UNITED STATES OF AMERICA

DEPARTMENT OF TRANSPORTATION

OFFICE OF THE SECRETARY

WASHINGTON, DC

Issued by the Department of Transportation on February 16, 2006

NOTICE OF ACTION TAKEN -- DOCKET OST-2001-10589

This serves as notice to the public of the action described below, taken
by the Department official indicated (no additional confirming order
will be issued in this matter).

Application of US AIRWAYS, INC., filed 1/13/06, for:

XX	Renewal of exemption for two years under 49 U.S.C. 40109 to provide
the following service:

Scheduled foreign air transportation of persons, property, and mail
between a point or points in the United States and St. Kitts and Nevis.

Applicant rep:	Howard Kass<PHONE_NUMBER>	DOT Analyst: Tretha Chromey
(202) 366-2367

D I S P O S I T I O N

XX	Granted (subject to conditions, see below)

The above action was effective when taken: February 16, 2006 through
February 16, 2008.

Action taken by:	Paul L. Gretch, Director

Office of International Aviation

XX The authority granted is consistent with the U.S.-U.K. Air Transport
Agreement of 1977, as amended, that St. Kitts and Nevis acceded to upon
its independence.

Except to the extent exempted or waived, this authority is subject to
the terms, conditions, and limitations indicated:	XX Holder’s
certificates of public convenience and necessity

XX Standard exemption conditions (attached)

On the basis of data officially noticeable under Rule 24(g) of the
Department’s regulations, we found the applicant qualified to provide
the services authorized.

Under authority assigned by the Department in its regulations, 14 CFR
Part 385, we found that (1) our action was consistent with Department
policy; (2) grant of the authority was consistent with the public
interest; and (3) grant of the authority would not constitute a major
regulatory action under the Energy Policy and Conservation Act of 1975.
To the extent not granted, we denied all requests in the referenced
Docket.  We may amend, modify, or revoke the authority granted in this
Notice at any time without hearing at our discretion.

Persons entitled to petition the Department for review of the action set
forth in this Notice under the Department’s regulations, 14 CFR
§385.30, may file their petitions within seven (7) days after the date
of issuance of this Notice.  This action was effective when taken, and
the filing of a petition for review will not alter such effectiveness.

An electronic version of this document is available on the World Wide
Web at:

http://dms.dot.gov//reports/report_aviation.asp

U.S. Carrier Exemption Conditions

In the conduct of the operations authorized, the U.S. carrier
applicant(s) shall:

(1)  Hold at all times effective operating authority from the government
of each country served;

(2)  Comply with applicable requirements concerning oversales contained
in 14 CFR 250 (for scheduled operations, if authorized);

(3)  Comply with the requirements for reporting data contained in 14 CFR
241;

(4)  Comply with requirements for minimum insurance coverage, and for
certifying that coverage to the Department, contained in 14 CFR 205;

(5)  Except as specifically exempted or otherwise provided for in a
Department Order, comply with the requirements of 14 CFR 203, concerning
waiver of Warsaw Convention liability limits and defenses;

(6)  Comply with all applicable requirements of the Federal Aviation
Administration and with all applicable U.S. Government requirements
concerning security, including, but not limited to, 49 CFR Part 1544.
To assure compliance with all applicable U.S. Government requirements
concerning security, the holder shall, before commencing any new service
(including charter flights) to or from a foreign airport, contact its
International Principal Security Inspector (IPSI) to advise the IPSI of
its plans and to find out whether the Transportation Security
Administration has determined that security is adequate to allow such
airport(s) to be served; and

(7)  Comply with such other reasonable terms, conditions, and
limitations required by the public interest as may be prescribed by the
Department of Transportation, with all applicable orders and regulations
of other U.S. agencies and courts, and with all applicable laws of the
United States.

The authority granted shall be effective only during the period when the
holder is in compliance with the conditions imposed above.

05/2004


CAIR Replacement Rule

Discussions between OTC and EPA

March 18, 2009

I.  Introduction

	On Wednesday, March 18, 2009, EPA held a call with the Ozone Transport
Commission (OTC) to discuss the CAIR replacement rule.  See Appendix A
for a list of the participants in the call.  The notes that follow are a
detailed summary of the call.

II.  EPA Opening Comments

	Sam Napolitano, CAMD, opened the call by thanking the OTC directors and
staff.  He said that EPA sees this call as the beginning of a dialogue
with the states, regional groups, and other key stakeholders.  EPA had a
very productive conversation with LADCO on Monday (March 16) and heard a
number of good suggestions about how to move forward.  The Agency sees
this call as the start of a similar dialogue with OTC about the
different elements that should be included in a replacement CAIR rule.
As part of the dialogue effort, EPA has pulled together the staff who
will actually write the rule, develop technical analyses, and perform
modeling.  The Agency hopes to complete the rule in the next couple of
years.  CAIR will remain in effect as a new rule is being developed.

	EPA has a topic guide to work from that is aimed at helping to organize
the discussion.  The purpose of this call is to gather different ideas
and thoughts to present to the new Assistant Administrator for Air (AA).
 This first series of teleconferences will include calls with states and
other stakeholders, including LADCO, NACAA, the southern states, Texas,
industry representatives, and environmental groups.  When this series
has concluded, EPA will meet with states to report what EPA has heard
from all of the groups.  This will provide a way for the states to
react, and to continue the general dialogue.  The Agency hopes to get
back to the states around April 20th.

	EPA is still waiting for the new AA, but staff have heard positive
things about the likely AA and expect her to arrive soon.  The staff
will discuss the input from these conversations with the AA to give her
a sense of the analytical and technical work that has been completed.

	The upcoming meeting in June might be a good time for interaction
between state and EPA personnel.  Also, the staff might have a better
sense at that time of how the AA wants to move on a replacement CAIR
rule.  During the process, EPA will be sure to include states on any key
issues that arise.

	At the moment EPA has many options to present to the new AA for
direction.  The political management structure is not yet fully in
place.  Thus, the Agency has not decided on how to address many of the
difficult issues.  However, this does afford an opportunity for the
Agency to listen to all stakeholder viewpoints and consider new
approaches to meeting air quality standards.  There are many current
programs and requirements, such as MACT, BART, and regional haze that
will affect the replacement rule.  However, it is unclear at this time
whether changes in those programs will have an effect on the replacement
CAIR program.

	EPA is interested in including industrial boilers, and will be
discussing ICI boilers with CIBO.  Although their inclusion is not
certain, these boilers are definitely on the table for consideration.

	EPA has received OTC's letter and understands the detailed work OTC is
doing.  The Agency looks forward to the results of that work being
presented through the State Collaborative in the near future.

III.  OTC Opening Comments

	Anna Garcia, Executive Director of the OTC, said that OTC was very
interested in many of the issues on EPA's topic list.  It should not
surprise EPA that baseline, significant contribution, timing, trading,
and coverage are all issues the Commission and its member states have
been discussing.  By May or June, OTC hopes to be able to share with EPA
some of the technical work the Commission has completed.

	OTC shared the letter it and LADCO sent to EPA outlining the emission
limits that the Commission thought would be required.  The letter has
been made public and was also shared with industry.  OTC expects to hear
reactions soon, and it has cost information and a preliminary technical
support document, both of which will be shared with EPA once they are
finalized.

	OTC is updating its information on electric utility controls and
emissions.  The Commission hopes to perform detailed analysis in an
effort to see the full range of reductions that would be possible, and
at what price.

	Trading remains an issue of concern to OTC members, who are interested
in how EPA will approach the policy and the court decision.  OTC has
seen cost benefits in most of its analyses, but there are concerns about
whether allowing trading will really solve transport issues.

IV.  OTC Discussion

1.  Timing

	Tad Aburn, MDE, noted that states are particularly concerned with
whether the CAIR replacement rule process would line up with the process
that states have to go through to meet attainment deadlines.  It is
important to get the reductions by the attainment dates, if not three
years beforehand, because states have to work within those dates.  The
big challenge is to make sure a replacement program happens quickly.

	Sam Napolitano, asked what years the states were considering.  Tad
replied that states were looking to have controls in place for 2013,
2014, and 2015 because they are anticipating that they will have to meet
attainment in 2016.

	Bill O'Sullivan, NJ DEP, suggested that performance standards would
need to be considered in order to adequately address the court's
concerns with the current CAIR rule.  Because it will probably take
longer than that timeframe to fully implement the performance standards,
trading should be used as a way to encourage earlier deeper reductions
from units that can reduce cheaply and quickly.  He suggested that the
phases of a replacement plan should coincide with attainment dates.  It
is important to pick performance standards that are not too high or too
low, and to then allow trading to encourage reductions beyond the
standard.

2.  Performance Standards

	Sam Napolitano asked Bill O'Sullivan to define what performance
standards he foresaw by pollutant and program.  Bill replied that EPA
would have to look at the different state programs, but that there
should be performance standards for all three pollutants, and even
tighter trading schemes for SO2 and NOx.

	Sam asked Bill what he would base the standards on.  Bill replied that
he would use RACT, which, while taking cost into account, does not
require that controls are at the cheapest cost available.  He suggested
that the original CAIR had paid too much attention to cost, and that EPA
should look at what the Agency had used for RACT and retrofit BACT.

	Ali Mirzakhalili, DNREC, suggested that EPA should look at anything
above 25 MW for these performance standards, with 24-hour average limits
set at around 0.26 pounds per mmBtu for SO2 and 0.125 pounds per mmBtu
for NOx.  He thought those limits could be met with retrofit and hybrid
controls.  He also noted that because small units were able to meet
those requirements, large units should have an even easier time.

	Ali also agreed that timing is critical.  He noted that plenty of work
has been done, much of the groundwork has been laid, and he suggested
that EPA could move faster than the two-year time frame to develop and
promulgate a rule.  If the Agency cannot move faster, he urged it to
stick to the timeline and put the rule development in high gear.

	Sam acknowledged that EPA understood the states' concerns, but that two
years is a very fast schedule for EPA.  How to define "significant
contribution" certainly is one factor that will lengthen the rule
development process because EPA is still trying to figure out exactly
what significant contribution is and how it compares to a base year.
EPA also is working hard to get the inventories set up so they can
perform the modeling that is needed to fully understand and demonstrate
the elimination of significant contribution as required by section
110(a)(2)(D).  The Agency would welcome any state help with either
inventories or modeling.

	Tad Aburn suggested that one option for a CAIR replacement would be to
disconnect it as a complete solution for  section 110(a)(2)(D).  EPA
could classify the new rule as another national rule that helps solve
transport, but disconnect it from the section 110(a)(2)(D)
demonstration.  He has never believed that section 110(a)(2)(D) could be
solved by looking at a single sector.

	Tim Smith, OAQPS, replied that under the section 110 findings of
failure, EPA was now under FIP obligations to address section
110(a)(2)(D) transport issues.  Therefore, the Agency is concerned about
whether it has the flexibility to solve the section 110 findings of
failure through another program.  At the same time, the Agency is very
sensitive to timing because it is already late, which means that EPA
potentially could be sued and put on a schedule for rule completion.

	Tad pointed out that if EPA could disconnect the replacement rule from
the obligation o f fully satisfying section 110(a)(2)(D), the Agency
might face fewer legal challenges, which would clearly make the whole
process easier and possibly faster.  Section 110(a)(2)(D) is not simply
satisfied by passing a CAIR-type rule, and he would like to continue
exploring the idea of disconnecting the replacement rule from the 110
finding.  EPA noted that it welcomes ideas for fresh thinking and would
like to hear more from the states about this issue.

3.  Baseline

	Susan Wierman, MARAMA, said that she does not understand how EPA could
use future year emission projections, which may or may not happen, as
the baseline for determining a significant contribution.  Based on the
meeting agenda distributed before the call, it appears that EPA is still
considering this approach, but she indicated that she does not think it
makes sense as a concept.  If EPA projects forward, the Agency cannot
know where the emissions will come from in the future because new
sources are created and old ones shut down.  Also, the Agency cannot
predict where emissions will occur under a trading program as allowances
can move between states.  She concluded that she thought EPA would have
to look at existing emissions that everyone knows have occurred.

	Sam Napolitano replied that using the 2010 baseline was one of the few
concepts EPA won in the court case.  The Agency chose to use a future
year baseline because it wanted to be able to take into account future
reductions from settlement agreements and mobile source controls, as
well as from other programs such as RACT.  EPA is considering
approaching the CAIR replacement rule baseline in a similar manner
because an accurate projection of future emissions would require taking
into account rules that EPA knows will have a quantifiable impact on
emissions.  Furthermore, inventories are works in progress; thus, some
level of uncertainty is unavoidable.  He added, however, that EPA would
still welcome other ideas on this subject.

	In response, other participants noted that EPA also won on the issue of
what year the rule would take effect, as well as on some aspects of
significant contribution.  Tim Smith explained that for EPA the big
issue in the July 11, 2008 court decision was the determination that EPA
had not come up with a rule that guaranteed to eliminate the significant
contribution from each state.  The court held that EPA had neither
adequately quantified each state's significant contribution nor provided
a remedy to eliminate the significant contribution which had been
identified.  The court did accept EPA's thresholds for consideration of
geographical areas and its choice of a baseline year.

	Susan suggested that in order to understand significant contribution
EPA would be required to use current year emissions data rather than
projecting what the Agency thinks emissions will be at some point in the
future and using those data to create the baseline for the programs.  In
response to Sam asking for further explanation of her rationale, Susan
replied that states would have to comment on which specific years should
be used, but as a general principle she thought using a year that is
known would be better than a technique that not everyone understands.

	Rob Sliwinski, NYSDEC, agreed with Susan, noting that the emissions
causing the attainment problems are current emissions.  Thus, it makes
the most sense to use actual data for the baseline rather than something
based on conjecture and future forecasts.  EPA should focus on
eliminating the emissions that people know are actually causing or
contributing to non-attainment.  Susan added that she thought it might
make sense to take into account future controls for mobile sources.
However, because EPA knows what the emissions from EGUs are, it should
rely on current year quality-assured data.

	Tim Smith said that EPA is considering what baseline to use, and he
thanked everyone for their input.  Potential legal challenges may impact
any final decision, and it will be important to look also at the
criticism that might be leveled at the Agency if data from a current
year were used for the baseline.  Tim noted two areas of concern.  The
first concern is that there are definitive settlements in place which
EPA knows will have a quantifiable effect on emissions.  The second
concern involves the SO2 bank, which could play a large role depending
on the overall direction of a replacement rule and where allowance
prices end up.  A no-CAIR-baseline would have to take into account the
possibility of an increase in emissions due to banked allowances.  These
are two major issues for EPA when considering what year to use for the
baseline.

	Sam then asked Susan whether the 2008 inventories were ready to be used
for creating a baseline.  Susan replied that 2008 was not yet completed.
 Sam responded that even with the current year's data forecasting would
be required.  Susan replied that there was a one-year lag; thus, 2007
data are available and quality-assured.  However, she added, even with
2007 data there are issues with some of the modeling inventory data.
Another participant noted that states just received a request from EPA
to see what controls are in place on EGUs and that there are some issues
with the inventories that were submitted.  States are currently trying
to correct the data in the inventory that was circulated.

	Susan suggested that EPA use the 2007 data to generate the baseline
because those are the data states are using for the next round of
modeling.  States would be willing to work with EPA to fix any issues
with the data so as to ensure the Agency and the states agree on the
baseline.  There will be concerns in any year about future settlements
and other programs that are coming on line.  Those programs and
settlements could be considered in the remedy rather than the baseline.

	Susan then noted that industry had raised the bank issue in recent
meetings with the states, noting that if CAIR were in place for only a
short period of time most sources would use up some of the banked
allowances rather than put on further controls.  Sam agreed this was a
likely scenario and noted that EPA was left by the Court with the
shortened version of CAIR from the options EPA had analyzed last fall.
The decision allowed CAIR to stay in place, but only while EPA develops
a replacement rule.

	Chris Salmi, NJ DEP, urged EPA to use the available information and
move forward quickly.  It is critical not to wait longer for more data
because states have people breathing bad air, suffering health effects,
and even dying.  He stressed the importance of moving swiftly and
decisively.

	Bill O'Sullivan strongly agreed with Chris.  He also agreed with Susan
that banking was something to be addressed in the remedy not the
baseline.  The baseline should be built on data that have been monitored
and quality-assured rather than on future year projections.  The same
applies to concerns about future year settlements, which should be
addressed in the remedy.  The baseline should account for the situation
as it exists in the most current data.

	Tim replied that EPA will consider all the comments about the baseline
and will move as quickly as possible.  However, one of the biggest
concerns remains legal risk.  The Agency wants to be sure that any
replacement rule will fully satisfy the courts because no matter how the
rule is constructed, litigation is expected.

4.  Scope of the Replacement Rule

	Ali Mirzakhalili suggested that EPA not try to do too much with the
replacement rule.  He thought one of the weaknesses with the last CAIR
rule was that it tried to address contribution through a cap and trade
program married to the Acid Rain Program.  EPA would not have to deal
with the bank if the Agency did not allow trading.  Also, if EPA were to
leave out provisions claiming that the rule fixes contribution then it
would not be required to demonstrate the elimination of significant
contribution.

	Anne Gobin, CT DEP, thought that EPA should bifurcate the rule process
and get the deepest and quickest reductions possible because people have
unhealthy air, and states have to meet these attainment levels.  The
rule does not have to be perfect and does not have to fix everything in
one step.  She agreed with Ali that taking on too much with a
replacement rule would open it to a high level of litigation risk.

	Sam Napolitano acknowledged that EPA understood and heard the states'
desire to move quickly.  Two years is a very fast time frame for EPA,
and the Agency intends to move with all deliberate speed.  However, as
others have pointed out, one of the primary concerns is making sure the
rule is legally defensible.

	Tim Smith said one of the core issues EPA needs to resolve is
determining the purpose of the CAIR replacement rule.  What is the rule
trying to accomplish?

	Tad Aburn said that he believes the key to a new rule would be
separating out section 110(a)(2)(D).  Although EPA tried to make section
110(a)(2)(D) only about EGUs in the original CAIR, he believes it covers
cars and other sources.  Clearly, section 110(a)(2)(D) is something EPA
needs to deal with, but disconnecting it from a CAIR replacement rule
might be best.  It appears that EPA is mostly concerned with section
110(a)(2)(D), while states are mostly concerned with getting controls in
place as fast as possible.

	Sara Schneeberg, OGC, replied that it might be possible legally to
replace CAIR with a rule that does not rely on section 110(a)(2)(D) and
to deal with the section 110 requirements through a FIP, but that would
require significant work.  State participants generally agreed but said
they believed that EPA might be able to move faster by disconnecting
from section 110(a)(2)(D).

	One state participant asked how EPA thought section 110(a)(2)(D) would
be addressed by looking only at the power sector, suggesting that the
Agency would have to look at other sectors.  EPA replied that it does
not have an answer as to whether section 110(a)(2)(D) requirements can
be met by controlling the power sector only, and that the Agency is open
to looking at additional sectors.  The state participant then suggested
that it depends on how significant contribution is defined and what
categories EPA defines as contributing.  All source categories should be
considered, and reasonable screening criteria are needed to determine
which sources are actually playing a role in significant contribution.
Section 110(a)(2)(D) is not solved by just going after EGUs.
Furthermore, seasonal or annual programs do not necessarily solve the
transport issue.

	Sam mentioned that detaching the replacement program from the section
110(a)(2)(D) finding might bring up authority issues.  The court clearly
instructed EPA to be sure the Agency based the replacement rule on clear
legislative authority.  EPA is uncertain where that authority would come
from, except from section 110(a)(2)(D).  The Agency is interested in the
idea of bifurcation, but it is concerned about the legal foundation.

	Andy Bodnarik, NH DES, said that one thing the court made clear is that
EPA must quantify each state's contribution, as well as each state's
contribution to other states.  Quantifying those contributions is not
something that can be addressed without taking all sectors into account,
along with all the state-specific requirements for those sectors.  He
also suggested that intrastate trading might provide flexibility.

	A participant from NJ DEP raised concerns about getting out of the
significant contribution classification once a state had been determined
to contribute to another state.  For instance, one way to determine if a
significant contribution has been addressed would be to look at the
contributing state's rules and determine if the receiving state had at
least as stringent controls as the contributing state.  If both states
have equally stringent rules, then the contribution might be considered
satisfied, for example.

5.  Trading

	Sam Napolitano noted that trading had not appeared to be a legal issue
for most states, and that only North Carolina had brought up legal
concerns with trading.  Other states had concerns about stringency and
how many allowances were given out, but most states did not oppose the
concept of trading.  However, one of the most significant choices EPA
must make in a replacement rule is between direct control and trading.
EPA is considering direct control, but "significant contribution" issues
remain even if EPA were to choose a direct control (e.g., performance
standard) approach.  Direct control still leaves the same problem of
trying to identify what parts of contribution are significant and then
demonstrating that the remedy eliminates that quantified significant
contribution.

	Susan Wierman indicated that the idea that only North Carolina had an
issue with trading might be too narrow.  Other states, such as New
Jersey, Maryland, and Delaware, adopted state-specific rules that
limited trading by requiring EGUs to put on controls and by curtailing
their ability to buy or sell allowances.  Although states did not argue
against trading on legal grounds in CAIR litigation, they clearly had
policy concerns.  Sam agreed that some states had added local controls
which the CAIR program allowed.  In those states direct control exists
with the ability for facilities also to trade.  Originally, when he said
that only North Carolina had a problem with trading he was speaking in
the legal context regarding states that made a legal challenge.

	Susan noted that some states were concerned that transport issues could
not be solved by trading.  She suggested that if an area in a state were
contributing to non-attainment in another state, that area should itself
be considered in non-attainment.  There are clearly political
ramifications to such a determination.  This concept has been discussed
by OTC but has not necessarily been supported by other states.  However,
she did think there was legal authority to move forward with something
other than CAIR.

	Tim Smith raised concerns about how a strictly performance-based system
can have a lowest common denominator effect.  With command and control,
sources control only down to the required level, even if they might
easily and cheaply control more emissions.  Trading adds an economic
incentive to reduce immediately and beyond the required level so sources
can sell or bank allowances.  One idea EPA is considering is to
establish minimum standards and allow any source that reduces below
those to participate in trading.

	Ali Mirzakhalili agreed that trading should be used to encourage
additional reductions beyond the standard.  He supports using a
performance standard and allowing trading to help eliminate the lowest
common denominator problem.

	Another state participant pointed out that regardless of trading, the
key point of the North Carolina case was that EPA needs to eliminate
significant contribution.

6.  Sectors to Include

	Barbara Kwetz, Massachusetts DEP, said that she believed a replacement
program would have to look at more than just utilities.  Massachusetts
gets the most response in modeling from the on-road sector.  She was
unsure if EPA had the authority to look at on-road through significant
contribution, but that the on-road sector plays a large role in their
modeling.

	Barbara also said that she believed EPA needed to build efficiency
factors into the consideration of EGUs.  States were concerned with how
the allowances were distributed between the states last time.  She
thought the new AA would support considering efficiency.

	Sam Napolitano replied that it seemed that Barbara was suggesting that
EPA needed to look at more than EGUs.  Was she considering cars?  Or
more broadly, what other sectors do the states think EPA should look at?
 Barbara replied that she was just reporting on what the modeling was
demonstrating.  She supports bifurcating and dealing with significant
contribution in a separate rulemaking because far more than just
utilities are involved in transport.

	Jeff Crawford, ME DEP, suggested that it is important timing-wise and
depth-wise to consider other programs that will affect mobile emissions.
 He thinks it might be better not to tie mobile sources directly into a
CAIR replacement rule, but he also said that mobile sources should not
be taken out of consideration.  He also thinks that the new rule would
need to include more than EGUs, most likely large stationary sources.
Large stationary sources were originally considered under CAIR, but in
the end were not included because there was not enough information.
Jeff believes the data have progressed to a point where EPA could
justify including the large stationary sources.  When asked if he was
referring to new information on ICI boilers, he replied yes, in part,
and that there was other new information that also supported inclusion
of large stationary sources.

	Andy Bodnarik reiterated the idea of bifurcation, suggesting that EPA
create one program to deal with transportation and another that
addresses CAIR-like programs that use a combination of performance
standards and trading.  Mobile sources should be included as one of many
sectors in the rule addressing transportation.

	Chris Salmi also believes that EPA should separate out section
110(a)(2)(D) and develop a comprehensive plan to address transportation.
 Such a plan could involve multiple smaller rules that combine to
control transportation across numerous sectors, allowing EPA to achieve
the objective in a timely fashion that the states believe is important.
Sam thanked Chris for the suggestion and said that EPA would consider
it.

7.  1997 versus 2006 NAAQS

	Bill Harnett noted that the 2007 deadline had passed for the FIP
required by the section 110(a)(2)(D) finding made in 2005 for the 1997
standards.  He also noted that the group had not even begun to talk
about the 2006 standards for PM and ozone and wondered how the states
foresaw these standards being addressed.

	The 2006 standards must be met in September 2009, so this is an
immediate issue for the states.  Would the states rather have EPA wait
and see if the states can meet the standards, or should EPA proceed with
creating the FIP?  Basically, should EPA consider the newer standards?

	States replied that it would depend on what type of FIP EPA intended to
create.  It was also noted that timing is difficult because the dates
are upcoming but not yet arrived.  It is hard to address a standard that
states are not yet officially failing, especially when standards exist
that are supposed to have been met, but were not in fact met.  However,
it is also true that the compliance date for the 2006 standards is fast
approaching.

	One participant noted that the EPA Administrator has acknowledged in
publications that EPA had not fulfilled the section 110(a)(2)(D)
requirements over the past eight years and would have to do better.
Thus, it seems as though EPA should admit that the approach to section
110(a)(2)(D) did not work, lay out a new plan for how to address
transport, and provide an indication of the role a CAIR replacement rule
will play in helping reduce future transport.

V.  EPA Discussion

	Sam Napolitano noted that the group had addressed each of the three
topic areas on the agenda in a largely unstructured fashion, and asked
whether there were any more discussion on the baseline.

1.  Baseline

	Andy Bodnarik raised the legal problem that EPA must confront in trying
to create a new rule.  The more assumptions EPA tacks onto the rule, the
harder it is to get the rule promulgated.  Last time there were
assumptions regarding BART, MACT, and RACT which he felt might endanger
the rule in the future.

	EPA asked if he meant that the new rule should satisfy the BART, MACT,
and RACT requirements.  Andy responded that he did not mean this, but
that if the future rule attempted to satisfy all those requirements it
would face potential legal challenges because those requirements are
moving targets.

	EPA acknowledged this point and said that in terms of the baseline
question the Agency is trying to understand what consideration, if any,
it should give to the reductions those programs will achieve when
creating the new baseline.

	The states responded that in general they were in favor of using actual
emissions data to generate the baseline rather than using projected
reductions.  The states believe 2007 is the best year meteorologically
and the one for which states have good data.  Furthermore, 2007 is the
year the states are using to create their inventories for the next round
of SIPs.  States would like to work with EPA on these data to be sure
everyone has a complete inventory that is based on real, monitored data.

2.  Significant Contribution

	Sam Napolitano then moved the discussion to significant contribution.
Clearly the states understand that significant contribution is a big
issue that EPA must be sure to adequately address.  EPA heard the
states' suggestion for disconnecting from section 110(a)(2)(D), which is
a good idea and will be considered.  Do the states have any further
comments or suggestions about how to deal with significant contribution?

	One participant replied that she had read the rules and the
methodologies and was still confused about how EPA arrived at the
significant contribution levels used in the original CAIR.  She said
that she understands the levels, but not the methodology used to
determine them.  She asked if EPA would be reviewing these
methodologies, and wondered what universe of factors EPA generally
considered when determining significant contribution or performing
related modeling.

	Sam explained that there were two elements involved in a significant
contribution determination.  The first was a numeric metric used to
define which geographical areas should be in CAIR.  The court agreed
with EPA's process in terms of identifying the areas that should be
included.  The second element was the remedy; here sources were required
to put on highly cost-effective controls.  If cost-effective controls
were put in place, the unit was determined to have met its CAIR
obligations.  By definition, complying with CAIR also meant the unit was
in compliance with section 110(a)(2)(D) requirements.

	States noted that the second section was what the court struck down.
Cost can be considered as part of the control strategy, but EPA said
that if the cost were reasonable then the controls met the requirements.
 It was suggested that the court thought EPA had put the priorities in
the wrong order.  EPA agreed that clearly the court had found the old
method unacceptable, but the Agency was less certain about what the
court would find acceptable, which is part of what is driving the
solicitation of new ideas.

	Barbara Kwetz suggested that significant contribution was a scientific
test which requires EPA to figure out and define the linkage between one
state's emissions and exactly what part of those emissions are
significantly contributing to non-attainment in a different state.
Cost-effectiveness arises when looking at a remedy.  Sam agreed that
this was one way to approach significant contribution.

	Barbara agreed that the court upheld the geographic metrics, but
thought that in order to meet the standards the metrics might have to be
lowered to include more areas.  However, once that significant
contribution is identified it must be removed; cost-effectiveness only
comes into consideration when choosing between the different strategies
that will eliminate significant contribution.  Cost-effectiveness alone
does not eliminate significant contribution.

	Tim Smith noted that EPA needed to develop some method of measuring the
actual amount of significant contribution, not just whether an area did
indeed significantly contribute.  The court specifically held that under
section 110(a)(2)(D) EPA needed to identify the significant
contribution, and then eliminate what was identified.  In the original
CAIR, the court found that EPA had neither identified nor eliminated the
significant contribution.

	Ali Mirzakhalili added that the geographic threshold of 0.2 that the
court agreed EPA had done correctly was based on a standard which is up
for review and will mostly like be revised.  However, another
participant noted that the court had sent only the annual standard back
to EPA for review.  It is impossible to prejudge what will happen during
the review because the court asked EPA to justify only the level at
which the annual standard was set.  Therefore, it is not certain that
the standard will change.  Ali agreed with this but noted that the ozone
NAAQS had already been lowered from 80 ppb to 75 ppb.  He suggested that
because the standard is more stringent, the thresholds for significant
contribution should be tightened as well.

	Some states noted that section 110(a)(2)(D) requires SIPs to contain
adequate measures to deal with transport.  They suggested that the
difference between individual states' controls should be taken into
account when determining significant contribution.  This would level the
playing field and ensure that those states which already have
significant levels of control are given credit for those reductions.

	As a participant from NJ DEP had noted earlier, as part of the review
it would be important to determine whether the receiving state has rules
at least as stringent as those of the contributing state.

	The states have always been slightly confused about the way EPA makes
significant contribution determinations.  It was suggested that if an
upwind state does not have a SIP measure that provides a non-zero
benefit to the downwind area, the downwind area already has those types
of controls in the SIP, and the downwind state's controls are
cost-effective, then no matter how small the contribution is from the
upwind state, it should be considered significant.  The suggestion was
that EPA might look at using the SIP measures as the driver for section
110(a)(2)(D).

	Sam explained that EPA has always been concerned about industry
litigation risk.  The Agency has always tried to select levels that
industry would have difficulty arguing were not significant.
Furthermore, requiring a 0.2 microgram reduction through a SIP requires
significant effort.  The entire CAIR program on average removed 1
microgram.

	Tim asked the larger question of whether in determining what different
states need to do to meet section 110(a)(2)(D) requirements EPA should
look at significant contribution strictly through a level playing field
paradigm, or should it also weigh which states contribute more?

	One state participant replied that the assumption is that states that
contribute more would have to control more.  Susan Wierman raised the
fact that states, specifically those in the Northeast, are smaller, and
that non-attainment areas overlap state boundaries.  For instance, the
District of Columbia non-attainment area includes three to four states.
It would seem that if there is an approvable SIP for that non-attainment
area then the SIP itself is a demonstration that each of the states have
done what is required to address transport to the states in that
non-attainment area.  Using the SIPs as a significant contribution
metric would allow EPA to move away from a metric based on standards
which change over time.

	Leah Weiss, NESCAUM, noted that all of the modeling numbers are based
on an average summer day.  However, many areas are affected by peak
emissions, which need to be considered because those emissions often
overwhelm an area and cause ozone non-attainment.  Tim asked whether the
states believe that the peak issue is linked to transport.  Jeff
Crawford responded that Maine has experienced high ozone levels between
2 a.m. and 3 a.m., which clearly points to a transport problem.

	EPA noted that its modeling has historically been aimed at a peak.  The
Agency would take an episode period, work through it, and think about
significant contribution relative to the peak.  EPA then asked if the
peak emission issue involved peaker plants coming on line during high
demand days, as those plants are often smaller and dirtier than usual.
One participant suggested that EPA had not looked at the issue in that
light before.  Leah noted generally that the manner in which modeling is
performed may contribute to some difficulties in this area.

	Tad Aburn asked if the section 110(a)(2)(D) demonstration was the
responsibility of the upwind area.  EPA said that it is the states'
responsibility to demonstrate compliance through the SIPs with section
110(a)(2)(D), and that the finding of failure to demonstrate section 110
compliance is what triggered this whole process.

	Tad asked if EPA might be able to provide more guidance to the states
on how to meet the section 110(a)(2)(D) requirements and what that
demonstration would require.  Bill Harnett agreed that guidance might be
useful.  Especially as the section 110 transport requirements will
continue to be an issue in the eastern U.S.  In any demonstration there
would have to be both a modeling and a control component.  EPA expressed
an interest in knowing which elements of the demonstration, such as
state and regional modeling, have already been developed through the RPO
process.

	OTC asked about EPA's review process for determining section
110(a)(2)(D) compliance.  OTC said it also would be interested in
additional guidance from EPA on how to meet those requirements.  EPA
responded that most states do not submit anything on this issue.  This
means, of course, that the state automatically falls under the FIP.
There was some discussion about the complexity of the demonstrations,
and it was suggested that in many ways the technical aspects of a
demonstration might be beyond the resources of states and that the SIP
process might not really be appropriate.  However, EPA understands the
concerns and will look into issuing more guidance.

	David Wackter, CT DEP, indicated that he thought that addressing
significant contribution would require sector-by-sector modeling.  This
would allow EPA to define what part of the significant contribution
comes from EGUs and create a rule to deal with that specific part of the
significant contribution.  EPA would also be able to see what portion of
significant contribution came from mobile sources, point sources, and
area sources.  He added that he believes the modeling would show that
sources other than EGUs are playing a large role in contribution, which
would mean that reductions might be required from those other sources.
He reiterated support for bifurcating the process.

	Sam acknowledged the suggestions and said that EPA would consider the
bifurcation ideas.  He then asked if the states had any more thoughts on
the remedy.

3.  Remedy

	Chris Salmi suggested that there are a number of area source categories
where national rules make more sense.  For instance, paint products, ICI
boilers, and many others.  Another participant noted that OTC was
re-examining area source rules and going back to the VOC rules
concerning consumer products.  The Commission is very interested in
working with EPA on new national rules controlling emissions from
sources other than EGUs, and  would be happy to share with EPA the work
done so far.

	Bill Harnett noted that there appeared to be two different remedies to
address transport that states would like to see implemented.  The first
would be to look at area sources for contribution and set a level of
control that sources would be required to achieve for area sources per
state.  EPA could recommend to the state how to achieve those control
levels and what types of controls EPA believed would be cost-effective.
However, it would be up to the state to meet the requirements.  A second
remedy would deal with national rules covering other sources, such as
future consumer products.

	One participant suggested EPA use thresholds for other sources and
allow the states to decide how to meet the thresholds.

	EPA indicated that it understands that the states are very interested
in getting a program in place as quickly as possible.  The Agency
understands that states want EPA to do whatever is possible with EGUs
and large stationary sources under the revised CAIR, and then to
consider separate programs to control other types of sources.

	Andy Bodnarik noted that some states already have area rules that cover
manufacturing and deal with more than just paints and coatings.
Therefore, he believes states might support national standards that fit
into pre-existing rules.  For example, California dealt with some area
sources, such as water heaters, by adopting a manufacturing standard.
There are clearly products other than VOC emitters that are contributing
to the overall emissions in large amounts.

	Sam Napolitano asked if Andy was referring to building codes.  Andy
replied that he was thinking more along the lines of how EPA controlled
wood stoves.  Sam asked if he thought this would be regulated under
NSPS.  Andy said it could operate in a similar manner, depending on the
source.  For example, under the wood stove program, EPA set up a test
lab, and manufacturers either passed or failed.  Andy suggested EPA
could do with other sources the same as California did with water
heaters.

	Bill Harnett agreed that using an approach similar to wood stoves for
other area sources would be one option.  However, Peter Tsirigotis,
OAQPS, might raise concerns with resources as his division can barely
keep up with current programs and litigation on MACT and residual risk.
Standards have to be reviewed, and the group is reviewing about 80 rules
every two years.  In addition, the sheer volume of court-ordered work at
this time makes it difficult to look ahead.  Although it strains EPA's
resources, the Agency is required to comply with court orders.  Bill
said he would raise the issue with Peter, but wanted the states to bear
the resource situation in mind.

4.  Coverage and Timing

	Sam Napolitano moved the discussion to coverage and timing, stating
that EPA understands that the states believe the program is late and
that they are pushing for fast action.  From this conversation he
understands that the states would like EPA to deal with the 2006 and
2008 revised NAAQS for ozone and particulates, as well as the 1997
standards.

	The states confirmed that a CAIR replacement rule on EGUs should
consider all three standards.  Using the 2006 and 2008 standards means
that EPA will have to define transport within the framework of these
newer, more stringent standards.  However, put simply, the states are
interested in the deepest and fastest emission reductions EPA can
achieve.  If combining source categories is necessary and will delay the
rule, states understand why EPA may have to take that path, but the
states encouraged the Agency to determine how to get some immediate
reductions.

	Sam replied that EPA would be best able to look at utilities and
possibly large industrial boilers because other source categories have
not been focused on in recent years.  EPA will have to build up data and
research policy options concerning area and other sources.  EPA believes
utilities and large industrial boilers will be the easiest to get quick
reductions from because so much work has already been done with these
sources.

VI.  Conclusion

	Sam Napolitano noted that the 2005–2008 data indicate that even with
the shortened CAIR and the court challenges, the current programs have
brought SO2 down by 2.4 million tons in the CAIR region.  Emissions are
still under the cap, and the bank did get bigger, but some progress was
made.  Additionally, the same data show that there was an annual NOx
reduction of over 0.5 million tons in the CAIR region.  The 2008 data
are not finalized, but it appears as though emissions will be under the
summer cap.

	Clearly, everyone would like to achieve greater reductions.  However,
EPA does believe these results will be helpful in trying to meet
attainment requirements.   While the SO2 bank is clearly an issue, EPA
believes the NOx reductions are very real and binding.  Sam noted that
while most people were satisfied with the reductions under Phase I, OTC
had wanted further reductions, and EPA looks forward to making sure
reductions continue to occur.  Finally, it is important to note that
there are many control equipment projects under construction that will
bring even more reductions.

	States and OTC said that they were pleased to hear about the
reductions.  However, they are concerned because preliminary work (which
has not yet been made public) based on the last round of modeling
indicates that another 500,000 tons of NOx reductions will be required
in the region.  They cautioned that all the data had not been finalized,
but noted that a large reduction would be required just from the
Northeast region.  That does not even take into account reductions that
will be required from other regions such as the Midwest and South.  In
response to further questions from EPA, they explained that the
predicted 500,000 ton reduction requirement applied not just to EGUs but
to all sectors.  In the power sector, it appears that a reduction of a
few hundred thousand tons might be required.  Sam then announced that
Maryland was the big reducer for NOx, and he congratulated Tad Aburn.

	Ali Mirzakhalili thanked EPA for the renewed efforts at dialogue and
mentioned that he hoped the dialogue would continue.  In the past,
starting with the Clear Skies initiative, the states' message has been
that the federal reductions are too little and too late.  The federal
response to the states' concerns was usually that EPA was doing the best
it possibly could and that the reductions offered were the best the
states were going to get.  He hopes that the state comments were clear
that this time EPA needs to do better and develop more stringent number
and caps.  States need reductions immediately to help meet attainment
dates.

	Sam acknowledged that EPA had heard the states and suggested that the
new AA would be a good listener.  Bill Harnett agreed with Sam and
thought the new AA would want to engage with states to make sure EPA
understands the issues states are facing and the support they need from
the Agency.  Both Sam and Bill indicated that they understand that the
states would like to have been more involved in the development of CAIR,
and they reiterated EPA's interest and commitment to a strong dialogue
with the states.

	Anna Garcia expressed OTC's approval of the renewed commitment to
dialogue.  OTC and the states then asked EPA how it thought regular
communication between states and EPA could be structured.  They
suggested that EPA staff discuss the issue once the political leadership
was settled.

	Bill Harnett indicated that he thought that arranging a phone call
similar to this one would be one way EPA could keep the lines of
communication open.  For now, EPA will stay in touch with OTC and let
OTC decide at what point another discussion would be useful.  As noted
at the beginning of this call, at some point after April 20th, EPA will
present a summary of this series of preliminary calls with states and
other stakeholders.  The semi-annual meeting was also mentioned as a
good place for some direct contact, though the states noted that it is
difficult at this time to get travel approval.

	Ali offered to develop a draft model rule to share with EPA.  EPA
agreed to consider it and suggested that he email it to Bill or Sam,
either of whom would then circulate the draft to the whole team.

	Anna Garcia concluded by thanking EPA, noting that OTC would be
speaking with LADCO the next day during the collaborative call, and she
said that if there is anything OTC can do to help EPA, the Agency should
not hesitate to call.  The states and OTC do understand that there is
lot of work facing the Agency.

	Sam thanked OTC and reiterated that EPA understands the states want a
rule back in place as soon as possible.  He concluded by noting that if
the states had concerns about specific details they should not hesitate
to call or email EPA.

Appendix A:

Participants

OTC and Other Groups:

Anna Garcia (OTC)

Doug Austin (OTC)

Seth Barna (OTC)

Amy Royden-Bloom (NACAA)

Leah Weiss (NESCAUM)

Susan Wierman (MARAMA)

States:

Anne Gobin (Connecticut)

David Wackter (Connecticut)

Ali Mirzakhalili (Delaware)

Cecily Beall (District of Columbia)

Jeff Crawford (Maine)

Diane Nelson (Maryland)

Frank Courtright (Maryland)

George (Tad) Aburn (Maryland)

Barbara Kwetz (Massachusetts)

Andrew (Andy) Bodnarik (New Hampshire)

Jeff Underhill (New Hampshire)

David Shaw (New York)

Robert Sliwinski (New York)

Jared Snyder (New York)

William (Bill) O’Sullivan (New Jersey)

Chris N. Salmi (New Jersey)

Joyce Epps (Pennsylvania)

Barbara Morin (Rhode Island)

Mike Dowd (Virginia)

Tamera Thompson (Virginia)

Tom Ballou (Virginia)

EPA:

CAMD:

Sam Napolitano

Larry Kertcher

Beth Murray

Gabrielle Stevens

Meg Victor

Tamara Saltman

OAPQS:

Bill Harnett

Rich Damberg

Todd Hawes

Gobeail McKinley

Tim Smith

OGC:

Sara Schneeberg

Representatives from EPA Regions 1 and 2

March 27, 2009

	Page   PAGE   \* MERGEFORMAT  16

Appendix A:  Participants

Page   PAGE   \* MERGEFORMAT  2


Results of Section 610 Review of Emission Standards

for Nonroad Compression-Ignition Engines

On October 23, 1998 (63 FR 56968), EPA promulgated a rule setting
emission standards for nonroad compression-ignition (CI) engines under
authority of Section 213 of the Clean Air Act. These standards are
codified in the Code of Federal Regulations at 40 CFR Part 89. Pursuant
to Section 610 of the Regulatory Flexibility Act, EPA has reviewed this
rule to determine if it should be continued without change, or should be
rescinded or amended to minimize adverse economic impacts on small
entities. EPA considered, and solicited comments on, the following
factors: (1) The continued need for the rule; (2) the nature of
complaints or comments received concerning the rule; (3) the complexity
of the rule; (4) the extent to which the rule overlaps, duplicates, or
conflicts with other Federal, State, or local government rules; and (5)
the degree to which technology, economic conditions, or other factors
have changed in the area affected by the rule. The results of EPA's
review are summarized here.

Background

The purpose of the requirements of emission standards and related
provisions for nonroad CI engines is to improve ambient air quality.
EPA’s authority for regulating nonroad engines and vehicles comes from
section 213 of the Clean Air Act as amended in 1990 (CAA or the Act).
Section 213 of the Act provides the criteria under which EPA should
promulgate standards for nonroad engines and vehicles and directs EPA to
revise the standards “from time to time” for such engines and
vehicles. EPA adopted the first standards for nonroad CI engines on June
17, 1994 (59 FR 31306). The October 1998 rule was EPA’s first action
to revise the standards for nonroad CI engines. A Notice of Proposed
Rulemaking was published in the Federal Register on September 24, 1997
(62 FR 50152) and the Final Rule was published on October 23, 1998 (63
FR 56968). These requirements are codified in 40 CFR Part 89.

The standards promulgated under the October 1998 rule took effect as
early as the 1999 model year and as late as the 2008 model year. The
standards cover a broad range of engines from just a few horsepower to
engines over 1,000 horsepower. The engines covered by the October 1998
rule are used in many different types of equipment applications
including generators, farm tractors, and a wide range of industrial and
construction equipment.

Regulatory Flexibility Act Section 610 Review

Pursuant to Section 610 of the Regulatory Flexibility Act, the Agency
has reviewed the October 1998 rule that set requirements for emission
standards and related provisions for nonroad CI engines. This review was
announced in the Regulatory Agenda on May 5, 2008 (73 FR 24761). In the
May 5 announcement, the Agency solicited comment on five factors that
are addressed below. No comments were received.

Discussion of Five Factors

1. Continued need for the rule

One of the factors that must be considered in a section 610 review is
the continued need for the rule under review. The Agency finds that
there is a continued need for the emission standards and related
provisions for nonroad CI engines. Many areas of the country do not meet
the National Ambient Air Quality Standards (NAAQS) for ozone or
particulate matter (PM2.5). Both of these environmental problems are
addressed in part by the October 1998 rule. In addition, the Agency has
taken another step beyond the October 1998 rule to further reduce
emissions from these same sources. Subsequent to the October 1998 rule,
EPA has adopted more stringent standards for the same regulated sources
(see 69 FR 38958, published June 29, 2004) that are scheduled to take
effect in the coming years, between 2008 and 2015.

2. Nature of complaints or comments received concerning the rule.

No public comments were received during the review period for the 1998
rule.

3. Complexity of the Rule

The Agency must also consider the complexity of the rule under review.
The  1998 rule included a number of provisions aimed at easing the
burden of compliance for both engine manufacturers and equipment
manufacturers, including provisions for equipment manufacturers, many of
which are small businesses, that allow the limited use of engines
meeting the previous emission standards during the initial years of the
program to help smooth the transition to the new standards. The rule
also included provisions that allow an equipment manufacturer to request
additional time to use engines meeting the previous emission standards
if the manufacturer can demonstrate it will face serious economic
hardship if relief is not granted. EPA believes that the transitional
flexibilities afforded by these provisions mitigate the implementation
complexity of the rule while meeting statutory objectives.

4. Extent to which the rule overlaps, duplicates, or conflicts with
other Federal, State, or local government rules

The Agency must also consider the extent to which the nonroad CI engine
rule overlaps, duplicates, or conflicts with other Federal, State, or
local government rules. The Agency believes the rules for nonroad CI
engines do not duplicate or conflict with any other rule. Under the CAA,
both EPA and the state of California are authorized to have emission
control program requirements programs covering these engines and,
indeed, both do now have programs. EPA worked closely with the state of
California in developing the October 1998 rule. The state of California
has subsequently adopted the same provisions for nonroad CI engines
subject to its control. (Under the CAA, only EPA can set standards for
engines used in farm and construction-related CI equipment below 175
horsepower.) Thus, the EPA program is fully necessary to achieve
national air quality objectives, and does not duplicate, conflict with,
or overlap unnecessarily with other programs.

5. The degree to which technology, economic conditions, or other factors
have changed in the area affected by the rule

Finally, the Agency must consider the length of time since the rule in
question has been evaluated, or the degree to which technology, economic
conditions, or other factors have changed in the area affected by the
rule under review. There have been a number of changes to and
improvements in CI engines since the late-1990s, some of them as a
direct result of the new emission standards. There also has been a
continual evolution in the number and type of products using these
engines. There are more engine and equipment product offerings today
than ever before and recently the economic impacts of off-shore engine
and equipment production, and engine imports, are becoming more
significant. However, the overall market remains strong. As part of
EPA’s ongoing work, the Agency continues to monitor the market and
evaluate the nonroad CI rule requirements. As mentioned above, we have
adopted a new set of emission requirements that will succeed the
standards adopted in the October1998 rule in the coming years, between
2008 and 2015. The most recent standards include provisions similar to
those from the October 1998 rule aimed at easing the burden of
compliance for both engine manufacturers and equipment manufacturers,
many of which are small businesses.

Conclusion

Equipment using nonroad CI engines continues to be a significant
contributor to ozone- and PM-related air pollution emission inventories.
The programs now in place have effectively reduced emission inventories
from nonroad CI engines and equipment. To ensure that these reductions
are maintained and that future nonroad CI engine and equipment
technology meets requirements, it is important to maintain the national
standards and related provisions established for such programs.
Furthermore, there is a statutory requirement for these standards and
related requirements. Without the nonroad CI rule, air pollutant
emissions from in-use equipment using such engines would be
substantially greater, having negative effects on human health and the
environment.

Based on EPA’s Section 610 review, including the fact that no comments
were received as a result of the review, no amendments based upon that
review are planned at this time. EPA expects that the current and future
rules for nonroad CI engines will be significant in helping to provide
emission inventory reductions needed in states with areas designated as
nonattainment areas under EPA’s NAAQS standards for ozone and PM.  As
part of any future rulemakings in this area, EPA will continue to work
with small-entity representatives to reduce unfavorable impacts to the
extent appropriate while meeting the need for emission reductions.


[Federal Register Volume 87, Number 25 (Monday, February 7, 2022)]
[Proposed Rules]
[Pages 6802-6804]
[FR Doc No: 2022-02413]

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

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA-2021-0217; Project Identifier MCAI-2020-01486-A]
RIN 2120-AA64

Airworthiness Directives; Viking Air Limited (Type Certificate
Previously Held by Bombardier Inc. and de Havilland, Inc.) Airplanes

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking (NPRM).

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

SUMMARY: The FAA proposes to adopt a new airworthiness directive (AD)
for certain Viking Air Limited (type certificate previously held by
Bombardier Inc. and de Havilland, Inc.) Model DHC-6-1, DHC-6-100, DHC-
6-200, DHC-6-300, and DHC-6-400 airplanes. This proposed AD results
from mandatory continuing airworthiness information (MCAI) originated
by an aviation authority of another country to identify and correct an
unsafe condition on an aviation product. The MCAI identifies the unsafe
condition as loose quadrants on the rudder pedal torque tube and signs
of loose rivets or rivet joint wear due to inadequate manufacturing
tolerances. This proposed AD would require inspecting the rudder pedal
torque tube quadrant for looseness and taking corrective action as
necessary. The FAA is proposing this AD to address the unsafe condition
on these products.

DATES: The FAA must receive comments on this proposed AD by March 24,
2022.

ADDRESSES: You may send comments, using the procedures found in 14 CFR
11.43 and 11.45, by any of the following methods:
     Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the instructions for submitting comments.
     Fax:<PHONE_NUMBER>.
     Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
     Hand Delivery: Deliver to Mail address above between 9
a.m. and 5 p.m., Monday through Friday, except Federal holidays.
    For service information identified in this NPRM, contact Viking Air
Ltd., 1959 de Havilland Way, Sidney British Columbia, Canada V8L 5V5;
phone:<PHONE_NUMBER>; email: [email protected];
website: https://www.vikingair.com. You may view this service
information at the FAA, Airworthiness Products Section, Operational
Safety Branch, 901 Locust, Kansas City, MO 64106. For information on
the availability of this material at the FAA, call<PHONE_NUMBER>.

Examining the AD Docket

    You may examine the AD docket at https://www.regulations.gov by
searching for and locating Docket No. FAA-2021-0217; or in person at
Docket Operations between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays. The AD docket contains this NPRM, the MCAI,
any comments received, and other information. The street address for
Docket Operations is listed above.

FOR FURTHER INFORMATION CONTACT: Deep Gaurav, Aviation Safety Engineer,
New York ACO Branch, FAA, 1515 Stewart Avenue, Westbury, NY 11590;
phone:<PHONE_NUMBER>; email: [email protected].

SUPPLEMENTARY INFORMATION:

Comments Invited

    The FAA invites you to send any written relevant data, views, or
arguments about this proposal. Send your comments to an address listed
under ADDRESSES. Include ``Docket No. FAA-2021-0217; Project Identifier
MCAI-2020-01486-A'' at the beginning of your comments. The most helpful
comments reference a specific portion of the proposal, explain the
reason for any recommended change, and include supporting data. The FAA
will consider all comments received by the closing date and may amend
this proposal because of those comments.
    Except for Confidential Business Information (CBI) as described in
the following paragraph, and other information as described in 14 CFR
11.35, the FAA will post all comments received, without change, to
https://www.regulations.gov, including any personal information you
provide. The agency will also post a report summarizing each
substantive verbal contact received about this NPRM.

Confidential Business Information

    CBI is commercial or financial information that is both customarily
and actually treated as private by its owner. Under the Freedom of
Information Act (FOIA) (5 U.S.C. 552), CBI is exempt from public
disclosure. If your comments responsive to this NPRM contain commercial
or financial information that is customarily treated as private, that
you actually treat as private, and that is relevant or responsive to
this NPRM, it is important that you clearly designate the submitted
comments as CBI. Please mark each page of your submission containing
CBI as ``PROPIN.'' The FAA will treat such marked submissions as
confidential under the FOIA, and they will not be placed in the public
docket of this NPRM. Submissions containing CBI should be sent to Deep
Gaurav, Aviation Safety Engineer, New York ACO Branch, FAA, 1515
Stewart Avenue, Westbury, NY 11590. Any commentary that the FAA
receives which is not specifically designated as CBI will be placed in
the public docket for this rulemaking.

Background

    Transport Canada, which is the aviation authority for Canada, has
issued Transport Canada AD CF-2020-45R1, dated April 16, 2021 (referred
to after this as ``the MCAI''), to correct an unsafe condition for
Viking Air Limited Model DHC-6 series 1, DHC-6 series 100, DHC-6 series
110, DHC-6 series 200, DHC-6 series 210, DHC-6 series 300, DHC-6 series
310, DHC-6 series 320 and DHC-6 series 400 airplanes, serial numbers
001 through 987. The MCAI states:

    There have been in-service reports of loose quadrants on the
rudder pedal torque tube and signs of loose rivets or rivet joint
wear, such as dark areas or streaks around the rivet heads and
quadrant to torque tube interface. Viking Air Ltd. has determined
that inadequate manufacturing tolerances may result in this
condition. This defect, if not detected and corrected, could result
in the affected parts deteriorating until the rivets fail, leading
to loss of control of the rudder and possible loss of control of the
aeroplane.
    To detect and correct this condition, [Transport Canada] AD CF-
2020-45 mandated a one-time detailed inspection of the rudder pedal
torque tube quadrant assembly, and rectification, as required, of
the affected parts.
    Viking Air Ltd. had published Service Bulletin (SB) V6/0067,
Revision NC, dated 16 July 2020, providing Accomplishment
Instructions for the one-time detailed inspection for looseness of
the affected parts. Since [Transport Canada] AD CF-2020-45 was
issued, Viking Air Ltd. has introduced a new rudder pedal torque
tube assembly in production that is not subject to the unsafe
condition of this [Transport Canada] AD. As a result, Viking Air
Ltd. has revised the SB V6/0067 at Revision A, dated 26 January 2021
(referred to as ``the SB'' in this [Transport Canada] AD) to update
the aeroplane serial number applicability.
    This [Transport Canada] AD revision, CF-2020-45R1, is issued to
modify the aeroplane serial number applicability in accordance with
the SB.

    You may examine the MCAI in the AD docket at https://www.regulations.gov by searching for

and locating Docket No. FAA-2021-0217.

Related Service Information Under 1 CFR Part 51

    The FAA reviewed Viking DHC-6 Twin Otter Service Bulletin V6/0067,
Revision A, dated January 26, 2021. This service information specifies
procedures for inspecting the rudder pedal torque tube quadrant for
looseness and performing a detailed visual inspection of the rudder
torque tube assembly for signs of loose rivets or rivet joint wear.
This service information is reasonably available because the interested
parties have access to it through their normal course of business or by
the means identified in the ADDRESSES section.

Other Related Service Information

    The FAA also reviewed Viking DHC-6 Twin Otter Service Bulletin V6/
0067, Revision NC, dated July 16, 2020. This service information
specifies procedures for inspecting the rudder pedal torque tube
quadrant for looseness and visually inspecting for signs of loose or
smoking rivets.

FAA's Determination

    This product has been approved by the aviation authority of another
country and is approved for operation in the United States. Pursuant to
the FAA's bilateral agreement with this State of Design Authority, it
has notified the FAA of the unsafe condition described in the MCAI and
service information referenced above. The FAA is issuing this NPRM
after determining the unsafe condition described previously is likely
to exist or develop on other products of the same type design.

Proposed AD Requirements in This NPRM

    This proposed AD would require accomplishing the actions specified
in the service information already described, except as discussed under
``Differences Between This NPRM and the MCAI.''

Differences Between This NPRM and the MCAI

    The MCAI applies to Viking Air Limited Model DHC-6 series 110, DHC-
6 series 210, DHC-6 series 310, and DHC-6 series 320, and this proposed
AD would not because these models do not have an FAA type certificate.
Transport Canada Models DHC-6 series 1, DHC-6 series 100, DHC-6 series
200, DHC-6 series 300, and DHC-6 series 400 airplanes correspond to FAA
Model DHC-6-1, DHC-6-100, DHC-6-200, DHC-6-300, and DHC-6-400
airplanes, respectively.

Costs of Compliance

    The FAA estimates that this AD, if adopted as proposed, would
affect 33 airplanes of U.S. registry. The FAA estimates the following
costs to comply with this proposed AD:

                                                 Estimated Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per      Cost on U.S.
              Action                      Labor cost             Parts cost          airplane        operators
----------------------------------------------------------------------------------------------------------------
Inspection........................  1 work-hour x $85 per  Not Applicable.......             $85          $2,805
                                     hour = $85.
----------------------------------------------------------------------------------------------------------------

    The FAA estimates the following costs to replace the rudder pedal
torque tube quadrant assembly based on the results of the proposed
inspection. The agency has no way of determining the number of
airplanes that might need this replacement:

                                               On-Condition Costs
----------------------------------------------------------------------------------------------------------------
                                                                                Cost per
                    Action                                 Labor cost               Parts cost       airplane
----------------------------------------------------------------------------------------------------------------
Rudder pedal torque tube quadrant assembly      10 work-hours x $85 per hour =            $9,256         $10,106
 replacement.                                    $850.
----------------------------------------------------------------------------------------------------------------

Authority for This Rulemaking

    Title 49 of the United States Code specifies the FAA's authority to
issue rules on aviation safety. Subtitle I, section 106, describes the
authority of the FAA Administrator. Subtitle VII: Aviation Programs,
describes in more detail the scope of the Agency's authority.
    The FAA is issuing this rulemaking under the authority described in
Subtitle VII, Part A, Subpart III, Section 44701: General requirements.
Under that section, Congress charges the FAA with promoting safe flight
of civil aircraft in air commerce by prescribing regulations for
practices, methods, and procedures the Administrator finds necessary
for safety in air commerce. This regulation is within the scope of that
authority because it addresses an unsafe condition that is likely to
exist or develop on products identified in this rulemaking action.

Regulatory Findings

    The FAA determined that this proposed AD would not have federalism
implications under Executive Order 13132. This proposed AD would not
have a substantial direct effect 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.
    For the reasons discussed above, I certify this proposed
regulation:
    (1) Is not a ``significant regulatory action'' under Executive
Order 12866,
    (2) Would not affect intrastate aviation in Alaska, and
    (3) Would not have a significant economic impact, positive or
negative, on a substantial number of small entities under the criteria
of the Regulatory Flexibility Act.

List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by
reference, Safety.

The Proposed Amendment

    Accordingly, under the authority delegated to me by the
Administrator, the FAA proposes to amend 14 CFR part 39 as follows:

PART 39--AIRWORTHINESS DIRECTIVES

0
1. The authority citation for part 39 continues to read as follows:

    Authority:  49 U.S.C. 106(g), 40113, 44701.

Sec.  39.13  [Amended]

0
2. The FAA amends Sec.  39.13 by adding the following new airworthiness
directive:

Viking Air Limited (Type Certificate Previously Held by Bombardier
Inc. and de Havilland, Inc.): Docket No. FAA-2021-0217; Project
Identifier MCAI-2020-01486-A.

(a) Comments Due Date

    The FAA must receive comments on this airworthiness directive
(AD) by March 24, 2022.

(b) Affected ADs

    None.

(c) Applicability

    This AD applies to Viking Air Limited (type certificate
previously held by Bombardier Inc. and de Havilland, Inc.) Model
DHC-6-1, DHC-6-100, DHC-6-200, DHC-6-300, and DHC-6-400 airplanes,
serial numbers 001 through 987, certificated in any category.

(d) Subject

    Joint Aircraft System Component (JASC) Code 2700, Flight Control
System.

(e) Unsafe Condition

    This AD was prompted by mandatory continuing airworthiness
information (MCAI) originated by an aviation authority of another
country to identify and correct an unsafe condition on an aviation
product. The MCAI identifies the unsafe condition as loose quadrants
on the rudder pedal torque tube and signs of loose rivets or rivet
joint wear due to inadequate manufacturing tolerances. The FAA is
issuing this AD to detect and correct loose rivets or rivet joint
wear and signs of loose or smoking rivets. The unsafe condition, if
not addressed, could result in the rudder pedal torque tube quadrant
assembly deteriorating until the rivets fail, leading to loss of
rudder control with consequent loss of airplane control.

(f) Compliance

    Comply with this AD within the compliance times specified,
unless already done.

(g) Action

    Within 3 months after the effective date of this AD, inspect the
rudder pedal torque tube quadrant assembly for looseness and, if
there is any looseness of the rudder pedal torque tube quadrant
assembly, a loose rivet, any rivet joint wear, or a smoking rivet,
before further flight, repair or replace the rudder pedal torque
tube or quadrant assembly. Do these actions by following the
Accomplishment Instructions, steps A.1. through A.9., in Viking DHC-
6 Twin Otter Service Bulletin No. V6/0067, Revision A, dated January
26, 2021, except for any requirement to obtain repair instructions
from Viking Customer Support, the repair must be accomplished using
a method approved by the Manager, New York ACO Branch, FAA;
Transport Canada; or Viking Air Limited's Transport Canada Design
Organization Approval (DOA). If approved by the DOA, the approval
must include the DOA-authorized signature.

(h) Credit for Previous Actions

    You may take credit for the actions required by paragraph (g) of
this AD if you performed those actions before the effective date of
this AD using Viking DHC-6 Twin Otter Service Bulletin V6/0067,
Revision NC, dated July 16, 2020.

(i) Alternative Methods of Compliance (AMOCs)

    (1) The Manager, New York ACO Branch, FAA, has the authority to
approve AMOCs for this AD, if requested using the procedures found
in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request
to your principal inspector or local Flight Standards District
Office, as appropriate. If sending information directly to the
manager of the certification office, send it to the attention of the
address identified in paragraph (j)(1) of this AD.
    (2) Before using any approved AMOC, notify your appropriate
principal inspector, or lacking a principal inspector, the manager
of the local flight standards district office/certificate holding
district office.

(j) Related Information

    (1) For more information about this AD, contact Deep Gaurav,
Aviation Safety Engineer, New York ACO Branch, FAA, 1515 Stewart
Avenue, Westbury, NY 11590; phone:<PHONE_NUMBER>; email:
[email protected].
    (2) Refer to Transport Canada AD CF-2020-45R1, dated April 16,
2021, for more information. You may examine the Transport Canada AD
in the AD docket at https://www.regulations.gov by searching for and
locating Docket No. FAA-2021-0217.
    (3) For service information identified in this AD, contact
Viking Air Ltd., 1959 de Havilland Way, Sidney British Columbia,
Canada V8L 5V5; phone:<PHONE_NUMBER>; email:
[email protected]; website: https://www.vikingair.com. You may review this referenced service
information at the FAA, Airworthiness Products Section, Operational
Safety Branch, 901 Locust, Kansas City, MO 64106. For information on
the availability of this material at the FAA, call<PHONE_NUMBER>.

    Issued on January 28, 2022.
Lance T. Gant,
Director, Compliance & Airworthiness Division, Aircraft Certification
Service.
[FR Doc. 2022-02413 Filed 2-4-22; 8:45 am]
BILLING CODE 4910-13-P