[Federal Register Volume 82, Number 153 (Thursday, August 10, 2017)]
[Proposed Rules]
[Pages 37389-37396]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-16902]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2017-0364; FRL-9965-99-Region 4]


Air Plan Approval; South Carolina; Cross-State Air Pollution Rule

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve portions of a draft revision to the South Carolina State 
Implementation Plan (SIP) concerning the Cross-State Air Pollution Rule 
(CSAPR) that was submitted by South Carolina for parallel processing on 
May 26, 2017. Under CSAPR, large electricity generating units (EGUs) in 
South Carolina are subject to Federal Implementation Plans (FIPs) 
requiring the units to participate in CSAPR's federal trading program 
for annual emissions of nitrogen oxides (NO<INF>X</INF>) and one of 
CSAPR's two federal trading programs for annual emissions of sulfur 
dioxide (SO<INF>2</INF>). This action would approve the State's 
regulations requiring large South Carolina EGUs to participate in new 
CSAPR state trading programs for annual NO<INF>X</INF> and 
SO<INF>2</INF> emissions integrated with the CSAPR federal trading 
programs, replacing the corresponding FIP requirements. These CSAPR 
state trading programs are substantively identical to the CSAPR federal 
trading programs, with the State retaining EPA's default allowance 
allocation methodology and EPA remaining the implementing authority for 
administration of the trading program. EPA is proposing to approve the 
portions of the draft SIP revision concerning these CSAPR state trading 
programs because these portions of the draft SIP revision meet the 
requirements of the Clean Air Act (CAA or Act) and EPA's regulations 
for approval of a CSAPR full SIP revision replacing the requirements of 
a CSAPR FIP. Under the CSAPR regulations, approval of these portions of 
the draft SIP revision would automatically eliminate South Carolina 
units' obligations to participate in CSAPR's federal trading programs 
for annual NO<INF>X</INF> and SO<INF>2</INF> emissions under the 
corresponding CSAPR FIPs addressing interstate transport requirements 
for the 1997 Annual Fine Particulate Matter (PM<INF>2.5</INF>) national 
ambient air quality standards (NAAQS). Approval of these portions of 
the SIP revision would satisfy South Carolina's good neighbor 
obligation for the 1997 Annual PM<INF>2.5</INF> NAAQS.

DATES: Comments must be received on or before September 11, 2017.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2017-0364 at http://www.regulations.gov. Follow the online 
instructions for submitting comments. Once submitted, comments cannot 
be edited or removed from Regulations.gov. EPA may publish any comment 
received to its public docket. Do not submit electronically any 
information you consider to be Confidential Business Information (CBI) 
or other information whose disclosure is restricted by statute. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. EPA will 
generally not consider comments or comment contents located outside of 
the primary submission (i.e., on the web, cloud, or other file sharing 
system). For additional submission methods, the full EPA public comment 
policy, information about CBI or multimedia submissions, and general 
guidance on making effective comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Ashten Bailey, Air Regulatory 
Management Section, Air, Pesticides and Toxics Management Division, 
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street SW., 
Atlanta, Georgia 30303-8960. Ms. Bailey can be reached by telephone at 
(404) 562-9164 or via electronic mail at <a href="/cdn-cgi/l/email-protection#6d0f0c04010814430c1e051908032d081d0c430a021b"><span class="__cf_email__" data-cfemail="593b3830353c2077382a312d3c37193c2938773e362f">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

I. Summary

    EPA is proposing to approve the portions of the May 26, 2017, draft 
revision to the South Carolina SIP concerning CSAPR \1\ trading 
programs for annual emissions of NOx and SO<INF>2</INF>. Large EGUs in 
South Carolina are subject to CSAPR FIPs that require the units to 
participate in the federal CSAPR NOx Annual Trading Program and the 
federal CSAPR SO<INF>2</INF> Group 2 Trading Program. CSAPR also 
provides a process for the submission and approval of SIP revisions to 
replace the requirements of CSAPR FIPs with SIP requirements under 
which a state's units participate in CSAPR state trading programs that 
are integrated with and, with certain permissible exceptions, 
substantively identical to the CSAPR federal trading programs.
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    \1\ Federal Implementation Plans; Interstate Transport of Fine 
Particulate Matter and Ozone and Correction of SIP Approvals, 76 FR 
48208 (August 8, 2011) (codified as amended at 40 CFR 52.38 and 
52.39 and subparts AAAAA through EEEEE of 40 CFR part 97).
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    The portions of the draft SIP revision proposed for approval would 
incorporate into South Carolina's SIP state trading program regulations 
for annual NO<INF>X</INF> and SO<INF>2</INF> emissions that would 
replace EPA's federal trading program regulations for those emissions 
for South Carolina units for control periods in 2017 and later 
years.\2\ EPA is proposing to approve these portions of the draft SIP 
revision because they meet the requirements of the CAA and EPA's 
regulations for approval of a CSAPR full SIP revision replacing a 
federal trading program with a state trading program that is integrated 
with and substantively identical to the federal trading program. Under 
the CSAPR regulations, approval of these portions of the draft SIP 
revision would automatically eliminate the obligations of large EGUs in 
South Carolina (but not any units in Indian country within South 
Carolina's borders) to participate in CSAPR's federal trading programs 
for annual NO<INF>X</INF> and SO<INF>2</INF> emissions under the 
corresponding CSAPR FIPs. EPA proposes to find that approval of these 
portions of the draft SIP revision would satisfy South Carolina's 
obligation

[[Page 37390]]

pursuant to CAA section 110(a)(2)(D)(i)(I) to prohibit emissions which 
will significantly contribute to nonattainment or interfere with 
maintenance of the 1997 Annual PM<INF>2.5</INF> NAAQS in any other 
state.
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    \2\ Under South Carolina's draft regulations, the State will 
retain EPA's default allowance allocation methodology and EPA will 
remain the implementing authority for administration of the trading 
program. See sections IV and V.B.2, below.
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    The Phase 2 SO<INF>2</INF> budget established for South Carolina in 
the CSAPR rulemaking has been remanded to EPA for reconsideration.\3\ 
If EPA finalizes approval of the portions of the draft SIP revision as 
proposed, South Carolina will have fulfilled its obligations to provide 
a SIP that address the interstate transport provisions of CAA section 
110(a)(2)(D)(i)(I) with respect to the 1997 Annual PM<INF>2.5</INF> 
NAAQS. Thus, EPA would no longer be under an obligation to (nor would 
EPA have the authority to) address those interstate transport 
requirements through implementation of a FIP, and approval of these 
portions of the draft SIP revision would eliminate South Carolina 
units' obligations to participate in the federal CSAPR NO<INF>X</INF> 
Annual Trading Program and the federal CSAPR SO<INF>2</INF> Group 2 
Trading Program. Elimination of South Carolina units' obligations to 
participate in the federal trading programs would include elimination 
of the federally-established Phase 2 budgets capping allocations of 
CSAPR NO<INF>X</INF> Annual allowances and CSAPR SO<INF>2</INF> Group 2 
allowances to South Carolina units under those federal trading 
programs. As approval of these portions of the draft SIP revision would 
eliminate South Carolina's remanded federally-established Phase 2 
SO<INF>2</INF> budget and eliminate EPA's authority to subject units in 
South Carolina to a FIP, it is EPA's opinion that finalization of 
approval of this SIP action would address the judicial remand of South 
Carolina's federally-established Phase 2 SO<INF>2</INF> budget.\4\
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    \3\ EME Homer City Generation, L.P. v. EPA (EME Homer City II), 
795 F.3d 118, 138 (D.C. Cir. 2015).
    \4\ Although the court in EME Homer City II remanded South 
Carolina's Phase 2 SO<INF>2</INF> budget because it determined that 
the budget may be too stringent, nothing in the court's decision 
affects South Carolina's authority to seek incorporation into its 
SIP of a state-established budget as stringent as the remanded 
federally-established budget or limits EPA's authority to approve 
such a SIP revision. See 42 U.S.C. 7416, 7410(k)(3).
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    EPA is proposing to approve the draft SIP revision through parallel 
processing. Should South Carolina not submit a final SIP revision to 
EPA and/or should EPA not be able to finalize a full approval action 
addressing interstate transport provisions of CAA section 
110(a)(2)(D)(i)(I) with respect to the 1997 Annual PM<INF>2.5</INF> 
NAAQS, EPA will undertake further reconsideration of the FIP pursuant 
to the judicial remand.
    Section II of this document describes the requirements and steps 
for parallel processing. Section III summarizes the relevant aspects of 
the CSAPR federal trading programs and FIPs as well as the range of 
opportunities states have to submit SIP revisions to modify or replace 
the FIP requirements while continuing to rely on CSAPR's trading 
programs to address the states' obligations to mitigate interstate air 
pollution. Section IV describes the specific conditions for approval of 
such SIP revisions. Section V contains EPA's analysis of South 
Carolina's SIP draft submittal, and Section VI sets forth EPA's 
proposed action on the draft submittal. Section VII addresses required 
statutory and Executive Order reviews.

II. What is ``parallel processing?''

    Parallel processing refers to a concurrent state and federal 
proposed rulemaking action. Generally, the state submits a copy of the 
proposed regulation or other revisions to EPA before conducting its 
public hearing. EPA reviews this proposed state action, and prepares a 
notice of proposed rulemaking. EPA's notice of proposed rulemaking is 
published in the Federal Register during the same timeframe that the 
state is holding its public hearing. The state and EPA then provide for 
concurrent public comment periods on both the state action and federal 
action. If the state's formal SIP revision is changed from the draft 
SIP revision, EPA will evaluate those changes and may publish another 
notice of proposed rulemaking. A final rulemaking action by EPA will 
occur only after the SIP revision has been adopted by South Carolina 
and submitted formally to EPA for incorporation into the SIP.
    On May 26, 2017, the State of South Carolina, through South 
Carolina Department of Health and Environmental Control (SCDHEC), 
submitted a request for parallel processing for a draft SIP revision 
related to the interstate transport provisions of CAA section 
110(a)(2)(D)(i)(I) with respect to the 1997 Annual PM<INF>2.5</INF> 
NAAQS. This revision was noticed for public comment by the State on May 
26, 2017, and is not yet state-effective. Through this proposed 
rulemaking, EPA is proposing parallel approval of this draft SIP 
revision.
    Once the May 26, 2017, draft revision is state-effective, South 
Carolina will need to provide EPA with a formal SIP revision. After 
South Carolina submits the formal SIP revision (including a response to 
any public comments raised during the State's public participation 
process), EPA will evaluate the revision. If the formal SIP revision is 
changed from the draft SIP revision, EPA will evaluate those changes 
for significance. If any such changes are found by EPA to be 
significant, then the Agency intends to re-propose the action based 
upon the revised submission.
    While EPA may not be able to have a concurrent public comment 
process with the State, the SCDHEC-requested parallel processing allows 
EPA to begin to take action on the State's draft SIP revision in 
advance of the submission of the formal SIP revision. As stated above, 
the final rulemaking action by EPA will occur only after the SIP 
revision has been: (1) Adopted by South Carolina, (2) submitted 
formally to EPA for incorporation into the SIP, and (3) evaluated for 
changes.

III. Background on CSAPR and CSAPR-Related SIP Revisions

    EPA issued CSAPR in July 2011 to address the requirements of CAA 
section 110(a)(2)(D)(i)(I) concerning interstate transport of air 
pollution. As amended (including the 2016 CSAPR Update \5\), CSAPR 
requires 27 Eastern states to limit their statewide emissions of 
SO<INF>2</INF> and/or NO<INF>X</INF> in order to mitigate transported 
air pollution unlawfully impacting other states' ability to attain or 
maintain four NAAQS: The 1997 Annual PM<INF>2.5</INF> NAAQS, the 2006 
24-hour PM<INF>2.5</INF> NAAQS, the 1997 8-hour ozone NAAQS, and the 
2008 8-hour ozone NAAQS. The CSAPR emissions limitations are defined in 
terms of maximum statewide ``budgets'' for emissions of annual 
SO<INF>2</INF>, annual NO<INF>X</INF>, and/or ozone season 
NO<INF>X</INF> by each covered state's large EGUs. The CSAPR state 
budgets are implemented in two phases of generally increasing 
stringency, with the Phase 1 budgets applying to emissions in 2015 and 
2016 and the Phase 2 (and CSAPR Update) budgets applying to emissions 
in 2017 and later years. As a mechanism for achieving compliance with 
the emissions limitations, CSAPR establishes five federal emissions 
trading programs: A program for annual NO<INF>X</INF> emissions, two 
geographically

[[Page 37391]]

separate programs for annual SO<INF>2</INF> emissions, and two 
geographically separate programs for ozone-season NO<INF>X</INF> 
emissions. CSAPR also establishes FIP requirements applicable to the 
large EGUs in each covered state. Currently, the CSAPR FIP provisions 
require each state's units to participate in up to three of the five 
CSAPR trading programs.
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    \5\ 81 FR 74504 (October 26, 2016). The CSAPR Update was 
promulgated to address interstate pollution with respect to the 2008 
ozone NAAQS and to address a judicial remand of certain original 
CSAPR ozone season NO<INF>X</INF> budgets promulgated with respect 
to the 1997 ozone NAAQS. 81 FR at 74505. The CSAPR Update 
established new emission reduction requirements addressing the more 
recent NAAQS and coordinated them with the remaining emission 
reduction requirements addressing the older NAAQS, so that starting 
in 2017, CSAPR includes two geographically separate trading programs 
for ozone season NO<INF>X</INF> emissions covering EGUs in a total 
of 23 states. See 40 CFR 52.38(b)(1)-(2).
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    CSAPR includes provisions under which states may submit and EPA 
will approve SIP revisions to modify or replace the CSAPR FIP 
requirements while allowing states to continue to meet their transport-
related obligations using either CSAPR's federal emissions trading 
programs or state emissions trading programs integrated with the 
federal programs.\6\ Through such a SIP revision, a state may replace 
EPA's default provisions for allocating emission allowances among the 
state's units, employing any state-selected methodology to allocate or 
auction the allowances, subject to timing conditions and limits on 
overall allowance quantities. In the case of CSAPR's federal trading 
programs for ozone season NO<INF>X</INF> emissions (or an integrated 
state trading program), a state may also expand trading program 
applicability to include certain smaller electricity generating 
units.\7\ If a state wants to replace CSAPR FIP requirements with SIP 
requirements under which the state's units participate in a state 
trading program that is integrated with and identical to the federal 
trading program even as to the allocation and applicability provisions, 
the state may submit a SIP revision for that purpose as well. However, 
no emissions budget increases or other substantive changes to the 
trading program provisions are allowed. A state whose units are subject 
to multiple CSAPR FIPs and federal trading programs may submit SIP 
revisions to modify or replace either some or all of those FIP 
requirements.
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    \6\ See 40 CFR 52.38, 52.39. States also retain the ability to 
submit SIP revisions to meet their transport-related obligations 
using mechanisms other than the CSAPR federal trading programs or 
integrated state trading programs.
    \7\ States covered by both the CSAPR Update and the 
NO<INF>X</INF> SIP Call have the additional option to expand 
applicability under the CSAPR NO<INF>X</INF> Ozone Season Group 2 
Trading Program to include non-electric generating units that would 
have participated in the former NO<INF>X</INF> Budget Trading 
Program.
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    States can submit two basic forms of CSAPR-related SIP revisions 
effective for emissions control periods in 2017 or later years.\8\ 
Specific conditions for approval of each form of SIP revision are set 
forth in the CSAPR regulations, as described in section IV below. Under 
the first alternative--an ``abbreviated'' SIP revision--a state may 
submit a SIP revision that upon approval replaces the default allowance 
allocation and/or applicability provisions of a CSAPR federal trading 
program for the state.\9\ Approval of an abbreviated SIP revision 
leaves the corresponding CSAPR FIP and all other provisions of the 
relevant federal trading program in place for the state's units.
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    \8\ CSAPR also provides for a third, more streamlined form of 
SIP revision that is effective only for control periods in 2016 and 
is not relevant here. See 40 CFR 52.38(a)(3), (b)(3), (b)(7); 
52.39(d), (g).
    \9\ 40 CFR 52.38(a)(4), (b)(4), (b)(8); 52.39(e), (h).
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    Under the second alternative--a ``full'' SIP revision--a state may 
submit a SIP revision that upon approval replaces a CSAPR federal 
trading program for the state with a state trading program integrated 
with the federal trading program, so long as the state trading program 
is substantively identical to the federal trading program or does not 
substantively differ from the federal trading program except as 
discussed above with regard to the allowance allocation and/or 
applicability provisions.\10\ For purposes of a full SIP revision, a 
state may either adopt state rules with complete trading program 
language, incorporate the federal trading program language into its 
state rules by reference (with appropriate conforming changes), or 
employ a combination of these approaches.
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    \10\ 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
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    The CSAPR regulations identify several important consequences and 
limitations associated with approval of a full SIP revision. First, 
upon EPA's approval of a full SIP revision as correcting the deficiency 
in the state's implementation plan that was the basis for a particular 
set of CSAPR FIP requirements, the obligation to participate in the 
corresponding CSAPR federal trading program is automatically eliminated 
for units subject to the state's jurisdiction without the need for a 
separate EPA withdrawal action, so long as EPA's approval of the SIP is 
full and unconditional.\11\ Second, approval of a full SIP revision 
does not terminate the obligation to participate in the corresponding 
CSAPR federal trading program for any units located in any Indian 
country within the borders of the state, and if and when a unit is 
located in Indian country within a state's borders, EPA may modify the 
SIP approval to exclude from the SIP, and include in the surviving 
CSAPR FIP instead, certain trading program provisions that apply 
jointly to units in the state and to units in Indian country within the 
state's borders.\12\ Finally, if at the time a full SIP revision is 
approved EPA has already started recording allocations of allowances 
for a given control period to a state's units, the federal trading 
program provisions authorizing EPA to complete the process of 
allocating and recording allowances for that control period to those 
units will continue to apply, unless EPA's approval of the SIP revision 
provides otherwise.\13\
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    \11\ 40 CFR 52.38(a)(6), (b)(10)(i); 52.39(j).
    \12\ 40 CFR 52.38(a)(5)(iv)-(v), (a)(6), (b)(5)(v)-(vi), 
(b)(9)(vi)-(vii), (b)(10)(i); 52.39(f)(4)-(5), (i)(4)-(5), (j).
    \13\ 40 CFR 52.38(a)(7), (b)(11)(i); 52.39(k).
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    On July 28, 2015, the United States Court of Appeals for the 
District of Columbia Circuit (D.C. Circuit) issued a decision on a 
number of petitions related to CSAPR, which found that EPA required 
more emissions reductions than may have been necessary to address the 
downwind air quality problems to which some states contribute. The 
court remanded several CSAPR emission budgets to EPA for 
reconsideration, including the Phase 2 SO<INF>2</INF> trading budget 
for South Carolina.\14\ However, South Carolina has proposed to 
voluntarily adopt into their SIP a CSAPR state trading program that is 
integrated with the federal trading program and includes a state-
established SO<INF>2</INF> budget equal to the state's remanded Phase 2 
SO<INF>2</INF> emission budget.\15\ EPA notes that nothing in the 
court's decision affects South Carolina's authority to seek 
incorporation into its SIP of a state-established budget as stringent 
as the remanded federally-established budget or limits EPA's authority 
to approve such a SIP revision. The CSAPR regulations provide each 
covered state with the option to meet its transport obligations through 
SIP revisions replacing the federal trading programs and requiring the 
state's EGUs to participate in integrated CSAPR state trading

[[Page 37392]]

programs that apply emissions budgets of the same or greater 
stringency. Under the CSAPR regulations, when such a SIP revision is 
approved, the corresponding FIP provisions are automatically withdrawn.
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    \14\ EME Homer City II, 795 F.3d 118; See also EME Homer City 
Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), EPA v. EME 
Homer City Generation, L.P., 134 S. Ct. 1584 (2014). The D.C. 
Circuit also remanded SO<INF>2</INF> budgets for Alabama, Georgia, 
and Texas. The court also remanded Phase 2 ozone-season 
NO<INF>X</INF> budgets for eleven states, including South Carolina.
    \15\ See memo entitled ``The U.S. Environmental Protection 
Agency's Plan for Responding to the Remand of the Cross-State Air 
Pollution Rule Phase 2 SO<INF>2</INF> Budgets for Alabama, Georgia, 
South Carolina and Texas'' from Janet G. McCabe, EPA Acting 
Assistant Administrator for Air and Radiation, to EPA Regional Air 
Division Directors (June 27, 2016), available at https://www.regulations.gov/document?D=EPA-HQ-OAR-2016-0598-0003. The memo 
directs the Regional Air Division Directors to share the memo with 
state officials. EPA also communicated orally with officials in 
Alabama, Georgia, South Carolina, and Texas in advance of the memo.
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IV. Conditions for Approval of CSAPR-Related SIP Revisions

    Each CSAPR-related abbreviated or full SIP revision must meet the 
following general submittal conditions:
    <bullet> Timeliness and completeness of SIP submittal. The SIP 
submittal completeness criteria in section 2.1 of appendix V to 40 CFR 
part 51 apply. In addition, if a state wants to replace the default 
allowance allocation or applicability provisions of a CSAPR federal 
trading program, the complete SIP revision must be submitted to EPA by 
December 1 of the year before the deadlines described below for 
submitting allocation or auction amounts to EPA for the first control 
period for which the state wants to replace the default allocation and/
or applicability provisions.\16\ This SIP submission deadline is 
inoperative in the case of a SIP revision that seeks only to replace a 
CSAPR FIP and federal trading program with a SIP and a substantively 
identical state trading program integrated with the federal trading 
program.
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    \16\ 40 CFR 52.38(a)(4)(ii), (a)(5)(vi), (b)(4)(iii), 
(b)(5)(vii), (b)(8)(iv), (b)(9)(viii); 52.39(e)(2), (f)(6), (h)(2), 
(i)(6).
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    In addition to the general submittal conditions, a CSAPR-related 
abbreviated or full SIP seeking to address the allocation or auction of 
emission allowances must meet the following further conditions:
    <bullet> Methodology covering all allowances potentially requiring 
allocation. For each federal trading program addressed by a SIP 
revision, the SIP revision's allowance allocation or auction 
methodology must replace both the federal program's default allocations 
to existing units \17\ at 40 CFR 97.411(a), 97.511(a), 97.611(a), 
97.711(a), or 97.811(a) as applicable, and the federal trading 
program's provisions for allocating allowances from the new unit set-
aside (NUSA) for the state at 40 CFR 97.411(b)(1) and 97.412(a), 
97.511(b)(1) and 97.512(a), 97.611(b)(1) and 97.612(a), 97.711(b)(1) 
and 97.712(a), or 97.811(b)(1) and 97.812(a), as applicable.\18\ In the 
case of a state with Indian country within its borders, while the SIP 
revision may neither alter nor assume the federal program's provisions 
for administering the Indian country NUSA for the state, the SIP 
revision must include procedures addressing the disposition of any 
otherwise unallocated allowances from an Indian country NUSA that may 
be made available for allocation by the state after EPA has carried out 
the Indian country NUSA allocation procedures.\19\
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    \17\ In the context of the approval conditions for CSAPR-related 
SIP revisions, an ``existing unit'' is a unit for which EPA has 
determined default allowance allocations (which could be allocations 
of zero allowances) in the rulemakings establishing and amending 
CSAPR. A document describing EPA's default allocations to existing 
units is available at https://www.epa.gov/sites/production/files/2017-05/documents/csapr_allowance_allocations_final_rule_tsd.pdf.
    \18\ 40 CFR 52.38(a)(4)(i), (a)(5)(i), (b)(4)(ii), (b)(5)(ii), 
(b)(8)(iii), (b)(9)(iii); 52.39(e)(1), (f)(1), (h)(1), (i)(1).
    \19\ See 40 CFR 97.412(b)(10)(ii), 97.512(b)(10)(ii), 
97.612(b)(10)(ii), 97.712(b)(10)(ii), 97.812(b)(10)(ii).
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    <bullet> Assurance that total allocations will not exceed the state 
budget. For each federal trading program addressed by a SIP revision, 
the total amount of allowances auctioned or allocated for each control 
period under the SIP revision (prior to the addition by EPA of any 
unallocated allowances from any Indian country NUSA for the state) 
generally may not exceed the state's emissions budget for the control 
period less the sum of the amount of any Indian country NUSA for the 
state for the control period and any allowances already allocated to 
the state's units for the control period and recorded by EPA.\20\ Under 
its SIP revision, a state is free to not allocate allowances to some or 
all potentially affected units, to allocate or auction allowances to 
entities other than potentially affected units, or to allocate or 
auction fewer than the maximum permissible quantity of allowances and 
retire the remainder. Under the CSAPR NO<INF>X</INF> Ozone Season Group 
2 Trading Program only, additional allowances may be allocated if the 
state elects to expand applicability to non-electric generating units 
that would have been subject to the NO<INF>X</INF> Budget Trading 
Program established for compliance with the NO<INF>X</INF> SIP 
Call.\21\
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    \20\ 40 CFR 52.38(a)(4)(i)(A), (a)(5)(i)(A), (b)(4)(ii)(A), 
(b)(5)(ii)(A), (b)(8)(iii)(A), (b)(9)(iii)(A); 52.39(e)(1)(i), 
(f)(1)(i), (h)(1)(i), (i)(1)(i).
    \21\ 40 CFR 52.38(b)(8)(iii)(A), (b)(9)(iii)(A).
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    <bullet> Timely submission of state-determined allocations to EPA. 
The SIP revision must require the state to submit to EPA the amounts of 
any allowances allocated or auctioned to each unit for each control 
period (other than allowances initially set aside in the state's 
allocation or auction process and later allocated or auctioned to such 
units from the set-aside amount) by the following deadlines.\22\ Note 
that the submission deadlines differ for amounts allocated or auctioned 
to units considered existing units for CSAPR purposes and amounts 
allocated or auctioned to other units.
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    \22\ 40 CFR 52.38(a)(4)(i)(B)-(C), (a)(5)(i)(B)-(C), 
(b)(4)(ii)(B)-(C), (b)(5)(ii)(B)-(C), (b)(8)(iii)(B)-(C), 
(b)(9)(iii)(B)-(C); 52.39(e)(1)(ii)-(iii), (f)(1)(ii)-(iii), 
(h)(1)(ii)-(iii), (i)(1)(ii)-(iii).

------------------------------------------------------------------------
                                                Deadline for submission
         Units           Year of the control    to EPA of allocations or
                                period              auction results
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  CSAPR NO Annual, CSAPR NOOzone Season Group 1, CSAPR SO Group 1, and
                    CSAPR SO Group 2 Trading Programs
------------------------------------------------------------------------
Existing..............  2017 and 2018........  June 1, 2016.
                        2019 and 2020........  June 1, 2017.
                        2021 and 2022........  June 1, 2018.
                        2023 and later years.  June 1 of the fourth year
                                                before the year of the
                                                control period.
Other.................  All years............  July 1 of the year of the
                                                control period.
------------------------------------------------------------------------
              CSAPR NO Ozone Season Group 2 Trading Program
------------------------------------------------------------------------
Existing..............  2019 and 2020........  June 1, 2018.
                        2021 and 2022........  June 1, 2019.
                        2023 and 2024........  June 1, 2020.
                        2025 and later years.  June 1 of the fourth year
                                                before the year of the
                                                control period.
Other.................  All years............  July 1 of the year of the
                                                control period.
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[[Page 37393]]

    <bullet> No changes to allocations already submitted to EPA or 
recorded. The SIP revision must not provide for any change to the 
amounts of allowances allocated or auctioned to any unit after those 
amounts are submitted to EPA or any change to any allowance allocation 
determined and recorded by EPA under the federal trading program 
regulations.\23\
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    \23\ 40 CFR 52.38(a)(4)(i)(D), (a)(5)(i)(D), (b)(4)(ii)(D), 
(b)(5)(ii)(D), (b)(8)(iii)(D), (b)(9)(iii)(D); 52.39(e)(1)(iv), 
(f)(1)(iv), (h)(1)(iv), (i)(1)(iv).
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    <bullet> No other substantive changes to federal trading program 
provisions. The SIP revision may not substantively change any other 
trading program provisions, except in the case of a SIP revision that 
also expands program applicability as described below.\24\ Any new 
definitions adopted in the SIP revision (in addition to the federal 
trading program's definitions) may apply only for purposes of the SIP 
revision's allocation or auction provisions.\25\
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    \24\ 40 CFR 52.38(a)(4), (a)(5), (b)(4), (b)(5), (b)(8), (b)(9); 
52.39(e), (f), (h), (i).
    \25\ 40 CFR 52.38(a)(4)(i), (a)(5)(ii), (b)(4)(ii), (b)(5)(iii), 
(b)(8)(iii), (b)(9)(iv); 52.39(e)(1), (f)(2), (h)(1), (i)(2).
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    In addition to the general submittal conditions, a CSAPR-related 
abbreviated or full SIP revision seeking to expand applicability under 
the CSAPR NO<INF>X</INF> Ozone Season Group 1 or CSAPR NO<INF>X</INF> 
Ozone Season Group 2 Trading Programs (or an integrated state trading 
program) must meet the following further conditions:
    <bullet> Only electricity generating units with nameplate capacity 
of at least 15 MWe. The SIP revision may expand applicability only to 
additional fossil fuel-fired boilers or combustion turbines serving 
generators producing electricity for sale, and only by lowering the 
generator nameplate capacity threshold used to determine whether a 
particular boiler or combustion turbine serving a particular generator 
is a potentially affected unit. The nameplate capacity threshold 
adopted in the SIP revision may not be less than 15 MWe.\26\ In 
addition or alternatively, applicability under the CSAPR NO<INF>X</INF> 
Ozone Season Group 2 Trading Program may be expanded to non-electric 
generating units that would have been subject to the NO<INF>X</INF> 
Budget Trading Program established for compliance with the 
NO<INF>X</INF> SIP Call.\27\
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    \26\ 40 CFR 52.38(b)(4)(i), (b)(5)(i), (b)(8)(i), (b)(9)(i).
    \27\ 40 CFR 52.38(b)(8)(ii), (b)(9)(ii).
---------------------------------------------------------------------------

    <bullet> No other substantive changes to federal trading program 
provisions. The SIP revision may not substantively change any other 
trading program provisions, except in the case of a SIP revision that 
also addresses the allocation or auction of emission allowances as 
described above.\28\
---------------------------------------------------------------------------

    \28\ 40 CFR 52.38(b)(4), (b)(5), (b)(8), (b)(9).
---------------------------------------------------------------------------

    In addition to the general submittal conditions and the other 
applicable conditions described above, a CSAPR-related full SIP 
revision must meet the following further conditions:
    <bullet> Complete, substantively identical trading program 
provisions. The SIP revision must adopt complete state trading program 
regulations substantively identical to the complete federal trading 
program regulations at 40 CFR 97.402 through 97.435, 97.502 through 
97.535, 97.602 through 97.635, 97.702 through 97.735, or 97.802 through 
97.835, as applicable, except as described above in the case of a SIP 
revision that seeks to replace the default allowance allocation and/or 
applicability provisions.\29\
---------------------------------------------------------------------------

    \29\ 40 CFR 52.38(a)(5), (b)(5), (b)(9); 52.39(f), (i).
---------------------------------------------------------------------------

    <bullet> Only non-substantive substitutions for the term ``State.'' 
The SIP revision may substitute the name of the state for the term 
``State'' as used in the federal trading program regulations, but only 
to the extent that EPA determines that the substitutions do not 
substantively change the trading program regulations.\30\
---------------------------------------------------------------------------

    \30\ 40 CFR 52.38(a)(5)(iii), (b)(5)(iv), (b)(9)(v); 
52.39(f)(3), (i)(3).
---------------------------------------------------------------------------

    <bullet> Exclusion of provisions addressing units in Indian 
country. The SIP revision may not impose requirements on any unit in 
any Indian country within the state's borders and must not include the 
federal trading program provisions governing allocation of allowances 
from any Indian country NUSA for the state.\31\
---------------------------------------------------------------------------

    \31\ 40 CFR 52.38(a)(5)(iv), (b)(5)(v), (b)(9)(vi); 52.39(f)(4), 
(i)(4).
---------------------------------------------------------------------------

V. South Carolina's SIP Draft Submittal and EPA's Analysis

A. South Carolina's Draft SIP Submittal

    In the CSAPR rulemaking, EPA determined that air pollution 
transported from EGUs in South Carolina would unlawfully affect other 
states' ability to attain or maintain the 1997 8-hour ozone NAAQS and 
the 1997 Annual PM<INF>2.5</INF> NAAQS, and included South Carolina in 
the CSAPR ozone season NO<INF>X</INF> trading program and the annual 
SO<INF>2</INF> and NO<INF>X</INF> trading programs.\32\ In the CSAPR 
Update rulemaking, EPA determined that South Carolina was no longer 
linked to any identified downwind nonattainment or maintenance 
receptors for the 1997 8-hour ozone NAAQS or 2008 8-hour ozone NAAQS, 
and removed South Carolina from the CSAPR ozone season NO<INF>X</INF> 
trading program beginning in 2017.\33\ South Carolina's units meeting 
the CSAPR applicability criteria are consequently currently subject to 
CSAPR FIPs that require participation in the CSAPR NO<INF>X</INF> 
Annual Trading Program and the CSAPR SO<INF>2</INF> Group 2 Trading 
Program.\34\ South Carolina's May 26, 2017, draft SIP revision 
incorporates into the SIP CSAPR state trading program regulations that 
would replace the CSAPR federal trading program regulations with regard 
to South Carolina units' SO<INF>2</INF> and annual NO<INF>X</INF> 
emissions. The draft SIP submittal includes the addition of South 
Carolina Regulation 61-62.97, Cross-State Air Pollution Rule (CSAPR) 
Trading Program. This rule will contain two subparts: 61-62.97, Subpart 
A--South Carolina CSAPR NO<INF>X</INF> Annual Trading Program, and 61-
62.97 Subpart B--South Carolina CSAPR SO<INF>2</INF> Group 2 Trading 
Program. In general, each subpart in South Carolina's draft CSAPR state 
trading program rule is designed to replace the corresponding federal 
trading program regulations. For example, South Carolina draft 
Regulation 61-62.97, Subpart A--South Carolina CSAPR NO<INF>X</INF> 
Annual Trading program is designed to replace subpart AAAAA of 40 CFR 
part 97 (i.e., 40 CFR 97.401 through 97.435).
---------------------------------------------------------------------------

    \32\ 76 FR 48208, 48213 (August 8, 2011).
    \33\ 81 FR 74504, 74524 (October 26, 2016). Removal of South 
Carolina from the CSAPR ozone season trading program beginning in 
2017 addressed the portion of the D.C. Circuit's remand in EME Homer 
City II related to South Carolina's ozone season NO<INF>X</INF> 
budget for the 1997 8-hour ozone NAAQS. Id.
    \34\ 40 CFR 52.38(a)(2), (b)(2); 52.39(c); 52.2140(a), (b); 
52.2141.
---------------------------------------------------------------------------

    With regard to form, some of the individual draft rules for each 
South Carolina CSAPR state trading program are set forth as full 
regulatory text--notably the rules identifying the trading budgets, 
NUSAs, and Indian country NUSA--but most of the draft rules incorporate 
the corresponding federal trading program section or sections by 
reference.
    With regard to substance, the draft rules for each South Carolina 
CSAPR state trading program differ from the corresponding CSAPR federal 
trading program regulations in two main ways. First, the applicability 
provisions in the South Carolina draft rules require participation in 
South Carolina CSAPR state trading programs only for units in South 
Carolina, not for units in any other state or in Indian country within 
the borders of South Carolina or any other state. Second, the South 
Carolina draft rules omit some federal trading program provisions not 
applicable to

[[Page 37394]]

South Carolina's state trading programs, including provisions setting 
forth the amounts of emissions budgets, NUSAs, Indian country NUSAs, 
and variability limits for other states and provisions relating to 
EPA's administration of Indian country NUSAs.
    The South Carolina draft rules adopt the Phase 2 annual 
NO<INF>X</INF> and SO<INF>2</INF> budgets found at 40 CFR 
97.410(a)(18)(iv) and 97.710(a)(6)(iv), respectively. Accordingly, EPA 
will evaluate the approvability of the South Carolina draft SIP 
submission consistent with these budgets.
    At this time, EPA is proposing to take action on the portions of 
South Carolina's draft SIP submission designed to replace the federal 
CSAPR NO<INF>X</INF> Annual Trading Program and the federal CSAPR 
SO<INF>2</INF> Group 2 Trading Program with regard to South Carolina 
units.

B. EPA's Analysis of South Carolina's Draft Submittal

    As described in section V.A above, at this time EPA is proposing to 
take action on the portions of South Carolina's draft SIP submittal 
designed to replace the federal CSAPR NO<INF>X</INF> Annual Trading 
Program and the federal CSAPR SO<INF>2</INF> Group 2 Trading Program 
for South Carolina units.\35\ The analysis discussed in this section 
addresses only the portions of South Carolina's draft SIP submittal on 
which EPA is taking action at this time. For simplicity, throughout 
this section EPA refers to the portions of the draft submittal on which 
EPA is proposing to take action as ``the draft submittal'' or ``the 
draft SIP revision'' without repeating the qualification that at this 
time EPA is analyzing and proposing to act on only portions of the 
draft SIP submittal.
---------------------------------------------------------------------------

    \35\ The other portions of the draft state submittal will be 
addressed in separate actions.
---------------------------------------------------------------------------

1. Timeliness and Completeness of SIP Submittal
    South Carolina submitted its draft SIP revision to EPA on May 26, 
2017, and EPA has determined that the submittal complies with the 
applicable minimum completeness criteria for parallel processing in 
section 2.3 of appendix V to 40 CFR part 51.\36\ The SIP submission 
deadline specified in 40 CFR 52.38(a)(5)(vi) and 52.39(i)(6) is defined 
with reference to certain separate CSAPR deadlines for submission of 
state-determined allowance allocations to EPA and is therefore 
inoperative in the case of a SIP revision that does not seek to replace 
the EPA-administered allowance allocation methodology and process set 
forth in the federal trading program rules. Because South Carolina is 
seeking to replace the federal trading program rules with substantively 
identical state trading program rules and is not seeking to replace the 
EPA-administered allowance allocation methodology and process, the SIP 
submission deadline does not apply.\37\
---------------------------------------------------------------------------

    \36\ The requirements of paragraph 2.1 must be met prior to 
publication of EPA's final determination of plan approvability. 40 
CFR 51, App. V, 2.3.2.
    \37\ See 40 CFR 52.38(a)(5)(vi) and 52.39(i)(6).
---------------------------------------------------------------------------

2. Complete, Substantively Identical Trading Program Provisions
    As discussed above, the South Carolina draft SIP revision adopts 
state budgets identical to the Phase 2 budgets for South Carolina under 
the federal trading programs and adopts almost all of the provisions of 
the federal CSAPR NO<INF>X</INF> Annual Trading Program and CSAPR 
SO<INF>2</INF> Group 2 Trading Program, including the default 
allocation provisions. Under the State's draft rules, EPA would 
administer the programs and would retain the authority to allocate and 
record allowances.
    With the following exceptions, the South Carolina draft rules 
comprising South Carolina's CSAPR state trading program for annual 
NO<INF>X</INF> emissions either incorporate by reference or adopt full-
text replacements for all of the provisions of 40 CFR 97.402 through 
97.435, and the South Carolina draft rules comprising South Carolina's 
CSAPR state trading program for SO<INF>2</INF> emissions either 
incorporate by reference or adopt full-text replacements for all of the 
provisions of 40 CFR 97.702 through 97.735.
    The first exception is that, as discussed below in section V.B.3, 
paragraphs 61-62.97.A.3 and B.3 of the South Carolina draft rules limit 
applicability of the rules to units located in South Carolina, 
excluding units located in Indian country within South Carolina's 
borders. This modification of the applicability provisions in the 
federal trading program rules is appropriate for state trading program 
rules which necessarily must be designed to apply only to sources 
subject to the State's jurisdiction.
    The second exception is that South Carolina draft rule 61-62.97 
omits the provisions of 40 CFR 97.410(a) and (b) and 97.710(a) and (b) 
setting forth the forth amounts of the Phase 1 emissions budgets, 
NUSAs, Indian country NUSAs, and variability limits for South Carolina 
and the amounts of the Phase 1 and Phase 2 emissions budgets, NUSAs, 
Indian country NUSAs, and variability limits for other states. Omission 
of the South Carolina Phase 1 emissions budget, NUSA, Indian country 
NUSA, and variability limit amounts is appropriate because South 
Carolina's state trading programs do not apply to emissions occurring 
in Phase 1 of CSAPR. Omission of the Phase 1 and Phase 2 budget, NUSA, 
Indian country NUSA, and variability limit amounts for other states 
from state trading programs in which only South Carolina units 
participate does not undermine the completeness of the state trading 
programs. South Carolina's draft rules include full-text replacement 
provisions for the remaining provisions of 40 CFR 97.410 and 97.710 
that are relevant to trading programs applicable only to South Carolina 
units during Phase 2 of CSAPR.
    The third exception is that South Carolina draft rule 61-62.97 
omits 40 CFR 97.411(b)(2), 97.411(c)(5)(iii), 97.412(b), 97.421(h), 
97.421(j), 97.711(b)(2), 97.711(c)(5)(iii), 97.712(b), 97.721(h), and 
97.721(j), concerning EPA's administration of Indian country NUSAs. 
Omission of these provisions from South Carolina's state trading 
program rules is required, as discussed in section V.B.4 below.
    None of the omissions undermine the completeness of the South 
Carolina's state trading programs and EPA has determined that South 
Carolina's draft SIP revision makes no substantive changes to the 
provisions of the federal trading program regulations. Thus, South 
Carolina's draft SIP revision meets the condition under 40 CFR 
52.38(a)(5) and 52.39(i) that the SIP revision must adopt complete 
state trading program regulations substantively identical to the 
complete federal trading program regulations at 40 CFR 97.402 through 
97.435 and 97.702 through 97.735, respectively, except to the extent 
permitted in the case of a SIP revision that seeks to replace the 
default allowance allocation and/or applicability provisions.
3. Only Non-Substantive Substitutions for the Term ``State''
    Paragraphs 61-62.97.A.3 and B.3 of the South Carolina draft rules 
substitute the phrase ``The following units in South Carolina (but not 
in Indian country within South Carolina's borders),'' for the phrase 
``The following units in a State (and Indian country within the borders 
of such State)'' in the corresponding federal trading program 
regulations at 40 CFR 97.410(a)(1) and 97.710(a)(1) and at 97.410(b) 
and 97.710(b), respectively. These provisions of the South Carolina 
draft rules define the units that are required to participate in South 
Carolina's CSAPR state trading programs. The substitutions 
appropriately exclude

[[Page 37395]]

units located in other states and units located in Indian country 
within the borders of South Carolina or any other state, thereby 
limiting the applicability of South Carolina's state trading programs 
to units that are subject to South Carolina's jurisdiction. These 
substitutions do not substantively change the provisions of CSAPR's 
federal trading program regulations. The remaining South Carolina rules 
do not substitute for the term ``State'' as used in the federal trading 
program regulations. EPA proposes to find that South Carolina's draft 
SIP revision therefore meets the condition under 40 CFR 
52.38(a)(5)(iii) and 52.39(i)(3) that the SIP revision may substitute 
the name of the state for the term ``State'' as used in the federal 
trading program regulations, but only to the extent that EPA determines 
that the substitutions do not substantively change the provisions of 
the federal trading program regulations.
4. Exclusion of Provisions Addressing Units in Indian Country
    As discussed above in section V.B.3, paragraphs 61-62.97.A.3 and 
B.3 of the South Carolina draft rules explicitly exclude units in 
Indian country within South Carolina's borders from the applicable 
requirements of the state rule. In addition, as required under 40 CFR 
52.38(a)(5)(iv) and 52.39(i)(4), South Carolina's draft SIP revision 
excludes federal trading program provisions related to EPA's process 
for allocating and recording allowances from Indian country NUSAs 
(i.e., 40 CFR 97.411(b)(2), 97.411(c)(5)(iii), 97.412(b), 97.421(h), 
97.421(j), 97.711(b)(2), 97.711(c)(5)(iii), 97.712(b), and 97.721(h) 
and 97.721(j)). South Carolina's draft SIP revision therefore meets the 
conditions under 52.38(a)(5)(iv) and 52.39(i)(4) that a SIP submittal 
must not impose any requirement on any unit in Indian country within 
the borders of the State and must exclude certain provisions related to 
administration of Indian country NUSAs.\38\
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    \38\ A FIP will remain in place for any units that are in Indian 
country within South Carolina's borders.
---------------------------------------------------------------------------

VI. EPA's Proposed Action on South Carolina's Draft Submittal

    EPA is proposing to approve the portions of South Carolina's May 
26, 2017, draft SIP submittal concerning the establishment for South 
Carolina units of CSAPR state trading programs for annual 
NO<INF>X</INF> and SO<INF>2</INF> emissions. The proposed draft 
revision would adopt into the SIP state trading program rules to be 
codified in SC Code of Annotated Regulations at 61-62.97, ``Cross-State 
Air Pollution Rule (CSAPR) Trading Program.'' These South Carolina 
CSAPR state trading programs would be integrated with the federal CSAPR 
NO<INF>X</INF> Annual Trading Program and the federal CSAPR 
SO<INF>2</INF> Group 2 Trading Program, respectively, and would be 
substantively identical to the federal trading programs.\39\ If EPA 
approves these portions of the proposed draft SIP revision, South 
Carolina units therefore would generally be required to meet 
requirements under South Carolina's CSAPR state trading programs 
equivalent to the requirements the units otherwise would have been 
required to meet under the corresponding CSAPR federal trading 
programs. EPA is proposing to approve these portions of the draft SIP 
revision because they meet the requirements of the CAA and EPA's 
regulations for approval of a CSAPR full SIP revision replacing a 
federal trading program with a state trading program that is integrated 
with and substantively identical to the federal trading program except 
for permissible differences, as discussed in section V above.
---------------------------------------------------------------------------

    \39\ As previously discussed in sections IV and V.B.2, under 
South Carolina's draft regulations, the State will retain EPA's 
default allowance allocation methodology and EPA will remain the 
implementing authority for administration of the trading program.
---------------------------------------------------------------------------

    EPA promulgated FIPs requiring South Carolina units to participate 
in the federal CSAPR NO<INF>X</INF> Annual Trading Program and the 
federal CSAPR SO<INF>2</INF> Group 2 Trading Program in order to 
address South Carolina's obligations under CAA section 
110(a)(2)(D)(i)(I) with respect to the 1997 Annual PM<INF>2.5</INF> 
NAAQS in the absence of SIP provisions addressing those requirements. 
Approval of the portions of South Carolina's draft SIP submittal 
adopting CSAPR state trading program rules for annual NO<INF>X</INF> 
and SO<INF>2</INF> substantively identical to the corresponding CSAPR 
federal trading program regulations (or differing only with respect to 
the allowance allocation methodology) would satisfy South Carolina's 
obligation pursuant to CAA section 110(a)(2)(D)(i)(I) to prohibit 
emissions which will significantly contribute to nonattainment or 
interfere with maintenance of the 1997 Annual PM<INF>2.5</INF> NAAQS in 
any other state and therefore would correct the same deficiency in the 
SIP that otherwise would be corrected by those CSAPR FIPs. Under the 
CSAPR regulations, upon EPA's full and unconditional approval of a SIP 
revision as correcting the SIP's deficiency that is the basis for a 
particular CSAPR FIP, the obligation to participate in the 
corresponding CSAPR federal trading program is automatically eliminated 
for units subject to the state's jurisdiction (but not for any units 
located in any Indian country within the state's borders).\40\ Approval 
of the portions of South Carolina's draft SIP submittal establishing 
CSAPR state trading program rules for annual NO<INF>X</INF> and 
SO<INF>2</INF> emissions therefore would result in automatic 
termination of the obligations of South Carolina units to participate 
in the federal CSAPR NO<INF>X</INF> Annual Trading Program and the 
federal CSAPR SO<INF>2</INF> Group 2 Trading Program.
---------------------------------------------------------------------------

    \40\ 40 CFR 52.38(a)(6); 52.39(j); see also 52.2140(a)(1); 
52.2141(a).
---------------------------------------------------------------------------

    As noted in section III above, the Phase 2 SO<INF>2</INF> budget 
established for South Carolina in the CSAPR rulemaking has been 
remanded to EPA for reconsideration. If EPA finalizes approval of these 
portions of the SIP revision as proposed, South Carolina will have 
fulfilled its obligations to provide a SIP that address the interstate 
transport provisions of CAA section 110(a)(2)(D)(i)(I) with respect to 
the 1997 Annual PM<INF>2.5</INF> NAAQS. Thus, EPA would no longer be 
under an obligation to (nor would EPA have the authority to) address 
those transport requirements through implementation of a FIP, and 
approval of these portions of the SIP revision would eliminate South 
Carolina units' obligations to participate in the federal CSAPR 
NO<INF>X</INF> Annual Trading Program and the federal CSAPR 
SO<INF>2</INF> Group 2 Trading Program. Elimination of South Carolina 
units' obligations to participate in the federal trading programs would 
include elimination of the federally-established Phase 2 budgets 
capping allocations of CSAPR NO<INF>X</INF> Annual allowances and CSAPR 
SO<INF>2</INF> Group 2 allowances to South Carolina units under those 
federal trading programs. As approval of these portions of the SIP 
revision would eliminate South Carolina's remanded federally-
established Phase 2 SO<INF>2</INF> budget and eliminate EPA's authority 
to subject units in South Carolina to a FIP, it is EPA's opinion that 
finalization of approval of this SIP action would address the judicial 
remand of South Carolina's federally-established Phase 2 SO<INF>2</INF> 
budget.
    EPA's proposed approval is contingent on South Carolina's 
submission of a final SIP revision to address interstate transport 
provisions of CAA section 110(a)(2)(D)(i)(I) with respect to the 1997 
Annual PM<INF>2.5</INF> NAAQS. Should South Carolina not submit a final 
SIP revision to EPA addressing interstate transport provisions of CAA 
section

[[Page 37396]]

110(a)(2)(D)(i)(I) with respect to the 1997 Annual PM<INF>2.5</INF> 
NAAQS and/or should EPA not be able to finalize a full approval action, 
EPA will undertake further reconsideration of the FIP pursuant to the 
judicial remand. The Agency has made the preliminary determination that 
these proposed actions are consistent with the CAA and EPA's 
regulations for approval of a CSAPR full SIP revision replacing the 
requirements of a CSAPR FIP.

VII. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submittal that complies with the provisions of the Act and applicable 
federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submittals, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
proposed action merely approves state law as meeting federal 
requirements and does not impose additional requirements beyond those 
imposed by state law. For that reason, this proposed action:
    <bullet> Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
    <bullet> Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
    <bullet> 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.);
    <bullet> 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);
    <bullet> Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
    <bullet> Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
    <bullet> Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
    <bullet> Is not subject to requirements of section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
    <bullet> Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule for South Carolina does not have 
Tribal implications as specified by Executive Order 13175 (65 FR 67249, 
November 9, 2000), because it does not have substantial direct effects 
on an Indian Tribe. The Catawba Indian Nation Reservation is located 
within the state of South Carolina. Pursuant to the Catawba Indian 
Claims Settlement Act, S.C. Code Ann. 27-16-120, ``all state and local 
environmental laws and regulations apply to the [Catawba Indian Nation] 
and Reservation and are fully enforceable by all relevant state and 
local agencies and authorities.'' However, the draft rules proposed for 
approval exclude units in Indian country from the applicable 
requirements of the draft rules and exclude federal trading provisions 
related to EPA's process for allocating and recording allowances from 
Indian country NUSAs. EPA notes this action will not impose substantial 
direct costs on Tribal governments or preempt Tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Incorporation by reference, Intergovernmental 
relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur oxides.

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

    Dated: July 28, 2017.
V. Anne Heard,
Acting Regional Administrator, Region 4.
[FR Doc. 2017-16902 Filed 8-9-17; 8:45 am]
 BILLING CODE 6560-50-P


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