[Federal Register Volume 87, Number 165 (Friday, August 26, 2022)]
[Rules and Regulations]
[Pages 52473-52481]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-18318]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 97

[EPA-HQ-OAR-2021-0668; FRL-8670.1-01-OAR]


Deadlines for Submission and Recordation of Allowance Allocations 
Under the Cross-State Air Pollution Rule (CSAPR) Trading Programs and 
the Texas SO2 Trading Program

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA) is revising certain 
administrative deadlines under seven allowance trading programs for 
emissions of sulfur dioxide (SO2) and nitrogen oxides 
(NOX).

DATES: This final rule is effective on August 26, 2022.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID No. EPA-HQ-OAR-2021-0668. All documents in the docket are 
listed on the http://www.regulations.gov website. Although listed in 
the index, some information is not publicly available, e.g., 
Confidential Business Information 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 hardcopy form. Publicly available docket materials are 
available electronically through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: David Lifland, Clean Air Markets 
Division, Office of Atmospheric Programs, Office of Air and Radiation, 
U.S. Environmental Protection Agency, Mail Code 6204M, 1200 
Pennsylvania Avenue NW, Washington, DC 20460; telephone: (202) 343-
9151; email: [email protected].

SUPPLEMENTARY INFORMATION: 
    Executive Summary: The Environmental Protection Agency (EPA) is 
revising certain administrative deadlines under seven allowance trading 
programs for emissions of sulfur dioxide (SO2) and nitrogen 
oxides (NOX). First, under the Cross-State Air Pollution 
Rule (CSAPR) NOX Ozone Season Group 3 Trading Program, the 
deadline for the EPA to record advance allocations of allowances for 
the 2023 and 2024 control periods is being revised to September 1, 
2023. Second, under all six CSAPR trading programs as well as the Texas 
SO2 Trading Program, the deadlines for the EPA to record 
advance allocations of allowances for control periods in 2025 and later 
years are being revised to July 1 of the year immediately before the 
year of each such control period. Finally, the latest approvable 
deadlines for states to submit the amounts of state-determined advance 
allocations of allowances used in the CSAPR trading programs to the EPA 
under state implementation plan (SIP) revisions are being revised to 
June 1 of the year immediately before the year of each such control 
period. The revisions being finalized in this rule do not alter the 
recipients or amounts of any allowance allocations under any trading 
program and do not affect the recordation schedules for any allowances 
that are reserved for allocation after the end of the control period 
for which the allowances are being issued. On April 26, 2022, the EPA 
proposed to revise these administrative deadlines as part of a larger 
proposal (published at 87 FR 20036) that addresses multiple states' 
obligations to mitigate interstate air pollution with respect to the 
2015 ozone national ambient air quality standards (NAAQS). The Agency 
is not taking final action with respect to the remainder of the April 
2022 proposed rule at this time.

Table of Contents

I. General
    A. Potentially Affected Entities
    B. Statutory Authority
II. Discussion of Revisions
    A. Background
    B. Deadlines for Recordation of Allowance Allocations

[[Page 52474]]

    C. Deadlines for Submission of State-Determined Allowance 
Allocations
III. Final Action
IV. Expected Impacts
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review, and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
    L. Determination Under CAA Section 307(b)

I. General

A. Potentially Affected Entities

    Some of the regulatory revisions finalized in this rule affect the 
EPA by extending the deadlines for the Agency to perform certain 
allowance recordation activities under the CSAPR trading programs and 
the Texas SO2 Trading Program. The remaining regulatory 
revisions potentially affect states whose sources participate in one or 
more CSAPR trading programs, if the states have chosen or choose in the 
future to allocate allowances among their sources pursuant to SIP 
revisions, by extending the latest approvable deadlines for the states 
to submit the amounts of the state-determined allocations to the EPA. 
The following states are potentially affected by the latter revisions: 
Alabama, Arkansas, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, 
Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, 
Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, 
Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West 
Virginia, and Wisconsin.
    The sources participating in the trading programs in each covered 
state are generally fossil fuel-fired boilers and combustion turbines 
that at any time on or after January 1, 2005, serve electricity 
generators larger than 25 megawatts producing electricity for sale.\1\ 
However, as discussed in Section IV of this rule, the regulatory 
revisions finalized in this rule will have no substantive impact on 
participating sources because the revisions do not alter which sources 
are required to participate in any of the trading programs, the 
regulatory requirements applicable to the participating sources, or the 
amounts of allowances allocated to any source for use in any control 
period.
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    \1\ See, e.g., 40 CFR 97.1004. The sources participating in the 
Texas SO2 Trading Program are identified by a list in the 
regulations rather than by applicability criteria, see 40 CFR 97.904 
and 97.911(a)(1), but all of these sources also participate in one 
of the CSAPR trading programs.
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B. Statutory Authority

    Statutory authority to issue the regulatory revisions finalized in 
this rule is provided by the same Clean Air Act (CAA) provisions that 
provided authority to issue the regulations being amended: CAA section 
110(a) and (c), 42 U.S.C. 7410(a) and (c) (SIP and federal 
implementation plan (FIP) requirements, including requirements for 
mitigation of interstate air pollution); CAA section 169A, 42 U.S.C. 
7491 (visibility protection); and CAA section 301, 42 U.S.C. 7601 
(general rulemaking authority). Because the revisions amend FIP 
provisions issued under CAA section 110(c), the rulemaking procedural 
requirements at CAA section 307(d), 42 U.S.C. 7607(d), apply to this 
action.

II. Discussion of Revisions

A. Background

    The EPA currently administers seven similarly structured allowance 
trading programs for electricity generating units under regulations set 
forth at 40 CFR part 97, subparts AAAAA through GGGGG.\2\ Six of the 
programs were created as mechanisms to address obligations of the 
covered states--that is, the states where the participating sources are 
located--under CAA section 110(a)(2)(D)(i)(I), 42 U.S.C. 
7410(a)(2)(D)(i)(I), known as the good neighbor provision, with respect 
to the 1997 and 2006 fine particulate matter NAAQS and the 1997 and 
2008 ozone NAAQS. These six programs, collectively referred to in this 
rule as the CSAPR trading programs, are the CSAPR NOX Annual 
Trading Program, the CSAPR NOX Ozone Season Group 1 Trading 
Program, the CSAPR SO2 Group 1 Trading Program, and the 
CSAPR SO2 Group 2 Trading Program, all established in the 
original CSAPR; \3\ the CSAPR NOX Ozone Season Group 2 
Trading Program, established in the CSAPR Update; \4\ and the CSAPR 
NOX Ozone Season Group 3 Trading Program, established in the 
Revised CSAPR Update.\5\ The seventh program is the Texas 
SO2 Trading Program, which was created to address certain 
visibility protection requirements under CAA section 169A but shares 
many structural elements and is administered in parallel with the CSAPR 
trading programs.\6\ All seven trading programs were promulgated as FIP 
provisions under CAA section 110(c).
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    \2\ This final rule does not amend any provision of the 
additional SO2 allowance trading program that the EPA 
administers under the Acid Rain Program regulations at 40 CFR parts 
72-78.
    \3\ 76 FR 48208 (August 8, 2011).
    \4\ 81 FR 74504 (October 26, 2016).
    \5\ 86 FR 23054 (April 30, 2021).
    \6\ 82 FR 48234 (October 17, 2017); affirmed with amendments, 85 
FR 49170 (August 12, 2020). The EPA has convened a proceeding to 
reconsider the amended rule. See EPA Motion to Govern, National 
Parks Conservation Assn. v. EPA, No. 20-1408 (D.C. Cir. filed June 
28, 2021). This final rule has no bearing on the reconsideration 
proceeding.
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    The functions that the EPA performs to administer the seven trading 
programs include allocation and recordation of allowances. Allocation 
is the process of determining the shares of the overall quantities of 
allowances issued for a given control period to be initially credited 
to various recipients.\7\ The amounts of most allowance allocations are 
determined before (or sometimes during) the control period in question. 
These allocations are referred to in this rule as advance allocations 
to distinguish them from other allowance allocations whose amounts are 
determined after the end of each control period.\8\ Under all seven 
trading programs, the EPA determines the default amounts of the advance 
allocations of allowances to the sources in each covered state from the 
respective state's emissions budget for each control period. However, 
for most control periods under the CSAPR trading programs, the Agency 
also allows covered states to replace the default EPA-determined 
advance allocations with state-determined advance allocations pursuant 
to approved SIP revisions.\9\
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    \7\ See, e.g., 40 CFR 97.1002 (definition of allocation).
    \8\ Under the CSAPR trading programs, some allowances issued for 
each control period are reserved in set-asides for allocation after 
the end of the control period. Allowances reserved in the Texas 
SO2 Trading Program's supplemental allowance pool are 
allocated on a parallel schedule. This final rule does not amend any 
provisions relating to these reserved allowances.
    \9\ See, e.g., 40 CFR 52.38(b)(11)-(12) (2021). A state may also 
choose to distribute allowances through an auction process instead 
of through a no-cost allocation process. Id. For simplicity, in this 
rule the EPA uses the term ``state-determined allocations'' to 
include the results of any state auction process because the same 
deadlines apply regardless of the state's choice of process.
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    Recordation is the process of moving allowances into, out of, or 
between

[[Page 52475]]

accounts in the EPA's Allowance Management System for purposes of 
allocation, auction, transfer, or deduction.\10\ Recordation is 
performed exclusively by the EPA.\11\ The regulations for each trading 
program include deadlines for the Agency to record the amounts of 
advance allocations of allowances issued for each control period in 
sources' compliance accounts. To promote regulatory clarity and 
minimize compliance and administrative burdens for sources and the EPA, 
the recordation deadlines are generally parallel across the seven 
trading programs. In addition, for states that choose to provide state-
determined allowance allocations pursuant to SIP revisions, the 
regulations governing the approvability of the SIP revisions require 
the states' rules to include deadlines for submitting the amounts of 
the advance allocations to the EPA that are coordinated with the 
Agency's deadlines for recording the allowances in sources' compliance 
accounts. When the proposal underlying this final rule was issued, the 
next deadline for the EPA to record the amounts of advance allocations 
of allowances that had not already been recorded was July 1, 2022, 
under all seven trading programs, and the associated latest approvable 
deadline for states to submit the amounts of any state-determined 
advance allocations to the EPA was June 1, 2022.
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    \10\ See, e.g., 40 CFR 97.1002 (definition of recordation).
    \11\ In some cases, the EPA records allowance transactions 
automatically in response to electronically submitted instructions 
from representatives for the accounts where the allowances are held.
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    In April 2022, the EPA published a proposal to address multiple 
states' obligations under the good neighbor provision with respect to 
the 2015 ozone NAAQS.\12\ Under the proposal, the CSAPR NOX 
Ozone Season Group 3 Trading Program would be revised in a number of 
ways. Among other things, the program would be expanded to apply to 
sources in additional states, the existing state emissions budgets and 
default unit-level allowance allocations for the 2023 and 2024 control 
periods would be updated, and starting with the 2025 control period the 
state emissions budgets and default unit-level allowance allocations 
would be dynamically determined in the year immediately before the year 
of each control period according to procedures to be set forth in the 
final revised regulations.\13\ In conjunction with these proposed 
revisions, the EPA proposed to revise that trading program's 
administrative deadlines for the Agency to record advance allocations 
of allowances and the latest approvable deadlines for states to submit 
the amounts of any state-determined advance allocations to the EPA 
pursuant to SIP revisions.\14\ The proposal also includes parallel 
proposed revisions to the recordation and latest approvable submission 
deadlines for the other five CSAPR trading programs and the Texas 
SO2 Trading Program.\15\ Under the proposed revised 
schedules, there would be no July 1, 2022, deadline to record advance 
allocations of allowances for use in any of the seven trading programs.
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    \12\ 87 FR 20036 (April 6, 2022).
    \13\ 87 FR 20115-19 (state emissions budgets) and 20128-30 
(unit-level allocations).
    \14\ 87 FR 20129-30.
    \15\ 87 FR 20140.
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    Following an extension, the public comment period on the April 2022 
proposal closed on June 21, 2022.\16\ No comments were received 
addressing the proposed revisions to the recordation deadlines and 
latest approvable submission deadlines,\17\ and the EPA is taking this 
action to expeditiously resolve the differences between the deadlines 
as previously in effect and the proposed revised deadlines included in 
the proposal. The Agency is not responding to comments or taking action 
on any other aspects of the April 2022 proposal at this time.
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    \16\ 87 FR 29108 (May 12, 2022).
    \17\ One comment includes a description of the proposed 
recordation deadline revisions under the CSAPR NOX Ozone 
Season Group 3 Trading Program, but the comment concerns the timing 
of information on the amounts of state emissions budgets and unit-
level allocations under that trading program, not the timing of 
recordation of allowances in sources' compliance accounts. See 
Comments of Basin Electric Power Cooperative, EPA-HQ-OAR-2021-0668-
0547, at 60.
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B. Deadlines for Recordation of Allowance Allocations

    The regulations for each of the seven trading programs addressed in 
this rule include schedules for the EPA to record advance allocations 
of allowances issued for each control period. Under the regulations for 
the CSAPR NOX Ozone Season Group 3 Trading Program in effect 
at the time of the April 2022 proposal, advance allocations of 
allowances issued for control periods through 2022 had already been 
recorded; the recordation deadline for advance allocations for the 2023 
and 2024 control periods was July 1, 2022; the recordation deadline for 
advance allocations for the 2025 and 2026 control periods was July 1, 
2023; and the recordation deadlines for advance allocations for control 
periods in 2027 and later years were July 1 of the third year before 
the year of each such control period.\18\ In the April 2022 proposal, 
the EPA proposed to revise the recordation deadline for advance 
allocations for the 2023 and 2024 control periods to the date 30 days 
after the effective date of a final rule and to revise the recordation 
deadlines for advance allocations for control periods in 2025 and later 
years to July 1 of the year immediately before the year of each such 
control period.\19\
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    \18\ See 40 CFR 97.1021(a)-(f) (2021).
    \19\ 87 FR 20129-30. The EPA notes that under the proposal, the 
recordation deadline for the 2024 advance allocations would be 
extended for several months if a state provides a timely letter of 
intent to submit state-determined allocations for that control 
period. See 87 FR at 20150.
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    Under the regulations for the other five CSAPR trading programs and 
the Texas SO2 Trading Program in effect at the time of the 
April 2022 proposal, advance allocations of allowances issued for 
control periods through 2024 had already been recorded and the 
recordation deadlines for advance allocations for control periods in 
2025 and later years were July 1 of the third year before the year of 
each such control period (e.g., the deadline for recording 2025 advance 
allocations was July 1, 2022).\20\ In the April 2022 proposal, the EPA 
proposed to revise the recordation deadlines for advance allocations 
for control periods in 2025 and later years to match the recordation 
deadlines established in a final rule for the CSAPR NOX 
Ozone Season Group 3 Trading Program for the same control periods, such 
that if the remainder of the proposal was finalized generally as 
proposed, the recordation deadlines for advance allocations for control 
periods in 2025 and later years under all seven trading programs would 
be July 1 of the year immediately before the year of each such control 
period.\21\
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    \20\ See, e.g., 40 CFR 97.821(a)-(f) (2021).
    \21\ 87 FR 20140.
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    The April 2022 proposal discussed several reasons supporting the 
proposed revisions to recordation deadlines. First, with respect to the 
CSAPR NOX Ozone Season Group 3 Trading Program, the deadline 
revisions would be necessary to accommodate proposed updates to the 
amounts of the advance allocations of allowances to be recorded for the 
2023 and 2024 control periods and proposed changes to the schedule for 
determining the amounts of the advance allocations for later control 
periods.\22\ Second, with respect to the other six trading programs, 
maintaining consistency in recordation deadlines

[[Page 52476]]

across the various trading programs to the extent possible is expected 
to minimize the time and cost expended by sources to understand and 
comply with multiple trading programs and would support greater 
administrative efficiency by the EPA.\23\ Third, lowering the number of 
future control periods for which allowances are recorded in advance 
will reduce the likelihood that the Agency might need to recall 
already-recorded allowances as part of a transition to new regulatory 
requirements in a future rulemaking.\24\ The EPA also observed that 
lowering the number of future control periods for which allowances are 
recorded in advance is not expected to adversely impact allowance 
market liquidity, because the historical data on transfers of recorded 
allowances between accounts in the EPA's Allowance Management System 
show few arms-length transfers of allowances issued for control periods 
more than one control period in the future.\25\
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    \22\ 87 FR 20130.
    \23\ 87 FR 20140.
    \24\ Id.
    \25\ Id.
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    Although the April 2022 proposal's rationale for the proposed 
recordation deadline revisions was provided in the context of a larger 
set of proposed trading program revisions, the same rationale supports 
finalizing the recordation deadline revisions on a stand-alone basis 
while the Agency continues to work toward a final rule addressing the 
remainder of the proposal in light of the comments received. With 
respect to the proposed revision to the deadline for recording the 2023 
and 2024 advance allocations of allowances used in the CSAPR 
NOX Ozone Season Group 3 Trading Program, finalizing a 
revised recordation deadline at this time, before issuance of a final 
rule addressing the remainder of the proposal, would accommodate 
updates to the allocation amounts if such updates are in fact finalized 
and would thereby facilitate an orderly implementation process for such 
a final rule. Conversely, if the Agency did not finalize a recordation 
deadline revision at this time and instead were to record advance 
allocations of allowances for the 2023 and 2024 control periods before 
completing consideration of the remainder of the proposal, the recorded 
amounts could become incorrect upon issuance of a more comprehensive 
final rule. Correcting the incorrect amounts would then require an 
allowance recall, which would reduce regulatory clarity and create an 
additional compliance requirement for sources and administrative burden 
for the EPA.
    It is not possible in this stand-alone rule to finalize the 
specific revised recordation deadline that was included in the April 
2022 proposal for the 2023 and 2024 advance allocations--that is, 30 
days after the effective date of a final rule addressing the full 
proposal. However, the EPA believes that finalizing a recordation 
deadline of September 1, 2023 in this rule for the 2023 and 2024 
advance allocations serves the same dual purpose of, first, allowing 
sufficient time for a final rule addressing the remainder of the 
proposal to take effect and, second, recording the allowances far 
enough in advance of the compliance deadlines for the respective 
control periods to allow ample time for sources to engage in any 
desired allowance trading activity. Allowances allocated for the 2023 
control period will be recorded in sources' compliance accounts before 
the end of the 2023 control period and eight months before the June 1, 
2024, date for demonstrating compliance for the 2023 control period. 
Further, if a rule addressing the remainder of the proposal is 
finalized on a schedule that makes it possible for the allowances to be 
recorded earlier than September 1, 2023, the EPA could accelerate 
recordation accordingly.\26\
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    \26\ A final rule addressing the remainder of the April 2022 
proposal could also finalize the proposed provision extending the 
recordation deadline for 2024 advance allocations if a state 
provides a timely letter of intent to submit state-determined 
allocations for that control period.
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    The April 2022 proposal's rationale also supports finalizing the 
remaining proposed revisions to recordation deadlines under all seven 
trading programs on a stand-alone basis. Under these proposed 
revisions, advance allocations of allowances for control periods in 
2025 and later years under all seven trading programs would be recorded 
by July 1 of the year before the year of each such control period. For 
the CSAPR NOX Ozone Season Group 3 Trading Program, as 
stated in the proposal, finalizing the revisions would accommodate the 
proposed revisions to the schedule for determining allowance 
allocations for control periods in 2025 and later years, and for the 
allowances issued for the 2025 and 2026 control periods in particular, 
extending the recordation deadline would also avert the possible need 
for an allowance recall that otherwise could arise if advance 
allocations for these control periods were recorded before the 
effective date of a final rule addressing the remainder of the April 
2022 proposal. For the remaining trading programs, as stated in the 
proposal, finalizing the recordation deadline revisions on a stand-
alone basis will minimize compliance burdens and support administrative 
efficiency by maintaining consistency across the trading programs and 
will reduce the likelihood that future allowance recalls would be 
needed in conjunction with possible future rulemakings. Under all seven 
trading programs, allowances allocated for control periods in 2025 and 
later years will be recorded in sources' compliance accounts in the 
year before the start dates and almost 2 years before the compliance 
determination dates of the respective control periods.
    The EPA notes that finalization of the proposed revisions to 
recordation deadlines is separable from the other elements of the April 
2022 proposal and does not require finalization of the proposal's other 
elements or otherwise represent a prejudgment of the Agency concerning 
the content of a potential future rule. If for some reason the EPA does 
not finalize, or is delayed in finalizing, the proposal's other 
elements, finalizing the revisions to the recordation deadlines would 
still provide the benefits described earlier concerning reduction of 
the likelihood of future allowance recalls and maintenance of 
consistency across the trading programs and would have no adverse 
impact on any source. In this circumstance, the amounts of sources' 
allocations to be recorded for all control periods under all seven 
trading programs would remain unchanged from the amounts already 
determined and announced pursuant to previous rulemakings unless and 
until a subsequent rule altering the allocation amounts is finalized.

C. Deadlines for Submission of State-Determined Allowance Allocations

    For all the CSAPR trading programs, covered states have options to 
replace the default EPA-determined allowance allocations with state-
determined allowance allocations pursuant to approved SIP revisions. 
Among other things, the regulations governing the EPA's approval of 
such SIP revisions require the states' rules to include deadlines for 
submitting the amounts of the allocations to the EPA that are 
coordinated with the Agency's deadlines for recording the allowances in 
sources' compliance accounts. Under the regulations in effect at the 
time of the April 2022 proposal, the latest approvable deadline for 
submission of state-determined advance allocations for each control 
period was June 1 immediately before the EPA's

[[Page 52477]]

corresponding July 1 recordation deadline for the control period.\27\ 
For control periods in 2025 and later years, these submission deadlines 
therefore were generally in the third year before the year of each such 
control period.\28\
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    \27\ See, e.g., 40 CFR 52.38(b)(11)(iii)(B) (2021).
    \28\ The latest approvable deadlines for submission of state-
determined allocations of allowances used in the CSAPR 
NOX Ozone Season Group 3 Trading Program for the control 
periods in 2023, 2024, and 2025 would have been in the first or 
second year before the year of the control period. However, at this 
time no covered state has sought approval for a SIP revision 
authorizing state-determined allocations of the allowances used in 
this trading program.
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    In the April 2022 proposal, the EPA proposed to revise the latest 
approvable deadlines for submission of state-determined advance 
allocations for the control periods in 2025 and later years under all 
the CSAPR trading programs to June 1 of the year immediately before the 
year of each such control period (i.e., one month before the EPA's 
proposed deadlines to record advance allocations of allowances for the 
same control periods). In the case of the CSAPR NOX Ozone 
Season Group 3 Trading Program, the reason provided for the proposed 
revision was to coordinate with the proposed revised schedule for 
determining state emissions budgets for the control periods in 2025 and 
later years, under which the state emissions budgets would be finalized 
by May 1 of the year immediately before the year of each control 
period. Revision of the submission deadline for state-determined 
allocations under this trading program would be necessary because a 
state would be unable to determine the amounts of unit-level 
allocations for a given control period without first knowing the amount 
of the state emissions budget for the control period.\29\ In the case 
of the other trading programs, the reason provided for the proposed 
revision to the latest approvable submission deadlines was to maintain 
consistent deadlines across the various trading programs to the extent 
possible so as to facilitate greater administrative efficiency by 
states that choose to provide state-determined allowance 
allocations.\30\ For all the trading programs, an additional reason 
supporting the revisions to the latest allowable submission deadlines 
is to maintain the existing relationship to the EPA's corresponding 
recordation deadlines. That relationship is intended to maximize 
states' flexibility by allowing the states to submit state-determined 
allocations to the EPA as late as one month before the EPA's deadlines 
for recording the allowances in sources' compliance accounts.
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    \29\ 87 FR 20130.
    \30\ 87 FR 20140.
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    The EPA considers it appropriate to revise the latest approvable 
deadlines for states to submit state-determined advance allocations to 
the Agency in the same stand-alone action as the corresponding 
recordation deadlines so as to maintain the existing relationship 
between the two sets of deadlines. The EPA does not need to receive the 
amounts of any state-determined allocations more than one month before 
the Agency's corresponding recordation deadlines, and revising the 
recordation deadlines makes it possible for the EPA to offer states the 
flexibility to adopt later submission deadlines. The EPA notes that 
revising the latest approvable submission deadlines in this rule will 
not obligate any state that already has an approved SIP revision 
authorizing the state to determine allocations of allowances for some 
of the CSAPR trading programs to adopt a revised submission deadline.

III. Final Action

    The EPA is taking final action to revise the regulations for the 
CSAPR trading programs and the Texas SO2 Trading Program as 
follows. Under the CSAPR NOX Ozone Season Group 3 Trading 
Program, the deadline at 40 CFR 97.1021 for the EPA to record advance 
allocations of allowances for the control periods in 2023 and 2024 is 
being revised to September 1, 2023. Under all the CSAPR trading 
programs and the Texas SO2 Trading Program, the deadlines at 
40 CFR 97.421, 97.521, 97.621, 97.721, 97.821, 97.921, and 97.1021 for 
the EPA to record advance allocations of allowances for the control 
periods in 2025 and later years are being revised to July 1 of the year 
immediately before the year of each such control period. Under the 
regulations at 40 CFR 52.38 and 52.39 governing approvability of SIP 
revisions that authorize states to determine the allocations of 
allowances used in the CSAPR trading programs, the latest approvable 
deadlines for submission to The EPA of the amounts of state-determined 
advance allocations for the control periods in 2025 and later years are 
being revised to June 1 of the year immediately before the year of each 
such control period.
    The EPA is making the regulatory revisions finalized in this rule 
effective immediately upon publication in the Federal Register. As 
noted in Section I.B of this rule, the revisions are being issued under 
CAA section 307(d), which does not include provisions governing the 
effective date of a rule issued under its procedures. While 
Congressional Review Act (CRA) section 801(a)(3), 5 U.S.C. 801(a)(3), 
and Administrative Procedure Act (APA) section 553(d), 5 U.S.C. 553(d), 
require specified minimum periods between the dates of publication and 
effectiveness for certain rules (with various exceptions), this action 
is not subject to such requirements under either statute.\31\ \32\ 
Accordingly, the EPA has discretion in establishing the effective date 
for the revisions finalized in this action. Resolving the differences 
between the previously effective deadlines and the deadlines in the 
April 2022 proposal at this time will provide clarity for stakeholders 
and facilitate an orderly process for implementing any additional 
regulatory revisions that may be promulgated after consideration of 
comments on the remainder of the April 2022 proposal. Further, as 
discussed in Section IV of this rule, the deadline revisions finalized 
in this action will not have any adverse impacts on any state or 
source. For these reasons, the Agency finds it is appropriate to make 
the deadline revisions effective immediately upon publication.
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    \31\ CRA section 801(a)(3) generally provides that a ``major 
rule'' may not take effect less than 60 days after the rule is 
published in the Federal Register. Under CRA section 804(2), 5 
U.S.C. 804(2), a major rule generally is a rule that the Office of 
Management and Budget finds has resulted in or is likely to result 
in (i) an annual effect on the economy of $100 million or more, (ii) 
major cost or price increases, or (iii) other significant adverse 
economic effects. This action is not a major rule for CRA purposes.
    \32\ APA section 553(d) generally provides that a covered rule 
may not take effect less than 30 days after the rule is published in 
the Federal Register. However, CAA section 307(d)(1) states that 
``[t]he provisions of [APA] section 553 . . . shall not, except as 
expressly provided in [CAA section 307(d)], apply to actions to 
which [CAA section 307(d)] applies.'' This action is subject to CAA 
section 307(d), which does not contain any provision making the 
action subject to APA section 553(d).
---------------------------------------------------------------------------

    Although APA section 553(d) does not apply to this action, in 
making the regulatory revisions finalized in this action effective 
immediately upon publication, the EPA has nevertheless considered this 
section's underlying purposes. The primary purpose of the section's 
general requirement for a minimum period between a covered rule's dates 
of publication and effectiveness is ``to give affected parties a 
reasonable time to adjust their behavior before the final rule takes 
effect.'' Omnipoint Corp. v. FCC, 78 F.3d 620, 630 (D.C. Cir. 1996). 
The revisions finalized in this action do not impose any new regulatory 
requirements on either covered states or participating sources and 
therefore do not necessitate time for the states or sources to adjust 
their behavior or otherwise prepare for implementation.

[[Page 52478]]

Further, APA section 553(d)(1) expressly allows an effective date 
earlier than 30 days after publication for a rule that ``grants or 
recognizes an exemption or relieves a restriction.'' This action 
relieves an existing restriction on covered states by extending the 
latest approvable deadlines for the states to submit any optional 
state-determined allowance allocations to the EPA. Consequently, making 
the deadline revisions effective immediately upon publication of the 
final action is consistent with the purposes of APA section 553(d).

IV. Expected Impacts

    The regulatory revisions to the CSAPR trading programs and the 
Texas SO2 Trading Program finalized in this rule extend the 
deadlines by which the EPA will record advance allocations of 
allowances in sources' compliance accounts as well as, for the CSAPR 
trading programs, the latest approvable deadlines by which covered 
states must submit any state-determined advance allocations to the EPA 
for subsequent recordation. The EPA expects the principal impacts of 
the revisions to be more orderly implementation of any final rule 
addressing the remainder of the April 2022 proposal and reduction of 
the likelihood of future allowance recalls in possible future 
rulemakings. For covered states, the revisions to the latest approvable 
submission deadlines will also generally increase flexibility regarding 
the timing of the states' optional activities to determine the amounts 
of allowance allocations under the CSAPR trading programs.
    The EPA expects the sources participating in the trading programs 
to benefit from improved regulatory clarity and potentially also from 
avoidance of the need to expend time and resources to comply with 
additional allowance recalls. Further, the EPA expects no adverse 
impact on any source. The revisions do not alter which sources are 
required to participate in any of the trading programs, the regulatory 
requirements applicable to the participating sources, or the amounts of 
emissions allowances allocated to any source for use in any control 
period. Advance allocations of allowances issued for the 2023 control 
period under the CSAPR NOX Ozone Season Group 3 Trading 
Program will be recorded before the end of that control period, which 
is the point in time at which trading of allowances for a given control 
period typically becomes most active, and well before June 1, 2024, 
which is the date when sources must hold allowances to demonstrate 
compliance for that control period. In all other cases, advance 
allocations of allowances for each control period will be recorded in 
sources' compliance accounts in the year before the start date and 
almost 2 years before the compliance determination date of the control 
period for which the allowances are being issued. Moreover, as observed 
in the proposal and referenced in Section II.B of this rule, lowering 
the number of future control periods for which allowances are recorded 
in advance is not expected to adversely impact allowance market 
liquidity, because the historical data on transfers of recorded 
allowances between accounts in the EPA's Allowance Management System 
show few arms-length transfers of allowances issued for control periods 
more than one control period in the future.

V. Statutory and Executive Order Reviews

    Additional information about these statutes and executive orders 
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review, and Executive 
Order 13563: Improving Regulation and Regulatory Review

    This action is not a significant regulatory action and therefore 
was not submitted to the Office of Management and Budget (OMB) for 
review.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. OMB has 
previously approved the information collection activities contained in 
the existing regulations and has assigned OMB control number 2060-0667. 
This action makes no changes to either the information collected or the 
number of respondents.

C. Regulatory Flexibility Act

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the Regulatory 
Flexibility Act, 5. U.S.C. 601-602. This action will not impose any 
requirements on small entities. This action simply extends certain 
administrative deadlines that apply to the EPA or covered states under 
existing regulations.

D. Unfunded Mandates Reform Act

    This action does not contain any unfunded mandate as described in 
the Unfunded Mandates Reform Act, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments. The action imposes 
no enforceable duty on any state, local, or tribal governments or the 
private sector.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

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

    This action does not have tribal implications as specified in 
Executive Order 13175. It will not have substantial direct effects on 
tribal governments, on the relationship between the federal government 
and Indian tribes, or on the distribution of power and responsibilities 
between the Federal government and Indian tribes. Thus, Executive Order 
13175 does not apply to this action.

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

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that the EPA has reason to believe may disproportionately affect 
children, per the definition of ``covered regulatory action'' in 
section 2-202 of the Executive Order. This action is not subject to 
Executive Order 13045 because it does not concern an environmental 
health risk or safety risk. This action simply extends certain 
administrative deadlines that apply to the EPA or covered states under 
existing regulations.

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

    This action is not subject to Executive Order 13211 because it is 
not a significant regulatory action under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    This rulemaking does not involve technical standards.

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

    The EPA believes that this action is not subject to Executive Order 
12898 because it does not establish an

[[Page 52479]]

environmental health or safety standard. This action simply extends 
certain administrative deadlines that apply to the EPA or covered 
states under existing regulations.

K. Congressional Review Act

    This action is subject to the Congressional Review Act, 5 U.S.C. 
801-808, and the EPA will submit a rule report to each House of the 
Congress and to the Comptroller General of the United States. This 
action is not a ``major rule'' as defined by 5 U.S.C. 804(2).

L. Determination Under CAA Section 307(b)

    CAA section 307(b)(1), 42 U.S.C. 7607(b)(1), indicates which United 
States Courts of Appeals have venue for petitions of review of final 
actions by the EPA. This section provides, in part, that petitions for 
review must be filed in the U.S. Court of Appeals for the District of 
Columbia Circuit (D.C. Circuit) if (i) the Agency action consists of 
``nationally applicable regulations promulgated, or final action taken, 
by the Administrator,'' or (ii) the action is locally or regionally 
applicable, but ``such action is based on a determination of nationwide 
scope or effect and if in taking such action the Administrator finds 
and publishes that such action is based on such a determination.'' This 
action amends existing regulations that apply to 27 states and to 
sources in those states. For this reason, this final action is 
nationally applicable. In the alternative, the Administrator hereby 
finds that this final action is based on a determination of nationwide 
scope and effect for purposes of CAA section 307(b)(1). Thus, pursuant 
to CAA section 307(b), any petitions for review of this final action 
must be filed in the D.C. Circuit within 60 days from the date this 
final action is published in the Federal Register.

List of Subjects

40 CFR Part 52

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

40 CFR Part 97

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Electric power plants, Nitrogen oxides, Ozone, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
dioxide.

Michael S. Regan,
Administrator.

    For the reasons stated in the preamble, parts 52 and 97 of title 40 
of the Code of Federal Regulations are amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

Subpart A--General Provisions

0
2. Amend Sec.  52.38 by:
0
a. In Table 1 to paragraph (a)(4)(i)(B), Table 2 to paragraph 
(a)(5)(i)(B), Table 3 to paragraph (b)(4)(ii)(B), Table 4 to paragraph 
(b)(5)(ii)(B), Table 5 to paragraph (b)(8)(iii)(B), and Table 6 to 
paragraph (b)(9)(iii)(B), revising the entries for ``2025 and any year 
thereafter'';
0
b. In paragraph (b)(11)(iii) introductory text, removing ``2023'' and 
adding in its place ``2025'';
0
c. In paragraph (b)(11)(iii)(B), removing ``no later than the dates in 
Table 7 to this paragraph;'' and adding in its place ``by June 1 of the 
year before the year of such control period;'', and removing Table 7 to 
paragraph (b)(11)(iii)(B);
0
d. In paragraph (b)(12)(iii) introductory text, removing ``2023'' and 
adding in its place ``2025'';
0
e. In paragraph (b)(12)(iii)(B), removing ``no later than the dates in 
Table 8 to this paragraph;'' and adding in its place ``by June 1 of the 
year before the year of such control period;'', and removing Table 8 to 
paragraph (b)(12)(iii)(B); and
0
f. In paragraph (b)(17)(ii), removing ``2023'' and adding in its place 
``2025''.
    The revisions read as follows:


Sec.  52.38  What are the requirements of the Federal Implementation 
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to 
emissions of nitrogen oxides?

    (a) * * *
    (4) * * *
    (i) * * *
    (B) * * *

                    Table 1 to Paragraph (a)(4)(i)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR NOX Annual allowances are       allocations or auction results
         allocated or auctioned               to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *
    (5) * * *
    (i) * * *
    (B) * * *

                    Table 2 to Paragraph (a)(5)(i)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR NOX Annual allowances are       allocations or auction results
         allocated or auctioned               to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *
    (b) * * *
    (4) * * *
    (ii) * * *
    (B) * * *

[[Page 52480]]



                   Table 3 to Paragraph (b)(4)(ii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 1       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *
    (5) * * *
    (ii) * * *
    (B) * * *

                   Table 4 to Paragraph (b)(5)(ii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 1       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *
    (8) * * *
    (iii) * * *
    (B) * * *

                   Table 5 to Paragraph (b)(8)(iii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 2       allocations or auction results
 allowances are allocated or auctioned        to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *
    (9) * * *
    (iii) * * *
    (B) * * *

                   Table 6 to Paragraph (b)(9)(iii)(B)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
     CSAPR NOX Ozone Season Group 2       allocations or auction results
 allowances are allocated or auctioned        to  the Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *

0
3. Amend Sec.  52.39 in Table 1 to paragraph (e)(1)(ii), Table 2 to 
paragraph (f)(1)(ii), Table 3 to paragraph (h)(1)(ii), and Table 4 to 
paragraph (i)(1)(ii) by revising the entries for ``2025 and any year 
thereafter''.
    The revisions read as follows:


Sec.  52.39  What are the requirements of the Federal Implementation 
Plans (FIPs) for the Cross-State Air Pollution Rule (CSAPR) relating to 
emissions of sulfur dioxide?

* * * * *
    (e) * * *
    (1) * * *
    (ii) * * *

                     Table 1 to Paragraph (e)(1)(ii)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR SO2 Group 1 allowances are      allocations or auction results
         allocated or auctioned               to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *
    (f) * * *
    (i) * * *

[[Page 52481]]

    (ii) * * *

                     Table 2 to Paragraph (f)(1)(ii)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR SO2 Group 1 allowances are      allocations or auction results
         allocated or auctioned               to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *
    (h) * * *
    (1) * * *
    (ii) * * *

                     Table 3 to Paragraph (h)(1)(ii)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR SO2 Group 2 allowances are      allocations or auction results
         allocated or auctioned               to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *
    (i) * * *
    (1) * * *
    (ii) * * *

                     Table 4 to Paragraph (i)(1)(ii)
------------------------------------------------------------------------
  Year of the control period for which      Deadline for submission of
    CSAPR SO2 Group 2 allowances are      allocations or auction results
         allocated or auctioned               to the  Administrator
------------------------------------------------------------------------
 
                              * * * * * * *
2025 and any year thereafter...........  June 1 of the year before the
                                          year of the control period.
------------------------------------------------------------------------

* * * * *

PART 97--FEDERAL NOX BUDGET TRADING PROGRAM, CAIR NOX AND SO2 
TRADING PROGRAMS, CSAPR NOX AND SO2 TRADING PROGRAMS, AND TEXAS SO2 
TRADING PROGRAM

0
4. The authority citation for part 97 continues to read as follows:

    Authority: 42 U.S.C. 7401, 7403, 7410, 7426, 7491, 7601, and 
7651, et seq.

Subpart AAAAA--CSAPR NOX Annual Trading Program


Sec.  97.421  [Amended]

0
5. In Sec.  97.421, amend paragraph (f)(2) by removing ``2022'' and 
adding in its place ``2024'', and removing the word ``third'' before 
``year after the year''.

Subpart BBBBB--CSAPR NOX Ozone Season Group 1 Trading Program


Sec.  97.521  [Amended]

0
6. In Sec.  97.521, amend paragraph (f)(2) by removing ``2022'' and 
adding in its place ``2024'', and removing the word ``third'' before 
``year after the year''.

Subpart CCCCC--CSAPR SO2 Group 1 Trading Program


Sec.  97.621  [Amended]

0
7. In Sec.  97.621, amend paragraph (f)(2) by removing ``2022'' and 
adding in its place ``2024'', and removing the word ``third'' before 
``year after the year''.

Subpart DDDDD--CSAPR SO2 Group 2 Trading Program


Sec.  97.721  [Amended]

0
8. In Sec.  97.721, amend paragraph (f)(2) by removing ``2022'' and 
adding in its place ``2024'', and removing the word ``third'' before 
``year after the year''.

Subpart EEEEE--CSAPR NOX Ozone Season Group 2 Trading Program


Sec.  97.821  [Amended]

0
9. In Sec.  97.821, amend paragraph (f) by removing ``2022'' and adding 
in its place ``2024'', and removing the word ``third'' before ``year 
after the year''.

Subpart FFFFF--Texas SO2 Trading Program


Sec.  97.921  [Amended]

0
10. In Sec.  97.921, amend paragraph (b)(2) by removing ``2022'' and 
adding in its place ``2024'', and removing the word ``third'' before 
``year after the year''.

Subpart GGGGG--CSAPR NOX Ozone Season Group 3 Trading Program


Sec.  97.1021  [Amended]

0
11. Amend Sec.  97.1021 by:
0
a. In paragraph (c), removing ``July 1, 2022, the'' and adding in its 
place ``September 1, 2023, the'';
0
b. Removing and reserving paragraph (d); and
0
c. In paragraph (f), removing the word ``third'' before ``year after 
the year''.

[FR Doc. 2022-18318 Filed 8-25-22; 8:45 am]
BILLING CODE 6560-50-P


