[Federal Register Volume 78, Number 167 (Wednesday, August 28, 2013)]
[Proposed Rules]
[Pages 53113-53124]
[FR Doc No: 2013-21010]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R09-OAR-2013-0534; FRL-9900-35-Region 9]

Approval and Promulgation of Implementation Plans; California;
San Joaquin Valley; Contingency Measures for the 1997 PM2.5 Standards

AGENCY: U.S. Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: EPA is proposing to approve a state implementation plan (SIP)
revision submitted by the State of California to address Clean Air Act
nonattainment area contingency measure requirements for the 1997 annual
and 24-hour fine particulate matter (PM2.5) national ambient
air quality standards in the San Joaquin Valley. Final approval of this
SIP revision would terminate the sanctions clocks and a federal
implementation plan clock that were triggered by EPA's partial
disapproval of a related SIP submission on November 9, 2011 (76 FR
69896).

DATES: Any comments must arrive by September 27, 2013.

ADDRESSES: Submit comments, identified by docket number EPA-R09-OAR-
2013-0534, by one of the following methods:
     Federal eRulemaking Portal: www.regulations.gov. Follow
the online instructions.
     Email<EMAIL_ADDRESS>     Mail or deliver: Frances Wicher, Office of Air Planning
(AIR-2), U.S. Environmental Protection Agency Region 9, 75 Hawthorne
Street, San Francisco, CA 94105.
    Instructions: All comments will be included in the public docket
without change and may be made available online at www.regulations.gov,
including any personal information provided, unless the comment
includes Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute. Information that you
consider CBI or otherwise protected should be clearly identified as
such and should not be submitted through www.regulations.gov or email.
The www.regulations.gov Web site is an ``anonymous access'' system, and
EPA will not know your identity or contact information unless you
provide it in the body of your comment. If you send email directly to
EPA, your email address will be automatically captured and included as
part of the public comment. If EPA cannot read your comments due to
technical difficulties and cannot contact you for clarification, EPA
may not be able to consider your comment.
    Docket: The index to the docket (docket number EPA-R09-OAR-2013-
0534) for this action is available electronically on the
www.regulations.gov Web site and in hard copy at EPA Region 9, 75
Hawthorne Street, San Francisco, California, 94105. While all documents
in the docket are listed in the index, some information may be publicly
available only at the hard copy location (e.g., copyrighted material),
and some may not be publicly available at either location (e.g., CBI).
To inspect the hard copy materials, please schedule an appointment
during normal business

hours with the contact listed in the FOR FURTHER INFORMATION CONTACT
section below.

FOR FURTHER INFORMATION CONTACT: Frances Wicher, Air Planning Office
(AIR-2), U.S. Environmental Protection Agency, Region 9, (415) 972-
3957<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us'' and
``our'' refer to EPA.

Table of Contents

I. Background
II. Clean Air Act Requirements for Contingency Measures
III. Review of the Submitted San Joaquin Valley PM2.5
Contingency Measure SIP
    A. The Submitted San Joaquin Valley PM2.5 Contingency
Measure SIP
    B. Clean Air Act Procedural Requirements for SIP Submissions
    C. Evaluation of the Contingency Measure SIP
    1. Contingency Measures for Failure To Meet the 2012 Reasonable
Further Progress Milestone
    2. Contingency Measures for Failure To Attain
    D. Clean Air Act Section 110(l)
IV. Proposed Actions and Request for Public Comment
V. Statutory and Executive Order Reviews

I. Background

    On July 18, 1997, EPA established new national ambient air quality
standards (NAAQS) for PM2.5 (particulate matter with a
diameter of 2.5 microns or less) including annual standards of 15.0
micrograms per cubic meter ([micro]g/m\3\) based on a 3-year average of
annual mean PM2.5 concentrations and 24-hour (daily)
standards of 65 [micro]g/m\3\ based on a 3-year average of the 98th
percentile of 24-hour concentrations. See 62 FR 36852 and 40 CFR 50.7.
Effective April 5, 2005, EPA designated the San Joaquin Valley (SJV) in
California as nonattainment for the 1997 annual and 24-hour
PM2.5 standards. See 70 FR 944 (January 5, 2005) and 40 CFR
81.305.\1\ The SJV PM2.5 nonattainment area is located in
the southern half of California's central valley and includes all or
part of eight counties: San Joaquin, Stanislaus, Merced, Madera,
Fresno, Tulare, Kings, and the valley portion of Kern. The local air
district with primary responsibility for developing the state
implementation plan (SIP) to attain the PM2.5 NAAQS in this
area is the San Joaquin Valley Unified Air Pollution Control District
(SJVUAPCD or ``District'').
---------------------------------------------------------------------------

    \1\ EPA has also designated the San Joaquin Valley as
nonattainment for the more stringent 24-hour PM2.5 NAAQS
of 35 [micro]g/m\3\, which EPA promulgated on October 17, 2006 and
codified at 40 CFR 50.13 (74 FR 58688, November 13, 2009). In this
preamble, all references to the PM2.5 NAAQS, unless
otherwise specified, are to the 1997 24-hour PM2.5
standards of 65 [micro]g/m\3\ and annual standards of 15 [micro]g/
m\3\ as codified in 40 CFR 50.7.
---------------------------------------------------------------------------

    California has made numerous SIP submittals to address the SJV's
nonattainment designation for the 1997 PM2.5 NAAQS. The two
principal ones are the SJVUAPCD's ``2008 PM2.5 Plan,''
submitted on June 30, 2008, and the California Air Resources Board's
(CARB's) ``State Strategy for California's 2007 State Implementation
Plan'' (``2007 State Strategy''), submitted on November 16, 2007 and
revised in 2009 and 2011 through CARB's ``2009 State Strategy Status
Report'' \2\ and ``2011 Progress Report.'' \3\
---------------------------------------------------------------------------

    \2\ CARB, ``Status Report on the State Strategy for California's
2007 State Implementation Plan (SIP) and Proposed Revision to the
SIP Reflecting Implementation of the 2007 State Strategy,'' dated
March 24, 2009, adopted April 24, 2009.
    \3\ CARB, ``Progress Report on Implementation of
PM2.5 State Implementation Plans (SIP) for the South
Coast and San Joaquin Valley Air Basins and Proposed SIP
Revisions,'' dated March 29, 2011 and adopted April 28, 2011.
---------------------------------------------------------------------------

    On November 9, 2011, EPA partially approved and partially
disapproved the District's 2008 PM2.5 Plan and the revised
2007 State Strategy (collectively the ``SJV PM2.5 SIP'') (76
FR 69896). EPA's partial disapproval of the SJV PM2.5 SIP
was based on our determination that its contingency measure provisions
failed to meet the requirements of Clean Air Act (CAA) section
172(c)(9) and 40 CFR 51.1012, which require that the SIP for each
PM2.5 nonattainment area contain contingency measures to be
implemented if the area fails to make reasonable further progress (RFP)
or to attain the NAAQS by the applicable attainment date. See 76 FR
41338, 41357 to 41359 (July 13, 2011) and 76 FR 69896, 69918 to 69919
and 69924.
    As we explained in our proposed action on the SJV PM2.5
SIP, contingency measures must be fully adopted rules or control
measures that are ready to be implemented quickly without significant
additional action by the state. See 76 FR 41338, 41357; see also
``Final Technical Support Document and Responses to Comments, Final
Rulemaking Action on the San Joaquin Valley PM2.5 State
Implementation Plan,'' Air Division, U.S. EPA Region 9, September 30,
2011 (``Final TSD for SJV PM2.5 SIP'') at pp. 126 to 134. We
further explained that these measures must not be relied on in the plan
to demonstrate RFP or attainment and should provide SIP-creditable
emission reductions equivalent to approximately one year of RFP. Id.
Finally, we stated that the SIP should contain trigger mechanisms for
the contingency measures and specify a schedule for their
implementation. Id.
    The contingency measure provisions in the SJV PM2.5 SIP
consisted of several different types of measures, including surplus
emission reductions in the RFP demonstration; commitments by the
District to take specific actions; a contingency provision in the
District's Rule 4901, ``Wood Burning Fireplaces and Wood Burning
Heaters Residential Woodburning;'' post-attainment year (2015)
reductions from CARB mobile source measures; reductions resulting from
the District's expenditure of incentive program funds; and other
reductions from implemented District rules that were not otherwise
relied on in the attainment and RFP demonstrations. See 76 FR 41338,
41357 to 41359; see also Final TSD for SJV PM2.5 SIP at pp.
126 to 136. EPA found that, although several of these measures
individually qualified for approval as contingency measures,
collectively the measures identified in the SJV PM2.5 SIP
did not provide sufficient SIP-creditable emission reductions for
contingency measure purposes . See id. and 76 FR 69896, 69918 to 69919.
    Specifically, for RFP contingency measures for the 2012 milestone
year, the SJV PM2.5 SIP relied on surplus reductions of
direct PM2.5 and the two regulated precursors \4\ in the RFP
demonstration, which provided some of the needed emission reductions
but did not provide enough to achieve roughly one-year's worth of RFP
(76 FR 41338, 41359 (Table 10)).\5\ For attainment contingency measures
in 2015, the SJV PM2.5 SIP relied on the State's continued
implementation of mobile source measures, a contingency provision in
the District's Rule 4901, and surplus reductions from other District
rules that would reduce emissions substantially in 2015. Overall, the
attainment contingency measures in the SJV PM2.5 SIP
provided all of the needed SOx reductions but only about
two-thirds of the needed NOX and direct PM2.5
reductions for 2015. Accordingly, we disapproved the contingency
measure provisions in the SJV PM2.5 SIP for

failure to satisfy the CAA's contingency measure requirements for the
2012 RFP milestone year and for the 2015 attainment date.\6\ See 76 FR
41338, 41359 and 76 FR 69896, 69924.
---------------------------------------------------------------------------

    \4\ To demonstrate attainment of the 1997 PM2.5
NAAQS, the SJV PM2.5 SIP relied on reductions of direct
PM2.5 and two PM2.5 precursor pollutants:
nitrogen oxides (NOX) and sulfur oxides (SOx).
It did not rely on reductions of the two other chemical precursors
to PM2.5: volatile organic compounds (VOC) and ammonia.
See 76 FR 41338, 41353 and 76 FR 69896, 69924.
    \5\ The SJV PM2.5 SIP also contained provisions
addressing RFP contingency measures for the 2009 milestone year, but
EPA concluded it was not necessary to evaluate these provisions
given the District had demonstrated that the area met the applicable
2009 RFP milestone year targets for direct PM2.5,
NOX, and SOx (76 FR 41338, 41358 to 41359).
    \6\ EPA's partial disapproval of the SJV PM2.5 SIP
based on these deficiencies triggered mandatory sanctions clocks
under CAA section 179(b) and an obligation on EPA to promulgate a
Federal Implementation Plan (FIP) within two years (76 FR 69896,
69924). The first sanctions, the offset sanction under CAA section
179(b)(2), became effective in the SJV area 18 months after the
effective date of EPA's final disapproval, i.e., on July 9, 2013 (40
CFR 52.31(d)). In a separate action published in today's Federal
Register, EPA is staying the offset sanction and deferring the
application of highway funding sanctions, based on today's proposed
rule to fully approve the Contingency Measure SIP. See ``Interim
Final Determination to Stay and Defer Sanctions; San Joaquin
Valley'' in the Rules section of today's Federal Register.
---------------------------------------------------------------------------

II. Clean Air Act Requirements for Contingency Measures

    CAA section 172(c)(9) requires that the SIP for each nonattainment
area ``provide for the implementation of specific measures to be
undertaken if the area fails to make reasonable further progress, or to
attain the [NAAQS] by the attainment date applicable under [part D of
title I]'' and requires that these measures ``take effect without
further action by the State or EPA.'' The CAA does not specify how many
contingency measures are required or the magnitude of emission
reductions that must be provided by these measures. Consistent with the
text of section 172(c)(9), however, these measures must be specific,
adopted measures that are ready to be implemented quickly upon failure
to meet RFP or failure of the area to meet the standard by its
attainment date.\7\
---------------------------------------------------------------------------

    \7\ We refer to those measures addressing failure to make RFP as
``RFP contingency measures'' and those measures addressing failure
to attain as ``attainment contingency measures.''
---------------------------------------------------------------------------

    EPA provided guidance on the section 172(c)(9) contingency measure
requirement in an interpretative document entitled ``State
Implementation Plans; General Preamble for the Implementation of Title
I of the Clean Air Act Amendments of 1990,'' 57 FR 13498 (April 16,
1992) (``General Preamble''). As EPA explained in the General Preamble,
``contingency measures should, at a minimum, ensure that an appropriate
level of emission reduction progress continues to be made if attainment
[or] RFP is not achieved and additional planning by the State is
needed'' (57 FR 13498, 13511). These emission reductions would be in
addition to those that were already scheduled to occur in accordance
with the plan for the area. See Id. at n. 2 and 57 FR 13498, 13543 to
13544. Additionally, States must show that their contingency measures
can be implemented with minimal further action on their part and
without additional rulemaking actions such as public hearings or
legislative review. In general, EPA expects actions needed to effect
full implementation of the measures to occur within 60 days after EPA
notifies the State of an area's failure to meet RFP or attain. See 57
FR 13498, 13512 and 13543 to 13544; see also 59 FR 41998, 42014 to
42015 (August 16, 1994) (``PM-10 Addendum'').
    Consistent with these interpretations of the Clean Air Act, EPA
explained in the preamble to its 2007 implementation rule for the 1997
PM2.5 NAAQS that the SIP should contain trigger mechanisms
for the contingency measures, specify a schedule for implementation,
and indicate that the measures will be implemented without significant
further action by the State or EPA. See 72 FR 20586, 20642 to 20645
(April 25, 2007) and 40 CFR 51.1012.\8\
---------------------------------------------------------------------------

    \8\ Although the U.S. Court of Appeals for the District of
Columbia (DC Circuit) recently remanded this rule and directed EPA
to re-promulgate it pursuant to subpart 4 of part D, title I of the
CAA (see Natural Resources Defense Council v. EPA, 706 F.3d 428 (DC
Cir., Jan. 4, 2013)), the court's ruling in this case does not
affect EPA's action on the Contingency Measure SIP. Subpart 4 of
part D, title I of the Act contains no specific provision governing
contingency measures for PM10 or PM2.5
nonattainment areas that supersedes the general contingency measure
requirement for all nonattainment areas in CAA section 172(c)(9).
Thus, even if EPA applies the subpart 4 requirements to our
evaluation of the Contingency Measure SIP and disregards the
provisions of the 2007 PM2.5 implementation rule recently
remanded by the court, the general requirement for contingency
measures in CAA section 172(c)(9) continues to apply.
---------------------------------------------------------------------------

    Contingency measures can include Federal, state, and local measures
already scheduled for implementation that provide emission reductions
in excess of those needed to provide for RFP or expeditious attainment.
The key is that the contingency measures provide for additional
emission reductions that are not relied on for RFP or attainment and
that are not included in the attainment demonstration. The purpose is
``to provide a cushion while the plan is being revised to meet the
missed milestone'' (72 FR 20586, 20642 to 20643). Nothing in the
statute precludes a state from implementing such measures before they
are triggered. See, e.g., LEAN v. EPA, 382 F.3d 575 (5th Cir. 2004)
(upholding contingency measures that were previously required and
implemented where they were in excess of the attainment demonstration
and RFP SIP).
    EPA has approved numerous SIPs under this interpretation--i.e.,
SIPs that use as contingency measures one or more Federal or local
measures that are in place and provide reductions that are in excess of
the reductions required by the attainment demonstration or RFP plan.
See, e.g., 62 FR 15844 (April 3, 1997) (direct final rule approving an
Indiana ozone SIP revision); 62 FR 66279 (December 18, 1997) (final
rule approving an Illinois ozone SIP revision); 66 FR 30811 (June 8,
2001) (direct final rule approving a Rhode Island ozone SIP revision);
66 FR 586 (January 3, 2001) (final rule approving District of Columbia,
Maryland, and Virginia ozone SIP revisions); and 66 FR 634 (January 3,
2001) (final rule approving a Connecticut ozone SIP revision). A state
may use the same measures for both RFP and attainment contingency if
the measures will provide reductions in the relevant years. If these
measures are first triggered for failure to make RFP, however, the
state would need to submit replacement contingency measures for
attainment purposes (57 FR 13498, 13511).
    With respect to the level of emission reductions associated with
contingency measures, EPA has recommended that states consider ``the
potential nature and extent of any attainment shortfall for the area''
and the amount of actual emission reductions required by the SIP
control strategy to attain the standards. See PM-10 Addendum at 42015;
see also 72 FR 20586, 20643. The contingency measures are to be
implemented in the event that the area does not meet RFP or attain the
standards by the attainment date, and ``should represent a portion of
the actual emission reductions necessary to bring about attainment in
area'' (72 FR 20586, 20643). Accordingly, EPA has recommended that the
emission reductions anticipated by the contingency measures should be
equal to approximately one-year's worth of emission reductions needed
to achieve RFP for the area. See id. and PM-10 Addendum at 42015.

III. Review of the Submitted San Joaquin Valley PM2.5 Contingency
Measure SIP

A. The Submitted San Joaquin Valley PM2.5 Contingency Measure SIP

    On July 3, 2013, CARB submitted the ``Quantifying Contingencies for
the 2008 PM2.5 Plan'' (dated June 20, 2013) (``Contingency Measure
SIP'') as a revision to the California State Implementation Plan. The
State and District adopted the Contingency Measure SIP to correct the
SIP deficiencies identified in EPA's November 9, 2011 partial
disapproval of the SJV PM2.5 SIP by (1) confirming that

the SJV area had met its 2012 RFP milestones and (2) expanding upon the
attainment contingency measures in the SJV PM2.5 SIP to
establish a contingency plan that achieves SIP-creditable emission
reductions equivalent to approximately one year's worth of RFP in 2015.
See generally Contingency Measure SIP. The July 3, 2013 submission
includes a copy of the Contingency Measure SIP revision itself; a
letter dated July 3, 2013 from Richard Corey, Executive Officer, CARB,
to Jared Blumenfeld, Regional Administrator, EPA Region 9, submitting
the adopted Contingency Measure SIP for EPA review; CARB Resolution 13-
30 (June 27, 2013) adopting the Contingency Measure SIP; a letter dated
June 21, 2013 from Samir Sheikh, Director of Strategies and Incentives,
SJVUAPCD, to Richard Corey, Executive Officer, CARB, submitting the
adopted Contingency Measure SIP for CARB review and approval; SJVUPACD
Board Resolution No. 13-6-18 approving the Contingency Measure SIP;
technical support documentation; and public process documentation.
    On July 24, 2013, the District clarified its intent that EPA
review, as support documentation for the Contingency Measure SIP,
additional materials related to incentive programs that the District
had submitted to EPA under separate cover. See email dated July 24,
2013, from Samir Sheikh, SJVUAPCD, to Kerry Drake, EPA Region 9, ``RE:
Per our conversation earlier.'' These supplemental materials include:
(1) SJVUAPCD Rule 9610, ``State Implementation Plan Credit for Emission
Reductions Generated through Incentive Programs,'' adopted June 20,
2013; (2) SJVUAPCD, Rule 9610 Final Staff Report (including
appendices), dated June 20, 2013; (3) SJVUAPCD, ``2013 Annual
Demonstration Report,'' dated June 2013 (including associated
electronic ``Data Sheet''); (4) CARB, ``Carl Moyer Program: Guideline
Criteria for On-Road and Off-Road Projects,'' dated July 2013; (5)
CARB, ``San Joaquin Valley Air Pollution Control District Proposed Rule
9610, Responses to U.S. EPA's Request to Address `Integrity Elements'
in the Proposition 1B: Goods Movement Emission Reduction Program
Guidelines,'' draft, revised June 6, 2013; (6) CARB, ``Proposition 1B:
Goods Movement Emission Reduction Program, Final Guidelines for
Implementation,'' adopted February 28, 2008 (selected excerpts); (7)
CARB, ``Proposition 1B: Goods Movement Emission Reduction Program,
Final 2010 Guidelines for Implementation,'' adopted March 25, 2010
(selected excerpts); and (8) CARB, ``The Carl Moyer Program
Guidelines,'' approved April 28, 2011 (selected excerpts). CARB
submitted additional technical support for its PM2.5 to
NOX conversion analysis on August 6, 2013. See Memorandum
dated August 13, 2013 from Scott Bohning, EPA Region 9 to File for
docket EPA-R09-OAR-2013-0534, San Joaquin Valley action; Subject:
Contingency precursor effectiveness ratio using additional information.
    In sum, the Contingency Measure SIP contains (1) the District's
demonstration that actual emission levels in the SJV in 2012 were below
the milestone year targets identified in the SJV PM2.5 SIP
and approved by EPA for the 2012 RFP year; and (2) identification of
contingency measures that provide 2015 emission reductions not relied
on for RFP or attainment that are approximately equivalent to one-
year's worth of RFP. The District's calculation of 2015 emission
reductions in the Contingency Measure SIP includes: reductions from
contingency measures that we previously identified as SIP-creditable
measures as part of our 2011 action on the SJV PM2.5 SIP, a
revised calculation of emission reductions from the District's
woodburning control measure (Rule 4901) based on updated air quality
and emissions data, emission reductions resulting from the District's
implementation of incentive programs, and substitution of surplus
direct PM2.5 reductions for NOX reductions. For
the SJV PM2.5 SIP, emission reductions equivalent to one
year's worth of RFP are 2.5 tpd of direct PM2.5, 31.6 tpd of
NOX and 0.2 tpd of SOx. See 76 FR 41338, 41359
(Table 10) and Final TSD for SJV PM2.5 SIP, p. 131.
    We provide below a summary of our evaluation of the Contingency
Measures SIP. For a more detailed discussion of EPA's analyses, see Air
Division, EPA Region 9, ``Technical Support Document--Proposed Approval
of Clean Air Act Section 172(c)(9) Contingency Measures--San Joaquin
Valley State Implementation Plan for Attainment of the 1997
PM2.5 Standards,'' August 15, 2013 (``Proposal TSD''),
available in the docket for this proposed rule.

B. Clean Air Act Procedural Requirements for SIP Submissions

    CAA sections 110(a) and 110(l) require that revisions to a SIP be
adopted by the State after reasonable notice and public hearing. EPA
has promulgated specific procedural requirements for SIP revisions in
40 CFR part 51, subpart F. These requirements include publication of
notices, by prominent advertisement in the relevant geographic area, of
a public hearing on the proposed revisions, a public comment period of
at least 30 days, and an opportunity for a public hearing.
    CARB's SIP submission includes public process documentation for the
Contingency Measure SIP, including documentation of duly-noticed public
hearings held by the District on June 20, 2013 and by CARB on June 27,
2013. See SJVUAPCD Board Resolution No. 13-6-18, pp. 2 and 3 and CARB
Resolution 13-30, p. 3. We find that the process followed by the
District and CARB in adopting the Contingency Measure SIP complies with
the procedural requirements for SIP revisions under CAA section 110 and
EPA's implementing regulations.\9\
---------------------------------------------------------------------------

    \9\ The State also provided public notice and a hearing on Rule
9610 before submitting the rule and associated support documents to
EPA as a SIP revision. See letter dated June 26, 2013 from Richard
Corey, Executive Officer, CARB to Jared Blumenfeld, Regional
Administrator, EPA Region 9 (submitting Rule 9610) and CARB
Executive Order S-13-006, dated June 26, 2013. EPA is not acting on
Rule 9610 at this time but is reviewing it as support material for
the Contingency Measure SIP. Other supplemental materials related to
incentive programs that the State submitted to EPA under separate
cover are not subject to additional State procedures under the Act
as they provide only technical support and do not alter the
substance of the Contingency Measure SIP. All of these supplemental
materials are available in EPA's docket for this rulemaking.
---------------------------------------------------------------------------

    CAA section 110(k)(1)(B) requires EPA to determine whether a SIP
submission is complete within 60 days of receipt. Our SIP completeness
criteria are found in 40 CFR part 51, Appendix V. We determined that
the Contingency Measure SIP is complete on August 12, 2013. See letter
from dated August 12, 2013 Deborah Jordan, Air Division Director EPA
Region 9 to Richard Corey, Executive Officer, Air Resources Board.

C. Evaluation of the Contingency Measure SIP

1. Contingency Measures for Failure To Meet the 2012 Reasonable Further
Progress Milestone
    The Contingency Measure SIP includes a demonstration that emissions
of direct PM2.5, NOX, and SOx in 2012
were all below the corresponding 2012 RFP milestone year emissions
targets that EPA approved as part of the SJV PM2.5 SIP. See
Contingency Measure SIP, p. 2. To make this demonstration, the District
used the emission inventory from the 2011 Progress Report, adjusted to
remove uncreditable reductions,\10\ and compared it to the SIP-approved
2012 RFP milestone year targets. Based on this comparison, the District

concluded that it met its approved 2012 RFP milestone year targets and,
accordingly, that RFP contingency measures for this milestone year are
no longer needed. Id.
---------------------------------------------------------------------------

    \10\ For a description of these uncreditable reductions, see
Proposal TSD, Table E-4, p. 15.
---------------------------------------------------------------------------

    We agree with the District's conclusion that the SJV area has now
met its approved 2012 RFP milestone year targets \11\ and that RFP
contingency measures for 2012 are, therefore, no longer needed. The
emission inventory used in the RFP demonstration in the SJV
PM2.5 SIP is expressed in tons per average annual day, an
appropriate metric for measuring progress for the annual
PM2.5 standard. The inventory in the 2011 Progress Report,
used in the Contingency Measure SIP to demonstrate that the 2012 RFP
targets have been met, is the most recent average annual day inventory
currently available for the SJV. However, as an additional check, EPA
also reviewed the average winter day inventory recently submitted as
part of the District's 2012 PM2.5 Plan for attaining of the
2006 24-hour PM2.5 NAAQS and determined that the conclusion
that the area has met its approved 2012 milestone year targets is also
supported by this inventory. See Proposal TSD, pp. 16 to 17.
---------------------------------------------------------------------------

    \11\ The 2012 RFP milestone year targets that EPA approved as
part of the RFP demonstration in the SJV PM2.5 SIP are
identified as ``revised projected controlled emissions levels'' for
2012 in EPA's proposed action on the SJV PM2.5 SIP (76 FR
41338, 41357 (Table 9)).
---------------------------------------------------------------------------

    Based on our evaluation, EPA proposes to find that the RFP
contingency measure requirement for the 2012 RFP milestone year is now
moot as applied to the SJV. The sole purpose of RFP contingency
measures is to provide continued progress if an area fails to meet its
RFP goal. Failure to meet the 2012 milestone year target would have
required California to implement RFP contingency measures and to revise
the SJV PM2.5 SIP to assure that the plan still provided for
attainment by the applicable attainment date of April 5, 2015. In this
case, however, the Contingency Measure SIP demonstrates that actual
emission levels in 2012 met the approved 2012 RFP milestone year
targets for all three pollutants (PM2.5, NOX, and
SOX) regulated in the SJV PM2.5 SIP. Accordingly,
RFP contingency measures for 2012 no longer have meaning or purpose,
and therefore EPA proposes to find that the requirement for them is now
moot.
2. Contingency Measures for Failure To Attain
    The Contingency Measure SIP identifies projected emission
reductions for 2015 on which the District is relying to meet the CAA's
attainment contingency measure requirement for the 1997
PM2.5 NAAQS. These projected emission reductions are
categorized as follows: (1) Surplus emission reductions from adopted
and implemented State and District regulatory measures, i.e., emission
reductions not relied on for RFP or attainment; (2) emission reductions
from a contingency provision in the District woodburning rule; (3)
emission reductions resulting from the District's implementation of
incentive programs, and (4) substitution of surplus direct
PM2.5 contingency reductions for NOX contingency
reductions. We address each of these categories of emission reductions
below.
a. Regulatory Measures and Programs
    The SJV PM2.5 SIP, which EPA partially approved and
partially disapproved in November 2011 (76 FR 69896), provided for the
continuing implementation of existing CARB mobile source measures that
will achieve 21 tpd of NOX reductions in 2015. See 76 FR
41338, 41359 (Table 9) and Final TSD for SJV PM2.5 SIP, p.
135. These mobile source emission reductions are surplus to the
reductions relied upon to demonstrate attainment because they occur in
2015 (after implementation of all control measures necessary for
expeditious attainment) \12\ and will achieve approximately two-thirds
of the NOX emission reductions needed to achieve one-year's
worth of RFP. The Contingency Measure SIP also identifies these same
mobile source emissions reductions as attainment contingency measures,
and EPA agrees that these emission reductions qualify for approval as
attainment contingency measures.
---------------------------------------------------------------------------

    \12\ Consistent with CAA section 172(c)(1) and 40 CFR
51.1007(b), the SJV PM2.5 SIP provides for the
implementation of all control measures needed for attainment as
expeditiously as practicable and no later than the beginning of the
year prior to the attainment date (i.e., by January 2014) (76 FR
69896, 69916 to 69917).
---------------------------------------------------------------------------

    Additionally, the SJV PM2.5 SIP showed that continuing
implementation of CARB's mobile source control program and District
rules would provide 3 tpd of SOX reductions beyond the
levels needed for expeditious attainment in 2015. See 76 FR 41338,
41359 (Table 10) and Final TSD for SJV PM2.5 SIP, p. 135.
These surplus reductions are primarily due to the low-sulfur content
requirements in CARB diesel fuel regulations for on- and off-road
equipment\13\ and SOX limits in District Rule 4320 (Advanced
Emission Reduction Option for Boilers) and Rule 4354 (Glass Melting
Furnaces).\14\ The Contingency Measure SIP also identifies these
SOX reductions from State and District control measures as
attainment contingency measures, and EPA agrees that these measures
provide 3 tpd of SOX reductions that are not relied on for
RFP or attainment and, therefore, qualify for approval as attainment
contingency measures.
---------------------------------------------------------------------------

    \13\ See 13 CCR section 2281 (``Sulfur Content of Diesel
Fuel'').
    \14\ EPA approved CARB's diesel fuel regulations on May 12, 2010
(75 FR 26653), Rule 4320 on March 25, 2011 (76 FR 16696), and Rule
4354 on August 29, 2011 (76 FR 53640).
---------------------------------------------------------------------------

    Finally, the SJV PM2.5 SIP included a contingency
provision in section 5.6.5 of District Rule 4901 (Wood Burning
Fireplaces and Wood Burning Heaters). This provision requires that 60
days after EPA finds the SJV has failed to attain the 1997
PM2.5 NAAQS, the District will lower the level at which
mandatory curtailment of residential wood burning is required from a
predicted level of 30 [micro]g/m\3\ to 20 [micro]g/m\3\. EPA approved
this rule, including the contingency provision, on November 10, 2009
(74 FR 57907).
    As part of the SJV PM2.5 SIP, the District had
preliminarily estimated the emissions reduction from this contingency
provision at 1.6 tons of direct PM2.5 per average annual
day. This estimate was derived by reviewing 2006 air quality data to
determine how many additional curtailment days would be required at the
lower (20 [micro]g/m\3\) threshold. As part of the revised analysis
contained in the Contingency Measure SIP, the District reviewed ambient
air quality data for the 2009-2013 period to determine the numbers of
``No Burn'' days that it would have required had the lower mandatory
curtailment level (20 [micro]g/m\3\) been effective during these years.
Based on these updated data, the District revised the estimated
additional emission reductions expected from the Rule 4901 contingency
provision to 3.12 tpd of direct PM2.5 and 0.32 tpd of
NOX. See Contingency Measure SIP, pp. 4 to 6. EPA now finds
that these updated calculations of the projected emission reductions
from Rule 4901 are reasonable and, therefore, agrees with the District
that Rule 4901 provides 3.1 tpd of direct PM2.5 reductions
and 0.3 tpd of NOX reductions that qualify for approval as
attainment contingency measures.
    In sum, taking into account surplus emission reductions in the SJV
PM2.5 SIP that EPA previously identified as available for
contingency measure purposes and the District's revised estimate of
emissions reduction from the contingency provision in the SIP-

approved Rule 4901, the total amount of emission reductions from
regulatory control measures that we are proposing to approve as part of
the Contingency Measure SIP are as follows: 21.3 tpd of NOX
reductions from the continuing implementation of CARB's mobile source
control program and District Rule 4901; 3.1 tpd of direct
PM2.5 reductions from the contingency provision in District
Rule 4901; and 3 tpd of surplus SOX reductions from District
rules limiting SOX emissions and CARB's mobile source
control program, including its low-sulfur diesel fuel regulation.
b. Discretionary Economic Incentive Programs
    The Contingency Measure SIP states that NOX and
PM2.5 emission reductions to be achieved through the
implementation of specific incentive programs in the San Joaquin Valley
are available for contingency measure purposes in 2015. See Contingency
Measure SIP, pp. 7 to 9. The incentive programs identified in the
Contingency Measure SIP for this purpose are as follows: the Carl Moyer
Memorial Air Quality Standards Attainment Program (Carl Moyer Program),
implemented through a partnership between CARB and local air districts;
the Proposition 1B: Goods Movement Emission Reduction Program (Prop
1B), also implemented through a partnership between CARB and local air
districts; and the U.S. Department of Agriculture, Natural Resources
Conservation Service's (NRCS) Environmental Quality Incentives Program
(EQIP), implemented by NRCS. See id. We are proposing to approve 4.15
tpd of NOX reductions and 0.10 tpd of direct
PM2.5 reductions from specific Carl Moyer Program and Prop
1B projects, as identified in the Contingency Measure SIP and in this
proposed rule, for purposes of satisfying the contingency measure
requirement for the 1997 PM2.5 NAAQS.
    The CAA explicitly provides for the use of economic incentives as
one tool for states to use to achieve attainment of the NAAQS. See,
e.g., CAA section 110(a)(2)(A) (requiring that each SIP ``include
enforceable emission limitations and other control measures, means, or
techniques (including economic incentives such as fees, marketable
permits, and auctions of emissions rights), as well as schedules and
timetables for compliance, as may be necessary or appropriate to meet
the applicable requirements of [the Act]''); see also sections
172(c)(6), 183(e)(4). Economic incentive programs (EIPs) use market-
based strategies to encourage the reduction of emissions from
stationary, area, and/or mobile sources in an efficient manner. EPA has
promulgated regulations for statutory EIPs required under section
182(g) of the Act and has issued guidance for discretionary EIPs.\15\
See 59 FR 16690 (April 7, 1994) (codified at 40 CFR part 51, subpart U)
and ``Improving Air Quality with Economic Incentive Programs,'' U.S.
EPA, Office of Air and Radiation, January 2001 (EPA-452/R-01-001)
(``2001 EIP''). Where a State relies upon a discretionary EIP in a SIP
submission, EPA evaluates the programmatic elements of the EIP to
determine whether the resulting emission reductions are quantifiable,
surplus, enforceable and permanent. See 2001 EIP at Section 4.1. These
four fundamental ``integrity elements,'' which apply to all EIPs and
other incentive/voluntary measures relied on for SIP purposes, are
designed to ensure that such programs and measures satisfy the
applicable requirements of the Act. See id.; see also ``Guidance on
Incorporating Voluntary Mobile Source Emission Reduction Programs in
State Implementation Plans (SIPs),'' October 24, 1997 (``1997 VMEP'');
``Incorporating Voluntary Stationary Source Emission Reduction Programs
Into State Implementation Plans--Final Policy,'' January 19, 2001;
``Incorporating Emerging and Voluntary Measures in a State
Implementation Plan (SIP),'' September 2004; ``Guidance on
Incorporating Bundled Measures in a State Implementation Plan,'' August
16, 2005; and ``Roadmap for Incorporating Energy Efficiency/Renewable
Energy Policies and Programs into State and Tribal Implementation
Plans,'' July 2012.
---------------------------------------------------------------------------

    \15\ A ``discretionary economic incentive program'' is ``any EIP
submitted to the EPA as an implementation plan revision for purposes
other than to comply with the statutory requirements of sections
182(g)(3), 182(g)(5), 187(d)(3), or 187(g) of the Act'' (40 CFR
51.491).
---------------------------------------------------------------------------

    We are evaluating the incentive-based emission reductions in the
Contingency Measure SIP in accordance with these fundamental integrity
elements as applied, in particular, to discretionary ``financial
mechanism EIPs'' and ``voluntary mobile source emission reduction
programs'' (VMEPs). See 2001 EIP at Section 8.0 (describing ``financial
mechanism EIP'' as a mechanism that indirectly reduces emissions by
increasing costs for high emitting activities--e.g., through fees/taxes
on emissions and subsidies targeted at promoting pollution-reducing
activities or products) and 1997 VMEP at p. 3 (describing ``VMEP'' as a
mobile source strategy that complements existing regulatory programs
through voluntary, nonregulatory changes in local transportation sector
activity levels or changes in in-use vehicle and engine fleet
composition). A discretionary EIP or VMEP submission must be
accompanied by sufficient technical support for EPA to determine that
the statutory criteria for approval are met--e.g., procedures designed
to compare projected emission reductions with actual emission
reductions achieved; State commitments to monitor, assess, and report
on program implementation and actual emission reductions achieved; and
procedures for the State to remedy emission reduction shortfalls in a
timely manner. See 2001 EIP at Section 5.0 and 1997 VMEP at pp. 6, 7.
The State must also demonstrate that it has adequate personnel and
program resources to implement the program and that the EIP or VMEP
does not interfere with other requirements of the Act. See id. and 2001
EIP at Section 11.0. With respect to VMEPs, EPA has in the past
generally limited the amount of emission reductions allowed in a SIP to
three percent (3 percent) of the total projected future year emission
reductions required to attain the relevant NAAQS, and for any
particular SIP submittal to demonstrate attainment or maintenance of
the NAAQS or progress toward attainment (RFP), 3 percent of the
specific statutory requirement. See 1997 VMEP at 5.
i. Overview of SJVUAPCD's Incentive-Based Emission Reductions
    The Carl Moyer Program is a California grant program established in
1998 that provides funding to encourage the voluntary purchase of
cleaner-than-required engines, equipment, and other emission reduction
technologies. See generally CARB, ``The Carl Moyer Program Guidelines,
Approved Revisions 2011,'' Release Date: February 8, 2013, at Chapter 1
(available electronically at http://www.arb.ca.gov/msprog/moyer/moyer.htm). In its first 12 years, the Carl Moyer Program provided over
$680 million in state and local funds to reduce air pollution from
equipment statewide, e.g., by replacing older trucks with newer,
cleaner trucks, retrofitting controls on existing engines, and
encouraging the early retirement of older, more polluting vehicles. Id.
    The Prop 1B program is a California grant program established in
2007, as a result of State bond funding approved by voters, which
provides $1 billion in funding to CARB to reduce air pollution
emissions and health risks from freight movement along California's
priority trade corridors. Under the enabling legislation (California
Senate Bill 88 and

Assembly Bill 201 (2007)), CARB awards grants to fund projects proposed
by local agencies that are involved in freight movement or air quality
improvements associated with goods movement activities. Upon receipt of
such grants, the local agencies are then responsible for providing
financial incentives to owners of equipment used in freight movement to
upgrade to cleaner technologies, consistent with program guidelines
adopted by CARB. See generally ``Strategic Growth Plan Bond
Accountability, Goods Movement Emission Reduction Program,'' Approved
February 27, 2008 (available electronically at http://www.arb.ca.gov/bonds/gmbond/docs/gm_accountability_with_links_2-27-08.pdf).
    The Contingency Measure SIP states that a total of 10.9 tpd of
NOX reductions and 0.44 tpd of direct PM2.5
reductions, to be achieved in 2015 through implementation of the Carl
Moyer Program, Prop 1B, and EQIP, are available for contingency measure
purposes and that these emission reductions exceed the 4.15 tpd of
NOX reductions and 0.10 tpd of direct PM2.5
reductions needed to satisfy the contingency measure requirement for
2015. See Contingency Measure SIP, p. 7. To support the District's
conclusion that these NOX and direct PM2.5
reductions from incentive programs are quantifiable, surplus,
enforceable and permanent, the Contingency Measure SIP cites specified
requirements in SJVUAPCD Rule 9610, a regulation adopted by the
District on June 20, 2013 to establish administrative processes and
criteria for documenting emission reductions achieved through incentive
programs for CAA SIP purposes. See id. at 7, 8 (citing Proposed
SJVUAPCD Rule 9610, section 7.0). According to the District, the 4.15
tpd of NOX reductions and 0.10 tpd of direct
PM2.5 reductions from incentive programs that it is relying
upon to satisfy the attainment contingency measure requirement (for
2015) satisfy the requirements of section 7.0 of proposed Rule 9610\16\
and, therefore, qualify for SIP credit under the CAA.
---------------------------------------------------------------------------

    \16\ The Contingency Measure SIP references ``proposed'' Rule
9610 because the rule was not yet adopted at the time the District
was developing the Contingency Measure SIP. Rule 9610, as adopted by
the SJVUAPCD Governing Board on June 20, 2013, is substantively
unchanged from the proposed rule that the District made available
for public comment on May 21, 2013, and section 7.0 of the adopted
rule is identical to the text in the proposed rule. Unless otherwise
noted, all references to Rule 9610 herein are to the rule as adopted
June 20, 2013.
---------------------------------------------------------------------------

    Under section 7.0 of Rule 9610,\17\ each SIP submission as to which
the District relies on projections of emission reductions from
incentive programs to satisfy a CAA SIP requirement must include a
demonstration that each applicable incentive program guideline
continues to provide for ``SIP-creditable emission reductions''--i.e.,
emission reductions that are quantifiable, surplus, enforceable, and
permanent, as those terms are defined in Rule 9610. See Rule 9610,
section 7.0 and section 2.25 (definition of ``SIP-Creditable Emission
Reduction''). In addition, each such SIP submission must include an
enforceable commitment that: (1) Identifies incentive program
guidelines used to generate projected SIP-creditable emission
reductions; (2) identifies emission reductions ``projected to be
achieved through the use of secured or reasonably anticipated incentive
program funding'' and estimated numbers of projects and willing
participants; (3) is specifically adopted by the District as part of
the SIP and accounted for in subsequent annual demonstration reports;
and (4) states that ``if either the District or EPA finds that there is
a SIP shortfall for a particular year, the District will adopt and
submit to EPA, by specified dates, substitute rules and measures that
will achieve equivalent emission reductions as expeditiously as
practicable and no later than any applicable implementation deadline in
the Clean Air Act or EPA's implementing regulations.'' See Rule 9610,
sections 7.1 through 7.4.
---------------------------------------------------------------------------

    \17\ EPA is not proposing at this time to act on Rule 9610
itself. To the extent the Contingency Measure SIP relies upon
emission reductions that are quantified and tracked pursuant to the
requirements of Rule 9610, however, EPA has reviewed relevant
provisions of Rule 9610 and related support documents, consistent
with the District's intent. See email dated July 24, 2013 from Samir
Sheikh, SJVUAPCD, to Kerry Drake, EPA Region 9, ``RE: Per our
conversation earlier.''
---------------------------------------------------------------------------

    Consistent with these criteria, the Contingency Measure SIP
contains the State's and District's demonstrations that specified
portions of the following Prop 1B and Carl Moyer Program guidelines
\18\ provide for emission reductions that are quantifiable, surplus,
enforceable, and permanent: (1) ``Proposition 1B: Goods Movement
Emission Reduction Program, Final 2010 Guidelines for Implementation,''
adopted March 25, 2010; (2) ``Proposition 1B: Goods Movement Emission
Reduction Program, Final Guidelines for Implementation,'' adopted
February 28, 2008; and (3) ``The Carl Moyer Program Guidelines,''
approved April 28, 2011. See email dated July 24, 2013 from Samir
Sheikh, SJVUAPCD, to Kerry Drake, EPA Region 9, ``RE: Per our
conversation earlier.'' In addition, the Contingency Measure SIP
contains an enforceable commitment by the District: (1) to ``account
for'' the District's claimed 4.15 tpd of NOX reductions and
0.10 tpd of direct PM2.5 reductions ``in annual
demonstration reports pursuant to the requirements of Rule 9610''; and
(2) if there is a shortfall in emission reductions from these incentive
programs, to ``adopt and submit to EPA substitute rules and measures
that will achieve equivalent emission reductions as expeditiously as
practicable and no later than any applicable implementation deadline in
the CAA or EPA's implementing regulations, by no later than December
31, 2016.'' See SJVUAPCD Board Resolution No. 13-6-18 at p. 3.
---------------------------------------------------------------------------

    \18\ The District's Board Resolution adopting the Contingency
Measure SIP broadly identifies ``the incentive program guidelines
identified in Section 3.1 of Rule 9610, the 2013 Draft Annual
Demonstration Report, and the Manual of Procedures to quantify SIP-
creditable emission reductions relied upon to satisfy the
PM2.5 contingency measure requirement for 2015 in the
amount of 4.15 tons per day (tpd) of NOX reductions and
0.10 tpd of direct PM2.5 reductions. . . .'' and the
Contingency Measure SIP similarly identifies the Carl Moyer Program,
Prop 1B, and EQIP (NRCS) in their entirety as the basis for the
District's claimed NOX and direct PM2.5
emission reductions. See SJVUAPCD Board Resolution No. 13-6-18, p. 3
and Contingency Measure SIP, p. 7. In this proposed rule, however,
EPA is evaluating only a subset of these guidelines (i.e., specified
portions of those Carl Moyer Program and Prop 1B guidelines
identified herein), as the Contingency Measure SIP does not contain
adequate technical documentation for EPA to fully evaluate all of
the incentive programs referenced in the SIP submission.
---------------------------------------------------------------------------

    Finally, information provided to support the Contingency Measure
SIP demonstrates that the District has adequate personnel and program
resources to implement the Carl Moyer Program and Prop 1B programs.
See, e.g., ``The Carl Moyer Program Guidelines'' (approved April 28),
Chapter 3 (``Program Administration''); ``2011 Proposition 1B: Goods
Movement Emission Reduction Program, Final 2010 Guidelines for
Implementation'' (adopted March 25, 2010) at Chapter III (``Local
Agency Project Proposal''); and letter dated January 2, 2013 from James
Goldstene, Executive Officer, CARB, to Seyed Sadredin, Air Pollution
Control Officer, SJVUAPCD, enclosing ``Incentive Program Review Report,
San Joaquin Valley Air Pollution Control District Fiscal Years 2006-07
through 2009-10.''
ii. Evaluation of Applicable Incentive Program Guidelines and Projects
    We have evaluated specific portions of the three incentive program
guidelines identified above (the 2008 and 2010 Prop 1B guidelines and
2011

Carl Moyer Program guideline) \19\ and believe, with one exception,
that they provide for emission reductions that are quantifiable,
surplus, enforceable, and permanent consistent with the requirements of
the CAA. The one exception is the option for the State to grant a
longer project life on a case-by-case basis ``if an applicant provides
justifying documentation.'' See, e.g., ``The Carl Moyer Program
Guidelines,'' approved April 28, 2011, Chapter 9 (Off-Road Equipment
Replacement) at section C.1(C)(5) (``Project Life''). This option to
grant a longer project life on a case-by-case basis provides the State
with broad discretion to extend the duration of emission reductions
claimed from an equipment replacement project without any EPA oversight
or public process. Because these case-by-case determinations could
undermine the integrity of the program (e.g., by undermining EPA's
ability to limit SIP credit to the period during which the emission
reductions are ``surplus'' to other requirements), EPA cannot grant SIP
credit for emission reductions from projects subject to such a
determination unless the District submits the individual determination
for EPA review and approval through the SIP process.
---------------------------------------------------------------------------

    \19\ Relevant excerpts of these three guidelines are available
in EPA's docket for this rulemaking.
---------------------------------------------------------------------------

    With the limited exception of these provisions regarding case-by-
case determinations, the portions of the identified program guidelines
that we have reviewed establish clear criteria that enable the District
to quantify the emission reductions attributed to specified projects
with a reasonable level of accuracy; verify that those emission
reductions are ``surplus'' as that term is defined in section 2.27 of
Rule 9610 \20\; enforce the conditions of program grants to ensure that
contracted emission reductions are achieved; and monitor the continuing
implementation of program grants to ensure that emission reductions are
``permanent'' throughout the life of each project. For a more detailed
discussion of EPA's review of the relevant portions of these three
program guidelines, see Proposal TSD, pp. 29 to 42.
---------------------------------------------------------------------------

    \20\ Section 2.27 of Rule 9610 defines the term ``surplus'' as
follows: ``for purposes of this rule, emission reductions are
surplus when they are not otherwise required by any federal, state,
or local regulation, or other legal mandate, and are in excess of
the baseline emission inventories underlying a SIP attainment
demonstration.''
---------------------------------------------------------------------------

    Additionally, we have evaluated the District's documentation for
specific projects \21\ funded through the Prop 1B program and Carl
Moyer Program that provide an adequate basis for the District's claimed
NOX and direct PM2.5 emission reductions for
2015.\22\ The Contingency Measure SIP states that it relies on
incentive-based emission reductions to be achieved from ``already-
executed, legally binding contracts'' rather than on projections of
future funding and participation rates. See Contingency Measure SIP at
7, 8. According to the 2013 Annual Demonstration Report and associated
``Data Sheet,'' \23\ on-road vehicle replacement projects that have
been funded through the Prop 1B program and off-road vehicle
replacement projects that have been funded through the Carl Moyer
Program are expected to achieve NOX and direct
PM2.5 emission reductions in amounts adequate to cover the
incentive-related emission reductions claimed by the District in the
Contingency Measure SIP (i.e., the 4.15 tpd of NOX
reductions and 0.10 tpd of direct PM2.5 reductions claimed
for 2015). Each of these funded projects is subject to one of the three
incentive program guidelines identified above (i.e., the 2008 Prop 1B
guideline, 2010 Prop 1B guideline, or 2011 Carl Moyer Program
guideline).
---------------------------------------------------------------------------

    \21\ Section 2.19 of Rule 9610 defines the term ``project'' as
follows: ``for purposes of this rule, actions taken to reduce
emissions through incentive programs, as contracted between the
Grantee and the District, NRCS, or CARB using incentive program
guidelines at the time of contracting. Such actions include, but are
not limited to, replacements, retrofits, new purchases, new
practices, and repower.''
    \22\ EPA is not reviewing projects funded through the EQIP
program at this time because the Contingency Measure SIP does not
contain adequate documentation regarding this program. See n. 18,
supra.
    \23\ Available at http://www.valleyair.org/MOP/docs/9610ProjectDataforPublicUNLOCKED8-7-13.xlsx.
---------------------------------------------------------------------------

    Specifically, the Data Sheet identifies 1243 ``on-road vehicle
replacement'' projects funded through the Prop 1B program that have a
``project life'' ending on or after January 1, 2016 and therefore will
continue to achieve emission reductions at least through the end of
2015.\24\ Collectively, these 1243 funded projects are projected to
achieve 3.78 tpd of NOX reductions and 0.15 tpd of PM
reductions in 2015. See Memorandum from Idalia Perez to File dated July
22, 2013. These totals are consistent with the emission reduction
estimates for 2015 provided in Table 18 of the 2013 Annual
Demonstration Report, which identifies the total reductions, in tons
per day, of NOX, particulate matter (PM) and ``reactive
organic gases'' (ROGs) \25\ that the District expects will be achieved
by Prop 1B projects related to on-road trucks between 2009 and 2020.
See 2013 Annual Demonstration Report at 40, Table 18 (``SIP-Creditable
Incentive-Based Emission Reductions for On-Road Trucks'').
Additionally, the Data Sheet indicates that 853 of these 1243 projects
subject to Prop 1B funds have a project life ending after December 31,
2016 and will, therefore, continue to generate emission reductions
through at least the end of 2016. See Proposal TSD at Attachment A
(``Prop 1B: On-Road Vehicle Replacement projects achieving emission
reductions through 2015'') and Memorandum from Idalia Perez to File
dated July 22, 2013. These funded projects are expected to achieve 2.35
tpd of NOX reductions and 0.09 tpd of PM reductions in 2016.
See id. and 2013 Annual Demonstration Report at 40, Table 18.
---------------------------------------------------------------------------

    \24\ In the Data Sheet, these Prop 1B projects are listed under
the following columns: (1) Component: ``On-Road Prop 1B''; (2)
Component Option: ``Vehicle Replacement'' and ``Vehicle Replacement
2 for 1''; and (3) Applicable Guideline: ``Prop 1B 2008'' and ``Prop
1B 2010.'' EPA has compiled these Prop 1B projects into a separate
document which identifies each project by its unique ``project
identification'' code and information regarding the emission
reductions it will achieve over its lifetime, in tons. See Proposal
TSD at Attachment A (``Prop 1B: On-Road Vehicle Replacement projects
achieving emission reductions through 2015'').
    \25\ California uses the term ``reactive organic gases'' (ROGs)
to refer generally to volatile organic compounds (VOCs) as defined
in 40 CFR 51.100(s).
---------------------------------------------------------------------------

    Similarly, the Data Sheet identifies 675 ``off-road vehicle
replacement'' projects funded through the Carl Moyer Program that have
a ``project life'' ending on or after January 1, 2021 and therefore
will continue to achieve emission reductions well past the end of
2015.\26\ Collectively, these 675 funded projects are projected to
achieve 1.23 tpd of NOX reductions and 0.06 tpd of PM
reductions in 2015. See Memorandum from Idalia Perez to File dated July
22, 2013. These totals are consistent with the emission reduction
estimates for 2015 provided in Table 13 of the 2013 Annual
Demonstration Report, which identifies the total reductions, in tons
per day, of NOX, PM and ROGs that the District expects will
be achieved by Carl Moyer Program projects related to off-road vehicle
replacement between 2009 and 2020. See 2013 Annual Demonstration Report
at 37, Table 13 (``SIP-Creditable Incentive-Based Emission Reductions
for Off-Road Compression-Ignition

Equipment Replacement Claimed Pursuant to Section 3.1''). All of these
funded projects are expected to continue achieving emission reductions
through at least 2021. See Proposal TSD at Attachment B (``Carl Moyer
Program: Off-Road Vehicle Replacement projects achieving emission
reductions through 2015'') and Memorandum from Idalia Perez to File
dated July 22, 2013. Although Chapter 9 of the 2011 Carl Moyer Program
guideline contains several provisions allowing for case-by-case
determinations,\27\ we understand that the District's 2015 emission
reduction estimates for Carl Moyer projects in Table 13 of the 2013
Annual Demonstration Report do not rely on any projects subject to
case-by-case determinations, as such determinations are not eligible
for SIP credit unless reviewed through a public process and submitted
to EPA as part of a SIP submission meeting the requirements of Rule
9610.\28\
---------------------------------------------------------------------------

    \26\ In the Data Sheet, these Carl Moyer Program projects are
listed under the following columns: (1) Component: ``Off-Road''; (2)
Component Option: ``Vehicle Replacement''; and (3) Applicable
Guideline: ``Carl Moyer 2011.'' EPA has compiled these Carl Moyer
Program projects into a separate document which identifies each
project by its unique ``project identification'' code and
information regarding the emission reductions it will achieve over
its lifetime, in tons. See Proposal TSD at Attachment B (``Carl
Moyer Program: Off-Road Vehicle Replacement projects achieving
emission reductions through 2015'').
    \27\ See, e.g., ``The Carl Moyer Program Guidelines,'' approved
April 28, 2011, Chapter 9 (Off-Road Equipment Replacement) at
section C.1(C)(5) (``Project Life'').
    \28\ Rule 9610 specifically prohibits the use of any case-by-
case determination to quantify emission reductions for SIP purposes
``unless such determination is reviewed through a public process and
submitted to EPA in accordance with Section 7.0 [of Rule 9610].''
See Rule 9610 at section 3.2.2; see also 2013 Annual Demonstration
Report at 11. Neither the 2013 Annual Demonstration Report nor the
Contingency Measure SIP specifically identifies any case-by-case
determination for EPA review.
---------------------------------------------------------------------------

    We conclude that the District's documentation regarding these Prop
1B and Carl Moyer Program projects is adequate to ensure that the
associated NOX and direct PM2.5 emission
reductions can be monitored and verified. In any future SIP that relies
on incentive-based emission reductions quantified pursuant to the
requirements of Rule 9610, we expect the District will specifically
identify the types of projects relied upon to generate the emission
reductions and the specific incentive program guidelines that apply to
those projects and we expect the subsequent annual demonstration
reports will then list the individual projects relied upon to achieve
those reductions, as provided in our Proposal TSD. We note that the
4.15 tpd of NOX reductions and 0.10 tpd of direct
PM2.5 reductions attributed to the Carl Moyer Program and
Prop 1B in 2015 for contingency measure purposes each amount to less
than 2 percent of the total projected emission reductions of each
pollutant needed to attain the 1997 PM2.5 NAAQS in the
SJV.\29\
---------------------------------------------------------------------------

    \29\ The SJV PM2.5 SIP projects the total amounts of
emission reductions needed to attain the PM2.5 NAAQS,
from a 2005 base year to a 2014 attainment year, are as follows:
284.2 tpd of NOX reductions; 22.7 tpd of direct
PM2.5 reductions; and 1.8 tpd of SOX
reductions. See 76 FR 69896, 69923 (Table 4, line A) and Final TSD
for SJV PM2.5 SIP, p. 113 (Table G-2, line C). Thus, the
incentive program reductions identified in the Contingency Measure
SIP amount to approximately 1.5 percent of the NOX
reductions and 0.4 percent of the direct PM2.5 reductions
needed for timely attainment of the PM2.5 NAAQS in the
SJV.
---------------------------------------------------------------------------

iii. Evaluation of SJVUAPCD's Enforceable Commitments
    We have evaluated the Board commitments submitted as part of the
Contingency Measure SIP and find that they establish clear obligations
on the District's part to monitor, assess, and report on program
implementation and actual emission reductions achieved and to remedy
any emission reduction shortfalls in a timely manner, consistent with
EPA policy. Specifically, SJVUAPCD Board Resolution No. 13-6-18
contains two key components designed to ensure that the 4.15 tpd of
NOX reductions and 0.10 tpd of direct PM2.5
reductions claimed in the District's Contingency Measure SIP are
enforceable under the CAA.
    The first key component is a commitment to ``account for'' these
emission reductions ``in annual demonstration reports pursuant to the
requirements of Rule 9610.'' SJVUAPCD Board Resolution No. 13-6-18 at
p. 3. Rule 9610 specifically requires the District to submit to EPA, no
later than August 31 of each year, an ``annual demonstration report''
that includes the following elements: (1) Identification of SIP-
creditable emission reductions generated through incentive programs
implemented in the preceding year(s), summarized by pollutant, years
that the emission reductions occur (project life), cost effectiveness,
funding amount, incentive program guideline, and project type; (2)
identification of SIP commitment(s) that the District has satisfied, in
whole or in part, through SIP-creditable emission reductions from the
identified incentive programs; (3) identification and quantification of
SIP commitment shortfalls, if any, and remedies for addressing said
shortfalls; (4) detailed information about each specific project
achieving SIP-creditable emission reductions, e.g., unique project
identification numbers, implementation dates, applicable incentive
program guideline(s), and quantified emission reductions per year and
aggregated over the project life, by pollutant; and (5) a summary of
monitoring and enforcement activities conducted during the reporting
period for incentive projects for which SIP-creditable emission
reductions are being claimed. See Rule 9610, sections 4.1-4.6 and 5.0.
    The second key component is a commitment to adopt and submit to
EPA, no later than December 31, 2016, ``substitute rules and measures
that will achieve equivalent emission reductions as expeditiously as
practicable and no later than any applicable implementation deadline in
the CAA or EPA's implementing regulations,'' if there is a shortfall in
emission reductions. SJVUAPCD Board Resolution No. 13-6-18, p. 3.
Consistent with this commitment, EPA expects the District to confirm as
part of its 2014 and 2015 Annual Demonstration Reports whether the
claimed 4.15 tpd of NOX reductions and 0.10 tpd of direct
PM2.5 reductions are expected to occur in 2015 as projected,
and to provide the basis for its conclusion--e.g., information about
actual program participation rates, actual reported activity data,
project audits, usage reports, and other project monitoring activities
consistent with the requirements of Rule 9610, section 4.0. If the
District finds that there may be a shortfall in the claimed emission
reductions for 2015, the District will be required to identify in its
2014 or 2015 Annual Demonstration Report both the estimated amount of
the SIP shortfall (in tons per day, by pollutant) and the specific
remedy to be implemented in the event of a shortfall--i.e., the
substitute rules and measures that will achieve equivalent emission
reductions, to be submitted to EPA no later than December 31, 2016. See
Rule 9610, section 4.4 (``The District shall identify and quantify SIP
commitment shortfalls, if any, and remedies for addressing said
shortfalls'' as part of the annual demonstration report). Finally, EPA
expects the District's 2016 Annual Demonstration Report will either
confirm that the claimed 4.15 tpd of NOX reductions and 0.10
tpd of direct PM2.5 reductions actually occurred in 2015 as
projected or identify and quantify the specific SIP shortfalls and
specific remedies to be implemented consistent with the District's
commitment. Any conclusion that the District's claimed 4.15 tpd of
NOX reductions and 0.10 tpd of PM2.5 reductions
actually occurred in 2015 must be supported by documentation of actual
emissions, based on historical annual usage (i.e., reported activity
data), actual program participation rates, project audits, and other
information consistent with the requirements of sections 4.0 to 4.6 of
Rule 9610. For a more detailed discussion of our evaluation of these
commitments, see Proposal TSD, pp. 42 to 44.
    These Board commitments obligate the District to monitor, assess,
and report on program implementation and

actual emission reductions achieved and, ultimately, enable EPA and the
public to determine whether the District's claimed emission reductions
(4.15 tpd of NOX reductions and 0.10 tpd of direct
PM2.5 reductions) actually occurred in 2015. Based on the
District's long history of successful implementation and enforcement of
Prop 1B and Carl Moyer Program grants and the detailed requirements in
the associated incentive program guidelines, we fully expect that
SJVUAPCD will achieve the required emission reductions in 2015 as
projected. However, should EPA find based on the 2014 or 2015 Annual
Demonstration Report that the District's claimed 4.15 tpd of
NOX reductions and 0.10 tpd of direct PM2.5
reductions may not occur in 2015 as projected, EPA will promptly notify
the District of its potential obligation to adopt and submit substitute
rules and measures consistent with its Board commitment no later than
December 31, 2016, so that the District has ample time to develop and
adopt such rules/measures consistent with this deadline. Subsequently,
should EPA determine that the SJV area has failed to attain the
PM2.5 NAAQS by the applicable attainment date of April 5,
2015, the District will be obligated to verify through its next annual
report (i.e., the 2016 Annual Demonstration Report) whether the 4.15
tpd of NOX reductions and 0.10 tpd of PM2.5
reductions identified in the Contingency Measure SIP occurred in 2015,
and if not, to adopt and submit substitute rules and measures to EPA
consistent with its Board commitment no later than December 31, 2016.
iv. Conclusion on SJVUAPCD's Incentive-Based Emission Reductions
    Based on our evaluation of the District's commitments regarding the
Carl Moyer Program and Prop 1B and related technical documentation
provided by the District in its SIP submission, we propose to find that
the 2015 emission reductions associated with these specific incentive
programs satisfy the statutory criteria for SIP credit and to approve
these emission reductions as attainment contingency measures for the
1997 PM2.5 NAAQS in the SJV. Upon EPA's final approval of
the Contingency Measure SIP, the District's commitments will become
federally enforceable and will obligate it to monitor, assess, and
report to EPA on implementation of the Carl Moyer Program and Prop 1B
program grants with respect to the specific Prop 1B and Carl Moyer
projects identified in EPA's Proposal TSD. See Proposal TSD at
Attachment A (``Prop 1B: On-Road Vehicle Replacement projects achieving
emission reductions through 2015'') and Attachment B (``Carl Moyer
Program: Off-Road Vehicle Replacement projects achieving emission
reductions through 2015'').
    EPA supports and encourages the continuing efforts by CARB, the
District, and NRCS to make incentive programs and voluntary measures an
effective part of the SJV's strategy for clean air. We commit to
continue our work with these agencies to establish reliable procedures
for documenting the emission reductions associated with voluntary and
incentive programs for SIP purposes, in particular through the
District's implementation of Rule 9610, which EPA intends to act on in
the near future. Our collective goal is to establish a process that
ensures that the emission reductions resulting from voluntary and
incentive programs are quantifiable, surplus, enforceable, and
permanent consistent with CAA requirements as interpreted in EPA
guidance. We welcome public comments on how best to achieve this goal.
c. Substitution of Direct PM2.5 Reductions for
NOX Reductions
    The District estimated, based on monitored air quality over the
past five winter seasons, that triggering the contingency provision in
the District's woodburning rule would reduce direct PM2.5
emissions by a further 3.12 tpd. See Contingency Measure SIP, p. 6.
This level of reduction exceeds the 2.5 tpd of direct PM2.5
reductions needed to meet the CAA contingency requirement for this
pollutant by 0.62 tpd. Taking into account the 0.1 tpd of direct
PM2.5 reductions from incentive programs discussed above in
section III.C.2.b, the District then converted the total amount of
surplus direct PM2.5 reductions (0.72 tpd) into
NOX reductions at a ratio of 9 tons of NOX for
each ton of direct PM2.5. Based on this PM2.5 to
NOX conversion, the District concluded that a 0.72 tpd
reduction in direct PM2.5 emissions has the same ambient air
quality impact as a 6.48 tpd reduction in NOX emissions.
    Using the Community Multiscale Air Quality (CMAQ) modeling
application underlying the attainment demonstration in the SJV
PM2.5 Plan,\30\ CARB developed an equivalency ratio between
emission reductions of direct PM2.5 and of NOX.
For each pollutant, CARB modeled the ambient effect of a 10 percent
reduction of emissions over the modeling domain. The concentration
change per emission change gave a precursor effectiveness value for
NOX and an effectiveness value for direct PM2.5.
The ratio of these two effectiveness values provided the
NOX-PM2.5 equivalency ratio.
---------------------------------------------------------------------------

    \30\ EPA approved this air quality modeling as part of its
approval of the attainment demonstration in the SJV PM2.5
Plan. See 76 FR 41338, 41349 and 76 FR 69896, 69924.
---------------------------------------------------------------------------

    Emission reductions of direct PM2.5 from the District's
wood burning restrictions tend to be concentrated in the SJV's urban
areas. These urban areas also typically record the highest
PM2.5 ambient levels in the SJV. As explained above, the
District is proposing to substitute these urban-centered direct
PM2.5 reductions for region-wide NOX reductions.
Because these wood burning reductions are concentrated in areas most
like to experience high levels of ambient PM2.5, their
impact on these ambient levels will likely be greater than the same
amount of PM2.5 reductions distributed over the entire
nonattainment area. CARB's full modeling domain approach, which assumed
distributed PM2.5 reductions, will therefore tend to
underestimate the impact of direct PM2.5 reductions from
wood burning restrictions on ambient concentrations. As a result the
9:1 ratio of NOX to PM2.5 emission reductions in
this case gives a conservatively high estimate of the direct
PM2.5 emission reductions needed to substitute for a given
amount of NOX reductions. EPA proposes to approve the use of
this ratio for purposes of quantifying emission reductions to satisfy
the CAA section 172(c)(9) attainment contingency measure requirement
for the 1997 PM2.5 NAAQS in the SJV.\31\ For further
information, see the Proposal TSD, pp. 44-45.
---------------------------------------------------------------------------

    \31\ EPA has previously approved the use of this ratio for use
in transportation conformity determinations for the 1997
PM2.5 NAAQS in the SJV. See 76 FR 69896, 69923. See also
76 FR 41338, 41349 (noting adequacy of CARB's ratio for purposes of
assessing the effect of ``area-wide emissions changes,'' e.g., to
address RFP, contingency measures, and conformity budgets).
---------------------------------------------------------------------------

d. Summary
    In sum, EPA believes that the Contingency Measure SIP identifies
SIP-creditable attainment contingency measures that will achieve a
total of 31.6 tpd of NOX, 2.5 tpd of direct
PM2.5, and 3 tpd of SOX reductions in 2015. EPA
believes that these emission reductions will equal or exceed one-year's
worth of RFP as calculated in EPA's 2011 final action on the SJV
PM2.5 SIP. See Table 1.

           Table 1-- Summary of 2015 Emission Reductions Creditable as Attainment Contingency Measures
                                                [In tons per day]
----------------------------------------------------------------------------------------------------------------
                                                 NOX                  Direct PM2.5                 SOX
----------------------------------------------------------------------------------------------------------------
California/Federal Mobile Source       21.....................                           .......................
 Control Program.
Surplus SOX Reductions from CARB and   .......................  .......................  3.
 District Rules.
[Incentive Programs].................  4.15...................  0.1                      .......................
Contingency Provision in District      0.3....................  3.1                      .......................
 Rule 4901.
Substitution of surplus direct PM2.5   6.5....................  -0.7                     .......................
 reductions for NOX reductions.
                                      --------------------------------------------------------------------------
    TOTAL EMISSION REDUCTIONS:.......  31.9...................  2.5....................  3.
Emission reductions equal to one-      31.6...................  2.5....................  0.2.
 year's worth of RFP \32\.
Contingency measure requirement met?.  Yes....................  Yes....................  Yes.
----------------------------------------------------------------------------------------------------------------

    Based on our evaluation, we are proposing to fully approve the
Contingency Measure SIP as satisfying the attainment contingency
measure requirement in CAA section 172(c)(9) for the 1997
PM2.5 NAAQS in the San Joaquin Valley nonattainment area.
All of the emission reductions relied on to meet the attainment
contingency measure requirement are provided by control measures or
incentive programs that are fully adopted under State law. These
measures and programs provide SIP-creditable emission reductions that
are not relied on in the SJV PM2.5 SIP to demonstrate RFP or
attainment and provide for an appropriate level of continued emission
reduction progress should the SJV area fail to attain by its statutory
attainment date and necessitate additional planning.
---------------------------------------------------------------------------

    \32\ See ibid.
---------------------------------------------------------------------------

D. Clean Air Act Section 110(l)

    CAA section 110(l) prohibits EPA from approving any SIP revision
that would interfere with any applicable requirement concerning
attainment and RFP or any other applicable CAA requirement. The
Contingency Measure SIP corrects SIP deficiencies identified in EPA's
November 9, 2011 partial approval and partial disapproval of the SJV
PM2.5 SIP (76 FR 69896). Specifically, the Contingency
Measure SIP contains: (1) the District's demonstration that actual
emission levels in the SJV in 2012 were below the approved 2012 RFP
milestone year targets and (2) identification of SIP-creditable
emission reductions to be achieved in 2015 that are not relied on for
RFP or expeditious attainment. The Contingency Measure SIP does not
alter any existing emission limitation or other control requirement in
the applicable SIP and only expands upon the contingency measure
portion of the SJV PM2.5 SIP, which EPA had partially
disapproved in November 2011. We propose to determine that our approval
of the Contingency Measure SIP would comply with CAA section 110(l)
because the proposed SIP revision would not interfere with the on-going
process for ensuring that requirements for RFP and attainment of the
NAAQS are met, and the submitted SIP corrects SIP deficiencies that
were the basis for EPA's November 9, 2011 partial disapproval of the
SJV PM2.5 SIP.

IV. Proposed Actions and Request for Public Comment

    For the reasons discussed above, we are proposing to conclude that
the Contingency Measure SIP submitted by CARB on July 3, 2013,
satisfies the attainment contingency measure requirement in CAA section
172(c)(9) for the 1997 PM2.5 NAAQS in the San Joaquin Valley
nonattainment area and to fully approve this submission into the
California SIP. We are also proposing to conclude that the RFP
contingency measure requirement in CAA section 172(c)(9) for the 2012
milestone year is moot as applied to the San Joaquin Valley because the
area achieved its approved emissions targets for the 2012 RFP milestone
year. Finally, we are proposing to approve enforceable commitments by
the SJVUAPCD to monitor, assess, and report on actual NOX
and direct PM2.5 emission reductions achieved through its
implementation of specific Prop 1B and Carl Moyer Program grants and to
remedy any identified emission reduction shortfall in a timely manner.
    Finalizing these proposals would correct the deficiencies that were
the basis for EPA's partial disapproval of the SJV PM2.5 SIP
on November 9, 2011 (76 FR 69896) and would, therefore, terminate the
CAA section 179(b) sanction and sanction clocks triggered by that
action and the obligation on EPA to promulgate a federal implementation
plan under CAA section 110(c).
    We will accept comments from the public on these proposals for the
next 30 days. The deadline and instructions for submission of comments
are provided in the ``Date'' and ``Addresses'' sections at the
beginning of this preamble.

V. Statutory and Executive Order Reviews

    Under the Clean Air Act, the Administrator is required to approve a
SIP submission that complies with the provisions of the Act and
applicable Federal regulations (42 U.S.C. 7410(k); 40 CFR 52.02(a)).
Thus, in reviewing SIP submissions, EPA's role is to approve State
choices, provided that they meet the criteria of the Clean Air Act.
Accordingly, this proposed action merely proposes to approve State law
as meeting Federal requirements and does not impose additional
requirements beyond those imposed by State law. For that reason, this
proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, (October 4, 1993);
     does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);

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

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental
relations, Nitrogen dioxide, Particulate matter, Reporting and
recordkeeping requirements, Sulfur oxides.

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

    Dated: August 15, 2013.
Jared Blumenfeld,
Regional Administrator, Region 9.
[FR Doc. 2013-21010 Filed 8-27-13; 8:45 am]
BILLING CODE 6560-50-P


[Federal Register: March 11, 2010 (Volume 75, Number 47)]
[Notices]
[Page 11608-11610]
[DOCID:fr11mr10-103]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-61640; File No. SR-ISE-2010-13]

Self-Regulatory Organizations; International Securities Exchange,
LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule
Change To Adopt a Minimum Quantity Order Type

March 3, 2010.
    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 February 23, 2010, the International Securities Exchange, LLC
(the ``Exchange'' or the ``ISE'') 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 ISE filed this proposal pursuant to Rule 19b-
4(f)(6) under the Act.\3\ 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.
    \3\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

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

    The Exchange proposes to adopt a minimum quantity order type. The
text of the proposed rule change is as follows (deletions are in
[brackets]; additions are underlined):

Rule 715. Types of Orders

    (a) through (k) no change.
    (l) Minimum Quantity Orders. A minimum quantity order is an
order that is available for partial execution, but each partial
execution must be for a specified number of contracts or greater. If
the balance of the order after one or more partial executions is
less than the minimum, such balance is treated as all-or-none.

Rule 713. Priority of Quotes and Orders

    (a) through (f) no change.

Supplementary Material to Rule 713

    .01 No change.
    .02 All-or none orders, as defined in Rule 715(c), and minimum
quantity orders, as defined in Rule 715(l), are contingency orders
that have no priority on the book. Such orders are maintained in the
system and remain available for execution after all other trading
interest at the same price has been exhausted.
    .03 through .04 no change.

Rule 717. Limitations on Orders

* * * * *

Supplementary Material to Rule 717

    .01-.03 No Change.
    .04 [A] [n]Non-marketable all-or-none limit orders and non-
marketable minimum quantity orders shall be deemed ``exposed'' for
the purposes of paragraphs (d) and (e) one second following a
broadcast notifying market participants that such an order to buy or
sell a specified number of contracts at a specified price either
all-or-none or with a specified minimum quantity has been received
in the options series. For non-marketable minimum quantity orders,
the broadcast will specify the minimum quantity that can be
executed.
    .05 No change.

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 self-regulatory organization
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 self-regulatory organization
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 seeks to allow members to enter minimum quantity
orders on the Exchange. A minimum quantity order is an order that is
available for partial execution, but each partial execution must be for
a specified number of contracts or greater. If the balance of the order
after one or more partial executions is less than the minimum, such
balance is treated as all-or-none. This order type currently is
available on other options exchanges.\4\
---------------------------------------------------------------------------

    \4\ See, e.g., Chicago Board Options Exchange (``CBOE'') Rule
43.2(a)(9)(E) (Types of Orders Handled) and Bats Exchange, Inc.
(``BATS'') Rule 21.1(d)(3) (Minimum Quantity Orders).
---------------------------------------------------------------------------

    Like all-or-none orders, minimum quantity orders are contingency
orders that are not displayed in the Exchange's best bid or offer.
However, the Exchange will disseminate to market participants an
indication that a minimum quantity order has been entered. As is the
case with all-or-none orders, pursuant to Rule 717(d) and (e), the
entering member will be required to wait at least one second before
entering a contra-side proprietary or solicited order that would
execute against the minimum quantity order. While the Exchange believes
it is unlikely that this order type would be used for crossing
purposes, disseminating the arrival of the order in the same manner as
all-or-none orders will minimize inadvertent violations of Rule 717(d)
or (e) and increase the opportunity for market participants to provide
liquidity to the orders.
2. Basis
    The basis under the Securities Exchange Act of 1934 (the ``Act'')
for this proposed rule change is the requirement under Section 6(b)(5)
that an exchange have rules that are designed to promote just and
equitable principles of trade, and to remove impediments to and perfect
the mechanism for a free and open market and a national market system,
and in general, to protect investors and the public interest. In
particular, the proposal will provide members with an additional order
type that they may chose to utilize on the Exchange. Additionally,
under the proposed rule change minimum quantity orders will be exposed
to members so that there is a greater opportunity for market
participants to interact with such orders.

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

    The proposed rule change does not impose any burden on competition
that is not necessary or appropriate in furtherance of the purposes of
the Act.

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

    The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from members or other interested
parties.

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

    Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days after the date of the filing, or such
shorter time as the Commission may designate, it has become effective
pursuant to Section 19(b)(3)(A) of the Act \5\ and Rule 19b-4(f)(6)
thereunder.\6\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b4(f)(6)(iii)
requires the Exchange to give the Commission written notice of the
Exchange's intent to file the proposed rule change along with a
brief description and text of the proposed rule change, or such
shorted time as designated by the Commission. The Exchange provided
a copy of this rule filing to the Commission at least five business
days prior to the date of this filing.
---------------------------------------------------------------------------

    The Exchange believes the proposed rule change is non-controversial
in that it is similar to the rules of the CBOE and BATS. Further, the
Exchange believes the proposed rule change may assist investors by
exposing the minimum quantity orders, thus allowing a greater
opportunity for market participants to interact with such orders. The
Exchange also believes that the proposed rule change does not raise any
new, unique or substantive issues, and is beneficial for competitive
purposes and to promote a free and open market for the benefit of
investors.
    At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate 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.

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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-ISE-2010-13 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.

All submissions should refer to File Number SR-ISE-2010-13. This file
number should be included on the subject line if e-mail 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
a.m. and 3 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
publicly available. All submissions should refer to File Number SR-ISE-
2010-13 and should be submitted on or before April 1, 2010.

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

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

Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-5220 Filed 3-10-10; 8:45 am]
BILLING CODE 8011-01-P