘‘Endangerment Finding’’ and ‘‘Cause or Contribute Finding,’’ 4 which EPA issued in a single final action; the ‘‘Johnson Memo Reconsideration;’’ 5 the ‘‘Light-Duty Vehicle Rule;’’ 6 and the ‘‘Tailoring Rule.’’ Taken together and in conjunction with the CAA, these actions established regulatory requirements for
GHGs emitted from new motor vehicles and new motor vehicle engines;


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7 On December 30, 2010, (75 FR 82536) EPA promulgated the rule entitled ‘‘Limitation of Approval of Prevention of Significant DeteriorationProvisions Concerning Greenhouse Gas EmittingSources in State Implementation Plans; Final Rule; (the ‘‘Narrowing Rule’’). In the Narrowing Rule, EPA explained that by ‘‘narrowing’’ its prior approval of a SIP-approved PSD program, EPA could ensure that for federal purposes, GHG sources below the Tailoring Rule’s thresholds would not be obligated to hold PSD permits until the state develops and submits a revised PSD program that EPA approves, either because the state adopts the Tailoring Rule thresholds or because the state demonstrates that it has adequate resources to administer a program covering GHGs at lower applicability thresholds. See 75 FR at 31518. However, as discussed later in this section, EPA issued a SIP call and FIP for the Jefferson County jurisdiction, and therefore did not narrow federal approval of LMAPCD’s PSD program. 8 EPA’s action on January 14, 2011, to put a FIP in place for Jefferson County, Kentucky does not relate to the rest of Kentucky, as the Commonwealth, through KDAQ submitted a

corrective SIP revision to address the remainder of Kentucky on December 13, 2010. KDAQ’s SIP revision to adopt the GHG Tailoring Rule thresholds for all portions of Kentucky, except Jefferson County, was approved by EPA on December 29, 2010 (75 FR 81868). determined that such regulations, when they took effect on January 2, 2011, subjected GHGs emitted from stationary sources to PSD requirements; and limited the applicability of PSD requirements to GHG sources on a phased-in basis. EPA took this last action in the GHG Tailoring Rule, which, more specifically, established appropriate GHG emission thresholds for determining the applicability of PSD requirements to GHG-emitting sources. In the GHG Tailoring Rule, EPA tailored the applicability criteria that determine
which GHG emission sources become subject to the PSD program of the CAA to relieve overwhelming permitting burdens that would, in the absence of the rule, fall on permitting authorities
and sources. See 75 FR 31514, (June 3, 2010). As EPA explained in the GHG Tailoring Rule, the threshold limitations are necessary because without them PSD would apply to all stationary sources that emit or have the potential
to emit more than 100 or 250 tons of GHG per year as of January 2, 2011. January 2, 2011, was the date when EPA’s Light-Duty Vehicle Rule took effect, imposing control requirements
for the first time on carbon dioxide and other GHGs. EPA asked permitting authorities to confirm that they would follow this implementation approach for their programs, and if they could not, to notify EPA so that the Agency could take appropriate follow-up action to

narrow 7 federal approval of their programs before GHGs became subject to PSD permitting on January 2, 2011.

See 75 FR at 31518.

Recognizing that some states had SIPapproved PSD programs that did not apply PSD to GHGs, EPA issued a SIP call and, for some of these states, a FIP. On December 13, 2010, EPA finalized the rulemaking entitled ‘‘Action to Ensure Authority to Issue Permits Under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Finding of Substantial Inadequacy and SIP Call,’’ Final Rule (hereafter referred to as the ‘‘SIP call’’). See 75 FR 77698. The rule finalized findings of substantial inadequacy and SIP call for 15 state and local permitting authorities (including Jefferson County) where the existing SIP-approved PSD program did not provide authority to regulate GHGs. EPA explained that if a state identified in the SIP call failed to submit the required corrective SIP revision by the applicable deadline, EPA would promulgate a FIP under CAA section 110(c)(1)(A) for that state to govern PSD permitting for GHGs. LMAPCD requested a SIP call deadline of January 1, 2011, to provide
its corrective SIP with the understanding that EPA would put a FIP in place for Jefferson County soon after
that date if a SIP revision was not provided. On January 14, 2011, EPA finalized a FIP for Jefferson County in the rulemaking ‘‘Action to Ensure Authority to Issue Permits Under the Prevention of Significant Deterioration Program to Sources of Greenhouse Gas Emissions: Federal Implementation Plan for Jefferson County, KY,’’ Final Rule (hereafter referred to as ‘‘Jefferson County GHG FIP’’). See 76 FR 2581. This rulemaking established a FIP for Jefferson County because LMAPCD, through KDAQ, was unable to submit, by its January 1, 2011, deadline, the corrective SIP revision to apply its PSD program to sources of GHG. 8 The FIP was put in place to ensure that a permitting authority (i.e., EPA) would be available to issue preconstruction PSD permits to GHG-emitting sources in Jefferson County, if necessary.

B. Jefferson County’s Actions

In response to EPA’s request in the GHG Tailoring Rule that permitting
authorities confirm whether their SIPs provide authority to implement the GHG Tailoring Rule thresholds, LMAPCD provided a letter (commonly referred to as the 60-day letter) to EPA on August 2, 2010, explaining that LMAPCD * * * ‘‘[i]s authorized in its existing SIP to apply the meaning of the term ‘‘subject to regulation’’ established by EPA in the GHG Tailoring Rule in both the PSD and title V permitting programs.’’ LMAPCD further explained
that it would need to amend its SIP for Jefferson County to enable it to implement the GHG Tailoring Rule
thresholds. See the docket for this proposed rulemaking for a copy of LMAPCD’s 60-day letter.

However, on October 4, 2010, in response to EPA’s request in the September 2, 2010, proposed SIP call Rule, LMAPCD submitted a letter to EPA changing its view of whether Jefferson County’s SIP-approved PSD regulations provided authority to regulate GHGs (referred to as the 30-day letter). Jefferson County’s 30-day letter acknowledged that while its existing SIP could be interpreted as providing the Agency authority to issue PSD permits to GHG-emitting sources, this interpretation would be a departure from its past practice of utilizing rulemaking procedures to update the SIP to incorporate revised EPA regulations.’’ See Docket ID: EPA–R04–
OAR–2011–0227 for LMAPCD’s October 4, 2010, 30-day letter. In a follow-up letter dated October 19, 2010, LMAPCD reiterated its position that it did not have the authority, under its existing SIP, to issue PSD permits to regulate GHG-emitting sources without going through rulemaking. See DOCKET ID:
EPA–R04–OAR–2011–0227 for LMAPCD’s October 19, 2010, follow-up
letter.

With the final GHG SIP call (75 FR 77698) and the Jefferson County GHG FIP rulemaking (76 FR 2581), EPA took steps to ensure that LMAPCD, whichdid not interpret its exiting SIPapproved PSD program to provideauthority to issue PSD permits to GHGemitting sources, would not be at risk for permitting interruptions related to GHG by either having EPA issue permits for GHG through a FIP or be in a position for EPA to use delegation to allow LMAPCD to issue permits related to GHGs. More detail regarding EPA’s analysis of the proposed changes to the Jefferson County portion of the Kentucky SIP (as provided in the February 8, 2011, revision) is provided
below.

C. EPA’s Analysis of Jefferson County’s SIP Revision To Adopt the GHG Tailoring Rule

On February 8, 2011, KDAQ, on behalf of LMAPCD, submitted to EPA a revision to the Jefferson County portion of Kentucky’s SIP to IBR NSR PSD requirements for GHG. Specifically, the February 8, 2011, SIP revision includes changes to LMAPCD’s Regulation 2.05— Prevention of Significant Deterioration of Air Quality (version 10) to provide authority to LMAPCD to regulate GHG under the PSD program; and establish appropriate PSD applicability


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thresholds for GHGs, consistent with EPA’s Tailoring Rule.

LMAPCD is currently the SIPapproved permitting authority for the PSD program in Jefferson County, Kentucky. As mentioned above, LMAPCD does not interpret the current SIP-approved version of its PSD regulations at Regulation 2.05 (i.e., version 9), which IBR the federal PSD regulations, to be applicable to GHG. In correspondences dated October 4, 2010, and October 19, 2010, LMAPCD notified EPA that it did not have the authority to regulate GHG under the PSD program, and thus was in the process of revising its regulations (the subject of this proposed action) to provide LMAPCD with this authority. The February 8,

2011 SIP revision IBR the federal PSD regulations at 40 CFR 52.21 as of July 2010 into Jefferson County Regulation

2.05 to include the relevant federal GHG Tailoring Rule revisions that provide LMAPCD with the authority to regulate GHG under the PSD program and

establish the thresholds for GHG permitting applicability. The GHG Tailoring Rule changes that this proposed action would incorporate into the Jefferson County portion of Kentucky’s SIP define the term ‘‘subject to regulation’’ for the PSD program and define ‘‘greenhouse gases’’ and ‘‘tons per year (tpy) carbon dioxide equivalent emissions’’ (CO 2 e). Additionally, the changes specify the methodology for calculating an emissions increase for GHG, the applicable thresholds for GHG emissions subject to PSD, and the schedule for when the applicability

thresholds take effect. See 75 FR at 31606–31607. EPA has preliminarily determined that these provisions, which provide LMAPCD with the authority to regulate GHG under the PSD program

and establish the thresholds for GHG permitting applicability, are consistent with EPA’s PSD regulations for GHG emitting sources as promulgated in the GHG Tailoring Rule and section 110 of the CAA. Therefore, EPA is proposing to approve the GHG PSD permitting revision into the Jefferson County portion of Kentucky’s SIP. See GHG Tailoring Rule, 75 FR at 31561. In addition, EPA is proposing to rescind the FIP promulgated January 14, 2011, codified in 40 CFR 52.37(b)(7), thatensures the availability of a PSDpermitting authority for GHG-emitting sources in Jefferson County, Kentucky. This FIP will no longer be required once the proposed GHG PSD permitting revision has been approved into the Jefferson County portion of Kentucky’s

SIP. III. What is EPA’s proposed action for
the NSR PM2.5 Rule?

A. Background on Fine Particulate

Matter

Today’s proposed action to revise the Jefferson County portion of the Kentucky SIP also regards EPA’s ‘‘Implementation of the New Source Review (NSR) Program for Particulate
Matter Less than 2.5 Micrometers (PM 2.5 ),’’ Final Rule (NSR PM 2.5 Rule), 73 FR 28321 (May 16, 2008). In the NSR

PM 2.5 Rule, EPA finalized regulations to implement the NSR program for the

PM 2.5 NAAQS. As a result of EPA’s final

NSR PM 2.5 Rule, states were required to provide SIP revisions no later than May 16, 2011, to address these requirements for both the PSD and NNSR programs. Jefferson County’s June 1, 2009, and February 8, 2011, SIP revisions both address the PSD requirements for the

PM 2.5 NAAQS. More detail on the NSR

PM 2.5 Rule can be found in EPA’s May 16, 2008, final rule and is summarized
below.

Fine particles in the atmosphere are made up of a complex mixture of components. Common constituents include sulfate (SO 4); nitrate (NO 3 ); ammonium; elemental carbon; a great variety of organic compounds; and inorganic material (including metals, dust, sea salt, and other trace elements) generally referred to as ‘‘crustal’’ material, although it may contain
material from other sources. Airborne particulate matter (PM) with a nominal aerodynamic diameter of 2.5 micrometers or less (a micrometer is one-millionth of a meter, and 2.5
micrometers is less than one-seventh the average width of a human hair) are considered to be ‘‘fine particles’’ and are
also known as PM 2.5 . ‘‘Primary’’ particles are emitted directly into the air as a solid or liquid particle (e.g., elemental carbon from diesel engines or fire activities, or condensable organic particles from gasoline engines). ‘‘Secondary’’ particles (e.g., SO 4 and

NO 3 ) form in the atmosphere as a result
of various chemical reactions.

The health effects associated with exposure to PM 2.5 include potential aggravation of respiratory and cardiovascular disease (i.e., lung disease, decreased lung function,
asthma attacks and certain cardiovascular issues). Epidemiological
studies have indicated a correlation
between elevated PM 2.5 levels and premature mortality. Groups considered especially sensitive to PM 2.5 exposure include older adults, children, and individuals with heart and lung diseases. For more details regarding
health effects and PM 2.5 see EPA’s Web site at http://www.epa.gov/air/urbanair/ pm/index.html (See heading ‘‘Health’’).

On July 18, 1997, EPA revised the NAAQS for PM to add new standards for fine particles, using PM 2.5 as the indicator. Previously, EPA used PM 10 (inhalable particles smaller than or equal to 10 micrometers in diameter) as the indicator for the PM NAAQS. EPA established health-based (primary)
annual and 24-hour standards for PM 2.5 , setting an annual standard at a level of 15.0 micrograms per cubic meter (mg/m 3 ) and a 24-hour standard at a
level of 65 mg/m 3

. See 62 FR 38652. At the time the 1997 primary standards were established, EPA also established welfare-based (secondary) standards identical to the primary standards. The secondary standards are designed to protect against major environmental
effects of PM 2.5, such as visibility impairment, soiling, and materials damage. On October 17, 2006, EPA revised the primary and secondary 24- hour NAAQS for PM 2.5 to 35 mg/m 3 and retained the existing annual PM 2.5 NAAQS of 15.0 mg/m 3

. See 71 FR 61236.

B. Implementation of NSR for the PM 2.5 NAAQS

After EPA promulgated the NAAQS
for PM 2.5 in 1997, the Agency issued a guidance document entitled ‘‘Interim Implementation of New Source Review Requirements for PM 2.5 .’’ John S. Seitz, EPA, October 23, 1997 (the ‘‘Seitz memo’’). The Seitz memo was designed to help states implement NSR requirements pertaining to the new

PM 2.5 NAAQS in light of technical difficulties posed by PM 2.5 at that time. Specifically, the Seitz memo stated: ‘‘PM–10 may properly be used as a surrogate for PM–2.5 in meeting NSR requirements until these difficulties are resolved’’ (the PM 10 Surrogate Policy).

EPA also issued a guidance document entitled ‘‘Implementation of New Source Review Requirements in PM 2.5 Nonattainment Areas’’ (the ‘‘2005 PM 2.5 Nonattainment NSR Guidance’’), on April 5, 2005, the date that EPA’s PM 2.5 nonattainment area designations became effective for the 1997 NAAQS. This memorandum provided guidance on the implementation of the nonattainment major NSR provisions in PM 2.5 nonattainment areas in the interim period between the effective date of the

PM 2.5 nonattainment area designations (April 5, 2005) and EPA’s promulgation
of final PM 2.5 NNSR regulations. Besides re-affirming the continuation of the

PM 10 Surrogate Policy for PM 2.5 attainment areas set forth in the Seitz memo, the 2005 PM 2.5 Nonattainment
NSR Guidance recommended that until EPA promulgated the PM 2.5 major NSR


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9 Additional information on this issue can also be found in an August 12, 2009, final order on a title V petition describing the use of PM 10 as a surrogate
for PM 2.5 . In the Matter of Louisville Gas & Electric Company, Petition No. IV–2008–3, Order on Petition (August 12, 2009) (available at http:// www.epa.gov/region07/air/title5/petitiondb/ petitions/lg

_e

_2nddecision2006.pdf ). 10 Sources that applied for a PSD permit under the federal PSD program on or after July 15, 2008, are already excluded from using the 1997 PM 10 Surrogate Policy as a means of satisfying the PSD requirements for PM 2.5

. See 73 FR 28321.

11 On July 21, 2011, as a result of reconsidering the interpollutant (IPT) policy, EPA issued a memorandum indicating that the existing preferred precursor offset ratios associated with the IPT policy and promulgated in the NSR PM 2.5 Rule were no longer considered approvable. The memorandum stated that any PM 2.5 precursor offset ratio submitted as part of the NSR SIP for PM 2.5 nonattainment areas would need to be accompanied by a technical demonstration exhibiting how the ratios are suitable for that particular nonattainment

area. See Memorandum from Gina McCarthy to Regional Air Division Directors, ‘‘Revised Policy to Address Reconsideration of Interpollutant Trading Provisions for Fine Particles (PM 2.5 )’’ (July 21, 2011) (available at http://www.epa.gov/nsr/documents/ 20110721PM25InterpollutantTradingPolicy.pdf. 12 In addition to the NSPS for PM, it is noted that states regulated ‘‘particulate matter emissions’’ for many years in their SIPs for PM, and the same indicator has been used as a surrogate for determining compliance with certain standards contained in 40 CFR part 63, regarding National

Emission Standards for Hazardous Air Pollutants. regulations, ‘‘[s]tates should use a PM 10 nonattainment major NSR program as a surrogate to address the requirements of nonattainment major NSR for the PM 2.5 NAAQS.’’

On May 16, 2008, EPA finalized a rule to implement the 1997 PM 2.5 NAAQS, including changes to the NSR program.

See 73 FR 28321. The 2008 NSR PM 2.5 Rule revised the NSR program requirements to establish the framework for implementing preconstruction permit review for the PM 2.5 NAAQS in
both attainment and nonattainment
areas. The 2008 NSR PM 2.5 Rule requires that major stationary sources seeking permits must begin directly satisfying
the PM 2.5 requirements, as of the effective date of the rule, rather than relying on PM 10 as a surrogate, with two exceptions. The first exception is a ‘‘grandfathering’’ provision in the federal PSD program at 40 CFR 52.21(i)(1)(xi). This grandfathering provision applied to sources that had applied for, but had not yet received, a final and effective PSD permit before the July 15, 2008, effective date of the May 2008 final rule. The second exception was that states with SIP-approved PSD programs could continue to implement
the Seitz Memo’s PM 10 Surrogate Policy for up to three years (until May 2011)
or until the individual revised state PSD programs for PM 2.5 are approved by EPA, whichever comes first. For
additional information on the NSR

PM 2.5 Rule, see 73 FR 28321. 9

On February 11, 2010, EPA proposed to repeal the grandfathering provision
for PM 2.5 contained in the federal PSD program at 40 CFR 52.21(i)(1)(xi) and to end early the PM 10 Surrogate Policyapplicable in states that have a SIPapproved PSD program. See 75 FR 6827. In support of this proposal, EPA explained that the PM 2.5 implementation issues that led to the adoption of the PM 10 Surrogate Policy in 1997 had been largely resolved to a degree sufficient for sources and permitting authorities to conduct meaningful permit-related PM 2.5 analyses. On May 18, 2011, EPA took final action to repeal the PM 2.5 grandfathering provision at 40 CFR 52.21(i)(1)(xi). See 76 FR 28646. This
final action ended the use of the 1997

PM 10 Surrogate Policy for PSD permits under the federal PSD program at 40 CFR 52.21. In effect, any PSD permit applicant previously covered by the grandfathering provision (for sources that completed and submitted a permit application before July 15, 2008) 10 that
did not have a final and effective PSD permit before the effective date of the repeal will not be able to rely on the

1997 PM 10 Surrogate Policy to satisfy the PSD requirements for PM 2.5 unless the application includes a valid surrogacy demonstration. See 76 FR 28646. In the February 8, 2011, SIP revision, LMAPCD elected to IBR the grandfathering provision at 40 CFR 52.21(i)(1)(xi) in its PSD regulations at Regulation 2.05. However, since the rule is repealed, EPA is not taking action to approve this provision into the Jefferson County portion of the Kentucky SIP.

The NSR PM 2.5 Rule also established the following NSR requirements to implement the PM 2.5 NAAQS: (1) Require NSR permits to address directly
emitted PM 2.5 and precursor pollutants; (2) establish significant emission rates
for direct PM 2.5 and precursor pollutants (including sulfur dioxide (SO 2) and

NO X); (3) establish PM 2.5 emission offsets; and (4) require states to account for gases that condense to form particles (‘‘condensables’’) in PM 2.5 and PM 10 emission limits in PSD or nonattainment NSR permits. In addition, the NNSR PM 2.5 Rule gives states the option of allowing interpollutant trading for the purpose of precursor offsets under the PM 2.5 NNSR

program. 11 Jefferson County’s June 1, 2009, and February 8, 2011, SIP revisions address only the PSD requirements related to EPA’s May 16,
2008, NSR PM 2.5 Rule.

In the NSR PM 2.5 Rule, EPA also revised the definition of ‘‘regulated NSR pollutant’’ for PSD and NNSR to add a paragraph providing that ‘‘particulate matter (PM) emissions, PM 2.5 emissions
and PM 10 emissions’’ shall include gaseous emissions from a source or activity which condense to form particulate matter at ambient temperatures and that on or after January 1, 2011, such condensable particulate matter shall be accounted for in applicability determinations and in establishing emissions limitations for
PM, PM 2.5 and PM 10 in permits issued.

See 40 CFR 51.166(b)(49)(vi), 52.21(b)(50)(vi) and ‘‘Emissions Offset Interpretative Ruling’’ (40 CFR Part 51, Appendix S). A similar paragraph added
to the NNSR rule does not include ‘‘particulate matter (PM) emissions.’’

See 40 CFR 51.165(a)(1)(xxxvii)(D).

On March 12, 2012, EPA proposed a rulemaking to amend the definition of ‘‘regulated NSR pollutant’’ promulgated
in the 2008 NSR PM 2.5 Rule regarding the PM condensable provision at 40 CFR 51.166(b)(49)(vi), 52.21(b)(50)(i) and EPA’s Emissions Offset Interpretative Ruling. See 77 FR 15656. The rulemaking proposes to remove the inadvertent requirement in the NSR

PM 2.5 Rule that the measurement of condensable ‘‘particulate matter emissions’’ be included as part of the measurement and regulation of ‘‘particulate matter emissions.’’ The term ‘‘particulate matter emissions’’ includes particles that are larger than

PM 2.5 and PM 10 and is an indicator
measured under various New Source Performance Standards (NSPS) (40 CFR part 60). 12 Jefferson County’s February
11, 2011, SIP revision IBR EPA’s definition for regulated NSR pollutant for condensables (at 40 CFR 52.21(b)(50)(vi)), including the term ‘‘particulate matter emissions’’, as promulgated in the NSR PM 2.5 Rule. EPA’s review of Jefferson County’s February 11, 2011, SIP revision with regards to the NSR PM 2.5 Rule condensable provision is provided
below in Section III.

C. EPA’s Analysis of Jefferson County’s SIP Revision To Adopt the NSR PM 2.5 PSD Permitting Requirements

Jefferson County’s Regulation 2.05— Prevention of Significant Deterioration of Air Quality IBR the provisions at 40 CFR 52.21, as amended in the NSR

PM 2.5 Rule for PSD. Specifically, Jefferson County’s June 1, 2009, and February 8, 2011, proposed SIP revisions IBR the following NSR PM 2.5 provisions for PSD: (1) Requirement for NSR permits to address directly emitted

PM 2.5 and precursor pollutants; (2) significant emission rates for direct


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13 Jefferson County’s SIP submittals proposed for approval in this rulemaking do not include NNSR provisions for the Phase II Rule. These permitting requirements (at Regulation 2.04) are still under development by LMAPCD. PM 2.5 and precursor pollutants (SO 2 and

NO X); (3) PSD and NNSR requirement of
states to address condensable PM in establishing enforceable emission limits
for PM 10 or PM 2.5 ; and (4) PM 2.5 emission offsets Regarding the PM 10 ‘‘grandfathering’’ provision, Jefferson County’s SIP revisions include the provision at 40 CFR 52.21(i)(1)(ix) promulgated in the NSR PM 2.5 Rule. As mentioned in Section III.B, EPA took final action to repeal the PM 10 grandfathering provision on May 18,

2011. See 76 FR 28646. Therefore, EPA is not taking action to approve this provision into the Jefferson County portion of the Kentucky SIP. Jefferson County will need to update its PSD provisions to reflect the repeal of the

PM 10 grandfathering provision in federal regulations at 40 CFR 52.21. At this time Jefferson County’s PSD regulations are approvable because they are at least as stringent as the current federal regulations, and are consistent with
section 110 of the CAA.

Jefferson County’s February 11, 2011 SIP revision also IBR, into the Jefferson County portion of the Kentucky SIP, PSD regulations regarding the requirement to address condensable PM in applicability determinations and in establishing enforceable emission limits in PSD and NNSR permits, as
established in the NSR PM 2.5 Rule. As discussed above in Section III.B, under a separate action, EPA has proposed to
correct the inadvertent inclusion of ‘‘particulate matter emissions’’ in the definition of ‘‘regulated NSR pollutant’’
as an indicator for which condensable
emissions must be addressed. See 77 FR 75656 (March 16, 2012). Further, on May 14, 2012, the State of Kentucky, on behalf of LMAPCD, provided a letter to EPA with clarification of Jefferson County’s intent in light of EPA’s March 12, 2012, proposed rulemaking. Specifically, in the letter, the State of Kentucky requested that EPA not approve (into the Jefferson County portion of the SIP) the term ‘‘particulate matter emissions’’ (at Regulation 2.05) as part of the definition for ‘‘regulated NSR pollutant’’ that condensable
emissions be accounted for in applicability determinations and in establishing emissions limitations for PM. Therefore given the state’s and LMAPCD’s request and EPA’s intention to amend the definition of ‘‘regulated NSR pollutant,’’ EPA is not proposing action to approve the terminology ‘‘particulate matter emissions’’ into the Jefferson County portion of the Kentucky SIP (at Regulation 2.05) for the condensable provision at the definition of ‘‘regulated NSR pollutant.’’ EPA is, however, proposing to approve into the SIP at Regulation 2.05 the remaining condensable requirement at 40 CFR 51.166(b)(49)(vi) that
condensable emissions be accounted for in applicability determinations and in establishing emissions limitations for

PM 2.5 and PM 10. EPA has preliminarily determined that Jefferson County’s June 1, 2009, and February 8, 2011, SIP
revisions are consistent with the NSR

PM 2.5 Rule for PSD and with section 110
of the CAA. See NSR PM 2.5 Rule, 75 FR

31514.

IV. What is EPA’s proposed action for
the Phase II Rule?

A. Background

Today’s proposed action on Jefferson County’s portion of the Kentucky SIP also relates to EPA’s November 29, 2005, Phase II Rule. See 70 FR 71612. In the Phase II Rule, EPA made a number of changes to the NSR rules including: recognizing NO X as an ozone precursor for PSD purposes; changing the NNSR rules that establish major stationary thresholds (marginal, moderate, serious, severe, and extreme nonattainment area classifications) and significant emission rates for the 8-hour
ozone, PM 10 and carbon monoxide NAAQS; revising the criteria for crediting emission reductions credits from operation shutdowns and curtailments as offsets, and changing offset ratios for marginal, moderate, serious, severe, and extreme ozone nonattainment areas. The following provides the background for the Phase II Rule requirements for NO X as an

ozone precursor.

On July 18, 1997, EPA promulgated a revised 8-hour ozone NAAQS of 0.08 parts per million—also referred to as the 1997 8-hour ozone NAAQS. On April 30, 2004, EPA designated areas as attainment, nonattainment and
unclassifiable for the 1997 8-hour ozone NAAQS. In addition, as part of the framework to implement the 1997 8- hour ozone NAAQS, EPA promulgated an implementation rule in two phases (Phase I and II). The Phase I Rule (effective on June 15, 2004) provided the implementation requirements for designating areas under subpart 1 and subpart 2 of the CAA. See 69 FR 23951 (April 30, 2004).

On November 29, 2005, EPA promulgated the second phase for implementation provisions related to the 1997 8-hour ozone NAAQS—also
known as the Phase II Rule. See 70 FR
71612. The Phase II Rule addressed control and planning requirements as they applied to areas designated
nonattainment for the 1997 8-hour ozone NAAQS, such as reasonably available control technology, reasonably available control measures, reasonable further progress, modeling and attainment demonstrations, NSR, and the impact to reformulated gas for the 1997 8-hour ozone NAAQS transition. The Phase II Rule NSR requirements include, among other changes, a provision stating that NO X is an ozone

precursor. See 70 FR at 71679. In the Phase II Rule, EPA stated as follows:

The EPA has recognized NO X as an ozone precursor in several national rules because of its contribution to ozone transport and the ozone nonattainment problem. The EPA’s recognition of NO X as an ozone precursor is supported by scientific studies, which have long recognized the role of NO X in ozone formation and transport. Such formation and transport is not limited to nonattainment areas. Therefore, we believe NO X should be treated consistently as an ozone precursor in

both our PSD and nonattainment NSR regulations. For these reasons, we have promulgated final regulations providing that

NO X is an ozone precursor in attainment

areas.

The Phase II Rule made changes to federal regulations 40 CFR 51.165, 51.166 and 52.21 (which governs the NNSR and PSD permitting programs respectively). Pursuant to these requirements, states were required to submit SIP revisions adopting the federal requirements of the Phase II Rule (at 40 CFR 51.165, 51.166 and 52.21) into their SIP no later than June 15, 2007. Jefferson County’s June 1, 2009, and February 8, 2011, SIP revisions both address the federal PSD-only provisions requirements promulgated in the Phase II rule recognizing NO X as an ozone precursor (at 40 CFR 52.21). 13

B. EPA’s Analysis of Jefferson County’s SIP Revisions To Adopt the Phase II
Rule

Jefferson County’s June 1, 2009, SIP revision updated LMAPCD’s PSD program to include NO X as an ozone precursor for PSD permitting, consistent with changes to the federal regulations
set forth in the Phase II Rule at 40 CFR 52.21. Subsequently, on February 8, 2011, KDAQ, submitted a SIP revision which included the June 1, 2009, changes in addition to other federal PSD permitting updates to the Jefferson County portion of the Kentucky SIP. Jefferson County’s SIP revisions IBR the federal PSD regulations (at 40 CFR 52.21) to include the NO X as a precursor PSD-only permitting provisions


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14 On January 14, 2009, EPA denied a petition by the State of New Jersey (submitted February 8, 2008) for reconsideration and stay of the December 21, 2007, final rule for ‘‘reasonable possibility.’’ However, on March 11, 2009, New Jersey reiterated its request for reconsideration, which EPA granted on April 24, 2009. EPA has not taken action on the reconsideration therefore, the current recordkeeping rules established in the December 21, 2007, final rule are approvable. promulgated in the Phase II Rule into the Jefferson County portion of the Kentucky SIP at Regulation 2.05— Prevention of Significant Deterioration of Air Quality (version 10) as of July 1, 2010. EPA has preliminarily determined that Jefferson County’s SIP revisions are
consistent with the PSD Phase II Rule permitting requirements and section 110
of the CAA.

V. What are EPA’s Proposed Actions for
NSR Reform and Reasonable Possibility?

A. Background

On December 31, 2002 (67 FR 80186), EPA published final rule changes to 40 CFR parts 51 and 52 regarding the CAA’s PSD and NNSR programs. On November 7, 2003 (68 FR 63021), EPA published a notice of final action on the reconsideration of the December 31, 2002, final rule changes. The December 31, 2002, and the November 7, 2003, final actions are collectively referred to
as the ‘‘2002 NSR Reform Rules.’’ The 2002 NSR Reform Rules are part of EPA’s implementation of parts C and D of title I of the CAA, 42 U.S.C. 7470– 7515. Part C of title I of the CAA, 42 U.S.C. 7470–7492, consists of the PSD program and applies to attainment and
unclassifiable areas. Part D of title I of the CAA, 42 U.S.C. 7501–7515, includes the NNSR program and applies in nonattainment areas. Collectively, the PSD and NNSR programs are referred to
as the ‘‘New Source Review’’ or NSR

programs.

The 2002 NSR Reform Rules made changes to five areas of the NSR programs. In summary, the 2002 NSR Reform Rules: (1) Provide a new method for determining baseline actualemissions; (2) adopt an actual-toprojected-actual methodology for determining whether a major modification has occurred; (3) allow major stationary sources to comply with plant-wide applicability limits (PALs) to avoid having a significant emissions increase that triggers the requirements of the major NSR program; (4) provide a new applicability provision for emissions units that are designated clean units; and (5) exclude pollution control projects (PCPs) from the definition of ‘‘physical change or change in the method of operation.’’ On November 7, 2003 (68 FR 63021), EPA published a notice of final action on its
reconsideration of the 2002 NSR Reform Rules, which added a definition for ‘‘replacement unit’’ and clarified an issue regarding PALs. For additional
information on the 2002 NSR Reform Rules, see 67 FR 80186 (December 31, 2002) and http://www.epa.gov/nsr. After the 2002 NSR Reform Rules were finalized and effective (March 3, 2003), industry, state, and environmental petitioners challenged numerous aspects of the 2002 NSR Reform Rules, along with portions of EPA’s 1980 NSR Rules, 45 FR 52676 (August 7, 1980). On June 24, 2005, the United States Court of Appeals for the District of Columbia (D.C. Circuit Court) issued a decision on the challenges to
the 2002 NSR Reform Rules. New York

v. U.S. EPA, 413 F.3d 3 (D.C. Cir. 2005). In summary, the D.C. Circuit Court vacated portions of the rules pertaining to clean units and PCPs, remanded a portion of the rules regarding recordkeeping and the term ‘‘reasonable possibility’’ found in 40 CFR 52.21(r)(6) and 40 CFR 51.165(a)(6) and 51.166(r)(6), and either upheld or did not comment on the other provisions included as part of the 2002 NSR Reform Rules. On June 13, 2007 (72 FR 32526), EPA took final action to revise
the 2002 NSR Reform Rules to remove from federal law all provisions pertaining to clean units and the PCPs exemption that were vacated by the D.C.

Circuit Court.

The 2002 NSR Reform Rules required that state agencies adopt and submit revisions to their SIP permitting programs implementing the minimum program elements of the 2002 NSR Reform Rules no later than January 2, 2006. State agencies may meet the requirements of 40 CFR 51 and the 2002
NSR Reform Rules with different but equivalent regulations.

With regard to the remanded portions
of the 2002 NSR Reform Rules related to recordkeeping, the U.S. Court of Appeals remanded to EPA either to provide an acceptable explanation for its ‘‘reasonable possibility’’ standard or devise an appropriate alternative. To satisfy the courts, on December 21, 2007, EPA took final action to clarify that a ‘‘reasonable possibility’’ applies where source emissions equal or exceed 50 percent of the CAA NSR significance levels for any pollutant. See ‘‘Prevention of Significant Deterioration and

Nonattainment New Source Review: Reasonable Possibility in Recordkeeping:’’ Final Rule, 72 FR 72607 (December 21, 2007) (the Reasonable Possibility Rule). The ‘‘reasonable possibility’’ provision identifies for sources and reviewing
authorities the circumstances under which a major stationary source undergoing a modification that does not trigger major NSR must keep records. EPA’s December 21, 2007, final rule on the recordkeeping and reporting provisions also explains state obligations with regard to the reasonable possibility related rule changes. 14 See 72 FR at 72613–72614. The final rule gave states and local permitting authorities three years from publication to submit revisions to incorporate the reasonable possibility provisions or to submit notice to EPA that their regulations fulfill these requirements.

On June 1, 2009, and February 8, 2011, KDAQ, on behalf of LMAPCD,
submitted to EPA revisions to the Jefferson County portion of Kentucky’s SIP to IBR the federal PSD permitting regulations promulgated in the 2002
NSR Reform Rule and the Reasonable Possibility Rule. EPA is now proposing to approve these SIP revisions
consistent with section 110 of the CAA.

B. EPA’s Analysis of Jefferson County’s SIP Revision To Adopt the NSR Reform and Reasonable Possibility

As mentioned in Section I, LMAPCD’s PSD Program at Regulation 2.05— Prevention of Significant Deterioration for Air Quality establishes the preconstruction review program as required under part C of title I of the CAA. The changes to LMAPCD’s PSD rules, which EPA is now proposing to approve into the Jefferson County portion of the Kentucky SIP, were established to update the existing PSD Program to meet the requirements of the 2002 NSR Reform Rules. Jefferson County’s SIP revisions IBR the 2002 NSR Reform PSD changes regardingbaseline actual emissions, actual-toprojected-actual applicability tests, and PAL provisions. Jefferson County’s June 1, 2009, and February 8, 2011, SIP
revisions both address the federal PSD requirements promulgated in the 2002 NSR Reform rules. The proposed revisions explicitly exclude the PCPs and clean unit portions of the 2002 NSR Reform Rules that were vacated as part of the DC Circuit Court’s June 2005
decision.

With regard to the remanded portions
of the 2002 NSR Reform Rules related to recordkeeping and EPA’s December 21, 2007, clarifications of the term ‘‘reasonable possibility’’ (72 FR 72607), Jefferson County’s SIP revisions IBR the federal revised ‘‘reasonable possibility’’ provisions at 40 CFR 52.21(r)(6). Thus, LMAPCD’s recordkeeping and reporting provisions are the same as the federal


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requirements promulgated in EPA’s December 21, 2007, final action.

In addition to incorporating the federal PSD regulations, Jefferson County’s February 8, 2011, SIP revision includes a technical support document (TSD), which assesses the impact of adopting the 2002 NSR Reform provisions into Jefferson County’s PSD permitting program and the air quality impacts. As mentioned above, LMAPCD has a SIP-approved PSD program. However, due to the limited number of sources in Jefferson County, the permitting program does not assess many major PSD permits. In fact, in nearly ten years, LMAPCD has only analyzed two projects under PSD. Most sources in Jefferson County are permitted through LMAPCD’s minor source program, which allows sources
to take emission limits to avoid PSD permitting. Additionally, regarding criteria pollutants, the TSD explains that sources typically subject to PSD permitting (i.e. point sources) have not been the primary driver for past or current nonattainment NAAQS designations in Jefferson County. See
the TSD in the Docket ID No. EPA–R04–

OAR–2011–0227.

LMAPCD’s TSD concluded that adoption of the 2002 NSR Reform improvements would not impede the LMAPCD’s ability to comply with the NAAQS or any reasonable progress
towards continued maintenance. After evaluating Jefferson County’s SIP revision, and the TSD provided with the February 8, 2011, SIP revision, EPA has determined that the proposed SIP revisions to adopt NSR Reform and reasonable possibility provisions are consistent with the federal program requirements for the preparation, adoption and submittal of implementation plans for the PSD of air quality, set forth at 40 CFR 52.21, and
the 2002 NSR Reform Rule.

VI. What is EPA’s proposed action for
the automatic rescission clause?

A. Jefferson County’s Proposed
Automatic Rescission Clause

Jefferson County’s February 8, 2011, proposed SIP revision adds a new section to Regulation 2.05, Section 2— Effect of Stay, Vacatur, or Withdrawal,
also known as an automatic rescission clause. This clause provides that in the event that EPA or a federal court stays, vacates, or withdraws any section or subsection of 40 CFR 52.21, that section or subsection shall automatically be deemed stayed, vacated or withdrawn from Jefferson County’s SIP-approved PSD program at Regulation 2.05. The period of delay resulting from a stay would begin and end for purposes of Jefferson County’s SIP on the date specified by EPA in a Federal Register notice announcing the stay. Likewise, any provision that is vacated or
withdrawn shall be null and void for purposes of Jefferson County’s SIP as of the date specified in the notice of vacatur or withdrawal published by

EPA in a Federal Register notice.

B. EPA’s analysis of the approvability of Jefferson County’s automatic rescission
clause

EPA has preliminarily concluded that Jefferson County’s automatic rescission clause is approvable. In assessing the approvability of this provision, EPA considered two key factors: (1) Whether the public will be given reasonable notice of any change to the SIP that
occurs as a result of the automatic rescission clause, and (2) whether any future change to the SIP that occurs as
a result of the automatic rescission
clause would be consistent with EPA’s interpretation of the effect of the triggering EPA or federal court action (e.g., the extent of an administrative or judicial stay). These criteria are derived from the SIP revision procedures set
forth in the CAA and federal regulations.

Regarding public notice, CAA section 110(l) provides that any revision to a SIP submitted by a state to EPA for approval ‘‘shall be adopted by such State after reasonable notice and public hearing.’’ In accordance with CAA section 110(l), the LMAPCD followed applicable notice-and-comment procedures prior to adopting the automatic rescission clause. Thus, the public is on notice that the Jefferson County portion of the Kentucky SIP will automatically update to reflect any EPA or federal action that stays, withdraws, or vacates any portion of 40 CFR 52.21. In addition, the automatic rescission clause provides that no change to the SIP will occur until EPA publishes a Federal Register notice announcing that a portion of 40 CFR 52.21 has been stayed, vacated, or withdrawn. Thus, the timing and extent of any future SIP change resulting from the automatic
rescission clause will be clear to both the regulated community and the general public.

EPA’s consideration of whether any SIP change resulting from the proposed
automatic rescission clause would be consistent with EPA’s interpretation of the effect of the triggering action on federal regulations is based on 40 CFR 51.105. Under 40 CFR 51.105, ‘‘[r]evisions of a plan, or any portion thereof, will not be considered part of an applicable plan until such revisions have been approved by the
Administrator in accordance with this part.’’ See 40 CFR 51.105. While EPA is approving the automatic updating of the Jefferson County portion of the Kentucky SIP to reflect the stay, withdrawal or vacatur of any section or subsection of 40 CFR 52.21, there could be varying interpretations of the timing and extent of changes to 40 CFR 52.21 resulting from a given EPA or federal court action. By tying the automatic updating of the SIP to EPA’s publication
of a Federal Register notice announcing the change to 40 CFR 52.21, the proposed automatic rescission clause ensures that any change to the SIP will be consistent with EPA’s interpretation of the triggering action.

VII. Proposed Actions

EPA is proposing to approve Jefferson County’s June 1, 2009, and February 8, 2011, SIP revisions which adopt federal requirements for NSR PSD permitting. Jefferson County’s SIP revisions consist of changes to the LMAPCD Air Quality Regulation 2.05—Prevention of Significant Deterioration of Air Quality and address several NSR PSD permitting requirements promulgated at 40 CFR 52.21. Specifically, Jefferson County’s June 1, 2009, SIP revision adopts federal regulations relating to PSD requirements
for the NSR PM 2.5 Rule, the Phase II Rule, the 2002 NSR Reform Rule, and the NSR Reasonable Possibility Rule into the Jefferson County portion of the Kentucky SIP. Jefferson County’s February 8, 2011, proposed SIP revision
includes all of the aforementioned updates to LMAPCD’s PSD regulations but also provides Jefferson County with the authority to regulate GHGs under its PSD program, establishes appropriate emissions thresholds for determining PSD applicability with respect to new and modified GHG-emitting sources (in accordance with EPA’s Tailoring Rule), and incorporates an automatic
rescission clause for 40 CFR 52.21 regulations. EPA has preliminarily
determined that these SIP revisions are approvable because they are in
accordance with the CAA and EPA regulations regarding PSD permitting. In addition, EPA is proposing to rescind the FIP promulgated on January 14, 2011 at 40 CFR 52.37(b)(7) once the proposed GHG PSD permitting revision has been approved into the Jefferson County portion of the Kentucky SIP.

VIII. Statutory and Executive Order

Reviews

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations.


### 33372 Federal Register / Vol. 77, No. 109 / Wednesday, June 6, 2012 / Proposed Rules

42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA’s role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, these proposed actions merely approve state law as meeting federal requirements and do not impose additional requirements beyond those imposed by state law. For that reason, these proposed actions:

• Are not a ‘‘significant regulatory action’’ subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Do not impose an information collection burden under the provisions of the Paperwork Reduction Act (44

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

• Are certified as not having a significant economic impact on a
substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. );

• Do not contain any unfunded mandate or significantly or uniquely affect small governments, as described
in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4);

• Do not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Are not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Are not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Are not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Do not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition, this proposed rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the Commonwealth, and it will not impose substantial direct costs on tribal governments or preempt tribal
law.

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Greenhouse Gas, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

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

Dated: May 24, 2012.
A. Stanley Meiburg,
Acting Regional Administrator, Region 4.

[FR Doc. 2012–13694 Filed 6–5–12; 8:45 am]

**BILLING CODE 6560–50–P**

**ENVIRONMENTAL PROTECTION**
**AGENCY**

**40 CFR Part 52**

**[EPA–R04–OAR–2012–0238; FRL–9681–8]**

**Approval and Promulgation of Implementation Plans; South Carolina;**  **110(a)(1) and (2) Infrastructure Requirements for the 1997 and 2006** 

**Fine Particulate Matter National Ambient Air Quality Standards** 

**AGENCY :**  Environmental Protection Agency (EPA).

**ACTION :**  Proposed rule.

**SUMMARY :**  EPA is proposing to approve the State Implementation Plans (SIP), submitted by the State of South Carolina, through the Department of
Health and Environmental Control (DHEC), as demonstrating that the State meets the requirements of sections 110(a)(1) and (2) of the Clean Air Act (CAA or the Act) for the 1997 annual and 2006 24-hour fine particulate matter (PM 2.5 ) national ambient air quality standards (NAAQS). Section 110(a) of the CAA requires that each state adopt
and submit a SIP for the implementation, maintenance, and enforcement of each NAAQS promulgated by the EPA, which is commonly referred to as an
‘‘infrastructure’’ SIP. South Carolina
certified that the South Carolina SIP contains provisions that ensure the 1997
annual and 2006 24-hour PM 2.5 NAAQS is implemented, enforced, and maintained in South Carolina (hereafter
referred to as ‘‘infrastructure submission’’). South Carolina’s infrastructure submissions, provided to EPA on March 14, 2008, and on September 18, 2009, addressed all the required infrastructure elements for the
1997 annual and 2006 24-hour PM 2.5 NAAQS with the exception of section 110(a)(2)(E)(ii) and 110(a)(2)(G) which were submitted by South Carolina on April 3, 2012. South Carolina’s April 3, 2012, submittal is being addressed in a separate action.

**DATES :**  Written comments must be received on or before July 6, 2012.

**ADDRESSES :**  Submit your comments, identified by Docket ID No. EPA–R04– OAR–2012–0238, by one of the following methods:

1. www.regulations.gov: Follow the on-line instructions for submitting

comments.

2. Email: R4-RDS@epa.gov.

3. Fax: (404) 562–9019.

4. Mail: ‘‘EPA–R04–OAR–2012– 0238,’’ Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303–8960.

5. Hand Delivery or Courier: Lynorae Benjamin, Chief, Regulatory Development Section, Air Planning Branch, Air, Pesticides and Toxics Management Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., Atlanta, Georgia 30303–8960. Such deliveries are only accepted during the Regional Office’s normal hours of operation. The Regional Office’s official hours of business are Monday through Friday, 8:30 to 4:30, excluding federal holidays.

Instructions: Direct your comments to
Docket ID No. EPA–R04–OAR–2012– 0238. EPA’s policy is that all comments received will be included in the public docket without change and may be
made available online at www. regulations.gov, including any personal information provided, unless the
comment includes information claimed
to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit through www.regulations.gov or email, information that you consider to be CBI or otherwise protected. The www.regulations.gov Web site is an ‘‘anonymous access’’ system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to EPA without going through www. regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD–ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your
comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects
or viruses. For additional information about EPA’s public docket visit the EPA