that analysis, EPA demonstrated that the CAIR (and CAIR FIP)
SO2 State budget and allocation methodology provides a
reasonable result. EPA's use of title IV allowances in the CAIR (and
CAIR FIP) SO2 trading program is supported by: EPA's
determination that this approach is necessary to maintain the emissions
reductions from, and effectiveness of, the title IV program; prevent
erosion of confidence in cap-and-trade programs in general; and EPA's
analysis showing that the allocations resulting from this approach is
reasonable.

H. Allowance Banking

    Allowance banking is the retention of unused emissions allowances
from one calendar year for use in a later calendar year (or from one
ozone season for use in a later ozone season). Banking allows sources
to make reductions beyond required levels and ``bank'' the unused
allowances for use later. Generally speaking, banking has several
advantages. Allowance banking can encourage earlier or greater
reductions than are required from sources, stimulate the market and
encourage efficiency, and provide flexibility in achieving emissions
reduction goals. The CAIR FIP NPR proposed a trading program with
unrestricted banking.
Comments on the Banking of Allowances
    Several commenters supported EPA's proposal to allow unrestricted
banking of allowances. In general, they agreed with EPA that this
approach: provides incentives for sources to make emission reductions
beyond required levels, in some cases earlier emission reductions; is
consistent with the CAIR SIP model trading rules; and provides
flexibility in compliance strategies. Supporters of unrestricted
banking also agreed with the EPA assessment that the use of banking
restrictions, such as the ``flow control'' in the Ozone Transport
Commission (OTC) cap-and-trade program, is complicated to understand
and implement and caused market complexity.
    Other commenters supported the use of banking restrictions claiming
that allowing unrestricted banking delays emission reductions. These
commenters did not provide additional details regarding an alternative
to banking or, if banking were to be restricted, what restrictions
should be used.
Final CAIR FIP Cap-and-Trade Program
    Today's final CAIR FIP cap-and-trade programs allow unrestricted
banking. EPA disagrees with commenters who claimed that unrestricted
banking simply delays emission reductions. The ability of sources to
sell allowances, without restriction, provides incentives for sources
to over-control their emissions prior to emission reduction deadlines.
As discussed in the CAIR NFR (section VIII.E), this creates a ``glide
path'' towards the final emission cap levels. Emission levels along the
glide path, which may not equate to the emissions caps for any given
year, are the levels of emission reductions that are shown to address
the pollution transport issue.
    EPA also agrees with supporting commenters that banking
restrictions, such as ``flow control,'' introduce uncertainty into
source planning by introducing the potential for devaluing allowances
on short notice. EPA also agrees that allowing unrestricted banking in
the CAIR FIP cap-and-trade programs provides consistency with the CAIR
cap-and-trade programs.

I. Incentives for Early Reductions

    When sources reduce their SO2 and NOX
emissions prior to the first phase of a multi-phase cap-and-trade
program, it creates a slope of emissions that gradually declines over
time, an emission reduction ``glide path'' that provides early
environmental benefit and lowers the costs of compliance. Each of the
cap-and-trade programs proposed in the CAIR FIP NPR incorporated the
incentives for early reductions provided in the respective CAIR model
trading programs: i.e., the banking of title IV allowances allocated of
vintage years pre-2010 into the CAIR SO2 trading program,
the compliance supplement pool (CSP) in the CAIR NOX annual
program, and the banking of NOX SIP Call allowances of pre-
2009 vintage into the CAIR NOX ozone season program. While
EPA believes that modeling has shown that the CAIR and CAIR FIP
timelines are as early as feasible, early reductions incentives provide
a mechanism for those facilities that can reduce their emissions prior
to the implementation deadline to receive some credit. By shifting some
emission reductions earlier, some environmental benefit is realized
earlier. In addition, the CAIR FIP trading programs' early reduction
mechanisms provide a way for companies that may have some difficulty
meeting the implementation timeline to start early and achieve the
mandated reductions on a more gradual pace. These mechanisms, along
with

public comment on each, are discussed below.
1. SO2 Annual Program
    The proposed CAIR FIP SO2 annual cap-and-trade program
would provide incentives for sources to reduce their SO2
emissions prior to the 2010 implementation date by allowing affected
sources to use title IV SO2 allowances of vintage 2009 and
earlier for compliance with the CAIR FIP program at a 1-to-1 ratio. The
CAIR FIP trading program adopts the early reductions incentive
mechanism in the CAIR model trading rules. The modeling for the CAIR
assumed the existence of such incentive mechanisms and showed that the
SO2 cap-and-trade program, with this early incentive
mechanism, will achieve the level of SO2 reductions needed
to meet the CAIR goals.
    Comments on Early Emission Reduction Incentives in the CAIR FIP SO2
Cap-and-trade Program. In general, commenters supported EPA's approach
of allowing sources to bank title IV SO2 allowances into the
CAIR FIP SO2 trading program at a 1-to-1 ratio. One
commenter opposed this mechanism because ``EPA does not explain how
carrying these allowances over to the CAIR bank creates an incentive
for reductions if the allowances already exist.'' The commenter
continues by highlighting that EPA modeling projects emissions to be
approximately 37 percent above the annual CAIR emission caps for the
first 5 years after the compliance deadline.
    Final CAIR FIP SO2 Annual Cap-and-trade Program. Today's
action allows sources to bank title IV SO2 allowances into
the Federal CAIR SO2 annual cap-and-trade program at a 1-to-
1 ratio. EPA disagrees with the comment that allowing banked allowances
does not promote early reductions because allowances were banked before
CAIR was proposed or finalized. Allowing sources to bank title IV
allowances in the CAIR FIP SO2 annual program provides
incentive for sources to: (1) Preserve reductions already made (whether
before or after CAIR was proposed) rather than negating these
reductions by increasing their emissions before 2010 and ``spending
down'' their bank; and (2) to reduce further emissions before 2010 and
increase their bank. This incentive is created by allowing sources to
benefit financially from allowances banked before 2010 that retain
their value in the CAIR FIP and CAIR SO2 trading programs.
All pre-2010 vintage allowances will retain their value in the CAIR and
CAIR FIP trading programs because they can be used (on a one-allowance-
per-ton basis) to meet the requirement to hold allowance to cover
emissions under the CAIR FIP (and CAIR) trading programs. In summary, a
source has an incentive to continue banking allowances before 2010,
which results in the preservation of existing emission reductions and
the creation of further reductions.
    The commenter noted that allowing banking into the CAIR FIP
SO2 annual program results in the emissions being greater
than the cap levels. However, the gradually declining emissions ``glide
slope'' is one of the keys to cap-and-trade programs achieving cost-
effective reductions. As discussed above, EPA's modeling for CAIR
showed that, with the pre-2010 title IV SO2 allowance
banking and subsequent use of the bank, the environmental goals of
reducing the interstate transport of pollution will be achieved.
2. NOX Annual Program
    The FIP NPR proposed a CAIR FIP NOX annual cap-and-trade
program that included a Compliance Supplement Pool (CSP) to provide an
incentive for early, annual NOX annual emission reductions.
The CSP would provide, for each affected State, a pool of CAIR
NOX annual allowances from which EPA could distribute
allowances for early, surplus NOX emissions reductions
occurring in the years 2007 and 2008. The CSP would provide a total of
200,000 annual NOX allowances of vintage 2009 for the CAIR
region (including Delaware and New Jersey's share of the pool),
apportioned to each State, which would be in addition to each State's
annual NOX budgets. Table V-3 in this preamble sets forth
the CSP amounts by State. The CAIR FIP trading program adopts the CSP
established in the CAIR model trading program. However, where the CAIR
model trading program provides States with flexibility to determine
what constitutes an early reduction qualifying for an allocation of
allowances from the CSP, the Administrator allocates the CSP in the
CAIR FIP trading program. As a result, the CAIR FIP, provides a
specific methodology for determining early reductions than is in the
CAIR model rules. This methodology is explained below.
    As proposed, Federal CSP allowances could be distributed to sources
based upon: (1) Implementing NOX control measures that
result in early emission reductions in 2007 or 2008, i.e., reductions
beyond what is required by any applicable State or Federal emissions
limitation; or, (2) a demonstration of need for an extension of the
2009 deadline for implementing emission controls. See section VII.A. in
the CAIR NFR preamble (70 FR 25256-25263). The Agency proposed that, in
order for early emission reductions to qualify for allowances from the
CAIR FIP CSP, sources would have to demonstrate that--for each year for
which they apply for CAIR FIP CSP allowances--they had an annual
NOX emission rate below 0.25 lb/mmBtu. In addition, sources
who also participate in a title IV NOX averaging plan would
have to demonstrate that the plan-wide weighted-average annual
NOX emission rate for each such year was equal to or lower
than the plan-wide rate for the preceding year. Sources meeting this
criterion could request early reduction credit equal to the difference
between 0.25 lb/mmBtu and the unit's actual emission rate multiplied by
the unit's actual heat input for the applicable control period.
    Comments on Federal CSP. Several commenters supported the use of a
CAIR FIP CSP to encourage early emission reductions and provide sources
access to some additional allowances for demonstrated reliability
needs. Some commenters supported including a CAIR FIP CSP but were
concerned about the use of additional criteria (i.e., a 0.25 lb/mmBtu
threshold and the limitation on emissions under a title IV
NOX averaging plan). Other commenters believed that
providing additional allowances would delay emission reductions and
that EPA's analysis already demonstrated that the mandated emission
reduction levels and timelines are feasible.
    EPA disagrees with commenters that believe the CAIR FIP CSP should
not include the criterion that units can only request early reduction
credit equal to the difference between 0.25 lb/mmBtu and the unit's
actual emission rate multiplied by the unit's actual heat input for the
applicable control period. EPA believes that the 0.25 lb/mmBtu
threshold (coupled with the limitation on emissions under a title IV
NOX averaging plan) provides a reasonable proxy for the more
general standard that emission reductions exceed what is required under
State or Federal law.\32\ Applying these criteria will provide
reasonable assurance that only early reductions (i.e., reductions
exceeding existing requirements) will be awarded CAIR FIP CSP
allowances. Further, because these criteria are clearer and more
precise than the general standard that reductions exceed existing

requirements, the criteria will give owners and operators greater
certainty when making reasonable projections about how many allowances
they may receive for their early reductions and will, thereby,
encourage early emission reductions.
---------------------------------------------------------------------------

    \32\ The 0.25 lbs/mmBtu criterion is based upon EPA analysis
described in the CAIR FIP CSP Technical Support Document and is
similar to the criterion used for the CSP established under the
NOX SIP Call section 126 action. (65 FR 2674, January 18,
2000).
---------------------------------------------------------------------------

    Additionally, EPA disagrees with commenters that believe the CAIR
FIP CSP should not include the distribution criterion that units in a
title IV NOX averaging plan would have to demonstrate that
the current plan-wide average NOX emission rate be less than
the plan-wide average for the previous year. The averaging plan
criterion acknowledges the unique circumstances for units that are in
title IV NOX averaging plans, where emission reductions by
one unit in the plan may be offset by emission increases by another
unit in the plan, thereby, making it difficult to determine whether
early reductions are taking place. As discussed above, EPA believes
that this criterion, coupled with the 0.25 lb/mmBtu criterion, provides
a reasonable proxy for the general standard that reductions exceed
existing requirements and that the criteria provide greater certainty
about the rewarding of CAIR FIP CSP allowances. EPA believes it is
appropriate to base the averaging plan criterion on a single, prior
year's plan-wide average emission rate because the averaging of
emissions across a plan tends to mitigate year-to-year fluctuations.
    EPA disagrees with commenters that believe a CAIR FIP CSP will
significantly delay emission reductions. For the CAIR NFR, EPA
conducted IPM modeling of the CAIR trading programs to evaluate the
effect of the 200,000 CAIR annual CSP NOX allowances. The
modeling shows that these CSP allowances do not have a significant
impact on regionwide NOX emissions.
    CAIR FIP CSP Finalized in Today's Action. Today's rule finalizes
the CAIR FIP CSP mechanism proposed in the FIP NPR. EPA believes that
including a CAIR FIP CSP will encourage early emission reductions and
alleviate concerns of some sources that they have unique issues
concerning compliance with the 2009 implementation deadline of the CAIR
FIP trading program. (See 70 FR 25286 for additional discussion of the
CAIR CSP.) EPA also believes that the CSP will not significantly impact
the achievement of emission reduction goals.
    The CAIR FIP CSP includes specific criteria for distributing
allowances based upon early emission reductions that do not appear in
the CAIR SIP trading programs. (Note that, as discussed in section IV.E
of today's action, States choosing the abbreviated SIP revision option
may choose to use the CAIR FIP CSP or the CAIR CSP mechanism or may
choose another mechanism consistent with Sec.  51.123(e)(4).) EPA
believes that the criteria will reasonably ensure that the award of CSP
allowances will be aimed at early reductions and give owners and
operators greater certainty to make reasonable projections about how
many allowances they may receive for their early reductions.
3. NOX Ozone Season Program
    The final CAIR FIP NOX ozone season cap-and-trade
program allows the banking of NOX SIP Call allowances of
vintage years 2008 and earlier and their use in the CAIR FIP
NOX ozone season program to meet the requirement to hold
allowances covering their emissions. This provides incentive for
sources in the NOX SIP Call to reduce their ozone season
NOX emissions before 2009 and bank additional allowances
into the CAIR FIP NOX ozone season program. This early-
reduction incentive mechanism is in the CAIR NOX ozone
season model rule and is adopted as part of the CAIR FIP NOX
ozone season cap-and-trade programs. EPA did not receive any comments
specifically addressing the early-reduction incentive mechanism in the
CAIR FIP NOX ozone season program. However, several
commenters generally supported mechanisms to provide incentives for
early emission reductions. The Agency is finalizing this mechanism.

J. Monitoring and Reporting Requirements

    Under the CAIR SIP model cap-and-trade rules, sources are required
to monitor and report NOX and SO2 mass emissions
in accordance with 40 CFR part 75. (See Section VIII.H. of the CAIR NFR
preamble, 70 FR 25288.) Many CAIR sources are measuring and reporting
SO2 mass emissions and NOX emission rate year
round under the Acid Rain Program. Many additional sources are also
reporting NOX mass emissions at least during the ozone
season and often year round under the NOX SIP Call. The CAIR
SIP model rules require continuous monitoring of NOX mass
emissions by all existing, affected units by January 1, 2008 using part
75 certified monitoring systems for the NOX annual program
and May 1, 2008 for the NOX ozone season program.
SO2 emissions must be monitored by those same units
beginning January 1, 2009.
    Today's rulemaking requires part 75 monitoring, reporting, and
recordkeeping for all units subject to the CAIR FIP cap-and-trade
programs. This is consistent with the CAIR model cap-and-trade
programs. For additional discussion on monitoring and reporting
requirements, see Section VIII.H. in the CAIR NFR preamble (70 FR
25288).

K. Interactions With Other CAA Programs

    In the CAIR NFR preamble, section IX discusses interactions between
the NOX SIP Call and CAIR. Section IX also discusses
interactions between the title IV Acid Rain Program and CAIR. Today's
final rule covers the same States as the CAIR and adopts as FIP trading
programs the CAIR SIP model trading rules, thus the interactions would
be as described in CAIR (70 FR 25289-25299).

VII. What Are the Revisions of the CAIR SIP Rule, Including the CAIR
Model Cap-and-Trade Rules?

    The EPA is adopting several revisions of the CAIR SIP rule. One
such revision is part of EPA's final action on reconsideration
concerning the applicability provisions as they relate to solid waste
incineration units. In particular, for the reasons stated in the
preamble of the August 24, 2005 proposed rule, EPA is finalizing the
EGU definition in Sec. Sec.  51.123(cc) and 51.124(q). The EGU
definition, as adopted, excludes certain solid waste incineration units
from being EGUs; limits EGUs to units that, as of November 15, 1990 or
any time later, serve a generator with a greater than 25 MWe nameplate
capacity producing electricity for sale; and clarifies language
concerning cogeneration units. The final EGU definition is the same as
the definition proposed on reconsideration except for a few minor
changes, e.g., to clarify the circumstances under which a unit that is
not an EGU, but that begins to combust fossil fuel or to serve a
generator with a 25 MWe nameplate, becomes an EGU. (For the reasons in
the preamble of the August 24, 2005 proposed rule, the language in the
final EGU definition is also reflected in final applicability
provisions of the CAIR model trading rules and the CAIR FIP trading
programs.) EPA is also finalizing, as discussed in detail above,
provisions allowing States to submit abbreviated SIP revisions.
    EPA is also adopting a number of revisions of the CAIR SIP model
cap-and-trade rules. The revisions are generally necessary to integrate
each of the CAIR SIP model cap-and-trade programs with its
corresponding CAIR FIP cap-and-trade program, and some of the final
revisions reflect needed technical and clarifying changes. The
revisions are consistent with the

analogous provisions of the final CAIR FIP trading programs. One such
revision is part of EPA's final action on reconsideration concerning
the applicability provisions as they relate to solid waste incineration
units.
    In particular, several definitions of terms are revised, and a few
new definitions are added. For example, the definitions of ``CAIR
designated representative'' and ``alternate CAIR designated
representative'' are modified to require that the respective
individuals designated for these positions be the same individuals as
designated, for a given source, as the designated representative and
alternate designated representative under any applicable trading
program under the Clean Air Mercury Rule (CAMR). (CAMR was promulgated
in May 2005 to achieve reduction of national mercury (Hg) emissions.
See 70 FR 28606, May 18, 2005.) This will greatly simplify the
administration of the allowance tracking systems for the trading
programs, including the Hg trading programs, for which EPA intends to
propose analogous changes. (In order to implement this change, a new
definition for ``Hg Budget Trading Program'' is added to the CAIR SIP
model trading rules.)
    As a further example, a new definition is added (``solid waste
incineration unit''), and certain definitions are modified (``commence
commercial operation'' and ``commence operation''), to reflect final
changes in the applicability provisions for the CAIR model trading rule
and to clarify and streamline the language in the definitions. In
particular, the modified definitions are consistent with the above-
noted revisions of the applicability provisions that: exempt certain
solid waste incineration units from the CAIR trading programs; limit
applicability to units that, as of November 15, 1990 or any time later,
serve a generator with a greater than 25 MWe nameplate capacity
producing electricity for sale; and clarify the language concerning
cogeneration units. In addition, the ``commence commercial operation''
and ``commence operation'' definitions are simplified by removing
unnecessary language, such as the language referring to CAIR opt-in
units, which is unnecessary because these terms are not used in the
CAIR opt-in rule provisions. Also, the simplified definition of
``commence operation'' means that all units will use the same
``commence operation'' definition in determining, for purposes of
allocations under Sec.  96.142 and 96.342, their baseline periods for
calculating adjusted or converted heat input. (The provisions for opt-
in units that subsequently become subject to the allocation provisions
of Sec.  96.142 and 96.342 and lose their opt-in status are also
revised to reflect this approach.)
    Further, a definition of ``replacement,'' a term used in the
``commence commercial operation'' and ``commence operation''
definitions, is added in order to clarify the application of the latter
two terms to cases when a unit is replaced by another unit, rather than
simply being modified. The revised applicability provisions and related
definitions in the CAIR SIP model trading rules are consistent with the
applicability provisions and related definitions in the final CAIR FIP
trading rules and with the above-discussed EGU definition in Sec. Sec.
51.123(cc) and 51.124(q).
    In addition, the definitions of ``CAIR NOX allowance,''
``CAIR NOX Annual Trading Program,'' ``CAIR SO2
allowance,'' ``CAIR SO2 Annual Trading Program,'' ``CAIR
NOX Ozone Season allowance,'' and ``CAIR NOX
Ozone Season Trading Program'' are modified to provide for integrated
operation of each CAIR SIP trading program administered by EPA for any
State with its corresponding CAIR FIP trading program for any State.
Under these revised definitions, CAIR NOX, SO2,
or NOX Ozone Season allowances issued under either type of
program for any State would be a ``CAIR NOX allowance,''
``CAIR SO2 allowance,'' or ``CAIR NOX Ozone
Season allowance,'' respectively, usable by owners and operators for
meeting the allowance-holding requirement under the corresponding CAIR
SIP model trading program or CAIR FIP trading program for any State.
    EPA is also simplifying and clarifying other definitions. For
example, the term ``allocate'' is simplified to cover allocation of
allowances for either the CAIR SIP or FIP trading programs. The
definition of ``maximum design heat input'' is simplified, and the
definition of ``nameplate capacity'' is clarified.
    Further, the retired unit exemption provisions are revised. The
revisions clarify that the provisions concerning CAIR designated
representatives and the appeal procedures generally applicable to final
actions of the Administrator are applicable to retired units and to
final actions of the Administrator with regard to retired units.
    In addition, the provisions listing the content of a certificate of
representation are revised to clarify that the identification of each
unit covered by the certificate of representation includes
identification and nameplate capacity of each generator served by the
unit. EPA believes that the current rule language requiring
``identification'' of each unit subject to the trading program is
already broad enough to encompass such information concerning each
generator served by the unit, particularly since only a unit serving a
generator with a nameplate capacity greater than 25 MWe can be subject
to the CAIR trading programs. However, EPA is revising the language to
make it clear that generator information is required in the certificate
of representation.
    EPA is also making technical revisions to the provisions concerning
the reflection in certificates of representation of the owners and
operators of the source and units involved. The changes make it clear
that all owners and operators must be listed and that those that should
be, but are not, listed are still bound by the certificate of
representation and the CAIR designated representative.
    Further, new provisions concerning designated representatives and
authorized account representatives are added to clarify that such
individuals may use agents in order to make electronic submissions. The
existing CAIR SIP model trading rules provide for certain submissions
(i.e., certificates of representation, applications for general
account, allowance transfers, and quarterly emissions reports) required
to be ``in a format prescribed'' or ``in a format specified'' by the
Administrator. (The terms ``prescribed'' and ``specified'' have the
identical meaning in these contexts.) These submissions may be made,
and in the case of quarterly emissions reports must be made,
electronically. Although the formats for the CAIR trading programs have
not yet been developed, other EPA-administered trading programs (i.e.,
the Acid Rain Program and the NOX Budget Trading Program)
have analogous language concerning submission formats and have
existing, prescribed formats for submissions. The electronic formats
prescribed by the Administrator for the Acid Rain Program and the
NOX Budget Trading Program allow the designated
representative or authorized account representative, as appropriate, to
designate other individuals (``agents'') who may make the electronic
submissions for the designated representative or authorized account
representative, who is fully bound by the agent's actions. EPA
maintains that the references in the Acid Rain Program and
NOX Budget Trading Program regulations to ``prescribed'' (or
``specified'') formats, coupled with the existing electronic formats,
provide the legal authority necessary for designated representatives
and authorized account

representatives to use agents to make electronic submissions in the
applicable trading programs. EPA plans to adopt electronic formats for
the CAIR trading programs that, similarly, allow for the use of agents.
EPA believes that the existing references in the CAIR SIP model trading
rules to ``format[s] prescribed '' or ``specified'' by the
Administrator, when coupled with the appropriate electronic formats,
will similarly provide the legal authority necessary for the use of
agents. However, in order to remove any uncertainty about such legal
authority, EPA is adding provisions to the CAIR SIP model trading rules
(and to the CAIR FIP trading rules) that explicitly authorize the use
of agents for electronic submissions.
    In addition, in the permitting provisions, EPA is revising the
deadline for submission of CAIR permit applications to run from the
later of January 1, 2009 (for the NOX programs) or 2010 (for
the SO2 program) or the date on which the unit commences commercial
operation, rather than the date on which the unit simply commences
operation. A unit's date of commencement of commercial operation is not
likely to range from more than a few days to a few months later than
the unit's date of commencement of operation since owners and operators
of EGUs generally prefer to minimize using fuel without producing
electricity. Moreover, running the permit application deadline from the
commencement of commercial operation avoids the need for complex
provisions in the definition of ``commence operation'' to address,
solely for permitting purposes, units that are not subject to the CAIR
trading programs when they first combust fuel and that subsequently
become CAIR units. (The simplified definition of ``commence operation''
reflects this revision.)
    Further, EPA is adopting certain technical corrections in the
NOX allowance allocation provisions. In particular, the
current provisions concerning timing of submission of unit allocations
by the permitting authority to the Administrator provide that if the
unit allocations are not submitted on time, the Administrator will
assume that the allocations are the same as in the prior year. If the
year for which allocations are submitted late is 2015 (the beginning of
phase II of the CAIR trading programs, the Administrator will assume
that the allocations are 83% of the 2014 allocations. EPA is removing
these provisions both for existing and new units because they seem
unlikely to be used, are unduly complicated, and may result in 2015 in
total allocations that do not equal the respective State trading
budget. Moreover, there are no comparable provisions in the CAIR FIP
trading rules.
    EPA is also revising the current provisions for new unit
allocations that provide that a new unit is eligible for allocations
from the new unit set-aside until that unit has operated long enough to
develop a baseline heat input using the 3 highest figures for converted
control period heat input out of such figures for the first 5 years of
operation. At that point, the unit is supposed to be allocated
allowances from the pool of allowances allocated to all units that have
a baseline heat input. However, allowances for units with baselines are
allocated a number of years in advance of the first year for which such
allowances may be used to meet the allowance-holding requirement.
Consequently, it is possible for a new unit to have a baseline as of a
given year but find that no more allowances are available for that year
for units with baselines because the allowances for that year were
allocated before the time when the new unit's baseline was developed. A
new unit could find that, for some years, it was both ineligible for
the new unit set-aside and unable to obtain an allocation from the pool
for units with baselines. EPA intended that new units move seamlessly
from new-unit-set-aside eligibility to units-with-baselines allocations
and not to fall in between the two types of allocation procedures. EPA
is revising the allocation provisions to clarify that a new unit
continues to be eligible for the new unit set-aside so long as the unit
is not allocated allowances from the pool for units with baselines
allocations either because the new unit does not yet have a baseline or
because all the allowances for units with baselines have already been
allocated for the year involved.
    EPA also is adopting technical changes that make it clear that a
separate request for new-unit-set-aside allowances must be submitted
for each control period for which they are sought and must be submitted
by May 1 (for the NOX annual program) or February 1 (for the
NOX ozone season program) of that control period. This
approach will reasonably put the burden on owners and operators to
inform the State permitting authority each year. This will ensure that
the State permitting authority can keep track, for each control period
in the future, of which units are seeking new-unit-set-aside allowances
for that control period. These submission deadlines will give the State
permitting authorities more time to process (which may include, when
appropriate, opportunity for public comment) the requests in time to
submit the allocations to the Administrator for recordation by December
1 (for the NOX annual program) or September 1 (for the
NOX ozone season program). Similarly, EPA is revising the
deadline for submission of requests for allowances from the compliance
supplement pool to be May 1, 2009 (rather than July 1, 2009). Just as
emissions data for 2008 will be available in time for new-unit-set-
aside requests due on May 1, emissions data for 2008 (and 2007) will be
available in time for compliance-supplement-pool requests due on May 1.
The July 1, 2009 deadline did not provide sufficient time for State
permitting authorities to process the requests.
    In addition, EPA is adopting technical changes to the provisions
for recordation of allowance allocations, for the reasons discussed
below and elsewhere in this preamble. For example, the current
provisions require the Administrator to record the initial allocations
for 2010-2014 by December 1, 2006. Because State plans are not due
until September 11, 2006, EPA cannot review and approve all State plans
in time to record allowance allocations in those plans by December 1,
2006, which date is changed to September 30, 2007. Further, the current
provisions also require the recordation of allocations for subsequent
years to occur only after completion of the end-of-year compliance
determination process for a previous year. Because of the need to
finalize emissions data for a year before the compliance determination
process for that year can be completed, the current provisions may
delay recordation for a number of months. However, as a matter of
logic, there is no necessary connection between one year's compliance
determination and the future year's allocation recordation.
Consequently, EPA is removing the connection made in the current
provisions and is setting an independent deadline (December 1) for
allocation recordation, which will result in recordation several months
earlier than under the current provisions.
    Further, EPA is adopting technical changes to the provisions
referring to when an allowance transfer by the owner of an allowance to
another allowance tracking system account is ``correctly submitted.''
The changes clarify that a ``correctly submitted'' allowance transfer
is one that references allowances that both: Were in the owner's
allowance tracking system account when the allowance transfer form was
submitted to the

Administrator; and continue to be in such account when the allowance
transfer form is processed by the Administrator.
    In addition, EPA is revising the provisions for deducting
allowances to determine compliance with the allowance-holding
requirement under the trading programs. The revisions do not change the
requirements that an allowance usable for compliance: be allocated for
the year, or a year before the year, for which compliance is being
determined; and be in or covered by a proper request for transfer into
the source's compliance account by the allowance transfer deadline.
However, the statement indicating that the allowance must also not be
necessary to account for excess emissions for a prior year is removed
because it is confusing and inconsistent with the compliance procedures
that EPA has been using in its ongoing cap-and-trade programs, i.e.,
the Acid Rain Program and the NOX Budget Trading Program.
    Further, as explained in the preamble of the August 24, 2005
proposed rule, EPA is adopting revisions clarifying the application of
excess emissions penalties for a source that is subject to, and has
excess emissions under, both the Acid Rain Program and the CAIR
SO2 model trading rule. Under these revisions, a given ton
of SO2 excess emissions at a source, the owners and
operators of the source will be liable, if that ton is an excess
emission under both the Acid Rain Program and the CAIR trading program,
for the offset (the deduction of one allowance) and the dollar penalty
($2,000 inflation adjusted) under the Acid Rain Program and liable, if
that ton is only an excess emission under the CAIR trading program, for
the 3-for-1 allowance deduction under the CAIR trading program.
    In addition, EPA is revising certain provisions concerning the use
of substitute data when the owner or operator of a unit adds a new
stack or flue and fails to meet the deadline for monitoring
certification. EPA proposed, but is not finalizing, procedures that
would allow for substitute data other than data reflecting maximum
potential emissions. Because EPA believes that the proposed provisions
would in fact still result in the use of data reflecting maximum
potential emissions, EPA is not adopting the proposed provisions.
    Further, EPA is removing a provision that separately requires units
to monitor heat input. The provision is unnecessary because heat input
monitoring is already explicitly required in the monitoring provisions
in Sec.  96.170, 96.270, and 96.370.
    In addition, EPA is revising the requirements for CAIR opt-in
permits for owners and operators planning to repower an opt-in unit and
seeking special allowance allocations for such unit. The revisions
require that the owners and operators state, in the permit application,
that they intend to repower the opt-in unit before January 1, 2015. EPA
believes that this is a reasonable requirement to prevent frivolous
requests for the special allocations for opt-in units to be repowered.
The permit application, like any submission for owners and operators,
must of course include a certification as to the truth, accuracy, and
completeness of the submission.
    A few changes are adopted for some other provisions (concerning,
e.g., the submission deadlines for quarterly emissions reports for CAIR
opt-in units and units applying to be CAIR opt-in units and inclusion
of the CAIR opt-in permit in the CAIR permit and the title V permit for
the source that includes the CAIR opt-in unit) of the CAIR SIP model
trading rules. These other changes are similarly technical or
clarifying in nature. All of these changes are consistent with the
analogous provisions in the final CAIR FIP trading rules.

VIII. What Are the Revisions of Acid Rain Program Regulations?

    A few changes are adopted for the Acid Rain Program regulations. As
explained in the preamble of the August 24, 2005 preamble, EPA is
adopting revisions aimed at facilitating interaction among the CAIR FIP
trading programs, any EPA-administered CAIR SIP trading programs, and
the Acid Rain SO2 trading program and revisions related to
the change, finalized in the CAIR rulemaking, from unit-level to
source-level compliance with the Acid Rain SO2 trading
program.
    In addition, EPA is revising the provisions listing the content of
a certificate of representation to clarify that the identification of
each unit covered by the certificate of representation includes
identification and nameplate capacity of each generator served by the
unit. EPA believes that the current rule language requiring
``identification'' of each unit subject to the trading program is
already broad enough to encompass such information concerning each
generator served by the unit, particularly since only a unit serving a
generator with a nameplate capacity greater than 25 MWe can be subject
to the Acid Rain Program. However, EPA is adopting revised language to
make it clear that generator information is required in the certificate
of representation.
    EPA is also making technical revisions to the provisions concerning
the reflection in certificates of representation of the owners and
operators of the source and units involved. The changes make these
provisions consistent with those in the CAIR trading programs. The
changes make it clear that all owners and operators must be listed and
that those that should be, but are not, listed are still bound by the
certificate of representation and the CAIR designated representative.
    Further, EPA is adding a new Sec.  72.26 and a new Sec.  73.33(g)
that are analogous to provisions adopted in the CAIR SIP model trading
rules and the CAIR FIP trading rules and concern the use of agents by a
designated representative and authorized account representative. As
discussed above in Section VII of this preamble, EPA maintains that the
existing Acid Rain Program regulations already authorize a designated
representative or authorized account representative to use agents to
make certain electronic submissions. However, in order to remove any
uncertainty about such legal authority, EPA is adding provisions to the
Acid Rain Program regulations that explicitly authorize such use of
agents.
    In addition, EPA is revising the appeal provisions of part 78 to
apply to the appeals procedures to final actions of the Administrator
under the CAIR FIP trading rule, just as these provisions already apply
to final Administrator actions under the CAIR SIP model trading rules.
Part 78 is revised to refer specifically, where appropriate, to the
CAIR FIP trading rules in a similar way to how part 78 currently refers
specifically, where appropriate, to the CAIR SIP model trading rules.

IX. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the
Agency must determine whether a regulatory action is ``significant''
and therefore subject to Office of Management and Budget (OMB) review
and the requirements of the Executive Order. The Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
    1. Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the

environment, public health or safety, or State, local, or Tribal
governments or communities;
    2. Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
    3. Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs or the rights and obligations of recipients
thereof; or
    4. Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
    Today's action both provides a response to the Section 126 Petition
filed by North Carolina and promulgates FIPs to implement the
requirements of the recently published CAIR (May 2005) in all affected
States. It also makes minor changes to the CAIR and the Acid Rain
Program. The FIPs require the same set of air pollution emissions
reductions required by the CAIR. For this reason, EPA is relying on the
economic analysis conducted for CAIR entitled ``Regulatory Impact
Analysis of the Final Clean Air Interstate Rule'' (March 2005) to serve
as the analysis for these rulemakings.
    This economic analysis shows that substantial net economic benefits
to society are likely to be achieved due to reduction in emissions
resulting from the CAIR program. The results show that the CAIR program
would be highly beneficial to society, with annual net benefits
(benefits less costs) of approximately $71.4 or $60.4 billion in 2010
and $98.5 or $83.2 billion in 2015. These alternative net benefits
estimates occur due to differing assumptions concerning the social
discount rate used to estimate the annual value of the benefits of the
rule with the lower estimates relating to a discount rate of 7 percent
and the higher estimates a discount rate of 3 percent. All amounts are
reflected in 1999 dollars. The costs and benefits presented in the CAIR
economic analysis are an accurate representation of the benefits and
costs anticipated for the FIPs. For more information, see the NFR for
the CAIR published in the Federal Register (70 FR 25162; May 12, 2005)
and the ``Regulatory Impact Analysis for the Final Clean Air Interstate
Rule'' (March 2005).
    In view of its important policy implications and potential effect
on the economy of over $100 million, this action has been judged to be
an economically ``significant regulatory action'' within the meaning of
the Executive Order. As a result, today's action was submitted to OMB
for review. Changes made in response to OMB suggestions or
recommendations are documented in the public record.

B. Paperwork Reduction Act

    The EPA believes that the Paperwork Reduction Act (44 U.S.C. 3501
et seq.) requirements of this rule are satisfied through the
Information Collection Request (ICR) (EPA ICR number 2152.02; OMB
control number 2060-0570) submitted to the OMB for review and approval
on May 12, 2005 as part of the CAIR (70 FR 25162-25405) and approved by
the OMB in September 2005. The ICR describes the nature of the
information collection and its estimated burden and cost associated
with that final rule. In cases where information is already collected
by a related program, the ICR takes into account only the additional
burden. [This situation arises in States that are also subject to
requirements of the Consolidated Emissions Reporting Rule (EPA ICR
number 0916.10; OMB control number 2060-0088) or for sources that are
subject to the Acid Rain Program (EPA ICR number 1633.13; OMB control
number 2060-0258) or NOX SIP Call (EPA ICR number 1857.03;
OMB number 2060-0445) requirements.]
    The burden of today's rule is essentially the same as the burden
estimated for the CAIR. There is a modest transfer of burden from the
States to EPA if the Federal plan is implemented rather than the CAIR
State plan. The overall total burden is essentially unchanged. Thus,
the ICR prepared for CAIR satisfies the requirements of the Paperwork
Reduction Act for this rule.
    Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations in 40 CFR, after appearing in the preamble of the final
rule, are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statute unless the agency certifies that the
rule will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For the purposes of this rulemaking, EPA defined small entities
according to the following three criteria:
    (1) A small business according to the Small Business Administration
size standards by the North American Industry Classification System
(NAICS) category of the owning entity. The range of small business size
standards for electric utilities is 4 billion kilowatt-hours of
production or less;
    (2) A small government jurisdiction that is a government of a city,
county, town, district, or special district with a population of less
than 50,000; and
    (3) A small organization that is any not-for-profit enterprise that
is independently owned and operated and is not dominant in its field.
    Table IX-1 lists entities potentially affected by this rule with
applicable NAICS code.

      Table IX-1.--Potentially Regulated Categories and Entities a
------------------------------------------------------------------------
                                      NAICS     Examples of potentially
             Category                 code b       regulated entities
------------------------------------------------------------------------
Industry..........................     221112  Fossil fuel-fired
                                                electric utility steam
                                                generating units.
Federal Government................   c 221112  Fossil fuel-fired
                                                electric utility steam
                                                generating units owned
                                                by the Federal
                                                government.

State/Local/......................   c 221112  Fossil fuel-fired
                                                electric utility steam
                                                generating units owned
                                                by municipalities.
Tribal Government.................     921150  Fossil fuel-fired
                                                electric utility steam
                                                generating units in
                                                Indian Country.
------------------------------------------------------------------------
a Include NAICS categories for source categories that own and operate
  electric generating units only.
b North American Industry Classification System.
c Federal, State, or local government-owned and operated establishments
  are classified according to the activity in which they are engaged.

    After considering the economic impacts of today's final rule on
small entities, EPA is certifying that this action will not have a
significant economic impact on a substantial number of small entities.
    EPA has assessed the potential impact of today's action on small
entities. Pursuant to section 603 of the RFA, EPA prepared an initial
regulatory flexibility analysis (IRFA) for the proposed rule (70 FR
49708, 49743). Approximately 140 of the estimated 3,000 EGUs
potentially affected by today's action are owned by the 58 potentially
affected small entities identified by EPA. Of the 140, 49 units are
owned by small entities that also share ownership with large entities.
Of these units, 34 are believed to be more than 50 percent owned by a
large entity.
    Beyond the 140, an additional 185 units owned by small entities in
these states could be exempted because they have a nameplate capacity
less than 25 MW. The above estimates include a number of units that are
owned jointly by small and non-small entities. In addition, these
estimates represent the maximum number of units potentially affected by
the CAIR FIP. Only units in States that fail to submit an approved SIP
would be directly regulated under the CAIR FIP. The actual number of
affected units will depend on the number of States that do not submit a
SIP or do not get their SIP submittal approved.
    This analysis is based in large part on EPA's prior analysis of the
potential impact of regulations implementing the CAIR model trading
programs in the CAIR region. The analysis of the model trading programs
was based on the best information available at that time and assumed
that 75 small entities could be affected by any eventual implementation
of the trading programs. However, EPA subsequently determined that some
of these 75 entities either did not meet the definition of a small
entity, or had units that were no longer generating. EPA's final
analysis thus concluded that only 58 entities would be affected by
today's action. Because the Agency's analysis of small entity impacts
was based on the earlier estimate of affected small entities (i.e., the
impacts were analyzed based on 75 affected entities, not 58 entities),
the impact analysis overstates the maximum potential impact of today's
action on small entities.
    Overall, EPA analysis suggested that about 445 MW of total small
entity capacity, or 1.0 percent of total small entity capacity in the
CAIR region, is projected to be uneconomic to maintain under
regulations implementing the CAIR trading programs relative to the Base
Case. In practice, units projected to be uneconomic to maintain may be
``mothballed'', retired, or kept in service to ensure transmission
reliability in certain parts of the grid. Our IPM modeling is unable to
distinguish between these potential outcomes.
    Of the 75 initially identified as potentially impacted by
regulations implementing the model trading programs, EPA determined
that 29 might experience compliance costs in excess of one percent of
revenues in 2010 and 46 might in 2015. Potentially affected small
entities experiencing compliance costs in excess of 1 percent of
revenues have some potential for significant impact resulting from
implementation of CAIR.
    Pursuant to section 609(b) of the RFA, EPA convened a Small
Business Advocacy Review Panel to obtain advice and recommendations
from representatives of small entities that would potentially be
regulated by the rule. A detailed discussion of the Panel's advice and
recommendations is found in the Panel Report (EPA-HQ-OAR-2004-0076-
0074). A summary of the Panel's recommendations is presented at 70 FR
49708, 49741.
    A detailed discussion of the panel process is provided in the
proposed rule. In the proposed rule, EPA took comment on all aspects of
the proposed FIP and its impact on small entities. EPA did not receive
significant comments in this regard. In addition, in section VI.D of
the proposed rule preamble, EPA specifically took comment on one of the
panel recommendations, which was to consider providing a greater share
of NOX allowances to small entities. A number of utilities
submitted comments opposing such a provision, and one State expressed
support for such a provision. These comments are discussed in more
detail in section VI.F of this preamble.
    The decision to certify that this rule will not have a significant
economic impact on a substantial number of small entities is largely a
result of two factors. First, because the rule only affects sources
with a capacity greater than 25 MW, the majority of potentially
affected small entities are exempted. The decision to include only
units greater than 25 MW in size exempts 185 small entities that would
otherwise be potentially affected by today's actions. In the final
CAIR, EPA stated its belief that it is reasonable to assume no further
control of air emissions from these smaller EGUs. Second, as EPA's
analysis of potential impacts of this rulemaking on small entities
progressed, we determined that our initial estimates were too high,
because some of the entities that EPA had projected to be affected
either did not meet the definition of a small entity, or had units that
were no longer generating. Finally, as was discussed in the NPR, the
use of cap-and-trade in general will limit impacts on small entities
relative to a less flexible command-and-control program.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995, Public Law
104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of the UMRA, 2
U.S.C. 1532, EPA generally must prepare a written statement, including
a cost-benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures by State, local, and tribal
governments, in the aggregate, or by the private sector, of

$100,000,000 or more in any 1 year. Before promulgating an EPA rule for
which a written statement is needed, section 205 of the UMRA generally
requires EPA to identify and consider a reasonable number of regulatory
alternatives and to adopt the least costly, most cost-effective or
least burdensome alternative that achieves the objectives of the rule.
The provisions of section 205 do not apply when they are inconsistent
with applicable law. Moreover, section 205 allows EPA to adopt an
alternative other than the least costly, most cost-effective or least
burdensome alternative if the Administrator publishes with the final
rule an explanation why that alternative was not adopted.
    In addition, before EPA establishes any regulatory requirements
that may significantly or uniquely affect small governments, including
Tribal governments, it must have developed under section 203 of the
UMRA, a small government agency plan. The plan must provide for
notifying potentially affected small governments, enabling officials of
affected small governments to have meaningful and timely input in the
development of EPA regulatory proposals with significant Federal
intergovernmental mandates, and informing, educating, and advising
small governments on compliance with the regulatory requirements.
    The EPA has determined that this rule contains a Federal mandate
that may result in expenditures of $100 million or more in 1 year. The
costs of compliance will be borne predominately by sources in the
private sector although a small number of sources owned by State and
local governments may also be impacted. EPA prepared a written
statement meeting the requirements of section 202 of the UMRA during
the CAIR rulemaking process. The Federal mandates in today's action
relate to its implementation of the CAIR and thus the analyses prepared
for CAIR are applicable to today's action.
    In accordance with section 202(c) of UMRA, EPA prepared the
statement required by section 202 in conjunction with the Regulatory
Impact Analysis prepared for the CAIR. This document is available at
http://www.epa.gov/cair/pdfs/finaltech08.pdf and contains analyses that

meet the requirements of section 202(a) of UMRA. That is, it contains a
qualitative and quantitative assessment of the anticipated costs and
benefits of the Federal mandate; estimates of future compliance costs
and any disproportionate budgetary effects upon any particular regions
of the nation; and estimates of the effect on the national economy.
    Consultation with State, local and Tribal governments potentially
affected by the CAIR emission reduction requirements was conducted
during the CAIR rulemaking process. Such consultation was conducted in
a manner consistent with the intergovernmental consultation provisions
of section 204 of the UMRA, and Executive Order 12875, ``Enhancing the
Intergovernmental Partnership.''
    EPA has determined that this rule contains no regulatory
requirements that might significantly or uniquely affect small
governments. Therefore, development of a small government plan under
section 203 of the Act is not required. The requirements in this action
do not distinguish EGUs based on ownership, either for those units that
are included within the scope of the rule or for those units that are
exempted by the generating capacity cut-off. Consequently, the rule has
no requirements that uniquely affect small governments that own or
operate EGUs within the region. Further, with respect to the
significance of the rule's provisions, EPA's UMRA analysis demonstrates
that the economic impact of the rule will not significantly affect
State or municipal EGUs or non-EGUs, either in terms of total cost
incurred and the impact of the costs on revenue, or increased cost of
electricity to consumers.

E. Executive Order 13132: Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that 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.''
    This rule does not have federalism implications. 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. These effects do not occur from the
final rule itself because it is the provisions of the CAA that require
EPA, after a State has failed to submit a SIP or a complete SIP, to
make a finding to that effect and then to promulgate a FIP within 2
years of the finding. Although EPA is exercising discretion to
promulgate the FIP within the early part of the 2-year period, EPA
intends to rescind the FIP for each State that submits a SIP that EPA
approves, and, if the FIP remains, sources are not required to
implement controls until after the close of the 2-year period.
Moreover, as emphasized throughout the preamble, States are not
required to adopt the FIP provisions, or any particular portion
thereof, in order for EPA to approve their SIPs. Thus, Executive Order
13132 does not apply to this rule.

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

    Executive Order 13175, entitled ``Consultation and Coordination
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000),
requires EPA to develop an accountable process to ensure ``meaningful
and timely input by Tribal officials in the development of regulatory
policies that have Tribal implications.'' This rule does not have
``Tribal implications'' as specified in Executive Order 13175.
    This rule addresses transport of pollution for precursors of ozone
and PM2.5. The CAA provides for States and Tribes to develop
plans to regulate emissions of air pollutants within their
jurisdictions. The regulations clarify the statutory obligations of
States and Tribes that develop plans to implement these rules. The
Tribal Authority Rule (TAR) gives Tribes the opportunity to develop and
implement CAA programs, but it leaves to the discretion of the Tribe
whether to develop these programs and which programs, or appropriate
elements of a program, the Tribe will adopt.
    This rule does not have Tribal implications as defined by Executive
Order 13175. It does not have a substantial direct effect on one or
more Indian Tribes because no Tribe has implemented a federally-
enforceable air quality management program under the CAA at this time.
Furthermore, this rule does not affect the relationship or distribution
of power and responsibilities between the Federal Government and Indian
Tribes. The CAA and the TAR establish the relationship of the Federal
Government and Tribes in developing plans to attain the NAAQS, and this
rule does nothing to modify that relationship. Because this rule does
not have Tribal implications, Executive Order 13175 does not apply.
    If one assumes a Tribe is implementing a Tribal Implementation
Plan, today' rule could have implications for that Tribe, but would

not impose substantial direct costs upon the Tribe, nor preempt Tribal
law. The EPA has estimated the total annual private costs for the FIP
for the CAIR region as implemented by State, local, and Tribal
governments to be approximately $2.4 billion in 2010 and $3.6 billion
in 2015 (1999$). There are currently very few emissions sources in
Indian country that could be affected by these rules and the percentage
of Tribal land that will be impacted is very small. For Tribes that
choose to regulate sources in Indian country, the costs would primarily
be attributed to inspecting regulated facilities and enforcing adopted
regulations.
    EPA consulted with Tribal officials in developing the final CAIR,
which provides the basis for the FIPs in today's rule. The EPA
encouraged Tribal input at an early stage. Also, EPA held periodic
meetings with the States and the Tribes during the technical
development of CAIR. Three meetings were held with the Crow Tribe,
where the Tribe expressed concerns about potential impacts of the rule
on their coal mine operations. In addition, EPA held three calls with
Tribal environmental professionals to address concerns specific to the
Tribes. These discussions have given EPA valuable information about
Tribal concerns regarding the development of CAIR. During the CAIR
rulemaking process, the EPA provided briefings for Tribal
representatives and the newly formed National Tribal Air Association
(NTAA), and other national Tribal forums. Input from Tribal
representatives was taken into consideration in development of CAIR.

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

    Executive Order 13045, ``Protection of Children from Environmental
Health and Safety Risks'' (62 FR 19885, April 23, 1997) applies to any
rule that (1) is determined to be ``economically significant'' as
defined under Executive Order 12866, and (2) concerns an environmental
health or safety risk that EPA has reason to believe may have a
disproportionate effect on children. If the regulatory action meets
both criteria, Section 5-501 of the Order directs the Agency to
evaluate the environmental health or safety effects of the planned rule
on children, and explain why the planned regulation is preferable to
other potentially effective and reasonably feasible alternatives
considered by the Agency.
    This rule is not subject to the Executive Order, because it does
not involve decisions on environmental health or safety risks that may
disproportionately affect children. The EPA believes that the emissions
reductions from the strategy in this rule would further improve air
quality and would further improve children's health.

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

    Executive Order 13211 (66 FR 28355, May 22, 2001) provides that
agencies shall prepare and submit to the Administrator of the Office of
Regulatory Affairs, OMB, a Statement of Energy Effects for certain
actions identified as ``significant energy actions.'' Section 4(b) of
Executive Order 13211 defines ``significant energy actions'' as ``any
action by an agency (normally published in the Federal Register) that
promulgates or is expected to lead to the promulgation of a final rule
or regulation, including notices of inquiry, advance notices of
proposed rulemaking, and notices of proposed rulemaking: (1)(i) That is
a significant regulatory action under Executive Order 12866 or any
successor order, and (ii) is likely to have a significant adverse
effect on the supply, distribution, or use of energy; or (2) that is
designated by the Administrator of the Office of Information and
Regulatory Affairs as a significant energy action.''
    This final rule is a significant regulatory action under Executive
Order 12866 and this rule may have a significant adverse effect on the
supply, distribution, or use of energy. The energy impacts of this rule
come from its implementation of the emission reduction requirements in
the CAIR. The impacts for this rule will therefore not differ from
those for the CAIR. These impacts are detailed in the final CAIR (70 FR
25315). As discussed in the CAIR NFR, EPA's analysis shows that the EGU
emission reductions required under the trading programs are projected
to result in a 1.6 percent or less increase in natural gas prices
projected from 2010 to 2020. If base case natural gas prices are higher
than EPA has assumed in its primary analysis, the impact on natural gas
price will be even less.

I. National Technology Transfer Advancement Act

    Section 12(d) of the National Technology Transfer Advancement Act
(NTTAA) of 1995 (Pub. L. 104-113; 15 U.S.C. 272 note) directs EPA to
use voluntary consensus standards in its regulatory and procurement
activities unless to do so would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., materials specifications, test methods, sampling
procedures, business practices) developed or adopted by one or more
voluntary consensus bodies. The NTTAA directs EPA to provide Congress,
through annual reports to OMB, with explanations when an agency does
not use available and applicable voluntary consensus standards.
    Today's rule implements requirements largely identical to the
requirements in the CAIR. This rule requires all sources that
participate in the trading programs under part 97 (analogous to the
CAIR SIP trading programs under part 96) to meet the applicable
monitoring requirements of part 75. Part 75 already incorporates a
number of voluntary consensus standards. Consistent with the Agency's
Performance Based Measurement System (PBMS), part 75 sets forth
performance criteria that allow the use of alternative methods to the
ones set forth in part 75. The PBMS approach is intended to be more
flexible and cost effective for the regulated community; it is also
intended to encourage innovation in analytical technology and improved
data quality. At this time, EPA is not recommending any revisions to
part 75; however, EPA periodically revises the test procedures set
forth in part 75. When EPA revises the test procedures set forth in
part 75 in the future, EPA will address the use of any new voluntary
consensus standards that are equivalent. Currently, even if a test
procedure is not set forth in part 75, EPA is not precluding the use of
any method, whether it constitutes a voluntary consensus standard or
not, as long as it meets the performance criteria specified; however,
any alternative methods must be approved through the petition process
under Sec.  75.66 before they are used under part 75.

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

    Executive Order 12898, Federal Actions to Address Environmental
Justice in Minority Populations and Low-Income Populations, requires
Federal agencies to consider the impact of programs, policies, and
activities on minority populations and low-income populations.
According to EPA guidance, U.S. Environmental Protection Agency, 1998.
Guidance for Incorporating Environmental Justice Concerns in EPAs NEPA
Compliance Analyses. Office of Federal Activities, Washington, D.C.,
April, 1998. Agencies

are to assess whether minority or low-income populations face risks or
a rate of exposure to hazards that are significant and that appreciably
exceed or is likely to appreciably exceed the risk or rate to the
general population or to the appropriate comparison group (EPA, 1998).
    In accordance with Executive Order 12898, the Agency has considered
whether this rule may have disproportionate negative impacts on
minority or low income populations. The Agency expects this rule will
lead to reductions in air pollution and exposures generally. In
addition, EPA has conducted an air quality modeling analysis to
estimate the changes in exposure of minority and low-income populations
to ambient concentrations of PM2.5 as a result of
implementation of a cap-and-trade program similar to CAIR: the Acid
Rain Program. The analysis shows that each racial, ethnic, and income-
level group studied is projected to experience similar average
improvement in ambient concentrations of PM2.5 in the
eastern U.S. (where the vast majority of the emission reductions took
place) as a result of the Acid Rain Program in 2010. No
disproportionately high and adverse human health or environmental
effects of the Acid Rain Program were found for any minority, low-
income, or other population. For these reasons, negative impacts to
these sub-populations that appreciably exceed similar impacts to the
general population are not expected.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. Therefore, EPA will submit a report containing this rule
and other required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action is a ``major rule'' as defined by 5 U.S.C.
804(2). This rule will be effective June 27, 2006.

List of Subjects

40 CFR Parts 51 and 52

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

40 CFR Parts 72, 73, 74, and 78

    Environmental protection, Acid rain, Administrative practice and
procedure, Air pollution control, Electric utilities, Intergovernmental
relations, Nitrogen oxides, Reporting and recordkeeping requirements,
Sulfur oxides.

40 CFR Parts 96 and 97

    Environmental protection, Administrative practice and procedure,
Air pollution control, Intergovernmental relations, Nitrogen oxides,
Reporting and recordkeeping requirements.

    Dated: March 15, 2006.
Stephen L. Johnson,
Administrator.

0
For the reasons set forth in the preamble, parts 51, 52, 72, 73, 74,
78, 96, and 97 of chapter I of title 40 of the Code of Federal
Regulations are amended as follows:

PART 51--[AMENDED]

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

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

0
2. Section 51.123 is amended as follows:
0
a. In paragraph (o)(2)(ii)(B), by revising the words ``for the year
after the year of'' to read ``for the 4th year after the year of'' and
by removing the word ``and'' at the end;
0
b. In paragraph (o)(2)(ii)(C), by revising the words ``allocated.'' to
read allocated; and'';
0
c. By adding a new paragraph (o)(2)(ii)(D);
0
d. By adding a new paragraph (p);
0
e. In paragraph (cc), by amending the definition of ``Electric
generating unit'' or ``EGU'' by:
0
i. In paragraph (1) of the definition, by redesignating the paragraph
as paragraph ``(1)(i)'', by revising the words ``since the start-up''
to read ``since the later of November 15, 1990 or the start-up'', and
by adding a new paragraph (1)(ii); and
0
ii. By revising paragraph (2) of the definition; and
0
f. In paragraph (cc), by adding a new definition for ``Solid waste
incineration unit''; and
0
g. By adding a new paragraph (ee).

Sec.  51.123  Findings and requirements for submission of State
implementation plan revisions relating to emissions of oxides of
nitrogen pursuant to the Clean Air Interstate Rule.

* * * * *
    (o) * * *
    (ii) * * *
    (D) The State's methodology for allocating the compliance
supplement pool must be substantively identical to Sec.  97.143 (except
that the permitting authority makes the allocations and the
Administrator records the allocations made by the permitting authority)
or otherwise in accordance with paragraph (e)(4) of this section.
* * * * *
    (p) Notwithstanding any other provision of this section, a State
may adopt, and include in a SIP revision submitted by March 31, 2007,
regulations relating to the Federal CAIR NOX Annual Trading
Program under subparts AA through HH of part 97 of this chapter as
follows:
    (1) The State may adopt, as CAIR NOX allowance
allocation provisions replacing the provisions in subpart EE of part 97
of this chapter:
    (i) Allocation provisions substantively identical to subpart EE of
part 96 of this chapter, under which the permitting authority makes the
allocations; or
    (ii) Any methodology for allocating CAIR NOX allowances
to individual sources under which the permitting authority makes the
allocations, provided that:
    (A) The State's methodology must not allow the permitting authority
to allocate CAIR NOX allowances for a year in excess of the
amount in the State's Annual EGU NOX budget for such year.
    (B) The State's methodology must require that, for EGUs commencing
operation before January 1, 2001, the permitting authority will
determine, and notify the Administrator of, each unit's allocation of
CAIR NOX allowances by April 30, 2007 for 2009, 2010, and
2011 and by October 31, 2008 and October 31 of each year thereafter for
the 4th year after the year of the notification deadline.
    (C) The State's methodology must require that, for EGUs commencing
operation on or after January 1, 2001, the permitting authority will
determine, and notify the Administrator of, each unit's allocation of
CAIR NOX allowances by October 31 of the year for which the
CAIR NOX allowances are allocated.
    (2) The State may adopt, as compliance supplement pool provisions
replacing the provisions in ( 97.143 of this chapter:

    (i) Provisions for allocating the State's compliance supplement
pool that are substantively identical to Sec.  97.143 of this chapter,
except that the permitting authority makes the allocations and the
Administrator records the allocations made by the permitting authority;
    (ii) Provisions for allocating the State's compliance supplement
pool that are substantively identical to Sec.  96.143 of this chapter;
or
    (iii) Other provisions for allocating the State's compliance
supplement pool that are in accordance with paragraph (e)(4) of this
section.
    (3) The State may adopt CAIR opt-in unit provisions as follows:
    (i) Provisions for CAIR opt-in units, including provisions for
applications for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR NOX allowances for CAIR opt-in units, that are
substantively identical to subpart II of part 96 of this chapter and
the provisions of subparts AA through HH that are applicable to CAIR
opt-in units or units for which a CAIR opt-in permit application is
submitted and not withdrawn and a CAIR opt-in permit is not yet issued
or denied;
    (ii) Provisions for CAIR opt-in units, including provisions for
applications for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR NOX allowances for CAIR opt-in units, that are
substantively identical to subpart II of part 96 of this chapter and
the provisions of subparts AA through HH that are applicable to CAIR
opt-in units or units for which a CAIR opt-in permit application is
submitted and not withdrawn and a CAIR opt-in permit is not yet issued
or denied, except that the provisions exclude Sec.  96.188(b) of this
chapter and the provisions of subpart II of part 96 of this chapter
that apply only to units covered by Sec.  96.188(b) of this chapter; or
    (iii) Provisions for applications for CAIR opt-in units, including
provisions for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR NOX allowances for CAIR opt-in units, that are
substantively identical to subpart II of part 96 of this chapter and
the provisions of subparts AA through HH that are applicable to CAIR
opt-in units or units for which a CAIR opt-in permit application is
submitted and not withdrawn and a CAIR opt-in permit is not yet issued
or denied, except that the provisions exclude Sec.  96.188(c) of this
chapter and the provisions of subpart II of part 96 of this chapter
that apply only to units covered by Sec.  96.188(c) of this chapter.
    (cc) * * *
    Electric generating unit or EGU means:
    (1)(i) * * *
    (ii) If a stationary boiler or stationary combustion turbine that,
under paragraph (1)(i) of this section, is not an electric generating
unit begins to combust fossil fuel or to serve a generator with
nameplate capacity of more than 25 MWe producing electricity for sale,
the unit shall become an electric generating unit as provided in
paragraph (1)(i) of this section on the first date on which it both
combusts fossil fuel and serves such generator.
    (2) A unit that meets the requirements set forth in paragraphs
(2)(i)(A), (2)(ii)(A), or (2)(ii)(B) of this definition paragraph shall
not be an electric generating unit:
    (i)(A) Any unit that is an electric generating unit under paragraph
(1)(i) or (ii) of this definition:
    (1) Qualifying as a cogeneration unit during the 12-month period
starting on the date the unit first produces electricity and continuing
to qualify as a cogeneration unit; and
    (2) Not serving at any time, since the later of November 15, 1990
or the start-up of the unit's combustion chamber, a generator with
nameplate capacity of more than 25 MWe supplying in any calendar year
more than one-third of the unit's potential electric output capacity or
219,000 MWh, whichever is greater, to any utility power distribution
system for sale.
    (B) If a unit qualifies as a cogeneration unit during the 12-month
period starting on the date the unit first produces electricity and
meets the requirements of paragraphs (2)(i)(A) of this section for at
least one calendar year, but subsequently no longer meets all such
requirements, the unit shall become an electric generating unit
starting on the earlier of January 1 after the first calendar year
during which the unit first no longer qualifies as a cogeneration unit
or January 1 after the first calendar year during which the unit no
longer meets the requirements of paragraph (2)(i)(A)(2) of this
section.
    (ii)(A) Any unit that is an electric generating unit under
paragraph (1)(i) or (ii) of this definition commencing operation before
January 1, 1985:
    (1) Qualifying as a solid waste incineration unit; and
    (2) With an average annual fuel consumption of non-fossil fuel for
1985-1987 exceeding 80 percent (on a Btu basis) and an average annual
fuel consumption of non-fossil fuel for any 3 consecutive calendar
years after 1990 exceeding 80 percent (on a Btu basis).
    (B) Any unit that is an electric generating unit under paragraph
(1)(i) or (ii) of this definition commencing operation on or after
January 1, 1985:
    (1) Qualifying as a solid waste incineration unit; and
    (2) With an average annual fuel consumption of non-fossil fuel for
the first 3 calendar years of operation exceeding 80 percent (on a Btu
basis) and an average annual fuel consumption of non-fossil fuel for
any 3 consecutive calendar years after 1990 exceeding 80 percent (on a
Btu basis).
    (C) If a unit qualifies as a solid waste incineration unit and
meets the requirements of paragraph (2)(ii)(A) or (B) of this section
for at least 3 consecutive calendar years, but subsequently no longer
meets all such requirements, the unit shall become an electric
generating unit starting on the earlier of January 1 after the first
calendar year during which the unit first no longer qualifies as a
solid waste incineration unit or January 1 after the first 3
consecutive calendar years after 1990 for which the unit has an average
annual fuel consumption of fossil fuel of 20 percent or more.
* * * * *
    Solid waste incineration unit means a stationary, fossil-fuel-fired
boiler or stationary, fossil-fuel-fired combustion turbine that is a
``solid waste incineration unit'' as defined in section 129(g)(1) of
the Clean Air Act.
* * * * *
    (ee) Notwithstanding any other provision of this section, a State
may adopt, and include in a SIP revision submitted by March 31, 2007,
regulations relating to the Federal CAIR NOX Ozone Season
Trading Program under subparts AAAA through HHHH of part 97 of this
chapter as follows:
    (1) The State adopt, as applicability provisions replacing the
provisions in Sec.  97.304 of this chapter, provisions for
applicability that are substantively identical to the provisions in
Sec.  96.304 of this chapter expanded to include all non-EGUs subject
to the State's emissions trading program approved under Sec.
51.121(p).
    (2) The State may adopt, as CAIR NOX Ozone Season
allowance allocation provisions replacing the provisions in subpart
EEEE of part 97 of this chapter:
    (i) Allocation provisions substantively identical to subpart EEEE
of part 96 of this chapter, under which the permitting authority makes
the allocations; or
    (ii) Any methodology for allocating CAIR NOX Ozone
Season allowances to

individual sources under which the permitting authority makes the
allocations, provided that:
    (A) The State may provide for issuance of an amount of CAIR Ozone
Season NOX allowances for an ozone season, in addition to
the amount in the State's Ozone Season EGU NOX Budget for
such ozone season, not exceeding the portion of the State's trading
program budget, under the State's emissions trading program approved
under Sec.  51.121(p), attributed to the non-EGUs that the
applicability provisions in Sec.  96.304 of this chapter are expanded
to include under paragraph (ee)(1) of this section.
    (B) The State's methodology must not allow the State to allocate
CAIR Ozone Season NOX allowances for an ozone season in
excess of the amount in the State's Ozone Season EGU NOX
Budget for such ozone season plus any additional amount of CAIR Ozone
Season NOX allowances issued under paragraph (ee)(2)(ii)(A)
of this section for such ozone season.
    (C) The State's methodology must require that, for EGUs commencing
operation before January 1, 2001, the permitting authority will
determine, and notify the Administrator of, each unit's allocation of
CAIR NOX Ozone Season allowances by April 30, 2007 for 2009,
2010, and 2011 and by October 31, 2008 and October 31 of each year
thereafter for the 4th year after the year of the notification
deadline.
    (D) The State's methodology must require that, for EGUs commencing
operation on or after January 1, 2001, the permitting authority will
determine, and notify the Administrator of, each unit's allocation of
CAIR NOX Ozone Season allowances by July 31 of the year for
which the CAIR NOX Ozone Season allowances are allocated.
    (3) The State may adopt CAIR opt-in unit provisions as follows:
    (i) Provisions for CAIR opt-in units, including provisions for
applications for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR NOX Ozone Season allowances for CAIR opt-in units,
that are substantively identical to subpart IIII of part 96 of this
chapter and the provisions of subparts AAAA through HHHH that are
applicable to CAIR opt-in units or units for which a CAIR opt-in permit
application is submitted and not withdrawn and a CAIR opt-in permit is
not yet issued or denied;
    (ii) Provisions for CAIR opt-in units, including provisions for
applications for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR NOX Ozone Season allowances for CAIR opt-in units,
that are substantively identical to subpart IIII of part 96 of this
chapter and the provisions of subparts AAAA through HHHH that are
applicable to CAIR opt-in units or units for which a CAIR opt-in permit
application is submitted and not withdrawn and a CAIR opt-in permit is
not yet issued or denied, except that the provisions exclude Sec.
96.388(b) of this chapter and the provisions of subpart IIII of part 96
of this chapter that apply only to units covered by Sec.  96.388(b) of
this chapter; or
    (iii) Provisions for applications for CAIR opt-in units, including
provisions for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR NOX allowances for CAIR opt-in units, that are
substantively identical to subpart IIII of part 96 of this chapter and
the provisions of subparts AAAA through HHHH that are applicable to
CAIR opt-in units or units for which a CAIR opt-in permit application
is submitted and not withdrawn and a CAIR opt-in permit is not yet
issued or denied, except that the provisions exclude Sec.  96.388(c) of
this chapter and the provisions of subpart IIII of part 96 of this
chapter that apply only to units covered by Sec.  96.388(c) of this
chapter.

0
3. Section 51.124 is amended as follows:
0
a. In paragraph (q), by amending the definition of ``Electric
generating unit'' or ``EGU'' by:
0
i. In paragraph (1) of the definition, redesignating the paragraph as
paragraph ``(1)(i)'', revising the words ``since the start-up'' to read
``since the later of November 15, 1990 or the start-up'', and adding a
new paragraph (1)(ii); and
0
ii. Revising paragraph (2) of the definition; and
0
b. In paragraph (q), add a new definition for ``Solid waste
incineration unit''; and
0
c. Add a new paragraph (r).

Sec.  51.124  Findings and requirements for submission of State
implementation plan revisions relating to emissions of sulfur dioxide
pursuant to the Clean Air Interstate Rule.

* * * * *
    (q) * * *
    Electric generating unit or EGU means:
    (1)(i) * * *
    (ii) If a stationary boiler or stationary combustion turbine that,
under paragraph (1)(i) of this section, is not an electric generating
unit begins to combust fossil fuel or to serve a generator with
nameplate capacity of more than 25 MWe producing electricity for sale,
the unit shall become an electric generating unit as provided in
paragraph (1)(i) of this section on the first date on which it both
combusts fossil fuel and serves such generator.
    (2) A unit that meets the requirements set forth in paragraphs
(2)(i)(A), (2)(ii)(A), or (2)(ii)(B) of this definition paragraph shall
not be an electric generating unit:
    (i)(A) Any unit that is an electric generating unit under paragraph
(1)(i) or (ii) of this definition:
    (1) Qualifying as a cogeneration unit during the 12-month period
starting on the date the unit first produces electricity and continuing
to qualify as a cogeneration unit; and
    (2) Not serving at any time, since the later of November 15, 1990
or the start-up of the unit's combustion chamber, a generator with
nameplate capacity of more than 25 MWe supplying in any calendar year
more than one-third of the unit's potential electric output capacity or
219,000 MWh, whichever is greater, to any utility power distribution
system for sale.
    (B) If a unit qualifies as a cogeneration unit during the 12-month
period starting on the date the unit first produces electricity and
meets the requirements of paragraphs (2)(i)(A) of this section for at
least one calendar year, but subsequently no longer meets all such
requirements, the unit shall become an electric generating unit
starting on the earlier of January 1 after the first calendar year
during which the unit first no longer qualifies as a cogeneration unit
or January 1 after the first calendar year during which the unit no
longer meets the requirements of paragraph (2)(i)(A)(2) of this
section.
    (ii)(A) Any unit that is an electric generating unit under
paragraph (1)(i) or (ii) of this definition commencing operation before
January 1, 1985:
    (1) Qualifying as a solid waste incineration unit; and
    (2) With an average annual fuel consumption of non-fossil fuel for
1985-1987 exceeding 80 percent (on a Btu basis) and an average annual
fuel consumption of non-fossil fuel for any 3 consecutive calendar
years after 1990 exceeding 80 percent (on a Btu basis).
    (B) Any unit that is an electric generating unit under paragraph
(1)(i) or (ii) of this definition commencing operation on or after
January 1, 1985:
    (1) Qualifying as a solid waste incineration unit; and
    (2) With an average annual fuel consumption of non-fossil fuel for
the first 3 calendar years of operation exceeding 80 percent (on a Btu
basis)

and an average annual fuel consumption of non-fossil fuel for any 3
consecutive calendar years after 1990 exceeding 80 percent (on a Btu
basis).
    (C) If a unit qualifies as a solid waste incineration unit and
meets the requirements of paragraph (2)(ii)(A) or (B) of this section
for at least 3 consecutive calendar years, but subsequently no longer
meets all such requirements, the unit shall become an electric
generating unit starting on the earlier of January 1 after the first
calendar year during which the unit first no longer qualifies as a
solid waste incineration unit or January 1 after the first 3
consecutive calendar years after 1990 for which the unit has an average
annual fuel consumption of fossil fuel of 20 percent or more.
* * * * *
    Solid waste incineration unit means a stationary, fossil-fuel-fired
boiler or stationary, fossil-fuel-fired combustion turbine that is a
``solid waste incineration unit'' as defined in section 129(g)(1) of
the Clean Air Act.
* * * * *
    (r) Notwithstanding any other provision of this section, a State
may adopt, and include in a SIP revision submitted by March 31, 2007,
regulations relating to the Federal CAIR SO2 Trading Program
under subparts AAA through HHH of part 97 of this chapter as follows.
The State may adopt the following CAIR opt-in unit provisions:
    (1) Provisions for CAIR opt-in units, including provisions for
applications for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR SO2 allowances for CAIR opt-in units, that are
substantively identical to subpart III of part 96 of this chapter and
the provisions of subparts AAA through HHH that are applicable to CAIR
opt-in units or units for which a CAIR opt-in permit application is
submitted and not withdrawn and a CAIR opt-in permit is not yet issued
or denied;
    (2) Provisions for CAIR opt-in units, including provisions for
applications for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR SO2 allowances for CAIR opt-in units, that are
substantively identical to subpart III of part 96 of this chapter and
the provisions of subparts AAA through HHH that are applicable to CAIR
opt-in units or units for which a CAIR opt-in permit application is
submitted and not withdrawn and a CAIR opt-in permit is not yet issued
or denied, except that the provisions exclude Sec.  96.288(b) of this
chapter and the provisions of subpart III of part 96 of this chapter
that apply only to units covered by Sec.  96.288(b) of this chapter; or
    (3) Provisions for applications for CAIR opt-in units, including
provisions for CAIR opt-in permits, approval of CAIR opt-in permits,
treatment of units as CAIR opt-in units, and allocation and recordation
of CAIR SO2 allowances for CAIR opt-in units, that are
substantively identical to subpart III of part 96 of this chapter and
the provisions of subparts AAA through HHH that are applicable to CAIR
opt-in units or units for which a CAIR opt-in permit application is
submitted and not withdrawn and a CAIR opt-in permit is not yet issued
or denied, except that the provisions exclude Sec.  96.288(c) of this
chapter and the provisions of subpart III of part 96 of this chapter
that apply only to units covered by Sec.  96.288(c) of this chapter.

PART 52--[AMENDED]

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

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

Subpart A--General Provisions

0
2. Subpart A is amended by adding Sec. Sec.  52.35 and 52.36 to read as
follows:

Sec.  52.35  What are the requirements of the Federal Implementation
Plans (FIPs) for the Clean Air Interstate Rule relating to emissions of
nitrogen oxides?

    The Federal CAIR NOX Annual Trading Program provisions
of part 97 of this chapter constitute the Clean Air Interstate Rule
Federal Implementation Plan provisions that relate to annual emissions
of nitrogen oxides (NOX). These provisions apply to sources
in each State that is described in Sec.  51.123(c)(1) and (2) of this
chapter, Delaware, and New Jersey, each of which States is subject to a
finding by the Administrator that the State failed to submit a State
Implementation Plan (SIP) to satisfy the requirements of section
110(a)(2)(D)(I) of the Clean Air Act for the PM2.5 NAAQS.
The Federal CAIR NOX Ozone Season Trading Program provisions
of part 97 of this chapter constitute the Clean Air Interstate Rule
Federal Implementation Plan provisions for emissions of nitrogen oxides
(NOX) during the ozone season, as defined in Sec.  97.302 of
this chapter. These provisions apply to sources in each State that is
described in Sec.  51.123(c)(1) and (3) of this chapter, each of which
States is subject to a finding by the Administrator that the State
failed to submit a State Implementation Plan (SIP) to satisfy the
requirements of section 110(a)(2)(D)(I) of the Clean Air Act for the 8-
hour ozone NAAQS. These provisions do not invalidate or otherwise
affect the obligations of States, emissions sources, or other
responsible entities with respect to all portions of plans approved or
promulgated under this part, nor the obligations of States under the
requirements of Sec.  51.123 and 51.125 of this chapter.

Sec.  52.36  What are the requirements of the Clean Air Interstate Rule
Federal Implementation Plans relating to emissions of sulfur dioxide?

    The Federal CAIR SO2 Trading Program provisions of part
97 of this chapter constitute the Clean Air Interstate Rule Federal
Implementation Plan provisions for emissions of sulfur dioxide
(SO2). These provisions apply to sources in each State that
is described in Sec.  51.124(c) of this chapter, Delaware, and New
Jersey, each of which States is subject to an EPA finding that the
State failed to submit a State Implementation Plan (SIP) to satisfy the
requirements of section 110(a)(2)(D)(I) of the Clean Air Act for the
PM2.5 NAAQS. These provisions do not invalidate or otherwise
affect the obligations of States, emissions sources, or other
responsible entities with respect to all portions of plans approved or
promulgated under this part, nor the obligations of States under the
requirements of Sec. Sec.  51.124 and 51.125 of this chapter.

Subpart B--Alabama

0
3. Subpart B is amended by adding Sec. Sec.  52.54 and 52.55 to read as
follows:

Sec.  52.54  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Alabama and for which requirements are set forth under the
Federal CAIR NOX Annual and Ozone Season Trading Programs in
part 97 of this chapter must comply with such applicable requirements.

Sec.  52.55  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Alabama and for which requirements are set forth under the
Federal CAIR SO2 Trading Program in part 97 of this chapter
must comply with such applicable requirements.

Subpart E--Arkansas

0
4. Subpart E is amended by adding Sec. Sec.  52.184 to read as follows:

Sec.  52.184  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Arkansas and for which requirements are set forth under
the Federal CAIR NOX Ozone Season Trading Program in part 97
of this chapter must comply with such applicable requirements.

Subpart H--Connecticut

0
5. Subpart H is amended by adding Sec. Sec.  52.386 to read as follows:

Sec.  52.386  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Connecticut and for which requirements are set forth under
the Federal CAIR NOX Ozone Season Trading Program in part 97
of this chapter must comply with such applicable requirements.

Subpart I--Delaware

0
6. Subpart I is amended by adding Sec. Sec.  52.440 and 52.441 to read
as follows:

Sec.  52.440  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Delaware and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.441  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Delaware and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart J--District of Columbia

0
7. Subpart J is amended by adding Sec. Sec.  52.484 and 52.485 to read
as follows:

Sec.  52.484  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the District of Columbia and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.485  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the District of Columbia and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart K--Florida

0
8. Subpart K is amended by adding Sec. Sec.  52.540 and 52.541 to read
as follows:

Sec.  52.540  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Florida and for which requirements are set forth under the
Federal CAIR NOX Annual and Ozone Season Trading Programs in
part 97 of this chapter must comply with such applicable requirements.

Sec.  52.541  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Florida and for which requirements are set forth under the
Federal CAIR SO2 Trading Program in part 97 of this chapter
must comply with such applicable requirements.

Subpart L--Georgia

0
9. Subpart L is amended by adding Sec. Sec.  52.584 and 52.585 to read
as follows:

Sec.  52.584  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Georgia and for which requirements are set forth under
Federal CAIR NOX Annual Trading Programs in part 97 of this
chapter must comply with such applicable requirements.

Sec.  52.585  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Georgia and for which requirements are set forth under the
Federal CAIR SO2 Trading Program in part 97 of this chapter
must comply with such applicable requirements.

Subpart O--Illinois

0
10. Subpart O is amended by adding Sec. Sec.  52.745 and 52.746 to read
as follows:

Sec.  52.745  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Illinois and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.746  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Illinois and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart P--Indiana

0
11. Subpart P is amended by adding Sec. Sec.  52.789 and 52.790 to read
as follows:

Sec.  52.789  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Indiana and for which requirements are set forth under the
Federal CAIR NOX Annual and Ozone Season Trading Programs in
part 97 of this chapter must comply with such applicable requirements.

Sec.  52.790  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Indiana and for which requirements are set forth under the
Federal CAIR SO2 Trading Program in part 97 of this chapter
must comply with such applicable requirements.

Subpart Q--Iowa

0
12. Subpart Q is amended by adding Sec. Sec.  52.840 and 52.841 to read
as follows:

Sec.  52.840  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Iowa and for which requirements are set forth under the
Federal CAIR NOX Annual and Ozone Season Trading Programs in
part 97 of this chapter must comply with such applicable requirements.

Sec.  52.841  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Iowa and for which requirements are set forth under the
Federal CAIR SO2 Trading Program in part 97 of this chapter
must comply with such applicable requirements.

Subpart S--Kentucky

0
13. Subpart S is amended by adding Sec. Sec.  52.940 and 52.941 to read
as follows:

Sec.  52.940  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Kentucky and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.941  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Kentucky and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart T--Louisiana

0
14. Subpart T is amended by adding Sec. Sec.  52.984 and 52.985 to read
as follows:

Sec.  52.984  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Louisiana and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.985  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Louisiana and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart V--Maryland

0
15. Subpart V is amended by adding Sec. Sec.  52.1084 and 52.1085 to
read as follows:

Sec.  52.1084  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Maryland and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.1085  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Maryland and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart W--Massachusetts

0
16. Subpart W is amended by adding Sec.  52.1140 to read as follows:

Sec.  52.1140  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Massachusetts and for which requirements are set forth
under the Federal CAIR NOX Ozone Season Trading Program in
part 97 of this chapter must comply with such applicable requirements.

Subpart X--Michigan

0
17. Subpart X is amended by adding Sec. Sec.  52.1186 and 52.1187 to
read as follows:

Sec.  52.1186  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Michigan and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.1187  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Michigan and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart Y--Minnesota

0
18. Subpart Y is amended by adding Sec. Sec.  52.1240 and 52.1241 to
read as follows:

Sec.  52.1240  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Minnesota and for which requirements are set forth under
the Federal CAIR NOX Annual Trading Programs in part 97 of
this chapter must comply with such applicable requirements.

Sec.  52.1241  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Minnesota and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart Z--Mississippi

0
19. Subpart Z is amended by adding Sec. Sec.  52.1284 and 52.1285 to
read as follows:

Sec.  52.1284  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Mississippi and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must

comply with such applicable requirements.

Sec.  52.1285  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Mississippi and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart AA--Missouri

0
20. Subpart AA is amended by adding Sec. Sec.  52.1341 and 52.1342 to
read as follows:

Sec.  52.1341  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Missouri and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.1342  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Missouri and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart FF--New Jersey

0
21. Subpart FF is amended by adding Sec. Sec.  52.1584 and 52.1585 to
read as follows:

Sec.  52.1584  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of New Jersey and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading Program
in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.1585  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of New Jersey and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart HH--New York

0
22. Subpart HH is amended by adding Sec. Sec.  52.1684 and 52.1685 to
read as follows:

Sec.  52.1684  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of New York and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.1685  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of New York and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart II--North Carolina

0
23. Subpart II is amended by adding Sec. Sec.  52.1784 and 52.1785 to
read as follows:

Sec.  52.1784  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of North Carolina and for which requirements are set forth
under the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.1785  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of North Carolina and for which requirements are set forth
under the Federal CAIR SO2 Trading Program in part 97 of
this chapter must comply with such applicable requirements.

Subpart KK--Ohio

0
24. Subpart KK is amended by adding Sec. Sec.  52.1891 and 52.1892 to
read as follows:

Sec.  52.1891  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Ohio and for which requirements are set forth under the
Federal CAIR NOX Annual and Ozone Season Trading Programs in
part 97 of this chapter must comply with such applicable requirements.

Sec.  52.1892  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Ohio and for which requirements are set forth under the
Federal CAIR SO2 Trading Program in part 97 of this chapter
must comply with such applicable requirements.

Subpart NN--Pennsylvania

0
25. Subpart NN is amended by adding Sec. Sec.  52.2040 and 52.2041 to
read as follows:

Sec.  52.2040  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Pennsylvania and for which requirements are set forth
under the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.2041  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Pennsylvania and for which requirements are set forth
under the Federal CAIR SO2 Trading Program in part 97 of
this chapter must comply with such applicable requirements.

Subpart PP--South Carolina

0
26. Subpart PP is amended by adding Sec. Sec.  52.2140 and 52.2141 to
read as follows:

Sec.  52.2140  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of South Carolina and for which requirements are set forth
under the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must

[[Continued on page 25377]]

]

[[pp. 25377-25426]] Rulemaking on Section 126 Petition From North Carolina To Reduce
Interstate Transport of Fine Particulate Matter and Ozone; Federal
Implementation Plans To Reduce Interstate Transport of Fine Particulate
Matter and Ozone; Revisions to the Clean Air Interstate R[[Page 25377]]

[[Continued from page 25376]]

comply with such applicable requirements.

Sec.  52.2141  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of South Carolina and for which requirements are set forth
under the Federal CAIR SO2 Trading Program in part 97 of
this chapter must comply with such applicable requirements.

Subpart RR--Tennessee

0
27. Subpart RR is amended by adding Sec. Sec.  52.2240 and 52.2241 to
read as follows:

Sec.  52.2240  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Tennessee and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.2241  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Tennessee and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart SS--Texas

0
28. Subpart SS is amended by adding Sec. Sec.  52.2283 and 52.2284 to
read as follows:

Sec.  52.2283  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Texas and for which requirements are set forth under the
Federal CAIR NOX Annual Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Sec.  52.2284  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Texas and for which requirements are set forth under the
Federal CAIR SO2 Trading Program in part 97 of this chapter
must comply with such applicable requirements.

Subpart VV--Virginia

0
29. Subpart VV is amended by adding Sec. Sec.  52.2440 and 52.2441 to
read as follows:

Sec.  52.2440  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Virginia and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.2441  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Virginia and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

Subpart XX--West Virginia

0
30. Subpart XX is amended by adding Sec. Sec.  52.2540 and 52.2541 to
read as follows:

Sec.  52.2540  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of West Virginia and for which requirements are set forth
under the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.2541  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of West Virginia and for which requirements are set forth
under the Federal CAIR SO2 Trading Program in part 97 of
this chapter must comply with such applicable requirements.

Subpart YY--Wisconsin

0
31. Subpart YY is amended by adding Sec. Sec.  52.2587 and 52.2588 to
read as follows:

Sec.  52.2587  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of nitrogen oxides?

    The owner or operator of each NOX source located within
the State of Wisconsin and for which requirements are set forth under
the Federal CAIR NOX Annual and Ozone Season Trading
Programs in part 97 of this chapter must comply with such applicable
requirements.

Sec.  52.2588  Interstate pollutant transport provisions; What are the
FIP requirements for decreases in emissions of sulfur dioxide?

    The owner or operator of each SO2 source located within
the State of Wisconsin and for which requirements are set forth under
the Federal CAIR SO2 Trading Program in part 97 of this
chapter must comply with such applicable requirements.

PART 72--[AMENDED]

0
1. The authority citation for Part 72 continues to read as follows:

    Authority: 42 U.S.C. 7601 and 7651, et seq.

0
2. Section 72.2 is amended, in the definition of ``Receive or
receipt'', by revising the words ``official correspondence log'' to
read ``official log''.
0
3. Section 72.7 is amended as follows:
0
a. By revising paragraph (f)(2); and
0
b. In paragraph (f)(4)(i), by revising the words ``become an affected
unit under the Acid Rain Program and parts 70 and 71 of this chapter''
to read, for purposes of applying parts 70 and 71 of this chapter,
shall be treated as an affected unit under the Acid Rain Program''. The
revision reads as follows:

Sec.  72.7  New units exemption.

* * * * *
    (f) * * *
    (2) For any period for which a unit is exempt under this section:
    (i) For purposes of applying parts 70 and 71 of this chapter, the
unit shall not be treated as an affected unit under the Acid Rain
Program and shall continue to be subject to any other applicable
requirements under parts 70 and 71 of this chapter.
    (ii) The unit shall not be eligible to be an opt-in source under
part 74 of chapter.
* * * * *

0
4. Section 72.8 is amended as follows:
0
a. By revising paragraph (d)(4); and
0
b. In paragraph (d)(6)(i) introductory text, by revising the words
``become an affected unit under the Acid Rain Program and parts 70 and
71 of this chapter'' to read ,`` for purposes of

applying parts 70 and 71 of this chapter, shall be treated as an
affected unit under the Acid Rain Program''.
    The revision reads as follows:

Sec.  72.8  Retired units exemption.

* * * * *
    (d) * * *
    (4) For any period for which a unit is exempt under this section:
    (i) For purposes of applying parts 70 and 71 of this chapter, the
unit shall not be treated as an affected unit under the Acid Rain
Program and shall continue to be subject to any other applicable
requirements under parts 70 and 71 of this chapter.
    (ii) The unit shall not be eligible to be an opt-in source under
part 74 of chapter.
* * * * *

Sec.  72.20  [Amended]

0
5. Section 72.20 is amended, in paragraph (b), by revising the words
``his or her actions'' to read ``his or her representations, actions''.

Sec.  72.22  [Amended]

0
6. Section 72.22 is amended, in paragraph (b), by revising the words
``any action, representation, or failure to act'' to read ``any
representation, action, inaction, or submission'' whenever they appear.

Sec.  72.23  [Amended]

0