ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-HQ-OAR-2009-0491; FRL- ]

[RIN 2060-AR01]

Federal Implementation Plans for Iowa, Kansas, Michigan, Missouri,
Oklahoma, and Wisconsin to Reduce Interstate Transport of Ozone 

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule (supplemental).

SUMMARY: In this supplemental notice of proposed rulemaking (SNPR), EPA
is providing an opportunity for public comment on our conclusion that
emissions from Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin
significantly contribute to downwind nonattainment or interfere with
maintenance of the 1997 ozone National Ambient Air Quality Standards
(NAAQS)in other states.  EPA is also proposing Federal Implementation
Plans (FIPs) to address a) the emissions identified as significantly
contributing to nonattainment and interference with maintenance and b)
the transport requirements with respect to the relevant NAAQS.  EPA is
proposing to implement the ozone season NOX program in the Transport
Rule (Federal Implementation Plans to Reduce Interstate Transport of
Fine Particulate Matter and Ozone in 27 States; Correction of SIP
Approvals for 22 States) as the FIPs for Iowa, Kansas, Michigan,
Missouri, Oklahoma, and Wisconsin to address the emissions identified as
significantly contributing to nonattainment or interfering with
maintenance with respect to the 1997 ozone NAAQS.  In addition, this
notice identifies the budgets, associated variability limits, and
allowance allocations that would be used for each state if EPA finalizes
the FIPs proposed here. 

DATES: Comments must be received on or before August 22, 2011. 

A public hearing, if requested, will be held in Room 4128 at USEPA West
(EPA West) [Old Customs Building], 1301 Constitution Avenue, NW,
Washington, D.C. 20004 on July 21, 2011, beginning at 9:00 a.m. 

ADDRESSES: Submit your comments, identified by Docket ID No.
OAR-EPA–HQ–OAR–2009–0491, by one of the following methods:

• Federal eRulemaking Portal:

http://www.regulations.gov. Follow the on-line instructions for
submitting comments.

• Agency Website: http://www.epa.gov/edocket.

EDOCKET, EPA’s electronic public docket and comment system, is EPA’s
preferred method for receiving comments. Follow the on-line instructions
for submitting comments.

• E-mail: A-and-R-Docket@epa.gov.

• Fax: (202) 566-1741.

• Mail: Air Docket, Environmental Protection Agency, Mailcode: 6102T,
1200 Pennsylvania Ave., NW, Washington, DC 20460. Please include a total
of two copies.

• Hand Delivery: EPA Docket Center (Air Docket),

U.S. Environmental Protection Agency, 1301

Constitution Avenue, NW, Room B102, Washington, DC 20004. Such
deliveries are only accepted during the Docket’s normal hours of
operation, and special arrangements should be made for deliveries of
boxed information.

Instructions: Direct your comments to Docket ID No.
EPA–HQ–OAR–2009–0491. The EPA's policy is that all comments
received will be included in the public docket without change and may be
made available online at  HYPERLINK "http://www.epa.gov/edocket"
http://www.epa.gov/edocket , including any personal information
provided, unless the comment includes information claimed to be
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through EDOCKET,
regulations.gov, or e-mail.  The EPA EDOCKET and the Federal
regulations.gov websites are “anonymous access” systems, which means
EPA will not know your identity or contact information unless you
provide it in the body of your comment.  If you send an e-mail comment
directly to EPA without going through EDOCKET or regulations.gov, your
e-mail address will be automatically captured and included as part of
the comment that is placed in the public docket and made available on
the Internet.  If you submit an electronic comment, EPA recommends that
you include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit.  If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment.  Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses.

Docket: All documents in the docket are listed in the EDOCKET index at
http://www.epa.gov/edocket. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute.  Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available either electronically in EDOCKET or in hard copy
at the Air Docket, EPA/DC, EPA West, Room B102, 1301 Constitution Ave.,
NW, Washington, DC.  The Public Reading Room is open from 8:30 a.m. to
4:30 p.m., Monday through Friday, excluding legal holidays.  The
telephone number for the Public Reading Room is (202) 566-1744, and the
telephone number for the Air Docket is (202) 566-1742.  This Docket
Facility is open from 8:00 a.m. to 5:30 p.m., Monday through Friday,
excluding legal holidays.  The Docket telephone number is (929)566-1742,
fax (202) 566-1741.

FOR FURTHER INFORMATION CONTACT: Questions concerning today's action
should be addressed to Ms. Doris Price, Clean Air Markets Division,
Office of Atmospheric Programs, Mail Code 6204J, Environmental
Protection Agency, 1200 Pennsylvania Avenue, NW., Washington, DC 20460;
telephone number: (202) 343-9067; fax number: (202) 343-2356; e-mail
address: price.doris@epa.gov. 

SUPPLEMENTARY INFORMATION:

PUBLIC HEARING

A public hearing, if requested, will be held in Room 4128 at USEPA West
(EPA West) [Old Customs Building], 1301 Constitution Avenue, NW,
Washington, D.C. 20004 on July 21, 2011, beginning at 9:00 a.m.

If you wish to request a hearing and present testimony or attend the
hearing, you should notify, on or before July 14, 2011, Ms. Doris Price,
Clean Air Markets Division, Office of Atmospheric Programs, Mail Code
6204J, Environmental Protection Agency, 1200 Pennsylvania Avenue, NW.,
Washington, DC 20460; telephone number: (202) 343-9067; fax number:
(202) 343-2356; e-mail address: price.doris@epa.gov.  Oral testimony
will be limited to 5 minutes each.  The hearing will be strictly limited
to the subject matter of the proposal, the scope of which is discussed
below.  Any member of the public may file a written statement by the
close of the comment period.

Written statements (duplicate copies preferred) should be submitted to
Docket ID No. EPA–HQ–OAR–2009–0491, at the address listed above
for submitted comments.  The hearing location and schedule, including
lists of speakers, will be posted on EPA's webpage at
http://www.epa.gov/airtransport.

A verbatim transcript of the hearing and written statements will be made
available for copying during normal working hours at the Office of Air
and Radiation Docket and Information Center at the address listed for
inspection for documents. 

If no requests for a public hearing are received by close of business on
July 14, 2011, a hearing will not be held and this announcement will be
made on the webpage at the address shown above.

Glossary of Terms and Abbreviations

The following are abbreviations of terms used in this SNPR:

CFR Code of Federal Regulations

EGU Electric Generating Unit

FIP Federal Implementation Plan

FR Federal Register

EPA U.S. Environmental Protection Agency

ICR Information Collection Request 

NAAQS National Ambient Air Quality Standards

NODA Notice of Data Availability

NOX Nitrogen Oxides

SIP State Implementation Plan

OMB Office of Management and Budget  

PM2.5 Fine Particulate Matter, Less Than 2.5 Micrometers

PM Particulate Matter

RIA Regulatory Impact Analysis

SNPR Supplemental Notice of Proposed Rulemaking

SO2 Sulfur Dioxide

TSD Technical Support Document

Outline

  Today’s Proposal

EPA’s Authority for this Rule

Application of Methodologies to Identify Nonattainment and Maintenance
Receptors and to Determine Significant Contribution and Interference
with Maintenance

Missouri

Iowa

Wisconsin

Michigan

Kansas

Oklahoma

Ozone Season NOX Emission Budgets for Six States

Allocation of Allowances to Covered Units 

Implementation

Expected Effects of the Proposed Action

Statutory and Executive Order Reviews

Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

Paperwork Reduction Act

Regulatory Flexibility Act

Unfunded Mandates Reform Act

Executive Order 13132:  Federalism

Executive Order 13175:  Consultation and Coordination

with Indian Tribal Governments

Executive Order 13045:  Protection of Children from

Environmental Health and Safety Risks

Executive Order 13211:  Actions That Significantly

Affect Energy Supply, Distribution or Use

National Technology Transfer Advancement Act

Executive Order 12898:  Federal Actions to Address Environmental Justice
in Minority Populations and Low-Income Populations

I. Today’s Proposal 

In this supplemental notice of proposed rulemaking (SNPR), EPA is
providing an opportunity for public comment on  its conclusion that
Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin significantly
contribute to nonattainment or interfere with maintenance of the 1997
ozone National Ambient Air Quality Standards (NAAQS) in other states.   


In addition, EPA is proposing FIPs to address the transport requirements
of the relevant NAAQS using programs created in the Transport Rule that
is being finalized simultaneously with this proposal.  EPA is proposing
to implement the ozone season NOX program in the Transport Rule as the
FIPs for Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin to
address the emissions identified as significantly contributing to
nonattainment or interfering with maintenance with respect to the 1997
ozone NAAQS. 

 In the final Transport Rule, EPA identified and finalized FIPs for 20
states with emissions that significantly contribute to nonattainment or
interfere with maintenance of the 1997 ozone NAAQS, 18 states with
emissions that significantly contribute to nonattainment or interfere
with maintenance of the 1997 annual PM2.5 NAAQS, and 21 states with
emissions that significantly contribute to nonattainment or interfere
with maintenance of the 2006 24-hour PM2.5 NAAQS.     

In this notice, EPA is taking comment only on a)its conclusions that the
six states identified above have emissions that significant contribute
to nonattainment and interfere with maintenance of the 1997 ozone NAAQS,
and b)its decision to use the final Transport Rule programs as the FIPs
to address these emissions in the six states.

In this notice, EPA is not taking comment on any aspect of the final
Transport Rule, including any aspect of the methodology used to identify
receptors for nonattainment; the methodology used to identify receptors
for maintenance; the methodology used to identify any specific state’s
significant contribution and interference with maintenance; the
methodologies used to establish state budgets, variability limits, and
state assurance levels; or the methodologies used to allocate allowances
to existing units, to establish new unit set-asides and Indian country
new unit set-asides, or to allocate allowances in these set-asides.  EPA
provided an adequate opportunity for public comment on all of these
issues during the comment period for the proposed Transport Rule and
during the comment periods for the associated Notices of Data
Availability (NODAs).  EPA received numerous comments on the proposed
Transport Rule and on the associated NODAs and considered all comments
received during the comment periods for these actions before finalizing
the Transport Rule.  

EPA is also not taking comment on the emissions inventories used for the
final Transport Rule modeling, including the emissions inventories for
the six states identified above.  EPA provided ample opportunity for
comment on these inventories during the comment period for the proposed
Transport Rule and the comment periods for the NODAs associated with
that proposal.  Inventories for all states included in the modeling
domain were made available for public comment during that process.  EPA
made numerous changes to these inventories in response to public
comments.  Furthermore, the public had an incentive to comment on the
inventories for these six states, not only because these inventories
affect the modeling for all states in the modeling domain, but also
because EPA was proposing to include all six states in at least one of
the Transport Rule trading programs and the inventories were used for
allocating the emissions allowances to covered units.  EPA proposed to
include Kansas and Michigan in the ozone-season NOX, annual NOX, and
annual SO2 programs, proposed to include Oklahoma in the ozone-season
NOX program, and proposed to include Iowa, Missouri and Wisconsin in the
annual NOX and annual SO2 programs.  Commenters therefore had reason to
look closely at the all of the emission data for all six states that EPA
made available in the proposal and the NODAs.   

A. EPA’s Authority for this Rule

The statutory authority for this action is provided by the CAA, as
amended, 42 U.S.C. § 7401 et. seq.  Section 110(a)(2)(D) of the CAA,
often referred to as the “good neighbor” provision of the Act,
requires states to prohibit certain emissions because of their impact on
air quality in downwind states.  Specifically, it requires all states,
within 3 years of promulgation of a new or revised NAAQS, to submit SIPs
that prohibit certain emissions of air pollutants because of the impact
they would have on air quality in other states.  42 U.S.C. §
7410(a)(2)(D).  Section 301(a)(1) of the CAA gives the Administrator of
EPA general authority to prescribe such regulations as are necessary to
carry out her functions under the Act.  42 U.S.C. § 7601(a)(1). 
Section 110(c)(1) requires the Administrator to promulgate a FIP at any
time within 2 years after the Administrator a)finds that a state has
failed to make a required SIP submission or that such a submission is
incomplete, or b) disapproves a SIP submission, unless the state
corrects the deficiency and the Administrator approves the SIP revision.
 42 U.S.C. § 7410(c)(1).  Tribes are not required to submit state
implementation plans.  However, as explained in EPA’s regulations
outlining Tribal Clean Air Act authority, EPA is authorized to
promulgate FIPs for Indian country as necessary or appropriate to
protect air quality if a tribe does not submit and get EPA approval of
an implementation plan.  See 40 CFR 49.11(a).  

For each FIP in this rule, except the FIP for Kansas, EPA either has
found that the state has failed to make a required 110(a)(2)(D)(i)(I)
SIP submission, or has disapproved a SIP submission.  In addition, EPA
has determined, in each case, that there has been no approval by the
Administrator of a SIP submission correcting the deficiency prior to
promulgation of the FIP.  EPA’s obligation to promulgate a FIP arose
when the finding of failure to submit or disapproval was made, and in no
case has it been relieved of that obligation.  The specific findings
made and actions taken by EPA are described in greater detail in the TSD
entitled “Status of CAA 110(a)(2)(D)(i)(I) SIPs: Supplemental Proposed
Rule TSD,” which is available in the public docket for this rule.  

In addition, EPA has proposed a SIP Call under CAA 110(k)(5) for Kansas
(76 FR 763, January 6, 2011), based on its conclusion that Kansas
significantly contributes to nonattainment or interferes with
maintenance of the 1997 ozone NAAQS.  On March 9, 2007, EPA approved a
110(a)(2)(D)(i) SIP submission from the state of Kansas for the 1997
ozone and 1997 PM2.5 NAAQS on March 9, 2007 (72 FR 10608).  This SIP
submission did not rely on compliance with the Clean Air Interstate Rule
(CAIR) to satisfy the requirements of 110(a)(2)(D)(i)(I).  The analysis
for the final Transport Rule, however, demonstrates that emissions from
Kansas significantly contribute to nonattainment or interfere with
maintenance of the 1997 ozone NAAQS in other states.  Because the SIP
does not prohibit these emissions, EPA is proposing to find it
substantially inadequate to meet the requirements of 110(a)(2)(D)(i)(I)
with respect to the 1997 ozone NAAQS.  EPA has proposed to give Kansas
18 months to submit a SIP to correct this deficiency.  EPA has also
proposed to give Kansas the option of asking EPA to impose a FIP
beginning in the 2012 ozone season.  Any final action on the proposed
SIP Call will be taken in a separate action, and will establish a
deadline for submission of a new 110(a)(2)(D)(i)(I) SIP.  In this action
we are taking comment, with respect to Kansas, only on our conclusion
that Kansas significantly contributes to nonattainment or interferes
with maintenance of the 1997 ozone NAAQS and our proposal to use the
Transport Rule ozone-season NOX program as the FIP for Kansas.  We are
not taking comment on issues related solely to the proposed SIP Call for
Kansas.  

B. Application of Methodologies to Identify Nonattainment and
Maintenance Receptors and to Determine Significant Contribution and
Interference with Maintenance

	In this SNPR, EPA is providing an opportunity for public comment on
specific conclusions regarding emissions from six states that
significantly contribute to nonattainment or interfere with maintenance
of the 1997 ozone NAAQS.  As noted above, EPA is not taking comment on
the methodologies to identify nonattainment and maintenance receptors
and to determine significant contribution and interference with
maintenance with respect to the 1997 ozone NAAQS, which were finalized
in the Transport Rule.  Rather, we are accepting comment on the
conclusion that application of these methodologies demonstrates that
Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin significantly
contribute to nonattainment or interfere with maintenance of the 1997
ozone NAAQS in other states.

i. Iowa

The final Transport Rule determined that emissions from Iowa
significantly contribute to nonattainment or interfere with maintenance
of the annual PM2.5 NAAQS and the 24-hour PM2.5 NAAQS.  EPA also
finalized FIPs to include Iowa in the Transport Rule annual NOX and
annual SO2 programs to address the transport requirements related to the
annual and 24-hour PM2.5 NAAQS.  These conclusions are not being
reviewed or reopened for public comment. 

The analysis for the final Transport Rule also identifies Iowa as a
state that significantly contributes to nonattainment or interferes with
maintenance only for a newly-identified 1997 ozone NAAQS maintenance
receptor in Allegan County, MI.  The methodology used to analyze
significant contribution with respect to the 1997 ozone NAAQS, and its
application to Iowa, is described in detail in the preamble to the final
Transport Rule and in the TSDs entitled “Air Quality Modeling Final
Rule TSD” and “Significant Contribution and State Emission Budgets
Final Rule TSD,” which are available in the public docket for this
rule.  In this SNPR, EPA specifically requests comment on whether there
are errors in the Agency’s application of the Transport Rule
methodologies with respect to Iowa’s significant contribution to
nonattainment and interference of the 1997 ozone NAAQS.

ii. Kansas

The final Transport Rule determined that emissions from Kansas
significantly contribute to nonattainment or interfere with maintenance
of the 24-hour PM2.5 NAAQS.  EPA also finalized FIPs to include Kansas
in the Transport Rule annual NOX and annual SO2 programs to address the
transport requirements related to the 24-hour PM2.5 NAAQS.  These
conclusions are not being reviewed or reopened for public comment.

The analysis for the final Transport Rule also identifies Kansas as a
state that significantly contributes to nonattainment or interferes with
maintenance of the 1997 ozone NAAQS in another state.  In its 2010
Transport Rule proposal, EPA proposed to determine that Kansas
significantly contributes to or interferes with maintenance of the 1997
ozone NAAQS and also proposed to include Kansas in the Transport Rule
ozone-season NOX program.  In the analysis conducted for the final
Transport Rule, however, Kansas is linked only to a newly identified
ozone maintenance receptor in Allegan County, MI.  The methodology used
to analyze significant contribution with respect to the 1997 ozone
NAAQS, and its application to Kansas, is described in detail in the
preamble to the final Transport Rule and in the TSDs entitled “Air
Quality Modeling Final Rule TSD” and “Significant Contribution and
State Emission Budgets Final Rule TSD,” which are available in the
public docket for this rule.  In this SNPR, EPA specifically requests
comment on whether there are errors in the Agency’s application of the
Transport Rule methodologies with respect to Kansas’s significant
contribution to nonattainment and interference of the 1997 ozone NAAQS.

iii. Michigan

The final Transport Rule determined that emissions from Michigan
significantly contribute to nonattainment or interfere with maintenance
of the annual and 24-hour PM2.5 NAAQS.  EPA also finalized FIPs to
include Michigan in the Transport Rule annual NOX and annual SO2
programs to address the transport requirements related to the annual and
24-hour PM2.5 NAAQS.  These conclusions are not being reviewed or
reopened for public comment.

The analysis for the final Transport Rule also identifies Michigan as a
state that significantly contributes to nonattainment or interferes with
maintenance of the 1997 ozone NAAQS in another state.  In its 2010
Transport Rule proposal, EPA proposed to determine that Michigan
significantly contributes to or interferes with maintenance of the 1997
ozone NAAQS and also proposed to include Michigan in the Transport Rule
ozone-season NOX program.  In the analysis conducted for the final
Transport Rule, however, Michigan is linked only to a newly identified
ozone maintenance receptor in Harford County, MD.  The methodology used
to analyze significant contribution with respect to the 1997 ozone
NAAQS, and its application to Michigan, is described in detail in the
preamble to the final Transport Rule and in the TSDs entitled “Air
Quality Modeling Final Rule TSD” and “Significant Contribution and
State Emission Budgets Final Rule TSD,” which are available in the
public docket for this rule.  In this SNPR, EPA specifically requests
comment on whether there are errors in the Agency’s application of the
Transport Rule methodologies with respect to Michigan’s significant
contribution to nonattainment and interference of the 1997 ozone NAAQS.

iv. Missouri

With regard to Missouri, the final Transport Rule determined that
emissions from Missouri significantly contribute to nonattainment or
interfere with maintenance of the annual PM2.5 NAAQS and the 24-hour
PM2.5 NAAQS.  EPA also finalized FIPs to include Missouri in the
Transport Rule annual NOX and annual SO2 programs to address the
transport requirements related to the annual and 24-hour PM2.5 NAAQS.
These conclusions are not being reviewed or reopened for public comment.


The analysis for the final Transport Rule also identifies Missouri as a
state that significantly contributes to nonattainment or interferes with
maintenance of the 1997 ozone NAAQS in Harris County, TX, Brazoria
County, TX, and Allegan County, MI.  The methodology used to analyze
significant contribution with respect to the 1997 ozone NAAQS, and its
application to Missouri, is described in detail in the preamble to the
final Transport Rule and in the TSDs entitled “Air Quality Modeling
Final Rule TSD” and “Significant Contribution and State Emission
Budgets Final Rule TSD,” which are available in the public docket for
this rule, Docket ID No. EPA–HQ–OAR–2009–0491.  In this SNPR,
EPA requests comment specifically on whether there are errors in the
Agency’s application of the Transport Rule methodologies with respect
to Missouri’s significant contribution to nonattainment and
interference of the 1997 ozone NAAQS.

v. Oklahoma

The final Transport Rule does not include any requirements that apply to
sources in Oklahoma.  The analysis conducted for the final Transport
Rule, however, identifies Oklahoma as a state that significantly
contributes to nonattainment or interferes with maintenance of the 1997
ozone NAAQS in Allegan County, MI.  In its 2010 Transport Rule proposal,
EPA proposed to determine that Oklahoma significantly contributes to or
interferes with maintenance of the 1997 ozone NAAQS and also proposed to
include Oklahoma in the Transport Rule ozone-season NOX program.  In the
analysis conducted for the final Transport Rule, however, Oklahoma is
linked only to a newly identified ozone maintenance receptor in Allegan
County, MI.  The methodology used to analyze significant contribution
with respect to the 1997 ozone NAAQS, and its application to Oklahoma,
is described in detail in the preamble to the final Transport Rule and
in the TSDs entitled “Air Quality Modeling Final Rule TSD” and
“Significant Contribution and State Emission Budgets Final Rule
TSD,” which are available in the public docket for this rule.  In this
SNPR, EPA specifically requests comment on whether there are errors in
the Agency’s application of the Transport Rule methodologies with
respect to Oklahoma’s significant contribution to nonattainment and
interference of the 1997 ozone NAAQS.

vi. Wisconsin

The final Transport Rule determined that emissions from Wisconsin
significantly contribute to nonattainment or interfere with maintenance
of the annual PM2.5 NAAQS and the 24-hour PM2.5 NAAQS.  EPA also
finalized FIPs to include Wisconsin in the Transport Rule annual NOX and
annual SO2 programs to address the transport requirements related to the
annual and 24-hour PM2.5 NAAQS.  These conclusions are not being
reviewed or reopened for public comment.

The analysis for the final Transport Rule also identifies Wisconsin as a
state that significantly contributes to nonattainment or interferes with
maintenance only for a newly-identified 1997 ozone NAAQS maintenance
receptor in Allegan County, MI.  The methodology used to analyze
significant contribution with respect to the 1997 ozone NAAQS, and its
application to Wisconsin, is described in detail in the preamble to the
final Transport Rule and in the TSDs entitled “Air Quality Modeling
Final Rule TSD” and “Significant Contribution and State Emission
Budgets Final Rule TSD,” which are available in the public docket for
this rule.  In this SNPR, EPA specifically requests comment on whether
there are errors in the Agency’s application of the Transport Rule
methodologies with respect to Wisconsin’s significant contribution to
nonattainment and interference of the 1997 ozone NAAQS.

C. Ozone Season NOX Emission Budgets for Six States 

In this SNPR, EPA is also presenting state ozone season NOX emission
budgets for covered units (generally large electric generating units) in
Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin pertaining to
the proposed FIPs for the 1997 ozone NAAQS.  EPA will finalize these
budgets, adjusted if necessary based on comments received, as part of
the FIPs for these six states.  As noted above, EPA is not taking
comment on the methodologies used to establish state budgets,
variability limits, or state assurance levels.  Rather, in this section,
we are requesting comment on the state ozone season NOX emission budgets
calculated using these methodologies.  These budgets are presented in
Table I.C-1.  The associated variability limits and state assurance
levels are presented in Table I.C-2.

Table I.C-1: Ozone Season NOX State Emission Budgets for Electric
Generating Units before Accounting for Variability* (tons)

Note - These state emission budgets apply to emissions from electric
generating units greater than 25 MW and covered by the Transport Rule
Program.

* The impact of variability on budgets is discussed in the preamble to
the final Transport Rule, section VI.E.

Table I.C-2: Variability Limits and State Assurance Levels for Ozone
Season NOX Emissions 

(tons)

Note: Variability limits and assurance levels apply to each state’s
emissions from covered sources, as defined by Federal Implementation
Plans to Reduce Interstate Transport of Fine Particulate Matter and
Ozone in 27 States; Correction of SIP Approvals for 22 States:  Final
Rule.

D. 	Allocation of Allowances to Covered Units

The proposed unit-level allocations of ozone season NOX allowances to
existing covered units in Iowa, Kansas, Michigan, Missouri, Oklahoma,
and Wisconsin are presented in the TSD entitled “Proposed Unit-Level
Ozone Season NOX Allowance Allocations to Existing Units in Six States: 
Supplemental Proposed Rule TSD,” which is available in the public
docket for this rule and on the Web at   HYPERLINK
"http://www.epa.gov/airtransport"  http://www.epa.gov/airtransport . 
The methodology and procedures used for allocations to units covered by
the Transport Rule ozone season NOX program are specified in section
VII.D, ”Allocation of Emission Allowances,” of the preamble to the
final Transport Rule and in the TSD entitled “Allowance Allocation
Final Rule TSD,” which is available in the public docket for this
rule.  The TSD entitled “Proposed Unit-Level Ozone Season NOX
Allowance Allocations to Existing Units in Six States: Supplemental
Proposed Rule TSD” also describes how to access publicly available
downloadable Excel spreadsheets with the proposed unit-level allowance
allocations and the supporting data EPA used in applying the final
Transport Rule existing unit allocation methodology to eligible units in
each of the named states in this SNPR on the Web at   HYPERLINK
"http://www.epa.gov/airtransport"  http://www.epa.gov/airtransport .

 EPA is taking comment only on the data inputs (e.g., corrections to the
heat input value used for any particular unit) used in applying the
allowance allocation methodology for existing units and on the resulting
existing-unit allocations that we are proposing for the six states
involved.  EPA provided ample opportunity for comment on the
methodologies used for allowance allocation and for establishing the
set-asides both in the public comment period following the rule proposal
and through the January 7, 2011 NODA.  As discussed in section VII.D.1,
“Allocations to Existing Units” of the preamble to the final
Transport Rule, EPA has carefully evaluated and responded to numerous
comments on this issue.  These public comments were taken into account
when finalizing the Transport Rule. 

EPA is proposing that new unit set-asides for allowance allocations to
new units be created and implemented for each of these six states in the
same manner as for the other states covered in the Transport Rule ozone
season NOX program.  This approach is described in section VII.D.2,
“Allocations to New Units,” of the preamble to the final Transport
Rule.  Table I.D-1 shows the proposed new allocation percentages for
ozone season NOX allowances for Iowa, Kansas, Michigan, Missouri,
Oklahoma, and Wisconsin.  As noted above, EPA is taking comment only on
the application of the new unit set-aside methodology to these states
and on the resulting set-asides that we are proposing (i.e., whether the
percentages for the set-asides are calculated properly). EPA provided
ample opportunity for comment on the new unit set-aside methodology in
the public comment period following the rule proposal. 

Table I.D-1:  State New Unit Set-Asides as a Percent of State Ozone
Season NOX Emission Budgets

As described in section VII.D.2, “Allocations to New Units,” of the
preamble to the final Transport Rule, EPA is providing a mechanism to
make allowances available in the future for new units built in Indian
country.  Table I.D-2 shows the Indian Country set-asides EPA is
proposing to use to set aside ozone-season NOX allowances from the
budgets of states included in this SNPR which have areas of Indian
country within their boundaries.  Under the final Transport Rule, EPA
will administer these Indian country new unit set-asides regardless of
whether a state replaces its Transport Rule FIP with an approved SIP. 
EPA is proposing to use the same mechanism for the states covered in
this SNPR.  EPA is taking comment only on the application of the Indian
country new unit set-aside methodology to these states and on the
resulting set-asides that we are proposing.  EPA provided ample
opportunity for comment on the methodologies for Indian country new unit
set-asides through the January 7, 2011 NODA. 

Table I.D-2: New Unit Set-Aside Allowances for

Indian Country (tons)

F. Implementation

EPA is proposing that implementation of emission requirements for the
six states addressed in this SNPR be identical to those for the other
states covered by the Transport Rule ozone season NOX program.  Refer to
section IV.C-2, “FIP Authority for Each State and NAAQS Covered,” in
the preamble to the final Transport Rule for a general discussion of
EPA’s legal responsibility and authority to impose Federal
Implementation Plans (FIPs) in certain circumstances where State
Implementation Plans (SIPs) are deficient.  The TSD entitled “Status
of CAA 110(a)(2)(D)(i)(I) SIPs: Supplemental Proposed Rule TSD”
identifies actions taken by EPA with respect to the 110(a)(2)(D)(i)(I)
SIP requirements for the named states with respect to the relevant
NAAQS.  This TSD demonstrates that EPA has authority and a legal
obligation to promulgate each FIP proposed in this SNPR. 

To be consistent and synchronize with the other states covered by the
Transport Rule ozone season NOX program, EPA has not adjusted the timing
for compliance with the Transport Rule programs for these states.  EPA
expects to finalize this rulemaking on or before November 1, 2011; the
ozone season for 2012 does not begin until May 1, 2012.  This will allow
an approximately six-month lead time before the start of the 2012 ozone
season.  The vast majority of covered sources already have combustion
controls installed; therefore, EPA expects that only a small number of
sources will need to install combustion controls to comply, and the
total number of installations is practical to achieve within the time
period for additional construction.  Individual sources may comply
through other measures (such as purchasing additional allowances) in the
event that it takes a particular source more than six months for
installation of a given combustion control.  EPA’s rationale for
determining that this lead time is sufficient is described in detail in
section VII.C “Compliance Deadlines” of the preamble to the final
Transport Rule.      

EPA is also not proposing to alter the compliance deadlines or deadlines
for submission of SIPs to replace the ozone FIPs for these six states. 
The submission deadlines and process for the six states covered by this
SNPR, as well as the rationale behind them, can be found in section X
“Transport Rule State Implementation Plans” of the preamble to the
final Transport Rule.

F. Expected Effects of the Proposed Action

This proposal is projected to limit ozone season NOX emissions in Iowa,
Kansas, Michigan, Missouri, Oklahoma, and Kansas beginning in 2012.  The
impacts of the Transport Rule inclusive of this proposal are discussed
in section VIII of the preamble to the final Transport Rule.  Table
VIII-A.5 shows the state-by-state ozone season NOX emissions reductions
(compared to the base case) expected in both 2012 and 2014.  Overall
ozone improvements, including these states and others, are displayed in
Table VIII-B-2 and are discussed in greater detail in the Air Quality
Modeling Final Rule TSD.  Overall benefits of the Transport Rule are
discussed in section VIII of the preamble to the final Transport Rule
and in the Regulatory Impact Analysis to the final Transport Rule.

II. Statutory and Executive Order Reviews 

Executive Order 12866:  Regulatory Planning and Review and  Executive
Order 13563:  Improving Regulation and Regulatory Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), the Agency
must determine whether a regulatory action is "significant" and
therefore subject to Office of Management and Budget (OMB) review and
the requirements of the Executive Order. The Order defines "significant
regulatory action" as one that is likely to result in a rule that may:

Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local, or Tribal governments or communities;

Create a serious inconsistency or otherwise interfere with an action
taken or planned by another agency;

Materially alter the budgetary impact of entitlements, grants, user
fees, or loan programs or the rights and obligations of recipients
thereof; or

Raise novel legal or policy issues arising out of legal mandates, the
President's priorities, or the principles set forth in the Executive
Order.

In view of its important policy implications and potential effect on the
economy of over $100 million, the Transport Rule program inclusive of
this proposal has been judged to be an economically “significant
regulatory action” within the meaning of the Executive Order.
Accordingly, EPA submitted the final Transport Rule and this SNPR to OMB
for review under EO 12866 and EO 13563 (76 FR 3821, January 21, 2011). 

In addition, EPA prepared an analysis of the potential costs and
benefits for the Transport Rule program inclusive of this proposal. 
This analysis is contained in the Regulatory Impact Analysis (RIA) for
the Transport Rule.  

The RIA available in the docket describes in detail the empirical basis
for EPA’s assumptions and characterizes the various sources of
uncertainties affecting the estimates below.  In doing this, EPA adheres
to EO 13563, “Improving Regulation and Regulatory Review,” (76 FR
3,821, January 21, 2011), which is a supplement to EO 12866.  For
additional information on how EPA’s benefit-cost analyses conform to
the requirements of EO 13563, please see section XII.A of the preamble
to the final Transport Rule.  EPA believes that there is no impact to
the economy beyond that which is reported in the final Transport Rule.

What Economic Analyses Were Conducted for the Rulemaking?

The analyses conducted for the Transport Rule program inclusive of this
proposal provide several important analyses of impacts on public
welfare.  These include an analysis of the social benefits, social
costs, and net benefits of the regulatory scenario.  The economic
analyses also address issues involving small business impacts, unfunded
mandates (including impacts for Tribal governments), and energy impacts.

2. What Are the Benefits and Costs of the Transport Rule Program?

The benefit-cost analysis shows that substantial net economic benefits
to society are likely to be achieved due to reduction in emissions and
improvements in ozone and PM2.5 ambient concentrations resulting from
the Transport Rule program inclusive of this proposal.  For more
information on the costs and benefits for the Transport Rule program
inclusive of this proposal, please refer to Table VIII.C-4 of the
preamble to the final Transport Rule.

B. Paperwork Reduction Act

EPA is required to document the information collection burden imposed by
the Transport Rule program on industry, States, and EPA in an
information collection request (ICR).  The ICR describes the information
collection requirements associated with the final Transport Rule program
inclusive of this proposal and estimates the incremental costs of
compliance with all such requirements, such as the requirement for
industry to monitor, record, and report emissions data to EPA.

The ICR for the Transport Rule Program inclusive of this proposal has
been submitted for approval to OMB under the Paperwork Reduction Act, 44
U.S.C. 3501 et seq., and the information collection requirements it
documents are not enforceable until such approval has been granted.  An
ICR was also submitted to OMB in support of the proposed Transport Rule;
no adverse comment was received by EPA on either the information
collection requirements or their associated cost estimates as described
in that document.

EPA believes that there are no information collection requirements or
burden beyond those reported in the Transport Rule program inclusive of
this proposal.

C. Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedure
Act or any other statute unless the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities.  Small entities include small businesses, small organizations,
and small governmental jurisdictions.

After considering the economic impacts of the Transport Rule program
inclusive of this proposal on small entities, as described in section
XII.C of the preamble to the final Transport Rule, EPA certifies that
this action will not have a significant economic impact on a substantial
number of small entities (No SISNOSE).  This certification is based on
the economic impact of the final Transport Rule and this proposal if
finalized on all affected small entities across all industries affected.
 EPA believes that the provisions of the Regulatory Flexibility Act are
covered by and reported in section XII.C of the preamble to the final
Transport Rule.

D. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C.
1531-1538, requires federal agencies, unless otherwise prohibited by
law, to assess the effects of their regulatory actions on state, local,
and tribal governments and the private sector.  The Transport Rule
program inclusive of this proposal contains a Federal mandate that may
result in expenditures of $100 million or more for state, local, and
tribal governments, in the aggregate, or the private sector in any one
year.  Accordingly, EPA has prepared under section 202 of the UMRA a
written statement that is summarized in section XII.D of the preamble to
the final Transport Rule. 

Consistent with the intergovernmental consultation provisions of section
204 of the UMRA, EPA held consultations with the governmental entities
affected by the final Transport Rule and this proposal if finalized.  As
detailed in section XII.D of the preamble to the final Transport Rule,
EPA participated in informational calls with the Environmental Council
of the States (ECOS) and the National Governors Association to provide
information about the January 7, 2011 NODA directly to state and local
officials and conducted consultations with federally recognized tribes
prior to finalizing the final Transport Rule and issuing this SNPR for
inclusion of six additional states (of which five—-Iowa, Kansas,
Michigan, Oklahoma, and Wisconsin—-have Indian country within their
boundaries).

EPA believes that no unfunded mandates have been created by the
Transport Rule program inclusive of this proposal. Neither the final
Transport Rule nor the provisions in this SNPR have regulatory
requirements that might significantly or uniquely affect small
governments.

E. Executive Order 13132: Federalism

As described in section XII.E of the preamble to the final Transport
Rule, EPA has concluded that the Transport Rule program inclusive of
this proposal does not have federalism implications.  Thus, Executive
Order 13132 does not apply to the final Transport Rule or to this SNPR.

F. Executive Order 13175: Consultation and Coordination with Indian
Tribal Governments

Under Executive Order 13175 (65 FR 67249, November 9, 2000), EPA may not
issue a regulation that has tribal implications, that imposes
substantial direct compliance costs, and that is not required by
statute, unless the Federal government provides the funds necessary to
pay the direct compliance costs incurred by tribal governments, or EPA
consults with tribal officials early in the process of developing the
proposed regulation and develops a tribal summary impact statement.  As
described in section XII.F of the preamble to the final Transport Rule,
EPA believes that there has been proper consultation and coordination
with Indian tribal governments for the Transport Rule program inclusive
of this proposal.

As required by section 7(a) of the Executive Order, EPA’s Tribal
Consultation Official has certified that the requirements of the
Executive Order have been met in a meaningful and timely manner.  A copy
of the certification is included in the docket for the final Transport
Rule.

G. Executive Order 13045: Protection of Children from Environmental
Health and Safety Risks

Executive Order 13045 (62 FR 19,885, April 23, 1997) applies to any rule
that:  1) is determined to be “economically significant” as defined
under EO 12866, and 2) concerns an environmental health or safety risk
that EPA has reason to believe may have a disproportionate effect on
children.  If the regulatory action meets both criteria, the Agency must
evaluate the environmental health or safety effects of this planned rule
on children, and explain why this planned regulation is preferable to
other potentially effective and reasonably feasible alternatives
considered by the Agency.

As described in section XII.G of the preamble to the final Transport
Rule, the Transport Rule program inclusive of this proposal is not
subject to Executive Order 13045 because it does not involve decisions
that increase environmental health or safety risks that may
disproportionately affect children.  The EPA believes that the emissions
reductions from the strategies in the Transport Rule program inclusive
of this proposal will further improve air quality and will further
improve children’s health. 

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

Executive Order 13211 (66 FR 28355, May 22, 2001) provides that agencies
shall prepare and submit to the Administrator of the Office of
Regulatory Affairs, OMB, a Statement of Energy Effects for certain
actions identified as “significant energy actions.”  Section 4(b) of
Executive Order 13211 defines “significant energy action” as “any
action by an agency (normally published in the Federal Register) that
promulgates or is expected to lead to the promulgation of a final rule
or regulation, including notices of inquiry, advance notices of proposed
rulemaking, and notices of proposed rulemaking:  (1) (i) that is a
significant regulatory action under Executive Order 12866 or any
successor order, and (ii) is likely to have a significant adverse effect
on the supply, distribution, or use of energy; or (2) that is designated
by the Administrator of the Office of Information and Regulatory Affairs
as a significant energy action.”  This rule is a significant
regulatory action under Executive Order 12866, and this rule is likely
to have a significant adverse effect on the supply, distribution, or use
of energy.  EPA prepared a Statement of Energy Effects for the transport
Rule program inclusive of this proposal which appears in section XII.H
of the preamble to the final Transport Rule.

EPA believes that there is no impact to the energy supply beyond that
which is reported for the Transport Rule program inclusive of this
proposal in the final Transport Rule.

I. National Technology Transfer Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of
1995 (‘‘NTTAA’’), Public Law 104–113, 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical.  Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, and business practices) that are developed or adopted by
voluntary consensus standards bodies. NTTAA directs EPA to provide
Congress, through OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.  As described in
section XII.I of the preamble to the final Transport Rule, the Transport
Rule program inclusive of this proposal will require all sources to meet
the applicable monitoring requirements of 40 CFR part 75. Part 75
already incorporates a number of voluntary consensus standards. 

J. Executive Order 12898: Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations

Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes
federal executive policy on environmental justice.  Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission by
identifying and addressing, as appropriate, disproportionately high and
adverse human health or environmental effects of their programs,
policies, and activities on minority, low-income, and Tribal populations
in the United States.  During development of this Transport Rule program
inclusive of this proposal, EPA considered its impacts on low-income,
minority, and tribal communities in several ways and provided multiple
opportunities for these communities to meaningfully participate in the
rulemaking process.  As described in section XII.J of the preamble to
the final transport Rule, EPA believes that the final remedy in the
Transport Rule program inclusive of this proposal addresses potential
environmental justice concerns about localized hot spots and reduces
ambient concentrations of pollution where they are most needed by
sensitive and vulnerable populations.

EPA believes that the vast majority of communities and individuals in
areas covered by the Transport Rule program inclusive of this proposal,
including numerous low-income, minority, and tribal individuals and
communities in both rural areas and inner cities in the eastern and
central U.S., will see significant improvements in air quality and
resulting improvements in health.  EPA’s assessment of the effects of
the final Transport Rule program inclusive of this proposal on these
communities is detailed in section XII.J of the preamble to the final
Transport Rule.  Based on this assessment, EPA concludes that we do not
expect disproportionately high and adverse human health or environmental
effects on minority, low-income, or tribal populations in the United
States as a result of implementing the Transport Rule program inclusive
of this proposal.



Federal Implementation Plans for Iowa, Kansas, Michigan, Missouri,
Oklahoma, and Wisconsin to Reduce Interstate Transport of Ozone — Page
36 of 36

List of Subjects in 40 CFR Part 52

Administrative practice and procedure, Air pollution control,
Intergovernmental relations, Nitrogen oxides, Ozone, Particulate matter,
Regional haze, Reporting and recordkeeping requirements, Sulfur dioxide.

List of Subjects in 40 CFR Part 97

Administrative practice and procedure, Air pollution control, Electric
utilities, Nitrogen oxides, Reporting and recordkeeping requirements,
Sulfur dioxide.  

___________________________________

Dated: 

___________________________________

Lisa P. Jackson,

Administrator

 Federal Implementation Plans to Reduce Interstate Transport of Fine
Particulate Matter and Ozone in 27 States; Correction of SIP Approvals
for 22 States: Final Rule. Available on the Web at   HYPERLINK
"http://www.epa.gov/airtransport"  http://www.epa.gov/airtransport .

  Notice of Data Availability   Supporting Federal Implementation Plans
to Reduce Interstate Transport of Fine Particulate Matter and Ozone (75
FR 53613; September 1, 2010).  This NODA provided additional information
on an updated version of the power sector modeling platform and data
inputs EPA proposed to use to support the final Transport Rule.

Notice of Data Availability   Supporting Federal Implementation Plans to
Reduce Interstate Transport of Fine Particulate Matter and Ozone: 
Revisions to Emission Inventories (75 FR 66055; October 27, 2010).

Notice of Data Availability for Federal Implementation Plans to Reduce
Interstate Transport of Fine Particulate Matter and Ozone:  Request for
Comment on Alternative Allocations, Calculation of Assurance Provision
Allowance Surrender Requirements, New-Unit Allocations in Indian
Country, and Allocations by States (76 FR 1109; January 7, 2011).

 Rule To Reduce Interstate Transport of Fine Particulate Matter and
Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program;
Revisions to the NOx SIP Call promulgated May 12, 2005 (70 FR 25162)

 The applicability provisions for determining covered units in the named
six states for the Transport Rule ozone season NOX program are the same
as those described in section VII.B, “Applicability,” of the
preamble to the final Transport Rule.  

  EPA made some corrections to heat input data based on comments
received from sources correcting such data.

   As explained in the TSD, EPA proposed a SIP call requiring Kansas to
address its deficiency for the 1997 Ozone NAAQS 110(a)(2)(D)(i)(I)
requirements (76 FR 763).  EPA intends to finalize the SIP call
concurrent with the finalization of this action.  This will enable
Kansas to use the same remedy as the other states covered by the final
Transport Rule ozone season NOX program.  (Specifically, Kansas may
request--through a letter submitted to EPA within three weeks of the
final SIP call--that the Kansas ozone FIP be implemented at the same
time as the other states.)

  This TSD for Federal Implementation Plans to Reduce Interstate
Transport of Fine Particulate Matter and Ozone in 27 States; Correction
of SIP Approvals for 22 States:  Final Rule is incorporated in its
entirety by reference into this SNPR.

   76 FR 1109 (January 7, 2011).

*** E.O. 12866 Review – Draft – Do Not Cite, Quote, or Release
During Review***

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