Federal Register / Vol. 74, No. 111 / Thursday, June 11, 2009 / Proposed Rules 27731 

was delinquent for a period of less than 

ten years. The amendment to the law 

allows for the collection of debt by 

offsetting nontax payments without any 

time limitation and applies to any debt 

outstanding on or after the date of the 

enactment of the Act. 

Although this statutory change does 

not directly apply to the offset of tax 

refund payments, we are nevertheless 

proposing to amend this regulation to 

mirror the statutory change because the 

regulatory time limitation contained in 

this regulation was intended to create 

uniformity in the way non-judicial 

offsets were conducted. Because there 

was no logical reason why the ten-year 

limitation applicable to the offset of 

nontax payments should not apply to 

non-judicial offsets under other statutes 

which did not contain their own 

limitations period, this regulation 

applied a ten-year limitation on the 

collection of debt by tax refund offset. 

However, now that the ten-year 

limitation has been eliminated for the 

offset of nontax payments, the rationale 

for including a ten-year limitation in 

this rule no longer applies. 

The proposed changes to this rule 

remove the limitations period by 

explicitly stating that no time limitation 

shall apply, and explain that by 

removing the time limitation, all debts, 

including debts that were ineligible for 

collection by offset prior to the removal 

of the limitations period, may now be 

collected by tax refund offset. 

Additionally, to avoid any undue 

hardship, we are proposing the addition 

of a notice requirement applicable to 

debts that were previously ineligible for 

collection by offset because they had 

been outstanding for more than ten 

years. For these debts, creditor agencies 

must certify to FMS that a notice of 

intent to offset was sent to the debtor 

after the debt became ten years 

delinquent. This notice of intent to 

offset is intended to alert the debtor that 

his debt may now be collected by offset 

and allows the debtor additional 

opportunities to dispute the debt, enter 

into a repayment agreement or 

otherwise avoid offset. This requirement 

will apply even in a case where notice 

was sent prior to the debt becoming ten 

years old. This requirement applies only 

with respect to debts that were 

previously ineligible for collection by 

offset because of the time limitation and 

does not apply to debts, such as 

Department of Education student loan 

debts, that could be collected by offset 

without regard to any time limitation 

prior to this regulatory change. 

II. Procedural Analyses 

Request for Comment on Plain Language 

Executive Order 12866 requires each 

agency in the Executive branch to write 

regulations that are simple and easy to 

understand. We invite comment on how 

to make the proposed rule clearer. For 

example, you may wish to discuss: (1) 

Whether we have organized the material 

to suit your needs; (2) whether the 

requirements of the rules are clear; or (3) 

whether there is something else we 

could do to make these rules easier to 

understand. 

Regulatory Planning and Review 

The proposed rule does not meet the 

criteria for a ‘‘significant regulatory 

action’’ as defined in Executive Order 

12866. Therefore, the regulatory review 

procedures contained therein do not 

apply. 

Regulatory Flexibility Act Analysis 

It is hereby certified that the proposed 

rule will not have a significant 

economic impact on a substantial 

number of small entities. This rule 

merely removes the ten-year time 

limitation on the collection of debts by 

tax refund offset. Moreover, the 

provisions contained in this proposed 

rule would primarily affect federal 

creditor agencies and impose no 

additional costs to small entities. 

Accordingly, a regulatory flexibility 

analysis under the Regulatory 

Flexibility Act (5 U.S.C. 601 et seq.) is 

not required. 

List of Subjects in 31 CFR Part 285 

Administrative practice and 

procedure, Child support, Child welfare, 

Claims, Credits, Debts, Disability 

benefits, Federal employees, 

Garnishment of wages, Hearing and 

appeal procedures, Loan programs, 

Privacy, Railroad retirement, Railroad 

unemployment insurance, Salaries, 

Social Security benefits, Supplemental 

Security Income (SSI), Taxes, Veterans’ 

benefits, Wages. 

For the reasons set forth in the 

preamble, we propose to amend 31 CFR 

part 285 as follows: 

PART 285—DEBT COLLECTION 

AUTHORITIES UNDER THE DEBT 

COLLECTION IMPROVEMENT ACT OF 

1996 

1. The authority citation for part 285 

continues to read as follows: 

Authority: 5 U.S.C. 5514; 26 U.S.C. 6402; 

31 U.S.C. 321, 3701, 3711, 3716, 3719, 

3720A, 3720B, 3720D; 42 U.S.C. 664; E.O. 

13019, 61 FR 51763, 3 CFR, 1996 Comp., p. 

216. 

2. In § 285.2, remove paragraph 

(d)(1)(ii), redesignate paragraphs 

(d)(1)(iii) through (d)(1)(v) as paragraphs 

(d)(1)(ii) through (d)(1)(ii) through 

(d)(1)(iv) respectively, and add 

paragraph (d)(6) as follows: 

§ 285.2 Offset of tax refund payments to 

collect past-due, legally enforceable nontax 

debt. 

* * * * * 

(d) * * * 

(6)(i) Creditor agencies may submit 

debts to FMS for collection by tax 

refund offset irrespective of the amount 

of time the debt has been outstanding. 

Accordingly, all nontax debts, including 

debts that were delinquent for ten years 

or longer prior to [INSERT DATE 30 

DAYS AFTER PUBLICATION OF THE 

FINAL RULE IN THE FEDERAL 

REGISTER] may be collected by tax 

refund offset. 

(ii) For debts outstanding more than 

ten years on or before [INSERT DATE 30 

DAYS AFTER PUBLICATION OF THE 

FINAL RULE IN THE FEDERAL 

REGISTER], creditor agencies must 

certify to FMS that the notice of intent 

to offset described in paragraph 

(d)(1)(iii)(B) of this section was sent to 

the debtor after the debt became ten 

years delinquent. This requirement will 

apply even in a case where notice was 

also sent prior to the debt becoming ten 

years delinquent, but does not apply to 

any debt that could be collected by 

offset without regard to any time 

limitation prior to [INSERT DATE 30 

DAYS AFTER PUBLICATION OF THE 

FINAL RULE IN THE FEDERAL 

REGISTER]. 

* * * * * 

Dated: May 29, 2009. 

Gary Grippo, 

Acting Fiscal Assistant Secretary. 

[FR Doc. E9–13604 Filed 6–10–09; 8:45 am] 

BILLING CODE 4810–35–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R03–OAR–2009–0033; FRL–8916–8] 

Approval and Promulgation of Air 

Quality Implementation Plans; West 

Virginia; Clean Air Interstate Rule 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to approve 

a revision to the West Virginia State 

Implementation Plan (SIP). This 

revision addresses the requirements of 


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27732 Federal Register / Vol. 74, No. 111 / Thursday, June 11, 2009 / Proposed Rules 

EPA’s Clean Air Interstate Rule (CAIR), 

and recodifies and revises provisions 

pertaining to internal combustion 

engines and cement kilns that are 

subject to the nitrogen oxides (NOX) SIP 

Call. Although the D.C. Circuit found 

CAIR to be flawed, the rule was 

remanded without vacatur and thus 

remains in place. Thus, EPA is 

continuing to take action on CAIR SIPs 

as appropriate. CAIR, as promulgated, 

requires States to reduce emissions of 

sulfur dioxide (SO2) and nitrogen oxides 

(NOX) that significantly contribute to, or 

interfere with maintenance of, the 

national ambient air quality standards 

(NAAQS) for fine particulates and/or 

ozone in any downwind state. CAIR 

establishes budgets for SO2 and NOX for 

States that contribute significantly to 

nonattainment in downwind States and 

requires the significantly contributing 

States to submit SIP revisions that 

implement these budgets. States have 

the flexibility to choose which control 

measures to adopt to achieve the 

budgets, including participation in EPAadministered cap-and-trade programs 

addressing SO2, NOX annual, and NOX

ozone season emissions. In the SIP 

revision that EPA is proposing to 

approve, West Virginia will meet CAIR 

requirements by participating in these 

cap-and-trade programs. EPA is 

proposing to approve the SIP revision, 

as interpreted and clarified herein, as 

fully implementing the CAIR 

requirements for West Virginia. 

DATES: Written comments must be 

received on or before July 13, 2009. 

ADDRESSES: Submit your comments, 

identified by Docket ID Number EPA– 

R03–OAR–2009–0033 by one of the 

following methods: 

A. http://www.regulations.gov. Follow 

the on-line instructions for submitting 

comments. 

B. E-mail: 

fernandez.cristina@epa.gov. 

C. Mail: EPA–R03–OAR–2009–0033, 

Cristina Fernandez, Chief, Air Quality 

Planning Branch, Mailcode 3AP21, U.S. 

Environmental Protection Agency, 

Region III, 1650 Arch Street, 

Philadelphia, Pennsylvania 19103. 

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

deliveries are only accepted during the 

Docket’s normal hours of operation, and 

special arrangements should be made 

for deliveries of boxed information. 

Instructions: Direct your comments to 

Docket ID No. EPA–R03–OAR–2009– 

0033. EPA’s policy is that all comments 

received will be included in the public 

docket without change, and may be 

made available online at http:// 

www.regulations.gov, including any 

personal information provided, unless 

the comment includes information 

claimed to be Confidential Business 

Information (CBI) or other information 

whose disclosure is restricted by statute. 

Do not submit information that you 

consider to be CBI or otherwise 

protected through http:// 

www.regulations.gov or e-mail. The 

http://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 e-mail comment directly 

to EPA without going through http:// 

www.regulations.gov, your e-mail 

address will be automatically captured 

and included as part of the comment 

that is placed in the public docket and 

made available on the Internet. If you 

submit an electronic comment, EPA 

recommends that you include your 

name and other contact information in 

the body of your comment and with any 

disk or CD–ROM you submit. If EPA 

cannot read your comment due to 

technical difficulties and cannot contact 

you for clarification, EPA may not be 

able to consider your comment. 

Electronic files should avoid the use of 

special characters, any form of 

encryption, and be free of any defects or 

viruses. 

Docket: All documents in the 

electronic docket are listed in the 

http://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 http:// 

www.regulations.gov or in hard copy 

during normal business hours at the Air 

Protection Division, U.S. Environmental 

Protection Agency, Region III, 1650 

Arch Street, Philadelphia, Pennsylvania 

19103. Copies of the State submittal are 

available at the West Virginia 

Department of Environmental 

Protection, Division of Air Quality, 601 

57th Street, SE., Charleston, West 

Virginia 25304. 

FOR FURTHER INFORMATION CONTACT: 

Marilyn Powers, (215) 814–2308, or by 

e-mail at powers.marilyn@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Table of Contents 

I. What Action Is EPA Proposing? 

II. What Is the Regulatory History of CAIR 

and the CAIR Federal Implementation 

Plans (FIPs)? 

III. What Are the General Requirements of 

CAIR and the CAIR FIPs? 

IV. What Are the Types of CAIR SIP 

Submittals? 

V. Analysis of West Virginia’s CAIR SIP 

Submittal 

A. State Budgets for Allowance Allocations 

B. CAIR Cap-and-Trade Programs 

C. Applicability Provisions 

D. NOX Allowance Allocations 

E. Allocation of NOX Allowances from 

Compliance Supplement Pool 

F. Individual Opt-in Units 

G. Additional Interpretations 

VI. Proposed Action 

VI. Statutory and Executive Order Reviews 

I. What Action Is EPA Proposing? 

EPA is proposing to approve the SIP 

revision submitted by West Virginia on 

April 22, 2008, as interpreted and 

clarified herein, as meeting the 

applicable CAIR requirements by 

requiring certain electric generating 

units (EGUs) to participate in the EPAadministered CAIR cap-and-trade 

programs addressing SO2, NOX annual, 

and NOX ozone season emissions. EPA 

is also proposing to approve 

recodification and revision of provisions 

that address NOX ozone season emission 

reduction requirements for internal 

combustion engines and cement kilns, 

updated only to revise NOX SIP Call 

references to CAIR references. These 

provisions for internal combustion 

engines and cement kilns were 

previously approved as part of West 

Virginia regulation 45CSR1. 45CSR1 set 

forth the requirements for both: nonEGUs that were part of the NOX Budget 

Trading Program, and non-EGUs that 

were not part of the trading program but 

instead had specific emission 

requirements. EPA will no longer 

administer the NOX Budget Trading 

program after 2008, therefore West 

Virginia chose to sunset its NOX Budget 

Trading Program rules by repealing 

45CSR1 and 45CSR26 (which applied to 

EGUs) in their entirety. The units that 

participated in the NOX Budget Trading 

Program in 45CSR1 and 45CSR26 will 

now be subject to the requirements of 

the CAIR trading program, as proposed 

in this action. The provisions for 

internal combustion engines and cement 

kilns have been recodified into separate 

sections of 45CSR40 (sections 45–40–90 

and 45–40–100, respectively). 

II. What Is the Regulatory History of the 

CAIR and the CAIR FIPs? 

EPA published CAIR on May 12, 2005 

(70 FR 25162). In this rule, EPA 

determined that 28 States and the 

District of Columbia contribute 

significantly to nonattainment and 

interfere with maintenance of the 

NAAQS for fine particles (PM2.5) and/or 


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8-hour ozone in downwind States in the 

eastern part of the country. As a result, 

EPA required those upwind States to 

revise their SIPs to include control 

measures that reduce emissions of SO2, 

which is a precursor to PM2.5 formation, 

and/or NOX, which is a precursor to 

both ozone and PM2.5 formation. For 

jurisdictions that contribute 

significantly to downwind PM2.5

nonattainment, CAIR sets annual Statewide emission reduction requirements 

(i.e., budgets) for SO2 and annual Statewide emission reduction requirements 

for NOX. Similarly, for jurisdictions that 

contribute significantly to 8-hour ozone 

nonattainment, CAIR sets State-wide 

emission reduction requirements or 

budgets for NOX for the ozone season 

(May 1st to September 30th). Under 

CAIR, States may implement these 

reduction requirements by participating 

in the EPA-administered cap-and-trade 

programs or by adopting any other 

control measures. 

CAIR explains to subject States what 

must be included in SIPs to address the 

requirements of section 110(a)(2)(D) of 

the Clean Air Act (CAA) with regard to 

interstate transport with respect to the 

8-hour ozone and PM2.5 NAAQS. EPA 

made national findings, effective on 

May 25, 2005, that the States had failed 

to submit SIPs meeting the requirements 

of section 110(a)(2)(D). The SIPs were 

due in July 2000, 3 years after the 

promulgation of the 8-hour ozone and 

PM2.5 NAAQS. These findings started a 

2-year clock for EPA to promulgate a FIP 

to address the requirements of section 

110(a)(2)(D). Under CAA section 

110(c)(1), EPA may issue a FIP anytime 

after such findings are made and must 

do so within two years unless a SIP 

revision correcting the deficiency is 

approved by EPA before the FIP is 

promulgated. 

On April 28, 2006, EPA promulgated 

FIPs for all States covered by CAIR in 

order to ensure the emissions reductions 

required by CAIR are achieved on 

schedule. The CAIR FIPs require EGUs 

to participate in the EPA-administered 

CAIR SO2, NOX annual, and NOX ozone 

season trading programs, as appropriate. 

The CAIR FIP SO2, NOX annual, and 

NOX ozone season trading programs 

impose essentially the same 

requirements as, and are integrated 

with, the respective CAIR SIP trading 

programs. The integration of the FIP and 

SIP trading programs means that these 

trading programs will work together to 

create effectively a single trading 

program for each regulated pollutant 

(SO2, NOX annual, and NOX ozone 

season) in all States covered by the 

CAIR FIP or SIP trading program for that 

pollutant. Further, as provided in a rule 

published by EPA on November 7, 2007, 

a State’s CAIR FIPs are automatically 

withdrawn when EPA approves a SIP 

revision, in its entirely and without any 

conditions, as fully meeting the 

requirements of CAIR. Where only 

portions of the SIP revision are 

approved, the corresponding portions of 

the FIPs are automatically withdrawn 

and the remaining portions of the FIP 

stay in place. Finally, the CAIR FIPs 

also allow States to submit abbreviated 

SIP revisions that, if approved by EPA, 

will automatically replace or 

supplement certain CAIR FIP provisions 

(e.g., the methodology for allocating 

NOX allowances to sources in the State), 

while the CAIR FIP remains in place for 

all other provisions. 

On April 28, 2006, EPA published 

two additional CAIR-related final rules 

that added the States of Delaware and 

New Jersey to the list of States subject 

to CAIR for PM2.5 and announced EPA’s 

final decisions on reconsideration of 

five issues, without making any 

substantive changes to the CAIR 

requirements. 

On October 19, 2007, EPA amended 

CAIR and the CAIR FIPs to clarify the 

definition of ‘‘cogeneration unit’’ and 

thus the applicability of the CAIR 

trading program to cogeneration units. 

There are no sources in West Virginia 

that are affected by the clarification of 

this definition, however, West Virginia 

must still revise their rules to address 

this clarification and submit the revised 

rule as a SIP revision. 

EPA was sued by a number of parties 

on various aspects of CAIR, and on July 

11, 2008, the U.S. Court of Appeals for 

the District of Columbia Circuit issued 

its decision to vacate and remand both 

CAIR and the associated CAIR FIPs in 

their entirety. North Carolina v. EPA, 

531 F.3d 836 (DC Cir. Jul. 11, 2008). 

However, in response to EPA’s petition 

for rehearing, the Court issued an order 

remanding CAIR to EPA without 

vacating either CAIR or the CAIR FIPs. 

North Carolina v. EPA, 550 F.3d 1176 

(DC Cir. Dec. 23, 2008). The Court 

thereby left CAIR in place in order to 

‘‘temporarily preserve the 

environmental values covered by CAIR’’ 

until EPA replaces it with a rule 

consistent with the Court’s opinion. Id. 

at 1178. The Court directed EPA to 

‘‘remedy CAIR’s flaws’’ consistent with 

its July 11, 2008 opinion, but declined 

to impose a schedule on EPA for 

completing that action. Id. Therefore, 

CAIR and the CAIR FIP are currently in 

effect in West Virginia. 

III. What Are the General Requirements 

of CAIR and the CAIR FIPs? 

CAIR establishes State-wide emission 

budgets for SO2 and NOX and is to be 

implemented in two phases. The first 

phase of NOX reductions starts in 2009 

and continues through 2014, while the 

first phase of SO2 reductions starts in 

2010 and continues through 2014. The 

second phase of reductions for both 

NOX and SO2 starts in 2015 and 

continues thereafter. CAIR requires 

States to implement the budgets by 

either: (1) Requiring EGUs to participate 

in the EPA-administered cap-and-trade 

programs; or (2) adopting other control 

measures of the State’s choosing and 

demonstrating that such control 

measures will result in compliance with 

the applicable State SO2 and NOX

budgets. 

The May 12, 2005 and April 28, 2006 

CAIR rules provide model rules that 

States must adopt (with certain limited 

changes, if desired) if they want to 

participate in the EPA-administered 

trading programs. 

With two exceptions, only States that 

choose to meet the requirements of 

CAIR through methods that exclusively 

regulate EGUs are allowed to participate 

in the EPA-administered trading 

programs. One exception is for States 

that adopt the opt-in provisions of the 

model rules to allow non-EGUs 

individually to opt into the EPAadministered trading programs. The 

other exception is for States that include 

all non-EGUs from their NOX SIP Call 

trading programs in their CAIR NOX

ozone season trading programs. 

IV. What Are the Types of CAIR SIP 

Submittals? 

States have the flexibility to choose 

the type of control measures they will 

use to meet the requirements of CAIR. 

EPA anticipates that most States will 

choose to meet the CAIR requirements 

by selecting an option that requires 

EGUs to participate in the EPAadministered CAIR cap-and-trade 

programs. For such States, EPA has 

provided two approaches for submitting 

and obtaining approval for CAIR SIP 

revisions. States may submit full SIP 

revisions that adopt the model CAIR 

cap-and-trade rules. If approved, these 

SIP revisions will fully replace the CAIR 

FIPs. Alternatively, States may submit 

abbreviated SIP revisions. These SIP 

revisions will not replace the CAIR FIPs; 

however, the CAIR FIPs provide that, 

when approved, the provisions in these 

abbreviated SIP revisions will be used 

instead of or in conjunction with, as 

appropriate, the corresponding 

provisions of the CAIR FIPs (e.g., the 


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27734 Federal Register / Vol. 74, No. 111 / Thursday, June 11, 2009 / Proposed Rules 

1The Court also determined that the CAIR trading 

programs were unlawful (id. at 906–8) and that the 

treatment of title IV allowances in CAIR was 

unlawful (id. at 921–23). For the same reasons that 

EPA is proposing approval of the provisions of West 

Virginia’s SIP revision that use the SO2 and NOX

budgets set in CAIR, EPA is also proposing 

approval, as discussed below, of West Virginia’s SIP 

revision to the extent the SIP revision adopts the 

CAIR trading programs, including the provisions 

addressing applicability, allowance allocations, and 

use of title IV allowances. 

NOX allowance allocation 

methodology). 

A State submitting a full SIP revision 

may either adopt regulations that are 

substantively identical to the model 

rules or incorporate by reference the 

model rules. CAIR provides that States 

may only make limited changes to the 

model rules if the States want to 

participate in the EPA-administered 

trading programs. A full SIP revision 

may change the model rules only by 

altering their applicability and 

allowance allocation provisions to: 

1. Include all NOX SIP Call trading 

sources that are not EGUs under CAIR 

in the CAIR NOX ozone season trading 

program; 

2. Provide for State allocation of NOX

annual or ozone season allowances 

using a methodology chosen by the 

State; 

3. Provide for State allocation of NOX

annual allowances from the compliance 

supplement pool (CSP) using the State’s 

choice of allowed, alternative 

methodologies; or 

4. Allow units that are not otherwise 

CAIR units to opt individually into the 

CAIR SO2, NOX annual, or NOX ozone 

season trading programs under the optin provisions in the model rules. An 

approved CAIR full SIP revision 

addressing EGUs’ SO2, NOX annual, or 

NOX ozone season emissions will 

replace the CAIR FIP for that State for 

the respective EGU emissions. As 

discussed above, EPA approval in full, 

without any conditions, of a CAIR full 

SIP revision causes the CAIR FIPs to be 

automatically withdrawn. 

V. Analysis of West Virginia’s CAIR SIP 

Submittal 

A. State Budgets for Allowance 

Allocations 

The CAIR NOX annual and ozone 

season budgets were developed from 

historical heat input data for EGUs. 

Using these data, EPA calculated annual 

and ozone season regional heat input 

values, which were multiplied by 0.15 

lb/mmBtu, for phase 1 and 0.125 lb/ 

mmBtu, for phase 2, to obtain regional 

NOX budgets for 2009–2014 and for 

2015 and thereafter, respectively. EPA 

derived the State NOX annual and ozone 

season budgets from the regional 

budgets using State heat input data 

adjusted by fuel factors. 

The CAIR State SO2 budgets were 

derived by discounting the tonnage of 

emissions authorized by annual 

allowance allocations under the Acid 

Rain Program under title IV of the CAA. 

Under CAIR, each allowance allocated 

in the Acid Rain Program for the years 

in phase 1 of CAIR (2010 through 2014) 

authorizes 0.5 ton of SO2 emissions in 

the CAIR trading program, and each 

Acid Rain Program allowance allocated 

for the years in phase 2 of CAIR (2015 

and thereafter) authorizes 0.35 ton of 

SO2 emissions in the CAIR trading 

program. 

In today’s action, EPA is proposing to 

approve West Virginia’s SIP revision 

that adopts the budgets established for 

the State in CAIR. These budgets are: 

74,220 tons for NOX annual emissions 

from 2009 through 2014 and 61,850 tons 

from 2015 and thereafter; 26,859 tons 

for NOX ozone season emissions from 

2009 through 2014 and 26,525 tons from 

2015 and thereafter; and 215,881 tons 

for SO2 annual emissions from 2009 

through 2014 and 151,117 tons from 

2015 and thereafter. Additionally, the 

CAIR NOX ozone season budget would 

be increased annually by 2,184 tons to 

account for NOX SIP Call trading 

sources that are not EGUs under CAIR, 

but are included in the CAIR NOX ozone 

season trading program. West Virginia’s 

SIP revision sets these budgets as the 

total amounts of allowances available 

for allocation for each year under the 

EPA-administered cap-and-trade 

programs. 

EPA notes that, in North Carolina, id. 

at 916–21, the Court determined, among 

other things, that the State SO2 and NOX

budgets established in CAIR were 

arbitrary and capricious.1 However, as 

discussed above, the Court also decided 

to remand CAIR but to leave the rule in 

place in order to ‘‘temporarily preserve 

the environmental values covered by 

CAIR’’ pending EPA’s development and 

promulgation of a replacement rule that 

remedies CAIR’s flaws. Id. at 1178. EPA 

had indicated to the Court that 

development and promulgation of a 

replacement rule would take about two 

years. Reply in Support of Petition for 

Rehearing or Rehearing en Banc at 5 

(filed Nov. 17, 2008 in North Carolina 

v. EPA, Case No. 05–1224, DC Cir.). The 

process at EPA of developing a proposal 

that will undergo notice and comment 

and result in a final replacement rule is 

ongoing. In the meantime, consistent 

with the Court’s orders, EPA is 

implementing CAIR by approving State 

SIP revisions that are consistent with 

CAIR (such as the provisions setting 

State SO2 and NOX budgets for the CAIR 

trading programs) in order to 

‘‘temporarily preserve’’ the 

environmental benefits achievable 

under the CAIR trading programs. North 

Carolina, 550 F.3d at 1178. 

B. CAIR Cap-and-Trade Programs 

The CAIR NOX annual and ozoneseason model trading rules both largely 

mirror the structure of the NOX SIP Call 

model trading rule in 40 CFR part 96, 

subparts A through I. While the 

provisions of the NOX annual and 

ozone-season model rules are similar, 

there are some differences. For example, 

the NOX annual model rule (but not the 

NOX ozone season model rule) provides 

for a CSP, which is discussed below, 

and under which allowances may be 

awarded for early reductions of NOX

annual emissions. As a further example, 

the NOX ozone season model rule 

reflects the fact that the CAIR NOX

ozone season trading program replaces 

the NOX SIP Call trading program after 

the 2008 ozone season and is 

coordinated with the NOX SIP Call 

program. The NOX ozone season model 

rule provides incentives for early 

emissions reductions by allowing 

banked, pre-2009 NOX SIP Call 

allowances to be used for compliance in 

the CAIR NOX ozone-season trading 

program. In addition, States have the 

option of continuing to meet their NOX

SIP Call requirement by participating in 

the CAIR NOX ozone season trading 

program and including all their NOX SIP 

Call trading sources in that program. 

The provisions of the CAIR SO2

model rule are also similar to the 

provisions of the NOX annual and ozone 

season model rules. However, the SO2

model rule is coordinated with the 

ongoing Acid Rain SO2 cap-and-trade 

program under CAA title IV. The SO2

model rule uses the title IV allowances 

for compliance, with each allowance 

allocated for 2010–2014 authorizing 

only 0.50 ton of emissions and each 

allowance allocated for 2015 and 

thereafter authorizing only 0.35 ton of 

emissions. Banked title IV allowances 

allocated for years before 2010 can be 

used at any time in the CAIR SO2 capand-trade program, with each such 

allowance authorizing 1 ton of 

emissions. Title IV allowances are to be 

freely transferable among sources 

covered by the Acid Rain Program and 

sources covered by the CAIR SO2 capand-trade program. 

EPA also used the CAIR model 

trading rules as the basis for the trading 

programs in the CAIR FIPs. The CAIR 

FIP trading rules are virtually identical 

to the CAIR model trading rules, with 

changes made to account for Federal 


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rather than State implementation. The 

CAIR model SO2, NOX annual, and NOX

ozone season trading rules and the 

respective CAIR FIP trading rules are 

designed to work together as integrated 

SO2, NOX annual, and NOX ozone 

season trading programs. 

In the SIP revision, West Virginia 

chooses to implement its CAIR budgets 

by requiring EGUs to participate in EPAadministered cap-and-trade programs 

for SO2, NOX annual, and NOX ozone 

season emissions. West Virginia has 

adopted a full SIP revision that adopts, 

with certain allowed changes discussed 

below, the CAIR model cap-and-trade 

rules for SO2, NOX annual, and NOX

ozone season emissions. 

C. Applicability Provisions 

In general, the CAIR model trading 

rules apply to any stationary, fossil-fuelfired boiler or stationary, fossil-fuelfired combustion turbine serving at any 

time, since the later of November 15, 

1990 or the start-up of the unit’s 

combustion chamber, a generator with 

nameplate capacity of more than 25 

MWe producing electricity for sale. 

Under the CAIR model trading rules, 

exemptions are provided for a unit 

otherwise covered by these general 

applicability criteria that is a 

cogeneration unit meeting a specified 

limit on its electricity sales or that is a 

solid waste incineration unit meeting a 

specified limit on combustion of fossil 

fuel. In the applicability section of each 

of West Virginia’s CAIR trading rules, 

these exemptions are set forth in 

subsection 4.2, which begins with the 

phrase ‘‘[w]ith limited exception’’ and 

then goes on to state that units meeting 

the exemption criteria that are set forth 

are not CAIR units. EPA interprets this 

phrase to mean, in each of West 

Virginia’s CAIR trading rules, that the 

provisions in subsection 4.2 that set 

forth the exemptions for cogeneration 

units and solid waste incineration units 

are the ‘‘limited exceptions’’ to the 

general applicability criteria in 

subsection 4.1 and that these provisions 

are not altered by the reference to 

‘‘limited exception’’ and are intended to 

be the same as the exemptions set forth 

in the CAIR model trading rules. In 

other words, there are no exceptions to 

the general applicability criteria other 

than those listed in subsection 4.2, and 

all units meeting the exemption criteria 

in subsection 4.2 are not CAIR units. In 

a letter submitted to EPA on April 30, 

2008, the West Virginia Department of 

Environmental Protection adopted this 

interpretation. 

States have the option of bringing in, 

for the CAIR NOX ozone season program 

only, those units in the State’s NOX SIP 

Call trading program that are not EGUs 

as defined under CAIR. EPA advises 

States exercising this option to add the 

applicability provisions in the State’s 

NOX SIP Call trading rule for non-EGUs 

to the applicability provisions in 40 CFR 

96.304 in order to include in the CAIR 

NOX ozone season trading program all 

units required to be in the State’s NOX

SIP Call trading program that are not 

already included under 40 CFR 96.304. 

Under this option, the CAIR NOX ozone 

season program must cover all large 

industrial boilers and combustion 

turbines, as well as any small EGUs (i.e. 

units serving a generator with a 

nameplate capacity of 25 MWe or less) 

that the State currently requires to be in 

the NOX SIP Call trading program. 

West Virginia has chosen to expand 

the applicability provisions of the CAIR 

NOX ozone season trading program to 

include all non-EGUs in the State’s NOX

SIP Call trading program, including the 

only unit (PPG Natrium Plant Unit 002) 

that opted into the State’s NOX SIP Call 

trading program. Under 40 CFR 

51.123(aa)(2)(i), a State may include ‘‘all 

non-EGUs subject to’’ the State’s NOX

SIP Call trading program. EPA believes 

that, although the unit voluntarily 

entered the State’s NOX SIP Call trading 

program, West Virginia properly 

included this unit in the CAIR NOX

ozone season trading program because 

the unit became subject to that trading 

program in 2003, installed emission 

controls for compliance with program 

requirements, and has continued to 

participate in the program through 2008. 

Consistent with the fact (discussed 

below) that West Virginia’s SIP revision 

does not allow for opt-in units in the 

CAIR NOX ozone season trading 

program, the SIP revision treats this unit 

like any other CAIR unit and does not 

give this unit the option of leaving the 

CAIR NOX ozone season trading 

program. 

Further, in connection with the 

inclusion, as CAIR units in the CAIR 

NOX ozone season trading program, of 

non-EGUs in the State’s NOX SIP Call 

trading program, West Virginia’s SIP 

revision includes (in subsection 2.37.b) 

a special definition of ‘‘commence 

operation’’ for such non-EGUs that 

become CAIR units after they have 

commenced operation. Section 45– 

2.37.b incorrectly references 

‘‘subsections 4.2 or 4.3,’’ which were 

renumbered in the latest version of West 

Virginia’s SIP revision as ‘‘subsections 

4.3 or 4.4.’’ Because this appears to be 

a scrivener’s error, EPA interprets the 

references to be to ‘‘subsections 4.3 or 

4.4.’’ In a letter submitted to EPA on 

April 30, 2008, the West Virginia 

Department of Environmental Protection 

adopted this interpretation. 

D. NOX Allowance Allocations 

Under the NOX allowance allocation 

methodology in the CAIR model trading 

rules and in the CAIR FIP, NOX annual 

and ozone season allowances are 

allocated to units that have operated for 

five years, based on heat input data from 

a three-year period that are adjusted for 

fuel type by using fuel factors of 1.0 for 

coal, 0.6 for oil, and 0.4 for other fuels. 

The CAIR model trading rules and the 

CAIR FIP also provide a new unit setaside from which units without five 

years of operation are allocated 

allowances based on the units’ prior 

year emissions. 

States may establish in their SIP 

submissions a different NOX allowance 

allocation methodology that will be 

used to allocate allowances to sources in 

the States if certain requirements are 

met concerning the timing of 

submission of units’ allocations to the 

Administrator for recordation and the 

total amount of allowances allocated for 

each control period. In adopting 

alternative NOX allowance allocation 

methodologies, States have flexibility 

with regard to: 

1. The cost to recipients of the 

allowances, which may be distributed 

for free or auctioned; 

2. The frequency of allocations; 

3. The basis for allocating allowances, 

which may be distributed, for example, 

based on historical heat input or electric 

and thermal output; and 

4. The use of allowance set-asides 

and, if used, their size. 

West Virginia has chosen to distribute 

NOX annual and NOX ozone season 

allowances in a manner substantively 

identical to that in the Part 96 model 

rule. The State’s NOX ozone season 

allocation provisions have been 

modified only to the extent necessary to 

add requirements associated with West 

Virginia’s option to bring its non-EGUs 

into the CAIR NOX ozone season trading 

program. 

E. Allocation of NOX Allowances From 

Compliance Supplement Pool 

The CAIR establishes a CSP to 

provide an incentive for early 

reductions in NOX annual emissions. 

The CSP consists of 200,000 CAIR NOX

annual allowances of vintage 2009 for 

the entire CAIR region, and a State’s 

share of the CSP is based upon the 

projected magnitude of the emission 

reductions required by CAIR in that 

State. States may distribute CSP 

allowances, one allowance for each ton 

of early reduction, to sources that make 

NOX reductions during 2007 or 2008 


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27736 Federal Register / Vol. 74, No. 111 / Thursday, June 11, 2009 / Proposed Rules 

beyond what is required by any 

applicable State or Federal emission 

limitation. States also may distribute 

CSP allowances based upon a 

demonstration of need for an extension 

of the 2009 deadline for implementing 

emission controls. 

The CAIR annual NOX model trading 

rule establishes specific methodologies 

for allocations of CSP allowances. States 

may choose an allowed, alternative CSP 

allocation methodology to be used to 

allocate CSP allowances to sources in 

the States. 

West Virginia’s compliance 

supplement pool is comprised of 4,898 

allowances. West Virginia has chosen to 

modify the provisions of the CAIR NOX

annual model trading rule concerning 

the allocation of allowances from the 

CSP. West Virginia has chosen to 

distribute CSP allowances to any CAIR 

NOX Annual unit in the State whose 

average annual NOX emission rate for 

2007 or 2008 is less than 0.25 lb/mmBtu 

and whose NOX averaging plan (if the 

unit is included in an Acid Rain 

Program NOX averaging plan under 40 

CFR 76.11) for that year has an actual 

weighted average NOX emission rate 

that is equal to or less than the actual 

weighted average NOX emission rate for 

the year before the unit achieves NOX

emission reductions in 2007 or 2008. 

F. Individual Opt-in Units 

The opt-in provisions of the CAIR SIP 

model trading rules allow certain nonEGUs (i.e., boilers, combustion turbines, 

and other stationary fossil-fuel-fired 

devices) that do not meet the 

applicability criteria for a CAIR trading 

program to participate voluntarily in 

(i.e., opt into) the CAIR trading program. 

A non-EGU may opt into one or more 

of the CAIR trading programs. In order 

to qualify to opt into a CAIR trading 

program, a unit must vent all emissions 

through a stack and be able to meet 

monitoring, recordkeeping, and 

recording requirements of 40 CFR part 

75. The owners and operators seeking to 

opt a unit into a CAIR trading program 

must apply for a CAIR opt-in permit. If 

the unit is issued a CAIR opt-in permit, 

the unit becomes a CAIR unit, is 

allocated allowances, and must meet the 

same allowance-holding and emissions 

monitoring and reporting requirements 

as other units subject to the CAIR 

trading program. The opt-in provisions 

provide for two methodologies for 

allocating allowances for opt-in units, 

one methodology that applies to opt-in 

units in general and a second 

methodology that allocates allowances 

only to opt-in units that the owners and 

operators intend to repower before 

January 1, 2015. 

States have several options 

concerning the opt-in provisions. States 

may adopt the CAIR opt-in provisions 

entirely or may adopt them but exclude 

one of the methodologies for allocating 

allowances. States may also decline to 

adopt the opt-in provisions at all. West 

Virginia has declined to adopt the optin provisions. 

G. Additional Interpretations 

1. References to NOX Emitting 

Equipment in Section 45–40–9 

West Virginia’s SIP revision includes 

provisions (in sections 45–40–90 and 

45–40–100) addressing NOX ozone 

season emission reduction requirements 

for internal combustion engines and 

cement kilns, none of which sources are 

included in the CAIR NOX ozone season 

trading program. The NOX ozone season 

emission reduction requirements in 

these sections—which have been moved 

from the portion of West Virginia’s rules 

addressing the NOX SIP Call to the 

portion addressing CAIR—are identical 

to those previously approved in West 

Virginia’s SIP for purposes of meeting 

requirements under the NOX SIP Call, 

except that references to the NOX SIP 

Call trading program are replaced by 

references to the CAIR NOX ozone 

season trading program. EPA is 

therefore proposing to approve the 

recodification and revision of sections 

45–40–90 and 45–40–100, as interpreted 

and clarified below. 

Some of the language in section 45– 

40–90 could be interpreted as being 

inconsistent with the above-discussed 

CAIR trading program applicability 

provisions in section 45–40–4 in West 

Virginia’s SIP revision. Specifically, 

subsections 90.1, 90.4.d, 90.4.g, and 

90.4.i refer to stationary internal 

combustion engines and ‘‘other 

significant NOX emitting equipment’’ 

located at facilities controlled by the 

same owner or operator. Section 90.1 

states that both of these categories of 

equipment ‘‘will not be * * * subject to 

the CAIR NOX Ozone Season Trading 

Program requirements under sections 4 

through 88.’’ Subsections 90.4.g and 

90.4.i include similar language stating 

the ‘‘other significant NOX emitting 

equipment’’ will not be subject to 

trading program requirements; however, 

these sections clarify that the ‘‘other 

significant NOX emitting equipment’’ 

that is not subject to the trading program 

requirements is only to equipment ‘‘that 

is not a CAIR NOX Ozone Season unit 

under section 4’’ (i.e., section 45–40–4). 

Subsections 90.1 and 90.4.d lack this 

clarifying language. Section 45–40–4 

does not exempt from the CAIR NOX

ozone season trading program ‘‘other 

significant NOX emitting equipment’’ 

covered by section 45–40–90. Therefore, 

if subsections 90.1 and 90.4.d. were 

interpreted to exempt ‘‘other significant 

NOX emitting equipment’’ regardless of 

whether it is covered by the CAIR 

trading programs, these subsections 

would be inconsistent with section 45– 

40–4. In order for West Virginia to 

participate in the CAIR trading program 

as the State clearly intends, the 

applicability of the CAIR trading 

program to ‘‘significant NOX emitting 

equipment’’ must be determined by 

section 45–40–4 (not section 45–40–90). 

EPA interprets all references to ‘‘other 

significant NOX emitting equipment’’ in 

section 45–40–90 to be limited to such 

equipment that is not a CAIR NOX

Ozone Season unit under section 45– 

40–4. In a letter submitted to EPA on 

April 30, 2008, the West Virginia 

Department of Environmental Protection 

adopted this interpretation. 

2. Treatment of CAIR Allowances 

Allocated to Opt-in Units 

Having chosen not to allow units to 

opt into the CAIR trading programs, 

West Virginia properly removed from its 

CAIR trading rules most of the 

provisions that are in the CAIR model 

trading rules and address CAIR opt-in 

units. However, while, as discussed 

above, West Virginia has the option of 

participating in the CAIR trading 

programs with or without allowing units 

in its jurisdiction to opt into the trading 

programs, other States also have that 

option, and some States have chosen to 

allow units in their respective 

jurisdictions to opt in. Consequently, 

any CAIR SO2 unit, including those in 

West Virginia, may obtain CAIR SO2

allowances allocated to a CAIR opt-in 

unit and use them to comply with the 

allowance-holding requirements in the 

CAIR SO2 trading program. Under the 

CAIR SO2 model trading rule, 

compliance with these requirements is 

determined in two steps: First, CAIR 

units that are also Acid Rain units must 

show compliance consistent with the 

Acid Rain Program allowance-holding 

requirement and so can use only title IV 

allowances; and second, all CAIR units 

must then show compliance with the 

CAIR trading program allowanceholding requirement using either title IV 

allowances or CAIR SO2 allowances 

allocated to CAIR opt-in units. Language 

in the compliance provisions of the 

CAIR SO2 model trading rule states 

explicitly when CAIR SO2 allowances 

allocated to CAIR opt-in units can and 

cannot be used. West Virginia’s SIP 

inadvertently omitted this language 

from section 45–41–54, apparently 

because the language refers to the CAIR 


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Federal Register / Vol. 74, No. 111 / Thursday, June 11, 2009 / Proposed Rules 27737 

opt-in unit provisions. However, West 

Virginia’s rule still requires compliance 

initially with the Acid Rain Program 

requirement set forth in sections 73.35 

and 77.5 of the Acid Rain Program rules, 

which themselves require the use of 

only title IV allowances. Consequently, 

EPA interprets subsections 54.2.a.1 and 

54.2.a.2 to allow only for the use of title 

IV allowances. Moreover, since West 

Virginia’s rule defines ‘‘CAIR SO2

allowance’’ as including allowances 

allocated to CAIR opt-in units, EPA 

interprets subsections 54.2.a.3, 54.2.b, 

54.2.b.2, and 54.4.a to allow for the use 

of title IV allowances and allowances 

allocated to CAIR opt-in units. In a letter 

submitted to EPA on April 30, 2008, the 

West Virginia Department of 

Environmental Protection adopted this 

interpretation. 

VI. Proposed Action 

EPA is proposing to approve West 

Virginia’s full CAIR SIP revision 

submitted on April 22, 2008, as 

interpreted and clarified herein. EPA is 

proposing to approve the recodification 

and revision of provisions (in sections 

45–40–90 and 45–40–100) addressing 

NOX ozone season emission reduction 

requirements for internal combustion 

engines and cement kilns, none of 

which are included in the CAIR trading 

programs. Under the SIP revision, West 

Virginia is choosing to participate in the 

EPA-administered CAIR cap-and-trade 

programs for SO2, NOX annual, and NOX

ozone season emissions. The SIP 

revision, as interpreted and clarified 

herein, meets the applicable 

requirements of CAIR, set forth in 40 

CFR 51.123(o) and (aa), with regard to 

NOX annual and NOX ozone season 

emissions, and 40 CFR 51.124(o), with 

regard to SO2 emissions. EPA is 

soliciting public comments on the 

issues discussed in this document. 

These comments will be considered 

before taking final action. 

VII. Statutory and Executive Order 

Reviews 

Under the Clean Air Act, the 

Administrator is required to approve a 

SIP submission that complies with the 

provisions of the Act and applicable 

Federal regulations. 42 U.S.C. 7410(k); 

40 CFR 52.02(a). Thus, in reviewing SIP 

submissions, EPA’s role is to approve 

state choices, provided that they meet 

the criteria of the Clean Air Act. 

Accordingly, this action merely 

proposes to approve state law as 

meeting Federal requirements and does 

not impose additional requirements 

beyond those imposed by state law. For 

that reason, this proposed action: 

• Is not a ‘‘significant regulatory 

action’’ subject to review by the Office 

of Management and Budget under 

Executive Order 12866 (58 FR 51735, 

October 4, 1993); 

• Does not impose an information 

collection burden under the provisions 

of the Paperwork Reduction Act (44 

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

• Is certified as not having a 

significant economic impact on a 

substantial number of small entities 

under the Regulatory Flexibility Act (5 

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

• Does not contain any unfunded 

mandate or significantly or uniquely 

affect small governments, as described 

in the Unfunded Mandates Reform Act 

of 1995 (Pub. L. 104–4); 

• Does not have Federalism 

implications as specified in Executive 

Order 13132 (64 FR 43255, August 10, 

1999); 

• Is not an economically significant 

regulatory action based on health or 

safety risks subject to Executive Order 

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

• Is not a significant regulatory action 

subject to Executive Order 13211 (66 FR 

28355, May 22, 2001); 

• Is not subject to requirements of 

Section 12(d) of the National 

Technology Transfer and Advancement 

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

application of those requirements would 

be inconsistent with the Clean Air Act; 

and 

• Does not provide EPA with the 

discretionary authority to address, as 

appropriate, disproportionate human 

health or environmental effects, using 

practicable and legally permissible 

methods, under Executive Order 12898 

(59 FR 7629, February 16, 1994). 

In addition, this proposed approval of 

West Virginia’s SIP revision to meet the 

requirements of CAIR does not have 

tribal implications as specified by 

Executive Order 13175 (65 FR 67249, 

November 9, 2000), because the SIP is 

not approved to apply in Indian country 

located in the state, and EPA notes that 

it will not impose substantial direct 

costs on tribal governments or preempt 

tribal law. 

List of Subjects in 40 CFR Part 52 

Environmental protection, Air 

pollution control, Incorporation by 

reference, Nitrogen dioxide, Ozone, 

Particulate matter, Reporting and 

recordkeeping requirements, Sulfur 

oxides. 

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

Dated: May 29, 2009. 

William C. Early, 

Acting Regional Administrator, Region III. 

[FR Doc. E9–13725 Filed 6–10–09; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R04–OAR–2008–0831–200825(b); 

FRL–8915–6] 

Approval and Promulgation of 

Implementation Plans Georgia: State 

Implementation Plan Revision 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Proposed rule. 

SUMMARY: EPA is proposing to approve 

the State Implementation Plan (SIP) 

revision submitted by the Georgia 

Department of Natural Resources, 

through the Georgia Environmental 

Protection Division, on June 25, 2008. 

The revisions include modifications to 

Georgia’s Air Quality Rules found at 

Chapters 391–3–1–.01, and 391–3–1– 

.02, pertaining to ‘‘Definitions,’’ and 

‘‘Emission Limitations and Standards,’’ 

respectively. This action is being taken 

pursuant to section 110 of the Clean Air 

Act. 

In the Final Rules Section of this 

Federal Register, EPA is approving the 

State’s SIP revision as a direct final rule 

without prior proposal because the 

Agency views this as a noncontroversial 

submittal and anticipates no adverse 

comments. A detailed rationale for the 

approval is set forth in the direct final 

rule. If no adverse comments are 

received in response to this rule, no 

further activity is contemplated. If EPA 

receives adverse comments, the direct 

final rule will be withdrawn and all 

public comments received will be 

addressed in a subsequent final rule 

based on this proposed rule. EPA will 

not institute a second comment period 

on this document. Any parties 

interested in commenting on this 

document should do so at this time. 

DATES: Written comments must be 

received on or before July 13, 2009. 

ADDRESSES: Submit your comments, 

identified by Docket ID No. EPA–R04– 

OAR–2008–0831, by one of the 

following methods: 

1. www.regulations.gov: Follow the 

on-line instructions for submitting 

comments. 

2. E-mail: harder.stacy@epa.gov. 

3. Fax: 404–562–9019. 

4. Mail: ‘‘EPA–R04–OAR–2008– 

0831,’’ Regulatory Development Section, 


cprice-sewell on PRODPC61 with PROPOSALS