        DEPARTMENT OF COMMERCE
        National Oceanic and Atmospheric Administration
        50 CFR Part 697
        [Docket No. 130319263-3577-01]
        RIN 0648-BD09
        Magnuson-Stevens Act Provisions; Fisheries of the Northeastern United States; Northeast Multispecies Fishery; Proposed Rule To Allow Northeast Multispecies Sector Vessels Access to Year-Round Closed Areas

          AGENCY:
          National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

          ACTION:
          Proposed rule; request for comments.

          SUMMARY:
          This rule proposes to partially reopen several groundfish closed areas in the 2013 fishing year. If implemented as proposed, this action would open portions of Closed Areas I and II to selective fishing gear for a limited time period. Two areas within the Nantucket Lightship Closed Area are also proposed to be opened to selective gear year-round. The Western Gulf of Maine and Cashes Ledge Closed Areas, both located in the Gulf of Maine, would not be opened.

          DATES:
          Written comments must be received on or before July 26, 2013.

          ADDRESSES:

          A copy of the accompanying environmental assessment is available from the NMFS Northeast Regional Office: John K. Bullard, Regional Administrator, National Marine Fisheries Service, 55 Great Republic Drive, Gloucester, MA 01930. These documents are also accessible via the Federal eRulemaking Portal: http://www.regulations.gov.

          You may submit comments on this document, identified by NOAA-NMFS-2013-0084, by any of the following methods:
          • Electronic Submissions: Submit all electronic public comments via the Federal eRulemaking Portal. Go to www.regulations.gov/#!docketDetail;D=NOAA-NMFS-2013-0084, click the “Comment Now!” icon, complete the required fields, and enter or attach your comments.
          • Fax: (978) 281-9135, Attn: William Whitmore.
          • Mail: Paper, disk, or CD-ROM comments should be sent to John K. Bullard, Regional Administrator, National Marine Fisheries Service, 55 Great Republic Drive, Gloucester, MA 01930. Mark the outside of the envelope: “Comments on Closed Area Rule.”

            Instructions: All comments received are part of the public record and will generally be posted to http://www.regulations.gov without change. No comments will be posted for public viewing until after the comment period has closed. All Personal Identifying Information (for example, name, address, etc.) voluntarily submitted by the commenter may be publicly accessible. Do not submit Confidential Business Information or otherwise sensitive or protected information. NMFS will accept anonymous comments (enter N/A in the required fields, if you wish to remain anonymous). You may submit attachments to electronic comments in Microsoft Word, Excel, WordPerfect, or Adobe PDF file formats only.
          Once submitted to NMFS, copies of addenda to fishing year 2013 sector operations plans detailing industry-funded monitoring plans, and the environmental assessment (EA), will be available from the NMFS NE Regional Office at the mailing address above.

          FOR FURTHER INFORMATION CONTACT:
          William Whitmore, Fishery Policy Analyst, phone (978) 281-9182, fax (978) 281-9135.

        SUPPLEMENTARY INFORMATION:

        Background
        Amendment 16 to the Northeast Multispecies Fisheries Management Plan (groundfish plan) includes several universal regulatory exemptions that apply to all groundfish sectors. Sectors can also request additional regulatory exemptions in their annual sector operations plans. These exemptions are reviewed and approved by the National Marine Fisheries Service (NMFS) on an annual basis. For additional information on sector exemptions, the process for approving sector exemptions, and a description of current sector exemptions, please see the final rule for fishing year 2013 sector operations plans (78 FR 25591, May 2, 2013).
        Amendment 16 also prohibited sectors from requesting exemptions from certain regulations, including exemptions from year-round closed areas. Some year-round closed areas were established as effort controls to reduce fishing mortality. Other year-round closed areas were established to protect essential fish habitat. In an attempt to mitigate the impacts of the low catch limits for fishing year 2013, the New England Fishery Management Council (Council) included a measure in Framework Adjustment 48 that would allow sectors to request regulatory exemptions to the year-round closed areas that were established for mortality reductions.
        On May 3, 2013, NMFS partially approved Framework 48 (78 FR 26118), including the Framework 48 provision allowing sectors to request access to year-round mortality closure areas. Anticipating that Framework 48 would be approved, sectors included exemption requests from year-round closure areas in their initial 2013 operations plan submissions. Exemption requests are only approved after we determine that the exemption is consistent with the groundfish plan's goals and objectives. For additional information on which areas sectors can request exemptions from, please see the final rule implementing Framework 48 (78 FR 26118, see page 26131).
        Anticipating that Framework 48 would be approved, sectors included exemption requests from year-round closure areas in their initial 2013 operations plan submissions. These exemption requests are being developed in a separate action from the final rule for fishing year 2013 sector operations plans to provide sufficient time for the extensive analyses needed for this action. Table 1 indicates which sectors requested access to particular closed areas in their initial fishing year 2013 operations plans.
        These closed area exemption requests are being considered as amendments to the sector operations plans in this action. Because the environmental assessment analyzes the potential effort and associated environmental impacts from all sectors fishing in the proposed areas, any sector could request access to any of the areas, if approved.

          EP11JY13.000

        The Council's Closed Area Technical Team (CATT) was asked by the Council to research and recommend potential changes to the groundfish mortality closures for the upcoming Omnibus Essential Fish Habitat (EFH) Amendment. The CATT conducted many analyses on the potential benefits derived from the current year-round groundfish closed areas, as well as how the area closures could be modified to improve protection of groundfish habitat or protection of groundfish during critical life stages. The group began by conducting a comprehensive literature and data review of groundfish closed areas—these data served as the basis for the analysis used in the Framework 48 environmental assessment.
        The CATT then attempted to identify areas where groundfish spawn, as well as areas that are critical to juvenile habitat. Currently, the CATT is attempting to take those data and identify groundfish closure areas that would provide the greatest benefit to groundfish stocks in need of rebuilding. Much of the research by the CATT is incorporated into the environmental assessment for this action. We are considering recent scientific analyses, including work by the CATT, in determining whether or not allowing sector vessels some access to these year-round closure areas is consistent with the goals and objectives of the groundfish plan while still protecting essential fish habitat management areas. The analyses developed by the CATT were reviewed and endorsed by the Council's Scientific and Statistical Committee on May 16, 2013.
        Using the CATT's analyses and other information, this proposed rule evaluates the impacts of any actual fishing effort in these mortality closure areas, including the concerns raised in public comments during the development of Framework 48. The Council believes, and we agree, that proposing access to the closed areas through a separate sector exemption review and approval process provides a better opportunity to address specific concerns with the potential impact of actual sector proposals. This is primarily because the NMFS Regional Administrator may include stipulations and constraints on specific exemptions to facilitate the monitoring and enforcement of sector operations or as mitigation measures to address specific potential impacts. In fact, the three measures proposed in this rule include additional constraints to mitigate impacts on groundfish stocks and protected resources. We want to ensure that any exemptions that are granted are consistent with the goals and objectives of the groundfish plan.

        As previously mentioned, the Council is also in the process of preparing an Essential Fish Habitat (EFH) Omnibus Amendment to several fishery management plans, including the groundfish plan. The Omnibus Amendment currently includes a review and update of EFH requirements and EFH management area designations, a review and update of Habitat Area of Particular Concern (HAPC) designations, a review of other EFH requirements of fishery management plans, including prey species information and non-fishing impacts, and alternatives to minimize the adverse effects of fisheries on EFH. Because there is considerable spatial overlap between the groundfish mortality closed areas and the current habitat areas that are closed to bottom tending mobile gears, a review of the groundfish mortality closures is also included in the Omnibus Amendment. Currently, it is anticipated that the Omnibus Amendment will be completed by May 2014, and potentially implemented by the end of 2014. While the measures proposed in this rule are only for the 2013 fishing year, it is likely that the current closed areas will be modified sometime during the 2014 fishing year as a result of the Omnibus Amendment. Additional information on the Habitat Omnibus Amendment, including a map and descriptions of the proposed closed area modification can be found on the Council's Web site at http://nefmc.org/habitat/index.html.

        A variety of concerns about the impacts from opening these areas have been expressed by fishery managers, members of the fishing industry, and the public, including many environmental non-governmental organizations. Most of these comments were provided during the public comment periods for the fishing year 2013 sector operations plans and Framework 48 proposed rules. Many comments were also sent to us during the development of Framework 48. Concerns were raised about potential impacts to protected species, spawning groundfish, and to other commercial species, like lobsters, that may result from opening these areas to new fishing effort. Some commenters also were worried that allowing groundfish vessels into these areas, mainly Closed Area II, could increase gear conflicts between mobile and lobster gear. Other commenters expressed concern that opening the closed areas could undermine current rebuilding efforts for stocks that are overfished or undergoing overfishing. Some commenters stated that this measure could undermine measures under consideration in the Omnibus EFH Amendment, as described above. The Council attempted to mitigate these concerns by excluding existing and potential habitat closed areas from consideration in Framework 48 to preserve the process under way to evaluate these areas in the Omnibus EFH Amendment. The Council also included seasonal restrictions on sector exemptions to reduce interactions with spawning stocks. We are attempting to further mitigate these concerns by only allowing seasonal access to specific areas with selective fishing gears. Selective fishing gear, such as a haddock separator trawl, allows a vessel to better target a specific species when compared to a standard bottom otter trawl. Selective fishing gear allows a vessel to reduce its catch of non-target species, which in turn reduces bycatch and lowers the sector's discard rate.

        This action proposes granting seasonal access into portions of Closed Areas I and II to sector vessels fishing selective gears (see Figure A). This action also proposes granting access to portions of the Nantucket Lightship Closed Area for vessels fishing selective gears for the remainder of the 2013 fishing year. In addition, to prevent harbor porpoise takes, vessels fishing in the western portion of Nantucket Lightship Closed Area would be required to use pingers, as stipulated in the Harbor Porpoise Take Reduction Plan (which can be found online at http://www.nero.noaa.gov/protected/porptrp/). Each of the four areas proposed could be approved independently of the others. It is hoped that allowing carefully designed access to these areas will allow vessels to increase their catch of under-harvested groundfish stocks (such as Georges Bank haddock and pollock) and healthy non-groundfish stocks (such as monkfish, dogfish, and skates), while minimizing impacts to recovering groundfish stocks and protected resources.

        We believe that this proposed rule is consistent with the goals and objective of Amendment 16 to the groundfish plan (for a complete list of the Amendment 16 goals and objectives, see page 67 of the Amendment 16 environmental impact statement). This proposed rule would provide reasonable and regulated access to regulated groundfish (Goal 5). This rule would allow sector vessels additional opportunities to increase their catch while constrained by an annual catch limit (Objectives 1 and 3). By restricting vessels to specific areas, gears, and seasons, this rule minimizes vessel bycatch. Habitat impacts from fishing would be minimized to the extent practicable because the areas were determined to have low vulnerability (Objectives 9 and 10). The considerations in this rule would allow vessels increased opportunity to meet optimum yield while constraining fishing mortality. The increased profits would benefit fishermen and fishing communities while the gear restrictions would continue to allow overfished stocks to rebuild.
        This action does not propose to grant sector vessels access to either the Western Gulf of Maine or Cashes Ledge year-round closed areas. There has been little public or industry support for opening the Gulf of Maine areas, and analyses indicate that access to these areas would not provide greater opportunity to target healthy stocks than areas already open. Moreover, preliminary analyses indicate that allowing access to Gulf of Maine non-habitat closed areas may have negative impacts on depleted and recovering stocks of groundfish, such as Gulf of Maine cod and haddock, and protected harbor porpoise.

          EP11JY13.001

        1. Closed Area I Exemption Area
        Closed Area I was closed year-round to groundfish fishing in 1994 to protect Georges Bank cod and haddock. If this proposed provision is implemented, the central portion of Closed Area I would be opened seasonally to selective gear only from the date the final rule is published through December. It is anticipated that, if this provision is implemented, the final rule would be published and effective in August. Trawl vessels would be restricted to selective trawl gear, including the separator trawl, the Ruhle trawl, the mini-Ruhle trawl, rope trawl, and any other gear authorized by the Council in a management action. Hook gear would be permitted in this area as well. Because Georges Bank cod is considered overfished and subject to overfishing and gillnets cannot selectively capture haddock without catching cod, vessels would be prohibited from fishing with gillnets in this area. Flounder nets would be prohibited, as Georges Bank yellowtail flounder are considered overfished and subject to overfishing.

        Allowing vessels into the Closed Area I Exemption Area would increase their opportunities to target healthy stocks of Georges Bank haddock. Since the closure, Georges Bank haddock have rebounded and are healthy. In fact, during fishing year 2012, less than 10 percent of the Georges Bank haddock quota was harvested. On the other hand, Georges Bank cod and Georges Bank yellowtail flounder are overfished and subject to overfishing. This proposed action would allow fishing for Georges Bank haddock and other healthy stocks while selective gear will help minimize catch of Georges Bank cod and yellowtail flounder.
        Selective gear is required to reduce bycatch of overfished stocks such as Georges Bank yellowtail flounder and cod. Although the Council specified that vessels could fish in the area until February 15, we are proposing to prohibit vessels from fishing in the Closed Area I Exemption Area after December 31 to avoid impacts to spawning stocks of Georges Bank cod.
        Except for a special access program that allows hook vessels to fish in a portion of the area), the portion of Closed Area I proposed to be reopened in this rule has been a part of the Scallop Access Area Rotational Management Program since 2004. As a result, the seabed in this area has been disturbed by scallop dredges and is not a preserved habitat area. Furthermore, analyses for the Habitat Omnibus Amendment did not identify this area as vulnerable to trawl gear. There are minimal concerns regarding impacts to protected species in this area. While there were initial concerns about effort shifts from lobster gear in the area, an analysis of lobster effort in the area indicates that there is very little lobster effort in this area. Because of this, it is not anticipated that lobster gear displaced from this area would result in increased interactions with protected species. More information on lobster effort in the proposed areas is available in the accompanying environmental assessment.
        2. Closed Area II Exemption Area
        Closed Area II was closed year-round to groundfish fishing in 1994 to protect Georges Bank cod and haddock. If approved, the central portion of Closed Area II would be opened seasonally to selective gear only through December 31, 2013. The gear restrictions in Closed Area II are the same as those proposed for Closed Area I—selective trawl and hook gear only. Trawl and hook vessels would be permitted in this area when specified (see below). Vessels would be prohibited from fishing with gillnets in Closed Area II. Flounder nets would be prohibited. As noted above, in the time since the closure, Georges Bank haddock has fully recovered, is rebuilt and is consistently under-harvested. Selective gear is proposed to minimize the catch of Georges Bank cod and yellowtail flounder, both of which are considered overfished and subject to overfishing.
        Only the central portion of Closed Area II is proposed to be reopened because the northern portion represents a habitat area of particular concern (HAPC) and the southern portion is the Closed Area II Yellowtail Flounder/Haddock Special Access Program area. There is no need to grant sector vessels access to the southern portion of Closed Area II through this rule because the fishing year 2013 sector rule already granted sector vessels an exemption to fish in this area through December 31, 2013. We also extended the Eastern United States/Canada Haddock SAP, which occurs in the northern tip of Closed Area II from May 1 through December 31, 2013 (see 78 FR 25599-25600; May 2, 2013).
        The offshore lobster industry and sector trawl vessels proposed a rotational gear-use agreement for proposed the Closed Area II Exemption Area (a copy of the agreement is included as an appendix in the EA). The restrictions proposed in the rotational gear use agreement have been adopted by the Atlantic States Marine Fisheries Commission, who modified the Interstate Fisheries Management Plan for American Lobster through Addendum XX to the lobster plan. This rule incorporates most portions of that agreement, a more detailed explanation is below.
        We remain concerned that fishing in Closed Area II could have negative impacts on spawning Georges Bank cod and dense concentrations of Georges Bank yellowtail flounder, both of which are considered overfished and subject to overfishing. The proposed seasons and gear requirements incorporate the rotational gear-use agreement and mitigate fishing effort on yellowtail flounder and spawning cod:
        • June 16-October 31: Sector trawl vessels would be prohibited, lobster and sector hook gear vessels only.
        • November 1-December 31: Only sector trawl vessels could access the area; lobster and hook gear vessels prohibited.
        • January 1-April 30: Lobster vessels permitted; sector groundfish vessels would be prohibited in Closed Area II during this time.
        • May 1-June 15: Only sector trawl vessels could access the area; lobster and hook gear vessels prohibited.
        The gears and seasons listed above match the agreement between the offshore lobster industry and sector trawl vessels, with the exception that groundfish vessels would be prohibited from fishing in Closed Area II after December 31. It should be noted that tyhe sector exemptions proposed in this rule are only for fishing year 2013, which ends April 30, 2014. In contrast, the lobster regulations at § 697.7 are proposed to be modified for fishing years 2013 and 2014, through this rule to prohibit lobster vessels from accessing the Closed Area II Exemption Area from November 1-December 31, 2013 and May 1-June 15 and November 1-December 31, 2014. The regulatory changes proposed for federally permitted lobster vessels would be effective through the end of fishing year 2014, the time frame established under the gear-use agreement and under Addendum XX. If sector vessels wish to request access to the Closed Area II Exemption Area from May 1-June 15 for fishing year 2014, that exemption request would be included in their 2014 sector operations plans and analyzed in the 2014 sector proposed rule and environmental assessment.
        Like Closed Area I, allowing vessels into this area would increase their opportunities to target healthy stocks of Georges Bank haddock. Selective gear is required to reduce bycatch of overfished stocks such as Georges Bank yellowtail flounder and cod to the extent practicable. Although the Council specified in Framework 48 that vessels could fish in Closed Area I until February 15, we are proposing to prohibit vessels into Closed Area I after December 31 due to impacts to Georges Bank cod spawning. While this area has been closed year-round to groundfishing since 1994, the majority of the seabed in this area is sand and is impacted by strong currents. As a result, this area is not considered to be vulnerable to trawl gear. Some areas are shallow enough that the bottom is affected by wave action. As a result, bottom trawling in this area would likely have minimal impact on benthic habitats.
        The agreement between the offshore lobster industry and sector vessels reduces concerns of gear conflicts in the area. Analyses for the environmental assessment indicate that only a small portion of the annual lobster catch from this portion of Closed Area II is gathered during November. No trips were reported in the proposed area during December of 2011 or 2012. As a result, the displacement of lobster effort into other areas is expected to be minimal. Because of this, it is not anticipated that lobster gear displaced from this area would result in increased interactions with protected species in other locations.
        3. Nantucket Lightship Closed Area Exemption

        The Nantucket Lightship Closed Area was established as a year-round groundfish closure in 1994 to protect yellowtail flounder. If approved, this measure would allow sector vessels to access the eastern and western portions of the Nantucket Lightship Closed Area. The central area is essential fish habitat and not proposed to be re-opened. Trawl vessels would be restricted to selective trawl gear, including the separator trawl, the Ruhle trawl, the mini-Ruhle trawl, rope trawl, and any other gear authorized by the Council in a management action. Flounder nets would be prohibited because there is concern that the population of yellowtail flounder in the area represents a source population that is critical to the Southern New England/Mid-atlantic stock. Gillnet vessels would be restricted to fishing 10-inch (25.4-cm) diamond mesh or larger. This would allow gillnet vessels to target monkfish and skates while reducing catch of flatfish. Because the area lies within the Southern New England Management Area of the Harbor Porpoise Take Reduction Plan, gillnet vessels would be required to use pingers when fishing in the Nantucket Lightship Closed Area—Western Exemption Area between December 1 and May 31. These catches could also help mitigate the low fishing year 2013 allocations for several groundfish stocks.
        Opening the eastern and western portions of the Nantucket Lightship Closed Area to selective gear is not expected to have any significant adverse habitat impacts. While this area has been closed year-round to groundfishing since 1994, the eastern portion proposed to be reopened in this rule has been a part of the Scallop Access Area Rotational Management Program since 2004—so it has been subject fishing. The western portion is referred to as the “mudhole” with a benthic habitat not vulnerable to bottom trawling. Therefore, bottom impacts from opening this area are anticipated to be minimal.
        Requiring selective gear in this area will help minimize flounder bycatch and address concerns that vessels could harvest a large portion of Southern New England/Mid Atlantic yellowtail flounder allocation from this area, which is considered home to an important source population for yellowtail flounder. To reduce potential interactions with harbor porpoises, gillnet gear in the western exemption would need to be equipped with pingers between December 1 and May 31 as described in the Harbor Porpoise Take Reduction Plan.
        4. Industry-Funded At-Sea Monitoring
        Sectors must have a NMFS-approved industry-funded at-sea monitoring program to receive the proposed exemptions from closed areas, and vessels that fish in these closed areas would be required to have an industry-funded at-sea monitor on board. A high level of at-sea monitoring coverage is necessary to accurately monitor total catch from these areas. Without a high level of at-sea monitoring coverage, discard rates would be difficult to estimate (as we do with other sector fishing trips) because there is very little catch history or data from these areas. Requiring 100 percent at-sea monitoring coverage would also allow NMFS to monitor whether vessels are interacting with protected species. This level of monitoring would also provide an ancillary benefit of gaining additional fishery dependent data from the catch from these areas.
        While NMFS has committed to pay for at-sea monitoring coverage for sector fishing trips during fishing year 2013, the agency does not have enough funding to also pay for additional trips utilizing regulatory exemptions that require 100-percent monitoring (such as trips targeting redfish and trips into closed areas). However, we are currently looking into possible ways to provide funding for these trips.
        A sector vessel intending to fish in these closed access areas would be required to declare its intent through its Vessel Monitoring System prior to departing the dock. Catch from these trips would not be used for determining a sector's discard rate because these trips are different than standard groundfish trips.
        Classification
        Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), the NMFS Assistant Administrator has determined that this proposed rule is consistent with the Northeast Multispecies Fishery Management Plan, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.
        This proposed rule has been determined to be not significant for purposes of Executive Order 12866.
        The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires agencies to assess the economic impacts of their proposed regulations on small entities. The objective of the RFA is to consider the impacts of a rulemaking on small entities, and the capacity of those affected by regulations to bear the direct and indirect costs of regulation. Size standards have been established for all for-profit economic activities or industries in the North American Industry Classification System. The Small Business Administration (SBA) defines a small business in the commercial fishing and recreational fishing sector, as a firm with receipts (gross revenues) of up to $4 million. The Small Business Act defines affiliation as: Affiliation may arise among two or more persons with an identity of interest. Individuals or firms that have identical or substantially identical business or economic interests (such as family members, individuals or firms with common investments, or firms that are economically dependent through contractual or other relationships) may be treated as one party with such interests aggregated (13 CFR 121.103(f)).

        An Initial Regulatory Flexibility Analysis (IRFA) has been prepared, as required by section 603 of the RFA. The Final Regulatory Flexibility Analysis (FRFA) will be prepared after the comment period for this proposed rule, and will be published with the final rule. The IRFA describes the economic impact that this proposed rule, if adopted, would have on small entities. The IRFA consists of this section, the SUMMARY section of the preamble of this proposed rule, and the EA prepared for this action. A description of the action, why it is being considered, and the legal basis for this action are contained in the preamble to this proposed rule and in Sections 1.0, 2.0, and 3.0 of the EA prepared for this action, and is not repeated here. A summary of the analysis follows. A copy of this analysis is available from NMFS (see ADDRESSES).
        Description of the Reasons Why Action by Agency Is Being Considered
        The flexibility afforded sectors includes exemptions from certain specified regulations as well as the ability to request additional exemptions. Sector members no longer have groundfish catch limited by days-at-sea (DAS) allocations and are instead limited by their allocations. In this manner, the economic incentive changes from a vessel maximizing its effective catch of all species on a DAS to maximizing the value of its allocation, which places a premium on timing landings to market conditions, as well as changes in the selectivity and composition of species landed on fishing trips. Further description of the purpose and need for the proposed action is contained in Section 2.0 of the EA prepared for this action.
        The Objectives and Legal Basis for the Proposed Action

        The objective of the proposed action is to grant sectors a regulatory exemption allowing sector vessels to fish in portions of several year-round groundfish closed areas. The legal basis for the proposed action is the NE Multispecies FMP and promulgating regulations at § 648.87. Regulations adding increased restrictions on offshore lobster vessels will be added to § 697.7.
        Estimate of the Number of Small Entities
        The SBA size standard for commercial fishing entities (North American Industry Classification System code 114111) is $4 million in annual sales. We have recently worked to identify ownership affiliations, and incorporated those data into this analysis. Although work to more accurately identify ownership affiliations is ongoing, for the purposes of this analysis, ownership entities are defined as an association of fishing permits held by common ownership personnel as listed on permit application documentation. Only permits with identical ownership personnel are categorized as an ownership entity.
        The maximum number of entities that could be affected by the proposed exemptions is expected to be approximately 355 ownership entities (352 qualifying as small entities)—this includes 303 entities enrolled in sectors as well as 52 offshore lobster vessels, but many of the offshore lobster vessels do not fish in the areas discussed in this action. A total of 301 groundfish ownership entities and 51 offshore lobster ownership entities would be considered small entities, based on the definition as stated above. The economic impact resulting from this action on these small groundfish entities is positive, since the action, if implemented, would provide additional operational flexibility to vessels participating in NE multispecies sectors for FY 2013. In addition, this action would further mitigate negative impacts from the implementation of Amendment 16, Frameworks 44 and 45, which have placed additional restrictions on the NE multispecies fleet, as well as Frameworks 48 and 50. The economic impact resulting from this action on offshore lobster entities is expected to be negligible, since they historically have very little fishing effort in an area that they would be unable to fish during a specific portion of the year.
        Reporting, Recordkeeping and Other Compliance Requirements
        This proposed rule contains no collection-of-information requirement subject to the Paperwork Reduction Act. The proposed action provides additional flexibility to sector vessels in fishing year 2013 by allowing them to fish in areas that were previously closed. Sector vessels would be required to declare their intent to fish in these areas prior to departure. As currently proposed, sectors interested in utilizing this exemption must have a NMFS-approved industry-funded at-sea monitoring program. Exemptions implemented through this action would be documented in a letter of authorization issued to each vessel participating in an approved sector.
        Duplication, Overlap or Conflict With Other Federal Rules
        The proposed action is authorized by the regulations implementing the NE Multispecies FMP. It does not duplicate, overlap, or conflict with other Federal rules.
        Alternatives Which Minimize Any Significant Economic Impact of Proposed Action on Small Entities
        NMFS considered two alternatives for the action proposed in this rule, the No Action Alternative and the Preferred Alternative. Under the No Action Alternative, sector vessels would not be able to fish in year-round closed areas unless fishing within an existing, approved Special Access Program. The No Action Alternative is the disapproval of the exemption and addendum to any sector's operations plan. The No Action Alternative would result in sector vessels operating under the operations plans as approved for the start of the 2013 FY on May 1, 2013. Approving the No Action Alternative would result in continued underharvesting of Georges Bank haddock and would eliminate the potential for groundfish to increase their profits.

        The Preferred Alternative (the proposed action) would allow sector vessels to fish in portions of the Nantucket Lightship Closed Area, Closed Area I, and Closed Area II. The Preferred Alternative would create a positive economic impact for the participating ownership entities that include sector vessels because it would mitigate the impacts from restrictive management measures implemented under NE Multispecies FMP. Few quantitative data on the precise economic impacts to individual ownership entities are available. The 2011 Final Report on the Performance of the Northeast Multispecies (NE multispecies) Fishery (May 2010-April 2011) (copies are available from NMFS, see ADDRESSES) documents that all measures of gross nominal revenue per trip and per day absent in 2011 were higher for the average sector vessel than in 2010, and lower for the average common pool vessel than in 2010, except for average revenue per day on a groundfish trip for vessels under 30 ft (9.14 m) in length and for vessels 75 ft (22.86 m) and above. However, the report stipulates that this comparison is not useful for evaluating the relative performance of DAS and sector-based management because of fundamental differences between these groups of vessels, which were not accounted for in the analyses. Accordingly, quantitative analysis of the impacts of sector operations plans is still limited. NMFS anticipates that by switching from effort controls of the common pool regime to operating under a sector ACE, sector members will have a greater opportunity to remain economically viable while adjusting to changing economic and fishing conditions. Thus, the proposed action provides benefits to sector members that they would not have under the No Action Alternative.
        Economic Impacts on Small Entities Resulting From Proposed Action
        The environmental impact statement for Amendment 16 compares economic impacts of sector vessels with common pool vessels and analyzes costs and benefits of the universal exemptions. The final rules for the approval of sector operations plans and contracts for fishing years 2010-2013 (75 FR 18113, April 9, 2010; 75 FR 80720, December 23, 2010; 76 FR 23076, April 25, 2011; 77 FR 26129, May 2, 2012; 78 FR 25591, May 2, 2013) and their accompanying EAs discussed the economic impacts of the exemptions requested by sectors in those years.
        The EA prepared for this rule evaluates the impacts of each closed area alternative individually relative to the no-action alternative (i.e., no sectors are approved), and the alternatives may be approved or disapproved individually or as a group. The impacts associated with the implementation of each of the exemptions proposed in this rule are analyzed as if each exemption would be implemented for all sectors. The EA analyses includes all sectors because all sectors can request the exemption. Sectors can also add approved exemptions to the operations plans at any point during the fishing year. Further, attempting to limit the analyses to a specific number of sectors would be incorrect because any sector(s) could lease in all the remaining allocation and fish for that allocation under the exemption. Therefore, it is important to analyze the impacts as if the entire allocation could be harvested under the exemption. However, each exemption will only be implemented for the sector(s) that requested that exemption.

        Approval of this rule, as proposed, would provide greater operational flexibility and increased fishing opportunities to sector vessels. Increased “operational flexibility” generally has positive impacts on human communities as sectors and their associated exemptions grant fishermen some measure of increased operational flexibility. By removing the limitations on vessel effort (amount of gear used, number of days declared out of fishery, trip limits and area closures), sectors help create a more simplified regulatory environment. This simplified regulatory environment grants fishers greater control over how, when, and where they fish, without working under increasingly complex fishing regulations with higher risk of inadvertently violating one of the many regulations. The increased control granted by the sectors and their associated exemptions may also allow fishermen to maximize the ex-vessel price of landings by timing them based on market prices and conditions. Generally, increased operational flexibility can result in reduced costs and/or increased revenues. All exemptions contained in the proposed fishing year 2013 sector operations plans are expected to generate positive social and economic effects for sector members and ports. In general, profits can be increased by increasing revenues or decreasing costs. Similarly, profits decrease when revenues decline or costs rise. The intent of this action is to allow fishermen to increase their revenues by increasing their catch, which would increase their revenue. Also, fishermen may potentially increase their catch per unit effort, which would also decrease their costs.
        It is anticipated that any economic impacts on offshore lobster vessels would be negligible. Analyses in the accompanying EA indicates that very little lobster fishing occurs in the Closed Area II Exemption Area when lobster vessels would be prohibited from entering the area. In addition, the offshore lobster industry voluntarily signed a gear-use agreement with several groundfish sectors agreeing not to fish in the area during certain seasons. It is unlikely that the offshore lobster industry would have voluntarily entered an agreement that resulted in greatly disproportionate impacts. This rule incorporates that agreement in an effort to minimize any economic impacts on lobster vessels.

          List of Subjects in 50 CFR Part 697
          Fisheries, fishing.

          Dated: July 8, 2013.
          Samuel D. Rauch III,
          Deputy Assistant Administrator for Regulatory Programs, performing the functions and duties of the Assistant Administrator for Fisheries, National Marine Fisheries Service.

        For the reasons set out in the preamble, 50 CFR part 697 is proposed to be amended as follows:

          PART 697—ATLANTIC COASTAL FISHERIES COOPERATIVE MANAGEMENT

        1. The authority citation for part 697 continues to read as follows:

          Authority:
          16 U.S.C. 5101 et seq.

        2. In § 697.7, add paragraph (c)(1)(xxxi) to read as follows:

          § 697.7
          Prohibitions.

          (c)  * * *
          (1)  * * *
          (xxxi) Closed Area II Exemption Area seasonal closure. The Federal waters in a portion of Northeast Multispecies Closed Area II, referred to as the Closed Area II Exemption Area, shall be defined by straight lines connecting the following points in the order stated stated here:

            Closed Area II Exemption Area

              Point
              N. lat.
              W. long.

              A
              41°50′
              67°20′

              B
              41°50′
              67°10′

              C
              42°00′
              67°10′

              D
              42°00′

                1 (67°00.5′)

              E 2

              41°30′

                1 (66°34.8′)

              F
              41°30′
              67°20′

              A
              41°50′
              67°20′

              1 The U.S.-Canada Maritime Boundary, approximate longitude in parentheses.

              2 Points D and E are connected along the U.S.-Canada maritime boundary.

          (A) Seasonal closure. Federal lobster permit holders fishing with traps from May 1 through June 15 and from November 1 through December 31 in NE multispecies fishing years 2013 and 2014. During this closure, Federally permitted trap fishers are prohibited from possessing or landing lobster taken from the Closed Area II Exemption Area.
          (B) All lobster traps must be removed from Closed Area II Exemption Area waters before the start of the seasonal closure and may not be re-deployed into Closed Area II Exemption Area waters until after the seasonal closure ends. Federal trap fishers are prohibited from setting, hauling, storing, abandoning or in any way leaving their traps in Closed Area II Exemption Area waters during the seasonal closure of this section. Federal lobster permit holders are prohibited from possessing or carrying lobster traps aboard a vessel in Closed Area II Exemption Area waters during the seasonal closure unless the vessel is transiting through the area pursuant to paragraph (c)(1)(xxxi)(E) of this section.
          (C) The seasonal closure relates only to the Closed Area II Exemption Area. The restrictive provisions of §§ 697.3 and 697.4(a)(7)(v) do not apply to this closure. Federal lobster permit holders with an Area 3 designation and another Lobster Management Area designation on their Federal lobster permit would not have to similarly remove their lobster gear from the other designated management areas. This restriction does not apply to Federal non-trap lobster permit holders.

          (D) The Regional Administrator may exempt Federal lobster permit holders from these closure provisions if no NE multispecies sector has been granted access into the Closed Area II Exemption Area. If the Regional Administrator decides to exempt Federal lobster permit holders from the seasonal closure, then the Regional Administrator must file notice of the exemption in the Federal Register setting forth the dates during which the exemption applies.
          (E) Transiting Closed Area II Exemption Area. Federal lobster permit holders may possess lobster traps on their vessel in the Closed Are II Exemption Area during the seasonal closure only if:
          (1) The trap gear is stowed; and
          (2) The vessel is transiting the Closed Area II Exemption Area. For the purposes of this section, transiting shall mean passing through the Closed Area II Exemption Area without stopping to reach a destination outside the Closed Area II Exemption Area.
          (F) The Regional Administrator may authorize a permit holder or vessel owner to haul ashore lobster traps from the Closed Area II Exemption Area during the seasonal closure without having to engage in the exempted fishing process in § 697.22 if the permit holder or vessel owner can establish the following:

          (1) That the lobster traps were not able to be hauled ashore before the seasonal closure due to incapacity, vessel/mechanical inoperability, and/or poor weather; and
          (2) That all lobsters caught in the subject traps will be immediately returned to the sea.
          (3) The Regional Administrator may condition this authorization as appropriate in order to maintain the overall integrity of the closure.

      [FR Doc. 2013-16644 Filed 7-10-13; 8:45 am]
      BILLING CODE 3510-22-P


        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Part 52
        [EPA-R09-OAR-2010-1078; FRL-9717-7]
        Revision to the South Coast Portion of the California State Implementation Plan, CPV Sentinel Energy Project AB 1318 Tracking System

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Supplemental Proposed Rule.

          SUMMARY:
          The Environmental Protection Agency (EPA) is supplementing our prior proposal to approve a source-specific State Implementation Plan (SIP) revision and requesting public comment on additional information we are adding to our docket to revise the South Coast Air Quality Management District (District or SCAQMD) portion of the California SIP. This source-specific SIP revision is known as the CPV Sentinel Energy Project AB 1318 Tracking System (“AB 1318 Tracking System”). We are supplementing our proposed approval of this SIP revision to provide additional information and request comment on three issues: (1) the District's quantification of the offsets it transferred to the AB 1318 Tracking System; (2) the District's surplus adjustment of the offsets in the AB 1318 Tracking System; and (3) which District Air Quality Management Plan (AQMP) is appropriate for determining the base year to evaluate the availability of offsets from shutdown sources.

          DATES:
          Comments on this Supplemental Notice of Proposed Rulemaking (NPRM) must be submitted no later than September 24, 2012.

          ADDRESSES:
          Submit comments, identified by docket number EPA-R09-OAR-2010-1078, by one of the following methods:
          1. Federal eRulemaking Portal:
            www.regulations.gov. Follow the on-line instructions.
          2. Email:
            r9airpermits@epa.gov.

          3. Mail or deliver: Gerardo Rios (Air-3), U.S. Environmental Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901.

            Instructions: All comments that EPA receives within the public comment period will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes Confidential Business Information (CBI) or other information where disclosure of the information is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through www.regulations.gov or email. 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 email directly to EPA, your email 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 www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While 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 or voluminous background documents), and some may not be publicly available in either location (e.g., CBI). To inspect the docket, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

          FOR FURTHER INFORMATION CONTACT:
          Laura Yannayon, EPA Region IX, (415) 972-3524, yannayon.laura@epa.gov.

        SUPPLEMENTARY INFORMATION:
        Throughout this document, “we”, “us”, and “our” refer to EPA.
        Table of Contents

          I. Background
          A. Facility Description and Background
          B. Procedural History of Source Specific SIP Revision
          C. Offsets in this Source-Specific SIP Revision
          D. Appropriate AQMP for Determining the Base-Year
          II. Evaluation of Source Specific SIP Revision
          A. What is in the SIP revision?
          B. What are the Federal Clean Air Act requirements?
          C. What actions has EPA taken previously?
          D. How is EPA supplementing its prior proposal now?
          E. Section 110(l) Evaluation
          F. Public Comment and Final Action
          III. Statutory and Executive Order Reviews

        I. Background
        A. Facility Description and Background

        For a detailed discussion of this topic, please refer to our proposed rule at 76 FR 2294 (Jan. 13, 2011). In summary, the Sentinel Energy Project is designed to be a nominally rated 850 Megawatt electrical generating facility covering approximately 37 acres within Riverside County, adjacent to Desert Hot Springs, California in the Palm Springs area. The District determined that the Sentinel Energy Project requires 118,120 pounds (“lbs”) of PM10 offsets and 13,928 lbs of SOX offsets for the District to issue a permit for construction and operation.
        B. Procedural History of Source Specific SIP Revision
        The District adopted the AB 1318 Tracking System on July 9, 2010. The California Air Resources Board (CARB) submitted the AB 1318 Tracking System to EPA as a source specific SIP revision on September 10, 2010. EPA issued a completeness letter on October 27, 2010, finding that the submittal met the completeness criteria in 40 CFR part 51 Appendix V. EPA proposed approval of the source specific SIP revision on January 13, 2011. 76 FR at 2294. On April 20, 2011, EPA responded to comments and finalized approval of the source specific SIP revision. 76 FR 22038.
        California Communities Against Toxics (CCAT) and Communities for a Better Environment (CBE) filed a petition for review with the United States Court of Appeals for the Ninth Circuit. On July 26, 2011, CCAT and CBE filed their Opening Brief. In the Brief, CCAT and CBE alleged that EPA committed a procedural error by failing to post all of the back-up documentation for the offset transactions on EPA's eDocket Web site. EPA was not and is not obligated to post all of these voluminous documents to the eDocket Web site. Copies of those documents were available for inspection in EPA's offices. In addition, those documents had been provided directly to the Petitioners several months earlier. Id.
        CCAT and CBE's Opening Brief set forth some detailed assertions regarding the quantification and surplus adjustments of the offset transactions in the AB 1318 Tracking System. The detailed arguments that CCAT and CBE included in their Ninth Circuit Opening Brief were not included in their comments on our proposed rulemaking.
        On September 13, 2011, EPA requested that the Court remand the rulemaking to EPA to supplement the record and provide additional justification for our action. The Ninth Circuit summarily denied this motion. Several months later after briefing and oral argument, the Court remanded the rulemaking to EPA for additional justification. The Court did not vacate the rule upon remand.
        This Supplemental proposal on remand is seeking comment on three specific issues: (1) The District's quantification of some of the offsets in the AB 1318 Tracking System; (2) the District's surplus adjustment of certain offsets; and (3) which District Air Quality Management Plan is appropriate for determining the base year to evaluate the availability of offsets from sources that shutdown. These three issues are discussed in more detail below.
        C. Offsets in This Source-Specific SIP Revision

        When equipment or an entire facility is shutdown, it no longer emits air pollutants. The CAA allows the emission reductions from shutdown equipment or facilities to be used to offset the operation of new or modified stationary sources provided the offsets meet the requirements of CAA Section 173. See 40 U.S.C. 7503(a)(1)(A). Section 173 requires offsets to be permanent, enforceable, quantifiable, and surplus. Id. 7503(c). This Supplemental proposal provides additional information regarding EPA's prior determination that at least 118,120 lbs of PM10 and 13,928 lbs of SOX offsets meet the requirements of Section 173 as transferred by the District into the AB 1318 Tracking System. Because the briefs that CCAT and CBE filed with the Ninth Circuit pointed to potential deficiencies with a small number of offsets in the AB 1318 Tracking System, EPA is providing additional information in this Supplemental proposal to identify the specific offsets that we are determining meet all federal requirements.

        Attachment A to the Technical Support Document (TSD) for this Supplemental proposal includes two spreadsheets, one for PM10 emissions and one for SOX emissions. These spreadsheets list each source that has shut down and is no longer operating resulting in offsets that the District transferred into the AB 1318 Tracking System.

        The offsets listed in Attachment A meet CAA Section 173's requirements to be permanent and enforceable because the owner or operator surrendered the permits to the District. It is illegal under SCAQMD Rule 203 for any source to emit any amount of an air pollutant without a valid permit, unless the source is specifically exempted from this requirement under District Rule 219 (Equipment Not Requiring a Written Permit Pursuant to Regulation II). The Federal government or local air agency may bring an enforcement action against a source operating without a permit. Citizens may also bring such actions because Rule 203 is included in the SIP. For these reasons, when a source shuts down and surrenders its permit to the District, its emissions reductions are permanent and enforceable. The source would be required to apply for a new permit, and provide new offsets, in order to operate again.
        The offsets listed in Attachment A are also quantifiable as required by Section 173. Each spreadsheet contains two sections, Section I and II, each with two parts (Parts A and B). For all of the sources listed in Section I, two years of actual emission data was used to calculate an annual average. Section I.A. lists those sources where District Annual Emissions Report (AER) data were used, and Section I.B. lists sources where AER, Acid Rain or Emission Reduction Credit (ERC) application data were used. Section II lists the sources where only one year of AER data was reported. Section II.A. lists those sources where only Year 2 data was reported and Section II.B. lists those sources where only Year 1 data was reported. Quantification of the offsets for which only one year of data is available is discussed in more detail below in Section II.D.1.
        The offsets listed in Attachment A are surplus in addition to being quantifiable, permanent and enforceable. Our detailed discussion in Section II.D.2. below provides our justification for finding that each pound of offsets listed in Attachment A is surplus to the requirements of the CAA.

        In summary, the Sentinel Energy Project needed 118,120 lbs of PM10 offsets and 13,928 lbs of SOX offsets. The District transferred more than these amounts into the AB 1318 Tracking System for the exclusive use of Sentinel Energy Project. EPA has determined that each of the offsets listed in Attachment A meets all of the creditability requirements of Section 173 of the CAA. The sum of the offsets in Attachment A is 124,797 lbs of PM10 and 25,178 lbs of SOX, which exceeds the amount needed by Sentinel. For any offset transactions the District included in the AB 1318 Tracking System that are not specifically listed in Attachment A, EPA is not taking a position at this time on whether those offsets meet the federal creditability requirements. Those offsets are not necessary for the Sentinel Energy Project to comply with Section 173(a)(1) even though the District transferred them to the AB 1318 Tracking System.
        D. Appropriate AQMP for Determining the Base-Year

        CCAT and CBE raised a third objection to our approval of the source-specific SIP revision. CCAT and CBE claim the District is prohibited from using any emission reductions from facilities that shutdown equipment prior to the last day of 2002. 2002 is the base-year in the 2007 Air Quality Management Plan (AQMP) that the District adopted to demonstrate attainment with the federal PM2.5 and 8-hour Ozone National Ambient Air Quality Standards (NAAQS).
        40 CFR 51.165(a)(3)(ii)(C)(1)(ii) provides that emissions reductions from shutting down equipment may be used as offsets if “[t]he shutdown or curtailment occurred after the last day of the base year for the SIP planning process.” The regulation also allows pre-base year emissions reductions from shutdown equipment to be used “if the projected emission inventory used to develop the attainment demonstration explicitly includes the emissions from such previously shutdown or curtailed emission units.” Id. Based on this regulation, CCAT and CBE contend the District may not include emission reductions from facilities shutting down equipment prior to the last day of 2002 in the AB 1318 Tracking System. In our prior rulemaking, EPA responded to this comment by stating that the District had added the offsets into the attainment demonstration in the 2007 AQMP for the PM2.5 and 8-hour Ozone NAAQS.

        This Supplemental proposal changes our reasoning on this issue. EPA has evaluated this issue further and determined that the District's 2003 AQMPs for PM10 for the South Coast and the Coachella Valley Basins establish the correct base year. The base year in these AQMPs is 1997. All of the emission reductions in the AB 1318 Tracking System occurred after 1997, and therefore comply with 40 CFR 51.165(a)(3)(ii)(C)(1)(ii). This issue is discussed in more detail in Section II.D.3. below.
        II. Evaluation of Source Specific SIP Revision
        A. What is in the SIP revision?
        For a detailed discussion of the SIP revision package, please see our proposed approval from January 13, 2011. 76 FR 2294.
        The text of the proposed source-specific SIP revision, in relevant part, is:

          The Executive Officer of the South Coast Air Quality Management District shall transfer sulfur oxides and particulate emission credits from the CPV Sentinel Energy Project AB 1318 Tracking System, attached hereto and incorporated by reference herein, to eligible electrical generating facilities pursuant to Health and Safety Code section 40440.14, as in effect January 1, 2010, (i.e. the Sentinel Energy Project to be located in Desert Hot Springs, CA) in the full amounts needed to issue permits to construct and to meet requirements for sulfur oxides and particulate matter emissions. Notwithstanding District Rule 1303, this SIP revision provides a federally enforceable mechanism for transferring offsets from the AQMD's internal accounts to the Sentinel Energy Project.

        This SIP revision is intended to provide a federally approved and enforceable mechanism for the District to transfer PM10 and SOX offsets from the District's internal bank to the Sentinel Energy Project and to account for the transferred offsets through the AB 1318 Tracking System.

        The District's SIP revision incorporates by reference each of the offsets from the facilities that shutdown equipment. Based on EPA's analysis, however, EPA is only proposing to approve that the PM10 and SOX offsets listed in Attachment A of our TSD meet the federal criteria for purposes of this source-specific SIP revision. This proposal is not taking any action on offsets that are not listed in Attachment A.
        B. What are the Federal Clean Air Act requirements?
        For a detailed discussion of these requirements, please refer to our proposed approval. 76 FR 2294.

        This Supplemental proposal focuses on three requirements. First, the offsets that the District transferred to the AB 1318 Tracking System must be quantifiable. Second, the offsets must be surplus. As discussed in more detail in Section II.D. the offsets in Attachment A meet those requirements. Third, offsets resulting from shutting down emissions units must occur after the base year for the applicable SIP attainment demonstration or otherwise be explicitly included in the SIP's attainment demonstration. The offsets transferred into the AB 1318 Tracking System meet this requirement with respect to the 2003 AQMPs for PM10 and precursors for the South Coast and Coachella Air Basins.
        C. What actions has EPA taken previously?

        Prior to our January 13, 2011 proposal to approve this SIP revision, EPA reviewed the District's Offset Verification Forms and attachments provided for each source's offsets that the District had transferred to the AB 1318 Tracking System. Our review determined that a sufficient amount of the offsets met the requirements to offset the PM10 and SOX emissions increases from the operation of the Sentinel Energy Project. Specifically, the Project required 118,120 lbs of PM10 and 13,928 lb of SOX offsets. The District had transferred a total of 137,799 lbs of PM10 and 25,346 lbs of SOX offsets into the AB 1318 Tracking System.

        EPA has re-evaluated the creditability of some of the offsets in AB 1318 Tracking System. We are now listing the offsets we have determined are creditable in Attachment A. For each source of offsets listed in Attachment A, the District provided documentation demonstrating those offsets meet the Section 173 requirements. Attachment A contains a total of 124,797 lbs of PM10 and 25,178 lbs of SOX, thereby exceeding the amount required for the Project.
        Our prior rulemaking did not specifically identify the offsets that we found met the Section 173 requirements. This Supplemental proposal now specifically identifies the offsets that we have determined meet the requirements of Section 173 and lists those offsets in Attachment A. EPA is not taking any action on, and has not reached any conclusion regarding the creditability of, any offsets the District transferred into the AB 1318 Tracking System that are not listed in Attachment A.
        D. How is EPA supplementing its prior proposal now?

        This Supplemental proposal provides additional details concerning EPA's determination that at least 118,120 lbs of PM10 and 13,928 lbs of SOX offsets transferred into the AB 1318 Tracking System meet the offset integrity requirements of Section 173. See Attachment A to the TSD.

        1. The District Has Demonstrated That at Least 118,120 lbs of PM10 and 13,928 lbs of SOX Offsets Are Properly Quantified
        To determine if the offsets listed in Attachment A were properly quantified, we reviewed the District's Offset Verification Forms and additional documents. From these documents, we have listed the following information in Attachment A: The type of equipment shutdown, the year the equipment was shutdown, the year 1 (i.e. the year immediately preceding the shutdown) and year 2 (i.e. the second year prior to shutdown) data of pre-shutdown actual emissions, the annual average of both years of pre-shutdown actual emissions (if available), the amount of emissions reductions calculated by the District, the amount calculated for this Supplemental proposal and the source of the emissions data.
        The offsets listed in Section I.A. of Attachment A rely on two years of emissions data reported by the source in its AER. The offsets listed in Section I.B. rely on two years of emissions data reported to EPA's Acid Rain database (either solely or in addition to an AER), or in one case, in an application for an ERC.1
           These sources of emissions data are reliable and inherently discourage inaccurate reporting. The permittee must pay substantial fees to the District based on the quantity of emissions reported in the AER, thereby discouraging over-reporting. The Acid Rain database collects data directly from Continuous Emission Monitors or throughput combined with a well established emissions factor. Finally, the emission data used to evaluate the Emission Reduction Credit application was based on actual operating data and reported emissions.

            1 For one project, Seagull Sanitation, the source shutdown and applied for ERCs. The District subtracted the amount of offsets required to comply with Best Available Retrofit Technology at the time of shutdown. Then the District subtracted the amount of offsets that the source “owed” the District.

        The offsets from sources listed in Section II rely upon one year of emissions data. Section 173 of the CAA does not define how to calculate actual emissions for purposes of providing offsets. EPA's regulations setting forth SIP requirements for offsets are also silent on this issue. See 40 CFR 51.165(a)(3)(i)(C). EPA's Emissions Offset Interpretative Ruling at 40 CFR Part 51, Appendix S, however, provides guidance for calculating the “baseline for determining credit for emission and air quality offsets”. Appendix S provides:

          When offsets are calculated on a tons per year basis, the baseline emissions for existing sources providing the offsets should be calculated using the actual annual operating hours for the previous one or two year period (or other appropriate period if warranted by cyclical business conditions).

        Id. at IV.C. (emphasis added). Therefore, Appendix S contemplates situations in which one year of emissions data is sufficient.
        CCAT and CBE have asserted that the District must use two years of actual emissions to calculate the actual emissions for offsets. This assertion relies on the definition of “actual emissions” in 40 CFR 51.165(a)(1)(xii). This definition of “actual emissions” is not provided for determining offset credit.
        We do not need to resolve whether CCAT has relied on the incorrect definition or whether 2 years of emissions data is required for purposes of this proposal. For this proposal, the District either used 2 years of data or appropriately adjusted the single year data. Section II.A. lists sources where we had only Year 2 data (i.e. data for the second year prior to shutdown) and Section II.B. lists sources where only Year 1 data (i.e. data for the year immediately preceding shutdown) was available. For the offsets in Section II.A where the source only reported AER data for Year 2, the District assumed that Year 1 emissions data (the year immediately prior to shutdown) was zero, and the Year 2 data was divided by two to calculate an annual average. Therefore, the District's approach for the sources in II.A is very conservative in calculating the lowest possible amount of offsets.
        For the sources listed in Section II.B. where the source only reported AER data for Year 1, then the District assumed that Year 2 data was not reported and the Year 1 data determined the quantity of offsets. For this small fraction of the facilities, the baseline emissions were calculated based on the emissions data from the year immediately preceding the shutdown date. For these facilities, because the data from the twelve month period immediately preceding the shutdown was available, there was no possibility that the year one emissions over estimated the actual emissions for the facility prior to shutdown. There was also no information to indicate that the emissions from the year immediately preceding shutdown were not representative. Therefore, the one year of emissions are representative and not over estimated.
        Based on the requirement in 40 CFR part 51, Appendix S and 51.165, EPA is proposing to determine that the District appropriately quantified the offsets for those sources with only one year of emissions data and that these emission reductions meet the requirement of CAA section 173 and 40 CFR part 51 Appendix S and 51.165(a)(1)(C) to be quantifiable.
        2. Offsets From Aggregate Facilities and Cement Operations Are Surplus

        When EPA proposed approval of the SIP revision in January 2011, we received a comment from CBE and CCAT that contended generally that not all of the offsets from aggregate facilities, spray booths and other industrial sources were surplus. In our response to comments, we stated that all of the emissions reductions were surplus because “[t]he District has not promulgated any new rules or standards that would apply to these types of sources, and thus no adjustments to the credits were required.” 76 FR at 22038. After we issued our response to comments and final rule, CBE and CCAT petitioned for judicial review. In briefing to the Court, CBE and CCAT stated for the first time that the District had adopted Rules 1156 and 1157 that require reductions of emissions at cement plants and aggregate plants. In this Supplemental proposal, EPA is adding information on the surplus adjustment made for the offsets in the AB 1318 Tracking System subject to Rule 1157 (PM10 Emission Reductions From Aggregate and Related Operations).
        It is important to note that the surplus adjustment of the offsets was not required to be performed until the time the authority to construct permit was issued because EPA requires the surplus adjustment “at the time of use”. The permit was not issued until after the final approval of our prior SIP action and was not included in the docket. However, now that the permit has been issued, we have re-evaluated the need to surplus adjust the offsets.2

            2 We considered the surplus adjustment at the time of our prior approval, however, the District made some final surplus adjustments before issuing the permit. This later adjustment does not change our prior determination that the available offsets in the AB 1318 Tracking System were more than required for the Sentinel Energy Project.

        Rule 1156 does not apply to any of the offsets included in the AB 1318 Tracking System. Rule 1156 (Further Reduction of Particulate Emissions from Cement Manufacturing Facilities) only applies to cement manufacturers, not users of cement products.3
           Two facilities in the AB 1318 Tracking System, Elsinore Ready-Mix Co., Inc. and Oldcastle Westile, Inc., use cement products but do not manufacture cement. Therefore, Rule 1156 does not apply to those facilities and Rule 1156 does not require any surplus adjustment to the offsets from these facilities or any others in the AB 1318 Tracking System.

            3 As stated in the District's Staff Report for Rule 1156, the two facilities affected by Rule 1156 are TXI Riverside Cement and Cal Portland Cement.

        Rule 1157, which applies to aggregate facilities, was also adopted after the earliest date equipment was shutdown for any offsets included in the AB 1318 Tracking System (i.e. 1999). Six aggregate facilities are included in the AB 1318 Tracking System. Matthews International Corp. is not subject to Rule 1157 because the rule only applies to aggregate operations which are defined as “operations that produce sand, gravel, crushed stone, and/or quarried rocks.” Since Matthews is a foundry operation that uses, but does not produce sand, the facility is not subject to Rule 1157.

        Rule 1157 applies to the six aggregate facilities in the AB 1318 Tracking System. If any of these facilities were already operating in compliance with the new standards in Rule 1157, then no surplus adjustment was required to ensure the emission reductions were surplus (i.e. went beyond the reductions required by the rule). In other words, the emissions from these facilities were already equal to or less than the emissions allowed by Rule 1157. The rule requires various techniques to be used throughout the facility to minimize PM10 emissions. These techniques include housekeeping provisions such as cleaning spills on paved roads; control techniques such as the application of water or dust suppressants, enclosures and baghouses; and equipment and work standards to minimize track out of materials. The District establishes emission factors based on the use of these techniques as part of the rulemaking process for adopting Rule 1157. If the facility's total emissions are below the material throughput multiplied by the applicable emissions factors, the facility is in compliance with Rule 1157. In this case, no further surplus adjustment is required unless the rule is amended to further reduce the allowable emissions before the offsets are used. While Rule 1157 has not been amended, the District has adopted revised emission factors for the various operations subject to this rule,4
           and therefore, further adjustments were made to the offsets from these six aggregate facilities. These further adjustments are discussed in more detail in the TSD and shown in Attachment A.

            4 See letter from Barry R. Wallerstein to Malcolm C. Weiss, Subject: Rule 1157—PM10 Emission Reductions from Aggregate and Related Operations, dated December 15, 2006.

        3. The District Properly Transferred Offsetting Emission Reductions From Sources that Shutdown in 1999-2002
        The final issue for comment in this Supplemental proposal concerns the appropriate SIP AQMP for the District and EPA to use to evaluate whether the emissions reductions from shutdown units have been included in the SIP's base year.

          40 CFR part 51, Appendix S,5

             at IV.3, provides: Emissions reductions achieved by shutting down an existing source or curtailing production or operating hours may be generally credited for offsets if they meet the requirements in paragraphs IV.C.3.i.1 through 2 of this section.

            5 Appendix S has the same language that is used in 40 CFR 51.165.

        Section IV.C.3.i.1 requires the emissions reductions to be surplus, permanent, quantifiable and federally enforceable. Section IV.C.3.i.2 allows emission reductions from shutdown equipment or curtailed operations to be used provided:

          The shutdown or curtailment occurred after the last day of the base year for the SIP planning process. For purposes of this paragraph, a reviewing authority may choose to consider a prior shutdown or curtailment to have occurred after the last day of the base year if the projected emissions inventory used to develop the attainment demonstration explicitly includes the emissions from such previously shutdown or curtailed emissions units.

        In our final rulemaking, EPA responded to comments on this issue by indicating our understanding that the District properly added pre-base year credits into its 2007 PM2.5 AQMP which we concluded met the requirements of the second sentence of the IV.3.C.i.2.

        EPA has now determined that it would be more appropriate to rely on the District's 2003 PM10 AQMPs, rather than their 2007 PM2.5 AQMP for two reasons. The reason for relying on the 2003 AQMPs is that the offsets the District transferred to the AB 1318 Tracking System are for PM10, not PM2.5. The District has approved PM10 AQMPs for both the South Coast Air Basin and the Coachella Valley that were adopted in 2003. Therefore, the appropriate AQMP for EPA to reference when evaluating PM10 offsets (and precursors including SOX) for the AB 1318 Tracking System is the approved 2003 PM10 AQMPs. The inventories in the 2003 PM10 AQMPs have a base year of 1997 for both the South Coast Air Basin and the Coachella Valley.6

           None of the offsets transferred by the District were derived from shutdowns occurring before the last day of 1997. Therefore all of the offsets in the AB 1318 Tracking System resulting from shutdown equipment were included in the base year for the 2003 PM10 AQMPs, including SOX as a precursor.7

            6 EPA also notes that we had not approved the 2007 PM2.5 AQMPs at the time the District transferred the offsets to the AB 1318 Tracking System. EPA proposed approval of the 2007 PM2.5 AQMP in July 2011 and finalized approval on November 9, 2011.

            7 Although we are now relying on the 2003 PM10 AQMPs, EPA has not changed our determination that the District explicitly added offsets into the inventories for the 2007 AQMP as discussed in EPA's and the District's briefing to the Ninth Circuit.

        EPA is now proposing to approve the AB 1318 Tracking System because all of the offsets for PM10 and the precursor SOX occurred after the base year of 1997 in the PM10 AQMPs.
        E. Section 110(l) Evaluation
        Under section 110(l) of the CAA, EPA may not approve any SIP revision that would interfere with attainment, reasonable further progress (RFP) or any other CAA requirement.
        We have determined that this SIP revision will not interfere with attainment or RFP because the offsets in the AB 1318 Tracking System are not relied on for attainment or RFP in the District's attainment demonstrations. We are also not aware of this revision interfering with any other CAA requirement. For example, this source-specific SIP revision provides a new but equivalent mechanism to provisions in Regulation XIII for satisfying the offset requirements of CAA Section 173 because the offsets the District is transferring from its internal bank to the AB 1318 Tracking System meet all federal requirements. In addition, the District supplied a copy of its air quality analysis for the Sentinel Energy Project that shows that operation of the facility will not interfere with the ability of the District to reach attainment.
        F. Public Comment and Final Action
        Because EPA believes the submittal fulfills all relevant requirements, we are proposing to fully approve it as described in section 110(k)(3) of the Act. We will accept comments from the public on this proposal for the next 30 days. Unless we receive convincing new information during the comment period, we intend to publish a final approval action, addressing all public comments, which will incorporate this submittal into the federally enforceable SIP.
        III. Statutory and Executive Order Reviews
        Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely proposes to approve state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
        • Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

        • Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

        • Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.);
        • Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
        • Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
        • Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
        • Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
        • Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the Clean Air Act; and
        • Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
        In addition, this proposed rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

          List of Subjects in 40 CFR Part 52
          Environmental protection, Air pollution control, Intergovernmental relations, Particulate matter, Reporting and recordkeeping requirements.

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

          Dated: August 9, 2012.
          Jared Blumenfeld,
          Regional Administrator, Region IX.

      [FR Doc. 2012-20777 Filed 8-22-12; 8:45 am]
      BILLING CODE 6560-50-P


        ENVIRONMENTAL PROTECTION AGENCY
        40 CFR Parts 271 and 272
        [EPA-R06-RCRA-2012-0411; FRL-9694-6]
        Louisiana: Final Authorization of State-Initiated Changes and Incorporation by Reference of State Hazardous Waste Management Program

          AGENCY:
          Environmental Protection Agency (EPA).

          ACTION:
          Proposed rule.

          SUMMARY:

          During a review of Louisiana's regulations, EPA identified a variety of State-initiated changes to Louisiana's hazardous waste program under the Resource Conservation and Recovery Act, as amended (RCRA), for which the State had not previously sought authorization. EPA proposes to authorize the State for the program changes. In addition, EPA proposes to codify in the regulations entitled “Approved State Hazardous Waste Management Programs”, Louisiana's authorized hazardous waste program. The EPA will incorporate by reference into the Code of Federal Regulations (CFR) those provisions of the State regulations that are authorized and that EPA will enforce under RCRA.

          DATES:
          Send written comments by August 13, 2012.

          ADDRESSES:

          Send written comments to Alima Patterson, Region 6, Regional Authorization Coordinator, or Julia Banks, Codification Coordinator (6PD-O), Multimedia Planning and Permitting Division at the address shown below. You can examine copies of the materials that form the basis for this authorization and incorporation by reference during normal business hours at the following location: EPA Region 6, 1445 Ross Avenue, Dallas, Texas 75202-2733, phone number (214) 665-6533 or (214) 665-8178. You may also submit comments electronically or through hand delivery/courier; please follow the detailed instructions in the ADDRESSES section of the direct final rule which is located in the Rules section of this Federal Register.

          FOR FURTHER INFORMATION CONTACT:
          Alima Patterson or Julia Banks at (214) 665-8533 or (214) 665-8178.

        SUPPLEMENTARY INFORMATION:
        In the “Rules and Regulations” section of this Federal Register, the EPA is authorizing the changes to the Louisiana program, and codifying and incorporating by reference the State's hazardous waste program as a direct final rule. The EPA did not make a proposal prior to the direct final rule because we believe these actions are not controversial and do not expect comments that oppose them. We have explained the reasons for this authorization and incorporation by reference in the preamble to the direct final rule. Unless we get written comments which oppose this authorization and incorporation by reference during the comment period, the direct final rule will become effective on the date it establishes, and we will not take further action on this proposal. If we get comments that oppose these actions, we will withdraw the direct final rule and it will not take effect. We will then respond to public comments in a later final rule based on this proposal. You may not have another opportunity for comment. If you want to comment on this action, you must do so at this time. For additional information, please see the immediate final rule published in the “Rules and Regulations” section of this Federal Register.

          Authority:
           This action is issued under the authority of sections 2002(a), 3006, and 7004(b) of the Solid Waste Disposal Act, as amended, 42 U.S.C. 6912(a), 6926, and 6974(b).

          Dated: June 15, 2012.
          Samuel Coleman,
          Acting Regional Administrator, EPA Region 6.

      [FR Doc. 2012-16827 Filed 7-12-12; 8:45 am]
      BILLING CODE 6560-50-P