[Federal Register Volume 76, Number 237 (Friday, December 9, 2011)]
[Rules and Regulations]
[Pages 76896-76899]
[FR Doc No: 2011-31595]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

46 CFR Part 8

[Docket No. USCG-2011-0745]
RIN 1625-AB79

International Anti-Fouling System Certificate

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: The Coast Guard is amending its vessel inspection regulations
to add the International Anti-fouling System (IAFS) Certificate to the
list of certificates a recognized classification society may issue on
behalf of the Coast Guard. This action is being taken in response to
recently enacted legislation implementing the International Convention
on the Control of Harmful Anti-fouling Systems on Ships, 2001. This
final rule will enable recognized classification societies to apply to
the Coast Guard for authorization to issue IAFS Certificates to vessel
owners on behalf of the Coast Guard.

DATES: This final rule is effective January 9, 2012.

ADDRESSES: Comments and material received from the public, if any, as
well as documents mentioned in this preamble as being available in the
docket, are part of docket USCG-2011-0745 and are available for
inspection or copying at the Docket Management Facility (M-30), U.S.
Department of Transportation, West Building Ground Floor, Room W12-140,
1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5
p.m., Monday through Friday, except Federal holidays. You may also find
this docket on the

Internet by going to http://www.regulations.gov, inserting USCG-2011-
0745 in the ``Keyword'' box, and then clicking ``Search.''

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or email CDR Ryan Allain, Environmental Standards Division, Coast
Guard; telephone<PHONE_NUMBER>, email<EMAIL_ADDRESS>If you
have questions on viewing the docket, call Renee V. Wright, Program
Manager, Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Abbreviations
II. Regulatory History
III. Basis and Purpose
IV. Background
V. Discussion of Comments and Changes
VI. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Abbreviations

    CFR Code of Federal Regulations
    DHS Department of Homeland Security
    FR Federal Register
    IAFS International Anti-fouling System
    NAICS North American Industry Classification System
    NPRM Notice of proposed rulemaking
    Sec.  Section
    U.S.C. United States Code

II. Regulatory History

    On September 1, 2011, we published a notice of proposed rulemaking
(NPRM) entitled ``International Anti-fouling System Certificate'' in
the Federal Register (76 FR 54419). We did not receive any comments on
the NPRM. No public meeting was requested and none was held.

III. Basis and Purpose

    The Coast Guard is amending 46 CFR 8.320(b) by adding the
International Anti-fouling System (IAFS) Certificate to the current
list of international convention certificates included in that
paragraph. Adding the IAFS Certificate to Sec.  8.320(b) will allow the
Coast Guard to authorize recognized classification societies to issue
IAFS Certificates. Authorization will be based on the Coast Guard's
review of applicable class rules and applicable classification society
procedures. See 46 CFR 8.320(a). For successful applicants, the Coast
Guard will then enter into a written agreement with a recognized
classification society authorized to issue international convention
certificates. The agreement will define the scope, terms, conditions,
and requirements of that delegation. See 46 CFR 8.320(c).

IV. Background

    The Coast Guard Authorization Act of 2010 at Title X, Public Law
111-281, 124 Stat. 3023, 33 U.S.C. 3801 to 3857 (Oct. 15, 2010),
directs the Secretary of Homeland Security to administer and enforce
the International Convention on the Control of Harmful Anti-fouling
Systems on Ships, 2001 (Convention). The Secretary has delegated to the
Commandant of the Coast Guard her authority under 33 U.S.C. 3803, 3805,
3821-3823, 3842(a), 3852(a)-(e), and 3855 to implement, administer, and
enforce the Convention. Section 1021 of Title X (33 U.S.C. 3821) and
Regulation 2 of Annex 4 of the Convention call for U.S. Government
officials, or an organization identified by the United States, to issue
IAFS Certificates to ships whose anti-fouling systems fully comply with
the Convention.
    Under the Convention, an ``anti-fouling system'' is defined as a
coating, paint, surface treatment, surface, or device that is used on a
ship to control or prevent attachment of unwanted organisms. The
Convention is currently focused on reducing pollution caused by
organotin compounds used in anti-fouling systems.
    Since the mid-1990s, under authority of 46 U.S.C. 3103, 3306, 3316
and 3703, and regulations in 46 CFR part 8, the Coast Guard has
authorized recognized classification societies to issue international
certificates to vessels. The United States currently recognizes six
classification societies for purposes of issuing international
certificates: the American Bureau of Shipping (ABS, United States), Det
Norske Veritas (DNV, Norway), Lloyd's Register (LR, Great Britain),
Germanischer Lloyd (GL, Germany), Bureau Veritas (BV, France), and
RINA, S.p.A. (RINA, Italy).
    The list of international certificates the Coast Guard may
authorize a recognized classification society to issue appears in 46
CFR 8.320. That list currently includes 12 certificates, but does not
include the IAFS Certificate.

V. Discussion of Comments and Changes

    We received no comments on the NPRM and we made no changes in the
regulatory text in going from the proposed rule to this final rule.

VI. Regulatory Analyses

    We developed this rule after considering numerous statutes and
executive orders related to rulemaking. Below we summarize our analyses
based on 14 of these statutes or executive orders.

A. Regulatory Planning and Review

    Executive Orders 12866 (``Regulatory Planning and Review'') and
13563 (``Improving Regulation and Regulatory Review'') direct agencies
to assess the costs and benefits of available regulatory alternatives
and, if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental,
public health and safety effects, distributive impacts, and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. This final rule has not been designated a
``significant regulatory action'' under section 3(f) of Executive Order
12866. Accordingly, this final rule has not been reviewed by the Office
of Management and Budget. A regulatory assessment follows:
    Under the authority of 46 U.S.C. 3103, 3306, 3316, and 3703, the
Coast Guard amends 46 CFR 8.320, to enable the Coast Guard to delegate
the activity of issuing IAFS Certificates to a recognized
classification society which would act on behalf of the Coast Guard.
The intent of this final rule is only to allow for the delegation of
IAFS Certification to recognized class societies; it does not impose
mandatory actions on the U.S. maritime industry.
    We received no comments and found no additional information or data
that would cause us to change our regulatory assessment in the
``Regulatory Planning and Review'' section of the NPRM. We, therefore,
have adopted the regulatory assessment of the NPRM as final.
    This final rule initiates the process that will allow recognized
classification societies to issue IAFS Certificates on behalf of the
Coast Guard. Any recognized classification society that wishes to issue
IAFS Certificates on the Coast Guard's behalf will be required to
request a delegation of authority from the Coast Guard pursuant to the
procedures in 46 CFR part 8. In response, the Coast Guard will evaluate
the application, and review the applicant's applicable class rules and
applicable classification society procedures, before deciding whether
to

issue a delegation of authority to the applicant.
    Although requesting the delegation of authority to conduct IAFS
surveys, inspections, and certifications is voluntary, classification
societies will incur minor costs associated with this process. The
Coast Guard will also incur costs associated with the evaluation of
these requests and the issuance of delegations of authority to
recognized classification societies.
    The Coast Guard expects that this final rule will potentially
affect six classification societies which may request a delegation of
authority to issue IAFS Certificates. The Coast Guard used OMB-approved
collections of information (1625-0101, 1625-0095, 1625-0093, and 1625-
0041) to estimate the costs and burden.
    The Coast Guard anticipates that each classification society will
take about 5.25 hours to review the rulemaking requirements and prepare
the delegation request. The total one-time cost for all six
classification societies is expected to be $2,800 (rounded).
    In addition, the Coast Guard will incur a one-time cost to review
and approve the requests for delegation from each of the classification
societies. Based on the OMB-approved collections of information
discussed above, the Coast Guard will take about 5 hours to review,
approve, and issue an order to delegate authority. The Coast Guard will
incur a total one-time cost of $2,200 (rounded) based on OMB-approved
collection of information estimates.
    The total one-time cost of this rule is expected to be $5,000 (non-
discounted) for classification societies and the Government combined.
    This final rule will result in several benefits to the U.S.
maritime industry. First, it will result in a reduction of potential
wait time for IAFS Certificates. In the absence of delegation of
authority to classification societies, vessel owners and operators
would experience delays while the Coast Guard processes and issues IAFS
Certificates. Combined with the Coast Guard's other activities and
responsibilities, such a process would result in an unnecessary and
burdensome wait for vessels. By issuing delegation of authority to
classification societies, the Coast Guard will not have to redirect
resources that would be used for other missions, resulting in a more
efficient use of Government resources. Finally, this final rule will
mitigate potential consequences to U.S.-flagged vessels due to non-
compliance with the Convention, including costly vessel detentions in
foreign ports.

B. Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), the Coast
Guard has considered whether this rule would have a significant
economic impact on a substantial number of small entities. The term
``small entities'' comprises small businesses, not-for-profit
organizations that are independently owned and operated and are not
dominant in their fields, and governmental jurisdictions with
populations of less than 50,000.
    Classification societies affected by this rule are classified under
one of the following North American Industry Classification System
(NAICS) 6-digit codes for water transportation: 488330--Navigation
Services to Shipping, 488390--Other Support Activities for Water
Transportation, or 541611--Administrative Management and General
Management Consulting Services.
    The Coast Guard did not find any classification societies directly
affected by this rule that are small businesses or governments with
populations of less than 50,000. The predominant U.S. classification
society is the American Bureau of Shipping (ABS). ABS is a privately
owned non-profit organization that is dominant in its field (Source:
2011 Hoovers, http://www.hoovers.com/company/American_Bureau_of_Shipping_Inc/rfsksji-1.html). Based on publicly available information,
ABS has more than 3,000 employees and an annual revenue of more than
$800 million (Source: 2011 Bloomberg, http://investing.businessweek.com/research/stocks/private/person.asp?personId=28915205&privcapId=4217113&previousCapId=764755&previousTitle=ABS%20Group%20of%20Companies,%20Inc). We do not consider ABS
to be a small entity under the Regulatory Flexibility Act. The other
classification societies affected by this rule are foreign owned and
operated.
    The Coast Guard expects that this final rule will not have a
significant economic impact on a substantial number of small entities.
As described in section VI.A. of this preamble, ``Regulatory Planning
and Review,'' the anticipated cost of this rule, per class society, is
less than $500. This rule is not mandatory, and classification
societies, regardless of size, will choose to participate only if the
benefits are greater than the costs.
    Therefore, the Coast Guard certifies under 5 U.S.C. 605(b) that
this final rule will not have a significant economic impact on a
substantial number of small entities.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), the Coast Guard wants to assist
small entities in understanding this rule so that they can better
evaluate its effects on them and participate in the rulemaking. If this
final rule will affect your small business, organization, or
governmental jurisdiction and you have questions concerning its
provisions or options for compliance, please consult CDR Ryan Allain,
Environmental Standards Division, Coast Guard, telephone<PHONE_NUMBER>
or email<EMAIL_ADDRESS>The Coast Guard will not retaliate
against small entities that question or complain about this rule or any
policy or action of the Coast Guard.

D. Collection of Information

    This final rule calls for no new collection of information under
the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) because the
Coast Guard expects that the number of applications will be less than
10 in any given year.

E. Federalism

    A rule has implications for federalism under Executive Order 13132,
Federalism, if it has a substantial direct effect on State or local
governments and would either preempt State law or impose a substantial
direct cost of compliance on them. It is well settled that States may
not regulate in categories reserved for regulation by the Coast Guard.
It is also well settled, now, that all of the categories covered in 46
U.S.C. 3306, 3703, 7101, and 8101 (design, construction, alteration,
repair, maintenance, operation, equipping, personnel qualification, and
manning of vessels) are within the field foreclosed from regulation by
the States. (See the decision of the Supreme Court in the consolidated
cases of United States v. Locke and Intertanko v. Locke, 529 U.S. 89,
120 S. Ct. 1135 (March 6, 2000).). We have evaluated this rule under
E.O. 13132 and have determined that it is preemptive of state law or
regulation since Congress intended the Coast Guard to regulate the
issuance of international certificates that demonstrate compliance with
international conventions requiring antifouling systems aboard U.S.
flagged vessels certificated for international voyages, including
certificates issued by recognized classification societies. Because
States may not promulgate

rules within this category, preemption is not an issue under Executive
Order 13132.

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any one year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

G. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

H. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

I. Protection of Children

    We have analyzed this rule under Executive Order 13045, Protection
of Children from Environmental Health Risks and Safety Risks. This rule
is not an economically significant rule and does not create an
environmental risk to health or risk to safety that may
disproportionately affect children.

J. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

K. Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order because it is not a ``significant
regulatory action'' under Executive Order 13211 and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy.

L. Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15
U.S.C. 272 note) directs agencies to use voluntary consensus standards
in their regulatory activities unless the agency provides Congress,
through the Office of Management and Budget, with an explanation of why
using these standards would be inconsistent with applicable law or
otherwise impractical. Voluntary consensus standards are technical
standards (e.g., specifications of materials, performance, design, or
operation; test methods; sampling procedures; and related management
systems practices) that are developed or adopted by voluntary consensus
standards bodies.
    This rule does not use technical standards. Therefore, we did not
consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this rule under Department of Homeland Security
Management Directive 023-01 and Commandant Instruction M16475.lD, which
guide the Coast Guard in complying with the National Environmental
Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded
that this action is one of a category of actions that do not
individually or cumulatively have a significant effect on the human
environment. This rule is categorically excluded under section 2.B.2,
figure 2-1, paragraphs (34)(b) and (d), of the Instruction, and under
section 6(b) of the ``Appendix to National Environmental Policy Act:
Coast Guard Procedures for Categorical Exclusions, Notice of Final
Agency Policy'' (67 FR 48243, July 23, 2002). This rule involves the
delegation of authority, the inspection and documentation of vessels,
and congressionally-mandated regulations designed to improve or protect
the environment. An environmental analysis checklist and a categorical
exclusion determination are available in the docket where indicated
under ADDRESSES.

List of Subjects in 46 CFR Part 8

    Administrative practice and procedure, Organization and functions
(Government agencies), Reporting and recordkeeping requirements,
Vessels.
    For the reasons discussed in the preamble, the Coast Guard amends
46 CFR part 8 as follows:

PART 8--VESSEL INSPECTION ALTERNATIVES

0
1. The authority citation for part 8 is revised to read as follows:

    Authority: 33 U.S.C. 3803 and 3821; 46 U.S.C. 3103, 3306, 3316,
3703; Department of Homeland Security Delegation No. 0170.1 and Aug.
8, 2011 Delegation of Authority, Anti-Fouling Systems.

0
2. Amend Sec.  8.320 as follows:
0
a. In paragraph (b)(11), remove the word ``and'';
0
b. In paragraph (b)(12), remove the symbol ``.'' and add, in its place,
the text ``; and''; and
0
c. Add paragraph (b)(13) to read as follows:

Sec.  8.320  Classification society authorization to issue
international certificates.

* * * * *
    (b) * * *
    (13) International Anti-fouling System Certificate.
* * * * *

    Dated: December 5, 2011.
J.G. Lantz,
Director of Commercial Regulations and Standards, U.S. Coast Guard.
[FR Doc. 2011-31595 Filed 12-8-11; 8:45 am]
BILLING CODE 9110-04-P


authorities' progress in implementing the PSD and title V programs
for GHG sources as well as EPA's and the permitting authorities'
progress in developing streamlining methods. We further commit to
undertake another round of rulemaking--beginning after the
assessment is done, and to be completed by April 30, 2016--to
address smaller sources.

75 FR 31573 June 3, 2010. We went on to point out that the timing of
the 5-year study and Step 4 was consistent with our development of
streamlining methods, some of which would require rulemaking, and
therefore would take several years. 75 FR 31573 June 3, 2010.

    This schedule for the 5-year study and Step 4 rulemaking will also
facilitate a

robust collection and review of data, as appropriate. In the Tailoring
Rule, the EPA calculated the administrative burdens of GHG permitting
based on data for (1) the numbers and types of PSD and title V GHG
permitting actions--e.g., new construction and modifications,
``anyway'' sources and GHG-only sources--and (2) the expected
processing time for the different types of GHG permits. The sets of
data that were available to us at the time of the Tailoring Rule--which
remain the only data available to us--were the foundation for our
calculations. If the reason why permit activity to this point has been
lower than expected is due to inaccuracies in those data, then we will
need to correct the data based on the actual experience of the
permitting authorities.
    Because GHG permitting is a new addition to the PSD program, we
believe that we would need 2 full years (July 1, 2012 to June 30, 2014)
of the above-described data about the GHG permitting, after the
initial, ``start-up'' year (July 1, 2011 to June 30, 2012). Data from
the initial year would be valuable, but because GHG permitting is new,
the initial year may well have involved some inefficiencies and a
learning curve. As a result, the initial year may not be considered to
be representative of a permitting authority's normal administration of
the permitting program. Moreover, we believe that 2 full years of data
are necessary to accurately reflect representative operations,
particularly since the program is new. For example, if we were to
select the number of permits issued as a measure of permitting
activity, that number may vary widely over a several-month period, and
that could skew the total for a particular year, but that variability
would have less of an impact over a 2-year period. We would expect to
be able to collect this data from the 2-year period in time to complete
the 5-year study that is due by April 30, 2015. Following the study, we
would be able to conduct the Step 4 rulemaking by the required April
30, 2016 completion date.
    We disagree with the suggestion from the environmental advocacy
organization commenter that we consider issuing a supplemental notice
of proposed rulemaking at this time, instead of finalizing Step 3. The
commenter did not describe what information it expected could be
obtained through a supplemental notice of proposed rulemaking. We see
little value to such an action at this time. If the reason for the
unexpectedly low level of permit activity is inaccuracies in our data
sets or methodology, as the commenter suggests, then the best way to
address that is through the 5-year study, as described. That process
allows a robust review. If the problem turns out to be inaccuracies in
the data set or methodology, we believe it is better to have the
opportunity to collect a comprehensive set of data.
    Another reason why we decline commenter's suggestion to delay
completing Step 3 and issue a supplemental notice of proposed
rulemaking is that any such delay would put pressure on the time frame
for the 5-year study and Step 4, in light of how quickly they follow
Step 3, and that would create uncertainty for sources and state or
local permitting authorities. We note that delaying completion of Step
3 and the final action we take on Step 3 in this rulemaking both have
the same effect, which is to leave in place the Step 2 thresholds.
Completing Step 3 now allows us to remain on track for the 5-year study
and Step 4, as prescribed in the regulations. We think it is unlikely
that delaying completion of Step 3, as commenters suggest, would lead
to a lowering of thresholds sooner than Step 4 because we do not
believe the information collected could be sufficiently robust to serve
as the basis of lowering the thresholds.
    In summary, we recognize the environmental advocacy organization
commenters' concerns that there is a disparity between the estimates of
permits issued and the actual numbers of permits issued to date. If
this disparity persists, it will deepen concerns about whether the
Tailoring Rule data sets or methodology overestimated permitting
burden. However, we also recognize other indications that suggest that
our methodology may have under-estimated permitting burden in other
respects, and we also recognize that to this point, with the first full
year of Step 2 only just now concluding, we do not have any more
information than we had when we promulgated the Tailoring Rule about
many aspects of our data sets and methodology that we have acknowledged
entail uncertainty. By the same token, the great majority of title V
permitting activity is only now just about to begin, and therefore we
have little information about it. Title V permitting activity is
important for purposes of not just title V permitting burdens but also
PSD permitting burdens because permitting authorities generally
administer the two programs in close relation to each other.
    Accordingly, we intend to collect information concerning recent,
current and future permitting activity in the states. We also intend to
review information available to us from other sources, such as the
Greenhouse Gas Mandatory Reporting Rule. Our goal would be to collect
data that would help us analyze how the various estimates in our
methodology vary from actual experience and how we can refine our
analysis. With this approach, as we conduct the 5-year study (due to be
completed by April 30, 2015), we would have data concerning permitting
activity over both (1) the 2-year period when Step 2 will have been in
full swing (July 1, 2012 to June 30, 2014), as well as (2) the earlier
start-up period (January 2, 2011 to June 30, 2012).
    If we find that a significant disparity between estimated and
actual numbers of permit actions has persisted, or if significant
disparities have become apparent between other aspects of our
methodology and actual permitting experience, we would expect to
address those disparities and the relevant aspects of our methodology
in the 5-year study. In this event, in Step 4, we would review and
revise our data and methodology as appropriate. Based on that review
and revision, we would review and revise, as appropriate, the
administrative burden estimates and the applicability thresholds that
are based on those burden estimates.

B. Plantwide Applicability Limitations for GHGs

    We received dozens of comments, including many from the regulated
community and individual permitting authorities, on the proposed
changes to the PALs provisions to better address GHGs. As explained
above, we are providing a general summary of those comments, as well as
providing responses to a few key comments in this section. We discuss
the comments received and our responses in more detail in the Response
to Comments document that appears in the docket for this final rule.
    As a general matter, many commenters on the proposal expressed
general support for the concept of GHG PALs, although some had
misgivings about some aspects of the proposal. Supporters indicated
that GHG PALs can streamline PSD permitting and reduce administrative
burden for some sources, and most thought that the Minor Source
Approach would be more beneficial and less burdensome than the Major
Source Opt-In Approach. Some comments stated that GHG PALs will have
advantages, including leading sources to minimize emissions to create
room for later expansion, providing certainty for planning purposes,
helping address changing market conditions and

reducing overall workload over the term of the permit. Several
commenters stated that PALs for GHGs would be consistent with the
treatment of other regulated NSR pollutants in the PSD programs. Other
commenters indicated that using GHG PALs as an alternative for
determining whether GHGs are subject to regulation and whether a
project is a major modification for purposes of permitting is
appropriate, and one elaborated that use of PALs will provide assurance
that GHGs are not subject to regulation and will not trigger a major
modification. On the other hand, several commenters generally opposed
the GHG PAL proposal, stating that they do not believe that the EPA had
provided an appropriate basis for changing the existing PAL program to
address GHGs or that such changes were necessary. One commenter stated
that the GHG PAL proposal offers little streamlining and only
complicates permitting.
    While we did not identify PALs as a viable streamlining technique
for GHG sources in the Tailoring Rule, since we finalized that rule, we
have recognized that plant-wide limitations could be designed in a way
that would be useful for easing administration of GHG permitting and
are adopting changes to the existing PAL regulations to address the
unique PSD applicability issues associated with GHGs. After reviewing
the comments received, we believe finalization of the changes to allow
permitting of GHG PALs using the Minor Source Approach and on a
CO2e basis, including the option to use the CO2e-
based applicability thresholds provided in the subject to regulation
definition in setting the PAL, will provide for better implementation
of PALs for GHGs, is consistent with the approach to GHG permitting
described in the Tailoring Rule and thus can play a relevant role in
our strategy for developing streamlining options for permitting
authorities to help ease the administrative burdens associated with GHG
permitting for sources and permitting authorities alike. To the extent
that some commenters oppose the use of PALs generally, we note that use
of PALs as an alternative NSR applicability mechanism and the basic
elements of PAL permits have already been upheld. New York v. EPA, 413
F.3d 3, 36-38 (D.C. Cir. 2005). The changes the EPA is finalizing to
make implementation of that mechanism more useful as applied to GHGs
are consistent with that decision, as well as the Tailoring Rule. Aside
from the specific GHG-based revisions to the PAL provisions that the
EPA is promulgating in this action, the EPA did not seek comment on, or
otherwise re-open the existing PAL provisions, so any comments on non-
GHG PAL-related issues are outside the scope of this rulemaking.
    Many commenters (including commenters that both supported and
opposed GHG PALs) stated that specific regulatory text for GHG PALs
must be made available to allow for effective and meaningful comment on
the proposal. Many of these commenters indicated that proposed GHG PAL
language must be subject to notice and comment rulemaking before the
EPA can finalize the GHG-specific changes to the PAL provisions, and
some stated that the description in the proposal was insufficient to
provide notice of the intended changes to the PAL regulations.
Commenters stated that the EPA should issue a re-proposal for the GHG
PAL revisions and include proposed regulatory text for public notice
and comment. Other commenters, however, indicated that the PAL
provisions should be finalized as soon as possible.
    The EPA disagrees with the comments arguing that the EPA must
provide notice-and-comment of specific regulatory text for its proposed
GHG PALs changes before taking final action. The EPA notes that the CAA
provisions contained in section 307, which govern rulemakings such as
this, do not explicitly require the Agency to propose specific
regulatory text as part of that process. In addition, the
Administrative Procedure Act (APA) requires simply that ``either the
terms or substance of the proposed rule or a description of the
subjects and issues involved'' be included in a notice of proposed
rulemaking. We believe that the notice and opportunity for comment
provided for the GHG PALs proposal was sufficient to satisfy the
requirements of the APA and CAA, and as explained below, we believe
that we have provided adequate notice of the changes we are making to
the PAL provisions to give a meaningful opportunity for comment on
those changes.
    In the Step 3 proposal, we described the various changes we were
proposing in detail (including a description of the Minor Source
Approach that we are finalizing today), and included a description of
how we intended to extend PALs to GHGs on a CO2e basis and a
description of how we proposed to allow the use of PALs to determine
whether GHG emissions are subject to regulation. 77 FR 14239 March 8,
2012. The Step 3 proposal also gave notice that we would revise a
number of existing regulatory provisions to implement the approach
selected. 77 FR 14244 March 8, 2012. In addition, we highlighted
specific provisions of the PALs that we proposed to change and
explained how we proposed to change those provisions. 77 FR 14244 March
8, 2012. For instance, we explained that for the Minor Source Approach,
we proposed to revise the PAL applicability provisions in 40 CFR
52.21(aa)(1) to include GHG-only sources. Id. We further explained that
we proposed to change the ``subject to regulation'' definition at 40
CFR 52.21(b)(49) and the PAL applicability section in 40 CFR
52.21(aa)(1) to indicate that a source that complies with a GHG PAL
will not be ``subject to regulation'' for GHGs. Id. In addition, we
explained that we proposed to revise 40 CFR 52.21(aa)(6) to allow PALs
issued on a CO2e basis to include the 75,000 tpy
CO2e emissions increase from the applicability thresholds,
so that amount could be added to baseline actual emissions in setting
the level of the PAL. Id. While we are making GHG-specific revisions to
a number of other regulatory provisions in the PAL regulations, these
changes simply implement the same regulatory revisions that we
described repeatedly in the proposal--i.e., making GHG PALs available
on a CO2e and mass basis, allowing a CO2e-based
PAL to include an emissions increase based on Tailoring Rule thresholds
and the Minor Source Approach. Although the proposal did not list every
specific provision we are revising in this final rule, each of these
changes has the effect of implementing the GHG PAL approach described
in the proposal and many of those changes are fairly small (for
example, inserting ``GHG-only source'' to provisions that currently
list only ``major stationary source''). Accordingly, our proposal
provided sufficient information on the regulatory changes that we are
finalizing in this action that allowed for public notice and comment.
    We further note that the comments raising concerns about the
adequacy of the notice for the GHG PAL revisions did not identify any
particular aspect of the revisions that we are finalizing in this
action that were not adequately explained in the proposal to allow for
comment. In fact, despite the general notice concerns raised by
commenters, many commenters did provide detailed comments on our
proposed changes to the PAL provisions. We also note that while one
comment indicated that the description of the proposed conversion from
a mass-based PAL to a CO2e-based PAL was too opaque for
meaningful comment, that comment is not relevant

to this final action because we are not taking action on that proposed
change.
    For these reasons, we believe that we have provided sufficient
notice and opportunity for comment on the revisions to the regulatory
provisions for GHG PALs that we are adopting in this action.
    A number of commenters also requested that the EPA provide
clarification that the proposed changes to address GHG PALs in the
federal regulations would not impact existing state authority to issue
PAL permits for GHG emissions or existing GHG PAL permits that might
have already been issued. In this action, we are finalizing revisions
to certain sections of the federal regulations governing the issuance
of permits pursuant to federal authority at 40 CFR 52.21, in particular
the provisions relating to PALs at 40 CFR 52.21(aa) and provisions
relating to the definition of ``subject to regulation'' at 40 CFR
52.21(b)(49). These provisions govern permits issued pursuant to
federal authority, and, accordingly, these changes would only affect
permits issued under federal authority (i.e., those issued by the EPA
or a delegated state or local agency). We do not intend these changes
to 40 CFR 52.21 to affect existing state authority to issue PAL
permits, and nothing in this action would require permitting
authorities to take any action with respect to their existing PAL
regulations or any existing PAL permits. We also note that these
revisions are not minimum program requirements that must be adopted by
states into their EPA-approved SIP PSD permitting programs.
Accordingly, this final rule does not adopt these changes into the
existing PAL provisions contained in 40 CFR 51.166, but nothing in this
action is intended to restrict states from adopting these, or similar,
changes into their SIP-approved PAL program if they choose to do so.
Moreover, to the extent that states with existing PAL permitting
programs have interpreted their PAL provisions to allow PAL permits to
be issued on a CO2e basis and for a PAL to be set at a level
that reflects baseline actual emissions plus a 75,000 tpy
CO2e emissions increase, the changes that the EPA is making
to the PAL regulations in 40 CFR 52.21 are not intended to change those
existing state interpretations. Accordingly, the changes that the EPA
is finalizing to address GHG PALs in the federal regulations do not, as
a general matter, impact existing state authority to issue PAL permits
for GHG emissions or existing GHG PAL permits that might have already
been issued.

VIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review

    This action is not a ``significant regulatory action'' under the
terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is
therefore not subject to review under Executive Orders 12866 and 13563
(76 FR 3821, January 21, 2011).

B. Paperwork Reduction Act

    This action does not impose any new information collection burden.
The final rule will not change the existing GHG permitting thresholds,
and therefore will not impose any additional burden on sources to
obtain PSD or title V permits or on permitting authorities to issue
such permits. The provisions for GHG PALs, which have previously been
approved by OMB, will have the effect of reducing permitting burden in
that the burden associated with obtaining or issuing a PAL permit will
be more than offset through avoiding subsequent PSD permitting actions
with greater associated burden. In addition, the OMB has previously
approved the information collection requirements contained in the
existing regulations for the NSR and title V programs under the
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. and
has assigned OMB control number 2060-0003 to the NSR program and OMB
control numbers 2060-0243 and 2060-0336 to the title V program (40 CFR
part 70 and part 71 components, respectively). The OMB control numbers
for the EPA's regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act generally requires an agency to
prepare a regulatory flexibility analysis of any rule subject to notice
and comment rulemaking requirements under the Administrative Procedures
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 purposes of assessing the impacts of today's rule on small
entities, small entity is defined as: (1) A small business that is a
small industrial entity as defined in the U.S. Small Business
Administration size standards (see 13 CFR 121.201); (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district or special district with a population of less than
50,000; or (3) a small organization that is any not-for-profit
enterprise that is independently owned and operated and is not dominant
in its field.
    After considering the economic impacts of today's final rule on
small entities, I certify that this final action will not have a
significant economic impact on a substantial number of small entities.
In determining whether a rule has a significant economic impact on a
substantial number of small entities, the impact of concern is any
significant adverse economic impact on small entities, since the
primary purpose of the regulatory flexibility analysis is to identify
and address regulatory alternatives ``which minimize any significant
economic impact of the rule on small entities.'' 5 U.S.C. 603 and 604.
Thus, an agency may certify that a rule will not have a significant
economic impact on a substantial number of small entities if the rule
relieves regulatory burden, or otherwise has a positive economic
effect, on all of the small entities subject to the rule.
    The final rule would not change the existing GHG permitting
thresholds, and therefore would not impose any additional burden on any
sources (including small entities) to obtain PSD or title V permits or
on any permitting authorities (including small entities, if any) to
issue such permits. The final provisions for GHG PALs could have the
effect of reducing permitting burden on all entities, including small
entities, in that the burden associated with obtaining or issuing a PAL
permit could be more than offset through avoiding subsequent PSD
permitting actions with greater associated burden. Moreover, the
decision of any source (including small entities) to request a GHG PAL
and the decision of any permitting authority (including small entities)
to either adopt the GHG PAL regulations or issue a GHG PAL are
completely voluntary. No source is required to seek a PAL and no
permitting authority is required to issue a PAL, so there is no
requirement for any entity (including a small entity) to use these
rules if it believes the GHG PAL would not relieve burden. We have
therefore concluded that today's final rule will relieve regulatory
burden for all affected small entities.

D. Unfunded Mandates Reform Act

    This rule does not contain a federal mandate that may result in
expenditures of $100 million or more for state, local and tribal
governments, in the aggregate, or the private sector in any 1 year. The
final rule will not change the existing GHG permitting thresholds, and

therefore will not impose any additional burden on sources to obtain
PSD or title V permits or on permitting authorities to issue such
permits. Moreover, the decisions of state, local and tribal governments
to adopt the GHG PAL provisions generally and to issue a GHG PAL to any
specific permitting action are completely voluntary. Thus, this rule is
not subject to the requirements of sections 202 or 205 of the Unfunded
Mandates Reform Act (UMRA).
    This rule is also not subject to the requirements of section 203 of
UMRA because it contains no regulatory requirements that might
significantly or uniquely affect small governments. As noted
previously, the effect of the final rule would be neutral or relieve
regulatory burden.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will 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. This final rule would maintain the
existing structure of the PSD and title V programs and would not,
therefore, affect the relationship between the national government and
the states or the distribution of power and responsibilities among the
various levels of government. In addition, the final rule would not
change the existing GHG permitting thresholds, and therefore would not
impose any additional burden on state permitting authorities to issue
PSD or title V permits or such permits. The provisions for GHG PALs
will have the effect of reducing permitting burden in that the burden
associated with issuing a PAL permit would be more than offset through
avoiding subsequent PSD permitting actions with greater associated
burden. Thus, Executive Order 13132 does not apply to this rule.

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

    This action does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). There are no
tribal authorities currently issuing major NSR permits, one tribe is
implementing a title V program based on a delegation agreement under 40
CFR part 71 and one tribe has recently obtained approval of title V
program under 40 CFR part 70. However, the final rule would not change
the existing GHG permitting thresholds, and therefore will not impose
any additional burden on sources to obtain PSD or title V permits or on
permitting authorities to issue such permits. The provisions for GHG
PALs will have the effect of reducing permitting burden in that the
burden associated with obtaining or issuing a PAL permit would be more
than offset through avoiding subsequent PSD permitting actions with
greater associated burden. Thus, Executive Order 13175 does not apply
to this action.

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

    The EPA interprets Executive Order 13045 (62 FR 19885, April 23,
1997) as applying only to those regulatory actions that concern health
or safety risks, such that the analysis required under section 5-501 of
the Executive Order has the potential to influence the regulation. This
action is not subject to Executive Order 13045 because it does not
establish an environmental standard intended to mitigate health or
safety risks.

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

    This action is not subject to Executive Order 13211 (66 FR 28355,
May 22, 2001) because it is not a significant regulatory action under
Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (NTTAA), Public Law 104-113, 12(d) (15 U.S.C. 272 note)
directs the EPA to use voluntary consensus standards in its regulatory
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 and business practices) that are developed or adopted by
voluntary consensus standards bodies. The NTTAA directs the EPA to
provide Congress, through the OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
    This rulemaking does not involve technical standards. Therefore,
the EPA did not consider the use of any voluntary consensus standards.

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

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes
federal executive policy on environmental justice. Its main provision
directs federal agencies, to the greatest extent practicable and
permitted by law, to make environmental justice part of their mission
by identifying and addressing, as appropriate, disproportionately high
and adverse human health or environmental effects of their programs,
policies and activities on minority populations and low-income
populations in the United States.
    The EPA has determined that this final rule will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
affect the level of protection provided to human health or the
environment. The final rule would not change the existing GHG
permitting thresholds, and therefore would not affect the universe of
sources subject to permitting.

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. The 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 not a ``major rule'' as defined by 5 U.S.C.
804(2). This action is effective on August 13, 2012.

L. Judicial Review

    Under section 307(b)(1) of the Act, petitions for judicial review
of this action must be filed in the United States Court of Appeals for
the District of Columbia Circuit by September 10, 2012. Filing a
petition for reconsideration by the Administrator of this final rule
does not affect the finality of this rule for the purposes of judicial
review nor does it extend the time within which a petition for judicial
review may be filed, and shall not

postpone the effectiveness of such rule or action. Under section
307(b)(2) of the Act, the requirements of this final action may not be
challenged later in civil or criminal proceedings brought by us to
enforce these requirements.
    Section 307(d)(1)(J) specifies that the provisions of section
307(d) apply to ``promulgation or revision of regulations under [part]
C of title I (pertaining to prevention of significant deterioration of
air quality and protection of visibility).'' This section clearly
subjects the portions of this action that pertain to PSD to the
provisions of section 307(d). Section 307(d)(1)(V) provides that the
provisions of section 307(d) apply to ``such other actions as the
Administrator may determine.'' Pursuant to this section, the
Administrator determines that this entire action is subject to the
provisions of section 307(d). This determination allows for uniform
treatment for all aspects of this action.
    Section 307(b)(1) of the CAA indicates which Federal Courts of
Appeal have venue for petitions of review of final actions by the EPA.
This section provides, in part, that petitions for review must be filed
in the Court of Appeals for the District of Columbia Circuit: (1) When
the agency action consists of ``nationally applicable regulations
promulgated, or final actions taken, by the Administrator,'' or (2)
when such action is locally or regionally applicable, if ``such action
is based on a determination of nationwide scope or effect and if in
taking such action the Administrator finds and publishes that such
action is based on such a determination.''
    This rule is ``nationally applicable'' within the meaning of
section 307(b)(1). This rule promulgates PSD regulations that are
applicable in every state in which the EPA is the PSD permitting
authority, and takes final action that is relevant for EPA-approved SIP
PSD programs in the rest of the states, as well as EPA-approved title V
programs in all states. For the same reasons, the Administrator also is
determining that this action is of nationwide scope and effect for the
purposes of section 307(b)(1). This is particularly appropriate
because, in the report on the 1977 Amendments that revised section
307(b)(1) of the CAA, Congress noted that the Administrator's
determination that an action is of ``nationwide scope or effect'' would
be appropriate for any action that has a scope or effect beyond a
single judicial circuit. H.R. Rep. No. 95-294 at 323, 324, reprinted in
1977 U.S.C.C.A.N. 1402-03. Here, the scope and effect of this
rulemaking extends to all judicial circuits because PSD and/or title V
programs in all areas across the country are affected by today's final
action. In these circumstances, section 307(b)(1) and its legislative
history call for the Administrator to find the rule to be of
``nationwide scope or effect'' and for venue to be in the D.C. Circuit.
    Thus, any petitions for review of this rule must be filed in the
Court of Appeals for the District of Columbia Circuit within 60 days
from the date final action is published in the Federal Register.

IX. Statutory Authority

    The statutory authority for this action is provided by sections
101, 114, 165, 169, 301, 501 and 502 of the CAA as amended (42 U.S.C.
7401, 7414, 7475, 7579, 7601, 7661 and 7661a).

List of Subjects in 40 CFR Part 52

    Environmental protection, Administrative practice and procedure,
Air pollution control, Carbon dioxide, Carbon dioxide equivalents,
Greenhouse gases, Hydrofluorocarbons, Intergovernmental relations,
Methane, Nitrous oxide, Perfluorocarbons, Reporting and recordkeeping
requirements, Sulfur hexafluoride.

    Dated: June 29, 2012.
Lisa P. Jackson,
Administrator.

    For the reasons stated in the preamble, title 40, Chapter I of the
Code of Federal Regulations is amended as set forth below.

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--[Amended]

0
2. Section 52.21 is amended by:
0
a. Revising paragraph (b)(49)(i);
0
b. Revising paragraph (aa)(1)(i);
0
c. Revising paragraph (aa)(1)(ii) introductory text;
0
d. Revising paragraphs (aa)(1)(ii)(b) and (c);
0
e. Adding paragraph (aa)(1)(ii)(d);
0
f. Revising paragraph (aa)(1)(iii);
0
g. Revising paragraphs (aa)(2)(i) and (iii);
0
h. Adding paragraph (aa)(2)(iv)(c);
0
i. Revising paragraphs (aa)(2)(v), (viii), (ix), (x) and (xi);
0
j. Adding paragraphs (aa)(2)(xii), (xiii), (xiv) and (xv);
0
k. Revising paragraph (aa)(3) introductory text;
0
l. Adding paragraph (aa)(3)(iv);
0
m. Revising paragraph (aa)(4)(i) introductory text;
0
n. Revising paragraphs (aa)(4)(i)(a), (d) and (g);
0
o. Revising paragraph (aa)(5);
0
p. Revising the first sentence of paragraph (aa)(6)(i);
0
q. Adding paragraph (aa)(6)(iii);
0
r. Revising paragraph (aa)(7) introductory text;
0
s. Revising paragraphs (aa)(7)(i), (iii), (v), (vi) and (vii);
0
t. Adding paragraph (aa)(7)(xi);
0
u. Revising paragraph (aa)(8)(ii)(b)(2);
0
v. Revising paragraph (aa)(9)(i)(a);
0
w. Revising paragraphs (aa)(9)(iv) and (v);
0
x. Revising paragraphs (aa)(10)(i) and (ii);
0
y. Revising paragraphs (aa)(10)(iv)(c)(1) and (2);
0
z. Revising paragraph (aa)(11)(i) introductory text;
0
aa. Revising paragraphs (aa)(11)(i)(a) and (b);
0
bb. Revising paragraph (aa)(12)(i)(a);
0
cc. Revising paragraphs (aa)(14)(i)(b) and (d); and
0
dd. Revising paragraph (aa)(14)(ii) introductory text.
    The revisions and additions read as follows:

Sec.  52.21  Prevention of significant deterioration of air quality.

* * * * *
    (b) * * *
    (49) * * *
    (i) Greenhouse gases (GHGs), the air pollutant defined in Sec.
86.1818-12(a) of this chapter as the aggregate group of six greenhouse
gases: Carbon dioxide, nitrous oxide, methane, hydrofluorocarbons,
perfluorocarbons, and sulfur hexafluoride, shall not be subject to
regulation except as provided in paragraphs (b)(49)(iv) through (v) of
this section and shall not be subject to regulation if the stationary
source maintains its total source-wide emissions below the GHG PAL
level, meets the requirements in paragraphs (aa)(1) through (15) of
this section, and complies with the PAL permit containing the GHG PAL.
* * * * *
    (aa) * * *
    (1) * * *
    (i) The Administrator may approve the use of an actuals PAL,
including for GHGs on either a mass basis or a CO2e basis,
for any existing major stationary source or any existing GHG-only
source if the PAL meets the requirements in paragraphs (aa)(1) through
(15) of this section. The term ``PAL'' shall mean ``actuals PAL''
throughout paragraph (aa) of this section.
    (ii) Any physical change in or change in the method of operation of
a major stationary source or a GHG-only source that maintains its total
source-wide emissions below the PAL level, meets

the requirements in paragraphs (aa)(1) through (15) of this section,
and complies with the PAL permit:
* * * * *
    (b) Does not have to be approved through the PSD program;
    (c) Is not subject to the provisions in paragraph (r)(4) of this
section (restrictions on relaxing enforceable emission limitations that
the major stationary source used to avoid applicability of the major
NSR program); and
    (d) Does not make GHGs subject to regulation as defined by
paragraph (b)(49) of this section.
    (iii) Except as provided under paragraph (aa)(1)(ii)(c) of this
section, a major stationary source or a GHG-only source shall continue
to comply with all applicable Federal or State requirements, emission
limitations, and work practice requirements that were established prior
to the effective date of the PAL.
    (2) * * *
    (i) Actuals PAL for a major stationary source means a PAL based on
the baseline actual emissions (as defined in paragraph (b)(48) of this
section) of all emissions units (as defined in paragraph (b)(7) of this
section) at the source, that emit or have the potential to emit the PAL
pollutant. For a GHG-only source, actuals PAL means a PAL based on the
baseline actual emissions (as defined in paragraph (aa)(2)(xiii) of
this section) of all emissions units (as defined in paragraph
(aa)(2)(xiv) of this section) at the source, that emit or have the
potential to emit GHGs.
* * * * *
    (iii) Small emissions unit means an emissions unit that emits or
has the potential to emit the PAL pollutant in an amount less than the
significant level for that PAL pollutant, as defined in paragraph
(b)(23) of this section or in the Act, whichever is lower. For a GHG
PAL issued on a CO2e basis, small emissions unit means an
emissions unit that emits or has the potential to emit less than the
amount of GHGs on a CO2e basis defined as ``significant''
for the purposes of paragraph (b)(49)(iii) of this section at the time
the PAL permit is being issued.
    (iv) * * *
    (c) For a GHG PAL issued on a CO2e basis, any emissions
unit that emits or has the potential to emit equal to or greater than
the amount of GHGs on a CO2e basis that would be sufficient
for a new source to trigger permitting requirements under paragraph
(b)(49) of this section at the time the PAL permit is being issued.
    (v) Plantwide applicability limitation (PAL) means an emission
limitation expressed on a mass basis in tons per year, or expressed in
tons per year CO2e for a CO2e-based GHG emission
limitation, for a pollutant at a major stationary source or GHG-only
source, that is enforceable as a practical matter and established
source-wide in accordance with paragraphs (aa)(1) through (15) of this
section.
* * * * *
    (viii) PAL major modification means, notwithstanding paragraphs
(b)(2), (b)(3), and (b)(49) of this section (the definitions for major
modification, net emissions increase, and subject to regulation), any
physical change in or change in the method of operation of the PAL
source that causes it to emit the PAL pollutant at a level equal to or
greater than the PAL.
    (ix) PAL permit means the major NSR permit, the minor NSR permit,
or the State operating permit under a program that is approved into the
State Implementation Plan, or the title V permit issued by the
Administrator that establishes a PAL for a major stationary source or a
GHG-only source.
    (x) PAL pollutant means the pollutant for which a PAL is
established at a major stationary source or a GHG-only source. For a
GHG-only source, the only available PAL pollutant is greenhouse gases.
    (xi) Significant emissions unit means an emissions unit that emits
or has the potential to emit a PAL pollutant in an amount that is equal
to or greater than the significant level (as defined in paragraph
(b)(23) of this section or in the Act, whichever is lower) for that PAL
pollutant, but less than the amount that would qualify the unit as a
major emissions unit as defined in paragraph (aa)(2)(iv) of this
section. For a GHG PAL issued on a CO2e basis, significant
emissions unit means any emissions unit that emits or has the potential
to emit GHGs on a CO2e basis in amounts equal to or greater
than the amount that would qualify the unit as small emissions unit as
defined in paragraph (aa)(2)(iii) of this section, but less than the
amount that would qualify the unit as a major emissions unit as defined
in paragraph (aa)(2)(iv)(c) of this section.
    (xii) GHG-only source means any existing stationary source that
emits or has the potential to emit GHGs in the amount equal to or
greater than the amount of GHGs on a mass basis that would be
sufficient for a new source to trigger permitting requirements for GHGs
under paragraph (b)(1) of this section and the amount of GHGs on a
CO2e basis that would be sufficient for a new source to
trigger permitting requirements for GHGs under paragraph (b)(49) of
this section at the time the PAL permit is being issued, but does not
emit or have the potential to emit any other non-GHG regulated NSR
pollutant at or above the applicable major source threshold. A GHG-only
source may only obtain a PAL for GHG emissions under paragraph (aa) of
this section.
    (xiii) Baseline actual emissions for a GHG PAL means the average
rate, in tons per year CO2e or tons per year GHG, as
applicable, at which the emissions unit actually emitted GHGs during
any consecutive 24-month period selected by the owner or operator
within the 10-year period immediately preceding either the date the
owner or operator begins actual construction of the project, or the
date a complete permit application is received by the Administrator for
a permit required under this section or by the permitting authority for
a permit required by a plan, whichever is earlier. For any existing
electric utility steam generating unit, baseline actual emissions for a
GHG PAL means the average rate, in tons per year CO2e or
tons per year GHG, as applicable, at which the emissions unit actually
emitted the GHGs during any consecutive 24-month period selected by the
owner or operator within the 5-year period immediately preceding either
the date the owner or operator begins actual construction of the
project, except that the Administrator shall allow the use of a
different time period upon a determination that it is more
representative of normal source operation.
    (a) The average rate shall include fugitive emissions to the extent
quantifiable, and emissions associated with startups, shutdowns, and
malfunctions.
    (b) The average rate shall be adjusted downward to exclude any non-
compliant emissions that occurred while the source was operating above
an emission limitation that was legally enforceable during the
consecutive 24-month period.
    (c) The average rate shall be adjusted downward to exclude any
emissions that would have exceeded an emission limitation with which
the stationary source must currently comply, had such stationary source
been required to comply with such limitations during the consecutive
24-month period.
    (d) The average rate shall not be based on any consecutive 24-month
period for which there is inadequate information for determining annual
GHG emissions and for adjusting this amount if required by paragraphs
(aa)(2)(xiii)(b) and (c) of this section.

    (xiv) Emissions unit with respect to GHGs means any part of a
stationary source that emits or has the potential to emit GHGs. For
purposes of this section, there are two types of emissions units as
described in the following:
    (a) A new emissions unit is any emissions unit that is (or will be)
newly constructed and that has existed for less than 2 years from the
date such emissions unit first operated.
    (b) An existing emissions unit is any emissions unit that does not
meet the requirements in paragraph (aa)(2)(xiv)(a) of this section.
    (xv) Minor source means any stationary source that does not meet
the definition of major stationary source in paragraph (b)(1) of this
section for any pollutant at the time the PAL is issued.
    (3) Permit application requirements. As part of a permit
application requesting a PAL, the owner or operator of a major
stationary source or a GHG-only source shall submit the following
information to the Administrator for approval:
* * * * *
    (iv) As part of a permit application requesting a GHG PAL, the
owner or operator of a major stationary source or a GHG-only source
shall submit a statement by the source owner or operator that clarifies
whether the source is an existing major source as defined in paragraph
(b)(1)(i)(a) and (b) of this section or a GHG-only source as defined in
paragraph (aa)(2)(xii) of this section.
    (4) General requirements for establishing PALs. (i) The
Administrator is allowed to establish a PAL at a major stationary
source or a GHG-only source, provided that at a minimum, the
requirements in paragraphs (aa)(4)(i)(a) through (g) of this section
are met.
    (a) The PAL shall impose an annual emission limitation expressed on
a mass basis in tons per year, or expressed in tons per year
CO2e, that is enforceable as a practical matter, for the
entire major stationary source or GHG-only source. For each month
during the PAL effective period after the first 12 months of
establishing a PAL, the major stationary source or GHG-only source
owner or operator shall show that the sum of the monthly emissions from
each emissions unit under the PAL for the previous 12 consecutive
months is less than the PAL (a 12-month average, rolled monthly). For
each month during the first 11 months from the PAL effective date, the
major stationary source or GHG-only source owner or operator shall show
that the sum of the preceding monthly emissions from the PAL effective
date for each emissions unit under the PAL is less than the PAL.
* * * * *
    (d) The PAL shall include fugitive emissions, to the extent
quantifiable, from all emissions units that emit or have the potential
to emit the PAL pollutant at the major stationary source or GHG-only
source.
* * * * *
    (g) The owner or operator of the major stationary source or GHG-
only source with a PAL shall comply with the monitoring, recordkeeping,
and reporting requirements provided in paragraphs (aa)(12) through (14)
of this section for each emissions unit under the PAL through the PAL
effective period.
* * * * *
    (5) Public participation requirements for PALs. PALs for existing
major stationary sources or GHG-only sources shall be established,
renewed, or increased through a procedure that is consistent with
Sec. Sec.  51.160 and 51.161 of this chapter. This includes the
requirement that the Administrator provide the public with notice of
the proposed approval of a PAL permit and at least a 30-day period for
submittal of public comment. The Administrator must address all
material comments before taking final action on the permit.
    (6) * * *
    (i) Except as provided in paragraph (aa)(6)(ii) and (iii) of this
section, the plan shall provide that the actuals PAL level for a major
stationary source or a GHG-only source shall be established as the sum
of the baseline actual emissions (as defined in paragraph (b)(48) of
this section or, for GHGs, paragraph (aa)(2)(xiii) of this section) of
the PAL pollutant for each emissions unit at the source; plus an amount
equal to the applicable significant level for the PAL pollutant under
paragraph (b)(23) of this section or under the Act, whichever is lower.
* * *
* * * * *
    (iii) For CO2e based GHG PAL, the actuals PAL level
shall be established as the sum of the GHGs baseline actual emissions
(as defined in paragraph (aa)(2)(xiii) of this section) of GHGs for
each emissions unit at the source, plus an amount equal to the amount
defined as ``significant'' on a CO2e basis for the purposes
of paragraph (b)(49)(iii) at the time the PAL permit is being issued.
When establishing the actuals PAL level for a CO2e-based
PAL, only one consecutive 24-month period must be used to determine the
baseline actual emissions for all existing emissions units. Emissions
associated with units that were permanently shut down after this 24-
month period must be subtracted from the PAL level. The reviewing
authority shall specify a reduced PAL level (in tons per year
CO2e) in the PAL permit to become effective on the future
compliance date(s) of any applicable Federal or state regulatory
requirement(s) that the reviewing authority is aware of prior to
issuance of the PAL permit.
    (7) Contents of the PAL permit. The PAL permit must contain, at a
minimum, the information in paragraphs (aa)(7)(i) through (xi) of this
section.
    (i) The PAL pollutant and the applicable source-wide emission
limitation in tons per year or tons per year CO2e.
* * * * *
    (iii) Specification in the PAL permit that if a major stationary
source or a GHG-only source owner or operator applies to renew a PAL in
accordance with paragraph (aa)(10) of this section before the end of
the PAL effective period, then the PAL shall not expire at the end of
the PAL effective period. It shall remain in effect until a revised PAL
permit is issued by a reviewing authority.
* * * * *
    (v) A requirement that, once the PAL expires, the major stationary
source or GHG-only source is subject to the requirements of paragraph
(aa)(9) of this section.
    (vi) The calculation procedures that the major stationary source or
GHG-only source owner or operator shall use to convert the monitoring
system data to monthly emissions and annual emissions based on a 12-
month rolling total as required by paragraph (aa)(13)(i) of this
section.
    (vii) A requirement that the major stationary source or GHG-only
source owner or operator monitor all emissions units in accordance with
the provisions under paragraph (aa)(12) of this section.
* * * * *
    (xi) A permit for a GHG PAL issued to a GHG-only source shall also
include a statement denoting that GHG emissions at the source will not
be subject to regulation under paragraph (b)(49) of this section as
long as the source complies with the PAL.
    (8) * * *
    (ii) * * *
    (b) * * *
    (2) Reduce the PAL consistent with any other requirement, that is
enforceable as a practical matter, and that the State may impose on the
major stationary source or GHG-only source under the State
Implementation Plan; and

    (9) * * *
    (i) * * *
    (a) Within the time frame specified for PAL renewals in paragraph
(aa)(10)(ii) of this section, the major stationary source or GHG-only
source shall submit a proposed allowable emission limitation for each
emissions unit (or each group of emissions units, if such a
distribution is more appropriate as decided by the Administrator) by
distributing the PAL allowable emissions for the major stationary
source or GHG-only source among each of the emissions units that
existed under the PAL. If the PAL had not yet been adjusted for an
applicable requirement that became effective during the PAL effective
period, as required under paragraph (aa)(10)(v) of this section, such
distribution shall be made as if the PAL had been adjusted.
* * * * *
    (iv) Any physical change or change in the method of operation at
the major stationary source or GHG-only source will be subject to major
NSR requirements if such change meets the definition of major
modification in paragraph (b)(2) of this section.
    (v) The major stationary source or GHG-only source owner or
operator shall continue to comply with any State or Federal applicable
requirements (BACT, RACT, NSPS, etc.) that may have applied either
during the PAL effective period or prior to the PAL effective period
except for those emission limitations that had been established
pursuant to paragraph (r)(4) of this section, but were eliminated by
the PAL in accordance with the provisions in paragraph (aa)(1)(ii)(c)
of this section.
    (10) * * *
    (i) The Administrator shall follow the procedures specified in
paragraph (aa)(5) of this section in approving any request to renew a
PAL for a major stationary source or a GHG-only source, and shall
provide both the proposed PAL level and a written rationale for the
proposed PAL level to the public for review and comment. During such
public review, any person may propose a PAL level for the source for
consideration by the Administrator.
    (ii) Application deadline. A major stationary source or GHG-only
source owner or operator shall submit a timely application to the
Administrator to request renewal of a PAL. A timely application is one
that is submitted at least 6 months prior to, but not earlier than 18
months from, the date of permit expiration. This deadline for
application submittal is to ensure that the permit will not expire
before the permit is renewed. If the owner or operator of a major
stationary source or GHG-only source submits a complete application to
renew the PAL within this time period, then the PAL shall continue to
be effective until the revised permit with the renewed PAL is issued.
* * * * *
    (iv) * * *
    (c) * * *
    (1) If the potential to emit of the major stationary source or GHG-
only source is less than the PAL, the Administrator shall adjust the
PAL to a level no greater than the potential to emit of the source; and
    (2) The Administrator shall not approve a renewed PAL level higher
than the current PAL, unless the major stationary source or GHG-only
source has complied with the provisions of paragraph (aa)(11) of this
section (increasing a PAL).
* * * * *
    (11) * * *
    (i) The Administrator may increase a PAL emission limitation only
if the major stationary source or GHG-only source complies with the
provisions in paragraphs (aa)(11)(i)(a) through (d) of this section.
    (a) The owner or operator of the major stationary source or GHG-
only source shall submit a complete application to request an increase
in the PAL limit for a PAL major modification. Such application shall
identify the emissions unit(s) contributing to the increase in
emissions so as to cause the major stationary or GHG-only source's
emissions to equal or exceed its PAL.
    (b) As part of this application, the major stationary source or
GHG-only source owner or operator shall demonstrate that the sum of the
baseline actual emissions of the small emissions units, plus the sum of
the baseline actual emissions of the significant and major emissions
units assuming application of BACT equivalent controls, plus the sum of
the allowable emissions of the new or modified emissions unit(s)
exceeds the PAL. The level of control that would result from BACT
equivalent controls on each significant or major emissions unit shall
be determined by conducting a new BACT analysis at the time the
application is submitted, unless the emissions unit is currently
required to comply with a BACT or LAER requirement that was established
within the preceding 10 years. In such a case, the assumed control
level for that emissions unit shall be equal to the level of BACT or
LAER with which that emissions unit must currently comply.
* * * * *
    (12) * * *
    (i) * * *
    (a) Each PAL permit must contain enforceable requirements for the
monitoring system that accurately determines plantwide emissions of the
PAL pollutant in terms of mass per unit of time or CO2e per
unit of time. Any monitoring system authorized for use in the PAL
permit must be based on sound science and meet generally acceptable
scientific procedures for data quality and manipulation. Additionally,
the information generated by such system must meet minimum legal
requirements for admissibility in a judicial proceeding to enforce the
PAL permit.
* * * * *
    (14) * * *
    (i) * * *
    (b) Total annual emissions (expressed on a mass-basis in tons per
year, or expressed in tons per year CO2e) based on a 12-
month rolling total for each month in the reporting period recorded
pursuant to paragraph (aa)(13)(i) of this section.
* * * * *
    (d) A list of any emissions units modified or added to the major
stationary source or GHG-only source during the preceding 6-month
period.
* * * * *
    (ii) Deviation report. The major stationary source or GHG-only
source owner or operator shall promptly submit reports of any
deviations or exceedance of the PAL requirements, including periods
where no monitoring is available. A report submitted pursuant to Sec.
70.6(a)(3)(iii)(B) of this chapter shall satisfy this reporting
requirement. The deviation reports shall be submitted within the time
limits prescribed by the applicable program implementing Sec.
70.6(a)(3)(iii)(B) of this chapter. The reports shall contain the
following information:
* * * * *
[FR Doc. 2012-16704 Filed 7-11-12; 8:45 am]
BILLING CODE 6560-50-P