Document ID: EPA-R07-OAR-2016-0302-0002
Agency: epa
Document Type: Rule
Title: Air Quality State Implementation Plans; Approval and Promulgation: Missouri; Cross-State Air Pollution Rule
Posted Date: 2016-06-28T04:00Z

[Federal Register Volume 81, Number 124 (Tuesday, June 28, 2016)]
[Rules and Regulations]
[Pages 41838-41845]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15048]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R07-OAR-2016-0302; FRL-9948-15-Region 7]

Approval and Promulgation of Air Quality Implementation Plans; 
State of Missouri; Cross-State Air Pollution Rule

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is taking direct 
final action to approve portions of a November 20, 2015, State 
Implementation Plan (SIP) submittal from Missouri concerning 
allocations of Cross-State Air Pollution Rule (CSAPR) emission 
allowances. Under CSAPR, large electricity generating units in Missouri 
are subject to Federal Implementation Plans (FIPs) requiring the units 
to participate in CSAPR's Federal trading program for annual emissions 
of nitrogen oxides (NOX) and one of CSAPR's two Federal 
trading programs for annual emissions of sulfur

[[Page 41839]]

dioxide (SO2). This action approves Missouri's adoption into 
its SIP of state regulations establishing state-determined allocations 
to replace EPA's default allocations to Missouri units of CSAPR 
allowances for annual NOX emissions and annual 
SO2 emissions for 2017 and later years. EPA is approving the 
SIP revision because it meets the requirements of the Clean Air Act 
(CAA) and EPA's regulations for approval of an abbreviated SIP revision 
replacing EPA's default allocations of CSAPR emission allowances with 
state-determined allocations. Approval of this SIP revision does not 
alter any provision of CSAPR's Federal trading programs for annual 
NOX emissions and annual SO2 emissions as applied 
to Missouri units other than the allowance allocation provisions, and 
the FIPs requiring the units to participate in those trading programs 
(as modified by the SIP revision) remain in place. The approval is 
being issued as a direct final rule without a prior proposed rule 
because EPA views it as uncontroversial and does not anticipate adverse 
comment. EPA is not acting at this time on the portion of Missouri's 
SIP submittal concerning allocations of CSAPR allowances for ozone-
season NOX emissions.

DATES: This direct final rule will be effective August 12, 2016, 
without further notice, unless EPA receives adverse comment by July 28, 
2016. If EPA receives adverse comment, we will publish a timely 
withdrawal of the direct final rule in the Federal Register informing 
the public that the rule will not take effect.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07-
OAR-2016-0302, to 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: Mr. Larry Gonzalez, Air Planning and 
Development Branch, Air and Waste Management Division, EPA Region 7, 
11201 Renner Boulevard, Lenexa KS 66219; telephone number: (913) 551-
7041; email address: gonzalez.larry@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document ``we,'' ``us,'' or 
``our'' refer to EPA. This section provides additional information by 
addressing the following:

I. What is being addressed in this document?
II. Background on CSAPR and CSAPR-Related SIP Revisions
III. Conditions for Approval of CSAPR-Related SIP Revisions
IV. Missouri's SIP Submittal and EPA's Analysis
    A. Missouri's SIP Submittal
    B. EPA's Analysis of Missouri's Submittal
    1. Timeliness and Completeness of SIP Submittal
    2. Methodology Covering All Allowances Potentially Requiring 
Allocation
    3. Assurance That Total Allocations Will Not Exceed the State 
Budget
    4. Timely Submission of State-Determined Allocations to EPA
    5. No Changes to Allocations Already Submitted to EPA or 
Recorded
    6. No Other Substantive Changes to Federal Trading Program 
Provisions
V. EPA's Action on Missouri's Submittal
VI. Incorporation by Reference
VII. Statutory and Executive Order Reviews

I. What is being addressed in this document?

    EPA is taking direct final action to approve the portions of a 
November 20, 2015, SIP submittal from Missouri concerning allocations 
of allowances used in the CSAPR \1\ Federal trading programs for annual 
emissions of NOX and SO2. Large electricity 
generating units in Missouri are subject to CSAPR FIPs that require the 
units to participate in the Federal CSAPR NOX Annual Trading 
Program and the Federal CSAPR SO2 Group 1 Trading 
Program.\2\ Each of CSAPR's Federal trading programs includes default 
provisions governing the allocation among participating units of 
emission allowances used for compliance under that program. CSAPR also 
provides a process for the submission and approval of SIP revisions to 
replace EPA's default allocations with state-determined allocations.
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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 DDDDD of 40 CFR part 97).
    \2\ EPA has proposed to replace the terms ``Transport Rule'' and 
``TR'' in the text of the Code of Federal Regulations with the 
updated terms ``Cross-State Air Pollution Rule'' and ``CSAPR.'' 80 
FR 75706, 75759 (December 3, 2015). Except where otherwise noted, 
EPA uses the updated terms here.
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    The SIP revision approved in this action incorporates into 
Missouri's SIP state regulations establishing state-determined 
allowance allocations to replace EPA's default allocations to Missouri 
units of CSAPR NOX Annual allowances and CSAPR 
SO2
    Group 1 allowances issued for the control periods in 2017 and later 
years. EPA is approving the SIP revision because it meets the 
requirements of the CAA and EPA's regulations for approval of an 
abbreviated SIP revision replacing EPA's default allocations of CSAPR 
emission allowances with state-determined allocations. Approval of this 
SIP revision does not alter any provisions of the CSAPR NOX 
Annual Trading Program or the CSAPR SO2 Group 1 Trading 
Program as applied to Missouri units other than the allowance 
allocation provisions, and the FIPs requiring the units to participate 
in those programs (as modified by this SIP revision) remain in place.
    Large electricity generating units in Missouri are also subject to 
an additional CSAPR FIP requiring them to participate in the Federal 
CSAPR NOX Ozone Season Trading Program. While Missouri's SIP 
submittal also seeks to replace the default allocations of CSAPR 
NOX Ozone Season allowances to Missouri units, EPA is not 
acting on that portion of the SIP submittal at this time. Approval of 
this SIP revision concerning other CSAPR trading programs has no effect 
on the CSAPR NOX Ozone Season Trading Program as applied to 
Missouri units, and the FIP requiring the units to participate in that 
program remains in place.
    Section II of this document summarizes 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 III describes the specific conditions for approval 
of such SIP revisions. Section IV contains EPA's analysis of Missouri's 
SIP submittal, and Section V sets forth EPA's action on the submittal.
    We are publishing this direct final rule without a prior proposed 
rule because we view this as a noncontroversial action and anticipate 
no adverse comment. However, in the

[[Page 41840]]

Proposed Rules section of this Federal Register, we are publishing a 
separate document that will serve as the proposed rule to approve the 
SIP revision if adverse comments are received on this direct final 
rule. We will not institute a second comment period on this action. Any 
parties interested in commenting must do so at this time. For further 
information about commenting on this rule, see the ADDRESSES section of 
this document. If EPA receives adverse comment, we will publish a 
timely withdrawal in the Federal Register informing the public that 
this direct final rule will not take effect. We will address all public 
comments in any subsequent final rule based on the proposed rule.

II. 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, CSAPR requires twenty-eight Eastern states to 
limit their statewide emissions of SO2 and/or NOX 
in order to mitigate transported air pollution unlawfully impacting 
other states' ability to attain or maintain three National Ambient Air 
Quality Standards (NAAQS): The 1997 ozone NAAQS, the 1997 annual fine 
particulate matter (PM2.5) NAAQS, and the 2006 24-hour 
PM2.5 NAAQS. The emissions limitations are defined in terms 
of maximum statewide ``budgets'' for emissions of annual 
SO2, annual NOX, and/or ozone-season 
NOX by each covered state's large electricity generating 
units. The 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 budgets applying to emissions in 2017 
and later years. As a mechanism for achieving compliance with the 
emissions limitations, CSAPR established four Federal emissions trading 
programs: A program for annual NOX emissions, a program for 
ozone-season NOX emissions, and two geographically separate 
programs for annual SO2 emissions. CSAPR also established up 
to three FIPs applicable to the large electricity generating units in 
each covered state. Each CSAPR FIP requires a state's units to 
participate in one of the four CSAPR trading programs.
    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.\3\ 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 
program for ozone-season NOX emissions (or an integrated 
state trading program), a state may also expand trading program 
applicability to include certain smaller electricity generating units. 
However, no emissions budget increases or other substantive changes to 
the trading program provisions are allowed. 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. A state whose units are subject to multiple CSAPR 
FIPs and Federal trading programs may submit SIP revisions to modify or 
replace the requirements under either some or all of those FIPs.
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    \3\ 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.
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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.\4\ 
Specific conditions for approval of each form of SIP revision are set 
forth in the CSAPR regulations, as described in Section III 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.\5\ 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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    \4\ 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 Sec.  52.38(a)(3), (b)(3); Sec.  52.39(d), 
(g).
    \5\ Sec.  52.38(a)(4), (b)(4); Sec.  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.\6\ 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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    \6\ Sec.  52.38(a)(5), (b)(5); Sec.  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 SIP that was 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 without the need for a separate EPA withdrawal action, so 
long as EPA's approval of the SIP is full and unconditional.\7\ 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.\8\ 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.\9\
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    \7\ Sec.  52.38(a)(6), (b)(6); Sec.  52.39(j).
    \8\ Sec.  52.38(a)(5)(iv) and (v), (a)(6), (b)(5)(v) and (vi), 
(b)(6); Sec.  52.39(f)(4) and (5), (i)(4) and (5), (j).
    \9\ Sec.  52.38(a)(7), (b)(7); Sec.  52.39(k).
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    Certain CSAPR Phase 2 emissions budgets have been remanded to EPA 
for reconsideration.\10\ However, the CSAPR trading programs remain in 
effect and all CSAPR emissions budgets likewise remain in effect 
pending EPA final action to address the remands. None of

[[Page 41841]]

the CSAPR emissions budgets applicable to Missouri units has been 
remanded.\11\
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    \10\ EME Homer City Generation, L.P. v. EPA, 795 F.3d 118, 138 
(D.C. Cir. 2015).
    \11\ Litigation concerning EPA's supplemental rule establishing 
the requirement for Missouri units to participate in the CSAPR 
NOX Ozone Season Trading Program is currently being held 
in abeyance. Public Service Co. of Oklahoma v. EPA, No. 12-1023 
(D.C. Cir. filed January 13, 2012).
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    In 2015, EPA proposed to update CSAPR to address Eastern states' 
interstate air pollution mitigation obligations with regard to the 2008 
ozone NAAQS. Among other things, the proposed rule would amend the 
Phase 2 emissions budget applicable to Missouri units under the CSAPR 
NOX Ozone Season Trading Program and would make technical 
corrections and nomenclature changes throughout the CSAPR regulations, 
including the CSAPR FIPs at 40 CFR part 52 and the CSAPR Federal 
trading program regulations for annual NOX, ozone-season 
NOX, and SO2 emissions at 40 CFR part 97.\12\
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    \12\ 80 FR 75706, 75710, 75757 (December 3, 2015).
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III. Conditions for Approval of CSAPR-Related SIP Revisions

    Each CSAPR-related abbreviated or full SIP revision must meet the 
following general submittal conditions:
     Timeliness and completeness of SIP submittal. 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.\13\ 
(The 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.) The SIP submittal 
completeness criteria in section 2.1 of appendix V to 40 CFR part 51 
also apply.
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    \13\ 40 CFR 52.38(a)(4)(ii), (a)(5)(vi), (b)(4)(iii), 
(b)(5)(vii); Sec.  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:
     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 \14\ at 40 CFR 97.411(a), 97.511(a), 97.611(a), or 
97.711(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), or 97.711(b)(1) and 97.712(a), as 
applicable.\15\ 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 any 
the disposition of 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.\16\
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    \14\ 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 spreadsheet showing EPA's default allocations to existing 
units is posted at www.epa.gov/crossstaterule/techinfo.html.
    \15\ Sec.  52.38(a)(4)(i), (a)(5)(i), (b)(4)(ii), (b)(5)(ii); 
Sec.  52.39(e)(1), (f)(1), (h)(1), (i)(1).
    \16\ See Sec. Sec.  97.412(b)(10)(ii), 97.512(b)(10)(ii), 
97.612(b)(10)(ii), 97.712(b)(10)(ii).
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     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) 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.\17\ 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.
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    \17\ Sec.  52.38(a)(4)(i)(A), (a)(5)(i)(A), (b)(4)(ii)(A), 
(b)(5)(ii)(A); Sec.  52.39(e)(1)(i), (f)(1)(i), (h)(1)(i), 
(i)(1)(i).
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     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.\18\ 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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    \18\ Sec.  52.38(a)(4)(i)(B) and (C), (a)(5)(i)(B) and (C), 
(b)(4)(ii)(B) and (C), (b)(5)(ii)(B) and (C); Sec.  52.39(e)(1)(ii) 
and (iii), (f)(1)(ii) and (iii), (h)(1)(ii) and (iii), (i)(1)(ii) 
and (iii).

------------------------------------------------------------------------
                                                Deadline for submission
         Units           Year of the control    to EPA of allocations or
                                period              auction results
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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.
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     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.\19\
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    \19\ Sec.  52.38(a)(4)(i)(D), (a)(5)(i)(D), (b)(4)(ii)(D), 
(b)(5)(ii)(D); Sec.  52.39(e)(1)(iv), (f)(1)(iv), (h)(1)(iv), 
(i)(1)(iv).
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     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

[[Page 41842]]

applicability as described below.\20\ 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.\21\
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    \20\ Sec.  52.38(a)(4), (a)(5), (b)(4), (b)(5); Sec.  52.39(e), 
(f), (h), (i).
    \21\ Sec.  52.38(a)(4)(i), (a)(5)(ii), (b)(4)(ii), (b)(5)(iii); 
Sec.  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 NOX Ozone Season Trading Program (or an integrated 
state trading program) must meet the following further conditions:
     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.\22\
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    \22\ Sec.  52.38(b)(4)(i), (b)(5)(i).
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     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.\23\
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    \23\ Sec.  52.38(b)(4), (b)(5).
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    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:
     Complete, substantively identical trading program 
provisions. The SIP revision must adopt complete state trading program 
regulations substantively identical to the Federal trading program 
regulations at 40 CFR 97.402 through 97.435, 97.502 through 97.535, 
97.602 through 97.635, or 97.702 through 97.735, 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.
     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.\24\
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    \24\ Sec.  52.38(a)(5)(iii), (b)(5)(iv); Sec.  52.39(f)(3), 
(i)(3).
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     Exclusion of provisions addressing units in Indian 
country. The SIP revision may not include references to or 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.\25\
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    \25\ Sec.  52.38(a)(5)(iv), (b)(5)(v); Sec.  52.39(f)(4), 
(i)(4).
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IV. Missouri's SIP Submittal and EPA's Analysis

A. Missouri's SIP Submittal

    In the CSAPR rulemaking, EPA determined that air pollution 
transported from Missouri unlawfully affected other states' ability to 
attain or maintain the 1997 annual PM2.5 NAAQS and the 2006 
24-hour PM2.5 NAAQS.\26\ In a supplemental rulemaking, EPA 
determined that air pollution transported from Missouri also unlawfully 
affected other states' ability to attain and maintain the 1997 ozone 
NAAQS.\27\ Missouri units meeting the CSAPR applicability criteria are 
consequently subject to CSAPR FIPs that require participation in the 
CSAPR NOX Annual Trading Program, the CSAPR SO2 
Group 1 Trading Program, and the CSAPR NOX Ozone Season 
Trading Program.\28\
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    \26\ 76 FR 48208, 48213 (August 8, 2011).
    \27\ 76 FR 80760, 80763 (December 27, 2011).
    \28\ 40 CFR 52.38(a)(2), (b)(2); Sec.  52.39(b); Sec.  52.1326; 
Sec.  52.1327.
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    On November 20, 2015, Missouri submitted to EPA an abbreviated SIP 
revision that, if all portions were approved, would replace the default 
allowance allocation provisions of all three CSAPR trading programs for 
the state's EGUs for the control periods in 2017 and later years with 
provisions establishing state-determined allocations for those control 
periods but that would leave the corresponding CSAPR FIPs and all other 
provisions of the trading programs in place. The SIP submittal 
generally consists of three duly adopted state rules, 10 CSR 10-6.372 
(Cross-State Air Pollution Rule Annual NOX Trading Allowance 
Allocations), 10 CSR 10-6.374 (Cross-State Air Pollution Rule Ozone 
Season NOX Trading Allowance Allocations), and 10 CSR 10-
6.376 (Cross-State Air Pollution Rule Annual SO2 Trading 
Allowances Allocations). The three state rules are substantively 
identical except that each addresses a different CSAPR Federal trading 
program and allocates a different total quantity of allowances. Each 
rule contains a table establishing specific amounts of allowances to be 
allocated for each control period in 2017 and later years to specified 
Missouri electricity generating units under the applicable CSAPR 
trading program. Each rule also establishes a NUSA for the applicable 
program for each control period and sets forth a procedure for 
allocating allowances from the NUSA to qualifying Missouri units.
    The SIP revision was submitted to EPA by a letter from the Director 
of the Missouri Air Pollution Control Program. The letter and its 
enclosures describe steps taken by Missouri to provide public notice 
prior to adoption of the state rules.
    In this rule, EPA is taking action on the portions of Missouri's 
SIP submittal relating to the CSAPR NOX Annual Trading 
Program and the CSAPR SO2 Group 1 Trading Program. EPA is 
not taking action at this time on the portion of the SIP submittal 
relating to the CSAPR NOX Ozone Season Trading Program. As 
noted in section II above, EPA has proposed to update CSAPR to address 
Eastern states' interstate air pollution mitigation obligations with 
regard to the 2008 ozone NAAQS. The proposal would reduce the ozone-
season NOX emissions budgets for control periods in 2017 and 
later years for a number of states, including Missouri. Action on the 
portion of Missouri's SIP submittal addressing allocations of ozone-
season NOX allowances would be premature while the proposed 
update is pending because there is a foreseeable potential conflict 
between the total amount of allowances that would be allocated to 
Missouri units under Missouri's state-determined allocation provisions, 
which are based on Missouri's current budget, and the total amount of 
allowances that could permissibly be allocated to the units under a 
final updated budget.
    EPA has previously approved a separate Missouri SIP revision 
replacing the default allowance allocation provisions of the CSAPR 
NOX Annual Trading Program and the CSAPR NOX 
Ozone Season Trading Program for Missouri existing units for the 
control period in 2016.\29\
---------------------------------------------------------------------------

    \29\ 80 FR 51131 (August 24, 2015).
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B. EPA's Analysis of Missouri's Submittal

    As described in section IV.A above, at this time EPA is taking 
action on the portions of Missouri's SIP submittal relating to the 
CSAPR NOX Annual Trading Program and the CSAPR 
SO2 Group 1 Trading Program but not the portion of the SIP 
submittal relating to

[[Page 41843]]

the CSAPR NOX Ozone Season Trading Program. The analysis 
discussed in this section addresses only the portions of Missouri's SIP 
submittal on which EPA is taking action at this time. For simplicity, 
throughout this section EPA refers to the portions of the submittal on 
which EPA is taking action as ``the submittal'' or ``the SIP revision'' 
without repeating the qualification that at this time EPA is analyzing 
and acting on only portions of the SIP submittal.
1. Timeliness and Completeness of SIP Submittal
    Missouri's SIP revision seeks to establish state-determined 
allocations of CSAPR NOX Annual allowances and CSAPR 
SO2 Group 1 allowances for the control periods in 2017 and 
later years. Under 40 CFR 52.38(a)(4)(i)(B) and 52.39(e)(1)(ii), the 
deadline for submission of state-determined allocations for the 2017 
and 2018 control periods is June 1, 2016, which under Sec. Sec.  
52.38(a)(4)(ii) and 52.39(e)(2) makes December 1, 2015, the deadline 
for submission to EPA of a complete SIP revision establishing state-
determined allocations for those control periods. Missouri submitted 
its SIP revision to EPA by a letter dated and delivered electronically 
on November 20, 2015, and EPA has determined that the submittal 
complies with the applicable minimum completeness criteria in section 
2.1 of appendix V to 40 CFR part 51. Because Missouri's SIP revision 
was timely submitted and meets the applicable completeness criteria, it 
meets the condition under 40 CFR 52.38(a)(4)(ii) and 52.39(e)(2) for 
timely submission of a complete SIP revision.
2. Methodology Covering All Allowances Potentially Requiring Allocation
    Paragraphs 10 CSR 10-6.372(3) and 10 CSR 10-6.376(3) of the 
Missouri rules provide that the allowance allocation methodology 
adopted by Missouri in the SIP revision replaces the provisions of 40 
CFR 97.411(a) and 97.611(a), respectively, thereby addressing all 
allowances that under the default allocation provisions for the Federal 
trading programs would be allocated to units considered existing units 
for CSAPR purposes (prior to allocation of any allowances set aside 
during the initial allocation process). The same Missouri rule 
paragraphs also provide that the state's allocation methodology 
replaces the provisions of 40 CFR 97.411(b)(1) and 97.412(a) and the 
provisions of 40 CFR 97.611(b)(1) and 97.612(a), respectively, thereby 
addressing allocation of allowances in the NUSAs established for 
Missouri under the Federal trading programs. The CSAPR Federal trading 
program regulations do not establish any Indian country NUSAs for 
Missouri. The allocations provisions in the Missouri rules therefore 
enable Missouri's SIP revision to meet the condition under 40 CFR 
52.38(a)(4)(i) and 52.39(e)(1) that the state's allocation or auction 
methodology must cover all allowances potentially requiring allocation 
by the state.
3. Assurance That Total Allocations Will Not Exceed the State Budget
    Paragraphs 10 CSR 10-6.372(3)(A)1. and 10 CSR 10-6.376(3)(A)1. of 
the Missouri rules provide for allowance allocations under each trading 
program to be made to specified units (including all Missouri units 
considered existing units for CSAPR purposes) in fixed amounts as set 
forth in tables referred to as ``Table 1'' in the state rules. The 
totals of the allowances allocated for each control period according to 
the two tables (45,818 CSAPR NOX Annual allowances and 
160,959 CSAPR SO2 Group 1 allowances) are less than 
Missouri's state budgets for the control periods in 2017 and later 
years under the respective trading programs (48,743 CSAPR 
NOX Annual allowances and 165,941 CSAPR SO2 Group 
1 allowances).\30\ Paragraphs 10 CSR 10-6.372(3)(B)3.B. and 10 CSR 10-
6.376(3)(B)3.B. of the Missouri rules establish NUSAs for each trading 
program, allocating to each NUSA for each control period an amount of 
allowances equal to the state budget for the trading program minus the 
total amount of allowances allocated according to the table for that 
trading program. As noted above, the CSAPR Federal trading program 
regulations do not establish Indian country NUSAs for Missouri. The 
only allowances available for allocation to Missouri units are 
therefore allowances allocated under the Missouri rules, and the only 
such allowances, which necessarily sum to the state budgets, are the 
allowances allocated according to the tables and the allowances 
allocated from the NUSAs. EPA has not yet allocated or recorded CSAPR 
allowances for the control periods in 2017 or later years. The 
allocation methodology in Missouri's SIP revision therefore meets the 
condition under 40 CFR 52.38(a)(4)(i)(A) and 52.39(e)(1)(i) that, for 
each trading program, the total amount of allowances allocated under 
the SIP revision (before the addition of any otherwise unallocated 
allowances from an Indian country NUSA) may not exceed the state's 
budget for the control period less the amount of the Indian country 
NUSA for the state and any allowances already allocated and recorded by 
EPA.
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    \30\ 40 CFR 97.410(a)(11)(iv), 97.610(a)(7)(iv).
---------------------------------------------------------------------------

4. Timely Submission of State-Determined Allocations to EPA
    The allocation tables in the Missouri rules establish the primary 
allowance allocations for all Missouri units that are considered 
existing units for CSAPR purposes. Paragraphs 10 CSR 10-6.372(3)(A)1.A. 
through D. and 10 CSR 10-6.376(3)(A)1.A. through D. of the Missouri 
rules provide for the state-determined allocations established 
according to the tables to be submitted to EPA by the following 
deadlines: Allocations for the control periods in 2017 and 2018, by 
June 1, 2016; allocations for the control periods in 2019 and 2020, by 
June 1, 2017; allocations for the control periods in 2021 and 2022, by 
June 1, 2018; and allocations for later control periods, by June 1 of 
the fourth year before the year of the control period. These submission 
deadlines match the deadlines under 40 CFR 52.38(a)(4)(i)(B) and 
52.39(e)(1)(ii) described in Section III above for allocations to 
existing units. Paragraphs 10 CSR 10-6.372(3)(B)1. and 10-6.376(3)(B)1. 
of the Missouri rules provide for the state-determined allowance 
allocations to other units from the NUSAs for each control period to be 
submitted to EPA by July 1 of the year of the control period. These 
submission deadlines match the submission deadlines under 40 CFR 
52.38(a)(4)(i)(C) and 52.39(e)(1)(iii) described in section III above 
for allocations to other units. Missouri's SIP revision therefore meets 
the conditions under 40 CFR 52.38(a)(4)(i)(B) and (C) and 
52.39(e)(1)(ii) and (iii) requiring that the SIP revision provide for 
submission of state-determined allowance allocations to EPA by the 
deadlines specified in those provisions.
5. No Changes to Allocations Already Submitted to EPA or Recorded
    The Missouri rules include no provisions allowing alteration of 
allocations after the allocation amounts have been provided to EPA and 
no provisions allowing alteration of any allocations made and recorded 
by EPA under the Federal trading program regulations, thereby meeting 
the condition under 40 CFR 52.38(a)(4)(i)(D) and 52.39(e)(1)(iv).
6. No Other Substantive Changes to Federal Trading Program Provisions
    Besides the provisions addressing allowance allocations discussed 
above, the Missouri rules contain certain

[[Page 41844]]

definitions. Paragraphs 10 CSR 10-6.372(2)(A) and 10 CSR 10-6.376(2)(A) 
incorporate by reference the Federal trading program definitions in 40 
CFR 97.402 and 97.403 and the definitions in 40 CFR 97.602 and 97.603, 
respectively. Paragraphs 10 CSR 6.372(2)(B) and 10 CSR 10-6.376(2)(B) 
define a single term which is not defined in the Federal trading 
program regulations (``notification''), and paragraphs 10 CSR 
6.372(2)(C) and 10 CSR 10-6.376(2)(C) refer to another Missouri rule 
for definitions of otherwise undefined terms. These definition 
provisions do not make substantive changes to the Federal trading 
program provisions.\31\ EPA therefore determines that Missouri's SIP 
revision meets the condition under 40 CFR 52.38(a)(4) and 52.39(e) of 
making no substantive changes to the Federal trading program 
regulations beyond the provisions addressing allowance allocations.
---------------------------------------------------------------------------

    \31\ EPA has proposed to make certain technical corrections to 
the CSAPR FIP and Federal trading program regulations in order to 
more accurately reflect EPA's intent as described in the CSAPR 
rulemaking and has also proposed to replace ``TR'' with ``CSAPR'' 
throughout the regulations (for example, ``TR NOX Annual 
unit'' would become ``CSAPR NOX Annual unit''). See 80 FR 
75706, 75758. Because the proposed technical corrections merely 
clarify and do not change EPA's interpretations, where the proposed 
corrections would apply to a provision incorporated by reference in 
the Missouri rules, EPA would interpret the Missouri rules as 
reflecting the corrections. Further, EPA anticipates that if the 
proposed nomenclature updates are finalized, the final CSAPR Federal 
regulations would explicitly provide that terms that include 
``CSAPR'' encompass otherwise identical terms in approved SIP 
revisions that include ``TR''.
---------------------------------------------------------------------------

V. EPA's Action on Missouri's Submittal

    EPA is taking direct final action to approve the portions of 
Missouri's November 20, 2015, SIP submittal concerning allocations to 
Missouri units of CSAPR NOX Annual allowances and CSAPR 
SO2 Group 1 allowances for the control periods in 2017 and 
later years. The approved revision adopts into the SIP the rules 
codified in Missouri's regulations at 10 CSR 10-6.372 (Cross-State Air 
Pollution Rule Annual NOX Trading Allowance Allocations) and 
10 CSR 10-6.376 (Cross-State Air Pollution Rule Annual SO2 
Trading Allowances Allocations). Following this approval, allocations 
of CSAPR NOX Annual allowances to Missouri units for the 
control periods in 2017 and later years will be made according to the 
provisions of Missouri's SIP instead of CSAPR's default allocation 
provisions at 40 CFR 97.411(a), 97.411(b)(1), and 97.412(a), and 
allocations of CSAPR SO2 Group 1 allowances to Missouri 
units for the control periods in 2017 and later years will be made 
according to the provisions of Missouri's SIP instead of CSAPR's 
default allocation provisions at 40 CFR 97.611(a), 97.611(b)(1), and 
97.612(a). Approval of this SIP revision does not alter any provision 
of the CSAPR NOX Annual Trading Program or the CSAPR 
SO2 Group 1 Trading Program as applied to Missouri units 
other than the allowance allocation provisions, and the FIPs requiring 
the units to participate in those programs (as modified by this SIP 
revision) remain in place. EPA is approving the indicated portions of 
the SIP submittal because they meet the requirements of the CAA and 
EPA's regulations for approval of an abbreviated SIP revision replacing 
EPA's default allocations of CSAPR emission allowances with state-
determined allocations, as discussed in section IV above.
    Large electricity generating units in Missouri are also subject to 
an additional CSAPR FIP requiring them to participate in the Federal 
CSAPR NOX Ozone Season Trading Program. While Missouri's SIP 
submittal also seeks to replace the default allocations of CSAPR 
NOX Ozone Season allowances to Missouri units, EPA is not 
acting on that portion of the SIP submittal at this time. Approval of 
this SIP revision concerning other CSAPR trading programs has no effect 
on the CSAPR NOX Ozone Season Trading Program as applied to 
Missouri units, and the FIP requiring the units to participate in that 
program remains in place.

VI. Incorporation by Reference

    In this rule, EPA is finalizing regulatory text that includes 
incorporation by reference. In accordance with requirements of 1 CFR 
51.5, EPA is finalizing the incorporation by reference of the Missouri 
Regulations described in the direct final amendments to 40 CFR part 52 
set forth below. EPA has made, and will continue to make, these 
documents generally available electronically through 
www.regulations.gov and at the appropriate EPA office (see the 
ADDRESSES section of this preamble for more information).

VII. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. Accordingly, this 
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 action:
     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);
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because this rulemaking does not involve technical standards; and
     Does not provide EPA with the discretionary authority to 
address, as appropriate, disproportionate human health or environmental 
effects, using practicable and legally permissible methods, under 
Executive Order 12898 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land or 
in any other area where EPA or an Indian tribe has demonstrated that a 
tribe has jurisdiction. In those areas of Indian country, the rule does 
not have tribal implications and will not impose substantial direct 
costs on tribal governments or preempt tribal law as specified by 
Executive Order 13175 (65 FR 67249, November 9, 2000).
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a

[[Page 41845]]

report containing this action and other required information to the 
U.S. Senate, the U.S. House of Representatives, and the Comptroller 
General of the United States prior to publication of the rule in the 
Federal Register. A major rule cannot take effect until 60 days after 
it is published in the Federal Register. This action is not a ``major 
rule'' as defined by 5 U.S.C. 804(2).
    Under section 307(b)(1) of the CAA, petitions for judicial review 
of this action must be filed in the United States Court of Appeals for 
the appropriate circuit by August 29, 2016. Filing a petition for 
reconsideration by the Administrator of this final rule does not affect 
the finality of this action for the purposes of judicial review nor 
does it extend the time within which a petition for judicial review may 
be filed, and shall not postpone the effectiveness of such rule or 
action. This action may not be challenged later in proceedings to 
enforce its requirements. (See section 307(b)(2)).

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.

    Dated: June 16, 2016.
Mark Hague,
Regional Administrator, Region 7.
    For the reasons stated in the preamble, EPA amends 40 CFR part 52 
as set forth below:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

0
1. The authority citation for part 52 continues to read as follows:

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

Subpart AA-Missouri

0
2. In Sec.  52.1320:
0
a. Revise the section heading.
0
b. In the table in paragraph (c), under Chapter 6, add entries ``10-
6.372'' and ``10-6.376'' in numerical order.
    The revisions read as follows:

Sec.  52.1320  Identification of plan.

* * * * *
    (c)* * *

                                        EPA-Approved Missouri Regulations
----------------------------------------------------------------------------------------------------------------
                                                           State
    Missouri citation                Title            effective date    EPA approval date        Explanation
----------------------------------------------------------------------------------------------------------------
                                    Missouri Department of Natural Resources
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
    Chapter 6--Air Quality Standards, Definitions, Sampling and Reference Methods, and Air Pollution Control
                                      Regulations for the State of Missouri
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
10-6.372.................  Cross-State Air Pollution        12/30/15  6/28/16 [Insert
                            Rule Annual NOX Trading                    Federal Register
                            Allowance Allocations.                     citation].
10-6.376.................  Cross-State Air Pollution        12/30/15  6/28/16 [Insert
                            Rule Annual SO2 Trading                    Federal Register
                            Allowance Allocations.                     citation].
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *
[FR Doc. 2016-15048 Filed 6-27-16; 8:45 am]
 BILLING CODE 6560-50-P