issue-1996-07-23•Federal Register proposed rules — 1996-07-23
Federal Register proposed rules — 1996-07-23
issue-1996-07-23Federal Register proposed rules — 1996-07-23Proposed Regulation
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FR Doc. 96-18802 Amendments to the Uniform Offering Circular for the Sale and Issue of Marketable Book-Entry Treasury Bills, Notes and Bonds; Notice of Meeting
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38127-38128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18802]
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DEPARTMENT OF THE TREASURY
Office of the Assistant Secretary for Financial Markets
Fiscal Service
31 CFR Part 356
Amendments to the Uniform Offering Circular for the Sale and
Issue of Marketable Book-Entry Treasury Bills, Notes and Bonds; Notice
of Meeting
AGENCY: Office of the Assistant Secretary for Financial Markets,
Treasury.
ACTION: Advance Notice of Proposed Rulemaking; Meeting.
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SUMMARY: On May 20, 1996, the Department of the Treasury published an
Advance Notice of Proposed Rulemaking soliciting comments on certain
aspects of a new inflation-protection security. The Treasury is hosting
a symposium to discuss the advantages and disadvantages of certain
structures under consideration for the inflation-protection security
Treasury intends to issue. The meeting will be open to the public.
DATES: 3:00 p.m., July 24, 1996.
ADDRESSES: Main Treasury Building, 1500 Pennsylvania Avenue, N.W.,
Washington, D.C. 20220; Meeting Room To Be Announced. For security
reasons, in order to be admitted to the Treasury Building, you must
call the contact person below.
FOR FURTHER INFORMATION CONTACT:
Questions about this notice should be addressed to Alison Shelton,
Financial Economist, Office of Federal Finance Policy Analysis, Office
of the Assistant Secretary for Financial Markets, at 202-622-2680.
Persons wishing to attend the meeting are requested to contact Tinese
Hamilton at 202-622-2624, prior to 12:00 noon Eastern time on July 24,
1996, to make arrangements for attendance.
SUPPLEMENTARY INFORMATION: On May 16, 1996, the Department of the
Treasury (Department or Treasury) announced its intention to issue a
new type of marketable book-entry security with a nominal return linked
to the inflation rate in prices or wages, as officially published by
the United States Government. An Advance Notice of Proposed Rulemaking
(ANPR) seeking comments on various structures was published on May 20,
1996 (61 FR 25164) and a series of meetings was subsequently held by
the Treasury to obtain public input on the new inflation-protection
security.
As a result of the comments received in response to the ANPR and at
the public meetings, the Department is
[[Page 38128]]
holding a symposium to discuss and obtain comments and information on
the comparison between two different structures for an inflation-
protection security--a Canadian-style and a current pay structure.
The Treasury has invited certain commenters to take part in the
symposium. These participants will comment on certain questions posed
by the Treasury and take part in a discussion. Members of the public
are invited to observe. Written comments from the public are also
welcome (see below). The Treasury intends to seek further comment on
the structure for Treasury inflation-protection securities and other
issues prior to issuing final rules.
Possible Structures
The Canadian-style structure was described in the ANPR. Briefly,
the principal of a Canadian-style inflation-protection security is
adjusted for inflation (with a lag) such that its real value remains
constant. The semiannual coupon payments are a fixed percentage of the
current, inflation-adjusted value of the principal on the interest
payment date. At maturity, the inflation-adjusted principal is paid,
along with the last interest payment. (Please refer to the ANPR for the
formulas for the Canadian-style structure.)
Some commenters have suggested that the Treasury consider an
alternative structure that was not described in the ANPR. Under this
current pay structure, all the inflation compensation and real interest
is paid out semiannually. The formula for the semiannual coupon on the
current pay security is the sum of the semiannual coupon and the
principal appreciation (depreciation) of the Canadian-style security.
Looking at this another way, the current pay semiannual coupon rate is
the sum of the real semiannual rate, the six-month percentage change in
the price or wage index, and the product of these two rates. The
principal of the current pay security would not be indexed. In order to
simplify the security, it is assumed here that the rate will not be
less than zero. Possible formulas for the current pay structure are
provided in the Appendix at the end of this notice.
Questions
The Treasury Department is interested in response to the following
questions:
(1) Which structure, Canadian or current pay, is likely to have the
largest potential market?
(2) Which investor groups would find investments in the different
structures appealing?
(3) How would the yield on the current pay structure compare with
the yields on other Treasury securities (bills, notes, or bonds)?
(4) If the current pay structure were strippable, would there be
substantial market interest in the stripped components?
(5) Would the preferred maturity sectors for the current pay
structure be different from those for the Canadian-style structure?
(6) What would be the best way to auction current pay securities?
For example, should the Treasury use a single-price auction and set the
coupon rate at the highest accepted yield? Should reopening auctions be
based on price rather than yield?
(7) Which structure would provide the Treasury with the largest
savings in financing costs?
Written Comments
The Treasury also welcomes written comments on these questions.
Written comments should be sent to: The Government Securities
Regulations Staff, Bureau of the Public Debt, 999 E Street N.W., Room
515, Washington, D.C. 20239. Comments received, together with any
written materials presented at the symposium, will be available for
public inspection and copying at the Internal Revenue Service, FOIA
Reading Room, located at the Internal Revenue Service building at
Pennsylvania Avenue and 11th Streets, N.W., Room 1621, until the
Treasury Department Library reopens.
Dated: July 18, 1996.
Darcy Bradbury,
Assistant Secretary, Financial Markets.
Appendix--Formulas for Current Pay Structure
I. Reference INUM:
t-1
Ref INUMDate=Ref INUMM + ------- [Ref INUMM+1-Ref INUMM]
D
II. Index Ratio:
Ref INUMDate
Index RatioDate = -------------------------
Ref INUMLastSA
III. Semiannual Interest:
A. Coupon = (I/2) x Index RatioDate x P + (Index
RatioDate - 1) X P
though not less than zero.
B. Coupon Rate = (I/2) + Infl. Rate + ((I/2) x Infl. Rate)
though not less than zero.
Definitions:
Date=valuation date
D=the number of days in the month in which Date falls
t=the calendar day corresponding to Date
INUM=index number
Ref INUMLastSA=reference INUM for the original issue date or last
semiannual interest payment date
Ref INUMM=reference INUM for the first day of the calendar month
in which Date falls
Ref INUMM+1=reference INUM for the first day of the calendar month
immediately following Date
I=real interest rate (set at initial auction)
P=principal amount
Coupon=semiannual interest payment amount
Coupon Rate=semiannual coupon rate
Infl. Rate=Index RatioDate-1
[FR Doc. 96-18802 Filed 7-19-96; 2:31 pm]
BILLING CODE 4810-39-M
Complete official Federal Register PDF
FR Doc. 96-18767 Commercial Driver Physical Qualifications as Part of the Commercial Driver's License Process
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38133-38135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18767]
=======================================================================
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DEPARTMENT OF TRANSPORTATION
Federal Highway Administration
49 CFR Parts 383 and 391
[FHWA Docket No. MC-93-23]
RIN 2125-AD20
Commercial Driver Physical Qualifications as Part of the
Commercial Driver's License Process
AGENCY: Federal Highway Administration (FHWA), DOT.
ACTION: Notice of first meeting of negotiated rulemaking advisory
committee.
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SUMMARY: The FHWA announces the first meeting of an advisory committee
(the Committee) established under the Federal Advisory Committee Act
and the Negotiated Rulemaking Act to consider the relevant issues and
attempt to reach a consensus in developing regulations governing the
proposed merger of the State-administered commercial driver's license
(CDL) procedures of 49 CFR Part 383 and the driver physical
qualifications requirements of 49 CFR Part 391. The Committee is
composed of persons who represent the interests that would be
substantially affected by the rule.
DATES: The first meeting of the advisory committee will begin at 10:00
a.m. on August 7 and 8, 1996.
ADDRESSES: The first meeting of the advisory committee will be held in
the Nassif Building, U.S. Department of Transportation, 400 Seventh
Street, SW., Washington, D.C. Subsequent meetings will be held at
locations to be announced. The Committee will meet in room 4438 on
August 7 and rooms 3200-3204 on August 8.
FOR FURTHER INFORMATION CONTACT: Ms. Teresa Doggett, Office of Motor
Carrier Research and Standards, (202) 366-4001, or Ms. Grace Reidy,
Office of Chief Counsel, (202) 366-0834, Federal Highway
Administration, 400 Seventh Street, SW., Washington, D.C. 20590. Office
hours are from 7:45 a.m. to 4:15 p.m. e.t., Monday through Friday,
except Federal holidays.
SUPPLEMENTARY INFORMATION:
Background
On April 29, 1996, the FHWA published a notice of intent to
establish an advisory committee for regulatory negotiation to develop
regulations governing the proposed merger of the State-administered
commercial driver's license procedures of 49 CFR Part 383 and the
driver physical qualifications requirements of 49 CFR Part 391 (61 FR
18713). The notice requested comment on membership, the interests
affected by the rulemaking, the issues the Committee should address,
and the procedures it should follow. The notice also announced the May
14 public meeting that was sponsored by the agency. This organizational
meeting was held in order to help identify and select organizations or
interests to be represented on the Committee.
The FHWA received 20 comments on the notice of intent. None of the
comments opposed using regulatory negotiation for this rulemaking; most
endorsed the process and included requests to serve on the Committee
and submitted nominations. Based on the responses to the notice of
intent and for the reasons the FHWA stated in that notice, the
Department of Transportation has determined that establishing an
advisory committee on this subject is necessary and in the public
interest. In accordance with section 9(c) of the Federal Advisory
Committee Act, the Department of Transportation filed the charter for
this Committee on July 12, authorizing the Committee to meet and begin
negotiations. The Department has also selected the members of the
Committee.
Negotiated Rulemaking Process
Mediator/Facilitator
In the notice of intent, the FHWA stated that it retained the
services of a contractor, Mr. Philip J. Harter, to act as a convener
and provide advice on the feasibility of using negotiated rulemaking
for this rule. The FHWA is pleased to announce that Mr. Harter will be
the mediator/facilitator of the Commercial Driver Physical
Qualifications Negotiated Rulemaking Advisory Committee.
Membership
In addition to a mediator/facilitator, the Committee will consist
of the following members:
Federal Highway Administration
American Association of Motor Vehicle Administrators
New York (State commercial driver licensing agency)
Utah (State commercial driver licensing agency)
Wisconsin (State commercial driver licensing agency)
Montana (State commercial driver licensing agency)
Commercial Vehicle Safety Alliance
International Association of Chiefs of Police
American Trucking Associations
National Private Truck Council
National School Transportation Association
United Motor Coach Association & American Bus Association (sharing one
seat on the Committee)
Owner Operator Independent Drivers Association
Independent Truckers and Drivers Association
Teamsters Union
Amalgamated Transit Union
Lancer Insurance
AI Transport
American Insurance Association
National Association of Independent Insurers
Advocates for Highway and Auto Safety
Farmland Industries
American College of Occupational and Environmental Medicine
Association for Advancement of Automotive Medicine
[[Page 38134]]
American Academy of Occupational Health Nurses
American Academy of Physicians' Assistants
The FHWA regrets being unable to accommodate all requests for
membership on the Committee. The Committee must be kept to a size that
permits effective negotiation, but that ensures all interests have a
voice in the negotiation and any ultimate recommendations adopted.
Although the FHWA would have preferred a smaller committee, the agency
erred on the side of inclusion to be certain that all interests
affected by the rulemaking are represented in this process.
The Negotiated Rulemaking Act provides that agencies should limit
membership on a negotiated rulemaking committee to 25 members, unless
the agency head determines that a greater number of members is
necessary for the functioning of the committee or to achieve balanced
membership. The FHWA recognizes that representation of all
significantly affected interests in the negotiation is critical if any
rule developed through this process is to achieve widespread support.
Therefore, to best serve all who have a significant stake in the
outcome of this negotiated rulemaking and to ensure the smooth
functioning of the negotiation process, we believe that a 26-member
committee is necessary and justified under the statutory standard cited
above.
The agency did not grant Committee membership to all applicants.
For example, the Georgetown University Law Center--Institute for Public
Representation and the National Association of the Deaf requested
membership on the Committee but were not included. The FHWA deliberated
on these applications and determined that these groups sought inclusion
on the Committee primarily because of the mistaken belief that the
scope of these negotiations would extend to a discussion of changes to
the FHWA's physical qualifications standards. For example, in its
comments, the Institute for Public Representation stated, ``We assume
from this [the April 29 notice] that the committee will in fact
consider the substance of the physical qualification standards.''
However, as noted in the April 29 notice, the current physical
qualifications standards will not be a subject for discussion during
this negotiated rulemaking process; nor will the FHWA's medical waiver
programs be a subject for negotiation in this proceeding. In light of
the FHWA's multi-year research plan to systematically review and
develop revised medical standards, using medical advisory panels, we
find that the use of this negotiated rulemaking forum to consider
changing the current medical standards is inappropriate. The Committee
will only address whether the physical qualification guidelines
currently used by the agency to implement the current medical standards
should be modified. Therefore, we believe that the interests of
disabled drivers operating in interstate commerce in accordance with
the Federal qualification standards will not be significantly affected
by this negotiated rulemaking in a way that is different from the
impacts of this action on the total driver population. Accordingly, the
interests of these disabled drivers are effectively represented by the
several driver organizations included on the Committee.
The FHWA believes that public participation is critical to the
success of this proceeding. Participation is not limited to Committee
members. Negotiation sessions will be open to the public, so interested
parties may observe the negotiations and communicate their views in the
appropriate time and manner to Committee members. Also, interested
groups or individuals may have the opportunity to participate with
working groups of the Committee. The FHWA believes that this form of
participation will produce meaningful information and lead to a more
effective commercial driver's license/physical qualifications
regulation. Of course, the FHWA will invite comment on any proposed
rule resulting from the Committee's deliberations.
Major Issues
In the notice of intent, the FHWA tentatively identified potential
topics to consider in the negotiation and asked for comment on whether
the issues presented were appropriate and if alternate or additional
issues should be considered. Most comments were devoted to membership,
and no significant modifications to the potential topics included in
the April notice were proposed. Therefore, the list of topics is
unchanged.
Those topics are:
1. Whether the physical qualifications guidelines currently used by
the agency should be modified to more effectively implement the current
medical standards.
2. The scope of any medical qualifications tracking system which
might be used by law enforcement officials, as well as by carriers
interested in medical information, that is not currently available.
3. What is the status of the various federally-funded State
Prototype Medical Review pilot programs which explored the merger of
the medical qualifications and licensing processes, and what useful
information can be utilized from these efforts in drafting a rule on
merging CDL and physical qualifications requirements?
4. How much control should various parties have over the medical
review process and should the current commonly-used procedure, in which
a company directs its drivers to physicians it selects, be replaced
entirely or could it simply be modified? For example, should the agency
require drivers to submit a medical long form to employers and the
appropriate State licensing agency instead of replacing the current
system?
5. How can the current physical examination requirements used by
medical providers be clarified? How can these requirements and
guidelines be more effectively communicated to the medical provider
community?
6. Is there a way to allow merger of the separate requirements
without burdening the small operator who moves to another State? In
this case, although the driver's medical certification would still be
valid, he or she might still be required to be recertified in the new
State, thus potentially requiring a new certificate and a corresponding
fee (e.g. medical reciprocity of old certificate to new States).
Once the rulemaking negotiations are underway, Committee members
may raise other issues.
Procedure and Schedule
Those who commented on the notice of intent generally did not
address Committee procedures. The FHWA anticipates that all of the
negotiation sessions will take place in Washington, D.C. at DOT
headquarters. Given the FHWA's limited resources, travel outside of
Washington, D.C. for the purpose of holding negotiation sessions is
unlikely.
Consistent with requirements of the Federal Advisory Committee Act,
a clear and comprehensive record of the Committee's deliberations will
be kept and circulated to Committee members. The facilitator will
provide an assistant to the Committee to complete these and other
duties.
The objective of the negotiation, in the FHWA's view, is for the
Committee to reach a consensus on how to efficiently and successfully
transfer responsibility for medical fitness
[[Page 38135]]
determinations to State licensing agencies and produce a draft notice
of proposed rulemaking for consideration by the agency.
The negotiation process will proceed according to a schedule of
specific dates that the Committee devises at the first meeting. The
FHWA will publish notices of future meetings in the Federal Register.
The FHWA has provided direct notice of this meeting to all Committee
members and urges all members to attend and participate in this first
and important meeting.
Authority: 5 U.S.C. Secs. 561-570; 5 U.S.C. App. 2 Secs. 1-15.
Issued on: July 19, 1996.
Stephen E. Barber,
Acting Associate Administrator for Motor Carriers.
[FR Doc. 96-18767 Filed 7-19-96; 12:10 pm]
BILLING CODE 4910-22-P
Complete official Federal Register PDF
FR Doc. 96-18701 Medical Devices; Reporting; Certification and U.S. Designated Agents
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38348-38352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18701]
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 /
Proposed Rules
[[Page 38348]]
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Food and Drug Administration
21 CFR Parts 803 and 804
[Docket No. 96N-0241]
RIN 0910-AA09
Medical Devices; Reporting; Certification and U.S. Designated
Agents
AGENCY: Food and Drug Administration, HHS.
ACTION: Proposed rule.
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SUMMARY: The Food and Drug Administration (FDA) is proposing to revise
its regulations for medical device manufacturer certification, and to
issue conforming certification requirements for distributors. FDA is
also announcing its intent to reconsider the requirement for foreign
manufacturers to appoint a U.S. designated agent to perform certain
duties under the adverse event reporting final rule that was published
in the Federal Register of December 11, 1995. FDA is taking this action
in response to comments from industry raising concerns that have not
been addressed previously. Elsewhere in this issue of the Federal
Register, FDA is announcing a stay of the effective date of the
manufacturer certification and U.S. designated agent provisions and the
revocation of the May 28, 1992, distributor certification provisions.
This proposed rule will assist FDA in protecting the public health by
helping to ensure that devices are not adulterated or misbranded and
are safe and effective for their intended uses while reducing the
regulatory burden on reporting entities.
DATES: Submit written comments by October 7, 1996. FDA intends that any
final rule based on this proposal become effective 75 days after
publication of the final rule in the Federal Register.
Submit written comments on the collection of information
requirements by August 22, 1996.
ADDRESSES: Submit written comments to the Dockets Management Branch
(HFA-305), Food and Drug Administration, 12420 Parklawn Dr., rm. 1-23,
Rockville, MD 20857.
Submit written comments on the information collection requirements
to the Office of Information and Regulatory Affairs, Office of
Management and Budget (OMB), New Executive Office Bldg., 725 17th St.
NW., rm. 10235, Washington, DC 20503, ATTN: Desk Officer for FDA.
FOR FURTHER INFORMATION CONTACT: Earl W. Robinson, Center for Devices
and Radiological Health (HFZ-530), Food and Drug Administration, 1350
Piccard Dr., Rockville, MD 20850, 301-594-2735.
I. Background
SUPPLEMENTARY INFORMATION: In the Federal Register of December 11, 1995
(60 FR 63578), FDA published a final rule (parts 803 and 807 (21 CFR
parts 803 and 807)) requiring medical device user facilities and
manufacturers to report adverse events related to medical devices under
a uniform reporting system (hereinafter referred to as the December
1995 final rule). The December 1995 final rule was scheduled to go into
effect on April 11, 1996. On April 11, 1996 (61 FR 16043), FDA
announced that OMB had approved the information collection requirements
in the final rule; FDA also announced an extension of the effective
date of the final rule to July 31, 1996. On May 28, 1992, a distributor
adverse event reporting rule became final. This rule went into effect
by operation of statute without the benefit of notice and comment.
After the issuance of the December 1995 final rule, FDA received
numerous requests for reconsideration of the certification requirements
and reconsideration of issues relating to U.S. designated agent
requirements. These comments led FDA to meet with the Health Industry
Manufacturers Association and several industry representatives on April
19, May 23, and June 13, 1996. During these meetings, issues concerning
industry burden and procedures relating to the certification and U.S.
designated agent requirements were put forth that had not been
considered previously .
To allow further consideration of these issues before
implementation, elsewhere in this issue of the Federal Register, FDA is
publishing a final rule staying the effective date of the manufacturer
certification and U.S. designated agent requirements until the agency
issues a new final rule addressing these issues. This final rule also
revokes the May 28, 1992, distributor certification provisions to
provide uniform manufacturer and distributor certification
requirements.
A. Section 803.57--Annual Certification-
Section 519(d) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 360i(d)) (the act) provides that each manufacturer, importer,
and distributor shall certify that it did file a certain number of
medical device reports (MDR's) in the previous 12 months or it did not
file any MDR reports. The final rule (Sec. 803.57) required
manufacturers through their president, chief executive officer
(C.E.O.), U.S. designated agent of a foreign manufacturer, or other
official most directly responsible for the firm's operations, to
certify that they filed MDR's for all reportable events required under
the rule for the previous 12 months and a numerical summary of MDR's
that they submitted, or that they did not receive any reportable events
during the reporting period.
Industry representatives objected to the corporate status of the
person required to certify, as well as the content of the certification
statement itself. Industry representatives objected to requiring the
C.E.O. or president to certify, because, especially in a large company,
that person may not be familiar with the details of the MDR reporting
program. Industry representatives also objected to the requirement that
they certify that they filed reports for all reportable events during
the reporting period. Industry representatives objected that this
requirement was not supported by the language of section 519(d) of the
act and objected to potential liability that may arise from
certification that all reportable events had been submitted, if there
were unintentional reporting mistakes.
In the December 1995 final rule, FDA required the certification
that all MDR reportable events were filed on the basis of the statute's
legislative history. The legislative history of section 519(d) of the
act states that Congress included this provision on the recommendation
of the General Accounting Office (GAO) as an important means of
increasing the effectiveness of the MDR system. (See H. Rept. 808,
101st Congress, 2d sess. 23, (1990); S. Rept. 513, 101st Congress, 2d
sess. 26, (1990)). The GAO report noted that certain information
indicated that a third of the establishments inspected were not even
aware that the MDR reporting requirements existed (GAO/PEMD-89-10,
``FDA's Implementation of the Medical Device Reporting Regulation,'' p.
4). The GAO report recommended certification to ensure that all
manufacturers and importers be made aware of their obligation to submit
MDR's and to identify those firms that were not aware of their
obligation (id. at pp. 5 and 69). The legislative history of section
519(d) of the act also cites the GAO report recommendation that the
certification state that the reporter filed a specific number of
reports and that the firm received or became aware of only these
reports (H. Rept. 808, 101st Congress, 2d sess. 23).
[[Page 38349]]
FDA believes that its regulation implementing the certification
requirements was within the scope of the statutory authority provided
in section 519(d) of the act. FDA, however, in response to the comments
objecting to the person required to certify and to the content of the
certification, has reexamined the certification requirement and
believes that the regulation may be revised in a manner that will
address the main concerns raised about the regulation and still meet
the intent of section 519(d) of the act that will improve MDR
efficiency by making firms aware of their reporting obligations under
MDR.
FDA designated in the December 1995 final rule that the certifier
must be the president, C.E.O., U.S. designated agent, or other official
most directly responsible for the firm's operations, in response to a
comment to the tentative final rule (56 FR 60024, November 26, 1991)
requesting FDA to identify who should certify. FDA now believes,
however, based on subsequent comments received, that it may be
appropriate for someone other than the president or chief executive
officer to sign the certification statement. FDA believes that the
proposal suggested by the comments to place this particular
responsibility of certification with the same individual in whom the
company has already vested overall responsibility for implementing and
overseeing its MDR program may be more appropriate than requiring
certification by the president or C.E.O. FDA, therefore, is proposing
to revise Sec. 803.57 to provide that the manufacturer shall designate,
as the certifying official, an individual with oversight
responsibilities for, and knowledge of, the firm's medical device
reporting system.
This proposal also provides that, based upon its organizational
structure, a firm may designate more than one certifying official, each
of whom would sign a certification statement for his or her identified
organizational component or site. This provision is designed to provide
needed flexibility to large companies with more than one operating
division or medical device reporting site.
Regarding the content of the certification, FDA is proposing to
amend Sec. 803.57 to require that the individual certifying for the
firm state that: (1) He/she has read the requirements of the MDR
regulation, (2) the firm has established a system to implement medical
device reporting; and (3) following the procedures of its medical
device reporting system, the firm submitted a specified number of
reports, or no reports, during the certification period.
FDA believes that this certification statement is a reasonable
application of the intent of section 519(d) of the act. The legislative
intent is to improve compliance with the MDR reporting requirements by
making responsible persons within medical device companies fully aware
of the MDR reporting requirements. This intent may be reasonably
accomplished by requiring a responsible company official to certify
that: (1) He/she has read the MDR regulation, (2) the company has put
in place a system to implement those regulations, and (3) a specified
number of MDR reports were submitted during the previous year as a
result of its implementation system.
Under proposed Sec. 803.57(a), the dates of certification would
remain the same as the December 1995 final rule, i.e., the date of the
firm's annual registration. FDA intends that the first certification
statement would be due with the first annual registration due at least
6 months after the effective date of the final rule. For example, if
the final rule were to become effective in March 1997, the first group
of certifications would be due with annual registrations due in
September 1997 and would cover a 6-month period. The next group of
annual certifications would be due in December 1997 and would cover a
9-month period. Annual certifications due in April 1998 or later would
cover a 12-month period. Foreign manufacturers would be required to
submit their certification with the annual registration, if they
voluntarily register, or in accordance with the schedule in
Sec. 807.21(a).
B. Section 803.58--Foreign Manufacturers
Section 803.58 of the December 1995 final rule required that
foreign manufacturers designate a U.S. agent to be responsible for
reporting under part 803. U.S. designated agents were to be responsible
for: (1) Reporting to FDA in accordance with Secs. 803.50, 803.52,
803.53, 803.55, and 803.56; (2) conducting, or obtaining from the
foreign manufacturer, the necessary information regarding the
investigation and evaluation of the event under the requirements of
Sec. 803.50; (3) certifying in accordance with Sec. 803.57; (4)
forwarding MDR complaints to the foreign manufacturer and maintaining
documentation of this requirement; (5) maintaining complaint files in
accordance with Sec. 803.18; and (6) registering, listing, and
submitting premarket notifications in accordance with part 807.
After the issuance of the December 1995 final rule, manufacturers
who began to implement arrangements with U.S. designated agents stated
that it was difficult to find individuals willing to take on the duties
of a U.S. designated agent and that fees were high for those willing to
take on the duties. Manufacturers noted particular concern about the
appropriateness of a U.S. designated agent providing certifications
related to MDR's and premarket notification requirements because they
believed that the U.S. designated agent may not be able to accurately
provide such certifications. Moreover, the potential liability
associated with certification responsibilities greatly increased the
cost of U.S. designated agent services.
In addition to the concerns discussed previously, many other issues
relating to the implementation and scope of U.S. designated agent
requirements were raised for the first time after the December 1995
final rule. After further internal discussions, FDA decided to stay the
effective date of these requirements, as noted elsewhere in this issue
of the Federal Register, until further notice and comment proceedings
and the issuance of a new rule.
In the interim, foreign manufacturers have a responsibility for
compliance with all medical device reporting requirements which will
not be affected by the stay of the effective date of the U.S.
designated agent requirements. This is because the December 1995 final
rule contained a significant change regarding foreign manufacturers.
The original MDR regulation that became effective December 13, 1984,
applied only to manufacturers that were required to register under part
807. Because foreign manufacturers are not required to register, the
1984 rule did not apply to them. The December 1995 final rule, however,
applies to manufacturers regardless of whether they are required to
register under part 807. Rather, under Sec. 803.3(n) of the December
1995 final rule, a manufacturer means any person who manufactures,
prepares, propagates, compounds, assembles, or processes a device by
chemical, physical, biological, or other procedure. Accordingly,
foreign manufacturers clearly fit within the definition of
manufacturers who are required to submit MDR's under the December 1995
final rule. Therefore, on July 31, 1996, foreign manufacturers will be
fully subject to the same requirements of part 803 applicable to
domestic manufacturers. This includes, but is not limited to, the
requirements for written procedures (Sec. 803.17), MDR event files
(Sec. 803.18), individual adverse
[[Page 38350]]
event reports (Secs. 803.50 and 803.52), five-day reports
(Sec. 803.53), baseline reports (Sec. 803.55), and supplemental reports
(Sec. 803.56).
The stayed provisions for U.S. designated agents would have
required that these functions be performed by a U.S. designated agent
on behalf of the foreign firm. Because FDA is staying the effective
date of the U.S. designated agent requirement, the full responsibility
for reporting is now the obligation of the foreign manufacturer.
Beginning July 31, 1996, foreign manufacturers are required to submit
MDR reports directly to FDA (except for certification). In addition,
existing registration, listing, and premarket notification regulations,
which will remain in effect during the stay, permit foreign
manufacturers to register (Sec. 807.40(a)) and submit premarket
notifications (Sec. 807.81) and require them to list their devices.
(Sec. 807.40(b)).
FDA is reconsidering the duties of a U.S. designated agent. As
noted in the preamble to the December 1995 final rule, FDA intends to
issue a proposed rule to revoke the reporting requirements for
distributors, including importers, (part 804 (21 CFR part 804)) and
replace them with requirements consistent with the new manufacturer and
user facility reporting requirements under part 803. Because importers
may be able to play a role, in whole or in part, that was assigned to
the U.S. designated agent in the December 1995 final rule, FDA believes
that it would be appropriate to address the issue of U.S. designated
agents at the same time the agency reproposes requirements for
distributors and importers generally.
FDA included the U.S. designated agent requirement in the December
1995 final rule in order to assure that foreign and domestic
manufacturers are treated equally and that FDA has access to the same
information it has from domestic manufacturers that will enable the
agency to protect the public health. To this end, FDA listed certain
duties in the December 1995 final rule that a U.S. designated agent
would be required to perform as described above. FDA solicits comments
on who may best perform these duties and specifically seeks comments on
the following points:
1. What person is best situated to perform the following duties
that, in the December 1995 final rule, were assigned to the U.S.
designated agent on behalf of the foreign manufacturer: (1) Reporting
to FDA in accordance with Secs. 803.50, 803.52, 803.53, 803.55, and
803.56; (2) conducting, or obtaining from the foreign manufacturer the
necessary information regarding the investigation and evaluation of the
event under the requirements of Sec. 803.50; (3) certifying in
accordance with Sec. 803.57; (4) forwarding MDR complaints to the
foreign manufacturer and maintaining documentation of this requirement;
(5) maintaining complaint files in accordance with Sec. 803.18; and (6)
registering, listing, and submitting premarket notifications in
accordance with part 807?
2. Should FDA require a foreign manufacturer to designate a U.S.
agent to fulfill the role of an ``official correspondent'' with FDA
regarding MDR reporting and other regulatory issues (e.g., product
listing)? The intent of this function would be to ensure that FDA can
easily contact foreign firms on MDR issues and communicate in English
with them, particularly on urgent public health matters.
3. Should FDA require foreign manufacturers to designate a U.S.
agent for the purpose of fulfilling their substantive U.S. MDR
obligations regarding complaint investigations, reporting, and
maintenance of MDR files? The intent of this function would be for FDA
to be able to monitor MDR compliance of foreign firms without
conducting a costly overseas inspection.
4. Can either of these functions readily be carried out by
importers, or by other means, so that foreign manufacturers would not
be required to enter into contractual arrangements with new entities?
5. How can these functions be carried out efficiently by foreign
manufacturers who distribute devices into the United States by multiple
importers, and how can FDA be routinely informed of all importers of a
firm annually or on an as needed basis?
Notwithstanding FDA's intent to repropose these requirements, the
agency has already tentatively concluded that it should propose that
two aspects of the U.S. designated agent regulations be deleted. The
first is the requirement for U.S. designated agents to issue the annual
certification required under Sec. 803.57. Upon reconsideration, FDA
believes it is more appropriate for the foreign manufacturer to issue
this certification as proposed in this rule. The other is the
requirement for foreign manufacturers to submit premarket notifications
(510(k)'s) through U.S. designated agents. Although the agency had
hoped this provision would help resolve 510(k) ownership issues
regarding foreign manufacturers, FDA is persuaded that the costs
imposed by this requirement are not likely to outweigh the possible
benefits. FDA solicits comment on its intent to propose to delete these
two parts of the U.S. designated agent regulations.
III. Environmental Impact
The agency has determined under 21 CFR 25.24(a)(8) that this action
is of a type that does not individually or cumulatively have a
significant effect on the human environment. Therefore, neither an
environmental assessment nor an environmental impact statement is
required.
IV. Analysis of Impacts
FDA has examined the economic impact of the proposed rule under
Executive Order 12866 and the Regulatory Flexibility Act (5 U.S.C.
22601-612). Executive Order 12866 directs agencies to assess all costs
and benefits of available regulatory alternatives and, when regulation
is necessary, to select regulatory approaches that maximize net
benefits including potential economic, environmental, public health and
safety, and other advantages; distributive impacts; and equity. The
agency believes that the proposed rule is consistent with the
principles set out in the Executive Order.
If a rule has a significant economic impact on a substantial number
of small entities, the Regulatory Flexibility Act requires agencies to
analyze regulatory options that would minimize any significant impact
of the rule on small entities. The proposed rule would apply to all
medical device manufacturers and distributors whose devices are sold in
the United States. The proposed rule would relieve two regulatory
burdens. It would allow the certification statement to be signed by the
person most familiar with the MDR program, not necessarily the
president or C.E.O. It also changes the certification statement to
minimize the possibility of liability as a result of an unintended
mistake in reporting. Therefore, under the Regulatory Flexibility Act,
5 U.S.C. 2605(b), the Commissioner of Food and Drugs certifies that the
proposed rule, if finalized, will not have a significant economic
impact on a substantial number of small entities.
V. Paperwork Reduction Act of 1995
This proposed rule contains information collections which are
subject to review by OMB under the Paperwork Reduction Act of 1995
(Pub. L. 104-13). The title, description, and respondent description of
the information collections are shown below along with an estimate of
the annual record keeping and periodic reporting burden. Included in
the estimate is the time for reviewing
[[Page 38351]]
instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the
collection of information.
Title: Reporting and record keeping requirements for user
facilities, distributors, and manufacturers of medical devices under
the Safe Medical Devices Act of 1990 and the Medical Device Amendments
of 1992 (General Requirements).
Description: This regulation proposes to amend regulations
regarding device manufacturer and distributor reporting of deaths,
serious injuries, and certain malfunctions related to medical devices.
The purpose of these changes is to improve the protection of the public
health while also reducing the regulatory burden on reporting entities.
The rule amends information collection requirements which have been
approved under OMB no. 0910-0059.
Description of Respondents: Businesses or other for profit
organizations, nonprofit organizations, Federal, State, and local
governments.
TABLE 1.--ESTIMATED ANNUAL REPORTING BURDEN
----------------------------------------------------------------------------------------------------------------
Annual
21 CFR Section No. of Frequency per Total Annual Hours per Total Hours
Respondents Response Responses Response
----------------------------------------------------------------------------------------------------------------
803.57 12,000 1 12,000 1 12,000
804.30 8,200 1 8,200 1 8,200
Total 20,200 20,000 20,200
----------------------------------------------------------------------------------------------------------------
There are no capital or operating and maintenance costs expected as
a result of this proposal.
Under OMB information collection no. 0910-0059, which expires on
February 28, 1999, a total of 187,610 burden hours were approved for
collection of information requirements in the December 11, 1995, final
rule (60 FR 63578) on medical device user facility and manufacturer
reporting, certification and registration. The 12,000 burden hours
reported above in Table 1 for Sec. 803.57 were included in that
approval and therefore do not affect the total number of approved
burden hours. However, the 8,200 burden hours reported in Table 1 for
Sec. 804.30 have not previously been considered in an information
collection submission to OMB, and do represent an increase in the
burden. Therefore, this proposed rule would add 8,200 hours to the
existing approved burden and would result in a proposed total annual
information collection burden of 195,810 hours (187,610 + 8,200 =
195,810).
Therefore, the agency solicits public comments on the revised
information collection requirements in order to: (1) Evaluate whether
the proposed collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility; (2) evaluate the accuracy of
the agency's estimate of the burden of the proposed collection of
information, including the validity of the methodology and assumptions
used; (3) enhance the quality, utility, and clarity of the information
to be collected; and (4) minimize the burden of the collection of
information on those who are to respond, including through the use of
appropriate automated, electronic, mechanical, or other technological
collection techniques or other forms of information technology, e.g.,
permitting electronic submission of responses.
As required by section 3507(d) of the Paperwork Reduction Act of
1995, FDA has submitted a copy of the proposed rule amending parts 803
and 804 to OMB for its review of the revised information collection
requirements. Other organizations and individuals interested in
submitting comments regarding this burden estimate or any aspect of
these information collection requirements, including suggestions for
reducing the burden, should direct them to the Office of Information
and Regulatory Affairs, OMB, New Executive Office Bldg., 725 17th St.
NW., rm. 10235, Washington, DC 20503, ATTN: Desk Officer for FDA.
Written comments on the information collections should be submitted by
August 22, 1996.
List of Subjects in 21 CFR Parts 803 and 804
Imports, Medical devices, Reporting and record keeping
requirements.
Therefore, under the Federal Food, Drug, and Cosmetic Act, and
under authority delegated to the Commissioner of Food and Drugs, it is
proposed that 21 CFR parts 803 and 804 amended as follows:
PART 803--MEDICAL DEVICE REPORTING
1. The authority citation for part 803 continues to read as
follows:
Authority: Secs. 502, 510, 519, 520, 701, 704 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 352, 360, 360i, 360j, 371,
374).
2. Section 803.1 is amended by revising paragraph (a) to read as
follows:-
Sec. 803.1 Scope.
(a) This part establishes requirements for medical device
reporting. Under this part, medical device user facilities and
manufacturers must report deaths and serious injuries to which a device
has or may have caused or contributed, and manufacturers must also
report certain device malfunctions. Additionally, user facilities and
manufacturers must establish and maintain adverse event files, and must
submit to FDA specified followup and summary reports. These reports
will assist FDA in protecting the public health by helping to ensure
that devices are not adulterated or misbranded and are safe and
effective for their intended use.
* * * * *
3. Section 803.57 is revised to read as follows:
Sec. 803.57 Annual certification.
(a) All manufacturers required to report under this section shall
submit an annual certification report to FDA, on FDA Form 3381, or
electronic equivalent as approved under Sec. 803.14. The date for
submission of certification coincides with the date for the firm's
annual registration, as designated in Sec. 807.21 of this chapter.
Foreign manufacturers shall submit their certification by the date on
which they would be required to register under Sec. 807.21 of this
chapter if they were domestic manufacturers. The certification period
will be the 12-month period ending 1 month before the certification
date.
(b) The manufacturer shall designate, as the certifying official,
an individual with oversight responsibilities for, and knowledge of,
the firm's medical device reporting system. A manufacturer may
determine, based upon its organizational structure, that one individual
cannot oversee or have
[[Page 38352]]
complete knowledge of the operation of the reporting system at all
organizational components or manufacturing sites owned by the firm. In
this circumstance, the firm may designate more than one certifying
official, each of whom will sign a certification statement pertaining
to their respective identified organizational component(s) or site(s).
(c) The report shall contain the following information:
(1) Name, address, telephone number, and FDA registration number or
FDA---assigned identification number of the reporting site and whether
the firm is a manufacturer;
(2) Name, title, address, telephone number, signature, and date of
signature of the person making the certification;
(3) Name, address, and FDA registration number of each
manufacturing site covered by the certification and the number of
reports submitted for devices manufactured at each site;
(4) A statement certifying that:
(i) The individual certifying for the firm has read the MDR
requirements under part 803;
(ii) The firm has established a system to implement medical device
reporting; and
(iii) Following the procedures of its medical device reporting
system, the reporting site submitted the specified number of reports,
or no reports, during the 12-month certification period.
(d) The name of the manufacturer and the registration number
submitted under paragraph (c)(1) of this section shall be the same as
the reporting site that submitted the reports required by Secs. 803.52,
803.53 and 803.55. Multi-reporting site manufacturers who choose to
certify centrally must identify the reporting sites, by registration
number or FDA-assigned identification number and name covered by the
certification, and provide the information required by paragraph (c)(2)
and (c)(3) of this section for each reporting site.
PART 804--MEDICAL DEVICE DISTRIBUTOR REPORTING
4. The authority citation for part 804 continues to read as
follows:
Authority: Secs. 502, 510, 519, 520, 701, 704 of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 352, 360, 360i, 360j, 371,
374).
5. Part 804 is amended by adding new Sec. 804.30 to read as
follows:
Sec. 804.30 Annual certification.
(a) Distributors required to report under this section shall submit
an annual certification report to FDA on form FDA 3381, or electronic
equivalent as approved under Sec. 803.14 of this chapter. The date for
submission of certification coincides with the date for the firm's
annual registration as designated in Sec. 807.21 of this chapter. This
certification period will be the 12-month period ending 1 month before
the certification date.
(b) The distributor shall designate, as the certifying official, an
individual with oversight responsibilities for, and knowledge of, the
firm's medical device reporting system. A distributor may determine,
based upon its organizational structure, that one individual cannot
oversee or have complete knowledge of the operation of the reporting
system at all organizational components or distribution sites owned by
the firm. In this circumstance, the firm may designate more than one
certifying official (one for each component or site), each of whom will
sign a certification statement pertaining to their respective
identified organizational component(s) or site(s).
(c) The report shall contain the following information:
(1) Name, address, telephone number, and FDA registration number or
FDA assigned identification number of the firm;
(2) Name, title, address, telephone number, signature, and date of
signature of the person making the certification;
(3) Name, address, and FDA registration number of the distributor
covered by the certification and the number of reports submitted for
devices distributed by the distributor;
(4) A statement certifying that;
(i) The individual certifying for the firm has read the MDR
requirements under part 804;
(ii) The firm has established a system to implement medical device
reporting; and,
(iii) Following the procedures of its medical device reporting
system, the firm submitted the specified number of reports, or no
reports, during the 12-month certification period.
Dated: July 16, 1996.
William K. Hubbard,
Associate Commissioner for Policy Coordination.
[FR Doc. 96-18701 Filed 7-19-96; 2:26 pm]
BILLING CODE 4160-01-F
Complete official Federal Register PDF
FR Doc. 96-18697 Denial of Petition for Rulemaking; Federal Motor Vehicle Safety Standards
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Page 38135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18697]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 571
Denial of Petition for Rulemaking; Federal Motor Vehicle Safety
Standards
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation.
ACTION: Denial of petition for rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document denies the petition by Mr. John Chevedden for
the issuance of a mandatory Federal regulation that would require all
new cars, light trucks and sport utility vehicles to be equipped with
reflectors or reflective tape on the open driver side door or door
jamb. An analysis of the petition revealed no information to support
the petitioner's contention that there is a safety problem with the
current situation and that his proposed solution will address the
problem and improve safety in a cost-effective way.
FOR FURTHER INFORMATION CONTACT: Kenneth O. Hardie, Safety Performance
Standards, NHTSA, 400 Seventh Street, SW, Washington, D.C. 20590. Mr.
Hardie's telephone number is (202) 366-6987.
SUPPLEMENTARY INFORMATION: By letter dated March 29, 1996, Mr. John
Chevedden of Redondo Beach, California, petitioned NHTSA to issue a new
rule that would mandate the equipping of all new cars, light trucks and
sport utility vehicles with reflectors or reflective tape on the open
driver side door or door jamb. The petitioner stated that this will
avoid collisions with drivers and their car doors as they exit the
vehicle at night near traffic because the door will be reflective to
oncoming traffic when the driver door is opened.
Analysis of Petition:
To establish a new vehicle safety requirement, the agency must
present data or analysis showing that there is a significant safety
problem and that the problem would likely be reduced by adopting that
requirement. The petitioner did not provide any information showing
that a safety problem presently exists. He did not submit any
information showing the frequency with which drivers or driver's doors
are struck by passing traffic. Further, he did not provide information
showing the extent to which such incidents are the result of
insufficient conspicuity of the door or the result of the suddenness
with which the driver opens his or her door into the path of an
oncoming vehicle. Finally, he did not provide any information showing
whether the incidents were more likely to involve a solitary parked
vehicle or a parked vehicle whose rear end was obscured by another
parked vehicle. The agency also lacks any such information.
In the absence of this information, the agency cannot assess
whether the problem is of sufficient magnitude to warrant rulemaking.
It also can only very roughly assess whether the suggested requirement
has the potential for reducing the problem.
NHTSA has already established requirements that make parked
vehicles, particularly solitary parked vehicles, more conspicuous to
following traffic. FMVSS 108 requires that vehicles be equipped with
rear taillamps, stoplamps, high mounted center stoplamps, license plate
lamps, and parking lamps. These lamps add to a vehicle's conspicuity
when its lights are turned on. The agency recognizes that to the extent
that drivers exit from their vehicles at night only after turning off
the vehicle lights, these lamps will not be of any assistance in making
the stopped vehicle conspicuous.
However, FMVSS 108 also contains a requirement that enhances the
conspicuity of vehicles whose lights are turned off. The Standard
requires that the rear of all cars, and multipurpose passenger vehicles
and trucks less than 80 inches overall width, be equipped with two red
reflex reflectors, on each side of the vehicle centerline. These
reflectors are required to be as far apart as possible. The intent of
requiring these reflectors is to make these vehicles more visible,
especially at times of reduced lighting, so that oncoming drivers will
ensure that there is sufficient separation to allow them to pass the
vehicles safely. Further, although not required by FMVSS 108, vehicles
have an interior light that is activated when the door is opened, even
if the external vehicle lights are turned off.
While NHTSA is interested in any suggestion that might reduce
deaths, injuries or crashes, the agency must ensure that all new
requirements are likely to enhance safety, are reasonable, practicable
and cost-effective and that the safety problem is significant enough to
warrant Federal intervention. Since there is no information available
to assess either the alleged safety problem or the potential of the
suggested requirement for solving the problem, NHTSA must decide if it
should spend limited agency resources to perform the research and
conduct the studies necessary to assess these matters. There could by
many other measures whose contribution to the safety of motor vehicles
could be more easily and certainly established.
In accordance with 49 CFR Part 552, this completes the agency's
technical review of the petition. The agency has concluded that there
is no reasonable possibility that the amendment requested by the
petitioner would be issued at the conclusion of a rulemaking
proceeding. After considering all relevant factors, including the need
to allocate and prioritize limited agency resources to best accomplish
the agency's safety mission, the agency has decided to deny the
petition.
Authority: 49 U.S.C. 30103, 30111, 30162; delegations of
authority at 49 CFR 1.50 and 501.8.
Issued on: July 17, 1996.
Barry Felrice.
Associate Administrator for Safety Performance Standards.
[FR Doc. 96-18697 Filed 7-22-96; 8:45 am]
BILLING CODE 4910-59-P
Complete official Federal Register PDF
FR Doc. 96-18692 Denial of Petition for Rulemaking; Federal Motor Vehicle Safety Standards
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38135-38136]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18692]
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
49 CFR Part 571
Denial of Petition for Rulemaking; Federal Motor Vehicle Safety
Standards
AGENCY: National Highway Traffic Safety Administration (NHTSA),
Department of Transportation.
ACTION: Denial of petition for rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document denies Mr. John Chevedden's petition for
rulemaking to require that all manual transmission cars, trucks, and
sport utility vehicles be manufactured with the ``Hill-Holder''
innovation which is found as standard equipment on the Subaru Legacy.
Mr. Chevedden claims
[[Page 38136]]
that this action will enhance safety by preventing backward travel
collisions on hills during start-up from a stop sign or signal. Mr.
Chevedden contends that the ``Hill-Holder'' prevents cars from slipping
backwards on hills during clutch release and accelerator application.
He believes this will reduce collisions with vehicles waiting behind.
NHTSA's analysis of the petition concludes that there is no evidence of
a significant safety problem that would warrant federal intervention
and such a mandate.
FOR FURTHER INFORMATION CONTACT: Mr. Jere Medlin, Office of Safety
Performance Standards, NHTSA, 400 Seventh Street, SW, Washington, DC
20590. Mr. Medlin's telephone number is: (202) 366-5276. His facsimile
number is (202) 366-4329.
SUPPLEMENTARY INFORMATION: By letter dated February 6, 1996, Mr. John
Chevedden of Redondo Beach, California, petitioned the agency to issue
a rule that would require equipping all manual transmission cars,
trucks, and sport utility vehicles with a ``Hill-Holder'' device
(currently found on the Subaru Legacy) to enhance safety by preventing
backward travel collisions on hills during start-up from a stop sign or
signal.
Mr. Chevedden did not provide any support for his suggestion that
the Hill-Holder will enhance safety. He provided no information
suggesting that the Hill-Holder would prevent any collisions or that
the type of collision in question causes any injuries or even causes
any damage that might lead to injury-causing collisions at a later
time. The collisions, if any, directly prevented by the Hill-Holder are
very low speed collisions, too low to have any injury potential.
Further, they are unlikely to cause any damage of safety significance.
They are particularly unlikely to cause damage to passenger cars
because of the protective capability required of passenger car bumpers
by 49 CFR Part 580. Part 580 requires that passenger car bumpers
provide protection against property damage in impacts up to 2.5 miles
per hour. Most cars have bumpers that far exceed the standard.
The agency notes further that any motorist uncomfortable with
operating a manual transmission vehicle on hills has ample opportunity
to buy an automatic transmission vehicle. Over 80 percent of light
vehicles (i.e., those under 8,500 pounds gross vehicle weight rating)
have automatic transmissions. According to 1995 vehicle production data
submitted to the agency under the Corporate Average Fuel Economy
Program, only 16.7 percent of passenger cars and 21.2 percent of light
trucks were equipped with manual transmissions.
The agency has just issued a comprehensive Crash Avoidance
Implementation Plan listing the agency's priorities for improving the
pre-crash safety of new vehicles and vehicles-in-use, and the
interactions of drivers with their vehicles. The agency's limited
resources for addressing pre-crash safety will be devoted to
implementing these measures based on their potential contribution to
safety. Even with additional resources, it would not be possible or
appropriate for the agency to address every measure believed by a
petitioner to have a possible connection with pre-crash safety. Given
that the agency does not believe that the suggested action would
enhance safety, NHTSA cannot devote its resources to pursuing it.
In accordance with 49 CFR part 552, this completes the agency's
technical review of the petition. The agency has concluded that there
is no reasonable possibility that the amendment requested by the
petitioner would be issued at the conclusion of a rulemaking
proceeding. After considering all relevant factors, including the need
to allocate and prioritize limited agency resources to best accomplish
the agency's safety mission, the agency has decided to deny the
petition.
Authority: 49 U.S.C. 30103, 30162; delegation of authority at 49
CFR 1.50 and 501.8.
Issued on: July 17, 1996.
Barry Felrice,
Associate Administrator for Safety Performance Standards.
[FR Doc. 96-18692 Filed 7-22-96; 8:45 am]
BILLING CODE 4910-59-P
Complete official Federal Register PDF
FR Doc. 96-18663 Proposed Flood Elevation Determinations; Illinois et al.
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38129-38133]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18663]
=======================================================================
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FEDERAL EMERGENCY MANAGEMENT AGENCY
44 CFR Part 67
[Docket No. FEMA-7187]
Proposed Flood Elevation Determinations; Illinois et al.
AGENCY: Federal Emergency Management Agency, FEMA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: Technical information or comments are requested on the
proposed base (1% annual chance) flood elevations and proposed base
flood elevation modifications for the communities listed below. The
base flood elevations are the basis for the floodplain management
measures that the community is required either to adopt or to show
evidence of being already in effect in order to qualify or remain
qualified for participation in the National Flood Insurance Program
(NFIP).
DATES: The comment period is ninety (90) days following the second
publication of this proposed rule in a newspaper of local circulation
in each community.
ADDRESSES: The proposed base flood elevations for each community are
available for inspection at the office of the Chief Executive Officer
of each community. The respective addresses are listed in the following
table.
FOR FURTHER INFORMATION CONTACT: Michael K. Buckley, P.E., Chief,
Hazard Identification Branch, Mitigation Directorate, 500 C Street SW.,
Washington, DC 20472, (202) 646-2756.
SUPPLEMENTARY INFORMATION: The Federal Emergency Management Agency
(FEMA or Agency) proposes to make determinations of base flood
elevations and modified base flood elevations for each community listed
below, in accordance with section 110 of the Flood Disaster Protection
Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).
These proposed base flood and modified base flood elevations,
together with the floodplain management criteria required by 44 CFR
60.3, are the minimum that are required. They should not be construed
to mean that the community must change any existing ordinances that are
more stringent in their floodplain management requirements. The
community may at any time enact stricter requirements of its own, or
pursuant to policies established by other Federal, state or regional
entities. These proposed elevations are used to meet the floodplain
management requirements of the NFIP and are also used to calculate the
appropriate flood insurance premium rates for new buildings built after
these elevations are made final, and for the contents in these
buildings.
National Environmental Policy Act. This proposed rule is
categorically excluded from the requirements of 44 CFR Part 10,
Environmental Consideration. No environmental impact assessment has
been prepared.
Regulatory Flexibility Act. The Acting Associate Director,
Mitigation Directorate, certifies that this proposed rule is exempt
from the requirements of the Regulatory Flexibility Act because
proposed or modified base flood elevations are required by the Flood
Disaster Protection Act of 1973, 42 U.S.C. 4104, and are required to
establish and maintain community eligibility in the National Flood
Insurance Program. As a result, a regulatory flexibility analysis has
not been prepared.
Regulatory Classification. This proposed rule is not a significant
regulatory action under the criteria of section 3(f) of Executive Order
12866 of September 30, 1993, Regulatory Planning and Review, 58 FR
51735.
Executive Order 12612, Federalism. This proposed rule involves no
policies that have federalism implications under Executive Order 12612,
Federalism, dated October 26, 1987.
Executive Order 12778, Civil Justice Reform. This proposed rule
meets the applicable standards of section 2(b)(2) of Executive Order
12778.
[[Page 38130]]
List of Subjects in 44 CFR Part 67
Administrative practice and procedure, Flood insurance, Reporting
and recordkeeping requirements.
Accordingly, 44 CFR part 67 is proposed to be amended as follows:
PART 67--[AMENDED]
1. The authority citation for part 67 continues to read as follows:
Authority: 42 U.S.C. 4001 et seq.; Reorganization Plan No. 3 of
1978, 3 CFR, 1978 Comp., p. 329; E.O. 12127, 44 FR 19367, 3 CFR,
1979 Comp., p. 376.
Sec. 67.4 [Amended]
2. The tables published under the authority of Sec. 67.4 are
proposed to be amended as follows:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
#Depth in feet above
ground. *Elevation in
State City/town/county Source of flooding Location feet (NGVD)
-------------------------
Existing Modified
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Illinois............................. Kankakee County Kankakee River........................... Approximately 0.5 mile upstream of confluence of Iroquois *613 *608
(Unincorporated Areas). River.
Approximately 0.4 mile upstream of confluence with *613 *608
Kankakee River along Spring Creek.
Maps available for inspection at the Kankakee County Administration Building, 189 East Court Street, Kankakee, Illinois.
Send comments to Mr. Russell Thompson, Chairman of the Kankakee County Board, Kankakee County Administration Building, 189 East Court Street, Kankakee, Illinois 60901.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Illinois............................. Sun River Terrace Kankakee River........................... At downstream corporate limits............................ *617 *611
(Village) Kankakee
County.
At upstream corporate limits.............................. *617 *611
Maps available for inspection at the Sun River Terrace Village Hall, 7267 East Chicago Street, St. Anne, Illinois.
Send comments to The Honorable Casey Wade, Jr., Mayor of the Village of Sun River Terrace, 7267 East Chicago Street, St. Anne, Illinois 60964.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Illinois............................. Wood Dale (City) DuPage Salt Creek............................... Just upstream of Thorndale Avenue......................... None *281
County.
Approximately 0.8 mile upstream of Thorndale Avenue....... None *283
Maps available for inspection at the Building Department, Wood Dale City Hall, 404 North Wood Dale Road, Wood Dale, Illinois.
Send comments to The Honorable David L. VanGeest, Mayor of the City of Wood Dale, 404 North Wood Dale Road, Wood Dale, Illinois 60191.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. Buena Vista (Township) Saginaw River Flood Storage Area......... Area east of Interstate 75 and north of East Washington *586 *587
Saginaw County. Road.
Saginaw River............................ At downstream corporate limits............................ *588 *589
Approximately 0.75 mile downstream of upstream corporate *588 *589
limits.
Maps available for inspection at the Township Clerk's Office, 1160 South Outer Drive, Saginaw, Michigan.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Send comments to Ms. Frances Hayes, Supervisor of the Charter Township of Buena Vista, 1160 South Outer Drive, Saginaw, Michigan 48601.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. Carrollton (Township) Saginaw River............................ Immediate area south of Tittabawassee Street and west of *587 *589
Saginaw County. Venoy Road.
Area west of CONRAIL and south of Schust Road............. *588 *589
Maps available for inspection at the Carrollton Township Building, 1645 Mapleridge, Saginaw, Michigan.
Send comments to Mr. Christopher Picard, Carrollton Township Supervisor, 1645 Mapleridge, Saginaw, Michigan 48604.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. Frankenmuth (Township) Cass River............................... Approximately 0.6 mile downstream of South Main Street.... None *612
Saginaw County.
Approximately 0.5 mile downstream of South Main Street.... None *612
Maps available for inspection at the Frankenmuth Township Building, 218 West Gennessee Street, Frankenmuth, Michigan.
Send comments to Mr. Martin Warnick, Supervisor of Frankenmuth Township, 218 West Gennessee Street, Frankenmuth, Michigan 48734.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. James (Township) Saginaw Tittabawassee River...................... Area north of CONRAIL and east of Van Wormer Road......... *596 *594
County.
[[Page 38131]]
Maps available for inspection at the James Township Hall, 2590 Sierra Drive, Saginaw, Michigan.
Send comments to Mr. Gerald M. Wieneke, Supervisor of James Township, 2255 Wiegl Road, Saginaw, Michigan 48603.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. Kochville (Township) Kochville Drain.......................... Approximately 0.75 mile downstream of CONRAIL............. *585 *586
Saginaw County.
Approximately 400 feet upstream of Kochville Road......... *585 *586
Saginaw River............................ (Area within the township) west of Venoy Road and north of *585 *586
Tittabawassee Street.
Saginaw Bay.............................. Saginaw River west of Venoy Road and north of *585 *586
Tittabawassee Street.
Maps available for inspection at the Kochville Township Hall, 5851 Mackinaw Road, Saginaw, Michigan.
Send comments to Mr. Edward Allington, Kochville Township Supervisor, 5851 Mackinaw Road, Saginaw, Michigan 48604.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. Swan Creek (Township) Shiawasee Flats.......................... Barer and Benkert Roads intersection...................... None *594
Saginaw County.
Maps available for inspection at the Swan Creek Township Offices, 11415 Lakefield Road, St. Charles, Michigan.
Send comments to Mr. Don Rappley, Swan Creek Township Supervisor, 11415 Lakefield Road, St. Charles, Michigan 48655.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. Thomas (Township) Shiawassee Flats (Tittabawassee River)... At Ederer Road and North River Road intersection.......... *597 *596
Saginaw County.
Swan Creek............................... At Ederer Road............................................ None *594
At Geddes Road............................................ *593 *594
Maps available for inspection at the Thomas Township Offices, 249 North Miller Road, Saginaw, Michigan.
Send comments to Mr. Morrison Stevens, Thomas Township Supervisor, 249 North Miller Road, Saginaw, Michigan 48609.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. Zilwaukee (City) Saginaw Saginaw Bay.............................. Area west of Grand Trunk Western Railroad and north of *585 *586
County. Tittabawassee Street.
Saginaw River............................ Area west of CONRAIL and south of Tittabawassee Street.... *588 *589
At downstream and upstream sides of Interstate Route 75... *588 *589
Maps available for inspection at the Zilwaukee City Hall, 319 Tittabawassee Road, Saginaw, Michigan.
Send comments to The Honorable Richard DeLong, Mayor of the City of Zilwaukee, 319 Tittabawassee Road, Saginaw, Michigan 48604.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Michigan............................. Zilwaukee (Township) Kochville Drain.......................... Approximately 0.4 mile upstream of Interstate Route 75.... *585 *586
Saginaw County.
Approximately 400 feet downstream of Kochville Road....... *585 *586
Saginaw River Flood Storage Area......... Area east of State Route 13 (Veterans Memorial Parkway)... *586 *587
Saginaw River............................ Approximately 3.3 miles downstream of Interstate Route 75. *586 *587
Approximately 1,000 feet upstream of Interstate Route 75.. *588 *589
Saginaw Bay.............................. Areas west of Grand Trunk Western and north of Kochville *585 *586
Road.
Maps available for inspection at the Township Supervisor's Home Office, 7600 Melbourne Road, Saginaw, Michigan.
Send comments to Mr. David F. Bradt, Zilwaukee Township Supervisor, 7600 Melbourne Road, Saginaw, Michigan 48604.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Mississippi.......................... Pearl (City) Rankin Conway Slough Tributary 2................ Approximately 0.1 mile upstream of Pearson Road culvert... None *271
County.
[[Page 38132]]
Approximatley 0.1 mile upstream of Lionel Road............ None *284
Neely Creek (Left Channel)............... Approximately 30 feet downstream of North Biederman Road.. *272 *271
At downstream side of Old Brandon Road.................... *281 *282
Neely Creek Tributary 2.................. At downstream side of North Biederman Road................ *272 *271
Approximately 1.2 miles upstream of Illinois Central Gulf None *280
Railroad.
Richland Creek........................... Approximately 1,050 feet upstream of Old Pearson Road..... *283 *284
Approximately 1.3 miles upstream of confluence of Richland *289 *288
Creek Tributary 1.
Richland Creek Tributary 1............... At confluence with Richland Creek......................... *286 *285
Approximately 400 feet downstream of Illinois Central Gulf *288 *287
Railroad.
Maps available for inspection at the Pearl City Hall, Department of Community Development, 2420 Old Brandon Road, Pearl, Mississippi.
Send comments to The Honorable Mitch Childre, Mayor of the City of Pearl, P.O. Box 5948, Pearl, Mississippi 39288-5948.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
New York............................. Canandaigua (Town) Lake Canandaigua......................... Approximately 200 feet east of intersection of Cribb and *693 *692
Ontario County. West Lake Roads.
Approximately 1,800 feet east of the intersection of Coy *695 *692
and West Lake Roads.
Mud Creek................................ Approximately 2,000 feet downstream of downstream None *683
corporate limits.
Approximately 200 feet upstream of upstream corporate None *706
limits.
Maps available for inspection at the Town of Canandaigua Planning Department, 5440 Route 5 and 20 West, Canandaigua, New York.
Send comments to Mr. Robert F. Simpson, Sr., Supervisor of the Town of Canandaigua, 5440 Route 5 and 20 West, Canandaigua, New York 14424.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
New York............................. Gouverneur (Village) St. Oswegatchie River........................ At corporate limits....................................... None *395
Lawrence County.
Approximately 0.74 mile upstream of State Route 58........ None *411
Maps available for inspection at the Village Clerk's Office, Gouverneur Municipal Building, 33 Clinton Street, Gouverneur, New York.
Send comments to The Honorable Dierdre Scozzafasa, Mayor of the Village of Gouverneur, 33 Clinton Street, Gouverneur, New York 13642.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
New York............................. Windham (Town) Greene Batavia Kill............................. At downstream corporate limits............................ None *1466
County.
At confluence of Mitchell Hallow Tributary................ None *1517
Maps available for inspection at the Windham Town Hall, Route 296, Hensonville, New York.
Send comments to Mr. Patrick Meehan, Windham Town Supervisor, P.O. Box 96, Hensonville, New York 12439.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania......................... London Grove (Township) East Branch White Clay Creek............. Approximately 1,000 feet downstream of Newgarden Station None *259
Chester County. Road.
Approximately 700 feet downstream of confluence of Chatham None *270
Run.
Chatham Run.............................. Approximately 350 feet downstream of Pomeroy Street....... None *283
At State Road 926......................................... None *504
Maps available for inspection at the at the London Grove Township Building, 550 East Baltimore Pike, Suite 200, West Grove, Pennsylvania.
Send comments to Mr. Lewis C. Ross, Chairman of the Township of London Grove Board of Supervisors, 550 East Baltimore Pike, Suite 200, West Grove, Pennsylvania 19390.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania......................... Westtown (Township) West Fork of East Branch Chester Creek... At upstream side of Street Road........................... *263 *258
Chester County.
[[Page 38133]]
Approximately 150 feet downstream of Westbourne Road...... *263 *262
Maps available for inspection at the Westtown Township Office, 1081 Wilmington Pike, West Chester, Pennsylvania.
Send comments to Mr. Kenton S. Stokes, Chairman of the Westtown Township Board of Supervisors, P.O. Box 79, Westtown, Pennsylvania 19395.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(Catalog of Federal Domestic Assistance No. 83.100, ``Flood
Insurance'')
Dated: July 10, 1996.
Richard W. Krimm,
Acting Associate Director for Mitigation.
[FR Doc. 96-18663 Filed 7-22-96; 8:45 am]
BILLING CODE 6718-04-P
Complete official Federal Register PDF
FR Doc. 96-18565 Regulatory Citations to Uniform Financial Institutions Rating System
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38114-38117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18565]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Parts 502, 516, 562, 563, 565, 574
[No. 96-69]
RIN 1550-AA99
Regulatory Citations to Uniform Financial Institutions Rating
System
AGENCY: Office of Thrift Supervision, Treasury (OTS).
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: In a related document published in the July 18, 1996 issue of
the Federal Register, the Federal Financial Institutions Examination
Council (FFIEC) requested comment on proposed changes to the Uniform
Financial Institutions Rating System (UFIRS). In this document, the OTS
is proposing to make conforming changes to its regulations that cross-
reference the UFIRS. The effect of these changes will be to confirm
that OTS regulations are intended to refer to the UFIRS as revised from
time to time.
DATES: Comments must be received on or before September 23, 1996.
ADDRESSES: Send comments to Manager, Dissemination Branch, Records
Management and Information Policy, Office of Thrift Supervision, 1700 G
Street, NW., Washington, DC 20552, Attention Docket No. 96-69. These
submissions may also be hand-delivered to 1700 G Street, NW., from 9
a.m. to 5 p.m. on business days or may be sent by facsimile
transmission to FAX Number (202) 906-7755. Comments will be available
for inspection at 1700 G Street, NW., from 9 a.m. until 4 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT: William J. Magrini, Senior Project
Manager, Supervision Policy, (202) 906-5744, Karen Osterloh, Counsel
(Banking & Finance), Regulations and Legislation Division, (202) 906-
6639 or Deborah Dakin, Assistant Chief Counsel, (202) 906-6445,
Regulations and Legislation Division, Chief Counsel's Office, Office of
Thrift Supervision, 1700 G Street, NW., Washington, DC 20552.
SUPPLEMENTARY INFORMATION:
I. Proposal
The UFIRS is a supervisory rating system used by the OTS and other
agencies represented on FFIEC to evaluate the soundness of depository
institutions on a uniform basis. The agencies have implemented the
UFIRS through CAMEL ratings. Under CAMEL, the agencies have organized
the relevant
[[Page 38115]]
UFIRS factors into five major areas (Capital Adequacy, Asset Quality,
Management, Earnings, and Liquidity). FFIEC has proposed changes to the
UFIRS system that: reformat and clarify the rating descriptions; add a
sixth rating area addressing sensitivity to market risk; emphasize risk
management processes; and make other changes. Currently, market risk is
evaluated within other rating areas.
Under current OTS regulations, ratings are used: (1) To define
``troubled savings association'' for purposes of the OTS assessment
system, 12 CFR 502.1; (2) to determine if a savings association is
eligible for expedited or standard treatment under the application
processing guidelines, 12 CFR Part 516; (3) to determine when an
independent audit is required for safety and soundness purposes and to
determine whether the Director may waive this independent audit
requirement, 12 CFR 562.4; (4) to determine when the OTS may require a
savings association and its subsidiaries to provide notification before
entering into transactions with affiliates, 12 CFR 563.41; (5) to
define ``eligible savings association'' for the purposes of exempting
loans to small and medium size businesses and farms from recordkeeping
requirements, 12 CFR 563.170(c)(10); 1 (6) to define ``adequately
capitalized'' and ``undercapitalized'' under the prompt corrective
action regulation, 12 CFR Part 565; (7) to determine whether a savings
association should be reclassified based on supervisory criteria other
than capital for the purposes of the prompt corrective action
regulation; and (8) to define a savings association in ``troubled
condition'' under rules requiring prior notice of the addition of any
individual to the board of directors or the employment of any
individual as senior executive officer, 12 CFR 574.9.2 Most of
these regulations currently refer to ``CAMEL'' ratings. Under the
proposed changes to UFIRS, the ``CAMEL'' acronym will become obsolete.
Accordingly, the OTS is proposing to revise its regulations to refer
more generally to the UFIRS as it may exist from time to time or to any
comparable rating system that the OTS may adopt in lieu of UFIRS.
---------------------------------------------------------------------------
\1\ In January 17, 1996, the OTS proposed to substantially
revise 12 CFR 563.170(c) in a way that would remove paragraph
(c)(10). 61 FR 1162 (Jan. 17, 1996). If that proposed amendment is
adopted, it will supersede the amendment proposed here.
\2\ The OTS previously proposed a revision to the capital
distributions regulation at 12 CFR 563.134 that would define
``troubled condition'' by reference to the examination rating
system. 59 FR 62356 (Dec. 5, 1994). When that regulation is
finalized, it will also include appropriate references to the
revised UFIRS system.
---------------------------------------------------------------------------
Two other minor changes are also being proposed. First, for the
sake of consistency and to prevent confusion, each regulation cross
referencing UFIRS will indicate that the OTS will use the most recent
rating (as determined either on-site or off-site by the most recent
examination) of which the savings association has been notified in
writing. Currently, some of the cited regulations include this
provision, while others do not. Additionally, the OTS proposes to
clarify 12 CFR 562.4. Currently, that regulation requires, inter alia,
all institutions receiving a rating of 3, 4 or 5 to obtain an
independent audit. However, the Director of the OTS is authorized to
waive the independent audit requirement for these institutions, if the
Director ``determines that an audit would not address the safety and
soundness issues that caused the [low] examination rating.'' To be more
precise, the OTS proposes to state that a waiver may be granted if an
audit ``would not provide further information on safety and soundness
issues relevant to the examination rating.''
The OTS request comments on all aspects of this aspects of this
proposal.
II. Reporting and Recordkeeping Requirements
Reporting and recordkeeping requirements in this proposed rule are
currently found in 12 CFR 563.41(e), 563.170(c), and 574.9. These
requirements are addressed in the following OMB approved packages:
Control Nos. 1550-0011, 1550-0083, and 1550-0032. The reporting burden
under these packages remains unchanged under the rule.
III. Executive Order 12866
The Director of the OTS has determined that this proposed rule does
not constitute a ``significant regulatory action'' for the purposes of
Executive Order 12866.
IV. Unfunded Mandates Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law
104-4 (Unfunded Mandates Act), requires that an agency prepare a
budgetary impact statement before promulgating a rule includes a
federal mandate that may result in expenditure by state, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any one year. If a budgetary impact statement is
required, Section 205 of the Unfunded Mandates Act also requires an
agency to identify and consider a reasonable number of regulatory
alternatives before promulgating a rule. As discussed in the preamble,
this proposed rule incorporates appropriate citations to the revised
Uniform Financial Institutions Rating System proposed by the Federal
Financial Institutions Examination Council. The revisions will merely
reduce confusion by updating the terminology used in the OTS
regulations to reflect the current rating system. The OTS has
determined that the proposed rule will not result in expenditures by
state, local, or tribal governments or by the private sector of $100
million or more. Accordingly, a budgetary impact statement is not
required under section 202 of the Unfunded Mandates Act of 1995.
V. Regulatory Flexibility Act Analysis
Pursuant to section 605(b) of the Regulatory Flexibility Act, the
OTS certifies that this proposed rule will not have a significant
economic impact on a substantial number of small entities. The OTS does
not anticipate that the application of the revised UFIRS rating system
will result in a change in composite ratings assigned to depository
institutions. Today's proposed rule will merely reduce confusion by
updating the terminology used in the OTS regulations to reflect the
current rating system.
List of Subjects
12 CFR Part 502
Assessments, Federal home loan banks, Reporting and recordkeeping
requirements, Savings associations.
12 CFR Part 516
Administrative practice and procedure, Reporting and recordkeeping
requirements, Savings associations.
12 CFR Part 562
Accounting, Reporting and recordkeeping requirements, Savings
associations.
12 CFR Part 563
Accounting, Advertising, Crime, Currency, Flood insurance,
Investments, Mortgages, Reporting and recordkeeping requirements,
Savings associations, Securities, Surety bonds.
12 CFR Part 565
Administrative practice and procedure, Capital, Savings
associations.
12 CFR Part 574
Administrative practice and procedure, Holding companies, Reporting
and recordkeeping requirements, Savings associations, Securities.
[[Page 38116]]
Authority and Issuance
Accordingly, the Office of Thrift Supervision proposes to amend
chapter V, title 12, Code of Federal Regulations, as set forth below.
PART 502--ASSESSMENTS
1. The authority citation for part 502 is revised to read as
follows:
Authority: 12 U.S.C. 1462a, 1463, 1467, 1467a.
2. Section 502.1 is amended by revising paragraph (f) to read as
follows:
Sec. 502.1 Asset-based assessments.
* * * * *
(f) Definition. For purposes of this section only, a troubled
savings association shall be defined as a savings association with a
composite rating of 4 or 5, as defined in Sec. 516.3(c) of this
chapter. A troubled savings institution also includes a savings
association in conservatorship so long as the association requires
increased supervision and examination by the Office.
* * * * *
PART 516--APPLICATION PROCESSING GUIDELINES AND PROCEDURES
3. The authority citation for part 516 continues to read as
follows:
Authority: 5 U.S.C. 552, 559; 12 U.S.C. 1462a, 1463, 1464.
4. Section 516.3 is amended by revising paragraphs (a)(1)(i),
(b)(1)(i), and (c) to read as follows:
Sec. 516.3 Definitions.
(a) * * *
(1) * * *
(i) The savings association has a composite rating of 1 or 2;
* * * * *
(b) * * *
(1) * * *
(i) The savings association has a composite rating of 3, 4 or 5;
* * * * *
(c) Composite rating. Composite rating means the composite
numerical rating assigned to the savings association by the OTS under
the Uniform Financial Institutions Rating System (For availability, see
Sec. 516.1.) or an equivalent rating under a comparable rating system
adopted by the OTS, and refers to the most recent rating (as determined
either on-site or off-site by the most recent examination) of which the
savings association has been notified in writing.
* * * * *
PART 562--REGULATORY REPORTING STANDARDS
5. The authority citation for part 562 continues to read as
follows:
Authority: 12 U.S.C. 1463.
6. Section 562.4 is amended by revising paragraphs (b)(1) and (c
)(2) to read as follows:
Sec. 562.4 Audit of savings associations and savings association
holding companies.
* * * * *
(b) * * *
(1) If a savings association has received a composite rating of 3,
4 or 5, as defined at Sec. 516.3(c) of this chapter; or
* * * * *
(c ) * * *
(2) The Director may waive the independent audit requirement
described in paragraph (b)(1) of this section, if the Director
determines that an audit would not provide further information on
safety and soundness issues relevant to the examination rating.
* * * * *
PART 563--OPERATIONS
7. The authority citation for part 563 continues to read as
follows:
Authority: 12 U.S.C. 375b, 1462, 1462a, 1463, 1464, 1467a, 1468,
1817, 1828, 3806; 42 U.S.C. 4106.
8. Section 563.41 is amended by revising paragraph (e)(2)(ii)(A) to
read as follows:
Sec. 563.41 Loans and other transactions with affiliates and
subsidiaries.
* * * * *
(e) * * *
(2) * * *
(ii) * * *
(A) Has a composite rating of 4 or 5, as defined in Sec. 516.3(c)
of this chapter;
* * * * *
9. Section 563.170 is amended by revising paragraph (c)(10)(i)(B)
to read as follows:
Sec. 563.170 Examinations and audits; appraisals; establishment and
maintenance of records.
* * * * *
(c) * * *
(10) * * *
(i) * * *
(B) Eligible savings association means any savings association that
is well- or adequately capitalized, as defined in part 565 of this
chapter and was either:
(1) Assigned a composite rating of 1 or 2, as defined in
Sec. 516.3(c) of this chapter; or
(2) Assigned a composite rating of 3, as defined in Sec. 516.3(c)
of this chapter, and has obtained written permission from the Regional
Director to employ this exemption.
* * * * *
PART 565--PROMPT CORRECTIVE ACTION
10. The authority citation for part 565 continues to read as
follows:
Authority: 12 U.S.C. 1831o.
11. Section 565.4 is amended by revising paragraphs (b)(2)(iii)(B),
(b)(3)(iii)(B), and (c)(2) to read as follows:
Sec. 565.4 Capital measures and capital category definitions.
* * * * *
(b) * * *
(2) * * *
(iii) * * *
(B) A leverage ratio of 3.0 percent or greater if the savings
association is assigned a composite rating of 1, as defined in
Sec. 516.3(c) of this chapter; and
* * * * *
(3) * * *
(iii)(A) * * *
(B) Has a leverage ratio that is less than 3.0 percent if the
savings association is assigned a composite rating of 1, as defined in
Sec. 516.3(c) of this chapter.
* * * * *
(c) * * *
(2) Unsafe or unsound practice. The OTS has determined, after
notice and an opportunity for hearing pursuant to Sec. 565.8(a), that
the savings association received, and has not corrected, a less-than-
satisfactory rating for any rating category (other than in a rating
category specifically addressing capital adequacy) under the Uniform
Financial Institutions Rating System (For availability, see Sec. 516.1
of this chapter.), or an equivalent rating under a comparable rating
system adopted by the OTS. Ratings under this paragraph (c)(2) refer to
the most recent ratings (as determined either on-site or off-site by
the most recent examination) of which the savings association has been
notified in writing.
PART 574--ACQUISITION OF CONTROL OF SAVINGS ASSOCIATIONS
12. The authority citation for part 574 continues to read as
follows:
Authority: 12 U.S.C. 1467a, 1817, 1831i.
13. Section 574.9 is amended by revising paragraph (a)(5)(i)(A) to
read as follows:
[[Page 38117]]
Sec. 574.9 Additions of directors and employment of senior executive
officers of savings associations and savings and loan holding
companies.
(a) * * *
(5) * * *
(i) * * *
(A) Has a composite rating of 4 or 5, as defined in Sec. 516.3(c)
of this chapter;
* * * * *
Dated: July 9, 1996.
By the Office of Thrift Supervision.
Jonathan L. Fiechter,
Acting Director.
[FR Doc. 96-18565 Filed 7-22-96; 8:45 am]
BILLING CODE 6720-01-P
Complete official Federal Register PDF
FR Doc. 96-18552 Special Flight Rules in the Vicinity of the Rocky Mountain National Park
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Page 38119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18552]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Parts 91, 121, 127, and 135
[Docket No. 28577; Notice No. 96-4]
RIN 2120-AG11
Special Flight Rules in the Vicinity of the Rocky Mountain
National Park
AGENCY: Federal Aviation Administration (FAA), DOT.
ACTION: Notice of Proposed Rulemaking; extension of comment period.
-----------------------------------------------------------------------
SUMMARY: This document announces an extension of the comment period on
a Notice of Proposed Rulemaking (NPRM), which proposes to establish a
Special Federal Aviation Regulation to preserve the natural quiet of
Rocky Mountain National Park from any potential adverse impact from
aircraft-based sightseeing overflights. This action is being taken to
rectify the discrepancy of the comment period closing date between the
NPRM published in the Federal Register and the closing date of the NPRM
located in the FAA Rules Docket.
DATES: Comments must be received on or before August 19, 1996.
ADDRESSES: Comments on this NPRM should be mailed, in triplicate to:
Federal Aviation Administration, Office of the Chief Counsel,
Attention: Rules Docket (AGC-200), Docket No. 28577, 800 Independence
Avenue SW., Washington, DC 20591. Comments may also be sent
electronically to the Rules Docket by using the following Internet
address: [email protected]. Comments must be marked Docket No.
28577. Comments may be examined in the Rules Docket in Room 915G on
weekdays between 8:30 a.m. and 5:00 p.m., except on Federal holidays.
SUPPLEMENTARY INFORMATION:
Background
Notice No. 96-4 was placed on immediate display at the Federal
Register on May 10, 1996, and published on May 15, 1996 (61 FR 24582).
This Notice, as published, provided for a 90 day comment period to
close on August 13, 1996. The FAA Rules Docket inadvertently stamped
the wrong date on the copy of the notice located in the docket room at
FAA Headquarters that comments to Notice No. 96-4 must be received on
or before August 18, 1996, which falls on a Sunday. To afford all
interested persons, especially those who relied on the closing date of
the comment period provided for in the FAA Docket, the opportunity to
comment on the proposal, the FAA extends the comment period, as
published in the Federal Register, to coincide with the closing date of
the comment period as provided for in the FAA Docket. Therefore,
comments on this Notice should be received on or before August 19,
1996.
Extension of Comment Period
The comment period closing date on Notice No. 96-4, Special Flight
Rules in the Vicinity of the Rocky Mountain National Park, is hereby
extended to August 19, 1996.
Issued in Washington, DC on July 17, 1996.
Harold W. Becker,
Acting Program Director for Air Traffic, Airspace Management.
[FR Doc. 96-18552 Filed 7-22-96; 8:45 am]
BILLING CODE 4910-13-M
Complete official Federal Register PDF
FR Doc. 96-18544 Country of Origin Marking Requirements for Frozen Imported Produce
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38119-38127]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18544]
=======================================================================
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DEPARTMENT OF THE TREASURY
Customs Service
19 CFR Part 134
RIN 1515-AB61
Country of Origin Marking Requirements for Frozen Imported
Produce
AGENCY: Customs Service, Treasury.
ACTION: Notice of proposed rulemaking; solicitation of comments.
-----------------------------------------------------------------------
SUMMARY: In response to comments received concerning an Advance Notice
of Proposed Rulemaking published by Customs on February 2, 1995,
regarding the need for country of origin marking requirements for
frozen imported produce, and in further consideration of Customs duty
to prescribe marking rules for imported merchandise when necessary,
Customs proposes to amend its regulations to require that the country
of origin of imported produce be marked on the front panel of packages
of frozen produce in order for the marking to comply with the statutory
requirement that it be in a ``conspicuous place''. This amendment is
proposed to ensure a uniform standard for the country of origin marking
of frozen produce.
DATES: Comments must be received on or before September 23, 1996.
ADDRESSES: Written comments (preferably in triplicate) may be addressed
to the Regulations Branch, Office of Regulations and Rulings, U.S.
Customs Service, Franklin Court, 1301 Constitution Ave., NW.,
Washington, DC 20229. Comments submitted may be inspected at the
Regulations Branch, Office of Regulations and Rulings, U.S. Customs
Service, Franklin Court, 1099 14th Street, NW., Suite 4000, Washington,
DC.
FOR FURTHER INFORMATION CONTACT: David Cohen, Special Classification
and Marking Branch, Office of Regulations and Rulings (202-482-6980).
SUPPLEMENTARY INFORMATION:
Background
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304),
provides that, unless excepted, every article of foreign origin (or its
container) imported into the United States shall be marked in a
conspicuous place as legibly, indelibly, and permanently as the nature
of the article (or its container) will permit, in such a manner as to
indicate to the ultimate purchaser in the United States the English
name of the country of origin of the article. Failure to mark an
article in accordance with the requirements of 19 U.S.C. 1304 may
result in the levy of an additional duty of ten percent ad valorem.
Part 134, Customs Regulations (19 CFR Part 134), implements the country
of origin marking requirements and exceptions of 19 U.S.C. 1304. This
document concerns the correct country of origin marking for packages of
frozen imported produce pursuant to 19 U.S.C. 1304 and 19 CFR part 134.
Customs Ruling and Court Action
On May 9, 1988, Norcal/Crosetti Foods, Incorporated, and other
California packers of domestically-grown produce requested a ruling
from Customs concerning what constituted a
[[Page 38120]]
conspicuous place for country of origin marking on packages of frozen
produce, i.e., whether the marking should be located on the front or
some other panel of the package and in what type size and style it
should appear. The request asked Customs to determine whether packaged
frozen imported produce was considered marked in a conspicuous place if
the marking did not appear on the front panel of the package in
prominent lettering. Sample packages which were not marked on their
front panels were submitted with the ruling request. On November 21,
1988, Customs issued Headquarters Ruling Letter (HRL) 731830, and
stated that all of the samples that the domestic packers submitted
complied with the country of origin marking requirements. Customs found
that the country of origin marking on packages of frozen imported
produce was not required to appear on the front panel of the package,
be in lettering at least as prominent as the product description, and/
or appear in a color or typestyle vividly contrasting with the rest of
the front panel to be considered conspicuous.
The packers obtained judicial review of the Customs determination
in HRL 731830 by the Court of International Trade (CIT). Norcal/
Crosetti Foods, Inc. v. U.S. Customs Service, 15 CIT 60, 758 F.Supp.
729 (CIT 1991) (Norcal I). In Norcal I, the Court disagreed with the
ruling and held that frozen produce is not marked in a conspicuous
place unless it is marked on the front panel of the package.
Upon examination of the sample packages supplied to Customs, the
Court found that the only consistency in the country of origin marking
of frozen imported produce was the inconsistency of where manufacturers
chose to place the marking. The Court found that most often the marking
was lost among information denoted in various small typefaces which
appeared on the back or side panels of the package. The Court stated
that producers were reluctant to conspicuously display the source of
the food, and that the result of these inconsistencies was that
customers could not be assured of easily finding the country of origin
marking, even upon reasonable inspection of the package. The Court
stated that this was a situation at cross-purposes with Congress'
attempt to ensure that consumers know of the country of origin of
imported goods before they decide to purchase the particular product.
The court took judicial notice of the common method of displaying
the merchandise in shelved freezers or frozen food bins with the front
panel in view and the rear panel obscured. The Court found that frozen
vegetables were commonly marketed in long, low freezers with open tops,
or wall-mounted freezers with glass doors, and that access to frozen
produce is limited and sometimes awkward, given that the produce must
not defrost. The Court further found that packages are usually
displayed so that only the front panel is clearly visible. Further,
because the packages are frozen and cold to the touch, and because, at
least in upright freezers, the freezer door must be held open, the
Court found that customers are unable to scan the labels on frozen
produce as easily as those on dry goods or other produce that are not
frozen. All of these factors, according to the Court, prevent consumers
from having the opportunity to see the country of origin marking that
is secluded among the small print on the back of a package.
The Court found the analogy in the ruling to the placement of
nutritional information on packages unconvincing, because that
information was not required information at that time. In contrast, it
found a more persuasive analogy in the Food and Drug Administration
(FDA) requirement that packages disclose the weight of their contents
on the principal display panel. Such quantity of contents disclosure
must be a certain size and located on the front or most prominent panel
of the package.
The Court also observed that certain packages of frozen produce
listed the name and U.S. address of the manufacturer and failed to
indicate the country of origin in close proximity as required under the
Customs Regulations. Applying 19 CFR 134.46, the Court held that if the
words ``U.S.,'' or ``America,'' or a United States address appeared on
those labels, the article would have to be marked to indicate the
country of origin in lettering of at least a comparable size.
The Court concluded by finding that, although Customs had routinely
interpreted ``conspicuous'' through 19 CFR 134.41(b), Customs failed in
its issuance of HRL 731830 to follow the clear meaning of the statute
or the regulation. Section 134.41(b) of the Customs Regulations
provides, in part, that the country of origin marking should be easily
found by the ultimate purchaser and read without strain. For packages
of imported frozen produce, the Court found that the country of origin
marking requirements were not met by the present practice of indicating
the country of origin marking on the back or side panels.
The Court remanded the matter to Customs with directions to issue a
new ruling. Pursuant to the court's order in Norcal I, Customs issued
Treasury Decision (T.D.) 91-48 (56 FR 24115, May 28, 1991), which
required the country of origin marking for frozen produce to be placed
on the front panel of the package.
The government appealed the CIT's decision to the United States
Court of Appeals for the Federal Circuit (CAFC) on the ground that the
CIT lacked jurisdiction. Norcal/Crosetti Foods, Inc. v. U.S., (Appeal
No. 91-1295), 10 Fed.Cir. ____, 963 F.2d 356 (CAFC 1992) (Norcal II).
In Norcal II, the CAFC reversed the judgment of the CIT and remanded
the case with instructions to dismiss the complaint for lack of
jurisdiction; the Court held that since the packers had not exhausted
their administrative remedies, their claims were not properly before
the CIT. The CAFC indicated that a proper course would have been for
the packers to file a domestic interested party petition with Customs
under section 516 of the Tariff Act of 1930, as amended (19 U.S.C.
1516).
The Section 516 Petition and Agency Action (1993)
A Section 516 petition was initiated by letters dated January 13
and January 29, 1993, and filed with Customs pursuant to part 175,
Customs Regulations (19 CFR part 175). The petitioners were Norcal/
Crosetti Foods, Incorporated and Patterson Frozen Foods, Incorporated,
California packers of produce grown domestically. The International
Brotherhood of Teamsters, on behalf of its Local 912, also submitted a
petition by letter dated February 24, 1993, supporting the Norcal and
Patterson petition (hereinafter, the petitions are collectively
referred to as the Norcal petition). The Norcal petition asked Customs
to reconsider its position in HRL 731830, and to adopt the findings of
the CIT in Norcal I.
The petitioners contended that frozen imported produce is not
marked in accordance with the requirement of 19 U.S.C. 1304 that the
country of origin shall appear in a conspicuous place; under a correct
application of 19 U.S.C. 1304, the country of origin must appear on the
front panel of a package to be considered as marked in a conspicuous
place. These domestic producers argued further that Customs standards
for the size and prominence of such markings were not in conformity
with 19 U.S.C. 1304. Supporting materials for the petition included
samples of frozen produce packages. These samples were alleged to be
illustrative of labels that, for various reasons, were not in
compliance with the marking rules: e.g.,
[[Page 38121]]
missing markings, illegible markings, and markings that were not in a
``conspicuous place.'' The allegations closely mirrored the allegations
in the complaint [filed] and the CIT's findings in Norcal I.
Customs published a notice in the Federal Register on September 9,
1993 (58 FR 47413), advising the public of the petitioners' contentions
and soliciting public comments on the issues raised in the petition.
Also in this notice, Customs effectively suspended the effective date
of T.D. 91-48 by reinstating HRL 731830. Seventy-one comments were
submitted in response to the Norcal petition.
Approximately half of the public comments expressed support for the
Norcal petition to require the country of origin marking of frozen
imported produce to appear on the front panel of the packaging. These
commenters presented data and arguments concerning the nature of frozen
produce and the manner of its storage and presentation for sale,
contending mainly that the inherent coldness of frozen produce makes
the packaging more cumbersome to handle than other food products. These
commenters accordingly concluded that the ultimate purchaser is likely
to examine the produce in haste, and is not likely to see country of
origin marking which appears on the back or side panel of the
packaging.
Some respondents also expressed concern that frozen produce
packaging tends to accumulate frost while being stored in
refrigerators, such that the country of origin marking often becomes
obscured in a way that is unique to frozen produce. In view of these
factors, it was argued, country of origin marking which does not appear
on the front of these frozen produce packages cannot be considered in a
conspicuous place, and cannot meet the standard stated at 19 CFR
134.41(b) that marking must be easily found and read without strain.
Commenters opposed to the Norcal petition tended to dismiss these
contentions as unfounded. These commenters claimed that there was no
reason to establish a different marking location for frozen produce
packages as opposed to other imported articles. They did not see the
temperature of the package as a fundamental obstacle to handling a
frozen produce package and turning it over to find country of origin
marking. They assert that even the information appearing on the front
panel probably cannot be read without picking up the package.
The petitioners, as well as several subsequent commenters,
submitted for consideration samples of frozen produce packaging as
evidence of common marking practices which were said to be short of the
statutory standards for permanence, legibility, and conspicuousness.
All the markings shown on the sample packages appear on the back panel.
One major category of sample packages consisted of rectangular packages
on which all the printed information, except the country of origin
marking, is pre-printed. The country of origin instead is evidently
stamped after the package is filled with frozen produce. The quality of
this marking tends to be poor, and for the most part does not satisfy
existing standards for permanence and legibility. The location is quite
inconsistent between various packages in the same batch. Sometimes the
lettering is stamped over pre-printed information; sometimes it is
sideways or crooked; and sometimes it is smudged. These stamped-on
markings are insufficient under the current statutory criteria of 19
U.S.C. 1304, particularly as regards legibility, indelibility and
permanence.
Commenters opposed to the petition believe that these defects
should be remedied by enforcement under the regulations of current
standards governing legibility, permanence, indelibility and
conspicuous placement, and that there is no compelling evidence that
the current regulations are inadequate.
Other sample packages submitted by the petitioners and other
commenters, while marked permanently and legibly under current
standards (on the back panel), showed geographic markings or names
which could create confusion or be misleading as to the country of
origin of the frozen produce. Some such names or markings were part of
the distributors' trademarks, while others used generic names for
vegetable products in potentially confusing ways. The petitioners and
other commenters argue that the remedy for these potentially confusing
or misleading markings is country of origin marking which appears
uniformly on the front panel of the package. They believe the ultimate
purchaser is less likely to inspect frozen produce on its back panel to
ascertain its country of origin when the front panel of the packaging
indicates in print a reference to a locale in a country other than the
country of origin.
Commenters opposed to the petition do not believe that ultimate
purchasers are deceived by such references. One opponent indicated that
while in some cases marking on the front panel of the package may be
needed, it is not generally necessary if the current regulations were
enforced in all cases. One of the sample packages already has been the
subject of corrective action and a ruling by Customs. See, HRL 735085
(June 4, 1993) (Mixed frozen vegetables sold as ``American Mixtures''
required to have country of origin marking on front of package to be
considered conspicuously marked; Customs indicated at that time,
however, that marking on the back could be permissible in the absence
of potentially confusing words or marks).
In T.D. 94-5 (58 FR 68743, December 29, 1993), Customs issued a
final interpretive ruling based on the comments described above which
were received in response to the September 9, 1993, Federal Register
notice. T.D. 94-5 stated that back panel marking was insufficient and
front panel marking of country of origin was required in a specified
type size and style designed to match the net weight or quantity
marking of the product under the Food Labeling Regulations (21 CFR
101.105). In T.D. 94-5, Customs modified T.D. 91-48 by requiring that
conspicuous marking within the meaning of T.D. 91-48, shall be limited
to marking which complies with the additional specifications for type
size and style set forth in T.D. 94-5. The effective date initially
established for the decision in T.D. 94-5 was May 8, 1994, in order to
allow importers time to modify their packaging. On March 29, 1994,
however, Customs issued two Federal Register documents: One (59 FR
14458) suspending the compliance date of May 8, 1994, for parties
adversely affected by the country of origin marking requirements
specified in T.D. 94-5, and the other (59 FR 14579) giving notice of
its intention to adopt a new compliance date of January 1, 1995, and
soliciting comments on both the proposed compliance date and on the
specifications regarding type size and style.
In response to T.D. 94-5, however, an action was filed with the
Court of International Trade on behalf of American Frozen Food
Institute, Incorporated, and National Food Processors Association,
which challenged the Customs decision. In American Frozen Food
Institute, Inc.; et al. v. The United States, (Slip Op. 94-97), 18 CIT
______, 855 F.Supp. 388 (CIT 1994), the CIT ruled that because Customs
had chosen to promulgate front panel marking in combination with other
requirements needing APA (Administrative Procedure Act, 5 U.S.C. 553)
rulemaking procedures, the entirety of T.D. 94-5 could not stand. The
Court accepted the government's position that to the extent the front
panel marking portion of T.D. 94-5 was
[[Page 38122]]
separable from the other portions of the ruling it constituted an
interpretive ruling. However, the court found that the type size and
style portion of the ruling functioned as a legislative ruling, as
Customs had selected a narrow range of sizes and styles from a broad
spectrum of type sizes and styles that could be considered conspicuous.
Accordingly, the Court found that the selection of type size and style
requirements imposed additional requirements which were not promulgated
as a regulation in accordance with APA rulemaking procedures.
The court further concluded that because the full rulemaking
process had not been followed, it would not rule on whether T.D. 94-5
was acceptable substantively. Since the court declared T.D. 94-5, in
its entirety, null and void, there is no decision on the 1993 petitions
of the domestic interested parties. On September 8, 1995, Customs
received notice from Dean Foods Vegetable Company (Dean Foods) that it
had purchased the assets of Norcal/ Crosetti Foods, Incorporated. Dean
Foods stated that, as Norcal/ Crosetti's successor in interest, it no
longer supported the petition and it withdrew the comments submitted by
Norcal/ Crosetti Foods in response to Customs solicitation of comments.
However, the petitions of Patterson Frozen Foods, Incorporated, and the
International Brotherhood of Teamsters, on behalf of its Local 912, are
still pending.
Proposed Rulemaking
In view of the foregoing background, Customs is exercising its
authority under 19 U.S.C. 1304(a)(1) to prescribe by regulation
reasonable methods of marking and a conspicuous place on the article
(or container) where the marking must appear on packages of frozen
produce. As the foregoing history of the issue illustrates, the
question of marking of frozen imported produce has been embroiled in
eight years of procedural disputes and litigation. In an attempt to
disentangle the issue from this history, to provide complete regulatory
due process, and to facilitate a fresh examination of the substantive
issues involved, Customs chose to publish an advance notice of proposed
rulemaking (ANPRM). 60 FR 6464 (1995). Customs published the ANPRM on
February 2, 1995, and solicited comments with respect to the marking
requirements for frozen imported produce. The comments received are
summarized below.
In addition, Customs has considered and drawn upon evidence and
opinions in the record of this matter, including public comments
received since the first ruling request and the various court opinions.
These have been considered for whatever persuasive authority they may
have regardless of whether they were submitted in response to the ANPRM
or, in the case of judicial opinions, are legally binding.
Summary of Comments Received in Response to the ANPRM.
A total of fifty comments were submitted in response to the
February 2, 1995, ANPRM. The commenters included a number of trade
organizations, companies in the business of manufacturing, processing,
and distributing frozen produce, a non-profit organization, the
Canadian government, members and officials of the International
Brotherhood of Teamsters; the California Department of Justice, and a
U.S. manufacturer of semiconductors, personal computers, and
communications products. In addition to general comments, Customs
invited specific comments regarding several issues, many of which have
been incorporated into this document.
In response to the issues that Customs raised in the ANPRM as to
whether there are current abuses in the country of origin marking of
imported packages of frozen produce, the commenters in favor of front
panel marking claim that many importers, processors, and distributors
of frozen produce neglect to mark packages of frozen imported produce
at all. In support of this position, they submitted several samples of
what they believe to be non-complying labels. Some commenters also
indicated that the marking was not conspicuous because the marking was
in an inconspicuous place, the type size was too small, or the ink was
smeared. Commenters opposed to a proposed rulemaking contend that they
are unaware of any abuses with respect to the country of origin marking
of frozen produce and believe that there is no need to provide specific
marking requirements for frozen produce. They stated that any problems
with the country of origin marking of frozen produce can be addressed
through a case-by-case basis rather than additional rulemaking.
On the other hand, some of the commenters believe that the way
frozen produce is displayed in the supermarket is sufficient reason to
require special marking rules. The commenters in favor of front panel
marking believe that because of the difference between the way canned
produce and frozen produce are displayed in the supermarket, canned
produce is easier for the consumer to pick up and inspect than frozen
produce. Further, they contend that canned produce is displayed on a
shelf at room temperature which makes it easy for the consumer to pick
up and inspect the can. The cold conditions under which frozen produce
must be maintained in the retail store make it less likely that
consumers will examine the back or side panels of frozen produce
packages prior to purchase. Moreover, these commenters submit that the
consumer has a greater motivation to examine the back label of canned
vegetables than of frozen produce. They maintain that the majority of
frozen vegetables sold at retail are plain, blanched vegetables,
without additives of any kind.
These commenters further state that the ingredients of frozen
produce are generally named and pictured on the front panel of each
package, there is almost never any added salt or sugar, and the
consumer typically knows about the high nutritional content of
vegetables and their ease of preparation. As a result, these commenters
contend that the consumer typically has no particular need to examine
the ingredients list, the nutritional content or the cooking
instructions as part of the process involved in making a decision of
whether or not to purchase the frozen produce item. Canned produce,
they say, by contrast with frozen produce, usually contains ingredients
beyond the pure agricultural product; therefore, the buyer of canned
produce has more incentive to examine the contents, nutritional
statement and cooking instructions than the buyer of frozen produce.
Commenters opposed to the requirement for front panel country of
origin marking submit that there is no reason for frozen produce to be
treated any differently than any other packaged food product. They
argue that Customs has never imposed a general requirement that
packaged goods bear country of origin marking on any specific panel or
in any specific type size or type style. They submit that it would be
arbitrary and capricious for Customs to impose on frozen produce a
different and more burdensome labeling requirement than that which is
applied to all other food products and to all other packaged products
that are subject to the marking requirements.
These respondents dismiss the view that packages of frozen produce
should be the subject of special regulatory attention because they are
displayed in retail freezers and are ``cold to the touch.'' They
maintain that there is no evidence to show that a frozen produce
package is so cold as to prevent the purchaser from removing it from
the
[[Page 38123]]
freezer display, examining it, and carrying it to the check-out
counter. Moreover, they state that consumers are accustomed to picking
up frozen food packages to read the nutritional information contained
on the rear and side panel of the product. They point out that in
enacting its current regulations, the FDA recognizes that the
information panel which can be located on the back or side panel of a
package is a conspicuous location for ingredient and nutrition
information. Thus, these commenters believe that frozen produce should
not be treated any differently for marking purposes than any other
packaged food product.
In response to the issue of whether Customs should prescribe, by
regulation, certain type size and style specifications for the country
of origin marking of frozen produce, commenters who were in favor of
this proposed measure believe that the type size and style should vary
depending upon the size of the package. One commenter suggested that
the marking should be the same size and style as the net weight
declaration. Another commenter suggested that Customs follow the
specifications set forth in the Federal Food Labeling Regulations (21
CFR 101.1) for information appearing on the principal display panel for
the country of origin marking of packages of frozen produce.
The commenters opposed to the imposition of certain type size and
style specifications maintained that additional regulations that would
increase the prominence of country of origin markings would impose
undue burdens on importers and would almost certainly be inconsistent
with the government's interest in encouraging the consumption of
vegetables and discouraging false health concerns.
Moreover, the commenters opposed to requiring certain type size and
style specifications for country of origin marking claim that there is
a vast difference in the amount of space that would be occupied on a
package, depending upon whether one or ten countries are listed. They
state that the question posed as to whether type size should vary with
the size of the package emphasizes the impracticality of imposing
industry-wide blanket regulations. These commenters believe that
determinations of conspicuousness can and should be made on a case-by-
case basis.
Customs Analysis of the Regulatory Options
With regard to a basic issue raised in the ANPRM, that is, whether
rulemaking is needed, Customs determined that not to proceed with a
marking proposal would leave the country of origin marking situation no
better than it was prior to Norcal I. Manufacturers of frozen produce
would still be free to choose marking options that could make it
difficult for the average consumer to learn the origin of the produce
prior to purchase, contrary to clear Congressional intent in the law.
The weight of information and opinion submitted in response to the
ANPRM did not furnish any justification for denial of the Section 516
petition and termination of the rulemaking process at this stage.
In developing this proposed regulation, Customs weighed a number of
alternatives, one of which, front panel marking, was selected as the
most consistent with the statutory requirement for marking frozen
produce in a conspicuous place. Customs believes that a front panel
requirement would prevent many of the regulatory abuses brought to the
attention of Customs and the CIT and illustrated by the label samples
submitted to Customs.
Customs has concluded that, while it can continue on a case-by-case
basis to correct the types of marking problems identified in the record
of this issue, and will do so as necessary, nonetheless a more
comprehensive solution is needed to assure proper marking of frozen
produce for the reasons discussed below. As a result, Customs is
proposing a blanket requirement that country of origin marking appear
on the front panel of the package of frozen imported produce. This
should afford a definitive solution to a problem which has been
demonstrated to be extensive.
Much of the frozen imported produce sold in the United States is
packaged after importation. As such, the marking of the retail packages
is not subject to physical supervision by Customs, but is performed
under importers' certifications for the marking of repacked articles
tendered in accordance with 19 CFR 134.25. The administrative burden of
enforcing the marking of such repacked articles on a case-by-case basis
is an additional reason for establishing uniform specifications for the
marking of frozen produce. Such specifications should reduce ambiguity
and interpretive questions, thus facilitating broad-based compliance by
importers, packagers, and distributors.
Customs has concluded that the nature of frozen produce and its
typical retail presentation makes marking on the back or side panel
insufficient; that there are numerous examples of insufficient and
potentially misleading marking practices based on current marking which
is typically on the back panel; that marking appearing on the back
panels of frozen produce packages is not easily found and is frequently
obscured by competing text or graphics; and that consequently a uniform
standard for marking should be prescribed for frozen produce packages
in order to assure proper marking under 19 U.S.C. 1304.
In addition, in Customs judgment, a front panel marking requirement
actually represents economy in government regulatory activity in
contrast to the available alternatives. By its very nature, the front
panel is a ``conspicuous place''. Consequently Customs, in the proposed
regulation, has been able to minimize government-imposed requirements
and leave the details of type size and label graphics to the
manufacturer while reserving the right to proscribe abuses. Such
regulatory simplicity is possible because there is little incentive or
opportunity for the manufacturer to clutter up the front panel in a way
that would obscure the marking and, in fact, there is a strong
disincentive to do so.
In contrast, by its very nature, the back panel is not a
``conspicuous place''; it affords many opportunities to bury the origin
marking in other information or graphic devices. In order to interpret
back panel marking as marking in a ``conspicuous place'' within the
meaning of the statute, Customs would have an obligation to inject
itself into the micromanagement of label graphics in order to
circumscribe the current abuses. (NOTE: The ``back panel'' routinely
has been referred to in this discussion because it is the location
typically chosen by the manufacturer for marking under current
practice. While the side panel may contain, in some instances, less
competing information and graphics than the back panel, Customs
concludes that the side panel is even less likely than the back panel
to receive careful scrutiny by the consumer except after purchase when
it may be necessary to refer to it to find other information, such as
cooking time.)
Regulating country of origin marking on the back, or information,
panel thus could involve a fairly detailed set of rules on type sizes
and styles, background colors, margins, headers, etc. It could even
involve a complex exercise in regulating label graphics comparable to
the ``Nutrition Facts'' box prescribed by the Food and Drug
Administration. While a number of commenters have objected to front
panel marking, we have concluded that this alternative is less
burdensome to industry than the Government injecting
[[Page 38124]]
itself into the minutiae of label graphics on the back or information
panel. Absent such Government controls on marking on the back panel, we
believe that the current situation where the marking tends to disappear
in other text would not be remedied.
In this regard, Customs did carefully consider whether one or more
regulatory options that would regulate marking of country of origin on
other than the front panel would constitute compliance with the statute
as well as a workable alternative to front panel marking. In an effort
to elicit suggestions for such an alternative, the following question
was included in the ANPRM:
(5) Whether a specified location on another panel (e.g. the back
panel) where the country of origin marking is demarcated by, for
example, a box, a header, bold print, margins, a contrasting
background, or other graphic devices, would constitute a
``conspicuous place'' for purposes of the marking statute.
This question was intended in part to explore the potential for a
compromise solution that would comply with the statute, correct
existing marking problems, and be acceptable to the interested parties.
Customs was interested in whether, for example, a ``conspicuous place''
on the back panel could be constructed by regulatory fiat in a manner
analogous to the FDA-mandated ``Nutrition Facts'' box. Such a solution
might eventuate from government design, industry-government agreement,
or negotiated rulemaking in which Customs mediated between and among
interested parties. However, no commenter came forward with such a
solution. Also, while such an alternative would be a compromise
position, it would have the disadvantage of involving Customs in
developing a potentially elaborate set of guidelines for back panel
marking, suitable for different styles and sizes of produce packages,
thus injecting the government more deeply into labeling decisions.
Consideration was also given to providing the manufacturer with a
choice: (1) Provide a simple and legible marking on the front panel or
(2) submit to a more detailed set of guidelines for marking on the back
panel as in the foregoing option. While this option would offer the
regulated industry some flexibility, it was rejected in part because of
its potential for confusing the ultimate purchaser who would not have a
consistent place on the package to look for country of origin marking.
In sum, based on the results of the ANPRM and other information
available, Customs concludes that the back panel (as well as the side
panel), with its manifold distractions and without qualifications or
graphic highlighting, is not a ``conspicuous place''. In contrast, the
front panel, with its limited amount of clutter and its ready
visibility, does constitute a conspicuous place. The front panel thus
meets the statutory test of marking in a conspicuous place without
elaborate conditions or regulations specifying, e.g., type size or
other details of the marking. Country of origin marking on the front
panel is presumptively adequate so long as it is permanent, indelible
and legible and the ultimate purchaser can see it without strain.
In the interest of an open rulemaking process, Customs has the
following comments on a number of key issues highlighted by commenters
opposed to front panel marking:
Importance and Prominence of Origin Marking Relative to the Nutritional
Information
Commenters opposed to a front panel marking requirement argued that
country of origin information is not as ``important'' as the nutrition
and health information. Yet the latter, under current government
regulations, may be relegated to the back panel. In the opinion of such
commenters, if the back panel is conspicuous enough for the concededly
important nutritional information, it ought to be sufficiently
conspicuous for the origin marking.
Such a comparison, in Customs' view, contributes little to the
analysis of whether front panel marking of produce is necessary to
comply with the law and to produce the desired consumer recognition. A
number of items on the label, even discretionary information provided
by the manufacturer such as preparation instructions and serving
suggestions, may be considered ``important''.
However, the rationale behind the different mandatory label
elements such as net weight, brand name, product identity, nutrition
facts, and country of origin are different. They do not necessarily
lend themselves to comparative valuation as to their relative
``importance'' and must be considered on their individual merits. The
issue in each case is what placement enables the particular information
to be effectively communicated to the consumer in a manner that carries
out the intended statutory or regulatory purpose.
1. The ``Nutrition Facts'' Box, Without Regard to Location, Is
Intrinsically More Visible Than Current Origin Marking
The ``Nutrition Facts'' box, mandated by the Food and Drug
Administration after extensive rulemaking procedures, is now one of the
most visible things on any panel of a package of food. Its distinctive
graphics, required by regulation, are as instantly recognizable to the
American consumer today as major corporate logos and trademarks. It
contains its own eye-catching headline ``Nutrition Facts'' and is
graphically subdivided by three distinctive bold lines. It must be
large enough to accommodate a significant amount of required
information. Hence, the high visibility or ``conspicuousness'' of the
Nutrition Facts Box derives from its relative size and its unique
design characteristics, not from the panel on which it is located. The
term ``conspicuous'' in the marking statute, however, refers only to
the location of the marking.
In contrast to the nutritional information, under current industry
practice, the country of origin marking may consist of one or a few
words such as ``Mexico'' or ``Product of Mexico'' placed without any
attention-getting graphics in a place on the back panel where it is not
particularly likely to be noticed. An example is for the country of
origin to follow or to be merged with other geographical information,
such as ``PRODUCT FROM THE UNITED STATES AND MEXICO. PACKAGED IN THE
UNITED STATES''. Also, in the words of one of the petitioners in the
Section 516 proceeding, the origin information is frequently submerged
on the back panel in a ``sea of cooking instructions.'' The CIT
observed in Norcal I that most often the marking is lost among the
various small typeface information contained on the back or side panel
of the package. In sum, Customs is not persuaded by the comparison of
the relatively obscure placements accorded to country of origin marks
in current practice to the very prominent government-mandated
presentation of the nutritional data.
2. The ``Nutrition Facts'' Box May Not Lead the Consumer's Attention to
the Origin Marking
While the availability of nutritional data may provide a consumer
with a reason to consult the back or information panel of the package,
this may not draw his attention to the origin marking. As indicated
above, the ``Nutrition Facts'' box tends to dominate the panel on which
it appears and the origin marking does not appear within the box or
necessarily even in proximity to it. Furthermore, the origin marking
may be relegated by design to an inconspicuous spot on the label.
There also is a fundamental difference between the type of
information imparted by the ``Nutrition Facts'' box
[[Page 38125]]
and that imparted by the country of origin marking. The former
identifies a number of characteristics that the product possesses
which, in fact, it may share generically with the same type of product
from another manufacturer and/or with a different origin. As one
commenter suggested, consumers tend to purchase frozen vegetables as a
``commodity''. For common vegetables, the nutritional value of this
commodity is often a known quantity to the experienced, health-
conscious consumer. Furthermore, nutritional characteristics of frozen
produce will not be likely to vary greatly from purchase to purchase,
particularly if the consumer chooses brands consistently. This may
diminish the attention paid by the consumer to the nutritional
information once he is familiar with the produce and brand.
In this regard, it is believed that consumers reserve their closest
scrutiny of the nutritional information for ``suspect foods'', e.g.,
processed foods, foods known or suspected of containing high levels of
fat, sodium, sugar, or additives. In contrast, frozen fruits and
vegetables tend to be the ``good guys'' of the supermarket which
require little scrutiny. In fact, in response to a petition filed by
the American Frozen Food Institute, the Food and Drug Administration
recently has published a notice of proposed rulemaking that would
permit the use of the term ``healthy'' to describe frozen vegetables
based on arguments submitted by the industry that the nutrient profile
for frozen vegetables is essentially the same as that for fresh
vegetables. 61 FR 534 (February 12, 1996). The foregoing considerations
may result in the fine print on the information panel of frozen produce
packages, including both nutritional information and origin marking,
receiving less attention while the consumer is in the store than in the
case of other products, including canned produce.
3. Origin Marking Relates to the Identity of the Product and Is
Exclusively ``Point of Sale'' Information
Country of origin marking, in contrast to nutritional information,
furnishes information that is specific to the product in the individual
package that the consumer is examining. In fact, the origin information
can be considered part of the ``identity'' of the product. Other
information that describes, defines, or illustrates the identity of the
product, such as the brand name or the vignette; the product name,
e.g., cauliflower; and the net weight are on the front panel where they
can be instantly grasped by the consumer in making a purchasing
decision. All of this information is ``point of sale'' information. It
has little or no value (except perhaps in promoting brand loyalty) once
the consumer leaves the store. In contrast, nutritional information has
continuing educational value and may be consulted by the consumer at
home, particularly during food preparation (e.g., serving size).
Since country of origin marking is point of sale information, if
the consumer does not notice the information until he or she arrives at
home, it then is too late to assist in the purchasing decision. The
consumer cannot even adjust purchasing intentions based on experience
for when he or she returns to the store for the next purchase. By then,
the facts of country of origin may have shifted again even if the
consumer chooses the same product with the same brand name.
The foregoing factors, in conjunction with the factors cited by the
CIT in Norcal I, relating to the environment in the frozen food aisle,
may cause the country of origin marking of frozen imported produce not
to be noticed prior to purchase. This is precisely the type of outcome
that the section 1304 requirement that the marking be in a
``conspicuous place'' is designed to prevent.
Health and Safety Implications of Front Panel Marking
A number of the commenters who opposed further rulemaking expressed
concerns that requiring more conspicuous labeling of produce would
arouse false concerns about health and safety on the part of consumers.
In their view, this could lead to decreased purchases and consumption
of frozen produce with resulting negative impacts on the U.S. economy
and even on the health of consumers.
No information has been submitted to us and none suggests itself to
us that would validate this concern. Customs believes that it is
unlikely that a consumer will perceive an implied health warning in
label information that is in no way identified as a warning. Consumers
are presumably familiar with the health warning labels on tobacco
products and alcoholic beverages, which are clearly stated as such, as
well as poison warnings. Further, it is unlikely that the consumer will
conclude that information such as country of origin that does not
appear in the ``Nutrition Facts'' box is intended to convey a health
and safety advisory. We believe it would take a highly explicit warning
to overcome the consumer's belief in the presumptive healthfulness of
frozen vegetables and fruits.
Moreover, we believe that the economic motivation that lies behind
the marking statute is readily apparent to the informed consumer. Major
trade developments and bilateral trade disputes and sanctions have
received extensive publicity in the media and in public campaigns by
trade associations, labor unions and others urging consumers to ``Buy
American''. Thus, we see little likelihood that the consumer will
misunderstand the significance of the country of origin marking. While
the consumer, once informed of the country of origin, may choose a
domestic source product over a foreign source product or vice versa, we
do not see evidence that overall consumption of frozen produce is
likely to be affected by labeling rules.
Impact of Front Panel Marking on Cost and Price
Finally, a number of commenters argued that more detailed labeling
requirements would be costly to the manufacturers and that these costs
would be passed on to the consumer. This would particularly be true,
they state, if the product were sourced from many countries and if the
sources were constantly shifting. Some of these broadly stated
arguments seem aimed at the marking requirement itself, a statutory
mandate that Customs has no choice but to enforce. Implicit in the
marking statute is the effort and expense of adding information to a
label that might not otherwise be incurred. There is no exemption in
the statute, or in the Customs Regulations, for products sourced in a
number of countries.
On the other hand, it may be noted that frozen produce labels
already frequently are characterized by colorful, sophisticated, and
detailed graphics. These labels may include an array of totally
discretionary and promotional information offered by the manufacturer
such as recipes and advertisements for other products. Realistically
evaluating the proposed rule in this context, we have not received
convincing evidence that placing simple country of origin information
in a different or additional place on the label, if required after a
reasonable period of time for industry to adjust, will adversely impact
profit margins, be economically injurious to the consumer, or have an
inflationary impact.
Further, as a practical matter, we have not received to date
empirical evidence that sourcing from more than two or three countries
is widespread as an industry practice. In fact, we are not aware that
it is likely that more than a single source is typically involved in
the
[[Page 38126]]
case of a package containing a single product (e.g., broccoli or
cauliflower).
Other Issues
1. Type Size and Style Requirements
T.D. 94-5 contained fairly detailed type size requirements
applicable to its front panel marking requirement. Three different type
sizes were specified for different size packages of produce. However,
this proposed rule does not specify type sizes and styles, background
colors or other graphic stipulations applicable to front panel marking.
Customs believes that this is consistent with regulatory economy and
minimum regulatory burden to the industry. Moreover, Customs has
concluded that the front panel marking requirement, subject to the
other statutory criteria of legibility, indelibility, and permanence is
sufficient to provide an adequate opportunity for the reasonably
attentive consumer to notice the country of origin information at point
of sale. Customs reserves its right to take enforcement action in the
event that label graphics on a package obscure or destroy the requisite
legibility of the marking.
2. Overstamped Markings and Other Illegible Markings
The plaintiffs in Norcal I and various commenters have alleged that
packages of frozen produce contained stamped markings that are smeared
or otherwise illegible. In a number of cases, packages are apparently
ink stamped with the name of the country of origin after the packages
have been filled with product. Frequently the result is a stamp that is
smeared or all but wiped off due to condensation on the package. In
other cases, the stamping is upside down vis-a-vis the print on the
panel where the stamp appears, is turned sideways, or is placed over
other text or graphics. All of these practices violate statutory
standards.
No change in the marking requirements is proposed to address these
problems. Customs believes that current regulations and enforcement
powers are adequate. The importer is responsible for compliance with
the marking statute. If ink markings, stick-on labels and other
practices that importers use to avoid the cost or rigidity of
preprinted labels do not hold up until the product reaches the ultimate
consumer at the point of sale, then Customs reserves the right to take
appropriate action, as prescribed by statute and regulations, including
detention of the merchandise and imposition of marking duties.
3. Implementation Period
Suggestions received in response to the ANPRM regarding the length
of the period from the publication date of a final rule to the required
implementation date ranged from 6 to 12 months from commenters favoring
tightened marking rules to 17 months or more from commenters opposed to
a new rulemaking on marking of country of origin. Common sense as well
as evidence in the record of this matter indicates to Customs that the
incremental cost of relabeling to comply with new marking rules tends
to have dropped dramatically by 18 months after the promulgation of new
rules. Thus, Customs is proposing an 18-month implementation period to
allow for current stock of labels to be depleted prior to the effective
date of any final rule.
4. Consumer Surveys
Information submitted by commenters in response to the question in
the ANPRM regarding determination of consumer behavior through surveys
was divided and not conclusive. In general, there was opposition,
particularly by commenters opposed to rulemaking, to the government
conducting surveys at taxpayers' expense. In fact, Customs has
conducted no survey and does not contemplate conducting a survey.
Commenters basing opinions on existing surveys reached different
conclusions. Those favoring rulemaking argued that consumers were
interested in country of origin information and tended to modify their
behavior if such information were available. Some of the data relied on
by these commenters concerned products other than produce, e.g.,
apparel. Opponents of rulemaking argued, among other things, that
consumers had little interest in country of origin information. While
some consumers may value country of origin information as enabling them
to act on preferences they may have regarding imported versus domestic-
source products, other consumers may be relatively indifferent to the
information. In either event, the marking statute is not designed
solely for the individual benefit of the consumer, but serves a broader
purpose.
Opportunity for Public Comment
As the foregoing illustrates, several issues with respect to the
rulemaking procedure to promulgate country of origin marking
regulations for frozen imported produce remain and public comments are
once again being solicited prior to the issuance of a final rule.
Suggestions received in response to the ANPRM on the length of the
comment period for an NPRM ranged from 60 days to 120 days. Customs is
herein providing its customary 60-day period. Since no commenter
requested time in which to conduct a consumer survey, Customs believes
the 60-day period is adequate, particularly in view of the extensive
opportunity to comment already afforded, and it is not expected that
this period will be extended. In addition to comments received on this
proposal, all relevant material previously submitted will be taken into
account in deciding on a final rule.
Pending a decision on whether a final rule will be promulgated,
Customs continues to deliberate on what requirements are proper in the
case of multiple source countries and whether Customs should set forth
a de minimis level of foreign content that would trigger the country of
origin marking requirements. These issues are not within the scope of
this proposed rulemaking. Customs will consider the possible need for
rulemaking on these issues in the future.
Since this administrative rulemaking process affects the decision
to be made on the pending section 516 petition, the Customs Service has
decided to delay issuance of a final decision on the section 516
petition until a final determination regarding the proposed regulations
concerning the country of origin marking of packages of frozen produce
contained in this document is made.
Discussion of Proposed Amendment
Customs proposes to amend part 134 of the Customs Regulations (19
CFR part 134) by adding a new paragraph (f) to Sec. 134.43 to implement
the country of origin marking requirements for packages of frozen
imported produce. Section 134.43 sets forth the methods of marking for
specific articles, such as watches, clocks, timing apparatus, Native-
American-style jewelry, and Native American-style arts and crafts.
Proposed paragraph (f) will contain two subparagraphs: Paragraph (1)
will define frozen produce which is subject to the marking requirement,
and paragraph (2) will denote the method of marking that is deemed
acceptable.
Proposed Effective Date
Customs recognizes that manufacturers, distributors, and packers of
frozen imported produce will need to consider revisions in their
current packaging which may be needed to comply with these proposed
regulations. Thus, in order to minimize the impact of these new
requirements, it is also proposed that the regulations, if
[[Page 38127]]
adopted, not be effective until eighteen months from the date of the
Federal Register Notice of Final Rulemaking.
Comments
While Customs received a request for a public hearing on the issues
involved in this rulemaking from one commenter, the great majority of
the commenters did not favor a hearing. Under these circumstances,
Customs does not believe that a hearing would significantly enhance the
process of public participation in the rulemaking and does not plan to
hold a hearing. However, before adopting this proposed regulation as a
final rule, consideration will be given to any written comments that
are timely submitted in connection with this notice. Comments are
requested on both the substance of these proposals and the proposed
effective date, if the proposals are adopted. Members of the public
submitting comments based on current labeling practices are requested,
where possible, to submit sample labels illustrating the alleged
practices. The submission of duplicate sets of labels will expedite
evaluation of the comments and will be appreciated by the Customs
Service.
Comments submitted will be available for public inspection in
accordance with the Freedom of Information Act (5 U.S.C. 552),
Sec. 1.4, Treasury Regulations (31 CFR 1.4), and Sec. 103.11(b),
Customs Regulations (19 CFR 103.11(b)), on regular business days
between the hours of 9 a.m. and 4:30 p.m. at the Regulations Branch,
Office of Regulations and Rulings, U.S. Customs Service, 1099 14th
Street, NW., Suite 4000, Washington, DC.
Inapplicability of the Regulatory Flexibility Act, and Executive Order
12866
For the reasons set forth in the preamble, pursuant to the
provisions of the Regulatory Flexibility Act (5 U.S.C. 601, et seq.),
it is certified that the amendment, if adopted, will not have a
significant economic impact on a substantial number of small entities.
Accordingly, it is not subject to the regulatory analysis or other
requirements of 5 U.S.C. 603 and 604. Further, this proposed amendment
does not meet the criteria for a ``significant regulatory action'' as
specified in E.O. 12866.
List of Subjects in 19 CFR Part 134
Country of origin, Customs duties and inspection, Imports,
Labeling, Marking, Packaging and containers.
Proposed Amendments
It is proposed to amend part 134, Customs Regulations (19 CFR part
134), as set forth below:
PART 134--COUNTRY OF ORIGIN MARKING
1. The authority citation for part 134 continues to read as
follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 66, 1202 (General Note 20,
Harmonized Tariff Schedule of the United States), 1304, 1624.
2. In Sec. 134.43, it is proposed to add a new paragraph (f) to
read as follows:
Sec. 134.43 Methods of marking specific articles.
* * * * *
(f) Frozen Produce--(1) Definition. Frozen produce means frozen
vegetables or mixtures of frozen vegetables provided for in Chapter 7,
Harmonized Tariff Schedule of the United States (HTSUS), or frozen
fruits or mixtures of frozen fruits provided for in Chapter 8, HTSUS.
(2) Method of Marking. (i) Unless otherwise excepted pursuant to 19
U.S.C. 1304(a)(3) and subpart D of this part, frozen produce must be
marked with the country of origin of the produce on the front panel of
its package for retail sale. The front panel is the part of a package
that is most likely to be displayed, presented, shown, or examined by
the ultimate purchaser under customary conditions of display for retail
sale.
(ii) The country of origin marking on the frozen produce required
by paragraph (f)(2)(i) of this section must appear in permanent,
indelible and legible print or type so that the consumer can easily
read it without strain. Condensed or compressed typefaces or
arrangements shall not be used.
Approved: July 9, 1996.
Michael H. Lane,
Acting Commissioner of Customs.
James E. Johnson,
Assistant Secretary of the Treasury (enforcement).
[FR Doc. 96-18544 Filed 7-22-96; 8:45 am]
BILLING CODE 4820-02-P
Complete official Federal Register PDF
FR Doc. 96-18468 Export Sales Reporting for Sunflowerseed and Sunflowerseed Oil
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38107-38108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18468]
========================================================================
Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
========================================================================
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 /
Proposed Rules
[[Page 38107]]
DEPARTMENT OF AGRICULTURE
Office of the Secretary
7 CFR Part 20
Export Sales Reporting for Sunflowerseed and Sunflowerseed Oil
AGENCY: Foreign Agricultural Service, USDA.
ACTION: Notice of Proposed Rulemaking.
-----------------------------------------------------------------------
SUMMARY: This proposed rule would add sunflowerseed and sunflowerseed
oil to the list of commodities subject to the export sales reporting
requirements of 7 CFR Part 20.
DATES: Comments on the proposed rule, as well as on alternatives to
this proposal, must be received on or before September 23, 1996 to be
assured of consideration.
ADDRESSES: Comments must be sent to: Export Sales Reporting Branch,
Trade and Economic Analysis Division, Room 5959--Stop 1025, Foreign
Agricultural Service, U.S. Department of Agriculture, 1400 Independence
Ave. SW., Washington, DC 20250-1025. All written comments received will
be available for public inspection at the above address during business
hours from 8:00 a.m. to 5:00 p.m., Monday through Friday.
FOR FURTHER INFORMATION CONTACT: Thomas B. McDonald, Jr., Chief, Export
Sales Reporting Branch, Trade and Economic Analysis Division, Foreign
Agricultural Service, U. S. Department of Agriculture, (202) 720-3273,
FAX (202) 690-3275.
SUPPLEMENTARY INFORMATION: This proposed rule is issued in conformance
with Executive Order 12866. Based on information compiled by the
Department, it has been determined that this rule:
(1) Would have an annual effect on the economy of less than $100
million;
(2) Would not adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities;
(3) Would not create a serious inconsistency or otherwise interfere
with an action taken or planned by another agency;
(4) Would not alter the budgetary impact of entitlements, grants,
user fees, or loan programs or rights and obligations of recipients
thereof; and
(5) Would not raise novel legal or policy issues arising out of
legal mandates, the President's priorities, or principles set forth in
Executive Order 12866.
Regulatory Flexibility Act
The Administrator, Foreign Agricultural Service, certifies that
this regulation will not have a significant economic impact on a
substantial number of small entities. Although many exporters of
sunflowerseed and sunflowerseed oil are small business, the time and
expense involved in complying with this proposed reporting requirement
is negligible. In addition, data reported under this regulation are
maintained as a part of the normal course of export contracting
business activity.
A copy of this proposed rule has been sent to the Chief Counsel,
Office of Advocacy, U.S. Small Business Administration.
Paperwork Reduction Act
This proposed rule involves the collection of information. FAS uses
Forms FAS-97, FAS-98, FAS-99, and FAS-100 for this collection of
information. OMB has assigned control number 0551-0007 to these forms.
The Department intends to amend the current information collection
approved by OMB expiring March 31, 1998.
Estimate of Burden: Public reporting burden for collecting
information under this proposed rule is estimated to average 33 minutes
per response, including the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
Respondents: Business and other for-profit.
Respondents: 30.
Estimated number of annual Responses per Respondent: 51.
Estimated total annual burden on Respondents: 855 hours.
Comments regarding this information collection requirement may be
directed to the Office of Information and Regulatory Affairs of OMB,
Attention: Desk Officer for the Foreign Agricultural Service,
Washington, DC 20503.
Executive Order 12372
This proposed rule is not subject to the provisions of Executive
Order 12372 which requires intergovernmental consultation with state
and local officials. See the Notice related to 7 CFR Part 3015, subpart
V, published at 46 FR 29115 (June 24, 1983).
Executive Order 12988
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. The proposed rule would have preemptive effect
with respect to any state or local laws, regulations, or policies which
conflict with such provisions or which otherwise impede their full
implementation. The proposed rule would not have retroactive effect.
Administrative proceedings are not required before parties may seek
judicial review.
Background
Section 602 of the Agricultural Trade Act of 1978, as amended,
requires the reporting of information pertaining to the export of
certain specified agricultural commodities and other agricultural
commodities that may be designated by the Secretary of Agriculture.
These reporting requirements are implemented by the Foreign
Agricultural Service under regulations codified at 7 CFR Part 20.
Individual reports collected under the exports sales reporting program
are confidential and are only to be released in compilation form each
week following the week of reporting. Reporting under 7 CFR Part 20 is
mandatory. Any person who knowingly fails to make a report shall be
fined not more than $25,000 or imprisoned for not more that 1 year, or
both.
Previously, reports relating to sunflowerseed export sales have not
been required because of the limited level of exports and the small
size of the industry. Recently, interested industry representatives
have suggested that sunflowerseed and sunflowerseed oil exports are now
of major importance to the U. S. oilseeds and products industry.
Between 30 to 35 percent of
[[Page 38108]]
the confection seed production and between 60 to 70 percent of the oil
production is exported. Sunflowerseed activity was added to the
Department's ``World Agricultural Supply and Demand Estimates'' report
in April 1994.
U. S. production of sunflowerseed is estimated at 2.19 million
metric tons in 1994 and 1.82 million tons in 1995, compared with an
average for 1988/89-1992/93 of only 1.09 million tons. U. S. exports of
sunflowerseed increased to 183.1 thousand tons valued at $79.4 million
during calendar year 1994 and to 296.0 thousand tons valued at $118.3
million in 1995. U. S. exports of sunflowerseed oil rose to 208.6
thousand tons worth $130.5 million in calendar year 1994 and to 471.3
thousand tons valued at $299.5 million in 1995.
The addition of sunflowerseed and sunflowerseed oil under the
mandatory reporting program will provide more complete coverage of the
oilseed export industry and additional high quality up-to-date
information required in making export projections. These projections
are used by private industry as well as the government in making
economic decisions concerning the orderly flow of U. S. agricultural
commodities in the domestic and export markets.
Lists of Subjects in 7 CFR Part 20
Agricultural commodities, Exports, Reporting.
Accordingly, it is proposed to amend Part 20 of 7 CFR as follows:
1. The authority citation for Part 20 continues to read as follows:
Authority: 7 U.S.C. 5712.
2. Appendix 1 to 7 CFR Part 20 is amended by adding the following
lines after the line for ``linseed oil, including raw, boiled'' under
the indicated column headings:
Appendix 1--Commodities Subject to Reporting, Units of Measure to be
Used in Reporting, and Beginning and Ending Dates of Marketing Years
----------------------------------------------------------------------------------------------------------------
Unit of measure to be Beginning of marketing
Commodity to be reported used in reporting year End of marketing year
----------------------------------------------------------------------------------------------------------------
* * * * * *
*
Sunflowerseed....................... ......do.............. September 1............. August 31.
Sunflowerseed Oil--including: crude ......do.............. October 1............... September 30.
(including degummed), once refined,
sunflowerseed salad oil (including
refined and further processed by
bleaching, deodorizing or
winterizing), hydrogenated.
* * * * * *
*
----------------------------------------------------------------------------------------------------------------
Signed at Washington, D.C., July 10, 1996.
August Schumacher, Jr.,
Administrator, Foreign Agricultural Service.
[FR Doc. 96-18468 Filed 7-22-96; 8:45 am]
BILLING CODE 3410-10-P
Complete official Federal Register PDF
FR Doc. 96-18461 Papaya, Carambola, and Litchi From Hawaii
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38108-38114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18461]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Animal and Plant Health Inspection Service
7 CFR Part 318
[Docket No. 95-069-1]
Papaya, Carambola, and Litchi From Hawaii
AGENCY: Animal and Plant Health Inspection Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: We are proposing to increase the irradiation treatment dose
required for papayas intended for interstate movement from Hawaii and
to allow carambolas and litchis to be moved interstate from Hawaii with
irradiation treatment. We are also proposing to allow papayas,
carambolas, and litchis from Hawaii to undergo irradiation treatment
either in Hawaii or in non-fruit fly supporting areas of the mainland
United States. We are also proposing to allow litchis to be moved
interstate from Hawaii if they are inspected and found free of the
litchi fruit moth and undergo hot water treatment for fruit flies. In
addition, we are proposing several amendments to the requirements for
irradiation procedures and facilities and the handling of treated and
untreated fruits and vegetables. Finally, we are proposing to amend the
definition for inspector to include State plant regulatory officials
designated by the Administrator of the Animal and Plant Health
Inspection Service, U.S. Department of Agriculture. These proposed
actions would facilitate the interstate movement of papayas,
carambolas, and litchis from Hawaii while continuing to provide
protection against the spread of injurious plant pests from Hawaii to
other parts of the United States.
DATES: For comments on all portions of this proposed rule except the
rule's information collection and recordkeeping requirements that are
subject to the Paperwork Reduction Act, consideration will be given
only to comments received on or before August 22, 1996. For comments on
the Paperwork Reduction Act requirements of this proposed rule,
consideration will be given only to comments received on or before
September 23, 1996.
ADDRESSES: Please send an original and three copies of your comments to
Docket No. 95-069-1, Regulatory Analysis and Development, PPD, APHIS,
suite 3C03, 4700 River Road Unit 118, Riverdale, MD 20737-1238. Please
state that your comments refer to Docket No. 95-069-1. Comments
received may be inspected at USDA, room 1141, South Building, 14th
Street and Independence Avenue SW., Washington, DC, between 8 a.m. and
4:30 p.m., Monday through Friday, except holidays. Persons wishing to
inspect comments are requested to call ahead on (202) 690-2817 to
facilitate entry into the comment reading room.
FOR FURTHER INFORMATION CONTACT: Mr. Peter M. Grosser, Senior Staff
Officer, Port Operations, PPQ, APHIS, 4700 River Road Unit 139,
Riverdale, MD 20737-1236, (301) 734-8295.
SUPPLEMENTARY INFORMATION:
Background
The Hawaiian Fruits and Vegetables regulations, contained in 7 CFR
318.13 through 318.13-17 (referred to below as the regulations),
govern, among other things, the interstate movement of fruits and
vegetables, including papayas, from Hawaii. Regulation is necessary to
prevent the spread of the Mediterranean fruit fly (Ceratitis capitata),
the melon fly (Bactrocera cucurbitae), and the Oriental fruit fly
(Bactrocera dorsalis), which occur in Hawaii. These types of fruit
flies are collectively referred to in this document as Trifly.
The regulations allow papayas to be moved interstate from Hawaii to
any destination in the United States if,
[[Page 38109]]
among other things, they have been treated for Trifly. One approved
treatment for Trifly in papayas is irradiation. Section 318.13-4f
provides for irradiation of papayas at an approved facility in Hawaii
at an irradiation dose of 150 Gray (15 krad).
Irradiation Dosage Levels
The Agricultural Research Service (ARS), United States Department
of Agriculture, recently reevaluated the irradiation treatment for
fruits and vegetables, including papayas, and has formally recommended
a change from 150 Gray to 250 Gray for the dose necessary to control
Trifly. At the current dosage levels, normal-appearing, sterile adult
pests may emerge after treatment. Although these insects cannot
reproduce, the emergence of normal-appearing adults presents problems
for surveillance programs designed to intercept exotic insects, because
there is no practical way to distinguish an irradiated (sterile) insect
from an untreated one. ARS has determined that the 250 Gray (25 krad)
dosage would prevent adult emergence altogether, including the
emergence of normal-appearing, sterile adult insects capable of flight.
The Food and Drug Administration (FDA) regulations permit the use
of irradiation at doses not to exceed 1,000 Gray (100 krad) to inhibit
the growth and maturation of fresh foods and to disinfest food of
arthropod pests. The 250 Gray (25 krad) dosage recommended by ARS is
well within FDA limits. We are therefore proposing to amend
Sec. 318.13-4f by increasing the irradiation treatment dose required
for papayas intended for interstate movement from Hawaii from 150 Gray
(15 krad) to 250 Gray (25 krad).
Irradiation Treatment on the Mainland
Hawaii has not been able to ship irradiated fresh papayas to the
mainland under the existing regulations due to the lack of an
irradiation facility in the State. We believe that routine commercial
shipments of papayas can be authorized for treatment in any State of
the continental United States except Alabama, Arizona, California,
Florida, Georgia, Kentucky, Louisiana, Mississippi, Nevada, New Mexico,
North Carolina, South Carolina, Tennessee, Texas, or Virginia. Prior to
treatment, movement into and through the United States would be limited
to the area authorized under Sec. 318.13-17(e) for fruits and
vegetables from Hawaii that transit the United States en route to a
foreign destination. It is unlikely that Trifly would be able to
establish reproducing populations in the States on the mainland where
treatment would be allowed because of either the relatively cool
climate or the lack of suitable host material in those areas.
Therefore, we are proposing to amend the regulations at Sec. 318.13-3
and 318.13-4f to allow untreated papayas from Hawaii to undergo
irradiation treatment in the areas of the mainland United States
described above.
We are also proposing to require that untreated papayas moved
interstate from Hawaii for treatment at an irradiation facility in an
approved area on the mainland United States be accompanied by a limited
permit. The purpose of a limited permit is to allow movement, under
certain restrictions, of a commodity that may not otherwise be
authorized for movement. This document provides a way to track the
commodity and ensure that it moves only as authorized.
In addition, we are proposing to prohibit the commingling of
untreated papayas shipped from Hawaii to the mainland United States
with other fruits and vegetables. This appears necessary to prevent
other commodities from becoming infested with Trifly.
Irradiation Procedures and Facilities
We are proposing to amend Sec. 318.13-4f to eliminate the
requirement that dose indicators be attached to the cartons or the
pallet loads of treated papayas. Instead, we would require that
absorbed dose be measured at the treatment facility using a dose
indicator that can accurately measure an absorbed dose of 250 Gray (25
krad). We would require that the number and placement of dosimeters
used to measure the absorbed dose be in accordance with standards of
the American Society for Testing and Materials (ASTM). (See Designation
E 1261-94, ``Standard Guide for Selection and Calibration of Dosimetry
Systems for Radiation Processing,'' American Society for Testing and
Materials, Annual Book of ASTM Standards.) We would add that the
dosimetry system (the system used for determining absorbed dose,
consisting of dosimeters, measurement instruments, reference standards,
and procedures) in place at the treatment facility must demonstrate
that the absorbed dose, including areas of minimum and maximum dose, is
mapped, controlled, and recorded, and we would rely on the treatment
facility records to verify the treatment. Under the current
regulations, the treatment facility is required to maintain records of
treatment for a period of time that exceeds the shelf life of the
irradiated product by 1 year. The regulations require the records to
include the lot identification, scheduled process, evidence of
compliance with the scheduled process, ionizing energy source, source
calibration, dosimetry, dose distribution in the product, and the date
of irradiation. All records must be available for inspection.
In addition, we are proposing to amend Sec. 318.13-4f to require
that approved irradiation treatment facilities be certified annually by
Plant Protection and Quarantine (PPQ), APHIS, and that they be
recertified in the event that an increase or decrease in radioisotope
or a major equipment modification affects the delivered dose. This
action would ensure that irradiation facilities are capable of properly
administering effective treatments.
Packaging Requirements
We are proposing to amend specific provisions regarding packaging
and wrapping of papayas under Sec. 318.13-4f to require that all
treated papayas be packaged in pest-proof cartons to protect them from
re-infestation by Trifly. Then, to ensure that no cartons are added to
or removed from a pallet load of cartons, pallet loads would have to be
wrapped in one of the following ways, as is currently required under
Sec. 318.13-4f(b)(6): With polyethylene sheet wrap, with net wrapping,
or with strapping so that each carton on an outside row of the pallet
load is constrained by a metal or plastic strap. We further propose to
require that pallet loads of treated papayas be marked with treatment
lot numbers, packing and treatment facility identification and
locations, and dates of packing and treatment. This information would
allow an inspector to identify the treatment lots and trace them back
to the packing and treatment facilities. This method of labeling would
replace the current requirement that individual cartons and pallet-
loads of cartons be marked with a ``Treated'' stamp.
We are not proposing similar packaging requirements for untreated
papayas moving interstate to the mainland United States. Any Trifly
that might be present in the shipment of untreated papayas would most
likely be eggs and larvae, and it is unlikely that eggs and larvae
could escape. If Trifly eggs and larvae were present in the shipment,
and if they reached maturity and escaped, it is unlikely that they
could establish a reproducing population in the areas in which movement
of untreated papayas would be authorized under this section because of
either the relatively cool climate or the lack of suitable host
material in those areas. Further, untreated papayas would be treated on
[[Page 38110]]
the mainland before being distributed, minimizing the possibility that
any eggs and larvae could reach maturity and escape.
Carambolas from Hawaii
Carambola (Averrhoa carambola) fruit is a recorded host of Trifly.
Based on ARS research and recommendations, 1 we are also proposing
to amend Sec. 318.13-4f to allow the interstate movement of carambolas
from Hawaii with irradiation treatment. The same provisions proposed
for papaya, including irradiation treatment dosage, would apply.
---------------------------------------------------------------------------
\1\ Information on this and other ARS research may be obtained
by writing to Dr. Ken Vick, USDA, ARS, NPS, BARC-West, Building 005,
Beltsville, MD 20705.
---------------------------------------------------------------------------
Litchis from Hawaii
Litchi (Litchi chinensis) fruit is a recorded host of the
Mediterranean fruit fly and Oriental fruit fly, among other pests, but
litchi is not a recorded host for melon fly. Based on ARS research and
recommendations, we are proposing to further amend Sec. 318.13-4f to
allow the interstate movement of litchis from Hawaii with irradiation
treatment. The same provisions proposed for papaya, including
irradiation treatment dosage, would apply.
We have determined, however, that irradiation treatment may not
affect other pests that may be carried by litchi. One pest, the litchi
rust mite (Eriphyes litchi), would not be easily detected by an
inspector. Therefore, the entry of litchi from Hawaii into Florida,
where most mainland litchi is grown, would be prohibited as a
precaution against the possible introduction of litchi rust mite.
Accordingly, the cartons in which the litchi are packed would have to
be stamped ``Not for importation into or distribution in FL.''
Other pests that may be carried by the litchi, including the litchi
fruit moth (Cryptophlebia spp.), could be easily detected by
inspection. We propose to require that the litchis be inspected by an
inspector and found free of plant pests prior to interstate movement
under a limited permit.
Allowing the interstate movement of litchis from Hawaii under the
conditions described above would facilitate trade while continuing to
provide protection against the spread of plant pests into other parts
of the United States.
As an alternative to the irradiation treatment for litchi from
Hawaii, we are proposing to allow the interstate movement of litchis
from Hawaii if the litchis are inspected and found free of the litchi
fruit moth (Cryptophlebia spp.) and other plant pests by an inspector
and then treated with hot water for the Mediterranean fruit fly and
Oriental fruit fly under the supervision of an inspector before the
litchis' interstate movement.
However, because the litchi rust mite cannot be effectively
detected by inspection and would not be eliminated by hot water
treatment, we are proposing that the litchi be prohibited movement into
Florida. Accordingly, the cartons in which the litchi are packed would
have to be stamped ``Not for importation into or distribution in FL.''
The provisions described above for litchi from Hawaii would be
added to the regulations as a new Sec. 318.13-4e.
Research conducted by ARS indicates that the following hot water
treatment of litchis would provide probit 9 quarantine security (no
more than 3 individuals surviving from an estimated treatment
population of 100,000 target) against any potential infestations of
Mediterranean fruit fly or Oriental fruit fly:
------------------------------------------------------------------------
Water temperature Time
------------------------------------------------------------------------
49 deg.C (120.2 deg.F) or above...... 20 minutes.
------------------------------------------------------------------------
Treatment would begin when the water temperature is 49 deg.C
(120.2 deg.F) or above in all locations throughout the tank; the tank
must be designed to allow sufficient water circulation and heating to
maintain treatment temperatures during the 20 minute treatment cycle.
Hot water treatment tanks with upper temperature limits of 49.5 deg.C
(121.1 deg.F) would be recommended, because temperatures exceeding
49.5 deg.C (121.1 deg.F) could cause phytotoxicity damage due to
overheating. Hydrocooling for 20 minutes at temperatures of 24 deg.C
(75.2 deg.F) # 4 deg.C (7.2 deg.F) would also be recommended to
prevent injury to the fruit from the hot water treatment. This
treatment schedule for litchis from Hawaii would be added to the Plant
Protection and Quarantine (PPQ) Treatment Manual, which is incorporated
into the regulations by reference at 7 CFR 300.1.
Definition of Inspector
We are proposing to amend the definition of inspector in
Sec. 318.13-1 to enable a greater number of qualified people to perform
inspections on, issue limited permits for, and certify fruits and
vegetables moving interstate from Hawaii. We propose that the new
definition define an inspector as ``An employee of Plant Protection and
Quarantine, or a State plant regulatory official designated by the
Administrator to inspect and certify to shippers and other interested
parties, as to the condition of the products inspected. To be eligible
for designation, a State plant regulatory official must have a
bachelor's degree in the biological sciences, a minimum of 2 years'
experience in State plant regulatory activities, and a minimum of 2
years' experience in recognizing and identifying plant pests known to
occur within Hawaii. Six years' experience in State plant regulatory
activities may be substituted for the degree requirement.'' We believe
that this proposed definition, which is based in part on the definition
for inspector found in 7 CFR 353, ``Phytosanitary Export
Certification,'' would allow greater State participation in the
inspection process while continuing to provide protection against the
spread of injurious plant pests from Hawaii to other parts of the
United States.
Miscellaneous
We are proposing to amend Sec. 318.13-4f so that it permits
irradiation treatment for certain fruits or vegetables, not exclusively
for papayas. Although papayas, carambolas, and litchis would be the
only commodities listed in Sec. 318.13-4f as being approved for this
treatment, we expect that additional fruits and vegetables from Hawaii
may be approved for irradiation treatment and added to this section
through rulemaking in the future.
We are also proposing to amend Sec. 318.13-4f(c) to update the
address for requests for approval and inspection of irradiation
facilies.
This proposed rule would facilitate the interstate movement of
papayas, carambolas, and litchis from Hawaii while continuing to
provide protection against the spread of injurious plant pests from
Hawaii to other parts of the United States.
Executive Order 12866 and Regulatory Flexibility Act
This proposed rule has been reviewed under Executive Order 12866.
For this action, the Office of Management and Budget has waived its
review process required by Executive Order 12866.
In accordance with 5 U.S.C. 603, we have performed an Initial
Regulatory Flexibility Analysis, which is set out below, regarding the
impact of this proposed rule on small entities. However, we do not
currently have all the data necessary for a comprehensive analysis of
the effects of this rule on small entities. Therefore, we are inviting
comments concerning potential effects. In particular, we are interested
in determining the number and kind of
[[Page 38111]]
small entities that may incur benefits or costs from implementation of
this proposed rule.
In accordance with 7 U.S.C. 162, the Secretary of Agriculture is
authorized to promulgate regulations governing the interstate movement
of plants and plant products from a State or territory of the United
States to prevent the spread of a dangerous plant disease or insect
infestation new to or not widely prevalent or distributed within or
throughout the United States.
This proposed rule would increase the irradiation treatment dose
required for papayas from Hawaii and allow irradiation treatment of
carambolas and litchis from Hawaii. The proposed rule would also allow
papayas, carambolas, and litchis from Hawaii to undergo irradiation
treatment in non-fruit fly supporting areas of the mainland United
States. In addition, the proposed rule would allow litchis to be moved
interstate from Hawaii if they are inspected and found free of the
litchi fruit moth and other plant pests and then undergo hot water
treatment for Medfly and Oriental fruit fly. Finally, the proposed rule
would amend the requirements for irradiation procedures and facilities
and the handling of treated and untreated fruits and vegetables.
Economic impacts associated with this rulemaking would largely be the
result of untreated papayas, carambolas, or litchis being allowed to
move to the mainland United States for irradiation treatment.
Papayas
Papayas are produced commercially on about 340 farms in Hawaii.
Nearly 65 percent of those farms are owned by individuals whose major
occupation is not farming, while the balance are operated by
individuals whose major occupation is farming.
Papaya farms with average annual revenues of less than $500,000 are
considered small. All papaya farms in Hawaii are therefore considered
small.
In 1994, Hawaii produced 62 million pounds of papaya (valued at $15
million). Fresh papaya comprised 56.2 million pounds of this total.
During that year, Hawaii shipped about 37.8 million pounds of papaya.
Shipment of fresh papaya to the mainland totaled about 19.4 million
pounds, and the remainder was exported to other countries. Of the
approximately 19.4 million pounds of fresh papayas shipped from Hawaii
to the mainland in 1994, most went to the West Coast. Seventy five
percent of them were sold directly to retailers, and the rest were sold
to wholesalers.
The United States imported about 41.2 million pounds of fresh
papaya (valued at $10.9 million) in 1994. Most of the imported papayas
came from Mexico (80 percent), Belize (9.6 percent), Jamaica (6.3
percent), and the Dominican Republic (1.9 percent). The United States
exported 18.4 million pounds of fresh papayas (valued at $15.4 million)
in 1994. The major importers were Japan (66.8 percent) and Canada (27.1
percent). Almost all United States exports of papayas go out of Hawaii,
while all imports come into the mainland United States.
There are five firms currently operating nine papaya treatment
facilities in the State of Hawaii. Four firms use the vapor-heat
treatment method and one uses the dry heat (or high-temperature forced
air) method. The total capacity of these treatment chambers is 85,000
pounds per run.
Both heat treatment methods have the potential to damage the
papayas. They require the center of each papaya fruit to reach about 47
deg.C (about 117 deg.F), a temperature sufficient to kill fruit fly
eggs and larvae. Because of variation in fruit size and ripeness, the
papayas may not be uniformly heated. This may result in the fruit
becoming lumpy and losing flavor. For both methods, careful control of
the uniformity of fruit size and ripeness is necessary for effective
treatment. In addition, both methods require between 4 and 6 hours of
treatment. Efforts to speed up the process result in fruit which is
either scalded externally or hardened on the inside. The cost of
treatment for both methods ranges from 9 to 23 cents per pound.
Although the regulations currently allow papayas to be treated by
irradiation in Hawaii, there are no irradiation facilities in that
State. Allowing irradiation to be performed on the mainland appears to
be an attractive option. The subsequent diversion of untreated papayas
from Hawaii to the mainland would likely result in loss of business to
the existing vapor heat and dry heat facilities. This could result in
lay-offs and possibly the shut-down of some of these facilities.
However, if papaya producers respond by producing more papayas,
continuing traditional treatment for some and shipping others for
irradiation, this would not necessarily occur.
Carambolas
The United States produced about 6 million pounds of carambola in
1994, with a total value of approximately $4 million to $4.5 million.
In the United States, carambola is grown on about 100 farms. All of
these farms have a market value of less than $500,000 and are thus
considered to be small businesses according to the Small Business
Administration's size standards.
In 1994, Hawaii produced only about 50,700 pounds of carambola,
valued at approximately $38,000, on 35 farms. The provisions proposed
in this rule concerning irradiation treatment of carambola fruits by
the mainland facilities are expected to stimulate growth of the
carambola industry in Hawaii and provide greater access to the larger
mainland market.
No economic impact on mainland carambola growers is anticipated,
since the total Hawaii production of carambola is less than one percent
of the mainland production. Therefore, even in the unlikely event that
Hawaii could ship 100 percent of its production to the mainland, supply
would only increase by less than one percent. However, mainland
consumers would likely benefit from increased seasonal and regional
availability, as well as from the increased variety of fresh carambola.
Additionally, carambola growers in Hawaii would benefit from the
opportunity to sell their product in a larger and more diverse market.
This proposed rule would enable carambola from Hawaii to be
irradiated at an existing irradiation facility on the mainland and is
not expected to impose additional costs on carambola producers in
Hawaii. We expect that carambola producers in Hawaii would benefit from
the proposed irradiation treatment because this treatment could deliver
better product quality, extended shelf life of the fruit, and cost
effective treatment of the fruit. However, the overall impact of the
carambola provisions of the proposed rule is expected to be
insignificant.
Litchis
Litchis are produced commercially on 257 farms in Hawaii. In 1993,
the United States produced about 770,000 pounds of litchi. Of that
total, approximately 85,000 pounds was produced in Hawaii.
Litchi farms with average annual revenues of less than $500,000 are
considered small. All litchi farms in Hawaii are considered small.
The litchi industry in Hawaii has been constrained by the lack of
an approved treatment for fruit flies since the cancellation of
ethylene dibromide in 1994. Approving irradiation treatment of litchis
on the mainland would be expected to stimulate growth of the industry
and provide access to the larger mainland market. No information is
available on the effect of approving inspection and hot water treatment
as an alternative method for moving litchis interstate.
[[Page 38112]]
The United States is a net importer of fresh litchi, with a total
import of about 165,000 pounds in 1994. In 1994, nearly 70 percent of
imported litchi came from Mexico; the remainder came from Israel. The
total supply of litchi on the mainland is about 850,000 pounds.
Wholesale prices of litchi range between $1.00 per pound and $4.50 per
pound.
The economic impact on mainland litchi growers and prices on the
mainland will not be significant. Even in the unlikely event that
Hawaii shipped 25 percent of its production to the mainland, supply
would increase by only about 2.3 percent. However, mainland consumers
would benefit from increased seasonal and regional availability, an
increased variety of fresh litchi, and stable prices. Additionally,
litchi growers in Hawaii would benefit from the increased opportunity
to sell their product in a larger and more diverse market.
According to recent research conducted by the ARS, irradiation
appears to be an effective treatment option that does not require
control of either fruit size or ripeness. Irradiation typically
requires only 40 minutes for treatment. The irradiation method may be
more cost effective depending on volume treated, because it costs only
about 5 to 12 cents per pound.
The proposed rule is expected to benefit producers, since
irradiation appears to offer a number of advantages over current
treatment options, including greater flexibility of fruit size and
ripeness, reduction in treatment time, improved effectiveness against
pest infestation, better product quality, extended shelf life, and
improved cost effectiveness. Consumers also could benefit from a better
quality product. The overall impact upon supply, price, and
competitiveness is expected to be insignificant.
This proposed rule contains paperwork requirements. Under this
proposed rule, a limited permit would be required for untreated
papayas, carambolas, and litchis moved interstate from Hawaii for
irradiation.
The alternative to this proposed rule would be to take no action.
We do not consider taking no action a reasonable alternative. Papayas,
carambolas, and litchis are not currently moved interstate from Hawaii
because of a lack of suitable treatment options. This proposed rule
would facilitate the interstate movement of papayas, carambolas, and
litchis from Hawaii while continuing to provide protection against the
spread of injurious plant pests from Hawaii to other parts of the
United States.
Executive Order 12372
This program/activity is listed in the Catalog of Federal Domestic
Assistance under No. 10.025 and is subject to Executive Order 12372,
which requires intergovernmental consultation with State and local
officials. (See 7 CFR part 3015, subpart V.)
Executive Order 12778
This proposed rule has been reviewed under Executive Order 12778,
Civil Justice Reform. If this proposed rule is adopted: (1) All State
and local laws and regulations that are inconsistent with this rule
will be preempted; (2) no retroactive effect will be given to this
rule; and (3) administrative proceedings will not be required before
parties may file suit in court challenging this rule.
Paperwork Reduction Act
In accordance with section 3507(d) of the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the information collection or
recordkeeping requirements included in this proposed rule have been
submitted for approval to the Office of Management and Budget (OMB).
Please send written comments to the Office of Information and
Regulatory Affairs, OMB, Attention: Desk Officer for APHIS, Washington,
DC 20503. Please state that your comments refer to Docket No. 95-069-1.
Please send a copy of your comments to: (1) Docket No. 95-069-1,
Regulatory Analysis and Development, PPD, APHIS, suite 3C03, 4700 River
Road Unit 118, Riverdale, MD 20737-1238, and (2) Clearance Officer,
OIRM, USDA, room 404-W, 14th Street and Independence Avenue SW.,
Washington, DC 20250. A comment to OMB is best assured of having its
full effect if OMB receives it within 30 days of publication of this
proposed rule.
We are proposing to increase the irradiation treatment dose
required for papayas intended for interstate movement from Hawaii and
to allow carambolas and litchis to be moved interstate from Hawaii with
irradiation treatment. We are also proposing to allow papayas,
carambolas, and litchis from Hawaii to undergo irradiation treatment
either in Hawaii or in non-fruit fly supporting areas of the mainland
United States. We are also proposing to allow litchis to be moved
interstate from Hawaii if they are inspected and found free of the
litchi fruit moth and undergo hot water treatment for fruit flies. In
addition, we are proposing several amendments to the requirements for
irradiation procedures and facilities and the handling of treated and
untreated fruits and vegetables. These proposals would facilitate the
interstate movement of papayas, carambolas, and litchis from Hawaii
while continuing to provide protection against the spread of Trifly
from Hawaii to other parts of the United States.
The implementation of these proposed regulatory actions would
require us to engage in certain information collection activities that
would necessitate the use of several forms, including limited permits
and container markings.
We are seeking OMB approval to use the following forms:
PPQ Form 530 (Limited Permit): The proposed rule would require that
untreated papayas moved interstate from Hawaii for treatment at an
irradiation facility on the United States mainland be accompanied by a
limited permit. The permit would be issued by an inspector after the
inspector examines the shipment and determines that it has been
prepared in compliance with our regulations.
Container Marking and Identity: The proposed rule would require
that pallet loads of irradiation-treated papayas be marked (by
irradiation facility personnel or by the shipper) with treatment lot
numbers, packing and treatment facility identification and locations,
and dates of packing and treatment. This information would allow an
inspector to identify the treatment lots and trace them back to the
packing and treatment facilities.
We are soliciting comments from the public (as well as affected
agencies) concerning our proposed information collection and
recordkeeping requirements. We need this outside input to help us:
(1) Evaluate whether the information collection is necessary for
the proper performance of our agency's functions, including whether the
information will have practical utility;
(2) Evaluate the accuracy of our estimate of the burden of the
proposed information collection, including the validity of the
methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the information collection on those who
are to respond, such as through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
Estimate of burden: Public reporting burden for this collection of
information
[[Page 38113]]
is estimated to average 15 minutes per response.
Respondents: Importers, exporters, and shippers.
Estimated number of respondents: 352.
Estimated number of responses per respondent: 1.
Estimated total annual burden on respondents: 88 hours.
Copies of this information collection can be obtained from:
Clearance Officer, OIRM, USDA, Room 404-W, 14th Street and Independence
Ave., SW, Washington, DC 20250.
List of Subjects
7 CFR Part 300
Incorporation by reference, Plant diseases and pests, Quarantine.
7 CFR Part 318
Cotton, Cottonseeds, Fruits, Guam, Hawaii, Plant diseases and
pests, Puerto Rico, Quarantine, Transportation, Vegetables, Virgin
Islands.
Accordingly, 7 CFR parts 300 and 318 would be amended as follows:
PART 300--INCORPORATION BY REFERENCE
1. The authority citation would continue to read as follows:
Authority: 7 U.S.C. 150ee, 154, 161, 162, and 167; 7 CFR 2.22,
2.80, and 371.2(c).
2. In Sec. 300.1, paragraph (a), the introductory text would be
revised to read as follows:
Sec. 300.1 Materials Incorporated by reference; availability.
(a) Plant Protection and Quarantine Treatment Manual. The Plant
Protection and Quarantine Treatment Manual, which was reprinted on
November 30, 1992, and includes all revisions through __________, has
been approved for incorporation by reference in 7 CFR chapter III by
the Director of the Office of the Federal Register in accordance with 5
U.S.C. 552(a) and 1 CFR part 51.
* * * * *
PART 318--HAWAIIAN AND TERRITORIAL QUARANTINE NOTICES
3. The authority citation for part 318 would continue to read as
follows:
Authority: 7 U.S.C. 150bb, 150dd, 150ee, 150ff, 161, 162, 164a,
and 167; 7 CFR 2.22, 2.80, and 371.2(c).
4. In Sec. 318.13-1, the definition for Inspector would be revised
to read as follows:
Sec. 318.13-1 Definitions.
* * * * *
Inspector. An employee of Plant Protection and Quarantine, or a
State plant regulatory official designated by the Administrator to
inspect and certify to shippers and other interested parties, as to the
condition of the products inspected. To be eligible for designation, a
State plant regulatory official must have a bachelor's degree in the
biological sciences, a minimum of 2 years' experience in State plant
regulatory activities, and a minimum of 2 years' experience in
recognizing and identifying plant pests known to occur within Hawaii.
Six years' experience in State plant regulatory activities may be
substituted for the degree requirement.
* * * * *
5. In Sec. 318.13-3, a new paragraph (b)(3) would be added to read
as follows:
Sec. 318.13-3 Conditions of movement.
* * * * *
(b) * * *
(3) Untreated fruits and vegetables from Hawaii may be moved
interstate for irradiation treatment on the mainland United States if
the provisions of Sec. 318.13-4f are met and if the fruits and
vegetables are accompanied by a limited permit issued by an inspector
in accordance with Sec. 318.13-4(c). The limited permit will be issued
only if the inspector examines the shipment and determines that the
shipment has been prepared in compliance with the provisions of this
subpart.
* * * * *
6. A new Sec. 318.13-4e would be added to read as follows:
Sec. 318.13-4e Administrative instructions governing the movement of
litchis from Hawaii to other States.
(a) Litchis may be moved interstate from Hawaii only in accordance
with this section or Sec. 318.13-4f and all other applicable provisions
of this part.
(b) To be eligible for interstate movement under this section,
litchi must be inspected and found free of the litchi fruit moth
(Cryptophlebia spp.) and other plant pests by an inspector and then
treated for fruit flies under the supervision of an inspector with a
treatment authorized by the Administrator.
(c) Treatments authorized by the Administrator are listed in the
Plant Protection and Quarantine Treatment Manual, which is incorporated
by reference at Sec. 300.1 of this chapter.
(d) Litchi from Hawaii may not be moved interstate into Florida.
All cartons in which litchi from Hawaii are packed must be stamped
``Not for importation into or distribution in FL.''
7. Section 318.13-4f would be amended as follows:
a. By revising the heading to read as set forth below.
b. By revising paragraph (a) to read as set forth below.
c. By revising the heading and the introductory text to paragraph
(b) to read as set forth below.
d. By revising paragraph (b)(1) to read as set forth below.
e. In paragraph (b)(2)(i), by removing the words ``15 kilorads (150
Gray) to the papayas'' and adding ``250 Gray (25 krad)'' in its place.
f. In paragraph (b)(2)(ii), by removing the word ``fruit'' each
time it appears and adding ``fruits and vegetables'' in its place.
g. In paragraph (b)(2)(ii), at the end of the paragraph, by adding
a new sentence to read as set forth below.
h. By adding a new paragraph (b)(2)(iv) to read as set forth below.
i. In paragraph (b)(4), in the first sentence, by removing the
words ``Papayas are'' and adding, in their place, the words ``Fruits
and vegetables that are treated in Hawaii must be''.
j. By redesignating the introductory text of paragraph (b)(4) as
paragraph (b)(4)(i), and by adding new paragraphs (b)(4)(ii),
(b)(4)(iii) and (iv) to read as set forth below.
k. By revising paragraphs (b)(5) and (b)(6) to read as set forth
below.
l. By removing paragraphs (b)(7), (b)(8), and (b)(9).
m. By adding a new paragraph (b)(7) to read as set forth below.
n. By redesignating paragraph (b)(10) as paragraph (b)(8).
o. In newly designated paragraph (b)(8), the beginning of the
second sentence, by removing the words ``A papaya'' and adding the word
``An'' in their place.
p. By revising paragraph (c) to read as set forth below.
q. In paragraph (d)(1), by removing the word ``papaya'' each time
it appears.
r. In paragraph (d)(2), by removing the words ``a papaya'' in the
first sentence and adding the word ``an'' in its place, and by removing
the word ``papaya'' each time it appears.
s. In paragraph (e), by removing the word ``papayas'' and adding
``the fruits and vegetables authorized for treatment under this
section'' in its place.
Sec. 318.13-4f Administrative instructions prescribing methods for
irradiation treatment of certain fruits and vegetables from Hawaii.
(a) Approved irradiation treatment. Irradiation, carried out in
accordance with the provisions of this section, is approved as a
treatment for the
[[Page 38114]]
following fruits and vegetables: carambola, litchi, and papaya.
(b) Conditions of movement. Fruits and vegetables from Hawaii may
be authorized for movement in accordance with this section only if the
following conditions are met:
(1) Location. The irradiation treatment must be carried out at an
approved facility in Hawaii or on the mainland United States. Fruits
and vegetables authorized under this section for treatment on the
mainland may be treated in any State on the mainland United States
except Alabama, Arizona, California, Florida, Georgia, Kentucky,
Louisiana, Mississippi, Nevada, New Mexico, North Carolina, South
Carolina, Tennessee, Texas, or Virginia. Prior to treatment, the fruits
and vegetables may not move into or through Alabama, Arizona,
California, Florida, Georgia, Kentucky, Louisiana, Mississippi, Nevada,
New Mexico, North Carolina, South Carolina, Tennessee, Texas, or
Virginia, except that movement would be allowed through Dallas/Fort
Worth, Texas, as an authorized stop for air cargo, or as a transloading
location for shipments that arrive by air but that are subsequently
transloaded into trucks for overland movement from Dallas/Fort Worth
into an authorized State by the shortest route.
* * * * *
(2) * * *
(ii) * * * Untreated fruits and vegetables shipped to the mainland
United States from Hawaii in accordance with this section may not be
packaged for shipment in a carton with treated fruits and vegetables.
* * * * *
(iv) Be certified by Plant Protection and Quarantine for initial
use and annually for subsequent use. Recertification is required in the
event that an increase or decrease in radioisotope or a major
modification to equipment that affects the delivered dose.
Recertification may be required in cases where a significant variance
in dose delivery is indicated.
* * * * *
(4) * * *
(ii) The pallet-load of cartons must be wrapped before it leaves
the irradiation facility in one of the following ways:
(A) With polyethylene sheet wrap;
(B) With net wrapping; or
(C) With strapping so that each carton on an outside row of the
pallet load is constrained by a metal or plastic strap.
(iii) Packaging must be labeled with treatment lot numbers, packing
and treatment facility identification and location, and dates of
packing and treatment.
(iv) Litchi from Hawaii may not be moved interstate into Florida.
All cartons in which litchi from Hawaii are packed must be stamped
``Not for importation into or distribution in FL.''
(5) Dosage. The fruits and vegetables must receive a minimum
absorbed ionizing radiation dose of 250 Gray (25 krad).5
---------------------------------------------------------------------------
\5\ See footnote 2.
---------------------------------------------------------------------------
(6) Dosimetry systems. (i) Dosimetry must demonstrate that the
absorbed dose, including areas of minimum and maximum dose, is mapped,
controlled, and recorded.
(ii) Absorbed dose must be measured using a dose indicator that can
accurately measure an absorbed dose of 250 Gray (25 krad).
(iii) The number and placement of dosimeters used must be in
accordance with American Society for Testing and Materials (ASTM)
standards.6
---------------------------------------------------------------------------
\6\ Designation E, ``Standard Guide for Selection and
Calibration of Dosimetry Systems for Radiation Processing,''
American Society for Testing and Materials, Annual Book of ASTM
Standards.
---------------------------------------------------------------------------
(7)(i) Certification on basis of treatment. A certificate shall be
issued by an inspector for the movement of fruits and vegetables from
Hawaii that have been treated and handled in accordance with this
section.
(ii) Limited permit. A limited permit shall be issued by an
inspector for the interstate movement of untreated fruits and
vegetables from Hawaii for treatment on the mainland United States in
accordance with this section.
* * * * *
(c) Request for approval and inspection of facility. Persons
requesting approval of an irradiation treatment facility and treatment
protocol must submit the request for approval in writing to the Animal
and Plant Health Inspection Service, Plant Protection and Quarantine,
Oxford Plant Protection Center, 901 Hillsboro St., Oxford, NC 27565.
Before the Administrator determines whether an irradiation facility is
eligible for approval, an inspector will make a personal inspection of
the facility to determine whether it complies with the standards of
paragraph (b)(2) of this section.
* * * * *
Done in Washington, DC, this 16th day of July 1996.
A. Strating,
Acting Administrator, Animal and Plant Health Inspection Service.
[FR Doc. 96-18461 Filed 7-22-96; 8:45 am]
BILLING CODE 3410-34-P
Complete official Federal Register PDF
FR Doc. 96-18453 Corporate Credit Unions
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38117-38119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18453]
=======================================================================
-----------------------------------------------------------------------
NATIONAL CREDIT UNION ADMINISTRATION
12 CFR Part 704
Corporate Credit Unions
AGENCY: National Credit Union Administration (NCUA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: NCUA recently issued a proposed rule to revise the regulations
governing corporate credit unions. At the time the proposal was
released, NCUA indicated that special consideration would have to be
provided for wholesale corporate credit unions, due to their unique
role in the credit union system. NCUA and the one wholesale corporate
credit union that currently exists have worked together to develop this
proposal, which provides for such consideration. This proposal would
amend the regulations on corporate credit unions by adding a new
section, to follow the numbering of the recent proposal, governing
wholesale corporate credit unions. Final provisions governing wholesale
corporate credit unions, as well as other corporate credit unions, will
be adopted after consideration of public comments.
DATES: Comments must be received on or before September 3, 1996.
ADDRESSES: Comments should be directed to Becky Baker, Secretary of the
Board. Mail or hand-deliver comments to: National Credit Union
Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. Fax
comments to (703) 518-6319. Post comments on NCUA's electronic bulletin
board by dialing (703) 518-6480. E-mail comments to [email protected].
Please send comments by one method only.
FOR FURTHER INFORMATION CONTACT: Robert F. Schafer, Acting Director,
Office of Corporate Credit Unions, at the above address, telephone:
(703) 518-6640, or E-mail: [email protected]; or Edward Dupcak,
Director, Office of Investment Services, at the above address,
telephone: (703) 518-6620, or E-mail: [email protected].
SUPPLEMENTARY INFORMATION:
Background
On May 22, 1996, NCUA issued a proposed rule to revise the
regulations for corporate credit unions. 61 FR 28085 (June 4, 1996).
The comment period expires on September 3, 1996. The proposal sets
forth requirements and authorities that would apply to all corporate
credit unions, and then provides, through appendices, additional
requirements and authorities for those corporate credit unions that
have more developed infrastructures and more experienced staffs.
Currently, the credit union system supports one ``wholesale'' corporate
credit union, which is a corporate credit union that serves corporate
credit unions. It was expected that this wholesale corporate credit
union would seek to obtain the authorities available under Appendix B
of the proposed rule. It was also expected that certain adjustments to
the general requirements and the requirements of Appendix B would have
to be made to allow the wholesale corporate credit union to fulfill its
role as an ultimate liquidity provider to the system.
NCUA and the wholesale corporate credit union have worked closely
on these adjustments, pending adoption of final revised rules governing
corporate credit unions. For several reasons, NCUA has determined to
incorporate these adjustments into the proposed revisions to Part 704.
First, the wholesale corporate credit union should have the assurance
that, once these adjustments are made final, it will remain entitled to
them, unless the regulation is changed. Second, the importance of the
wholesale corporate credit union to the entire credit union system
warrants public comment on the adjustments. Further, the adjustments
should be standardized in the event other corporate credit unions wish
to become wholesale corporate credit unions. Accordingly, this proposed
rule adds a new Section 704.19 governing wholesale corporate credit
unions. Public comment is requested. Final action on this proposal will
coincide with final action on the broader proposed Part 704.
Analysis
-Proposed Section 704.19(a) provides that wholesale corporate
credit unions must comply with Part 704, unless there is a specific
provision to the contrary in Section 704.19. Thus, a wholesale
corporate credit union that wishes to have access to the broader
investment powers of Appendix B of the May proposal must meet the
general requirements of that proposal, except as modified by Appendices
B and C and proposed Section 704.19. For a wholesale corporate credit
union, where Section 704.19 conflicts with Appendices B or C, Section
704.19 prevails.
-For example, Section 704.3(b)(1) of the May proposal contains a
general requirement that a corporate credit union maintain a capital
ratio of 4 percent. To engage in Part II authorities, though, a 6
percent ratio is required. For a wholesale corporate credit union,
however, proposed Section 704.19(b)(1) requires only a 5 percent ratio.
This is partly justified by proposed Section 704.19(c), which
establishes a narrower limit for risk taking than is available to other
corporate credit unions with Part II authority. It is also justified
because of the membership of a wholesale corporate credit union. Senior
managers of corporate credit unions have specialized expertise in the
areas of investments and asset and liability management. NCUA believes
that corporate credit union managers, as members and board
representatives, will analyze and question the balance sheet strength
and financial activities of the wholesale corporate credit union,
keeping its risk-taking in check. Finally, the lower ratio is justified
because a wholesale corporate credit union has a greater capacity to
raise paid-in capital from non-credit union sources if the need arises.
-Section 704.3(b)(2) of the May proposal provides that a corporate
credit union's monthly reserve transfers are based upon the level of
its reserve ratio, which is calculated by dividing the institution's
moving daily average net assets into the total of its reserves and
undivided earnings plus paid-in capital. Where the reserve ratio is
greater than or equal to 3 percent but less than 4 percent, the
corporate credit union must transfer .10 percent of its moving daily
average net assets. Where the reserve ratio is less than 3 percent, the
corporate credit union must transfer .15 percent of its moving daily
average net assets. The amount to be transferred must be calculated
monthly, but the funds may come out of earnings for the quarter. This
formula is maintained even for a corporate credit union operating with
Part II authorities.
-Proposed Section 704.19(b)(2), however, allows a wholesale
corporate
[[Page 38118]]
credit union to make reserve transfers at the lesser of .10 percent of
its moving daily average net assets or the amount, depending on its
reserve ratio, that would be required under Section 704.3(c). A lower
requirement is appropriate to provide competitive wholesale corporate
credit union services. Proposed 704.19(b)(2) also provides that reserve
transfers may be made from earnings in either the prior calendar month
or prior twelve- month period. It may be necessary for a wholesale
corporate credit union to utilize the earnings accumulated over a year,
rather than just a quarter, to balance occasional short-term losses
with overall long-term gain.
-Section 704.8(e)(1) of the May proposal requires a corporate
credit union to evaluate the risk in its balance sheet by measuring, at
least quarterly, the impact of a 300 basis point interest rate shock. A
corporate credit union must structure its balance sheet so that its
after-shock MVPE ratio does not fall below 1 percent. If the ratio
falls below 2 percent, the corporate credit union must conduct the
tests monthly. Section 704.8(e)(2) of the May proposal provides that a
corporate credit union must limit its risk exposure to levels that do
not result in an after-shock decline in MVPE of more than 18 percent.
Pursuant to Appendix B, a corporate credit union with Part II
authorities may structure its balance sheet so that its MVPE declines
as much as 50 percent after a 300 basis point shock.
-Proposed Section 704.19(c) permits a wholesale corporate credit
union's after- shock MVPE ratio to go as low as .75 percent and
restricts the absolute decline in MVPE to 35 percent. The MVPE floor
was lowered in the belief that the 1 percent level could unduly
restrict a wholesale corporate credit union and prevent it from
providing essential services to members. Since the MVPE floor serves,
in part, as a cushion for MVPE modeling errors, lowering the floor
requires greater assurance that the modeling system is reliable.
Accordingly, proposed Section 704.19(c)(2) requires a wholesale
corporate credit union to obtain, at its expense, an annual third-party
review of its asset and liability management modeling system. --
-In light of the forbearance provided in the capital and MVPE
requirements, NCUA believes that a wholesale corporate credit union
should operate with a lower limit on the permitted decline in MVPE than
provided in Appendix B, Part II. The proposed limit is consistent with
the level of risk a wholesale corporate credit union should undertake
in light of its mission to provide liquidity to the credit union
system.
Regulatory Procedures
Regulatory Flexibility Act
-The NCUA Board certifies that the proposed rule, if made final,
will not have a significant economic impact on small credit unions
(those under $1 million in assets).
Paperwork Reduction Act
-The paperwork requirements of this proposed rule are incorporated
in the requirements set forth in a proposed rule issued by NCUA on May
22, 1996. 61 FR 28085 (June 4, 1996). NCUA invites comment on: (1)
whether the collection of the information is necessary for the proper
performance of the functions of NCUA, including whether the information
will have practical utility; (2) the accuracy of NCUA's estimate of the
burden of the collection of information; (3) ways to enhance the
quality, utility, and clarity of the information to be collected; and
(4) ways to minimize the burden of collection of information. Comments
on the collection of information should be directed to Ms. Beauchesne,
at the National Credit Union Administration, 1775 Duke Street,
Alexandria, Virginia 22314-3428; Fax No. (703) 518-6433; E-Mail
Address: [email protected], by September 3, 1996. Comments should also be
sent to the OMB Desk Officer at the following address: Mr. Milo
Sunderhauf, OMB Reports Management Branch, New Executive Office
Building, Rm. 10202, Washington, DC 20530.
Executive Order 12612
-Executive Order 12612 requires NCUA to consider the effect of its
actions on state interests. It states that: ``Federal action limiting
the policy-making discretion of the states should be taken only where
constitutional authority for the action is clear and certain, and the
national activity is necessitated by the presence of a problem of
national scope.'' The risk of loss to federally insured credit unions
and the NCUSIF caused by actions of corporate credit unions are
concerns of national scope. The proposed rule would help assure that
proper safeguards are in place to ensure the safety and soundness of
corporate credit unions.
-Proposed Part 704 applies to all corporate credit unions that
accept funds from federally insured credit unions. NCUA believes that
the protection of such credit unions, and ultimately, the NCUSIF,
warrants application of the proposed rule to non federally insured
corporate credit unions. NCUA, pursuant to Executive Order 12612, has
determined that this rule may have an occasional 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 and the states, or on the distribution of
power and responsibilities among the various levels of government.
However, the potential risk to the NCUSIF without these changes
justifies them.
List of Subjects in 12 CFR Part 704
Credit unions, Reporting and recordkeeping requirements.
By the National Credit Union Administration Board on July 16,
1996.
Becky Baker,
Secretary of the Board.
For the reasons set forth in the preamble, NCUA proposes to amend
12 CFR Part 704, as proposed to be revised at 61 FR 28098, June 4,
1996, as follows:
PART 704--CORPORATE CREDIT UNIONS
1. The authority citation for part 704 continues to read as
follows:
Authority: 12 U.S.C. 1762, 1766(a), 1781, and 1789.
-2. Section 704.19 is added to read as follows:
Sec. 704.19 Wholesale corporate credit unions.
-(a) General. Wholesale corporate credit unions are subject to the
requirements of this part, except as set forth in this section.
-(b) Capital. (1) A wholesale corporate credit union will maintain
a minimum capital ratio of 5 percent.
-(2) A wholesale corporate credit union shall make reserve
transfers at the lower of .10 percent of its moving daily average net
assets or the amount that would be required under Sec. 704.3(c).
-(i) Required transfers are to be made from earnings in either the
prior calendar month or prior twelve-month period. Transfers made
during the prior twelve-month period must be greater than or equal to
the aggregate amount of required reserve transfers for each of the
months in that twelve-month period.
-(ii) NCUA and, in the case of state-chartered wholesale corporate
credit unions, the state supervisory authority, must be notified within
15 business days of the close of any calendar month in which a
wholesale corporate credit union's required reserve transfer exceeds
earnings for that month. The notice must include the dollar amounts
[[Page 38119]]
of the required reserve transfer and earnings for that month and for
the prior twelve-month period. The notice must also provide an
explanation of why the current month's required reserve transfer
exceeded earnings for that month.
-(c) Asset and liability management. (1) In conducting the interest
rate sensitivity analysis set forth in Sec. 704.8(e)(1)(i), a wholesale
corporate credit union must limit its risk exposure to levels that do
not result, at any time, in an MVPE ratio below .75 percent or a
decline in MVPE of more than 35 percent.
-(2) A wholesale corporate credit union must obtain, at its
expense, an annual third-party review of its asset and liability
management modeling system. -
[FR Doc. 96-18453 Filed 7-22-96; 8:45 am]
BILLING CODE 7535-01-P
Complete official Federal Register PDF
FR Doc. 96-18200 Approval and Promulgation of Air Quality Implementation Plans; Washington; Revision to the State Implementation Plan Vehicle Inspection and Maintenance Programs
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38128-38129]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-18200]
=======================================================================
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[[Page 38129]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[WA43-7116b; FRL-5514-5]
Approval and Promulgation of Air Quality Implementation Plans;
Washington; Revision to the State Implementation Plan Vehicle
Inspection and Maintenance Programs
AGENCY: Environmental Protection Agency (EPA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The EPA proposes to approve the State Implementation Plan
(SIP) revision submitted by the State of Washington for the purpose of
approving the Inspection and Maintenance (I/M) State Implementation
Plan (SIP), for Washington State. On August 21, 1995, Washington
submitted SIP revision requests to the EPA to satisfy the requirements
of sections 182(b)(4) and 182(c)(3) of the Clean Air Act, as amended,
and Federal I/M rule 40 CFR part 51, subpart S. These SIP revisions
will require vehicle owners to comply with the Washington I/M program
in the two Washington ozone nonattainment areas classified as
``marginal'' and in the three carbon monoxide nonattainment areas
classified as ``moderate''. This revision applies to the Washington
counties of Clark, King, Pierce, Snohomish, and Spokane. In the Final
Rules Section of this Federal Register, the EPA is approving the
State's SIP revision as a direct final rule without prior proposal
because the Agency views this as a noncontroversial revision and
anticipates no adverse comments. A detailed rationale for the approval
is set forth in the direct final rule. If no adverse comments are
received in response to this proposed rule, no further activity is
contemplated in relation to this rule. If the EPA receives adverse
comments, the direct final rule will be withdrawn and all public
comments received will be addressed in a subsequent final rule based on
this proposed rule. The EPA will not institute a second comment period
on this action.
DATES: Comments on this proposed rule must be received in writing by
August 22, 1996.
ADDRESSES: Written comments should be addressed to Montel Livingston,
Environmental Protection Specialist (OAQ-107), Office of Air Quality,
at the EPA Regional Office listed below. Copies of the documents
relevant to this proposed rule are available for public inspection
during normal business hours at the following locations. The interested
persons wanting to examine these documents should make an appointment
with the appropriate office at least 24 hours before the visiting day.
Environmental Protection Agency, Region 10, Office of Air Quality, 1200
6th Avenue, Seattle, WA 98101.
The Washington State Department of Ecology, P.O. Box 47600, Olympia, WA
98504-7600.
FOR FURTHER INFORMATION CONTACT: Stephanie Cooper, EPA, 1200 6th
Avenue, Seattle, WA 98101, (206) 553-6917.
SUPPLEMENTARY INFORMATION: See the information provided in the Direct
Final action which is located in the Rules Section of this Federal
Register.
Dated: May 24, 1996.
Jane S. Moore,
Acting Regional Administrator.
[FR Doc. 96-18200 Filed 7-22-96; 8:45 am]
BILLING CODE 6560-50-P
Complete official Federal Register PDF
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
[Federal Register Volume 61, Number 142 (Tuesday, July 23, 1996)]
[Proposed Rules]
[Pages 38250-38344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-17544]
[[Page 38249]]
_______________________________________________________________________
Part II
Environmental Protection Agency
_______________________________________________________________________
40 CFR Parts 51 and 52
Prevention of Significant Deterioration and Nonattainment New Source
Review; Proposed Rule
Federal Register / Vol. 61, No. 142 / Tuesday, July 23, 1996 /
Proposed Rules
[[Page 38250]]
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 51 and 52
[AD-FRL-5455-7]
RIN 2060-AE11
Prevention of Significant Deterioration (PSD) and Nonattainment
New Source Review (NSR)
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The EPA is proposing to revise regulations for both the
approval and promulgation of implementation plans and the requirements
for preparation, adoption, and submittal of implementation plans
governing the NSR programs mandated by parts C and D of title I of the
Clean Air Act (Act). These proposed changes are largely drawn from the
discussions and recommendations of the Clean Air Act Advisory
Committee's (CAAAC) Subcommittee on NSR Reform. The proposed changes
are intended to reduce costs and regulatory burdens for permit
applicants, while still ensuring that emissions from new or modifying
major stationary sources of air pollution will not interfere with
efforts to attain and maintain the nation's air quality standards and
goals.
DATES: Comments. All public comments must be received on or before
October 21, 1996.
Public Hearing. A public hearing is scheduled for 8:30 a.m. to 4:30
p.m. in Research Triangle Park, North Carolina September 23, 1996. The
hearing may be canceled if no requests to speak have been received 15
days prior to the scheduled hearing date.
ADDRESSES: Comments. Comments on this proposal should be mailed (in
duplicate if possible) to: U.S. EPA, Air Docket Section, Air Docket A-
90-37; 401 M Street SW., Washington, DC 20460.
Docket. Supporting information for this proposal is contained in
Docket No. A-90-37. This docket is available for public review and
copying between 8:00 a.m. and 4:00 p.m., Monday through Friday at the
EPA's Air Docket Section, 401 M Street SW., Washington, DC; Room M-
1500. A reasonable fee may be charged for copying.
Public Hearing. A document announcing the specific location of the
public hearing will be published in the Federal Register.
FOR FURTHER INFORMATION CONTACT: Dennis Crumpler, Information Transfer
and Program Integration Division, MD-12, Office of Air Quality Planning
and Standards (OAQPS), U.S. EPA, Research Triangle Park, North Carolina
27711, (919) 541-0871. Persons wishing to make oral presentations at
the public hearing, or seeking further information, should contact Pam
J. Smith at (919) 541-5319.
SUPPLEMENTARY INFORMATION: The following outline reflects the contents
of this action:
I. Overview of This Proposal
A. Introduction
B. Background
II. Applicability of the NSR Program
A. Overview
B. Background
1. Current Provisions
2. Litigation over the Actual-to-Potential Test
3. The Wisconsin Electric Power Company (WEPCO) Rulemaking
C. The Proposed ``Clean Unit'' and ``Clean Facility'' Exclusion
1. Introduction
2. Description of the Clean Unit Proposal
3. What Constitutes a ``Clean Unit''
4. Description of the Clean Facility Proposal
D. Revision to the Netting Baseline
1. Introduction
2. Description of Proposed Netting Baseline
3. Protection of Short-term Increments and National Ambient Air
Quality Standards (NAAQS)
E. Proposed Pollution Control Project Exclusion
1. Background
2. Description of Proposed Exclusion of Pollution Control
Projects
3. The Environmentally Beneficial Test
4. Procedural Safeguards
5. Emission Reduction Credits
F. Proposed Plantwide Applicability Limits (PAL)
1. Background
2. Description of PAL's Proposal
3. Discussion
G. Actual-to-Future-Actual Methodology
1. Background
2. Limitation of the WEPCO Rule to One Source Category
3. Issues Regarding the Future-Actual Methodology
H. Proposal of Chemical Manufacturers Association (CMA) Exhibit
B
1. Description of the Exhibit B Methodology
2. The EPA's Preliminary Analysis
3. The EPA Action
I. Allowed Activities Prior to Receipt of Permit
III. Proposed Revisions to Control Technology Review Requirements
A. Introduction
B. Proposed Revisions to the Methodology for Determining Best
Available Control Technology (BACT)
1. General Description of the BACT Determination Process
2. The Core Criteria
3. Description of the Federal Methodology for Determining BACT
4. Additional Guidance for BACT Determinations
C. Improving Information about Available Control Technologies:
Changes to the Reasonably Available Control Technology (RACT)/BACT/
Lowest Achievable Emission Rate (LAER) Clearinghouse (RBLC)
D. Streamline Proposed to BACT/LAER Determinations
1. Permit Applications Must Include Analysis of Control
Technologies That Are Demonstrated in Practice
2. Permitting Authority May Limit Consideration of New or
Emerging Technologies After Complete Application
E. Proposed Complete Application Criteria
F. Proposed Undemonstrated Control Technology or Application
(UT/A)
1. Introduction
2. Description of Proposed UT/A Waiver
G. Pollution Prevention
1. The Pollution Prevention Act (PPA) and the EPA's Pollution
Prevention Policies
2. Pollution Prevention in BACT and LAER
H. States' Discretion to Adopt or Enforce More Stringent
Requirements
I. Addressing the EPA's Obligation Under Pending Settlement
Agreement
IV. Class I Areas
A. Introduction
B. Background
1. Overview of PSD Requirements for Class I Areas
2. The Need to Improve PSD Requirements Related to the
Protection of Air Quality Related Values (AQRV) in Class I Areas
C. The EPA Proposal
1. Defining AQRV and Determining Adverse Impacts
2. Improving Federal Land Manager (FLM)/ Permitting Authority
Coordination
3. Mitigating an Adverse Impact on AQRV
4. Class I Significant Impact Levels
5. Clarification of Miscellaneous Issues
6. Information Clearinghouse (Federal Class I areas)
7. Visibility New Source Review
V. Prevention of Significant Deterioration Preconstruction
Monitoring
VI. Changes Resulting From the 1990 Clean Air Act Amendments (1990
Amendments)
A. NSR Provisions for Nonattainment Area Permitting
1. Provisions for Ozone Nonattainment Areas
2. Provisions for Carbon Monoxide (CO) Nonattainment Areas
3. Provisions for PM-10 Nonattainment Areas
4. Statutory Restrictions for New Sources
5. Applicability of Nonattainment NSR to Internal Combustion
Engines
B. NSR Provisions for Prevention of Significant Deterioration
1. Stratospheric Ozone-Depleting Substances
2. Listed Hazardous Air Pollutants (HAP)
3. Applicability of PSD Requirements to Internal Combustion
Engines
C. Control Technology Information
VII. Other Proposed Changes
A. Emissions Credits Resulting From Source Shutdowns and
Curtailments
[[Page 38251]]
B. Judicial Review of NSR Permits
C. Department of Defense (DOD) Concerns
VIII. Additional Information
A. Public Docket
B. Public Comments and Public Hearing
C. Executive Order (EO) 12866
D. Regulatory Flexibility Act
E. Paperwork Reduction Act
F. Unfunded Mandates Reform Act
I. Overview of This Proposal
A. Introduction
The EPA is proposing substantial changes to the major NSR program,
a preconstruction permitting program required by the Clean Air Act
(Act) that regulates the construction and modification of major
stationary sources of air pollution. This proposal represents the first
comprehensive overhaul of the program in 15 years. The proposed
revisions are largely drawn from the recommendations and deliberations
of the CAAAC's NSR Reform Subcommittee, a panel of industry
representatives, State and local air pollution control officials,
environmentalists and other experts.
This proposal also contains certain revisions to the NSR
regulations for State Implementation Plans (SIP) based on requirements
established by the 1990 Amendments. These revisions are proposed here
in order to clarify certain requirements of the 1990 Amendments. The
adoption of the proposed changes will resolve a number of the
underlying issues that have impeded full adoption of the nonattainment
NSR programs by some States and caused uncertainties in the permitting
process thereby delaying some projects. Other revisions, based on the
CAAAC that are deregulatory in nature have also been included.
If adopted, the proposed reforms will significantly reduce the
number and types of activities at sources that would otherwise be
subject to major NSR under the existing NSR program regulations,
including the new and revised requirements imposed by the 1990
Amendments. At the same time, the proposed changes are intended to
provide States with greater flexibility to customize their own
regulations implementing the NSR program, address concerns raised about
the permitting of sources near protected National Parks and other
wilderness areas (Federal Class I areas), promote the use of innovative
technologies and pollution prevention, and, in general, streamline the
overall NSR permitting process.
The key elements of this proposal designed to relieve regulatory
burden are:
Deregulation of changes at ``clean'' emissions units and
``clean'' facilities and of pollution control and pollution prevention
projects--Existing sources that have clean emissions units or are
undertaking projects to clean up air pollution should not be targeted
for major NSR.
Promotion of voluntary plant-wide limits--Rather than face
complicated, piecemeal applicability decisions every time a change at a
plant is contemplated, plant managers may prefer to work within an
emissions cap or emissions budget, an annual emissions limit that
allows managers to make almost any change anytime as long as the
plant's emissions do not exceed the cap. Today's action proposes to
create this option in EPA's regulations.
Applicability criteria to reflect real emissions
increases--This proposal would extend the range of years sources can
use to establish their historical emissions and would allow sources to
calculate emissions increases using projected future actual emissions
rather than maximum potential to emit (PTE). This will especially
benefit cyclical industries which during economic downturns are
currently penalized for making modernizing changes that are vital to
their recovery, even when the changes lower emissions rates.
Encouragement of pollution prevention and innovative
control technologies--these proposed changes would ensure that
pollution prevention qualifies for the pollution control project
exclusion and revamp the under-used innovative control technology
waiver to simplify the process and eliminate penalties for good faith
failures.
Enhanced Public Awareness--Increased public disclosure of
source impacts on Class I areas, establishment of national database of
major permit applications, and improvements to EPA's pollution control
technology bulletin board to increase opportunities for informed
citizen participation in key permitting decisions.
Revised requirements for control technology
determinations--These proposed changes would allow States to adopt
their own methodologies for reviewing and determining BACT so long as
control technology evaluations include reasoned consideration of the
most stringent control technology. Other proposed changes clarify the
extent of a source's duty to search out new technology and shorten the
technology review process by providing presumptive cut-offs.
Better coordination of permit reviews for sources
potentially affecting air quality in Federal Class I areas--These
proposed changes clarify the role of the FLM, the State permitting
authority and the applicant with regard to the NSR permitting process.
The steps in considering of Class I area issues are clarified and would
be initiated earlier in the permit review process than in current
regulations. De minimis levels for determining whether Class I
increment analyses must be performed would be established. The changes
should reduce delays and disputes associated with permitting near
Federal Class I areas.
Increased State flexibility--Instead of one-size-fits-all
solutions to applicability and other issues, States will be allowed for
the first time to choose applicability and implementation approaches
from a menu of alternatives.
The EPA is taking comment on the range of preliminary
construction activities that might be allowed to proceed prior to the
issuance of an NSR permit in cases of modifications at existing
facilities.
More offset credits available to nonattainment area
sources--Proposed changes will ease restrictions on use of emissions
reductions credits resulting from source shutdowns and curtailments.
New definition to ensure that the definition of
``stationary source'' included stationary internal combustion engines,
but excludes newly-defined ``nonroad engines'' and ``nonroad
vehicles.''
Proposed deregulatory changes that are authorized by the 1990
Amendments include:
Exclusion of HAP from PSD requirements.
Requirements on ozone-depleting substances (ODS)--Relaxes
PSD requirements on the substitution of ODS with lower potency.
Revisions in this document that are being proposed based on
requirements mandated by the 1990 Amendments are:
Revised major source thresholds and emissions offset
ratios for sources of volatile organic compounds (VOC), nitrogen oxides
(NOX), particulate matter with diameter of 10 microns or less (PM-
10) and CO according to severity of a nonattainment area's ambient air
quality problem.
Special requirements for determining major modifications
of VOC and NOX sources in serious and severe ozone nonattainment
areas.
Requirements for the submittal of control technology
information into the EPA's RACT/BACT/LAER Clearinghouse.
This proposal also includes proposed ``housekeeping'' revisions to
the NSR regulations at Sec. 51.165(a) (NSR in nonattainment areas) for
control
[[Page 38252]]
technology review, complete application criteria, and public
participation, which are consistent with similar provisions under the
PSD regulations at Secs. 51.166 and 52.21. Further, consistent with
proposed reform-related revisions to public participation provisions,
the EPA is also proposing provisions that clarify permit applicants'
and the public's opportunities for judicial review in State court
regarding PSD or nonattainment permit actions.
Finally, the EPA is proposing clarification of source definition
criteria as they relate to military installations during ``national
security emergencies''.
B. Background
The NSR program legislated by Congress in parts C and D of title I
of the Act is a preconstruction review and permitting program
applicable to new or modified major stationary sources of air
pollutants regulated under the Act.1
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\1\ Section 112(g) of the Act provides for preconstruction
review of HAP. Section 112(b)(6) of the Act specifies that the
``part C'' PSD program shall not apply to HAP listed under section
112. The EPA has published guidance on NSR implementation issues
presented by these provisions. See 57 FR 18074-18075 (April 28,
1992).
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In areas not meeting health-based NAAQS and in ozone transport
regions (OTR), the program is implemented under the requirements of
part D of title I of the Act for ``nonattainment'' NSR. In areas
meeting NAAQS (``attainment'' areas) or for which there is insufficient
information to determine whether they meet the NAAQS
(``unclassifiable'' areas), the NSR requirements for the prevention of
significant deterioration of air quality under part C of title I of the
Act apply. These regulations are contained in 40 CFR 51.165, 51.166,
52.21, 52.24 and part 51 appendix S.
The NSR provisions of the Act are a combination of air quality
planning and air pollution control technology program requirements for
new and modified stationary sources of air pollution. In brief, section
109 of the Act requires the EPA to promulgate primary NAAQS to protect
public health and secondary NAAQS to protect public welfare. Once these
standards have been set, States must develop, adopt, and submit to the
EPA for approval a SIP which contain emission limitations and other
control measures to attain and maintain the NAAQS and to meet the other
requirements of section 110(a) of the Act.
Each SIP is required to contain a preconstruction review program
for the construction and modification of any stationary source of air
pollution to assure that the NAAQS are achieved and maintained; to
protect areas of clean air; to protect AQRV (including visibility) in
national parks and other natural areas of special concern; to assure
appropriate emission controls are applied; to maximize opportunities
for economic development consistent with the preservation of clean air
resources; and to ensure that any decision to increase air pollution is
made only after full public consideration of all the consequences of
such a decision. See, e.g., sections 101(b)(1), 110(a)(2)(C), 160, and
173 of the Act.
On November 15, 1990, Congress enacted numerous changes to title I
of the Act, including changes involving the NSR provisions under parts
C and D for major new sources and major modifications locating in
attainment and unclassifiable areas, nonattainment areas, and ozone
transport regions. Most of these changes are described in the ``General
Preamble for Implementation of Title I of the Clean Air Act Amendments
of 1990'' (General Preamble; see 57 FR 13498, April 16, 1992). The EPA
has not yet revised its NSR regulations to reflect the statutory
changes resulting from the 1990 Amendments.
In August 1992, amidst concerns expressed by regulated industries
that the EPA's major NSR regulations were too complex and burdensome,
the EPA began an effort to revise those regulations. This effort
involved the solicitation of ideas and recommendations from the CAAAC,
as well as public input.2 The goal of the NSR Reform effort is to
eliminate as much of the program complexity, administrative burden and
resultant project delays as possible without sacrificing the current
level of environmental protection and benefits derived from the
program.
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\2\ The meetings of the CAAAC and its NSR Reform Subcommittee
are announced in the Federal Register and open to the public. The
last meeting of the NSR Subcommittee was in July 1994. A preliminary
draft of this rulemaking was discussed at that meeting and made
available for public comments. A copy is in the Docket for this
rulemaking. See 59 FR 35119 (July 8, 1994).
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In today's action, the EPA is proposing changes to various aspects
of the current NSR program based primarily on its consideration of
recommendations provided through the NSR Reform effort, but also based
on independent EPA initiatives to clarify the NSR program. The EPA
further proposes to add certain new requirements established by the
1990 Amendments.
The reader should note that the proposed new and revised
regulations in this document do not comprehensively address all the
statutory revisions to the NSR program in the 1990 Amendments.
Consequently, EPA's promulgation of any or all revisions in this
proposal should not create the expectation that States and permit
applicants may obtain program approvals or be issued permits,
respectively, by solely following the NSR rules, as proposed or
ultimately promulgated.
II. Applicability of the NSR Program
A. Overview
The issue of NSR applicability proved to be one of the most
difficult and divisive issues for the CAAAC's NSR Reform Subcommittee.
While the issue was considered by a subgroup of the Subcommittee for
several months and debated by the full Subcommittee during several
sessions, consensus proved elusive. As a result, no formal
recommendations were proffered to the CAAAC or the EPA on this issue.
Still the discussions provided the EPA with a better understanding of
the concerns of all sides and revealed a few areas of potential
agreement. There were common elements in many of the competing
proposals circulated by members of the Subcommittee. Thus, while there
was no CAAAC resolution of the issues, today's proposed applicability
changes build upon the Subcommittee's deliberations.
This preamble discusses the following proposed changes to NSR
applicability: (1) A new exclusion from major NSR for existing
emissions units and facilities that are subject to BACT or LAER,
equivalent minor NSR control requirements, or comparable ``clean''
emissions control technology (see section II.C); (2) a new baseline for
determining if a physical or operational change will result in a
significant net emissions increase and thereby trigger major NSR,
allowing sources to use any 12 consecutive months in the past 10 years
to establish the unit's pre-change emissions level (see section II.D);
(3) a pollution control project exclusion, patterned after the
exclusion recently adopted by EPA for utilities but covering all source
categories and pollution prevention projects (see section II.E); (4) a
new provision allowing States to base applicability on a PAL (see
section II.F); and (5) extension of a version of the ``actual-to-
future-actual'' test, currently only available for utilities, to all
source categories (see section II.G). Finally, the EPA is proposing for
comment an applicability approach which the EPA agreed to consider and
take final action
[[Page 38253]]
on in accordance with the settlement of a lawsuit with the CMA and
other industry petitioners (see section II.H).
In the past, EPA has essentially required States to follow a single
applicability methodology. States could, of course, have a more
stringent approach but most followed closely the EPA prototype. The EPA
is proposing to break with this one-size-fits-all approach to
applicability by proposing to adopt these changes as a menu of options
from which a State may pick and choose in order to customize a specific
approach for its individual needs. Thus, in its final action on this
rulemaking, EPA will consider placing all or some of the applicability
options presented today as permissible alternatives in its part 51
regulations containing minimum requirements for State NSR programs in
nonattainment and attainment/unclassified areas. States will then be
free to adopt any combination of these menu options into their own
regulations and SIP to offer sources these alternatives. For instance,
if EPA adopts in its final rulemaking both the ``Clean Unit'' exclusion
and the PAL option, a State could retain its current federally-approved
applicability approach without making changes, retain its existing
approach and add a Clean Unit Test, or retain its existing approach and
add both a Clean Unit Test and an option for PAL. The EPA also proposes
to include these applicability approaches in the part 52 regulations
governing Federal permitting programs. The EPA solicits comment on this
approach and specifically solicits comments on what restrictions, if
any, EPA should place on States in selecting applicability options.
B. Background
1. Current Provisions
The major NSR provisions of part C (PSD) and part D (nonattainment
requirements) of title I of the Act apply to both the construction of
new major sources and the modification of existing major sources. For
new ``greenfield'' sources, ``applicability''--the determination of
whether an activity is subject to the program or, stated differently,
whether the program applies to particular circumstances--is a fairly
straightforward determination. The Act, as implemented by the EPA's
regulations, sets applicability thresholds for nonattainment areas (PTE
above 100 tons per year (tpy) of any pollutant subject to regulation
under the Act, or smaller amounts, depending on the nonattainment
classification) and attainment areas (100 or 250 tpy, depending on the
source type). A new source with a ``PTE'' in excess of the applicable
threshold amount ``triggers'' or is subject to major NSR.3
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\3\ The ``PTE'' is currently defined as the ``maximum capacity
of a stationary source to emit a pollutant under its physical and
operational design.'' Any physical or operational limitation on the
capacity of the source to emit a pollutant, including a permit
limitation, is treated as part of its design provided the limitation
or its effect on emissions is federally enforceable (e.g., see
existing Secs. 51.165(a)(1)(iii) and 51.166(b)(4)).
In recent decisions, National Mining Ass'n v. EPA, 59 F.3d 1351
(D.C. Cir. 1995) and Chemical Manufacturers Ass'n v. EPA, No. 89-
1514, slip op. (D.C. Cir. Sept. 15, 1995), the District of Columbia
Circuit court addressed challenges related to EPA's requirement that
a source which wishes to limit its PTE must obtain a federally
enforceable limit. The EPA is currently reviewing its Federal
enforceability requirements in light of these court decisions, and
has not yet decided how it will address this issue. Once EPA has
completed its review of the Federal enforceability requirements in
all relevant programs including NSR, the Agency will make available
in a Federal Register notice its response to the court decisions.
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The determination of what should be classified as a modification
subject to major NSR presents more difficult issues. The modification
provisions of the NSR programs in parts C and D are based on the broad
definition of modification in section 111(a)(4) of the Act: the term
``modification'' means ``any physical change in, or change in the
method of operation of, a stationary source which increases the amount
of any air pollutant emitted by such source or which results in the
emission of any air pollutant not previously emitted.'' That definition
contemplates a two-step test for determining whether activities at an
existing major facility constitute a major modification subject to
major NSR requirements. In the first step, the permitting authority
determines whether a physical or operational change will occur. If so,
then the permitting authority proceeds in the second step to determine
whether the physical or operational change will result in an emissions
increase over baseline levels.
The reference to ``any physical change * * * or change in the
method of operation'' in section 111(a)(4) of the Act could--read
literally--encompass the most mundane activities at an industrial
facility (even the repair or replacement of a single leaky pipe, or an
insignificant change in the way that pipe is utilized). However, the
EPA has recognized that Congress did not intend to make every activity
at a source subject to major new source requirements under parts C and
D. As a result, the EPA has adopted several exclusions from the
``physical or operational change'' component of the definition. For
instance, the EPA has specifically recognized that routine maintenance,
repair and replacement, and changes in hours of operation or in the
production rate are not by themselves considered a physical change or
change in the method of operation within the definition of major
modification. See, e.g., existing Secs. 52.21(b)(2)(iii),
52.24(f)(5)(iii), 51.165(a)(1)(v)(C)(1), and 51.166(b)(2)(iii).
The EPA has likewise limited the reach of the second step of the
statutory definition of modification by excluding all changes that do
not result in an emissions increase above ``significance'' levels for
the pollutant in question. See, e.g., existing Sec. 51.165(a)(1)(x).
Taken together, these regulatory limitations restrict the application
of the NSR program in parts C and D to only ``major modifications'' at
existing major stationary sources. See, e.g., existing
Sec. 51.165(a)(1)(v).
One key attribute of the NSR program in general is that sources
typically ``net'' modifications out of review by coupling proposed
emissions increases at the source with contemporaneous emissions
reductions. The judicial decision in Alabama Power Co. v. Costle, 636
F.2d 323, 400-403 (D.C. Cir. 1979), endorsed use of this ``plantwide
bubble'' concept in the PSD program. The court reasoned that since the
principal purpose of the PSD program was to prevent deterioration in
air quality, a PSD permit was unnecessary so long as new construction
at an existing plant did not increase overall emissions to the
environment. Thus, under the EPA regulations promulgated in 1980
following Alabama Power (which are for the most part still in place
today), source owners may modify or even completely replace or add
emissions units without obtaining a PSD permit so long as ``actual
emissions'' do not increase over baseline levels at the plant as a
whole. In 1984, the EPA regulations expanding the use of the plantwide
bubble to the nonattainment area NSR program under title I, part D of
the Act were upheld in Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837
(1984).
Applicability of the part C and D NSR provisions must be determined
in advance of construction and is pollutant-specific. In cases
involving existing sources, this requires a pollutant-by-pollutant
determination of the emissions change, if any, that will result from
the physical or operational change. The EPA's 1980 regulations
implementing the PSD and nonattainment NSR programs thus inquire
whether the proposed change constitutes a ``major modification,'' i.e.,
a nonexcluded physical change or change in the method of operation
``that
[[Page 38254]]
would result in a significant net emissions increase of any pollutant
subject to regulation under the Act.'' See existing
Sec. 52.21(b)(2)(i). A ``net emissions increase'' is defined as the
increase in ``actual emissions'' from the particular physical or
operational change (taking into account the use of emissions control
technology and restrictions on hours of operation or rates of
production where such controls and restrictions are federally
enforceable), together with other contemporaneous increases or
decreases in actual emissions at the source. See footnote 3 and
existing Sec. 52.21(b)(3)(i).4 In order to trigger major NSR, the
net emissions increase must exceed specified ``significance'' levels
when compared to a pre-modification ``baseline.'' 5 See existing
Secs. 52.21(b)(2)(i) and 52.21(b)(23).
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\4\ In approximate terms, ``contemporaneous'' emissions
increases or decreases are those which have occurred between the
date 5 years preceding the proposed physical or operational change
and the date that the increase from the change occurs [see, e.g.,
existing section 52.21(b)(3)(ii)].
\5\ Once a modification is determined to be major, the PSD
requirements apply only to those specific pollutants for which there
would be a significant net emissions increase. See, e.g., existing
sections 52.21(j)(3) (BACT) and 52.21(m)(1)(b) (air quality
analysis).
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The EPA's existing regulations generally define baseline actual
emissions as ``the average rate, in tpy, at which the unit actually
emitted the pollutant during a 2-year period which precedes the
particular date and which is representative of normal source
operation'' (see, e.g., existing Sec. 52.21(b)(21)(ii)). The
Administrator ``shall'' allow use of a different time period ``upon a
determination that it is more representative of normal source
operation.'' Id. The EPA has historically used the 2 years immediately
preceding the proposed change to establish the baseline [see 45 FR
52676, 52705, 52718]. However, in some cases it has allowed use of an
earlier period.
With respect to modifications at existing sources, a prediction of
whether the physical or operational change will result in a significant
net increase in the source's actual emissions following the
modification is thus necessary. In part this involves a straightforward
and readily predictable engineering judgment--how will the change
affect the emissions factor or emissions rate of the emissions units
that are to be changed. It also necessarily involves a prediction of
utilization rates--how much of the source's full production
capabilities as modified will be used per hour, and how many hours per
year the source will be operated.
The current regulations provide that when an emissions unit (other
than an electric utility steam generating unit) ``has not begun normal
operations,'' actual emissions equal the PTE of the unit. See existing
Sec. 52.21(b)(21)(iv). The EPA has interpreted this provision as
creating an initial presumption that because the changed unit ``has not
begun normal operations'' following the change, it will operate at its
full capacity year round, i.e., at its full emissions potential. This
is referred to as the ``actual-to-potential'' test. The owner or
operator is free to rebut the presumption that actual emissions will
increase over pre-modification levels by agreeing to limit its PTE,
through the use of federally enforceable restrictions, to pre-
modification actual emissions levels (plus an amount that is less than
``significant''). See footnote 3. The effect of this methodology is to
require the source to take minor NSR permit limits to ensure that
actual emissions will not increase (by more than a prescribed
``significant'' amount, if any) above baseline levels following the
physical or operational change.
2. Litigation Over the Actual-to-Potential Test
Industry has long been concerned that most physical or operational
changes under EPA's rules will initially register as emissions
increases under EPA's actual-to-potential test because most sources are
operated at less than full capacity on an annual basis. As a result, a
change at the source that does not affect instantaneous emissions rates
shows up as a presumed emissions increase because the pre-modification
actual utilization is less than the projected post-modification
utilization, which is presumed to reflect full capacity at all times.
Hence, often sources have accept federally enforceable limits on post-
modification emissions or operations to avoid major NSR.6 As a
legal matter, some industry representatives argue that under current
regulations the EPA cannot properly presume that every non-routine or
otherwise nonexcluded change to an existing emissions unit cannot be
the basis for finding that the unit ``has not begun normal
operations.'' They contend that the fact that a unit is proposed to be
``changed'' should not necessarily mean that it has not yet ``begun
normal operations'' following the change.
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\6\ For example, consider an industrial coal-fired boiler,
constructed in the late 1960s and therefore ``grandfathered'' from
NSR, which originally had a PTE of 1000 tons per year of SO2.
Since the mid-1980s, this source has actually operated at 50 percent
of its capacity and emitted only 500 tons per year due to economic
conditions or because the boiler became less efficient as it aged,
and hence less economic to operate at full capacity. If the boiler
were to be modified through a non-routine physical change which did
not affect the unit's hourly emissions rate, the owner or operator
would need either to accept a cap on its post-modification emissions
at 539 tons per year (i.e., a level less than a significant increase
over its past actual emissions, where the significant increase level
for SO2 is 40 tons per year), or to obtain a major NSR permit
if it desires to maintain the ability to operate at 100 percent of
its rated capacity. The 500 ton ``cushion'' between actual and
potential emissions that existed prior to the modification would no
longer exist.
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Two cases have addressed the EPA's application of the actual-to-
potential test, and specifically, the interpretation of the phrase
``begun normal operations.'' In Puerto Rican Cement Co. v. EPA, 889
F.2d 292 (1st Cir. 1989), the court upheld the EPA's application of the
actual-to-potential methodology in a case involving conversion of a
cement plant from a wet process to a more efficient dry process. The
court upheld the EPA's interpretation that the words ``emissions unit
that has not begun normal operations'' include modified units as well
as new units, citing a passage from the 1980 rulemaking preamble that,
in the court's view, made it clear that the EPA intended to apply the
actual-to-potential test to a ``new or modified unit.'' 889 F.2d at 298
(45 FR 52676, 52677) (emphasis added by court).
The court noted that its endorsement of EPA's use of the ``actual-
to-potential'' approach for calculating an emission change in this case
was simplified by the facts presented, and that under other
circumstances, the decision could have been more difficult.
On a related issue, the court agreed with the EPA's position that
the regulatory exclusion for certain increases in a source's production
rate or hours of operation applies only when such an increase is
unaccompanied by construction or modification activity. See id. at 916,
n.11. The EPA is today proposing to make the existing exclusion
explicitly clear on this point by inserting the phrase ``standing
alone'' at the beginning of the exclusion. See proposed amendatory
language for Secs. 51.165(a)(1)(v)(C)(6), 51.166(b)(2)(iii)(F),
52.21(b)(2)(iii)(F) and 52.24(f).
The actual-to-potential test was also at the heart of a legal
challenge brought by WEPCO, see Wisconsin Electric Power Co. v. Reilly,
893 F.2d 901 (7th Cir. 1990). The WEPCO proposed extensive, life-
extension renovations for several older (35- to 50-year old) coal-fired
electric utility boilers. The EPA sought to apply the ``actual-to-
potential'' test reasoning that the modernizing changes, as confirmed
by the WEPCO's own projections, would increase reliability
[[Page 38255]]
and decrease operating costs, thus likely leading to increased
utilization and, hence, increased actual emissions. However, the
Seventh Circuit disagreed with the EPA's interpretation. The court
coined the phrase ``like-kind replacement'' to describe the type of
renovations occurring at the WEPCO plant, where steam drums and other
major components were replaced by new components of identical design
and function. 893 F.2d at 917. The court said that where the
renovations were like-kind replacements, the EPA could not reasonably
interpret its regulations to say that such a unit was so different that
it has not begun normal operations.
Following the remand in the WEPCO case, the EPA employed an
``actual-to-future-actual'' test for the WEPCO facility comparing
WEPCO's emissions during the baseline period to estimated future-actual
emissions drawn from utilization projections available in the record.
3. The WEPCO Rulemaking
In 1992, the EPA promulgated revisions to its applicability
regulations creating special rules for physical and operational changes
at electric utility steam generating units [see 57 FR 32314, July 21,
1992].7 In this rule, prompted by the WEPCO litigation and
commonly referred to as the ``WEPCO Rule,'' the EPA adopted an actual-
to-future-actual methodology for all changes at electric utility steam
generating units except the construction of a new electric generating
unit or the replacement or reconstruction of an existing emissions
unit. Under this methodology, a utility compares its actual annual
emissions before the change with its projected annual emissions after
the change to determine if a physical or operational change would
result in a significant increase in emissions. To ensure that the
projection is valid, the rule requires the source to track its
emissions for the next 5 years. The EPA is today proposing to allow use
of this methodology for all source categories as described in more
detail in section II.G of this preamble.
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\7\ The regulations define ``electric utility steam generating
units'' as any steam electric generating unit that is constructed
for the purpose of supplying more than one-third of its potential
electric output capacity and more than 25 megawatts (MW) of
electrical output to any utility power distribution system for sale.
See e.g., existing section 51.166(b)(30).
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The EPA also made changes to the baseline portion of the actual-to-
future-actual methodology. The EPA retained the existing regulatory
language, but adopted a presumption that utilities may use as baseline
emissions the annual actual emissions from any 2 consecutive years
within the prior 5 years. This presumption would be superseded by the
proposed baseline changes for all source categories discussed in
section II.D. of this preamble. In the WEPCO rule, the EPA also created
a pollution control project exclusion for utilities. As discussed in
section II.E. of this preamble, today's proposal would replace this
pollution control project exclusion with a new pollution control
project exclusion for all source categories.8
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\8\ In the WEPCO Rule, the EPA also created special new source
performance standard (NSPS) treatment for certain repowering
projects and provided limited NSR exemptions for temporary and
permanent Clean Coal Technology projects, and for certain ``very
clean'' units. See e.g., existing section 51.166(b)(2)(iii) (i), (j)
and (k)]. All of these changes implemented special provisions in the
1990 Amendments. In the rule, the EPA also amended its NSPS
regulations (40 CFR part 60) to allow a utility to use as its pre-
change baseline its highest hourly emissions rate achieved during
the 5 years prior to the proposed physical or operational change.
The changes implementing the NSPS baseline change are neither
discussed nor affected by today's rulemaking proposal.
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C. The ``Clean Unit'' and ``Clean Facility'' Exclusion
1. Introduction
The Applicability Subgroup of the CAAAC's NSR Reform Subcommittee
considered many applicability options. While none of these proposals
garnered the full Subcommittee's support, representatives of State and
local regulators as well as environmental groups expressed general
support for the idea that ``benign'' changes at existing emissions
units should not be subject to the complicated NSR applicability rules
related to determining a significant net emissions increase. There was
also support for the proposition that the NSR applicability test should
provide some deference to sources that have already undergone major
NSR.
The EPA, after careful consideration of these discussions, believes
that the best approach for a new exclusion is one that focuses on the
existing emissions control of a unit, rather than the change being
proposed. Almost all stakeholders identified the goal of ensuring that
modified units apply state-of-the-art controls as being of paramount
importance. Accordingly, where an emissions unit already meets this
goal, environmental concerns associated with proposed changes are
likely reduced. For example, it is the EPA's experience that in many
cases where an existing well-controlled unit triggers major NSR, the
permitting process does not necessarily result in improved controls. On
the other hand, where the review is focused on units which have not
recently been required to meet a control technology requirement, NSR
can be expected to result in more effective controls and meaningful
reductions in actual emissions.
Similarly, where an entire facility already meets the goal of the
application of state-of-the-art controls and has undergone an air
quality impact analysis of its emissions, environmental concerns
associated with proposed changes are likely reduced if the changes
remain consistent with requirements imposed by the original analysis.
Thus, EPA is also proposing a ``clean'' facility exclusion that allows
a major stationary source to make changes at its facility consistent
with PSD or NSR permits that have been recently issued.
2. Description of the Clean Unit Proposal
Based on these factors, the EPA is today proposing a simplified
applicability test for changes to existing emissions units that already
are well-controlled considering the extent a current BACT/LAER review
for a particular unit would result in lower emissions. In general, this
new ``clean unit'' exclusion will allow States to exclude from major
NSR, proposed changes to existing emissions units that have installed
major BACT or LAER within the last 10 years or which otherwise qualify
as a ``clean unit.'' Under this exclusion, sources can make any change
to a qualifying unit so long as the change will not increase the unit's
emissions rate (measured in terms of the unit's maximum hourly
emissions, the NSPS test found at 40 CFR 60.14). Specifically, changes
which do not increase the unit's hourly potential emissions would not
be considered a physical or operational change and thus would not
trigger major NSR.9 See proposed
[[Page 38256]]
Sec. Sec. 51.165(a)(1)(v)(C)(10), 51.166(b)(2)(iii)(L),
52.21(b)(2)(iii)(L), and 52.24(f).
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\9\ Under today's proposal, for units that are permitted to
change feedstocks frequently, such as pharmaceutical manufacturing
and certain chemical batch processes, the maximum hourly emissions
rate test would be applied on a per feedstock basis to determine if
an emission increase will occur. For example, a unit which has
state-of-the-art volatile organic compounds (VOC) control technology
and uses toluene and other organic solvents as feedstocks, the
hourly maximum emission rate of toluene before and after the
proposed physical or operational change would be assessed as if
toluene alone was to be fully utilized by the unit before and after
the proposed change. The other feedstocks would also be individually
assessed. A change in feedstock would not trigger NSR if the control
technology designed to control emissions resulting from the
feedstock and the unit was previously permitted to use the
feedstock. The EPA encourages suggestions in developing rules or
guidance on other approaches for determining emissions increases for
processes with rapidly changing and mixed feedstocks.
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The proposed ``clean unit'' exclusion would both simplify the
applicability test for qualifying units and increase source
flexibility. It would also reward sources that in the recent past have
applied controls to their emissions units that were equal or comparable
to BACT or LAER.
Ideally, the change in hourly potential emissions would be assessed
immediately before and after the change to determine if an emissions
increase did indeed occur. However, this may not be practical in many
instances because information necessary to establish the hourly
potential emissions rate may require considerable time to develop or
collect. Therefore, under the proposed provision, the pre-change hourly
potential emission rate may be established or verified at any time up
to 6 months prior to the proposed activity or project. The EPA solicits
comment on alternative periods for establishing the pre-change hourly
emissions rate, particularly periods which might allow the use of
routine compliance emissions tests to determine the emissions rate
(e.g., annual). Also, under the proposed provision, where the unit is
subject to a federally enforceable limitation (on operations or
emissions) which limits the unit's hourly potential emissions to less
than the maximum physically-achievable hourly rate, the unit's lower
allowable rate must be used in determining if an emissions increase
will occur at the unit.
3. What Constitutes a ``Clean Unit''?
For this exclusion to function, it is necessary to distinguish a
well-controlled unit from a poorly controlled one. In other words, what
criteria distinguish a unit eligible for this exclusion from one which
is not? Criteria which allow a broad range of units to qualify could
largely transform the existing applicability system into one based
solely on assessing a unit's potential emissions, with the possibility
of a dramatic increase in a unit's actual annual emissions without
undergoing NSR.
The EPA proposes to require that in order to qualify as a ``clean
unit'' an emissions unit must have a federally enforceable emissions
limit that ``is comparable'' to the BACT or LAER requirements for that
type of unit, whichever would otherwise be applicable to the proposed
change. See proposed Secs. 51.165(a)(1)(v)(C) (10) through (13),
51.166(b)(2)(iii)(L), 52.21(b)(2)(iii)(L), and 52.24(f). The EPA
envisions that three types of limits would qualify: (1) BACT or LAER
limits set within the last 10 years for the particular unit; (2) a
limit set within the last 10 years for the particular unit by a State
technology review program determined by EPA to be comparable to the
Federal BACT or LAER programs; and (3) a limit found on a case-by-case
basis--after notice and opportunity for public comment--to be
comparable to the current BACT or LAER limits that would otherwise be
imposed on the source after weighing the cost and benefits of
additional or modified controls, including retrofit cost and benefits.
a. Units with BACT or LAER Limits. One starting point for
determining whether a unit is well-controlled is the level of control
required to satisfy BACT (in attainment/unclassified areas) or LAER (in
nonattainment areas). For units which have recently undergone these
reviews, re-evaluation of the technology shortly after the source is
constructed or modified to determine if the technology is still
``state-of-the-art'' would likely result in very little or no
incremental improvement in emissions control. Moreover, units that are
recently permitted are far less likely to have physically deteriorated
and more likely to be running near permitted capacity, reducing the
risk that changes to the unit will result in increased utilization and
increased actual emissions.
Therefore, the EPA is proposing that the new exclusion may
presumptively apply to any unit which received a BACT or LAER limit in
a currently applicable major NSR permit within 10 years of the proposed
change under consideration. See proposed
Secs. 51.165(a)(1)(v)(C)(11)(i), 51.166(b)(2)(iii)(L)(2)(i),
52.21(b)(2)(iii)(L)(2)(i), and 52.24(f). In other words, for the first
10 years following issuance of a PSD or nonattainment NSR permit, units
subject to BACT or LAER set in that permit are eligible for the clean
unit exclusion. At least some members of the Subcommittee expressed
concern that the 10-year period is too long given the improvement in
control technology that can occur in some source categories. For this
reason, EPA solicits comment on using a shorter period such as 5 years
as the length of the Clean Unit presumption derived from a NSR permit.
During consideration of the Clean Unit Exclusion, several
participants suggested that units subject to maximum achievable control
technology (MACT) or reasonably available control technology (RACT)
should also automatically qualify as clean units. A recently required
MACT emissions limit, while not necessarily equal to BACT or LAER, is
likely to result in significant emissions controls such that a BACT or
LAER review would not necessarily result in significant additional
emissions reductions. However, the EPA is also concerned that a MACT
limit could be significantly less effective in limiting VOC emissions
than BACT or LAER in many circumstances. A MACT emission limit may
adequately control a toxic VOC but could result in emission increases
of pollutants subject to NSR. For example, an incinerator installed to
reduce a toxic VOC will increase nitrogen oxides (NOX) emissions
emitted to the atmosphere.
The EPA also has concerns with using Federal RACT limits to
presumptively qualify a unit as a clean unit since RACT emission limits
can be less stringent than LAER and BACT. Further, in some instances
RACT is based on the attainment needs of the area and not a specific
control technology standard. While EPA solicits comment on
presumptively applying the clean unit exclusion test to units with
Federal MACT or RACT limits, the EPA is not inclined to do so across
the board. Rather, the EPA believes that MACT or RACT limits should be
found to qualify for the Clean Unit exclusion using the case-by-case
option described in section II.C.3.c.
b. State Technology Programs Comparable to BACT or LAER.There are
many emissions units at stationary sources that were permitted
according to a State's minor NSR permitting program. While these units
were not subject to a major source BACT or LAER limit per se, they may
have installed controls that would have satisfied major source BACT or
LAER requirements at the time the permit was issued. For instance,
several jurisdictions have control technology reviews as part of a
State, local or tribal minor NSR program which requires new or
modifying sources to meet emissions levels comparable to major source
control technology requirements (BACT or LAER). For this reason, the
EPA is proposing that permitting authorities may submit minor NSR
control technology requirements for certification by the EPA that the
minor NSR program requires control technology that would satisfy the
requirements for the clean unit exclusion. See proposed
Secs. 51.165(a)(1)(v)(C)(11)(ii), 51.166(b)(2)(iii)(L)(2)(ii),
[[Page 38257]]
52.21(b)(2)(iii)(L)(2)(ii), and 52.24(f). Once determined by EPA to be
comparable, all units subject to emissions limitation established under
the jurisdiction's minor NSR program would be eligible for the clean
unit exclusion for the first 10 years following issuance of the permit.
This could also apply to permits that have been issued previously under
minor NSR technology requirements that are later determined to be
comparable to major source BACT or LAER requirements. In such a case,
the clean unit exclusion would apply to the unit covered by the minor
NSR permit, and it would take effect once EPA makes the certification
of comparability (i.e., the clean unit test would apply only to
modifications taking place after the EPA certification of
comparability). The clean unit test could apply to the qualifying unit
for up to 10 years after issuance of the minor source permit. The EPA
also solicits comment on whether a shorter period, such as 5 years,
would be more appropriate.
The EPA also solicits comment on the appropriate standards for EPA
to use in determining whether a permitting authority's minor NSR
program control technology requirements are comparable to the BACT and
LAER requirements. The EPA envisions that as a minimum a ``pre-
certified'' minor NSR program comply with 40 CFR 51.160 through
164.10
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\10\ In a separate rulemaking EPA has proposed revising the
public review and comment requirements at 40 CFR 51.161 to give
States more flexibility in processing minor source permits for
projects that are determined to be ``less environmentally
significant.'' Certain minor source actions, e.g., netting, that in
effect shield a source from major source permitting requirements
would not qualify for less environmentally significant status. See
60 FR 45529, 45549 (August 31, 1995).
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c. Qualification of Units on a Case-By-Case Basis. In many cases an
emissions unit not subject to major NSR is constructed or retrofitted
with a control technology or strategy comparable to the best controls
applied in practice. This may occur when a source minimizes emissions
in order to ``net'' a unit out of major NSR or applies controls to
comply with other provisions of the Act. For this reason, the EPA's
proposed regulations would allow a source having a limit on an
emissions unit determined to be comparable to BACT or LAER for the
particular unit considering cost and benefits of additional or modified
controls, including retrofit cost and benefits to qualify for the
``clean unit'' exclusion on a case-by-case basis. Specifically, an
existing unit which has not undergone a BACT or LAER determination or
comparable State technology requirement can also qualify as a ``clean
unit'' if, in the informed judgment of the permitting agency, a current
BACT or LAER determination for the unit would not be expected to result
in any lower level of emissions from the unit for the pollutant in
question. The costs, benefits and technical consideration associated
with the retrofit application of additional controls to the particular
unit may be considered by the permitting agency in the evaluation.
Since this in effect may require the permitting authority to engage in
a technology review that is similar to BACT or LAER review in order to
qualify a unit for this exclusion, the EPA is asking for comment on
other approaches for qualifying units.
Once a permitting authority makes this determination through a
process involving notice and opportunity for public comment, the unit
would be eligible for the clean unit exclusion for the next 5 years. As
with the other types of proposed clean unit exclusions, EPA requests
public comments on the proposed exclusion eligibility period. See
proposed Secs. 51.165(a)(1)(v)(C)(11)(iii),
51.166(b)(2)(iii)(L)(2)(iii), 52.21(b)(2)(iii)(L)(2)(iii), and
52.24(f).
The EPA solicits comments on several other alternative bases upon
which a permitting authority could take to make the determination that
a unit has a comparable BACT or LAER emissions limitation. The first
would be based on an average of BACT or LAER for equivalent or similar
sources over a recent period of time (e.g., most recent 3 years). The
second would be based on the unit's control level being within some
percentage (e.g., 5 or 10 percent) of the most recent, or average of
the most recent, BACT or LAER levels for equivalent or similar sources.
The EPA solicits comment on these approaches and on the general issues
concerning whether and how EPA should impose a specific methodology for
determining that a specific emissions limit is ``comparable'' to the
BACT or LAER limit that would result from a major source review.
For all of the above tests, the EPA realizes that there are many
source and emission unit categories for which BACT or LAER
determinations do not exist, let alone recent determinations. For these
sources, the EPA proposes that their level of control be gauged against
the control level associated with BACT or LAER for emission units with
similar emission stream characteristics. Since this in effect requires
the permitting authority to engage in a BACT or LAER review in order to
qualify a unit for this exclusion, the EPA is asking for comment on
other approaches for qualifying units.
States are encouraged to use the permitting process required by
title V of the Act as the vehicle for determining and recording which
units at a title V source can qualify for this exclusion.11 The
permitting authority could use the title V permit issuance, revision or
renewal process as the mechanism for making the case-by-case
determination (so long as the opportunity for public comment is
provided). For convenience, one, many or all units at a source could be
reviewed and subjected to public notice and comment concurrently with
the issuance or renewal of a title V operating permit. For units
eligible for the ``clean unit'' exclusion due to a prior NSR BACT or
LAER determination, or a determination under a program found comparable
by EPA, the title V permit offers the opportunity to clearly set forth
the status of the unit under the clean unit exclusion. Qualifying clean
units and the pollutant for which the determination was made should be
clearly identified and listed in the title V permit as ``clean units''
for NSR purposes.
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\11\ While rules implementing title V address how the unit's
major NSR permit and BACT or LAER limit are incorporated into the
title V permit, it is not clear that the status of a unit as a NSR
clean unit would be included in the title V permit as an applicable
requirement. Whether the status of a unit as a NSR clean unit
presumption is an applicable requirement in the title V permit will
likely depend upon how the clean unit test is adopted by the
permitting authority (e.g., adopted as a SIP requirement). The EPA
solicits comment on the best approach for implementing and
coordinating the review and designation of clean units with the
title V permit process.
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Under this proposal, a unit that does not initially qualify for the
clean unit exclusion could install controls meeting the criteria the
EPA establishes for well-controlled units and thereby qualify to use
the exclusion. The controls or pollution reduction strategy that are
the basis for the clean unit determination must be in place and
federally enforceable at the time the source relies on an exclusion
under this provision. So long as these federally enforceable conditions
are met, the source is free to make any change at the permitted unit
including those which could affect a unit's efficiency, capacity,
availability, longevity and utilization. However, changes which would
compromise the original emissions unit's BACT or LAER control level or
air quality impact (e.g., modified stack parameters which would cause
or contribute to violation of any applicable ambient standard,
replacement of the unit with a different type or size of unit, or
reconstruction of the unit) would not be allowed. Also,
[[Page 38258]]
for units excluded from major NSR under this proposed revision, the
physical or operational change must still comply with all otherwise
applicable Act and SIP requirements including any federally enforceable
limits on emissions or operations and minor NSR requirements.
Finally, the determination that a unit is ``clean'' or ``well-
controlled'' under this proposal is an applicability test and is
independent from the case-by-case determination of BACT or LAER for
sources subject to major NSR. While control technology which qualifies
a unit as ``clean'' may be ``comparable'' to BACT or LAER for a
particular unit considering its unique circumstances, it is not
necessarily equal to BACT or LAER for that unit when considered as part
of a new major facility or major modification, and in no way
establishes a presumptive BACT or LAER for that unit, source type or
category. Further, a 5- or 10-year presumption that a unit is ``clean''
does not in any way ``freeze'' BACT or LAER determinations in
permitting actions. The Act requires that BACT and LAER be current
determinations for sources subject to major NSR and the clean unit
designation does not override this determination.
4. Description of the Clean Facility Proposal
Similar to the clean unit exclusion, EPA is proposing an exclusion
for changes at clean facilities. This ``clean facility'' exclusion will
allow States to exclude from major NSR, proposed changes to an existing
major stationary source that has undergone major NSR for the entire
source within the last 10 years. See proposed
Secs. 51.165(a)(1)(v)(C)(11), 51.166(b)(2)(iii)(M),
52.21(b)(2)(iii)(M), and 52.24(f). Under this exclusion, a major source
can make any change as long as the source would still be in compliance
with its major NSR permit. The EPA envisions this to allow any changes
that do not include adding new units or allowing emissions trades that
were not evaluated for air quality impacts in the major NSR permit. The
exclusion would, however, allow a source to replace or reconstruct
existing units so long as they continue to meet the emissions
limitations established in the permit. Thus, such replacement or
reconstruction would not result in a different type of emissions unit
than envisioned and covered by the major NSR permit and its
requirements. The addition of new emissions units would not be allowed
under the proposal because such changes would not be consistent with
the existing NSR permit. However, all other changes consistent with the
terms of the major NSR permit would not be considered a ``physical or
operational change'' for the purposes of major NSR applicability.
Similarly, emissions trades may not be permissible where a different
air quality impact would result since the PSD or NSR permit might limit
such differing impacts.
As proposed, a clean major stationary source is one that underwent
NSR within the last 10 years. The EPA requests comment on this approach
and specifically on whether this proposed approach should not allow
units or facilities to be replaced or reconstructed.
D. Revision to the Netting Baseline
This preamble describes and solicits comment on a new method for
determining an existing source's baseline emissions for purposes of
determining whether a physical or operational change will cause an
increase in emissions and trigger NSR.
1. Introduction
As discussed, in order to determine whether a physical or
operational change will result in an increase in emissions, it is
necessary to compare a source's emissions before the change (its
baseline emissions) with its emissions after the change. The EPA's
existing regulations generally define baseline actual emissions as
``the average rate, in tpy, at which the unit actually emitted the
pollutant during a 2-year period which precedes the particular date and
which is representative of normal source operation.'' See, e.g.,
existing Sec. 52.21(b)(21)(ii). The Administrator ``shall'' allow use
of a different time period ``upon a determination that it is more
representative of normal source operation.'' Id. Prior to the WEPCO
rule, EPA historically used the 2 years immediately preceding the
proposed change to establish the baseline. (See 57 FR 32323.) However,
in the WEPCO rule, EPA adopted a ``presumption'' that utility sources
could use any 2-year period out of the preceding 5 years.
During the CAAAC Subcommittee deliberations, there was considerable
interest in the issue of the proper baseline. For instance in the
automobile industry, where low utilization rates have persisted at some
plants for several years, EPA's baseline presumptions have the effect
of leaving plant managers with the choice of surrendering capacity
(that would not be considered representative of normal operations under
the current NSR rules) or taking the time and expense to secure a major
NSR permit for even small, non-excluded changes to a portion of the
plant.
Provisions in the existing regulations which, at the discretion of
the permitting authority, allow the use a different, ``more
representative,'' period have not alleviated the problem in the view of
many Subcommittee members. As with other aspects of current netting
rules, establishing representative baseline periods other than the 2-
year period preceding the proposed change can be complex and time-
consuming, and often involves disputed judgment calls.
Several industry applicability proposals included changing to a
netting baseline that allows sources to use the highest year or 12
consecutive months out of the previous 10 years. Generally, the
participating State air pollution management officials favored this
increase in flexibility. Some of the environmental group
representatives also recognized that the existing baseline approach has
the impact of taking away ``used and useful'' capacity and that a
longer baseline period would be appropriate. On the other hand, some
participants were concerned that the test for determining a net
emissions increase take into account not only annual emissions levels
but short-term levels as well. The proposal outlined below addresses
these concerns.
2. Description of Proposed Netting Baseline
The EPA is today proposing to extend the time period for
determining baseline in the definition of actual emissions to 10 years
for all source categories and to allow sources to base their actual
emissions on the highest consecutive 12 months during this 10-year
period. See proposed Secs. 51.165(a)(1)(xii)(b), 51.166(b)(21)(ii) and
52.21(b)(21)(ii). As described below, in nonattainment areas and ozone
transport regions, the EPA proposes that the 12-month period begin on
or after November 15, 1990 to be consistent with the area's emissions
inventory and attainment plan requirements. See proposed Sec. 51.165
(a)(1)(xii)(B). In addition, this proposal would replace the any 2-
years-in-5 baseline established as a presumption for utilities in the
WEPCO rulemaking and would be available for all source categories,
subject to the restrictions discussed below. See, e.g., existing
Sec. 51.166(b)(21)(v).
The EPA's intent is to allow sources to determine applicability
based on their highest level of utilization and not necessarily their
highest emissions rate. The emissions rate of units at issue may be
subject to any number of current Federal or State restrictions (e.g.,
RACT,
[[Page 38259]]
MACT, BACT, LAER, NSPS, national emission standard for HAP (NESHAP)) as
well as voluntary limits (e.g., reductions used for netting, offsets,
Emission Reduction Credits creation) and these limits may have been
imposed since the time the source achieved its highest emissions level.
Therefore, these limits must be included in establishing the baseline
emissions. For this reason, the EPA is today proposing that sources
calculate the baseline by using their current emissions factor in
combination with the utilization level from the 12-month time period
selected. This safeguard insures that no significant loss of
environmental protection will result from the proposed change.
Under the proposed provision, EPA also would limit the new baseline
in nonattainment areas and ozone transport regions to no sooner than
the enactment date of the 1990 Amendments, November 15, 1990. The 1990
Amendments included a number of changes in how emissions are to be
inventoried and tracked, particularly in nonattainment areas and ozone
transport regions. The changes strengthen reasonable further progress
tracking requirements, offset limitations and RACT requirements for
nonattainment areas and establish enhanced emissions inventory
requirements for all areas. The EPA believes that allowing baselines
prior to the 1990 Amendments may complicate and impede State and local
efforts to track and reduce emissions from a 1990 emissions baseline
which in many cases may be lower than pre-1990 emission levels.
Therefore, the EPA is proposing to limit use of an expanded baseline in
nonattainment areas and ozone transport regions to a period of time no
earlier than November 15, 1990 and no greater than 10 years, whichever
is more restrictive. This means that sources in nonattainment areas
would not be able to utilize a 10-year look back until November 15,
2000.
In attainment/unclassifiable areas, use of pre-1990 emission
baselines would also pre-date general emission inventory and reporting
requirements of the 1990 Amendments which are expected to improve
recordkeeping and inventory maintenance by State and local agencies.
Unlike nonattainment areas and ozone transport regions, however, these
inventory and data requirements are not directly linked to the PSD
requirements. Therefore, the EPA sees no clear reason why the use of a
10 year look back should be limited to after November 15, 1990 in
attainment/ unclassifiable areas. However, EPA solicits comment on this
issue for both attainment/unclassifiable areas and nonattainment areas.
It is the EPA's experience that many sources keep accurate records
on emissions or operations for only 3 to 5 years, unless expressly
required to do so for a longer period. A number of State and local
permitting authorities have similar experiences. Thus, the EPA has
reservations concerning the use of 10-year, and longer, baselines and
solicits comment on whether a shorter (e.g., 5-year) period would be
more appropriate. In addition, if the EPA adopts a 10-year look back
period, the EPA also proposes that such period be available only when
adequate emissions and/or capacity utilization data are available for
the baseline calculation. The EPA solicits comment on the need to
condition the use of such periods upon the accurac
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
y and completeness of
available data, and the need to establish specific criteria, through
guidance or otherwise, for accuracy, completeness and recordkeeping
when using older data.
As noted, the EPA's existing regulations provide that the source
may seek to use another time period outside the 2 preceding years upon
a finding by the permitting authority that this other period is ``more
representative'' of normal source operations. See existing
Secs. 51.165(a)(1)(xii)(B), 51.166(b)(21)(ii), 52.21(b)(21)(ii), and
52.24(f)(13)(ii). This provision has been a source of confusion and
uneven implementation. The EPA therefore proposes to eliminate this
provision. In other words, if the EPA were to adopt a 10-year look
back, a source may simply choose the highest consecutive 12-month
period of utilization within the 10 years prior to a proposed physical
or operational change (but not before November 15, 1990 in ozone
transport regions and nonattainment areas). Neither the permitting
authority nor the EPA will retain any discretion to allow a time period
outside this extended range.
The EPA also solicits comment on how this proposed extension of the
emissions baseline for netting may interact with the statutory
requirements in section 182 (c) and (e) of the Act applicable in
serious, severe and extreme ozone nonattainment areas. Section 182(c)
(6), (7) and (8) of the Act provides special rules for modifications at
major sources in serious and severe ozone nonattainment areas including
an aggregation of all net increases in emissions from a source over 5
consecutive calendar years. Section 182(e)(2) of the Act governs
applicability of NSR to modifications in extreme ozone nonattainment
areas requiring any change that results in any increase in emissions
from a discrete operation or unit to be subject to major NSR. While the
determination of the emissions baseline is somewhat independent of the
actual netting calculation, clearly the proposed new baseline can
affect netting transactions and may be in tension with the design and
intent of these statutory provisions.
This proposal does not extend the current 5-year contemporaneous
period for considering increases and decreases for netting. See, e.g.,
existing Secs. 51.165(a)(1)(vi)(B), 51.166(b)(3)(ii), 52.21(b)(3)(ii),
and 52.24(f)(6)(ii). While this proposal would allow a 10-year look
back from the activity under review to determine baseline emissions,
any contemporaneous increases and decreases must occur within the 5-
year window to be applicable for netting. The EPA solicits comment on
the effect of the differing look back and contemporaneous periods and
any reasons why these periods should be consistent, over either 5 or 10
years.
3. Protection of Short-term Increments and NAAQS
In discussions of a longer baseline, environmental group
representatives linked any change from the existing baseline with the
adoption of safeguards for short-term NAAQS and PSD increments.12
These representatives suggested that the current netting analysis be
changed to require a source to go through major NSR when there is a net
increase in short-term (e.g., hourly, daily, weekly or monthly,
depending on the emission tracking capability of the source) emissions
when past actual emissions are represented by the highest short-term
emissions in the previous year. This step could provide assurances that
peak emissions, which could cause violations of short-term NAAQS, would
not be allowed to increase without major NSR. Some applicability
subgroup members argued that the short-term test should be an air
quality screening test rather than an NSR applicability trigger.
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\12\ The PSD increments are explained in section IV.B.1.
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The EPA carefully considered the possibility of adding a short-term
``increase'' test to the netting calculation; however, ultimately
decided against this in the proposal for two reasons. First, the EPA is
concerned that a test that relies on a source's highest short-term
actual emissions would be too easy to circumvent. For a short time,
sources can run at maximum capacity so that the baseline short-term
emissions would likely be nothing less than the source's maximum
potential emissions.
[[Page 38260]]
Moreover, the EPA is not sure that limiting the source to its
highest past short-term emissions level will necessarily provide any
additional protection to NAAQS, increments or Class I AQRV. The current
regulations already restrict the creditability of some decreases in
emissions where the overall netting transaction could jeopardize air
quality. In particular, a provision in the definition of ``net
emissions increase'' allows credit for a reduction only to the extent
that it has approximately the same qualitative significance for public
health and welfare as the increase from the proposed change. See,
existing Secs. 51.165(a)(1)(vi)(E)(4), 51.166(b)(3)(vi)(c),
52.21(b)(3)(vi)(c), and 52.24(f)(6)(v)(d). In a June 28, 1989,
rulemaking (54 FR 27286) EPA clarified that aspect of the regulations
to require that, despite the absence of a significant net increase in
emissions, an applicant proposing to net out of review must demonstrate
that the proposed netting transaction will not cause or contribute to
an air quality violation before the emissions reduction may be
credited.
To ensure that the change to a netting baseline based on the
highest 12 consecutive months out of the last 120 consecutive months
does not adversely impact short- (or long-) term ambient standards, the
EPA is proposing to clarify the regulations by requiring that, to be
creditable for netting purposes, an emissions reduction must be
sufficient to prevent the proposed increase from causing or
contributing to a violation of any NAAQS or PSD increment and must not
have an adverse impact on AQRV (including visibility) of Class I
areas.13 See proposed Secs. 51.165(a)(1)(vi)(E)(4),
51.166(b)(3)(vi)(C), 52.21(b)(3)(vi)(C) and 52.24(f). As discussed
above, this requirement is inherent in the EPA's current regulations
and, therefore, should already be part of any netting analysis.
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\13\ The AQRV in Federal Class I areas are explained in section
IV.
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E. Pollution Control Project Exclusion
The 1990 Amendments are stimulating a vast number of sources in the
country to undertake pollution control and pollution prevention
projects during the next few years. As a result, most stakeholders
urged EPA to clarify the applicability of major NSR requirements to
pollution control and pollution prevention projects. The EPA has
previously adopted a limited exclusion for pollution control project
undertaken by utilities as part of the 1992 WEPCO rulemaking. See 57 FR
32314. Based on the stakeholder deliberations, EPA issued policy
guidance which covered all other source categories and which excluded
qualifying pollution control projects from major NSR.14 Today, EPA
proposes to replace both the WEPCO exclusion and the policy guidance
with a single comprehensive regulatory exclusion for all types of
pollution control projects (including add-on controls, switches to
less-polluting fuels, and pollution prevention projects). The proposed
exclusion is designed to minimize procedural delays while still
ensuring appropriate environmental protection (i.e., that a project be
allowed not cause or contribute to a violation of a NAAQS or PSD
increment and not adversely impact on the AQRV of Class I areas).
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\14\ July 1, 1994 memorandum from John Seitz, Director, OAQPS,
``Pollution Control Projects and New Source Review (NSR)
Applicability''.
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While this proposal was modeled after the WEPCO exclusion, it
contains several significant changes reflecting the fact that the WEPCO
exclusion was limited to a single source category and covered only a
small, finite set of pollution control projects specific to utility
units. In contrast to the WEPCO exclusion, this proposal reflects the
more complex task of addressing a vast array of pollution control and
pollution prevention projects at a variety of sources facing numerous
Federal, State and local environmental requirements. Specifically, this
proposal:
Provides a much broader definition of ``pollution control
project'' than that adopted in the WEPCO rule and includes, unlike the
WEPCO rule, pollution prevention projects;
Deletes the requirement that add-on controls and fuel
switches be subject to an ``environmentally beneficial'' test; instead
only pollution prevention projects are subject to this additional
safeguard;
Incorporates the safeguard that no project, whether an
add-on control, a fuel switch, or pollution prevention, can result in
an increase in actual emissions that will cause or contribute to a
violation of a NAAQS or PSD increment, and extends the policy to
protection against adverse impacts of AQRV in a Class I areas.15
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\15\ The WEPCO rule refers specifically to ``visibility
limitation'' rather than ``air quality related values.'' However,
EPA clearly stated in the preamble to the final rule that permitting
agencies have the authority to ``solicit the views of others in
taking any other appropriate remedial steps deemed necessary to
protect Class I areas * * *. EPA emphasizes that all environmental
impacts, including those on Class I areas, can be considered * *
*.'' See 57 FR 32322. Further, the statutory provisions in section
165(d) of the Act plainly are intended to protect against any
adverse impact on AQRV in such Class I lands (including visibility).
Based on this statutory provision, EPA believes that any air quality
assessment for a pollution control project should consider impacts
on visibility and any other relevant AQRV for any Class I areas that
may be affected by the proposed project.
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The EPA encourages commenters to address EPA's proposed decision to
supersede the WEPCO pollution control project exclusion with a single
exclusion applicable to all types of sources. Specifically, EPA invites
comment on two alternative approaches: (1) In addition to today's
proposed exclusion for all source categories, retain the WEPCO
pollution control project exclusion for utilities only or (2) in lieu
of the comprehensive exclusion proposed today, extend the WEPCO
pollution control project exclusion to all source categories.
1. Background
In the WEPCO rulemaking, the EPA amended its PSD and nonattainment
NSR regulations as they pertain to utilities by adding ``the addition,
replacement or use of a pollution control project at an existing
electric utility steam generating unit'' to the list of activities
excluded from major NSR applicability. See, e.g., existing
Sec. 51.166(b)(2)(iii)(h). Because the WEPCO rulemaking was directed
only at the utility industry, the EPA limited the types of projects
eligible for the exclusion to those types of controls typically
associated with that industry, namely add-on controls and fuel switches
to a less polluting fuel.16
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\16\ The definition also includes certain clean coal technology
demonstration projects. See, e.g., existing section
51.166(b)(2)(iii)(i) and (j). Today's proposal would not affect
these applicability rules for certain clean coal technology projects
that were codified in the WEPCO rulemaking.
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The EPA built two safeguards into the exclusion in the WEPCO
rulemaking. First, a project that meets the definition of pollution
control project would nonetheless not qualify for the exclusion where
the ``reviewing authority determines that [the proposed project]
renders the unit less environmentally beneficial.'' See, e.g., existing
Sec. 51.165(a)(1)(v)(C)(8). This provision is buttressed by a second
safeguard that directs permitting authorities to evaluate the air
quality impacts of a proposed pollution control project that the
reviewing authority believes could result in a significant net increase
in representative actual annual emissions of a criteria pollutant (id.;
see also 57 FR 32322), since under no circumstances can a pollution
control project cause or contribute to violation of a NAAQS, PSD
increment, or visibility limitation.17 See, e.g., existing
Sec. 51.165(a)(1)(v)(C)(8)(ii); 57 FR 32322.
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\17\ The WEPCO rule adds that when evaluating impacts the
permitting authority may use that part of any increase that exceeds
an emissions level used for that source--if any--in the most recent
air quality impact analysis in the area conducted for the purpose of
title I.
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[[Page 38261]]
Subsequent to issuance of the WEPCO rule, EPA's July 1, 1994,
policy guidance provided a limited pollution control project exclusion
for other source categories on a case-by-case basis. The July 1994
guidance will remain in effect until the EPA takes final action on
today's proposal.
2. Description of Proposed Exclusion of Pollution Control Projects
The EPA proposes to adopt for all source categories a pollution
control project exclusion from the definition of ``physical or
operational change'' within the definition of major modification. See
proposed Secs. 51.165(a)(1)(v)(C)(8), 51.166(b)(2)(iii)(H),
52.21(b)(2)(iii)(H), and 52.24(f). This proposed exclusion will shield
these projects from being considered ``major modifications'' and
subject to major NSR. As proposed, the exclusion encompasses add-on
controls, switches to less polluting fuels and pollution prevention
projects and is subject to one overarching safeguard first applied in
WEPCO: that the proposed pollution control project cannot result in an
emissions increase that will cause or contribute to a violation of a
NAAQS or PSD increment. See 57 FR 32322. As discussed, while the WEPCO
rulemaking also extended this prohibition to ``visibility
limitations,'' EPA is proposing instead to focus the protection on AQRV
(including visibility) in Class I areas. In addition, for pollution
prevention projects, the permitting authority must find that the
project is environmentally beneficial before such projects may qualify
as a pollution control project.
a. Types of Projects Covered. (1) Add-On Controls and Fuel
Switches. In the WEPCO rulemaking, EPA found that both add-on emissions
control projects and fuel switches to less polluting fuels could be
considered to be pollution control projects. Today's proposal affirms
that these types of projects are appropriate candidates for the
exclusion, but also greatly expands the types of add-on controls
covered to include other control projects. See proposed
Secs. 51.165(a)(1)(xxv), 51.166(b)(31), 52.21(b)(31), and 52.24(f).
These types of projects include:
--The installation of conventional and advanced flue gas
desulfurization and sorbent injection for sulfur dioxide (SO2);
---Electrostatic precipitators, baghouses, high-efficiency multiclones,
and scrubbers for particulate or other pollutants;
--Flue gas recirculation, low-NOX burners, selective non-catalytic
reduction and selective catalytic reduction for NOX; and
--Regenerative thermal oxidizers, catalytic oxidizers, condensers,
thermal incinerators, flares and carbon absorbers for VOC and HAP.
Projects undertaken to accommodate switching to a less-polluting
fuel, such as natural gas when the source is burning coal, would also
qualify for the proposed exclusion. In some instances, where the
emissions unit's capability would otherwise be impaired as a result of
the fuel switch, this may involve certain necessary changes to the
pollution generating equipment (e.g., boiler) in order to maintain the
normal operating capability of the unit at the time of the project.
The EPA has also concluded that substitutions of less potent ODS
for more potent ODS is environmentally beneficial and is therefore
proposing that such substitutions be considered a pollution control
project for PSD purposes. See proposed Secs. 51.166(b)(2)(iii)(N) and
40 CFR 52.21(b)(2)(iii)(N). This proposed exclusion is described
further in section VI.B.2. of this preamble.
(2) Pollution Prevention Projects. The EPA's policy is to promote
pollution prevention approaches and to remove regulatory barriers to
sources seeking to develop and implement pollution prevention solutions
to the extent allowed under the Act. For this reason, the EPA proposes
today to include in the definition of pollution control projects
switches to inherently less-polluting raw materials and processes and
certain other types of ``pollution prevention'' projects.18 For
instance, under these proposed regulations, VOC users who switch to
water-based or powder paint application systems as a strategy for
meeting RACT or switch to a non-toxic VOC to comply with MACT
requirements, could qualify for this exclusion.
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\18\ As defined in proposed sections, pollution prevention means
any activity that through process changes, product reformulation or
redesign, or substitution of less-polluting raw materials,
eliminates or reduces the release of air pollutants and other
pollutants to the environment (including fugitive emissions) prior
to recycling, treatment, or disposal; it does not mean recycling
(other than certain ``in-process recycling'' practices), energy
recovery, treatment, or disposal [see Pollution Prevention Act of
1990, Pub. L. 101-508, section 6602(b) and section 6603(5) (A) and
(B), 42 U.S.C. sections 13101(b) and 13102(5) (A) and (B); see also
``EPA Definition of 'Pollution Prevention,' '' memorandum from F.
Henry Habicht II, May 28, 1992].
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Accordingly, under this proposal permitting authorities would be
allowed to consider excluding from major NSR raw material
substitutions, process changes and other pollution prevention
strategies where the proposed changes are determined to be
environmentally beneficial as discussed below. See proposed
Secs. 51.165(a)(1)(xxv)(A)(6), 51.166(b)(31)(i)(F), 52.21(b)(32)(i)(F),
and 52.24(f).
b. Safeguards. (1) General Applicability. For the purpose of this
proposed exclusion, a pollution control project is an activity or
project at an existing emissions unit where the primary purpose of such
activity or project is the reduction of air pollutants subject to
regulation under the Act at the emissions unit. See proposed
Secs. 51.165(a)(1)(xxv), 51.166(b)(31), 52.21(b)(31), and 52.24(f). The
proposed exclusion would not be applicable to air pollution controls
and emissions associated with the construction of a proposed new
emissions unit. Consistent with the WEPCO rule and EPA's existing
policy guidance the replacement of an existing emissions unit with a
newer or different one (albeit more efficient and less polluting) or
the reconstruction of an existing emissions unit would not qualify as a
pollution control project. Similarly, the fabrication, manufacture or
production of pollution control/prevention equipment and inherently
less-polluting fuels or raw materials would not qualify as pollution
control projects (e.g., a physical or operational change for the
purpose of producing reformulated gasoline at a refinery is not a
pollution control project under the proposed exclusion).
A point was raised to EPA that new pollution control technologies
are likely to be developed over time that will meet the same criteria
that technologies named above have met. Consequently, a process would
be useful whereby any such new technology qualifies as a ``pollution
control project'' when a history of performance has been established.
The EPA is therefore proposing that a new technology which meets the
following criteria should be considered eligible for a pollution
control project exclusion: (1) It has been installed for the purposes
of a pollution control project as defined in the regulation; (2) it has
been demonstrated in practice; (3) it has been determined by the
permitting authority to be environmentally beneficial. See proposed
Secs. 51.165(a)(1)(xxv)(A)(7), 52.21(b)(32)(i)(G), 51.166(b)(31)(i)(G),
and 52.24(f).
The EPA solicits comment on extending the pollution control project
[[Page 38262]]
exclusion to new qualifying technologies and the qualification
criteria. Specifically, EPA requests comment on whether control
technologies, other than those listed above and at
Secs. 51.165(a)(1)(xxv)(A)(1) through (6), 52.21(b)(32)(i) (A) through
(E), and 51.166(b)(31)(i) (A) through (E) must be comparable in
effectiveness to those listed technologies on a pollutant-specific
basis in order to qualify for the exclusion contained under proposed
Secs. 51.165(a)(1)(xxv)(A)(7), 52.21(b)(32)(i)(G), 51.166(b)(31)(i)(G),
and 52.24(f).
The EPA also solicits comment on whether applicability of the
pollution control project exemption should be extended to ``cross
media'' pollution control projects, and whether they should be required
to meet the ``environmentally beneficial'' test.19 To qualify for
this exemption, as for all pollution control projects, a ``cross
media'' pollution control project could not cause or contribute to a
violation of any NAAQS or PSD increment or have an adverse impact on
AQRV in a Class I area.
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\19\ A ``cross media'' pollution control project could be
defined as either a control technology or application to comply with
limitations established under other Federal environmental laws
(e.g., Safe Drinking Water Act or Clean Water Act) that results in
emissions to the atmosphere. For example, to comply with an effluent
limitation established under the Clean Water Act, a source chooses
to install a control device that removes the pollutant from the
wastewater stream and discharges it into the atmosphere. This type
of pollution control project could qualify for the exclusion provide
it is environmentally beneficial.
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(2) The Cause or Contribute Test. A proposed pollution control
project, or any physical or operational change, cannot result in an
emissions increase that will cause or contribute to a violation of any
NAAQS or PSD increment, or have an adverse impact on AQRV in a Class I
area. See sections 110(a)(2)(C), 165, and 173 of the Act; see also 57
FR 32322-32323. To ensure that the proposed pollution control project
exclusion does not have this proscribed impact, EPA is also proposing
to adopt (with some changes) the air quality impacts safeguard
currently in place for utility pollution control projects. See proposed
Secs. 51.165(a)(1)(v)(C)(8), Sec. 51.166(b)(2)(iii)(H),
Sec. 52.21(b)(2)(iii)(H), and Sec. 52.24(f).
It is possible that a pollution control project, while
significantly reducing the emissions rate of a targeted pollutant,
could still cause an increase in actual emissions of that or another
pollutant at the source. This could occur either from the project
causing collateral emissions (such as in the case of a VOC incinerator
which causes NOX emissions) or through a utilization change (where
a project reduces an emission rate but increased utilization stemming
from the project results in increased emissions of the same or other
air pollutants). In either case, the emissions increases could cause or
contribute to a violation of any NAAQS or PSD increment, or have an
adverse impact on AQRV.
Under the WEPCO rule, permitting authorities can require a source
to model its impacts whenever (1) the permitting authority has reason
to believe that the proposed project would result in a significant net
increase in actual emissions of any criteria pollutant over levels used
for that source in the most recent air quality impact analysis; and (2)
the permitting authority has reason to believe that such an increase
would cause or contribute to a violation of any NAAQS or PSD increment
or visibility limitation. If this analysis indicates that the increase
in emissions will cause or contribute to a violation of any NAAQS or
PSD increment, or result in either visibility limitation or impairment,
the pollution control exclusion does not apply. See 57 FR 32322.
The EPA believes that such safeguard needs to be included in this
proposal as well. Thus, where a pollution control project will result
in a significant increase in actual emissions and the increased level
has not been previously analyzed for its air quality impact and raises
the possibility of a NAAQS or increment or adverse impact on an AQRV,
the permitting authority would require the source to provide an air
quality analysis sufficient to demonstrate that the impact of the
project would not cause or contribute to a violation of any NAAQS or
PSD increment, or have an adverse impact on AQRV. The EPA would not
necessarily require that the increase be modeled, but the source must
provide sufficient data to satisfy the permitting authority that the
new levels of emissions will not cause or contribute to a violation of
any NAAQS or PSD increment, and will have an adverse impact the AQRV in
nearby Class I areas.
Since a significant increase in a nonattainment pollutant would be
considered to contribute to the existing nonattainment problem, in the
case of nonattainment areas the State or the source would be required
under this proposal to mitigate (e.g, through offsets or SIP measures)
any significant increase in a nonattainment pollutant resulting from
the pollution control project. De minimis collateral emissions
increases (e.g., less than 40 tpy of VOC in a moderate ozone
nonattainment area) would not trigger such mitigation requirements.
However, a de minimis increase may be subject to a State's minor NSR
requirements.
(3) Determination of Increase in Emissions. The EPA is today
proposing to use a representative actual annual emissions approach to
determining whether a pollution control project will result in
increased emissions. See proposed Secs. 51.165(a)(1)(v)(C)(8),
51.166(b)(2)(iii)(H), 52.21(b)(2)(iii)(H), and 52.24(f). This is the
methodology developed in the WEPCO rule and is explained in detail in
that rulemaking. See 57 FR 32323. The use of this approach is premised
on the EPA's experience and expectation that in most circumstances
pollution control projects will not affect how the source is operated
so that the calculation of whether a pollution control project will
result in an emissions increase can be made through the simple
comparison of pre-change and post-change emissions rates. Of course,
where the permitting authority expects source operations to change,
this methodology allows the post-change emissions to be projected based
on the new operating levels. In the case of a pollution control project
that will not affect utilization but collaterally increases a non-
targeted pollutant, this proposal requires that the actual increase
(calculated using the new emissions rate and current utilization
pattern) must be analyzed to determine its air quality impact.
Although the EPA is supportive of pollution prevention projects and
strategies, special care must be taken in classifying a project as a
pollution control project and in evaluating a project under a pollution
control project exclusion. Virtually every modernization or upgrade
project at an existing industrial facility which reduces inputs and
lowers unit costs has the concurrent effect of lowering an emissions
rate per unit of fuel, raw material or output. Nevertheless, it is
clear that these major capital investments in industrial equipment are
the very types of projects that Congress intended to address in the new
source modification provisions. See Wisconsin Electric Power Co. v.
Reilly, 893 F.2d 901, 907-10 (7th Cir. 1990) (rejecting contention that
the utility life-extension project was not a physical or operational
change); Puerto Rican Cement Co., Inc. v. EPA, 889 F.2d 292, 296-98
(1st Cir. 1989) (major NSR was found to be applicable to a
modernization that decreased emissions per unit of output). Moreover,
projects which significantly increase capacity, decrease production
costs, or improve product marketability may dramatically increase
source operations. In these situations, the
[[Page 38263]]
environment may or may not see a reduction in overall source emissions
due to the project.20 Nevertheless, the EPA believes that these
types of projects may have other desirable environmental effects by
reducing energy and raw materials consumption and minimizing waste by-
products. Consequently, the EPA solicits comment on how to address
pollution prevention projects that can be reasonably expected to result
in a significant increase in emissions resulting from increased
utilization of the affected emissions unit(s) where notwithstanding
such increase an overall positive environmental benefit is evident.
Specifically, where emissions are expected to increase significantly as
a result of a pollution prevention project, should these types of
projects be allowed to take advantage of this pollution control project
exclusion?
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\20\ This is in marked contrast to the addition of pollution
control equipment which typically does not, in EPA's experience,
result in any increase in the source's utilization of the emission
unit in question.
---------------------------------------------------------------------------
3. The Environmentally Beneficial Test
The WEPCO rule also provided that, to qualify for exclusion, a
pollution control project cannot render the unit less environmentally
beneficial. For the proposed list of pollution control projects and for
fuel switches to a less-polluting fuel, EPA is satisfied that the
overall impact on the environment of these projects is beneficial and
that, consequently, such projects are desirable from an environmental
perspective. These are the very types of pollution controls that have
historically been applied to new and modified major and minor sources
for the purpose of reducing emissions based on known and permissible
environmental effects. Inherent in their historic use has been the
basic understanding that from an overall environmental perspective the
use of such controls is acceptable. The EPA has no reason at this time
to doubt the validity of this presumption when such controls are
applied to existing sources in a manner consistent with standard and
reasonable practices.21 Consequently, as part of the exclusion for
pollution control projects, EPA's proposal would not require an overall
environmental impact test for the listed pollution control projects.
See proposed Secs. 51.165(a)(1)(xxv)(A) (1) through (5),
51.166(b)(31)(i) (A) through (E), 52.21(b)(31)(i) (A) through (E), and
52.24(f).
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\21\ The presumption that the listed projects are
environmentally acceptable is premised on an understanding that such
controls would be designed and operated in a manner consistent with
standard and reasonable practices, (e.g., increases in collateral
pollutants are minimized within the control's inherent design, no
unacceptable increased risk due to the release of toxic pollutants
would occur). Where a permitting agency determines that an otherwise
listed project would not be constructed and operated in such a
manner, then that specific project would not qualify as a listed
project for the purpose of the exclusion.
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However, the EPA proposes to retain the environmentally beneficial
standard for pollution prevention projects. See proposed
Secs. 51.165(a)(1)(xxv)(A)(6), 51.166(b)(31)(i)(F), 52.21(b)(31)(i)(F),
and 52.24(f). Unlike the list of pollution control projects described
above for which the environmental impacts are known and EPA is
satisfied that the projects will be environmentally acceptable, a
project that may be acclaimed as a pollution prevention project may not
be as well documented or substantiated as others and its effectiveness
may depend on site-specific factors. Any project requesting a pollution
prevention exclusion should be reviewed by the permitting authority to
ensure that the project's overall impact on the environment is
beneficial.22 Once a particular kind of project has been
demonstrated to be environmentally beneficial, the permitting authority
could rely on this demonstration in evaluating subsequent applications
for the same kind of project. A subsequent project could be presumed
environmentally beneficial unless case-specific factors or impacts
would indicate otherwise.
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\22\ For example, a pollution prevention project which while
decreasing emissions of a criteria pollutant results in an
unacceptable increased risk due to the release of air toxics should
not be considered environmentally beneficial. However, the EPA
expects that many pollution prevention projects will be for the
purpose of compliance with title III MACT requirements and by their
nature will result in reduced risk from air toxics. Consequently, in
judging whether a pollution prevention project can be considered
environmentally beneficial, permitting authorities may consider as a
relevant factor whether a project is being undertaken to bring a
source into compliance with a MACT, RACT, or other Act requirement.
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4. Procedural Safeguards
Nothing in current guidance or in this proposal voids or creates an
exclusion from any applicable minor NSR preconstruction review
requirement in any SIP that has been approved pursuant to section
110(a)(2)(C) of the Act and 40 CFR 51.160 through 164. See footnote 10.
Accordingly, the EPA believes that a pollution control project
qualifying for this proposed exclusion generally will be required by
the applicable SIP to obtain a minor NSR permit prior to beginning
construction. The EPA expects the minor NSR permitting process to be
the mechanism by which the permitting agency reviews the pollution
control project to ensure that the project design is consistent with
standard and reasonable practices, determines if a significant net
increase in representative actual emissions will occur and, if so,
whether the resultant air quality or AQRV impacts are acceptable. See
57 FR 32322.
In addition, as discussed above, for a proposed project to qualify
as a pollution control project the permitting agency must first
determine that the project will be environmentally beneficial. The
decision-making process should include documentation of the basis for a
finding that a proposed pollution prevention project is environmentally
beneficial. The EPA also solicits comment on the adequacy of these
procedural safeguards and the need for any additional or alternative
safeguards.
5. Emission Reduction Credits
In general, certain pollution control projects approved for an
exclusion from major NSR could result in emission reductions which may
serve as NSR offsets or netting credits. Under this proposal, credit
may be given for all or part of the emission reductions equal to the
difference between the pre-modification actual baseline emissions and
post-modification PTE for the decreased pollutant provided that (1) the
project will not result in a significant collateral increase in actual
emissions of any criteria pollutant, (2) the project is still
considered environmentally beneficial, and (3) all otherwise applicable
criteria for the crediting of such reductions are met (e.g.,
quantifiable, surplus, permanent, and enforceable). Where an excluded
pollution control project results in a significant collateral increase
of a criteria pollutant, emissions reduction credits from the pollution
control project for the controlled pollutant could still be granted
provided, in addition to (2) and (3) above, the actual collateral
increase is reduced below the applicable significance level, through
either internal contemporaneous reductions or external offsets.
However, neither the exclusion from major NSR nor any credit (full or
partial) for emission reductions would be available where the type or
amount of the emissions increase which would result from the use of
such credits would lessen the environmental benefit associated with the
pollution control project to the point where the project would not have
initially qualified for an exclusion.
The EPA solicits comment on alternative methods for calculating
emissions reduction credits, especially if the NSR applicability rules
are revised.
[[Page 38264]]
F. Proposed Plantwide Applicability Limitations (PAL)
The EPA today proposes a new applicability approach for existing
sources under which a source, if authorized by a State in a SIP, may
base its NSR applicability on a plantwide emissions cap, termed a
plantwide applicability limitation (PAL). So long as source activities
do not result in emissions above the cap level, the source will not be
subject to major NSR. The voluntary source-specific PAL is a
straightforward, flexible approach to determine whether changes to an
existing major stationary source result in an emissions increase. In
the NSR Reform Subcommittee deliberations, the PAL was viewed as an
alternative that a plant manager could readily understand. Instead of a
case-by-case assessment of whether a modification is excluded from
major NSR, the manager knows that as long as the plant stays within its
emissions cap, major NSR will not be triggered. Production units can be
started and stopped, product lines reconfigured, and products changed
and revamped without delay from major NSR.
In addition, the PAL approach should provide a valuable tool for
managing a number of other Act requirements. For instance, a NSR PAL
may also include terms that allow changes to be made without triggering
minor NSR or which essentially preauthorize the minor NSR approval, as
allowed by State law and the SIP. In fact, the EPA and the State of
Oregon have been working with Intel to develop a NSR/title V permit
that uses Oregon's plant site emission limit program, minor NSR pre-
approval, pollution prevention, and synthetic minor limits on any HAP
to create a flexible permit under title V, major NSR, and the State's
preconstruction review program. Available information regarding this
permit is in the public docket identified at the beginning of this
preamble.
In short, EPA foresees the PAL option offering a number of
advantages for industry, permitting authorities and the environment,
including (1) increased operational flexibility and the ability to make
timely changes to react to market demand; (2) certainty regarding the
level of emissions at which a stationary source will be required to
undergo major NSR (thereby eliminating the need to establish a baseline
for each modification, calculate the contemporaneous increases and
decreases, and determine whether the source qualifies under another
exclusion or another emissions increase test); (3) a decreased
permitting burden for the source and the permitting authority; (4) an
incentive for source owners and operators to create room for growth
under the cap by implementing pollution prevention and other pollution
reduction strategies on existing emissions units; and (5) reduction of
some of the ``paper'' emissions in the system, thereby creating
additional room for growth for new and modified sources.
1. Background
Plantwide emissions limits for NSR applicability have been used in
Oregon for many years and have been utilized by individual sources on a
case-by-case basis. The state-wide applicability system in Oregon,
known as the ``plant site emission limit'' program, bases major NSR
applicability on an emission limit set for each major source in the
State. When the program originated, the State capped sources at their
actual emissions levels. New sources are capped at their NSR permitted
level. During the NSR Reform Subcommittee deliberations,
representatives from several companies with operations in Oregon
briefed members on the advantages of the system for their firms. They
focused on the flexibility afforded under the cap and their ability to
expand operations and production without regulatory review.
During the NSR Reform Subcommittee deliberations, the EPA also
developed and presented a voluntary, source-specific PAL approach,
similar to that demonstrated by a Minnesota Manufacturing and Mining
(3M) facility in St. Paul, Minnesota. This permit established a PAL
which allowed 3M to make many changes to its facility without
triggering NSR review. The source's baseline emissions were based on a
level that was lower than past actual emissions but reflected most
current actual emissions based on current operations with new controls.
Since the 3M permit, EPA understands that other States (and sources)
have experimented with the issuance of permits with emissions caps
under EPA's existing regulations. Additional information on these
approaches is contained in the docket for this proposal.
2. Description of the PAL Proposal
The EPA proposes to revise the NSR regulations to allow States to
authorize PAL approaches on a voluntary source-by-source basis.
Although a source-by-source PAL approach may be implemented in many
situations under the current regulations, several PAL-related issues
are not clearly addressed by the current regulations, policies, or
practice. The EPA believes that regulatory changes would allow for more
ease, clarity, and certainty in the implementation of a PAL approach.
Accordingly, the EPA proposes to define PAL and PAL major modification.
See proposed Secs. 51.165(a)(1)(xxx) and (a)(1)(xxxi), 51.166(b)(44)
and (b)(45), 52.21(b)(45) and (b)(46), and 52.24(f).
The EPA proposes to define ``plantwide applicability limitation''
as a federally enforceable plantwide emissions limitation established
for a stationary source to limit the allowable emissions of a source to
a level such that major NSR is not required for changes under that
emissions limitation. The applicable emissions limitation must be
established in a federally enforceable permit that includes all
conditions needed to make the limitation practically enforceable. The
EPA proposes to define a ``plantwide emissions limitation major
modification'' as any emissions increase over the PAL, notwithstanding
the general definition of ``major modification.''
The EPA proposes to add regulatory provisions that (1) allow the
use of a PAL for applicability determinations for major modifications
rather than the existing or proposed provisions, (see proposed
Secs. 51.165(a)(9)(i), 51.166(u)(1) and 52.21(x)(1)); (2) prescribe the
basis for establishing a PAL and additional PAL terms and conditions,
(see proposed Secs. 51.165(a)(9)(iii), 51.166(u)(3) and 52.21(x)(3));
(3) describe control technology application when a source proposes a
PAL major modification, (see proposed Secs. 51.165(a)(9)(iv),
51.166(u)(4) and 52.21(x)(4)); (4) describe public notice and comment
procedures for establishing a PAL, (see proposed
Secs. 51.165(a)(9)(ii), 51.166(u)(2) and 52.21(x)(2)); (5) describe the
process for periodic reevaluation of a PAL, (see proposed
Secs. 51.165(a)(9)(v), 51.166(u)(5) and 52.21(x)(5)); and (6) describe
additional conditions that would ensure a PAL remains protective of air
quality while providing flexibility for source operations, (see
proposed Secs. 51.165(a)(9)(iv)(A), 51.166(u)(4)(i) and
52.21(x)(4)(i)).
3. Discussion
The EPA has determined that the voluntary source-specific PAL is a
practical method to provide both flexibility and regulatory certainty
to many existing sources, as well as benefits to permitting
authorities, while maintaining air quality. Accordingly, the EPA today
proposes to revise its NSR regulations to provide for this approach as
a voluntary source-specific
[[Page 38265]]
option that States may adopt in their SIP.
The regulatory proposal allows PAL to be established for existing
major stationary sources in PSD areas, and for proposed and existing
major stationary sources in nonattainment areas. In all cases, the EPA
is proposing that the PAL be established through a public participation
process consistent with the requirements at 40 CFR 51.161, and with a
public comment period of at least 30 days. See proposed
Secs. 51.165(a)(9)(ii), 51.166(u)(2) and 52.21(x)(2).
The EPA considered a number of regulatory options addressing new
and existing sources in both areas and is requesting comment on
emissions levels for PAL for both areas. The EPA believes that the
proposed PAL regulatory provisions offer the best approach for both
proposed and existing major stationary sources located in nonattainment
areas and existing major stationary sources in attainment/
unclassifiable areas. In PSD areas, the ``Clean Facility'' exclusion
offers the best flexibility for new major stationary sources.
Certainly, when a facility cannot exercise the clean facility exclusion
either because its permit is older than 10 years or because a change is
not consistent with the PSD permit, it will have historic emissions of
at least 2 years upon which to establish a PAL.
A permitting authority may choose to adopt an area-wide PAL
approach, rather than a voluntary source-specific approach, so that all
major sources in the entire area, designated as nonattainment or
attainment/unclassifiable for a given pollutant, would have a PAL.
Area-wide PAL approaches would be options for States and not mandatory
for any area under this proposal. The EPA seeks comment on area-wide
PAL approaches in light of the source specific voluntary criteria in
this proposal and requests comment on other criteria or minimum
requirements for area-wide PAL approaches. The EPA also seeks comment
on whether States adopting an area-wide PAL system should be allowed to
establish PAL at levels higher than actual emissions.
The EPA proposes that once a PAL's is established for a facility,
the source may make any physical or operational changes at the facility
as long as its emissions remain under the PAL. Under the proposal, for
a source to increase emissions over its PAL, whether or not in
connection with a physical or operational change, it must first undergo
major NSR. The EPA proposes to provide that emissions levels set by the
PAL may be reevaluated periodically, consistent with the title V
permitting and public participation process, to review the need for
revisions. The EPA also proposes to require that the PAL must be
federally and practicably enforceable and therefore must be
incorporated into federally enforceable permits containing compliance
methods and monitoring requirements.
a. PAL Levels. The EPA proposes that a PAL be based on plantwide
actual emissions, including a reasonable operating margin less than the
applicable significant emissions rate, for existing sources or on a
level established pursuant to recent (within the preceding 5 years)
major nonattainment NSR where the source-wide levels were completely
offset and relied upon in an EPA-approved attainment demonstration. See
proposed Secs. 51.165(a)(9)(iii), 51.166(u)(3) and 52.21(x)(3). The EPA
requests comment on alternatives for establishing a PAL, including (1)
Actual emissions, as defined in existing Sec. 51.166(b)(21)(ii); (2)
actual emissions, as defined in proposed Sec. 51.166(b)(21)(ii); (3)
actual emissions with the addition of an operating margin greater than
the applicable significant emissions rate; (4) for a new stationary
source, limits established pursuant to review of the entire facility
under PSD, and (5) for nonattainment pollutants (in nonattainment
areas), any emissions level completely offset and relied upon in an
EPA-approved State attainment demonstration plan, even when the source
has not recently received a major NSR permit.
b. Options for Permitting Authorities. The proposal would
incorporate the PAL approach into the NSR rules by adopting new PAL
provisions in Secs. 51.165, 51.166, and 52.21. A number of new
provisions have been developed to specify the requirements of using a
PAL approach. The EPA requests comments on these provisions which are
described in more detail below.
The proposed rules allow the use of a PAL for NSR applicability in
lieu of the applicability provisions in Sec. 52.21. See proposed
Sec. 52.21(x). Similarly, revisions to Secs. 51.165 and 51.166 are
proposed to provide an alternative applicability approach that States
may adopt into SIP to facilitate use of voluntary source-specific PAL.
See proposed Secs. 51.165(a)(9) and 51.166(u). Under the proposed PAL
rules, States may choose to adopt or accept delegation of PAL
approaches to apply at sources only in lieu of otherwise applicable
major NSR applicability rules, or to apply in lieu of both major and
minor NSR requirements. When adopting the PAL approach, States may
choose in their SIPs or delegation agreement to adopt the PAL approach
on a limited basis. For example, States may choose to adopt the PAL
approach only in attainment/unclassifiable areas, only in nonattainment
areas, for specified source categories, or only for certain pollutants
in these areas. States may also choose to allow the PAL approach only
for sources with a record of existing emissions or normal operations
for at least 2 years, in order to establish a PAL based on historical
actual emissions.
c. Changes Under the PAL Approach. The EPA requests comment on
several possible scenarios involving changes under the PAL approach.
First, under this proposal, facilities that wish to increase source-
wide emissions over the PAL would trigger major NSR. See proposed
Secs. 51.165(a)(9)(iv)(B), 51.166(u)(4)(ii) and 52.21(x)(4)(ii). In
some instances, the increase will result from the addition of a new
unit or physical or operational change to an existing unit. Clearly,
the units associated with the increase would be reviewed for control
technology, BACT or LAER, air quality impact modeling, and emissions
offsets, if applicable. However, the EPA raises for consideration the
situation where a source may wish to increase emissions above the PAL
as a result of an increase in an overall plant production rate. In this
case, it may not be obvious which units would have to apply BACT or
LAER. As proposed, a PAL major modification would require BACT or LAER
for each pollutant limited by the PAL which will be increased. Thus,
BACT or LAER would apply to each emissions unit that contributes to the
emissions increase that occurs above the latest PAL. Id.
The EPA requests comment on how to apply the major NSR requirements
to emissions increases that are not directly associated with a
particular modification or physical change to an emissions unit. Major
NSR could be applied to: (1) all modifications that have occurred under
the PAL; (2) all modifications that have occurred under the PAL since
the last PAL renewal; (3) all modifications that have occurred under
the PAL in the last 5 years; (4) only those modifications that can be
associated with the increase, as proposed by the source, or (5) the
entire facility and BACT or LAER can apply where most appropriate, i.e,
any uncontrolled units or the less controlled units.
In light of the benefits offered by this approach and the ability
of the States to impose control technology requirements in SIP, the EPA
requests comment on whether to require, for all new units
[[Page 38266]]
which net out of major NSR or for all new units added under a PAL, that
States must impose some level of control technology, or similarly
whether to require in the Federal regulations the application of a
particular level of control technology.
d. Plantwide Applicability Limitation Review and Adjustments. The
PAL, once included in a permit, may be adjusted for a number of
reasons. Industry, regulatory agencies, and the public need to
understand what adjustments to a PAL may be necessary, both on an
immediate basis and during some periodic review cycle. The EPA requests
comment on why, how, and when a PAL should be lowered or increased
without being subject to major NSR. The need for adjustments would
arise, for example, (1) Where technical errors have been made, or
technical improvements have become available with regard to calculating
past actual emissions or potential emissions or emissions factors; (2)
when new requirements apply to the PAL pollutant, such as RACT or other
SIP- required reductions 23; (3) to account for the generation of
offsets or permanent shutdowns where the State has the authority to
remove permanent shutdowns from the emissions inventory after a certain
time period; (4) when any changes (though consistent with the PAL)
might cause or contribute to a violation of any NAAQS or PSD increment
or would have an adverse impact on air quality related values; and (5)
during periodic review, consistent with the title V permit renewal
process of the appropriateness of emissions levels set in the PAL. A
concern was raised in the NSR Reform Subcommittee discussions about the
uncertainty that results from the State review and renewal of the PAL
as well as any authority to adjust the PAL. It has been recognized that
sources will want to maximize the room for growth under a PAL. If there
are too frequent opportunities for a downward adjustment to the PAL, a
source may be reluctant to accept a PAL for fear of losing allowable
emissions through the State's ability to make adjustments.
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\23\ Emissions reductions of HAP to meet MACT at emissions units
under a PAL would generally not necessitate a downward adjustment to
the PAL because the PAL is not designed to limit HAP. However, if
MACT reductions are relied on in the SIP (e.g., VOC reductions in
nonattainment areas used for RFP or attainment demonstrations) then
the PAL needs adjustment downward.
---------------------------------------------------------------------------
This proposal requires adjustments to the PAL to incorporate new
applicable requirements. See proposed Secs. 51.165(b)(9)(v),
51.166(u)(5) and 52.21(x)(5). Nothing in this proposal prevents the
State's PAL program from being more stringent by requiring adjustments
in other circumstances such as those described above. In addition, the
EPA solicits comments on the need for a specific provision that would
require the PAL to be adjusted at any time to address any technical
errors in the emissions calculations and other permit deficiencies when
discovered by either the source owner or operator or the permitting
authority after the permit has been issued.
e. Plantwide Applicability Limitations in Serious and Above
Nonattainment Areas. The EPA also solicits comment on how a PAL will
comply with section 182(c) and (e) of the Act which contains special
provisions for modifications to major sources in serious, severe and
extreme ozone nonattainment areas. For serious and severe nonattainment
areas, depending on the baseline used to establish a PAL, a PAL may
effectively assure that sources do not increase emissions (thereby
changes under the PAL would not trigger these special provisions). This
is because the PAL in an ozone nonattainment area would in most cases
be based on actual emissions of the source and require any increase
over the PAL to be subject to major NSR with no allowance for de
minimis emission increases over the PAL. Thus, with these stipulations,
the de minimis emissions rate (25 tpy) under section 182(c)(6) of the
Act could not be exceeded without triggering major NSR. In extreme
ozone nonattainment areas, section 182(e)(2) of the Act requires major
NSR for ``any increase'' at any discrete operation or unit. In such
areas a PAL may be problematic because it could allow for an increase
at an emissions unit by a change under a PAL, although there would be
no emissions increase of the source's PAL. The provisions of section
182(e)(2) appear to allow for a PAL provided that any increase at an
emissions unit would impose a LAER emissions limit on that unit and the
unit's increase in emissions would have to be ``internally offset''
within the source, which is in effect a 1.3 to 1 internal ``netting''
transaction. Thus a PAL in an extreme nonattainment area may have to be
a ``declining value'' cap reducing at a rate that ensures sufficient
``internal offsets'' are undertaken to fulfill the requirements of
section 182(e)(2) of the Act. The EPA welcomes additional comment on
how a PAL may comport with the statutory requirements for modifications
to major sources in these ozone nonattainment areas.
f. Air Quality Changes. Certain changes under the PAL, such as
changes in effective stack parameters, can change a source's impact
area, and must be assessed to demonstrate protection of NAAQS,
increments, and AQRV. See proposed Secs. 51.165(a)(9)(iv)(A),
51.166(u)(4)(i) and 52.21(x)(4)(i). The EPA requests comment on when
modeling or other types of ambient impact assessments should be
required for changes occurring under a PAL. Comments may also address
the usefulness of existing guidance on similar issues (see e.g., June
28, 1989 Federal Register Notice addressing CMA (54 FR 27274) and the
Emissions Trading Policy Statement (51 FR 43814)), and what should be
done to protect AQRV in Class I areas.
G. Actual-to-future-actual Methodology
As previously discussed, the EPA explicitly limited the scope of
the WEPCO rulemaking to one source category, i.e., electric utility
steam generating units. In the final rule, however, the EPA indicated
that it would ``consider the desirability of adopting for other source
categories the changes to the methodology for determining whether a
source change constitutes a modification'' in a subsequent rulemaking.
See 57 FR 32333. In previous sections, the EPA discusses its proposals
to adopt a new pollution control project exclusion applicable to all
source categories and to replace its existing baseline regulations with
a new provision, again applicable to all source categories. There
remains the question of the ``future-actual'' methodology which allows
a utility to use a prediction of its post-change actual emissions--
excluding any increases in utilization caused by demand growth--to
determine whether the change at issue will increase emissions over
baseline levels.
The WEPCO rule was challenged by both industry and environmental
petitioners. These challenges included a demand from some industries
that EPA expand the WEPCO rule to all source categories and a demand
from an environmental group that EPA abandon the rule or at least the
demand growth exclusion. This litigation is now inactive pending the
outcome of this rulemaking. Today, EPA proposes to allow use of the
future-actual methodology for all source categories. See proposed
Secs. 51.165(a)(1)(xii)(F), 51.166(b)(21)(vi), 52.21(b)(21)(vi) and
52.24(f).
As discussed in section II.A. of this preamble, EPA proposes that
States be given the choice of whether to retain in their SIP the
current actual-to-potential test, or to adopt the actual-to-actual test
for all source categories. Although EPA is also proposing the actual-to
future
[[Page 38267]]
actual test for the Federal permitting program in lieu of the current
actual-to-potential test, EPA solicits comments on whether to retain
the actual-to-potential test. In addition, EPA solicits comments on
whether to leave the scope of the future actual methodology the same--
available only for utility units or eliminating the methodology
completely.24 In addition, in regard to use of a future actual
methodology, the EPA solicits comment on what changes if any should be
made to the demand growth exclusion and the 5-year tracking
requirement.
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\24\ This discussion of the use of the future-actual methodology
as an applicability test is separate from the proposed use of the
methodology to project emission increases from pollution control
projects in section II.E.
---------------------------------------------------------------------------
1. Background
As noted, the WEPCO rule in EPA's regulations prescribed a new
methodology for determining whether a physical or operational change
would result in a significant increase in emissions and therefore
constitute a major modification. The rule provided that the post-change
emissions level of a utility unit would be calculated using a
projection of the unit's ``future actual'' emissions. The rule was
limited to existing electric utility steam generating units and did not
apply to the addition of a new unit or the replacement of an existing
unit.25
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\25\ A unit is considered replaced if it would constitute a
reconstructed unit within the meaning of 40 CFR 60.15 (the NSPS test
for ``reconstruction''). The EPA reasoned that since there is no
relevant operating history for wholly new units and replaced units,
it is not possible to reasonably project post-change utilization for
these units, and hence, their future level of ``representative
annual emissions.'' For other changes, past operating history and
other relevant information provides a basis for reasonable
projections. See 57 FR 32323.
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Pursuant to the WEPCO rule, the future actual projection is the
product of (1) the hourly emissions rate, which is based on the unit's
physical and operational capabilities following the change and taking
into account federally enforceable operational restrictions that would
affect the hourly emissions rate following the change; and (2)
projected capacity utilization, which is based on both the unit's
historical annual utilization and all available information regarding
the unit's likely post-change capacity utilization. See 57 FR
32323.26 To guard against the possibility that significant
unreviewed increases in actual emissions would occur under this
methodology, the EPA provided in its final regulations that any utility
which uses the ``representative actual annual emissions'' methodology
to determine that it is not subject to NSR must submit annually for 5
years after the change sufficient records to demonstrate that the
change has not resulted in an emissions increase over the baseline
levels. See 57 FR 32325. To meet this requirement, utilities can use
continuous emissions monitoring data, operational levels, fuel usage
data, source test results, or any other readily available data of
sufficient accuracy for the purpose of documenting a unit's post-change
actual annual emissions. Where the change does not increase the unit's
emissions factor, the utility may submit annual utilization data,
rather than emissions data, as a method of tracking post-change
emissions. Id. If, during the required 5-year tracking period, the
unit's post-change actual emissions exceed its pre-change baseline
level, the unit is then subject to NSR. Emissions increases which occur
after the required 5-year tracking period are presumed not to be
related to the earlier change.27
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\26\ In projecting future utilization and emissions factors, the
permitting authority may consider the company's historical
operational data, its own representations, filings with Federal,
State or local regulatory authorities, and compliance plans
developed under title V of the Act. See 57 FR 32323, footnote 19.
\27\ The permitting authority may require a longer period, not
to exceed 10 years, where it determines that no period within the
first 5 years following the change is representative of normal
source operations. 57 FR 32325.
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As discussed, the NSR regulatory provisions require that the
physical or operational change must ``result in'' an increase in actual
emissions in order to consider that change to be a modification. See
also the discussion of the term ``modification'' in section II.B. of
this preamble. In other words, NSR will not apply unless there is a
causal link between the proposed change and any post-change increase in
emissions. In the WEPCO rule, EPA clarified this provision in the
context of modifications at electric utility generating units to
exclude increases due to ``independent factors'' such as demand growth.
The EPA stated that:
where projected increased operations are in response to an
independent factor, such as demand growth, which would have occurred
and affected the unit's operations during the representative
baseline period even in the absence of the physical or operational
change, the increased operations cannot be said to result from the
change and therefore may be excluded from the projection of the
unit's future actual emissions. Conversely, where the increase could
have occurred during the representative baseline period but for the
physical or operational change, that change will be deemed to have
resulted in the increase.
Thus, the promulgated regulatory provision excluded from the
calculation of future emissions:
that portion of the unit's emissions following the change that could
have been accommodated during the representative baseline period and
is attributable to an increase in projected capacity utilization at
the unit that is unrelated to the particular change, including any
increased utilization due to the rate of electricity demand growth
for the utility system as a whole.
See, e.g., existing Sec. 51.166(b)(32)(ii).
The EPA explained that this provision allows demand growth to be
excluded from the calculation of future emissions only ``to the extent
it--and not the physical or operational change--is the cause of the
emissions increase.'' See 57 FR 32327. On the other hand, any emissions
increases attributable to a physical or operational change that
``significantly alters the efficiency of the plant * * * must be
included in the post-change emissions calculations.'' See 57 FR 32327.
Thus, the question of exclusion of independent factors, such as system-
wide demand growth, is ``a question of fact which must be resolved on a
case-by-case basis and is dependent on the individual facts and
circumstances of the change at issue.'' Id.
2. Limitation of the WEPCO Rule to One Source Category
The EPA indicated in the WEPCO rule that it had ``high confidence''
that a workable ``future-actual'' methodology could be developed for
the utility industry for all changes that did not involve construction
of a new unit or the replacement of an existing unit. See 57 FR 32333.
Specifically, the EPA pointed to several factors, including (1) a
limited and technologically homogeneous source population; (2)
oversight by State Public Utility Commissions that typically evaluate
utility growth and utilization projections; and (3) requirements in
title IV of the Act that mandate continuous emissions monitors (CEM) or
other highly accurate methods for recording actual emissions, as well
as special reporting requirements. In EPA's judgment, these factors
meant that permitting authorities could make independent assessments of
the likely post-change emissions and utilization rates of utility
emissions units, and could track these predictions for the relevant
period to ensure that the utility did not exceed its predicted level of
emissions.
The EPA continues to view these characterizations as generally
accurate. There are a relatively limited number of electric utility
installations and, due to
[[Page 38268]]
title IV and other regulatory programs, the EPA and State and local
permitting authorities have extensive information on the type, fuel,
size, and other characteristics of the electric generating units in
operation. Most of the utilities operating these units are subject to
regulatory oversight by a State Public Utility Commission (PUC) which
regularly reviews growth patterns and utility strategies for meeting
future electrical demand. Finally, as a result of title IV, most large
utility units are now, or will be shortly, using CEM to demonstrate
continuous compliance with many of the Federal and State requirements
applicable to their units. Similarly, the EPA expects that most major
sources in the country will be upgrading their monitoring and reporting
capabilities due to the Act's monitoring and title V operating permit
programs. Thus, these sources should also be able to provide the
necessary documentation of their compliance with a post-change
emissions prediction.
However, utilities remain the only source category where
projections of demand and facility utilization are typically assessed
by an independent regulatory agency (the State PUC) and are available
to the public. Because of this, permitting authorities should be able
to find independent data and assessments regarding current operations
and costs for the utility unit subject to the change as well as
projected data for the unit after the change. Similarly, the PUC should
have made an assessment of future demand growth and utility plans to
meet this increased demand so a permitting authority should be able to
secure independent corroboration of utility claims in this area as
well. Because this kind of information is typically not available for
other source categories, the EPA is concerned about the basis
permitting authorities would have to review projections for other
source categories.
On the other hand, the 5-year tracking provision that was adopted
in the final WEPCO rule makes the accuracy of the future projection
subject to a safeguard that should guarantee the accuracy of the
prediction for at least 5 years. This tracking period may be extended
to 10 years where the permitting authority is concerned that the first
5 years will not be representative of normal source operation. See,
e.g., existing Sec. 51.166(b)(21)(v). Even after this time period, the
permitting authority may still consider whether a particular increase
is ``caused'' by the change and thus results in an emissions increase
subjecting the original change to major NSR. See 57 FR 32326. In
proposing to expand the ``future actual'' methodology to all source
categories, the EPA also solicits comment on the adequacy of these
safeguards and whether the ``future-actual'' methodology should either
be retained only for the electric utilities, or be eliminated entirely.
3. Issues Regarding the ``Future-actual'' Methodology
The EPA seeks comment on two specific parts of the WEPCO rule.
First, the EPA solicits comment on whether a demand growth exclusion
should be included, with or without changes. Second, the EPA solicits
comment on whether the 5-year reporting provision is working as
intended and whether it should be changed in any way.
As discussed, the WEPCO rule requires the permitting authority to
exclude from the post-change emissions estimate, any increase in
utilization that is unrelated to the particular change, ``including any
increased utilization due to the rate of electricity demand growth for
the utility system as a whole.'' While this provision ``does not amount
to a per se exclusion of demand growth from the emissions increase
calculation'' (57 FR 32327), it may create confusion outside the
utility area as to when demand growth increases may be excluded.
The WEPCO preamble is very clear that any increases at a unit that
result from a change that significantly affects the efficiency of the
unit must be included in the calculation of future actual emissions,
although EPA declined to create a presumption that every emissions
increase that follows a change in efficiency (at an utility electric
generating unit) is inextricably linked to the efficiency change. Id.
Indeed, where the proposed change will increase reliability, lower
operating costs, or improve other operational characteristics of the
unit, increases in utilization that are projected to follow can and
should be attributable to the change. These factors are the very
factors that utilities use to order the production dispatch of the
various units in the system. The EPA believes that this approach has
proven to be effective in distinguishing between demand growth and
other factors that result in load shifting for utilities. Comment is
requested on the experience to date with the use of the WEPCO demand
growth exclusion.
Moreover, it is clear for other source categories that predictions
of future demand and its impact on individual emissions units are far
more complicated and uncertain. For consumer-driven industries, for
instance, demand varies and presumptions regarding its size and source
would be more speculative than in the utility industry. In most
industries, the prediction of future-actual emissi
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
ons would be left to
the permitting authority for a case-by-case determination of whether
the proposed change will cause any increase in emissions or whether all
or part of any projected increases will be caused by independent
factors. For this reason, EPA seeks specific comments on whether the
demand growth exclusion should be (1) expanded to all source
categories, (2) retained only for the electric utility sector, or (3)
eliminated for all industries.
In addition, the EPA solicits comment on the 5-year tracking
requirement which mandates that permitting authorities track
projections of future actual emissions for the 5-year period following
the change to insure the accuracy of such projections. The EPA believes
that the mechanism is working as intended. However, the EPA invites the
public to comment on this issue and the experience to date of
applicability determinations making use of this safeguard.
H. Proposal of CMA Exhibit B
As part of the settlement of a challenge to the EPA's 1980 NSR
regulations by CMA and other industry petitioners, the EPA agreed to
propose (for public comment) and take final action on a methodology for
determining whether a source has undertaken a modification based on its
potential emissions. The exact regulatory language the EPA was to
propose was set forth in Exhibit B to the Settlement Agreement, which
is contained in the docket for this rulemaking. Under this methodology,
sources may calculate emissions increases and decreases based on either
the actual emissions methodology in the existing rules or the unit's
potential emissions, measured in terms of hourly emissions (i.e.,
pounds of pollutant per hour). Sources could use this potential-to-
potential test for NSR applicability, as well as for calculating
offsets, netting credits and other emissions reductions credits.
The following discussion describes the proposed alternative in more
detail and provides the EPA's preliminary assessment of this
alternative.
1. Description of the Exhibit B Methodology
Exhibit B contains a series of revisions to the EPA's NSR
regulations. These revisions are all designed to provide sources with
the alternative of using their hourly potential emissions to determine
baselines for NSR
[[Page 38269]]
applicability and other NSR purposes. First, Exhibit B would add the
following exclusion to the definition of major modification:
A major modification shall be deemed not to occur if one of the
following occurs: (a) there is no significant net increase in the
source's PTE (as calculated in terms of pounds of pollutant emitted
per hour); or (b) there is no significant net increase in the
source's actual emissions.
Exhibit B would also delete all references to actual emissions in
the definition of net emissions increase and adds language indicating
that all references to ``increase in emissions'' and ``decrease in
emissions'' in the definition of ``net emissions increase'' ``shall
refer to changes in the source's PTE (as calculated in terms of pounds
of pollutant emitted per hour) or in its actual emissions.'' 28
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\28\ For example, Exhibit B calls for EPA to propose these
changes to Sec. 52.21 by deleting ``actual'' wherever it appears in
paragraph (b)(3), except in paragraph (b)(3)(vi)(B) and adding a new
paragraph (b)(3)(ix) to read as follows: ``(ix) For the purposes of
this subsection, `increase in emissions' and `decrease in emissions'
shall refer to changes in the source's potential to emit (as
calculated in terms of pounds of pollutant emitted per hour) or in
its actual emissions.''
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Other changes in Exhibit B modify the applicability baseline by
eliminating the reference to the 2-year baseline period and to a method
for determining actual emissions during the representative
period.29 Exhibit B also provides a methodology for determining if
an increase in hourly emissions is significant.30 Finally, Exhibit
B provides express authorization for sources to use potential emissions
in calculating offsets and in creating emission reduction
credits.31 Industry has championed the Exhibit B alternative
because it would maximize the flexibility that a source has in
calculating the net emissions increase due to a modification, which
would exclude more physical and operational changes at existing sources
from major NSR. The Exhibit B approach would also greatly simplify the
task of tracking emissions increases and decreases because the level of
operations and actual emissions would generally no longer be pertinent.
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\29\ For example, Exhibit B calls for EPA to propose these
changes by deleting the second sentence and the word ``2-year'' in
the first sentence of existing paragraph (b)(21)(ii).
\30\ Since EPA's ``significance levels'' are expressed in tons
per year, Exhibit B called for any increase in a source's PTE (as
calculated in terms of pounds of pollutant emitted per hour) to be
extrapolated to a maximum annual emission rate in order to determine
if it is significant. For example, exhibit B proposed to revise
Sec. 52.21(b)(23)(iv) by changing it to read as follows: ``A net
emissions increase in a source's PTE (as calculated in terms of
pounds of pollutant emitted per hour) is significant if that
increase, as multiplied by 8760 and divided by 2000, exceeds the
rates specified in subparagraph (i) above.''
\31\ For example, Exhibit B proposed to revise
Sec. 51.165(a)(3)(i) to read as follows: ``Each plan shall provide
that for sources and modifications subject to any preconstruction
review program adopted pursuant to this subsection, the baseline for
determining credit for emissions reductions is either (A) the PTE
(as calculated in terms of pounds of pollutant emitted per hour) or
(B) the actual emissions of the source from which offset credit is
to be obtained'' and by deleting Sec. 51.165(a)(3)(ii) (A) and (B)
and renumbering the remaining paragraphs accordingly. However, this
proposal on offsets may conflict with the 1990 Amendments. That is,
section 173(c) of the Act requires that a source secure sufficient
emissions reductions to assure that ``the total tonnage of increased
emissions of the air pollutant from the new or modified source shall
be offset by an equal or greater reduction * * * in the actual
emissions of such air pollutants.'' (Emphasis added). Thus,
offsetting emissions reductions (including emissions reduction
credits used for offsets) must be calculated in terms of actual
emissions.
The CMA Exhibit B also calls for EPA to propose language
regarding the amount of offsetting emissions. The relevant passage
requires offsets to ``represent (when considered together with the
plan provisions required under section 172 of the Act) reasonable
further progress (as defined in the plan provisions required under
section 172 of the Act).'' The EPA views this proposed insert as
merely a restatement of the requirements in sections 172 and 173 of
the Act. This proposal could be added as Sec. 52.21(a)(3)(ii)(H).
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2. The EPA's Preliminary Analysis
The EPA has undertaken a preliminary analysis of the impact on the
NSR program of Exhibit B changes. The EPA agrees that the Exhibit B
alternative would provide maximum flexibility to existing sources with
respect to determining if a significant net emissions increase would
result from a physical change or change in the method of operation. The
primary effect of an hourly potential test is to eliminate a source's
level of operations as a factor when determining whether a proposed
change will result in an increase. Past and future level of utilization
of the source are completely disregarded, unless restricted in some way
by a federally enforceable SIP or permit limit. Consequently, an
existing source could make any change so long as the change does not
significantly increase the source's hourly potential emissions rate.
For instance, under this test, where a source has a widget maker with
maximum hourly emissions of 10 pounds per hour, the source may make any
changes it wishes to that machine so long as the hourly emissions rate
remains at 10 pounds per hour or less.
Moreover under Exhibit B, an existing source could also use as
netting credits a reduction in the hourly potential emissions rate at
one emissions unit, even though that emission rate has never been
actually realized, against an increase in the hourly potential
emissions of a new or modified unit. Thus the widget maker could use
credit for reducing the potential hourly emissions from a unit in the
plant, even though it had never operated at that emissions level. This
credit would allow the hourly emissions rate of the modified unit to
increase to greater than 10 pounds per hour without subjecting the
source to NSR.
While EPA agrees that the Exhibit B alternative would give a source
maximum operational flexibility and reduce the administrative burden
for source and permitting agencies, there is concern for the
environmental consequences. For example, assume the emissions unit at
the widget factory that is emitting 10 pounds an hour but has
historically operated at 40 percent capacity due at first to operating
cost, but with age, reduced efficiency and reliability. Under the
Exhibit B alternative, the owner could modernize the unit, thus
lowering the operating costs and increasing efficiency and reliability.
This change will allow the owner to use the machine at much higher
levels (e.g., more hours per day or week) than it had in the past. As a
result actual emissions (measured in tpy) could more than double due to
the increase in utilization even though hourly potential emissions
remain the same.
Further, since Exhibit B would allow sources to generate netting
credits and emission reduction credit (ERC) for offsets based on
potential hourly emissions, even if never actually emitted, and unused
operating capacity. The effect could be to sanction an even greater
actual emissions increase to the environment without any review. Of
particular concern are potential emissions levels, which may be
consistent with older sources, whose impact have never been assessed.
For example, suppose an old ``grandfathered'' 32 source has an
hourly PTE of 100 pounds per hour, which is well under the SIP
allowable limits based on some other factor (e.g., process weight
table). Unless there are more restrictive permit conditions, 8760
annual hours of operation are assumed, so its annual PTE is 438 tpy.
Assume the process is old and inefficient, however, so the source over
its life has averaged about 3000 hours of operation annually and
emitted 150 tpy. Under Exhibit B, the difference, 278 tpy, is available
as a netting credit. However,
[[Page 38270]]
because the plant had never operated more than 3500 hours per year and
the 150 tpy emission rate had been constant for several years prior to
the most recent inventory, 150 tpy was the value the State used for
various air quality analyses. In this example the source could build a
second unit with a PTE of 288 tpy by simply limiting the existing unit
to its nominal 3000 hours of operation per year.
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\32\ In this example the ``grandfathered'' describes a source
that was permitted to construct prior to promulgation of EPA's PSD
regulations. Thus, this source was not subject to the applicable PSD
requirements (e.g., control technology review and modeling
analysis).
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The magnitude of the environmental impact of Exhibit B, if
promulgated, is difficult to predict. Its effects will vary from State
to State depending to a great degree on how much cumulative difference
exists between the unused potential emissions ( so-called ``paper''
emissions and actual emissions in a given inventory of sources and to
what extent those ``paper'' emissions have been used in attainment
demonstrations, impacts analyses, etc. If there is little difference
between annual allowable and actual emissions as may be the case in
some States, the choice of either level as the baseline for netting and
other ERC's purposes would have little significance with regard to the
impact on air quality.
The EPA conducted an analysis to estimate the potential
environmental impacts associated with the CMA Exhibit B potential-to-
potential approach. (See ``Results of Data Gathering and Analysis
Activities for the CMA Exhibit B Settlement Agreement,'' November 1988,
which has been placed in the public docket identified at the outset of
this preamble.) This analysis was performed to estimate the difference
between allowable and actual emissions for permitted facilities in
selected study areas. Available actual, permitted, and SIP allowable
emissions data were obtained from the States of North Carolina, Texas,
Illinois, and Oregon.
Due to problems with the data and other circumstances, the analysis
focused only on the States of Texas and Illinois because these States
appeared to have a more thorough data base and realistic distribution
of data.\33\ Both Texas and Illinois have engaged in substantial
permitting activity over the years. The completeness, availability and
accessibility of their data, and the mix of source categories thus was
found to represent more typical differences between allowable and
actual emissions. From each State, a cross section of sources were
chosen. Allowable and actual emissions were determined for each source
in the sample, based on both annual and hourly emission rates. For the
analysis, this information was then segregated by pollutant and source
type, and, for combustion sources, further segregated by unit size.
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\33\ In conjunction with its plant site emission limit program,
Oregon requires sources, after operation for a specified period of
time, to take enforceable permit restrictions on annual allowable
emissions based on annual actual emissions during normal operation.
This requirement effectively removes ``paper emissions'' from its
inventory. Oregon appears to be unusual in its comprehensive
application of this requirement; consequently, its data could not
form the basis of any conclusions about CMA Exhibit B. North
Carolina's historical data was determined to be insufficient to
allow statewide analysis.
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The results of the Texas and Illinois analysis indicate that
typical source operation frequently does result in actual emissions
that are substantially below allowable emissions levels. In these two
States, actual emissions represent from 30 to 86 percent of the
allowable emissions, depending on source category and pollutant.
Finally, one of the most troubling side effects of the Exhibit B
proposal is that it could ultimately stymie major new source growth by
allowing unreviewed increases of emissions from modifications of
existing sources to consume all available increment in PSD areas. After
the minor source baseline date has been established in an area, all
increases, whether subject to major NSR or not, consume increment. As
illustrated in the example above, under the CMA Exhibit B test an old
grandfathered source could experience a ``significant'' net increase in
annual actual emissions, yet it would not necessarily be subject to
review. Since increment consumption after the minor source baseline
date is calculated based on actual emissions increases, the ``minor''
modification of the grandfathered source would still consume increment.
If a major new source with state-of-the-art emission controls proposes
to locate in an area in which the increment has been consumed in this
manner, it would be barred from building unless and until the increment
problem was resolved. At the same time, older plants would continue to
be able to make changes resulting in significant unreviewed, and
possibly uncontrolled, actual emission increases.
3. The EPA Action
As provided under the CMA Settlement Agreement, the EPA is today
proposing the regulatory changes contained in Exhibit B as another
alternative, and seeks comments on those changes and the EPA's
preliminary analysis described above. The EPA also solicits comment on
(1) the environmental impact of the Exhibit B proposal and how any
adverse environmental impacts associated with the Exhibit B alternative
could be minimized or eliminated; (2) the impact of Exhibit B on the
permitting of new ``greenfield'' sources; and (3) whether Exhibit B is
consistent with the air quality planning goals of the NSR program. That
is, while Exhibit B could allow significant increases in actual
emissions to be unreviewed, section 173 of the Act requires offsets to
be based on actual emissions, and the PSD increment system as well as
many nonattainment area plans are keyed to an actual emissions
baseline.
If EPA were to promulgate the Exhibit B settlement as final rules,
the Exhibit B rules would need to be updated to reflect other rule
changes since 1980 as well as provisions of the 1990 Amendments. In
this context, the EPA also solicits comment on updating the Exhibit B
language.
I. Allowed Activities Prior to Receipt of Permit
Several industry members of the Subcommittee recommended that EPA
change the NSR regulations to enable sources to engage in a broader
range of activities prior to receipt of an NSR permit in cases
involving modifications to existing sources. See, e.g., 40 CFR
Secs. 51.166(b)(11) and 52.21(b)(11). These industry members asserted
that it was unnecessary and inappropriate to prohibit preliminary
activities to achieve the statutory purpose of requiring a permit
before construction begins, and that such prohibitions caused delay and
added expense for no good purpose. EPA realizes that there is a wide
difference of opinion on these issues and is soliciting comments. Set
forth below is a summary to assist in formulating comments.
New Source Review is a preconstruction requirement, and the statute
plainly bars construction without a permit. The congressional policy
behind this is obvious: to insure that well-reasoned permitting
decisions that may involve millions of dollars and significant, long-
lasting environmental impacts are made before companies begin actual
construction on a new or modified source of air pollution. If it were
otherwise, and companies were given unlimited ability to place ``equity
in the ground'' by constructing plants before a permit is issued,
permitting authorities' discretion in making permit decisions may be
compromised, and the ability of EPA and citizens to challenge the
permit that is eventually issued may likewise be undermined. Thus, the
general policy at issue is clear, and it is likewise clear that core
activities at an industrial site, such as the fabrication or
[[Page 38271]]
installation of pollution-generating equipment, constitute
``construction'' within the meaning of the Act. At the same time, the
statute does not address the details of the construction process, nor
does it constrain EPA's discretion to fashion regulatory mechanisms to
harmonize the needs of environmental protection and economic growth in
a manner consistent with the legislative purpose. Consistent with these
statutory goals, the regulations and EPA's longstanding policy clearly
identify the scope of prohibited preconstruction activities. The
current regulations and policies remain in effect regardless of today's
request for comment.
Accordingly, EPA today solicits comments regarding (1) whether
there exists a significant problem with the current system, and the
specific nature of such problem(s), and if so, (2) whether a broader
range of preliminary activities should be allowed prior to the issuance
of a final NSR permit, and (3) how EPA would implement any approach
ultimately adopted. EPA is seeking comments regarding the need for
potential changes to the current regulations that would allow greater
flexibility with respect to construction activities in the case of a
proposed modification to the source, while preserving the essential
characteristics of a preconstruction review program.
The EPA solicits comments on all aspects of this issue, including
comments suggesting specific regulatory language to implement it. In
taking final action on this proposal, EPA may adopt specific regulatory
language consistent with this discussion without further public notice.
III. Proposed Revisions To Control Technology Review Requirements
A. Introduction
New major emitting facilities and major modifications proposed in
areas designated ``attainment'' or ``unclassifiable'' under section 107
of the Act must apply the BACT for each pollutant subject to regulation
under the Act (in addition to other preconstruction review
requirements). See sections 165(a)(4) and 169(3) of the Act. New or
modified major stationary sources proposing to locate in an area
designated ``nonattainment'' under section 107 of the Act are required
to meet the LAER.\34\ See section 173(a)(2) of the Act.
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\34\ In serious and severe ozone nonattainment areas, section
182(c)(7) of the Act specifies that BACT may apply in certain
circumstances.
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The deliberative nature of BACT and, to some extent, LAER
determinations has spawned considerable controversy. Issues have
included (1) the scope and comprehensiveness of the universe of
candidate technologies which must be considered; (2) when the universe
of control technology candidate technologies may be closed to the
introduction of new technologies relative to a given permit application
and, (3) the methodology for analyzing the candidate technologies for
BACT.
The CAAAC made several recommendations to EPA that address issues
regarding the management of EPA's BACT/LAER data base and the process
by which BACT or LAER is determined. Upon evaluation of those
recommendations the EPA is taking steps, described in this preamble, to
improve and make more accessible its existing database on BACT and LAER
determinations and other technical information resources. These
improvements will not only limit the costs permit applicants incur in
identifying and evaluating available controls, but will also facilitate
timely review of the BACT analysis. The EPA is also proposing
regulatory revisions that provide a framework for BACT determinations
under EPA-approved State administered programs and a specific, reliable
and efficacious methodology for federally-administered programs, which
would be available for States to adopt. In proposing these revisions
and taking final action, EPA will also discharge certain obligations
arising out of several judicial and administrative matters. See section
IV.I. of this preamble.
The EPA is also proposing regulatory revisions that significantly
limit a permit applicant's responsibility to review new control
technologies that are developed or emerge after a complete permit
application has been submitted. This revision will reduce the number of
delays associated with evaluating emerging control technologies in the
post-completeness stage of the permitting process. See proposed
Sec. 51.166(j)(5).
The CAAAC's discussions focused primarily on BACT; no specific
recommendations were made concerning the methodology for determining
LAER. Therefore, the EPA is not proposing changes to existing
regulations which govern how to determine LAER.\35\ However, the
recommendations and resultant improvements to EPA's control technology
information systems, the proposed regulatory language pertaining to the
universe of candidate technologies, and limitations on the
consideration of new technologies also extend to LAER. Thus, the EPA is
proposing to add such new provisions applicable to LAER, which are
analogous to the proposed changes described above for BACT under the
PSD program. See proposed Sec. 51.165(a)(2)(ii).
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\35\ A subsequent proposed rulemaking, for implementing changes
to the NSR regulations pursuant to provisions in title I parts C and
D of the 1990 Amendments, will further update the control technology
requirements at 40 CFR 51.165(a)(2) to reflect statutory
requirements.
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B. Proposed Revisions to the Methodology for Determining BACT
1. General Description of the BACT Determination Process
Typically, the proposed Major Source Permit Applicant Conducts a
BACT analysis to be submitted with the permit application to the
permitting authority. The analysis includes an evaluation of the
technical feasibility and the energy, environmental, economic impacts,
and other costs associated with various alternative control options.
The applicant includes in its application the BACT analysis and what it
considers to be the best control technology or system of controlling
emissions for the particular source or project. The permitting
authority reviews the applicant's analysis and, after taking into
account the energy, environmental, and economic impacts and other
costs, and the public's views, specifies an emissions limitation for
the source that, in the permitting authority's reasoned judgment,
reflects BACT.\36\
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\36\ BACT is defined in section 169(3) of the Act as, ``[A]n
emission limitation based on the maximum degree of reduction * * *
which the permitting authority, on a case-by-case basis, taking into
account energy, environmental, and economic impacts and other costs,
determines is achievable for such facility through application of
production processes and available methods, systems, and techniques,
including fuel cleaning, clean fuels, or treatment or innovative
fuel combustion techniques for control of each such pollutant.''
0Section 169(3) also provides that in no event may BACT result in
emissions that exceed those allowed by any applicable standard
established under section 111 or 112 of the Act. In addition, if the
reviewing authority determines that there is no economically
reasonable or technologically feasible way to measure the emissions,
and hence to impose an enforceable emissions standard, it may
require the source to use a design, equipment, work practice or
operational standard or combination thereof, to reduce emissions of
the pollutant to the maximum extent practicable. See also existing
Secs. 52.21(b)(12) and 51.166(b)(12).
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2. The Core Criteria
As noted, BACT requires the adoption of an emission limitation
based on the ``maximum degree of reduction...which the permitting
authority, on a case-by-case basis, taking into account energy,
environmental, and economic impacts and other costs, determines is
achievable.'' See section 169(3) of the
[[Page 38272]]
Act. The Act confers substantial discretion on the permitting authority
in establishing BACT.
The State flexibility in weighing relevant factors and determining
BACT in any particular circumstance is addressed in the legislative
history associated with congressional adoption of the PSD program in
the 1977 Amendments. The legislative history provides that a central
benefit of State flexibility is that it facilitates implementation of
the best available controls, allowing for the widespread adoption of
improved technologies far more quickly than would occur with a uniform
standard:
The decision regarding the specific implementation of best
available technology is a key one and the committee places this
responsibility with the State, to be determined in a case-by-case
judgment. It is recognized that the phrase has broad flexibility in
how it should and can be interpreted, depending on actual
construction location.
In making this key decision on the technology to be used, the
State is to take into account energy, environmental, and economic
impacts and other costs of the application of BACT. The weight
assigned to such factors is to be determined by the State. Such a
flexible approach allows the adoption of improvements in technology
to become widespread far more rapidly than would occur with a
uniform Federal standard. The only Federal guidelines are EPA's
individual new source performance standards and hazardous emissions
standards, both of which represent a floor for the State's
decision.37
\37\ See S. Rep. No. 127, 95th Cong., 1st Sess. 31 (1977).
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The legislative history also indicates that an intended benefit of
the BACT requirement is the minimization of the amount of increment
consumed by any single source, thus allowing for greater growth in an
area:
In the long run, the growth potential of these clean areas may
be quickly filled without a reasonable policy to prevent significant
deterioration. The first new source built in an area would often
absorb the entire available air resource, leaving no capacity for
future expansion or growth.
Under the policy to prevent significant deterioration in this
bill, the growth options should be enlarged. This is because the
provision requires that any major source be constructed to utilize
the best available control technology. This should leave room for
additional growth.38
\38\ Id.
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The legislative history describes the breadth of State discretion
in regulating significant air quality deterioration in a community.
While the legislative history recognizes that the BACT requirement
helps limit the amount of increment new sources consume, it also
recognizes that a proposed source meeting BACT may nevertheless consume
substantial increment. The legislative history provides that the
permitting authority has broad discretion in deciding how much, if any,
incremental air quality deterioration to apportion to a proposed source
meeting BACT. The legislative history also indicates that a State has
discretion to reject a permit application for a proposed source because
of impacts the proposed source could have on the character of the
community:
This congressional directive enables the State to consider the
size of the plant, the increment of air quality which will be
consumed by any particular major emitting facility, as well as such
other considerations as anticipated and desired economic growth for
the area. The balancing of these factors allows States and local
communities to judge how much of the defined increment of
significant deterioration will be used by any major emitting
facility. If, under the design which a major facility propose [sic],
the percentage of the increment would effectively prevent growth
after the proposed major facility was completed, the State or
community could either refuse to permit construction or limit its
size. This is strictly a State and local decision; the legislation
provides the parameters for that decision.
Similarly, when an analysis of energy, economics, or
environmental considerations indicates that the impact of a major
facility could alter the character of that community, then the State
could, after considering those impacts, reject the application or
condition it within the desires of the State or local community.
Flexibility and State judgment are the foundations of this policy.
Accordingly, in adopting the PSD program, Congress emphasized the
importance of thorough and public analysis in PSD decision-making. One
of the enumerated purposes of PSD is to assure that any decision to
permit increased air pollution in any area to which PSD applies is made
only after careful evaluation of all the consequences of such a
decision and after adequate procedural opportunities for informed
public participation in the decision-making process. See section 160(5)
of the Act.
In summary, for a given proposed source or modification, BACT is
not a preordained level of emissions reduction, but the result of a
determination by the permitting authority based on an analysis of
available control methods, systems, and techniques. The permitting
authority establishes an emissions limitation based on the maximum
degree of reduction that is achievable in light of the circumstances of
the individual case taking into account the energy, environmental,
economic impacts and other costs of the candidate control alternatives,
and the concerns of the State and local community that could be
impacted by the source under consideration. Consequently, the EPA
believes a BACT determination should, at a minimum, meet two core
requirements, including (1) all of the available control systems for
the source, including the most stringent, must be considered in the
determination,39 and (2) the selection of a particular control
system as BACT must be justified in terms of the statutory criteria and
supported by the record, and must explain the basis for the rejection
of other more stringent candidate control systems. However, an
applicant proposing the most stringent candidate control alternative
need not provide cost and other detailed information in regard to other
control options.40
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\39\ An applicant could limit its proposed list of technology
alternatives to the most effective control technologies.
Consideration of technologies that are outdated or are clearly
inferior to those in the applicants proposed list would not be
necessary. The EPA is also proposing in this notice, limits on the
applicant's responsibility to consider control technologies that
have not been demonstrated in practice as of the time a permit
application is determined to be complete. See section IV.D. of this
notice.
\40\ The applicant may need to consider collateral emission
increases of hazardous air pollutants under other State programs.
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Today, the EPA is proposing to make the core criteria described
herein the minimum requirements for determining BACT. The EPA is
proposing to codify in the Federal PSD regulations at 40 CFR 52.21, a
specific methodology for determining BACT that effectively implements
the statutory requirements and the core criteria. See proposed
Sec. 52.21(j)(5) and (n)(2)(iii). However, to allow states more
flexibility under their own rules for making case-specific BACT
determinations, EPA is proposing to insert the core criteria for BACT
determinations into the part 51 PSD regulations. Thus, so long as the
core criteria are met, these proposed revisions allow for other
methodologies that provide equivalent results with less time and
effort. See proposed Sec. 51.166(j)(5) and (n)(2)(iii). The EPA
requests public comment on this approach and on the proposed core
criteria.
3. Description of the Federal Methodology for Determining BACT
Since late 1987 EPA has recommended a specific process for
determining BACT. The recommendation evolved from a 1986 national
program audit that identified BACT determinations as a deficient aspect
of the PSD permitting process, and a 1987 EPA permit appeal
[[Page 38273]]
decision.41 The EPA's recommended methodology for determining BACT
is described in detail in the 1990 Draft NSR Workshop Manual 42
and is summarized below.
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\41\ See ``New Source Review Task Force Report,'' Final Draft,
Dec. 1986. Honolulu Resource Recovery Facility, PSD Appeal No. 86-8
(Remand Order, June 22, 1987). ``Operational Guidance on Control
Technology for New and Modified Municipal Waste Combustors,'' June
26, 1987. ``Improving New Source Review,'' Memorandum from Craig
Potter, Assistant Administrator for Air and Radiation to EPA
Regional Administrators, Regions I-X, December 1, 1987.
\42\ See Chapter B of EPA's 1990 Draft NSR Workshop Manual for a
more detailed description of EPA's BACT determination policies,
including guidance addressing the consideration of energy,
environmental, and economic impacts.
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The first step is to identify, for the emissions unit in question,
all ``available'' control options.43 See proposed
Sec. 52.21(j)(5). Available control options are those air pollution
control technologies or techniques with a practical potential for
application to the emissions unit and the regulated pollutant under
evaluation, and which have been ``demonstrated in practice.'' See
proposed Secs. 52.21(b)(42) and (j)(5)(i). Air pollution control
technologies and techniques include the application of production
processes and available methods, systems, and techniques, including
fuel cleaning, clean fuels or treatment or innovative fuel combustion
techniques for control of the affected pollutant. See section 169(3) of
the Act. In some circumstances, inherently lower-polluting processes
are appropriate for consideration as available control alternatives.
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\43\ The term ``emissions unit'' may also represent a process or
a system that might collect emissions from several discrete pieces
of equipment.
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By proposing that for consideration in permit applications,
technologies should be ``demonstrated in practice,'' EPA intends to
require consideration of technologies in EPA's RACT/BACT/LAER
Clearinghouse (see section III.C. of this preamble), technologies
identified or required in a regulatory context and technologies meeting
minimum operating performance requirements. The EPA proposes to
authorize limiting consideration of emerging technologies that are
identified after an application is complete. This is discussed in more
detail in sections III.D.1. and III.D.2. of this preamble.
In the second step, the technical feasibility of each control
option that was identified in step one is evaluated with respect to the
source-specific (or emissions unit-specific) factors. See proposed
Sec. 52.21(j)(5)(i). One or more of the options may be eliminated from
consideration where they are demonstrated to be technically infeasible.
A demonstration of technical infeasibility should be clearly documented
and should show, based on physical, chemical, and engineering
principles, that technical difficulties would preclude the successful
use of the control option on the emissions unit under review.
The control technology options identified as available and
technically feasible are then ranked by overall control effectiveness
for the pollutant under review, with the most effective control
alternative at the top. At this point in the analysis, it is initially
assumed that the most stringent alternative represents BACT pending the
consideration of the source-specific energy, environmental and economic
impacts, and other costs associated with each control option. See
proposed Sec. 52.21(j)(5)(i). Both beneficial and adverse impacts
should be discussed and, where possible, quantified. In general, the
BACT analysis should focus on the direct impact of the control
alternative.
Cost is often a major concern of the owner or operator of the
proposed source and should be included in the analysis. Both average
cost effectiveness and marginal (incremental) cost effectiveness should
be derived for the control alternatives and considered in the final
decision.44
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\44\ Cost effectiveness is the cost of control divided by the
mass of emissions (usually in tons) reduced by that control. Average
cost effectiveness is the cost per ton that would be incurred
compared with baseline controls, (i.e., either uncontrolled or the
control level that would be required in the absence of the major
source requirements for which the source is making application).
Marginal or incremental cost effectiveness is the difference in cost
per ton of emissions reduced at the next most stringent level of
control, when comparing two control options.
The EPA has developed and published detailed procedural
information for performing cost analyses, including average and
incremental cost effectiveness, in the OAQPS Cost Manual. The Manual
is available through the National Technical Information Service
(NTIS) 5285 Port Royal Road, Springfield, Virginia 22161; Phone No.
(703) 487-4807. Government agencies can order it from the EPA CTC.
The EPA has made parts of the Manual dealing with general cost
analysis procedures available as retrievable electronic files on the
CTC bulletin board. See also footnote 49 for computer access
information.
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If the applicant is disposed toward selecting the most stringent
emissions control alternative in the listing as BACT, irrespective of
cost, then the analysis need only address generation of other air
pollutants, e.g., toxic pollutants. See proposed Sec. 52.21(j)(5)(i).
If there are no outstanding issues that would justify selection of an
alternative control option, the analysis ends and the results are
proposed as BACT.
In the event that the most stringent candidate control alternative
is shown to be inappropriate, due to energy, environmental or economic
impacts and other costs, the rationale for this finding must be
documented for the public record. See proposed Sec. 52.21(j)(5)(i).
Then the next most stringent alternative in the listing becomes the new
control candidate and is similarly evaluated. This process continues
until the technology under consideration cannot be eliminated by any
source-specific environmental, energy or economic impacts which
demonstrate that alternative to be inappropriate as BACT.
In summary, under the methodology just described, the most
effective control option not eliminated based on relevant statutory
factors is proposed as BACT for the pollutant and emission unit under
review. The EPA believes the proposed BACT determination methodology is
a rigorous and reliable way of determining a level of control that
conforms with the statutory definition of BACT and the core criteria.
For this reason the EPA is proposing to codify this methodology in the
Federal NSR regulations. The proposed Federal regulations could also
serve as a template for those States that choose to incorporate this
method into their SIP.
The EPA requests public comments on alternative methods for
determining BACT. Commenters should explain or illustrate how such
alternative method will satisfy the following core criteria proposed in
this document: (1) All available control systems for the source must be
considered in the determination, including the most stringent emissions
control alternative, and (2) selection of a particular control system
as BACT, and the basis for the rejection of the other more effective
emissions control systems, must be justified in terms of the statutory
criteria and supported by the record. Specifically, the comments should
address how the alternative methodology would provide for consideration
of energy, environmental, and economic impacts and other costs. See
section 169(3) of the Act.
4. Additional Guidance for BACT Determinations
The Federal analytical methodology outlined above provides for
reasoned BACT determinations, but it does not dictate a particular
result. Although the progression of the analysis is logical, the CAAAC
suggested that it would be helpful for EPA to develop more detailed
guidance addressing how the method actually works in real-life
applications. The CAAAC recommended that the EPA provide
[[Page 38274]]
guidance in the form of specific examples illustrating (1) how the
consideration of energy, environmental or economic factors justified
establishing a less stringent control technology as BACT, and (2) how
the BACT process may properly result in a BACT determination based on
control technology more stringent than that initially proposed by the
source.
The EPA agrees that the issuance of guidance in the form of
illustrative examples would improve understanding of EPA's BACT
determination process. Therefore, the EPA is preparing a case study
report, containing examples of BACT determinations properly employing
the EPA methodology. The EPA's guidance will examine several instances
in which a technology less stringent than the most stringent one was
determined to represent BACT, and other instances where the permitting
authority imposed BACT requirements that were more stringent than those
proposed by the applicant. This document will be made available to the
public when it is completed, independent of this proposed action. In
addition, the existing ``OAQPS Cost Manual'' provides basic guidance on
how to perform cost analyses for air pollution control equipment. See
footnote 45.
C. Improving Information about Available Control Technologies: Changes
to the Reasonably Available Control Technology (RACT)/BACT/Lowest
Achievable Emission Rate (LAER) Clearinghouse (RBLC)
The EPA established the original computerized database of BACT and
LAER determinations (the BACT/LAER Clearinghouse) at the request of
permitting agencies to promote sharing of technology determinations in
the permitting process. The clearinghouse was installed on the OAQPS
Technology Transfer Network (TTN) for convenient public access. The
1990 Amendments now requires the EPA to make information regarding
emission control technology available to the States and to the general
public through a central database. The 1990 Amendments directs that the
database include control technology information received from States
issuing NSR and operating permits, which include RACT 45 SIP
requirements. See sections 108(h) and 173(d) of the Act. This
discussion will refer to the database as the RBLC. The EPA also
established the Control Technology Center (CTC) to assist State and
local permitting agencies in identifying and evaluating new control
technologies or control technologies for industrial categories that
have been previously uncontrolled. It maintains a separate bulletin
board (CTC BBS) that operates in concert with the RBLC.
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\45\ The RACT is an acronym for reasonably available control
technology, which applies to existing stationary sources located in
nonattainment areas. See section 172(c)(1) of the Act.
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Both bulletin boards, the RBLC and the CTC BBS, are useful sources
of publicly available information on control technology determinations,
but they are not exhaustive. The CAAAC made numerous detailed
recommendations for improving the content and management of the
RBLC.46 The following discussion explains several steps the EPA
has taken or is planning to take to improve the control technology
information resources that it manages.
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\46\ July 1, 1994 Letter from Patrick M. Raher to Mary D.
Nichols transmitting CAAAC's Recommendations for NSR rule reforms.
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The EPA is proposing in this rulemaking to require
permitting authorities to submit BACT and LAER determinations to the
RBLC within 60 days following permit issuance. See section VI.C. of
this preamble.
Based on the CAAAC's recommendation that the RBLC should
comprehensively catalog information on critical data elements for new
entries (rather than obtaining missing data for existing entries), the
EPA is considering ways to ensure--through better cooperation with
permitting authorities and private industry--that the RBLC is complete
and comprehensive. The EPA intends to focus the RBLC's resources on
providing complete and correct information about new permit
determinations. Data gaps in old determinations will be addressed as
resources allow.
The EPA has simplified the RBLC's reporting form and
limited the information in the RBLC. Data fields that were of
questionable value or have received little use have been deleted. These
changes are expected to reduce the burden on permitting agencies and
encourage participation. The EPA has also prepared a stand-alone
program on computer disk for use by agencies to submit determinations
as an alternative to completing forms and direct data entry to the
RBLC.
The EPA intends, as resources allow, to establish standard
emission units for reporting emission limits from all major process
categories.
The EPA intends, as resources allow, to implement a
process to highlight the most stringent determinations reported to the
RBLC and to provide follow-up verification on installation and
compliance.
Due to the case-by-case and evolutionary nature of BACT,
as well as limited Agency resources, EPA does not intend to implement a
recommendation that the EPA prepare written guidance indicating
demonstrated technology that presumptively should be considered BACT or
LAER for certain industries. Nevertheless, EPA will publicize the
RBLC's capability to present technology determinations in rank order
(most to least stringent) for a particular process and pollutant. The
EPA has already placed such lists for several common sources and
pollutants in retrievable document files on the RBLC and will
periodically update and add to these rankings. Process-and pollutant-
specific rankings can be generated directly by users by performing
standardized search and download procedures that are integral functions
of the RBLC.
The EPA intends to up-date its RBLC users manual to more
clearly explain options and searches available to users. The manual is
available in hardcopy from the National Technical Information Service
(NTIS) of the U.S. Department of Commerce, the CTC (for government
agencies), or as a retrievable file on the RBLC. The RBLC also offers
an informational flyer which, in part, fulfills basic user manual
functions. The flyer is available to anyone free of charge from the CTC
47 and is a retrievable document file on the RBLC. The EPA will
continue to utilize the CTC and the RBLC as well as other available
electronic media to disseminate other guidance and technical
information such as the OAQPS ``Cost Manual.''
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\47\ Inquiries may be addressed to: Control Technology Hotline,
Information Transfer Group, OAQPS (MD-12), Research Triangle Park,
NC 27711, Hotline No. (919) 541-0800, OAQPS TTN: Electronic bulletin
board, computer access telephone number (919) 541-5642; Internet
Access: TELNET ttnbbs.rtpnc.epa.gov.
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If fully implemented, the impact and scope of the CAAAC's
recommendations to expand and improve EPA's technology information
services would require a substantial increase in resources. The EPA
invites comments on funding alternatives for the RBLC and CTC BB. The
EPA also seeks comments on a strategy for prioritizing all or part of
the RBLC's functions if full funding is not available.
D. Streamlining BACT/LAER Determinations
The EPA's current policy calls for consideration of available
control techniques, including emerging technology, in making BACT and
LAER
[[Page 38275]]
determinations until the time that a final NSR permit is issued.48
During the NSR Reform Subcommittee meetings, industry representatives
expressed concern about instances when applicants have been required to
consider emerging technologies long after their applications were
prepared but before a final permit was issued. This practice interposes
significant uncertainty in business planning as well as permit delays.
For example, permit applicants face the risk of having to substantially
redesign a project due to the emergence of new control technology prior
to final permit issuance. Further, there are research and related
transaction costs, and even project jeopardy, when permit processing is
extended while more information about the availability and
achievability of an emerging technology is assessed.
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\48\ See J. Seitz memo, ``BACT/LAER Determination Cutoff Date,''
January 11, 1990.
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The EPA is today proposing to alter its current policy and
proposing accompanying changes to its NSR regulations to address this
problem. These proposed changes strike a balance between providing more
certainty for industry in making technology choices for planning major
projects, and ensuring that state-of-the-art technologies are
adequately considered.
1. Permit Applications Must Include Analysis of Control Technologies
That are Demonstrated in Practice
Specifically, the EPA is proposing to require that the BACT
analysis or LAER determination that is submitted with a permit
application consider technologies that have been ``demonstrated in
practice.'' See proposed Secs. 51.165(a)(2)(ii)(A), 51.166(j)(5)(i),
and 52.21(j)(5)(i). The proposed regulations define ``demonstrated in
practice'' to include all technologies required and reported through
existing regulatory programs and those that, while not identified in
the regulatory arena, meet specific criteria for determining their
availability and appropriateness for consideration in a BACT or LAER
analysis. See proposed Secs. 51.165(a)(1)(xxviii), 51.166(b)(42),
52.21(b)(43), and 52.24(f).
With regard to regulatory documentation, technologies from the
following sources must be considered in the BACT or LAER analysis:
(a) The EPA's RACT/BACT/LAER Clearinghouse;
(b) Major source construction permits issued pursuant to parts C
(PSD) and D (NSR in nonattainment areas) of title I of the Act;
(c) Emissions limitations contained in federally-approved
implementation plans, excluding emissions limitations established by
permits issued pursuant to programs for non-major sources;
(d) Permits and standards developed under sections 111 and 112 of
the Act; and
(e) Alternative Control Techniques Documents and Control Techniques
Guidelines that have been issued by the EPA.
The EPA is not proposing to require that operating permits issued
under federally-approved title V Act programs be among the sources of
available control technology that must be examined in preparing a
permit application except where sources are issued an ``integrated''
NSR and Operating permit. Title V permits generally compile
requirements that are independently established under other Act
programs. Title V programs do not mandate substantive requirements
concerning the selection, installation and performance of control
technologies. Therefore, a title V permit, unless it jointly imposes
the substantive requirements of a major NSR permit, would likely not
provide significant new control technology information.
Control technologies that may not be implemented in a regulatory
context of a substantive Act program may nevertheless be available for
a given BACT or LAER analysis. For example, sources often install
state-of-the-art technology in order to be classified as a minor source
or to avoid NSR requirements for major modifications. (In this case
permitting authorities are encouraged to report the technology to the
RBLC.) Furthermore, new technologies and innovations of existing
technologies occasionally evolve without wide publicity in the
regulatory arena. Such technologies also deserve consideration.
Consequently, the EPA also proposes to define ``demonstrated in
practice'' to include any technology that meets the following criteria:
(1) it has been installed and operating continually for at least 6
months on an emissions unit(s) which has been operating at least at 50
percent of design capacity during that period of time; and (2) its
performance has been verified during that 6-month period with a
performance test or performance data while operating under a load that
coincides with either the operation of the emissions units served by
the control technology at their PTE, or 90 percent of the control
technology's design specifications. See proposed
Secs. 51.165(a)(1)(xxviii), 51.166(b)(42), 52.21(b)(43), and 52.24(f).
The 6-month operating requirement within the definition of
``demonstrated in practice'' is proposed to establish a minimum
operating history to demonstrate the performance and reliability of the
new technology. The EPA believes that a 6-month period is appropriate
because this is the maximum amount of time currently allowed for the
shakedown period for establishing emissions of replacement emissions
units in NSR netting transactions. See existing
Secs. 51.165(a)(1)(vi)(F), 51.166(b)(3)(vii) and 52.21(b)(3)(vii). The
EPA also believes that the 50 percent continual load factor provides
some assurance that the control technology has been placed in
meaningful service during the 6-month period, while recognizing that
higher loads may not be sustainable by the source for extended periods
of time so soon after start-up.
Knowledge of the control technology's ability to perform
effectively at specified loads is essential for its consideration in a
BACT or LAER determination. Therefore EPA is proposing to add the
emissions load criteria for testing a control technology's performance
during the 6 months in which the sustained operability of the
technology is established. This testing requirement is similar to that
found under the NSPS, which requires facilities to conduct performance
tests within the period 60 to 180 days after start-up to determine
compliance with the applicable standards. See existing 40 CFR 60.8(a).
The EPA requests comment on the criteria and rationale described above
for determining if a control technology has been demonstrated in
practice.
Further, EPA is proposing that consideration of a technology that
is demonstrated in practice outside the regulatory context not be
required if the operation period and performance test concluded less
than 90 days prior to the date a permit application is complete.49
See proposed Secs. 51.165(a)(2)(ii)(A), 51.166(j)(5)(i)(A) and
52.21(j)(5)(i)(A). The proposed 90-day period preceding the date of
complete permit application allows time for the installation and
performance that is ``demonstrated in practice'' to be publicized in
trade journals and company newsletters and the results to be examined
by the scientific community. On the other hand, having the 90-day
period keyed to the completeness date creates an incentive for the
source to resolve incomplete applications expeditiously.
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\49\ In the case of foreign technology that has been installed
and operating outside the U.S., the same proposed criteria would
apply in determining whether a technology has been demonstrated in
practice.
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The following examples illustrate the proposed process.
[[Page 38276]]
Example A: On June 1 a permit applicant submits an application
that is subsequently determined to have been complete on the date of
the submittal. The applicant in this case would be responsible for
evaluating all technologies reported or required in a regulatory
context as of the date of submittal. Those technologies that have
been ``demonstrated in practice'' via the operating and performance
criteria specified above, as of 90 days prior to June 1st would also
have to be evaluated.
Example B: On June 1st, a source submits a permit application.
One month later (May 1st), the permitting authority determines the
application to be incomplete. The source submits new information on
August 1st and the permitting authority finds the application
complete as of the day the new information was submitted. The
applicant would be responsible for evaluating all technologies
reported or required in a regulatory context as of May 1st. Those
technologies that have been ``demonstrated in practice'' via the
operating and performance criteria specified above as of 90 days
prior to the original submittal date would have to be evaluated.
Comment is solicited on the proposed 90-day post-demonstration
period in light of the 6-month demonstration period within the
definition of ``demonstrated in practice.''
Finally the proposed regulations would require, in evaluating
control technologies that are demonstrated in practice under both the
regulatory and performance-based criteria, the consideration of control
technologies on the basis of technology transfer. Technology transfer
is appropriate when sources or source categories have similar emission
stream characteristics. See proposed Secs. 51.166(j)(5)(ii) and
52.21(j)(5)(ii).
Some industry and State representatives on the NSR Reform
Subcommittee expressed concern about the administrative delays if a
permit application is determined incomplete due to the inadvertent
omission from a BACT or LAER analysis of a technology alternative that
has been ``demonstrated in practice.'' For example a technology that
has recently been ``demonstrated in practice'' may have been publicized
in a less well-known publication, and thereby escaped notice of the
applicant. Certainly, overt disregard of reasonably accessible
information would be grounds for determining the application to be
incomplete. Inadvertent omissions should be evaluated by the permitting
authority in light of case-specific factors. In all instances, if a
technology that should have been evaluated is identified and the
permitting authority sustains the completeness finding, there is still
a duty to evaluate the omitted technology relative to the other
technology alternatives prior to permit issuance.
2. Permitting Authority May Limit Consideration of New or Emerging
Technologies After Complete Application
New or emerging technologies are those technologies that have been
developed but have not satisfied the criteria to be classified as
``demonstrated in practice.'' Some NSR Reform Subcommittee members
recommended that EPA prohibit any consideration of new or emerging
technologies identified after the permit application is complete. Other
members recommended that EPA not allow any limitations on consideration
of new or emerging technologies prior to the end of the public comment
period on a permit application. The EPA is proposing new regulatory
provisions that would authorize the permitting authority to cut-off
consideration of technologies that evolve or appear after the permit
application is complete, except under limited circumstances described
below. See proposed Secs. 51.165(a)(2)(ii)(B) and (a)(7)(iii),
51.166(j)(5)(iii) and (q)(3) and 52.21(j)(5)(iii) and (q)(3).
The EPA today proposes to add provision concerning public
recommendations on new and emerging control technologies as part of the
new provisions for public participation. Under the proposed rules, the
permitting authority may require commenters to submit a recommendation,
accompanied by reasonably available information, regarding new or
emerging control technologies. The accompanying information could
include the name and location of the source utilizing the control
technology, the manufacturer and type of control device, the date on
which the technology was installed and became operational, appropriate
performance requirements, and any resulting test or performance data
available. See proposed Secs. 51.165(a)(7)(ii) and 51.166(q)(2). With
regard to the implementation of the Federal PSD requirements at
Sec. 52.21, the EPA is proposing to require that public commenters
include the above information along with any recommendation for further
consideration of new control technology alternatives. See proposed
Sec. 52.21(q)(2).
It should be noted that the existing NSR regulations at
Sec. 51.165(a) do not contain an explicit provision for public
participation procedures as do the PSD regulations in parts 51 and 52.
Nevertheless, the public participation procedures set forth under
Sec. 51.161 generally apply for both major and minor new source review
permitting. In the proposal, certain minor source actions, e.g.
netting, that in effect shield a source from major source permitting
requirements would not qualify for less environmentally significant
status. In order to make clear the regulatory context for today's
proposed provisions concerning a cutoff date and informational
requirements for public commenters, the EPA is today proposing to amend
Sec. 51.165 to refer to the existing requirements at
Sec. 51.161.50 See proposed Sec. 51.165(a)(7).
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\50\ In a separate rulemaking EPA has proposed revising the
public review and comment requirements at 40 CFR 51.161 to give
States more flexibility in processing minor source permits for
projects that are determined to be ``less environmentally
significant.'' See 60 FR 45529, 45549, (August 31, 1995).
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The permitting authority shall be responsible for evaluating the
supporting documentation that has been provided by commenters asserting
new or emerging technologies warrant consideration as BACT or LAER.
Based on the facts that are presented, the permitting authority will
either accept the recommendation at face value, reject it as being
insufficiently demonstrated, or refer it to the permit applicant for
further consideration. The EPA is also proposing to require the
permitting authority to notify the permit applicant within 10 working
days of receipt of comments recommending a new technology for which the
permitting authority determines the comments have met the specificity
criteria it has established relative to the cut-off date. See proposed
Secs. 51.165(a)(7)(iii), 51.166(q)(3) and 52.21(q)(3). This requirement
would provide applicants with an opportunity to respond to the comments
and expedite their investigation relative to the proposed project.
The permitting authority, in determining the extent to which
commenters' recommendations deserve further consideration, should
consider the difficulty of private citizens and small organizations in
getting access to detailed supporting data. If information about the
emerging technology is limited, commenters should document their
attempts to obtain data about the source and the recommended
technology. For example, the commenter may present logs of telephone
conversations with company officials and correspondence with trade
associations, environmental associations, government agencies and
technical consultants that might have relevant information regarding
the availability and effectiveness of the technology. A list of
questions that are asked and respective responses may be
[[Page 38277]]
helpful. While this information may not actually demonstrate the
availability of a recommended technology, it will provide the
permitting authority with information to help determine whether further
evaluation is warranted either by its staff or the source. The EPA
requests comment on the proposed criteria for evaluating public
comments addressing the availability of new technologies and the
appropriate burden of proof that commenters should bear after a permit
is determined to be complete.
Unlike a recommendation to consider new or emerging technology as
discussed above, the identification of a technology alternative that
has been ``demonstrated in practice'' and should have been assessed
prior to completeness, places no burden on the commenter to supply
qualifying information about the technology. The permitting authority
must ensure that the omitted technology alternative is adequately
considered in the BACT or LAER determination. The permitting authority
may be able, however, to determine if the alternative is inferior to
the technology proposed by the applicant. In all circumstances the
permitting authority would be responsible for considering the comments
and documenting its associated decisions for the public record.
The proposed approach for considering new or emerging technologies
promotes certainty and limits permitting burdens for those applicants
that have included a thorough review of control technologies in their
permit applications. The proposed regulations would require
consideration of only those post-completeness emerging technologies
whose availability and effectiveness are substantiated to the
satisfaction of the permitting authority.
This proposal also preserves opportunity for public participation.
In all instances, the public would have the right to submit comments
addressing whether all control technologies that were, in fact,
``demonstrated in practice'' prior to completeness, were adequately
considered in the permit application and during review by the
permitting authority. In addition, public commenters have the
opportunity to recommend new or emerging technologies provided that
recommendations are accompanied with supporting information about the
existence and capabilities of the technology. The permitting authority
would be required to consider timely and documented public comments
addressing technologies that emerge after completeness.
In light of the considerations described above, the EPA is also
proposing regulatory changes to revise its policy that sets the permit
issuance date as the final cut-off for consideration of new and
emerging technologies. Proposed revisions to the Federal regulations
would set the final cut-off at the close of the public comment period,
unless the permit is reopened for review or the source fails to
commence construction within a prescribed time period after the permit
is issued.
The EPA also requests public comment on alternative regulatory
changes that would (1) allow State NSR programs to wholly preclude
consideration of public comments about technology that is new or
emerging after an application is complete; and (2) provide in the
Federal NSR program for wholly precluding consideration of public
comments about technology that is new or emerging after an application
is complete.
Rules that allow or provide for entirely precluding public comment
on technology that emerges after a permit application is complete would
provide greater certainty for business planning and have administrative
ease and simplicity benefits. On the other hand, such rules would
potentially eliminate public input on emerging technologies and for go
any resulting emission reductions benefits. If EPA did allow or provide
for a categorical cutoff of public comment addressing technologies
emerging after an application is complete, EPA may also need to include
an exception that provides for consideration of new or emerging
technologies in circumstances where substantial time elapses between
the completeness determination and final permit issuance (e.g., a
permit applicant submits an application that is determined complete but
significant deficiencies that substantially delay permit processing
with the application are discovered during the full permit review).
Under all of the alternatives presented, the permitting authority
would be required to consider public comment addressing whether the
technologies available (i.e., ``demonstrated in practice'') at the time
the permit is complete were adequately evaluated. The EPA seeks public
input on these alternatives and related issues.
E. Proposed Complete Application Criteria
In several of the proposed regulatory and policy changes based on
the consideration of the CAAAC recommendations, the completeness
determination has emerged as a key step in the permit review process.
The cut-off date EPA is proposing to authorize for consideration of new
and emerging technology for BACT or LAER, and the proposed procedures
for FLM notification and coordination are inseparably tied to the
completeness date. As discussed in this section and in section V.
(Class I Areas), the evaluation and determination of whether a permit
application is complete is the responsibility of the permitting
authority. Consequently, EPA is proposing minimum criteria upon which
the permitting authority should base its completeness determination.
Broadly, EPA is proposing that a permit application shall contain
information necessary to make the demonstrations, analyses, and
determinations required under the NSR regulations. See proposed
Secs. 51.165(a)(6), 51.166(n), and 52.21(n).
The completeness criteria is derived from applicable existing
provisions on ``Source information'' at Secs. 51.166(n) and 52.21(n)
that remain unchanged by this rulemaking, as well as proposed revisions
and new provisions. In addition, the EPA proposes renaming
Secs. 51.166(n) and 52.21(n) to ``Complete application criteria,'' and
adding similar provisions to Sec. 51.165. Specifically, proposed
revisions to Secs. 51.166(n)(1) and 52.21(n)(1) assign the completeness
determination t
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
o the permitting authority and indicate the
determination shall be made upon the presence and adequacy of analyses
and information required under Secs. 51.166(n)(2) through (n)(5) and
Secs. 52.21(n)(2) through (n)(5), respectively. Proposed revisions at
Secs. 51.166(n)(2) and (n)(3), and at Secs. 52.21(n)(2) and (n)(3),
require that the application contain sufficient information to
substantiate the following: (1) the BACT recommendation pursuant to
proposed Secs. 51.166(j)(5) or 52.21(j)(5); (2) the analyses required
by Secs. 51.166(k) through (m) or Secs. 52.21(k) through (m); (3) the
additional impact analysis pursuant to Secs. 51.166(o) or 52.21(o); (4)
determinations and analyses related to the protection of Federal Class
I areas pursuant to Secs. 51.166(p) or 52.21(p); (5) the establishment
of PALs under Secs. 51.166(u) or 52.21(x); and (6) undemonstrated
technology waiver applications under Secs. 51.166(s) and 52.21(v), as
appropriate. The EPA is proposing as independent requirements for
completeness at Secs. 51.166(n)(4) and (n)(5), and Secs. 52.21(n)(4)
and (n)(5), that key information from the permit application be
registered on the applicable EPA electronic bulletin board
[[Page 38278]]
and that FLM review and coordination has been provided.
The EPA is proposing similar completeness criteria at
Sec. 51.165(a)(6) for nonattainment area major source construction
permit applications. Under the proposed provisions, the plan shall
require the application to include information pertaining to the LAER,
or where applicable, the BACT determination, statewide compliance and
undemonstrated technology or application waiver.\51\
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\51\ The upcoming proposed rulemaking to implement changes to
the NSR regulations pursuant to provisions in parts C and D of the
Act as amended in 1990 will provide additional detail of required
information for offset showings and the alternatives analysis.
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The EPA expects that the demonstration of statewide compliance
would be met by the owner or operator of the proposed source
submitting, with the permit application, the compliance certifications
for all other major stationary sources that it owns or operates in the
State. See section 173(a)(3) of the Act. Title V compliance
certifications may serve to satisfy this demonstration. However, with
regard to facilities that have certified noncompliance or have
experienced noncompliance since the last title V certification, an
updated compliance certification may be necessary to demonstrate
statewide compliance.
By proposing these complete application criteria, EPA is not
proposing additional substantive requirements for either PSD or
nonattainment NSR permits, but is summarizing the information and
analyses required by the provisions of the respective program.
Generally, information necessary for purposes of a completeness
determination is described with the substantive requirements, e.g., see
the discussions contained in this proposal on BACT, protection of
Federal Class I areas, PALs and undemonstrated technology waivers.
F. Proposed Undemonstrated Control Technology or Application (UT/A)
1. Introduction
The EPA proposes to revise the existing Innovative Control
Technology (ICT) Waiver. This provision allows sources to satisfy the
BACT requirement through the use of innovative control technologies. It
is termed a waiver since a source is allowed an extended period of time
to bring the new technology into compliance with the required
performance level. The EPA today proposes to make the innovative
technology alternative simpler and more attractive in PSD areas and,
for the first time, proposes to add a similar waiver to nonattainment
NSR regulations. These changes are intended to facilitate the use of
innovative or undemonstrated pollution control, prevention, or
reduction technologies in NSR permitting.
The utilization of undemonstrated technologies or applications
generally involves risk-taking on the part of the source, the
permitting agency, the public, and the environment. The CAAAC's NSR
Reform Subcommittee and the EPA recognized the risks associated with
undertaking innovative projects while also recognizing the potential
benefits to all stakeholders of a well designed and frequently used
waiver that leads to greater use of previously undemonstrated control
strategies. As a result, the CAAAC provided the EPA with a series of
detailed recommendations on how the existing waiver should be recast.
The EPA has evaluated the recommendations and proposes to adopt many of
them. Further, the EPA believes that the following proposal minimizes
the uncertainty to the source while protecting the environment from
undemonstrated technologies that fail.
Specifically, the EPA proposes (1) changing the name of the waiver
to ``UT/A'' and changing the definition to expand the environmental
considerations, (2) adding UT/A provisions for nonattainment area
sources, (3) ensuring FLM consultation in UT/A decisions for sources in
PSD areas locating near Class I areas, (4) establishing reference BACT/
LAER levels in the permit that grandfathers sources out of application
of later demonstrated technologies if the UT/A fails, (5) establishing
protective emission limits in the permit for the duration of the
waiver, (6) requiring that contingency measures be addressed and
established in the application and the permit, (7) reducing the
duration of the waiver, and establishing a limit on the number of UT/A
waivers issued for any given UT/A to that necessary to demonstrate the
performance of a technology or application. The EPA is proposing
modifications to the existing ICT regulations that reflect the
differences in the proposed UT/A approach. Many of the existing
provisions of Secs. 51.166(s) and 52.21(v) will remain unchanged. In
several instances, the EPA is proposing only minor conforming changes.
See proposed Secs. 51.166(s)(2) and 52.21(v)(2) and newly created
Sec. 51.165(a)(8).
2. Description of Proposed UT/A Waiver
Section 111(j) of the Act provides for the issuance of waivers to
sources which propose the use of control technology which the
Administrator determines to be innovative. Concerned that a source
would be able to obtain a section 111(j) waiver but remain subject to
BACT requirements thus discouraging innovation, the EPA incorporated
into the PSD regulations a corresponding ICT waiver. See 45 FR 52676
(August 7, 1980). However, this waiver has not been widely used since
its adoption 15 years ago.
The CAAAC's NSR Reform Subcommittee examined the reasons for the
ICT waiver's limited usage and developed three possible outcomes, other
than performance as expected, for the installation of undemonstrated
control technology--that the technology performs better than expected;
that there is a ``marginal'' failure; or that there is a ``gross
failure.'' The Subcommittee recommended options to reward the source
for incurring the risk of failure, procedures to be taken by the
permitting agency in case of failure, and certain air quality
safeguards.
a. Proposed New Definition and Scope. The CAAAC recommended that
the EPA replace the existing ``Innovative Control Technology'' name
with the term ``UT/A.'' The CAAAC recommended the following definition
for the waiver: ``any system, process, material, or treatment
technology that shows substantial likelihood to operate effectively and
to achieve either: (a) greater continuous reductions of air pollutant
emissions than any demonstrated system, or (b) comparable emission
reductions at lower cost, lower energy input, with lesser non-air
environmental impacts, or with other advantages that are defined and
mutually agreed on a case-specific basis to justify the use of UT/A
provisions.'' In developing the proposed UT/A definition, the EPA has
slightly modified the CAAAC's suggested definition. See proposed
Secs. 51.166(b)(19) and 52.21(b)(19). For PSD areas, the Agency
proposes to interpret ``comparable emission reductions'' as allowing
the UT/A to achieve marginally less emission reductions in the
pollutants subject to BACT than the otherwise applicable BACT. This
proposed flexibility allows a permitting agency to issue a PSD UT/A
waiver for an undemonstrated technology that achieves somewhat less
than the otherwise applicable BACT emission limit provided that the
benefits (i.e., energy, environmental or economics) associated with the
UT/A
[[Page 38279]]
clearly compensate for the increase in emissions. (As is discussed in
the next section, the EPA does not believe that such ``comparable''
emissions reductions can satisfy LAER.) In addition, EPA's proposed UT/
A definition includes undemonstrated pollution prevention techniques as
potentially eligible UT/A candidates. See also discussion of pollution
prevention issues in section IV.H. of this preamble.
The EPA has made some changes to the UT/A definition recommended by
the CAAAC. The EPA is not proposing the general catch-all phrase for
other mutually agreed upon advantages because it is vague and
unnecessary, and could potentially lead to misuse of the waiver. In
addition, although the choice of ICT or UT/A is generally a mutual
agreement between the permitting authority and the source, the existing
ICT rules properly make clear that the source makes the request for an
ICT, and the permitting authority approves or disapproves the request.
The EPA is also omitting ``non-air'' from the CAAAC recommended UT/A
definition to allow air-related impacts to be factored into the
decision process thus expanding the arena of potential environment
impacts that can be considered. The EPA solicits comment on this
proposed definition, particularly on whether any other factors should
be included in the definition. The proposed PSD definition of UT/A does
not affect the section 111(j) ICT waiver for sources seeking a waiver
under the NSPS.
b. Extension to Nonattainment NSR. The CAAAC's Subcommittee
recommended that the UT/A waiver be extended to major nonattainment
NSR, in light of the increased number of sources subject to
nonattainment NSR after the 1990 Amendments. Many of these sources will
be relatively small (compared to typical pre-1990 major nonattainment
NSR sources) and may have relatively unique emission units which could
greatly benefit from expanded use of undemonstrated control
technologies and applications.
However, expanding the UT/A waiver to nonattainment area NSR could
create a discrepancy between the UT/A definition and the statutory
definition of LAER. The recommended UT/A definition provides that a
control technique may qualify if it achieves ``comparable emission
reductions.'' As previously discussed, the EPA interprets this as
allowing the UT/A to achieve marginally less emission reduction than
the applicable emissions level which would otherwise be required by the
major NSR permit. However, section 171(3) of the Act defines LAER as
the more stringent of either: (1) The most stringent emission
limitation contained in the implementation plan of any State for such
class or category of source; or (2) the most stringent emission
limitation achieved in practice by such class or category of source.
The LAER requirement, unlike BACT, does not allow consideration of
economic, energy, or other environmental factors to compensate for less
emission reductions. Accordingly, it is inappropriate to include in the
definition of UT/A for nonattainment areas technologies that achieve
only comparable emission reductions.
The EPA is proposing to expand UT/A waiver applicability to
nonattainment area NSR and require that all applicable part D
requirements (e.g., LAER and offsets) are met prior to issuance of a
waiver. See proposed Secs. 51.165(a)(1)(xxvi), and 51.165(a)(8). This
action supports an Agency objective, as stated in a June 15, 1993
memorandum from Carol Browner, EPA Administrator, entitled ``Pollution
Prevention Policy Statement: New Directions for Environmental
Protection,'' to further pollution prevention by providing
opportunities for technological innovation. The EPA is proposing the
recommended UT/A definition for nonattainment NSR, but replaces
``comparable'' with ``equal'' in the ``emission reductions'' language
and omits the general, catch all ``other advantages'' language for the
same reasons EPA declined to use the language in the PSD context. The
EPA solicits comment on this definition, particularly on whether any
factors other than those proposed should be included in the definition.
To provide EPA information on the waiver's utilization and types of
technologies or applications approved, the EPA is proposing that a copy
of the waiver be submitted to the Agency within 30 days of its
approval. See proposed Secs. 51.165(a)(8)(ix) and 51.166(s)(9).
c. Federal Land Manager (FLM) Consultation. As part of the UT/A
waiver approval process, the CAAAC recommended that the FLM be
consulted before the permitting authority approves an UT/A waiver where
impacts on Class I area air quality or AQRV's may result from the UT/A
source. Existing Secs. 51.166(s)(2)(vi) and 52.21(v)(2)(vi) require
that before an ICT waiver can be approved the Class I area protection
provisions of Secs. 51.166(p) and 52.21(p) must be satisfied with
respect to all periods during the life of the ICT source or
modification. The EPA believes these provisions and revisions to
Secs. 51.166(p) and 52.21(p) proposed in this document, address these
concerns and proposes to retain these provisions for a UT/A waiver
under PSD.
d. Content of a UT/A Waiver. Based on the CAAAC's recommendations,
the EPA proposes to revise the existing ICT waiver provisions to
require that the UT/A waiver contain the emission control performance
objective of the UT/A and the otherwise applicable BACT or LAER
standard identified in the UT/A permit for reference, but not as
enforceable limits during the life of the UT/A waiver. See proposed
Secs. 51.166(s)(5)(i) and 52.21(v)(5)(i). With regard to a
nonattainment area NSR UT/A waiver, the EPA is proposing that the
undemonstrated technology comply with the applicable LAER limit. See
proposed Sec. 51.165(a)(8)(v)(A).
The CAAAC recommended that, in addition to including the otherwise
applicable BACT or LAER emission limit and the UT/A's emission limit
objective in the permit, the permitting authority should also establish
an upper emission limit for the UT/A. Based on the Subcommittee's
discussions, the Agency interprets this recommendation as being an
enforceable emission limit established by the permitting authority and
not to be exceeded during the term of the UT/A waiver. This issue is
discussed further in section IV.f of this preamble.
As recommended by the CAAAC, a proposed UT/A waiver application and
permit should include (1) identification of potential failure modes,
(2) projections of corresponding emissions increases expected from such
failure modes, (3) characterization of such failure modes and
corresponding emission increases as marginal or gross failures, and (4)
identification of potential contingency measures, both short- and long-
term, to reduce or mitigate emission increases in the event of worse-
than-expected emissions during the term of the UT/A waiver. The CAAAC
recommended that these elements be included in the UT/A permit and that
the potential contingency measures not be construed to limit the
consideration or use of any other contingency measures that may be
identified later, if such measure would better ameliorate worse-than-
expected UT/A performance. These projections and contingency measures
would, as for any NSR permit term, be subject to public notice, comment
and review and approval by the permitting authority.
The EPA has evaluated and largely agrees with the CAAAC's
recommendations. Thus, the EPA proposes regulations requiring the
permitting authority to include in UT/
[[Page 38280]]
A approved permits (1) the UT/A's emission control performance
objective and applicable reference BACT or LAER emission limit and (2)
the identification and classification of potential failure modes and
associated contingency measures. See proposed Secs. 51.165(a)(8)(v) (A)
and (C), 51.166(s)(5) (i) and (ii), and 52.21(v)(5) (i) and (ii). The
EPA also proposes that an application for a UT/A waiver include a
detailed description of the continuous emission reduction system and
all information used or consulted in applying for a UT/A waiver. See
proposed Secs. 51.165(a)(6)(ii)(C), 51.166(n)(2)(iii) and
52.21(n)(2)(iii).
The CAAAC recommended that EPA should allow the initial compliance
demonstration requirements to be revised by mutual agreement within the
life of the UT/A provisions. The CAAAC's rationale was to allow
improvements in the suitability, representativeness, repeatability,
accuracy, or reliability of emission control performance test results,
or for such other causes as are mutually agreed to justify a revision.
Currently a permitting authority has the flexibility to revise
compliance demonstration requirements in a permit as allowed by
applicable law. In addition, EPA is currently modifying its title V
permit revision process to allow sources considerable flexibility in
making changes to existing permit terms. The EPA expects to allow
compliance demonstration changes in the UT/A context consistent with
the Title V revision process.
e. Failure of a UT/A. The Subcommittee acknowledged that the UT/A
may fail to achieve its emission control performance objective and that
the level of failure may vary thereby warranting different types of
corrective action. As described in the preceding section, the EPA is
proposing regulations largely consistent with the CAAAC recommendations
that would require the UT/A permit to include potential failure modes.
Based on the CAAAC's recommendation, the EPA proposes that potential
failure modes be identified as either ``marginal'' or ``gross'' and
that emissions levels associated with a ``marginal'' and a ``gross''
failure be specified in the permit along with the corresponding
remedial actions. See proposed Secs. 51.165(a)(8)(v)(B),
51.166(s)(5)(ii) and 52.21(v)(5)(ii). ``Marginal'' and ``gross''
failure should be expressed as both an emission rate (e.g., pounds/
hour) and mass emission limit (e.g., pounds/million British thermal
units). Recognizing that the installation of each UT/A will be unique,
the EPA is proposing to provide the permitting authority with the
flexibility to define both ``marginal'' and ``gross'' failure on a
case-by-case basis. To protect public health, NAAQS and AQRV, the EPA
is proposing that the ``gross'' failure limit be included in the permit
as an enforceable emission limit that is not to be exceeded during the
term of the UT/A waiver. See proposed Secs. 51.165(a)(8)(viii),
51.166(s)(8) and 52.21(v)(8).
The EPA envisions that a ``marginal'' failure would be addressed
with specific contingency measures, but the source would not need to
abandon the technology. Thus, the permitting authority is provided with
the flexibility to either permit the UT/A at its ``marginal'' failure
emission level or require the source to install technology capable of
achieving the appropriate reference emission limit (i.e., BACT or
LAER). See proposed Secs. 51.165(a)(8)(vii), 51.166(s)(7) and
52.21(v)(7). The EPA solicits comment on whether specific definitions
of ``marginal'' and ``gross'' failure should be established by the
Agency by rule or guidance.
f. Incentives. Recognizing that a very limited number of PSD ICT
waivers have been requested or approved since 1980, the NSR Reform
Subcommittee discussed various options for promoting the use of UT/A's.
One option discussed by the Subcommittee would allow a source to use,
bank, or trade the portion of emission offsets of a nonattainment
pollutant that becomes surplus when the UT/A achieves greater emission
reductions than originally anticipated. The second option would allow
the permitting authority, on a case-by-case basis, in conjunction with
the source and subject to public review, to agree on values of either
mass emission reduction credits or emission impact reductions in PSD
areas in the UT/A permit. The third option, applicable to both PSD and
nonattainment areas, would limit the benefit accruing to the UT/A
source to protection from enforcement of the initial UT/A emission
limit during the life of the UT/A waiver.
The EPA agrees that incentives should be provided to encourage the
development of UT/As and is requesting comment on whether existing
policies (e.g., Emission Trading Policy Statement (51 FR 43814) and
Economic Incentive Program (59 FR 16690)) provide sufficient guidance
concerning emission reduction credits thus making specific UT/A
provisions that address credits unnecessary. In addition, the EPA
solicits comment on the second option identified by the Subcommittee,
i.e. some type of PSD emission reduction (or emission impact reduction)
credit. In regard to the third option, the EPA believes that both the
current ICT and the proposed UT/A waivers provide the protection
envisioned by the Subcommittee, namely a limited shield from
enforcement during the term of the UT/A waiver, assuming all applicable
UT/A requirements are met. However, the proposed UT/A waiver
regulations specifically require the permitting authority to establish
an enforceable upper emission limit which is not to be exceeded during
the term of the UT/A waiver. See proposed Secs. 51.165(a)(8)(viii),
51.166(s)(8) and 52.21(v)(8).
g. Duration and Number of UT/A Waivers. The CAAAC recommended that
UT/A waiver provisions expire no later than 4 years after start of
operation or 7 years after the initial UT/A permit is issued, whichever
is earlier, or by any earlier date mutually agreed upon by the parties.
As described below, EPA is proposing a shorter waiver period. The EPA
is also proposing that upon expiration of the UT/A provisions, either
the initial UT/A emissions limit, or a revised limit that meets the
requirements for either better-than-expected or less-than-expected
emissions control performance, as appropriate, would be incorporated
into a final permit (i.e. no longer an UT/A waiver). The EPA also
proposes to require reporting of the final permit limits to EPA's RACT/
BACT/LAER Clearinghouse. See proposed Secs. 51.165(a)(8) (vi) and
(vii), 51.166(s) (6) and (7) and 52.21(v) (6) and (7).
The EPA is proposing that the UT/A be allowed no longer than 2
years from the time of startup or 5 years from permit issuance (2/5
years), whichever is earlier, to achieve the emission control
performance objective on a continuous basis. See proposed
Sec. 51.165(a)(8)(ii)(B), and the amendatory language for
Secs. 51.166(s)(2)(ii) and 52.21(v)(2)(ii). This proposal is applicable
to both PSD and nonattainment area UT/A waivers. The Agency is
proposing a compliance timeframe other than the CAAAC's recommendation
due to comments received during the Subcommittee's deliberations that
indicated, as a general rule, an UT/A must perform as envisioned within
a relatively short timeframe, primarily due to production constraints,
or it is replaced with a conventional control technology. In addition,
in order to protect air quality, especially for nonattainment areas,
the EPA considers the proposed 2/5 year compliance timeframe more
appropriate than the CAAAC's recommendation.
[[Page 38281]]
The EPA solicits comment on the allowable length of a compliance
schedule to meet the reference BACT or LAER and on whether the
allowable length should be longer for BACT than for LAER.
The CAAAC recommended that the number of UT/A waivers approved for
any given UT/A should not exceed the quantity that the permitting
authority deems appropriate to determine the particular UT/A's emission
control performance potential, its capability to operate safely and
effectively, and its capability to protect health, safety, and welfare.
Section 111(j) of the Act contains the same language identified by
the Subcommittee; however, neither existing Sec. 51.166(s) nor
Sec. 52.21(v) contain such provisions. While EPA is inclined to allow
additional waivers if the criteria specified in section 111(j)(1) are
met, EPA does have reservations about reissuing waivers for the same
system, particularly in nonattainment areas. For both PSD and
nonattainment area UT/A waivers, the EPA is proposing to incorporate
the criteria referenced in section 111(j)(1)(C) and found in section
111(j)(1)(A) (ii) and (iii) of the Act. See proposed
Secs. 51.165(a)(8)(x), 51.166(s)(10) and 52.21(v)(9). The EPA solicits
comment on this proposal.
G. Pollution Prevention
1. The Pollution Prevention Act (PPA) and the EPA's Pollution
Prevention Policies
In 1990 Congress passed the PPA which established as national
policy ``that pollution should be prevented or reduced at the source
whenever feasible; pollution that cannot be prevented should be
recycled in an environmentally safe manner, whenever feasible;
pollution that cannot be prevented or recycled should be treated in an
environmentally safe manner whenever feasible; and disposal or other
release into the environment should be employed only as a last resort
and should be conducted in an environmentally safe manner.'' See 42
U.S.C. sec. 13101(b). In subsequent correspondence (memorandum dated
May 28, 1992, from Hank Habicht III, EPA Deputy Administrator, to all
the EPA personnel and memorandum dated June 15, 1993, from Carol
Browner, EPA Administrator, to all the EPA personnel), the EPA provided
guidance on interpreting the PPA and integrating pollution prevention
into the Agency's activities.
The Subcommittee developed several draft recommendations on
pollution prevention issues, which were adopted by the CAAAC. The CAAAC
also submitted a document from the Business Roundtable related to the
definition of pollution prevention. The CAAAC recommended that the EPA
define pollution prevention consistent with the PPA and that the term
``pollution prevention project'' include ``pollution prevention
processes, strategies, or systems,'' so that the concept is not limited
to technology.
In adopting the PPA, Congress found that ``[t]here are significant
opportunities for industry to reduce or prevent pollution at the source
through cost-effective changes in production, operation, and raw
material use.'' See 42 U.S.C. sec. 13101(2). The PPA defines ``source
reduction'' to mean any practice which (1) Reduces the amount of any
hazardous substance, pollutant, or contaminant entering any waste
stream or otherwise released into the environment (including fugitive
emissions) prior to recycling, treatment, or disposal; and (2) reduces
the hazards to public health and the environment associated with the
release of such substances, pollutants, or contaminants. The term
includes equipment or technology modifications, process or procedure
modifications, reformulation or redesign of products, substitution of
raw materials, and improvements in housekeeping, maintenance, training,
or inventory control. See 42 U.S.C. sec. 13102(5)(A). The PPA expressly
provides that the term ``source reduction'' does not include any
practice which alters the physical, chemical, or biological
characteristics or the volume of a hazardous substance, pollutant or
contaminant through a process or activity which itself is not integral
to and necessary of the production of a product or the providing of a
service. See 42 U.S.C. sec. 13102(5)(B). Under the PPA, recycling,
energy recovery, treatment, and disposal are not included within the
definition of pollution prevention.
In the May 28, 1992 EPA pollution prevention policy memorandum, the
Agency provided guidance on incorporating pollution prevention into the
Agency's ongoing programs. The guidance provides that the selection of
a pollution prevention option, in any given situation, depends on the
requirements of applicable law, the level of risk reduction achieved,
and the cost-effectiveness of that option. In addition, the policy
provides that the Agency's environmental management hierarchy is as
follows: (1) Prevention, (2) recycling, (3) treatment, and (4) disposal
or release, should be viewed as a set of preferences, rather than an
absolute judgment that prevention is always the most desirable option.
The Agency's hierarchy is applied to many different kinds of
circumstances that will involve judgment. Finally, the Agency
distinguishes between prevention and recycling by including what is
commonly called ``in-process recycling,'' as ``prevention'' but
excluding ``out-of-process recycling.'' This guidance memorandum
further observes that recycling conducted in an environmentally sound
manner shares many of the advantages of prevention in that it can
reduce the need for treatment or disposal, and conserve energy and
resources.
2. Pollution Prevention in BACT and LAER
The CAAAC recommended that the EPA issue guidance or regulatory
authority allowing consideration of pollution prevention when
determining BACT or LAER. The CAAAC also recommended that the Agency
create separate categories of demonstrated and undemonstrated pollution
prevention BACT and LAER. The categories would include systems,
processes, or strategies expected to achieve either (1) more stringent
emission levels than demonstrated BACT and LAER or (2) comparable
emission levels at lower energy input, lower collateral emissions or
having cross-media environmental benefits, or other advantages that are
defined and mutually agreed upon to justify the pollution prevention
approach. Both demonstrated and undemonstrated pollution prevention
BACT would take cost into account.
The Agency examined whether existing regulations provide permitting
agencies with the flexibility to consider pollution prevention
techniques in their analysis of control options. The Act defines ``best
available control technology'' as ``an emission limitation based on the
maximum degree of reduction of each pollutant subject to regulation
under the Act emitted from or which results from any major emitting
facility, which the permitting authority, on a case-by-case basis,
taking into account energy, environmental, and economic impacts and
other costs, determines is achievable for such facility through
application of production processes and available methods, systems, and
techniques, including fuel cleaning, clean fuels, or treatment or
innovative fuel combustion techniques for control of each such
pollutant.'' See section 169(3) of the Act.
The Agency interprets the phrase ``production processes and
available methods, systems and techniques'' in
[[Page 38282]]
the statutory BACT definition to encompass pollution prevention
techniques. Existing Secs. 51.166(b)(12) and 52.21(b)(12) incorporate
the BACT definition into PSD regulations. The EPA solicits comment on
any potential revisions or new provisions in the PSD regulations that
would further facilitate consideration of pollution prevention
techniques.
Any major stationary source or major modification locating in an
area designated nonattainment pursuant to section 107 of the Act is
required to meet LAER. See, e.g., sections 172(c)(5) and 173 of the
Act. The LAER is defined as the more stringent of (1) the most
stringent emission limitation contained in the implementation plan of
any State for such class or category of source, unless the owner or
operator demonstrates that such limitations are not achievable; or (2)
the most stringent emission limitation achieved in practice by such
class or category of source. See section 171(3) of the Act. In general,
the LAER requirement is based on whether an emission limitation is
achievable and, unlike BACT, does not provide for consideration of
economic, energy, or other environmental factors on a case-by-case
basis. The Agency has interpreted the LAER definition as including any
method of emissions reduction provided it achieves the lowest emission
rate feasible. Thus, for nonattainment area purposes, pollution
prevention techniques can be considered as a control option; however,
the techniques must achieve the same emission rate as otherwise
applicable LAER.
After review of the Subcommittee's deliberations, the CAAAC's
recommendation and public comment, the EPA believes that current PSD
and nonattainment NSR regulations, combined with today's proposed
version of UT/A waivers, provide the permitting agencies with the
flexibility to consider pollution prevention techniques when
considering either BACT or LAER control options. Thus, the EPA does not
find that additional regulatory authority is necessary. The EPA
solicits comment on this view and any suggested rule changes to
facilitate the consideration of pollution prevention in NSR permitting.
The Agency also reviewed the CAAAC's recommendation to create
separate categories for demonstrated and undemonstrated BACT and LAER
control options in regard to the UT/A waiver. As discussed above, the
Agency's interpretation of the definitions for BACT and LAER provide
for the inclusion of pollution prevention techniques when considering
available control options. With respect to a separate category for
undemonstrated pollution prevention options and as discussed in the UT/
A waiver section, the EPA considers all undemonstrated control options,
including pollution prevention, to be eligible to qualify for this
waiver. Thus, because the Agency interprets BACT and LAER to allow for
demonstrated and certain undemonstrated pollution prevention techniques
and because EPA is proposing to explicitly provide that undemonstrated
pollution prevention techniques may qualify for a UT/A waiver, the EPA
does not believe it necessary to create a separate and unique category
for either demonstrated or undemonstrated pollution prevention control
options.
Finally, EPA notes that it has addressed pollution prevention
elsewhere in this document. In section II.E. of this preamble, EPA
proposes to include pollution prevention projects in the proposed
pollution control project exclusion. The EPA also proposes an
accompanying definition of pollution prevention based on the PPA and
EPA's pollution prevention policies. See proposed
Secs. 51.165(a)(1)(xxix), 51.166(b)(43), 52.21(b)(44), and 52.24(f).
H. States' Discretion To Adopt or Enforce More Stringent Requirements
The regulatory revisions proposed in this action represent minimum
Federal requirements under the Act. States retain full discretion to
adopt or enforce more stringent air quality protection requirements
consistent with section 116 of the Act.
I. Addressing the EPA's Obligation under Pending Settlement Agreement
The ``top-down'' process, the methodology described in section
IV.B. of this preamble, is the EPA's recommended approach for
determining BACT and is based on the EPA's interpretation of existing
statutory and regulatory requirements. On March 29, 1989 (supplemented
on May 3 and 10, 1989), the American Paper Institute and the National
Forest Products Association (collectively ``API'') petitioned the EPA
to rescind the top-down policy and initiate a rulemaking on BACT
determinations. The EPA denied this request on May 12, 1989
(supplemented on June 13, 1989), explaining that the top-down approach
was neither at variance with, nor a revision of, the PSD regulations,
and that no rulemaking was required. Subsequently, API filed suit in
the U.S. Court of Appeals for the District of Columbia and in the U.S.
District Court for the District of Columbia. API v. Reilly, No. 89-1428
(D.C. Cir. filed July 10, 1989); API v. Reilly, No. 89-2030 (D.C.C.
filed July 18, 1989). The District Court action was dismissed on
January 5, 1993 for lack of subject matter jurisdiction.
A consortium of utilities filed a similar petition for review of
the EPA's actions, Alabama Power Co. v. EPA, No. 89-1429 (D.C. Cir.
filed July 11, 1989), and the case was consolidated with the pending
API case in the D.C. Circuit. On February 1, 1990, the Utility Air
Regulatory Group submitted an administrative petition concerning the
EPA's policy and practice on BACT determinations. The API also
challenged a 1990 draft guidance document by the EPA on top-down BACT,
API v. Reilly, No. 90-1364 (D.C. Cir. filed July 13, 1990).
All of these judicial and administrative matters were resolved by a
settlement agreement in which the EPA agreed to publish, by January 6,
1992, a proposed rule ``to revise or clarify the regulations defining
BACT'' and ``to revise or clarify how BACT determinations should be
made.'' See 56 FR 34202 (July 26, 1991) (request for public comment on
proposed settlement). The EPA also agreed to take final action on the
proposed rule as expeditiously as practicable. In the event the EPA did
not take the specified action, the parties' sole and exclusive remedy
under the express terms of the settlement agreement was to reactivate
the underlying litigation.
This publication of proposed rules revising and clarifying the BACT
regulations and how BACT determinations should be made triggers certain
obligations by the other parties to the settlement. The EPA's final
action on the proposed rules will discharge all of its remaining
obligations under the settlement agreement and require the dismissal or
withdrawal of the remaining judicial and administrative matters
described above.
IV. Class I Areas
A. Introduction
The EPA is today providing guidance and proposing a number of
revisions to the PSD regulations at 40 CFR 51.166 and 52.21 to address
the protection of air quality and air quality related values in Class I
areas. In many instances, where it has been deemed appropriate, the EPA
is taking action consistent with, or similar to, the CAAAC's
recommendations.
In general, the EPA is proposing several changes to better
facilitate State notification and coordination with the FLM and to
provide the States, permit
[[Page 38283]]
applicants and FLM with clearer guidance about their relative roles and
responsibilities. The EPA is proposing ``significant impact levels''
for Class I increments that would exclude proposed sources with de
minimis ambient impacts from the requirement to conduct comprehensive
Class I increment analyses and enable the permitting authority to
determine that the emissions from such source would not contribute to
an increment violation. The EPA is also establishing a general policy,
and proposing regulatory language, allowing the use of offsets to
mitigate adverse impacts on AQRV in Federal Class I areas. This policy
will provide a reasonable way to allow the permitting of sources that
would otherwise face permit denial because of their adverse impact on
AQRV. The EPA is also proposing several clarifications to its PSD
regulations where confusion about a requirement has created controversy
or impeded more expeditious permit review.
B. Background
1. Overview of PSD Requirements for Class I Areas
The PSD program applies to ``PSD areas''--areas designated as
``attainment'' or ``unclassifiable'' pursuant to section 107 of the
Act.52 A fundamental aspect of the PSD program is an assessment of
a proposed source's impact on the amount of air quality deterioration
that is allowed within a particular PSD area. All PSD areas are
categorized as either Class I, II or III. See section 162 of the Act.
The classification of an area determines the corresponding ``maximum
allowable increases'' of air quality deterioration (``increments'') for
that area. See section 163 of the Act. Only a relatively small
increment of air quality deterioration is permissible in Class I areas
and, consequently, these areas are afforded the greatest degree of air
quality protection.
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\52\ Areas having air quality that meets the national ambient
air quality standards (NAAQS) are designated ``attainment,'' and
areas for which there is insufficient information to reach a
conclusion about their air quality status are designated
``unclassifiable'' in accordance with procedures set forth in
section 107 of the Act.
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The PSD program provides an additional layer of special protection
for Federal Class I areas. See section 165(d)(2) of the Act. Mandatory
Federal Class I areas are national parks greater than 6,000 acres in
size, national wilderness areas greater than 5,000 acres in size and
other areas specified in section 162(a) of the Act. These Federal Class
I areas are mandatory in that they may not be redesignated as any other
classification. All other PSD areas in the country were initially
designated as Class II areas in accordance with section 162(b) of the
Act. Federal lands not already designated as Class I areas under
section 162(a) may be redesignated as Class I areas. See section 164 of
the Act.
The FLM and the Federal official charged with direct responsibility
for management of any Federal lands within a Class I area have an
``affirmative responsibility'' to protect the AQRV (including
visibility) of such lands.53 See section 165(d)(2)(B) of the Act.
The FLM protects AQRV through a prescribed statutory role in assessing
the potential impacts of a proposed PSD source. See section
165(d)(2)(C) of the Act. If a proposed source does not cause or
contribute to a violation of a Class I increment, the FLM may,
nevertheless, demonstrate to the satisfaction of the permitting
authority that the source will have an adverse impact on AQRV in a
specific Federal Class I area and, if so demonstrated, the PSD permit
shall not be issued. Conversely, if the proposed source will cause or
contribute to a violation of a Class I increment, then the owner or
operator must demonstrate to the satisfaction of the FLM that there
will be no adverse impact on AQRV. See sections 165(d)(2)(C) (ii) and
(iii) of the Act.
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\53\ The ``FLM'' is defined as the Secretary of the department
with authority over such lands, i.e., Department of the Interior and
Department of Agriculture. See Act section 302(i). It should be
noted that FLM authority has been delegated to other officials
within these Departments. For example, the Assistant Secretary for
Fish and Wildlife and Parks is the FLM for areas under the
jurisdiction of the National Park Service and U.S. Fish and Wildlife
Service. In today's notice, the EPA is proposing to clarify the
definition of ``FLM'' to reflect the FLM's authority to designate
another official to act on his or her behalf with respect to Federal
Class I areas. See proposed sections 51.166(b)(24) and 52.21(b)(24).
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2. The Need To Improve PSD Permit Requirements Related to the
Protection of Air Quality Related Values (AQRV) in Federal Class I
Areas
Over the past several years Congress, the FLM, and others
increasingly have expressed concern about the effects of air pollution
being observed and documented in Federal Class I areas, as well as the
failure of Act programs to adequately protect Federal Class I areas
from such effects. The U.S. General Accounting Office has issued
reports addressing these issues.54
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\54\ See U.S. General Accounting Office Report to the Chairman,
Environment, Energy, and Natural Resources Subcommittee, Committee
on Government Operations, House of Representatives, ``Air Pollution:
Protecting Parks and Wilderness from Nearby Pollution Sources''
(February 7, 1990) reprinted in 136 Cong. Rec. S2879-2880 (March 21,
1990); U.S. General Accounting Office Testimony before the
Environment, Energy and Natural Resources Subcommittee, Committee on
Government Operations, House of Representatives, ``Air Pollution:
Regional Approaches Are Needed to Protect Visibility in National
Parks and Wilderness Areas'' (April 29, 1994).
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The FLM have sought to protect Federal Class I areas by, among
other efforts, identifying concerns about the potential impacts
associated with emissions from new source growth. In their attempts to
protect these lands, FLM have indicated that their failure to receive
timely notice of relevant permit applications has undermined their
ability to exercise their affirmative responsibility to protect Class I
areas and that permitting authorities have given insufficient weight to
concerns of FLM. Permit applicants have complained that EPA's existing
regulations are unclear and that there is confusion and uncertainty
about the PSD permit requirements related to the protection of AQRV in
Federal Class I areas. Moreover, permitting authorities examining
permit applications in the face of objections by FLM have complained to
the EPA about the lack of guidance on Class I area protection and the
consideration that should be given to an FLM's concerns. The EPA's
proposal, described below, attempts to address these various concerns
and, thereby, improve the PSD permitting process.
C. The EPA Proposal
1. Defining AQRV and Determining Adverse Impacts
The Act and the existing PSD regulations are silent in explaining
what an AQRV (other than visibility) is, what procedures should be
followed for defining an AQRV, and what criteria should be used for
setting critical pollutant loadings for determining whether an adverse
impact on AQRV would occur. The EPA is proposing to add general
definitions for the terms ``AQRV'' and ``adverse impact on AQRV.'' In
addition, the EPA is clarifying the role and responsibilities of the
FLM in the PSD permitting process.
a. Definitions. The EPA is proposing to add definitions of ``air
quality related value'' and ``adverse impact on air quality related
values'' to both sets of PSD regulations. As noted, the Act is silent
in defining AQRV other than visibility. However, the legislative
history provides the following:
[T]he term ``air quality related values'' of Federal lands
designated as class I includes the fundamental purposes for which
such lands have been established and preserved by the Congress and
the responsible Federal agency. For example, under the 1916 Organic
Act to establish the National Park Service (16
[[Page 38284]]
U.S.C. 1), the purpose of such national park lands ``is to conserve
the scenery and the natural and historic objects and the wildlife
therein and to provide for the enjoyment of the same in such manner
and by such means as will leave them unimpaired for the enjoyment of
future generations.''
S. Rep. No. 127, 95th Cong., 1st Sess. 36 (1977).
The EPA proposes to define ``AQRV'' as a scenic, cultural,
physical, biological, ecological, or recreational resource which may be
affected by a change in air quality, as defined by the FLM for Federal
lands and as defined by a State or Indian Governing Body for nonfederal
lands within their respective jurisdictions. See proposed
Secs. 51.166(b)(40) and 52.21(b)(41). The proposed definition addresses
the fundamental purposes for which such lands have been established and
preserved. The proposed definition also recognizes that (1) The FLM
have the responsibility to identify AQRV for Federal lands, and (2) the
Act gives authority to States and Indian Governing Bodies to identify
AQRV for areas within their respective jurisdictions.55 The EPA is
proposing to define ``adverse impacts on air quality related values''
as a deleterious effect on any AQRV defined by the FLM, resulting from
the emissions of a proposed source or modification, that interferes
with the management, protection, preservation, or enjoyment of the AQRV
of a Federal Class I area. See proposed Sec. 51.166(b)(41) and
Sec. 52.21(b)(42). Under the part 52 PSD regulations, the proposed
definition would be in addition to the existing definition of ``adverse
impact on visibility'' [Sec. 52.21(b)(29)] which is derived from the
EPA's visibility regulations adopted pursuant to the Act's visibility
protection program. See existing 40 CFR 51.301(a) and 51.307. Under the
Federal PSD requirements, EPA intends that the definition of ``adverse
impact on visibility'' continue to be used when the AQRV of concern is
visibility. The new definition is intended to encompass all AQRV.
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\55\ Section 164(e) of the Act provides for EPA protection of
AQRV when the EPA is requested to resolve a dispute between a State
and Tribe about the redesignation of an area or a proposed PSD
permit. The reader is also referred to the discussion in section
IV.C.5 of this preamble, where EPA clarifies its position concerning
the authority of States and Indian tribes to establish AQRV for
their respective lands.
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The proposed definition of ``adverse impact on air quality related
values'' includes the requirement that such determinations be made on a
case-by-case basis, considering the change in existing air quality that
will result from the emissions of a particular pollutant from a
proposed major source or major modification.56 Moreover, a
determination of whether a source will have an adverse effect must
consider the AQRV specifically identified by the FLM and, for each
affected AQRV, the projected impact of the emissions from the proposed
PSD source on the existing background air quality (including the
predicted impacts of recently-permitted sources not yet in operation)
in the Class I area.57 Thus, the FLM's demonstration of adverse
impact on AQRV, may consider a source's impact on existing conditions,
which may already be regarded as ``adverse.'' The adverse impact
demonstration is also discussed in section IV.C.2.d. of this preamble.
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\56\ In determining whether emissions from a proposed source
would present an adverse impact, the effects of hazardous and toxic
pollutant emissions should be considered in the analysis if they are
constituents of any criteria pollutant emitted in ``significant''
amounts by the source.
\57\ In a previous rulemaking, EPA determined that an assessment
of whether a proposed source would cause an adverse impact on
visibility requires the permitting authority to review the new
source's impact in the context of background impacts caused by both
existing and previously permitted (not yet constructed) sources. See
50 FR 28548 (July 12, 1985).
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The proposed definition also recognizes that the term ``adverse
impact on air quality related values'' has special meaning under the
Act that is properly limited to Federal Class I areas. See section
165(d) of the Act. As described previously, permits must be denied to
sources whose emissions would have an adverse impact AQRV in a Federal
Class I area, even though no violation of a Class I increment would
result from those emissions.
b. Role of the FLM in Defining Specific AQRV. In general, the EPA
explicitly recognizes that FLM have special expertise and knowledge
about the Federal Class I areas which they manage. In addition, the EPA
agrees with the CAAAC's recommendation that the FLM should be expressly
recognized as having the primary responsibility for the identification
of specific AQRV.
The EPA believes that it is appropriate not to propose regulations
that would dictate how the FLM identify AQRV (and associated critical
pollutant loadings) or demonstrate an adverse impact on AQRV. These
responsibilities are closely tied to the role of the FLM mandated by
the Act, and are also integral to the management of those AQRV under
the mandates of the Federal Lands statutes as well (e.g., Wilderness
Act, 16 U.S.C. 1131 et seq., and 1916 National Park Service Organic
Act, 16 U.S.C. 1 et seq.) Furthermore, because of the wide variety of
Federal Class I areas and AQRV, sensitivities of critical receptors,
and the unavailability of data in many cases, the EPA believes that the
FLM must have sufficient latitude to address these issues on an area-
by-area, as well as a permit-by-permit, basis. At the same time, the
EPA encourages FLM to identify AQRV on a regional or national basis
where appropriate, and to establish general procedures for identifying
AQRV.
c. Role of the FLM in Triggering a Class I Area Analysis. It is
generally agreed that not all sources applying for PSD permits should
have to provide information concerning potential Class I area impacts.
Various factors concerning a particular source, including the type and
amount of its emissions, and the source's distance from the Class I
area, will influence whether the emissions from a proposed source have
the potential to adversely impact a Class I area. This proposal links
the requirement for a permit applicant to provide Class I impact
information with the filing of a notice by the FLM (or certain other
government officials) which (1) alleges that emissions of a particular
pollutant from a proposed major emitting facility may cause or
contribute to a change in air quality in a particular Class I area, and
(2) identifies the potential adverse impact of such change in air
quality on each affected AQRV. The proposal is consistent with section
165(d)(2)(C)(i) of the Act which provides that once such a notice is
filed a permit shall not be issued unless the applicant demonstrates
that its proposed emissions will not cause or contribute to a violation
of the Class I increments. See proposed Secs. 51.166(p)(2)(i) and
52.21(p)(2)(i). The proposal also is in accordance with the provisions
under section 165(e)(3)(B) of the Act which require, for a proposed
source, an analysis of the ambient air quality, climate and
meteorology, terrain, soils and vegetation, and visibility, at the site
of the proposed source and ``in the area potentially affected by the
emissions from such facility.''
The permitting authority would determine the status of the Class I
increments considering, as appropriate, the analysis provided by the
applicant. The analysis of potential impacts on Class I area resources
will help provide the basis for an eventual determination of whether
the source will have an adverse impact on AQRV. The EPA generally
believes that the combined informational requirements contained in this
proposed provision will greatly facilitate resolution of AQRV issues
which must ultimately be addressed as a prerequisite to permit
issuance. That
[[Page 38285]]
is, the analyses will reveal whether the Class I increments will be
violated; establish the relative roles of the applicant; the FLM and
the permitting authority in making decisions concerning the AQRV; and
provide information needed to determine potential AQRV impacts.
Moreover, this proposal would limit an applicant's responsibility to
perform Class I area assessments to circumstances where there is an
identified potential that the proposed source will have an adverse
impact on a Class I area.
If the proposed source will cause or contribute to a violation of a
Class I increment, the applicant will provide information pertaining to
the source's impacts on, as appropriate in light of the FLM's notice,
such things as soils, vegetation and visibility to demonstrate that
there will be no adverse impact on the potentially affected AQRV
identified by the FLM. See section 165(d)(2)(C)(iii) of the Act. If the
FLM agrees with this demonstration, and so certifies, the permitting
authority may issue the PSD permit even though a violation of a Class I
increment has been shown. Alternatively, when the applicant's analysis
shows, to the satisfaction of the permitting authority, that the
proposed source will not cause or contribute to a violation of a Class
I increment, the information pertaining to impacts on the potentially
affected AQRV identified by the FLM will help the FLM determine if the
proposed source will have an adverse impact on AQRV, and to make a
demonstration of such adverse impact to the permitting authority, where
appropriate.
While the Act is silent concerning the timing for filing the notice
of potential adverse impacts, the EPA believes that it is reasonable
and appropriate to require the FLM or other named officials to file the
notice before the permitting authority issues its completeness
determination on the permit application. See proposed
Secs. 51.166(p)(2)(i) and 52.21(p)(2)(i). One reason for this proposal
is that the filing of the notice establishes certain informational
requirements which serve as a measure of the application's
completeness. Moreover, it is generally important that EPA require that
the notice be filed early in the permit process to expedite permit
review. A requirement for early notice submittal helps ensure that the
Class I area issues are identified by FLM and other officials early in
the permit process and enables the applicant to provide the appropriate
Class I analyses in a timely manner so as not to delay the review and
issuance of the permit.
The EPA encourages, particularly where a source proposes to locate
within 100 kilometers of a Federal Class I area, the applicant to
coordinate with the FLM prior to the submittal of its application in
order to be able to learn of any FLM concerns and to submit the Class I
analyses along with the other required information in its initial
permit application. Otherwise, the FLM would be expected to file the
notice alleging potential affects on the Federal Class I area, where
appropriate, during the 30-day period for review of the application for
completeness, as provided under this proposal and described in section
IV.C.2.c of this preamble. In the absence of a notice being filed
concerning potential Class I impacts, the applicant will still be
required to demonstrate that emissions from the proposed source do not
cause or contribute to any violation of the Class II increments or
NAAQS.
This proposal to require the applicant to complete a comprehensive
Class I impact analysis is tied directly to the filing of a notice
(alleging potential adverse impacts) prior to the permitting
authority's issuance of its completeness determination. However, this
proposal is not intended to preclude the FLM from raising new concerns
about effects at a later time during the permit review. The FLM may
ultimately submit a demonstration of adverse impact on AQRV even if a
notice has not been previously filed. In such cases, where additional
information is needed to enable the FLM to make the necessary
demonstration, the EPA believes that the permitting authority has
discretion to determine whether, and to what extent, the applicant
should be required to produce the additional information.
The EPA requests comments on this aspect of the proposal in light
of the importance of having to file a notice alleging potential Class I
impacts in order to trigger the applicant's responsibility to perform
an analysis of its Class I impacts. The EPA has considered alternative
approaches for triggering the Class I analysis, including a mandatory
Class I analysis for any proposed major source or major modification
proposing to locate within 100 kilometers, or some other specific
distance, from a Federal Class I area. The proposed approach is
consistent with the Act requirement for the filing of a notice.
With respect to alternative approaches not proposed, a rigid
distance-based test may necessarily be either over- or under-inclusive.
For example, if a cutoff of 100 kilometers was established, some
sources locating within 100 kilometers from a Federal Class I area may
be required to perform an analysis even though there is no potential
that the proposed source will have an adverse impact on the area.
Conversely, sources proposing to locate more than 100 kilometers from a
Federal Class I area that may nevertheless adversely impact a Class I
area would not be required to carry out the appropriate Class I
analyses. Thus, a rigid distance cutoff would still need some kind of
accompanying triggering mechanism to establish the informational
requirement for Class I impacts for potential sources of concern
locating beyond any specified cutoff distance. The EPA is interested in
alternative approaches which will establish a reasonable requirement
for Class I analyses at a reasonable point in the permit process.
With regard to the notice, the EPA believes that it should be in
writing, preferably in the form of a letter to the permitting
authority, and should address at a minimum (1) the specific pollutant
emissions from the proposed source that may cause or contribute to a
change in air quality in the specified Federal Class I area, and (2)
the potential adverse impact of such change on each specified AQRV.
While the alleged change in air quality and potential impacts are
naturally preliminary, and perhaps somewhat speculative, the intent is
that the allegation should present a potential linkage between the
proposed source--based on its specific pollutant emissions and its
relative location to the affected Class I area--and the specified AQRV
in the affected Federal Class I area as to warrant the required Class I
analysis.
The notice is also intended to provide the applicant with
sufficient information to focus the required Class I analysis on the
appropriate pollutant emissions and AQRV of concern to the FLM.
Accordingly, the notice should not be used by the permitting authority
for any prejudgment as to whether any potential effects on AQRV will be
adverse. If it is plausible that a source may impact the affected Class
I area, further analysis should generally be performed. The only basis
for rejecting such notice, and thereby determining that a Class I
analysis is not required, is that the permitting authority finds no
potential linkage between the proposed source's potential impact (i.e.,
change in air quality in the Class I area) and the AQRV identified by
the FLM.
An important related issue concerns the responsibility for carrying
out any additional technical analyses which may be necessary for the
FLM to demonstrate that a source's emissions will have an adverse
impact on AQRV. The EPA generally expects the analyses performed by the
applicant under the
[[Page 38286]]
proposed provisions to enable a FLM to evaluate the impacts on AQRV. In
some cases, however, additional information may be necessary to make a
thorough AQRV assessment and there is a question as to who should bear
the responsibility for such information. Applicants for PSD permits are
typically required to provide information and analyses necessary for
the permitting authority to make a variety of ambient air quality
decisions because, among other reasons, applicants have detailed
knowledge about the proposed source's emissions and operations. Yet,
applicants should not necessarily be expected to conduct an unlimited
number of studies. The permitting authority should ultimately
determine, based on consultation with the FLM, what additional
information collection should be required of the applicant.
The EPA solicits public comment on this issue in order to establish
an equitable approach for completing the required analyses for Class I
areas applicable to individual PSD permit applicants. Specifically, the
EPA seeks input in determining what the respective responsibilities of
the FLM and the permit applicant should be for carrying out the
analyses necessary to enable the FLM to demonstrate an adverse impact
on AQRV. The EPA will consider such input and decide whether the
regulations should explicitly address these individual roles.
This proposal also recognizes that the FLM is not the only official
authorized by the Act to file the notice concerning potential impacts
on a Federal Class I area. Section 165(d)(2)(C)(i) of the Act
authorizes that the notice be filed by any one of several officials,
including the Federal official charged with direct responsibility for
management of any lands within the Class I area potentially affected,
the Federal Land Manager of such lands, the EPA Administrator, or the
Governor of an adjacent State containing such Class I lands.
Accordingly, the EPA is including in the proposal that the FLM or other
named officials may file a notice when it is believed that a proposed
source may affect air quality in a Federal Class I area. See proposed
Secs. 51.166(p)(2)(i) and 52.21(p)(2)(i). In addition, the EPA is
proposing to define the term ``Federal official,'' which is used in the
proposed regulatory provision as well as in the Act, as the Federal
official charged with direct responsibility for management of any lands
within a Federal Class I area.58 See proposed Secs. 51.166(b)(39)
and 52.21(b)(40).
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\58\ The EPA is using the term ``Federal official'' to reflect
the terminology used in the Act. The legislative history uses the
term ``supervisor of a class I area'' in lieu of ``Federal
official.'' See S. Rep. No. 127, 95th Cong., 1st Sess. 35-37 (1977).
Once a notice is filed alleging possible adverse impacts, the FLM--
not any other Federal official, unless duly designated by the FLM--
is authorized to demonstrate to the satisfaction of the permitting
authority that a proposed source will have an adverse impact on AQRV
and that the permit should be denied (as described elsewhere in this
preamble). See section 165(d)(2)(C)(ii) of the Act.
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d. Informational Responsibilities of the FLM. The EPA believes that
a logical adjunct of an FLM's expertise and responsibility for
protecting the AQRV of Federal Class I areas and identifying a
potential adverse impact on AQRV is the responsibility to provide
relevant information to persons involved in the permitting process.
Permitting authorities and permit applicants should have access to any
information concerning AQRV which an FLM has defined for any Federal
Class I areas that may be affected by a proposed source or
modification. To address this concern, the EPA is proposing that the
FLM be required to provide pertinent information, where available, to
PSD permit applicants upon request. See proposed Secs. 51.166(p)(2)(ii)
and 52.21(p)(2)(ii).
Specifically, the proposal would benefit the owner or operator of a
proposed facility that may have an adverse impact on AQRV in a Federal
Class I area. The proposed regulations generally call for the FLM to
provide all available information about relevant AQRV and methods for
analyzing potential impacts on those AQRV when the applicant requests
such information. This information would include a current listing of
the AQRV, sensitive receptors and critical pollutant loadings for each
AQRV, as well as the methods and tools (e.g., models) available to
analyze the potential impacts for the affected Class I area. The FLM
also would be expected to provide copies of relevant previous findings
of adverse impact on AQRV that have been made as part of other PSD
permit reviews affecting the same Class I area.
The EPA is pursuing the development of a computerized compilation
or clearinghouse of available Class I area information. The cooperation
of the FLM would be critical to the utility of this resource. Relevant
information would be posted as it becomes available. To the extent that
the relevant information is posted in the clearinghouse, it would not
be necessary to provide such information to an applicant. If however,
the FLM has new information not yet available in the clearinghouse, the
FLM should directly provide such information to the applicant when a
request is made. This clearinghouse is described in section IV.C.6 of
this preamble.
2. Improving Federal Land Manager (FLM)/Permitting Authority
Coordination
The CAAAC recommendations reflected general agreement that better
State and FLM coordination is integral to avoiding delays and
controversies during the PSD permitting process. Accordingly, the EPA
is proposing a general provision which requires that the permitting
authority provide for consultation and coordination with the FLM. See
proposed Secs. 51.166(p)(2)(iii) and 52.21(p)(2)(iii). The permitting
authority is expected to use its judgment in deciding the appropriate
measure of consultation and coordination that will ensure adequate
input from the FLM as well as adequate consideration of the FLM's
expertise and findings concerning potential Class I area impacts. While
this particular provision affords the permitting authority flexibility
in determining the appropriate level of interaction with the FLM
throughout the permitting process, the EPA also believes that certain
specific points of consultation and coordination, as described below,
are needed to ensure that the FLM is given adequate opportunity to
carry out the responsibilities conferred on the FLM by the Act.
a. Pre-application Coordination. The EPA is today proposing to
require that the FLM be informed of any advance notification received
by the permitting authority from a prospective applicant involving a
source that would construct within 100 kilometers of a Federal Class I
area. As proposed, the affected FLM must be notified within 30 days of
the permitting authority's receipt of any such advance notification of
a PSD permit application. See proposed Secs. 51.166(p)(3)(i) and 52.21
(p)(3)(i).
The EPA recognizes that the type of early notification that a
prospective applicant may provide to the permitting authority will vary
from one situation to the next. Thus, the type of notification provided
by the permitting authority to the FLM should be commensurate with the
type of information which is received. For example, a brief letter or
phone call from the permitting authority to the FLM may be appropriate
when the information about the potential project is only very
preliminary. Generally, it should not be necessary to notify the FLM
more than once concerning any early contacts by a prospective applicant
with the permitting authority. An exception would be where, as
described below, a pre-application meeting is arranged as a
[[Page 38287]]
result of subsequent communications between the applicant and the
permitting authority.
Consistent with CAAAC recommendations, the EPA is also proposing to
require that the permitting authority provide the FLM with notice of,
and reasonable opportunity to participate in, pre-application meetings
scheduled with prospective PSD applicants that would locate within 100
kilometers of a Federal Class I area. See proposed
Secs. 51.166(p)(3)(iii) and 52.21(p)(3)(ii). If given such an early
opportunity, the FLM would be expected, where possible, to inform the
prospective applicant of concerns about Class I impacts, as well as any
intention to file a notice alleging potential Class I impacts.
While this proposal for advance notification applies specifically
to prospective sources and modifications located 100 kilometers or
closer to a Federal Class I area, there should be no automatic
presumption that sources located farther than 100 kilometers will not
affect a Federal Class I area.59 There will be instances where it
would be prudent for the permitting authority to notify the FLM of a
prospective source that would locate more than 100 kilometers from a
Federal Class I area. As further described below, the FLM will receive
summary notification of such distant sources at the permit application
notification stage and may be interested in learning about them as
early as possible. However, the EPA has declined to propose
requirements for mandatory pre-application notification beyond the 100-
kilometer distance. Nevertheless, the EPA will consider a more
inclusive cutoff, e.g., 200 kilometers, for mandatory pre-application
notification, if for some reason it is unable to implement the database
that is intended to inform FLM about the more distant proposed new
major sources and major modifications.
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\59\ The 100-kilometer cutoff being used in this proposal for
mandatory notification requirements involving FLM's is consistent
with the current EPA policy concerning modeling of Class I impacts.
In an October 19, 1992 memorandum from John S. Seitz, Director,
Office of Air Quality Planning and Standards to EPA Regional
Offices, the EPA clarified its guidance for modeling Class I area
impacts under the PSD program. The policy statement advised Regional
Office personnel that it was appropriate to routinely consider the
ambient impacts resulting from PSD sources proposing to locate
within 100 kilometers of a Class I area. The EPA further stated that
such guidance was not to be interpreted so as to preclude the
consideration of potential impacts of emissions from large sources
locating at distances greater than 100 kilometers if there is reason
to believe that such sources could adversely affect the air quality
in the Class I area.
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The EPA requests public comments on all aspects of these proposed
regulatory revisions addressing advance notification, including the
appropriate type of notification, the mandatory notification within 100
kilometers of a Federal Class I area, and the 30-day timeframe for
providing such notification to the FLM. The EPA is interested in the
public's views abou
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
t the need for these changes in light of the other
regulatory revisions, described below, that the EPA is proposing to
improve FLM coordination, including the proposed requirement that
permit applications for all PSD sources and modifications proposing to
locate within 100 kilometers of a Federal Class I area must
automatically be transmitted to the FLM.
b. Coordination of the Permit Application. Several of the CAAAC
recommendations addressed improving coordination between the permitting
authority and the FLM once a permit application has been received.
Similar to the recommendations for pre-application coordination
addressed previously, such coordination was considered important in
helping to avoid disputes and delays in carrying out the permit review
process.
The EPA is proposing to revise the notification requirements that
apply when the permitting authority receives a PSD permit application.
The proposed notification requirements are to apply on the basis of the
proximity of the proposed source or modification to a Federal Class I
area. However, as described previously, sources proposing to locate
near a Federal Class I area are not automatically assumed to have an
adverse impact on that area. With the proposed revisions, the FLM is
afforded an opportunity to review the contents of any PSD permit
application to determine whether sufficient information is available to
assess the potential impacts on a Federal Class I area. As described
earlier, in section IV.C.1.c of this preamble, the EPA has proposed to
require that the FLM (or other named officials) file a notice alleging
potential Class I impacts in order to trigger specific Class I
informational needs in the permit application. The proposed 100
kilometer cutoff described below applies only to the automatic
notification (including forwarding of permit application) of the FLM
that such source has applied for a PSD permit.
(1) Notification to FLM for Sources Located Within 100 Kilometers
of a Federal Class I Area. Because sources located within a 100-
kilometer range of Federal Class I areas generally have the greatest
potential for affecting the air quality in those areas, EPA is
proposing to require notification of the affected FLM when a PSD permit
application is received for a new or modified source proposing to
locate within 100 kilometers of a Federal Class I area. The proposed
notification includes sending a copy of the permit application and any
other relevant information. See proposed Secs. 51.166(p)(4)(i) and
52.21(p)(4)(i).
The proposed regulations do not mandate that the permitting
authority, itself, must send each affected permit application to the
FLM. Instead, the State may elect to require the PSD applicant to
directly transmit a copy of its application and other relevant
information to the FLM. In either case, the EPA believes that the
permitting authority will want to ensure that the FLM receives the
application promptly so there will be few, if any, delays to the
initial phase of the permit process.
With regard to the existing notification provision at
Sec. 51.166(p)(1), the EPA proposes to move this provision to a more
appropriate location. This provision requires that the permitting
authority transmit to the Administrator a copy of each PSD permit
application received and does not address FLM notification. In its
present location in the regulations, the existing EPA notification
requirement could be interpreted to apply only to proposed sources and
modifications whose emissions affect a Federal Class I area. The Act
provides that the EPA notification requirement apply with respect to
all PSD permit applications--not just those affecting Federal Class I
areas. See section 165(d)(1) of the Act. In moving the existing
provision to the new location in the part 51 regulations, its intended
coverage of all PSD permit applications will be better understood. See
proposed redesignated Sec. 51.166(q)(1).
(2) Notification to FLM for Sources Locating more than 100
Kilometers from a Federal Class I Area. The EPA recognizes that the FLM
will have an interest in reviewing the potential effects associated
with emissions from certain sources proposing to locate more than 100
kilometers from a Federal Class I area. It emphatically is not the
EPA's intention to enable such sources to be automatically exempted
from consideration as to their potential impacts on Class I areas.
However, a general requirement to transmit copies of all permit
applications to the FLM would be quite burdensome and overly inclusive.
Accordingly, the EPA is proposing a different approach for providing
notification to the FLM for applications proposing sources more than
100 kilometers from a Federal
[[Page 38288]]
Class I area. The EPA is developing a special electronic database and
proposing to require that a summary of each PSD permit application be
entered into this database.60
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\60\ Under the part 51 PSD regulations, the proposed
requirement does not specify whether the applicant or the permitting
authority must enter the data summary. The EPA believes that it is
appropriate in this situation to allow permitting authorities to
exercise their discretion in determining what specific procedures
they will adopt and implement to ensure that the required data is
entered into the EPA electronic database.
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The proposed informational requirements include the name and type
of source, the nature of the project, source location and proximity to
Class I areas (i.e., within 250 kilometers), the proposed emission
rates (or emissions increases) of air pollutants to be emitted by the
source, and key mailing addresses. The FLM, as well as the general
public, will have access to this information. The administration of
this electronic database is addressed in more detail in section IV.C.6.
of this preamble, ``Information Clearinghouse.'' See proposed
Secs. 51.166(n)(4) and 52.21(n)(4).
Once relevant information pertaining to a proposed major source or
major modification is registered in the EPA database, the FLM will be
able to check the Bulletin Board, determine whether such source
represents a potential concern to air quality or air quality related
values in the Class I area (based on the summary information contained
therein), and request a copy of the entire permit application. In order
to ensure that the FLM is given a reasonable opportunity to request a
copy of any specific application (for sources that would locate beyond
the 100-kilometer range), the EPA is proposing that the FLM will be
afforded at least 7 days from the date of registration of information
on the electronic database to review such information and request the
entire permit application. See proposed Secs. 51.166(p)(4)(ii) and
52.21(p)(4)(ii).
The EPA requests public comments on its proposed requirements to
improve the notification procedures which inform the FLM about incoming
permit applications. In particular, the EPA requests public comments
addressing the proposed requirement to transmit a permit application to
the FLM when the proposed source is within 100 kilometers of a Federal
Class I area.
c. Coordination of the Completeness Determination. The EPA is also
proposing to revise both sets of PSD regulations by adding a
requirement that the FLM be given at least 30 days (starting from
receipt of the application by the FLM) to review the application prior
to any completeness determination issued by the permitting authority.
The 30-day review is required only when the FLM is to receive the
permit application as provided under this proposal [See e.g., proposed
Sec. 51.166(p)(4)] where the proposed source is located within 100
kilometers from a Federal Class I area or where it is located beyond
100 kilometers but the FLM requests the entire application within 7
days from the inclusion of summary information in EPA's electronic data
base. See proposed Secs. 51.166(p)(5)(ii) and 52.21(p)(5)(ii).61
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\61\ For proposed sources more than 100 kilometers from a
Federal Class I area, the permitting authority may proceed to issue
its completeness determination any time after the 7-day period for
FLM review if the FLM does not request a copy of the permit
application. However, the FLM is not precluded from requesting
additional information at any time after the formal 7-day review
period. But, such later requests will not trigger the 30-day FLM
review period prior to the permitting authority's completeness
determination proposed elsewhere in this notice [See, e.g., proposed
section 51.166(p)(5)(i)].
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During the proposed 30-day review period, the FLM will have an
opportunity to determine whether there is reason to believe that the
proposed source may adversely affect a Federal Class I area and request
additional information, to be obtained from the applicant, in order for
an adequate Class I impact analysis to be completed. The request for
additional information by the FLM may be in the form of a notice
alleging that emissions from the proposed source may cause or
contribute to a change in air quality in the affected Class I area and
identifying the potential adverse impacts of such change on AQRV (see
section IV.C.1.c. of this preamble). If such notice is given, the
permit applicant would be required to perform the Class I impact
analysis, discussed previously, to satisfy its obligation for a
complete application. The EPA's proposed regulations would also require
permitting authorities to consider, in making a completeness
determination, any comments provided by the FLM concerning the
completeness of the application within the 30-day review period. See
proposed Secs. 51.166(p)(5)(iii) and 52.21(p)(5)(iii).
The EPA generally anticipates that the permitting authority will
respond affirmatively to the FLM's request for additional information
and will notify the applicant that the application is incomplete and
require such additional information from the applicant. The permitting
authority generally should not announce that an application is deemed
complete until the FLM's request for additional information has been
satisfied by the applicant, and the FLM has had an opportunity to file
a notice alleging potential Class I impacts, if such notice has not
already been filed. In some cases, however, the permitting authority
may question the request made by the FLM or simply disagree with it.
When this occurs, the EPA is proposing that the permitting authority
must consult with the FLM and try to resolve whatever problems may
exist prior to issuing a completeness determination. See proposed
Secs. 51.166(p)(5)(iv) and 52.21(p)(5)(iv). Nevertheless, while the
permitting authority must give reasonable consideration to the FLM's
concerns under the proposed changes, the permitting authority is
responsible for making the ultimate decision regarding the
application's completeness. The proposed provisions allow the
permitting authority to issue its completeness determination any time
(either before or after the 30-day period has ended) after any comments
from the FLM have been received and consultation with the FLM has
occurred about any inconsistency between the permitting authority's
views and the FLM's recommendations.
The CAAAC recommended that the EPA consider establishing a formal
dispute resolution process as a part of the completeness review. The
EPA has declined to propose any specific requirements focusing on the
resolution of potential problems between the permitting authority and
the FLM. Instead, the EPA's proposal contemplates that the permitting
authority and the FLM retain discretion to determine the nature of
consultation that is appropriate. The EPA believes that most permitting
authorities and permit applicants recognize the merits of early
consultation with the FLM and that all affected parties will work in a
cooperative manner.
d. Coordination of the Preliminary Determination. The Act provides
that, if the proposed source or modification will not cause or
contribute to a violation of an increment in a Federal Class I area,
the FLM has the burden of demonstrating to the satisfaction of the
permitting authority that the source will have an adverse impact on
AQRV. If so demonstrated, the Act mandates that the permit shall not be
issued. Conversely, if a proposed source or modification causes or
contributes to an increment violation in a Federal Class I area, the
permit may be issued if the owner or operator demonstrates to the
satisfaction of the FLM that the proposed source will have no adverse
impact on AQRV and the FLM so certifies. See section
[[Page 38289]]
165(d)(2)(C)(ii) and (iii) of the Act. In either situation, the FLM has
an affirmative responsibility to protect the AQRV associated with the
affected Federal Class I area. See section 165(d)(2)(B) of the Act.
The EPA is proposing several revisions to the existing PSD
regulations concerning the permitting authority's preliminary
determination to issue or not issue the PSD permit where a proposed
source will not cause or contribute to a violation of a Class I
increment and the FLM has submitted a demonstration that a proposed
source will have an adverse impact on AQRV. Specifically, these changes
relate to (1) clarifications to existing regulations addressing the
scope of the FLM's demonstration of an adverse impact on AQRV, (2)
timing for submittal of the FLM's demonstration to the permitting
authority for consideration prior to issuing or denying a PSD permit,
and (3) criteria which the permitting authority must consider in
deciding to nonconcur with the FLM's demonstration.
(1) Scope of the FLM's Demonstration of an Adverse Impact on AQRV.
The existing part 52 PSD regulations are inadequate because they only
require the Administrator to consider the FLM's demonstration of the
visibility impacts of a proposed source, and therefore do not
contemplate consideration of other AQRV. See existing Sec. 52.21(p)(3).
When the part 52 PSD regulations were originally promulgated,
visibility was the only specified AQRV; however, the FLM have
identified a variety of AQRV and, as discussed previously, the EPA is
proposing a more general definition of AQRV similar to the definition
that the FLM have historically been using. See, e.g., proposed
Sec. 51.166(b)(40). Thus, the EPA is proposing to delete the existing
provision in Sec. 52.21, and, under the proposed revisions described
immediately below, provide for consideration of the FLM's demonstration
of an adverse impact on AQRV.
(2) Timing for Submittal of the FLM's Demonstration of an Adverse
Impact on AQRV. Under the existing part 52 PSD regulations, the FLM is
given only 30 days from receipt of a notice (that a PSD application has
been submitted) from the Administrator to provide the required
demonstration of an adverse impact on AQRV for the Administrator's
consideration prior to the Administrator's issuance of a preliminary
permit determination. This time constraint places the FLM in a dilemma.
The FLM is expected to provide a well-documented, reasoned
demonstration of an adverse impact on AQRV that a proposed source will
have in a Federal Class I area, but is generally given an abbreviated
time to complete this critical task.
In contrast, the part 51 PSD regulations [See existing paragraph
(p)(3)] require that the State provide a mechanism whereby the FLM may
present a demonstration of an adverse impact on AQRV to the permitting
authority after the preliminary determination has been made. This
existing requirement does not contemplate that the FLM's demonstration
would be best addressed as part of the preliminary determination and
then made available for public notice and comment.
The EPA believes that it is important to the permitting process
that the FLM's demonstration be submitted before a preliminary
determination is made and that sufficient time be allowed to complete
the demonstration. Thirty days is generally not a sufficient amount of
time for the FLM to complete a demonstration of an adverse impact on
AQRV. Instead, the EPA proposes that the FLM be allowed at least 60
days to make the required demonstration. Moreover, the proposed
regulations provide that the 60-day period occur prior to a preliminary
determination so that any demonstration submitted by the FLM may be
adequately considered by the permitting authority and addressed as part
of the preliminary determination. See proposed Secs. 51.166(p)(6)(i)
and 52.21(p)(6)(i).
The EPA also believes that a 60-day period (beginning on the date
that the permitting authority formally issues its determination that
the application is complete), taken together with the improvements
addressed above to facilitate earlier FLM and permitting authority
coordination, provides the FLM with a more reasonable period of time.
During this period, the FLM may need to conduct a variety of technical
analyses or perhaps request (via the permitting authority) that the
applicant provide additional analyses to provide sufficient basis for
the demonstration to be developed. This will, of course, depend on the
amount of information already contained in the application as a result
of prior coordination about the potential impacts on AQRV in the
Federal Class I area. For example, if the FLM has issued notice
pursuant to proposed Secs. 51.166(p)(2)(i) or 52.21(p)(2)(i), alleging
that the proposed source may impact a Federal Class I area, then the
FLM may rely on the ensuing impact analysis performed by the applicant
as at least a significant starting point for the FLM's evaluation.
The EPA invites public comments on the adequacy of a 60-day period
for completing the demonstration of an adverse impact on AQRV. The EPA
will consider a different time period if it can be shown that such
different period would allow a more appropriate amount of time for the
FLM to complete any necessary analyses without unduly delaying the
permit process.
In addition, the EPA requests comments on its own role. Section
165(d)(2)(B) of the Act provides that the FLM and the Federal official
charged with direct responsibility for land management have an
``affirmative responsibility'' to ``consider, in consultation with the
Administrator, whether a proposed major emitting facility will have an
adverse impact.'' The EPA is not proposing a specific role, beyond the
significant programmatic changes related to Class I area protection
proposed today, concerning how it should consult with the FLM. The EPA
requests comments on this issue.
(3) Rejection of the FLM's Demonstration of an Adverse Impact on
AQRV. The Act and EPA's PSD regulations provide that where the
permitting authority determines that a proposed source's emissions will
not cause or contribute to a violation of a Class I increment, the FLM
must demonstrate ``to the satisfaction of the permitting authority''
that the proposed source will have an adverse impact on AQRV. The
permitting authority is thus given the authority to accept or reject
the FLM's demonstration. The permitting authority's concurrence with
such demonstration means that the permitting authority must propose to
deny the PSD permit. See existing Secs. 51.166(p)(3) and 52.21(p)(4).
[See also proposed Secs. 51.166(p)(6)(ii) and 52.21(p)(6)(ii).] If the
permitting authority determines that the FLM has not demonstrated to
its satisfaction that a proposed source's emissions will have an
adverse impact on AQRV, the permitting authority may reject the FLM's
demonstration so long as it has a rational basis for doing so.62
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\62\ See 50 FR 28544, 28549 (July 12, 1985); see also Old
Dominion Electric Cooperative, PSD Appeal No. 91-39 at 8 and n. 9
(Jan. 29, 1992).
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Recent permit controversies have underscored the need for national
guidance addressing the permitting authority's role in evaluating the
FLM's demonstration of an adverse impact on AQRV and the rationale for
any decision to disagree with the FLM's findings. For example, in a PSD
permit appeal proceeding, the EPA's Environmental Appeals Board held
that the permitting authority erred in summarily rejecting the
demonstrations of the FLM for the
[[Page 38290]]
Shenandoah National Park and James River Face Wilderness that the
proposed facility would have an adverse impact on AQRV in those Federal
Class I areas.63
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\63\ Hadson Power 14--Buena Vista, PSD Appeal Nos. 92-3, 92-4 &
92-5 (Oct. 5, 1992). The EPA Environmental Appeals Board reasoned
that, ``States do not have unfettered discretion to reject an FLM's
adverse impact determination. If a State determines that an FLM has
not satisfactorily demonstrated an adverse impact on AQRV from the
proposed facility, the State must provide a `rational basis' for
such a conclusion, `given the FLM's affirmative responsibility and
expertise regarding the Class I areas within their jurisdiction.' 50
FR 28549 (July 12, 1985). Arbitrary and capricious rejections of
adverse impact demonstrations are not sustainable.'' [Hadson at p.
21. (citations omitted)]
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In an effort to provide clearer guidance and promote more reasoned
decision-making, the EPA is proposing to require that certain
considerations must be addressed and made public concerning a
permitting authority's rejection of the FLM's demonstration of an
adverse impact on AQRV. In doing so, the EPA has tried to balance the
statutory provisions concerning the affirmative responsibility given to
the FLM to protect AQRV and the stipulation that the permitting
authority must be satisfied with the FLM's demonstration of adverse
impact on AQRV in any particular situation.
The FLM are entrusted with administering the statutes governing the
management and preservation of Federal Class I areas, and are expressly
entrusted by the Act with an affirmative responsibility to protect
AQRV. The FLM have expert knowledge about the unique values associated
with Federal lands, and administer ongoing monitoring and research
programs to help evaluate the effects that air pollution has on such
values. Accordingly, the EPA believes it is appropriate for the
permitting authority to recognize the FLM's broad expertise in the
identification and evaluation of adverse effects on AQRV.
Notwithstanding this expertise, the permitting authority may call upon
experts of its own choosing to evaluate the findings in the FLM's
demonstration.
Where the permitting authority is not satisfied with the FLM's
demonstration of adverse impact on AQRV, the EPA is proposing (1) a
general consultation provision necessitating some form of communication
and discussion between the permitting authority and the FLM; and (2) a
provision requiring the permitting authority to highlight the issues
raised by the FLM and explain its reasons for disagreement in the
public record. The permitting authority would satisfy this latter
requirement by including a brief summary of the Class I area impact
issues in the public notice announcing the preliminary permit
determination, and explaining in writing, in the public record, its
specific reasons for rejecting the FLM's demonstration of adverse
impact. See proposed Secs. 51.166(p)(6)(iii), 51.166(q)(4)(ii) and
(iii), and 52.21(p)(6)(iii). The EPA believes that the requirement to
indicate in the public notice that the FLM's demonstration has been
rejected will give the public sufficient notice and opportunity to
access the permitting authority's reasons for not being satisfied with
the FLM's demonstration. Such access will aid the public's ability to
comment meaningfully at any public hearing that may be requested. As
proposed, the permitting authority's written explanation must address,
at a minimum, the following factors:
i. Scientific/Technical Basis. The permitting authority must
consider all relevant data and analyses submitted by the FLM and offer
a reasoned explanation for its disagreement with such data and the
resulting analyses. See proposed Secs. 51.166(p)(6)(iii)(A) and
52.21(p)(6)(iii)(A).
ii. Description of the AQRV and Adverse Impact. The permitting
authority must address the FLM's findings describing the adverse impact
being demonstrated for each affected AQRV, by explaining any
conclusions it reaches, about whether the projected impacts of the
source's emissions will have an adverse impact on the AQRV, that are
inconsistent with the conclusions reached in the demonstration
submitted by the FLM. See proposed Secs. 51.166(p)(6)(iii)(B) and
52.21(p)(6)(iii)(B).
iii. Mitigative Measures. The permitting authority must describe
any efforts that have been undertaken to mitigate the potential impacts
of a proposed source on the Federal Class I area of concern, including
any estimated emissions reductions, and the effect of such reductions.
See proposed Secs. 51.166(p)(6)(iii)(C) and 52.21(p)(6)(iii)(C).
Finally, the EPA is proposing to require that, for any permit
ultimately issued to a source determined by the FLM to have an adverse
impact on AQRV, the permitting authority must address any additional
comments or input from the FLM (intended to substantiate or augment its
initial demonstration) that may be submitted during the public comment
period. See proposed Secs. 51.166(p)(6)(iv) and 52.21(p)(6)(iv).
3. Mitigating an Adverse Impact on AQRV
a. Background. In general, a PSD permit shall not be issued when
the emissions from a proposed facility would have an adverse impact on
AQRV in a Federal Class I area. See section 165(d)(2)(C) of the Act.
This specific prohibition on permit issuance applies when the FLM of a
Class I area demonstrates to the satisfaction of the permitting
authority that emissions from a proposed source will have an adverse
impact on AQRV, notwithstanding that the proposed source does not cause
or contribute to a violation of a Class I increment. See section
165(d)(2)(C)(ii) of the Act. There have been several instances over the
past few years where, in such circumstances, the FLM has submitted a
demonstration of an adverse impact on AQRV in a Class I area. In some
cases, the FLM's concerns have been addressed through successful
negotiations between the FLM and the permit applicant, where the source
obtained either emissions reductions (offsets) from an existing source,
or adopted more stringent control measures, or did some combination of
both.64 In other instances, similar demonstrations of an adverse
impact on AQRV have been the subject of contentious administrative
litigation.65
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\64\ See, e.g., Multitrade Limited Partnership, PSD Appeal Nos.
91-2 et alia (January 21, 1992). In Multitrade the proposed source
agreed to mitigate its impact through a combination of reduced
emissions from the new source as originally proposed and emission
offsets from a nearby existing source, resulting in an offset ratio
substantially greater than one-to-one. Based on these changes, the
FLM concluded that the emissions from the proposed source, if
modified, would not have an adverse impact on the Shenandoah
National Park. Id. at 5.
\65\ See Old Dominion Electric Cooperative, PSD Appeal No. 91-
39 (January 29, 1992); Hadson Power 14--Buena Vista, PSD Appeal Nos.
92-3, 92-4 & 92-5 (October 5, 1992).
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b. General Policy for Mitigating Class I Area Impacts. The CAAAC
recommended requiring offsets for any proposed source that would have
an adverse impact on AQRV. Specifically, the CAAAC recommended that
where the emission offset ratio was less than 1:1, a net air quality
benefit analysis should be made to support the specific offset ratio
proposed. The CAAAC recommended that, where the emission offset ratio
is greater than 1:1, a standardized emission/distance adjustment factor
for offsets could be used instead of demonstrating that a net air
quality benefit results from the offsets.
While the EPA agrees with the CAAAC's overarching concern that the
EPA provide guidance on the
[[Page 38291]]
implementation of mitigating offsets, the EPA declines to recommend
rigid tests for assessing the adequacy of offsets. Rather, the EPA
proposes that general principles already established under the PSD
program guide the implementation of offsets. In addition, the EPA is
proposing to add a provision to the PSD regulations that explicitly
provides what EPA has previously acknowledged--that sources may
mitigate an adverse impact on AQRV in order to obtain a PSD
permit.66 See proposed Secs. 51.166(p)(7) and 52.21(p)(7).
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\66\ See Multitrade at p. 7-8, n.5.
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The proposed provision specifies that PSD programs shall allow for
mitigation by a proposed source and specifically provides that the
permitting authority may issue a permit for a proposed major source or
major modification that would otherwise be denied a permit because of
an adverse impact on AQRV, if the permitting authority determines, in
consultation with the FLM, that the source has mitigated the adverse
impact on AQRV. The EPA believes that sound technical evidence should
support a demonstration of mitigation. The demonstration should show
that there will be no net adverse impact as a result of the proposed
source's emissions. The proposed provision specifically acknowledges
offsets as a mitigation option where the owner or operator of a
proposed source obtains enforceable and permanent emissions reductions
of sufficient amount and in such location that the reductions will
offset the change in air quality in the Federal Class I area that would
have resulted from the proposed source. See proposed Secs. 51.166(p)(7)
and 52.21(p)(7). The quantitative amount of the offsetting emissions
should, therefore, be shown to be sufficient to in fact mitigate the
adverse impact on AQRV that would otherwise be caused by the proposed
emissions increase. This will involve consideration of the location of
the offsetting source relative to the Class I area, as well as the
meteorological and topographical conditions which affect dispersion of
the offsetting emissions.
Another possible consideration in evaluating whether any potential
emission reductions identified at existing sources can be used to
mitigate the adverse impact on any AQRV is whether the reductions are
already required by some other Act-mandated program. In nonattainment
areas, section 173(c)(2) of the Act plainly prohibits emission
reductions otherwise required under the Act from being credited as
offsets for new source review purposes.67
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\67\ Incidental emission reductions not otherwise required by
the Act are to be creditable under section 173(c)(2) of the Act. See
also 57 FR 13553 (April 16, 1992) (guidance on creditable reductions
under the nonattainment NSR program).
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Unlike the nonattainment NSR program, offsets under the PSD program
are not expressly addressed by the Act. The EPA is interested in the
public's views about the crediting of those emission reductions already
required for other purposes as offsets for mitigating a proposed
source's adverse impact on an AQRV.
As an alternative to emissions offsets, a more stringent emission
limitation than the limitation that would otherwise be required by BACT
may be established to mitigate an adverse impact on an AQRV in a
Federal Class I area. Depending upon the remaining emissions released
and the sensitivity of the AQRV of a Class I area, an emissions
limitation that would otherwise be required by BACT, if an adverse
impact on an AQRV was not considered, may be inadequate to entirely
mitigate the adverse impact. Thus, emission offsets, a stricter
emission limitation, or some combination of both, may be appropriate to
mitigate an adverse impact on an AQRV.
The EPA believes that measures such as emission offsets from
existing sources represent a reasonable approach which enables the
mitigation of an adverse impact on an AQRV. The EPA's mitigation policy
provides needed flexibility to the PSD permitting process by allowing a
new major source or major modification that mitigates an adverse impact
on AQRV to receive a construction permit, even though its proposed
emissions increase is otherwise demonstrated by the FLM, and concurred
with by the permitting authority, to have an adverse impact on AQRV.
The adoption of this policy is also intended to promote dispatch in the
PSD permit process by providing a clearly available elective recourse
enabling applicants to avoid potentially contentious and protracted
permitting disputes where the FLM demonstrates an adverse impact on
AQRV and the applicant wishes to mitigate its demonstrated impacts
prior to a formal concurrence with the demonstration by the permitting
authority.
c. Post-construction Monitoring. The CAAAC recommendations
addressing mitigation of an adverse impact on AQRV included
consideration of post-construction monitoring for Class I areas. Post-
construction monitoring alone would not directly mitigate an adverse
impact on AQRV. However, such monitoring may provide critical
information about a source's impact on a Class I area.
The EPA is proposing to amend its PSD regulations to clarify that
post-construction ambient monitoring may be required for the purpose of
determining the effect emissions from a facility may have, or are
having, on AQRV in a Federal Class I area. The existing PSD regulations
at Secs. 51.166(m)(2) and 52.21(m)(2) currently require the owner or
operator of a new major source or major modification to conduct such
post-construction ambient monitoring, as the permitting authority
determines to be necessary, to determine the effect emissions may have,
or are having, on air quality in any area. However, the current EPA
regulations do not specify that such ambient monitoring may include the
monitoring of air quality-related impacts in Federal Class I areas. The
EPA is, therefore, proposing to amend the PSD regulations to
specifically state that post-construction ambient monitoring may be
required in Class I areas. See proposed amendatory language for
Secs. 51.166(m)(2) and 52.21(m)(2). The EPA requests comments on this
proposed regulatory change.
4. Class I Significant Impact Levels
Some members of the NSR Reform Subcommittee recommended that the
EPA provide criteria indicating the circumstances in which a proposed
source's projected contribution to ambient concentrations in a Class I
area may be considered de minimis for certain planning requirements.
These members recommended that the EPA identify a level of contribution
(ambient concentration) that is de minimis, or insignificant, so that a
proposed source having a contribution less than that concentration will
know with certainty that it will not be subject to the full
requirements for an increment analysis in Class I areas. The EPA
believes that it is reasonable to extend the use of significant impact
levels to the Class I increments. Levels of significant impact are
currently used as a matter of policy in the PSD program for determining
whether a proposed source may be excluded from certain requirements
(e.g., significant emissions rates, and significant monitoring
concentrations).68
[[Page 38292]]
See, also, discussion in section IV.C.5.a. of this preamble, addressing
the proposed codification of significant impact levels for NAAQS and
Class II and III increments.
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\68\ For example, under the PSD regulations, a comprehensive
preconstruction review must be conducted for each regulated
pollutant that a proposed major source or major modification will
have the PTE in ``significant'' amounts, as defined in existing
section 51.166(b)(23)(i) and 52.21(b)(23)(i). Under existing section
51.166(i)(8) and section 52.21(i)(8), the permitting authority may
exempt a proposed source from having to include ambient monitoring
data in its permit application for a particular pollutant if the
applicant's air quality impact for such pollutant is less than the
``significant'' concentration prescribed in the regulations.
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Administrative agencies may exempt ``truly de minimis'' situations
from a statutory command ``when the burdens of regulation yield a gain
of trivial or no value.'' 69 Accordingly, the EPA is proposing to
add significant impact levels for Class I increments to both sets of
PSD regulations. See proposed Secs. 51.166(b)(23)(v) and
52.21(b)(23)(v). The proposed significant impact levels would apply to
the existing Class I increments for PM-10, SO2, and NO2 in
the PSD regulations. The significant impact levels would be used to
determine whether a new major source or major modification, due to the
predicted ambient concentration from its own emissions, would be
required to conduct a comprehensive Class I increment analysis for a
given pollutant. A de minimis impact resulting from the emissions from
a proposed source would serve as the basis for a determination that
such emissions will not contribute to a violation of the applicable
Class I increments.
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\69\ Alabama Power Co. v. Costle, 636 F.2d 323, 360-61 (D.C.
Cir. 1979).
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The proposed significant impact levels for Class I increments were
derived by taking four percent of the concentration defined for the
existing Class I increment for each applicable pollutant and averaging
period. The EPA believes that where a proposed source contributes less
than four percent to the Class I increment, concentrations are
sufficiently low so as not to warrant a costly and detailed analysis of
the combined effects of the proposed source and all other increment-
consuming emissions. The EPA previously used a similar rationale to
establish the significant emissions rates for PSD applicability
purposes, concluding in part that emissions rates which resulted in
ambient impacts less than four percent of the 24-hour standards for
particulate matter and SO2 were sufficiently small so as to be
considered de minimis.70
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\70\ See 45 FR 52676, 52707-52708 (August 7, 1980).
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It should be noted that, while the FLM representing the National
Park Service and the U.S. Fish and Wildlife Service agree that the
general use of significant impact levels for Class I increments may be
appropriate, they have indicated that such levels should be adequately
conservative. These FLM have, in fact, recommended significant impact
levels that are more restrictive than those being proposed today by
EPA. Their recommended levels were developed using the ratios derived
from a comparison of existing significant impact levels--used by EPA
for NAAQS and Class II increment analyses--and the respective NAAQS.
For comparative purposes the significant impact levels being proposed
today by EPA and the levels recommended by the FLM are shown below.
----------------------------------------------------------------------------------------------------------------
Levels
Pollutant Averaging time Levels proposed Recommended by
by EPA (ug/m3) FLM (ug/m3)
----------------------------------------------------------------------------------------------------------------
Sulfur Dioxide............................. Annual....................... 0.1 0.03
24-hour...................... 0.2 0.07
3-hour....................... 1.0 0.48
Particulate Matter......................... Annual....................... 0.2 0.08
24-hour...................... 0.3 0.27
Nitrogen Dioxide........................... Annual....................... 0.1 0.03
----------------------------------------------------------------------------------------------------------------
The EPA wishes to emphasize that the specific significant impact
levels that it is proposing today for the Class I increments are not
intended to serve as thresholds for determining the need for an AQRV
analysis or whether an adverse impact on AQRV will occur. An adverse
impact on AQRV in a Class I area depends upon the sensitivity of the
particular AQRV and involves an assessment of potential harm. An
ambient pollutant concentration that is deemed to be of relatively
insignificant consequence for purposes of increment consumption should
not automatically be considered inconsequential relative to the
inherently fact-specific demonstration upon which an adverse impact on
AQRV is to be based. Thus, a notice may be filed (as described in
section IV.C.1.c. of this preamble) alleging that a proposed source's
emissions may cause or contribute to a change in the air quality in a
Federal Class I area and identifying the potential adverse impact of
such change. The fact that such source's predicted ambient impact is
less than the applicable significant impact level for Class I
increments would neither relieve the applicant from having to complete
an analysis of impacts on AQRV nor automatically allow the permitting
authority to reject the FLM's demonstration of adverse impact on AQRV.
The EPA requests comments on its proposal to establish significant
impact levels for Class I increments in general, and the proposed
levels in particular.
The EPA is declining to propose specific significance levels for
determining whether the emissions from a proposed source may have an
adverse impact on AQRV. The FLM is specifically entrusted by the Act
with protecting AQRV and the decision to establish any appropriate
significance levels for AQRV should be made primarily by the FLM.
Conceptually, such significance levels would represent ambient air
pollutant concentrations or deposition rates below which only de
minimis effects on AQRV will occur. Accordingly, emissions increases
not resulting in ambient concentrations or deposition rates exceeding
the prescribed significance levels would therefore be excluded from a
review of AQRV impacts.
The EPA generally recognizes the administrative benefits of
categorically eliminating certain pollutant-emitting activities from
regulatory review and has employed significance levels in other
contexts in the NSR program, including the significance levels proposed
above for Class I increments. However, there are many obstacles to
formulating reasonable significance levels in the AQRV context. For
example, there are numerous AQRV and there is a wide variance in
sensitivity to emissions increases for particular AQRV.
The FLM have been working with other air pollution effects
scientists to develop lists of sensitive resources (e.g., species of
plants and invertebrates, and particular streams and lakes) and
sensitivity thresholds that could help
[[Page 38293]]
establish significant impact levels for individual AQRV in the future.
However, many studies conducted to date have not yielded the
information needed to establish a critical threshold level from which a
significance level could be derived. The EPA encourages the FLM to
continue pursuing research on AQRV effects, and anticipates an evolving
process by which research and information may eventually support the
establishment of site specific significance levels for individual AQRV.
Any significant impact levels for AQRV may necessarily be site specific
since each AQRV and its associated critical pollutant loadings may be
different from one area to another and even within individual Federal
Class I areas. In any event, EPA encourages the establishment of an
electronic database about Class I area resources, described elsewhere
in this preamble, that will make information about available research
on AQRV effects more accessible.
The EPA requests public comment on the issue of significance levels
for AQRV. In particular, EPA is interested in suggestions regarding
alternative approaches that promote regulatory certainty by excluding
from consideration proposed sources that have truly de minimis impacts
on Class I resources while still ensuring that AQRV are adequately
protected in the PSD permitting process. Commenters should fully
consider the legal standards that govern the establishment of de
minimis regulatory exemptions. See e.g., Alabama Power Co. v. Costle,
636 F. 2d 323, 360-61 (D.C. Cir. 1979).
5. Clarification of Miscellaneous Issues
The discussion which follows addresses several relatively discrete
issues. The EPA is clarifying current policy in areas where there is
potential for significant confusion or uncertainty and, in some
instances, is proposing conforming changes to the implementing
regulations. The EPA is also proposing changes that largely codify
existing policy.
a. Significant Impact Levels for NAAQS and Class II and III
Increments. The EPA is proposing several changes to the PSD regulations
at both Secs. 51.166 and 52.21 to make the rules consistent with
current practice. First, the EPA is proposing to revise the provisions
of existing Secs. 51.166(k) and 52.21(k) to clarify that a source's own
emissions must make a ``significant contribution'' to a violation of
any NAAQS or PSD Class II or III increment before that source would be
denied a PSD permit. See proposed amendatory language for
Secs. 51.166(k) and 52.21(k). Second, the EPA is proposing to
incorporate into the PSD regulations the significant impact levels
currently set forth at Sec. 51.165(b)(2)--which are being used to
determine whether major new source or major modification contributes to
a violation of a NAAQS--so that they may be directly applied to the
``significant contribution'' test in the PSD regulations. See proposed
Secs. 51.166(b)(23)(iv) and 52.21(b)(23)(iv). The EPA has long
interpreted the ``significant contribution'' test set forth in existing
Sec. 51.165(b)(2) to apply to PSD sources, as well, since the provision
applies to major new sources and major modifications located in
attainment and unclassifiable areas.
Finally, the EPA is proposing to add significant impact levels for
the Class II and Class III increments. See proposed
Secs. 51.166(b)(23)(v) and 52.21(b)(23)(v). The proposed levels are the
same as those levels at existing Sec. 51.165(b)(2), which define a
significant contribution to a violation of the NAAQS, and simply codify
current EPA policy which allows the significant impact levels from
Sec. 51.165(b)(2) to be directly applied to the PSD program to
determine a significant contribution to either the NAAQS or PSD
increments. The EPA requests comment on the need to include these
significant impact levels in the PSD regulations and the need for
significant impact levels for Class II and Class III increments.
Furthermore, the EPA requests comment on the proposed significant
impact levels for the Class II and Class III increments, specifically
whether they should be lower than the levels used for NAAQS compliance.
b. Analysis of Impacts on Federal Class II Areas. This proposal
also clarifies the requirement for the ``additional impact analysis''
under Sec. 51.166 and 52.21. In addition to the central requirements
that each PSD source must demonstrate that its allowable emissions will
not cause or contribute to a violation of any NAAQS or PSD increment,
each such source is generally required to prepare further analyses for
the pollutants that it will emit. Such ``additional impact analysis''
is consistent with the statutory provisions under section 165(e)(3)(B)
of the Act, and includes an assessment of the impairment of visibility,
soils, and vegetation within the proposed source's impact area,
including Federal Class I and II areas. See proposed amendatory
language for Secs. 51.166(o)(1) and 52.21(o)(1). In addition, the EPA
is proposing more specific provisions for Federal Class I areas that
require similar analysis where a FLM alleges that an adverse impact on
AQRV may occur in Federal Class I area lands located beyond the area
normally considered to be within the proposed source's impact area. See
proposed Secs. 51.166(p)(2)(i)(A)(2) and 52.21(p)(2)(i)(A)(2), and
related discussion in section IV.C.1.c. of this preamble.
The FLM have expressed concern that the existing provisions, see,
e.g., existing Sec. 51.166(o)(1), which enable the applicant to exclude
from analysis any impact on vegetation ``having no significant
commercial or recreational value,'' could exclude the analysis of
certain vegetation with ecological significance in the lands under
their jurisdiction, i.e., Federal Class I and II areas. The EPA is
proposing a change in the existing provisions so that applicants may
not presume that soils and vegetation in Federal Class I and II areas
are of no significant commercial or recreational value, except where
the FLM indicates that such analysis is not needed. See proposed
amendatory language for Secs. 51.166(o)(1) and 52.21(o)(1).
c. Clarification of PSD Requirements Applicable to Non-Federal
Lands Redesignated as Class I Areas. Individual CAAAC members and
Tribal representatives have asked the EPA to provide guidance on the
PSD provisions that apply to ``non-Federal'' reservation lands that are
redesignated as Class I areas.\71\ In particular, guidance has been
requested concerning whether AQRV may be established for such lands and
how these values are to be protected under the PSD program. The
discussion below is intended to clarify the EPA's views on these issues
and to describe the accompanying, largely technical, regulatory
revisions that the EPA is today proposing. The policies described in
the following discussion would also apply to non-Federal State lands
redesignated as Class I areas.
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\71\ Lands within reservation boundaries may be Federal lands
under Federal Indian law and may or may not be ``Federal lands''
within the specific meaning of the PSD program. ``Federal lands''
under the PSD program include: national wilderness areas, national
memorial parks, national parks, national monuments, national
reserves, national seashores and other similar national public land
areas. See, e.g., sections 160(2), 162(a) and 164(d) of the Act. The
term ``non-Federal'' is used here to refer to State lands or lands
within the boundaries of an Indian reservation that are not Federal
lands within the meaning of the Act's PSD program.
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(1) Redesignation of Class I Areas. Section 164(c) of the Act gives
federally-recognized Indian Tribes\72\ broad authority to request
redesignation of lands within the exterior boundaries of
[[Page 38294]]
their reservations as Class I areas. Several Indian Tribes have already
had lands within reservation boundaries redesignated as Class I areas.
The EPA has approved redesignation of the Northern Cheyenne Indian
Reservation, the Flathead Indian Reservation, the Fort Peck Indian
Reservation and the Spokane Indian Reservation on the basis of tribal
requests. See 40 CFR 52.1382(c) and 52.2497. States also have broad
authority under section 164(a) to request redesignation of lands as
Class I areas. To date, the EPA has not received such a State PSD
redesignation request.
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\72\ See section 302(r) of the Act. The Department of the
Interior periodically publishes a list of Tribes officially
recognized by the Federal government. See 58 FR 54364 (Oct. 21,
1993).
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(2) Status of AQRV Protection for Non-Federal Lands Redesignated as
Class I Areas. Any State or federally-recognized Tribe may establish
AQRV for non-Federal lands within its jurisdiction which have been
redesignated as Class I areas. The mechanism identified in the Act, by
which a State or Tribe may seek protection of such AQRV when a proposed
or modified major source in another jurisdiction will affect any AQRV
which have been established, is contained in section 164(e) of the Act.
See also Sec. 52.21(t). Section 164(e) of the Act is a special dispute
resolution provision involving intervention by the EPA Administrator.
If the governing body of an affected Indian Tribe or Governor of an
affected State determines that a proposed PSD source ``will cause or
contribute to a cumulative change in air quality in excess of that
allowed in this part [i.e., part C, title I of the Act, containing the
PSD program]'' the Tribe or State may request that the Administrator
enter into negotiations with the parties involved to resolve the
dispute.\73\ If requested by the Tribe or State, the Administrator must
make a recommendation ``to resolve the dispute and protect the air
quality related values of the lands involved.'' See section 164(e) of
the Act.
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\73\ Section 164(e) also provides that a State or Tribe may
request EPA to enter into negotiations to resolve
interjurisdictional disputes about PSD air quality redesignation.
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The EPA proposes to interpret these provisions to direct EPA
intervention, at the request of a State or Tribe, when a State or Tribe
determines that a proposed source will cause or contribute to a
violation of a NAAQS or PSD increment or will harm AQRV established by
a State or Tribe. In accordance with section 164(e), the PSD provisions
prohibit ``changes in air quality'' that exceed these requirements. See
proposed Sec. 51.166(t) and existing Sec. 52.21(t). Further, as to
AQRV, their protection is a stated purpose of the EPA's involvement in
the dispute--'' the Administrator shall make a recommendation to
resolve the dispute and protect the AQRV of the lands involved.'' See
section 164(e) of the Act.\74\ Accordingly, AQRV may be identified by
States and Tribes for redesignated non-Federal Class I areas and these
areas may be protected by a State's or Tribe's request for the EPA to
resolve an intergovernmental dispute over a proposed PSD facility
pursuant to section 164(e). The EPA requests comments on its proposed
interpretation of the circumstances that authorize a State or Tribe to
involve the EPA in resolving interjurisdictional permitting disputes
pursuant to section 164(e).
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\74\ Note also that the dispute resolution provisions are not
limited to class I areas.
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The EPA, in the preceding discussion, is drawing a key distinction
between the authority bestowed solely on FLM under section 165(d) of
the Act to protect the AQRV of Federal Class I areas and the authority
States and Tribes have under section 164(e) to protect the AQRV of non-
Federal lands through the dispute resolution mechanism. The EPA intends
to clearly distinguish between provisions that apply to the protection
of AQRV of non-Federal class I areas and the provisions that apply to
FLM under paragraph (p) of the existing and proposed PSD regulations in
parts 51 and 52 by proposing a definition for ``Federal Class I
areas.'' The EPA proposes to define ``Federal Class I areas'' as those
areas owned by the United States and either (1) designated by Congress
as mandatory Class I areas, unable to be redesignated, pursuant to
section 162(a) of the Act, or (2) redesignated as Class I pursuant to
paragraph (g) of the existing PSD regulations. See proposed
Secs. 51.166(b)(38) and 52.21(b)(39).
The existing part 52 PSD regulations already contain a dispute
resolution provision based on section 164(e) of the Act. However, the
existing provision at Sec. 52.21(t) of the PSD regulations requires
that, when the parties involved in a dispute do not reach agreement,
the Administrator's determination (or the results of agreements reached
through some other means) is to become part of the applicable ``State
implementation plan.'' To avoid confusion, the EPA is proposing to
revise the language to conform with the statutory language, which
refers instead to the ``applicable plan.'' The EPA believes that the
more general reference to the ``applicable plan'' used in the statutory
language will avoid potential confusion because, in disputes involving
a State and an Indian Tribe, the Administrator's determination should
be made part of the applicable State implementation plan or Federal
implementation plan, whichever is appropriate for the affected State,
or the applicable Tribal implementation plan or Federal implementation
plan, whichever is appropriate for the affected Indian Tribe.
Therefore, the EPA is proposing to amend the existing regulatory
provision by changing the words ``State implementation plan'' to read
``applicable plan'' consistent with the language in the Act. See
proposed amendatory language for Sec. 52.21(t).
The same wording problem is found in existing Secs. 51.166(g) and
52.21(g), concerning area redesignation proposed by States or Indian
Tribes. In that particular case, the regulatory provisions provide that
the redesignation is subject to approval as a revision to the
``applicable State implementation plan.'' Accordingly, for the same
reasons, the EPA is proposing clarifying revisions to Secs. 51.166(g)
and 52.21(g) by changing ``applicable State implementation plan'' to
read ``applicable plan.'' See proposed amendatory language for
Secs. 51.166(g)(1) and 52.21(g)(1). The proposed addition of the
dispute resolution provision in the part 51 PSD regulations will
similarly use the statutory language, the ``applicable plan.'' See
proposed Sec. 51.166(t).
The EPA is also proposing to revise superseded definitions of
``Indian Reservation'' in existing Secs. 51.166(b)(27) and
52.21(b)(27). The 1990 Amendments to the Act added several provisions
relating to the authority of Indian Tribes to administer Act programs
in the same manner as States. See sections 301(d) and 110(o) of the
Act. Section 110(o) provides that implementation plans for Tribes are
to be effective ``within the exterior boundaries of the reservation,
notwithstanding the issuance of any patent and including rights-of-way
running through the reservation.'' On August 25, 1994, the EPA
published proposed rules implementing the general Act Tribal authority
added in the 1990 amendments and proposed to define reservation under
those rules as ``all land within the limits of any Indian reservation
under the jurisdiction of the United States Government, notwithstanding
the issuance of any patent, and including rights-of-way running through
the reservation.'' See 59 FR 43956 at 43980 (proposed 40 CFR 49.2). In
the accompanying preamble, the EPA explained:
Based on recent Supreme Court case law, EPA has construed the
term `reservation' to
[[Page 38295]]
incorporate trust land that has been validly set apart for use by a
Tribe, even though that land has not been formally designated as a
`reservation.' See 56 FR at 64,881 (Dec. 12, 1991); see also
Oklahoma Tax Commission v. Citizen Band Potawatomi Indian Tribe of
Oklahoma, 111 S.Ct. 905, 910 (1991). The EPA will be guided by
relevant case law in interpreting the scope of `reservation' under
the Act.
See 59 FR at 43,960. Accordingly, the EPA adopts this interpretation of
reservation for the PSD program and proposes to make conforming changes
to the definition of ``Indian Reservation.'' See proposed
Secs. 51.166(b)(27) and 52.21(b)(27).
6. Information Clearinghouse (Federal Class I areas)
The CAAAC recommended that the EPA establish a clearinghouse of
information about Federal Class I areas. The EPA has been working on a
clearinghouse project that was originally planned to be incorporated
into the EPA's public NSR BB which is hosted by the OAQPS TTN.\75\ The
advent of the ``Internet'' system and new budgetary
constraints are causing EPA to consider new strategies for transferring
information. Nevertheless, the EPA plans to address the CAAAC's
recommendations in two respects.
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\75\ Historically, users of the NSR BB have been able to
retrieve, then read and/or download full text of recent policy and
guidance material. The users may also solicit from or provide to
other parties in the NSR permitting community, information
pertaining to areas of interest within NSR.
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First, consistent with the proposed requirement to improve
permitting authority and FLM coordination, described in section
IV.C.2., above, the EPA is planning to create a publicly accessible,
electronic bulletin board for posting notice of major NSR permit
applications by permitting authorities and/or permit applicants. On
this bulletin board will be logged very basic source information, such
as the name and type of source, a brief description of its location in
terms of the State and county in which it will construct and operate
(including UTM coordinates), the distance between the proposed source
and all Federal Class I areas within 250 kilometers, and the proposed
emission rate or net emissions increase of each air pollutant
associated with the project. It also will allow permit applicants and
permitting authorities to present questions to the FLM regarding air
quality issues relative to any Federal lands potentially affected by
the proposed new or increased emissions, and, conversely, provide a
contact to whom the FLM may direct inquiries and information. See
proposed Secs. 51.166(n)(4) and 52.21(n)(4).
Second, EPA will pursue the development of a FLM Clearinghouse in
which the FLM and the EPA will post the following information as it
becomes available:
--Boundaries and size of existing Federal Class I areas
--Area-specific AQRV information, including sensitive receptors,
critical loadings, current source inventory, current loadings from
sources in the source inventory, and existing adverse conditions;
--Source-specific information on increment consumption and impacts on
AQRV in specific Federal Class I areas;
--Reports of research and investigations about the impacts of air
pollution on natural resources in Federal Class I areas, and contact
persons for further information;
--Comment letters and any findings of an adverse impact on AQRV issued
relative to specific draft PSD permits;
--Adjudicative appeals and corresponding orders from the EPA
Environmental Appeals Board and court decisions relative to issues
involving Federal Class I areas.
All users of the NSR BB will be able to download all the documents
posted in this clearinghouse. As suggested earlier, the host mechanism,
the schedule for completion and the degree of sophistication of this
clearinghouse will depend greatly on available resources, the dynamics
of the electronic communications industry, and the cooperation of the
FLM Agencies.
7. Visibility New Source Review
If adopted, these proposed revisions to the PSD rules related to
the protection of air quality related values (including visibility) in
Federal Class I areas may necessitate revisions to EPA's existing
visibility new source review rules (the ``visibility NSR'' rules),
which are codified separately from the PSD rules. See, e.g., existing
40 CFR 51.307, 52.27 and 52.28. Section 169A(a)(1) of the Act
established as a national goal the prevention of any future, and the
remedying of any existing, manmade impairment of visibility in
mandatory Federal Class I areas. Section 169A also called for EPA to
promulgate regulations to assure reasonable progress toward meeting the
national goal. See section 169A(a)(4) of the Act. Accordingly, EPA has
promulgated visibility regulations to address prospective visibility
impairment in mandatory Federal Class I areas from certain new or
modified major stationary sources.
The visibility NSR rules establish independent visibility
protection requirements that apply in areas designated attainment and
unclassifiable (PSD areas) and in areas designated nonattainment. For
efficiency, these requirements generally are implemented in conjunction
with PSD and nonattainment NSR permitting. The current visibility NSR
rules contain FLM coordination procedures. In some instances, the
visibility NSR rules also adopt, by cross reference, some of the
provisions of the PSD rules EPA is proposing to revise today.
The EPA may therefore need to revise its current visibility NSR
rules, depending upon the outcome of the rules proposed today. The EPA
would want to ensure that the different sets of rules are appropriately
harmonized in light of the permit streamlining goals embodied in this
proposal and the potential for overall improvement in FLM, State and
permit applicant coordination reflected in the rules proposed today.
V. Prevention of Significant Deterioration Preconstruction
Monitoring
Applicants for PSD permits often must provide continuous air
quality monitoring data as part of the air quality analysis
requirements set forth in Secs. 51.166(m) and 52.21(m) of the PSD
regulations. In both sets of regulations the air quality data provision
generally requires that an applicant for a new major source or major
modification submit with the permit application continuous air quality
monitoring data representing the 12-month period preceding application
submittal.76 Historically, this data requirement has been
satisfied largely through the use of monitoring data collected from
existing State or local agency air quality monitoring networks.
However, in the absence of existing data, it is the applicant's
responsibility to establish, operate and maintain sufficient air
monitoring stations to collect the necessary ambient data to satisfy
the data requirement.
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\76\ The PSD regulations currently provide that the permitting
authority has discretion to exempt an applicant from the requirement
to collect continuous air quality monitoring data if (1) the
predicted ambient impact caused by the proposed source, or (2) the
ambient pollutant concentrations that the proposed source would
affect, are less than prescribed significant monitoring
concentrations for the pollutants listed in the PSD regulations (or
if the pollutant emitted from the proposed source is not among those
listed). If, however, both the predicted impacts and the existing
ambient concentrations exceed the significant monitoring
concentrations, then the applicant must provide the required
monitoring data. See existing sections 51.166(i)(8) and 52.21(i)(8).
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The prospect of having to operate their own monitoring networks and
[[Page 38296]]
collect ambient data for 1 year prior to the submittal of a complete
PSD application has long been a concern of industry, particularly in
cases where there is no practical need for the data in the air quality
analysis. This monitoring responsibility obligates a considerable
amount of an applicant's resources and often interposes significant
time prior to permit application submittal. Permitting authorities
frequently have agreed that the monitoring requirement imposes an
unnecessary burden on industry where the data is not needed for the air
quality analysis but is required by regulation nevertheless.
The air quality data requirement originates in the Act at section
165(e) (1) and (2). Section 165(e)(1) requires, for each PSD source, a
preconstruction analysis ``of the ambient air quality at the proposed
site and in areas which may be affected by emissions from such facility
for each pollutant subject to regulation under [the Act] which will be
emitted from such facility.''
Section 165(e)(2) of the Act requires that the air quality analysis
``shall include continuous air quality monitoring data gathered for
purposes of determining whether emissions from such facility will
exceed the maximum allowable increases or maximum allowable
concentrations permitted under [the PSD provisions].'' Further, section
165(e)(2) provides that data for the analysis shall be gathered over a
period of 1 calendar year preceding the permit application or for a
shorter period if a State determines that a complete and adequate
analysis may be accomplished, according to the EPA regulations.77
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\77\ See, e.g., existing section 51.166(m)(1)(iv).
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On June 19, 1978, the EPA promulgated regulations which required a
source to submit an air quality analysis that included continuous air
quality monitoring data only for those pollutants, emitted by the
source, which would impact an existing NAAQS. See 43 FR 26380.
Monitoring data was not required to determine whether the source would
cause or contribute to a violation of a PSD increment. In Alabama Power
Co. v. Costle, 636 F.2d 323, 371-372 (D.C. Cir. 1979), the reviewing
court found the June 19, 1978 regulation to be deficient in that it did
not provide for continuous preconstruction monitoring for purpose of
determining impacts on both NAAQS and increments. On August 7, 1980,
the EPA corrected the deficiency by promulgating the current PSD
regulations covering preconstruction monitoring requirements. See 45 FR
52676.
The EPA had argued in the Alabama Power case that monitoring air
quality concentrations was technologically infeasible for all but a
small number of pollutants and that the available monitoring techniques
were at best of questionable accuracy even for the relatively
straightforward measurement of whether an applicable NAAQS has been
exceeded. The Court rejected the EPA's arguments, reasoning that the
statute clearly required monitoring for determining whether PSD
increments would be exceeded. The Court discerned from the Act that
Congress had a technology forcing intent in requiring such monitoring.
The Court indicated that Congress intended that the development of
monitoring techniques and the resulting data impose discipline on the
use of modeling. The Court explained that Congress intended ``that the
employment of modeling techniques [the principal device relied on for
predicting source impacts] be held to earth by a continual process of
confirmation and reassessment, a process that enhances confidence in
modeling, as a means for realistic projection of air quality.'' See
Alabama Power, 636 F.2d at 372. However, the Court added, ``[o]f course
even a congressional mandate, such as a technology-forcing requirement
based on a congressional projection of emergence of technology for the
future, is subject to a justified excuse from compliance where good-
faith effort to comply has not been fruitful of results.'' Id. The
Court found that such a legitimate ``excuse'' had not been presented in
the case, in which the EPA exempted sources from preconstruction
monitoring for PSD increments based upon current technological
infeasibility.
The Court's opinion thus contemplates that the EPA, after an
additional 15 years of experience under the PSD program since Alabama
Power, may excuse strict compliance with the requirements of section
165(e)(2) where a good-faith effort in preconstruction monitoring has
failed in producing fruitful results. Elsewhere in the Alabama Power
decision the court also indicated that there is a basis for a statutory
exemption ``when the burdens of regulation yield a gain of trivial or
no value.'' Id. at 360-61.
In the years since the court's decision, questions have continued
concerning the provisions requiring the submittal of air quality
monitoring data in cases where such data is not deemed necessary or
useful as part of the air quality analysis. Modeled estimates of air
quality are often sufficient to make the required demonstrations of
source compliance with NAAQS and PSD increments. Yet some sources still
are confronted with the requirement to provide air quality monitoring
data as part of a complete application.
Further, the use of air quality data has been used only to a
limited extent in the past to calibrate models for speci
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
fic SIP-related
applications; however, such calibration of air quality models has not
been a common practice. Moreover, the EPA's Guideline on Air Quality
Models describes the uncertainty associated with comparing short-term
model estimates with ambient measurements and concludes that ``short
term model calibration is unacceptable.'' See 58 FR 38816 at 38835,
July 20, 1993. In addition, ambient monitoring techniques that could be
used to measure increment consumption are still not available because
of the inability of ambient monitors to separate the pollutant
concentrations attributable to increment-consuming and non-increment
consuming source emissions. Available ambient monitoring methods cannot
make such distinctions.
The EPA believes that it is appropriate to reassess the regulatory
requirement for preconstruction monitoring data for proposed PSD
construction to address situations where the collection of such air
quality data serves no practical purpose in the required air quality
analysis. A more reasonable approach is to give the permitting
authority discretion not to require the submittal of air quality
monitoring data--including the installation and operation of monitoring
stations by the applicant--where the permitting authority determines
such data to be unnecessary to assess the air quality in the area
affected by the proposed source.
However, before the EPA decides whether to propose specific changes
to the existing requirements, it is seeking public input concerning the
benefits and disadvantages of the current air quality monitoring
requirements. The EPA is also seeking information concerning those
specific situations where air quality monitoring data was required as
part of a complete application, and whether the data was considered to
serve a necessary or useful purpose in the required air quality
analysis. Based on the resulting comments and information, the EPA will
determine whether it is appropriate to subsequently propose changes to
the current air quality monitoring requirements at Secs. 51.166(m)(1)
and 52.21(m)(1).
[[Page 38297]]
VI. Changes Resulting From the 1990 Clean Air Act (1990) Amendments
A. NSR Provisions for Nonattainment Area Permitting
1. Provisions for Ozone Nonattainment Areas
New sections 182 through 185 (part D, title I) of the Act contain
new NSR requirements specifically for ozone nonattainment areas that
supplement the basic requirements in section 173 of the Act. In
general, Congress intended that these new requirements vary in
stringency according to the severity of the ozone nonattainment
problem. The severity of the ozone nonattainment problem is as
expressed through a series of area classifications.
a. Area Classifications. Section 181(a) defines five area
classifications for ozone based on ambient ozone concentrations (ozone
design values).78 These five classifications (in ascending order
of severity) are marginal, moderate, serious, severe, and extreme.
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\78\ A detailed description of the individual area
classifications for ozone nonattainment areas is contained in the
EPA's General Preamble for the Implementation of Title I of the 1990
Amendments, 57 FR 13498 (April 16, 1992). The reader who is not
already familiar with these classifications, as well as the general
new SIP requirements for ozone, should refer to the General Preamble
for background information.
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Some ozone nonattainment areas do not fit under the section 181
classifications. Therefore, the EPA has classified these
``nonclassifiable'' nonattainment areas into three additional groupings
referred to as transitional, submarginal, and incomplete/no data areas.
The nonclassifiable ozone nonattainment areas should all be considered
of equal classification for purposes of implementing the applicable NSR
requirements, and are subject to the NSR requirements under section 173
(the basic requirements). However, when such area is located within an
OTR, the area will be treated as a moderate area for NSR purposes.
b. Major Stationary Sources. Congress retained the 100 tpy major
source threshold for stationary sources of VOC in the less severely
polluted ozone nonattainment areas. For those more severely polluted
areas, including ozone transport areas, Congress specified
progressively lower thresholds. The existing threshold of 100 tpy
continues to apply generally to sources of VOC in areas classified as
marginal, moderate, or any category of nonclassifiable ozone
nonattainment areas. However, when any of the above areas is in an
ozone transport area, the major source threshold is 50 tpy of VOC
pursuant to section 184(b)(2). New section 182 establishes new major
source thresholds of 50 tpy, 25 tpy, and 10 tpy for sources of VOC in
areas classified as serious, severe, and extreme, respectively.
Section 182(f) sets forth the presumption that NOX is an ozone
precursor unless the Administrator makes a finding of nonapplicability
or grants a waiver pursuant to criteria contained in that
subsection.79 Specifically, section 182(f) provides that
requirements applicable for major stationary sources of VOC shall apply
to major stationary sources of NOX, unless otherwise determined by
the Administrator. Pursuant to section 182(f), EPA is proposing that in
cases where NOX is considered an ozone precursor, major stationary
sources of NOX are also subject to the part D NSR requirements
applicable for VOC in ozone nonattainment areas and OTR's. See proposed
Sec. 51.165(a)(12). The major stationary source thresholds for NOX
and VOC are the same except in the OTR for marginal, moderate, or
unclassified ozone nonattainment areas and attainment (or
nonclassifiable) ozone areas. For these latter areas, the major
stationary source threshold for VOC is 50 tpy while the major source
threshold for NOX is 100 tpy. In serious, severe, and extreme
ozone nonattainment areas, the applicable major stationary source
threshold for NOX is 50 tpy, 25 tpy, and 10 tpy, respectively.
Note that NOX is not considered an ozone precursor in
nonclassifiable ozone nonattainment areas unless the area is in the
OTR.
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\79\ The EPA policy on the applicability of NOX
requirements under section 182(f) of the Act is in the document
``Guideline for Determining the Applicability of Nitrogen Oxides
Requirements Under Section 182(f)'', December 1993, U.S. EPA, OAQPS,
and two memoranda, dated May 27, 1994 and February 8, 1995, both
entitled, ``Section 182(f) Nitrogen Oxides (NOX) Exemptions--
Revised Process and Criteria,'' from John Seitz, Director of the
OAQPS, to EPA's Regional Air Directors.
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In this proposal, the EPA is changing the existing definition of
``major stationary source'' to add the new statutory major source
thresholds for both VOC and NOX emissions, as applicable. See
proposed Secs. 51.165(a)(1)(iv)(A) (1) and (2).
c. Major Modifications. The 1990 Amendments change the requirements
applicable to modifications of stationary sources in serious, severe,
and extreme ozone nonattainment areas to determine whether such a
modification is a major modification subject to nonattainment NSR. The
1990 Amendments do not mandate a change in approach for marginal,
moderate, and nonclassifiable ozone nonattainment areas.
(1) The Current Regulations. The EPA's current regulations for
determining a major modification are set out at 40 CFR 51.165. These
regulations define a ``major modification'' as:
* * *any physical change in or change in the method of operation
of a major stationary source that would result in a significant net
emissions increase of any pollutant subject to regulation under the
Act* * *
See existing Sec. 51.165(a)(1)(v)(A). Under these regulations, the
``net emissions increase'' is calculated taking into account all
contemporaneous, creditable, actual emissions increases and decreases
on a plant-wide basis. See existing Sec. 51.165(a)(1)(vi). Emissions
increases and decreases are ``contemporaneous'' with the increase from
the proposed project only if they occur before the date that the
increase from the proposed project occurs, and no earlier than the
reasonable contemporaneous time period specified by the reviewing
authority. Id. ``Significant'' is defined for ozone to mean, in
reference to a ``net emissions increase,'' a rate of emissions equal to
or exceeding 40 tpy of VOC. See existing Sec. 51.165(a)(1)(x). Thus, a
net emissions increase of VOC that is less than 40 tpy is considered de
minimis.
The EPA's policy under its existing NSR regulations has been that a
proposed modification resulting in a de minimis increase (standing
alone without considering any decreases associated with the proposed
modification), is not major, regardless of previous contemporaneous
emissions increases and decreases. This policy was discussed in detail
in an EPA memorandum dated June 3, 1983 entitled ``Net Emission
Increase Under PSD'' from Sheldon Myers, Director, OAQPS. This has been
called a ``non-aggregation policy'' because netting contemporaneous
increases and decreases would not be necessary unless the proposed
modification standing alone would result in a significant emissions
increase.
(2) Modifications in Marginal, Moderate, and Nonclassifiable Ozone
Nonattainment Areas. As noted above, the 1990 Amendments do not mandate
a change in the current regulatory approach for major stationary
sources of VOC emissions in marginal, moderate, and nonclassifiable
ozone nonattainment areas,\80\ or major stationary sources in the ozone
attainment areas in the OTR under section 184(b)(2). Therefore the
[[Page 38298]]
approach for determining whether modifications at major stationary
sources of VOC emissions are major (hence subject to nonattainment NSR)
in these areas will default to that which emerges from the proposed NSR
reforms described in section II of this preamble. Because Congress did
not specify a different significance level for these areas, the EPA is
not proposing to change the current significance threshold level for
VOC emissions of 40 tpy for modifications at major VOC sources in these
areas.
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\80\ Nonclassifiable nonattainment areas include transitional,
submarginal, and incomplete or ``no data'' areas, as defined in the
General Preamble, 57 FR 13524 (April 16, 1992).
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For the entire OTR, section 184(b)(2) requires that at a minimum
the nonattainment NSR provisions applicable to moderate ozone
nonattainment areas also apply to major stationary sources of VOC.
Again, section 182(f) makes requirements for proposed modification
applicable to major stationary sources of NOX in an OTR, as well.
This means that, within an OTR, the NOX requirements of section
182(f) apply to classified and nonclassifiable ozone nonattainment
areas and to ozone attainment (or unclassifiable) areas.
The EPA is also proposing that the approach retained for
determining whether a modification at an existing stationary source of
VOC emissions is major will also apply to modifications at major source
of NOX in these areas. See proposed Sec. 51.165(a)(12). In
addition, in areas where the VOC significance threshold for
modifications is 40 tpy, the EPA is also proposing that the
significance threshold level for NOX emissions for modifications
at major NOX sources be 40 tpy. See proposed
Sec. 51.165(a)(1)(x)(C). Since Congress generally intended to treat
major NOX sources in a manner similar to major VOC sources and did
not specify a NOX significance threshold different from the
current VOC level, the EPA believes it is appropriate to propose a
NOX significance level for modifications that parallels the 40 tpy
VOC significance level.
(3) Special Modification Provisions in Serious and Severe Areas.
Sections 182(c)(6), (7), and (8) of the Act change the procedures for
determining the applicability of the nonattainment NSR requirements to
a major stationary source of ozone [and in some areas NOX under
section 182(f) of the Act] which undergoes a modification in a serious
or severe ozone nonattainment area.\81\ The States have requested EPA's
interpretation of the new special provisions to help States change
their NSR rules to implement these new provisions of the Act. In
addition, sources are awaiting EPA's proposed interpretation so that
sources may use internal offsets to minimize the NSR requirements as
allowed under the Act. In response to these requests EPA is proposing
to amend the nonattainment NSR regulations to include the new special
provisions for modifications in serious and severe ozone nonattainment
areas as discussed below. See proposed Sec. 51.165(a)(1)(v)(D).
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\81\ The 1990 Amendments do not mandate a change in approach for
modifications in marginal, moderate, and nonclassifiable ozone
nonattainment areas.
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In sum, for serious and severe ozone nonattainment areas the EPA is
proposing the following changes to the current method for determining
whether proposed modifications emitting VOC at major stationary sources
of VOC are subject to nonattainment NSR:
The new significance level for modifications would change
from 40 tpy or more to greater than 25 tpy;
The provisions for determining the net emissions increase
(netting) during the 5-year contemporaneous period would apply to
emissions increases from the proposed modifications, including such
increases that are less than ``significant'' standing alone;
The contemporaneous time period for netting would be the
5-year period that includes the calendar year in which the proposed
modification will begin emitting and the 4 previous calendar years; and
As a source option, creditable internal offsets at a ratio
of at least 1.3:1 could be used for the proposed modification (or for
any discrete unit, operation, or pollution-emitting activity that is
part of the proposed modification) to either: (a) avoid nonattainment
NSR at existing major sources that emit, or have the potential to emit,
less than 100 tpy of VOC; or (b) avoid LAER at existing major sources
that emit, or have the PTE, 100 tpy or more of VOC.
Section 182(f) of the Act generally requires new or modified
sources of NOX located in ozone nonattainment areas classified as
serious or severe to meet permit requirements consistent with those
applicable to major sources of VOC. Accordingly, the EPA is proposing
to require, in addition to the proposed special provisions described
below, that such provisions also apply to NOX emissions at
modifications of major sources of NOX. See proposed
Sec. 51.165(a)(11). The proposed regulatory language also provides that
such requirements shall not apply to sources of NOX in areas where
the Administrator has determined that the provisions of section 182(f)
do not apply.
i. The De Minimis Rule. The new section 182(c)(6) of the Act
specifies a new approach for determining whether proposed modifications
are subject to nonattainment NSR. It states that increased emissions of
VOC resulting from any modification of a major stationary source:
* * * shall not be considered de minimis for purposes of
determining the applicability of the permit requirements established
by this chapter unless the increase in net emissions of such air
pollutant from such source does not exceed 25 tons when aggregated
with all other net increases in emissions from the source over any
period of 5 consecutive calendar years which includes the calendar
year in which such increase occurred * * *
In short, this provision changes the current significance level for VOC
emissions (in serious and severe ozone nonatttainment areas) from 40
tpy to ``greater than 25 tpy,'' i.e., 25 tpy or less is de minimis. See
proposed Sec. 51.165(a)(1)(x)(B). As explained below, the EPA does not
believe that this provision necessarily changes the approach to
``netting'' increases and decreases. It does, however, specify a
``contemporaneous'' period slightly different than that currently used,
and departs from the ``nonaggregation'' policy to require netting over
the contemporaneous period in all instances where there is an increase
in net emissions from the proposed modification standing alone.
The EPA is proposing that the first step in applying section
182(c)(6) is to determine the ``increase in net emissions'' from the
proposed modification for which NSR applicability is in question.\82\
The net emissions from the proposed modification (referred to here as
the ``project net'') is the sum of all proposed creditable emissions
increases and decreases proposed at the source between the date of
application for the modification and the date the modification begins
emitting.\83\ See proposed Sec. 51.165(a)(1)(v)(D)(1). If the project
net is an emissions increase, then the next step is to aggregate the
project net emissions increase with all
[[Page 38299]]
other ``net increases in emissions from the source'' over the 5-year
contemporaneous period. This aggregation is referred to as the
contemporaneous net. Note that this is a change from the current
regulatory approach, in which proposed de minimis modifications are not
subject to nonattainment NSR and there is no aggregation over a
contemporaneous period for them.
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\82\ Note that it is only the project net emissions increase
from the proposed modification that could potentially trigger the
netting under section 182(c)(6). Therefore, it is only the proposed
modification that may possibly have to meet the new source
requirements, not all of the previous projects that are aggregated
in the determination of contemporaneous ``net emissions increase''
under section 182(c)(6). There is no requirement, for example, to
retroactively apply LAER to prior changes within the 5 year
contemporaneous period.
\83\ States have the flexibility to be more stringent than the
EPA in their rules. For example, States may opt to not allow
emissions decreases when determining the project net.
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Two associated issues must be addressed in interpreting the new
provisions of section 182(c)(6) of the Act: the first, is to what
extent creditable decreases in emissions may be aggregated together
with creditable increases in emissions; the second, is the precise 5-
year period over which the emissions are to be aggregated. In
implementing these special modification provisions, note that increases
and decreases are creditable for netting only to the extent the
creditability criteria under existing Sec. 51.165(a)(1)(vi) are met.
This netting criterion requires that the emissions reductions are
consistent with the area's attainment demonstration and plan for
reasonable further progress (RFP).
(a) Netting Increases and Decreases. The EPA believes that this new
provision is most reasonably understood to change the significance
threshold emissions level for serious and severe ozone nonattainment
areas, and to continue to allow both creditable increases and
creditable decreases occurring during the contemporaneous period to be
``netted'' together. The language of section 182(c)(6) is ambiguous. It
refers to aggregating ``net increases in emissions from the source.''
While the language omits any reference to ``decreases,'' the word
``net'' indicates that decreases may be deducted from the increases.
The EPA believes that Congress intended for the EPA and the States to
use the current netting criteria to determine what emission reductions
are creditable. The rationale for this position is outlined below.
The statutory provision does not address how increases and
decreases are to be ``netted'' to calculate the ``net increases'' that
are to be aggregated. The use of the plural ``net increases'' arguably
contradicts a single netting calculation of increases and decreases
over the 5-year period. Under this view, increases and decreases over
the 5 years would have to be grouped to result in a series of ``net
increases.'' The reference to increases in emissions ``from the
source,'' does not seem to limit netting of increases and decreases
that occur from changes at a ``discrete operation, unit, or other
pollutant emitting activity.'' Compare with subsections 182(c) (7) and
(8). Another alternative might be to calculate a ``net increase'' for
changes that are made at the same time, as part of a single project in
a single application. But there does not seem to be a significant
reason Congress would have wanted to provide an incentive for sources
to plan decreases at the particular time increases would occur within
the 5-year period. Thus, the EPA believes that Congress did not intend
to exclude permanent, quantifiable, enforceable, and otherwise
creditable decreases from the netting calculation. The Agency believes
that Congress emphasized increases simply because it is those that are
necessary to exceed the 25-ton threshold, and, by this action, Congress
did not thereby intend to exclude otherwise creditable decreases from
the netting calculations.
The Agency believes the legislative history supports the above
conclusion. The House Report summarized the treatment of ``netting'' in
H.R. 3030 (containing the same language as the statute as enacted) as
follows:
In addition, the graduated control requirements include
continued use of ``netting'' in other than extreme areas subject to
increasingly stringent limitations for higher classifications. The
netting process allows sources making modifications that would
otherwise be subject to the new source review requirements of the
Act to escape such requirements upon a showing that the emissions
increase associated with the modification is ``netted out'' to a de
minimis overall level by emission decreases from elsewhere within
the source. The netting concept has in many cases allowed sources to
modernize and expand without application of new source review
provisions intended to assure that modernization and expansions
bring about continued air quality improvement. It is the Committee's
view that new source review should reconcile economic growth with
clean air. It is an important concept for modifications that affect
ongoing operations of existing facilities and related existing jobs.
Limitations on netting in serious and severe areas include a lowered
de minimis level from today's level of 40 tons per transaction, to a
5-year total of no more than 25 tons.
See H. Rep. No. 490, part 1, 101st Cong., 2d Sess., at 234-35 1990.
This discussion highlights the important netting changes involving the
threshold level mandatory aggregation,\84\ but omits any discussion of
a change in eligibility of decreases in the netting calculation. Had
Congress intended such an important change, it would be surprising that
it is not mentioned in this discussion. Nor do other places in the
legislative history clearly specify such a change. See id. at 241-42;
Cong. Rec. at H12870 (Oct. 26, 1990) (statement of Rep. Oxley). The EPA
requests comment on this interpretation. The EPA specifically requests
comments on whether emissions reductions should be credited when
determining the ``project net'' and the ``contemporaneous net.''
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\84\ Section 182(c)(6) of the Act also changes the bounds of the
contemporaneous period from the pre-existing regulations. But this
is not a major change, and it is not surprising that it is not
raised in the legislative history discussions.
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For these special modification provisions, the quantity of
emissions that must be offset to meet the nonattainment NSR general
offset provisions is the project net emissions increase for proposed
major modifications. This means that the project net emissions increase
from the proposed modification, and not the contemporaneous net
emissions increase calculation over the contemporaneous period,
determines the quantity of emissions from the proposed modification
that must be offset. While only the project net emissions increase need
be offset, States are required to reconcile their emissions inventory
by accounting for all increases in emissions in order to demonstrate
RFP and attainment. For cases where discrete emissions limits are
offset internally at a 1.3:1 offset ratio under section 182(c) (7) or
(8) of the Act, the amount to be offset is the emissions increase from
the units within the proposed project. However, if such units replace
existing units, the emissions reduction from the replaced units may be
credited towards reducing the quantity of emissions that must be
internally offset.
(b) The 5-Year Contemporaneous Period. A remaining issue is the
time period over which other net increases from the source are to be
aggregated. Section 182(c)(6) of the Act specifies ``any period of 5
calendar years which includes the calendar year in which such increase
occurred.'' From this plain language, the period must include the full
calendar year in which the increase occurred, including the rest of the
calendar year beyond the actual time of the increase. This differs from
the EPA's current regulations that allow the reviewing authority to
specify a longer period extending before construction of the particular
change and through the date that the increase from the particular
change occurs. See existing Sec. 51.165(a)(1)(vi)(B).
An ambiguity arises from the provision's reference to ``any'' 5-
year period. The EPA's current regulations specify a single period. Id.
The reference to ``any'' in section 182(c)(6) raises an issue whether
the contemporaneous period may include other combinations
[[Page 38300]]
of 5 consecutive years including the year of the particular increase.
Other combinations would, of course, include future years beyond the
year of the particular increase. The EPA does not believe Congress
intended that the contemporaneous period include such future years.
This is because the NSR program has always been limited to addressing
the emissions impact of new growth when it occurs, including both
``offset'' and LAER technology requirements. If NSR applicability is
based on future actions, the need for offsets and LAER could not be
finally determined at the time a particular modification is made.
Instead, the EPA believes that the reference to ``any'' was included
simply in recognition of the fact that the particular span of calendar
years will change over time. In short, Congress simply recognized that
the period of 5 calendar years, from, for example, 1992 to 1996 is
different than the period from 1993 to 1997.
Therefore, for these special modification provisions the EPA is
proposing that the 5-year contemporaneous period is the period of 5
consecutive calendar years ending with the full calendar year when the
increase in emissions from the proposed modification is to occur. See
proposed Sec. 51.165(a)(1)(vi)(C)(1). In any case, the EPA believes
consideration of future years in the de minimis calculation beyond the
calendar year when the increase occurs would raise serious
implementation problems, because increases in future years must be
projected and may not be certain. The permitting authority might impose
permit conditions to ensure that a source limits increases in future
years consistent with a projection on which a current de minimis
calculation is based.85 The EPA solicits comments on whether the
5-year period may extend beyond the calendar year when the increase in
emissions from the proposed modification is to occur.
---------------------------------------------------------------------------
\85\ Congressman Waxman, in a law review article, suggests that
section 182(c)(6) requires that the sum of net emissions increases
be below the de minimis level over all 5-year periods, including the
year of the particular increase. Under this approach, no emissions
increase could be determined to be de minimis ``until 5 years after
it has occurred.'' See Waxman, Wetstone, and Barnett, ``Roadmap to
Title I of the Clean Air Act Amendments of 1990,'' 21 Northwest
Univ. Envir. L. Rev. 1843, 1874 (1991). The EPA believes this
interpretation, while conceivable on its face, conflicts with the
structure of NSR as a preconstruction permitting program. Under
Waxman's approach, projects that have been reviewed, approved, and
completed could be subject to retroactive NSR.
---------------------------------------------------------------------------
The EPA also requests comment on whether a State may propose a
different contemporaneous period, so long as the State can demonstrate
that any such period is as stringent as the EPA's. To the extent
increases may be netted with decreases over the contemporaneous period,
the EPA is concerned there may be no way to tell in a particular case
whether a longer or different contemporaneous period is more stringent
than the EPA's proposed approach.
(c) Trivial Increases. Some States have inquired whether every
single increase that is a modification must be tracked under the new de
minimis rule or whether States may adopt sub-de minimis levels and
exclude increases (and, presumably, decreases) below these levels. The
EPA is not now proposing a particular level of sub-de minimis increases
and decreases, but the EPA may consider whether such levels are
acceptable in States' NSR SIP submissions. The EPA requests comment on
the following discussion of this issue, and on what type of sub-de
minimis level, if any, might be acceptable.
This issue turns on the EPA's legal authority to exclude emissions
increases (and decreases) from a rule that, on its face, seemingly
applies to every emission increase--no matter how small the increase
may be. In Alabama Power Co. v. Costle, 636 F.2d 323, 357 (D.C. Cir.
1979), the court discussed two bases for categorical regulatory
exemptions that could apply here. Where these grounds exist, the
availability of a categorical regulatory exemption may be presumed
``save in the face of the most unambiguous demonstration of
congressional intent to foreclose them.'' 636 F.2d at 357. However, the
EPA lacks the power to revise legislative directives in a manner
``inconsistent with the clear intent of the relevant statute.'' Id. at
358 [quoting NRDC v. Costle, 568 F.2d 1369, 1377 (D.C. Cir. 1977)].
First, the Agency may create a categorical regulatory exemption out
of administrative necessity, where compliance with the explicit
instructions of a statute may be infeasible, impractical, or
impossible. See Alabama Power, 636 F.2d at 358-59. However, there is a
``heavy'' burden where, as here, the Agency seeks to create a
``prospective exemption of certain categories from a statutory command
based upon the Agency's prediction of the difficulties of undertaking
regulation.'' Id. at 359. The EPA believes that, since very small
increases resulting from modifications (physical changes or changes in
the method of operation) are routinely tracked today as part of State
construction programs, a showing of administrative necessity may be
difficult for all but the smallest increases and decreases.
Second, under Alabama Power categorical exemptions may also be
permissible as an exercise of an Agency's powers to recognize
inconsequential situations. Id. at 360. In general, an Agency can
create this exemption where the application of a regulation across all
classes will ``yield a gain of trivial or no value.'' Id. The exemption
is not available where the regulatory scheme ``does provide benefits,
in the sense of furthering the regulatory objectives, but the Agency
concludes that the acknowledged benefits are exceeded by the costs.''
Id. A determination of when a matter can be classified as de minimis
turns ``on the assessment of particular circumstances'' of the
individual case. Id. The EPA believes that a State's demonstration that
a particular increase is trivial and of no consequence in furthering
the statutory purpose must take account of the size of the applicable
threshold and major source thresholds applicable in the various areas.
For example, a 5-ton increase is 20 percent of the de minimis threshold
for serious and severe areas and half the major source threshold in
extreme areas. It is not at all clear that an increase of that size
could be characterized as trivial. On the other hand, a level of less
than one ton might conceivably be more reasonable. Any such showing by
a State would surely have to be supported by solid scientific evidence
and analysis.
In any case, the EPA emphasizes that States must track and quantify
all emissions increases to the extent necessary to ensure progress
toward attainment. Small measurable increases from any stationary
source should be addressed in States' stationary source permitting
programs consistent with section 110(a)(2)(C) of the Act to assure that
NAAQS are achieved. In addition, small measurable increases should be
counted as minor source growth under section 173(a)(1)(A) of the Act.
These provisions suggest a very high hurdle to show that tracking such
small increases is either trifling or will administratively frustrate
the NSR program.
ii. Special Modification Rules. If a particular physical or
operational change at a major stationary source in a serious or severe
ozone nonattainment area is not considered de minimis under section
182(c)(6), then the provisions of sections 182(c) (7) and (8) of the
Act apply. Those provisions establish special rules for major
modifications at sources that emit, or have the potential to emit, less
than 100 tpy, or 100 tpy or more, respectively of VOC [or NOX,
[[Page 38301]]
consistent with section 182(f)]. These subsections offer sources
options that may be more desirable than would otherwise apply.
Specifically, sections 182(c) (7) and (8) offer sources the option of
obtaining 1.3:1 internal offsets in order to avoid NSR entirely (for
sources emitting less than 100 tpy), or to avoid LAER (for sources
emitting 100 tpy or more). These special provisions are discussed
below.
(a) Modifications at Sources Emitting Less Than 100 TPY. Section
182(c)(7) of the Act specifies a special rule for modifications at
existing major stationary sources of VOC that emit, or have the PTE,
less than 100 tpy. This rule applies to any change [as described in
section 111(a)(4)] at the source:
* * * that results in any increase (other than a de minimis
increase) in emissions of volatile organic compounds from any
discrete operation, unit, or other pollutant emitting activity at
the source * * *
Thus, while the determination of de minimis under section 182(c)(6)
requires that all changes within the 5-year contemporaneous period at
the source be considered, sections 182(c) (7) and (8) apply to the
particular change at the discrete unit, operation or activity at issue.
Sections 182(c)(7) and (8) do not apply to other previous increases
within the 5-year period that are unrelated to the change at issue. Of
course, if the contemporaneous net emissions increase for the proposed
modification is a de minimis increase [as defined in section
182(c)(6)], then the nonattainment NSR provisions need not apply at
all.
The special rule for sources of less than 100 tpy is that the
particular increase at issue:
* * * shall not be considered a modification for [purposes of
sections 172(c)(5) and 173] if the owner or operator of the source
elects to offset the increase by a greater reduction in emissions of
VOC concerned from other operations, units, or activities within the
source at an internal offset ratio of at least 1.3:1 * * *
A question may arise as to what sources would choose to utilize the
1.3:1 offset ratio where the source could possibly avoid NSR entirely
by applying creditable decreases at a ``1:1 ratio'' such that the
aggregated increase remains at 25 tons or less under section 182(c)(6).
The EPA believes that sources may not have enough emissions decreases
to internally ``net'' the entire proposed modification to 25 tons or
less. However, where the proposed modification results in increases at
more than one discrete unit, the source may have sufficient creditable
internal emissions decreases to apply a 1.3:1 offset ratio and avoid
review for that particular unit. While some sources may be able to plan
modifications at various units over time so that each could avoid
review through netting under section 182(c)(6), the EPA believes that
not all sources will be able to do so, and will have reason to utilize
the 1.3:1 internal offset ratio option. See proposed
Sec. 51.165(a)(1)(v)(D)(2). Once an internal offset has been used to
exempt a particular increase from NSR, the particular increase and
decrease(s) would not be creditable for future netting and offset
transactions. See proposed Sec. 51.165(a)(10)(iii).
If the source does not avoid NSR under the internal offset option,
the change is a modification subject to nonattainment NSR. When
applying the nonattainment NSR requirements, note that the special rule
in section 182(c)(7) of the Act provides that BACT is to be substituted
for LAER for sources of less than 100 tpy. See proposed
Sec. 51.165(a)(10)(ii).
(b) Modifications of Sources Emitting 100 TPY or More. Section
182(c)(8) of the Act provides a special rule for modifications at major
stationary sources of VOC that emit, or have the PTE, 100 tpy or more.
This special rule applies to any change at the source according to the
same terms as the special rule in section 182(c)(7).
The special rule for sources of 100 tpy or more is that:
* * * if the owner or operator of the source elects to offset the
increase by a greater reduction in emissions of VOC from other
operations, units, or activities within the source at an internal
offset ratio of at least 1.3 to 1, the requirements of section
173(a)(2) of this title [concerning the LAER (LAER)], shall not
apply * * *
This option to avoid LAER could be utilized in the same circumstances
as described in section 182(c)(7), above. While a source could avoid
NSR entirely for the proposed modification by netting creditable
emissions reductions at any internal operations, units, or activities
at a 1:1 ratio under section 182(c)(6), it may nevertheless have the
ability to arrange proposed modifications over time in order to avoid
review under section 182(c)(7), or the LAER requirement under section
182(c)(8). In such circumstances under section 182(c)(8), the source
would have reason to use creditable internal decreases that were
insufficient to avoid nonattainment NSR for the entire project to avoid
LAER for discrete units at a 1.3:1 internal offset ratio. See proposed
Sec. 51.165(a)(10)(i).
An additional issue under section 182(c)(8) is whether sources
satisfying the internal offset ratio of 1.3:1 to avoid LAER must secure
additional offsets to separately satisfy the general offset ratio
requirements of sections 182(c)(10) (1.2:1 ratio for serious areas) and
182(d)(2) (1.3:1 ratio for severe areas, or 1.2:1 if all major sources
use BACT). The EPA believes section 182(c)(8) of the Act may reasonably
be interpreted to provide that the 1.3:1 internal offset ratio is in
lieu of the general offset ratio. The EPA recognizes that the only
remaining NSR requirements of section 182(c)(8) would be less geared
toward emissions control at the source, such as the alternative siting
analysis of section 173(a)(5) and the compliance demonstration of
section 173(a)(3) of the Act. But the EPA believes it is reasonable to
believe Congress intended to provide an incentive to obtain offsets
internally, where the actual impact of the new emissions may be most
precisely counteracted. Also, the 1.3:1 internal offset ratio would
generally offset minor source growth and contribute to RFP as specified
in section 173(a)(1)(A). Of course, if more reductions are needed to
offset minor source growth and contribute to RFP under section
173(a)(1)(A), the State may need to require offsets beyond the 1.3:1
internal offset requirement. The EPA requests comment on this
interpretation.
iii. Examples. Examples of the EPA's proposed approach for the
special modification provisions follow. Note that the examples also
apply to NOX emissions consistent with section 182(f) of the Act.
(a) Example A.
An existing major stationary source of VOC has the PTE 285 tpy
of VOC and is located in a serious ozone nonattainment area. The
source proposes a modification (a physical change or change in the
method of operation) that includes the following changes in VOC
emissions:
+40 tpy from addition of new unit A
-30 tpy from shutdown of existing unit B
-60 tpy from the addition of control equipment on existing unit C
The shutdown of unit B and the addition of controls to unit C are
proposed by the source as federally enforceable permit conditions to
occur during the period between the date of permit application for
the proposed modification and the date the proposed modification
will begin emitting. Both emissions reductions meet all criteria for
netting. As a result, the resultant project net of VOC from the
proposed modification is -50 tpy (+40 -30 -60), which is not an
increase. Therefore, since the special provisions may only apply to
proposed modifications that result in a net project emissions
increase, nonattainment NSR does not apply to this proposed
modification.
(b) Example B.
An existing major stationary source of VOC has the potential to
emit 90 tpy of VOC and
[[Page 38302]]
is located in a severe ozone nonattainment area. The source proposes
a modification (a physical change or change in the method of
operation) with the following VOC emissions changes:
+110 tpy from addition of new unit A
-20 tpy from shutdown of existing unit B
+10 tpy from the addition of new unit C
The shutdown of unit B is proposed by the source as a federally
enforceable permit condition. The shutdown is to occur during the
period between the date of permit application for the proposed
modification and the date the proposed modification will begin
emitting. As a result, the project net is +100 tpy of VOC, which is
a VOC emissions increase subject to netting over the 5-year
contemporaneous period.
The proposed modification is to begin emitting in 1997, so the
contemporaneous period for netting is the calendar years 1993 through
1997. Creditable VOC emissions increases and decreases at the source
during the contemporaneous period are +80 tpy in 1994, -60 tpy in 1996,
and +100 tpy from the proposed modification. The contemporaneous net
emissions increase of +120 tpy is significant (>25 tpy). Therefore, the
proposed modification is major and subject to the special modification
provisions for existing major stationary sources of VOC with a PTE less
than 100 tpy of VOC. The major modification is subject to nonattainment
NSR, including a requirement to provide at least 130 tpy (100 x 1.3) of
emissions offsets. However, nonattainment NSR may be avoided if the
source elects to use the internal offsets alternative. Under this
option, the entire proposed modification is not subject to NSR if an
internal offset of at least 130 tpy (100 x 1.3) is provided by the
source. However, it is not likely that this option is viable for this
source of the size given. Another option is to avoid NSR for new unit C
by providing at least 13 tpy (10 x 1.3) of internal offsets for that
unit. Consequently, only unit A would be subject to NSR.
If in this example the existing major stationary source has the PTE
100 tpy or greater, then nonattainment NSR applies to the major
modification, except that the LAER provision will not apply if the
source elects to provide internal offsets at a ratio of at least 1.3:1.
The remaining part D nonattainment NSR provisions still apply.
Alternatively, the source may elect either to avoid LAER for the entire
modification if at least 130 tpy of internal offsets is secured or to
avoid LAER for new unit C if at least 13 tpy of internal offsets is
provided. Note than an emissions reduction at the source occurring
prior to the 5-year contemporaneous period may be used as an internal
offset to the extent it meets all otherwise applicable criteria for a
creditable offset.
iv. Transition. For purposes of permitting in the absence of State
NSR SIP revisions, the EPA does not intend to apply the interpretations
proposed here for the special modification provisions of sections
182(c) (6), (7), and (8) of the Act, except that the lower significance
threshold of greater than 25 tpy for applicability is in effect. The
EPA believes that the remainder of these special modification
provisions are sufficiently complicated that it is appropriate to defer
implementation until State NSR rules implementing the provisions are in
place or when the EPA takes final action on this proposal, whichever
comes first. Upon promulgation of the final rule, the EPA expects to
review each State's NSR SIP and issue a call for any necessary
additional SIP revisions under section 110(k)(5) of the Act to ensure
that States' NSR SIP's are ultimately consistent with the provisions of
the final rule.
(4) Modifications in Extreme Areas. For modifications of major
stationary sources of VOC [and NOX consistent with section 182(f)]
located in extreme ozone nonattainment areas, the 1990 Amendments
eliminate the concept of de minimis altogether for purposes of
determining a major modification. New section 182(e)(2) provides that
any physical change or change in the method of operation at the source
that results in any increase in emissions from any discrete operation,
unit, or other pollutant-emitting activity at the source generally must
be considered a modification subject to the part D NSR permit
requirements, regardless of any decreases elsewhere at the source.
Thus, the EPA is proposing to amend the both the definition of ``major
modification and the definition of ``significant'' to specifically
address proposed modifications of major stationary sources of VOC (and
presumptively NOX) in extreme areas for ozone. The proposed change
would reflect the statutory requirement by requiring that any increase
in emissions from any discrete operation, unit, or permit emitting
activity at a source locating in an extreme ozone nonattainment area is
considered ``significant'' and, thereby, a major modification. See
proposed Secs. 51.165(a)(1)(v)(E) and 51.165(a)(1)(x)(F)].
d. Emissions Offset Ratios. The 1990 Amendments clarified the
existing statutory offset requirements under part D of title I of the
Act by stipulating that:
* * *the total tonnage of increased emissions of the air pollutant
from the new or modified source shall be offset by an equal or
greater reduction, as applicable, in the actual emissions of such
air pollutant from the same or other sources in the [nonattainment]
area * * *. [Emphasis added.]
See section 173(c)(1) of the Act. Elsewhere in the 1990 Amendments,
Congress prescribed a set of emissions offset ratios, calling for
greater than one-for-one emissions reductions, to be applied to
stationary sources of VOC according to the severity of the ozone
nonattainment problem. Wherever NOX emissions are considered an
ozone precursor under section 182(f), the emissions offset ratios for
VOC also apply to NOX emissions. For purposes of satisfying the
section 173 emissions offset provisions, new section 182 established
five separate minimum emission offset ratios, each corresponding to one
of five area classifications for ozone nonattainment areas, as follows:
(1) 1.1:1 in marginal areas; (2) 1.15:1 in moderate areas; (3) 1.2:1 in
serious areas; (4) 1.3:1 in severe areas; and (5) 1.5:1 in extreme
areas. The minimum offset ratio in the OTR is 1.15:1. For ozone
nonattainment areas outside the OTR that the EPA has categorized as
nonclassifiable (transitional, submarginal, or incomplete/no data), the
emissions offset ratio must be at least 1:1. Consistent with section
173(c)(1), the EPA interprets that the offset ratio, in each case, is
the ratio of total actual emissions reductions of VOC (or NOX,
where applicable) to the total allowable emissions increase of such
pollutant from the new or modified stationary source.
In the case of severe and extreme areas, section 182(c)(10)
provides that the emissions offset ratio is reduced to a ratio of at
least 1.2:1 if the applicable SIP contains the requirement that all
existing major sources in such nonattainment areas must use BACT for
the control of VOC emissions. Because BACT changes over time as
technologies advance, some methodology must be adopted for States to
demonstrate that all existing sources in a given nonattainment area
have met the BACT requirement in section 182(d)(2). In the PSD program,
BACT applies to new sources at the time of permitting. In the context
of existing sources, this requirement could conceivably apply at a
fixed point in time, or might apply continuously so that existing
sources must be using technology that constitutes BACT at particular
intervals. The EPA believes that it may be most appropriate to require
BACT as of the time the attainment demonstration is due, so that the
technology and offsets
[[Page 38303]]
requirements will be consistent with the overall attainment plan.
Alternatively, it may be appropriate to require BACT as of the time the
permitting program that would switch the offset ratio to 1.2:1 is
adopted. The EPA requests comment on the appropriate methodology for
applying the BACT requirement in section 182(d)(2) to existing sources.
The EPA is proposing the minimum offset ratios in ozone nonattainment
areas and in the OTR in accordance with the 1990 Amendments. See
proposed Sec. 51.165(a)(14).
For extreme ozone nonattainment areas section 182(e)(2) also
provides for an exemption from the section 173(a)(1) offset
requirements if the owner or operator of the major stationary source
agrees to offset any proposed increase by a greater reduction in onsite
emissions from other discrete operations, units, or activities at an
internal offset ratio of 1.3:1. EPA is proposing this exemption for
extreme ozone nonattainment areas at proposed Sec. 51.165(a)(15). The
remaining part D NSR provisions still apply. In addition, this new
section stipulates that the offset requirements do not apply in extreme
areas if the modification consists of installing equipment required to
comply with the applicable implementation plan, permit, or the Act
itself. The EPA notes with respect to this offsets exemption in extreme
areas that the State must nonetheless account for collateral increases
in emissions associated with installation of equipment required to
comply with another legal mandate. For example, where a source
incinerates VOC in order to limit VOC emissions, NOX emissions may
increase. The State may still require offsets as an approach more
stringent than that the Act provides, or must otherwise ensure that
such increases in emissions are counteracted by other SIP measures so
as to comply with sections 110(a)(2)(C) and 173(a)(1)(A) of the Act. Of
course, any increase is still subject to the LAER technology
requirement, even where offsets are not applicable. The EPA encourages
States to require alternatives for compliance with legal mandates that
minimize collateral emissions increases, so that the State's obligation
to counteract such increases will also be minimized. Finally, pursuant
to section 182(e)(2) of the Act, EPA is also proposing that, in extreme
ozone nonattainment areas, sources need not offset emissions increases
of VOC resulting from modifications consisting of equipment that is
needed to comply with a SIP, permit, or Act requirement. See proposed
Sec. 51.165(a)(15)
2. Provisions for Carbon MoNOXide (CO) Nonattainment Areas
New subpart 3 of part D of the Act contains new NSR requirements
for CO nonattainment areas as determined by the area's CO design value.
The 1990 Amendments established an area classification system for the
CO nonattainment air quality problem based on the area's CO design
value. Only two types of area classifications are defined in section
186 for CO nonattainment areas-- moderate and serious.
The major stationary source threshold for moderate areas is 100
tpy. Pursuant to section 187(c), the EPA is proposing to amend the
definition of ``major stationary source'' to incorporate a lower
emissions threshold of 50 tpy for serious areas in which stationary
sources are significant contributors to CO levels as determined by the
Administrator. See proposed Sec. 51.165(a)(1)(iv)(A)(1)(vi). Also, for
such CO moderate areas, EPA is proposing a significance threshold of 50
tpy for defining a major modification at an existing major stationary
source of CO. See proposed Sec. 51.165(a)(1)(x)(E).
In addition to the two classifications for CO nonattainment areas,
some nonattainment areas do not fit into the classification scheme and
are considered ``nonclassifiable'' CO nonattainment areas. The
following discussion describes the EPA's proposed NSR requirements for
all CO nonattainment areas (moderate, serious and nonclassifiable).
Like those for ozone, the NSR requirements for CO are additive (i.e., a
serious area has to meet all moderate requirements in addition to all
serious requirements, etc.). Requirements discussed for moderate areas
will be repeated for serious areas only if the requirements are
different.
a. Moderate Areas with a Design Value of 12.7 Parts Per Million and
Below. The part D NSR requirements of section 173 apply in CO
nonattainment areas. All States with moderate CO nonattainment areas
with a design value of 12.7 parts per million (ppm) or less must submit
proposed part D NSR programs no later than November 15, 1993. The
provisions of these plans must be developed in accordance with the
requirements of sections 172(c)(5) and 173 of the Act.
b. Moderate Areas with a Design Value Greater than 12.7 Parts Per
Million. In the General Preamble (57 FR 13533), the EPA interpreted
sections 187(a)(7) to require that all CO nonattainment areas with a
design value greater than 12.7 ppm submit part D NSR programs meeting
section 172(c)(5) and 173 requirements not later than November 15,
1992. Unless otherwise noted, all moderate areas above 12.7 ppm are
also to meet those requirements applicable to moderate areas below 12.7
ppm.
c. Serious Areas. As specified in section 187(c)(1), for serious CO
nonattainment areas in which stationary sources contribute
significantly to CO levels (as determined according to rules issued by
the Administrator), a SIP shall be submitted by November 15, 1992, that
provides that ``major stationary source'' includes any stationary
source that emits or has the PTE 50 tpy or more of CO. If stationary
sources do not contribute significantly to CO levels under section
187(c)(1), then ``major stationary source'' includes any stationary
source that emits or has the potential to emit 100 tpy or more of CO.
d. Nonclassifiable Areas. The ``nonclassifiable'' category of CO
nonattainment areas is comprised of two subcategories--''not
classified'' and ``incomplete/no-data.'' The EPA describes an area as
``not classified'' if the area was designated nonattainment both prior
to enactment and (pursuant to section 107(d)(1)(C) of the Act) at
enactment and if it did not violate the primary NAAQS for CO in either
year for the 2-year period 1988 through 1989. The EPA defines an
``incomplete/no-data'' area as an area that retained its nonattainment
designation at enactment [under section 107(d)(1)(C)] but for which
data are not available to indicate whether or not violations of the
standard have occurred. For a more detailed discussion of
nonclassifiable CO nonattainment areas, see the General Preamble (57 FR
13535). The specific requirements of subpart 3 of part D of the Act do
not apply to CO ``not classified'' and ``incomplete/no data'' areas.
However, because these areas are designated nonattainment, the
requirements of section 172(c)(5) apply. Therefore, States with CO
nonattainment areas classified as ``not classified'' or ``incomplete/no
data'' areas, are required to adopt part D NSR programs meeting the
requirements of section 173, as amended. As required by section 172(b),
States' changes to NSR SIP's for such areas were due to the EPA no
later than 3 years (November 15, 1993) from designation under section
107(d)(4)(A)(ii).
3. Provisions for PM-10 Nonattainment Areas
This proposal also adds certain new requirements pertaining to PM-
10 to the nonattainment NSR permit regulations at 40 CFR 51.165. These
particular changes are being made in accordance
[[Page 38304]]
with new statutory provisions contained in new subpart 4 of part D of
the Act.
Prior to the 1990 Amendments, designations identifying the
attainment status of an area pursuant to section 107(d) did not exist
for PM-10. Consequently, new and modified stationary sources were not
required to undergo preconstruction review under NSR nonattainment
permit requirements based on the amount of PM-10 which they could emit.
The 1990 Amendments established an area classification system under
section 188 to define the severity of the air quality problem in
designated nonattainment areas for PM-10. Only two types of area
classifications for PM-10 nonattainment areas were defined--moderate
and serious. A detailed discussion of the nonattainment designation
process for PM-10 is contained in the General Preamble (see 57 FR
13537).
a. Moderate Areas. Section 189(a)(1)(A) of the Act provides that
each State with a PM-10 nonattainment area classified as moderate is to
submit an implementation plan [as required by section 172(c)(5)]
containing a permit program meeting the requirements of section 173 for
the construction of new and modified major stationary sources of PM-10
(and in some cases PM-10 precursors). In moderate areas for PM-10, new
stationary sources are determined to be ``major'' in accordance with
section 302(j) (also existing Sec. 51.165(a)(1)(iv)(A)). Major
stationary sources of PM-10 will be subject to preconstruction review
under the NSR nonattainment permit regulations if they emit, or have
the potential to emit, 100 tpy or more of PM-10 emissions (or in some
cases PM-10 precursors). No changes to the applicability requirements
are needed under the current Federal NSR regulations to cause major new
sources of PM-10 to undergo the necessary preconstruction review.
The regulations currently require that any modification to an
existing stationary source that is major for the same pollutant is
subject to the part D NSR requirements if the net emissions increase of
the applicable nonattainment pollutant is significant. The EPA is today
proposing for nonattainment purposes a significance threshold of 15 tpy
for PM-10 emissions. See proposed Sec. 51.165(a)(1)(x)(A). This
threshold is the same emissions rate currently used to define
``significant'' for PM-10 emissions under the PSD regulations at
Secs. 51.166 and 52.21. See, e.g., existing Sec. 51.166(b)(23)(i).
b. Serious Areas. For nonattainment areas classified as serious for
PM-10, Congress determined that stationary sources emitting 70 tpy or
more of PM-10 emissions must be considered major stationary sources.
See section 189(b)(3) of the Act. Therefore, the EPA is proposing to
amend the current definition of ``major stationary source'' to add a 70
tpy major source threshold for any stationary source of PM-10 located
in a serious area for PM-10. See proposed
Sec. 51.165(a)(1)(iv)(A)(1)(i) This new emissions threshold would apply
to new stationary sources of PM-10, as well as existing major sources
proposing a modification resulting in an increase in PM-10 emissions.
An existing major stationary source of PM-10 would be considered a
major modification when it proposes a change that will result in a
significant net emissions increase. The EPA is also proposing that the
proposed significance threshold of 15 tpy, as described above, apply to
any major modification of PM-10 in a serious PM-10 nonattainment.
c. PM-10 precursors. Section 189(e) provides that the part D NSR
requirements applicable to major stationary sources of PM-10 shall also
apply to major stationary sources of PM-10 precursors (SO2,
NOX, and VOC). As described earlier, the EPA is proposing
regulatory language which calls for each plan to subject major
stationary sources of specific PM-10 precursors to the same part D
permit requirements applicable to major stationary sources of PM-10.
See proposed Sec. 51.165(a)(13). States will not be required to
implement this particular requirement in PM-10 nonattainment areas
where the Administrator determines that PM-10 precursors (i.e.,
SO2, NOX, and VOC) are not significant contributors of
ambient PM-10.
To implement the new applicability requirement for PM-10 precursors
in serious PM-10 nonattainment areas, the EPA is proposing a major
source threshold of 70 tpy or more of any individual PM-10 precursor.
See proposed Sec. 51.165(a)(1)(iv)(A)(1)(i). For stationary sources of
PM-10 precursors located in moderate PM-10 nonattainment areas, the EPA
does not intend to propose an emissions threshold different from the
existing general threshold of 100 tpy or more of any pollutant. Thus,
under this proposal the existing threshold of 100 tpy would also apply
to such sources of PM-10 precursors.
The EPA is also proposing that any modification of a source
emitting a PM-10 precursor meet the same part D permit requirements
that apply to modifications at major stationary sources of PM-10. See
proposed Sec. 51.165(a)(1)(v)(G). For purposes of defining a
significant increase in emissions of any PM-10 precursor, the EPA is
proposing a 40 tpy threshold. See proposed Sec. 51.165(a)(1)(x)(D).
This proposed threshold is the same emissions rate used to define
significant emissions increases individually for SO2, NOX,
and VOC. Thus, the 40 tpy threshold would be used to determine whether
a major modification would occur under the part D NSR requirements with
respect to each proposed net emissions increase of a PM-10 precursor
from a major stationary source of that PM-10 precursor, except in areas
where the Administrator determines that the sources of PM-10 precursors
do not contribute significantly to the PM-10 nonattainment problem in
the area.
The EPA considered several approaches before deciding on the use of
a level equal to the original significance threshold in each case. One
approach involved the EPA's procedures for defining the significant
emissions rate for each criteria pollutant under the current PSD and
part D NSR programs. In selecting those existing rates for the criteria
pollutants, the EPA used four percent of the short-term primary
standard for each pollutant as a design value. The design values were
then converted to emissions rates in accordance with EPA's modeling
procedures.86 The difficulty in using this approach to select a
significance level for PM-10 precursors is the uncertainty concerning
the PM-10 conversion rate for each of the affected pollutants. Such
conversion rates depend on the specific chemistry of the pollutant
emissions, as well as a number of meteorological factors which are
area-specific. Thus, a standard conversion rate has not been developed
that would apply to all sources emitting a particular PM-10 precursor.
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\86\ See 50 FR 13145, April 2, 1985.
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Another approach for PM-10 precursors involved the use of the 15
tpy significance level already used for PM-10 emissions under the PSD
regulations, and being proposed today for PM-10 emissions under the
part D NSR regulations. The EPA rejected this approach, however,
because of its overly conservative nature. The EPA does not believe
that it would be reasonable to assume a 100 percent conversion rate for
each of the PM-10 precursors.
Careful consideration should be given before approving offsets
between PM-10 and PM-10 precursors. An increase in PM-10 emissions
should not be offset by an equivalent decrease in emissions of a PM-10
precursor. This is because a reduction of a PM-10 precursor
[[Page 38305]]
ordinarily will not negate an equivalent increase in PM-10, as not all
of a PM-10 precursor will ordinarily convert to the same mass of PM-10.
The conversion process may depend on several variables, including the
availability of chemical reactants in the atmosphere for the conversion
process, and the difference in mass between the PM-10 precursor
molecule and the PM-10 particle that the precursor reacts to become.
Another concern is that the rate of conversion of the precursor to PM-
10 may be so long that the precursor may not entirely convert to PM-10
within the same nonattainment area. Thus, there would be less
counteracting effect and no net improvement to air quality in the area.
Under the EPA's proposal, a source of a PM-10 precursor may offset
its increased emissions with the same precursor type or PM-10 (or a
combination of the two). In this situation, a net improvement in air
quality would be assured. At this point, however, the EPA is not
proposing to allow offsetting among different types of PM-10
precursors, or offsetting PM-10 increases with reductions in PM-10
precursors, because the Agency does not now have a scientific basis to
propose conversion factors. However, the Agency does not intend through
this rulemaking to preclude trading between PM-10 precursors at such
time as technical data supporting such a scheme is developed. The
Agency expects that the approvability of a scheme allowing trading
between precursors will be addressed in subsequent guidance or in the
context of individual SIP reviews, though the Agency is considering
resolving certain policy and legal issues in this rulemaking.
The EPA believes that nothing in subpart 4 of part D of the Act
would prohibit trading between PM-10 and PM-10 precursors, or among PM-
10 precursors. The Agency recognizes that section 173(c)(1) of the Act
may be relevant to whether Congress intended to allow offsets trading
among PM-10 precursors or between PM-10 and PM-10 precursors, and
requests comment on the legal, technical, and policy aspects of this
issue.
Also, the EPA believes that trading among PM-10 and PM-10
precursors raises significant issues, including the issue of scientific
uncertainty. The EPA requests comment on this issue and on whether or
how trading should be allowed for netting in determining NSR
applicability. The scientific basis supporting offsets conversions and
trading conceptually should apply with equal force to netting. But
allowing such trading may improperly allow what would have otherwise
been major modifications to escape review. Finally, the Agency requests
comment on whether allowing trading among PM-10 and PM-10 precursors
for offsets and netting purposes should affect the treatment of these
emissions for major source threshold applicability purposes. The EPA
requests comment on the policy, technical and legal considerations
regarding all of these issues.
4. Statutory Restrictions for New Sources
The EPA is also proposing to amend its regulations at 40 CFR 52.24
which contain restrictions on the construction or modification of new
major stationary sources (the construction ban). The changes made by
the 1990 Amendments that alter the applicability of the construction
ban provisions are reflected and clarified in this proposal. The EPA is
also proposing that the definitions contained in proposed Sec. 51.165
also apply in Sec. 52.24.
Under the 1977 Amendments, section 110(a)(2)(I) of the Act required
the EPA to place certain areas under a federally imposed construction
moratorium (ban) that prohibited the construction of new or modified
major stationary sources in nonattainment areas where the State failed
to have an implementation plan meeting all of the requirements of part
D. The 1990 amendments removed the provision under section 110(a)(2)(I)
requiring this prohibition of construction. However, in section
110(n)(3) of the Act (Savings Clause), the 1990 Amendments retained the
prohibition in cases where it was applied prior to the 1990 Amendments
based upon a finding that the area (1) lacked an adequate NSR
permitting program (as required by section 172(b)(6) of the 1977 Act),
or (2) the State plan failed to achieve the timely attainment of the
NAAQS for sulfur dioxide by December 31, 1982. All other construction
bans pursuant to section 110(a)(2)(I) are lifted as a result of the new
statutory provision. This includes previously imposed construction bans
based upon a finding that the plan for the area did not demonstrate
timely attainment and maintenance of the ozone or CO NAAQS. In
accordance with the amended section 110(n)(3) of the Act, any
construction ban retained remains in effect until the EPA determines
that the SIP meets either the amended part D permit requirements, or
the requirements under subpart 5 of part D for attainment of the NAAQS
for sulfur dioxide, as applicable.
Section 173 and the various subparts of title I of the Act contain
the requirements for the issuance of NSR permits to new or modified
major stationary sources in nonattainment areas or ozone transport
regions. To issue such permits, the permit authority must first find
per section 173(a)(4) that the ``Administrator has not determined that
the applicable implementation plan is not being adequately implemented
for the nonattainment area'' in accordance with the requirements of
part D. If the Administrator determines that the SIP for meeting the
part D requirements is not being adequately implemented for the
nonattainment area where the new source or modification wants to
locate, permits that would otherwise meet the requirements of section
173 cannot be issued. The Administrator intends to make the
determination by letter to the permit authority, with a follow-up
notice to be published in the Federal Register and need not undertake
notice-and-comment procedures before taking final action. The EPA
solicits comments on this method of communicating the determination.
Specifically, the EPA requests comments on the need for an opportunity
for public notice and comment prior to making the determination
effective.
While the EPA policy is generally to impose a FIP where States fail
to adopt adequate NSR provisions, section 113(a)(5) of the Act provides
that the EPA may issue an order prohibiting the construction or
modification of any major stationary source in any area, including an
attainment area, where the Administrator finds that the State is out of
compliance with the NSR requirements. Specifically, the EPA may issue
an order under section 113(a)(5) banning construction in an area
whenever the Administrator finds that a State is not acting in
compliance with any requirement or prohibition of the Act relating to
construction of new sources or the modification of existing sources.
This proposal does not include the transition provisions under
existing Sec. 52.24 (c) and (g). These paragraphs were removed because
they were originally designed to clarify the applicable requirements
for permits issued prior to the initial SIP revisions required by the
1977 Amendments. The EPA solicits comments on the removal of these
paragraphs. Specifically, comments are requested on the possible need
to maintain these paragraphs for enforcement purposes for sources that
constructed prior to the initial SIP revisions required by the 1977
Amendments.
In addition to the significant changes already discussed, the
proposed changes to Sec. 52.24 include several minor
[[Page 38306]]
changes. These minor changes include: (1) The addition of requirements
applicable to transport regions, (2) the inclusion of requirements
applicable to criteria pollutant precursors, (3) incorporation of the
definitions proposed in Sec. 51.165(a), (4) revisions to the language
at Sec. 52.24 (h) (2), and (5) revisions to Sec. 52.24(j).
In Secs. 52.24 (b), (d), (e), and (i), the EPA proposes that all
the requirements of Sec. 52.24 applicable to nonattainment areas are
now also applicable to transport regions. The proposed revised
regulations also incorporate requirements for criteria pollutant
precursors. Where previously only criteria pollutants were covered
under Secs. 52.24 (d) and (e), the EPA proposes that the construction
ban provisions of proposed Sec. 52.24 now extend to major stationary
sources of precursors of pollutants for which the area is in
nonattainment or for which it is in a transport region.
The EPA believes that the proposed definitions at Sec. 51.165(a)
should also apply when implementing the provisions of proposed
Sec. 52.24. Instead of listing each definition from Sec. 51.165(a) in
the amended Sec. 52.24, the EPA proposes that the definitions at
proposed Sec. 51.165(a) apply under Sec. 52.24(f). Also, by referring
to the definitions in Sec. 51.165(a), the fugitive emissions language
at existing Sec. 52.24(h) is not needed, since the applicable
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
definition is contained in the definitions under Sec. 51.165(a) which
the EPA is today proposing to incorporate into Sec. 52.24(f). The
proposed changes to existing NSR definitions and the rationale for
these changes is discussed in the appropriate sections of this preamble
which discuss proposed changes to regulations at Sec. 51.165.
At Sec. 52.24(g)(2), the EPA is proposing to add that, under
certain conditions when an enforceable limitation is relaxed, the
requirements of Sec. 51.165(a) apply.
5. Applicability of Nonattainment NSR to Internal Combustion Engines
Using new and revised definitions contained in the 1990 Amendments
Congress drew a distinction between emissions resulting from stationary
internal combustion engines and newly-defined ``nonroad engines'' (for
purposes of regulating internal combustion engines under titles I and
II of the Act). Section 216(10) of the Act defines ``nonroad engine''
as ``an internal combustion engine (including the fuel system) that is
not used in a motor vehicle or a vehicle used solely for competition,
or that is not subject to standards promulgated under sections 111 or
202.'' Congress also added a definition of ``nonroad engine'' in
section 216(10), a definition of ``nonroad vehicle'' in section
216(11), a new definition of ``stationary source'' in section 302(z),
and revised the existing definition of ``stationary source'' in section
111(a)(3). Both definitions of ``stationary source'' include the
distinction between stationary and nonroad internal combustion engines.
Under the amended Act, emissions from a ``stationary internal
combustion engine'' are generally considered part of a stationary
source and subject to control under title I State NSR permit programs.
On the other hand, emissions resulting directly from internal
combustion engines considered to be nonroad engines, or from nonroad
vehicles, are generally subject to separate regulation under title II
of the Act. On June 17, 1994, the EPA published regulations at 40 CFR
part 89 regarding new nonroad engines and nonroad vehicles, which
included definitions of the two terms. See 59 FR 31306.
In today's document, the EPA is proposing to amend the various NSR
regulations by revising the definition of ``stationary source'' to
include emissions from stationary internal combustion engines, and to
exclude emissions from nonroad engines and nonroad vehicles, as well as
from emissions resulting directly from an internal combustion engine
used for transportation purposes. See proposed Sec. 51.165(a)(1)(i).
The EPA is also proposing to complement the definition of ``stationary
source'' with new definitions addressing the terms ``stationary
internal combustion engine,'' ``nonroad engine,'' and ``nonroad
vehicle.'' 87 See proposed Secs. 51.165 (a)(1)(xxxii) through
(a)(1)(xxxiv), respectively. It should be noted that the proposed
definitions of ``nonroad engine'' and ``nonroad vehicle'' are the same
definitions that EPA promulgated under 40 CFR part 89 on June 17, 1994
(59 FR 31337). As proposed, a ``stationary internal combustion engine''
refers to any internal combustion engine that is regulated by a Federal
NSPS promulgated under section 111 of the Act, or an internal
combustion engine that is none of the following: a nonroad engine, an
engine used to propel a motor vehicle or a vehicle used solely for
competition, or an engine subject to standards promulgated under
section 202 of the Act. See proposed Sec. 51.165(a)(1)(xxxii).
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\87\ The proposed revisions to the definition of ``stationary
source,'' as well as the addition of new definitions for
``stationary internal combustion engine,'' ``nonroad engine,'' and
``nonroad vehicle'' are also being proposed for inclusion in the PSD
regulations as discussed in section VI.B.3 of this preamble.
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It is the EPA's intent to continue to regulate internal combustion
engines that function in a stationary manner as stationary internal
combustion engines. Apart from engines regulated under section 111 and
engines used to propel a motor vehicle or a vehicle used solely for
competition, the proposed definitions distinguish nonroad engines from
stationary internal combustion engines primarily on the basis of engine
mobility and residence time. Engines that are permanently affixed or
are otherwise non-portable and non-transportable are clearly stationary
internal combustion engines. In addition, the definition of nonroad
engine provides that while portable and transportable internal
combustion are generally to be regulated as nonroad engines, those
internal combustion engines that remain in a particular location for
over 12 months (or a shorter period of time for engines operating at
sources with seasonal operating schedules) are to be treated as
stationary internal combustion engines (this excludes engines in self-
propelled equipment and equipment intended to be propelled while
performing its intended function).
Typical stationary internal combustion engines generally include,
but are not limited to, engines associated with pipeline pump and
compressor drives, electric power generation, and certain well-drilling
operations. Examples of internal combustion engines which, for the most
part, would be considered nonroad engines (and nonroad vehicles)
include diesel locomotives, farm and construction equipment, utility
engines (such as lawn and garden equipment), forklifts, mobile cranes,
and airport service vehicles. Some internal combustion engines perform
both mobile and stationary activities--i.e., they are used both to
propel a vehicle and to operate some equipment or device when the
vehicle is stationary. The EPA is proposing that such engines would be
considered nonroad engines, and not subject to review as stationary
internal combustion engines.
The EPA notes that as part of the rulemaking on nonroad engines on
June 17, 1994 (59 FR 31311), it is a prohibited act to attempt to
circumvent the exclusion based on the residence time of a portable or
transportable engine by means of removing the engine from its location
for a period and then returning it to that same location. In such
cases, the time between removal of
[[Page 38307]]
the engine and its return to service (or replacement) would be counted
toward the time period specified in paragraph (2)(iii). An example of
the final sentence of paragraph (2)(iii) of the definition of nonroad
engine is when a portable generator engine that functions as a
permanent backup generator is replaced by a different engine (or
engines) that performs the same function. In that case, the cumulative
residence time of both generators, including the time between removal
of the original engine and installation of the replacement, would be
counted toward the consecutive residence time period.
The definition of nonroad engine includes a provision that if an
engine is replaced by another engine within the 12-month period, that
the replacement engine should be considered in calculating the
consecutive time period. This provision is designed to ensure that
where an internal combustion engine is necessary for the operation of a
stationary facility, the replacement of one particular engine with
another would not prevent the engines from being included as part of
the stationary facility. The EPA solicits comment on the
appropriateness of the proposed definition of stationary internal
combustion engine and of the appropriateness of incorporating the same
definition of nonroad engine as was promulgated in part 89.
The EPA published on June 17, 1994 (59 FR 31339) an interpretative
rule as an appendix to 40 CFR part 89 explaining the EPA's views
concerning the ability of States to regulate internal combustion
engines manufactured prior to the effective date of part 89, as well as
the ability to impose in-use restrictions on nonroad engines.
Paragraphs 1 and 2 of the Appendix relating to engines manufactured
prior to the effective date of part 89 have been remanded to EPA and
ordered to be vacated pursuant to a voluntary motion by EPA to the
Court of Appeals for the District of Columbia Circuit. The EPA expects
to give further consideration to the interpretations in these
paragraphs in a separate action. The full text of the remaining
paragraph (paragraph 3) of the appendix is repeated here:
3. Moreover, EPA believes that States are not precluded under
section 209 from regulating the use and operation of nonroad
engines, such as regulations on hours of usage, daily mass emission
limits, or sulfur limits on fuel; nor are permits regulating such
operations precluded once the engine is placed into service or once
the equitable or legal title to the engine or vehicle is transferred
to an ultimate purchaser, as long as no certification, inspection or
other approval related to the control of emissions is required as a
condition precedent to the initial retail sale, titling, or
registration of the engine or equipment. The EPA believes that
States are not prevented by section 209 from requiring retrofitting
of nonroad engines in certain circumstances once a reasonable time
has passed after the engine is no longer new, as long as the
requirements do not amount to a standard relating back to the
original manufacturer. Therefore, EPA believes that modest retrofit
requirements may be required after a reasonable amount of time
(e.g., at the time of reregistration or rebuilding) and more
significant retrofit requirements may be required after a more
significant period of time (e.g. after the end of the useful life of
the engine).
B. NSR Provisions for Prevention of Significant Deterioration
As discussed below EPA is proposing several changes pursuant to the
1990 Amendments to the PSD rules at 40 CFR 51.166 and 40 CFR 52.21 to
codify some of revised preconstruction permit requirements of part C of
title I of the Act. These changes include (1) the applicability of PSD
to ozone depleting substances (ODS) regulated under title VI of the
Act, and (2) the exemption of the HAP listed under section 112 of the
Act from Federal PSD applicability. The EPA is considering future
rulemaking to propose other changes to EPA's PSD program in light of
the 1990 Amendments.
1. Stratospheric Ozone-Depleting Substances
New title VI of the Act, entitled ``Stratospheric Ozone
Protection,'' regulates the production and consumption of substances
that deplete the stratospheric ozone layer. These substances are
typically used as refrigerants for both household and commercial
purposes, and for other common uses such as fire suppression, solvents,
and foam blowing. Methyl bromide is also a listed ozone depleting
substance that is used as a broad spectrum biocidal agricultural
fumigant. Pursuant to section 165(a)(4) 88, the PSD regulations
apply to all pollutants regulated under the Act.89 See also, e.g.,
existing Sec. 51.166(b)(23)(ii).
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\88\ Section 165(a)(4) of the Act provides that, in order to
obtain a PSD permit, a source must be ``subject to the BACT for each
pollutant subject to regulation under this Act emitted from, or
which results from, such facility.'' (Emphasis Supplied.)
\89\ Note that new section 112(b)(6) of the Act exempts the HAP
listed under section 112 from the PSD provisions of part C of title
I.
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Section 602 of title VI of the Act lists ODS for regulation and
classifies the substances as either Class I or Class II. The Class I
list includes the substances previously regulated to implement the
Montreal Protocol on Substances that Deplete the Ozone Layer (Montreal
Protocol).90 The Class I substances list contains specific
chlorofluorocarbons (CFC), specific halons, carbon tetrachloride, and
methyl chloroform, methyl bromide, and the hydrochlorofluorocarbons
(HCFC); the Class II substances list contains specific HCFC. These
Class I and Class II lists also include the isomers of the listed
substances, except for 1,1,2-trichloroethane, which is an isomer of
methyl chloroform. Pursuant to the listing criteria of section 602, the
Administrator may by rule add new substances to the lists of Class I
and Class II substances. The EPA added methyl bromide and the
hydrobromofluorocarbons (HBFC) to the Class I list pursuant to Section
602. See 58 FR 65018, 65028 (December 10, 1993).
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\90\ Prior to enactment of the new title VI, on August 12, 1988
(53 FR 30566) the EPA published rules implementing the Montreal
Protocol. These rules regulate CFC 11, 12, 113, 114, 115 and halons
1211, 1301 and 2402 as ODS. The PSD regulations applied to the ODS
regulated under the Montreal Protocol.
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As ODS are regulated under title VI of the Act, they are pollutants
``subject to regulation'' under the Act for PSD applicability purposes.
The EPA is therefore proposing that new major stationary sources and
major modifications of sources of these pollutants are subject to BACT
for ODS. Under section 169(1), a stationary source is major if it is
one of 28 listed source categories and it emits, or has the PTE, 100
tpy or more of any air pollutant. Likewise, for other source
categories, the major stationary source threshold is 250 tpy. Absent an
EPA determination of a ``significance level'' for a particular
pollutant, a modification at a major stationary source resulting in any
net increase in emissions of the pollutant is subject to the PSD
requirements. See existing Sec. 52.21(b)(23)(ii).
The EPA is proposing that the ODS listed under section 602 be
aggregated as a single pollutant for PSD applicability purposes. See
proposed Secs. 51.166(b)(23)(i) and 52.21(b)(23)(i). Since these
substances are in many cases used for the same purposes and can be
substituted for each other, and because the nature of their
environmental impact is the same, the EPA believes it is appropriate to
aggregate them as a single pollutant for purposes of PSD applicability.
Also, treating ODS as a single pollutant is similar to treatment of VOC
for PSD purposes. Like VOC, ODS have varying levels of environmental
impacts (or reactivity), but PSD applicability for VOC is nevertheless
based on a total
[[Page 38308]]
mass of emissions without adjustment for reactivity.
As part of the same proposed change, the EPA is proposing a
significance level of 100 tpy for determining PSD applicability to
modifications at major stationary sources that result in a net increase
in emissions of aggregate ODS. The EPA has determined significance
levels for all other pollutants based on the local ambient impact
associated with that particular amount of emissions. Since emissions
causing stratospheric ozone depletion is strictly a global problem, no
appreciable local ambient impact will result from emissions from a
particular source. Among regulated pollutants, ODS are unique in this
regard. Also, the global stratospheric ozone impact from a particular
source is far below an amount that would have a measurable local
ambient impact. In addition, the EPA believes that title VI constitutes
a fairly comprehensive approach to addressing ODS emissions, including
a program to recycle and reduce emissions under section 608 of the Act.
On the other hand, the Act provides that a new source emitting 100
tpy of ODS (and for some source categories 250 tpy) should be subject
to PSD review, including the BACT requirement. The EPA believes that
PSD should apply to any modification at a major stationary source that
would result in a net emissions increase in ODS of at least 100 tpy,
which is the lower major source threshold. This is consistent with the
purposes of Congress in enacting the PSD provisions to identify
facilities which are responsible for deleterious pollution and which,
due to their size, are financially able to bear the costs imposed by
PSD. See Alabama Power Co. v. Costle, 636 F.2d 323, 353 (D.C. Cir.
1979) (discussing Congress's intent in enacting PSD provisions).
However, for the reasons discussed above, the Agency believes that the
global ambient impact of emissions below that threshold are de minimis.
The EPA requests comment on its proposed 100 tpy significance level for
ODS. Commenters should specify the basis for any other suggested
significance level.
The EPA is also considering an alternative whereby groups of ODS
that may be used for the same purposes would be aggregated, but that
those that are used for different purposes and cannot be substituted
for each other would be treated separately for PSD applicability. The
current groupings under section 602 may represent such use groups. The
EPA recognizes, however, that these groups may not sufficiently
represent chemicals that can be substituted for each other because some
within the same group may not be substitutes, and because substitutes
may exist across groups. (Of course, as discussed below, HCFC may be
substituted for CFC.) Under this alternative, the major source
thresholds and the significance level would apply independently for
each group of substitutable ODS. The EPA requests comment on this
option, and on the appropriate groupings of ODS under such an approach.
The EPA notes that the termination date for production and
consumption 91 of halons passed with the end of 1993, and that the
termination date for production and consumption of the CFC was the end
of 1995. Therefore, significant increases in emissions of halons and
CFC are not likely to occur after final promulgation of this rule.
Rather, the EPA understands that it intends that the termination of
production and consumption of the more potent ODS will force users to
substitute less potent ODS. The most common switch is the substitution
of the lower ozone-depleting potential HCFC for the higher ozone-
depleting potential CFC. Much of this will have been accomplished by
the time of final promulgation of this rule.
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\91\ Consumption equals production plus imports minus exports.
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Currently, the EPA's regulations would appear to require that any
increase in the mass of emissions from a non-routine change involving
substitution of HCFC for CFC would trigger PSD review. Existing
equipment in many cases may have to be altered or replaced to
accommodate the substitute ODS. Since the EPA's title VI program is
geared toward forcing such changes because they are environmentally
beneficial, the EPA has indicated that it will consider treating such
substitutions as pollution control projects. The EPA issued policy
concerning pollution control projects in a July 1, 1994 memorandum from
John S. Seitz, Director, OAQPS, entitled ``Pollution Control Projects
and New Source Review (NSR) Applicability.'' The EPA also took the
position that the proposed substitution of HCFC-141b for CFC-11 at
Whirlpool Corporation's Forth Smith, Arkansas facility would qualify
for a case-by-case exclusion from PSD review as a pollution control
project.92 See 57 FR 32314, 32320 (July 21, 1992) (explaining that
the EPA will consider pollution control projects on a case-by-case
basis). This may be appropriate at least where the switch will not
increase emissions of any other pollutant which would impact a NAAQS,
PSD increment, or air quality-related value, will not cause any cross-
media concerns, and will not increase any risk associated with toxic or
HAP.
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\92\ Letter from A. Stanley Meiburg, U.S. EPA Region VI, to
Randall Mathis, Arkansas Department of Pollution Control and Ecology
(February 1, 1994).
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The EPA is proposing this approach as a regulatory exclusion. The
title VI program is designed to force such substitution in order to
reduce the harmful effect of ODS on the stratospheric ozone layer, and
the Agency encourages voluntary or early substitution. Because
substitution of less potent ODS for more potent ODS is a primary goal
of the EPA's ODS regulatory program, the Agency believes that an
existing major stationary source that emits ODS should be able to make
a change to use other ODS with less ozone-depleting potential without
triggering PSD review. So long as the modifications needed to
accomplish such substitution do not result in an increase of the
production capacity of the ODS-emitting equipment, the EPA believes
that applying PSD and the BACT requirement would not be within the
intended scope of the PSD program. However, if the physical change or
change in the method of operation is other than what is needed to
accommodate the switch in ODS, and if there is a significant net
emissions increase of 100 tpy or greater of ODS, then the change is a
major modification subject to PSD and the BACT requirement.
Accordingly, to implement this policy regarding ODS substitution, the
EPA is proposing to provide that such substitutions would not be
considered a physical change or change in the method of operation, and
therefore would not be a major modification for PSD purposes. See
proposed Secs. 51.166(b)(2)(iii)(N) and 40 CFR 52.21(b)(2)(iii)(N).
The EPA recognizes that the very specific assessment of ozone-
depleting potential for all listed substances under section 602 of the
Act also may support a broader incorporation of relative ozone-
depleting potential into PSD applicability for all ODS-related
modifications. In short, as noted above, EPA is considering an
alternative whereby all modifications would be assessed on a weighted
basis relative to their ozone-depleting potential. Under this
alternative approach, any increase in amount of ODS emitted as a result
of a change to a substance with lower ozone-depleting potential would
be discounted by the relative ODP of the new substance. For example, if
a facility using 500 tpy of CFC-11 (with an ozone-depleting potential
of 1.0) switched to use 1000 tpy of an HCFC
[[Page 38309]]
with an ODP of 0.1, there would actually be a decrease in total ozone-
depleting potential, and PSD review would not apply. This approach is
arguably consistent with the purpose of PSD to prevent deterioration in
air quality. To the extent a switch in ODS actually reduces overall
ozone-depleting potential, no deterioration in air quality would
result. Were the EPA to adopt this alternative approach, it would be
consistent for purposes of the PSD netting calculation to adjust the
mass of each ODS involved based on its ozone-depleting potential to
determine if a modification results in a significant net emissions
increase.
The EPA recognizes that the significant variation in ozone-
depleting potential could allow substantial plant expansions
contemporaneous with the elimination of a substance having a higher
ozone-depleting potential. This approach would thus allow a source that
builds new units contemporaneously with a substitution to avoid PSD
(and the pollution minimization opportunity it affords), whereas a
``green field'' source simply building the new units would be subject
to PSD. Nevertheless, from an environmental impact standpoint, this is
arguably no different than an existing utility replacing an
uncontrolled NOX-emitting boiler contemporaneously with the
construction of several well-controlled new boilers.
Still, section 165 of the Act specifies preconstruction review
requirements for construction of ``major emitting facilities,'' defined
in section 302(j) in terms of tons of pollutant emitted per year. These
provisions do not specifically consider the relative reactivity of
pollutants in determining whether PSD applies. The general rule is that
physical or operational changes that do not increase emissions on a
plant-wide basis are excluded from the PSD program because Congress
intended this program to prevent significant increases in air pollution
and, hence, deterioration in air quality. Alabama Power, 636 F.2d at
401. The EPA recognizes that, based on our knowledge of the reactivity
of ODS, air quality deterioration can be prevented despite certain
increases in the tpy of ODS emissions.
But the Agency does not believe it is obligated to adjust the
increases in the mass of pollution on a reactivity basis in order to
ensure that PSD apply only where an increase in the mass of pollution
would actually deteriorate air quality. This is particularly so where
title VI of the Act represents a Congressional determination that
existing levels of ODS are unacceptable and must be reduced (and
ultimately eliminated), and where PSD review may constitute a tool for
reducing ODS emissions associated with major new construction. The EPA
therefore believes that it has discretion to apply PSD in a straight-
forward manner under section 165 to unadjusted mass increases where
sources are expanding capacity in order to ensure BACT is applied to
such modifications.
The EPA believes this alternative could promote early substitution
of less potent ODS to support expansion in capacity. The EPA is also
sensitive to any incentive it might provide to delay substitution until
the source is ready for plant expansion or other physical or
operational changes that may result in a significant net increase in
ODS. Since sources could utilize credit from substitution throughout
the 5-year contemporaneous period for netting, the incentive to delay
substitution may be limited to unusual situations where a source has
flexibility to delay substitution for 5 years and is aware of
construction it intends to commence long in the future.93 The
Agency expects that the extra incentive for substitution this approach
will provide should outweigh any risk of an incentive to delay
substitution. The EPA requests comment on this alternative approach.
The EPA specifically requests that commenters address the incentives
this alternative would create, the legal basis for adjusting mass
emissions in light of the ozone-depleting potential and the costs and
benefits of applying BACT and other PSD requirements to the variety of
ODS-emitting sources.
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\93\ Nevertheless, a hypothetical source in 1997 might delay
substitution until 2003 because it wishes to preserve the credit it
would get from the substitution for use to avoid PSD applicability
for new construction at the plant in 2008.
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Finally, the Agency is again aware that the phaseout schedule for
the CFC and halons is likely to prompt the bulk of substitution to HCFC
even before the Agency takes final action on this rule. As noted above,
the Agency has already taken the position for one such facility that
substitution of HCFC-141b for CFC-11 would qualify for a case-by-case
exclusion from PSD review as a pollution control project, where the
project would not increase production capacity at the plant or result
in increased utilization of existing capacity. The Agency may need to
address whether modifications involving increases in plant capacity or
utilization and overall reduction in total ozone-depleting potential
should qualify as a pollution control project based on an overall
decrease in emissions, weighted on the basis of ozone-depleting
potential, from the project. The Agency requests comment on whether a
project involving expansion in plant capacity or utilization may
reasonably be considered part of a pollution control project. In any
case, even if the Agency does not allow such projects to qualify as a
pollution control project, if the Agency adopts the ozone depletion
weighting alternative for all modifications, substitutions that occur
before the final rule may still generate credit to support expansions
later in the 5-year contemporaneous period after promulgation of the
final rule. The EPA requests comment on this view.
2. Listed Hazardous Air Pollutants (HAP)
Under the 1977 Act Amendments and regulations issued thereunder,
the PSD requirements of the Act apply to all ``major'' new sources and
``major modifications,'' i.e., those sources exceeding certain annual
tonnage thresholds. See, e.g., existing Secs. 51.166(b)(2)(i) and
(b)(23)(i). Typically, new sources and modifications become subject to
PSD because their potential emissions exceed the specified tonnage
threshold for a criteria pollutant (i.e., a pollutant for which a NAAQS
has been established under section 109 of the Act). For a major new
source, the PSD requirements apply to every pollutant subject to
regulation under the Act that is emitted in ``significant'' quantities
or, in the case of a modification to an existing major source, for
which there is a significant net emissions increase. See, e.g.,
existing Sec. 52.21(b)(23)(i). Under the 1977 Act Amendments, BACT and
other PSD requirements applied not only to emissions of criteria
pollutants but also to emissions of pollutants regulated under other
provisions of the Act, such as section 111 or section 112. This
regulatory structure was altered by the 1990 Amendments.
Section 112(b)(6) of Act generally excludes the HAP listed in
section 112 (as well as any pollutants that may be added to the list)
from the PSD provisions of part C. Some of the chemical compounds
listed in (b)(1) are arsenic compounds, beryllium compounds, lead (Pb)
compounds, and mercury compounds. These compounds are defined as
including any unique chemical substance that contains the named
chemical (i.e., arsenic, beryllium, etc.) as part of the chemical's
infrastructure. These named chemicals are not independently listed on
the section 112(b)(1) list; however, with the exception of Pb, the EPA
is proposing that the named chemicals (i.e., arsenic,
[[Page 38310]]
beryllium, etc.) that are components of the compounds listed under
section 112(b)(1) are, like their compounds, exempt from the Federal
PSD requirements. Regarding Pb, section 112(b)(7) states that elemental
Pb (the named chemical) may not be listed by the Administrator as a HAP
under section 112(b)(1); therefore, elemental Pb emissions are not
exempt from the Federal PSD requirements because section 112(b)(6)
exempts only the pollutants listed in section 112. Elemental Pb
continues to be a criteria pollutant subject to the Pb NAAQS and other
requirements of the Act.
The regulations specifying a significance level refer to ``Pb'' and
do not specify whether the Pb covered is ``elemental'' or ``Pb
compounds.'' As noted in the EPA's transition guidance,94 the
elemental Pb portion of Pb compounds (as tested for in 40 CFR part 60,
appendix A, Method 12) is still considered a criteria pollutant subject
to the Pb NAAQS and regulated under PSD. Thus, the EPA intends that the
reference to ``Pb'' in the proposed regulations covers the Pb portion
of Pb compounds. The Agency requests comment on this position. The EPA
also requests comment on whether references in the regulations should
specify ``elemental'' Pb, or whether the word ``elemental'' might
mislead the public to believe that only Pb that is not part of a Pb
compound is covered.
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\94\ Memorandum from John S. Seitz, Director, OAQPS, ``New
Source Review (NSR) Program Transitional Guidance,'' (March 11,
1991).
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Pollutants regulated under the Act and not on the list of HAP, such
as fluorides (except for hydrogen fluoride), total reduced sulfur
compounds, and sulfuric acid mist, continue to be regulated under
PSD.95 Because they are on the initial HAP list of section
112(b)(1), the following pollutants, which had been regulated under PSD
because they were covered by the section 112 NESHAP, are now exempt
from Federal PSD applicability:
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\95\ The compound hydrogen sulfide (H2S) was inadvertently
on the section 112(b)(1) list of HAP's in the 1990 Amendments. To
correct this clerical error, H2S was removed from the section
112(b)(1) list by a joint resolution of Congress. The resolution by
the Senate was on August 1, 1991, while the House resolution was on
November 25, 1991. This means that the PSD provisions of the Act
continue to apply to H2S, which is still regulated under
section 111 of the Act. The compound H2S is still on the
section 112(r) list.
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Arsenic;
Asbestos;
Benzene (including benzene from gasoline);
Beryllium;
Mercury;
Radionuclides (including radon and polonium);
Vinyl chloride.
Pursuant to section 116 and the preservation clause in section
112(d)(7), States with an approved PSD program may continue to regulate
the HAP now exempted from Federal PSD by section 112(b)(6) if the State
PSD regulations provide an independent basis to do so. These State
rules remain in effect unless a State revised them to provide similar
exemptions. Such provisions that are part of the SIP are federally
enforceable. Additionally, the listed HAP continue to be subject to any
other applicable State and Federal rules; the exclusion is only for the
part C rules for PSD.
The EPA is proposing that any HAP listed in section 112(b)(1) which
are regulated as constituents or precursors of a more general pollutant
listed under section 108 are still subject to PSD as part of the more
general pollutant, despite the exemption in section 112(b)(6). For
example, VOC (a term which includes benzene, vinyl chloride, methanol,
toluene, methyl ethyl ketone, and numerous other compounds) are still
regulated as VOC (but not as individual pollutants such as benzene,
etc.) under the PSD regulations because these pollutants are ozone
precursors, not because they are HAP. Also, particulates (including Pb
compounds and asbestos) are still regulated as particulates (both PM-10
and PM) under the PSD regulations.
Section 112(b)(6) provides: ``The provisions of part C (PSD) shall
not apply to pollutants listed under this section.'' Under the plain
terms of section 112(b)(6), PSD does not apply to substances by virtue
of their inclusion on the list of substances that the Administrator is
to promulgate under section 112(r), Prevention of Accidental Releases.
Subsection (r) establishes a program to prevent and minimize the
consequences of an accidental release of the listed HAP. Section 112(r)
is not intended to address emissions of these pollutants outside of an
accident, and certain regulated sources may have no emissions at all
outside of accidental releases. It thus makes sense that the PSD
program, which is designed to limit and control emissions that occur in
the ordinary course of a source's operations, does not apply to
substances by virtue of their listing under section 112(r).
But, like substances listed under section 112(b)(1), substances
regulated under section 112(r) may still be subject to PSD if they are
regulated under other provisions of the Act. For example, the EPA
believes that even though H2S is listed under section 112(r), hydrogen
sulfide is still regulated under the Federal PSD provisions because it
is regulated under the NSPS program in section 111. This means that the
listing of a substance under section 112(r) does not exclude the
substance from the Federal PSD provisions; the PSD provisions apply if
the substance is otherwise regulated under the Act.
In summary, the following pollutants currently regulated under the
Act as of January 1, 1996, are still subject to Federal PSD review and
permitting requirements:
CO;
NOX;
SO2;
PM and PM-10;
Ozone (VOC);
Pb (elemental);
Fluorides (excluding hydrogen fluoride);
Sulfuric acid mist;
H2S;
Total reduced sulfur compounds (including H2S);
Reduced sulfur compounds (including H2S);
CFC's 11, 12, 112, 114, 115;
Halons 1211, 1301, 2402;
Municipal waste combustor (MWC) acid gases, MWC metals and
MWC organics.
ODS regulated under title VI.
The PSD program will also automatically apply to newly regulated
pollutants, for example, upon final promulgation of an NSPS applicable
to a previously unregulated pollutant.
Based on the remand decision on June 3, 1986 by the EPA
Administrator in North County Resource Recovery Associates (PSD Appeal
No. 85-2), the impact on emissions of other pollutants, including
unregulated pollutants, must be taken into account in determining BACT
for a regulated pollutant. When evaluating control technologies and
their associated emissions limits, combustion practices, and related
permit terms and conditions in a BACT proposal, the applicant must
consider the environmental impacts of all pollutants, including those
not regulated by PSD. Once a project is subject to BACT due to the
emission of nonexempted pollutants, the EPA believes that the BACT
analysis should therefore consider the impact of the various control
options under consideration on all pollutants, including the section
112(b)(1) listed HAP previously subject to PSD, in determining which
control strategy is best. Likewise, consideration of alternatives to a
proposed PSD source, as discussed in Section IV.D.7 of this preamble,
may include impacts from listed HAP and other pollutants not directly
regulated under the PSD program.
In addition, section 112(q) retains existing NESHAP regulations by
[[Page 38311]]
specifying that any standard under section 112 in effect prior to the
date of enactment of the 1990 Amendments shall remain in force and
effect after such date unless modified as provided in the amended
section. Therefore, the requirements of 40 CFR 61.05 to 61.08,
including preconstruction permitting requirements, for new and modified
sources subject to existing NESHAP regulations, are still applicable.
To implement the new requirements of section 112 in the NSR program
rules, the EPA today proposes to exempt the HAP listed under statutory
section 112, including any HAP that may be added to the lists, from the
Federal PSD permitting requirements. See proposed Sec. 52.21(i)(14).
Should a listed pollutant be removed from the list under the provisions
of section 112(b)(3) or 112(r)(3) of the Act, such pollutant would be
subject to the applicable PSD requirements of part C to the extent it
is otherwise regulated under the Act. The EPA also proposes to
eliminate the applicability of the PSD requirements to individual HAP
by deleting from the existing regulations those HAP listed under
section 112, including beryllium, mercury, vinyl chloride and asbestos.
See proposed Secs. 52.21(b)(23)(i) and 52.21(i)(8)(i).
The PSD regulations at 40 CFR 51.166, which list the minimum
criteria for State SIP conformance, are also being amended to reflect
the changes mentioned above. Accordingly, the EPA proposes to allow
States to exempt from PSD the section 112(b)(1) list of HAP. See
proposed Sec. 51.166(i)(13). The EPA also proposes to revise the
current pollutant listings by deleting the HAP which are now exempt
from Federal PSD applicability. See proposed Secs. 51.166(b)(23)(i) and
51.166(i)(8)(i).
3. Applicability of PSD Requirements to Internal Combustion Engines
In accordance with the provisions of the amended Act, the EPA today
proposes to revise the definition of ``stationary source'' in the PSD
regulations to include ``stationary internal combustion engines,'' and
to exclude ``nonroad engines'' and ``nonroad vehicles.'' See proposed
Secs. 51.166(b)(5) and 52.21(b)(5). Accordingly, the EPA is also
proposing to add new definitions to address the terms ``stationary
internal combustion engine,'' ``nonroad engine,'' and ``nonroad
vehicle.'' See proposed Secs. 51.166(b) (46) through (48) and
Secs. 52.21(b) (47) through (49). The rationale and background for
these changes are the same as those provided in section VI.A.5. of this
preamble, which describe similar changes to the definition of
``stationary source'' under the nonattainment NSR regulations.
C. Control Technology Information
Section 108(h) of the Act requires the EPA to maintain a central
database of information regarding emissions control technology, such as
the RACT/BACT/LAER Clearinghouse. Section 108(h) also requires this
information to be disseminated by the EPA to the States and to the
general public. Today, the EPA is proposing to require that permitting
authorities submit to EPA's RACT/BACT/LAER Clearinghouse, within 60
days of issuance of either a nonattainment NSR or PSD permit, all
requisite information on emission control technology contained in any
such permit. See proposed Secs. 51.165(a)(16), 51.166(j)(5), and
52.21(j)(5)].
Section 173(d) of the Act specifically requires such control
technology information from States for permitted sources located in
nonattainment areas. This proposal extends that requirement to apply to
permits for PSD sources as well. The EPA also solicits comment on the
availability of information in the RACT/BACT/LAER Clearinghouse.
VII. Other Proposed Changes
A. Emissions Credits Resulting From Source Shutdowns and Curtailments
The EPA's current regulations limit the use as offsets of emissions
reductions achieved by shutting down an existing source or curtailing
production or operating hours below baseline levels. See existing
Sec. 51.165(a)(3)(ii)(C). These regulations provide that such emissions
reductions cannot be used as new source offsets if the State lacks an
approved attainment demonstration, unless the shutdown or curtailment
occurs on or after the date the new source permit application is filed
or the applicant can establish that the proposed new source is a
replacement for the shutdown or curtailed source. Such shutdown or
curtailment credits may be generally credited if the reductions are
permanent, quantifiable, and federally enforceable, if the area has an
EPA-approved attainment demonstration.
In 1989, when EPA adopted the current regulations regarding
crediting of shutdowns, it focused on the large degree of discretion
granted to it under the Act to shape implementing regulations, as well
as the need to exercise that discretion in a manner consistent with the
statutory directive that offsets insure that new source growth is
consistent with reasonable further progress (RFP) toward attainment of
the NAAQS, and on the presence of an adequate nexus between the new
source and the shutdown source. See 54 FR 27292. At that time, EPA
believed that adequate safeguards to assure RFP were present when an
area had an approved attainment demonstration, and so relaxed the 1980
regulations by allowing the crediting, for offset purposes, of
shutdowns that occur after an application for a new or modified major
source is filed. Id. The EPA also believed that the necessary
assurances of RFP were lacking, and that the transactional ``match''
between the new source and the shutdown source was inadequate, when an
area was lacking an approved attainment demonstration, and so the
Agency retained the restrictions on pre-application shutdowns in such
cases. Id. at 27292-94.
Passage of the 1990 Amendments has significantly altered the
landscape that confronted EPA at the time of the 1989 rulemaking.
Congress significantly reworked the attainment planning requirements of
part D of title I of the Act, such that EPA now believes it is
appropriate to delete the restrictions on crediting of emissions
reductions from source shutdowns and curtailments that occurred after
1990. In particular, Congress enhanced the importance of the
requirement in section 172(c)(3) that States prepare a ``comprehensive,
accurate, current inventory of actual emissions from all sources'' in a
nonattainment area as the fundamental tool for air quality planning.
This was done by restating the inventory requirement as the first
requirement in several pollutant-specific planning provisions, most
notably for ozone nonattainment areas. See section 182(a)(1) of the
Act, requiring submission of an inventory of ozone precursor emissions
within 2 years of enactment of the amendments. Congress also required
submission of a revised ozone precursor inventory every 3 years
thereafter. See section 182(a)(3)(A) of the Act.
In addition, Congress added several new provisions in 1990 that are
keyed to the inventory requirements. Ozone nonattainment areas must
adopt a series of planning requirements including specific reduction
strategies and ``milestones'' that enable areas to demonstrate that
specific progress toward attainment has been made. This progress is
measured from the 1990 ozone precursor inventory, or subsequent revised
inventories, and must take any source shutdown or curtailment into
account. See General Preamble, 57 FR 13498, 13507-13509 (April 16,
1992).
[[Page 38312]]
Moreover, the 1990 Amendments mandate several adverse consequences
for States that fail to meet the planning or emissions reductions
requirements of the amended Act that are tied to the emissions
inventories. For example, the Act contains mandatory increased new
source offset sanctions for States that fail to submit a required
attainment demonstration. The Act's sanction for failure to submit a
required demonstration is 2:1 offsets. The 1990 Amendments also contain
provisions to require that when an area fails to attain the air quality
standard by its statutory attainment date, EPA must bump the area up to
the next higher classification or the classification based on its
design value, whichever is higher. Additional regulatory requirements
are imposed as a result of the higher classification. Also, sections
181(b)(4) and 185 of the Act contain fee provisions applicable to
severe ozone nonattainment areas that do not attain the standard by
their statutory attainment date.
Thus, there is now a host of negative impacts that flow from a
State's failure to plan for and make reductions in the amount of
pollution set forth in the emissions inventories. The EPA has
tentatively concluded that, taken together, these statutory changes
justify a shift away from the focus of the current regulations on
individual offset transactions between a specific new source and a
specific source that will be shut down, and towards a systemic
approach. The EPA believes that a benefit from easing the shutdown
restrictions is that emissions reductions from the closing of some
military installations may be available as offsets for new sources to
build.
In this proposal, the EPA is proposing to revise the existing
provisions for crediting emissions reductions by restructuring existing
Secs. (a)(3)(ii)(C)(1) and (2) for clarity without changing the current
requirements therein. See proposed Secs. (a)(3)(ii)(C)(1) through (4).
In addition, EPA is proposing two alternatives which would ease, under
certain circumstances, the current restrictions on the use of emissions
reductions as offsets from source shutdowns and curtailments.
Under Alternative 1, EPA is proposing for ozone nonattainment areas
to lift the current offset restriction applicable to emissions
reductions from source shutdowns and curtailments in such areas without
EPA-approved attainment demonstrations, so long as the emissions
reductions occur after November 15, 1990 and the area is current with
part D ozone nonattainment planning requirements. See proposed
Secs. 51.165(a)(3)(ii)(C)(5) and (6)[Alternative 1]. Proposed
Alternative 2 generally lifts the current offset restriction applicable
to emissions reductions from source shutdowns and source curtailments
for all nonattainment areas and all pollutants where such reductions
occur after the baseyear of the emissions inventory used (or to be
used) to meet the applicable provisions of part D of the Act. See
proposed Sec. 51.165(a)(3)(ii)(C)(5)[Alternative 2]. Neither
alternative changes the current offset restrictions with respect to
their application to emissions reductions that occur prior to the base-
year of the emissions inventory in nonattainment areas without EPA-
approved attainment demonstrations. Moreover, both alternatives allow
States, if they so choose, to retain the current restrictions on the
use of shutdown and curtailment credits for offset purposes. The EPA is
seeking comments on these proposed alternatives. Discussion of the two
proposed alternatives follows.
1. Shutdown Alternative 1
In a July 21, 1993 policy statement, the EPA reconsidered the
applicability of these regulatory requirements for ozone nonattainment
areas and ozone attainment and unclassifiable areas in the OTR in light
of the 1990 Amendments.96 The EPA explained that States should be
able to allow shutdown or curtailment credits to be used under
conditions applicable to areas with approved attainment demonstrations
until the EPA action to approve or disapprove a timely submitted
attainment demonstration. The EPA also explained that, if the State is
delinquent in submitting specified SIP revisions or if the State's
attainment demonstration is disapproved, the use of shutdown credits
would again be restricted to those occurring on or after the filing
date of the new source permit application (unless the applicant can
establish that the proposed new source is a replacement for the one
that was shutdown or curtailed). The EPA also took the position that
areas not required to submit an attainment demonstration should be
allowed to follow the less restrictive shutdown policies applicable to
areas in compliance with the attainment demonstration requirements
under the current regulations.
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\96\ See Memorandum from John Seitz, Director of EPA's OAQPS
(July 21, 1993).
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The EPA also specified that creditable shutdowns or curtailments
must (1) have occurred on or after November 15, 1990, (2) have reduced
emissions that are included in the emissions inventory for attainment
demonstration and RFP milestone purposes, and (3) generate an amount of
credit equal to the lower of actual or allowable emissions for the
source. Consistent with the current regulations, the EPA noted that all
shutdown or curtailment reductions must be permanent, quantifiable, and
federally enforceable in order to be creditable.
The EPA clearly explained in the July 21, 1993 policy statement
that it did not supersede existing Federal or State regulations or
approved SIP, but intended solely to provide guidance during the
interim period prior to submission and approval of attainment
demonstrations under the 1990 Amendments. The EPA also explained that
it would address matters relating to shutdown credits in the rulemaking
regarding regulatory changes mandated by the 1990 Amendments and would
take comment on its policy at that time. The EPA chose to address this
issue through a policy statement rather than through binding regulatory
changes because there was a need for immediate guidance during the
interim period. The EPA therefore is proposing regulatory changes in
light of the 1990 Amendments to address the creditability of shutdown
and curtailment reductions.
The EPA's proposal regarding the treatment of shutdown and
curtailment credits will affect a number of different circumstances.
First, the EPA believes the interim period prior to approval or
disapproval of attainment demonstrations for ozone nonattainment areas
will continue after the promulgation of this final rule. The attainment
demonstration for serious and above ozone nonattainment areas was not
due until November 15, 1994, and the EPA action to approve or
disapprove these submissions may not occur until some time after that.
Second, areas may be designated as new ozone nonattainment areas in the
future that will have future attainment dates, and if designated
moderate or above will have future dates for submission of an
attainment demonstration. Third, ozone nonattainment areas not reaching
attainment by the applicable dates may be ``bumped up'' to the next
higher nonattainment classification, and may be given new future dates
for submission of an attainment demonstration and for reaching
attainment.
The EPA's rationale for its July 21, 1993 policy statement was
rooted in the belief that the 1990 Amendments new schedules for
submitting attainment demonstrations rendered the restrictions on the
use of so-called ``prior shutdown credits'' as unnecessarily hindering
a
[[Page 38313]]
State's ability to establish a viable offset banking program. For those
ozone nonattainment areas (and areas in the OTR), the EPA explained
that the purposes of the prior shutdown credits restrictions would not
be served if these areas were treated as if they had failed to make
such a demonstration.
As explained in the July 21, 1993 policy statement, the EPA's
concern in its final action establishing the current regulatory
approach to shutdown credits in 40 CFR 51.165 was that unrestricted use
of prior shutdown credits would lead to offset transactions without any
nexus between the decision to shut down or curtail operations at the
existing source and the decision to construct new capacity. Thus,
shutdowns or curtailments that would have occurred in any case (not
prompted by a new source seeking offsets) would not be applied to RFP,
but would instead be used to accommodate additional emissions growth in
the nonattainment area.
The EPA explained in the July 21, 1993 policy statement that the
1990 Amendments merit a less restrictive approach to the use of prior
shutdown and curtailment credits in ozone nonattainment areas. The EPA
took the position that such credits may be used as offsets until the
EPA acts to approve or disapprove an attainment demonstration that is
due. The 1990 Amendments established new attainment deadlines for all
nonattainment areas. Ozone nonattainment areas classified as moderate
and above must submit new attainment demonstrations. (Marginal and
unclassifiable areas, as well as attainment areas in the OTR, are not
obligated to submit an attainment demonstration.) These ozone
nonattainment areas must adopt a series of planning requirements
including specific reduction strategies and ``milestone'' requirements
that areas demonstrate that specific progress toward attainment has
been made. This progress is measured from a specific 1990 ozone
inventory, for which any prior shutdown or curtailment reductions must
be taken into account. See General Preamble, 57 FR 13498, 13507-13509
(April 16, 1992). For pollutants other than ozone, the EPA stated that
it would consider requests for relaxation of the shutdown and
curtailment credits policy on a case-by-case basis.
As Alternative 1, for ozone nonattainment areas in general, the EPA
is proposing to adopt the policies reflected in the July 21, 1993
policy statement as regulatory changes. See proposed
Secs. 51.165(a)(3)(ii)(C)(5) and (6) [Alternative 1]. The EPA continues
to adhere to its view in the July 21, 1993 policy statement that the
1990 Amendments' provisions for ozone nonattainment areas justify use
of prior shutdown and curtailment credits as offsets in the interim
period before the EPA approves or disapproves any required attainment
demonstration. The EPA believes that the safeguards in the new
requirements of the 1990 Amendments provide adequate assurance of
progress toward attainment so that restrictions on the use of prior
shutdown or curtailment credits is not necessary. Thus, the EPA is
proposing that prior shutdown and curtailment credits may be used as
offsets in ozone nonattainment areas (as well as areas in the OTR, to
the extent applicable), as long as when they come due the State (1)
submits a complete emissions inventory for the area under section
182(a)(1), (2) submits complete revisions to its NSR program under
section 182(a)(2)(C), (3) submits the 15 percent plan for the area
under section 182(b)(1)(A) for moderate and above areas, (4) submits
the attainment demonstration for the area under section 182(b)(1)(A)
(for moderate areas) or section 182(c)(2) (for serious and above
areas), (5) submits the 3 percent reduction plan under section
182(C)(2)(B) for serious and above areas, and (6) submits milestone
demonstrations under section 182(g)(2) for serious and above areas. To
the extent ozone nonattainment areas are classified marginal (or
lower), States are not required by the Act to submit an attainment
demonstration, and may rely on shutdown and curtailment credits for
offsets.
The EPA also continues to adhere to the limitations explained in
the July 21, 1993 policy statement. The EPA is therefore proposing in
Alternative 1 that the restrictions on the use of prior shutdown and
curtailment credits will again apply as soon as a State fails to make
any of these submissions, or if such a submission is deemed incomplete
or is disapproved. These limitations address the concern underlying the
initial imposition of these restrictions that use of prior shutdown and
curtailment credits in such circumstances would be inconsistent with
the RFP requirement. Also, if a State is late in making any of these
submissions, once the submission is made to the EPA, the State is
allowed to implement the less restrictive shutdown credits policy. The
EPA is also proposing that, if a State becomes delinquent during review
of a permit application that relies on emissions reductions from prior
shutdowns or curtailments, the State may allow offsets to remain
creditable if the application was complete before the State became
delinquent.
Areas currently designated attainment or unclassifiable for ozone
under section 107(d)(4) of the Act may be redesignated under section
107(d)(3) to nonattainment, and at the time of redesignation will be
classified by operation of law under section 181(b). The EPA is
proposing that shutdown and curtailment credits be available as offsets
in these new areas under the same conditions applicable to those areas
now designated as nonattainment. Just as the ozone nonattainment
provisions of the 1990 Amendments provide assurance that currently
designated areas will achieve RFP and attainment, so, too, do those
provisions provide assurance that new ozone nonattainment areas will
achieve RFP and attainment.
Pursuant to section 181(b)(2), ozone nonattainment areas that fail
to reach attainment by the applicable date are to be reclassified
(bumped up) by operation of law to the higher of the next higher
classification or the classification applicable to the area's design
value at the time (except no area is to be reclassified as extreme).
Pursuant to section 182(i), areas that are reclassified on failure to
attain are to meet the requirements applicable to the new
classification, according to the prescribed schedules, except that the
Administrator may adjust deadlines other than the attainment dates to
the extent necessary or appropriate to assure consistency among the
required submissions.
Thus, moderate areas failing to attain by November 15, 1996, will
be reclassified as serious and the Administrator may revise submission
dates including the date for submission of a new attainment
demonstration. The EPA does not believe that prior shutdown and
curtailment credits should be used as offsets in such areas where the
date for a new attainment demonstration has been extended. Having
failed to reach attainment by the date specified in the 1990
Amendments, the EPA does not believe it may continue to regard the new
statutory provisions as providing an ``independent assurance of RFP.''
Rather, the EPA believes that it should regard failure to attain by the
applicable date as a delinquency rendering prior shutdown and
curtailment credits unavailable as offsets.
Section 181(b)(3) of the Act provides that the Administrator shall
grant the request of any State to reclassify a
[[Page 38314]]
nonattainment area in that State to a higher classification. Upon
voluntary reclassification, the fixed deadlines applicable for the
higher classified area may well be later than those otherwise
applicable to the original classification. For example, the attainment
demonstration submission date applicable for a serious area is later
than such date for a moderate area.
Under alternative 1, the EPA is proposing that shutdown and
curtailment credits be available as offsets for voluntarily
reclassified areas under the same conditions applicable if the area
were originally classified in the higher category. The EPA does not
believe voluntary reclassification constitutes a delinquency, and
believes the provisions applicable to the higher classification will
provide the necessary assurance that the area will achieve RFP and
attainment. The EPA requests comment on this approach.
2. Shutdown Alternative 2
Under this alternative the EPA is proposing for all nonattainment
areas and all pollutants that the current offset restrictions on
crediting of emissions reductions from source shutdowns and
curtailments be lifted where the reductions occur after the baseyear of
the emissions inventory used (or to be used) to meet the applicable
part D requirements of the Act.
In light of the NSR requirements in the 1990 Amendments, EPA
believes that the Act now contains sufficient procedures, air quality
tests, penalties, and assurances to address air quality concerns in
nonattainment areas lacking EPA-approved attainment demonstrations.
Specifically, the Act requires a mandatory 2:1 offset sanction for new
or modified major sources in States that fail to submit a required
attainment demonstration. Consequently, the EPA is proposing that
continuing a prohibition on the use of source shutdown and curtailment
credits generated after the baseline year of the most recent inventory
is not warranted.
Under alternative 2, the EPA believes that emissions reductions
from the shutdown or curtailment of emissions which occur after the
baseyear of the most recent emissions inventory may be fully creditable
for offset purposes, and that no additional nexus between source
shutdowns or curtailments and the new source is necessary to insure
that construction of the new source will result in reasonable further
progress towards attainment. From an air quality planning perspective,
such emissions actually impacted the measurements of air quality used
in determining the nonattainment status of an area. Subsequently,
reductions in these emissions from source shutdowns or curtailments are
reductions in actual emissions, and their use as emission offsets at
the statutorily-required greater than 1:1 ratio constitutes progress
towards improved air quality. Also, for all classified ozone
nonattainment areas, the Act now requires emission offsets at ratios
ranging from 1.15:1 to 1.5:1 be obtained from either the same
nonattainment area or an area of equal or greater classification.
For nonattainment areas for pollutants other than ozone, the NSR
regulations also require each applicant to perform modeling analyses to
demonstrate that the major new source or modification will not
interfere with reasonable further progress and the State's ability to
produce an attainment plan. The applicant must not only secure actual
emission reductions sufficient to meet the numerically calculated
amount necessary under the Act to offset the associated allowable
emissions increase for the new source or modification, but enough
offsets such that the modeling demonstrates no significant adverse air
quality impact from the proposed major new source or modification.
B. Judicial Review of NSR Permits
The EPA is clarifying that the Act and the EPA's implementing
regulations require SIP to provide applicants and affected members of
the public with an opportunity for State judicial review of PSD and
nonattainment NSR permit actions under approved NSR SIP to ensure an
adequate and meaningful opportunity for public review and comment on
all issues within the scope of the permitting decision as required
under parts C and D of title I. The PSD provisions of the Act emphasize
the importance of public participation in permitting decisions. See
section 160(5) of the Act. In addition, section 165(a)(2) of the Act
provides that no PSD permit shall be issued unless ``a public hearing
has been held with opportunity for interested persons including
representatives of the Administrator to appear and submit written or
oral presentations on the air quality impact of the source,
alternatives thereto, control technology requirements, and other
appropriate considerations.'' Further, Sec. 51.166(a)(1) provides that
``[i]n accordance with the policy of section 101(b)(1) of the Act and
the purposes of section 160 of the Act, each applicable State
implementation plan shall contain emission limitations and such other
measures as may be necessary to prevent significant deterioration of
air quality.'' See also section 161 of the Act.
The EPA interprets existing law and regulations to require an
opportunity for State judicial review of PSD and nonattainment NSR
permit actions under approved NSR SIP by permit applicants and affected
members of the public in order to ensure an adequate and meaningful
opportunity for public review and comment on all issues within the
scope of the permitting decision. The EPA believes that the opportunity
for public review and comment, as provided in the statute and
regulations, is seriously compromised where an affected member of the
public is unable to obtain judicial review of an alleged failure of the
State to abide by its NSR SIP permitting rules. Accordingly, all such
persons, as well as the applicant, must be able to challenge NSR
permitting actions in a judicial forum.
In section 307(b) of the Act, Congress expressly provided an
opportunity for judicial review of NSR permitting decisions when the
EPA is the permitting authority. There is no indication that Congress
intended that citizens' rights would be diminished upon the EPA
approval of a State's NSR program. Similarly, Congress has provided
citizens the ability to challenge the failure of a major source to
obtain the NSR permit required under part C or D or the violation of
such permit in Federal district court under the citizen suit provisions
of section 304(a)(3), regardless of whether the permitting authority is
the EPA or a State.
The operative language of section 304(a)(3) could be read as
equivalent to the Federal NSR enforcement provisions of sections
113(a)(5) and 167, which enables EPA to challenge in Federal court both
construction without any permit and construction without a permit that
satisfies applicable NSR requirements. The EPA believes that the better
view is that expressed in the legislative history of the 1977
Amendments, which provided Federal court jurisdiction under section 304
for citizen suits directed at the failure to obtain any major NSR
permit, but directed citizen challenges to the terms of major NSR
permits to State court: ``[i]n order to challenge the legality of a
permit which a State has actually issued, or proposes to issue, under
[the PSD provisions of the Act] however, a citizen must seek
administrative remedies under the State permit consideration process,
or judicial review of the permit in State court.'' Staff of the
Subcomm. on Environmental Pollution of the Senate Comm. on Environment
[[Page 38315]]
and Public Works, 95th Cong., 1st Sess., A Section-by-section Analysis
of S. 252 and S. 253, Clean Air Act Amendments 36 (1977), reprinted in
five Legislative History of the Clean Air Act Amendments of 1977 (1977
Legislative History) 3892 (1977). (Section 304(a)(3) originated in S.
252; the House bill had no such provision; the conference committee
expanded the coverage of the provision to apply to nonattainment major
new source review as well. See H.R. Conf. Rep. No. 564, 95th Cong., 1st
Sess., reprinted in three 1977 Legislative History at 553). This
reading is supported by the limited case law on the subject. See Ogden
Projects, Inc. v. New Morgan Landfill Co., Inc., No. 94-CV-3048 (E.D.
Pa.), Jan. 10, 1996 (slip op. at 5-9); see also League to Save Lake
Tahoe, Inc. v. Trounday, 598 F.2d 1164, 1173 (9th Cir.), cert. denied,
444 U.S. 943 (1979). The EPA believes that Congress intended such
opportunity for State judicial review of PSD and nonattainment NSR
permit actions to be available to permit applicants and at least those
members of the public who can satisfy threshold standing requirements
under Article III of the Constitution. The EPA also solicits comment on
whether the statute should instead be interpreted as providing for
citizen challenges to State-issued permits in Federal court under
section 304(a)(3), on whether citizens should be given the option of
proceeding in State or Federal court, and on whether citizens should be
allowed to proceed in Federal court only if a State court remedy is not
provided.
The EPA seeks to codify its interpretation by proposing in this
action expressly to require that a SIP provide for judicial review by
private parties in State court of PSD and nonattainment NSR permit
actions. Such review must be available to the applicant and any person
who participated in the public participation process (unless that
person can demonstrate that it was impracticable to raise an objection
during the comment period, e.g., because the permit term complained of
was one added to the final permit without prior notice) and who can
satisfy threshold Article III standing requirements. The EPA also
solicits comment on whether to require States, either instead of such a
SIP revision requirement or in addition to such a SIP revision
requirement, to submit a legal opinion from the Attorney General for
the State, or the chief attorney for an air pollution control agency
that has independent legal counsel, demonstrating that the State has
adequate legal authority to provide for and implement the opportunity
for State judicial review of a PSD or nonattainment NSR permit action
by the applicant and members of the public who participated in the
public participation process and who can satisfy threshold Article III
standing requirements.
The SIP may also provide that this opportunity for judicial review
is the exclusive means by which citizens may obtain judicial review of
the permit, and that all such actions for judicial review must be filed
within a reasonable period of time specified in the SIP. If the SIP
includes such a time limit, it must also provide that if new grounds
for challenge arise after the review period has ended, a person may
challenge the permit on such new grounds within a reasonable period
specified in the SIP after the new grounds arise. Such new grounds may
be limited to new information which was not available during the review
period.
Finally, EPA also solicits comment on the extent to which judicial
review of the provisions of PSD and nonattainment NSR permits through
the provisions of title V of the Act may substitute for judicial review
under the terms of the SIP. In August 1995 EPA issued a supplemental
rulemaking notice proposing changes to the requirements of 40 CFR Part
70 governing State operating permit programs under title V of the Act.
60 FR 45529 (Aug. 31, 1995). In that document, EPA proposed to require
that certain activities governed by a State review program, including
the issuance of a PSD or nonattainment NSR permit under parts C or D of
title I of the Act, meet the procedural requirements of title V, such
that there would only be a single round of public process and EPA
review, as opposed to possibly duplicative permit issuance procedures
under title I and title V. EPA solicited comment, however, on whether
EPA review and, ultimately, judicial review under title V should
address all or only some of the requirements of PSD and nonattainment
NSR permits. Thus, it is not clear at this juncture whether EPA and
judicial review under part 70 will extend to all PSD and nonattainment
NSR requirements, and hence, whether adoption of the proposed changes
to part 70 would obviate the need for a separate judicial review
requirement under title I. The EPA will coordinate final action under
both proposals, and will take care to ensure that final action under
this proposal and under the proposed revisions to part 70 are
consistent and do not result in duplicative or unnecessary
requirements.
For the reasons discussed above, the EPA is proposing that SIP
provide for judicial review in State court for PSD and nonattainment
NSR permits issued under parts C and D of title I, respectively. See
proposed Secs. 51.165(a)(5)(iii) and 51.166(q)(6). The EPA seeks
comment on this proposal.
C. Department of Defense (DOD) Concerns
The DOD has raised the question of whether the NSR rules should
provide to military sources temporary exclusions from the requirement
for preconstruction review of major modifications in the event of a
``national security emergency.'' The DOD defines ``national security
emergency'' as a situation where rapid response is required on the part
of a Military Department or a DOD Component (i.e., the Army, the Navy,
the Air Force, the Marines, the Coast Guard when in the naval service,
the National Guard, and the Reserves) to respond to emergency
situations that make it impractical
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
to meet the procedural requirements
for obtaining a major NSR permit in advance of a major modification and
the associated increase in emissions. ``National security emergencies''
would include situations where United States forces are introduced into
hostilities or peacekeeping operations, other situations where
involvement in hostilities is indicated, and situations where U.S.
forces are called upon to provide emergency humanitarian relief or
protect the public health or welfare, such as responding to civil
disturbances and natural disasters such as hurricanes, earthquakes, and
wildfires. Under a temporary national security emergency exclusion, in
lieu of the normal preconstruction review process, the military
facility would apply for and obtain an NSR permit, if necessary, after
the emergency has ended. A temporary national security emergency
exclusion, if provided, would be invoked only in emergencies that
require physical or operational changes to military sources that are
significant enough to trigger the NSR permitting requirements for a
major modification.
The DOD believes that regulatory provisions to address ``national
security emergencies'' are necessary to enable the DOD to immediately
and dramatically respond to support specifically designated national
security missions or civilian emergencies. The absence of such
emergency provisions could hinder the ability of local commanders to
comply with Presidential directives in a timely manner because of the
time periods and
[[Page 38316]]
public notice requirements involved in obtaining NSR permits.
The EPA is requesting comment on the need for an explicit
regulatory exclusion in the NSR rules for ``national security
emergencies.'' In particular, the EPA is soliciting comment on the
legal authority and necessity for such an exclusion in light of Act
section 118, whether such an exclusion should be mandatory or voluntary
for States with approved NSR SIP, and whether such an exclusion should
be limited to the DOD, or whether it should be made available to other
public agencies that may be called on to protect the public health or
welfare in response to unforeseen natural or civilian emergencies. In
addition, the EPA is requesting comment on the specific form that any
such provisions should take, including how to structure a definition
for ``national security emergency'' that is sufficiently descriptive to
be implemented as intended.
The August 31, 1995 supplemental proposal concerning the EPA's
regulations at 40 CFR parts 70 and 71, that address requirements for
title V operating permit programs, raised the issue of whether similar
exclusion provisions should be added to parts 70 and 71 to authorize
local governments (and other sources) to make changes without revising
the source's title V permit under specified circumstances to respond to
emergencies such as natural disasters and severe weather conditions.
(See 60 FR 45560-45561) The EPA requested comments on this topic in
response to preproposal comments submitted by State and local air
pollution control agencies that already have authority to grant
temporary exclusions as a matter of State or local law. In that
document, the Agency solicited comment on the proper scope and terms of
any such authorization provision that might be added to parts 70 and
71, including appropriate procedural safeguards for exercising such
authority considering the scope of the authorization. Examples of
procedural safeguards include prior notification of a change by the
source requesting emergency authorization, unless prior notification is
not possible, and authorization for the permitting authority to attach
conditions to the authorization, as it deems appropriate, to ensure
that the change is being made in a manner that will cause the least
change, modification, or adverse impact to life, health, property, or
natural resources. The EPA believes that similar considerations are
appropriate in the context of a temporary national security emergency
exclusion that might be added to the NSR rules in parts 51 and 52.
Furthermore, in the context of responding to comments on the August 31,
1995 supplemental proposal and on this proposal, the EPA will consider
whether temporary national security emergency exclusion provisions that
specifically address DOD sources should be added to parts 70 and 71 as
well as to the NSR regulations. Although the EPA is not reopening the
public comment period for the August 31, 1995 supplemental proposal,
the EPA solicits comments in this document on whether such temporary
national security emergency exclusion provisions for the DOD should be
added to parts 70 and 71 and on how such provisions should differ from
those that may be incorporated in the NSR regulations, should such
provisions be adopted for either program.
The DOD has suggested the following approach for including
``national security emergency'' provisions in the NSR regulations.
Sections 51.165(a), 51.166, 52.21 and 52.24 would be amended to add a
definition for ``national security emergency'' that is based on the
description of that term above. A new, stand-alone paragraph would be
added in Secs. 51.165(a), 51.166, 52.21 and 52.24, entitled ``Temporary
exclusions for national security emergencies,'' which would read as
follows:
Each plan shall provide that actions on the part of a military
facility to respond to a national security emergency that otherwise
would constitute a major modification shall not constitute a major
modification for the purposes of this section for the duration of the
temporary exclusion provided by this paragraph, provided that the
Commanding Officer of the military facility complies with the following
conditions. For the purposes of this section, ``military facility''
shall mean the major stationary source that is owned or operated by a
United States Department of Defense Component and that is engaged in
national security or related activities.
(1) As soon as practicable, but no later than seven calendar days
after the military facility begins to use the national security
emergency exclusion, the Commanding Officer of the military facility
shall notify in writing all affected State permitting authorities and
EPA Regional Offices, and the appropriate Secretary of the Military
Department or Head of the Department of Defense Component, that the
military facility is responding to a national security emergency and is
using the exclusion. During the 7-day notice period and the 30 calendar
days after the date of the document, the Commanding Officer of the
military facility shall be authorized to determine when the exclusion
under this section applies. Such determination shall be made only after
the Commanding Officer has made all reasonable efforts to accommodate
the emissions increase without deviating from otherwise applicable
permitting requirements.
(2) If the military facility seeks to rely on the temporary
national security emergency exclusion for longer than 30 calendar days
from the date of the notice in paragraph (1), the continued use of the
exclusion must be reviewed and approved by the appropriate Secretary of
the Military Department or Head of the Department of Defense Component
taking into account any public health, welfare, or environmental
concerns raised in consultation with all affected permitting
authorities. The authorization to continue use of the temporary
national security exclusion shall be required for each consecutive 30-
day period following the date of the notice required in paragraph (1).
(3) During the national security emergency, the Commanding Officer
of the military facility shall take all reasonable measures, where
practicable, to ensure that any physical or operational changes to the
source that would result in an emissions increase that otherwise would
constitute a major modification are made in a manner that will minimize
the emissions increase or otherwise minimize any potential for adverse
impact to public health and welfare or the environment. Such measures
may include the use of emission controls and proper operation and
maintenance practices and/or choosing materials or operating scenarios
that minimize deviations from existing permit terms and conditions. In
addition, the Commanding Officer of the military facility shall make a
reasonable effort, where practicable, to monitor emissions during the
emergency in order to quantify the emissions resulting from the
physical or operational changes.
(4) As soon as practicable, but no later than 7 calendar days after
the use of this exclusion is no longer needed, the Commanding Officer
of the military facility shall notify in writing all affected State
permitting authorities and EPA Regional Offices, and the appropriate
Secretary of the Military Department or Head of the Department of
Defense Component, that the military facility has ceased responding to
a national security emergency for the purposes of this section.
(5) As soon as practicable, but no later than 45 calendar days
after the date of the notification in paragraph (4), the
[[Page 38317]]
Commanding Officer of the military facility shall provide a written
report to all affected State permitting authorities and EPA Regional
Offices, and to the appropriate Secretary of the Military Department or
Head of the DOD Component, that describes the reasons for relying on
the exclusion, the emissions units affected, the amount of increased
emissions, and other information needed to determine the nature and
extent to which the source deviated from otherwise applicable
permitting requirements.
(6)(i) The Commanding Officer of the military facility need not
submit an application to the permitting authority for a permit under
this section if the physical or operational changes to the source
resulted only in a temporary modification, that is, a modification that
lasts no longer than the period of the national security emergency and
that does not expand the capacity of the source to emit at an increased
level after the cessation of the emergency.
(ii) As soon as practicable, but no later than 45 calendar days
after the date of the notification required in paragraph (4), the
Commanding Officer of the military facility shall submit an application
for a permit under this section in the event that the physical or
operational changes made at the source in response to the national
security emergency are not temporary. For example, a permit shall be
required if the military facility is physically changed or has capacity
added in ways that are not later reverted or otherwise actually
returned to the pre-modification conditions.
(7) The permit application under paragraph (6)(ii) and the
permitting authority's actions on that application shall comply with
the requirements of this section as though construction had not yet
commenced on the modification.
The DOD has provided some examples of actions that military
installations could be called on to take during national security
emergencies that would result in ``temporary'' and ``nontemporary''
modifications that otherwise would be subject to major NSR. In the
event of a national security emergency involving hostilities, the DOD
may have to make physical changes to a source to be able to paint
tactical equipment at that location. These changes could involve the
construction of new painting facilities. If these changes would result
in emissions increases but, after the cessation of the emergency they
are returned to their pre-modification condition, under the DOD's
suggested language, the changes would be considered ``temporary'' and
would not be required to undergo post-modification NSR permitting.
However, if the changes are not returned to their pre-modification
condition after the cessation of the emergency, the changes would be
considered a ``nontemporary'' modification and they would be required
to undergo post-modification NSR permitting.
The EPA is requesting comments on the appropriateness and
sufficiency of the preceding suggested language for inclusion in parts
51 and 52. In particular, the EPA is soliciting comments on whether any
type of authorization by the permitting authority should be required
before a military installation may use the temporary national security
emergency exclusion, if one is adopted. In extraordinary circumstances,
the permitting authority may have concerns about the public health,
welfare, or environmental impacts that would result from an emissions
increase or other changes made at a military source to respond to a
national security emergency. In such circumstances, the EPA believes it
may be appropriate for the permitting authority to work with the DOD to
mitigate such adverse impacts before the DOD facility continues to rely
on the national security emergency exclusion provision. The EPA expects
that the permitting authority's assessment in such circumstances would
be made rapidly and would take into account the urgency with which the
DOD must respond to the particular emergency. Under any version of the
exclusion, where the permitting authority is a State or local agency,
the EPA is requesting comment on whether the Agency should have a
formal role in the process for determining whether the DOD can extend
use of a national security emergency exclusion beyond the initial 30-
day period.
In addition, the EPA seeks comment on the open-ended nature of the
DOD's proposed national security emergency exclusion and whether there
should be some limit on the total duration of the exclusion, especially
where an excluded activity may have the potential for an adverse impact
on public health and welfare or the environment. Furthermore, when a
national security emergency is expected to last for an extended period
(such as longer than 30 days), the EPA requests comment on whether a
military facility acting under such an exclusion should be required to
apply for and obtain an NSR permit, if necessary, at some point after
the emergency response has commenced, rather than waiting until the
national security emergency has ended. The EPA also seeks comment on
whether a national security emergency exclusion should apply to the
construction of a new major source where the existing military facility
is not an existing major source.
Finally, the EPA is interested in knowing commenters' opinions and
concerns about any additional requirements that should or could be
included, such as additional elements that could be included in the
report on emissions increases resulting from physical or operational
changes made to respond to a national security emergency, and about the
implications of providing for a national security emergency exclusion
if such provisions are not mandatory for all states.
The DOD also requested that the rules at 40 CFR 51.161 and 51.166
be revised to provide an exclusion from public availability
requirements for classified information. The EPA agrees with the DOD
that information properly classified under applicable laws, including
Executive Orders 12958 and 12968, is not required to be made publicly
available, and the Agency proposes to codify this view in the minor and
major NSR rules. As suggested by the DOD, the EPA proposes that
``classified information'' be defined in the NSR rules as it is defined
in the Classified Procedures Act, 18 U.S.C. App. 3, section 1(a), as
``any information or material that has been determined by the United
States Government pursuant to an Executive order, statute, or
regulation, to require protection against unauthorized disclosure for
reasons of national security.'' The EPA notes that criminal penalties
exist for the unauthorized disclosure of classified information,
defined as ``information, which at the time of a violation of this
section, is, for reasons of national security, specifically designated
by a U. S. Government Agency for limited or restricted dissemination or
distribution.'' 18 U.S.C. 798(b). The DOD and the EPA believe that
these laws must be read in congruence with the Act and the need for
public availability of permitting information. The Act cannot be
reasonably interpreted to require a violation of criminal law by making
classified information publicly available. As recommended by the DOD,
the EPA proposes that the public availability provisions be revised as
follows. Existing Sec. 51.161(b)(1) would be revised to read:
Availability for public inspection in at least one location in the
area affected of the information, except for classified information,
submitted by the owner or operator and of the State or local
[[Page 38318]]
agency's analysis of the effect on air quality. Classified information
provided by the Department of Defense or other Federal agencies or
contractors for such agencies and designated as such will be controlled
by applicable law concerning the release of classified information.
Existing Sec. 51.166(q)(2)(ii) would be revised to read:
Make available in at least one location in each region in which the
proposed source would be constructed a copy of all materials, except
for classified information, the applicant submitted, a copy of the
preliminary determination, and a copy or summary of other materials, if
any, considered in making the preliminary determination. Classified
information provided by the Department of Defense or other Federal
agencies or contractors for such agencies and designated as such will
be controlled by applicable law concerning the release of classified
information.''
The EPA is proposing to adopt this exclusion from public
availability requirements for classified information not only in
Secs. 51.161 and 51.166 but also in Secs. 51.165 and 52.21. The EPA
solicits comment on all aspects of this proposed provision.
VIII. Additional Information
A. Public Docket
This rulemaking action is subject to section 307(d) of the Act. The
aspects of the rulemaking action related to PSD are subject to section
307(d), in accordance with section 307(d)(1)(J) of the Act. Pursuant to
section 307(d)(1)(V), the Administrator hereby determines that the
other aspects of this rulemaking action are subject to section 307(d).
Accordingly, section 307(d) applies to this entire rulemaking action.
The public docket for this rulemaking action is A-90-37. The docket
is a file of the information relied upon by the EPA in the development
of this proposed rule (as well as interagency review materials related
to the proposed rule). The EPA will also place the following materials
in the docket: (1) Written comments EPA receives during the public
comment period; (2) the transcript of the public hearing, if any; (3)
any documents that EPA determines are of central relevance to the
rulemaking; (4) EPA's response to significant comments; (5) any
additional information the final rule is based on; and (6) interagency
materials related to the final rule. The docket, excluding interagency
review materials, will represent the record for judicial review. See
section 307(d)(7)(A) of the Act. The docket is available for public
review and copying at EPA's Air Docket, as indicated in the ADDRESSES
section at the beginning of this document.
B. Public Comments and Public Hearing
The EPA requests public comment on all aspects of this proposed
action. All public comments must be addressed to the Docket for this
rulemaking and received no later than October 21, 1996, at the address
indicated in the ADDRESSES section at the beginning of this document.
The EPA plans to convene a meeting of the NSR Reform FACA
Subcommittee in conjunction with the public comment period. In this
meeting the Subcommittee will review today's proposed rulemaking. A
transcript of the Subcommittee's meeting, will be available for public
inspection in EPA Air Docket No. A-90-37. The NSR Reform Subcommittee
meeting will be open to the public although seating may be limited.
Further information regarding the specific dates, location and starting
time will be published in the Federal Register prior to the meeting.
The EPA plans to hold a public hearing on this proposed action. A
public hearing is scheduled for 10:00 a.m. to 4:00 p.m. in Research
Triangle Park, North Carolina on September 23,1996. A notice announcing
additional information about the public hearing, including the specific
location, will be published in the Federal Register.
Persons wishing to make oral presentations at the public hearing
should contact the EPA as indicated in the DATES section at the
beginning of this preamble. The order of presentation will be based on
the order in which EPA receives requests to speak. Written statements
in lieu of, or in addition to, oral testimony are encouraged and may be
any length. If necessary, oral presentations will be time limited. The
hearing may be canceled if no requests to speak have been received 15
days prior to the scheduled hearing date.
C. Executive Order 12866
Section 3(f) of Executive Order 12866 (E.O. 12866) defines
``significant regulatory action'' for purposes of centralized
regulatory review by the Office of Management and Budget (OMB) to mean
any regulatory action that is likely to result in a rule that may:
(1) Have an annual effect on the economy of $100 million or more
or adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local or tribal governments or
communities;
(2) Create a serious inconsistency or otherwise interfere with
an action taken or planned by another agency;
(3) Materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or the rights and obligations of
recipients thereof; or
(4) Raise novel legal or policy issues arising out of legal
mandates, the President's priorities, or the principles set forth in
the Executive Order.
Drafts of this proposed rule and associated materials were reviewed
by the OMB because of the novel policy issues presented and anticipated
public interest in this action. Interagency review materials have been
placed in the public docket in accordance with section 307(d)(4)(B)(ii)
of the Act and section 6(a)(3)(E) of E.O. 12866 (including documents
identifying the substantive changes made between the draft submitted to
OMB for review and the action proposed, and the changes that were made
at the suggestion or recommendation of OMB).
The EPA has prepared a draft Regulatory Impact Analysis (RIA) for
these proposed rules and it is included in the docket for this
rulemaking. The EPA projects that as a result of the rule changes being
proposed today, the overall costs and burdens for the major NSR program
to decrease. As shown in the draft RIA for this rule, the EPA has
estimated the total annualized ``information collection request'' (ICR)
cost burden of the NSR permitting program under the proposed reforms to
be $27.6 million. This includes costs for preparation of permit
applications, including technology and environmental impact analyses,
record-keeping, and reporting requirements. It represents a projected
decrease of $11.1 million in the annual ICR cost burden to industry.
The burden to State and local air pollution control agencies is
expected to decrease by approximately $2.5 million, and to EPA by
approximately $200,000.
Other cost savings will be realized by sources that avoid major NSR
and thus become subject to minor NSR programs implemented at the State
and local levels. The greatest savings, based on industry comments
during the NSR Reform Subcommittee meetings, would be realized due to
the shorter processing time of a minor versus major NSR permit. Also,
the streamlining of some of the time-intensive aspects of the major
source requirements would have a similar effect. The total industry
savings would be difficult to predict given the diversity of industries
covered by this program; nevertheless, every facility would experience
less down time, quicker start up and resumption of
[[Page 38319]]
revenue generation. Further savings would accrue the extent that the
minor NSR technology control requirements and mitigation measures are
less costly than the major source requirements and measures. Industry
and State representatives reported that the difference in emissions
between minor and major source technology requirements are
insignificant in most cases. The incremental cost savings could be
quite large, however, if the minor source requirements are applicable.
The EPA solicits further comment on the cost savings that would be
derived from this proposed rulemaking.
The reader should note that the ICR cost burden reduction estimates
in the draft RIA are highly sensitive to the estimated impact of the
proposed revisions to the applicability test for modifications at
existing major stationary sources. The EPA estimates that 20 percent
fewer sources will be classified as major as a result of revising the
period for establishing the baseline for actual emissions from which to
calculate emissions increases to the highest 12 consecutive months
operation by the source. Another 6% reduction is anticipated from the
``clean unit'' and ``clean facility'' tests and the exclusion for
pollution control and pollution prevention projects. The EPA estimates
still another 25 percent of modifications, which would otherwise be
subject to major NSR, would be excluded due to allowing sources to use
projected future actual emissions to calculate emissions increases
rather than requiring the calculation to be based on the source's
potential to emit in each case. The EPA solicits comments on these
estimated impacts on the burden reduction of revising the regulations
for netting as proposed.
The proposed revisions include certain provisions which, while
generally intended to clarify the statutory Class I area protection
process under the existing PSD program and improve coordination between
the permitting authority and the FLM (an area of the PSD rules that has
been the subject of significant confusion and controversy), may, in
certain circumstances, place additional burdens on the permit applicant
and the permitting authority. The EPA requests public comment on
whether these proposed revisions represent a net increase in costs and
burdens for permitting authorities and permit applicants in comparison
with the existing rules related to the protection of Class I areas.
These issues are described in more detail in the Information Collection
Request (ICR) and will be further assessed in the draft RIA for the
final rule.
D. Regulatory Flexibility Act
Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, EPA must
prepare and make available for public comment an initial regulatory
flexibility analysis assessing the impact of a proposed rule on small
entities. See 5 U.S.C. 603. Small entities include small businesses,
small not-for-profit enterprises and government entities with
jurisdiction over populations of less than 50,000. See 5 U.S.C. 601.
However, the requirement to prepare a regulatory flexibility analysis
does not apply if the Administrator certifies that the rule will not,
if promulgated, have a significant economic impact on a substantial
number of small entities. See 5 U.S.C. 605(b).
The major NSR program applies to new major stationary sources and
major modifications to existing major stationary sources, as explained
elsewhere in this preamble. These rules reform the existing major NSR
rules, making them less burdensome and generally improving the rules
for any small entities that might be affected by the major NSR program.
Accordingly, the Administrator hereby certifies that these rules, if
promulgated, will not have a significant economic impact on a
substantial number of small entities.
E. Paperwork Reduction Act
The information collection requirements in this proposed rule have
been submitted for approval to the Office of Management and Budget
(OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An
Information Collection Request (ICR) document has been prepared by EPA
(ICR No. 1230.08) and a copy may be obtained from Sandy Farmer, OPPE
Regulatory Information Division; U.S. Environmental Protection Agency
(2136); 401 M St., SW.; Washington, DC 20460 or by calling (202) 260-
2740.
Section 110 of the Act requires all States to adopt into their SIPs
preconstruction review programs for new or modified stationary sources.
The programs must include provisions that meet the specific
requirements of Part C ``Prevention of Significant Deterioration''
(PSD) and Part D ``Plan Requirements for Nonattainment Areas'' of title
I of the Act for permitting construction and modification of major
stationary sources. Implementing regulations for State adoption of the
two NSR programs into their SIPs are promulgated at Secs. 51.160
through 51.166 and appendix S. Federal permitting regulations are
promulgated at Sec. 52.21 for PSD areas that are not covered by a SIP
program. Essentially a source cannot construct without securing a
permit to ensure that the requirements of the Act are met.
Part C of title I of the Act outlines specific preconstruction
permitting requirements for new and modified sources constructing in
areas that do not violate the NAAQS. These PSD rules, generally require
a prospective major new or modified source to: (1) Demonstrate that the
NAAQS and increments will not be exceeded, (2) ensure the application
of best available control technology (BACT), and (3) protect Federal
Class I areas from adverse impacts, including adverse impacts on air
quality related values (AQRVs).
Similarly, Part D of title I of the Act specifies requirements for
major new and modified sources constructing in areas designated as
nonattainment for a NAAQS pursuant to section 107 of the Act. The part
D provisions also apply to major source permitting in the Northeast
Ozone Transport Region as established under section 184 of the Act. The
part D rules generally require a major new or modified source to: (1)
ensure the application of controls which will achieve the lowest
achievable emission rate (LAER), (2) certify that all major sources in
a State owned or controlled by the same person (or persons) are in
compliance with all air emissions regulations, and (3) secure
reductions in actual emissions from existing sources equal to or
greater than the projected increase to show attainment and maintenance
of the applicable NAAQS (offsets). A public review and comment period
is required for all major source permit actions and some non-major
source actions.
A new source that would be major if operated at full capacity may
accept specific enforceable permit conditions to keep its emissions
below the major source threshold. Similarly existing major sources that
propose modifications that would produce significant emissions
increases as a result of new or modified emissions units may either
contemporaneously retire existing emissions units to generate emissions
reductions credits or take permit limits on future emissions or both to
avoid major NSR.
Prospective sources must conduct the necessary research, perform
the appropriate analyses and prepare permit applications with
documentation to support the conclusion that their project meets all
applicable Statutory and regulatory, requirement summarized above. The
specific activities are described further in the draft RIA and
[[Page 38320]]
the ICR for this proposed rulemaking, which are available from OPPE at
the address stated above and in the Docket for this rulemaking.
Permitting agencies, either State, local or Federal, review the
permit applications to affirm the proposed source or modification will
comply with the Act and applicable regulations, conduct the public
review process, issue the permit and then verify that a source has
constructed and subsequently operates in compliance with the permit
conditions. The EPA, more broadly, reviews a fraction of the total
applications and audits the State and local programs for its
effectiveness. Consequently, information prepared and submitted by the
source is essential for proper administration and management of the NSR
program.
Information that is to be submitted by sources as a part of their
permit application, should generally be a matter of public record given
the requirements for public participation in issuing permits. See
sections 165(a)(2) and 110(a)(2)(C), (D) and (F) of the Act.
Notwithstanding, to the extent that the information required for the
completeness of a permit is proprietary, confidential, or of a nature
that it could impair the ability of the source to maintain its market
position, that information is collected and handled according to EPA's
policies set forth in title 40, chapter 1, part 2, subpart B--
Confidentiality of Business Information (see 40 CFR part 2). See also
section 114(c) of the Act.
As mentioned previously, this proposed rulemaking would provide
substantial reduction in major NSR permits, which would translate into
a reduction in industry respondents and number of reviews by the
Federal, State, and local permitting agencies. The baseline for
comparison is drawn from that of the NSR program ICR approved in
September 1995. A copy may be obtained from OPPE at the address stated
above. As a result of this proposal, the estimated number of major PSD
permits is expected to decrease from 320 to 144. Major part D
nonattainment permits would decrease from 590 to 266. The number of
minor source actions would increase by the combined reduction in both
major source programs. The burden for PSD permits is estimated to
increase for industry respondents by about 11 hours per permit, and the
burden for part D permits should decrease by an estimated 5 hours per
permit. The burden for State and local permitting agencies is estimated
to decrease from 280 to 272 hours per permit for PSD, and stay about
the same for part D permits and minor source actions, 110 hours and
eight hours per permit respectively. The EPA burden on a per permit
basis is expected to remain unchanged--15 hours for all major source
permits and 2 hours for minor source permits. The resulting cost
savings is estimated to be $11 million for industry, about $2.5 million
for States and local agencies and about $250,000 for the EPA. These
estimates are discussed in detail in the draft RIA and the Information
ICR for this rulemaking.
Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, or disclose or
provide information to or for a Federal agency. This includes the time
needed to review instructions; develop, acquire, install, and utilize
technology and systems for the purposes of collecting, validating, and
verifying information, processing and maintaining information, and
disclosing and providing information; adjust the existing ways to
comply with any previously applicable instructions and requirements;
train personnel to be able to respond to a collection of information;
search data sources; complete and review the collection of information;
and transmit or otherwise disclose the information.
An Agency may not conduct or sponsor, and a person is not required
to respond to a collection of information unless it displays a
currently valid OMB control number. The OMB control numbers for EPA's
regulations are listed in 40 CFR part 9 and 48 CFR chapter 15.
Comments are requested on the Agency's need for this information,
the accuracy of the provided burden estimates, and any suggested
methods for minimizing respondent burden, including through the use of
automated collection techniques. Send comments on the ICR to the
Director, OPPE Regulatory Information Division; U.S. Environmental
Protection Agency (2136); 401 M St., SW.; Washington, DC 20460; and to
the Office of Information and Regulatory Affairs, Office of Management
and Budget, 725 17th St., NW., Washington, DC 20503, marked
``Attention: Desk Officer for EPA.'' Include the ICR number in any
correspondence. Since OMB is required to make a decision concerning the
ICR between 30 and 60 days after July 23, 1996, a comment to OMB is
best assured of having its full effect if OMB receives it by August 22,
1996. The final rule will respond to any OMB or public comments on the
information collection requirements contained in this proposal.
F. Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and tribal governments, in
the aggregate, or to the private sector, of $100 million or more in any
1-year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objectives of the rule. The provisions of section 205
do not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including tribal governments, it must have developed under
section 203 of the UMRA a small government agency plan. The plan must
provide for notifying potentially affected small governments, enabling
officials of affected small governments to have meaningful and timely
input in the development of EPA regulatory proposals with significant
Federal intergovernmental mandates, and informing, educating, and
advising small governments on compliance with the regulatory
requirements.
As shown in the draft RIA for this rule, EPA has estimated the
total annualized cost of the NSR permitting program including the
proposed reforms does not include a Federal mandate that may result in
expenditures of $100 million or more to either State, local, or tribal
governments in the aggregate, or to the private sector. Therefore, this
proposed rule is not subject to the requirements of sections 202 and
205 of the UMRA. In addition, EPA has determined that this proposed
rule contains no regulatory requirements that might significantly or
uniquely affect small governments, which generally do not have new
source permitting authority.
[[Page 38321]]
Executive Order 12875 (``Enhancing the Intergovernmental
Partnership'') is designed to reduce the burden to State, local, and
tribal governments of the cumulative effect of unfunded Federal
mandates, and recognizes the need for these entities to be free from
unnecessary Federal regulation to enhance their ability to address
problems they face and provides for Federal agencies to grant waivers
to these entities from discretionary Federal requirements.
In accordance with the purposes of Executive Order 12875, the EPA
has already initiated consultations with the government entities
affected by the NSR changes. From August 1992 through June 1993 EPA
convened three NSR simplification workshops, inviting representatives
from among those involved with and affected by the major source NSR
permitting program. In July 1993 EPA formed the NSR Reform Subcommittee
under the auspices of the CAAAC, a committee formed in accordance with
the Federal Advisory Committee Act (FACA) (5 U.S.C. App.) This
committee is composed of representatives from industry, State and local
air pollution control agencies, environmental organizations and other
Federal agencies. The purpose of this Subcommittee was to provide,
under the direction of the CAAAC, independent advice and counsel to the
EPA on policy and technical issues associated with reforming the major
NSR program. Specifically, the responsibilities of the Subcommittee
included developing draft recommendations on approaches for reforming
the major NSR rules in order to reduce complexity and perceived
impediments to speedy review of permit applications in the current
systems, while at the same time maintaining the environmental goals and
benefits embodied in the current approach. Upon proposal EPA
anticipates reconvening the NSR Reform FACA Subcommittee to review the
proposed revisions which will afford another opportunity for State,
local and Tribal Governments to participate in this rulemaking effort.
List of Subjects
40 CFR Part 51
Environmental protection, Administrative practice and procedure,
Air pollution control, Carbon monoxide, Hydrocarbons, Intergovernmental
relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Sulfur
oxides, BACT, LAER offsets and Class I increments.
40 CFR Part 52
Administrative practice and procedure, Air pollution control,
Carbon monoxide, Hydrocarbons, Intergovernmental relations, Lead,
Nitrogen dioxide, Ozone, Particulate matter, Sulfur oxides, BACT, and
Class I increments.
Dated: April 3, 1996.
Carol M. Browner,
Administrator.
For the reasons set forth in the preamble, parts 51 and 52 of
chapter I of title 40 of the Code of Federal Regulations are proposed
to be amended as follows:
PART 51--REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF
IMPLEMENTATION PLANS
1. The authority citation for part 51 is revised to read as
follows:
Authority: 42 U.S.C. 7401-7671q.
2. Section 51.165 is amended as follows:
a. Revising paragraph (a)(1)(i);
b. Revising paragraph (a)(1)(iv)(A);
c. Amending paragraph (a)(1)(v)(C)(6) by adding the words
``Standing alone,'' at the beginning of the sentence, and revising the
word ``An'' to read ``an'';
d. Revising paragraph (a)(1)(v)(C)(8);
e. Adding new paragraphs (a)(1)(v)(C) (10) through (15);
f. Adding new paragraphs (a)(1)(v) (D) through (G);
g. Revising paragraph (a)(1)(vi)(C)(1);
h. Removing the word ``and'' at the end of paragraph
(a)(1)(vi)(E)(2), adding the word ``and'' at the end of paragraph
(a)(1)(vi)(E)(3), and revising paragraph (a)(1)(vi)(E)(4);
i. Redesignating paragraph (a)(1)(x) as (a)(1)(x)(A)
j. Amending newly redesignated paragraph (a)(1)(x)(A) by adding the
words ``Particulate matter: 15 tpy of PM-10 emissions.'' at the end of
the list of pollutant emission rates;
k. Adding new paragraphs (a)(1)(x) (B) through (F);
l. Revising paragraph (a)(1)(xii)(B);
m. Amending paragraph (a)(1)(xii)(C) by removing the word
``reviewing'' and adding in its place ``permitting'';
n. Adding new paragraph (a)(1)(xii)(F);
o. Amending paragraph (a)(1)(xxii) by removing the word ``it'' and
adding in its place ``the project'';
p. Revising paragraph (a)(1)(xxv) introductory text and
(a)(1)(xxv)(A);
q. Removing paragraph (a)(1)(xxv)(B) and redesignating paragraphs
(a)(1)(xxv) (C) and (D) as newly redesignated paragraphs (a)(1)(xxv)
(B) and (C);
r. Adding new paragraphs (a)(1) (xxvi) through (xxxiv);
s. Redesignating paragraph (a)(2) as (a)(2)(i);
t. Adding new paragraph (a)(2)(ii);
u. Revising paragraph (a)(3)(ii)(C);
v. Adding new paragraph (a)(5)(iii);
w. Adding new paragraphs (a) (6) through (16).
Sec. 51.165 Permit requirements.
(a) * * *
(1) * * *
(i)(A) Stationary source means any building, structure, facility,
installation, or stationary internal combustion engine which emits or
which may emit any air pollutant subject to regulation under the Act.
(B) A stationary source does not include emissions resulting
directly from an internal combustion engine used for transportation
purposes, or from a nonroad engine or nonroad vehicle.
* * * * *
(iv)(A) Major stationary source means:
(1) Any stationary source of air pollutants which emits, or has the
potential to emit, 100 tons per year or more of any pollutant subject
to regulation under the Act, except that lower emissions thresholds
shall apply as follows:
(i) 70 tons per year of PM-10 or, where applicable, 70 tons per
year of a specific PM-10 precursor, in any serious nonattainment area
for PM-10.
(ii) 50 tons per year of volatile organic compounds in any serious
nonattainment area for ozone.
(iii) 50 tons per year of volatile organic compounds in an area
within an ozone transport region except for any severe or extreme
nonattainment area for ozone.
(iv) 25 tons per year of volatile organic compounds in any severe
nonattainment area for ozone.
(v) 10 tons per year of volatile organic compounds in any extreme
nonattainment area for ozone.
(vi) 50 tons per year of carbon monoxide in any serious
nonattainment area for carbon monoxide, where stationary sources
contribute significantly to carbon monoxide levels in the area (as
determined under rules issued by the Administrator);
(2) For the purposes of applying the requirements of paragraph
(a)(12) of this section to stationary sources of nitrogen oxides
located in an ozone nonattainment area or in an ozone transport region,
any stationary source which emits, or has the potential to emit,
nitrogen oxides emissions as follows:
(i) 100 tons per year or more of nitrogen oxides in any ozone
[[Page 38322]]
nonattainment area classified as marginal or moderate.
(ii) 100 tons per year or more of nitrogen oxides in any ozone
nonattainment area classified as a transitional, submarginal, or
incomplete or no data area, when such area is located in an ozone
transport region.
(iii) 100 tons per year or more of nitrogen oxides in any area
designated under section 107(d) of the Act as attainment or
unclassifiable for ozone that is located in an ozone transport region.
(iv) 50 tons per year or more of nitrogen oxides in any serious
nonattainment area for ozone.
(v) 25 tons per year or more of nitrogen oxides in any severe
nonattainment area for ozone.
(vi) 10 tons per year or more of nitrogen oxides in any extreme
nonattainment area for ozone; or
(3) Any physical change that would occur at a stationary source not
qualifying under paragraphs (a)(1)(iv)(A) (1) or (2) of this section as
a major stationary source, if the change would constitute a major
stationary source by itself.
* * * * *
(v) * * *
(C) * * *
(8) The addition, replacement, or use of a pollution control
project at an existing emissions unit unless the pollution control
project will result in a significant net increase in representative
actual annual emissions of any pollutant regulated under the Act and
the permitting authority determines that this increase will cause or
contribute to a violation of any national ambient air quality standard
or any maximum increase over baseline concentrations (in accordance
with Sec. 51.166(c) or Sec. 52.21(c) of this chapter) or will have an
adverse impact on visibility in accordance with the definition at
Sec. 51.301(a). For the purpose of this paragraph (a)(1)(v)(C)(8), in
lieu of the source's representative actual annual emissions, the
emissions levels used for the source in the most recent air quality
impact analysis in the area conducted for the purpose of title I, if
any, may be used.
* * * * *
(10) Any activity undertaken at an existing emissions unit for
which a federally enforceable emission limit has been established,
provided the activity or project will not increase the maximum
emissions rate, in pounds or kilograms per hour, above the maximum
emissions rate achievable by the emission unit at any time during the
180 consecutive days which precede the date of the activity or project
and the emissions increase is determined by:
(i) Material balances, continuous emission monitoring data, or
manual emission tests using the EPA-approved procedures, where
available, and conducted under such conditions as the permitting
authority will specify to the owner or operator based on representative
performance of the emission units affected by the activity or project,
including at least three valid test runs conducted before, and at least
three valid test runs conducted after, the activity or project with all
operating parameters which may affect emissions held constant to the
maximum feasible degree for all such test runs; or
(ii) Emission factors as specified in the latest issue of
``Compilation of Air Pollutant Emission Factors,'' EPA Publication No.
AP-42, available from EPA, MD14, Emission Inventory and Factors Group,
RTP, NC 27711, or other emission factors determined by the permitting
authority to be superior to AP-42 emission factors, in such cases where
use of emission factors demonstrates that the emission level resulting
from the activity or project will clearly not increase emissions.
(11) Any activity undertaken at an existing emissions unit for
which a federally enforceable emission limit has been established,
provided the federally enforceable emissions limit at the time of the
change is comparable to the emission limit that, considering the air
quality designation of the area where the source is located, would
result from a current review in accordance with either paragraph (a)(2)
of this section or regulations approved pursuant to Sec. 51.166(j), or
Sec. 52.21(j) of this chapter, for emission units of the same class or
source category. The permitting authority may presume that a source
satisfies this paragraph (a)(1)(v)(C)(11) if:
(i) The activity would occur no later than 120 consecutive months
from the date of issuance of the permit, issued under either this
section or regulations approved pursuant to Sec. 51.166 or Sec. 52.21
of this chapter, that established the currently applicable emission
limit for the emissions unit;
(ii) The activity would occur no later than 120 consecutive months
from the date of issuance of the permit, issued under regulations
approved pursuant to Secs. 51.160 through 51.164, that established the
currently applicable emission limit for the emissions unit, provided
the permit was issued under regulations that were determined by the
Administrator to provide for permits that contain emission limitations
satisfying this paragraph (a)(1)(v)(C)(11); or
(iii) The activity would occur no later than 60 consecutive months
from the date on which the permitting authority made a determination,
with public notice and opportunity for public comment consistent with
Sec. 51.161, that the emissions satisfied paragraph
(a)(1)(v)(C)(10)(iii) of this section.
(12) Any activity undertaken at an existing emissions unit for
which a federally enforceable emission limit has been established,
provided the activity would not require a revision to, or cause a
violation of, any federally enforceable limit or condition in a permit
issued either under regulations approved pursuant to Secs. 51.160
through 51.166 or under Sec. 52.21 of this chapter.
(13) Any activity undertaken at an existing emissions unit for
which a federally enforceable emission limit has been established,
provided the activity or project does not include the replacement or
reconstruction of an emissions unit.
(14) Any activity undertaken at an existing major stationary
source, provided:
(i) The activity would not require a revision to, or cause a
violation of, any federally enforceable limit or condition in a permit
issued under either regulations approved pursuant to Secs. 51.160
through 51.166 or Sec. 52.21 of this chapter; and
(ii) The entire major stationary source was permitted, and received
the currently applicable emission limits for all emissions units under
either this section or regulations approved pursuant to Sec. 51.166 or
Sec. 52.21 of this chapter no more than 120 consecutive months prior to
the proposed activity.
(D) For the purposes of applying the requirements of this section
to any source of volatile organic compounds locating in a serious or
severe ozone nonattainment area:
(1) A proposed modification shall not be considered to result in a
significant net emissions increase for volatile organic compounds and
is therefore not a major modification for if the project's net increase
of volatile organic compounds (any proposed creditable increases and
creditable decreases in emissions of volatile organic compounds at the
source that are federally enforceable and occur between the date of
permit application for the proposed modification and the date that the
proposed modification begins to emit) from the proposed modification
results in no increase of volatile organic compounds;
(2) The provisions of this section shall not apply to any and all
discrete
[[Page 38323]]
emissions unit(s) (or other operations or pollutant emitting
activities) that are part of a proposed modification (that is otherwise
a major modification) at an existing major stationary source that
emits, or has the potential to emit, less than 100 tons per year of
volatile organic compounds if such source proposes creditable emissions
reductions from the source to internally offset the emissions increase
from the selected discrete emissions unit(s) (or other operations or
pollutant emitting activities) at a ratio of at least 1.3:1.
(E) For the purpose of applying the requirements of paragraph
(a)(12) of this section to modifications at major stationary sources of
nitrogen oxides located in ozone nonattainment areas or in ozone
transport regions, any significant net emissions increase of nitrogen
oxides is considered significant for ozone.
(F) Any physical change in, or change in the method of operation of
a major stationary source of volatile organic compounds located in an
extreme nonattainment area for ozone which results in any increase in
emissions of volatile organic compounds from any discrete operation,
emissions unit, or other pollutant emitting activity at the source
shall be considered a significant net emissions increase and a major
modification for ozone.
(G) For the purposes of applying the requirements of paragraph
(a)(13) of this section to modifications at major stationary sources of
PM-10 precursors, any significant net emissions increase of a PM-10
precursor is considered significant for PM-10.
(vi) * * *
(C) * * *
(1) It occurs within a reasonable contemporaneous period to be
specified by the reviewing authority, except that for emissions of
volatile organic compounds from sources locating in serious and severe
ozone nonattainment areas the contemporaneous period shall be the
period of 5 consecutive calendar years that ends with the full calendar
year in which such increase is to occur; and
* * * * *
(E) * * *
(4) It has approximately the same qualitative significance for
public health and welfare as that attributed to the increase from the
particular change such that, at a minimum, the decrease is sufficient
to prevent the proposed increase from causing or contributing to a
violation of any national ambient air quality standard or maximum
allowable increase over baseline concentrations (in accordance with
either Sec. 51.166(c) or Sec. 52.21(c) of this chapter) or having an
adverse impact on visibility in accordance with the definition at
Sec. 51.301(a).
* * * * *
(x) * * *
(B) Notwithstanding the significant emissions rate for ozone under
paragraph (a)(1)(x)(A) of this section, significant means any net
emissions increase, as defined under paragraph (a)(1)(vi) of this
section, in actual emissions of volatile organic compounds that would
result from any physical change in, or change in the method of
operation, of a major stationary source locating in a serious or severe
ozone nonattainment area if such net emissions increase of volatile
organic compounds exceeds 25 tons per year.
(C) For the purposes of applying the requirements of paragraph
(a)(12) of this section to modifications at major stationary sources of
nitrogen oxides located in an ozone nonattainment area or in an ozone
transport region, the significant emission rates and other requirements
for volatile organic compounds in paragraphs (a)(1)(x)(A) and (B) of
this section shall apply to nitrogen oxides emissions.
(D) For the purposes of applying the requirements of paragraph
(a)(13) of this section, where applicable, to a major stationary source
of a PM-10 precursor located in a PM-10 nonattainment area, the
significant emission rate for a PM-10 precursor is 40 tons per year or
more of that precursor.
(E) Notwithstanding the significant emissions rate for carbon
monoxide under paragraph (a)(1)(x)(A) of this section, a net emissions
increase in actual emissions of carbon monoxide that would result from
any physical change in, or change in the method of operation, of a
stationary source in a serious nonattainment area for carbon monoxide
is significant if such increase equals or exceeds 50 tons per year,
provided the Administrator has determined that stationary sources
contribute significantly to carbon monoxide levels in that area.
(F) Notwithstanding the significant emissions rates for ozone under
paragraphs (a)(1)(x)(A) and (B) of this section, any increase in actual
emissions of volatile organic compounds from any emissions unit at a
major stationary source of volatile organic compounds located in an
extreme nonattainment area for ozone shall be considered a significant
net emissions increase.
(xii) * * *
(B) Actual emissions shall be calculated using the unit's actual
operating hours, production rates, and types of materials processed,
stored, or combusted for any 12 consecutive months during the 120
consecutive months that precede the commencement of construction of a
proposed physical or operational change at the source, and any current,
federally enforceable limitations on emissions required by the Act,
including but not limited to, best available control technology (as
defined at Sec. 51.166(b)(12)), lowest achievable emission rate,
reasonably available control technology, or emissions standards for
hazardous air pollutants under section 112 of the Act.
* * * * *
(F) In lieu of paragraphs (a)(1)(xii)(D) and (E) of this section,
the plan may provide that for any emissions unit, actual emissions of
the unit following a physical or operational change shall equal the
representative actual annual emissions of the unit, provided the source
owner or operator maintains and submits to the permitting authority, on
an annual basis for a period of 5 years from the date the unit resumes
regular operation, information demonstrating that the physical or
operational change did not result in an emissions increase. A longer
period, not to exceed 10 years, may be required by the permitting
authority if the permitting authority determines such a period to be
more representative of normal source post-change operations.
* * * * *
(xxv) Pollution control project means:
(A) Any activity or project undertaken at an existing emissions
unit which, as its primary purpose, reduces emissions of air pollutants
from such unit. Such activities or projects do not include the
replacement of an existing emissions unit with a newer or different
unit, or the reconstruction of an existing emissions unit, and are
limited to any of the following:
(1) The installation of conventional or advanced flue gas
desulfurization, or sorbent injection for SO2;
(2) Electrostatic precipitators, baghouses, high efficiency
multiclones, or scrubbers for particulate matter or other pollutants;
(3) Flue gas recirculation, low-NOX burners, selective non-
catalytic reduction or selective catalytic reduction for NOX;
(4) Regenerative thermal oxidizers, catalytic oxidizers,
condensers, thermal incinerators, flares, or carbon absorbers for
volatile organic compounds or hazardous air pollutants;
(5) Activities or projects undertaken to accommodate switching to
an inherently less polluting fuel, including
[[Page 38324]]
but not limited to, natural gas or coal reburning, or the cofiring of
natural gas and other inherently less polluting fuels, for the purpose
of controlling emissions, and including any activity that is necessary
to accommodate switching to an inherently less polluting fuel;
(6) Pollution prevention projects which the permitting authority
has determined through a process consistent with Sec. 51.161 to be
environmentally beneficial. Pollution prevention projects that may
result in an unacceptable increased risk from the release of hazardous
pollutants are not environmentally beneficial; and
(7) Installation of a technology, for purposes set forth in
paragraph (a)(1)(xxv) of this section, which is not listed in
paragraphs (a)(1)(xxv)(A)(1) through (5) of this section but meets the
following:
(i) Its effectiveness in reducing emissions has been demonstrated
in practice; and
(ii) It is determined by the permitting authority to be
environmentally beneficial;
* * * * *
(xxvi) Undemonstrated technology or application means any system,
process, material, or treatment technology (including pollution
prevention), that has not been demonstrated in practice, but would have
a substantial likelihood to:
(A) Operate effectively; and
(B) Achieve either equal or greater continuous reductions of air
pollutant emissions than any demonstrated system at lower cost, lower
energy input, or with less environmental impact.
(xxvii) Complete means, in reference to an application for a permit
required under this section, that the permitting authority has deemed
the application to contain the information necessary to begin formal
review of the application. Determining an application complete for the
purpose of beginning formal review does not preclude the permitting
authority from requiring additional information as may be needed to
determine whether the applicant satisfies all requirements of this
section.
(xxviii) Demonstrated in practice means, for the purposes of this
section, a control technology that has been--
(A) Listed in or required by any of the following:
(1) The EPA's RACT/BACT/LAER Clearinghouse;
(2) A major source construction permits issued pursuant to either
part C or D of title I of the Act;
(3) An emissions limitations contained in a federally-approved
plan, excluding any emissions limitations established by permits issued
pursuant to programs for non-major sources;
(4) A permits or standard under either section 111 or 112 of the
Act; and
(5) The EPA's Alternative Control Techniques documents and Control
Techniques Guidelines; or
(B) Notwithstanding paragraph (a)(1)(xxviii)(A) of this section,
installed and operating on an emissions unit (or units) which:
(1) Has operated at a minimum of 50 percent of design capacity for
6 months; and
(2) The pollution control efficiency performance has been verified
with either:
(i) A performance test; or
(ii) Performance data collected at the maximum design capacity of
the emissions unit (or units) being controlled, or 90 percent or more
of the control technology's designed specifications.
(xxix) Pollution prevention means any activity that through process
changes, product reformulation or redesign, or substitution of less
polluting raw materials, eliminates or reduces the release of air
pollutants and other pollutants to the environment (including fugitive
emissions) prior to recycling, treatment, or disposal; it does not mean
recycling (other than certain ``in-process recycling'' practices),
energy recovery, treatment, or disposal.
(xxx) Plantwide applicability limit means a plantwide federally
enforceable emission limitation established for a stationary source
such that subsequent physical or operational changes resulting in
emissions that remain less than the limit are excluded from
preconstruction review under this section.
(xxxi) Plantwide applicability limit major modification means,
notwithstanding the requirements of paragraph (a)(1)(v) of this
section, any increase in the emissions rate, in tons per year, over the
plantwide applicability limit. Any emissions increase of volatile
organic compounds shall be considered an increase for ozone.
(xxxii)(A) Nonroad engine means, except as discussed in paragraph
(a)(1)(xxxii)(B) of this section, any internal combustion engine:
(1) In or on a piece of equipment that is self-propelled or that
serves a dual purpose by both propelling itself and performing another
function (such as garden tractors, off-highway mobile cranes and
bulldozers);
(2) In or on a piece of equipment that is intended to be propelled
while performing its function (such as lawnmowers and string trimmers);
or
(3) That, by itself or in or on a piece of equipment, is portable
or transportable, meaning designed to be and capable of being carried
or moved from one location to another. Indicia of transportability
include, but are not limited to, wheels, skids, carrying handles,
dolly, trailer, or platform.
(B) An internal combustion engine is not a nonroad engine if:
(1) The engine is used to propel a motor vehicle or a vehicle used
solely for competition, or is subject to standards promulgated under
section 202 of the Act;
(2) The engine is regulated by a Federal new source performance
standard promulgated under section 111 of the Act; or
(3) The engine otherwise included in paragraph (a)(1)(xxxii)(A)(3)
of this section remains or will remain at a location for more than 12
consecutive months, or a shorter period of time for an engine located
at a seasonal source. A location is any single site at a building,
structure, facility, or installation. Any engine (or engines) that
replaces an engine at a location and that is intended to perform the
same or similar function as the engine replaced will be included in
calculating the consecutive time period. An engine located at a
seasonal source is an engine that remains at a seasonal source during
the full annual operating period of the seasonal source. For purposes
of this paragraph (a)(1)(xxxii)(B)(3), a seasonal source is a
stationary source that remains in a single location on a permanent
basis (i.e., at least 2 years) and that operates at that single
location approximately 3 months (or more) each year. This paragraph
(a)(1)(xxxii)(B)(3) does not apply to an engine after the engine is
removed from the location.
(xxxiii) Nonroad vehicle means a vehicle that is powered by a
nonroad engine and that is not a motor vehicle or a vehicle used solely
for competition.
(xxxiv) Stationary internal combustion engine means:
(A) Any internal combustion engine that is regulated by a Federal
new source performance standard promulgated under section 111 of the
Act; or
(B) Any internal combustion engine that is none of the following:
(1) A nonroad engine;
(2) An engine used to propel a motor vehicle or a vehicle used
solely for competition; or
(3) An engine subject to standards promulgated under section 202 of
the Act.
(2) * * *
[[Page 38325]]
(ii) Control technology review.
(A) In determining the lowest achievable emission rate the
applicant shall consider all control technology alternatives that have
been demonstrated in practice pursuant to paragraph (a)(1)(xxviii)(A)
of this section prior to the date on which the permit application is
complete, and paragraph (a)(1)(xxviii)(B) of this section 90 days prior
to the date on which the permit application is complete.
(B) The plan may establish a cut-off date as the date on or
subsequent to the date that an application is complete pursuant to
paragraph (a)(6) of this section, after which the permit applicant will
not be required to consider control technology alternatives that are
identified through public comments and that are in addition to those
alternatives required under paragraph (a)(2)(ii)(A) of this section,
unless the permitting authority determines that the alternatives
warrant further consideration by the applicant.
(3) * * *
(ii) * * *
(C)(1) Emissions reductions achieved by shutting down an existing
source or curtailing production or operating hours below baseline
levels may be generally credited if:
(i) Such reductions are surplus, permanent, quantifiable, and
federally enforceable;
(ii) The area has an EPA-approved attainment plan, except that the
plan may provide that the reductions described in paragraph
(a)(3)(ii)(C)(1)(i) of this section may be credited in the absence of
an EPA-approved attainment demonstration in areas where the Act does
not require an attainment demonstration, including any area designated
attainment or unclassifiable for ozone (areas) in an ozone transport
region and any marginal or nonclassified ozone nonattainment area; and
(iii) The shutdown or curtailment occurred on or after the date
specified for this purpose in the attainment plan, and if such date is
on or after the date of the most recent emissions inventory used in the
plan's demonstration of attainment.
(2) Where the plan does not specify a cutoff date for shutdown
credits, the date of the most recent emissions inventory or attainment
demonstration, as the case may be, shall apply. However, in no event
may credit be given for shutdowns which occurred prior to August 7,
1977.
(3) For purposes of paragraph (a)(3)(ii)(C)(1)(iii) of this
section, a permitting authority may choose to consider a prior shutdown
or curtailment to have occurred after the date of its most recent
emissions inventory, if the inventory explicitly includes as current
existing emissions the emissions from such previously shutdown or
curtailed sources.
(4) The reductions described in paragraph (a)(3)(ii)(C)(1) of this
section may be credited in the absence of an approved attainment
demonstration in an area where an attainment demonstration is or will
be required only if the shutdown or curtailment occurred on or after
the date the new source permit application is filed, or if the
applicant can establish that the proposed new source is a replacement
for the shutdown or curtailed source, and the cutoff date provisions of
paragraph (a)(3)(ii)(C) of this section are observed.
Alternative 1--paragraphs (a)(3)(iii)(C)(5) and (a)(3)(iii)(C)(6):
(5) Notwithstanding paragraph (a)(3)(ii)(C)(4), the plan may
provide that for ozone nonattainment areas the reductions described in
paragraph (a)(3)(ii)(C)(1) of this section, occurring after November
15, 1990, may be credited in the absence of an EPA-approved attainment
demonstration in an area where an attainment demonstration is or will
be required if the following conditions are met as they come due:
(i) The State has submitted a complete emissions inventory as
required by section 182(a)(1) of the Act;
(ii) The State has submitted complete revisions to its new source
review permitting program as required under section 182(a)(2)(C) of
title I of the Act;
(iii) The State has submitted the 15 percent volatile organic
compounds reduction plan required under section 182(b)(1)(A) of the Act
for moderate (or higher) ozone nonattainment areas;
(iv) The State has submitted the attainment demonstration required
for moderate ozone nonattainment areas under section 182(b)(1)(A) of
the Act or serious (or higher) ozone nonattainment areas under section
182(c)(2) of the Act;
(v) The State has submitted the 3 percent reduction plan for
serious (or higher) ozone nonattainment areas under section
182(c)(2)(B) of the Act; and
(vi) The State has submitted milestone demonstrations for serious
(or higher) ozone nonattainment areas under section 182(g)(2) of the
Act.
(6) If any of the submissions included in paragraph
(a)(3)(ii)(C)(5) of this section are delinquent, or deemed incomplete
or disapproved by the Administrator, then at such time the restrictions
of paragraph (a)(3)(ii)(C)(4) of this section are in effect. However,
during review of a permit application, if a State becomes delinquent
for any of these submissions, or a submission is deemed incomplete or
disapproved by the Administrator, the plan may allow the reductions to
remain creditable if the permit application was complete (as determined
in writing by the reviewing authority) before the State became
delinquent or had a submission deemed incomplete or disapproved by the
Administrator.
Alternative 2--paragraph (a)(3)(iii)(C)(5) only:
(5) Notwithstanding paragraph (a)(3)(ii)(C)(4) of this section, the
plan may provide that the reductions described in paragraph
(a)(3)(ii)(C) of this section may be credited in the absence of an EPA-
approved attainment demonstration if such reductions occurred after the
last day of the baseline year of the most recent base year emissions
inventory used (or to be used) in the plan.
* * * * *
(5) * * *
(iii) The reviewing authority shall provide an opportunity for
judicial review in State court of the final permit action by the
applicant and any person who participated in the public participation
process provided pursuant to this part. The plan may provide that the
opportunity for judicial review shall be the exclusive means by which
citizens may obtain judicial review of the terms and conditions of
permits, and may require that such actions for judicial review be filed
no later than a reasonable period after the final permit action. If
such a limited time period for judicial review is provided in the plan,
then the plan shall provide that petitions for judicial review of final
permit actions nevertheless can be filed after the deadline if they are
based sol
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
ely on grounds arising after the deadline for judicial review
and if filed within a reasonable period specified in the plan after the
new grounds for review arise.
(6) Complete application criteria.
(i) The plan shall provide that the permitting authority shall--
(A) Determine that a permit application is complete or deficient
based on the permitting authority's consideration of determinations,
analyses and other information contained in the application, and
adequacy thereof, as specified in paragraphs (a)(6)(ii) through (iii)
of this section; and
(B) Notify each applicant within a specified time period as to
either the completeness of the application or any deficiencies in the
application or
[[Page 38326]]
information submitted. In the event of such a deficiency, the date of
receipt of the complete application shall be the date on which the
permitting authority has received all required information.
(ii) The plan shall provide that such information shall include:
(A) A description of the nature, location, design capacity, and
typical operating schedule of the source or modification, including
specifications and drawings showing its design and plant layout;
(B) A detailed schedule for construction of the source or
modification;
(C)(1) A detailed description of the system of continuous emissions
reduction which the applicant has submitted in a permit application for
the source or modification to qualify for either the lowest achievable
emission rate or an approved undemonstrated technology in accordance
with the waiver provision under paragraph (a)(8) of this section; and
(2) All information used or consulted by the applicant in
recommending a system of continuous emissions reduction that qualifies
as either the lowest achievable emission rate or an approved
undemonstrated technology; and
(D) All information necessary to document that the owner or
operator of the proposed source or modification has demonstrated that
all major stationary sources owned or operated by such person (or by
any entity controlling, controlled by, or under common control with
such person) in such State are subject to emission limitations and are
in compliance, or on a schedule for compliance, with all applicable
emission limitations and standards under the Act.
(iii) The plan shall provide that an application shall not be
considered complete unless the permit application has been registered
on the applicable EPA electronic bulletin board. To register, at a
minimum, the following must be provided:
(A) Name and type of source;
(B) Nature of proposed project, i.e., new facility or modification;
(C) Proposed location of the source in state/county (including
Universal Transverse Mercator coordinates) and the distance between the
source and each Class I area within 250 kilometers;
(D) Anticipated allowable emissions, or increase in emission rate,
for each affected air pollutant regulated under the Act;
(E) Source contact mailing address and telephone number; and
(F) The agency responsible for issuing the permit.
(7) Public participation.
(i) The plan shall provide that prior to issuing a permit under
this section the requirements under Sec. 51.161 shall be met;
(ii) The plan may set forth the minimum information which must be
submitted by public commenters to accompany any recommendations for
control technology alternatives for which permit applicants would not
otherwise be responsible to consider in determining the lowest
achievable emission rate as of the date an application is complete
according to paragraph (a)(2)(ii) of this section. Such information may
include the name and location of the source utilizing the control
technology, manufacturer and type of control device, date of
installation and operation of control device, and performance
requirements and available test data; and
(iii) The plan shall provide that--
(A) After any cut-off date established in accordance with paragraph
(a)(2)(ii)(B) of this section, the permitting authority shall notify a
permit applicant within 10 working days from the date of receipt of a
public comment concerning any control technology alternatives that the
permitting authority determines to warrant further consideration by the
applicant; and
(B) The permitting authority shall make available in the public
record all information that was submitted with public comment regarding
control technology alternatives and provide the basis for its decision
to either require or not require the permit applicant to further
consider such control technology alternatives.
(8) Undemonstrated technology or application waiver.
(i) The plan may provide that an owner or operator of a proposed
major stationary source or major modification may satisfy the
requirements of paragraph (a)(2)(ii) of this section through the use of
an undemonstrated technology or application as set forth in this
section. The plan may provide that the owner or operator shall provide
to the permitting authority a written request for approval of an
undemonstrated technology or application as part of the permit
application.
(ii) The plan may provide that the permitting authority may approve
a system of undemonstrated technology or application for a particular
source or modification if:
(A) The proposed control system would not cause or contribute to an
unreasonable risk to public health, welfare, or safety in its operation
or function;
(B) The owner or operator agrees to achieve a level of continuous
emissions reduction equivalent to that which would have been required
under paragraph (a)(2)(ii) of this section, by a date specified by the
permitting authority. Such date shall not be later than 2 years from
the time of startup or 5 years from permit issuance;
(C) The source or modification would meet the requirements
equivalent to those in paragraph (a)(2) of this section, based on the
emissions rate that the stationary source employing the system of
undemonstrated technology or application would be required to meet on
the date specified by the permitting authority;
(D) The source or modification would not, before the date specified
by the permitting authority, cause or contribute to any violation of an
applicable national ambient air quality standard; and
(E) All other applicable requirements including those for public
participation have been met.
(iii) The plan shall provide that the permitting authority shall
withdraw any approval to employ a system of undemonstrated technology
or application made under this system if:
(A) The proposed system fails by the specified date to achieve the
required continuous emissions reduction rate;
(B) The proposed system fails before the specified date so as to
contribute to an unreasonable risk to public health, welfare, or
safety; or
(C) The permitting authority decides at any time that the proposed
system is unlikely to achieve the required level of control or to
protect the public health, welfare, or safety.
(iv) The plan shall provide that, if the permitting authority
withdraws approval of a system of undemonstrated technology or
application, the owner or operator shall bring the affected emissions
unit(s) into compliance with the reference lowest achievable emission
rate within 18 months from the date of withdrawal.
(v) The plan shall provide that the permitting authority shall
include, as a minimum, the following information in a waiver issued
pursuant to paragraph (a)(8) of this section:
(A) The undemonstrated technology or application's emission control
performance objective and the applicable reference lowest achievable
emission rate;
(B) The marginal and gross failure emission limits as defined by
the permitting authority on a case-by-case basis; and
[[Page 38327]]
(C) Identification and classification of potential failure modes
and associated contingency measures.
(vi) The plan shall provide that if, by the date established in
paragraph (a)(8)(ii)(B) of this section, the undemonstrated technology
or application does not achieve the permitted emission limit, but
actual emissions are equal to or less than the lowest achievable
emission rate referenced in the permit, the permitting authority shall:
(A) Issue a final permit with the emissions limit equal to the
undemonstrated technology or application's consistently achieved actual
emission rate; and
(B) Report the final permit limits to the EPA's RACT/BACT/LAER
Clearinghouse as a demonstrated control technology.
(vii) The plan shall provide that if, by the date established in
paragraph (a)(8)(ii)(B) of this section, the actual emissions from the
undemonstrated technology or application constitute marginal failure
the owner or operator may petition the permitting authority to permit
the undemonstrated technology or application to operate at its actual
emissions limit. Accordingly, the permitting authority may either:
(A) Approve the petition and proceed in accordance with paragraph
(a)(8)(vi) of this section; or
(B) Disapprove the petition and require the owner or operator to
comply with paragraph (a)(8)(iv) of this section.
(viii) The plan shall provide that if, at any time prior to or on
the date established in paragraph (a)(8)(ii)(B) of this section, the
actual emissions from the undemonstrated technology or application
constitute gross failure--
(A) The permitting authority shall withdraw approval pursuant to
paragraph (a)(8)(iv) of this section; and
(B) The owner or operator shall mitigate all emissions increases
above the emissions limit equivalent to the applicable reference lowest
achievable emissions rate by reducing actual emissions.
(ix) The plan shall provide that the permitting authority submit to
the Administrator a copy of the approval of the system of
undemonstrated technology or application within 30 days of its
approval.
(x) The plan shall provide that the permitting authority shall
limit the number of waivers granted to the number necessary to
ascertain whether or not such system complies with sections
111(j)(1)(A)(ii) and (iii) of the Act.
(9) Plantwide applicability limit.
(i) Applicability. The plan may provide that the owner or operator
of a proposed or existing major stationary source may request the
permitting authority to approve a plantwide applicability limit for any
one or more pollutants, and that the permitting authority may approve a
plantwide applicability limit in accordance with paragraphs (a)(9)(ii)
through (iv) of this section.
(ii) Procedure. The plan shall provided that a plantwide
applicability limit for:
(A) A proposed major stationary source may be established only
through a process that complies with paragraph (a)(7) of this section;
(B) An existing major stationary source may be established only
through a procedure consistent with Sec. 51.161, and with at least 30
days allowed for public notice and opportunity for comment.
(iii) Emission limitations and conditions.
(A) The plan shall provide that a plantwide applicability limit
shall be established based on either:
(1) Plantwide actual emissions (not to exceed current allowable
emissions), including a reasonable operating margin that is less than
the applicable significant emissions rate as defined under paragraph
(a)(1)(x) of this section; or
(2) Source-wide limits on annual emissions established in a permit
issued within the immediately preceding 5 years under regulations
approved pursuant to this section, where the source-wide emissions
limits were completely offset and relied upon in an approved state
attainment demonstration plan.
(B) The plan shall provide that any plantwide applicability limit
emissions limitations shall be achievable through application of
production processes or available methods, systems, and techniques
including, but not limited to, emissions control equipment, fuel
cleaning or treatment, fuel combustion techniques, substitution of less
polluting materials, or limits on production that represent normal
source operations.
(C) The plan shall provide that specific terms and conditions which
assure the practical enforceability of plantwide applicability limit
emissions limitations shall be contained in a federally enforceable
permit applicable to the source.
(D) The plan shall provide that the emissions limitations and
conditions established for a plantwide applicability limit shall not
relieve any owner or operator of the responsibility to comply fully
with any applicable control technology requirements.
(iv) Plantwide applicability limit modifications. The plan shall
provide that:
(A) Notwithstanding paragraphs (a)(1)(v) and (vi) of this section
(the definitions for major modification and net emissions increase),
any physical or operational change consistent with plantwide
applicability limit terms and conditions and paragraph (a)(1)(vi)(E)(4)
of this section shall not constitute a major modification for the
pollutants covered by the plantwide applicability limit. All decreases
in emissions shall have approximately the same qualitative significance
for public health and welfare as that attributed to the increase from
the particular change;
(B) Requirements equivalent to those contained in paragraphs (a)(2)
through (7) of this section shall apply to any plantwide applicability
limit major modification as if it were a major modification, except
that in lieu of paragraph (a)(2)(ii)(B) of this section, a plantwide
applicability limit major modification shall apply the lowest
achievable emission rate for each pollutant subject to regulation under
the Act if an emissions increase above the plantwide applicability
limit would occur; and
(C) The lowest achievable emission rate requirement applies to each
emissions unit that contributes to the emissions increase above the
plantwide applicability limit.
(v) Plantwide applicability limit reevaluation. (A) The plan shall
provide that the permitting authority shall reevaluate the plantwide
applicability limit emission limitations pursuant to--
(1) Permit renewal and public notification procedures under parts
70 or 71 of this chapter; or
(2) Another proceeding with public notice and opportunity for
public comment.
(B) As part of the reevaluation, the permitting authority may
reduce permitted emission limitations or otherwise adjust, but not
increase, permitted emission limitations to reflect--
(1) Air quality concerns arising after the approval of the
plantwide applicability limit;
(2) Changes at the source; or
(3) Other appropriate considerations.
(C) The plan shall provide that the permitting authority shall
adjust the source's plantwide applicability limit emission limitations
to reflect new applicable requirements as they become effective.
(10) For a major modification of volatile organic compounds at a
[[Page 38328]]
stationary source locating in a serious or severe ozone nonattainment
area the plan shall include enforceable procedures to provide that:
(i) The lowest achievable emission rate requirement pursuant to
paragraph (a)(2)(i) of this section does not apply to any discrete
emissions unit(s) (or other operations or pollutant emitting
activities) that is part of the proposed major modification of volatile
organic compounds at an existing stationary source which emits, or has
the potential to emit, 100 tons per year or more of volatile organic
compounds if such source proposes creditable emissions reductions from
the source to internally offset the emissions increase from the
selected discrete emissions unit(s) (or other operations or pollutant
emitting activities) at a ratio of at least 1.3:1;
(ii) Notwithstanding the requirement for the lowest achievable
emission rate pursuant to paragraph (a)(2)(i) of this section, the best
available control technology requirement of section 165(a)(4) of the
Act shall apply to a proposed major modification of volatile organic
compounds at an existing major stationary source which emits, or has
the potential to emit, less than 100 tons of volatile organic compounds
per year; and
(iii) Any emissions reduction of volatile organic compounds used as
an internal offset pursuant to this section shall meet the applicable
requirements for crediting emissions reductions under paragraph
(a)(3)(ii) of this section.
(11) For modifications at major stationary sources of nitrogen
oxides in serious or severe ozone nonattainment areas the plan shall
require that the provisions of this section applicable to modifications
of volatile organic compounds in serious and severe ozone nonattainment
areas shall also apply to nitrogen oxides, except for serious or severe
ozone nonattainment areas where the Administrator has determined that
the requirements of section 182(f) of the Act do not apply.
(12) The plan shall provide that the requirements of this section
applicable to major stationary sources and major modifications of
volatile organic compounds shall apply to nitrogen oxides emissions
from major stationary sources and major modifications of nitrogen
oxides in an ozone transport region or in any ozone nonattainment area
classified as marginal, moderate, serious, severe, or extreme, except
in:
(i) Areas where the Administrator determines that the net air
quality benefits are greater in the absence of nitrogen oxides
reductions;
(ii) Nonattainment areas not within an ozone transport region if
the Administrator determines (when the Administrator approves a plan or
plan revision) that additional reductions of nitrogen oxides would not
contribute to attainment of the national ambient air quality standard
for ozone in the area; or
(iii) Areas within an ozone transport region if the Administrator
determines (when the Administrator approves a plan or plan revision)
that additional reductions of nitrogen oxides would not produce net air
quality benefits in such region.
(13) The plan shall require that the requirements of this section
applicable to major stationary sources and major modifications of PM-10
shall also apply to major stationary sources and major modifications of
PM-10 precursors, except where the Administrator determines that such
sources do not contribute significantly to PM-10 levels which exceed
the PM-10 ambient standards in the area.
(14)(i) The plan shall require that in meeting the emissions offset
requirements of paragraph (a)(2) of this section for ozone
nonattainment areas, the ratio of total actual emission reductions of
VOC to the emissions increase of VOC shall be as follows:
(A) In any marginal nonattainment area for ozone--at least 1.1:1;
(B) In any moderate nonattainment area for ozone--at least 1.15:1;
(C) In any serious nonattainment area for ozone--at least 1.2:1;
(D) In any severe nonattainment area for ozone--at least 1.3:1
(except that the ratio may be at least 1.2:1 if the approved plan also
requires all existing major sources in such nonattainment area to use
BACT for the control of VOC); and
(E) In any extreme nonattainment area for ozone--at least 1.5:1
(except that the ratio may be at least 1.2:1 if the approved plan also
requires all existing major sources in such nonattainment area to use
BACT for the control of VOC); and
(ii) Notwithstanding the requirements of paragraph (a)(14)(i) of
this section for meeting the requirements of paragraph (a)(2) of this
section, the ratio of total actual emissions reductions of VOC to the
emissions increase of VOC shall be at least 1.15:1 for all areas within
an ozone transport region except for serious, severe, and extreme ozone
nonattainment areas.
(15) The plan shall require that a major modification of a major
stationary source of VOC locating in an extreme nonattainment area for
ozone shall be considered to comply with the emissions offset
requirements under paragraph (a)(2) of this section if the owner or
operator of the source elects to offset the proposed emissions increase
of such VOC by a greater reduction in actual emissions of VOC from
other discrete operations, units, or pollutant emitting activities
within the same stationary source at a ratio of at least 1.3:1. Also,
in extreme ozone nonattainment areas emissions increases of VOC
resulting from modifications consisting of equipment that is needed to
comply with the applicable implementation plan, permit, or provision
under the Act need not be offset under this section.
(16) The plan shall require that the permitting authority shall,
for each new major source and major modification subject to the
provisions of this section, submit to the RACT/BACT/LAER Clearinghouse
within 60 days of issuance of the permit, all relevant information on
the emissions prevention or control technology for the new major source
or major modification.
3. Paragraphs in Sec. 51.166 are redesignated as follows:
------------------------------------------------------------------------
Old paragraph New paragraph
------------------------------------------------------------------------
(b)(1)(i)(a) through (c).................. (b)(1)(i)(A) through (C).
(b)(1)(iii)(a) through (aa)............... (b)(1)(iii)(A) through (AA).
(b)(2)(iii)(a) through (k)................ (b)(2)(iii)(A) through (K).
(b)(3)(i)(a) and (b)...................... (b)(3)(i)(A) and (B).
(b)(3)(vi)(a) through (c)................. (b)(3)(vi)(A) through (C).
(b)(13)(i)(a) and (b)..................... (b)(13)(i)(A) and (B).
(b)(13)(ii)(a) and (b).................... (b)(13)(ii)(A) and (B).
(b)(14)(i)(a) and (b)..................... (b)(14)(i)(A) and (B).
(b)(14)(ii)(a) and (b).................... (b)(14)(ii)(A) and (B).
(b)(14)(iii)(a) and (b)................... (b)(14)(iii)(A) and (B).
(b)(15)(ii)(a) and (b).................... (b)(15)(ii)(A) and (B).
(f)(4)(iii)(a) and (b).................... (f)(4)(iii)(A) and (B).
(i)(4)(ii)(a) through (aa)................ (i)(4)(ii)(A) through (AA).
(i)(4)(iii)(a) through (d)................ (i)(4)(iii)(A) through (D).
(i)(8)(i)(a) through (m).................. (i)(8)(i)(A) through (M).
(m)(1)(i)(a) and (b)...................... (m)(1)(i)(A) and (B).
(s)(2)(iv)(a) and (b)..................... (s)(2)(iv)(A) and (B).
------------------------------------------------------------------------
[[Page 38329]]
4. Section 51.166 is amended as follows:
a. Amending newly redesignated paragraph (b)(2)(iii)(F) by adding
the words ``Standing alone,'' at the beginning of the sentence and
revising the word ``An'' to read ``an'';
b. Revising newly redesignated paragraph (b)(2)(iii)(H);
c. Adding new paragraphs (b)(2)(iii)(L) through (N);
d. Revising newly redesignated paragraph (b)(3)(vi)(C);
e. Revising paragraph (b)(5);
f. Revising paragraphs (b)(19), (b)(21)(ii), and (b)(22);
g. Adding a new paragraph (b)(21)(vi);
h. Revising paragraph (b)(23);
i. Amending paragraph (b)(24) by adding the words ``(or the
Secretary's designee)'' after the word ``lands'' at the end of the
sentence;
j. Revising paragraph (b)(27);
k. Revising paragraphs (b)(31) introductory text and (b)(31)(i);
l. Removing paragraph (b)(31)(ii) and redesignating paragraphs
(b)(31)(iii) and (iv) as new paragraphs (b)(31)(ii) and (iii);
m. Adding new paragraphs (b)(38) through (b)(48);
n. Amending paragraph (g)(1) by removing the words ``State
implementation'' from the last sentence;
o. Amending paragraph (i)(8)(i) by removing newly redesignated
paragraphs (i)(8)(i)(G), (H) and (J) and redesignating paragraph
(i)(8)(i)(I) as paragraph (i)(8)(i)(G) and (i)(8)(i)(K) through
(i)(8)(i)(M) as (i)(8)(i)(H) through (i)(8)(i)(J);
p. Adding new paragraph (i)(13);
q. Adding new paragraphs (j)(5) and (6);
r. Amending the introductory text of paragraph (k) by adding the
word ``significantly'' after the words ``would not cause or'';
s. Amending paragraph (m)(2) by removing the word ``ambient'',
removing the word ``reviewing'' and adding in its place ``permitting'',
and adding the words ``, or on air quality related values of a Federal
Class I area. Decisions about post-construction monitoring for air
quality related values in Federal Class I areas shall be made in
consultation with the Federal Land Manager.'' at the end of the
paragraph;
t. Revising the heading of paragraph (n);
u. Revising paragraph (n)(1);
v. Redesignating paragraph (q)(1) as new paragraph (n)(1)(ii);
w. Amending newly redesignated paragraph (n)(1)(ii) by removing the
words ``The reviewing authority shall'', and capitalizing ``n'' in the
word ``notify'', adding the word ``complete'' after the words ``receipt
of the'' in the last sentence, and removing the word ``reviewing'' and
adding in its place ``permitting'';
x. Amending paragraph (n)(2) introductory text by removing the word
``may'' and adding in its place ``shall'' and removing the words
``shall include'' and adding in its place ``includes'';
y. Revising paragraph (n)(2)(iii) and adding new paragraph
(n)(2)(iv);
z. Revising paragraph (n)(3);
aa. Adding new paragraphs (n)(4) and (n)(5);
bb. Amending paragraph (o)(1) by adding ``, except that for Federal
Class I and II areas such analysis may be excluded only by approval of
the Federal Land Manager'' to the end of the second sentence;
cc. Revising the heading of paragraph (p);
dd. Redesignating paragraph (p)(1) as new paragraph (q)(1);
ee. Adding new paragraph (p)(1);
ff. Revising paragraphs (p)(2) and (p)(3);
gg. Redesignating paragraphs (p)(4) through (p)(7) as new
paragraphs (p)(8) through (p)(11);
hh. Adding new paragraphs (p)(4) through (p)(7);
ii. Amending newly redesignated paragraph (p)(9)(i) by revising the
citation ``(q)(4)'' to read ``(p)(7)'';
jj. Amending newly redesignated paragraphs (p)(9)(iii) and
(p)(10)(iii) by removing the citation ``(q)(7)'' and adding in its
place ``(p)(11)'';
kk. Amending newly redesignated paragraph (p)(11) by removing the
citation ``(q)(5) or (6)'' and adding in its place ``(p)(9) or
(p)(10)'';
ll. Amending newly redesignated paragraph (q)(1) by removing the
words ``Notice to EPA,'' and in the first sentence, removing the word
``reviewing'' and adding in its place ``permitting'';
mm. Redesignating paragraph (q)(2) introductory text through
(q)(2)(v) as new paragraphs (q)(4) introductory text through (q)(4)(v);
nn. Redesignating paragraphs (q)(2)(vi) through (viii) as new
paragraphs (q)(5)(i) through (iii);
oo. Adding new paragraphs (q)(2) and (q)(3);
pp. Amending newly redesignated paragraph (q)(4)(ii) by removing
the words ``if any'' and adding in its place ``such as any information
concerning an adverse impact on air quality related values required
under paragraph (p)(6)(iii) of this section'';
qq. Amending newly redesignated paragraph (q)(4)(iii) by adding the
words ``any potential adverse impact on air quality related values,''
after the words ``source or modification,'';
rr. Adding new paragraph (q)(6);
ss. Revising paragraph (r)(1);
tt. Revising the heading of paragraph (s);
uu. Revising paragraphs (s)(1) and (s)(2) introductory text;
vv. Amending paragraph (s)(2)(ii) by removing the cite ``(j)(2)''
and adding in its place ``(j)'', removing the word ``reviewing'' and
adding in its place ``permitting'', removing the words ``4 years'' and
adding in its place ``2 years'', and removing the words ``7 years'' and
adding in its place ``5 years'';
ww. Amending the introductory text of both paragraphs (s)(2)(iii)
and (s)(3) by removing the word ``reviewing'' and adding in its place
``permitting'' and removing the words ``innovative control technology''
to read ``undemonstrated technology or application'';
ww. Revising paragraph (s)(4);
xx. Adding new paragraphs (s)(5) through (s)(10);
yy. Adding new paragraphs (t) and (u).
Sec. 51.166 Prevention of significant deterioration of air quality.
* * * * *
(b) * * *
(2) * * *
(iii) * * *
(H) The addition, replacement, or use of a pollution control
project at an existing emissions unit unless the pollution control
project will result in a significant net increase in representative
actual annual emissions of any pollutant regulated under this section
and the permitting authority determines that this increase will cause
or contribute to a violation of any national ambient air quality
standard or any maximum allowable increase over the baseline
concentration, or will have an adverse impact on air quality related
values at any Class I area. For the purpose of this paragraph, in lieu
of the source's representative actual annual emissions, the emissions
levels used for that source in the most recent air quality impact
analysis in the area conducted for the purpose of title I of the Act,
if any, may be used.
* * * * *
(L) Any activity undertaken at an existing emissions unit for which
a federally enforceable emission limit has been established, provided
that:
(1) The activity or project will not increase the maximum emissions
rate, in pounds or kilograms per hour, above the maximum emissions rate
achievable by the emission unit at any time during the 180 consecutive
days which precede the date of the activity or project and the
emissions increase is determined by:
(i) Material balances, continuous emissions monitoring data, or
manual
[[Page 38330]]
emissions tests using the EPA-approved procedures, where available, and
conducted under such conditions as the permitting authority will
specify to the owner or operator based on representative performance of
the emissions units affected by the activity or project, including at
least three valid test runs conducted before, and at least three valid
test runs conducted after, the activity or project with all operating
parameters which may affect emissions held constant to the maximum
feasible degree for all such test runs; or
(ii) Emission factors as specified in the latest issue of
``Compilation of Air Pollutant Emission Factors,'' EPA Publication No.
AP-42, or other emission factors determined by the permitting authority
to be superior to AP-42 emission factors, in such cases where use of
emission factors demonstrates that the emissions level resulting from
the activity or project will clearly not increase emissions;
(2) The federally enforceable emissions limit at the time of the
change is comparable to the emission limit that, considering the air
quality designation of the area where the source is located, would
result from a review in accordance with either paragraph (j) of this
section or regulations approved pursuant to Sec. 51.165(a)(2), or a
review in accordance with Sec. 52.21(j) of this chapter, for emission
units of the same class or source category. The permitting authority
may presume that a source satisfies paragraph (b)(2)(iii)(L)(2) of this
section if:
(i) The activity would occur no later than 120 consecutive months
from the date of issuance of the permit issued under regulations
approved pursuant to either this section or Sec. 51.165, or Sec. 52.21
of this chapter, that established the currently applicable emission
limit for the emissions unit;
(ii) The activity would occur no later than 120 consecutive months
from the date of issuance of the permit issued under regulations
approved pursuant to Secs. 51.160 through 51.164, that established the
currently applicable emissions limit for the emissions unit, provided
the permit was issued under regulations that were determined by the
Administrator to provide for permits that contain emission limitations
that satisfy paragraph (b)(2)(iii)(L)(2) of this section; or
(iii) The activity would occur no later than 60 consecutive months
from the date on which the permitting authority made a determination,
with public notice and opportunity for public comment consistent with
Sec. 51.161 of this part, that the emissions limit satisfied paragraph
(b)(2)(iii)(L)(2) of this section.
(3) The activity would not require a revision to, or cause a
violation of, any federally enforceable limit or condition in a permit
issued under either Sec. 52.21 of this chapter or regulations approved
pursuant to Secs. 51.160 through 51.166;
(4) The activity or project does not include the replacement or
reconstruction of an emissions unit; and
(M) Any activity undertaken at an existing major stationary source,
provided:
(1) The activity would not require a revision to, or cause a
violation of, any federally enforceable limit or condition in a permit
issued under either Sec. 52.21 of this chapter or regulations approved
pursuant to Secs. 51.160 through 51.166; and
(2) The entire major stationary source was permitted, and received
the currently applicable emission limits for all emission units at the
source issued in accordance with either this section, or regulations
approved pursuant to Sec. 51.165 or a permit issued under Sec. 52.21 of
this chapter, no more than 120 consecutive months prior to the proposed
activity.
(N) A change to ozone-depleting substances with lower ozone-
depleting potential under the provisions of sections 601 and 602 of the
Act, including changes to ozone-depleting substances emitting equipment
needed to accommodate the change, as long as the productive capacity of
the equipment is not increased.
* * * * *
(3) * * *
(vi) * * *
(C) It has approximately the same qualitative significance for
public health and welfare as that attributed to the increase from the
particular change such that, at a minimum, the decrease is sufficient
to prevent the proposed increase from causing or contributing to a
violation of any national ambient air quality standard or any
applicable maximum allowable increase over baseline concentrations or
having an adverse impact on air quality related values in Class I
areas.
* * * * *
(5)(i) Stationary source means any building, structure, facility,
installation, or stationary internal combustion engine which emits or
which may emit any air pollutant subject to regulation under the Act.
(ii) A stationary source does not include emissions resulting
directly from an internal combustion engine used for transportation
purposes, or from a nonroad engine or nonroad vehicle.
* * * * *
(19) Undemonstrated technology or application means any system,
process, material, or treatment technology (including pollution
prevention) that has not been demonstrated in practice, but would have
a substantial likelihood to operate effectively and achieve:
(i) A greater continuous reduction of air pollutant emissions than
any demonstrated system; or
(ii) A comparable emissions reduction at lower cost, or with lower
energy input, or with less environmental impact.
* * * * *
(21) * * *
(ii) Actual emissions shall be calculated using the unit's actual
operating hours, production rates, and types of materials processed,
stored, or combusted for any 12 consecutive months during the 120
consecutive months that precede the commencement of construction of a
proposed physical or operational change at the source and any current,
federally enforceable limitations on emissions required by the Act,
including, but not limited to, best available control technology,
lowest achievable emission rate (as defined at
Sec. 51.165(a)(1)(xiii)), reasonably available control technology, or
emissions standards for hazardous air pollutants under section 112 of
the Act.
* * * * *
(vi) In lieu of paragraphs (b)(21)(iv) and (v) of this section, the
plan may provide that, for any emissions unit, actual emissions of the
unit following a physical or operational change shall equal the
representative actual annual emissions of the unit, provided the source
owner or operator maintains and submits to the reviewing authority, on
an annual basis for a period of 5 years from the date the unit resumes
regular operation, information demonstrating that the physical or
operational change did not result in an emissions increase. A longer
period, not to exceed 10 years, may be required by the reviewing
authority if it determines such a period to be more representative of
normal source post-change operations.
(22) Complete means, in reference to an application for a permit
required under this section, that the permitting authority has deemed
the application to contain the information necessary (in accordance
with the criteria contained in paragraph (n) of this section) to begin
formal review of the application. Determining an application complete
for the purpose of beginning formal review does not preclude the
permitting
[[Page 38331]]
authority from requiring additional information as may be needed to
determine whether the applicant satisfies all requirements of this
section.
(23) Significant means:
(i) In reference to a net emissions increase or the potential of a
source to emit any of the following pollutants, a rate of emissions
that would equal or exceed any of the following rates:
POLLUTANT AND EMISSIONS RATE
Carbon monoxide: 100 tons per year
Nitrogen oxides: 40 tons per year
Sulfur dioxide: 40 tons per year
Ozone: 40 tons per year of volatile organic compounds
Particulate matter: 25 tons per year of particulate matter
emissions; 15 tons per year of PM-10 emissions
Lead: 0.6 tons per year
Fluorides: 3 tons per year
Sulfuric acid mist: 7 tons per year
Hydrogen sulfide: 10 tons per year
Total reduced sulfur (including hydrogen sulfide): 10 tons per year
Reduced sulfur compounds (including hydrogen sulfide): 10 tons per
year
Municipal waste combustor organics (measured as total tetrathrough
octa-chlorinated dibenzo-p-dioxins and dibenzofurans): 3.2 x
10-6 megagrams per year (3.5 x 10-6 tons per year)
Municipal waste combustor metals (measured as particulate matter):
14 megagrams per year (15 tons per year)
Municipal waste combustor acid gases (measured as sulfur dioxide and
hydrogen chloride): 36 megagrams per year (40 tons per year)
Ozone-depleting substances (ODS): 100 tons per year.
(ii) In reference to a net emissions increase or the potential of a
source to emit a pollutant subject to regulation under the Act that
paragraph (b)(23)(i) of this section does not list, any emissions rate.
However, for purposes of the applicability of this section, the
hazardous air pollutants listed under section 112(b)(1) of the Act,
including the hazardous air pollutants that may be added to the list,
are not considered subject to regulation under the Act.
(iii) Notwithstanding paragraph (b)(23)(i) of this section, any
emissions rate or any net emissions increase associated with a major
stationary source or major modification, which would construct within
10 kilometers of a Class 1 area, and have an impact on such area equal
to or greater than 1 microgram per cubic meter (24-hour average).
(iv) In reference to the predicted ambient impact that the
emissions from a proposed major source or major modification will have
for purposes of determining compliance with the national ambient air
quality standards, concentrations which exceed any of the following:
------------------------------------------------------------------------
Significant
Pollutant Averaging time Impact
------------------------------------------------------------------------
SO2.............................. Annual............ 1.0 g/
m\3\
24-Hour........... 5.0 g/
m\3\
3-Hour............ 25.0 g/
m\3\
PM-10............................ Annual............ 1.0 g/m/
\3\
24-hour........... 5.0 g/
m\3\
NO2.............................. Annual............ 1.0 g/
m\3\
CO............................... 8-hour............ 0.5 mg/m\3\
1-Hour............ 2.0 mg/m\3\
------------------------------------------------------------------------
(v) In reference to the predicted ambient impact that emissions
from a proposed major source or major modification will have for
purposes of determining compliance with the maximum allowable increases
in pollutant concentrations contained in paragraph (c) of this section,
concentrations in excess of any of the following:
----------------------------------------------------------------------------------------------------------------
Class III
Pollutant Averaging time Class I significant Class II significant significant
impact impact impact
----------------------------------------------------------------------------------------------------------------
SO2......................... Annual.............. 0.1 g/m\3\. 1.0 g/m\3\. 1.0 g/
m\3\
24-Hour............. 0.2 g/m\3\. 5.0 g/m\3\. 5.0 g/
m\3\
3-Hour.............. 1.0 g/m\3\. 25.0 g/m\3\ 25.0 g/
m\3\
PM-10....................... Annual.............. 0.2 g/m\3\. 1.0 g/m\3\. 1.0 g/
m\3\
24-Hour............. 0.3 g/m\3\. 5.0 g/m\3\. 5.0 g/
m\3\
NO2......................... Annual.............. 0.1 g/m\3\. 1.0 g/m\3\. 1.0 g/
m\3\
----------------------------------------------------------------------------------------------------------------
* * * *
(27) Indian reservation means all land within the limits of any
Indian Reservation under the jurisdiction of the United States
Government, notwithstanding the issuance of any patent, and including
rights-of-way running through the reservation.
* * * * *
(31) Pollution control project means:
(i) Any activity or project undertaken at an existing emissions
unit which, as its primary purpose, reduces emissions of air pollutants
from such unit. Such activities or projects do not include the
replacement of an existing emissions unit with a newer or different
unit, or the reconstruction of an existing emissions unit, and are
limited to any of the following:
(A) The installation of conventional or advanced flue gas
desulfurization, or sorbent injection for SO2;
(B) Electrostatic precipitators, baghouses, high efficiency
multiclones, or scrubbers for particulate or other pollutants;
(C) Flue gas recirculation, low-NOX burners, selective non-
catalytic reduction or selective catalytic reduction for NOX;
(D) Regenerative thermal oxidizers, catalytic oxidizers,
condensers, thermal incinerators, flares or carbon absorbers for
volatile organic compounds or hazardous air pollutants;
(E) Activities or projects undertaken to accommodate switching to
an inherently less polluting fuel, including but not limited to natural
gas or coal reburning, or the cofiring of natural gas and other
inherently less polluting fuels for the purpose of controlling
emissions, and including any activity that is necessary to accommodate
switching to an inherently less polluting fuel;
(F) Pollution prevention projects which are determined by the
permitting agency through a process consistent with Sec. 51.161 to be
environmentally beneficial. Pollution prevention projects that may
result in an unacceptable increased risk from the release of hazardous
pollutants are not environmentally beneficial; and
(G) Installation of a technology, for purposes set forth in
paragraph (b)(31) of this section, which is not listed in paragraphs
(b)(31)(i)(A) through (E) of this section but meets the following:
(1) Its effectiveness in reducing emissions has been demonstrated
in practice; and
(2) It is determined by the permitting authority, consistent with
Sec. 51.161, to be environmentally beneficial.
* * * * *
(38) Federal Class I area means any Federal lands within the United
States either designated by Congress as Class I pursuant to section
162(a) of the Act (and which may not be redesignated) or redesignated
as Class I pursuant to either paragraph (g) of this section or
Sec. 52.21(g) of this chapter.
(39) Federal official means the Federal official charged with
direct
[[Page 38332]]
responsibility for management of any lands within a Federal Class I
area.
(40) Air quality related value means, for purposes of this section,
visibility or a scenic, cultural, physical, biological, ecological, or
recreational resource that may be affected by a change in air quality,
as defined by the Federal Land Manager for Federal lands, or by the
applicable State or Indian Governing Body for nonfederal lands.
(41) Adverse impact on air quality related values means, for
purposes of this section, a deleterious effect on any air quality
related value identified by a Federal Land Manager, resulting from
emissions from a proposed major source or major modification, that
interferes with the management, protection, preservation, or enjoyment
of such air quality related values of a Federal Class I area. This
determination shall be made on a case-by-case basis taking into account
existing air quality conditions.
(42) Demonstrated in practice means, for the purposes of this
section, a control technology that has been--
(i) Listed in or required by any of the following:
(A) The EPA's RACT/BACT/LAER Clearinghouse;
(B) A major source construction permit issued pursuant to either
part C or D of title I of the Act;
(C) An emissions limitation contained in a federally-approved plan,
excluding emissions limitations established by permits issued pursuant
to programs for non-major sources;
(D) A permit or standard under section 111 or 112 of the Act;
(E) The EPA's Alternative Control Techniques documents and Control
Techniques Guidelines; or
(ii) Notwithstanding paragraph (b)(42)(i) of this section,
installed and operating on an emissions unit (or units) which:
(A) Has operated at a minimum of 50 percent of design capacity for
6 months; and
(B) The pollution control efficiency performance has been verified
with either:
(1) A performance test; or
(2) Performance data collected at the maximum design capacity of
the emissions unit (or units) being controlled, or 90 percent or more
of the control technology's designed specifications.
(43) Pollution prevention means any activity that through process
changes, product reformulation or redesign, or substitution of less-
polluting raw materials, eliminates or reduces the release of air
pollutants (including fugitive emissions) and other pollutants to the
environment prior to recycling, treatment, or disposal; it does not
mean recycling (other than certain ``in-process recycling'' practices),
energy recovery, treatment, or disposal.
(44) Plantwide applicability limit means a plantwide, federally
enforceable emission limitation established for a stationary source
such that any subsequent physical or operational changes resulting in
emissions that remain less than the limit, are excluded from
preconstruction review under this section.
(45) Plantwide applicability limit major modification means,
notwithstanding the requirements of paragraph (b)(2) of this section,
any increase in the emissions rate (in tons per year) over the
plantwide applicability limit. Any emissions increase of volatile
organic compounds shall be considered an increase for .
(46)(i) Nonroad engine means, except as discussed in paragraph
(b)(46)(ii) of this section, any internal combustion engine:
(A) In or on a piece of equipment that is self-propelled or that
serves a dual purpose by both propelling itself and performing another
function (such as garden tractors, off-highway mobile cranes and
bulldozers);
(B) In or on a piece of equipment that is intended to be propelled
while performing its function (such as lawnmowers and string trimmers);
or
(C) That, by itself or in or on a piece of equipment, is portable
or transportable, meaning designed to be and capable of being carried
or moved from one location to another. Indicia of transportability
include, but are not limited to, wheels, skids, carrying handles,
dolly, trailer, or platform.
(ii) An internal combustion engine is not a nonroad engine if:
(A) The engine is used to propel a motor vehicle or a vehicle used
solely for competition, or is subject to standards promulgated under
section 202 of the Act;
(B) The engine is regulated by a Federal new source performance
standard promulgated under section 111 of the Act; or
(C) The engine otherwise included in paragraph (b)(46)(i) of this
section remains or will remain at a location for more than 12
consecutive months, or a shorter period of time for an engine located
at a seasonal source. A location is any single site at a building,
structure, facility, or installation. Any engine (or engines) that
replaces an engine at a location and that is intended to perform the
same or similar function as the engine replaced will be included in
calculating the consecutive time period. An engine located at a
seasonal source is an engine that remains at a seasonal source during
the full annual operating period of the seasonal source. For purposes
of this paragraph (b)(46)(ii)(C), a seasonal source is a stationary
source that remains in a single location on a permanent basis (i.e., at
least 2 years) and that operates at that single location approximately
3 months (or more) each year. This paragraph (b)(46)(ii)(C) does not
apply to an engine after the engine is removed from the location.
(47) Nonroad Vehicle means a vehicle that is powered by a nonroad
engine and that is not a motor vehicle or a vehicle used solely for
competition.
(48) Stationary internal combustion engine means:
(i) Any internal combustion engine that is regulated by a Federal
new source performance standard promulgated under section 111 of the
Act; or
(ii) Any internal combustion engine that is none of the following:
a nonroad engine, an engine used to propel a motor vehicle or a vehicle
used solely for competition, or an engine subject to standards
promulgated under section 202 of the Act.
* * * * *
(i) * * *
(13) The plan may provide that the provisions of this section do
not apply to any stationary source with respect to any or all of the
hazardous air pollutants listed in section 112 the Act, as well as any
or all pollutants that may be added to the list under the provisions of
section 112(b)(2) of the Act. However, the applicable provisions of
this section shall apply to any pollutant listed under sections
112(b)(1) or (b)(2) of the Act that is deleted from such list under the
provisions of section 112(b)(3) of the Act. Any hazardous air
pollutants listed in section 112 of the Act which are regulated as
constituents or precursors of a more general pollutant listed under
section 108 of the Act are still subject to the provisions of this
section, notwithstanding section 112(b)(6) of the Act.
(j) * * *
(5)(i) In determining best available control technology:
(A) The applicant shall identify and evaluate all available and
technically feasible control technology alternatives that have been
demonstrated in practice pursuant to either paragraph (b)(42)(i) of
this section prior to the date on which the permit application is
complete, or paragraph (b)(42)(ii) of this section 90 days prior to the
date on which the permit application is complete; and
(B) The applicant shall demonstrate to the satisfaction of the
permitting
[[Page 38333]]
authority that the rejection of all alternatives more stringent than
the one recommended as best available control technology is justified
by the energy, environmental, and economic impacts and other costs of
those alternatives. If the most stringent technology is chosen, the
permitting authority may wave the requirement to analyze less effective
control technologies. Documentation supporting the demonstration shall
be included in the public record pursuant to paragraph (q)(6)(iii) of
this section.
(ii) The control technology alternatives considered in paragraph
(j)(5)(i) of this section shall be based upon control technologies and
methods for the same and similar source categories, i.e., those
categories including sources that have similar emissions-stream
characteristics.
(iii) The plan may establish a cut-off date on or subsequent to the
date that an application is complete pursuant to paragraph (n) of this
section, after which the permit applicant will not be required to
consider control technology alternatives that are identified through
public comments and that are in addition to those alternatives required
under paragraph (j)(5)(i)(A) of this section, unless the permitting
authority determines that, based on information submitted pursuant to
paragraph (q)(2) of this section, the alternatives warrant further
consideration by the applicant.
(6) For determinations of best available control technology under
the requirements of this section, the reviewing authority shall submit
the control technology information to the EPA's RACT/BACT/LAER
Clearinghouse within 60 days after permit approval.
* * * * *
(n) Complete application criteria.
(1) The plan shall provide that the permitting authority shall--
(i) Determine that a permit application is complete or deficient
based on the permitting authority's consideration of determinations,
analyses and other information contained in the application, and
adequacy thereof, as specified in paragraphs (n)(2) through (n)(5) of
this section; and
* * * * *
(2) * * *
(iii)(A) A detailed description of the system of continuous
emissions reduction which the applicant has submitted in a permit
application for a source or modification, to qualify either as best
available control technology, or for an undemonstrated technology
waiver in accordance with paragraph (s) of this section; and
(B) All information used or consulted by the applicant in
recommending a system of continuous emissions reduction as either the
best available control technology or an approvable undemonstrated
technology.
(iv) Information and data used to perform all required analyses or
determinations under paragraphs (o), (p), (r), (s) and (u) of this
section, as applicable.
(3) The plan shall provide that upon request of the permitting
authority, the owner or operator shall provide any information and data
used to perform all required analyses or determinations under
paragraphs (k), (l) and (m) of this section.
(4) The plan shall provide that an application shall not be
considered complete unless the permit application has been registered
on the applicable EPA electronic bulletin board. To register, at a
minimum, the following must be provided:
(i) Name and type of source;
(ii) Nature of proposed project, i.e., new facility or
modification;
(iii) Proposed location of the source in state/county (including
Universal Transverse Mercator coordinates) and the distance between the
source and each Class I area within 250 kilometers;
(iv) Anticipated allowable emissions, or increase in emissions
rate, for each affected air pollutant regulated under the Act;
(v) Source contact mailing address and telephone number; and
(vi) The agency responsible for issuing the permit.
(5) The plan shall provide that prior to making a completeness
determination, the permitting authority shall provide for any Federal
Land Manager review and coordination required under paragraph (p)(5) of
this section.
* * * * *
(p) Sources potentially impacting Federal Class I areas.
(1) Protection of air quality related values. The Federal Land
Manager and the Federal Official have an affirmative responsibility to
protect the air quality related values of Federal Class I areas and to
consider, in consultation with the Administrator, whether a proposed
source or modification will have an adverse impact on such values.
(2) General requirements.
(i) Notification of potential impacts on a Federal Class I area and
requirement for impact assessment. The plan shall provide that:
(A) Where the Federal Official, Federal Land Manager, the
Administrator, the Governor of an adjacent State, or the governing body
of an adjacent Indian Tribe containing a Federal Class I area, files,
prior to the date a completeness determination is made pursuant to
paragraph (n)(1) of this section, a written notice alleging that
emissions of a particular pollutant from a proposed major source or
major modification may cause or contribute to a change in the air
quality in such area and identifying the potential adverse impact of
such change on affected air quality related values identified in the
area by the Federal Land Manager, a permit shall not be issued unless
the owner or operator of such source:
(1) Demonstrates to the satisfaction of the permitting authority
that emissions will not cause or contribute to ambient pollutant
concentrations in the Federal Class I area which violate the maximum
allowable increases over baseline concentrations; and
(2) Provides an analysis of the potential impacts on air quality
related values at the Federal Class I area.
(B) Notwithstanding the restriction on issuing a permit under
paragraph (p)(2)(i)(A)(1) of this section, a permit otherwise
prohibited under paragraph (p)(2)(i)(A)(1) of this section may be
issued in accordance with the variance provisions in paragraphs (p)(8)
through (p)(11) of this section.
(ii) Available information on air quality related values and
analytical methods. The Federal Land Manager or Federal Official shall,
upon request, provide to the owner or operator of a proposed major
source or major modification that may have an adverse impact on air
quality related values in a Federal Class I area all available
information about such values and methods to analyze potential impacts.
(iii) Consultation with Federal Land Manager. The plan shall
provide for consultation and coordination with the Federal Land
Manager, including the procedures contained in paragraphs (p)(3)
through (p)(6) of this section.
(3) Pre-application coordination. The plan shall provide that, for
a proposed major source or major modification within 100 kilometers of
a Federal Class I area the permitting authority shall:
(i) Notify the affected Federal Land Manager shall be notified
within 30 days from receipt by the permitting authority of advance
notification of a permit application; and
(ii) Give the affected Federal Land Manager reasonable notice and
an opportunity to participate in pre-application meetings with the
applicant.
(4) Permit application coordination. The plan shall provide that:
(i) The Federal Land Manager of any Federal Class I area within 100
[[Page 38334]]
kilometers of a proposed major source or major modification shall be
provided with a copy of the permit application and other relevant
information; and
(ii) The Federal Land Manager shall be provided with a copy of a
permit application requested within 7 days from the date information
about such application is registered on the applicable EPA electronic
bulletin board (in accordance with paragraph (n)(4) of this section).
(5) Completeness determination coordination. The plan shall provide
that prior to making the completeness determination under paragraph
(n)(1) of this section, the permitting authority shall:
(i) Ensure that the applicant has provided any analysis required
pursuant to paragraph (p)(2)(i) of this section;
(ii) Give the Federal Land Manager 30 days from receipt of an
application to review the application, where the Federal Land Manager
has received such application pursuant to paragraph (p)(4) of this
section;
(iii) Consider any comments provided by the Federal Land Manager
within the time period under paragraph (p)(5)(ii) of this section; and
(iv) Consult with the Federal Land Manager about any inconsistency
between the determination by the permitting authority and the Federal
Land Manager's recommendations.
(6) Preliminary and final permit determination--No Class I
increment violation. The plan shall provide that, where the permitting
authority has determined that the emissions from the proposed major
source or major modification will not cause or contribute to ambient
pollutant concentrations in the Federal Class I area which violate the
maximum allowable increases over baseline concentrations--
(i) The permitting authority shall not issue a preliminary permit
determination until the Federal Land Manager has been given at least 60
days (from the date of issuance of the completeness determination
required under paragraph (n)(1) of this section to submit a
demonstration that a proposed major source or major modification will
have an adverse impact on air quality related values;
(ii) If the permitting authority agrees with the Federal Land
Manager's demonstration under paragraph (p)(6)(i) of this section, the
permitting authority shall propose to deny the permit;
(iii) If the permitting authority is not satisfied with the Federal
Land Manager's demonstration under paragraph (p)(6)(i) of this section,
the permitting authority shall consult with the Federal Land Manager,
reference the Federal Land Manager's demonstration and its rejection of
the demonstration in the public notice announcing the preliminary
permit determination and propose to approve the permit with an
explanation in writing (for inclusion in the public record along with
the Federal Land Manager's demonstration) of the reasons for rejecting
the Federal Land Manager's demonstration. The permitting authority's
written explanation shall address, at a minimum, the following:
(A) The basis for any disagreement with the data and analyses
contained in the Federal Land Manager's demonstration of adverse impact
on air quality related values;
(B) Any conclusions the permitting authority reaches, about whether
the projected impacts of the proposed source's emissions will have an
adverse impact on air quality related values, that are inconsistent
with the conclusions reached in the demonstration submitted by the
Federal Land Manager; and
(C) Any measures undertaken to mitigate the potential adverse
impacts of proposed emissions increases, including the estimated effect
of any mitigation;
(iv) In the final permit determination, the permitting authority
shall address any comments made by the Federal Land Manager concerning
the permitting authority's preliminary determination.
(7) Mitigation of adverse impacts. The plan may provide that the
permitting authority may issue a permit for a proposed major source or
major modification that would otherwise be denied a permit under
paragraph (p)(6) of this section, if the permitting authority
determines, in consultation with the Federal Land Manager, that the
source has mitigated its adverse impact on air quality related values.
The owner or operator of a proposed major source or major modification
may mitigate an adverse impact by obtaining enforceable and permanent
emissions reductions of sufficient amount and in such location that the
reductions will offset the change in air quality in the Federal Class I
area that would have resulted from the proposed source.
* * * * *
(q) * * *
(2) The plan may set forth the minimum information which must be
submitted by public commenters to accompany any recommendations for
control technology alternatives for which permit applicants would not
otherwise be responsible to consider in determining best available
control technology as of the date an application is complete according
to paragraph (j)(5)(iii) of this section. Such information may include
the name and location of the source utilizing the control technology,
manufacturer and type of control device, date of installation and
operation of control device, and performance requirements and available
test data.
(3) The plan shall provide that--
(i) After any cut-off date established pursuant to paragraph
(j)(5)(iii) of this section, the permitting authority shall notify a
permit applicant within 10 working days from the date of receipt of a
public comment concerning any control technology alternatives that the
permitting authority determines to warrant further consideration by the
applicant; and
(ii) The permitting authority shall make available in the public
record all information that was submitted with public comment regarding
control technology alternatives and provide the basis for its decision
to either require or not require the permit applicant to further
consider such control technology alternatives.
* * * * *
(6) The reviewing authority shall provide an opportunity for
judicial review in State court of the final permit action by the
applicant and any person who participated in the public participation
process provided pursuant to this section. The plan may provide that
the opportunity for judicial review shall be the exclusive means for
obtaining judicial review of the terms and conditions of permits, and
may require that such petitions for judicial review be filed no later
than a reasonable period after the final permit action. If such a
limited time period for judicial review is provided in the plan, then
the plan shall provide that petitions for judicial review of final
permit actions can be filed after the deadline only if they are based
solely on grounds arising after the deadline for judicial review and
only if filed within a reasonable period specified in the plan after
the new grounds for review arise.
(r) Source obligation.
(1) The plan shall include enforceable procedures to--
(i) Provide that approval to construct shall not relieve any owner
or operator of the responsibility to comply fully with applicable
provisions of the plan and any other requirements under local, State or
Federal law; and
(ii) Require any owner or operator to construct and operate a
source or modification in accordance with the application submitted
pursuant to this
[[Page 38335]]
section or with the terms of any approval to construct.
* * * * *
(s) Undemonstrated technology or application waiver.
(1) The plan may provide that an owner or operator of a proposed
major stationary source or major modification may satisfy the
requirements of paragraph (j) of this section through the use of an
undemonstrated technology or application as set forth in this section.
The plan may provide that the owner or operator shall provide to the
permitting authority a written request for approval of an
undemonstrated technology or application as part of the permit
application.
(2) The plan may provide that the permitting authority may approve
a system of undemonstrated technology or application for a particular
source or modification if:
* * * * *
(4) The plan shall provide that, if the permitting authority
withdraws approval of a system of undemonstrated technology or
application, the owner or operator shall bring the affected emissions
unit(s) into compliance with the reference best available control
technology emissions limit within 18 months from the date of
withdrawal.
(5) The plan shall provide that the permitting authority shall
include, as a minimum, the following information in a waiver issued
pursuant to paragraph (s) of this section:
(i) The undemonstrated technology or application's emission control
performance objective and the applicable reference best available
control technology emissions limit;
(ii) The marginal and gross failure emissions limit(s) as defined
by the permitting authority on a case-by-case basis; and
(iii) Identification and classification of potential failure modes
and associated contingency measures.
(6) The plan shall provide that if, by the date established in
paragraph (s)(2)(ii) of this section, the undemonstrated technology or
application does not achieve the permitted emission limit, but actual
emissions are equal to or less than the best available control
technology emission limit referenced in the permit, the permitting
authority shall:
(i) Issue a final permit with the emission limit equal to the
undemonstrated technology or application's consistently achieved actual
emission rate; and
(ii) Report the final permit limits to the EPA's RACT/BACT/LAER
Clearinghouse as a demonstrated control technology.
(7) The plan shall provide that if, by the date established in
paragraph (s)(2)(ii) of this section, the actual emissions from the
undemonstrated technology or application constitute marginal failure,
the owner or operator may petition the permitting authority to permit
the undemonstrated technology or application at its actual emission
limit. Accordingly the permitting authority shall either:
(i) Approve the petition and proceed in accordance with paragraphs
(s)(6)(i) and (ii) of this section; or
(ii) Disapprove the petition and require the owner or operator to
comply with paragraph (s)(4) of this section.
(8) The plan shall provide that if, at any time prior to, or on,
the date established in paragraph (s)(2)(ii) of this section, the
actual emissions from the undemonstrated technology or application
constitute gross failure:
(i) The permitting authority shall withdraw approval pursuant to
paragraph (s)(4) of this section; and
(ii) The owner or operator shall mitigate all emission increases
above the applicable reference best available control technology
emission limit by reducing actual emissions.
(9) The plan shall provide that the permitting authority submit to
the Administrator a copy of the approval of the system of
undemonstrated technology or application within 30 days of its
approval.
(10) The plan shall provide that the number of waivers granted by
the permitting authority shall not exceed such number as necessary to
ascertain whether or not such system complies with section
111(j)(1)(A)(ii) and (iii) of the Act.
(t) Disputed permits or redesignations. If any State affected by
the redesignation of an area by an Indian Tribe, or any Indian Tribe
affected by the redesignation of an area by a State disagrees with such
redesignation of an area, or if a permit is proposed to be issued for
any major stationary source or major modification proposed for
construction in any State which the Governor of an affect State or
Governing Body of an affected Indian Tribe determines will cause or
contribute to a cumulative change in air quality in excess of that
allowed in this section within the affected State or Indian
Reservation, the Governor or Indian Governing Body may request the
Administrator to enter into negotiations with the parties involved to
resolve such dispute. If requested by any State or Indian Tribe
involved, the Administrator shall make a recommendation to resolve the
dispute and protect the air quality related values of the lands
involved. If the parties involved do not reach agreement, the
Administrator shall resolve the dispute and the Administrator's
determination, or the results of agreements reached through other
means, shall become part of the applicable plan and shall be
enforceable as part of such plan. In resolving such disputes relating
to area redesignation, the Administrator shall consider the extent to
which the lands involved are of sufficient size to allow effective air
quality management or have air quality related values.
(u) Plantwide applicability limit.
(1) Applicability. The plan may provide that an owner or operator
of an existing major stationary source may request the permitting
authority to approve a plantwide applicability limit for any one or
more pollutants, and that the permitting authority may approve a
plantwide applicability limit for an existing major stationary source,
in accordance with paragraphs (u)(2) through (5) of this section.
(2) Procedure. The plan shall provide that a plantwide
applicability limit for an existing major stationary source may be
established only through a procedure consistent with Sec. 51.161 of
this chapter, and with at least 30 days allowed for public notice and
opportunity for comment.
(3) Emission limitations and conditions. (i) The plan shall provide
that a plantwide applicability limit shall be established based on
either:
(A) Plantwide actual emissions (not to exceed current allowable
emissions) and a reasonable operating margin less than the applicable
significant emissions rate; or
(B) Source-wide limits on annual emissions established in a permit
issued within
FR Doc. 96-17544 Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR)
the immediately preceding 5 years under regulations
approved pursuant to Sec. 51.165 of this part, where the source-wide
emissions limits were completely offset and relied upon in an approved
state attainment demonstration plan.
(ii) The plan shall provide that any plantwide applicability limit
emission limitations shall be achievable through application of
production processes or available methods, systems, and techniques
including, but not limited to, emissions control equipment, fuel
cleaning or treatment, fuel combustion techniques, substitution of less
polluting materials, or limits on production that represent normal
source operations.
(iii) The plan shall provide that specific terms and conditions
that assure the practical enforceability of plantwide applicability
limit emission limitations shall be contained in a
[[Page 38336]]
federally enforceable permit applicable to the source.
(iv) The plan shall provide that the emissions limitations and
conditions established for a plantwide applicability limit shall not
relieve any owner or operator of the responsibility to comply fully
with any applicable control technology requirements.
(4) Plantwide applicability limit modifications. The plan shall
provide that:
(i) Notwithstanding paragraphs (b)(2) and (b)(3) of this section
(the definitions for major modification and net emissions increase),
any physical or operational change consistent with plantwide
applicability limit terms and conditions of this section shall not
constitute a major modification for the pollutants covered by the
plantwide applicability limits. All decreases in emissions shall have
approximately the same qualitative significance for public health and
welfare as that attributed to the increase from the particular change;
(ii) Requirements equivalent to those contained in paragraphs (j)
through (r) of this section shall apply to any plantwide applicability
limit major modification as if it were a major modification, except
that in lieu of paragraph (j)(3) of this section, a plantwide
applicability limit major modification shall apply best available
control technology for each pollutant subject to regulation under the
Act if an emissions increase above the plantwide applicability limit
would occur; and
(iii) The best available control technology requirement applies to
each emissions unit that contributes to the emissions increase above
the plantwide applicability limit.
(5) Plantwide applicability limit reevaluation.
(i) The plan shall provide that the permitting authority shall
reevaluate the plantwide applicability limit emission limitations
pursuant to:
(A) Permit renewal and public notification procedures under parts
70 or 71 of this chapter; or
(B) Another proceeding with public notice and opportunity for
public comment.
(ii) As part of the reevaluation required under paragraph (u)(5)(i)
of this section, the permitting authority may reduce permitted emission
limitations or otherwise adjust (but not increase) permitted emission
limitations to reflect:
(A) Air quality concerns arising after the approval of the
plantwide applicability limit;
(B) Changes at the source; or
(C) Other appropriate considerations.
(iii) The plan shall provide that the permitting authority shall
adjust the source's plantwide applicability limit emissions limitations
to reflect new applicable requirements as they become effective.
PART 52-APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS
1. The authority citation for part 52 is revised to read as
follows:
Authority: 42 U.S.C. 7401-7671q.
2. Section 52.21 is amended by redesignating the paragraphs as
follows:
------------------------------------------------------------------------
Old paragraph New paragraph
------------------------------------------------------------------------
(b)(1)(i) (a) through (c)................. (b)(1)(i) (A) through (C).
(b)(1)(iii) (a) through (aa).............. (b)(1)(iii) (A) through
(AA).
(b)(2)(iii) (a) through (k)............... (b)(2)(iii) (A) through
(K).
(b)(3)(i) (a) and (b)..................... (b)(3)(i) (A) and (B).
(b)(3)(vi) (a) through (c)................ (b)(3)(vi) (A) through (C).
(b)(13)(i) (a) and (b).................... (b)(13)(i) (A) and (B).
(b)(13)(ii) (a) and (b)................... (b)(13)(ii) (A) and (B).
(b)(14)(ii) (a) and (b)................... (b)(14)(ii) (A) and (B).
(b)(14)(iii) (a) and (b).................. (b)(14)(iii) (A) and (B).
(b)(15)(ii) (a) and (b)................... (b)(15)(ii) (A) and (B).
(i)(4)(ii) (a) through (c)................ (i)(4)(ii) (A) through (C).
(i)(4)(iv) (a) through (c)................ (i)(4)(iv) (A) through (C).
(i)(4)(v) (a) through (c)................. (i)(4)(v) (A) through (C).
(i)(4)(vii) (a) through (aa).............. (i)(4)(vii) (A) through
(AA).
(i)(4)(viii) (a) through (d).............. (i)(4)(viii) (A) through
(D).
(i)(4)(ix) (a) through (c)................ (i)(4)(ix) (A) through (C).
(m)(1)(i)(a) and (b)...................... (m)(1)(i) (A) and (B).
(m)(1)(v) (a) through (c)................. (m)(1)(v) (A) through (C).
(v)(2)(iv) (a) and (b).................... (v)(2)(iv) (A) and (B).
------------------------------------------------------------------------
3. Section 52.21 is amended as follows:
a. Amending newly redesignated paragraph (b)(2)(iii)(F) by adding
the words ``Standing alone,'' at the beginning of the sentence and
revising the word ``An'' to read ``an'';
b. Revising newly redesignated paragraph (b)(2)(iii)(H);
c. Adding new paragraphs (b)(2)(iii) (L) through (N); Revising
newly redesignated paragraph (b)(3)(vi)(C);
e. Revising paragraph (b)(5);
f. Revising paragraphs (b)(19), (b)(21)(ii), and (b)(22);
g. Adding new paragraph (b)(21)(vi);
h. Revising paragraph (b)(23);
i. Amending paragraph (b)(24) by adding the words ``(or the
Secretary's designee)'' after the word ``lands'' at the end of the
sentence;
j. Revising paragraph (b)(27);
k. Revising paragraphs (b)(32) introductory text and (b)(32)(i);
l. Removing paragraph (b)(32)(ii) and redesignating paragraphs
(b)(32)(iii) and (iv) as new paragraphs (b)(32)(ii) and (iii);
m. Adding new paragraphs (b)(39) through (b)(49);
n. Amending paragraph (g)(1) by removing the words ``State
implementation'' from the the last sentence;
o. Revising paragraph (i)(8)(i);
p. Adding new paragraph (i)(14);
q. Adding new paragraphs (j)(5) and (6);
r. Amending paragraph (k) introductory text by adding the word
``significantly'' after the words ``would not cause or'';
s. Amending paragraph (m)(2) by removing the word ``ambient'' and
adding the words ``, or on air quality related values of a Federal
Class I area. Deci sions about post-construction monitoring for air
quality related values in Federal Class I areas shall be made in
consultation with the Federal Land Manager.'' at the end of the
paragraph;
t. Revising the heading and removing the introductory text of
paragraph (n);
u. Redesignating paragraph (n)(2) as paragraph (n)(3) and revising
it;
v. Redesignating paragraph (n)(1) as paragraph (n)(2);
w. Revising newly redesignated paragraph (n)(2) introductory text
and newly redesignated paragraph (n)(2)(iii) and adding new paragraph
(n)(2)(iv);
x. Adding new paragraphs (n)(1), (n)(4) and (n)(5);
y. Amending paragraph (o)(1) by adding the words ``, except that
for Federal Class I and II areas such analysis may be excluded only by
approval of the Federal Land Manager'' to the end of the second
sentence;
z. Revising the heading of paragraph (p);
aa. Removing paragraph (p)(1);
bb. Redesignating paragraph (p)(2) as paragraph (p)(1);
cc. Amending newly redesignated paragraph (p)(1) by revising the
heading and removing the words ``charged with direct responsibility for
management of such lands'';
dd. Adding new paragraph (p)(2);
ee. Revising paragraphs (p)(3) and (p)(4);
ff. Redesignating paragraphs (p)(5) through (p)(8) as paragraphs
(p)(8) through (p)(11);
gg. Adding new paragraphs (p)(5) through (p)(7);
hh. Amending the newly redesignated paragraph (p)(9) by removing
the citation ``(q)(4)'' and adding in its place ``(p)(7)'';
[[Page 38337]]
ii. Amending the newly redesignated paragraphs (p)(9) and (p)(10)
by removing the citation ``(q)(7)'' and adding in its place
``(p)(11)'';
jj. Amending the newly redesignated paragraph (p)(11) by removing
the citation ``(q) (5) or (6)'' and adding in its place ``(p)(9) or
(p)(10)'';
kk. Revising paragraph (q);
ll. Amending paragraph (t) by removing the words ``State
implementation'' in the phrase ``applicable State implementation
plan'';
mm. Revising the heading of paragraph (v);
nn. Revising paragraphs (v)(1) and (v)(2) introductory text;
oo. Amending paragraph (v)(2)(ii) by removing the cite ``(j)(2)''
and adding in its place ``(j)'', removing the words ``4 years'' and
adding in its place ``2 years'', and removing the words ``7 years'' and
adding in its place ``5 years'';
pp. Amending paragraphs (v)(2)(iii) and (v)(3) introductory text by
removing the words ``innovative control technology'' and adding in its
place ``undemonstrated technology or application'';
qq. Revising paragraph (v)(4);
rr. Adding new paragraphs (v)(5) through (v)(9);
ss. Adding new paragraph (x).
Sec. 52.21 Prevention of significant deterioration of air quality.
* * * * *
(b) * * *
(2)--* * *
(iii) * * *
(H) The addition, replacement, or use of a pollution control
project at an existing emissions unit unless the pollution control
project would result in a significant net increase in representative
actual annual emissions of any pollutant regulated under this section
and the Administrator determines that this increase would cause or
contribute to a violation of any national ambient air quality standard
or any maximum allowable increase over the baseline concentration or
will have an adverse impact on any air quality related value at any
Class I area. For the purpose of this paragraph, in lieu of the
source's representative actual annual emissions, the emissions levels
used for that source in the most recent air quality impact analysis in
the area conducted for the purpose of title I of the Act, if any, may
be used.
* * * * *
(L) Any activity undertaken at an existing emissions unit for which
a federally enforceable emissions limit has been established, provided
that:
(1) The activity or project will not increase the maximum emissions
rate, in pounds or kilograms per hour, above the maximum emissions rate
achievable by the emissions unit at any time during the 180 consecutive
days which precede the date of the activity or project and the
emissions increase is determined by:
(i) Material balances, continuous emissions monitoring data, or
manual emissions tests using the EPA-approved procedures, where
available, and conducted under such conditions as the permitting
authority will specify to the owner or operator based on representative
performance of the emissions units affected by the activity or project,
including at least three valid test runs conducted before, and at least
three valid test runs conducted after, the activity or project with all
operating parameters which may affect emissions held constant to the
maximum feasible degree for all such test runs; or
(ii) Emission factors as specified in the latest issue of
``Compilation of Air Pollutant Emission Factors,'' EPA Publication No.
AP-42, or other emission factors determined by the permitting authority
to be superior to AP-42 emissions factors, in such cases where use of
emission factors demonstrates that the emissions level resulting from
the activity or project will clearly not increase emissions;
(2) The federally enforceable emissions limit at the time of the
change is comparable to the emission limit that, considering the air
quality designation of the area where the source is located, would
result from a current review in accordance with either paragraph (j) of
this section or regulations approved pursuant to Sec. 51.165(a)(2) or
Sec. 51.166(j) of this chapter, for emissions units of the same class
or source category. The Administrator may presume that a source
satisfies this paragraph (b)(2)(iii)(L)(2) if:
(i) The activity would occur no later than 120 consecutive months
from the date of issuance of the permit issued under either this
section or regulations approved pursuant to Sec. 51.165 or Sec. 51.166
of this chapter, that established the currently applicable emissions
limit for the emissions unit;
(ii) The activity would occur no later than 120 consecutive months
from the date of issuance of the permit issued under regulations
approved pursuant to Secs. 51.160 through 51.164 of this chapter, that
established the currently applicable emissions limit for the emissions
unit, provided the permit was issued under regulations that were
determined by the Administrator to provide for permits that contain
emissions limitations that satisfy paragraph (b)(2)(iii)(L)(2) of this
section; or
(iii) The activity would occur no later than 60 consecutive months
from the date on which the applicable permitting authority made a
determination, with public notice and opportunity for public comment
consistent with Sec. 51.161 of this chapter, that the emissions limit
satisfied paragraph (b)(2)(iii)(L)(2) of this section.
(3) The activity would not require a revision to, or cause a
violation of, any federally enforceable limit or condition in a permit
issued under either this section or regulations approved pursuant to
Secs. 51.160 through 51.166 of this chapter;
(4) The activity or project does not include the replacement or
reconstruction of an emissions unit; and
(M) Any activity undertaken at an existing major stationary source,
provided :
(1) The activity would not require a revision to, or cause a
violation of, any federally enforceable limit or condition in a permit
issued under either this section or regulations approved pursuant to
Secs. 51.160 through 51.166 of this chapter; and
(2) The entire major stationary source was permitted, and received
the currently applicable emissions limits for all emissions units, at
the source issued in accordance with either this section or regulations
approved pursuant to Secs. 51.165 through 51.166 of this chapter no
more than 120 consecutive months prior to the proposed activity.
(N) A change to ozone-depleting substances with lower ozone-
depleting potential under the provisions of sections 601 and 602 of the
Act, including changes to ozone-depleting substances emitting equipment
needed to accommodate the change, as long as the productive capacity of
the equipment is not increased.
* * * * *
(3) * * *
(vi) * * *
(C) It has approximately the same qualitative significance for
public health and welfare as that attributed to the increase from the
particular change such that, at a minimum, the decrease is sufficient
to prevent the proposed increase from causing or contributing to a
violation of any national ambient air quality standard or any
applicable maximum allowable increase over baseline concentrations or
having an adverse impact on air quality related values in Class I
areas.
* * * * *
(5) (i) Stationary source means any building, structure, facility,
installation, or stationary internal combustion engine which emits or
which may emit any air
[[Page 38338]]
pollutant subject to regulation under the Act.
(ii) A stationary source does not include emissions resulting
directly from an internal combustion engine used for transportation
purposes, or from a nonroad engine or nonroad vehicle.
* * * * *
(19) Undemonstrated technology or application means any system,
process, material, or treatment technology (including pollution
prevention) that has not been demonstrated in practice, but would have
a substantial likelihood to operate effectively and achieve:
(i) A greater continuous reduction of air pollutant emissions than
any demonstrated system; or
(ii) A comparable emissions reduction at lower cost, or with lower
energy input, or with less environmental impact.
* * * * *
(21) * * *
(ii) Actual emissions shall be calculated using the unit's actual
operating hours, production rates, and types of materials processed,
stored, or combusted during any 12 consecutive months during the 120
consecutive months that precede the commencement of construction of a
proposed physical or operational change at the source, and any current,
federally enforceable limitation on emissions, as required by the Act,
including but not limited to, best available control technology, lowest
achievable emission rate (as defined at Sec. 51.165(a)(1)(xiii) of this
chapter), reasonably available control technology, or emissions
standards for hazardous air pollutants under section 112 of the Act.
* * * * *
(vi) In lieu of paragraphs (b)(21)(iv) and (v) of this section,
actual emissions of the unit following a physical or operational change
shall equal the representative actual annual emissions of the unit,
provided the source owner or operator maintains and submits to the
Administrator, on an annual basis for a period of 5 years from the date
the unit resumes regular operation, information demonstrating that the
physical or operational change did not result in an emissions increase.
A longer period, not to exceed 10 years, may be required by the
Administrator if the Administrator determines such a period to be more
representative of normal source post-change operations.
(22) Complete means, in reference to an application for a permit
required under this section, that the Administrator has deemed the
application to contain the information necessary (in accordance with
the criteria contained in paragraph (n) of this section) to begin
formal review of the application. Determining an application complete
for the purpose of beginning formal review does not preclude the
Administrator from requiring additional information as may be needed to
determine whether the applicant satisfies all requirements of this
section.
(23) Significant means:
(i) In reference to a net emissions increase or the potential of a
source to emit any of the following pollutants, a rate of emissions
that would equal or exceed any of the following rates:
POLLUTANT AND EMISSIONS RATE
Carbon monoxide: 100 tons per year
Nitrogen oxides: 40 tons per year
Sulfur dioxide: 40 tons per year
Ozone: 40 tons per year of volatile organic compounds
Particulate matter: 25 tons per year of particulate matter
emissions; 15 tons per year of PM-10 emissions
Lead: 0.6 tons per year
Fluorides: 3 tons per year
Sulfuric acid mist: 7 tons per year
Hydrogen sulfide: 10 tons per year
Total reduced sulfur (including hydrogen sulfide): 10 tons per year
Reduced sulfur compounds (including hydrogen sulfide): 10 tons per
year
Municipal waste combustor organics (measured as total tetrathrough
octa-chlorinated dibenzo-p-dioxins and dibenzofurans):
3.2 x 10-6 megagrams per year (3.5 x 10-6 tons per year)
Municipal waste combustor metals (measured as particulate matter):
14 megagrams per year (15 tons per year) Municipal waste combustor
acid gases (measured as sulfur dioxide and hydrogen chloride): 36
megagrams per year (40 tons per year)
Ozone-depleting substances (ODS): 100 tons per year.
(ii) In reference to a net emissions increase or the potential of a
source to emit a pollutant subject to regulation under the Act that
paragraph (b)(23)(i) of this section does not list, any emissions rate.
However, for purposes of the applicability of this section, the
hazardous air pollutants listed under section 112(b)(1) of the Act,
including the hazardous air pollutants that may be added to the list,
are not considered subject to regulation under the Act.
(iii) Notwithstanding paragraph (b)(23)(i) of this section, any
emissions rate or any net emissions increase associated with a major
stationary source or major modification, which would construct within
10 kilometers of a Class 1 area, and have an impact on such area equal
to or greater than 1 microgram per cubic meter (24-hour average).
(iv) In reference to the predicted ambient impact that the
emissions from a proposed major source or major modification will have
for purposes of determining compliance with the national ambient air
quality standards, concentrations which exceed any of the following:
------------------------------------------------------------------------
Pollutant Averaging time Significant impact
------------------------------------------------------------------------
SO2............................. Annual............ 1.0 g/m3.
24-Hour........... 5.0 g/m3.
3-Hour............ 25.0 g/
m3.
PM-10........................... Annual............ 1.0 g/m3.
24-Hour........... 5.0 g/m3.
NO2............................. Annual............ 1.0 g/m3.
CO.............................. 8-Hour............ 0.5 mg/m3.
1-Hour............ 2.0 mg/m3.
------------------------------------------------------------------------
(v) In reference to the predicted ambient impact that emissions
from a proposed major source or major modification will have for
purposes of determining compliance with the maximum allowable increases
in pollutant concentrations contained in paragraph (c) of this section,
concentrations which exceed any of the following:
----------------------------------------------------------------------------------------------------------------
Class I Class II Class III
------------------------------------------------------------
Pollutant Averaging time Significant
Significant impact impact Significant impact
----------------------------------------------------------------------------------------------------------------
SO2............................ Annual............ 0.1 g/m 3 1.0 g/m 1.0 g/m 3.
3.
24-Hour........... 0.2 g/m 3 5.0 g/m 5.0 g/m 3.
3.
3-Hour............ 1.0 g/m 3 25.0 g/m 25.0 g/m 3.
3.
PM-10.......................... Annual............ 0.2 g/m 3 1.0 g/m 1.0 g/m 3.
3.
24-Hour........... 0.3 g/m 3 5.0 g/m 5.0 g/m 3.
3.
NO2............................ Annual............ 0.1 g/m 3 1.0 g/m 1.0 g/m 3.
3.
----------------------------------------------------------------------------------------------------------------
[[Page 38339]]
* * * * *
(27) Indian Reservation means all land within the limits of any
Indian Reservation under the jurisdiction of the United States
Government, notwithstanding the issuance of any patent, and including
rights-of-way running through the reservation.
* * * * *
(32) Pollution control project means:
(i) Any activity or project undertaken at an existing emissions
unit which, as its primary purpose, reduces emissions of air pollutants
from such unit. Such activities or projects do not include the
replacement of an existing emissions unit with a newer or different
unit, or the reconstruction of an existing emissions unit, and are
limited to any of the following:
(A) The installation of conventional or advanced flue gas
desulfurization, or sorbent injection for SO2;
(B) Electrostatic precipitators, baghouses, high efficiency
multiclones, or scrubbers for particulate matter or other pollutants;
(C) Flue gas recirculation, low-NOX burners, selective non-
catalytic reduction or selective catalytic reduction for NOX;
(D) Regenerative thermal oxidizers, catalytic oxidizers,
condensers, thermal incinerators, flares, or carbon absorbers for
volatile organic compounds or hazardous air pollutants;
(E) Activities or projects undertaken to accommodate switching to
an inherently less polluting fuel, including but not limited to,
natural gas or coal reburning, or the cofiring of natural gas and other
inherently less polluting fuels, for the purpose of controlling
emissions, and including any activity that is necessary to accommodate
switching to an inherently less polluting fuel;
(F) Pollution prevention projects which the Administrator has
determined through a process consistent with Sec. 51.161 of this
chapter to be environmentally beneficial. Pollution prevention projects
that may result in an unacceptable increased risk from the release of
hazardous pollutants are not environmentally beneficial; and
(G) Installation of a technology, for purposes set forth in
paragraph (b)(32) of this section, which is not listed in paragraphs
(b)(32)(i) (A) through (E) of this section but meets the following:
(1) Its effectiveness in reducing emissions has been demonstrated
in practice; and
(2) It is determined by the Administrator to be environmentally
beneficial.
* * * * *
(39) Federal Class I area means any Federal lands within the United
States either designated as Class I pursuant to section 162(a) of the
Act (and which may not be redesignated) or redesignated as Class I
pursuant to either paragraph (g) of this section or Sec. 51.166(g) of
this chapter.
(40) Federal official means the Federal official charged with
direct responsibility for management of any lands within a Federal
Class I area.
(41) Air quality related value means, for purposes of this section,
visibility or a scenic, cultural, physical, biological, ecological, or
recreational resource that may be affected by a change in air quality,
as defined by the Federal Land Manager for Federal lands and as defined
by the applicable State or Indian Governing Body for nonfederal lands.
(42) Adverse impact on air quality related values means, for
purposes of this section, a deleterious effect on any air quality
related value identified by a Federal Land Manager, resulting from
emissions from a proposed major source or major modification, that
interferes with the management, protection, preservation, or enjoyment
of such air quality related values of a Federal Class I area. This
determination shall be made on a case-by-case basis taking into account
existing air quality conditions.
(43) Demonstrated in practice means, for the purposes of this
section, any control technology that has been--
(i) Listed in or required by any of the following:
(A) The EPA's RACT/BACT/LAER Clearinghouse;
(B) A major source construction permit issued pursuant to either
part C or D of title I of the Act;
(C) An emissions limitation contained in a federally-approved plan,
excluding any emissions limitations established by permits issued
pursuant to programs for non-major sources;
(D) A permit or standard under either section 111 or 112 of the
Act; and
(E) The EPA's Alternative Control Techniques documents and Control
Techniques Guidelines; or
(ii) Notwithstanding paragraph (b)(43)(i) of this section,
installed and operating on an emissions unit (or units) which:
(A) Has operated at a minimum of 50 percent of design capacity for
6 months; and
(B) The pollution control efficiency performance has been verified
with either:
(1) A performance test; or
(2) Performance data collected at the maximum design capacity of
the emissions unit (or units) being controlled, or 90 percent or more
of the control technology's designed specifications.
(44) Pollution prevention means any activity that through process
changes, product reformulation or redesign, or substitution of less
polluting raw materials, eliminates or reduces the release of air
pollutants (including fugitive emissions) and other pollutants to the
environment prior to recycling, treatment, or disposal; it does not
mean recycling (other than certain ``in-process recycling'' practices),
energy recovery, treatment, or disposal.
(45) Plantwide applicability limit means a plantwide federally
enforceable emissions limitation established for a stationary source
such that any subsequent physical or operational change resulting in
plantwide emissions that remain less than the limit are excluded from
preconstruction review under this section.
(46) Plantwide applicability limit major modification means,
notwithstanding the requirements of paragraph (b)(2) of this section,
any increase in the emissions rate, in tons per year, over the
plantwide applicability limit. Any emissions increase of volatile
organic compounds shall be considered an increase for.
(47)(i) Nonroad engine means, except as discussed in paragraph
(b)(46)(ii) of this section, any internal combustion engine:
(A) In or on a piece of equipment that is self-propelled or that
serves a dual purpose by both propelling itself and performing another
function (such as garden tractors, off-highway mobile cranes and
bulldozers);
(B) In or on a piece of equipment that is intended to be propelled
while performing its function (such as lawnmowers and string trimmers);
or
(C) That, by itself or in or on a piece of equipment, is portable
or transportable, meaning designed to be and capable of being carried
or moved from one location to another. Indicia of transportability
include, but are not limited to, wheels, skids, carrying handles,
dolly, trailer, or platform.
(ii) An internal combustion engine is not a nonroad engine if:
(A) The engine is used to propel a motor vehicle or a vehicle used
solely for competition, or is subject to standards promulgated under
section 202 of the Act;
(B) The engine is regulated by a Federal new source performance
standard promulgated under section 111 of the Act; or
(C) The engine otherwise included in paragraph (b)(47)(i) of this
section remains or will remain at a location for
[[Page 38340]]
more than 12 consecutive months, or a shorter period of time for an
engine located at a seasonal source. A location is any single site at a
building, structure, facility, or installation. Any engine (or engines)
that replaces an engine at a location and that is intended to perform
the same or similar function as the engine replaced will be included in
calculating the consecutive time period. An engine located at a
seasonal source is an engine that remains at a seasonal source during
the full annual operating period of the seasonal source. For purposes
of this paragraph (b)(47)(ii)(C), a seasonal source is a stationary
source that remains in a single location on a permanent basis (i.e., at
least 2 years) and that operates at that single location approximately
three months (or more) each year. This paragraph (b)(47)(ii)(C) does
not apply to an engine after the engine is removed from the location.
(48) Nonroad vehicle means a vehicle that is powered by a nonroad
engine and that is not a motor vehicle or a vehicle used solely for
competition.
(49) Stationary internal combustion engine means:
(i) Any internal combustion engine that is regulated by a Federal
new source performance standard promulgated under section 111 of the
Act; or
(ii) Any internal combustion engine that is none of the following:
a nonroad engine, an engine used to propel a motor vehicle or a vehicle
used solely for competition, or an engine subject to standards
promulgated under section 202 of the Act.
* * * * *
(i) * * *
(8) * * *
(i) The emission increase of the pollutant from a new stationary
source or the net emissions increase of the pollutant from a
modification would cause, in any area, air quality impacts less than
the following amounts:
(A) Carbon monoxide: 575 micrograms per cubic meter, 8-hour
average;
(B) Nitrogen dioxide: 14 micrograms per cubic meter, annual
average;
(C) Sulfur dioxide: 13 micrograms per cubic meter, 24-hour average;
(D) Ozone; 1
---------------------------------------------------------------------------
\1\ No de minimis air quality level is provided for ozone.
However, any net increase of 100 tons per year or more of VOC
subject to PSD would be required to perform an ambient impact
analysis, including the gathering of ambient air quality data.
---------------------------------------------------------------------------
(E) Particulate matter: 10 micrograms per cubic meter PM-10, 24-
hour average;
(F) Lead: 0.1 micrograms per cubic meter, 3-month average;
(G) Fluorides: 0.25 micrograms per cubic meter, 24-hour average;
(H) Hydrogen sulfide: 0.2 micrograms per cubic meter, 1-hour
average;
(I) Total reduced sulfur: 10 micrograms per cubic meter, 1-hour
average;
(J) Reduced sulfur compounds: 10 micrograms per cubic meter, 1-hour
average; or
* * * * *
(14) The requirements of this section do not apply to any
stationary source with respect to each hazardous air pollutant listed
pursuant to section 112 of the Act, as well as all pollutants that may
be added to such list under the provisions of section 112(b)(2) of the
Act. However, the applicable provisions of this section shall apply to
any pollutant listed pursuant to sections 112(b)(1) or (b)(2) of the
Act that is deleted from such list under the provisions of section
112(b)(3) of the Act. Any hazardous air pollutants listed in section
112 of the Act which are regulated as constituents or precursors of a
more general pollutant listed under section 108 of the Act are still
subject to the provisions of this section, notwithstanding section
112(b)(6) of the Act.
(j) * * *
(5)(i) In determining best available control technology:
(A) The applicant shall identify and evaluate all available and
technically feasible control technology alternatives that have been
demonstrated in practice pursuant to paragraph (b)(43)(i) of this
section prior to the date on which the permit application is complete
and pursuant to paragraph (b)(43)(ii) of this section 90 days prior to
the date on which the permit application is complete;
(B) All control technology alternatives identified pursuant to
paragraph (j)(5)(i)(A) of this section shall be ranked and evaluated in
descending order of control effectiveness. The alternative providing
the maximum degree of emissions reduction shall be established as best
available control technology unless it is demonstrated to the
satisfaction of the Administrator that, based upon technical
considerations, or energy, environmental, and economic impacts and
other costs, the maximum degree of emissions reduction is not
achievable in that case. If the applicant identifies the technology
providing the maximum degree of emissions reduction as the best
available control technology, then the Administrator may waive the
requirement to analyze or evaluate less effective control technologies.
Otherwise, the next most stringent control technology shall then be
evaluated in the same manner. Documentation supporting the
demonstration shall be included in the public record pursuant to
paragraph (q)(2) of this section.
(ii) The control technology alternatives considered in paragraph
(j)(5)(i) of this section shall be based upon control technologies and
methods for the same and similar source categories, i.e., those
categories including sources that have similar emissions stream
characteristics.
(iii) On or after the date that an application is complete pursuant
to paragraph (n) of this section, the permit applicant will not be
required to consider control technology alternatives identified through
public comments that are in addition to those alternatives required
under paragraph (j)(5)(i)(A) of this section, unless the Administrator
determines that, based on information provided pursuant to paragraph
(q)(2) of this section, the alternatives warrant further consideration
by the applicant.
(iv) After the date on which the public comment period is closed
for a permit issued pursuant to this section, the applicant for such
permit will not be required to consider any control technology that has
not been identified either prior to or during the public comment
period.
(6) For determinations of best available control technology
required under this section, the Administrator shall include the
control technology information in the EPA's RACT/BACT/LAER
Clearinghouse within 60 days after permit approval.
* * * * *
(n) Complete application criteria.
(1)(i) The Administrator shall determine that a permit application
is complete or deficient based on the consideration of determinations,
analyses and other information contained in the application, and
adequacy thereof, as specified in paragraphs (n)(2) through (n)(5) of
this section.
(ii) The Administrator shall notify each applicant, in accordance
with procedures set forth in Sec. 124.3(c) of this chapter, as to
either the completeness of the application or any deficiency in the
application or information submitted. In the event of such a
deficiency, the date of receipt of the complete application shall be
the date on which the Administrator received all required information.
(2) Information necessary to determine a permit application
complete shall include:
* * * * *
[[Page 38341]]
(iii) (A) A detailed description of the system of continuous
emissions reduction which the applicant has submitted in a permit
application for a source or modification, to qualify either as best
available control technology, or for an undemonstrated technology
waiver in accordance with paragraph (s) of this section; and
(B) All information used or consulted by the applicant in
recommending a system of continuous emissions reduction as either the
best available control technology or an approvable undemonstrated
technology.
(iv) Information and data used to perform all required analyses or
determinations under paragraphs (o), (p), (r), (v) and (x) of this
section, as applicable.
(3) Upon request of the Administrator, the owner or operator shall
provide any information and data used to perform all required analyses
or determinations under paragraphs (k), (l) and (m) of this section.
(4) An application shall not be considered complete unless the
permit application has been registered on the applicable EPA electronic
bulletin board. To register, at a minimum, the following must be
provided:
(i) Name and type of source;
(ii) Nature of proposed project, i.e., new facility or
modification;
(iii) Proposed location of the source in State/county (including
Universal Transverse Mercator coordinates) and the distance between the
source and each Class I area within 250 kilometers;
(iv) Anticipated allowable emissions, or increase in emissions
rate, for each affected air pollutant regulated under the Act;
(v) Source contact mailing address and telephone number, and
(vi) The agency responsible for issuing the permit.
(5) Prior to making a completeness determination, the Administrator
shall provide for any Federal Land Manager review and coordination
required under paragraph (p)(5) of this section.
* * * * *
(p) Sources potentially impacting Federal Class I areas.
(1) Protection of air quality related values. * * *
(2) General requirements.
(i) Notification of potential impacts on a Federal Class I area and
requirement for impact assessment.
(A) Where the Federal Official, Federal Land Manager, the
Administrator, the Governor of an adjacent State, or the governing body
of an adjacent Indian Tribe containing a Federal Class I area, files,
prior to the date a completeness determination is made pursuant to
paragraph (n)(1) of this section, a written notice alleging that
emissions of a particular pollutant from a proposed major source or
major modification may cause or contribute to a change in the air
quality in such area and identifying the potential adverse impact of
such change on affected air quality related values identified in the
area by the Federal Land Manager, a permit shall not be issued unless
the owner or operator of such source:
(1) Demonstrates to the satisfaction of the Administrator that
emissions will not cause or contribute to ambient pollutant
concentrations in the Federal Class I area which violate the maximum
allowable increases over baseline concentrations; and
(2) Provides an analysis of the potential impacts on air quality
related values at the Federal Class I area.
(B) A permit otherwise prohibited under paragraph (p)(2)(i)(A)(1)
of this section may be issued in accordance with the variance
provisions in paragraphs (p)(8) through (p)(11) of this section.
(ii) Available information on air quality related values and
analytical methods. The Federal Land Manager or Federal Official shall,
upon request, provide to the owner or operator of a proposed major
source or major modification that may have an adverse impact on air
quality related values in a Federal Class I area all available
information about such values and methods to analyze potential impacts.
(iii) Consultation with Federal Land Manager. The Administrator
shall provide for consultation and coordination with the Federal Land
Manager including the procedures contained in paragraphs (p)(3) through
(p)(6) of this section.
(3) Pre-application coordination. For a proposed major source or
major modification within 100 kilometers of a Federal Class I area:
(i) The affected Federal Land Manager shall be notified within 30
days from receipt by the Administrator of advance notification of a
permit application; and
(ii) The affected Federal Land Manager shall be given reasonable
notice and an opportunity to participate in pre-application meetings
with the applicant.
(4) Permit application coordination. (i) The Federal Land Manager
of any Federal Class I area within 100 kilometers of a proposed major
source or major modification shall be provided with a copy of the
permit application and other relevant information, and
(ii) The Federal Land Manager shall be provided with a copy of a
permit application requested within 7 days from the date information
about such application is registered on the applicable EPA electronic
bulletin board (in accordance with paragraph (n)(4) of this section).
(5) Completeness determination coordination. Prior to making the
completeness determination under paragraph (n)(1) of this section, the
Administrator shall:
(i) Ensure that the applicant has provided any analysis required
pursuant to paragraph (p)(2)(i) of this section;
(ii) Give the Federal Land Manager 30 days from receipt of an
application to review the application, where the Federal Land Manager
has received such application pursuant to paragraph (p)(4) of this
section;
(iii) Consider any comments provided by the Federal Land Manager
within the time period under paragraph (p)(5)(ii) of this section; and
(iv) Consult with the Federal Land Manager about any inconsistency
between the determination by the Administrator and the Federal Land
Manager's recommendations.
(6) Preliminary and final permit determination--No Class I
increment violation. Where the Administrator has determined that the
emissions from the proposed major source or major modification will not
cause or contribute to ambient pollutant concentrations in the Federal
Class I area which violate the maximum allowable increases over
baseline concentrations:
(i) The Administrator shall not issue a preliminary permit
determination until the Federal Land Manager has been given at least 60
days (from the date of issuance of the completeness determination
required under paragraph (n)(1) of this section that the permit is
complete) to submit a demonstration that a proposed major source or
major modification will have an adverse impact on air quality related
values.
(ii) If the Administrator agrees with the Federal Land Manager's
demonstration under paragraph (p)(6)(i) of this section, the
Administrator shall propose to deny the permit.
(iii) If the Administrator is not satisfied with the Federal Land
Manager's demonstration under paragraph (p)(6)(i) of this section, the
Administrator shall consult with the Federal Land Manager, reference
the Federal Land Manager's demonstration and the Administrator's
proposed rejection of the demonstration in the public notice announcing
the preliminary permit determination, and provide an explanation in
writing (for inclusion in the public record along
[[Page 38342]]
with the Federal Land Manager's demonstration) of the reasons for
proposing to reject the Federal Land Manager's demonstration. The
Administrator's written explanation shall address, at a minimum, the
following:
(A) The basis for any disagreement with the data and analyses
contained in the Federal Land Manager's demonstration of adverse impact
on air quality related values;
(B) Any conclusions the Administrator reaches, about whether the
projected impacts of the proposed source's emissions will have an
adverse impact on air quality related values, that are inconsistent
with the conclusions reached in the demonstration submitted by the
Federal Land Manager; and
(C) Any measures undertaken to mitigate the potential adverse
impacts of proposed emissions increases, including the estimated effect
of any mitigation.
(iv) In the final permit determination, the Administrator shall
address any comments made by the Federal Land Manager concerning the
Administrator's preliminary determination.
(7) Mitigation of adverse impacts. The Administrator may issue a
permit for a proposed major source or major modification that would
otherwise be denied a permit under paragraph (p)(6) of this section, if
the Administrator determines, in consultation with the Federal Land
Manager, that the source has mitigated its adverse impact on air
quality related values. The owner or operator of a proposed major
source or major modification may mitigate an adverse impact by
obtaining enforceable and permanent emissions reductions of sufficient
amount and in such location that the reductions will offset the change
in air quality in the Federal Class I area that would have resulted
from the proposed source.
* * * * *
(q) Public participation.
(1) The Administrator shall follow the applicable procedures of
part 124 of this chapter in processing applications under this section.
The Administrator shall follow the procedures at Sec. 51.166(q) of this
chapter to the extent that the procedures of part 124 of this chapter
do not apply.
(2) The following information must be submitted with any new
control technology alternatives recommended by the public for the
Administrator to consider in determining best available control
technology pursuant to paragraph (j)(5) of this section:
(i) Name and location of the source utilizing the control
technology;
(ii) Manufacturer, type and model of pollution control device;
(iii) Date installed and date operational;
(iv) Performance requirements specified under applicable permits,
implementation plans or Federal standards; and
(v) Available test or performance data or identification of source
of additional information.
(3)(i) After any cut-off date established in accordance with
paragraph (j)(5)(iii) of this section, the Administrator shall notify a
permit applicant within 10 working days from the date of receipt of a
public comment concerning any control technology alternatives that the
Administrator determines to warrant further consideration by the
applicant; and
(ii) The Administrator shall make available in the public record
all information that was submitted with public comment regarding
control technology alternatives and provide the basis for its decision
to either require or not require the permit applicant to further
consider such control technology alternatives.
* * * * *
(v) Undemonstrated technology or application waiver.
(1) An owner or operator of a proposed major stationary source or
major modification may satisfy the requirements of paragraph (j) of
this section through the use of an undemonstrated technology or
application as set forth in this section. The owner or operator shall
provide to the Administrator a written request for approval of an
undemonstrated technology or application as part of the permit
application.
(2) The Administrator may approve a system of undemonstrated
technology or application for a particular source or modification if:
* * * * *
(4) If the Administrator withdraws approval of a system of
undemonstrated technology or application, the owner or operator shall
bring the affected emissions unit(s) into compliance with the reference
best available control technology emissions limit within 18 months from
the date of withdrawal.
(5) The Administrator shall include, as a minimum, the following
information in a waiver issued pursuant to paragraph (v) of this
section:
(i) The undemonstrated technology or application's emissions
control performance objective and the applicable reference best
available control technology emissions limit;
(ii) The marginal and gross failure emissions limits as defined by
the Administrator on a case-by-case basis; and
(iii) Identification and classification of potential failure modes
and associated contingency measures.
(6) If, by the date established in paragraph (v)(2)(ii) of this
section, the undemonstrated technology or application does not achieve
the permitted emissions limit, but actual emissions are equal to or
less than the best available control technology emissions limit
referenced in the permit, the Administrator shall:
(i) Issue a final permit with the emissions limit equal to the
undemonstrated technology or application's consistently achieved actual
emissions rate; and
(ii) Report the final permit limits to the EPA's RACT/BACT/LAER
Clearinghouse as a demonstrated control technology.
(7) If, by the date established in paragraph (v)(2)(ii) of this
section, the actual emissions from the undemonstrated technology or
application constitute marginal failure the owner or operator may
petition the Administrator to permit the undemonstrated technology or
application to operate at its actual emissions limit. Accordingly, the
Administrator shall either:
(i) Approve the petition and proceed in accordance with paragraphs
(v)(6) (i) and (ii) of this section; or
(ii) Disapprove the petition and require the owner or operator to
comply with paragraph (v)(4) of this section.
(8) If, at any time prior to or on the date established in
paragraph (v)(2)(ii) of this section, the actual emissions from the
undemonstrated technology or application constitute gross failure:
(i) The Administrator shall withdraw approval pursuant to paragraph
(v)(4) of this section; and
(ii) The owner or operator shall mitigate all emissions increases
above the applicable reference best available control technology
emissions limit by reducing actual emissions.
(9) The Administrator shall limit the number of waivers granted to
the number necessary to ascertain whether or not such system complies
with sections 111(j)(1)(A)(ii) and (iii) of the Act.
* * * * *
(x) Plantwide applicability limit.
(1) Applicability. The owner or operator of an existing major
stationary source may request the Administrator to approve a plantwide
applicability limit for any one or more pollutants, and the
Administrator may approve a plantwide applicability limit for an
existing major stationary source, in accordance with paragraphs (x)(2)
through (x)(5) of this section.
[[Page 38343]]
(2) Procedure. A plantwide applicability limit for an existing
major stationary source may be established only through a procedure
consistent with Sec. 51.161 of this chapter, and with at least 30 days
allowed for public notice and opportunity for comment.
(3) Emissions limitations and conditions.
(i) A plantwide applicability limit shall be established based on
either:
(A) Plantwide actual emissions (not to exceed current allowable
emissions), including a reasonable operating margin, less than the
applicable significant emissions rate; or
(B) Source-wide limits on annual emissions established in a permit
issued within the immediately preceding 5 years under regulations
approved pursuant to Sec. 51.165 of this part, where the source-wide
emissions limits were completely offset and relied upon in an approved
State attainment demonstration plan.
(ii) Any plantwide applicability limit emissions limitations shall
be achievable through application of production processes or available
methods, systems, and techniques including, but not limited to,
emissions control equipment, fuel cleaning or treatment, fuel
combustion techniques, substitution of less polluting materials, or
limits on production that represent normal source operations.
(iii) Specific terms and conditions that assure the practical
enforceability of plantwide applicability limit emissions limitations
shall be contained in a federally enforceable permit applicable to the
source.
(iv) The emissions limitations and conditions established for a
plantwide applicability limit shall not relieve any owner or operator
of the responsibility to comply fully with any applicable control
technology requirements.
(4) Plantwide applicability limit modifications.
(i) Notwithstanding paragraphs (b)(2) and (b)(3) of this section
(the definitions for major modification and net emissions increase),
any physical or operational change consistent with plantwide
applicability limit terms and conditions and paragraph (b)(3)(vi)(C) of
this section shall not constitute a major modification for the
pollutants covered by the plantwide applicability limits. All decreases
in emissions shall have approximately the same qualitative significance
for public health and welfare as that attributed to the increase from
the particular change;
(ii) Requirements equivalent to those contained in paragraphs (j)
through (r) of this section shall apply to any plantwide applicability
limit major modification as if it were a major modification, except
that in lieu of paragraph (j)(3) of this section, a plantwide
applicability limit major modification shall apply best available
control technology for each pollutant subject to regulation under the
Act if an emissions increase above the plantwide applicability limit
would occur; and
(iii) The best available control technology requirement applies to
each emissions unit that contributes to the emissions increase above
the plantwide applicability limit.
(5) Plantwide applicability limit reevaluation.
(i) The Administrator shall reevaluate the plantwide applicability
limit emissions limitations pursuant to--
(A) Permit renewal and public notification procedures under part 70
or 71 of this chapter; or
(B) Another proceeding with public notice and opportunity for
public comment.
(ii) As part of the reevaluation required under paragraph (x)(5)(i)
of this section, the Administrator may reduce permitted emissions
limitations or otherwise adjust (but not increase) permitted emissions
limitations to reflect:
(A) Air quality concerns arising after the approval of the
plantwide applicability limit;
(B) Changes at the source; or
(C) Other appropriate considerations.
(iii) The Administrator shall adjust the source's plantwide
applicability limit emissions limitations to reflect new applicable
requirements as they become effective.
* * * * *
4. Section 52.24 is revised to read as follows:
Sec. 52.24 Statutory restriction on new sources.
(a) Any area designated nonattainment pursuant to section 107(d) of
the Act to which, immediately prior to the enactment of the Amendments
to the Act of 1990 (November 15, 1990), a prohibition of construction
or modification of major stationary sources was applied, shall retain
that prohibition if such prohibition was applied by virtue of a finding
of the Administrator that the State containing such an area:
(1) Failed to submit an implementation plan meeting the
requirements of an approvable new source review permitting program; or
(2) Failed to submit an implementation plan that provided for
timely attainment of the national ambient air quality standard for
sulfur dioxide by December 31, 1982. This prohibition shall apply until
the Administrator approves a plan for such area as meeting the
applicable requirements of part D of title I of the Act as amended (NSR
permitting requirements) or subpart 5 of part D of title I of the Act
as amended (relating to attainment of the national ambient air quality
standards for sulfur dioxide), as applicable.
(b) Permits to construct and operate as required by permit programs
under section 172(c)(5) of the Act may not be issued for new or
modified major stationary sources proposing to locate in nonattainment
areas or areas in a transport region where the Administrator has
determined that the applicable implementation plan is not being
adequately implemented for the nonattainment area or transport region
in which the proposed source is to be constructed or modified in
accordance with the requirements of part D of title I of the Act.
(c) Whenever, on the basis of any information, the Administrator
finds that a State is not in compliance with any requirement or
prohibition of the Act relating to the construction of new sources or
the modification of existing sources, the Administrator may issue an
order under section 113(a)(5) of the Act prohibiting the construction
or modification of any major stationary source in any area to which
such requirement applies.
(d) The restrictions in paragraphs (a) and (b) of this section
apply only to major stationary sources of emissions that cause or
contribute to concentrations of the pollutant (or precursors, as
applicable) for which the transport region or nonattainment area was
designated such, and for which the applicable implementation plan is
not being carried out in accordance with, or does not meet, the
requirements of part D of title I of the Act.
(e) For any transport region or any area designated as
nonattainment for any national ambient air quality standard, the
restrictions in paragraphs (a) and (b) of this section shall apply to
any major stationary source or major modification that would be major
for the pollutant (or precursors, where applicable) for which the area
is designated nonattainment or a transport region, if the stationary
source or major modification would be constructed anywhere in the
designated nonattainment area or transport region. A major stationary
source or major modification that is major for volatile organic
compounds is also major for ozone.
[[Page 38344]]
(f) The definitions in Sec. 51.165(a) of this chapter shall apply
under this section.
(g) At such time that a particular source or modification becomes a
major stationary source or major modification solely by virtue of a
relaxation in any enforceable limitation which was established after
August 7, 1980, on the capacity of the source or modification otherwise
to emit a pollutant, such as a restriction on hours of operation, then:
(1) If the construction moratorium imposed pursuant to this section
is still in effect for the nonattainment area or transport region in
which the source or modification is located, then the permit may not be
so revised; or
(2) If the construction moratorium is no longer in effect in that
area, then the requirements of Sec. 51.165(a) of this chapter shall
apply to the source or modification as though construction had not yet
commenced on the source or modification.
(h) This section does not apply to major stationary sources or
major modifications locating in a clearly defined part of a
nonattainment area or transport region (such as a political subdivision
of a State), where the EPA finds that a plan which meets the
requirements of part D of title I of the Act is in effect and is being
implemented in that part.
[FR Doc. 96-17544 Filed 7-22-96; 8:45 am]
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