[Federal Register Volume 78, Number 12 (Thursday, January 17, 2013)]
[Proposed Rules]
[Pages 3867-3877]
[FR Doc No: 2013-00951]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2012-0700; FRL-9771-5]

Approval and Promulgation of Implementation Plans; Kentucky;
110(a)(1) and (2) Infrastructure Requirements for the 2008 8-Hour Ozone
National Ambient Air Quality Standards

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve in part, conditionally approve in
part, and disapprove in part, the July 17, 2012, State Implementation
Plan (SIP) submission provided by the Commonwealth of Kentucky, through
the Division of Air Quality (DAQ) of the Kentucky Energy and
Environment Cabinet. Kentucky DAQ submitted the July 17, 2012, SIP
submission as a replacement to its original September 8, 2009, SIP
submission. Specifically, this proposal pertains to the Clean Air Act
(CAA or Act) requirements for the 2008 8-hour ozone national ambient
air quality standards (NAAQS) infrastructure SIP. The CAA requires that
each state adopt and submit a SIP for the implementation, maintenance,
and enforcement of each NAAQS promulgated by EPA, which is commonly
referred to as an ``infrastructure'' SIP. Kentucky DAQ made a SIP
submission demonstrating that the Kentucky SIP contains provisions that
ensure the 2008 8-hour ozone NAAQS are implemented, enforced, and
maintained in the Commonwealth (hereafter referred to as
``infrastructure submission''). EPA is now proposing three related
actions on Kentucky DAQ's infrastructure SIP submission. First, EPA is
proposing to determine that Kentucky DAQ's infrastructure submission,
provided to EPA on July 17, 2012, satisfies certain required
infrastructure elements for the 2008 8-hour ozone NAAQS. Second, with
respect to the infrastructure requirements related to specific
prevention of significant deterioration (PSD) requirements, EPA is
proposing to approve, in part and conditionally approve in part, the
infrastructure SIP submission based on a December 19, 2012, Kentucky
DAQ commitment to submit specific enforceable measures for approval
into the SIP to address specific PSD program deficiencies. Third, EPA
is proposing to disapprove Kentucky DAQ's infrastructure SIP submission
with respect to certain interstate transport requirements for the 2008
8-hour ozone NAAQS because the submission does not address the
statutory provisions with respect to the relevant NAAQS and thus does
not satisfy the criteria for approval. The CAA requires EPA to act on
this portion of the SIP submission even though under a recent court
decision (which is not yet final as EPA has requested rehearing),
Kentucky DAQ was not yet required to submit a SIP submission to address
these interstate transport requirements. Moreover, under that same
court decision, this disapproval does not trigger an obligation for EPA
to promulgate a Federal Implementation plan (FIP) to address these
interstate transport requirements.

DATES: Written comments must be received on or before February 7, 2013.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R04-
OAR-2012-0700, by one of the following methods:
    1. www.regulations.gov: Follow the on-line instructions for
submitting comments.
    2. Email<EMAIL_ADDRESS>    3. Fax:<PHONE_NUMBER>.
    4. Mail: ``EPA-R04-OAR-2012-0700,'' 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.
    5. Hand Delivery or Courier: Lynorae Benjamin, 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-
2012-0700. EPA's policy is that all comments received will be included
in the public docket without change and may be made available online at
www.regulations.gov, including any personal information provided,
unless the comment includes information claimed to be Confidential
Business Information (CBI) or other information whose disclosure is
restricted by statute. Do not submit through www.regulations.gov or
email, information that you consider to be CBI or otherwise protected.
The www.regulations.gov Web site is an ``anonymous access'' system,
which means EPA will not know your identity or contact information
unless you provide it in the body of your comment. If you send an email
comment directly to EPA without going through www.regulations.gov, your
email address will be automatically captured and included as part of
the comment that is placed in the public docket and made available on
the Internet. If you submit an electronic comment, EPA recommends that
you include your name and other contact information in the body of your
comment and with any disk or CD-ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket visit the EPA Docket Center
homepage at http://www.epa.gov/epahome/dockets.htm.
    Docket: All documents in the electronic docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is

not publicly available, i.e., CBI or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either electronically in www.regulations.gov or in hard copy
at the 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. EPA requests that if at all possible, you contact the
person listed in the FOR FURTHER INFORMATION CONTACT section to
schedule your inspection. The Regional Office's official hours of
business are Monday through Friday, 8:30 to 4:30, excluding federal
holidays.

FOR FURTHER INFORMATION CONTACT: Nacosta C. Ward, 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. The telephone number
is<PHONE_NUMBER>. Ms. Ward can also be reached via electronic mail at
<EMAIL_ADDRESS>
Table of Contents

I. Background and Overview
II. What elements are required under sections 110(a)(1) and (2)?
III. Scope of Infrastructure SIPs
IV. What is EPA's analysis of how the Commonwealth of Kentucky
addressed the elements of sections 110(a)(1) and (2)
``infrastructure'' provisions?
V. Proposed Action
VI. Statutory and Executive Order Reviews

I. Background and Overview

    On March 27, 2008, EPA promulgated a revised NAAQS for ozone based
on 8-hour average concentrations. EPA revised the level of the 8-hour
ozone NAAQS to 0.075 parts per million (ppm). See 77 FR 16436. Pursuant
to section 110(a)(1) of the CAA, states are required to submit SIPs
meeting the applicable requirements of section 110(a)(2) within three
years after promulgation of a new or revised NAAQS or within such
shorter period as EPA may prescribe. Section 110(a)(2) requires states
to address basic SIP elements such as requirements for monitoring,
basic program requirements and legal authority that are designed to
assure attainment and maintenance of the NAAQS. States were required to
submit such SIPs for the 2008 8-hour ozone NAAQS to EPA no later than
March 2011.
    Midwest Environmental Defense and Sierra Club filed a complaint in
federal court on November 20, 2011, alleging EPA's failure to issue
findings of failure to submit related to the infrastructure
requirements for the 2008 8-hour ozone NAAQS. On December 13, 2011, and
March 6, 2012, Midwest Environmental Defense and Sierra Club filed
amended complaints alleging that EPA had failed to promulgate PSD
regulations required with respect to the 2008 8-hour ozone NAAQS within
two years, alleging that EPA had failed to approve or disapprove SIP
submittals, and removing claims regarding states that had by that time
submitted infrastructure SIPs for the 2008 8-hour ozone NAAQS,
respectively. Kentucky was among the states named in the November 2011
complaint, and in the December 2011, and March 2012, amended
complaints. Specifically, the plaintiffs claimed that EPA had failed to
perform a mandatory duty under section 110(k) to take action upon
Kentucky's 2008 8-hour ozone infrastructure SIP addressing sections
110(a)(2)(A)-(H) and (J)-(M) by no later than March 8, 2011.
    Kentucky DAQ's infrastructure submission for the 2008 8-hour ozone
NAAQS was originally received by EPA on September 8, 2009. Kentucky
DAQ's September 8, 2009, SIP revision became complete by operation of
law on March 8, 2010, and thus under CAA section 110(k)(2) EPA was
required to take action on this SIP revision no later than March 8,
2011. On July 17, 2012, Kentucky DAQ withdrew its September 8, 2009,
submission and concurrently provided a new submission to satisfy the
infrastructure requirements for the 2008 8-hour ozone NAAQS.\1\
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    \1\ EPA understands that Kentucky believed, based upon the 2006
24-hour PM2.5 Infrastructure Guidance (the most current
infrastructure guidance at the time), it did not need to hold a
public hearing for its original letter certification for the 2008 8-
hour ozone NAAQS infrastructure SIP (dated September 8, 2009). EPA
further understands that, following the publication of EPA's
Infrastructure Guidance for the 2008 Lead NAAQS, Kentucky decided to
undergo public notice and comment for its 2008 8-hour ozone NAAQS
infrastructure SIP. Following that public review and comment, on
July 17, 2012, Kentucky withdrew its original infrastructure
submission, and provided EPA with a new, publically noticed
infrastructure submission.
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    On December 7, 2012, EPA was ordered by the U.S. District Court for
the Northern District of California (hereafter also referred to as the
``district court'') to ``sign a final rule or rules taking final action
on the 2008 ozone NAAQS Infrastructure SIP submittals from Kentucky
(submittal dated 9/8/2009, revised 7/17/2012) * * * by no later than 3/
4/2013.'' EPA does not agree that the July 17, 2012, submission
``revised'' the earlier September 8, 2009, infrastructure submission.
Instead, according to the transmittal letter from Kentucky DAQ, the
latter submission was a new infrastructure submission sent to EPA to
completely replace the earlier September 8, 2009, submission which
Kentucky DAQ withdrew. The July 17, 2012, infrastructure submission and
accompanying transmittal letter are available in the docket for today's
action. Although Kentucky DAQ clearly stated its intention to replace
the original September 8, 2009, submission with the July 17, 2012,
submission, EPA interprets the district court order as requiring EPA to
act on both infrastructure SIP submittals and to treat the July 17,
2012, submission merely as a revision to the original September 8,
2009, submission, and EPA is proposing to do so in this notice. EPA
views the actions proposed today as steps toward satisfying the
requirements of the December 7, 2012, district court order regarding
Kentucky DAQ's infrastructure submission.
    On December 19, 2012, Kentucky DAQ submitted a request for
conditional approval of the infrastructure SIP submission with respect
to the PSD requirements of sections 110(a)(2)(C), 110(a)(2)(D)(i)(II)
(hereafter referred to as prong 3 of section 110(a)(2)(D)(i)),\2\ and
110(a)(2)(J) to address deficiencies in the infrastructure SIP
concerning the fine particulate matter (PM2.5 ) PSD
requirements for these elements. Today's action proposes conditional
approval of the Commonwealth's infrastructure SIP submission,
consistent with section 110(k)(4) of the CAA, for the portions of the
submission related to PSD requirements based upon a commitment by
Kentucky DAQ to submit the necessary SIP revisions with specific
enforceable measures to address PM2.5 PSD requirements. EPA
notes that these requirements are part of the structural requirements
for the PSD program that are relevant for purposes of infrastructure
SIPs for the 2008 8-hour ozone NAAQS.
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    \2\ Section 110(a)(2)(D)(i) includes four requirements referred
to as prongs 1 through 4. Prongs 1 and 2 appear in section
110(a)(2)(D)(i)(I); prongs 3 and 4 appear in section
110(a)(2)(D)(i)(II).
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    Kentucky DAQ's July 17, 2012, infrastructure SIP submission for the
2008 8-hour ozone NAAQS also addressed CAA section 110(a)(2)(D)(i)(I),
which requires that SIPs contain adequate provisions prohibiting any
source or other type of emissions activity in one state from
contributing significantly to nonattainment maintenance of the NAAQS in
another

state. In its submission, Kentucky DAQ asserts that section
110(a)(2)(D)(i)(I) is satisfied by the Commonwealth's previously
approved SIP revision to meet the Clean Air Interstate Rule (CAIR)
requirements.
    CAIR was promulgated by EPA in 2005 to address, for certain states,
the requirements of CAA section 110(a)(2)(D)(i)(I) with respect to the
1997 8-hour ozone and 1997 annual PM2.5 NAAQS. See 70 FR
25162. In 2008, the U.S. Court of Appeals for the D.C. Circuit granted
several petitions for review of CAIR; however, the D.C. Circuit
ultimately decided to leave CAIR in place to preserve the environmental
values of the rule while EPA promulgated a new rule to replace it.
North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), as modified on
rehearing, 550 F.3d 1176 (D.C. Cir. 2008). In 2011, EPA promulgated the
Cross-State Air Pollution Rule (CSAPR) to replace CAIR and to address,
for certain states, the requirements of 110(a)(2)(D)(i)(I) with respect
to the 1997 8-hour ozone, the 1997 annual PM2.5 NAAQS and
the 2006 24-hour PM2.5 NAAQS. See 76 FR 48208. Neither CAIR
nor CSAPR addressed the requirements of 110(a)(2)(D)(i)(I) with respect
to the 2008 8-hour ozone NAAQS.
    In August of 2012, a panel of the U.S. Court of Appeals for the
D.C. Circuit issued a decision to vacate CSAPR. See EME Homer City
Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012). This decision
addressed the requirements of 110(a)(2)(D)(i)(I). The EME Homer City
panel decision vacated CSAPR and ordered EPA to continue implementing
CAIR. The D.C. Circuit has not yet issued the final mandate in EME
Homer City as EPA (as well as several interveners) petitioned for
rehearing en banc, asking the full court to review the decision.
Nonetheless, while rehearing proceedings are pending, EPA intends to
act in accordance with the panel opinion in EME Homer City opinion.
    Several aspects of the EME Homer City opinion are potentially
relevant to this proposal. First, the opinion concludes that a section
110(a)(2)(D)(i)(I) SIP submission cannot be considered a ``required''
SIP submission until EPA has defined a state's obligations pursuant to
that section. See EME Homer City, 696 F.3d at 32 (``A SIP logically
cannot be deemed to lack a `required submission' or deemed to be
deficient for failure to meet the good neighbor obligation before EPA
quantifies the good neighbor obligation.'') EPA historically has
interpreted section 110(a)(1) of the CAA as establishing the required
submittal date for SIPs addressing all of the ``interstate transport''
requirements in section 110(a)(2)(D), including the provisions in
section 110(a)(2)(D)(i)(I) regarding significant contribution to
nonattainment and interference with maintenance. However, at this time
in light of the EME Homer City opinion, EPA is not treating the section
110(a)(2)(D)(i)(I) SIP submission from Kentucky DAQ as a required SIP
submission. Second, the EME Homer City opinion provides that EPA does
not have authority to promulgate a FIP to address the requirements of
section 110(a)(a)(2)(D)(i)(I) until EPA has identified emissions in a
state that significantly contribute to nonattainment or interfere with
maintenance of the NAAQS in another state and given the state an
opportunity to submit a SIP to address those emissions. EME Homer City,
696 F.3d at 28.
    As explained in greater detail below, in this action, EPA is
proposing to disapprove Kentucky DAQ's SIP submission as it relates to
section 110(a)(2)(D)(i)(I) because the submission does not address the
statutory provisions with respect to the relevant NAAQS and thus does
not satisfy the criteria for approval presented in CAA section
110(k)(3). EPA must act on the 110(a)(2)(D)(i)(I) SIP submission from
the Commonwealth because, even if the submission is not considered to
be ``required,'' section 110(k)(2) of the CAA requires EPA to act on
all SIP submissions. However, unless the EME Homer City decision is
reversed or otherwise modified by the D.C. Circuit, any final
disapproval would not obligate the Commonwealth to take any action or
make a new SIP submission. Nor would it trigger an obligation for EPA
to promulgate a FIP to address these interstate transport requirements.
    Kentucky DAQ's July 17, 2012, 2008 8-hour infrastructure submission
also addressed sections 110(a)(2)(A)-(B); (D)(i) prong 4;(E)-(H); other
sub-elements of (J); and (K)-(M). Today, EPA is proposing to fully
approve these elements of the Commonwealth's submission for the reasons
explained below.

II. What elements are required under sections 110(a)(1) and (2)?

    Section 110(a) of the CAA requires states to submit SIPs to provide
for the implementation, maintenance, and enforcement of a new or
revised NAAQS within three years following the promulgation of such
NAAQS, or within such shorter period as EPA may prescribe. Section
110(a) imposes the obligation upon states to make a SIP submission to
EPA for a new or revised NAAQS, but the contents of that submission may
vary depending upon the facts and circumstances. In particular, the
data and analytical tools available at the time the state develops and
submits the SIP for a new or revised NAAQS affects the content of the
submission. The contents of such SIP submissions may also vary
depending upon what provisions the state's existing SIP already
contains. In the case of the 2008 8-hour ozone NAAQS, states typically
have met the basic program elements required in section 110(a)(2)
through earlier SIP submissions in connection with the 1997 8-hour
ozone NAAQS.
    More specifically, section 110(a)(1) provides the procedural and
timing requirements for SIPs. Section 110(a)(2) lists specific elements
that states must meet for ``infrastructure'' SIP requirements related
to a newly established or revised NAAQS. As mentioned above, these
requirements include basic SIP elements such as requirements for
monitoring, basic program requirements and legal authority that are
designed to assure attainment and maintenance of the NAAQS. The
requirements that are the subject of this proposed rulemaking are
summarized below.\3\
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    \3\ Two elements identified in section 110(a)(2) are not
governed by the three year submission deadline of section 110(a)(1)
because SIPs incorporating necessary local nonattainment area
controls are not due within three years after promulgation of a new
or revised NAAQS, but rather due at the time the nonattainment area
plan requirements are due pursuant to section 172. These
requirements are: (1) Submissions required by section 110(a)(2)(C)
to the extent that subsection refers to a permit program as required
in part D Title I of the CAA; and (2) submissions required by
section 110(a)(2)(I) which pertain to the nonattainment planning
requirements of part D, Title I of the CAA. Today's proposed
rulemaking does not address infrastructure elements related to
section 110(a)(2)(I) or the nonattainment planning requirements of
110(a)(2)(C).
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     110(a)(2)(A): Emission limits and other control measures.
     110(a)(2)(B): Ambient air quality monitoring/data system.
     110(a)(2)(C): Program for enforcement of control
measures.\4\
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    \4\ This rulemaking only addresses requirements for this element
as they relate to attainment areas.
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     110(a)(2)(D): Interstate transport.\5\
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    \5\ As explained above, EPA at this time is not treating the
110(a)(2)(D)(i)(I) SIP submission from Kentucky DAQ as a required
SIP submission. The portions of the SIP submission relating to
110(a)(2)(D)(i)(II) and 110(a)(2)(D)(ii), in contrast, are required,
and are being acted upon by EPA in today's proposed rulemaking.
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     110(a)(2)(E): Adequate resources.
     110(a)(2)(F): Stationary source monitoring system.
     110(a)(2)(G): Emergency power.
     110(a)(2)(H): Future SIP revisions.

     110(a)(2)(I): Areas designated nonattainment and meet the
applicable requirements of part D.\6\
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    \6\ As mentioned above, this element is not relevant to today's
proposed rulemaking.
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     110(a)(2)(J): Consultation with government officials;
public notification; and PSD and visibility protection.
     110(a)(2)(K): Air quality modeling/data.
     110(a)(2)(L): Permitting fees.
     110(a)(2)(M): Consultation/participation by affected local
entities.

III. Scope of Infrastructure SIPs

    EPA notes that this rulemaking does not address four substantive
issues that are not integral to the Commonwealth's infrastructure SIP
submission. These four issues are: (i) Existing provisions related to
excess emissions during periods of start-up, shutdown, or malfunction
at sources (SSM), that may be contrary to the CAA and EPA's policies
addressing such excess emissions; (ii) existing provisions related to
``director's variance'' or ``director's discretion'' that purport to
permit revisions to SIP approved emissions limits with limited public
process or without requiring further approval by EPA, that may be
contrary to the CAA (director's discretion); (iii) existing provisions
for minor source new source review (NSR) programs that may be
inconsistent with the requirements of the CAA and EPA's regulations
that pertain to such programs (minor source NSR); and, (iv) existing
provisions for PSD programs that may be inconsistent with current
requirements of EPA's ``Final NSR Improvement Rule,'' 67 FR 80186
(December 31, 2002), as amended by 72 FR 32526 (June 13, 2007) (NSR
Reform).
    Instead, EPA has indicated that it has other authority to address
any such existing SIP defects in other rulemakings, as appropriate. A
detailed rationale for why these four substantive issues are not part
of the scope of infrastructure SIP rulemakings can be found in EPA's
August 3, 2012, proposed rule entitled, ``Approval and Promulgation of
Implementation Plans; Kentucky; 110(a)(1) and (2) Infrastructure
Requirements for the 1997 annual and 2006 24-hour Fine Particulate
Matter National Ambient Air Quality Standards'' in the section
entitled, ``Scope of Infrastructure SIPs'' (See 77 FR 46352).

IV. What is EPA's analysis of how the Commonwealth of Kentucky
addressed the elements of sections 110(a)(1) and (2) ``infrastructure''
provisions?

    Kentucky DAQ's infrastructure submission addresses the provisions
of sections 110(a)(1) and (2) as described below.
    1. 110(a)(2)(A): Emission limits and other control measures:
Kentucky DAQ's infrastructure submission provides an overview of the
provisions of the Kentucky Air Regulations relevant to air quality
control regulations. The regulations described below have been
federally approved in the Kentucky SIP and include enforceable emission
limitations and other control measures. Chapter 50--Division for Air
Quality; General Administrative Procedures of the Kentucky Air
Regulations generally authorizes the Kentucky Energy and Environment
Cabinet to adopt rules for the control of air pollution, including
those necessary to obtain EPA approval under section 110 of the CAA and
details the authority and means with which DAQ can require testing and
emissions verification. Chapter 51--Attainment and Maintenance of the
National Ambient Air Quality Standards, also includes references to
rules adopted by Kentucky DAQ to control air pollution, including ozone
precursors. Chapter 53--Ambient Air Quality Standards, serves to
establish the requirements for the prevention, abatement, and control
of air pollution. EPA has made the preliminary determination that the
provisions contained in these chapters and the Commonwealth's practices
are adequate to demonstrate enforceable emission limitations and other
control measures for the 2008 8-hour ozone NAAQS in Kentucky.
Accordingly, EPA is proposing to approve Kentucky DAQ's infrastructure
SIP submission with respect to section 110(a)(2)(A).
    In this action, EPA is not proposing to approve or disapprove any
existing state provisions with regard to excess emissions during SSM of
operations at a facility. EPA believes that a number of states have SSM
provisions which are contrary to the CAA and existing EPA guidance,
``State Implementation Plans: Policy Regarding Excess Emissions During
Malfunctions, Startup, and Shutdown'' (September 20, 1999), and the
Agency plans to address such state regulations in the future. In the
meantime, EPA encourages any state having deficient SSM provisions to
take steps to correct them as soon as possible.
    Additionally, in this action, EPA is not proposing to approve or
disapprove any existing state rules with regard to director's
discretion or variance provisions. EPA believes that a number of states
have such provisions which are contrary to the CAA and existing EPA
guidance (52 FR 45109, November 24, 1987), and the Agency plans to take
action in the future to address such state regulations. In the
meantime, EPA encourages any state having a director's discretion or
variance provision which is contrary to the CAA and EPA guidance to
take steps to correct the deficiency as soon as possible.
    2. 110(a)(2)(B) Ambient air quality monitoring/data system: Chapter
50:050--Monitoring, Chapter 51:010--Attainment status designations, and
Chapter 53--Ambient Air Quality Standards, along with the
Commonwealth's Network Description and Ambient Air Monitoring Network
Plan, provide for an ambient air quality monitoring network in
Kentucky. Annually, EPA approves the ambient air monitoring network
plan for the state agencies. On May 25, 2012, the Commonwealth of
Kentucky submitted its plan to EPA, which also included the Louisville-
Jefferson County local monitoring program. On June 29, 2012, EPA
approved the Commonwealth's monitoring network plan. The Commonwealth's
approved monitoring network plan can be accessed at www.regulations.gov
using Docket ID No. EPA-R04-OAR-2012-0700. EPA has made the preliminary
determination that the Commonwealth's SIP and practices are adequate
for the ambient air quality monitoring and data system related to the
2008 8-hour ozone NAAQS. Accordingly, EPA is proposing to approve
Kentucky DAQ's infrastructure SIP submission with respect to section
110(a)(2)(B).
    3. 110(a)(2)(C) Program for enforcement of control measures
including review of proposed new sources: Chapter 51--Attainment and
Maintenance of the National Ambient Air Quality Standards, describes
the permit requirements for new major sources or major modifications of
existing sources in areas classified as attainment or unclassifiable
under section 107(d)(1)(A)(ii) or (iii) of the CAA. These requirements
are designed to ensure that sources in areas attaining the NAAQS at the
time of designations prevent any significant deterioration in air
quality. Chapter 51 also sets the permitting requirements for areas in
or around nonattainment areas and a description of the Commonwealth's
statutory authority to enforce regulations relating to attainment and

maintenance of the 2008 8-hour ozone NAAQS.
    At present, there are four SIP revisions that are relevant to EPA's
review of Kentucky DAQ's infrastructure SIP submission for the 2008 8-
hour ozone NAAQS in connection with the current PSD-related
infrastructure requirements. See sections 110(a)(2)(C), prong 3 of
110(a)(2)(D)(i), and 110(a)(2)(J) of the CAA. The EPA regulations that
require these SIP revisions are: (1) ``Final Rule To Implement the 8-
Hour Ozone National Ambient Air Quality Standard--Phase 2; Final Rule''
(November 29, 2005, 70 FR 71612) (hereafter referred to as the ``Phase
II Rule''); (2) ``Prevention of Significant Deterioration and Title V
Greenhouse Gas [GHG] Tailoring Rule; Final Rule'' (June 3, 2010, 75 FR
31514) (hereafter referred to as the ``GHG Tailoring Rule''); (3)
``Implementation of the New Source Review Program for Particulate
Matter Less Than 2.5 Micrometers; Final Rule'' (May 16, 2008, 73 FR
28321) (hereafter referred to as the ``NSR PM2.5 Rule'');
and, (4) ``Final Rule on the Prevention of Significant Deterioration
(PSD) for Particulate Matter Less Than 2.5 Micrometers
(PM2.5)--Increments, Significant Impact Levels (SILs) and
Significant monitoring Concentration (SMC); Final Rule'' (October 20,
2010, 75 FR 64864) (hereafter referred to as the``PM2.5 PSD
Increment-SILs-SMC Rule (only as it relates to PM2.5
Increments)'').
    The first revision to the Kentucky SIP (Phase II Rule revisions)
was submitted by Kentucky DAQ on February 4, 2010. Kentucky DAQ's
submittal addressed the structural PSD program revisions required by
the Phase II Rule, including requirements to include nitrogen oxides
(NOX) as an ozone precursor for permitting purposes for PSD
and nonattainment NSR. EPA published a final action approving Kentucky
DAQ's revisions which incorporate NOX as an ozone precursor
on September 15, 2010. See 75 FR 55988. Thus, EPA has preliminarily
determined that the infrastructure SIP submission is approvable with
respect to this issue.
    The second revision to the Kentucky SIP pertains to revisions to
the PSD program promulgated in the GHG Tailoring Rule, submitted to EPA
by Kentucky DAQ on December 13, 2010. EPA published a final action to
approve revisions to Kentucky DAQ's SIP related to GHG regulations on
December 29, 2010. See 75 FR 81868. The revisions include two
significant changes impacting the regulation of GHGs under the
Commonwealth's NSR/PSD program: (1) They provide the Commonwealth with
authority to issue PSD permits governing GHGs, and (2) they establish
appropriate emission thresholds for determining which new stationary
sources and modification projects become subject to Kentucky DAQ's PSD
permitting requirements for its GHG emissions. Thus, EPA has
preliminarily determined that the infrastructure SIP submission is
approvable with respect to this issue.
    The third revision to the Kentucky SIP pertains to the adoption of
PSD and Nonattainment New Source Review (NNSR) requirements related to
the implementation of the NSR PM2.5 Rule approved in EPA's
May 16, 2008, final rule. The fourth revision to the Kentucky SIP
pertains to PM2.5 PSD Increment-SILs-SMC Rule approved in
EPA's October 20, 2010, final rule (only as it relates to
PM2.5 Increments). Currently, Kentucky DAQ's SIP does not
contain provisions to address these structural PSD requirements and
thus the infrastructure SIP submission is deficient with respect to
these requirements.
    On December 19, 2012, however, Kentucky DAQ submitted a commitment
letter to EPA requesting conditional approval of the infrastructure SIP
submission for the 2008 8-hour ozone NAAQS to address outstanding
requirements related to the NSR PM2.5 Rule and
PM2.5 PSD Increment-SILs-SMC Rule (only as it relates to
PM2.5 Increments).\7\ In its December 19, 2012, letter,
Kentucky DAQ described the specific rules that it is developing to
address outstanding requirements related to the NSR PM2.5
Rule and PM2.5 PSD Increment-SILs-SMC Rule (only as it
relates to PM2.5 Increments), provided its intended schedule
and process to address the requirements, and committed to adopt these
specific enforceable provisions to address the requirements.\8\
Further, Kentucky DAQ has committed to submitting these SIP revisions
to EPA for incorporation into the Kentucky SIP by no later than one
year from the publication date of EPA's final conditional approval
action of the infrastructure SIP for this requirement. Failure by the
Commonwealth to adopt these provisions and submit them to EPA for
incorporation into the SIP within one year from the publication date of
EPA's final conditional approval action would result in this proposed
conditional approval being treated as a disapproval. Should that occur,
EPA would provide the public with notice of such a disapproval in the
Federal Register.\9\ Based on Kentucky DAQ's commitment, EPA is
proposing to conditionally approve the Commonwealth's infrastructure
SIP submission as it relates to PSD requirements related to
110(a)(2)(C) in accordance with section 110(k)(4) of the Act.
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    \7\ The December 19, 2012, commitment letter submitted to EPA by
Kentucky DAQ can be accessed at www.regulations.gov using Docket ID
No. EPA-R04-OAR-2012-0700.
    \8\ The December 19, 2012, comment letter references Kentucky's
June 19, 2012, submittal to EPA of the proposed regulatory
amendments that the Commonwealth will submit to meet the applicable
requirements of the NSR PM2.5 Rule and PM2.5
PSD Increment-SILs-SMC Rule. Accordingly, EPA's proposed conditional
approval related to these requirements as they pertain to sections
110(a)(2)(C) and (J), and prong 3 of section 110(a)(2)(D)(i), is
based upon the Commonwealth's commitment to submit the specific
enforceable provisions as described in the December 19, 2012,
commitment letter. This letter references the June 19, 2012,
proposed regulatory amendments which Kentucky commits to incorporate
into the SIP consistent with requirements of section 110(k)(4). The
June 19, 2012, submittal is included in the docket for today's
proposed rulemaking.
    \9\ EPA notes that pursuant to section 110(k)(4), a conditional
approval is treated as a disapproval in the event that a State fails
to comply with its commitment. Notification of this disapproval
action in the Federal Register is not subject to public notice and
comment.
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    EPA has preliminarily determined that the Kentucky SIP meets the
relevant PSD program requirements, with the exception of those SIP
revisions described in the commitment letter. Accordingly, in this
action EPA is proposing to approve the infrastructure SIP submission as
meeting the applicable requirements of section 110(a)(2)(C), but for
the remaining narrow issues related to the NSR PM2.5 Rule
and PM2.5 PSD Increment-SILs-SMC Rule. In addition, EPA is
proposing to conditionally approve Kentucky DAQ's infrastructure SIP
submission for the 2008 8-hour ozone NAAQS with respect to these
specific issues related to NSR PM2.5 Rule and
PM2.5 PSD Increment-SILs-SMC Rule based upon the
Commonwealth's commitment letter.
    EPA is not proposing to approve or disapprove the Commonwealth's
existing minor NSR program itself to the extent that it is inconsistent
with EPA's regulations governing this program because this is not
germane in the context of acting on an infrastructure SIP submission.
EPA believes that a number of states may have minor NSR provisions that
are contrary to the existing EPA regulations for this program. EPA
intends to work with states to reconcile state minor NSR programs with
EPA's regulatory provisions for the program. The statutory requirements
of section 110(a)(2)(C) provide for considerable flexibility in
designing minor NSR

programs, and EPA believes it may be time to revisit the regulatory
requirements for this program to give the states an appropriate level
of flexibility to design a program that meets their particular air
quality concerns, while assuring reasonable consistency across the
country in protecting the NAAQS with respect to new and modified minor
sources. EPA has made the preliminary determination that Kentucky's SIP
and practices are adequate for program enforcement of control measures
including review of proposed new sources related to the 2008 8-hour
ozone NAAQS.
    4. 110(a)(2)(D)(i) and (ii) Interstate and International transport
provisions: Section 110(a)(2)(D) has two components; 110(a)(2)(D)(i)
and 110(a)(2)(D)(ii). Section 110(a)(2)(D)(i) includes four distinct
components, commonly referred to as ``prongs,'' that must be addressed
in SIP submissions. The first two prongs, which are codified in section
110(a)(2)(D)(i)(I), are provisions that prohibit any source or other
type of emissions activity in one state from contributing significantly
to nonattainment of the NAAQS in another state (``prong 1''), and
interfering with maintenance of the NAAQS in another state (``prong
2''). The third and fourth prongs, which are codified in section
110(a)(2)(D)(i)(II), are provisions that prohibit emissions activity in
one state interfering with measures required to prevent significant
deterioration of air quality in another state (``prong 3''), or to
protect visibility in another state (``prong 4''). Section
110(a)(2)(D)(ii) requires SIPs to include provisions insuring
compliance with sections 115 and 126 of the Act, relating to interstate
and international pollution abatement. EPA's analysis of Kentucky DAQ's
infrastructure submission with regard to the requirements of
110(a)(2)(D) is as follows:
    110(a)(2)(D)(i)(I): With regard to section 110(a)(2)(D)(i)(I)
(prongs 1 and 2), EPA is proposing to disapprove Kentucky DAQ's
infrastructure submission for this subsection. In its submission,
Kentucky DAQ provides that section 110(a)(2)(D)(i)(I) is met through
the Commonwealth's approved regulations to meet the Clean Air
Interstate Rule (CAIR) requirements. However, CAIR was promulgated
before the 2008 8-hour ozone NAAQS were promulgated, and CAIR did not,
in any way, address interstate transport requirements related to the
2008 8-hour ozone NAAQS. The submission from Kentucky DAQ thus does not
purport to address the requirements of section 110(a)(2)(D)(i)(I) with
respect to the relevant NAAQS. As such, it does not appear to be
complete with respect to this element. Nonetheless as the submission
has become complete by operation of law, EPA is obligated to act on it
pursuant to CAA section 110(k)(2). Because the submission does not
address the requirements with respect to the relevant NAAQS and relies
exclusively on the CAIR--a rule that was promulgated to address the
requirements of 110(a)(2)(D)(i)(I) with respect to earlier NAAQS and
found insufficient to do so \10\--EPA is proposing to disapprove the
submission with regard to the requirements of 110(a)(2)(D)(i)(I).
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    \10\ Moreover, in its decision granting the petitions for review
of CAIR, the D.C. Circuit held that compliance with CAIR did not
constitute compliance with section 110(a)(2)(D)(i)(I) even for the
NAAQS that were addressed by CAIR--namely the 1997 ozone and 1997
annual PM2.5 NAAQS. See North Carolina v. EPA, 531 F.3d
896 (D.C. Cir. 2008).
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    If the opinion in EME Homer City is neither reversed nor modified
as a result of the pending petitions for rehearing, disapproval of the
Kentucky SIP submission as proposed herein will neither obligate the
Commonwealth to make a new SIP submission nor trigger EPA's obligation
to promulgate a FIP to address the requirements of 110(a)(2)(D)(i)(I)
for Kentucky. The D.C. Circuit's recent opinion in EME Homer City
concluded that EPA cannot promulgate a FIP to address the requirements
of 110(a)(2)(D)(i)(I) for a state until sometime after EPA has
quantified the emissions that must be prohibited under that provision.
See EME Homer City, 696 F.3d at 28 (``explaining that EPA must, after
quantifying state's obligations under section 110(a)(2)(D)(i)(I) give
states an initial opportunity to implement the obligations through
SIPs''). For this reason, unless the EME Homer City opinion is reversed
or modified, the disapproval proposed herein by itself will not trigger
any FIP obligation under CAA section 110(c). Thus, EPA disapproval of
the infrastructure SIP submission cannot be said to start a ``FIP
clock''--that is activation of the two year deadline for EPA to
promulgate a FIP pursuant to CAA section 110(c). Moreover, and unless
the portion of the EME Homer City opinion holding that
110(a)(2)(D)(i)(I) SIPs are not required SIP submissions until EPA
defines state's obligations pursuant to that section is reversed or
otherwise modified, any final disapproval of the section
110(a)(2)(D)(i)(I) portion of the infrastructure SIP submittal will not
require Kentucky DAQ to take any additional action related to the
requirements of 110(a)(2)(D)(i)(I) for the 2008 8-hour ozone NAAQS.
    110(a)(2)(D)(i)(II)--prong 3: With regard to prong 3 of section
110(a)(2)(D)(i), this requirement may be met by the state's
confirmation in an infrastructure SIP submission that new major sources
and major modifications in the state are subject to a PSD program
meeting all the current structural requirements of part C of title I of
the CAA or (if the state contains a nonattainment area for the relevant
pollutant) to a NNSR program that implements the 2008 8-hour ozone
NAAQS. As discussed in more detail with respect to section
110(a)(2)(C), Kentucky's SIP contains provisions for the Commonwealth's
PSD program that reflect relevant SIP revisions most of the structural
PSD requirements.\11\ There are, however, additional relevant PSD
program revisions that EPA considers relevant to action on the
infrastructure SIP submission for the 2008 8-hour ozone NAAQS. On
December 19, 2012, Kentucky DAQ submitted a letter to EPA with a
schedule and commitment to make the necessary SIP revisions to include
specific enforceable provisions to address the deficiency in the
infrastructure SIP submission with respect to the structural
requirements for PSD programs required by the NSR PM2.5 Rule
and the PM2.5 PSD Increment-SILs-SMC Rule.
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    \11\ See: (1) EPA's approval of Kentucky's PSD/NSR regulations
which address the Ozone Implementation NSR Update requirements and
(2) EPA's approval of Kentucky's PSD GHG Tailoring Rule revisions
which addresses the thresholds for GHG permitting applicability in
Kentucky. For additional detailed information on these requirements,
see section 3 above.
---------------------------------------------------------------------------

    EPA has preliminarily determined that the Kentucky SIP meets the
relevant PSD program requirements, but for those SIP revisions
described in the December 19, 2012, commitment letter. Accordingly, in
this action EPA is proposing to approve the infrastructure SIP
submission as meeting the applicable requirements of prong 3 of section
110(a)(2)(D)(i), but for the remaining narrow issues related to the NSR
PM2.5 Rule and PM2.5 PSD Increment-SILs-SMC Rule.
In addition, based on the Commonwealth's commitment, EPA is proposing
to conditionally approve the Commonwealth's SIP infrastructure
submission with respect to prong 3 of section 110(a)(2)(D)(i)
consistent with section 110(k)(4) of the Act.
    110(a)(2)(D)(i)(II)--prong 4: Prong 4 of section 110(a)(2)(D)(i)
requires that SIPs include provisions prohibiting any source or other
type of emissions activity in one state from interfering

with measures to protect visibility in another state. In describing how
its submission meets this requirement, the Commonwealth referred to
EPA-approved provisions requiring electric generating units (EGUs) in
Kentucky DAQ to comply with CAIR and to the limited approval and
limited disapproval of Kentucky DAQ's regional haze SIP. Although
Kentucky DAQ's regional haze SIP has not been fully approved, EPA
believes that the infrastructure SIP submission together with
previously approved SIP provisions, specifically those provisions that
require EGUs to comply with CAIR and the additional measures in the
regional haze SIP addressing best available retrofit technology (BART)
and reasonable progress requirements for other sources or pollutants,
are adequate to demonstrate compliance with prong 4, thus, EPA is
proposing to fully approve this aspect of the submission.
    Kentucky DAQ's regional haze SIP relied on the Commonwealth's
previous incorporation of the CAIR into the EPA-approved SIP for
Kentucky as an alternative to the requirement that the regional haze
SIPs provide for source-specific BART emission limits for sulfur
dioxide (SO2) and NOX emissions from EGUs. At the
time the Commonwealth's regional haze SIP was being developed, the
Commonwealth's reliance on CAIR was fully consistent with EPA's
regulations. CAIR, as originally promulgated, requires significant
reductions in emissions of SO2 and NOX to limit
the interstate transport of these pollutants, and EPA's determination
that states could rely on CAIR as an alternative to requiring BART for
CAIR-subject EGUs had specifically been upheld in Utility Air
Regulatory Group v. EPA, 471 F.3d 1333 (D.C. Cir. 2006). Moreover, the
states with Class I areas affected by emissions from sources in
Kentucky had adopted reasonable progress goals for visibility
protection that were consistent with the EGU emission limits resulting
from CAIR.
    In 2008, however, the D.C. Circuit remanded CAIR back to EPA. See
North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008). The court found
CAIR to be inconsistent with the requirements of the CAA, see North
Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded
the rule to EPA without vacatur because it found that ``allowing CAIR
to remain in effect until it is replaced by a rule consistent with [the
court's] opinion would at least temporarily preserve the environmental
values covered by CAIR.'' North Carolina, 550 F.3d at 1178.
    After the remand of CAIR by the D.C. Circuit and the promulgation
by EPA of a new rule--CSAPR--to replace CAIR, EPA issued a limited
disapproval of Kentucky DAQ's regional haze SIP (and other states'
regional haze SIPs that relied similarly on CAIR) because EPA believed
that full approval of the SIP was not appropriate in light of the
court's remand of CAIR and the uncertain but limited remaining period
of operation of CAIR. EPA finalized a limited approval of the regional
haze SIP, indicating that except for its reliance on CAIR, the SIP met
CAA requirements for the first planning period of the regional haze
program. See 77 FR 19098 (March 30, 2012).\12\ EPA also finalized a
limited FIP for Kentucky, which merely substituted reliance on EPA's
more recent Transport Rule's (also known as CSAPR) NOX and
SO2 trading programs for EGUs for the SIP's reliance on
CAIR. See 77 FR 33642, June 7, 2012.
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    \12\ Under CAA sections 301(a) and 110(k)(6) and EPA's long-
standing guidance, a limited approval results in approval of the
entire SIP submittal, even of those parts that are deficient and
prevent EPA from granting a full approval of the SIP revision.
Processing of State Implementation Plan (SIP) Revisions, EPA
Memorandum from John Calcagni, Director, Air Quality Management
Division, OAQPS, to Air Division Directors, EPA Regional Offices I-
X, September 7, 1992, (1992 Calcagni Memorandum) located at http://www.epa.gov/ttn/caaa/t1/memoranda/siproc.pdf.
---------------------------------------------------------------------------

    Since the above-described developments with regard to Kentucky
DAQ's regional haze SIP, the situation has changed. In August 2012, the
DC Circuit issued a decision to vacate CSAPR. See EME Homer City , 696
F.3d 7. In this decision, the court ordered EPA to ``continue
administering CAIR pending the promulgation of a valid replacement.''
Thus, EPA has been ordered by the court to develop a new rule, and to
continue implementing CAIR in the meantime, and the opinion makes clear
that after promulgating that new rule EPA must provide states an
opportunity to draft and submit SIPs to implement that rule.
Implementation of CAIR thus cannot be replaced until EPA has
promulgated a final rule through a notice-and-comment rulemaking
process; states have had an opportunity to draft and submit SIPs; EPA
has reviewed the SIPs to determine if they can be approved; and EPA has
taken action on the SIPs, including promulgating a FIP, if appropriate.
    EPA has filed a petition for rehearing of the court's decision on
the Transport Rule. However, based on the current direction from the
court to continue administering CAIR, EPA believes that it is
appropriate to rely on CAIR emission reductions as permanent and
enforceable for purposes of assessing the adequacy of Kentucky DAQ's
infrastructure SIP with respect to prong 4 while a valid replacement
rule is developed and until implementation plans complying with any new
rule are submitted by the states and acted upon by EPA or until the
court case is resolved in a way that provides different direction
regarding CAIR and CSAPR. In addition, EPA believes that based on the
court's decision on CSAPR it would be appropriate to propose to rescind
its limited disapproval of Kentucky DAQ's regional haze SIP and propose
a full approval, but EPA is not proceeding to do so at this time
because of the possibility that an en banc review of the court's
decision may have a different outcome that could bear on such action on
the regional haze SIP.
    As neither the Commonwealth nor EPA has taken any action to remove
CAIR from the Kentucky SIP, CAIR remains part of the EPA-approved SIP
and can be considered in determining whether the SIP as a whole meets
the requirement of prong 4 of 110(a)(2)(D)(i). EPA is proposing to
approve the infrastructure SIP submission with respect to prong 4
because Kentucky's regional haze SIP which EPA has given a limited
approval in combination with its SIP provisions to implement CAIR
adequately prevent sources in Kentucky from interfering with measures
adopted by other states to protect visibility during the first planning
period. While EPA is not at this time proposing to change the March 30,
2012, limited approval and limited disapproval of Kentucky DAQ's
regional haze SIP, EPA expects to propose an appropriate action
regarding Kentucky DAQ's regional haze SIP upon final resolution of EME
Homer City.
    110(a)(2)(D)(ii): With regard to 110(a)(2)(D)(ii), Chapter 51:017--
Prevention of significant deterioration of air quality of the Kentucky
Air Regulations outlines how Kentucky DAQ will notify neighboring
states of potential impacts from new or modified sources. The Kentucky
SIP also includes federally approved regulations that satisfy the
requirements for the NOx SIP Call. See 67 FR 17624 (April 11, 2002).
Further, EPA is unaware of any pending obligations for the Commonwealth
pursuant to sections 115 or 126 of the CAA. EPA has made the
preliminary determination that Kentucky DAQ's SIP and practices are
adequate for insuring compliance with the applicable requirements
relating to interstate and international pollution abatement for the
2008 8-hour ozone NAAQS. Accordingly, EPA is proposing to approve
Kentucky DAQ's infrastructure SIP submission with respect to section
110(a)(2)(D)(ii).

    5. 110(a)(2)(E) Adequate resources: Section 110(a)(2)(E) requires
that each implementation plan provide (i) necessary assurances that the
State will have adequate personnel, funding, and authority under state
law to carry out its implementation plan, (ii) that the State comply
with the requirements respecting State Boards pursuant to section 128
of the Act, and (iii) necessary assurances that, where the State has
relied on a local or regional government, agency, or instrumentality
for the implementation of any plan provision, the State has
responsibility for ensuring adequate implementation of such plan
provisions. EPA is proposing to approve Kentucky DAQ's SIP as meeting
the requirements of sub-elements 110(a)(2)(E)(i), (ii) and (iii).
    In support of EPA's proposal to approve elements 110(a)(2)(E)(i)
and (iii), Kentucky DAQ's infrastructure submission demonstrates that
it is responsible for promulgating rules and regulations for the NAAQS,
emissions standards general policies, a system of permits, fee
schedules for the review of plans, and other planning needs. As
evidence of the adequacy of Kentucky DAQ's resources with respect to
sub-elements (i) and (iii), EPA submitted a letter to Kentucky DAQ on
March 14, 2012, outlining 105 grant commitments and current status of
these commitments for fiscal year 2011. The letter EPA submitted to
Kentucky DAQ can be accessed at www.regulations.gov using Docket ID No.
EPA-R04-OAR-2012-0700. Annually, states update these grant commitments
based on current SIP requirements, air quality planning, and applicable
requirements related to the NAAQS. There were no outstanding issues in
relation to the SIP for fiscal year 2011, therefore, Kentucky DAQ's
grants were finalized and closed out. EPA has made the preliminary
determination that Kentucky has adequate resources for implementation
of the 2008 8-hour ozone NAAQS. In addition, the requirements of
110(a)(2)(E)(i) and (iii) are met when EPA performs a completeness
determination for each SIP submittal. This determination ensures that
each submittal provides evidence that adequate personnel, funding, and
legal authority under state law has been used to carry out the state's
implementation plan and related issues. Kentucky DAQ's authority is
included in all prehearings and final SIP submittal packages for
approval by EPA. EPA has made the preliminary determination that
Kentucky has adequate resources for implementation of the 2008 8-hour
ozone NAAQS. Accordingly, EPA is proposing to approve Kentucky DAQ's
infrastructure SIP submission with respect to section 110(a)(2)(E)(i)
and (iii).
    Section 110(a)(2)(E)(ii) requires that the Commonwealth comply with
section 128 of the CAA. Section 128 requires that: 1) The majority of
members of the state board or body which approves permits or
enforcement orders represent the public interest and do not derive any
significant portion of their income from persons subject to permitting
or enforcement orders under the CAA; and 2) any potential conflicts of
interest by such board or body, or the head of an executive agency with
similar, powers be adequately disclosed. Kentucky DAQ's July 17, 2012,
infrastructure SIP submission adequately demonstrated that Kentucky's
SIP meets the applicable section 128 requirements pursuant to section
110(a)(2)(E)(ii).
    For purposes of section 128(a)(1), Kentucky has no boards or bodies
with authority over air pollution permits or enforcement actions. Such
matters are instead handled by the Director of Division for Air
Quality. As such, a ``board or body'' is not responsible for approving
permits or enforcement orders in Kentucky, and the requirements of
section 128(a)(1) are not applicable. For purposes of section
128(a)(2), Kentucky DAQ's SIP has recently been updated. On October 3,
2012,, EPA finalized approval of Kentucky DAQ's July 17, 2012, SIP
revision requesting incorporation of KRS Chapters 11A.020, 11A.030,
11A.040 and Chapters 224.10-020 and 224.10-100 into the SIP to address
sub-element 110(a)(2)(E)(ii). See 77 FR 60307. With the incorporation
of these regulations into the Kentucky SIP, EPA has made the
preliminary determination that the Commonwealth has adequately
addressed the requirements of section 128(a)(2), and accordingly has
met the requirements of section 110(a)(2)(E)(ii) with respect to
infrastructure SIP requirements. Thus, EPA is proposing approval of
Kentucky DAQ's infrastructure SIP submission for the 2008 8-hour ozone
NAAQS with respect to this requirement as well.
    6. 110(a)(2)(F) Stationary source monitoring system: Chapter 50--
General Administrative Procedures of the Kentucky Air Regulations
describes how the major source and minor source emission inventory
programs collect emission data throughout the Commonwealth (including
Jefferson County) and ensure the quality of such data. Additionally,
the Commonwealth is required to submit emissions data to EPA for
purposes of the National Emissions Inventory (NEI). The NEI is EPA's
central repository for air emissions data. EPA published the Air
Emissions Reporting Rule (AERR) on December 5, 2008, which modified the
requirements for collecting and reporting air emissions data (73 FR
76539). The AERR shortened the time states had to report emissions data
from 17 to 12 months, giving states one calendar year to submit
emissions data. All states are required to submit a comprehensive
emissions inventory every three years and report emissions for certain
larger sources annually through EPA's online Emissions Inventory
System. States report emissions data for the six criteria pollutants
and the precursors that form them--NOX, SO2,
lead, carbon monoxide, particulate matter, and volatile organic
compounds. Many states also voluntarily report emissions of hazardous
air pollutants. the Commonwealth made its latest update to the NEI on
March 14, 2012. EPA compiles the emissions data, supplementing it where
necessary, and releases it to the general public through the Web site
http://www.epa.gov/ttn/chief/eiinformation.html. EPA has made the
preliminary determination that Kentucky's SIP and practices are
adequate for the stationary source monitoring systems related to the
2008 8-hour ozone NAAQS. Accordingly, EPA is proposing to approve
Kentucky DAQ's infrastructure SIP submission with respect to section
110(a)(2)(F).
    7. 110(a)(2)(G) Emergency power: Kentucky's infrastructure
submission provides an overview of the Kentucky Air Regulations,
specifically Chapter 55--Emergency Episodes, which identifies air
pollution emergency episodes and preplanned abatement strategies. The
episode criteria specified in this chapter for ozone are based on a 1-
hour average ozone level at a monitoring site. These criteria have
previously been approved by EPA. EPA has made the preliminary
determination that these criteria are adequate to address ozone
emergency episodes for the 2008 8-hour ozone NAAQS. As a result, EPA
has made the preliminary determination that Kentucky DAQ's SIP and
practices are adequate for emergency powers related to the 2008 8-hour
ozone NAAQS. Accordingly, EPA is proposing to approve Kentucky DAQ's
infrastructure SIP submission with respect to section 110(a)(2)(G).
    8. 110(a)(2)(H) Future SIP revisions: As previously discussed,
Kentucky's DAQ is responsible for adopting air quality rules and
revising SIPs as needed to attain or maintain the NAAQS. Kentucky DAQ
has the ability and authority to respond to calls for SIP

revisions, and has provided a number of SIP revisions over the years
for implementation of the NAAQS.
    Kentucky has one area, Cincinnati, OH-KY-IN, that is designated as
nonattainment for the 2008 8-hour ozone NAAQS. This area is classified
as marginal nonattainment area and therefore no attainment
demonstration SIPs are required. Section 182(a) of the CAA does require
that, for marginal areas, states must submit Base Year Emissions
Inventory SIPs, Periodic Emission Inventory SIPs, Emission Statement
SIPs, and possibly SIP updates to their NSR program. While the CAA
requires these types of SIPs for marginal areas, the specific
requirements and compliance dates for these SIPs, as they relate to the
2008 8-hour ozone NAAQS, are not yet established but are expected to be
addressed in the upcoming Implementation Rule for the 2008 Ozone NAAQS
SIP Requirements. Kentucky DAQ has provided SIP revisions for both the
1-hour ozone and 1997 8-hour ozone NAAQS. EPA has made the preliminary
determination that Kentucky DAQ's SIP and practices adequately
demonstrate a commitment to provide future SIP revisions related to the
2008 8-hour ozone NAAQS when necessary. Accordingly, EPA is proposing
to approve Kentucky DAQ's infrastructure SIP submission with respect to
section 110(a)(2)(H).
    9. 110(a)(2)(J): EPA is proposing to approve in part, and
conditionally approve in part, the Commonwealth's infrastructure SIP
for the 2008 8-hour ozone NAAQS with respect to the requirements in
section 110(a)(2)(J) to include a program in the SIP that provides for
meeting the applicable consultation requirements of section 121, the
public notification requirements of section 127, and the PSD and
visibility protection requirements of part C of the Act.
    110(a)(2)(J) (121 consultation) Consultation with government
officials: Kentucky Air Regulations Chapter 50--Division for Air
Quality; General Administrative Procedures of the Kentucky Air
Regulations, and Chapter 51--Attainment and Maintenance of the National
Ambient Air Quality Standards, provide for consultation with government
officials whose jurisdictions might be affected by SIP development
activities. More specifically, Kentucky DAQ adopted state-wide
consultation procedures for the implementation of transportation
conformity which includes the consideration of the development of
mobile inventories for SIP development. Required partners covered by
Kentucky DAQ's consultation procedures include federal, state, and
local transportation and air quality agency officials. Additionally,
Kentucky DAQ submitted a regional haze plan which outlines its
consultation practices with Federal Land Managers. EPA has made the
preliminary determination that Kentucky DAQ's SIP and practices
adequately demonstrate consultation with government officials related
to the 2008 8-hour ozone NAAQS when necessary. Accordingly, EPA is
proposing to approve Kentucky DAQ's infrastructure SIP submission with
respect to section 110(a)(2)(J) (121 consultation).
    110(a)(2)(J) (127 public notification) Public notification: The
Commonwealth's emergency episode provisions provide for notification to
the public when the NAAQS, including the ozone NAAQS, are exceeded. See
also the discussion above in regarding section 110(a)(2)(G).
Additionally, the Commonwealth reports daily air quality information on
its Web site at http://air.ky.gov/Pages/AirQualityIndexMonitoring.aspx
to inform the public on the existing air quality within the
Commonwealth. EPA has made the preliminary determination that Kentucky
DAQ's SIP and practices adequately demonstrate the Commonwealth's
ability to provide public notification related to the 2008 8-hour ozone
NAAQS when necessary. Accordingly, EPA is proposing to approve Kentucky
DAQ's infrastructure SIP submission with respect to section
110(a)(2)(J) (127 public notification).
    110(a)(2)(J) (PSD) PSD: Kentucky DAQ demonstrates its authority to
regulate new and modified sources of ozone to assist in the protection
of air quality in Kentucky. Chapter 51--Attainment and Maintenance of
the National Ambient Air Quality Standards, describes the permit
requirements for new major sources or major modifications of existing
sources in areas classified as attainment or unclassifiable under
section 107(d)(1)(A)(ii) or (iii) of the CAA. These permitting
requirements are designed to ensure that sources in areas attaining the
NAAQS at the time of designations prevent any significant deterioration
in air quality. Chapter 51 also sets the permitting requirements for
areas in or around nonattainment areas. Accordingly, this portion of
element (J) also requires compliance with the Phase II Rule, the ``GHG
Tailoring Rule'', the NSR PM2.5 Rule, and the
PM2.5 PSD Increment-SILs-SMC Rule. Two of these SIP
revisions \13\ have been approved into the Kentucky SIP and address
requisite requirements of the PSD-related requirement of infrastructure
element 110(a)(2)(J). As with infrastructure elements 110(a)(2)(C), and
prong 3 of 110(a)(2)(D)(i), EPA has preliminarily determined that
Kentucky DAQ's infrastructure SIP submission does not fully meet
element 110(a)(2)(J). Kentucky DAQ's SIP does not include provisions to
meet relevant requirements for NSR/PSD program related to the NSR
PM2.5 Rule and PM2.5 PSD Increment-SILs-SMC Rule
(only as it relates to PM2.5 Increments). As noted above, on
December 19, 2012, Kentucky DAQ submitted a letter to EPA providing a
schedule to address outstanding PSD program requirements promulgated in
the NSR PM2.5 Rule and PM2.5 PSD Increment-SILs-
SMC Rule and committed to provide specific enforceable provisions for
incorporation into the SIP to address the outstanding requirements. EPA
has preliminarily determined that the Kentucky SIP meets the relevant
PSD program requirements, with the exception of those SIP revisions
described in the December 19, 2012, commitment letter. Accordingly, in
this action EPA is proposing to approve the infrastructure SIP
submission as meeting the applicable requirements of section
110(a)(2)(J) (PSD), with the exception of the remaining issues related
to the NSR PM2.5 Rule and PM2.5 PSD Increment-
SILs-SMC Rule. In addition, EPA is proposing to conditionally approve
Kentucky DAQ's infrastructure SIP submission for the 2008 8-hour ozone
NAAQS with respect to these specific issues related to NSR
PM2.5 Rule and PM2.5 PSD Increment-SILs-SMC Rule
based upon the Commonwealth's commitment letter.
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    \13\ (1) EPA's approval of Kentucky's PSD/NSR regulations which
address the Ozone Implementation NSR Update requirements promulgated
in the Phase II Rule and (2) EPA's approval of Kentucky's PSD GHG
Tailoring Rule revisions which addresses the thresholds for GHG
permitting applicability in Kentucky.
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    110(a)(2)(J) Visibility protection: With regard to the visibility
protection aspect of 110(a)(2)(J), EPA recognizes that states are
subject to visibility and regional haze program requirements under part
C of the Act (which includes sections 169A and 169B). In the event of
the establishment of a new NAAQS, however, the visibility and regional
haze program requirements under part C do not change. Thus, EPA finds
that there are no applicable visibility obligations under part C
``triggered'' under section 110(a)(2)(J) when a new NAAQS becomes
effective. Kentucky DAQ has submitted SIP revisions to satisfy the
requirements of the CAA

Section 169A and 169B, and the regional haze and BART rules contained
in 40 CFR 51.308. On March 30, 2012, EPA published a final rulemaking
regarding Kentucky DAQ's regional haze program, consisting of a limited
approval and a limited disapproval. See 77 FR 19098. In EPA's view, the
current status of Kentucky DAQ's regional haze SIP as having not been
fully approved is not a bar to full approval of the infrastructure SIP
submission with respect to the visibility protection aspect of
110(a)(2)(J), and EPA is proposing to fully approve the infrastructure
SIP for this aspect. While EPA is not at this time proposing to change
the March 30, 2012, limited approval and limited disapproval of
Kentucky DAQ's Regional haze SIP itself, EPA expects to address the
approval status of the regional haze SIP upon final resolution of EME
Homer City.
    10. 110(a)(2)(K) Air quality and modeling/data: Kentucky DAQ
conducts air quality modeling and reports the results of such modeling
to EPA as set forth in Kentucky Air Regulations Chapter 50:040--Air
Quality Models. This regulation provides for the use of ambient ozone
monitoring is used, in conjunction with pre- and post-construction
ambient air monitoring, to track local and regional scale changes in
ozone concentrations. Additionally, the Commonwealth supports a
regional effort to coordinate the development of emissions inventories
and conduct regional modeling for several NAAQS, including the 2008 8-
hour ozone NAAQS, for the Southeastern states. Taken as a whole, the
Commonwealth's air quality regulations demonstrate that the Kentucky
DAQ has the authority to provide relevant data for the purpose of
predicting the effect on ambient air quality of the 8-hour ozone NAAQS.
EPA has made the preliminary determination that Kentucky DAQ's SIP and
practices adequately demonstrate the Commonwealth's ability to provide
for air quality and modeling, along with analysis of the associated
data, related to the 2008 8-hour ozone NAAQS when necessary.
Accordingly, EPA is proposing to approve Kentucky DAQ's infrastructure
SIP submission with respect to section 110(a)(2)(K).
    11. 110(a)(2)(L) Permitting fees: Kentucky DAQ addresses the review
of construction permits as previously discussed in 110(a)(2)(C) above.
Permitting fees are collected through the Commonwealth's title V fees
program, which has been federally approved. EPA has made the
preliminary determination that Kentucky DAQ's SIP and practices
adequately provide for permitting fees related to the 2008 8-hour ozone
NAAQS when necessary. Accordingly, EPA is proposing to approve Kentucky
DAQ's infrastructure SIP submission with respect to section
110(a)(2)(L).
    12. 110(a)(2)(M) Consultation/participation by affected local
entities: The Kentucky DAQ coordinates with local governments affected
by the SIP. More specifically, Kentucky DAQ adopted state-wide
consultation procedures for the implementation of transportation
conformity which includes the consideration of the development of
mobile inventories for SIP development and the requirements that link
transportation planning and air quality planning in nonattainment and
maintenance areas. EPA approved these procedures in Chapter 50:066
Conformity of transportation plans, programs, and projects (Amendment)
on April 21, 2010 (75 FR 20180). Required partners covered by Kentucky
DAQ's consultation procedures include federal, state, and local
transportation and air quality agency officials. The state and local
transportation agency officials are most directly impacted by
transportation conformity requirements and are required to provide
public involvement for their activities including the analysis of how
the Commonwealth meets transportation conformity requirements.
Additionally, Chapter 65--Mobile Source-Related Emissions also
discusses consultation related activities specifically related to
mobile sources. EPA has made the preliminary determination that
Kentucky DAQ's SIP and practices adequately demonstrate consultation by
affected local entities related to the 2008 8-hour ozone NAAQS when
necessary. Accordingly, EPA is proposing to approve Kentucky DAQ's
infrastructure SIP submission with respect to section 110(a)(2)(J) (127
public notification).

V. Proposed Action

    EPA is proposing to approve in part, conditionally approve in part,
and disapprove in part, Kentucky DAQ's July 17, 2012, SIP revision
submitted to satisfy infrastructure requirements for the 2008 8-hour
ozone NAAQS. These proposed actions to approve in part, conditionally
approve in part, and disapprove in part the Commonwealth of Kentucky's
infrastructure submission are consistent with sections 110(k)(3) and
110(k)(4) of the CAA.
    First, EPA is proposing to approve Kentucky DAQ's infrastructure
submission with regard to sections 110(a)(2)(A); (B); (D)(i) prong 4;
(E)-(H); (J) with the exception of the PSD element; and (K)-(M). EPA
has made the preliminary determination that Kentucky DAQ's July 17,
2012, SIP revision meets the infrastructure requirements for the 2008
8-hour ozone NAAQS for all the pertinent sections for 110(a)(2) with
the exception of portions of sections 110(a)(2)(C), prong 3 of
110(a)(2)(D)(i), and 110(a)(2)(J), related to the SIP revisions
identified in the commitment letter described above; and with the
exception of section 110(a)(2)(D)(i)(I).
    Second, EPA has preliminarily determined that the Kentucky SIP
meets the relevant PSD program requirements of sections 110(a)(2)(C),
prong 3 of 110(a)(2)(D)(i), and 110(a)(2)(J), with the exception of
those SIP revisions described in the December 19, 2012, commitment
letter described above. Accordingly, in this action EPA is proposing to
approve the infrastructure SIP submission as meeting the applicable
requirements of these sections, with the exception of the remaining
issues related to the NSR PM2.5 Rule and PM2.5
PSD Increment-SILs-SMC Rule. In addition, EPA is proposing to
conditionally approve Kentucky DAQ's infrastructure SIP submission for
the 2008 8-hour ozone NAAQS with respect to these specific issues
related to NSR PM2.5 Rule and PM2.5 PSD
Increment-SILs-SMC Rule based upon the Commonwealth's commitment
letter.
    Third, EPA is proposing to disapprove Kentucky DAQ's infrastructure
submission as it relates to 110(a)(2)(D)(i)(I) (i.e. prongs 1 and 2 of
110(a)(2)(D)(i)) because the Commonwealth's submission does not address
the statutory provisions with respect to the relevant NAAQS and thus
does not satisfy the criteria for approval. EPA notes, that unless the
EME Homer City decision is reversed or otherwise modified, the
disapproval proposed herein will not require promulgation of a FIP for
Kentucky related to the requirements of 110(a)(2)(D)(i)(I) for the 2008
8-hour ozone NAAQS. Also as EPA is not at this time treating the
110(a)(2)(D)(i)(I) SIP submission as a required submission, no further
action will be required on the part of Kentucky related to the
requirements of 110(a)(2)(D)(i)(I) for the 2008 8-hour ozone NAAQS.

VI. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in
reviewing SIP submissions, EPA's role is to approve state choices,

provided that they meet the criteria of the CAA. Accordingly, this
proposed action merely approves state law as meeting federal
requirements and does not impose additional requirements beyond those
imposed by Commonwealth law. For that reason, this proposed action:
     Is not a ``significant regulatory action'' subject to
review by the Office of Management and Budget under Executive Order
12866 (58 FR 51735, October 4, 1993);
     Does not impose an information collection burden under the
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact
on a substantial number of small entities under the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or
uniquely affect small governments, as described in the Unfunded
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based
on health or safety risks subject to Executive Order 13045 (62 FR
19885, April 23, 1997);
     Is not a significant regulatory action subject to
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of Section 12(d) of the
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272
note) because application of those requirements would be inconsistent
with the CAA; and
     Does not provide EPA with the discretionary authority to
address, as appropriate, disproportionate human health or environmental
effects, using practicable and legally permissible methods, under
Executive Order 12898 (59 FR 7629, February 16, 1994).
    In addition, this proposed rule does not have tribal implications
as specified by Executive Order 13175 (65 FR 67249, November 9, 2000),
because the SIP is not approved to apply in Indian country located in
the Commonwealth, and EPA notes that it will not impose substantial
direct costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by
reference, Intergovernmental relations, Nitrogen dioxide, Ozone,
Particulate matter, Reporting and recordkeeping requirements, Volatile
organic compounds.

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

    Dated: January 10, 2013.
A. Stanley Meiburg,
Acting Regional Administrator, Region 4.
[FR Doc. 2013-00951 Filed 1-16-13; 8:45 am]
BILLING CODE 6560-50-P