Document ID: EPA-R09-OAR-2011-0211-0001
Agency: epa
Document Type: Proposed Rule
Title: Approvals and Promulgations of Implementation Plans: California; Interstate Transport of Pollution; Interference with Prevention of Significant Deterioration Requirement
Posted Date: 2011-05-31T04:00Z

[Federal Register Volume 76, Number 104 (Tuesday, May 31, 2011)]
[Proposed Rules]
[Pages 31263-31271]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-13397]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2011-0211; FRL-9312-8]

Approval and Promulgation of Implementation Plans; State of 
California; Interstate Transport of Pollution; Interference With 
Prevention of Significant Deterioration Requirement

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing a limited approval and limited disapproval of 
a State Implementation Plan (``SIP'') revision submitted by the State 
of California on November 17, 2007, for the purpose of addressing the 
``transport SIP'' provisions of Clean Air Act (``CAA'') section 
110(a)(2)(D)(i) for the 1997 8-hour ozone National Ambient Air Quality 
Standards (NAAQS or standards) and the 1997 fine particulate matter 
(``PM2.5'') NAAQS. Section 110(a)(2)(D)(i) of the CAA 
requires that each SIP contain adequate provisions to prohibit 
emissions that adversely affect air quality in other States through 
interstate transport. EPA is proposing a limited approval and limited 
disapproval of California's SIP revision for the 1997 8-hour ozone and 
1997 PM2.5 NAAQS with respect to the requirement in CAA 
section 110(a)(2)(D)(i)(II) that each SIP contain adequate measures 
prohibiting emissions of air pollutants in amounts which will interfere 
with other States' measures required under title I, part C of the CAA 
to prevent significant deterioration of air quality. Specifically, EPA 
is proposing to approve California's SIP revision with respect to those 
Districts in California that implement SIP-approved permit programs 
meeting the approval criteria under CAA section 110(a)(2)(D)(i), as 
discussed in this proposal. EPA is simultaneously proposing to 
disapprove California's SIP revision with respect to those Districts in 
California that do not implement SIP-approved permit programs meeting 
these approval criteria. For any District for which we finalize a 
disapproval, EPA intends to simultaneously promulgate a limited Federal 
Implementation Plan (``FIP''), as discussed in this proposal, unless 
the relevant area is already subject to a FIP.

DATES: Written comments must be received on or before June 30, 2011.

ADDRESSES: Submit your comments, identified by Docket ID Number EPA-
R09-OAR-2011-0211, by one of the following methods:
    1. http://www.regulations.gov: Follow the on-line instructions for 
submitting comments.
    2. E-mail: mays.rory@epa.gov.
    3. Fax: 415-947-3579.
    4. Mail or deliver: Rory Mays (AIR-2), U.S. Environmental 
Protection Agency, Region IX, 75 Hawthorne Street, San Francisco, CA 
94105-3901. Deliveries are only accepted during the Regional Office's 
normal hours of operation.
    Instructions: All comments 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 Confidential Business Information (CBI) or 
other information whose disclosure is restricted by statute. 
Information that you consider CBI or otherwise protected should be 
clearly identified as such and should not be submitted through the 
http://www.regulations.gov or e-mail. http://www.regulations.gov is an 
anonymous access system, and EPA will not know your identity or contact 
information unless you provide it in the body of your comment. If you 
send e-mail directly to EPA, your e-mail address will be automatically 
captured and included as part of the public comment. 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.
    Docket: The index to the docket for this action is available 
electronically at http://www.regulations.gov and in hard copy at EPA 
Region IX, 75 Hawthorne Street, San Francisco, California. While all 
documents in the docket are listed in the index, some information may 
be publicly available only at the hard copy location (e.g., copyrighted 
material), and some may not be publicly available in either location 
(e.g., CBI). To inspect the hard copy materials, please schedule an 
appointment during normal business hours with the contact listed 
directly below.

FOR FURTHER INFORMATION CONTACT: Rory Mays, Air Planning Office (AIR-
2), U.S. Environmental Protection Agency, Region IX, (415) 972-3227, 
mays.rory@epa.gov.

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

Table of Contents

I. Background
II. What is the State process to submit these materials to EPA?
III. What is EPA's evaluation of the State's submission?
    A. Evaluation of Measures To Prevent Significant Deterioration 
for 1997 8-Hour Ozone NAAQS
    B. Evaluation of Measures To Prevent Significant Deterioration 
for 1997 PM2.5 NAAQS
    C. Evaluation of Measures To Prevent Significant Deterioration 
for Greenhouse Gases
    D. Conclusion Regarding Measures To Prevent Significant 
Deterioration
IV. Proposed Action
V. Statutory and Executive Order Reviews

I. Background

    On July 18, 1997, EPA promulgated new standards for 8-hour ozone 
\1\ and

[[Page 31264]]

fine particulate matter \2\ (``PM2.5''). This proposed 
action is in response to the promulgation of these standards (the 
``1997 8-hour ozone NAAQS'' and ``1997 PM2.5 NAAQS''). This 
proposed action does not address the requirements of the 2006 
PM2.5 NAAQS or the 2008 8-hour ozone NAAQS; those standards 
will be addressed in future actions.
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    \1\ See 62 FR 38856. The level of the 1997 8-hour ozone NAAQS is 
0.08 parts per million (ppm). 40 CFR part 50.10. The 8-hour ozone 
standard is met when the 3-year average of the annual 4th highest 
daily maximum 8-hour ozone concentrations is 0.08 ppm or less (i.e., 
less than 0.085 ppm based on the rounding convention in 40 CFR part 
50 Appendix I). This 3-year average is referred to as the ``design 
value.''
    \2\ See 62 FR 38652. The level of the 1997 PM2.5 
NAAQS are 15.0 [micro]g/m\3\ (annual arithmetic mean concentration) 
and 65 [micro]g/m\3\ (24-hour average concentration). 40 CFR part 
50.7. The annual standard is met when the 3-year average of the 
annual mean concentrations is 15.0 [micro]g/m\3\ or less (i.e., less 
than 15.05 [micro]g/m\3\ based on the rounding convention in 40 CFR 
part 50 Appendix N Section 4.3). The 24-hour standard is met when 
the 3-year average annual 98th percentile of 24-hour concentrations 
is 65 [micro]g/m\3\ or less (i.e., less than 65.5 [micro]g/m\3\ 
based on the rounding convention in 40 CFR part 40 Appendix N 
Section 4.3). Id. These 3-year averages are referred to as the 
annual PM2.5 and 24-hour PM2.5 ``design 
values,'' respectively.
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    Section 110(a)(1) of the CAA requires states to submit SIPs to 
address a new or revised NAAQS within three years after promulgation of 
such standards, or within such shorter period as EPA may prescribe. 
Section 110(a)(2) lists the elements that such new SIPs must address, 
as applicable, including section 110(a)(2)(D)(i) which pertains to 
interstate transport of certain emissions.
    The transport SIP provisions in section 110(a)(2)(D)(i) (also 
called ``good neighbor'' provisions) require each State to submit a SIP 
that prohibits emissions that adversely affect another State in the 
ways contemplated in the statute. Section 110(a)(2)(D)(i) identifies 
four distinct elements related to the evaluation of impacts of 
interstate transport of air pollutants. In this rulemaking EPA is 
addressing the third element of section 110(a)(2)(D)(i), which requires 
that each SIP contain adequate measures to prohibit emissions of air 
pollutants from sources within the State in amounts that will interfere 
with any other State's measures required under title I, part C of the 
CAA to prevent significant deterioration of air quality. We refer to 
this requirement as ``element (3)'' of section 110(a)(2)(D)(i).
    On August 15, 2006, EPA issued guidance (herein ``2006 Guidance'') 
to assist States and EPA Regional offices in developing and evaluating, 
respectively, transport SIPs for the 1997 8-hour ozone and 
PM2.5 NAAQS.\3\ As to element (3) of section 
110(a)(2)(D)(i), the 2006 Guidance states that this requirement may be 
met by the State's confirmation in a SIP submission that major sources 
and major modifications in the State are subject to Prevention of 
Significant Deterioration (``PSD'') and Nonattainment New Source Review 
(``NNSR'') programs that implement current requirements.\4\
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    \3\ Memorandum from William T. Harnett, Director, Air Quality 
Policy Division, OAQPS, ``Guidance for State Implementation Plan 
(SIP) Submissions to Meet Current Outstanding Obligations Under 
Section 110(a)(2)(D)(i) for the 8-Hour Ozone and PM2.5 
National Ambient Air Quality Standards,'' August 15, 2006.
    \4\ Id. at 6.
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    The PSD and NNSR permit programs require preconstruction permits to 
protect the air quality within each State and are designed to prohibit 
construction of new major sources and major modifications at existing 
major sources from contributing to nonattainment in surrounding areas, 
including nearby States. Specifically, a PSD permit may not be issued 
unless the new or modified source demonstrates that emissions from the 
construction or operation of the facility will not cause or contribute 
to air pollution in any area that exceeds any NAAQS or any maximum 
allowable increase (i.e., PSD increment). 42 U.S.C. 7475(a)(3); 40 CFR 
51.166(k). An NNSR permit may not be issued unless the new or modified 
source shows it has obtained sufficient emissions reductions to offset 
increases in emissions of the pollutants for which an area is 
designated nonattainment, consistent with reasonable further progress 
toward attainment. 42 U.S.C. 7503(a)(1); 40 CFR 51.165(a)(3).
    Because the PSD and NNSR permitting programs require a 
demonstration that new or modified sources will not cause or contribute 
to air pollution in excess of the NAAQS in neighboring States or that 
sources in nonattainment areas procure offsets, States may satisfy the 
requirement of section 110(a)(2)(D)(i)(II) regarding measures to 
prevent significant deterioration of air quality by submitting SIPs 
confirming that major sources and major modifications in the State are 
subject to PSD and NNSR programs that implement current requirements.
    As such, we have evaluated California's PSD and NNSR 
preconstruction permitting programs to determine whether these programs 
implement the 1997 8-hour ozone and PM2.5 NAAQS. In 
addition, because stationary sources of greenhouse gas (``GHG'') 
emissions at or above certain thresholds are now subject to PSD 
permitting requirements, we have evaluated California's PSD programs 
for compliance with the requirements for GHG PSD authorities.\5\ Our 
evaluation is summarized below (see section III of this proposed rule) 
and described in more detail in the technical support document 
(``TSD'') for this proposed rule, which is available in the docket for 
this action.
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    \5\ For explanation of the GHG PSD permitting requirements, see 
``Prevention of Significant Deterioration and Title V Greenhouse Gas 
Tailoring Rule; Final Rule,'' 75 FR 31514 (June 3, 2010); ``Action 
To Ensure Authority To Issue Permits Under the Prevention of 
Significant Deterioration Program to Sources of Greenhouse Gas 
Emissions: Findings of Substantial Inadequacy and SIP Call; Final 
Rule,'' 75 FR 77698 (December 13, 2010); ``Limitation of Approval of 
Prevention of Significant Deterioration Provisions Concerning 
Greenhouse Gas-Emitting Sources in State Implementation Plans; Final 
Rule,'' 75 FR 82536 (December 30, 2010).
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II. What is the State process to submit these materials to EPA?

    CAA sections 110(a)(2) and 110(l) require that revisions to a SIP 
be adopted by the State after reasonable notice and public hearing. EPA 
has promulgated specific procedural requirements for SIP revisions in 
40 CFR part 51, subpart F. These requirements include publication of 
notices, by prominent advertisement in the relevant geographic area, of 
a public hearing on the proposed revisions, a public comment period of 
at least 30 days, and an opportunity for a public hearing.
    On November 16, 2007, the California Air Resources Board (``CARB'') 
submitted the State Strategy for California's 2007 State Implementation 
Plan to attain the 1997 8-hour ozone and PM2.5 NAAQS (``2007 
State Strategy'').\6\ Appendix C of the 2007 State Strategy, as 
modified by Attachment A,\7\ contains California's SIP revision to 
address the transport SIP requirements of CAA section 110(a)(2)(D)(i) 
for the 1997 8-hour ozone and PM2.5 NAAQS (``2007 Transport 
SIP''). CARB's November 16, 2007 submittal includes public process 
documentation for the 2007 State Strategy, including the 2007 Transport 
SIP. In addition, the SIP revision includes documentation of a duly 
noticed public hearing held on September 27, 2007 on the proposed 2007 
State Strategy.
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    \6\ See transmittal letter dated November 16, 2007, from James 
N. Goldstene, Executive Officer, CARB, to Wayne Nastri, Regional 
Administrator, EPA Region 9, with enclosures, and CARB Resolution 
No. 07-28 (September 27, 2007).
    \7\  See ``Technical and Clarifying Modifications to April 26, 
2007 Revised Draft Air Resources Board's Proposed State Strategy for 
California's 2007 State Implementation Plan and May 7, 2007 Revised 
Draft Appendices A through G,'' included as Attachment A to CARB's 
Board Resolution 07-28 (September 27, 2007).
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    We find that the process followed by CARB in adopting the 2007 
Transport SIP complies with the procedural requirements for SIP 
revisions under CAA section 110 and EPA's implementing regulations.

[[Page 31265]]

III. What is EPA's evaluation of the State's submission?

    California's 2007 Transport SIP states that all areas of California 
are subject to some form of preconstruction permitting program for 
ozone and PM2.5 and that ``[t]hese rules are as stringent, 
or more stringent, than the federal preconstruction programs (PSD and 
NNSR).'' \8\ The submittal also states that California is on track to 
submit SIP revisions to meet the PSD and NNSR requirements of the Phase 
2 Implementation Rule for the 1997 8-hour ozone NAAQS (70 FR 71612, 
November 29, 2005) (``Phase 2 Rule'') and is implementing 
preconstruction programs for PM2.5 in accordance with EPA's 
October 23, 1997 guidance memorandum entitled ``Interim Implementation 
of New Source Review Requirements for PM2.5'' 
(``PM10 Surrogate Policy''). Finally, the submittal includes 
a list of local air districts that implement the PSD and NNSR programs 
throughout the State. In sum, the 2007 Transport SIP asserts that 
California's existing PSD and NNSR programs contain adequate measures 
to prohibit emissions of air pollutants which will interfere with any 
other State's required measures under title I, part C of the CAA, to 
prevent significant deterioration of air quality, for the 1997 8-hour 
ozone and PM2.5 NAAQS.
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    \8\ See 2007 Transport SIP, Attachment A of 2007 State Strategy 
at 21-22 (modifying Appendix C of 2007 State Strategy).
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    The 2007 Transport SIP provides little information to support the 
State's assertions regarding the adequacy of its existing PSD and NNSR 
permit programs. Furthermore, the 2007 Transport SIP relied solely on 
EPA's 2006 Guidance and, therefore, did not fully address certain 
implementation requirements for the 1997 8-hour ozone and 
PM2.5 NAAQS that are now relevant to our evaluation, as 
discussed further below and in our TSD. We have, therefore, conducted 
an independent evaluation of California's PSD and NNSR programs in 
relation to specific implementation provisions for the 1997 8-hour 
ozone and PM2.5 NAAQS that are necessary for approval of the 
2007 Transport SIP. We conducted this evaluation for each of the 35 
permitting authorities (``Districts'') \9\ in California, which cover 
the entire geographic extent of the State excluding Indian country.\10\ 
The details of our evaluation are provided in the TSD for this proposed 
rule.
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    \9\ Although EPA's air quality designations for California in 40 
CFR 81.305 are defined by planning areas, we discuss the relevant 
PSD and NNSR program requirements as they apply to the local 
permitting agencies that implement these requirements in each 
planning area. We use the term ``District'' throughout this document 
to refer both to the local agency responsible for issuing PSD/NNSR 
permits and to the geographic area over which that agency has 
jurisdiction.
    \10\ California's SIP obligations under the CAA do not apply in 
Indian country.
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A. Evaluation of Measures To Prevent Significant Deterioration for 1997 
8-Hour Ozone NAAQS

    Fifteen air quality planning areas in California are designated 
nonattainment for the 1997 8-hour ozone NAAQS. See 40 CFR 81.305. 
Twenty Districts implement preconstruction permit programs in these 15 
nonattainment areas. See TSD at 9-12. Thirteen air quality planning 
areas in California are designated unclassifiable/attainment for the 
1997 8-hour ozone standard. See 40 CFR 81.305. Twenty-three Districts 
implement preconstruction permit programs in these 13 unclassifiable/
attainment areas. See TSD at 12, 13.
1. 8-hour Ozone Nonattainment Areas
    The Phase 2 Rule requires specific revisions to States' NNSR SIPs 
to implement the requirements of the CAA Amendments of 1990, as 
applicable based on each area's classification for the 8-hour ozone 
standard. See 70 FR 71612 at 71675, 71698-71699. Specifically, the 
Phase 2 Rule requires that NNSR SIPs apply all NNSR requirements for 
major sources of volatile organic compounds (VOCs) to major sources of 
nitrogen oxides (NOX) as well, except where a NOX 
waiver applies under section 182(f) of the Act. 40 CFR 51.165(a)(8). In 
addition, NNSR SIPs must include provisions establishing the applicable 
major stationary source thresholds, significant emissions rates, and 
offset ratios for VOCs and NOX based on each area's 
classification for the 8-hour ozone NAAQS. 40 CFR 51.165(a)(1)(iv), 
(a)(1)(v), (a)(1)(x), (a)(8), (a)(9). These SIP revisions were due June 
15, 2007. 70 FR at 71683.
    Among the 20 Districts that are entirely or partially designated 
nonattainment for the 1997 8-hour ozone NAAQS, 12 Districts have 
nonattainment areas classified under subpart 2 of part D, title I of 
the CAA. The remaining eight Districts and a portion of a ninth 
District cover areas now referred to as ``former subpart 1'' 
nonattainment for the 1997 8-hour ozone NAAQS. See 40 CFR 81.305; South 
Coast Air Quality Management District v. EPA, 472 F.3d 882 (DC Cir. 
2006) (vacating certain elements of EPA's Phase 1 ozone implementation 
rule), reh'g denied 489 F.3d 1245.
    For the 12 Districts covering subpart 2 nonattainment areas, EPA 
has reviewed the SIP-approved NNSR rules and determined that all but 
three of these SIP programs meet the approval criteria discussed above. 
See TSD at 9-11. The three Districts in which the SIP-approved NNSR 
programs do not currently satisfy these program requirements are the 
Feather River Air Quality Management District (``AQMD''), Placer County 
Air Pollution Control District (``APCD''), and Sacramento Metropolitan 
AQMD. These three agencies implement permit programs in the Sacramento 
Metro ozone nonattainment area, which was initially designated and 
classified as serious nonattainment for the 1997 8-hour ozone NAAQS. 69 
FR 23858 (April 30, 2004).\11\
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    \11\ In this action, we are evaluating the NNSR programs for 
these Districts in accordance with the requirements for ``serious'' 
ozone nonattainment areas. We note, however, that EPA reclassified 
the Sacramento Metro area as a ``severe-15'' nonattainment area for 
the 1997 8-hour ozone standard, effective June 4, 2010. 75 FR 24409 
(May 5, 2010).
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    In separate actions, EPA has proposed to approve NNSR SIP revisions 
submitted by the Placer County APCD (``Placer''), Feather River AQMD 
(``Feather River''), and Sacramento Metropolitan AQMD (``Sacramento'') 
to meet the approval criteria discussed above.\12\ See 76 FR 28944 (May 
19, 2011) and 76 FR 28942 (May 19, 2011). We propose to determine that 
final approval of the required NNSR SIP revisions will address element 
(3) of CAA section 110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS for 
these Districts. Alternatively, for any of these Districts for which we 
cannot finalize approval of the required NNSR provisions by our July 
10, 2011 Consent Decree deadline \13\ for final action on element (3) 
of the 2007 Transport SIP, we propose to disapprove the 2007 Transport 
SIP and to promulgate a limited NNSR FIP (for the relevant District) 
based on Sacramento's Rule 202 and the provisions of 40 CFR part 51, 
Appendix S identifying the major source threshold, significant 
emissions rate, and offset ratio applicable to the area's 8-hour ozone 
classification. EPA would retain authority to implement these

[[Page 31266]]

requirements for NOX and VOC emission sources in the 
relevant Districts (unless and until EPA delegates such authority to 
the District), while the District would retain authority to continue 
implementing any existing SIP-approved NNSR requirements. Our TSD 
describes the limited FIPs that we propose to promulgate for any 
District for which we cannot finalize approval of the required NNSR SIP 
revisions by July 10, 2011. See TSD at 10, 11.
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    \12\ These proposals address the NNSR requirements for 
``severe'' ozone nonattainment areas, which each of these Districts 
has submitted in advance of the June 4, 2011 submittal deadline 
established as part of EPA's action to reclassify the Sacramento 
Metro area from serious to severe-15 nonattainment for the 8-hour 
ozone standard. See 75 FR 24409.
    \13\ See WildEarth Guardians v. U.S. EPA (Case No. 4:09-CV-
02453-CW), Consent Decree dated November 10, 2009, as amended by 
Notice of Stipulated Extensions to Consent Decree Deadlines, dated 
April 28, 2011.
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    For the nine Districts covering ``former subpart 1'' nonattainment 
areas, we have reviewed the existing SIPs and determined that two of 
the SIP-approved NNSR programs in these areas (for Eastern Kern APCD 
and San Diego County APCD) implement the 1997 8-hour ozone NAAQS. We 
propose to determine that the existing NNSR programs for these two 
former subpart 1 areas are, therefore, adequate to address element (3) 
of section 110(a)(2)(D)(i) for this standard. See TSD at 11.
    The remaining seven Districts, which cover five former subpart 1 
areas (Central Mountain Counties, Chico, Southern Mountain Counties, 
Sutter Buttes, and Western Nevada County), are currently subject to the 
NNSR permitting requirements in The Interpretative Rule (40 CFR part 51 
Appendix S), except that the waiver provisions in section VI of 40 CFR 
part 51 Appendix S no longer apply. See Phase 2 Rule, 75 FR 71612 
(November 29, 2005) and NRDC v. EPA, 571 F. 3d 1245 (DC Cir. 2009) 
(vacating EPA's elimination of the 18-month limitation in 40 CFR part 
52.24(k) with respect to the waiver provisions in section VI of 40 CFR 
part 51 Appendix S). See TSD at 11, 12. The California SIP remains 
deficient for purposes of 8-hour ozone NNSR requirements in these five 
former subpart 1 areas that do not yet have approved NNSR programs 
under part D, title I of the Act. Thus, we propose to disapprove the 
2007 Transport SIP with respect to element (3) of CAA section 
110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS for the seven Districts 
covering these five former subpart 1 areas.
    As discussed above, however, all of these areas are currently 
subject to NNSR permitting requirements under The Interpretative Rule 
in 40 CFR part 51, Appendix S, except for the waiver provisions in 
section VI. These permitting provisions will continue to apply in these 
areas until the State submits and EPA approves NNSR SIP revisions 
addressing the subpart 2 NNSR requirements that will apply following 
EPA's classification of each area under subpart 2. See 74 FR 2936 
(January 16, 2009) (proposing to require States to submit all required 
SIP elements for the areas' subpart 2 classifications one year after 
the effective date of a final rule classifying the areas). We propose 
to determine that implementation of The Interpretative Rule during this 
interim period adequately addresses the requirements of element (3) of 
section 110(a)(2)(D)(i) in these areas and that this discharges EPA's 
obligation to promulgate a FIP for these limited purposes. This 
proposal applies only to our FIP obligation in this particular 
circumstance and should not be construed as an interpretation of our 
obligations in other nonattainment areas where The Interpretative Rule 
currently applies under 40 CFR 52.24(k). See TSD at 12.
2. 8-Hour Ozone Unclassifiable/Attainment Areas
    For areas designated unclassifiable/attainment for the 1997 8-hour 
ozone NAAQS, the Phase 2 Rule requires revisions to PSD SIPs to require 
explicit identification of NOX as an ozone precursor. 70 FR 
71612 at 71679, 71699-71700; 40 CFR 51.166(b)(1)(ii), (b)(2)(ii), 
(b)(23)(i), (b)(49)(i). These SIP revisions were due June 15, 2007. 70 
FR at 71683. In areas subject to the Federal PSD program in 40 CFR 
52.21, EPA's revisions to 40 CFR 52.21 (including regulation of 
NOX as an ozone precursor) became effective January 30, 
2006. 70 FR 71612 at 71683.
    Fifteen Districts and portions of eight additional Districts in 
California are designated unclassifiable/attainment for the 1997 8-hour 
ozone NAAQS. All but four of these Districts are currently subject to 
the Federal PSD program in 40 CFR 52.21. 40 CFR 52.270. The California 
SIP remains deficient for purposes of 8-hour ozone PSD requirements in 
those areas subject to the Federal PSD program. Because EPA has already 
promulgated a PSD FIP for these areas, however, no further action is 
required to address element (3) of CAA section 110(a)(2)(D)(i) for the 
1997 8-hour ozone NAAQS in these areas.
    We reviewed the PSD rules for the four Districts with SIP-approved 
programs for ozone (Mendocino County AQMD (``Mendocino''), Monterey Bay 
Unified APCD (``Monterey''), North Coast Unified AQMD (``North 
Coast''), and Northern Sonoma County APCD (``Northern Sonoma'')). Of 
these, only Monterey's existing SIP PSD program identifies 
NOX as an ozone precursor. We propose to approve the 2007 
Transport SIP with respect to element (3) of CAA section 
110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS for Monterey. See TSD 
at 12, 13.
    The SIP-approved PSD programs for the other three Districts 
(Mendocino, North Coast, and Northern Sonoma) do not currently identify 
NOX as an ozone precursor. However, by direct final rule on 
May 6, 2011, EPA approved PSD SIP revisions submitted by Mendocino and 
Northern Sonoma to explicitly identify NOX as an ozone 
precursor. See 76 FR 26192 and 76 FR 26224 (May 6, 2011). We propose to 
determine that these PSD SIP revisions satisfy the requirements of 
element (3) of CAA section 110(a)(2)(D)(i) for the 1997 8-hour ozone 
NAAQS in these Districts. If, however, either of these approvals is 
withdrawn and does not become effective by our July 10, 2011 Consent 
Decree deadline for final action on element (3) of the 2007 Transport 
SIP, we propose to disapprove the 2007 Transport SIP for the relevant 
area and to promulgate a limited PSD FIP based on the provisions of 40 
CFR 52.21 identifying NOX as an ozone precursor. EPA would 
retain authority to implement the applicable requirements of 40 CFR 
52.21 for NOX emission sources in the relevant area (unless 
and until EPA delegates such authority to the District), while the 
District would retain authority to continue implementing any existing 
SIP-approved PSD requirements. See TSD at 13.
    Finally, although North Coast has also submitted PSD SIP revisions 
to address this requirement, among others, we are proposing to 
disapprove the 2007 Transport SIP with respect to element (3) of CAA 
section 110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS and to 
promulgate a limited PSD FIP for North Coast because we do not expect 
to finalize approval of that PSD submittal by our July 10, 2011 Consent 
Decree deadline for final action on element (3) of the 2007 Transport 
SIP. Thus, for North Coast, we are proposing to promulgate a limited 
PSD FIP based on the provisions of 40 CFR 52.21 regulating 
NOX as an ozone precursor. EPA would retain authority to 
implement the applicable requirements of 40 CFR 52.21 for 
NOX emission sources in North Coast (unless and until EPA 
delegates such authority to the District), while the District would 
retain authority to continue implementing any existing SIP-approved PSD 
requirements. See TSD at 13. This limited FIP would apply only until 
EPA approves a PSD SIP revision for North Coast addressing this 
requirement.

B. Evaluation of Measures To Prevent Significant Deterioration for 1997 
PM2.5 NAAQS

    Two air quality planning areas in California (the San Joaquin 
Valley and the Los Angeles-South Coast Air Basin) are designated 
nonattainment for the

[[Page 31267]]

1997 PM2.5 NAAQS. See 40 CFR 81.305. Two Districts (San 
Joaquin Valley APCD and South Coast AQMD) implement preconstruction 
permit programs in these two nonattainment areas. See TSD at 13, 14. 
Twenty-five air quality planning areas that cover the rest of the State 
are designated unclassifiable/attainment for the 1997 PM2.5 
NAAQS. See 40 CFR 81.305. Thirty-four Districts implement 
preconstruction permit programs in these 25 unclassifiable/attainment 
areas. See TSD at 14, 15.
1. PM2.5 Nonattainment Areas
    For areas designated nonattainment for the 1997 PM2.5 
NAAQS, the NSR Implementation Rule for PM2.5, 73 FR 28321 
(May 16, 2008) (``PM2.5 NSR Rule''), establishes new 
requirements under 40 CFR part 51.165 for States to include in their 
SIP-approved NNSR programs to address the PM2.5 NAAQS. These 
NNSR SIP revisions were due May 16, 2011. See 73 FR 28321 (May 16, 
2008). Under 40 CFR part 52.24(k), during the period of time allowed 
for States to amend their existing NNSR programs to address the new 
PM2.5 requirements, States are allowed to rely on the 
procedures under 40 CFR part 51 Appendix S (``The Interpretative 
Rule'') to issue permits to new or modified major stationary sources 
proposing to locate in a PM2.5 nonattainment area.\14\ Both 
the San Joaquin Valley APCD and South Coast AQMD have confirmed to EPA 
that they are implementing and will continue to implement the 
requirements of The Interpretative Rule to any prospective project that 
triggers PM2.5 NSR requirements during this interim 
period.\15\ Thus, with respect to element (3) of CAA section 
110(a)(2)(D)(i) for the 1997 PM2.5 NAAQS, we propose to 
approve the 2007 Transport SIP for the San Joaquin Valley and the Los 
Angeles-South Coast Air Basin based on a determination that current 
implementation of The Interpretative Rule in these areas adequately 
addresses the 1997 PM2.5 NAAQS. See TSD at 13, 14.
---------------------------------------------------------------------------

    \14\ Note that for purposes of the 1997 PM2.5 NAAQS, 
the waiver provisions in section VI of 40 CFR part 51 Appendix S 
expired in October 2006, i.e., 18 months after the April 2005 
effective date of each area's designation as nonattainment for this 
standard. See Phase 2 Rule, 75 FR 71612 (November 29, 2005) and NRDC 
v. EPA, 571 F. 3d 1245 (DC Cir. 2009) (vacating EPA's elimination of 
the 18-month limitation in 40 CFR 52.24(k) with respect to the 
waiver provisions in section VI of 40 CFR part 51 Appendix S).
    \15\ See Policy Memorandum Dated October 27, 2009, ``San Joaquin 
Valley Unified APCD: Interim New Source Review Requirements for 
PM2.5''; e-mail dated September 4, 2010, from Mohsen 
Nazemi, South Coast AQMD to Gerardo Rios, U.S. EPA Region 9, 
``Appendix S Implementation of NSR for PM2.5.''
---------------------------------------------------------------------------

2. PM2.5 Unclassifiable/Attainment Areas
    For areas designated unclassifiable/attainment for the 1997 
PM2.5 NAAQS, the PM2.5 NSR Rule establishes new 
PSD requirements under 40 CFR 51.166 for SIP-approved PSD programs to 
implement the new PM2.5 requirements. These SIP revisions 
were due May 16, 2011. 73 FR 28321 at 28341 (May 16, 2008). In areas 
subject to the Federal PSD program in 40 CFR 52.21, the 
PM2.5 requirements of 40 CFR 52.21 became effective July 15, 
2008. 73 FR at 28340, 28343.
    Thirty-four Districts implement preconstruction permit programs in 
the 25 air quality planning areas designated as unclassifiable/
attainment for the 1997 PM2.5 NAAQS. In all but five of 
these Districts, the Federal PSD program in 40 CFR 52.21 applies. 40 
CFR 52.270. Under the PM2.5 NSR Rule, the PM2.5 
requirements of 40 CFR 52.21 became applicable in these 29 Districts as 
of July 15, 2008, including regulation of SO2 and 
NOX as precursors. See 73 FR at 28340, 28343 (May 16, 2008). 
Because the California SIP remains deficient with respect to PSD 
requirements in these areas generally, we propose to disapprove the 
2007 Transport SIP with respect to element (3) of CAA section 
110(a)(2)(D)(i) for the 1997 PM2.5 NAAQS for these areas. 
Because EPA has already promulgated a PSD FIP for these areas, however, 
no further action is required to address element (3) of CAA section 
110(a)(2)(D)(i) for the 1997 PM2.5 NAAQS in these areas.
    The remaining five Districts (Mendocino, Monterey, North Coast, 
Northern Sonoma, and Sacramento) have SIP-approved PSD programs. We 
have reviewed the PSD rules for each of these Districts and determined 
that all five of these SIP PSD programs require owners and operators of 
sources and permitting authorities to conduct permit-related 
PM2.5 analyses. We propose to approve the 2007 Transport SIP 
with respect to element (3) of CAA section 110(a)(2)(D)(i) for the 1997 
PM2.5 NAAQS for these areas based on a determination that 
these five SIP-approved PSD programs implement the 1997 
PM2.5 NAAQS. See TSD at 14, 15.

C. Evaluation of Measures To Prevent Significant Deterioration for 
Greenhouse Gases

    Three Districts (Mendocino, North Coast, and Northern Sonoma) were 
subject to EPA's recently promulgated rule, Limitation of Approval of 
Prevention of Significant Deterioration Provisions Concerning 
Greenhouse Gas Emitting-Sources in State Implementation Plans (``PSD 
SIP Narrowing Rule'') (75 FR 82536, Dec. 30, 2010). In the PSD SIP 
Narrowing Rule, EPA withdrew its previous approval of California's PSD 
programs for these three Districts to the extent that the programs 
applied PSD permit requirements to GHG emissions increases from GHG-
emitting sources below the thresholds set in EPA's June 3, 2010 
Prevention of Significant Deterioration and Title V Greenhouse Gas 
Tailoring Rule (``Tailoring Rule'') (75 FR 31514). California's 2007 
Transport SIP relies, in part, on the PSD programs for Mendocino, North 
Coast, and Northern Sonoma as of November 2007--which was before 
December 30, 2010, the effective date of the PSD SIP Narrowing Rule--to 
satisfy element (3) of CAA section 110(a)(2)(D)(i). On April 21, May 5, 
and May 9 of 2011, respectively, Mendocino, Northern Sonoma, and North 
Coast each submitted letters clarifying that the 2007 Transport SIP 
should be read with respect to CAA section 110(a)(2)(D)(i)(II) to 
reflect each of their PSD programs as they are currently Federally 
approved as a result of the PSD SIP Narrowing Rule, 75 FR 82536 (Dec. 
30, 2010).\16\ EPA proposes, therefore, to fully approve the 2007 
Transport SIP for Mendocino, North Coast, and Northern Sonoma with 
respect to element (3) of CAA section 110(a)(2)(D)(i).
---------------------------------------------------------------------------

    \16\ See letter dated April 21, 2011, from Christopher D. Brown, 
APCO, Mendocino County AQMD, to Gerardo Rios, EPA Region 9, re: 
``Clarification of the 2007 Transport SIP as it relates to the PSD 
Program in Mendocino County''; letter dated May 5, 2011, from 
Barbara A. Lee, Northern Sonoma APCD, to Gerardo Rios, EPA Region 9, 
re: ``Clarification of the CA Transport SIP submittal''; letter 
dated May 9, 2011, from Richard Martin, APCO, North Coast Unified 
AQMD, to Gerardo Rios, EPA Region 9.
---------------------------------------------------------------------------

    In addition, Monterey has confirmed that its SIP provides GHG PSD 
permitting authority at thresholds consistent with the Tailoring Rule. 
See Monterey Bay Unified APCD, Rule 207 (as approved February 4, 2000, 
65 FR 5433); see also letter dated July 28, 2010, from Richard Stedman, 
Monterey Bay Unified APCD to Jared Blumenfeld, EPA Region 9, re: 
``Implementation of Greenhouse Gas Tailoring Rule.'' We propose, 
therefore, to fully approve the 2007 Transport SIP for Monterey with 
respect to element (3) of CAA section 110(a)(2)(D)(i).
    Finally, Sacramento was subject to EPA's recently promulgated rule, 
Findings of Substantial Inadequacy and SIP Call (``PSD GHG SIP Call'') 
(75 FR 77698, Dec. 13, 2010). In the PSD GHG SIP Call, EPA determined 
that

[[Page 31268]]

Sacramento's PSD program was substantially inadequate because it did 
not apply to GHG-emitting sources, and established a deadline of 
January 31, 2011, for Sacramento to submit its corrective SIP revision. 
Sacramento submitted the corrective SIP revision on January 28, 2011, 
and in a separate action EPA has proposed to approve that SIP revision. 
See 76 FR 28942 (May 19, 2011). We propose, therefore, to fully approve 
the 2007 Transport SIP for Sacramento with respect to element (3) of 
CAA section 110(a)(2)(D)(i) if Sacramento's corrective SIP revision to 
address GHG permitting requirements receives final EPA approval.
    All other areas in California are subject to current Federal PSD 
requirements for GHG emissions in 40 CFR 52.21. Because the California 
SIP remains deficient for purposes of GHG PSD requirements in these 
areas, we propose to disapprove the 2007 Transport SIP with respect to 
element (3) of CAA section 110(a)(2)(D)(i) for these areas. Because 
these areas are already subject to the Federal PSD program, however, we 
propose to determine that no further action is required to address 
element (3) of CAA section 110(a)(2)(D)(i) in these areas. See TSD at 
15, 16.

D. Conclusion Regarding Measures To Prevent Significant Deterioration

    Based on our review of the NNSR and PSD programs that currently 
apply in each of California's 35 Districts, we propose a limited 
approval and limited disapproval of the 2007 Transport SIP with respect 
to the requirement in CAA section 110(a)(2)(D)(i) to prohibit emissions 
of air pollutants which will interfere with other States' required 
measures to prevent significant deterioration of air quality for the 
1997 8-hour ozone and 1997 PM2.5 NAAQS.
    Specifically, we propose the following actions with respect to 
element (3) of CAA section 110(a)(2)(D)(i) for the 1997 8-hour ozone 
NAAQS. For nine Districts \17\ that are designated nonattainment and 
classified under subpart 2 of part D, title I of the CAA and that have 
SIP-approved NNSR programs meeting the approval criteria discussed 
above, we propose to approve the 2007 Transport SIP. For three 
Districts \18\ with nonattainment areas classified under subpart 2 for 
which NNSR SIP revisions are necessary to meet the approval criteria 
discussed above, we propose to approve the 2007 Transport SIP if we 
finalize approval of the required NNSR SIP revisions by our July 10, 
2011 deadline for final action on element (3) of the 2007 Transport 
SIP. Alternatively, for any of these Districts for which we cannot 
approve the required NNSR SIP revision by our July 10, 2011 deadline, 
we propose to disapprove the 2007 Transport SIP with respect to element 
(3) of CAA section 110(a)(2)(D)(i) for the 1997 8-hour ozone NAAQS and 
to promulgate a limited NNSR FIP addressing the relevant requirements.
---------------------------------------------------------------------------

    \17\ Antelope Valley AQMD, Bay Area AQMD, El Dorado APCD, 
Imperial County APCD, Mojave Desert AQMD, San Joaquin Valley APCD, 
South Coast District, Ventura County APCD, and Yolo-Solano AQMD.
    \18\ Placer County APCD, Feather River AQMD, and Sacramento 
Metropolitan AQMD.
---------------------------------------------------------------------------

    For two Districts \19\ with ``former subpart 1'' nonattainment 
areas that implement SIP-approved NNSR programs meeting the approval 
criteria discussed above, we propose to approve the 2007 Transport SIP. 
For seven Districts \20\ with ``former subpart 1'' nonattainment areas 
that do not yet have SIP-approved NNSR programs, we propose to 
disapprove the 2007 Transport SIP but to determine that implementation 
of The Interpretative Rule during this interim period pending EPA's 
final subpart 2 classifications of these areas adequately addresses the 
requirements of element (3) of CAA section 110(a)(2)(D)(i) and, 
therefore, discharges EPA's obligation to promulgate a FIP for these 
limited purposes.
---------------------------------------------------------------------------

    \19\ Eastern Kern APCD and San Diego County APCD.
    \20\ Amador County APCD, Butte County AQMD, Calaveras County 
APCD, Feather River AQMD, Northern Sierra AQMD, Mariposa County 
APCD, and Tuolumne County APCD.
---------------------------------------------------------------------------

    For Monterey, which is designated unclassifiable/attainment and has 
a SIP-approved PSD program meeting the approval criteria discussed 
above, we propose to approve the 2007 Transport SIP. For two Districts 
\21\ with unclassifiable/attainment areas for which we have recently 
approved PSD SIP revisions meeting these requirements by direct final 
rule, we propose to approve the 2007 Transport SIP. If, however, either 
of these direct final rules is withdrawn and does not become effective 
by our July 10, 2011 Consent Decree deadline for final action on 
element (3) of the 2007 Transport SIP, we propose to disapprove the 
2007 Transport SIP for the relevant District and to promulgate a 
limited PSD FIP for that District based on the provisions of 40 CFR 
52.21 identifying NOX as an ozone precursor. EPA would 
retain authority to implement the requirements of 40 CFR 52.21 in the 
relevant District, for NOX emission sources only, unless and 
until it delegates such authority to the District. For North Coast, we 
propose to disapprove the 2007 Transport SIP and to promulgate a 
limited PSD FIP for NOX emission sources only, as discussed 
above. For the rest of the State, which is designated unclassifiable/
attainment for the 1997 8-hour ozone NAAQS and subject to the Federal 
PSD program in 40 CFR 52.21, we propose to disapprove the 2007 
Transport SIP but to determine that no further action is required to 
address element (3) of CAA section 110(a)(2)(D)(i) because EPA has 
already promulgated a PSD FIP for these areas.
---------------------------------------------------------------------------

    \21\ Mendocino County AQMD and Northern Sonoma County APCD.
---------------------------------------------------------------------------

    We propose the following actions with respect to element (3) of CAA 
section 110(a)(2)(D)(i) for the 1997 PM2.5 NAAQS. For two 
Districts \22\ that are designated nonattainment, we propose to approve 
the 2007 Transport SIP based on a determination that implementation of 
The Interpretative Rule during the SIP-development period adequately 
addresses the requirements of element (3) of CAA section 
110(a)(2)(D)(i). For five Districts \23\ that are designated 
unclassifiable/attainment and that have SIP-approved PSD programs 
meeting the approval criteria discussed above, we propose to approve 
the 2007 Transport SIP. For the rest of the State, which is designated 
unclassifiable/attainment and subject to the Federal PSD program in 40 
CFR 52.21, we propose to disapprove the 2007 Transport SIP but to 
determine that no further action is required to address element (3) of 
CAA section 110(a)(2)(D)(i) because EPA has already promulgated a PSD 
FIP for these areas.
---------------------------------------------------------------------------

    \22\ San Joaquin Valley APCD and South Coast AQMD (excluding 
Coachella Valley part).
    \23\ Mendocino County AQMD, Monterey Bay Unified AQMD, North 
Coast Unified AQMD, Northern Sonoma County APCD, and Sacramento 
Metropolitan AQMD.
---------------------------------------------------------------------------

    Finally, with respect to PSD authority to regulate GHGs, we propose 
to take the following actions. For three Districts \24\ that were 
subject to the PSD SIP Narrowing Rule (75 FR 82536, Dec. 30, 2010), we 
propose to fully approve the 2007 Transport SIP with respect to element 
(3) of CAA section 110(a)(2)(D)(i) based on the Districts' letters 
clarifying that the 2007 Transport SIP should be read with respect to 
CAA section 110(a)(2)(D)(i)(II) to reflect each of their PSD programs 
as they are currently Federally approved as a result of the PSD SIP 
Narrowing Rule. For Monterey, which has confirmed that its SIP provides 
GHG PSD permitting authority at thresholds consistent with

[[Page 31269]]

the Tailoring Rule, we propose to fully approve the 2007 Transport SIP 
with respect to element (3) of CAA section 110(a)(2)(D)(i). For 
Sacramento, which was subject to the PSD GHG SIP Call (75 FR 77698, 
Dec. 13, 2010), we propose to fully approve the 2007 Transport SIP with 
respect to element (3) of CAA section 110(a)(2)(D)(i) if Sacramento's 
corrective SIP revision to address GHG permitting requirements receives 
final EPA approval. For all other areas in California, which are 
subject to the Federal PSD program in 40 CFR 52.21, we propose to 
disapprove the 2007 Transport SIP but to determine that no further 
action is required to address element (3) of CAA section 
110(a)(2)(D)(i) because EPA has already promulgated a PSD FIP for these 
areas.
---------------------------------------------------------------------------

    \24\ Mendocino County AQMD, Monterey Bay Unified AQMD, and North 
Coast Unified AQMD.
---------------------------------------------------------------------------

    For a more detailed discussion of each of these proposed actions, 
see our TSD.

IV. Proposed Action

    As authorized in CAA sections 110(k)(3) and 301(a), EPA is 
proposing a limited approval and limited disapproval of the 2007 
Transport SIP with respect to the requirement in CAA section 
110(a)(2)(D)(i) to prohibit emissions of air pollutants in amounts 
which will interfere with any other State's measures required under 
title I, part C of the CAA to prevent significant deterioration of air 
quality. CARB submitted the 2007 Transport SIP on November 17, 2007, to 
address the requirements of CAA section 110(a)(2)(D)(i) for the 1997 8-
hour ozone and 1997 PM2.5 NAAQS. Specifically, for those 
Districts in California that implement SIP-approved PSD or NNSR permit 
programs meeting the approval criteria discussed above, EPA is 
proposing to approve the 2007 Transport SIP with respect to element (3) 
of CAA section 110(a)(2)(D)(i). For those Districts in California with 
SIP-approved PSD or NNSR permit programs that do not meet the approval 
criteria discussed above, or that are subject to the Federal PSD 
program in 40 CFR 52.21, EPA is simultaneously proposing to disapprove 
the 2007 Transport SIP with respect to element (3) of CAA section 
110(a)(2)(D)(i) and to promulgate limited FIPs as appropriate.
    Under section 179(a) of the CAA, final disapproval of a submittal 
that addresses a requirement of part D, title I of the CAA (CAA 
sections 171-193) or is required in response to a finding of 
substantial inadequacy as described in CAA section 110(k)(5) (SIP Call) 
starts a sanctions clock. The 2007 Transport SIP was not submitted to 
meet either of these requirements. Therefore, if we take final action 
to disapprove this submittal, no sanctions will be triggered. 
Disapproval of a required SIP revision also triggers the requirement 
under CAA section 110(c) that EPA promulgate a FIP no later than 2 
years from the date of the disapproval unless the State corrects the 
deficiency, and the Administrator approves the plan or plan revision 
before the Administrator promulgates such FIP. For any District in 
California for which we finalize a disapproval of the 2007 Transport 
SIP, EPA intends to simultaneously promulgate a limited PSD or NNSR 
FIP, as discussed in this proposal, unless the relevant area is already 
subject to the Federal PSD program in 40 CFR 52.21.
    This proposed action does not apply to the remaining three elements 
of CAA section 110(a)(2)(D)(i) regarding significant contribution to 
nonattainment in any other State, interference with maintenance in any 
other State, and interference with measures required to protect 
visibility in any other State. In separate actions, EPA has fully 
approved the 2007 Transport SIP for purposes of these three additional 
elements of CAA section 110(a)(2)(D)(i). See Final Rule signed May 9, 
2011, ``Approval and Promulgation of Air Quality Implementation Plans; 
State of California; Regional Haze State Implementation Plan and 
Interstate Transport Plan; Interference with Visibility Requirement''; 
Final Rule signed May 10, 2011, ``Approval and Promulgation of 
Implementation Plans; State of California; Interstate Transport of 
Pollution; Significant Contribution to Nonattainment and Interference 
with Maintenance Requirements.''
    EPA is soliciting public comments on this proposal and will accept 
comments until the date noted in the DATES section above.

V. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from Executive Order 12866, entitled ``Regulatory 
Planning and Review.''

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. 
Burden is defined at 5 CFR 1320.3(b).

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedures Act or another statute unless the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small not-for-profit enterprises, and small governmental jurisdictions.
    For purposes of assessing the impacts of this proposal on small 
entities, small entity is defined as: (1) A small business that is a 
small industrial entity as defined in the U.S. Small Business 
Administration (SBA) size standards (See 13 CFR 121.201); (2) a small 
governmental jurisdiction that is a government of a city, county, town, 
school district, or special district with a population of less than 
50,000; or (3) a small organization that is any not-for-profit 
enterprise that is independently owned and operated and is not dominant 
in its field.
    After considering the economic impacts of this proposed rule on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. Although 
this rule may eventually lead to Federal permitting requirements for a 
handful of sources, EPA believes that in such an event, there will not 
be a significant economic impact on the potentially affected sources 
and that any such impacts would not affect a substantial number of 
sources, regardless of size. In this proposal, EPA is not proposing any 
requirements beyond those with which existing sources are already 
required to comply.
    In the case of Mendocino and Northern Sonoma, EPA has already 
separately approved, by direct final rule, the SIP revisions necessary 
to make NOx a precursor for ozone under the SIP-approved PSD program. 
For these areas, EPA is only proposing a narrow FIP to take effect in 
the event that EPA receives adverse comment that require additional 
notice and comment rulemaking to take final action on those SIP 
submissions. In this action, EPA is proposing a FIP that would 
effectively only impose a Federal requirement that sources in these 
districts must already meet pursuant to existing state or local 
requirements. For this reason, EPA does not anticipate that such 
sources would be subject to any additional burden as a result of such a 
FIP and we expect that if there is any such burden, it would be 
minimal. Accordingly, EPA does not believe that such a FIP would have a 
significant economic impact on any sources in these areas, regardless 
of size.
    In the case of North Coast, EPA has not yet proposed to approve the 
SIP

[[Page 31270]]

revision necessary to make NOx a precursor for ozone in the context of 
PSD permitting. For this area, EPA is likewise only proposing a narrow 
FIP to fill the gap with respect to requiring PSD permits to address 
NOx as a precursor for ozone. To EPA's knowledge, in the past ten years 
there have been no major sources or major modifications in this area 
subject to PSD permitting requirements for NOx emissions. EPA does not 
anticipate that there will be additional sources that would require 
such a permit in the future, and EPA is not required to analyze 
theoretical future impacts. It would be speculative to estimate 
potential impacts on sources based solely on theoretical future 
sources. Based on this fact, EPA does not believe that such a FIP would 
have an impact on a substantial number of sources, regardless of size.
    EPA is also proposing a FIP for the Feather River, Placer, and 
Sacramento areas, to take effect in the event that EPA is not able to 
finalize its proposed approval of SIP submissions for these areas with 
respect to the nonattainment NSR permitting requirements for ozone. The 
affected sources in these three areas are already required to meet 
essentially the same applicable requirements under state or local 
regulations contained within the SIP submissions that EPA has proposed 
to approve, even if EPA were not to finalize the approval of such 
regulations into the SIPs for these areas. Because the sources are 
already required to comply with the same substantive requirements by 
existing regulatory regimes, the proposed FIPs would not impose an 
additional burden. Thus, in these circumstances, EPA believes that were 
it to impose such a FIP on any of these areas in the final action on 
this proposal, it would not impose a significant economic impact on any 
source, regardless of size.
    We continue to be interested in the potential impacts of the 
proposed rule on small entities and welcome comments on issues related 
to such impacts.

D. Unfunded Mandates Reform Act

    Under sections 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or Tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the approval action proposed does not 
include a Federal mandate that may result in estimated costs of $100 
million or more to either State, local, or Tribal governments in the 
aggregate, or to the private sector. This Federal action proposes to 
approve pre-existing requirements under State or local law, and imposes 
no new requirements. Accordingly, no additional costs to State, local, 
or Tribal governments, or to the private sector, result from this 
action.

E. Executive Order 13132, Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces 
Executive Orders 12612 (Federalism) and 12875 (Enhancing the 
Intergovernmental Partnership). Executive Order 13132 requires EPA to 
develop an accountable process to ensure ``meaningful and timely input 
by State and local officials in the development of regulatory policies 
that have federalism implications.'' ``Policies that have federalism 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government.'' Under Executive Order 13132, EPA may not issue a 
regulation that has federalism implications, that imposes substantial 
direct compliance costs, and that is not required by statute, unless 
the Federal government provides the funds necessary to pay the direct 
compliance costs incurred by State and local governments, or EPA 
consults with State and local officials early in the process of 
developing the proposed regulation. EPA also may not issue a regulation 
that has federalism implications and that preempts State law unless the 
Agency consults with State and local officials early in the process of 
developing the proposed regulation.
    This rule will not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government, as specified in Executive Order 13132, because it 
merely approves a State rule implementing a Federal standard, and does 
not alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. Thus, the 
requirements of section 6 of the Executive Order do not apply to this 
rule.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This proposed rule does not 
have Tribal implications, as specified in Executive Order 13175. It 
will not have substantial direct effects on Tribal governments, on the 
relationship between the Federal government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian Tribes. Thus, Executive Order 13175 does not 
apply to this rule.
    EPA specifically solicits additional comment on this proposed rule 
from Tribal officials.

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

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) 
as applying only to those regulatory actions that concern health or 
safety risks, such that the analysis required under section 5-501 of 
the Executive Order has the potential to influence the regulation. This 
rule is not subject to Executive Order 13045, because it approves a 
State rule implementing a Federal standard.

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

    This rule is not subject to Executive Order 13211, ``Actions 
Concerning Regulations That Significantly Affect Energy Supply, 
Distribution, or Use'' (66 FR 28355, May 22, 2001) because it is not a 
significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act 
(NTTAA) of 1995 requires Federal agencies to evaluate existing 
technical standards when developing a new regulation. To comply with 
NTTAA, EPA must consider and use ``voluntary

[[Page 31271]]

consensus standards'' (VCS) if available and applicable when developing 
programs and policies unless doing so would be inconsistent with 
applicable law or otherwise impractical.
    The EPA believes that VCS are inapplicable to this action. Today's 
action does not require the public to perform activities conducive to 
the use of VCS.

List of Subjects in 40 CFR Part 52

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

    Dated: May 20, 2011.
Keith Takata,
Acting Regional Administrator, Region IX.

    Title 40, chapter I, of the Code of Federal Regulations is proposed 
to be amended as follows:

PART 52--[AMENDED]

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

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

Subpart F--California

    2. Section 52.233 is amended by adding paragraph (h) to read as 
follows:

Sec.  52.233  Review of new sources and modifications.

* * * * *
    (h) Regulation for review of major stationary sources and major 
modifications for nitrogen oxides. (1) Upon the effective date of this 
regulation, the requirements of this paragraph are applicable to any 
source under the jurisdiction of the APCDs listed below that is a major 
stationary source or major modification for nitrogen oxides in a 
``serious'' ozone nonattainment area under 40 CFR part 51, Appendix S, 
and that is not otherwise subject to new source review under the 
applicable SIP for the area.
    (i) Feather River AQMD.
    (ii) Placer County APCD.
    (iii) Sacramento Metropolitan AQMD.
    (2) Except for a major stationary source that is subject to new 
source review under the applicable SIP for the area, no owner or 
operator shall commence construction of a new stationary source that 
emits or has the potential to emit 50 tons per year or more of nitrogen 
oxides, without first obtaining approval from the Administrator.
    (3) Except for a major modification that is subject to new source 
review under the applicable SIP for the area, no owner or operator 
shall commence construction of a modification to an existing stationary 
source that results in a net emissions increase of 25 tons per year or 
more of nitrogen oxides, without first obtaining approval from the 
Administrator.
    (4) For any major stationary source or major modification subject 
to this paragraph in accordance with the emission thresholds identified 
in paragraphs (h)(2) and (3) of this section, the Administrator shall 
approve the construction of such source or modification if the owner or 
operator demonstrates that construction of such source or modification 
satisfies the requirements of Sacramento Metropolitan AQMD Rule 202, as 
approved on June 19, 1985 (50 FR 25417).
* * * * *
    3. Section 52.270 is amended by adding paragraphs (b)(2)(iv), 
(b)(3)(iv), and (b)(4)(iv) to read as follows:

Sec.  52.270  Significant deterioration of air quality.

* * * * *
    (b) * * *
    (2) * * *
    (iv) Those projects which are major stationary sources or major 
modifications for nitrogen oxides as precursors to ozone under Sec.  
52.21.
    (3) * * *
    (iv) Those projects which are major stationary sources or major 
modifications for nitrogen oxides as precursors to ozone under Sec.  
52.21.
    (4) * * *
    (iv) Those projects which are major stationary sources or major 
modifications for nitrogen oxides as precursors to ozone under Sec.  
52.21.

[FR Doc. 2011-13397 Filed 5-27-11; 8:45 am]
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