[Federal Register Volume 79, Number 50 (Friday, March 14, 2014)]
[Notices]
[Pages 14558-14561]
[FR Doc No: 2014-05594]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71671; File No. SR-NYSE-2014-08]

Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change To Adopt the Bond Trading
License and the Bond Liquidity Provider Programs Pursuant to NYSE Rules
87 and 88

March 10, 2014.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that, on February 27, 2014, New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Exchange proposes to amend [sic] proposes to make permanent its
pilot program (``Pilot Program'') regarding its bond trading license
(``BTL'') and the Bond Liquidity Provider (``BLP'') programs pursuant
to Rules 87 and 88. The text of the proposed rule change is available
on the Exchange's Web site at www.nyse.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.

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

    In its filing with the Commission, the 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 those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.

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

1. Purpose
    On January 19, 2011, the Exchange established a 12-month pilot
program to (1) adopt new Rule 87 to create a BTL for member
organizations that desire to trade only debt securities on the
Exchange,\3\ and (2) adopt new Rule 88 to establish BLPs, a new class
of debt market participants.\4\ The Pilot Program was extended through
January 19, 2014 \5\ and the Exchange provided the Commission with
written notice of its intent to extend the Pilot Program beyond such
date.\6\ The Exchange has since determined that it is more appropriate
at this time to seek the Commission's approval to make the Pilot
Program permanent. Accordingly, the Exchange is proposing to make
permanent the Pilot Program and adopt Rules 87 and 88 on a permanent
basis.
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    \3\ Debt securities are traded on the Exchange pursuant to Rules
86, 1400, and 1401. Bonds eligible to trade on the NYSE Bonds
platform include any debt instrument that is listed on the NYSE and
any corporate debt of a listed company of the Exchange.
    \4\ See Securities Exchange Act Release No. 63736 (January 19,
2011), 76 FR 4959 (January 27, 2011) (order approving SR-NYSE-2010-
74). See also Securities Exchange Act Release No. 63444 (December 6,
2010), 75 FR 77024 (December 10, 2010) (notice of filing of SR-NYSE-
2010-74).
    \5\ See Securities Exchange Act Release No. 68533 (December 21,
2012), 77 FR 77166 (December 31, 2012) (SR-NYSE-2012-74).
    \6\ On January 10, 2014, pursuant to Rule 19b-4(f)(6)(iii), the
Exchange submitted NYSE-2014-1P through the Commission's Electronic
Form 19b-4 Filing System (``EFFS''), which provided the Commission
with written notice of the Exchange's intent to file a rule change
to extend the Pilot Period. See 17 CFR 240.19b-4(f)(6)(iii). On
January 16, 2014, NYSE-2014-1P was marked acceptable in the EFFS.
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    The purpose of Pilot Program is to encourage market participants to
bring additional liquidity to the Exchange's bond marketplace by
providing incentives for quoting and adding liquidity to the market and
to offer investors an alternative to over-the-counter trading for debt
securities. Under Rule 87, a member organization that chooses to trade
only bonds, or a new member organization that desires to trade only
bonds, may apply for a BTL, which is available to any approved member
organization. A BTL license is not transferable and may not, in whole
or in part, be transferred, assigned, sublicensed or leased. However,
the holder of the BTL could, with the prior written consent of the
Exchange, transfer a BTL to a qualified and approved member
organization (i) that is an affiliate or (ii) that continues

substantially the same business of such BTL holder without regard to
the form of the transaction used to achieve such continuation, e.g.,
merger, sale of substantially all assets, reincorporation,
reorganization or the like. The Exchange currently has one member
organization operating under a BTL, but has been notified that
additional market participants are interested in applying for a BTL.
    Under Rule 88, the Exchange provides incentives for quoting and
adding liquidity to the bond market in the form of rebates to BLPs that
provide liquidity to the Exchange's bond market. The Exchange believes
that the rebates encourage the additional utilization of, and
interaction with, the Exchange, improve price discovery and liquidity,
and encourage competitive quotes and price improvement opportunities.
These incentives encourage BLPs to make more liquid and competitive
markets. In return, BLPs must meet certain qualification and quoting
obligations under the Rule.
    Specifically, pursuant to Rule 88(a), a BLP is required to
maintain: (1) A bid at least seventy percent (70%) of the trading day
for a bond; (2) an offer at least seventy percent (70%) of the trading
day for a bond; and (3) a bid or offer at the Exchange's Best Bid
(``BB'') or Exchange's Best Offer (``BO'') at least five percent (5%)
of the trading day in each of its bonds in the aggregate. To create a
financial incentive to serve as a BLP, Rule 88(b) provides that a BLP
that meets the quoting requirement for a bond as described in paragraph
(a) would receive the liquidity provider rebate set forth in the
Exchange's Price List.
    To qualify as a BLP pursuant to Rule 88(c), a member organization
is required to: (1) Demonstrate an ability to meet the quoting
requirements of a BLP; (2) have mnemonics that identify to the Exchange
BLP trading activity in assigned BLP bonds; (3) have adequate trading
infrastructure and technology to support electronic trading.
    Because a BLP is only permitted to trade electronically from off
the Floor of the Exchange, a member organization's off-Floor technology
must be fully automated to accommodate the Exchange's trading and
reporting systems that are relevant to operating as a BLP. If a member
organization were unable to support the relevant electronic trading and
reporting systems of the Exchange for BLP trading activity, it would
not qualify as a BLP.
    Pursuant to Rule 88(d), to become a BLP, a member organization is
required to submit a BLP application form with all supporting
documentation to the Exchange. The Exchange determines whether an
applicant is qualified to become a BLP as set forth above. After an
applicant submits a BLP application to the Exchange, with supporting
documentation, the Exchange notifies the applicant member organization
of its decision. If an applicant is approved by the Exchange to act as
a BLP, the applicant is required to establish connectivity with
relevant Exchange systems before the applicant is permitted to trade as
a BLP on the Exchange. In the event an applicant is disapproved or
disqualified under proposed Rule 88(d)(4) or (i)(2) by the Exchange,
such applicant may request an appeal of such disapproval or
disqualification by the Exchange as provided in Rule 88(j), and/or
reapply for BLP status three (3) months after the month in which the
applicant received disapproval or disqualification notice from the
Exchange.
    Pursuant to Rule 88(e), a BLP is permitted to withdraw from the
status of a BLP by providing notice to the Exchange. Such withdrawal is
effective when those bonds assigned to the withdrawing BLP are
reassigned to another BLP. After the Exchange receives the notice of
withdrawal from the withdrawing BLP, the Exchange reassigns such bonds
as soon as practicable, but no later than 30 days of the date the
notice was received by the Exchange. If the reassignment of bonds takes
longer than the 30-day period, the withdrawing BLP has no further
obligations and is not held responsible for any matters concerning its
previously assigned BLP bonds.
    Rule 88(f) sets forth how the Exchange calculates a BLP's quoting
requirements. Beginning with the first month of operation as a BLP, the
BLP must satisfy the 70% quoting requirement for each of its assigned
BLP bonds. The Exchange determines whether a BLP met its 70% quoting
requirement by determining the average percentage of time a BLP was at
a bid (offer) in each of its BLP bonds during the regular trading day
\7\ on a daily and monthly basis. The Exchange determines whether a BLP
has met this requirement by calculating the following:
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    \7\ ``Trading day'' means any day on which the Exchange is
scheduled to be open for business. Days on which the Exchange closes
prior to 4 p.m. (Eastern Time) for any reason, which may include any
regulatory halt or trading halt, are considered a trading day.
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     A ``Daily Bid Quoting Percentage'' is calculated by
determining the percentage of time a BLP had at least 10 displayed BLP
bonds at a single price level in an Exchange bid during each trading
day for a calendar month;
     A ``Daily Offer Quoting Percentage'' is calculated by
determining the percentage of time a BLP had at least 10 displayed BLP
bonds at a single price level in an Exchange offer during each trading
day for a calendar month;
     A ``Monthly Average Bid Quoting Percentage'' is calculated
for each BLP bond by summing the bond's ``Daily Bid Quoting
Percentages'' for each trading day in a calendar month then dividing
the resulting sum by the total number of trading days in such calendar
month; and
     A ``Monthly Average Offer Quoting Percentage'' is
calculated for each BLP bond by summing the bond's ``Daily Offer
Quoting Percentage'' for each trading day in a calendar month then
dividing the resulting sum by the total number of trading days in such
calendar month.
    Only displayed orders entered throughout the trading day are used
when calculating whether a BLP is in compliance with its 70% average
quoting requirements.
    The BLP's 5% quoting requirements is not in effect during the first
two months of operation as a BLP in order to allow the BLP time to
achieve this quoting metric. The 5% quoting requirement takes effect in
the third month of a BLP's operation. At that time, a BLP is required
to satisfy the 5% quoting requirement for each assigned BLP bond. The
Exchange determines whether a BLP had met its 5% quoting requirement by
determining the average percentage of time a BLP was at the BB or BO in
each of its assigned BLP bonds during the regular trading day on a
daily and monthly basis, as follows:
     A ``Daily BB Quoting Percentage'' is calculated by
determining the percentage of time a BLP had at least one displayed BLP
bond in an Exchange bid at the BB during each trading day for a
calendar month;
     A ``Daily BO Quoting Percentage'' is calculated by
determining the percentage of time a BLP had at least one displayed BLP
bond in an Exchange offer at the BO during each trading day for a
calendar month;
     A ``Daily BBO Quoting Percentage'' is calculated for each
trading day by summing the ``Daily BB Quoting Percentage'' and the
``Daily BO Quoting Percentage'' in each BLP bond; and
     A ``Monthly Average BBO Quoting Percentage'' would be
calculated for each BLP bond by summing the bond's ``Daily BBO Quoting
Percentages'' for each trading day in a calendar month then dividing
the resulting sum by the total number of trading days in such calendar
month.

    Only displayed orders at the BB and BO throughout the trading day
are used when calculating whether a BLP is in compliance with its 5%
average quoting requirement.
    Rule 88(g) sets forth how BLPs are matched to issuers. The Exchange
matches BLPs to issuers with one or more debt issues, each of which has
a current outstanding principal of less than $500 million. Each BLP
would submit a list of the issuers and the issuer's bonds it would be
willing to represent. The BLP willing to represent the most bonds for a
given issuer would be matched to that issuer. In the event of a tie
(i.e., two or more BLPs seeking to represent the same issuer and the
same number of that issuer's bonds), the BLP with the highest lottery
number from the first round would be matched with the issuer. On a
monthly basis, BLPs are permitted to apply for unrepresented issuers.
The BLP willing to represent the most debt issuances of an issuer is
awarded status as a BLP for such issuer, with ties resolved by lottery.
    A BLP must represent each debt issuance of an issuer that has an
outstanding principal of $500 million or more. A BLP also may represent
any debt issuance below such level, but would not be required to do so.
If a BLP is representing a debt issuance that was above $500 million
but falls below such level, or has voluntarily been representing an
issuance below the $500 million level where the outstanding principal
amount has since been reduced, the BLP may cease representing such
issue by notifying the Exchange in writing by the 15th day of the
month, in which case the BLP may cease acting as such on the 1st day of
the following month.
    The Exchange believes that this matching process is fair to
approved BLPs and beneficial to issuers. In light of the unique nature
of the debt market, the matching process gives BLPs the opportunity to
select the issuers they want to represent and thereby take into account
the BLP's expertise in particular issuers and sectors. The matching
process for the largest issuers is determined on a random basis, while
the matching process for smaller issuers is determined in favor of
those BLPs willing to offer the broadest coverage to such issuers.
    Rule 88(i) sets forth what happens if a BLP fails to meet its
quoting requirements. If, in any given calendar month after the first
two months a BLP acted as a BLP, a BLP fails to meet any of the quoting
requirements set forth in Rule 88(a), the BLP would no longer be
eligible for the rebate for the affected bond. If a BLP's failure to
meet the quoting requirements continues for three consecutive calendar
months in any assigned BLP bond, the Exchange could, in its discretion,
take one or more of the following actions: (i) Revoke the assignment of
all of the affected issuer's bonds from the BLP; (ii) revoke the
assignment of an additional unaffected issuer from a BLP; or (iii)
disqualify a member organization from its status as a BLP.
    The Exchange, in its sole discretion, would determine if and when a
member organization is disqualified from its status as a BLP. One
calendar month prior to any such determination, the Exchange would
notify a BLP of such impending disqualification in writing. When
disqualification determinations are made, the Exchange would provide a
disqualification notice to the member organization.
    If a member organization were disapproved pursuant to Rule 88(d)(2)
or disqualified from its status as a BLP pursuant to Rule 88(i)(1)(C),
such member organization could re-apply for BLP status three calendar
months after the month in which the member organization received its
disqualification notice.
    Pursuant to Rule 88(j), in the event a member organization disputes
the Exchange's decision to disapprove or disqualify it under Rule
88(d)(4) or (i)(2), such member organization (``appellant'') may
request, within five (5) business days of receiving notice of the
decision, the Bond Liquidity Provider Panel (``BLP Panel'') to review
all such decisions to determine if such decisions were correct. In the
event a member organization is disqualified from its status as a BLP
pursuant to Rule 88(i)(2), the Exchange will not reassign the
appellant's bonds to a different BLP until the BLP Panel has informed
the appellant of its ruling.
    The BLP Panel consists of the NYSE's Chief Regulatory Officer
(``CRO''), or a designee of the CRO, and two (2) officers of the
Exchange designated by the Co-Head of U.S. Listings and Cash Execution.
The BLP Panel will review the facts and render a decision within the
time frame prescribed by the Exchange. The BLP Panel may overturn or
modify an action taken by the Exchange and all determinations by the
BLP Panel will constitute final action by the Exchange on the matter at
issue.
    The Exchange believes that the Pilot Program has provided value to
the bonds marketplace as the Exchange is the only marketplace that
offers pre-trade transparency and real-time reporting of trading in
debt securities. The Exchange believes that making the Pilot Program
permanent will continue to encourage trading of debt securities on a
transparent market and reduce the opportunities for anti-competitive
practices.\8\ The Exchange therefore believes it is appropriate for it
to maintain its BTL and BLP Programs on a permanent basis in order to
continue to compete in the retail bond market, thereby encouraging
market participants to bring additional liquidity to the Exchange's
transparent bond marketplace.
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    \8\ Commissioner Michael S. Piwowar recently noted the need to
improve how the fixed-income market operates, including how more
transparency could benefit investors. See ``Advancing and Defending
SEC's Core Mission,'' Remarks by Commissioner Piwowar to the U.S.
Chamber of Commerce, Washington, DC (Jan 27, 2014), http://www.sec.gov/News/Speech/Detail/Speech/1370540671978.
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    The proposed change is not otherwise intended to address any other
issues or make any other amendments to Rules 87 and 88 and the Exchange
is not aware of any problems that member organizations would have in
complying with the proposed change.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\9\ in general, and furthers the
objectives of Section 6(b)(5) of the Act,\10\ in particular, because it
is designed to prevent fraudulent and manipulative acts and practices,
to promote just and equitable principles of trade, to remove
impediments to, and perfect the mechanisms of, a free and open market
and a national market system and, in general, to protect investors and
the public interest.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes the proposed rule change is designed to
prevent fraudulent and manipulative acts and practices and to promote
just and equitable principles of trade because it seeks to make
permanent a Pilot Program that is designed to encourage market
participants to bring additional liquidity to the only transparent bond
market. The Exchange believes the proposed rule change is designed to
facilitate transactions in securities and to remove impediments to, and
perfect the mechanisms of, a free and open market and a national market
system because making the Pilot Program permanent would expand the
number of member organizations that can trade debt securities on the
Exchange and enable the Exchange to continue to create incentives for
BLPs to provide additional liquidity to the only transparent bond
market. The Exchange believes that making the Pilot Program

permanent protects investors and the public interest because investors
benefit from the availability of a transparent market for bonds
trading, as well as the increased competition and liquidity in the
bonds marketplace that the Pilot Program has offered. Finally, the
Exchange believes that it is subject to significant competitive forces,
as described below in the Exchange's statement regarding the burden on
competition, and making the Pilot Program permanent will support the
continued availability of a transparent market in this highly
competitive environment. For these reasons, the Exchange believes that
the proposal to make the Pilot Program permanent is consistent with the
Act.
    Finally, recognizing the statements of Commissioners who have
expressed concern about the state of the U.S. corporate and municipal
bond markets as well as recommendations outlined in the Commission's
release of its Report on the Municipal Securities Market (Report), the
Exchange believes that BLPs, by meeting their quoting requirements,
will be an important participant in the democratization of the fixed
income market.\11\ As highlighted in SEC Chair White's statement during
the SEC's 2013 Roundtable on Fixed Income Markets, the Report makes
recommendations that include (1) improving pre- and post-trade
transparency; (2) promoting the use of transparent and open trading
venues, and (3) requiring dealers to seek ``best execution'' for
customers and to provide customers with relevant pricing information in
connection with their transactions.\12\ Achieving these recommendations
and applying them to both the municipal and corporate bond markets
would, in our view, assist in lowering the systemic risk that is
anticipated to increase as interest rates rise and the closed network
of bond trading comes under pressure as retirement and pension managers
seek to adjust their positions.
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    \11\ See SEC Report on the Municipal Securities Market, July
2012. http://www.sec.gov/news/studies/2012/munireport073112.pdf;
``SEC's Gallagher Says Retail Bond Investors Fighting `Headwinds'
'', Jesse Hamilton, Bloomberg News. Sep 20, 2012. See http://www.bloomberg.com/news/2012-09-19/sec-s-gallagher-says-retail-bond-investors-fighting-headwinds-.html.
    \12\ See Opening remarks of Chairman Mary Jo White at SEC
Roundtable on Fixed Income Markets. http://www.sec.gov/News/Speech/Detail/Speech/1365171515300.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    In accordance with Section 6(b)(8) of the Act,\13\ the Exchange
believes that the proposed rule change would not impose any burden on
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. The Exchange believes that the Pilot Program has
promoted liquidity and competition in the marketplace and is designed
to improve market quality and making the Pilot Program permanent would
continue these benefits.
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    \13\ 15 U.S.C. 78f(b)(8).
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    The Exchange notes that it operates in a highly competitive market
in which market participants can readily favor competing venues that
are not transparent. In such an environment, the Exchange must
continually review, and consider adjusting the services it offers and
the requirements it imposes to remain competitive with other U.S. bond
trading platforms. For the reasons described above, the Exchange
believes that the proposed rule change reflects this competitive
environment by making permanent a program that promotes transparency,
competition, and liquidity in the bond marketplace.

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

    No written comments were solicited or received with respect to the
proposed rule change.

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

    Within 45 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
    (A) By order approve or disapprove the proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule
change should be disapproved.

IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number SR-NYSE-2014-08 on the subject line.

Paper Comments

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

All submissions should refer to File Number SR-NYSE-2014-08. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549, on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSE-2014-08 and should be
submitted on or before April 4, 2014.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-05594 Filed 3-13-14; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register: August 1, 2008 (Volume 73, Number 149)]
[Notices]
[Page 44984-44985]
[DOCID:fr01au08-51]

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

[Docket No. ER08-934-000 ]

Locust Ridge II, LLC; Supplemental Notice That Initial Market-
Based Rate Filing Includes Request for Blanket Section 204
Authorization

July 25, 2008.
    This is a supplemental notice in the above-referenced proceeding of
Locust Ridge, LLC's application for market-based rate authority, with
an

accompanying rate schedule, noting that such application includes a
request for blanket authorization, under 18 CFR part 34, of future
issuances of securities and assumptions of liability.
    Any person desiring to intervene or to protest should file with the
Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, DC 20426, in accordance with Rules 211 and 214 of the
Commission's Rules of Practice and Procedure (18 CFR 385.211 and
385.214). Anyone filing a motion to intervene or protest must serve a
copy of that document on the Applicant.
    Notice is hereby given that the deadline for filing protests with
regard to the applicant's request for blanket authorization, under 18
CFR part 34, of future issuances of securities and assumptions of
liability, is August 14, 2008.
    The Commission encourages electronic submission of protests and
interventions in lieu of paper, using the FERC Online links at http://
www.ferc.gov. To facilitate electronic service, persons with Internet
access who will eFile a document and/or be listed as a contact for an
intervenor must create and validate an eRegistration account using the
eRegistration link. Select the eFiling link to log on and submit the
intervention or protests.
    Persons unable to file electronically should submit an original and
14 copies of the intervention or protest to the Federal Energy
Regulatory Commission, 888 First St., NE., Washington, DC 20426.
    The filings in the above-referenced proceeding are accessible in
the Commission's eLibrary system by clicking on the appropriate link in
the above list.
    They are also available for review in the Commission's Public
Reference Room in Washington, DC. There is an eSubscription link on the
Web site that enables subscribers to receive e-mail notification when a
document is added to a subscribed docket(s). For assistance with any
FERC Online service, please e-mail<EMAIL_ADDRESS>or call
(866) 208-3676 (toll free). For TTY, call<PHONE_NUMBER>.

Kimberly D. Bose,
Secretary.
[FR Doc. E8-17635 Filed 7-31-08; 8:45 am]

BILLING CODE 6717-01-P


[Federal Register: August 29, 2007 (Volume 72, Number 167)]
[Proposed Rules]
[Page 49679-49689]
[DOCID:fr29au07-19]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 81

[EPA-R04-OAR-2007-0549-200727; FRL-8461-7]

Approval and Promulgation of Implementation Plans and
Designations of Areas for Air Quality Planning Purposes; Georgia:
Redesignation of the Murray County 8-Hour Ozone Nonattainment Area to
Attainment for Ozone

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: On June 15, 2007, the State of Georgia, through the Georgia
Environmental Protection Division (EPD), submitted a request to
redesignate the Murray County 8-hour ozone nonattainment area (Murray
County Area) to attainment for the 8-hour ozone National Ambient Air
Quality Standard (NAAQS); and to approve a State Implementation Plan
(SIP) revision containing a maintenance plan for the Murray County
Area. The Murray County 8-hour nonattainment ozone area is a partial
county area, comprised of the portion of Murray County that makes up
the Chattahoochee National Forest. In this action, EPA is proposing to
approve Georgia's 8-hour ozone redesignation request for the Murray
County Area. Additionally, EPA is proposing to approve the 8-hour ozone
maintenance plan for the Murray County Area, including the regional
motor vehicle emissions budgets (MVEBs) for nitrogen oxides
(NOX) and volatile organic compounds (VOCs). This proposed
approval of Georgia's redesignation request is based on EPA's
determination that Georgia has demonstrated that the Murray County Area
has met the criteria for redesignation to attainment specified in the
Clean Air Act (CAA), including the determination that the Murray County
8-hour ozone nonattainment area has attained the 8-hour ozone standard.
In this action, EPA is also describing the status of its transportation
conformity adequacy determination for the new regional MVEBs for 2018
that are contained in the 8-hour ozone maintenance plan for the Murray
County Area.

DATES: Comments must be received on or before September 28, 2007.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2007-0549, by one of the following methods:
    (a) http://www.regulations.gov: Follow the on-line instructions for

submitting comments.
    (b) E-mail<EMAIL_ADDRESS>    (c) Fax:<PHONE_NUMBER>.
    (d) Mail: EPA-R04-OAR-2007-0549, Regulatory Development Section,
Air Planning Branch, Air, Pesticides and Toxics Management Division,
U.S. Environmental Protection Agency, Region 4, 61 Forsyth Street, SW.,
Atlanta, Georgia 30303-8960.
    (e) Hand Delivery or Courier: Stacy Harder, Regulatory Development
Section, Air Planning Branch, Air, Pesticides and Toxics Management
Division, U.S. Environmental Protection Agency, Region 4, 61 Forsyth
Street, SW., Atlanta, Georgia 30303-8960. Such deliveries are only
accepted during the Regional Office's normal hours of operation. The
Regional Office's official hours of business are Monday through Friday,
8:30 to 4:30, excluding Federal holidays.
    Instructions: Direct your comments to Docket ID No. EPA-R04-OAR-
2007-0549. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
http://www.regulations.gov, including any personal information

provided, unless the comment includes information claimed to be
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in hard copy at the Regulatory Development Section, Air Planning
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contact the person listed in the FOR FURTHER INFORMATION CONTACT
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FOR FURTHER INFORMATION CONTACT: Ms. Stacy Harder of the Regulatory
Development Section at the Air Planning Branch, Air, Pesticides and
Toxics Management Division, U.S. Environmental Protection Agency,
Region 4, 61 Forsyth Street, SW., Atlanta, Georgia 30303-8960. Ms.
Harder's telephone number is<PHONE_NUMBER>. She can also be reached
via electronic mail at<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:

Table of Contents

I. What Proposed Actions is EPA Taking?
II. What Is the Background for EPA's Proposed Actions?
III. What Are the Criteria for Redesignation?
IV. Why Is EPA Proposing These Actions?
V. What Is the Effect of EPA's Proposed Actions?
VI. What Is EPA's Analysis of the Request?
VII. What Are the Proposed Regional MVEBs for the Murray County
Area?
VIII. What Is the Status of EPA's Adequacy Determination for MVEBs
for the Year 2018 for the Murray County Area?
IX. Proposed Action on the Redesignation Request and Maintenance
Plan SIP Revision Including Proposed Approval of the 2018 MVEBs
X. Statutory and Executive Order Reviews

I. What Proposed Actions Is EPA Taking?

    EPA is proposing to take two related actions, which are summarized
below and described in greater detail throughout this notice of
proposed rulemaking: (1) to redesignate the Murray County Area to
attainment for the 8-hour ozone NAAQS; and (2) to approve Georgia's 8-
hour ozone maintenance plan into the Georgia SIP, including the
associated MVEBs. EPA is also notifying the public of the status of
EPA's adequacy determination for the Murray County Area MVEBs.
    First, EPA is proposing to determine that the Murray County Area
has attained the 8-hour ozone standard, and that the Murray County Area
has met the requirements for redesignation under section 107(d)(3)(E)
of the CAA. EPA is now proposing to approve a request to change the
legal designation of the Murray County Area from nonattainment to
attainment for the 8-hour ozone NAAQS.
    Second, EPA is proposing to approve Georgia's 8-hour ozone
maintenance plan for the Murray County Area (such approval being one of
the CAA criteria for redesignation to attainment status). The
maintenance plan is designed to help keep the Murray County Area in
attainment with the 8-hour ozone NAAQS through 2018. Consistent with
the CAA, the maintenance plan that EPA is proposing to approve today
also includes 2018 regional MVEBs for NOX and VOCs.
Therefore, EPA is proposing to approve into the Georgia SIP the 2018
regional MVEBs that are included as part of Georgia's maintenance plan.
These regional MVEBs apply to the Murray County Area.
    In this proposed rulemaking, EPA is notifying the public of the
status of EPA's adequacy process for the newly established 2018 MVEBs
for the Murray County Area. The adequacy comment period for the Murray
County Area's 2018 MVEBs began on June 21, 2007, with EPA's posting of
the availability of this submittal on EPA's Adequacy Web Site (http://www.epa.gov/otaq/stateresources/transconf/currsips.htm
). The adequacy

comment period for these MVEBs closed on July 23, 2007. No adverse
comments were received on this submittal during the adequacy public
comment period. Please see section VIII of this proposed rulemaking for
further explanation of this process, and for more details on the MVEBs.
    Today's notice of proposed rulemaking is in response to Georgia's
June 15, 2007, SIP submittal. The June 15, 2007, submittal requests
redesignation of the Murray County Area, and included a SIP revision
addressing the specific issues summarized above and the necessary
elements for redesignation described in section 107(d)(3)(E) of the
CAA.

II. What Is the Background for EPA's Proposed Actions?

    Ground-level ozone is not emitted directly by sources. Rather,
emissions of NOX and VOCs react in the presence of sunlight
to form ground-level ozone. NOX and VOCs are referred to as
precursors of ozone. The CAA establishes a process for air quality
management through the NAAQS.
    On July 18, 1997, EPA promulgated a revised 8-hour ozone standard
of 0.08 parts per million (ppm). This new standard is more stringent
than the previous 1-hour ozone standard. Under EPA regulations at 40
CFR part 50, the 8-hour ozone standard is attained when the 3-year
average of the annual fourth highest daily maximum 8-hour average
ambient air quality ozone concentrations is less than or equal to 0.08
ppm (i.e., 0.084 ppm when rounding is considered). (See, 69 FR 23857
(April 30, 2004) for further information.) Ambient air quality
monitoring data for the 3-year period must meet a data completeness
requirement. The ambient air quality monitoring data completeness
requirement is met when the average percent of days with valid ambient
monitoring data is greater than 90 percent, and no single year has less
than 75 percent data completeness as determined in Appendix I of part
50. Specifically, section 2.3 of 40 CFR part 50, Appendix I,
``Comparisons with the Primary and Secondary Ozone Standards'' states:

    The primary and secondary ozone ambient air quality standards
are met at an ambient air quality monitoring site when the 3-year
average of the annual fourth-highest daily maximum 8-hour average
ozone concentration is less than or equal to 0.08 ppm. The number of
significant figures in the level of the standard dictates the
rounding convention for comparing the computed 3-year average annual
fourth-highest daily maximum 8-hour average ozone concentration with
the level of the standard. The third decimal place of the computed
value is rounded, with values equal to or greater than 5 rounding
up. Thus, a computed 3-year average ozone concentration of 0.085 ppm
is the smallest value that is greater than 0.08 ppm.

    The CAA required EPA to designate as nonattainment any area that
was violating the 8-hour ozone NAAQS based on the three most recent
years of ambient air quality data. The Murray County 8-hour ozone
nonattainment area was designated using 2001-2003 ambient air quality
data. The Federal Register document making these designations was
signed on April 15, 2004, and published on April 30, 2004 (69 FR
23857).
    The CAA contains two sets of provisions--subpart 1 and subpart 2--
that address planning and control requirements for ozone nonattainment
areas. (Both are found in title I, part D.) Subpart 1 (which EPA refers
to as

``basic'' nonattainment) contains general, less prescriptive,
requirements for nonattainment areas for any pollutant--including
ozone--governed by a NAAQS. Subpart 2 (which EPA refers to as
``classified'' nonattainment) provides more specific requirements for
certain ozone nonattainment areas. Some 8-hour ozone nonattainment
areas are subject only to the provisions of subpart 1. Other 8-hour
ozone nonattainment areas are also subject to the provisions of subpart
2. Under EPA's Phase 1 8-hour ozone implementation rule (69 FR 23857)
(Phase 1 Rule), signed on April 15, 2004, and published April 30, 2004,
an area was classified under subpart 2 based on its 8-hour ozone design
value (i.e., the 3-year average of the annual fourth-highest daily
maximum 8-hour average ozone concentrations), if it had a 1-hour design
value at or above 0.121 ppm (the lowest 1-hour design value in Table 1
of subpart 2). All other areas are covered under subpart 1, based upon
their 8-hour ambient air quality design values.
    On April 30, 2004, EPA designated the Murray County Area as a
``basic'' 8-hour ozone nonattainment area (see, 69 FR 23857, April 30,
2004). Thus, on June 15, 2007, when Georgia submitted its final
redesignation request, the Murray County Area was classified under
subpart 1 of the CAA, and was obligated to meet only the subpart 1
requirements.
    Various aspects of EPA's Phase 1 8-hour ozone implementation rule
were challenged in court. On December 22, 2006, the U.S. Court of
Appeals for the District of Columbia Circuit (D.C. Circuit Court)
vacated EPA's Phase 1 Implementation Rule for the 8-hour Ozone Standard
(69 FR 23951, April 30, 2004). South Coast Air Quality Management Dist.
(SCAQMD) v. EPA, 472 F.3d 882 (D.C.Cir. 2006). On June 8, 2007, in
response to several petitions for rehearing, the D.C. Circuit Court
clarified that the Phase 1 Rule was vacated only with regard to those
parts of the Rule that had been successfully challenged. Therefore, the
Phase 1 Rule provisions related to classifications for areas currently
classified under subpart 2 of title I, part D of the CAA as 8-hour
nonattainment areas, the 8-hour attainment dates and the timing for
emissions reductions needed for attainment of the 8-hour ozone NAAQS
remain effective. The June 8th decision left intact the Court's
rejection of EPA's reasons for implementing the 8-hour standard in
certain nonattainment areas under subpart 1 in lieu of subpart 2. By
limiting the vacatur, the Court let stand EPA's revocation of the 1-
hour standard and those anti-backsliding provisions of the Phase 1 Rule
that had not been successfully challenged. The June 8th decision
reaffirmed the December 22, 2006, decision that EPA had improperly
failed to retain measures required for 1-hour nonattainment areas under
the anti-backsliding provisions of the regulations: (1) Nonattainment
area New Source Review (NSR) requirements based on an area's 1-hour
nonattainment classification; (2) Section 185 penalty fees for 1-hour
severe or extreme nonattainment areas; and (3) measures to be
implemented pursuant to section 172(c)(9) or 182(c)(9) of the CAA, on
the contingency of an area not making reasonable further progress
toward attainment of the 1-hour NAAQS, or for failure to attain that
NAAQS. The June 8th decision clarified that the Court's reference to
conformity requirements for anti-backsliding purposes was limited to
requiring the continued use of 1-hour MVEBs until 8-hour budgets were
available for 8-hour conformity determinations, which is already
required under EPA's conformity regulations. The Court thus clarified
that 1-hour conformity determinations are not required for anti-
backsliding purposes.
    This section sets forth EPA's views on the potential effect of the
Court's rulings on this proposed redesignation action. For the reasons
set forth below, EPA does not believe that the Court's rulings alter
any requirements relevant to this redesignation action so as to
preclude redesignation, and do not prevent EPA from proposing or
ultimately finalizing this redesignation. EPA believes that the Court's
December 22, 2006, and June 8, 2007, decisions impose no impediment to
moving forward with redesignation of the Murray County Area to
attainment. Even in light of the Court's decisions, redesignation is
appropriate under the relevant redesignation provisions of the CAA and
longstanding policies regarding redesignation requests.
    With respect to the 8-hour standard, the Court's ruling rejected
EPA's reasons for classifying areas under subpart 1 for the 8-hour
standard, and remanded that matter to the Agency. Consequently, it is
possible that this Area could, during a remand to EPA, be reclassified
under subpart 2. Although any future decision by EPA to classify this
area under subpart 2 might trigger additional future requirements for
the area, EPA believes that this does not mean that redesignation of
the area cannot now go forward. This belief is based upon (1) EPA's
longstanding policy of evaluating redesignation requests in accordance
with the requirements due at the time the request is submitted; and (2)
consideration of the inequity of applying retroactively any
requirements that might in the future be applied.
    First, at the time the redesignation request was submitted, the
Murray County Area was classified under subpart 1 and was obligated to
meet only subpart 1 requirements. Under EPA's longstanding
interpretation of section 107(d)(3)(E) of the CAA, to qualify for
redesignation, states requesting redesignation to attainment must meet
only the relevant SIP requirements that came due prior to the submittal
of a complete redesignation request. See, September 4, 1992, Calcagni
Memorandum (``Procedures for Processing Requests to Redesignate Areas
to Attainment,'' Memorandum from John Calcagni, Director, Air Quality
Management Division). See also, Michael Shapiro Memorandum, September
17, 1993, and 60 FR 12459, 12465-66 (March 7, 1995) (Redesignation of
Detroit-Ann Arbor, Michigan). See, Sierra Club v. EPA, 375 F.3d 537
(7th Cir. 2004), which upheld this interpretation. See, e.g. also, 68
FR 25418, 25424, 25427 (May 12, 2003) (redesignation of St. Louis,
Missouri).
    Moreover, it would be inequitable to retroactively apply any new
SIP requirements that were not applicable at the time the request was
submitted. The D.C. Circuit Court has recognized the inequity in such
retroactive rulemaking (Sierra Club v. Whitman, 285 F.3d 63 (D.C. Cir.
2002)), in which the Court upheld a district court's ruling refusing to
make retroactive an EPA determination of nonattainment that was past
the statutory due date. Such a determination would have resulted in the
imposition of additional requirements on the area. The Court stated,
``Although EPA failed to make the nonattainment determination within
the statutory time frame, Sierra Club's proposed solution only makes
the situation worse. Retroactive relief would likely impose large costs
on the States, which would face fines and suits for not implementing
air pollution prevention plans in 1997, even though they were not on
notice at the time.'' Id. at 68. Similarly here, it would be unfair to
penalize the area by applying to it for purposes of redesignation,
additional SIP requirements under subpart 2 that were not in effect at
the time it submitted its redesignation request.
    As noted earlier, in 2004, the ambient ozone data for the Murray
County Area indicated no further violations of the 8-hour ozone NAAQS,
using data from the 3-year period of 2002-2004 to demonstrate
attainment. As a result, on June 15, 2007, Georgia requested
redesignation of the Murray County

Area to attainment for the 8-hour ozone NAAQS. The redesignation
request included three years of complete, quality-assured ambient air
quality data for the ozone seasons (March 1st until October 31st) of
2002-2004, indicating that the 8-hour ozone NAAQS has been achieved for
the Murray County Area. Under the CAA, nonattainment areas may be
redesignated to attainment if sufficient, complete, quality-assured
data is available for the Administrator to determine that the area has
attained the standard and the area meets the other CAA redesignation
requirements in section 107(d)(3)(E).

III. What Are the Criteria for Redesignation?

    The CAA provides the requirements for redesignating a nonattainment
area to attainment. Specifically, section 107(d)(3)(E) of the CAA
allows for redesignation providing that: (1) The Administrator
determines that the area has attained the applicable NAAQS; (2) the
Administrator has fully approved the applicable implementation plan for
the area under section 110(k); (3) the Administrator determines that
the improvement in air quality is due to permanent and enforceable
reductions in emissions resulting from implementation of the applicable
SIP and applicable Federal air pollutant control regulations and other
permanent and enforceable reductions; (4) the Administrator has fully
approved a maintenance plan for the area as meeting the requirements of
section 175A; and, (5) the state containing such area has met all
requirements applicable to the area under section 110 and part D of the
CAA.
    EPA provided guidance on redesignation in the General Preamble for
the Implementation of Title I of the CAA Amendments of 1990, on April
16, 1992 (57 FR 13498), and supplemented this guidance on April 28,
1992 (57 FR 18070). EPA has provided further guidance on processing
redesignation requests in the following documents:
    1. ``Ozone and Carbon Monoxide Design Value Calculations,''
Memorandum from Bill Laxton, Director, Technical Support Division, June
18, 1990;
    2. ``Maintenance Plans for Redesignation of Ozone and Carbon
Monoxide Nonattainment Areas,'' Memorandum from G.T. Helms, Chief,
Ozone/Carbon Monoxide Programs Branch, April 30, 1992;
    3. ``Contingency Measures for Ozone and Carbon Monoxide (CO)
Redesignations,'' Memorandum from G. T. Helms, Chief, Ozone/Carbon
Monoxide Programs Branch, June 1, 1992;
    4. ``Procedures for Processing Requests to Redesignate Areas to
Attainment,'' Memorandum from John Calcagni, Director, Air Quality
Management Division, September 4, 1992 (hereafter referred to as the
``Calcagni Memorandum'');
    5. ``State Implementation Plan (SIP) Actions Submitted in Response
to Clean Air Act (ACT) Deadlines,'' Memorandum from John Calcagni,
Director, Air Quality Management Division, October 28, 1992;
    6. ``Technical Support Documents (TSD's) for Redesignation of Ozone
and Carbon Monoxide (CO) Nonattainment Areas,'' Memorandum from G. T.
Helms, Chief, Ozone/Carbon Monoxide Programs Branch, August 17, 1993;
    7. ``State Implementation Plan (SIP) Requirements for Areas
Submitting Requests for Redesignation to Attainment of the Ozone and
Carbon Monoxide (CO) National Ambient Air Quality Standards (NAAQS) On
or After November 15, 1992,'' Memorandum from Michael H. Shapiro,
Acting Assistant Administrator for Air and Radiation, September 17,
1993;
    8. ``Use of Actual Emissions in Maintenance Demonstrations for
Ozone and CO Nonattainment Areas,'' Memorandum from D. Kent Berry,
Acting Director, Air Quality Management Division, November 30, 1993;
    9. ``Part D New Source Review (Part D NSR) Requirements for Areas
Requesting Redesignation to Attainment,'' Memorandum from Mary D.
Nichols, Assistant Administrator for Air and Radiation, October 14,
1994; and
    10. ``Reasonable Further Progress, Attainment Demonstration, and
Related Requirements for Ozone Nonattainment Areas Meeting the Ozone
National Ambient Air Quality Standard,'' Memorandum from John S. Seitz,
Director, Office of Air Quality Planning and Standards, May 10, 1995.

IV. Why Is EPA Proposing These Actions?

    On June 15, 2007, Georgia requested redesignation of the Murray
County 8-hour ozone nonattainment area to attainment for the 8-hour
ozone standard. EPA's evaluation indicates that Georgia has
demonstrated that the Murray County Area has attained the standard and
has met the requirements for redesignation set forth in section
107(d)(3)(E) of the CAA. EPA is also announcing the status of its
adequacy determination for the 2018 regional MVEBs, which is relevant
to the requested redesignation.

V. What Is the Effect of EPA's Proposed Actions?

    EPA's proposed actions establish the basis upon which EPA may take
final action on the issues being proposed for approval today. Approval
of Georgia's redesignation request would change the legal designation
of the Murray County Area for the 8-hour ozone NAAQS found at 40 CFR
part 81. Approval of Georgia's request would also incorporate into the
Georgia SIP, a plan for the Murray County Area for maintaining the 8-
hour ozone NAAQS in the area through 2018. This maintenance plan
includes contingency measures to remedy future violations of the 8-hour
ozone NAAQS. The maintenance plan also establishes regional MVEBs for
the year 2018 of 0.0117 tons per day (tpd) for VOCs and 0.0129 tpd for
NOX, for the Murray County Area. Approval of Georgia's
maintenance plan would also result in approval of the regional MVEBs.
Additionally, EPA is notifying the public of the status of its adequacy
determination for the 2018 regional MVEBs, pursuant to 40 CFR
93.118(f)(1).

VI. What Is EPA's Analysis of the Request?

    EPA is proposing to make the determination that the Murray County
Area has attained the 8-hour ozone standard, and that all other
redesignation criteria have been met for the Murray County Area. The
basis for EPA's determination for the area is discussed in greater
detail below.

Criteria (1)--The Murray County Area Has Attained the 8-Hour Ozone
NAAQS

    EPA is proposing to determine that the Murray County Area has
attained the 8-hour ozone NAAQS. For ozone, an area may be considered
to be attaining the 8-hour ozone NAAQS if there are no violations, as
determined in accordance with 40 CFR 50.10 and Appendix I of part 50,
based on three complete, consecutive calendar years of quality-assured
air quality monitoring data. To attain this standard, the 3-year
average of the fourth-highest daily maximum 8-hour average ozone
concentrations measured at each monitor within an area over each year
must not exceed 0.08 ppm. Based on the rounding convention described in
40 CFR part 50, Appendix I, the standard is attained if the design
value is 0.084 ppm or below. The data must be collected and quality-
assured in accordance with 40 CFR part 58, and recorded in the EPA Air
Quality System (AQS). The monitors generally

should have remained at the same location for the duration of the
monitoring period required for demonstrating attainment.
    EPA reviewed ozone monitoring data from the ambient ozone
monitoring station in the Murray County Area for the ozone season from
2002--2004. This data has been quality assured and is recorded in AQS.
The fourth high average for 2002, 2003, and 2004, and the 3-year
average of these values (i.e., design values), are summarized in the
following table:

             Table 1.--Annual 4th Max High and Design Value Concentration for 8-Hour Ozone for the Murray County Area (In Parts per Million)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                4th highest value (ppm)                              3-year
                                                                 -----------------------------------------------------------------------------  average
                            Site name                                                                                ----------
                                                                     2000       2001       2002       2003       2004       2005       2006    2002-2004
--------------------------------------------------------------------------------------------------------------------------------------------------------
Fort Mountain...................................................      0.091      0.080      0.092      0.085      0.074      0.080      0.074      0.084
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As discussed above, the design value for an area is the highest
design value recorded at any monitor in the area. Therefore, the design
value for the Murray County Area is 0.084 ppm, which meets the standard
as described above. As discussed in more detail below, Georgia has
committed to continue monitoring in this area in accordance with 40 CFR
part 58. The data submitted by Georgia provides an adequate
demonstration that the Murray County Area has attained the 8-hour ozone
NAAQS. Additional data for 2005 and 2006 show continued attainment;
however, the analysis for EPD's submittal was initiated prior to the
certification of 2005 and 2006 data, which provides an even greater
margin of compliance.

Criteria (2)--Georgia Has a Fully Approved SIP Under Section 110(k) For
the Murray County Area and Criteria (5)--Has Met All Applicable
Requirements Under Section 110 and Part D of the CAA

    Below is a summary of how these two criteria were met.
    EPA has determined that Georgia has met all applicable SIP
requirements for the Murray County Area under section 110 of the CAA
(general SIP requirements). EPA has also determined that the Georgia
SIP satisfies the criterion that it meet applicable SIP requirements
under part D of title I of the CAA (requirements specific to subpart 1
basic 8-hour ozone nonattainment areas) in accordance with section
107(d)(3)(E)(v). In addition, EPA has determined that the SIP is fully
approved with respect to all applicable requirements in accordance with
section 107(d)(3)(E)(ii). In making these determinations, EPA
ascertained which requirements are applicable to the area and that if
applicable, they are fully approved under section 110(k). SIPs must be
fully approved only with respect to applicable requirements.
a. The Murray County Area Has Met All Applicable Requirements Under
Section 110 and Part D of the CAA
    The September 4, 1992, Calcagni Memorandum (see ``Procedures for
Processing Requests to Redesignate Areas to Attainment,'' Memorandum
from John Calcagni, Director, Air Quality Management Division,
September 4, 1992) describes EPA's interpretation of section
107(d)(3)(E). Under this interpretation, to qualify for redesignation,
states requesting redesignation to attainment must meet only the
relevant CAA requirements that come due prior to the submittal of a
complete redesignation request. See also, Michael Shapiro Memorandum,
(``SIP Requirements for Areas Submitting Requests for Redesignation to
Attainment of the Ozone and Carbon Monoxide NAAQS On or After November
15, 1992,'' September 17, 1993), and 60 FR 12459, 12465-66 (March 7,
1995) (redesignation of Detroit-Ann Arbor, Michigan). Applicable
requirements of the CAA that come due subsequent to the area's
submittal of a complete redesignation request remain applicable until a
redesignation is approved, but are not required as a prerequisite to
redesignation. See, section 175A(c) of the CAA; Sierra Club, 375 F.3d
537; see also, 68 FR 25424, 25427 (May 12, 2003) (redesignation of St.
Louis, Missouri).
    General SIP requirements. Section 110(a)(2) of title I of the CAA
delineates the general requirements for a SIP, which include
enforceable emissions limitations and other control measures, means, or
techniques, provisions for the establishment and operation of
appropriate devices necessary to collect data on ambient air quality,
and programs to enforce the limitations. General SIP elements and
requirements are delineated in section 110(a)(2) of title I, part A of
the CAA. These requirements include, but are not limited to, the
following: submittal of a SIP that has been adopted by the state after
reasonable public notice and hearing; provisions for establishment and
operation of appropriate procedures needed to monitor ambient air
quality; implementation of a source permit program; provisions for the
implementation of part C requirements (Prevention of Significant
Deterioration (PSD)) and provisions for the implementation of part D
requirements (NSR permit programs); provisions for air pollution
modeling; and provisions for public and local agency participation in
planning and emission control rule development.
    Section 110(a)(2)(D) requires that SIPs contain certain measures to
prevent sources in a state from significantly contributing to air
quality problems in another state. To implement this provision, EPA has
required certain states to establish programs to address the transport
of air pollutants (NOX SIP Call, Clean Air Interstate Rule
(CAIR)). EPA has also found, generally, that states have not submitted
SIPs under section 110(a)(1) to meet the interstate transport
requirements of section 110(a)(2)(D)(i). However, the section
110(a)(2)(D) requirements for a state are not linked with a particular
nonattainment area's designation and classification in that state. EPA
believes that the requirements linked with a particular nonattainment
area's designation and classifications are the relevant measures to
evaluate in reviewing a redesignation request. The transport SIP
submittal requirements, where applicable, continue to apply to a state
regardless of the designation of any one particular area in the state.
Thus, we do not believe that the CAA's interstate transport
requirements should be construed to be applicable requirements for
purposes of redesignation.
    In addition, EPA believes that the other section 110 elements not
connected with nonattainment plan

submissions and not linked with an area's attainment status are not
applicable requirements for purposes of redesignation. The area will
still be subject to these requirements after the area is redesignated.
The section 110 and part D requirements, which are linked with a
particular area's designation and classification, are the relevant
measures to evaluate in reviewing a redesignation request. This
approach is consistent with EPA's existing policy on applicability
(i.e., for redesignations) of conformity and oxygenated fuels
requirements, as well as with section 184 ozone transport requirements.
See, Reading, Pennsylvania, proposed and final rulemakings (61 FR
53174-53176, October 10, 1996), (62 FR 24826, May 7, 1997); Cleveland-
Akron-Loraine, Ohio, final rulemaking (61 FR 20458, May 7, 1996); and
Tampa, Florida, final rulemaking at (60 FR 62748, December 7, 1995).
See also, the discussion on this issue in the Cincinnati, Ohio
redesignation (65 FR 37890, June 19, 2000), and in the Pittsburgh,
Pennsylvania redesignation (66 FR 50399, October 19, 2001).
    EPA believes that section 110 elements not linked to the area's
nonattainment status are not applicable for purposes of redesignation.
Any section 110 requirements that are linked to the part D requirements
for 8-hour ozone nonattainment areas are not yet due, since, as
explained below, no part D requirements for 8-hour standard became due
prior to submission of the redesignation request. Therefore, as
discussed above, for purposes of redesignation, they are not considered
applicable requirements. Nonetheless, EPA notes it has previously
approved provisions in the Georgia SIP addressing section 110 elements
under the 1-hour ozone NAAQS (See, 70 FR 34660, June 15, 2005). EPA
believes that the section 110 SIP approved for the 1-hour ozone NAAQS
is also sufficient to meet the requirements under the 8-hour ozone
NAAQS (as well as satisfying the issues raised by the D.C. Circuit
Court in the SCAQMD case).
    Part D requirements. EPA has also determined that the Georgia SIP
meets applicable SIP requirements under part D of the CAA since no
requirements became due prior to the submission of the Area's
redesignation request. Sections 172-176 of the CAA, found in subpart 1
of part D, set forth the basic nonattainment requirements applicable to
all nonattainment areas. Section 182 of the CAA, found in subpart 2 of
part D, establishes additional specific requirements depending on the
area's nonattainment classification. Subpart 2 is not applicable to the
Murray County Area.
    Part D, subpart 1 applicable SIP requirements. For purposes of
evaluating this redesignation request, the applicable part D, subpart 1
SIP requirements for all nonattainment areas are contained in sections
172(c)(1)-(9). A thorough discussion of the requirements contained in
section 172 can be found in the General Preamble for Implementation of
title I (57 FR 13498). No requirements applicable for purposes of
redesignation under part D became due prior to the submission of the
redesignation request, and therefore none are applicable to the Area
for purposes of redesignation. For example, the requirements for an
attainment demonstration that meets the requirements of section
172(c)(1) are not yet applicable, nor are the requirements for
Reasonably Achievable Control Technology (RACT) and Reasonably
Available Control Measures (RACM) (section 172(c)(1)), reasonable
further progress (RFP) (section 172(c)(2)), and contingency measures
(section 172(c)(9)).
    In addition to the fact that no part D requirements applicable for
purposes of redesignation became due prior to submission of the
redesignation request and therefore are not applicable, EPA believes it
is reasonable to interpret the conformity and NSR requirements as not
requiring approval prior to redesignation.
    Section 176 Conformity Requirements. Section 176(c) of the CAA
requires states to establish criteria and procedures to ensure that
Federally supported or funded projects conform to the air quality
planning goals in the applicable SIP. The requirement to determine
conformity applies to transportation plans, programs and projects
developed, funded or approved under title 23 of the United States Code
(U.S.C.) and the Federal Transit Act (transportation conformity) as
well as to all other Federally supported or funded projects (general
conformity). State conformity revisions must be consistent with Federal
conformity regulations relating to consultation, enforcement and
enforceability that the CAA required the EPA to promulgate.
    EPA believes it is reasonable to interpret the conformity SIP
requirements as not applying for purposes of evaluating the
redesignation request under section 107(d), because state conformity
rules are still required after redesignation and Federal conformity
rules apply where state rules have not been approved. See, Wall v. EPA,
265 F.3d 426 (6th Cir. 2001), (upholding this interpretation). See
also, 60 FR 62748 (December 7, 1995, Tampa, Florida).
    NSR Requirements. EPA has also determined that areas being
redesignated need not comply with the requirement that a NSR program be
approved prior to redesignation, provided that the area demonstrates
maintenance of the standard without a part D NSR program in effect
since PSD requirements will apply after redesignation. The rationale
for this view is described in a memorandum from Mary Nichols, Assistant
Administrator for Air and Radiation, dated October 14, 1994, entitled
``Part D New Source Review (Part D NSR) Requirements for Areas
Requesting Redesignation to Attainment.'' Georgia has demonstrated that
the Murray County Area will be able to maintain the standard without a
part D NSR program in effect, and therefore, Georgia need not have a
fully approved part D NSR program prior to approval of the
redesignation request. Georgia's PSD program will become effective in
the Murray County Area upon redesignation to attainment. See,
rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995);
Cleveland-Akron-Lorraine, Ohio (61 FR 20458, 20469-70, May 7, 1996);
Louisville, Kentucky (66 FR 53665, October 23, 2001); Grand Rapids,
Michigan (61 FR 31834-31837, June 21, 1996). Thus, the Murray County
Area has satisfied all applicable requirements for purposes of
redesignation under section 110 and part D of the CAA.
b. The Area Has a Fully Approved Applicable SIP Under Section 110(k) of
the CAA
    EPA has fully approved the applicable Georgia SIP for the portion
of Murray County affected by today's proposed redesignation, under
section 110(k) of the CAA for all requirements applicable for purposes
of redesignation. EPA may rely on prior SIP approvals in approving a
redesignation request, see Calcagni Memorandum at p. 3; Southwestern
Pennsylvania Growth Alliance v. Browner, 144 F.3d 984, 989-90 (6th Cir.
1998); Wall, 265 F.3d 426, plus any additional measures it may approve
in conjunction with a redesignation action. See, 68 FR 25426 (May 12,
2003) and citations therein. Following passage of the CAA of 1970,
Georgia has adopted and submitted, and EPA has fully approved at
various times, provisions addressing the various 1-hour ozone standard
SIP elements applicable in Murray County, Georgia (See, 70 FR 34660,
June 15, 2005).
    As indicated above, EPA believes that the section 110 elements not
connected

with nonattainment plan submissions and not linked to the area's
nonattainment status are not applicable requirements for purposes of
redesignation. EPA also believes that since the part D requirements
applicable for purposes of redesignation did not become due prior to
submission of the redesignation request, they also are therefore not
applicable requirements for purposes of redesignation.

Criteria (3)--The Air Quality Improvement in the Murray County Area is
Due to Permanent and Enforceable Reductions in Emissions Resulting From
Implementation of the SIP and Applicable Federal Air Pollution Control
Regulations and Other Permanent and Enforceable Reductions

    EPA believes that Georgia has demonstrated that the observed air
quality improvement in the Murray County Area is due to permanent and
enforceable reductions in emissions resulting from implementation of
the SIP, Federal measures, and other state-adopted measures.
Additionally, new emissions control programs for fuels and motor
vehicles will help ensure a continued decrease in emissions throughout
the region.

                                 Table 2
------------------------------------------------------------------------
             Murray county area emission reductions programs
-------------------------------------------------------------------------
Onboard Refueling Vapor Recovery for Light-Duty Vehicles.
Architectural and Industrial Maintenance Coatings.
Automobile Refinishing.
The National Emission Standards for Hazardous Air Pollutants (NESHAP);
 the majority of which are also VOCs.
Phase II Acid Rain Program for NOX.
Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control
 Requirements.
Regional NOX SIP Call.
------------------------------------------------------------------------

    Although the NOX SIP Call is stayed in Georgia, this
regional program implemented in neighboring states, has resulted in
measurable emissions reductions that have lowed pollution transported
into Murray County.

Criteria (4)--The Area Has a Fully Approved Maintenance Plan Pursuant
to Section 175A of the CAA

    In its request to redesignate the Murray County Area to attainment,
EPD submitted a SIP revision to provide for the maintenance of the 8-
hour ozone NAAQS for at least 10 years after the effective date of
redesignation to attainment.
a. What is required in a maintenance plan?
    Section 175A of the CAA sets forth the elements of a maintenance
plan for areas seeking redesignation from nonattainment to attainment.
Under section 175A, the plan must demonstrate continued attainment of
the applicable NAAQS for at least 10 years after the Administrator
approves a redesignation to attainment. Eight years after the
redesignation, the State of Georgia must submit a revised maintenance
plan which demonstrates that attainment will continue to be maintained
for the 10 years following the initial 10-year period. To address the
possibility of future NAAQS violations, the maintenance plan must
contain such contingency measures, with a schedule for implementation,
as EPA deems necessary to assure prompt correction of any future 8-hour
ozone violations. Section 175A of the CAA sets forth the elements of a
maintenance plan for areas seeking redesignation from nonattainment to
attainment. The Calcagni Memorandum provides additional guidance on the
content of a maintenance plan. The Calcagni Memorandum explains that an
ozone maintenance plan should address five requirements: the attainment
emissions inventory, maintenance demonstration, monitoring,
verification of continued attainment, and a contingency plan. As is
discussed more fully below, Georgia's maintenance plan includes all the
necessary components and is approvable as part of the redesignation
request.
b. Attainment Emissions Inventory
    Georgia selected 2004 as ``the attainment year'' for the Murray
County Area for the purposes of demonstrating attainment of the 8-hour
ozone NAAQS. This attainment inventory identifies the level of
emissions in the area, which is sufficient to attain the 8-hour ozone
standard. Georgia began development of this attainment inventory by
first developing a baseline emissions inventory for the Murray County
Area. The year 2002 was chosen as the base year for developing a
comprehensive ozone precursor emissions inventory for which projected
emissions could be developed for 2002, 2009, and 2018. Non-road mobile
emissions estimates were based on EPA's NONROAD2005 model. On-road
mobile source emissions were calculated using EPA's MOBILE6.2 emission
factors model. The 2004 VOCs and NOX emissions, as well as
the emissions for other years, for the Murray County Area were
developed consistent with EPA guidance, and are summarized in Tables 3
and 4 in the following subsection.
c. Maintenance Demonstration
    The June 15, 2007, final submittal includes a maintenance plan for
the Murray County Area. This demonstration:
    (i) Shows compliance and maintenance of the 8-hour ozone standard
by providing information to support the demonstration that current and
future emissions of VOCs and NOX remain at or below
attainment year 2004 emissions levels. The year 2004 was chosen as the
attainment year because it is one of the most recent three years (i.e.,
2002, 2003, and 2004) for which the Murray County Area has clean air
quality data for the 8-hour ozone standard.
    (ii) Uses 2004 as the attainment year and includes future emission
inventory projections for 2002, 2009, and 2018.
    (iii) Identifies an ``out year'' at least 10 years after the time
necessary for EPA to review and approve the maintenance plan. Per 40
CFR part 93, MVEBs were established for the last year (2018) of the
maintenance plan. See, section VII below.
    (iv) Provides the following actual and projected emissions
inventories for the Murray County Area. See, Tables 3 and 4.

             Table 3.--Murray County Area Emissions of VOCs
                          [Tons per summer day]
------------------------------------------------------------------------
          Source category                2002          2009       2018
------------------------------------------------------------------------
Area*.............................  0.0209........     0.0204     0.0240
Mobile**..........................  0.0171........     0.0126     0.0075
Nonroad...........................  0.0050........     0.0033     0.0031
                                   -------------------------------------
    Total.........................  0.0430........     0.0363     0.0346
Safety Margin***..................  N/A...........     0.0067     0.0084
------------------------------------------------------------------------
*Scaled according to the population of the partial county area.
** Calculated using MOBILE6.2.
*** After assigning 0.0042 TPD of the 2018 VOCs safety margin to the
  MVEB, the revised 2018 safety margin will be 0.0042 TPD.

               Table 4.--Murray County Area NOX Emissions
                          [Tons per summer day]
------------------------------------------------------------------------
            Source category                 2002       2009       2018
------------------------------------------------------------------------
Area*..................................     0.0070     0.0072     0.0076
Mobile**...............................     0.0156     0.0119     0.0073
Nonroad................................     0.0054     0.0040     0.0020
                                        --------------------------------
    Total..............................     0.0280     0.0231     0.0169
Safety Margin***.......................        N/A     0.0049     0.0111
------------------------------------------------------------------------
*Scaled according to the population of the partial county area.
** Calculated using MOBILE6.2.
*** After assigning 0.0056 TPD of the 2018 NOX safety margin to the
  MVEB, the revised 2018 safety margin will be 0.0055 TPD.

    A safety margin is the difference between the attainment level of
emissions (from all sources) and the projected level of emissions (from
all sources) in the maintenance plan. The attainment level of emissions
is the level of emissions during one of the years in which the area met
the NAAQS. Georgia has decided to allocate a portion of the available
safety margin to the regional 2018 MVEBs for NOX and VOCs
for the Murray County Area, and has calculated the safety margin in its
submittal. See, Tables 3 and 4 above. This allocation and the resulting
available safety margin for the Murray County Area are discussed
further in section VII of this proposed rulemaking.
d. Monitoring Network
    There is currently one monitor measuring ozone in the Murray County
Area. Murray County has committed in the maintenance plan to continue
operation of this monitor in compliance with 40 CFR part 58, and has
addressed the requirement for monitoring.
e. Verification of Continued Attainment
    Georgia has the legal authority to enforce and implement the
requirements of the ozone maintenance plan for the Murray County Area.
This includes the authority to adopt, implement and enforce any
subsequent emissions control contingency measures determined to be
necessary to correct future ozone attainment problems.
    Georgia will track the progress of the maintenance plan by
performing future reviews of actual emissions for the Area using the
latest emissions factors, models and methodologies. For these periodic
inventories Georgia will review the assumptions made for the purpose of
the maintenance demonstration concerning projected growth of activity
levels. If any of these assumptions appear to have changed
substantially, Georgia will re-project emissions.
f. Contingency Plan
    The contingency plan provisions are designed to promptly correct a
violation of the NAAQS that occurs after redesignation. Section 175A of
the CAA requires that a maintenance plan include such contingency
measures as EPA deems necessary to assure that the state will promptly
correct a violation of the NAAQS that occurs after redesignation. The
maintenance plan should identify the contingency measures to be
adopted, a schedule and procedure for adoption and implementation, and
a time limit for action by the state. A state should also identify
specific indicators to be used to determine when the contingency
measures need to be implemented. The maintenance plan must include a
requirement that a state will implement all measures with respect to
control of the pollutant that were contained in the SIP before
redesignation of the area to attainment in accordance with section
175A(d).
    In the June 15, 2007, submittal, Georgia affirms that all programs
instituted by the State and EPA will remain enforceable, and that
sources are prohibited from reducing emissions controls following the
redesignation of the Murray County Area. In the submittal, if there is
a measured violation of the 8-hour ozone NAAQS in the Murray County
Area, contingency measures would be adopted and implemented as
expeditiously as possible, but no later than eighteen to twenty four
months after the triggering event. The proposed schedule for these
actions would be as follows:
     Six months to perform a comprehensive analysis;
     Three months to identify potential sources for reductions;
     Three months to identify applicable control measures;
     Three months to initiate a stakeholder process;
     Three months to draft SIP regulations; and
     Six months to initiate the rulemaking process. This step
would include the time required to hold a public comment period,
hearing, and board adoption, and submit the final plans to EPA. This
process may be initiated simultaneously with drafting the regulations.
    Georgia will consider one or more of the following contingency
measures to re-attain the standard.
     RACM for all sources of NOX

     RACT for all existing point sources of NOX
     Expansion of RACM/RACT to area(s) of transport within the
State
     Mobile Source Measures
     Additional NOX reduction measures yet to be
identified
    EPA has concluded that the maintenance plan adequately addresses
the five basic components of a maintenance plan: attainment inventory,
maintenance demonstration, monitoring network, verification of
continued attainment, and a contingency plan. The maintenance plan SIP
revision submitted by Georgia for the Murray County Area meets the
requirements of section 175A of the CAA and is approvable.

VII. What Are the Proposed Regional MVEBs for the Murray County Area?

    Under the CAA, states are required to submit, at various times,
control strategy SIPs and maintenance plans in ozone areas. These
control strategy SIPs (reasonable further progress SIPs and attainment
demonstration SIPs, etc.) and maintenance plans create MVEBs for
criteria pollutants and/or their precursors to address pollution from
cars and trucks. Per 40 CFR part 93, an MVEB is established for the
last year of the maintenance plan. The MVEB is the portion of the total
allowable emissions in the maintenance demonstration that is allocated
to highway and transit vehicle use and emissions. See, 40 CFR 93.101.
The MVEB serves as a ceiling on emissions from an area's planned
transportation system. The MVEB concept is further explained in the
preamble to the November 24, 1993, transportation conformity rule (58
FR 62188). The preamble also describes how to establish the MVEB in the
SIP and revise the MVEB.
    Georgia, after interagency consultation with the transportation
partners for the Murray County Area, has elected to develop regional
MVEBs for NOX and VOCs for this Area. Georgia is developing
these MVEBs, as required, for the last year of its maintenance plan
(2018). The MVEBs reflect the total on-road emissions for 2018, plus an
allocation from the available VOCs and NOX safety margin.
Under 40 CFR 93.101, the term safety margin is the difference between
the attainment level (from all sources) and the projected level of
emissions (from all sources) in the maintenance plan. The safety margin
can be allocated to the transportation sector; however, the total
emissions must remain below the attainment level. These MVEBs and
allocation from the safety margin were developed in consultation with
the transportation partners and were added to account for uncertainties
in population growth, changes in model vehicle miles traveled (VMT) and
new emission factor models. The regional MVEBs for the Murray County
Area are defined in Table 5 below.

                   Table 5.--Murray County Area MVEBs
                             [Tons per day]
------------------------------------------------------------------------
                                                                 2018*
------------------------------------------------------------------------
NOX..........................................................     0.0129
VOCs.........................................................    0.0117
------------------------------------------------------------------------
* Includes an allocation for the available NOX and VOCs safety margins.

    As mentioned above, Georgia has chosen to allocate a portion of the
available safety margin to the 2018 MVEBs. This allocation is 0.0056
tpd for NOX and 0.0042 tpd for VOCs. The 2018 regional MVEBs
are derived as follows for NOX: (0.0073 tpd for total mobile
emissions) + (0.0056 tpd from available safety margin) = 0.0129 tpd;
and for VOCs: (0.0075 tpd for total mobile emissions) + (0.0042 tpd
from available safety margin) = 0.0117 tpd. Thus, the remaining safety
margin in 2018 is 0.0055 tpd for NOX and 0.0042 tpd for
VOCs.
    Through this rulemaking, EPA is proposing to approve the 2018
regional MVEBs for NOX and VOCs for the Murray County Area
because EPA has determined that the Area maintains the 8-hour ozone
standard with the emissions at the levels of the budgets. As mentioned
above, these MVEBs are regional MVEBs for the Murray County Area. Once
the new regional MVEBs for the Murray County Area (the subject of this
rulemaking) are approved or found adequate (whichever is done first),
they must be used for future conformity determinations. As is discussed
in greater detail below, EPA is also announcing the status of its
adequacy determination for the proposed 2018 MVEBs for the Murray
County Area pursuant to 40 CFR 93.118(f)(1).

VIII. What Is the Status of EPA's Adequacy Determination for MVEBs for
the Year 2018 for the Murray County Area?

    Under section 176(c) of the CAA, new transportation projects, such
as the construction of new highways, must ``conform'' to (i.e., be
consistent with) the part of the State's air quality plan that
addresses pollution from cars and trucks. ``Conformity'' to the SIP
means that transportation activities will not cause new air quality
violations, worsen existing violations, or delay timely attainment of
the NAAQS. If a transportation plan does not ``conform,'' most new
projects that would expand the capacity of roadways cannot go forward.
Regulations at 40 CFR part 93 set forth EPA policy, criteria, and
procedures for demonstrating and assuring conformity of such
transportation activities to a SIP. The regional emissions analysis is
one, but not the only, requirement for implementing transportation
conformity. Transportation conformity is a requirement for
nonattainment and maintenance areas. Maintenance areas are areas that
were previously nonattainment for a particular NAAQS but have since
been redesignated to attainment with a maintenance plan for that NAAQS.
    When reviewing submitted ``control strategy'' SIPs or maintenance
plans containing MVEBs, EPA must affirmatively find the MVEB contained
therein ``adequate'' for use in determining transportation conformity.
Once EPA affirmatively finds the submitted MVEB is adequate for
transportation conformity purposes, that MVEB can be used by state and
Federal agencies in determining whether proposed transportation
projects ``conform'' to the SIP as required by section 176(c) of the
Clean Air Act.
    EPA's substantive criteria for determining ``adequacy'' of an MVEB
are set out in 40 CFR 93.118(e)(4). The process for determining
``adequacy'' consists of three basic steps: public notification of a
SIP submission, a public comment period, and EPA's adequacy finding.
This process for determining the adequacy of submitted SIP MVEBs was
initially outlined in EPA's May 14, 1999, guidance, ``Conformity
Guidance on Implementation of March 2, 1999, Conformity Court
Decision.'' This guidance was finalized in the Transportation
Conformity Rule Amendments for the ``New 8-Hour Ozone and PM2.5
National Ambient Air Quality Standards and Miscellaneous Revisions for
Existing Areas; Transportation Conformity Rule Amendments--Response to
Court Decision and Additional Rule Change,'' on July 1, 2004 (69 FR
40004). EPA follows this guidance and rulemaking in making its adequacy
determinations.
    Georgia's maintenance plan submission contained new regional MVEBs
for VOCs and NOX for the Murray County Area for the year
2018. The availability of the Georgia SIP submission with the Murray
County MVEBs was available for public comment on EPA's adequacy Web

http://www.epa.gov/otaq/stateresources/transconf/currsips.htm. The EPA public

comment period on adequacy of the 2018 regional MVEBs for the Murray
County Area closed on July 23, 2007. EPA did not receive any comments,
or requests for the submittal.
    EPA intends to make its determination of the adequacy of the 2018
MVEBs for the Murray County Area for transportation conformity purposes
in the final rulemaking on the redesignation of the Murray County Area.
If EPA finds the 2018 MVEBs adequate and approves these MVEBs in the
final rulemaking action, the new MVEBs must be used for future
transportation conformity determinations. The new 2018 MVEBs, if found
adequate and approved in the final rulemaking, will be effective on the
date of publication of EPA's final rulemaking in the Federal Register.
For required regional emissions analysis years that involve the year
2017 or before, the State will use the interagency consultation group
for this Area to determine the appropriate interim test to use to
demonstrate conformity. For required regional emissions analysis years
that involve 2018 or beyond, the applicable budgets will be the new
2018 MVEBs. The 2018 MVEBs are defined in section VII of this
rulemaking.

IX. Proposed Actions on the Redesignation Request and the Maintenance
Plan SIP Revision Including Proposed Approval of the 2018 MVEBs

    EPA is proposing to make the determination that the Murray County
Area has met the criteria for redesignation from nonattainment to
attainment for the 8-hour ozone NAAQS. Further, EPA is proposing to
approve Georgia's redesignation request for the Murray County Area.
After evaluating Georgia's SIP submittal requesting redesignation, EPA
has determined that it meets the redesignation criteria set forth in
section 107(d)(3)(E) of the CAA. EPA believes that the redesignation
request and monitoring data demonstrate that the Murray County Area has
attained, and will continue to maintain the 8-hour ozone standard.
    EPA is also proposing to approve the June 15, 2007, SIP revision
containing Georgia's 8-hour ozone maintenance plan for the Murray
County Area. The maintenance plan includes regional MVEBs for 2018,
among other requirements. EPA is proposing to approve the 2018 MVEBs
for the Murray County Area, because the maintenance plan demonstrates
that expected emissions for all other source categories will continue
to maintain the 8-hour ozone standard.
    Further, as part of today's action, EPA is describing the status of
its adequacy determination for the 2018 MVEBs in accordance with 40 CFR
93.118(f)(1). If transportation conformity is implemented in this Area,
the transportation partners will need to use these new MVEBs pursuant
to 40 CFR 93.104(e) as effectively amended by section 172(c)(2)(E) of
the CAA as added by the Safe, Accountable, Flexible, Efficient
Transportation Equity Act--A Legacy for Users (SAFETEA-LU), which was
signed into law on August 10, 2005.

X. Statutory and Executive Order Reviews

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this
proposed action is not a ``significant regulatory action'' and
therefore is not subject to review by the Office of Management and
Budget. For this reason, this action is also not subject to Executive
Order 13211, ``Actions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use'' (66 FR 28355, May 22, 2001). This
proposed action merely proposes to approve State law as meeting Federal
requirements and imposes no additional requirements beyond those
imposed by State law. Redesignation of an area to attainment under
section 107(d)(3)(e) of the CAA does not impose any new requirements on
small entities. Redesignation is an action that affects the status of a
geographical area and does not impose any new regulatory requirements
on sources. Accordingly, the Administrator certifies that this proposed
rule will not have a significant economic impact on a substantial
number of small entities under the Regulatory Flexibility Act (5 U.S.C.
601 et seq.). Because this rule proposes to approve pre-existing
requirements under state law and does not impose any additional
enforceable duty beyond that required by state law, it 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).
    This proposed rule also does not have tribal implications because
it will not have a substantial direct effect on one or more Indian
tribes, on the relationship between the Federal Government and Indian
tribes, or on the distribution of power and responsibilities between
the Federal Government and Indian tribes, as specified by Executive
Order 13175 (65 FR 67249, November 9, 2000). This action also does not
have Federalism implications because it does not have substantial
direct effects on the states, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government, as specified
in Executive Order 13132 (64 FR 43255, August 10, 1999). This action
merely affects the status of a geographical area, does not impose any
new requirements on sources, or allow a state to avoid adopting or
implementing other requirements and does not alter the relationship or
the distribution of power and responsibilities established in the CAA.
This proposed rule also is not subject to Executive Order 13045
``Protection of Children from Environmental Health Risks and Safety
Risks'' (62 FR 19885, April 23, 1997), because it is not economically
significant and because the Agency does not have reason to believe that
the rule concerns an environmental health risk or safety risk that may
disproportionately affect children.
    In reviewing SIP submissions, EPA's role is to approve state
choices, provided that they meet the criteria of the CAA. In this
context, in the absence of a prior existing requirement for the State
to use voluntary consensus standards (VCS), EPA has no authority to
disapprove a SIP submission for failure to use VCS. It would thus be
inconsistent with applicable law for EPA, when it reviews a SIP
submission, to use VCS in place of a SIP submission that otherwise
satisfies the provisions of the CAA. Redesignation is an action that
affects the status of a geographical area but does not impose any new
requirements on sources. Thus, the requirements of section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) do not apply. This proposed rule does not impose an information
collection burden under the provisions of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.).

List of Subjects

40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental
relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping
requirements, Volatile organic compounds.

40 CFR Part 81

    Environmental protection, Air pollution control, National parks,
Wilderness areas.

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

    Dated: August 16, 2007.
J.I. Palmer, Jr.,
Regional Administrator, Region 4.
[FR Doc. E7-17133 Filed 8-28-07; 8:45 am]

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