[Federal Register Volume 77, Number 207 (Thursday, October 25, 2012)]
[Rules and Regulations]
[Pages 65107-65119]
[FR Doc No: 2012-25978]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 52

[EPA-HQ-OAR-2003-0062; FRL-9742-8]
RIN 2060-AR30

Implementation of the New Source Review (NSR) Program for
Particulate Matter Less Than 2.5 Micrometers (PM2.5):
Amendment to the Definition of ``Regulated NSR Pollutant'' Concerning
Condensable Particulate Matter

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is issuing a final rule that revises the definition of
``regulated NSR pollutant'' contained in two sets of Prevention of
Significant Deterioration (PSD) regulations and in the EPA's Emission
Offset Interpretative Ruling. The revision corrects an inadvertent
error made in 2008 when the EPA issued its rule to implement the New
Source Review (NSR) program for fine particles with an aerodynamic
diameter of less than or equal to 2.5 micrometers (PM2.5).
This revision removes a general requirement in the definition of
``regulated NSR pollutant'' to include condensable PM when measuring
one of the emissions-related indicators for particulate matter (PM)
known as ``particulate matter emissions'' in the context of the PSD and
NSR regulations. However, the rule preserves the requirement in some
particular cases to include condensable PM in measurements of
``particulate matter emissions'' as required by other regulations. In
addition, measurement of condensable PM continues to be required in all
cases for two other emissions-related indicators for emissions of PM--
emissions of particles with an aerodynamic diameter of less than or
equal to 10 micrometers (PM10 emissions) and
PM2.5 emissions.

DATES: The amendments to 40 CFR parts 51 and 52 are effective December
24, 2012.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2003-0062. All documents in the docket are
listed in the www.regulations.gov index. Although listed in the index,
some information is not publicly available, e.g., Confidential Business
Information (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 through www.regulations.gov or in hard copy at the EPA
Docket Center, Public Reading Room, EPA West, Room 3334, 1301
Constitution Avenue, Northwest, Washington, DC 20460. 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<PHONE_NUMBER>, and the telephone number for the Air
Docket is<PHONE_NUMBER>.

FOR FURTHER INFORMATION CONTACT: Mr. Dan deRoeck, Air Quality Policy
Division (C504-03), U.S. Environmental Protection Agency, Research
Triangle Park, NC, 27711; telephone number<PHONE_NUMBER>; fax number
(919) 541-5509; or email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The information in this Supplementary
Information section of this preamble is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document and other related
information?
II. Purpose
III. Background
    A. National Ambient Air Quality Standards (NAAQS) for PM
    B. Measuring and Reporting Emissions of PM
    C. NSR Program for PM
IV. What is the final action that the EPA is taking on the
definition of ``regulated NSR pollutant'' and how does it affect the
way ``particulate matter emissions'' are measured?
V. What comments did we receive on the proposed amendments to the
definition of ``regulated NSR pollutant''?
    A. Regulated Indicators of PM
    B. Defining PM Consistent With an Applicable New Source
Performance Standard (NSPS)
    C. Defining PM To Include Condensable PM in the State
Implementation Plan (SIP)
    D. Comments Related to Special EPA Policies for Implementing PM
Requirements Under the NSR Program
    E. Other Comments Unrelated to the Final Rule
VI. 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. Judicial Review
VII. Statutory Authority

I. General Information

A. Does this action apply to me?

    Entities affected by this rule include sources in all industry
groups. The majority of sources potentially affected are expected to be
in the following groups that emit PM:

------------------------------------------------------------------------
                  Industry group                          NAICS \a\
------------------------------------------------------------------------
Electric services.................................  221111, 221112,
                                                     221113, 221119,
                                                     221121, 221122.
Petroleum refining................................  32411.
Industrial inorganic chemicals....................  325181, 32512,
                                                     325131, 325182,
                                                     211112, 325998,
                                                     331311, 325188.
Industrial organic chemicals......................  32511, 325132,
                                                     325192, 325188,
                                                     325193, 32512,
                                                     325199.
Miscellaneous chemical products...................  32552, 32592, 32591,
                                                     325182, 32551.

Natural gas liquids...............................  211112.
Natural gas transport.............................  48621, 22121.
Pulp and paper mills..............................  32211, 322121,
                                                     322122, 32213.
Paper mills.......................................  322121, 322122.
Automobile manufacturing..........................  336111, 336112,
                                                     336712, 336211,
                                                     336992, 336322,
                                                     336312, 33633,
                                                     33634, 33635,
                                                     336399, 336212,
                                                     336213.
Pharmaceuticals...................................  325411, 325412,
                                                     325413, 325414.
------------------------------------------------------------------------
\a\ North American Industry Classification System.

    Entities affected by this rule also include state, local and tribal
reviewing authorities responsible for implementing Clean Air Act (CAA
or Act) stationary source permitting programs.

B. Where can I get a copy of this document and other related
information?

    In addition to being available in the docket, an electronic copy of
this final rule will also be available on the World Wide Web. Following
signature by the EPA Administrator, a copy of this final rule will be
posted in the regulations and standards section of our NSR home page
located at http://www.epa.gov/nsr.

II. Purpose

    The purpose of this rulemaking is to revise the definition of
``regulated NSR pollutant'' to correct an inadvertent error contained
in the regulations for PSD at 40 CFR 51.166 and 52.21, and in the EPA's
Emission Offset Interpretative Ruling at 40 CFR part 51 Appendix S.
This error was introduced in the revised definition of ``regulated NSR
pollutant'' in the 2008 rule titled, ``Implementation of the New Source
Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers
(PM2.5).'' See 73 FR 28321 (May 16, 2008). The revised
definition required that particulate matter emissions, PM10
emissions and PM2.5 emissions--representing three separate
size ranges or indicators of particles--must include ``gaseous
emissions from a source or activity which condense to form particulate
matter at ambient temperatures,'' i.e., condensable particulate matter
(condensable PM). See existing 40 CFR 51.166(b)(49)(vi), part 51
Appendix S, and 52.21(b)(50)(vi). This final action removes an
unintended new requirement on state and local agencies and the
regulated community that ``particulate matter emissions'' must include
the condensable PM fraction in all cases. As described in more detail
in section IV of this preamble, in the 2008 rule we did not intend that
the term ``particulate matter emissions'' be listed with
``PM2.5 emissions'' and ``PM10 emissions'' to
include the condensable PM fraction of primary PM. Historically, for
``particulate matter emissions'' often only the filterable fraction had
been considered for NSR purposes, consistent with the applicable New
Source Performance Standards (NSPS) for PM and the corresponding
compliance test method.
    This final action ensures that our originally-intended approach for
regulating the three indicators for emissions of particulate matter
under the PSD program is codified. Thus, ``PM10 emissions''
and ``PM2.5 emissions'' are regulated as criteria pollutants
(that is, under the portion of the definition of ``regulated NSR
pollutant'' that refers to ``[a]ny pollutant for which a national
ambient air quality standard has been promulgated * * *''), and are
required to include the condensable PM fraction emitted by a source.
See 40 CFR 51.166(b)(49)(i) and 52.21(b)(50)(i). By contrast,
``particulate matter emissions'' is regulated as a non-criteria
pollutant under the portion of the definition that refers to ``[a]ny
pollutant that is subject to any standard promulgated under section 111
of the Act,'' where the condensable PM fraction generally is not
required to be included in measurements to determine compliance with
standards of performance for PM. See 40 CFR 51.166(b)(49)(ii) and
52.21(b)(50)(ii).

III. Background

A. National Ambient Air Quality Standards (NAAQS) for PM

    Sections 108 and 109 of the CAA govern the establishment and
revision of the NAAQS. Section 108 directs the Administrator to
identify and list each air pollutant that ``in his judgment, cause[s]
or contribute[s] to air pollution which may reasonably be anticipated
to endanger public health and welfare'' and ``the presence of which in
the ambient air results from numerous or diverse mobile or stationary
sources'' and to issue air quality criteria for those pollutants that
are listed. CAA section 108(a)(1)(A), (B). Section 109 directs the
Administrator to propose and promulgate primary and secondary NAAQS for
pollutants listed under section 108 to protect public health and
welfare, respectively. Section 109 also requires review of the NAAQS at
5-year intervals.
    ``Particulate matter'' is a term used to define an air pollutant
that consists of a mixture of solid particles and liquid droplets found
in the ambient air. Particulate matter occurs in many sizes and shapes
and can be made up of hundreds of different chemicals. As explained
further in the discussion that follows, the EPA has regulated several
size ranges of particles under the CAA, referred to as indicators of
particles, which has required that test methods be developed to measure
the appropriate size particles that occur in the ambient air or that
are being emitted directly from a source. In some cases, the EPA
regulates certain species of particles as separate ``air pollutants.''
For example, lead, beryllium, fluorides and sulfuric acid mist are
constituents of particulate matter that are also regulated separately
under New Source Performance Standards (40 CFR part 60) and/or National
Emissions Standards for Hazardous Air Pollutants (40 CFR parts 61, 63
or 65).
    Particles as measured in the ambient air consist of both primary
and secondary particles. Primary particles are emitted directly from
sources, and may include gaseous emissions, which, when emitted from
the stack of a source, condense under ambient conditions to form
particles. Primary particles directly emitted by a source as a solid or
liquid at the stack and captured on the filter of a test train are
referred to as the ``filterable'' PM fraction. The gaseous emissions
that form particles upon condensing under ambient conditions soon after
release from the stack are referred to as ``condensable PM.'' Other
types of particles, known as secondary particles, are formed from
precursors, such as SO2 and NOX, at a distance
from their point of release as a result of complex reactions in the
atmosphere.
    Initially, the EPA established NAAQS for PM on April 30, 1971,
under sections 108 and 109 of the Act. See 36 FR 8186. Compliance with
the original PM NAAQS was based on the measurement of particles in the
ambient

air using an indicator of particles measuring up to a nominal size of
25 to 45 micrometers ([micro]m). The EPA used the indicator name
``total suspended particulate'' or ``TSP'' to define the particle size
range that was being measured. Total suspended particulate remained the
indicator for the PM NAAQS until 1987 when the EPA revised the NAAQS in
part by replacing the TSP indicator for both the primary and secondary
standards with a new indicator that includes only those particles with
an aerodynamic diameter less than or equal to a nominal 10 [micro]m
(PM10).
    On July 18, 1997, the EPA made significant revisions to the PM
NAAQS in several respects. While the EPA determined that the PM NAAQS
should continue to focus on particles less than or equal to 10 [micro]m
in diameter, the EPA also determined that the fine and coarse fractions
of PM10 should be considered separately. Accordingly, on
July 18, 1997, the EPA added a new indicator for fine particles with a
nominal mean aerodynamic diameter less than or equal to 2.5 [micro]m
(PM2.5), and continued to use PM10 as the
indicator for purposes of regulating the coarse fraction of
PM10. See 62 FR 38652.
    In the next periodic review, the EPA concluded, on October 17,
2006, that it was necessary to revise the primary and secondary NAAQS
for PM to provide increased protection of public health and welfare.
See 71 FR 61144. The EPA retained the two separate indicators--
PM10 and PM2.5--for determining compliance with
the revised NAAQS for PM, so both continue to be regarded as pollutants
for which a NAAQS has been promulgated.

B. Measuring and Reporting Emissions of PM

    Section 110 of the Act requires that state and local air pollution
control agencies develop and submit plans, known as state
implementation plans or SIPs (that provide for the attainment,
maintenance and enforcement of the NAAQS), for approval by the EPA. An
essential component of each SIP is the emissions reduction strategy,
including emissions limitations and other control measures (as set
forth in SIPs and in individual source permits) designed to control the
emissions of pollutants that contribute to the air quality against
which the NAAQS are measured. For many years, most control measures for
PM were generally focused on primary PM--specifically, the filterable
PM fraction. Accordingly, the early EPA test methods for quantifying
amounts of PM emitted by sources generally were based on the collection
of the filterable PM fraction.
    In support of state obligations to develop emissions reduction
strategies, section 111 of the Act requires the EPA to adopt standards
of performance that focus on sources that cause or contribute
significantly to ``air pollution which may reasonably be anticipated to
endanger public health and welfare.'' Such standards, referred to as
NSPS, are emissions standards that are intended to reflect the degree
of air pollution emission limitation attainable through the application
of the best system of emission reduction (taking into account the cost
of achieving such reduction and any non-air quality health and energy
requirements) that the Administrator determines has been adequately
demonstrated. Accordingly, the EPA historically has developed NSPS (and
corresponding compliance test methods) under 40 CFR part 60 to provide
standards of performance that address, among other pollutants, the
control of PM.
    When the EPA promulgated the first set of NSPS for PM in 1971, only
the filterable PM fraction was regulated. The EPA simultaneously
promulgated a test method, known as Method 5, as the NSPS compliance
test method to measure the filterable fraction of PM. Once available,
Method 5 was often also used for permitting purposes to quantify the
in-stack emissions of PM that represented the particles in the
atmosphere expressed in terms of the ambient indicator, TSP--the
original indicator for the PM NAAQS. Thus, the filterable PM collected
by Method 5 or other similar source test methods was sometimes referred
to as ``TSP emissions,'' even though it was recognized that Method 5
actually collected particles that exceeded the TSP size range (25-45
[micro]m), and did not include the condensable PM fraction. Today,
Method 5 continues to serve as the performance testing procedure for
most NSPS for PM.
    As a result of the promulgation of the PM10 NAAQS in
1987, the annual source emissions reporting of ``particulate matter
emissions'' (required under 40 CFR 51.322 and 51.323) ended with the
state reporting of calendar year 1987 emissions, and the required
reporting of PM10 emissions began with state reporting of
calendar year 1988 emissions. In the absence of a standard reference
test method for measuring PM10 emissions, states were
instructed to choose an appropriate method of determining
PM10 emissions for each source. On April 17, 1990, the EPA
promulgated Method 201A to provide the states with a standard means of
measuring filterable PM10 emissions contained in the stack.
In the preamble of the promulgated Method 201A, the EPA noted that
condensable PM forms very fine particles in the PM10 size
range and is considered a portion of total PM10 emissions.
The EPA announced its intent to propose Method 202 as a test method to
measure the condensable portion. On October 12, 1990, the EPA proposed
Method 202 to provide states with a means of measuring condensable PM
from stationary sources. See 55 FR 41546. The test method for
condensable PM, known as Method 202, was promulgated on December 17,
1991, in Appendix M of 40 CFR part 51. With the new focus on the
PM10 indicator the EPA also began to emphasize the relevance
of condensable PM,\1\ and encouraged states to consider the condensable
PM fraction as part of PM10 emissions where it was
considered to be a significant contributor to an area's PM10
nonattainment status. However, there were only a few nonattainment
areas where control of the condensable PM portion was actually required
in order to achieve attainment of the NAAQS.
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    \1\ ``Condensable PM is of potential importance because it
usually is quite fine and thus falls primarily within the
PM10 fraction.'' See ``PM-10 SIP Development Guideline,''
EPA-450/2-86-001 (June 1987) at p. 5-32.
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    Even before the EPA introduced the PM2.5 indicator for
the PM NAAQS in 1997, the agency published information on
PM2.5 emissions in its National Emission Inventory Database
(NEI).\2\ With the assistance of information gained through speciation
analyses of PM2.5, the EPA recognized that condensable PM
could be a substantial portion of the total PM2.5 emitted by
certain source categories. Beginning with the 1999 NEI, the EPA began
including the condensable PM fraction of the total PM2.5
emitted by certain source categories, and encouraged states to consider
the condensable PM fraction for the development of emissions
inventories for PM2.5 SIPs.\3\ The EPA also provided
condensable PM emission factors for various source categories in AP-42
so that those state and local air control agencies having the
responsibility to report emission inventories would have the tools
needed

to estimate and report those emissions to the EPA.
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    \2\ The EPA's NEI contains information about sources that emit
criteria pollutants and their precursors, and hazardous pollutants.
The database includes estimates of annual air pollutant emissions
from point, nonpoint and mobile sources. The NEI currently contains
information on PM with regard to the criteria indicators
PM10 and PM2.5.
    \3\ ``Emissions Inventory Guidance for Implementation of Ozone
and Particulate Matter National Ambient Air Quality Standards
(NAAQS) and Regional Haze,'' EPA-454/R-99-006 (April 1999).
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    In 2002, the EPA issued a rule known as the Consolidated Emissions
Reporting Rule (CERR), which, among other things, established
requirements for the reporting to the EPA of PM2.5
emissions. In conjunction with the new reporting requirements, the EPA
added definitions of ``primary PM,'' ``primary PM10,'' and
``primary PM2.5,'' all of which included both the filterable
and condensable PM fraction. See 67 FR 39602 (June 10, 2002). The CERR
required states to report emissions of primary PM10 and
primary PM2.5, and listed as optional the reporting of
emissions of primary PM. However, when the EPA amended those rules in
2008, it dropped the definition of ``primary PM'' and the listing of
``primary PM'' as an optional pollutant, eliminating the requirement
for reporting ``PM'' (as opposed to PM10 and
PM2.5). See 73 FR 76539 (December 17, 2008).
    In November 2005, the EPA proposed requirements that states must
fulfill in developing their implementation plans for the attainment of
PM2.5 NAAQS. See 70 FR 65984 (November 1, 2005). With the
historical emphasis on controlling the filterable PM fraction, it
became apparent that in many cases it would be necessary to take a
closer look at the control of the condensable PM fraction in order to
attain the PM2.5 NAAQS in some areas.\4\ The preamble to the
2005 proposed rule highlighted the importance in certain cases of
controlling the condensable PM fraction to help ensure the attainment
of the new NAAQS. It was acknowledged at that time that most stationary
source test methods specified in state rules did not provide for the
measurement of condensable PM. As such, it was found that most source
test methods referenced in SIPs provided a measurement of only the
filterable fraction of PM. The EPA further noted that ``these
filterable particulate matter test methods are either identical or very
similar to one of the ten federal test methods published in Appendix A
of 40 CFR Part 60 and used to determine compliance with New Source
Performance Standards (NSPS).'' Id. at 66049. The EPA indicated that
states needing to adopt local control measures for primary
PM2.5 in nonattainment areas would need to revise their
stationary source test methods to focus on the PM2.5
indicator, including the condensable PM fraction.\5\
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    \4\ ``The inclusion of condensable emissions in a source's
PM2.5 emissions is of increasing importance with the
change in the indicator for particulate matter to PM2.5.
Condensible emissions are essentially fine particles, and thus are a
larger fraction of PM2.5 than of TSP or
PM10.'' 70 FR 65984 (November 1, 2005) at p. 66039.
    \5\ The EPA did indicate that ``test methodologies that measure
only filterable particulate matter would be acceptable in areas
where no additional reductions of primary PM2.5 and
particulate precursor emissions are required to project attainment
of the PM2.5 NAAQS.'' Id. at 66049.
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    On March 25, 2009, the EPA proposed to modify existing Method 201A
to allow for measurement of filterable PM2.5. In fact, the
proposed modification offered the ability to measure filterable
PM10, filterable PM2.5, or both filterable
PM10 and filterable PM2.5 from stationary
sources. At the same time, the EPA proposed amendments to Method 202 to
improve the precision of the method for measuring condensable PM and to
provide for more accurate overall quantification of primary emissions
of PM10 and PM2.5 to the ambient air. Method 202
contained several optional procedures that were intended to accommodate
the various test methods used by state and local regulatory entities at
the time Method 202 was being developed. The inclusion of the optional
procedures ultimately proved problematic in that each of them resulted
in a different emissions value. To address this issue, the EPA explored
the influence of the optional procedures to identify the ones that
would result in biased or imprecise measurements. In December 2010, the
EPA promulgated an improved Method 202 with limited options that would
produce more consistent measures of emissions.

C. NSR Program for PM

    The NSR program is a statutorily-based preconstruction permitting
program that applies when a stationary source of air pollution proposes
to construct or undergo modification. The NSR program consists of three
different preconstruction permit programs: PSD, nonattainment NSR and
minor NSR. We often refer to the PSD and nonattainment NSR programs
together as the major NSR program because those permit programs
regulate the construction of new major stationary sources and major
modifications to existing major stationary sources.
    The nonattainment NSR program applies in advance of construction to
new major stationary sources and major modifications of sources of a
pollutant that locate in an area that is designated ``nonattainment''
for that pollutant. As such, the nonattainment NSR program applies only
with respect to pollutants for which the EPA has promulgated NAAQS
(commonly described as ``criteria pollutants''). On the other hand, the
PSD program is a statutorily-based preconstruction review and
permitting program that applies to new or modified major stationary
sources proposing to locate in an area meeting any NAAQS
(``attainment'' areas) and areas for which there is insufficient
information to classify them as either attainment or nonattainment
(``unclassifiable'' areas) for at least one pollutant. Like the
nonattainment NSR program, the applicability of the PSD program to a
major stationary source or major modification must be determined in
advance of construction and is on a pollutant-specific basis. However,
unlike the nonattainment NSR program, the PSD requirements may apply to
any ``air pollutant'' that is ``subject to regulation'' under the
Act.\6\ Thus, the PSD program is not restricted to criteria
pollutants.\7\ Once a major source is determined to be subject to the
PSD program (PSD source) for a particular air pollutant, among other
requirements, it must undertake a series of analyses to demonstrate
that it will use the best available control technology (BACT) to
minimize the emissions of each regulated pollutant and that the
emissions of the source will not cause or contribute to a violation of
any applicable NAAQS or any applicable maximum allowable increase in a
pollutant concentration (PSD increment).
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    \6\ Although the language in the PSD requirements in the CAA
states that those requirements apply to any pollutant subject to
regulation under the Act, section 112(b)(6) of the CAA specifically
excludes hazardous pollutants regulated under that section of the
CAA from the PSD provisions. Accordingly, hazardous pollutants
listed in section 112 of the CAA are not regulated under the EPA's
PSD regulations. See, e.g., 40 CFR 52.21(b)(50)(v).
    \7\ The EPA uses the term ``particulate matter emissions'' to
define a pollutant regulated under the PSD program, but not under
the nonattainment NSR program because nonattainment designations
apply only with regard to criteria pollutants (pollutants for which
NAAQS exist, e.g., PM10 and PM2.5).
``Particulate matter emissions'' are not considered a criteria
pollutant.
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    Consistent with the original NAAQS and PSD increments for PM, the
PSD program established pollutant applicability requirements for PM on
the basis of the TSP indicator. Accordingly, the PSD regulations
defined a ``significant'' increase in emissions of PM as 25 tons per
year (tpy). When the EPA revised the PM NAAQS in 1987, establishing a
new PM10 indicator, two indicators for particles were
recognized as being regulated under the Act because the statutory PSD
increments for PM were still expressed in terms of TSP. The addition of
the new PM10 indicator also necessitated a distinction
between those emissions of PM that should be used to determine a
source's compliance with

the new PM10 NAAQS and those emissions of PM that should be
used to determine a source's compliance with the existing TSP-based
increments. Hence, in 1987, the EPA adopted the term ``particulate
matter emissions'' to represent the indicator of emissions of PM that
roughly corresponds to the ambient indicator, TSP, and adopted the term
``PM10 emissions'' to represent the indicator of emissions
of PM that corresponds to the ambient indicator, PM10. See
52 FR 24672 (July 1, 1987). Accordingly, the original significant
emissions rate of 25 tpy was retained and applied to the newly-defined
term ``particulate matter emissions'' (associated with the ambient TSP
indicator), and simultaneously a significant emissions rate of 15 tpy
was defined with regard to ``PM10 emissions.'' See 40 CFR
51.166(b)(23)(i) and 52.21(b)(23)(i).
    In 1993, as authorized by the CAA Amendments of 1990, the EPA
adopted increments for PM that were expressed in terms of ambient
concentrations of PM10, and substituted those increments for
the original statutory increments for PM based on the TSP indicator.
See 58 FR 31622 (June 3, 1993). As a result, both the NAAQS for PM and
the PSD increments for PM were henceforth measured by the
PM10 indicator and, once states revised their SIPs to
incorporate the new PM10 NAAQS and PM10
increments, the TSP (ambient) indicator was no longer considered a
regulated indicator of particles. However, because the NSPS for PM
commonly measured performance standard compliance based on emissions of
PM in a manner that was roughly associated with the original ambient
TSP indicator, the EPA stated in the preamble to the 1993 final rule
promulgating new PSD increments based on PM10 that the
agency would continue to regulate ``particulate matter emissions'' (25
tpy significant emissions rate) separately from ``PM10
emissions'' (15 tpy significant emissions rate) for purposes of PSD
applicability determinations. Id. at 31629.
    In October 1997, following the promulgation of revised NAAQS for
PM, which included the addition of NAAQS defined by the
PM2.5 indicator, the EPA issued a guidance memorandum titled
``Interim Implementation for the New Source Review Requirements for
PM2.5'' (John Seitz, EPA, October 27, 1997).\8\ In this
guidance, the EPA set forth what is referred to as the 1997
PM10 Surrogate Policy, in which it was explained that
sources could continue to use implementation of a PM10
program as a surrogate for meeting the PM2.5 NSR
requirements until certain technical difficulties were resolved. Those
technical difficulties included the lack of necessary tools to
calculate PM2.5 emissions and related precursors from
individual stationary sources, the lack of adequate modeling techniques
to project ambient PM2.5 impacts, and the lack of
PM2.5 ambient monitoring sites. Accordingly, sources
applying for PSD permits could rely on a demonstration of compliance
with regard to the PM10 requirements as an interim measure
to satisfy the CAA requirements for meeting BACT and ambient air
quality standards for the new PM2.5 indicator. In 2005,
following the promulgation of nonattainment area designations for
PM2.5, the EPA issued guidance extending the 1997
PM10 Surrogate Policy to the issuance of major source
permits in PM2.5 nonattainment areas. (``Implementation of
New Source Review Requirements in PM2.5 Nonattainment
Areas,'' April 5, 2005.)
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    \8\ Available in the docket, ID. No. EPA-HQ-OAR-2003-0063, and
at http://www.epa.gov.nsr/documents/nsrmemo.pdf.
---------------------------------------------------------------------------

    In 2008, the EPA issued a final rule setting forth certain new
requirements for PM2.5 in its NSR and PSD regulations. See
``Implementation of the New Source Review (NSR) Program for Particulate
Matter Less Than 2.5 Micrometers (PM2.5),'' 73 FR 28321 (May
16, 2008). Specifically, the EPA identified the major source threshold
and significant emissions rate for PM2.5 to reflect the
indicator for the PM NAAQS promulgated in 1997. See 40 CFR
51.166(b)(23)(i) and 52.21(b)(23)(i). The 2008 rule also announced the
end of the use of the EPA's 1997 PM10 Surrogate Policy under
the federal PSD program at 40 CFR 52.21 and the nonattainment NSR
program (including the Emission Offset Rule at 40 CFR part 51 Appendix
S) upon the effective date of the final rule (July 15, 2008). See 73 FR
at 28340-28343. However, the rule provided a grandfathering provision,
under the federal PSD program, for PSD permit applications that were
determined to be complete before July 15, 2008, but had not yet
received a PSD permit by that date, enabling those applications to
continue to be reviewed under the 1997 PM10 Surrogate Policy
in lieu of the new PM2.5 requirements. Later, in a final
rule issued on May 18, 2011, which became effective on July 18, 2011,
the EPA announced the repeal of that PSD grandfather provision. See 76
FR 28646. The EPA continued to allow the use of the surrogate policy
\9\ for PSD permits issued under SIP-approved PSD programs until May
16, 2011--the due date for revising SIPs to incorporate the new
PM2.5 PSD requirements promulgated in the 2008 rule. See 76
FR at 28659 (declining to adopt a proposal to end the policy earlier).
---------------------------------------------------------------------------

    \9\ During this period, EPA communicated that the policy should
be applied consistent with applicable case law on use of surrogates.
See 75 FR at 6831.
---------------------------------------------------------------------------

    Hence, PM is currently being regulated under the PSD program as
three separate regulated pollutants. Those include PM10 and
PM2.5--both of which are indicators reflecting the way the
NAAQS for PM are currently measured--and ``particulate matter
emissions,'' which is a term used in the PSD regulations to signify the
indicator of PM that is measured and regulated under various NSPS for
PM (40 CFR part 60).\10\ All three of the indicators for PM are
considered separately as regulated NSR pollutants subject to review
under the PSD program, which means that proposed new and modified
sources must treat each indicator of PM as a separate regulated
pollutant for applicability determinations, and must then apply the PSD
requirements, as appropriate, independently for each indicator of PM.
---------------------------------------------------------------------------

    \10\ In addition to the NSPS for PM, it is noted that states
regulated ``particulate matter emissions'' for many years in their
SIPs for PM, and the same indicator has been used as a surrogate for
determining compliance with certain standards contained in 40 CFR
part 63, regarding National Emission Standards for Hazardous Air
Pollutants.
---------------------------------------------------------------------------

    The 2008 rule also added a provision to the definition of
``regulated NSR pollutant'' in the PSD regulations and the Emission
Offset Interpretative Ruling that required the inclusion of the
condensable PM fraction for all three emissions-based indicators of PM.
Accordingly, the determination of the potential emissions (for permit
applicability determinations), and the setting of emissions limitations
and in-stack pollutant measurements (for source compliance purposes)
would involve the inclusion of the condensable fraction of PM for each
of the three PM indicators. However, the EPA also announced in the 2008
rule that it would not require states to implement the requirement to
account for condensable PM in establishing enforceable emissions limits
for either PM10 or PM2.5 in permits until the
completion of a transition period that would end on January 1, 2011.
See 73 FR at 28335. The EPA explained that the transition period would
allow the agency time to assess concerns raised about uncertainties
associated with the measurement of direct PM2.5, including
condensable PM, and to conduct a notice and comment rulemaking to
codify new or revised test methods.

Thus, while the definition of ``regulated NSR pollutant'' required the
inclusion of condensable PM in all three indicators for emissions of
PM, the transition policy effectively delayed its implementation until
January 1, 2011, unless an existing permit condition or SIP expressly
required that the condensable PM fraction be included in the
measurement of PM10 emissions or PM2.5 emissions.
Also, states were required to submit to the EPA by May 16, 2011, SIP
revisions addressing the new, revised definition of ``regulated NSR
pollutant'' and other new PM2.5 NSR requirements promulgated
in the 2008 rule.

IV. What is the final action that the EPA is taking on the definition
of ``regulated NSR pollutant'' and how does it affect the way
``particulate matter emissions'' are measured?

    This final rule corrects an inadvertent error that established a
general requirement under the definition of ``regulated NSR pollutant''
to account for the condensable PM fraction in applicability
determinations and in establishing emissions limitations with regard to
``particulate matter emissions.'' The change that has been made affects
three sets of NSR regulations, including the PSD regulations at 40 CFR
51.166 and 52.21, and the Emission Offset Interpretative Ruling at 40
CFR part 51 Appendix S.
    It is important to note that the change being finalized under this
action does not mean that we are totally exempting the inclusion of the
condensable PM fraction as part of ``particulate matter emissions.'' As
we described in the proposal, it may be necessary for PSD sources to
count the condensable PM fraction with regard to ``particulate matter
emissions'' in certain cases. The first case is for a source that is
subject to an NSPS for which the condensable PM fraction must be
included in the determination of compliance with the standard of
performance for PM.\11\ The second case is where the applicable SIP
already requires that the condensable PM fraction be included in the
measurement of ``particulate matter emissions.'' Finally, the third
case is where a source that emits ``particulate matter emissions'' is
not subject to an NSPS, but is required by the reviewing authority to
include the condensable PM fraction. See 77 FR 15661. Accordingly, the
EPA proposed to add new regulatory language at 40 CFR 51.166(b)(49)(ii)
and 52.21(b)(50)(ii) to address these particular situations. (However,
as pointed out by a commenter, we omitted language referencing an
approved SIP (case 2) in the proposed regulatory language.)
---------------------------------------------------------------------------

    \11\ In developing the NSPS for Wool Fiberglass Insulation
Manufacturing facilities (Subpart PPP), the EPA determined that the
control device could effectively reduce both the solid particles and
the condensable PM, and promulgated the PM standard based on the
measurement of both filterable solid particles and condensable PM.
In addition, the agency established a variant of Method 5, referred
to as Method 5e, to measure the filterable PM and the total organic
carbon portion of the impinger catch. See 50 FR 7694 (February 25,
1985).
---------------------------------------------------------------------------

    In this final rule, based on public comments and additional
considerations we have since identified, we are not adopting the
proposed clarifying text in 40 CFR 51.166(b)(49)(ii) and
52.21(b)(50)(ii). In the proposal, the EPA explained that the revisions
to these subsections were intended to assure that the condensable PM
fraction of ``particulate matter emissions'' was counted in those cases
where either the applicable NSPS requires that the condensable PM
fraction be included in the determination of compliance with the
standard of performance for PM or the applicable SIP already requires
the inclusion of the condensable PM fraction. The EPA does not believe
that the proposed revisions to subparagraph (ii) are necessary to
include the condensable fraction of ``particulate matter emissions''
where it would be consistent with the applicable NSPS. Federal
regulations at 40 CFR 51.100(pp) already define ``particulate matter
emissions'' to be measured according to ``the applicable reference
methods, or an equivalent or alternative method, specified in this
chapter, or by a test method specified in an approved State
implementation plan.'' We believe that definition is appropriately
applied under both part 51 and part 52 of our regulations, even though
part 52 does not presently contain such any definition of the term
``particulate matter emissions,'' and thus is not directly applicable.
Thus, the condensable fraction of particulate matter emissions should
be counted where appropriate, consistent with the part 51 definition.
    In addition, public comments discussed later in this preamble
raised questions about the proposed regulatory language that provided
the option, when an NSPS was not applicable to a source, for a
reviewing authority to determine on a case-by-case basis whether to
include condensables in ``particular matter emissions.'' Comments have
persuaded the EPA that this case-by-case approach is not needed and
that if a source is not covered by an NSPS, the condensable PM fraction
need not be included in ``particulate matter emission'' unless the
state elects to implement such a requirement through its SIP.
    Furthermore, we have recognized that the regulatory text that we
proposed (which is not specific to ``particulate matter emissions'')
may have a broader effect on the definition and measurement of other
regulated NSR pollutants that extends beyond the intentions outlined in
the proposal. Accordingly, in order to allow for further evaluation of
the possible implications of the proposed regulatory text, the EPA is
not finalizing the proposed revisions to subparagraph (ii) at this
point.
    For these reasons, we are retaining the existing regulatory
language in these subparts of the PSD regulations without change.
However, we will continue to evaluate the need for the proposed changes
to 40 CFR 51.166(b)(49)(ii) and 52.21(b)(50)(ii).
    The proposed revisions to these paragraphs of the regulations were
a secondary component of the proposed rule. The primary objective of
our decision to revise the definition of ``regulated NSR pollutant'' is
to correct an inadvertent error, and thus ensuring that we do not
impose a new requirement on state/local agencies and the regulated
community that has little if any effect on preventing significant air
quality deterioration or on efforts to attain the primary and secondary
PM NAAQS. That is, the PSD regulations will not require the inclusion
of condensable PM in measurements of ``particulate matter emissions,''
except where either the applicable NSPS compliance test includes the
condensable PM fraction or the applicable implementation plan requires
the condensable PM fraction to be counted. Proposed new or modified
stationary sources of PM typically will be subjected to the PSD
requirements on the basis of their potential to emit significant
amounts of PM10 or PM2.5 and will be required to
install controls for their emissions of PM10 and/or
PM2.5, both of which must consider the condensable PM
fraction.

V. What comments did we receive on the proposed amendments to the
definition of ``regulated NSR pollutant''?

    The EPA provided a 60-day review and comment period on this
rulemaking, which closed on May 15, 2012. A total of seven comment
letters (six industry comment letters and one state agency comment
letter) were received on the proposed amendment to correct the
definition of ``regulated NSR pollutant'' by removing the unilateral
requirement that condensable PM be

included in measurements of ``particulate matter emissions.'' All of
the commenters supported the EPA's proposed correction. Although the
commenters supported the EPA's proposal with regard to the way that
``particulate matter emissions'' should be measured, some commenters
also requested that the EPA make additional revisions or clarify
certain aspects of the proposal in the final rule preamble and
regulation language. The following subsections provide a summary of
those requests.

A. Regulated Indicators of PM

    Comment: A state agency commenter claims that the EPA's discussion
of PM and the various indicators of PM is confusing in several ways.
First, the state agency commenter notes that the EPA uses the general
term ``particulate matter'' in the Integrated Science Assessment or ISA
(previously called the Air Quality Criteria Document) to describe the
criteria pollutant, while also using various indicators--TSP,
PM10 and PM2.5--based on particle size to
establish NAAQS. The state then explained that ``[w]e have always
understood that each of the indicators used for PM included all
applicable size distributions. Therefore, PMTSP includes
PM10 and PM2.5 and PM10 includes
PM2.5. Therefore, we found the preamble justification
confusing when EPA refers to PM without reference to particle size.''
    Response: Any reference to ``PM'' alone was intended to generally
describe the generic pollutant without regard to the specific indicator
being regulated by either the NAAQS or an emissions test method. The
term ``particulate matter'' or ``PM'' is used generically to describe a
broad range of particles. PM is a pollutant that is defined more
specifically for regulatory purposes by the method in which it is
collected, either under in-stack or ambient conditions. As explained
earlier in this preamble, for NSR purposes, the EPA regulates three
indicators of emissions of PM--``particulate matter emissions,''
``PM10 emissions'' and ``PM2.5 emissions,'' and
two indicators of ambient PM--PM10 and PM2.5. The
term ``total suspended particulate'' or ``TSP'' was originally used by
the EPA as an indicator of ambient concentrations of PM by which
compliance with the original NAAQS for PM was measured. The term
``particulate matter emissions'' represents the indicator of emissions
of PM that roughly corresponds with the ambient indicator ``TSP.''
Since the EPA revoked the TSP-based NAAQS, but continues to regulate
``particulate matter emissions'' as an emissions indicator associated
with various NSPS for PM, ``particulate matter emissions'' is referred
to as a non-criteria emissions indicator of PM. Accordingly, when we
intend to refer to a specific regulated form of PM, the preamble uses
the appropriate term--``particulate matter emissions,''
``PM10 emissions,'' or ``PM2.5 emissions''--to
establish the form of PM to be regulated for NSR applicability
determinations and emissions setting purposes.
    Comment: The same state agency commenter claims that ``EPA proposes
to regulate only the filterable portion of PM under Method 5 and retain
PM10 and PM2.5 as indicators for the PM criteria
pollutant.'' The state then indicated that ``[t]he definition of direct
emissions for PM10 and PM2.5 includes both
filterable and condensable PM emissions.'' Thus, the state agency
commenter claims that it was unclear how the EPA's final rule would
affect permit applicability determinations, ``since the state
implementation plan (SIP) includes condensable emissions for total
PM.'' In conjunction with this uncertainty, the state commenter asks
whether it is the EPA's intent ``to limit the emissions for PM to only
the fraction larger than PM10 or PM2.5? Or, is
EPA's intent to limit the emissions for PM to only the filterable
fraction larger than PM10 or PM2.5, but include
the filterable and condensable emissions for PM10 and
PM2.5?'' The state agency commenter requests that the EPA
confirm its understanding that ``no source impact analysis under PSD is
required for PM because EPA considers PM--as PMTSP--to be a
non-criteria pollutant indicator similar to sulfuric acid mist.'' Thus,
the state agency commenter understood that it would evaluate impacts
under the state's minor NSR program, and only require a control
technology review under PSD for the filterable fraction of particulate
matter emissions.
    Response: The final rule sets forth minimum PSD program
requirements at 40 CFR 51.166 for an approvable SIP. Under those
requirements, the measurement of ``particulate matter emissions''
generally includes only the filterable portion, unless the applicable
NSPS or SIP requires that the condensable PM fraction be counted as
well. Hence, as in the case of the state commenter, where a SIP
requires the inclusion of condensable PM emissions in the measurement
of ``total PM'' (the term that the state commenter appears to use in
lieu of the EPA's term ``particulate matter emissions''), the final
rule does not preclude the state from requiring a source to determine
its applicability, and enforceable emissions limits, for ``particulate
matter emissions'' based on both the filterable and the condensable PM
fractions. In any case, it was not the EPA's intent to limit the
measurement of ``particulate matter emissions'' to the fraction (or
filterable fraction) larger than PM10 and PM2.5.
Clearly, Method 5 measures particles that include the filterable
PM10 and PM2.5, but includes larger particles as
well.
    To address ``particulate matter emissions,'' we generally agree
with the commenter's understanding that one of the primary concerns
under the PSD program is to ensure that a new major stationary source
that emits significant amounts of ``particulate matter emissions'' or a
major modification that results in a significant net emissions increase
of ``particulate matter emissions'' must undergo a control technology
review for that emissions indicator of PM. However, there is a source
impact assessment component in the PSD requirements that cannot simply
be relegated to a minor NSR review requirement with regard to
``particulate matter emissions.'' While there are no air quality
standards (NAAQS or increments) associated with ``particulate matter
emissions,'' section 165(e)(3)(B) of the CAA requires an analysis of
the ambient air quality, climate, meteorology, terrain, soils and
vegetation, and visibility ``for each pollutant regulated under this
Act'' that will be emitted by the proposed PSD project. This
requirement, referred to as the ``Additional Impact Analysis'' at 40
CFR 51.166(o) and 40 CFR 52.21(o), could potentially require certain
analyses with regard to ``particulate matter emissions'' as part of the
PSD preconstruction review process.
    Comment: The state agency commenter and an industry commenter both
had recommendations for excluding ``particulate matter emissions'' from
the major source applicability requirements. The state agency
commenter's recommendation addresses major modifications, while the
industry commenter recommends an exclusion from major source
applicability altogether. The state agency commenter recommends that,
because the concern with ``particulate matter emissions'' rests with
NSPS applicability and control technology review, the EPA should
``remove the major modification significant emission rate (25 tpy) for
PM from the PSD major modification portion of the PSD rules, and rely
on the state's minor NSR program to conduct the technology review under
the NSPS program. * * *'' The industry commenter

believes that there is no reason to include ``particulate matter
emissions'' in any major NSR applicability determinations, regardless
of whether the term includes condensable PM or not, because (1)
particles larger than 10 [mu]m are not a significant driver of health
effects; and (2) applicability thresholds for PM10 and
PM2.5 are already in place and are generally more protective
standards than the ``particulate matter emissions'' standards. Thus,
the industry commenter recommends that the definition of ``regulated
NSR pollutant'' be further modified to eliminate ``particulate matter
emissions'' as a third indicator of PM for NSR purposes.
    Response: With regard to the comments that ``particulate matter
emissions'' should be excluded from major source applicability
determinations, we note that the statutory PSD requirements mandate
preconstruction review for each pollutant regulated under the CAA. For
example, section 165(a)(4) requires best available control technology
for ``each pollutant subject to regulation under this Act. * * * ''
Thus, the EPA's PSD regulations require that both criteria and non-
criteria pollutants undergo PSD review under the applicable provisions.
The term ``particulate matter emissions'' represents an indicator of
emissions of PM, different from the current indicators of PM that
define the PM NAAQS, that is regulated under various NSPS to determine
compliance with regard to PM based on Test Method 5. For this reason,
the EPA believes that it is necessary to consider ``particulate matter
emissions'' to be a separate pollutant subject to regulation under the
CAA and, thus, subject to PSD. See, e.g., 58 FR 31622 at 31629 (June 3,
1993).
    Comment: Two industry commenters request that the EPA clarify that,
consistent with prior rulemaking, it intends to limit the
interpretation of existing limits--and associated compliance
demonstration requirements--to filterable PM. The commenters point to
several instances when the EPA stated the importance of implementing
any new or revised emissions limits and test methods that account for
condensable emissions in a prospective manner and clearly
differentiated from existing NSR permit requirements in order to avoid
confusion over a source's compliance status relative to existing PM
emissions limits that did not include the condensable portion.
(Commenters cited similar EPA statements made in two separate Federal
Register notices, i.e., 72 FR 20586 (April 25, 2007) at 20654 and 73 FR
28321 (May 16, 2008) at 28335.)
    Response: The EPA's position with regard to the enforcement of
permits, as explained in the preamble to the 2008 rule, was and
continues to be that the provisions requiring the inclusion of the
condensable PM fraction should be implemented prospectively and not
retroactively after the January 1, 2011, default end date for the
condensable PM transition period. In the preamble to the 2008 rule, we
indicated with regard to the potential for retroactive enforcement that
the EPA ``will not revisit applicability determinations made in good
faith prior to the end of the transition period, insofar as the
quantity of condensable PM emissions are concerned, unless the
applicable implementation plan clearly required consideration of
condensable PM.'' See 73 FR at 28335. We also stated that ``EPA will
interpret PM emissions limitations in existing permits or permits
issued during the transition period as not requiring quantification of
condensable PM2.5 for compliance purposes unless such a
requirement was clearly specified in the permit conditions or the
applicable implementation plan.'' Id. 28335. Thus, we believe our
position is clear that it is not our intention to apply the requirement
to include the condensable PM fraction to applicability determinations
and emissions limitations in permits that occurred prior to the January
1, 2011, end of the condensable PM transition period, unless such
determinations and emissions limitations already address the
condensable PM fraction. We do, however, intend to apply the
requirement prospectively, such that when existing sources undergo
modifications involving increases in PM10 emissions and
PM2.5 emissions, the source will be required to consider the
condensable fraction of PM10 and PM2.5 emissions
in determining the applicability of PSD to the proposed project, and
establishing enforceable emissions limits and compliance tests.

B. Defining PM Consistent With an Applicable New Source Performance
Standard (NSPS)

    Comment: Several industry commenters support the EPA's proposal to
define PM consistent with an applicable NSPS. One of the commenters
recommends that the final regulation be amended to clarify that the
definition and measurement of PM10 and PM2.5,
when used in the context of NSR and PSD reviews and analyses, also be
tied to the underlying and governing NSPS requirements of the source
being considered. Specifically, the commenter states that the final
regulation should be amended to state that PM2.5 and
PM10 should not include the condensable fraction of PM for
any source where the applicable NSPS does not include the condensable
fraction of PM in the definition or measurement of the PM standard.
    Response: The main purpose of this rule is to remove the general
requirement that ``particulate matter emissions'' include the
condensable PM fraction and to make the measurement of ``particulate
matter emissions'' generally consistent with the method prescribed by
the applicable NSPS (except where a SIP would be more stringent). We do
not agree with the recommendation by the commenters that the final PSD
regulations should not require ``PM2.5 emissions'' and
``PM10 emissions'' to include the condensable PM fraction
when the applicable NSPS does not include the condensable fraction.
There may be more than one basis upon which a pollutant is regulated
under the Clean Air Act, and hence defined as a regulated NSR
pollutant. Both PM2.5 and PM10 are indicators of
PM for which the EPA has promulgated health- and welfare-based NAAQS
and thus each is a regulated NSR pollutant independent of the scope of
any applicable NSPS for a source. Furthermore, it is important that a
source seeking a PSD permit demonstrate that its proposed emissions
increases will not cause or contribute to a violation of any NAAQS or
increment, as is clearly required by the CAA and PSD regulations. As
such, it is important to consider the condensable PM fraction in each
case when setting enforceable emissions limits and compliance tests for
PSD sources. The fact that a particular NSPS may not include the
condensable fraction to determine compliance with a particular
performance-based standard does not alter that fact. The standards of
performance for new sources established under section 111 of the CAA
reflect emission limits achievable at the time of promulgation with the
best adequately demonstrated technological system of continuous
emission reduction considering the cost of achieving such emission
reductions and any non-air quality health, environmental and energy
impacts. Thus, if the consideration of the condensable fraction of
PM10 and PM2.5 emissions would not be indicative
of the efficiency of a control device used by the industry at the time
of promulgation, then it would not be necessary or appropriate to
include

measurement of the condensable PM fraction as part of the NSPS.\12\
---------------------------------------------------------------------------

    \12\ Several preambles for NSPS have recognized that the
measurement methods for the standards highlight the basis for the
test methods selected and that the selected test methods will not
necessarily measure emissions as they would exist upon release to
the atmosphere. See, e.g., 40 FR 46250 (Oct. 6, 1975); 43 FR 7568
(Feb. 23, 1978); 44 FR 34840 (June 15, 1979); 45 FR 66742 (Oct. 7,
1980).
---------------------------------------------------------------------------

    On the other hand, SIPs, including the NSR permitting requirements,
approved under section 110 of the Act, must provide for the attainment
and maintenance of NAAQS designed to protect public health and welfare.
If the enforceable limits in a PSD permit for PM10 and
PM2.5 do not include the condensable PM fraction, simply
because the applicable NSPS does not include it, the source's
demonstration of compliance with the NAAQS and increments for
PM10 and PM2.5 would be incomplete and subject to
challenge. Similarly, for nonattainment NSR, it is important to
consider the condensable PM fraction so that all PM10 and
PM2.5 emissions increases can be considered for
applicability determinations and for determining required offsets.
    Thus, the final rule retains the general requirement to include the
condensable fraction of PM10 and PM2.5 emissions
in each case for purposes of NSR permitting under the EPA's regulations
at 40 CFR 51.166(b)(49)(i), 40 CFR 52.21(b)(50)(i), 40 CFR
51.165(a)(1)(xxxvii), and 40 CFR part 51 Appendix S. Because of these
provisions, the definition of ``PM10 emissions'' in section
51.100(rr) of the EPA's regulations should not be construed to limit
PM10 emissions to only the fraction covered by an applicable
test method in an NSPS or SIP. Section 51.100(rr) defines
``PM10 emissions'' as measured under the chapter of the Code
of Federal Regulations where this provision is located or an approved
SIP. The more specific definitions of the term ``regulated NSR
pollutant'' referenced above are part of the same chapter and thus
applicable under the general definition of ``PM10
emissions'' in section 51.100(rr). Therefore, the specific definitions
in the NSR regulations control in this instance to require inclusion of
the condensable fraction of PM10 emissions in all cases
under the NSR program.

C. Defining PM To Include Condensable PM in the State Implementation
Plan (SIP)

    In the preamble to the notice of proposed rulemaking (NPRM), we
indicated that when a proposed source or modification emits a pollutant
that is regulated under section 111 of the CAA, but the source itself
is not subject to an NSPS for that pollutant, the reviewing authority
will determine the applicable test method to be used to determine the
source's compliance, e.g., with regard to the possible inclusion of
condensable PM in the measurement of ``particulate matter emissions.''
See 77 FR at 15661 and 15663 (proposed regulatory text at 40 CFR
51.166(b)(49)(ii) providing that ``[f]or sources not currently
regulated by an applicable NSPS, measurement of such pollutant shall be
determined by the reviewing authority'').
    Comment: Two industry commenters opine that reviewing authorities
should not be allowed to define PM as requiring consideration of
condensable PM where the SIP does not already require it of a
particular source category. One of the industry commenters suggest that
the EPA replace the reference to the ``reviewing authority'' in
proposed 40 CFR 51.166(b)(49)(ii) and 52.21(b)(50)(ii) with a reference
to the ``applicable state implementation plan.'' The commenter states
that the proposed language suggests that, for a non-NSPS source, a
permitting authority could specify a measurement method that is
inconsistent with the SIP.
    Response: The EPA believes that states should follow the
requirements set forth in their EPA-approved SIP and that it would be
inappropriate to make decisions on individual permits that are
inconsistent with the applicable SIP provisions. Thus, where a SIP
provides that only the filterable fraction of ``particulate matter
emissions'' be counted, individual sources should not be selectively
required to count the condensable PM fraction as well. We do not
believe, however, that explicit language needs to be included in the
regulatory text as recommended by the commenters. As explained earlier
in this preamble, we have decided to take no final action at this time
with regard to revising subparagraph (ii) of the definition ``regulated
NSR pollutant.'' Accordingly, this final action does not revise the PSD
regulations to include the proposed language or any clarification of
it. As explained earlier, the definition of ``particulate matter
emissions'' at 40 CFR 51.100(pp) provides that states can rely on a
test method contained in ``an approved State implementation plan'' to
determine the measurement of that pollutant. In the absence of specific
language in the definition of ``regulated NSR pollutant,'' this
definition provides sufficient criteria for the reviewing authority to
determine the applicable method under federal law for measuring
``particulate matter emissions,'' and should address the commenters'
concerns about the reviewing authority using a method inconsistent with
the SIP in circumstances where the reviewing authority is implementing
the approved SIP.
    Comment: One state agency commenter provides that the actual
proposed rule language (40 CFR 51.166(b)(49)(ii) and 52.21(b)(50)(ii))
only accounts for two of three stated cases cited by the EPA where
condensable PM could be included in the measurement of ``particulate
matter emissions,'' and omits the EPA-cited case where the applicable
SIP already requires that the condensable PM fraction be included in
the measurement of ``particulate matter emissions.'' The commenter
suggests that the EPA reconsider and specifically list the SIP
requirement case (where condensable PM should still be counted) in the
final rule language to avoid confusion in regulatory intent.
    Response: The commenter is correct in identifying the omission of
the cited regulatory language in the proposal. For reasons discussed
above, we are not adopting the proposed revisions to sections
51.166(b)(49)(ii) and 52.21(b)(50)(ii) at this time. In light of the
definition of ``particulate matter emission'' in section 51.100(pp), we
do not believe that a direct reference to the SIP needs to be included
in sections 51.166(b)(49)(ii) and 52.21(b)(50)(ii). Accordingly, it
should be clear that a state may choose to adopt a requirement for a
test method that includes the condensable PM fraction as part of
``particulate matter emissions,'' for PSD applicability and permit
enforcement purposes. It should also be noted that such requirement in
a state's SIP will not similarly affect PSD sources in other states or
SIP jurisdictions.\13\
---------------------------------------------------------------------------

    \13\ See Memo from Stephen L. Johnson, Administrator, to
Regional Administrators re: EPA's Interpretation of Regulations that
Determine Pollutants Covered by Federal Prevention of Significant
Deterioration (PSD) Permit Program, at 15 (Dec. 18, 2008) (outlining
interpretation of CAA section 116); 74 FR 51535, 51542-43 (Oct. 7,
2009) (proposing to retain Johnson Memo interpretation on
reconsideration); 75 FR 17004, 17011-12 (April 2, 2010) (final
action on reconsideration of interpretation).
---------------------------------------------------------------------------

D. Comments Related to Special EPA Policies for Implementing PM
Requirements Under the NSR Program

    Comment: Two industry commenters express concerns that the
discussion in the March 16, 2012, proposal preamble regarding the
history of the EPA's regulation of PM under the NSR program, failed to
include a description of several key policy decisions, including the
1997 PM10 Surrogate

Policy, the Grandfather Policy for PM2.5 (for pending
permits under the federal PSD program) and the condensable PM
Transition Policy. These commenters indicate that there are continued
concerns regarding the EPA's PM regulations that have created
uncertainty and hardship for the regulated community, and specifically
requests that the EPA include a discussion of these policies in the
final rule preamble for accuracy purposes.
    Response: This preamble includes a limited discussion about each of
these special policies for implementing the PM program in section III.C
of this preamble (New Source Review Program for PM). In addition, we
have included references to earlier actions that provide greater
details of the respective policies. Thus, we do not believe that it is
necessary to provide more lengthy descriptions of the individual
policies herein.

E. Other Comments Unrelated to the Final Rule

    Several commenters raise concerns of either a policy or technical
nature unrelated to the actions associated with this final rule. For
example, two industry commenters state that EPA Method 201A cannot be
used to accurately measure filterable PM10 and
PM2.5 from emissions units that use wet controls. Another
commenter recommends that the EPA continue work toward development of a
methodology known as the air dilution test methodology. A commenter
recommends that the EPA accelerate its progress toward promulgating
complete and appropriate modeling and monitoring methods necessary to
provide the required technical support for effective and equitable
implementation of PM2.5 major NSR permitting. Finally, one
commenter requests that the EPA review guidance documents to the states
to assure that the EPA is giving them correct and clear direction
regarding the need to test certified stationary engines. The details of
these comments can be reviewed in the docket where all of the
individual sets of comments received for this rulemaking have been
posted. The EPA believes that these comments generally pertain to
broader PM2.5 issues but are not relevant to this limited
action to revise the definition of ``regulated NSR pollutant'' as it
applies to condensable PM emissions. As such, the issues described
above are more appropriately addressed in forums other than this final
rule.

VI. Statutory and Executive Order Reviews

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'' under the
terms of Executive Order 12866 (58 FR 51735, October 4, 1993), and is
therefore not subject to review under Executive Orders 12866 and 13563
(76 FR 3821, January 21, 2011).

B. Paperwork Reduction Act

    This action does not impose an information collection burden under
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
Burden is defined at 5 CFR 1320.3(b). This final action removes an
unintended requirement to include condensable PM when quantifying
``particulate matter emissions'' from proposed new major stationary
sources and major modifications subject to the PSD program. The change
will eliminate an unintended burden.

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.
    For purposes of assessing the impacts of this rule on small
entities, ``small entity'' is defined as: (1) A small business as
defined by the Small Business Administration's regulations at 13 CFR
121.201; (2) a small governmental jurisdiction that is a government of
a city, county, town, school district or special district with a
population of less than 50,000; and (3) a small organization that is
any not-for-profit enterprise which is independently owned and operated
and is not dominant in its field.
    After considering the economic impacts of this final rule on small
entities, which removes an unintended requirement to include
condensable PM when quantifying ``particulate matter emissions'' from
proposed new major stationary sources and major modifications, I
certify that this action will not have a significant economic impact on
a substantial number of small entities. This final rule will not impose
any requirements on small entities because small entities are not
subject to the requirements of this rule.

D. Unfunded Mandates Reform Act

    This final action contains no federal mandates under the provisions
of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2
U.S.C. 1531-1538 for state, local or tribal governments or the private
sector. The action does not impose any enforceable duty on any state,
local or tribal governments or the private sector. This action removes
an unintended requirement to include condensable PM when quantifying
``particulate matter emissions'' from proposed new major stationary
sources and major modifications. Thus, this action is not subject to
the requirements of sections 202 or 205 of UMRA.
    This final action is also not subject to the requirements of
section 203 of UMRA because it contains no regulatory requirements that
might significantly or uniquely affect small governments. As noted
above, this final action removes an unintended requirement to include
condensable PM when quantifying ``particulate matter emissions'' from
proposed new major stationary sources and major modifications.

E. Executive Order 13132: Federalism

    This final 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,
as specified in Executive Order 13132. This final action removes the
unintended requirement to include condensable PM when quantifying
``particulate matter emissions'' from proposed new major stationary
sources and major modifications. The requirement being removed was
inadvertently included in the 2008 rule for implementation of the
PM2.5 NSR program. Thus, Executive Order 13132 does not
apply to this rule. Nevertheless, in the spirit of Executive Order
13132, and consistent with EPA policy to promote communications between
EPA and state and local governments, EPA specifically solicited comment
on the proposed action from state and local officials.

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

    This action does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). This final
action removes the

unintended requirement to include condensable PM when quantifying
``particulate matter emissions'' from proposed new major stationary
sources and major modification. The removed requirement was
inadvertently included in the 2008 rule for implementation of the
PM2.5 NSR program.
    The Act provides for states to develop plans to regulate emissions
of air pollutants within their jurisdictions. The Tribal Air Rule (TAR)
under the Act gives tribes the opportunity to develop and implement Act
programs to attain and maintain the PM2.5 NAAQS, but leaves
to the discretion of the tribes the decision of whether to develop
these programs and which programs, or appropriate elements of a
program, they will adopt. Thus, Executive Order 13175 does not apply to
this action.

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

    This final action is not subject to Executive Order 13045 (62 FR
19885, April 23, 1997) because it is not economically significant as
defined in Executive Order 12866, and because the agency does not
believe the environmental health or safety risks addressed by this
action to eliminate an unintended requirement present a
disproportionate risk to children. The removal of this requirement will
not affect one of the basic requirements of the PSD program; that new
and modified major sources must demonstrate that any new emissions do
not cause or contribute to air quality in violation of the NAAQS.

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

    This action is not subject to Executive Order 13211 (66 FR 28355
(May 22, 2001)), because it is not a significant regulatory action
under Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(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 the 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. The NTTAA directs the EPA to
provide Congress, through OMB, explanations when the agency decides not
to use available and applicable voluntary consensus standards.
    This action does not involve technical standards. Therefore, the
EPA did not consider the use of any voluntary consensus standards.

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

    Executive Order 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 populations and low-income
populations in the United States.
    The EPA has determined that this final rule action to remove an
inadvertent error that was introduced in a 2008 rulemaking will not
have adverse human health or environmental effects on minority or low-
income populations because it does not appreciably affect the level of
protection provided to human health or the environment.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. The EPA will submit a report containing this rule and
other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A Major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is not a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective on December 24, 2012.

L. Judicial Review

    Under CAA section 307(b)(1), judicial review of this final rule is
available only by filing a petition for review in the United States
Court of Appeals for the District of Columbia Circuit by December 24,
2012. Under CAA section 307(d)(7)(B), only an objection to this final
rule that was raised with reasonable specificity during the period for
public comment (including any public hearing) can be raised during
judicial review. This section also provides a mechanism for the EPA to
convene a proceeding for reconsideration ``[i]f the person raising an
objection can demonstrate to the Administrator that it was
impracticable to raise such objection within [the period for public
comment] or if the grounds for such objection arose after the period
for public comment (but within the time specified for judicial review)
and if such objection is of central relevance to the outcome of the
rule[.]'' Any person seeking to make such a demonstration to us should
submit a Petition for Reconsideration to the Office of the
Administrator, Environmental Protection Agency, Room 3000, Ariel Rios
Building, 1200 Pennsylvania Ave. NW., Washington, DC 20004, with a copy
to the person listed in the preceding FOR FURTHER INFORMATION CONTACT
section, and the Associate General Counsel for the Air and Radiation
Law Office, Office of General Counsel (Mail Code 2344A), Environmental
Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20004.
Note, under CAA section 307(b)(2), the requirements established by this
final rule may not be challenged separately in any civil or criminal
proceedings brought by the EPA to enforce these requirements.

VII. Statutory Authority

    The statutory authority for this final action is provided by
sections 101, 160, 163, 165, 166, 301 and 307(d) of the Act as amended
(42 U.S.C. 7401, 7470, 7473, 7475, 7476, 7601 and 7607(d)).

List of Subjects

40 CFR Part 51

    Environmental protection, Administrative practices and procedures,
Air pollution control, Intergovernmental relations.

40 CFR Part 52

    Environmental protection, Administrative practices and procedures,
Air pollution control, Incorporation by reference, Intergovernmental
relations.

    Dated: October 12, 2012.
Lisa P. Jackson,
Administrator.

    For the reasons stated in the preamble, title 40, chapter I of the
Code of Federal Regulations is amended as follows:

PART 51--[AMENDED]

0
1. The authority citation for part 51 continues to read as follows:

    Authority:  23 U.S.C. 101; 42 U.S.C. 7401-7671q.

Subpart I--[Amended]

0
2. Section 51.166 is amended by revising paragraph (b)(49)(i) and by
removing paragraph (b)(49)(vi). The revised text reads as follows:

Sec.  51.166  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (49) * * *
    (i) Any pollutant for which a national ambient air quality standard
has been promulgated. This includes, but is not limited to, the
following:
    (a) PM2.5 emissions and PM10 emissions shall
include gaseous emissions from a source or activity which condense to
form particulate matter at ambient temperatures. On or after January 1,
2011, such condensable particulate matter shall be accounted for in
applicability determinations and in establishing emissions limitations
for PM2.5 and PM10 in PSD permits. Compliance
with emissions limitations for PM2.5 and PM10
issued prior to this date shall not be based on condensable particulate
matter unless required by the terms and conditions of the permit or the
applicable implementation plan. Applicability determinations made prior
to this date without accounting for condensable particulate matter
shall not be considered in violation of this section unless the
applicable implementation plan required condensable particulate matter
to be included;
    (b) Any pollutant identified under this paragraph (b)(49)(i)(b) as
a constituent or precursor to a pollutant for which a national ambient
air quality standard has been promulgated. Precursors identified by the
Administrator for purposes of NSR are the following:
    (1) Volatile organic compounds and nitrogen oxides are precursors
to ozone in all attainment and unclassifiable areas.
    (2) Sulfur dioxide is a precursor to PM2.5 in all
attainment and unclassifiable areas.
    (3) Nitrogen oxides are presumed to be precursors to
PM2.5 in all attainment and unclassifiable areas, unless the
State demonstrates to the Administrator's satisfaction or EPA
demonstrates that emissions of nitrogen oxides from sources in a
specific area are not a significant contributor to that area's ambient
PM2.5 concentrations.
    (4) Volatile organic compounds are presumed not to be precursors to
PM2.5 in any attainment or unclassifiable area, unless the
State demonstrates to the Administrator's satisfaction or EPA
demonstrates that emissions of volatile organic compounds from sources
in a specific area are a significant contributor to that area's ambient
PM2.5 concentrations.
* * * * *

0
3. Appendix S to Part 51 is amended by revising paragraph II.A.31(ii)
and by removing paragraphs II.A.31(iii) and (iv). The revised text
reads as follows:

Appendix S to Part 51--Emission Offset Interpretative Ruling

* * * * *
    II. * * *
    A. * * *
    31. * * *
    (ii) Any pollutant for which a national ambient air quality
standard has been promulgated. This includes, but is not limited to,
the following:
    (a) PM2.5 emissions and PM10 emissions
shall include gaseous emissions from a source or activity, which
condense to form particulate matter at ambient temperatures. On or
after January 1, 2011, such condensable particulate matter shall be
accounted for in applicability determinations and in establishing
emissions limitations for PM2.5 and PM10 in
permits issued under this ruling. Compliance with emissions
limitations for PM2.5 and PM10 issued prior to
this date shall not be based on condensable particulate matter
unless required by the terms and conditions of the permit or the
applicable implementation plan. Applicability determinations made
prior to this date without accounting for condensable particulate
matter shall not be considered in violation of this section unless
the applicable implementation plan required condensable particulate
matter to be included.
    (b) Any pollutant that is identified under this paragraph
II.A.31(ii)(2) as a constituent or precursor of a general pollutant
listed under paragraph II.A.31(i) or (ii) of this Ruling, provided
that such constituent or precursor pollutant may only be regulated
under NSR as part of regulation of the general pollutant. Precursors
identified by the Administrator for purposes of NSR are the
following:
    (1) Volatile organic compounds and nitrogen oxides are
precursors to ozone in all ozone nonattainment areas.
    (2) Sulfur dioxide is a precursor to PM2.5 in all
PM2.5 nonattainment areas.
* * * * *

PART 52--[Amended]

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

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

Subpart A--[Amended]

0
5. Section 52.21 is amended by revising paragraph (b)(50)(i) and by
removing paragraph (b)(50)(vi). The revised text reads as follows:

Sec.  52.21  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (50) * * *
    (i) Any pollutant for which a national ambient air quality standard
has been promulgated. This includes, but is not limited to, the
following:
    (a) PM2.5 emissions and PM10 emissions shall
include gaseous emissions from a source or activity, which condense to
form particulate matter at ambient temperatures. On or after January 1,
2011, such condensable particulate matter shall be accounted for in
applicability determinations and in establishing emissions limitations
for PM2.5 and PM10 in PSD permits. Compliance
with emissions limitations for PM2.5 and PM10
issued prior to this date shall not be based on condensable particulate
matter unless required by the terms and conditions of the permit or the
applicable implementation plan. Applicability determinations made prior
to this date without accounting for condensable particulate matter
shall not be considered in violation of this section unless the
applicable implementation plan required condensable particulate matter
to be included.
    (b) Any pollutant identified under this paragraph (b)(50)(i)(b) as
a constituent or precursor for a pollutant for which a national ambient
air quality standard has been promulgated. Precursors identified by the
Administrator for purposes of NSR are the following:
    (1) Volatile organic compounds and nitrogen oxides are precursors
to ozone in all attainment and unclassifiable areas.
    (2) Sulfur dioxide is a precursor to PM2.5 in all
attainment and unclassifiable areas.
    (3) Nitrogen oxides are presumed to be precursors to
PM2.5 in all attainment and unclassifiable areas, unless the
State demonstrates to the Administrator's satisfaction or EPA
demonstrates that emissions of nitrogen oxides from sources in a
specific area are not a significant contributor to that area's ambient
PM2.5 concentrations.
    (4) Volatile organic compounds are presumed not to be precursors to
PM2.5 in any attainment or unclassifiable area, unless the
State demonstrates to the Administrator's satisfaction or EPA

demonstrates that emissions of volatile organic compounds from sources
in a specific area are a significant contributor to that area's ambient
PM2.5 concentrations.
* * * * *
[FR Doc. 2012-25978 Filed 10-24-12; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register Volume 82, Number 71 (Friday, April 14, 2017)]
[Notices]
[Pages 18044-18045]
[FR Doc No: 2017-07535]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80422; File No SR-CBOE-2017-023]

Self-Regulatory Organizations; Chicago Board Options Exchange,
Incorporated; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Eliminate Obsolete References in the Fees
Schedule

April 10, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on April 3, 2017, Chicago Board Options Exchange, Incorporated
(the ``Exchange'' or ``CBOE'') filed with the Securities and Exchange
Commission (the ``Commission'') the proposed rule change as described
in Items I, II, and III below, which Items have been prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to eliminate obsolete references in the Fees
Schedule. The text of the proposed rule change is available on the
Exchange's Web site (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the
Secretary, and at the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant aspects of such
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its Fees Schedule. Specifically, the
Exchange proposes to eliminate references to (i) mini-options, (ii) SPX
Range Options (``SROs''), (iii) Floor Broker Workstation (``FBW'') and
(iv) Livevol X (``LVX'') Fees.
    First, the Exchange notes it no longer lists mini-options or SROs.
As such, the Exchange proposes to delete from the Fees Schedule
references to mini-options and SROs, as such references are no longer
necessary and obsolete.
    Next, the Exchange proposes to eliminate all references to FBW in
the Fees Schedule. The Exchange no longer offers FBW. As such, all
references to FBW will be eliminated from the Fees Schedule as it is
unnecessary to maintain and is now obsolete.
    Lastly, the Exchange proposes to eliminate the Livevol X (LVX)
section of the Livevol Fees table. The Exchange notes that LVX has been
sold to another party and as such it will no longer assesses any LVX
related fees. The

Exchange therefore proposes to eliminate the LVX section of the Fees
Schedule (i.e., the Application fees for Standard and Enterprise Users
and the LV Routing Intermediary Fee). The Exchange believes eliminating
fees from the Fees Schedule that are no longer charged by the Exchange
will eliminate confusion.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\3\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \4\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and facilitating
transactions in securities, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and,
in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange believes eliminating references to (i) classes that
are no longer listed on the Exchange, (ii) functionality that is no
longer offered at the Exchange and (iii) fees that will no longer be
assessed due to the sale of LVX to a third party, will help to avoid
confusion, thereby removing impediments to and perfecting the mechanism
of a free and open market and a national market system. Additionally,
the Exchange notes that no substantive changes are being made by the
proposed rule change.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will
impose any burden on intramarket or intermarket competition that is not
necessary or appropriate in furtherance of the purposes of the Act. The
proposed change to eliminate obsolete references to delisted options
and fees and functionality no longer offered will alleviate confusion
and is not intended for competitive reasons and only applies to CBOE.
The Exchange also notes that no rights or obligations of Permit Holders
are affected by the change.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange neither solicited nor received comments on the
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \5\ and paragraph (f) of Rule 19b-4 \6\
thereunder. At any time within 60 days of the filing of the proposed
rule change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-CBOE-2017-023 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields,
Secretary, Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549.

All submissions should refer to File Number SR-CBOE-2017-023. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-CBOE-2017-023 and should be
submitted on or before May 5, 2017.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-07535 Filed 4-13-17; 8:45 am]
 BILLING CODE 8011-01-P