**NSR: Reasonable Possibility in Recordkeeping - Proposal**

**Table of Contents**

*For hyperlink from this TOC, \[you may have to hold down Ctrl key and
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return to TOC. This TOC is for reviewers' use only and will be deleted
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[I. General Information 3](#__RefHeading___Toc151351560)

[A. Does This Action Apply To Me? 3](#__RefHeading___Toc151351561)

[B. What Should I Consider as I Prepare My Comments for EPA?
3](#__RefHeading___Toc151351562)

[1. Submitting CBI 3](#__RefHeading___Toc151351563)

[2. Tips for Preparing Your Comments 3](#__RefHeading___Toc151351564)

[C. Where Can I Obtain Additional Information?
3](#__RefHeading___Toc151351565)

[D. How Is This Preamble Organized? 3](#__RefHeading___Toc151351566)

[II. Introduction 3](#__RefHeading___Toc151351567)

[A. Purpose of Proposed Rulemaking 3](#__RefHeading___Toc151351568)

[B. Background 3](#__RefHeading___Toc151351569)

[1. 2002 NSR Reform Rule 3](#__RefHeading___Toc151351570)

[2. July 1992 Rule for EUSGUs 3](#__RefHeading___Toc151351571)

[C. Reasonable Possibility Standard 3](#__RefHeading___Toc151351572)

[D. Court Remand of Reasonable Possibility Standard
3](#__RefHeading___Toc151351573)

[E. Interim Interpretation of Reasonable Possibility in Appendix S
3](#__RefHeading___Toc151351574)

[III. Description of This Proposed Action
3](#__RefHeading___Toc151351575)

[A. Application of \"Reasonable Possibility\" Standard
3](#__RefHeading___Toc151351576)

[B. Options for Circumstances Under Which \"Reasonable Possibility\"
Standard Applies 3](#__RefHeading___Toc151351577)

[1. Percentage Increase Trigger 3](#__RefHeading___Toc151351578)

[2. Potential Emissions Trigger 3](#__RefHeading___Toc151351579)

[C. What Is Recorded and Reported Under the \"Reasonable Possibility\"
Requirements 3](#__RefHeading___Toc151351580)

[IV. Statutory and Executive Order Reviews
3](#__RefHeading___Toc151351581)

[A. Executive Order 12866 - Regulatory Planning and Review
3](#__RefHeading___Toc151351582)

[B. Paperwork Reduction Act 3](#__RefHeading___Toc151351583)

[C. Regulatory Flexibility Analysis (RFA)
3](#__RefHeading___Toc151351584)

[D. Unfunded Mandates Reform Act 3](#__RefHeading___Toc151351585)

[E. Executive Order 13132 - Federalism 3](#__RefHeading___Toc151351586)

[F. Executive Order 13175 - Consultation and Coordination with Indian
Tribal Governments 3](#__RefHeading___Toc151351587)

[G. Executive Order 13045 - Protection of Children from Environmental
Health Risks and Safety Risks 3](#__RefHeading___Toc151351588)

[H. Executive Order 13211 - Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
3](#__RefHeading___Toc151351589)

[I. National Technology Transfer and Advancement Act
3](#__RefHeading___Toc151351590)

[V. Statutory Authority 3](#__RefHeading___Toc151351591)

**6560-50-P**

**ENVIRONMENTAL PROTECTION AGENCY**

**40 CFR Parts 51 and 52**

**\[EPA-HQ-OAR-2001-0004; FRL‑ \]**

**RIN 2060-AN88**

**Prevention of Significant Deterioration (PSD) and Nonattainment New
Source Review (NSR): Reasonable Possibility in Recordkeeping**

**AGENCY:** Environmental Protection Agency (EPA).

**ACTION:** Proposed rule.

**SUMMARY:** The EPA proposes revisions to the regulations governing the
major NSR programs mandated by parts C and D of title I of the Clean Air
Act (CAA). These proposed changes clarify the "reasonable possibility"
recordkeeping and reporting standard of the 2002 NSR reform rules. The
"reasonable possibility" standard identifies for sources and reviewing
authorities the circumstances under which a major stationary source
undergoing a modification that does not trigger major NSR must keep
records. The standard also specifies the recordkeeping and reporting
requirements on such sources. Recently, the U.S. Court of Appeals for
the D.C. Circuit in [New York v. EPA]{.underline}, 413 F.3d 3 (D.C. Cir.
2005) [(New York)]{.underline} remanded for the EPA either to provide an
acceptable explanation for its "reasonable possibility" standard or to
devise an appropriately supported alternative. To satisfy the Court\'s
remand, we (the EPA) are proposing two alternative options to clarify
what constitutes \"reasonable possibility\" and when the "reasonable
possibility" recordkeeping requirements apply. The two options are the
\"percentage increase trigger\" and the \"potential emissions trigger.\"

**DATES:** [Comments.]{.underline} Comments must be received on or
before **\[INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL
REGISTER\]**.

[Public Hearing.]{.underline} If anyone contacts EPA requesting a public
hearing by **\[INSERT DATE 14 DAYS AFTER PUBLICATION IN THE FEDERAL
REGISTER\]**, we will hold a public hearing approximately 30 days after
publication in the [Federal Register]{.underline}.

**ADDRESSES:** Submit your comments, identified by Docket ID No.
EPA-HQ-OAR-2001-0004 by one of the following methods:

-   [www.regulations.gov](http://www.regulations.gov/): Follow the
    online instructions for submitting comments.

-   Email: <a-and-r-docket@epa.gov>.

-   Fax: (202) 566-1741.

-   Mail: Air and Radiation Docket and Information Center, Environmental
    Protection Agency, Mailcode: 6102T, 1200 Pennsylvania Ave., NW,
    Washington, DC 20460. In addition, please mail a copy of your
    comments on the information collection provisions to the Office of
    Information and Regulatory Affairs, Office of Management and Budget
    (OMB), Attn: Desk Officer for EPA, 725 17th St., NW, Washington, DC
    20503.

-   Hand Delivery: Environmental Protection Agency, EPA West Building,
    Room B102, 1301 Constitution Ave., NW, Washington, DC. Such
    deliveries are only accepted during the Docket's normal hours of
    operation, and special arrangements should be made for deliveries of
    boxed information.

[Instructions:]{.underline} Direct your comments to Docket ID No.
EPA-HQ-OAR-2001-0004. EPA's policy is that all comments received will be
included in the public docket without change and may be made available
online at [www.regulations.gov](http://www.regulations.gov/), including
any personal information provided, unless the comment includes
information claimed to be Confidential Business Information (CBI) or
other information whose disclosure is restricted by statute. Do not
submit information that you consider to be CBI or otherwise protected
through [www.regulations.gov](http://www.regulations.gov/) or e-mail.
The [www.regulations.gov](http://www.regulations.gov/) website is an
"anonymous access" system, which means EPA will not know your identity
or contact information unless you provide it in the body of your
comment. If you send an e-mail comment directly to EPA without going
through [www.regulations.gov](http://www.regulations.gov/), your e-mail
address will be automatically captured and included as part of the
comment that is placed in the public docket and made available on the
Internet. If you submit an electronic comment, EPA recommends that you
include your name and other contact information in the body of your
comment and with any disk or CD ROM you submit. If EPA cannot read your
comment due to technical difficulties and cannot contact you for
clarification, EPA may not be able to consider your comment. Electronic
files should avoid the use of special characters, avoid any form of
encryption, and be free of any defects or viruses. For additional
information about EPA's public docket, visit the EPA Docket Center
homepage at <http://www.epa.gov/epahome/dockets.htm>. For additional
instructions on submitting comments, go to section I.B of the
**SUPPLEMENTARY INFORMATION** section of this document.

[Docket:]{.underline} All documents in the docket are listed in the
[www.regulations.gov](http://www.regulations.gov/) index. Although
listed in the index, some information is not publicly available,
[e.g.]{.underline}, CBI or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either electronically in
[www.regulations.gov](http://www.regulations.gov/) or in hard copy at
the Air and Radiation Docket and Information Center, EPA/DC, EPA West
Building, Room 3334, 1301 Constitution Ave., NW, Washington, DC. The
Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is (202) 566-1744, and the telephone number for the Air and
Radiation Docket and Information Center is (202) 566-1742.

[Public Hearing:]{.underline} If a public hearing is held, it will be
held at 9 a.m. in EPA\'s Auditorium in Research Triangle Park, North
Carolina, or at an alternate site nearby. Details regarding the hearing
(time, date, and location) will be posted on EPA\'s Web site at
[www.epa.gov/nsr](http://www.epa.gov/nsr) not later than 15 days prior
to the hearing date. People interested in presenting oral testimony or
inquiring as to whether a hearing is to be held should contact Ms. Pam
Long, Air Quality Planning Division, Office of Air Quality Planning and
Standards (C504-03), U.S. Environmental Protection Agency, Research
Triangle Park, NC 27711, telephone (919) 541-0641, fax number (919)
541-5509, e-mail address <long.pam@epa.gov>, at least 2 days in advance
of the public hearing ([see]{.underline} **DATES**). People interested
in attending the public hearing must also call Ms. Long to verify the
time, date, and location of the hearing. The public hearing will provide
interested parties the opportunity to present data, views, or arguments
concerning the proposed action.

**FOR FURTHER INFORMATION CONTACT**: Ms. Lisa Sutton, Air Quality Policy
Division, Office of Air Quality Planning and Standards (C504-03), U.S.
Environmental Protection Agency, Research Triangle Park, NC 27711,
telephone (919) 541-3450, fax number (919) 541-5509, e-mail address
<sutton.lisa@epa.gov>.

**SUPPLEMENTARY INFORMATION:**

[]{#__RefHeading___Toc151351560 .anchor}I. General Information

[]{#__RefHeading___Toc151351561 .anchor}A. Does This Action Apply To Me?

Entities affected by this rule include sources in all industry groups.
The majority of sources potentially affected are expected to be in the
following groups:

+-----------------------------------------------------------------------+
|   ------------------------------ --------- -------------------------- |
|   Industry Group                 SIC^a^    NAICS^b^                   |
|                                                                       |
|   Electric Services              491       221111, 221112, 221113,    |
|                                            221119, 221121, 221122     |
|                                                                       |
|   Petroleum Refining             291       324110                     |
|                                                                       |
|   Industrial Inorganic Chemicals 281       325181, 325120, 325131,    |
|                                            325182, 211112, 325998,    |
|                                            331311, 325188             |
|                                                                       |
|   Industrial Organic Chemicals   286       325110, 325132, 325192,    |
|                                            325188, 325193, 325120,    |
|                                            325199                     |
|                                                                       |
|   Miscellaneous Chemical         289       325520, 325920, 325910,    |
|   Products                                 325182, 325510             |
|                                                                       |
|   Natural Gas Liquids            132       211112                     |
|                                                                       |
|   Natural Gas Transport          492       486210, 221210             |
|                                                                       |
|   Pulp and Paper Mills           261       322110, 322121, 322122,    |
|                                            322130                     |
|                                                                       |
|   Paper Mills                    262       322121, 322122             |
|                                                                       |
|   Automobile Manufacturing       371       336111, 336112, 336211,    |
|                                            336992, 336322, 336312,    |
|                                            336330, 336340, 336350,    |
|                                            336399, 336212, 336213     |
|                                                                       |
|   Pharmaceuticals                283       325411, 325412, 325413,    |
|                                            325414                     |
|   ------------------------------ --------- -------------------------- |
+-----------------------------------------------------------------------+

a Standard Industrial Classification

b North American Industry Classification System.

Entities affected by the rule also include States, local permitting
authorities, and Indian tribes whose lands contain new and modified
major stationary sources.

[]{#__RefHeading___Toc151351562 .anchor}B. What Should I Consider as I
Prepare My Comments for EPA?

[]{#__RefHeading___Toc151351563 .anchor}1. Submitting CBI

Do not submit information that you consider to be CBI electronically
through www.regulations.gov or e-mail. Clearly mark the part or all of
the information that you claim to be CBI. For CBI information in a disk
or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM
as CBI and then identify electronically within the disk or CD ROM the
specific information that is claimed as CBI. In addition to one complete
version of the comment that includes information claimed as CBI, a copy
of the comment that does not contain the information claimed as CBI must
be submitted for inclusion in the public docket. Information so marked
will not be disclosed except in accordance with procedures set forth in
40 CFR part 2.

[]{#__RefHeading___Toc151351564 .anchor}2. Tips for Preparing Your
Comments

When submitting comments, remember to:

-   Identify the rulemaking by docket number and other identifying
    information ([e.g.,]{.underline} subject heading, [Federal
    Register]{.underline} proposal publication date and reference page
    number(s)).

-   Follow directions - The EPA may ask you to respond to specific
    questions or organize comments by referencing a Code of Federal
    Regulations (CFR) part or section number.

-   Explain why you agree or disagree; suggest alternatives and provide
    substitute language for your requested changes.

-   Describe any assumptions and provide any technical information
    and/or data that you used.

-   If you estimate potential costs or burdens, explain how you arrived
    at your estimate in sufficient detail to allow for it to be
    reproduced.

-   Provide specific examples to illustrate your concerns, and suggest
    alternatives.

-   Explain your views as clearly as possible, avoiding the use of
    profanity or personal threats.

-   Make sure to submit your comments by the specified comment period
    deadline.

Commenters wishing to submit proprietary information for consideration
must clearly distinguish such information from other comments and
clearly label it as CBI. Send submissions containing such proprietary
information directly to the following address, and not to the public
docket, to ensure that proprietary information is not inadvertently
placed in the docket: Attention: Mr. Roberto Morales, U.S. Environmental
Protection Agency, OAQPS Document Control Officer, 109 TW Alexander
Drive, Room C404-02, Research Triangle Park, NC 27711. EPA will disclose
information identified as CBI only to the extent allowed by the
procedures set forth in 40 CFR part 2. If no claim of confidentiality
accompanies a submission when it is received by the EPA, the information
may be made available to the public without further notice to the
commenter.

[]{#__RefHeading___Toc151351565 .anchor}C. Where Can I Obtain Additional
Information?

In addition to being available in the docket, an electronic copy of this
proposed rule is also available on the World Wide Web. Following
signature by the EPA Administrator, a copy of this proposed rule will be
posted on the EPA=s New Source Review (NSR) website, under Regulations &
Standards, at <http://www.epa.gov/nsr>.

[]{#__RefHeading___Toc151351566 .anchor}D. How Is This Preamble
Organized?

The information presented in this preamble is organized as follows:

I. General Information

A. Does This Action Apply To Me?

B. What Should I Consider as I Prepare My Comments for EPA?

C. Where Can I Obtain Additional Information?

D. How Is This Preamble Organized?

II\. Introduction

A. Purpose of Proposed Rulemaking

B. Background

C. Reasonable Possibility Standard

D. Court Remand of Reasonable Possibility Standard

E. Interim Interpretation of Reasonable Possibility in Appendix S

III\. Description of This Proposed Action

A. Application of \"Reasonable Possibility\" Standard

B. Options for Circumstances Under Which \"Reasonable Possibility\"
Standard Applies

C. What Is Recorded and Reported Under the \"Reasonable Possibility\"
Requirements

IV\. Statutory and Executive Order Reviews

A. Executive Order 12866 - Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Analysis (RFA)

D. Unfunded Mandates Reform Act

E. Executive Order 13132 - Federalism

F. Executive Order 13175 - Consultation and Coordination with Indian
Tribal Governments

G. Executive Order 13045 - Protection of Children from Environmental
Health Risks and Safety Risks

H. Executive Order 13211 - Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use

I. National Technology Transfer and Advancement Act

V. Statutory Authority

[]{#__RefHeading___Toc151351567 .anchor}II. Introduction

[]{#__RefHeading___Toc151351568 .anchor}A. Purpose of Proposed
Rulemaking

On December 31, 2002 (67 FR 80187), we promulgated final changes
(variously, \"2002 NSR reform rules,\" \"NSR reform,\" or \"reform
rules\") to the major NSR program contained in 40 CFR 51.165, 51.166,
52.21, and 52.24. Major elements of these NSR reform changes concerned
baseline emissions, actual-to-projected-actual methodology, Clean Units,
Plantwide Applicability Limitations (PALs), and Pollution Control
Projects (PCPs). At that time we also added \"reasonable possibility\"
recordkeeping requirements, to apply to projects at existing emissions
units at a major stationary source (other than projects at a Clean Unit
or at a source with a PAL). Further, the \"reasonable possibility\"
requirements only apply if such a project relies on a projection of
post-project emissions (as opposed to potential to emit) in order to
demonstrate that the project is not part of a major modification.

It was our intent to finalize changes to another part of the major NSR
program, at 40 CFR part 51, appendix S (\"Appendix S\"), precisely as we
finalized the NSR reform changes. Appendix S provides NSR requirements
applicable to nonattainment areas after EPA has promulgated a new or
revised NAAQS but before the area has an approved NSR SIP. However, in
the [New York]{.underline} case, the Court remanded the \"reasonable
possibility\" recordkeeping and reporting provision of the 2002 NSR
reform rules for the EPA either to provide an acceptable explanation or
to devise an appropriately supported alternative. The [New
York]{.underline} case also vacated the Clean Unit provision and the PCP
exemption in the 2002 NSR reform rules. We subsequently promulgated
final changes to Appendix S **\[###add date, January 2007?\]**. These
final changes include the \"reasonable possibility\" standard of the NSR
reform rules, with the \"percentage increase trigger,\" as described
below.

To reflect that the Court vacated the Clean Unit provision, today\'s
proposed rule omits reference to Clean Units in the description of
projects to which the \"reasonable possibility\" provisions apply.

The purpose of this rulemaking is to address the Court's remand by
clarifying the reasonable possibility standard and thus clarifying the
circumstances under which records must be kept for projects that do not
trigger major NSR. For purposes of 40 CFR 51.165, 51.166, 52.21, 52.24,
and part 51 appendix S, we are proposing two main options for clarifying
the \"reasonable possibility\" standard.

[]{#__RefHeading___Toc151351569 .anchor}B. Background

[]{#__RefHeading___Toc151351570 .anchor}1. 2002 NSR Reform Rule

In our 2002 NSR reform rule, we revised the major NSR applicability test
by promulgating an actual-to-projected-actual applicability test for
projects involving existing emissions units. Under this test, sources
base major NSR applicability determinations on projected actual
emissions (not necessarily their future potential to emit).

Until promulgation of the 2002 NSR reform rules, sources that were not
electric utility steam generating units (EUSGU) were subject to the
\"potential to emit\" test for determining emissions increases and
therefore were not required to keep records of projected emissions. The
2002 NSR reform rules changed the applicability test for non-EUSGU
sources and created certain recordkeeping requirements under what is
referred to as the "reasonable possibility" standard. The NSR reform
rule added the same \"reasonable possibility\" recordkeeping and
reporting requirements for EUSGUs.

[]{#__RefHeading___Toc151351571 .anchor}2. July 1992 Rule for EUSGUs

Primarily as a result of [Wisconsin Elec. Power Co. v.
Reilly]{.underline} (\"WEPCO\"), 893 F.2d 901 (7th Cir. 1990), we
revised our NSR regulations in 1992 to apply an actual-to-future-actual
test on all physical or operational changes at EUSGUs except those that
are an addition of a new unit or constitute a replacement of an existing
unit. The 1992 regulation (57 FR 32314, July 21, 1992) provides a
"representative actual annual emissions" methodology that requires the
EUSGU (other than a new unit or the replacement of an existing unit) to
compare its baseline emissions with its estimated future actual
emissions to determine how much the proposed change will increase actual
emissions. A discussion of the WEPCO case is included in the preamble to
the 1992 regulation.

In the 1992 regulation, EPA added a reporting provision as a safeguard
to ensure that future actual emissions resulting from the change that
exceeded the estimate would not go unnoticed or unreviewed. Under the
reporting provision, sources that utilize the "representative actual
annual emissions" methodology to determine that they are not subject to
NSR must maintain and submit sufficient records to determine if the
change results in an increase in representative actual annual emissions.
The regulation generally required that the owner or operator submit
records to the reviewing authority on an annual basis for a period of
5 years from the date the unit resumes regular operation after the
change; however, it allowed for a longer tracking period, not to exceed
10 years, in cases where the permitting agency determined that such
longer period was necessary to capture normal source operations. We
expected that documentation of post-change actual annual emissions would
not impose any additional data collection burden on the part of the
EUSGUs, because the EUSGUs would submit the same data normally used to
report emissions or operational levels under other existing
requirements. As we noted in the preamble to the 1992 regulations (57
Fed. Reg. at 32325), the purpose of the provision is "to provide a
reasonable means of determining whether a significant increase in
representative actual annual emissions resulting from a proposed change
at an existing utility occurs within the 5 years following the change."
Prior to 1992, no sources were required to keep records of projected
emissions under major NSR because only the actual-to-potentials test was
used.

[]{#__RefHeading___Toc151351572 .anchor}C. Reasonable Possibility
Standard

Under the two-step applicability test of the 2002 NSR reform rules, a
physical or operational change is a major modification for a regulated
NSR pollutant if it causes both: (1) a significant emissions increase
(see, e.g., 40 CFR 52.21(b)(40)); and (2) a significant net emissions
increase (as defined pursuant to, e.g., 40 CFR 52.21(b)(3) and (b)(23)).
Under the first step of this test, you compare actual annual emissions
before the change to projected actual emissions after the change to
determine whether the change would result in a significant increase in
emissions. The regulation defines "projected actual emissions" such that
the owner or operator of the major stationary source projects the
post-project maximum annual rate at which an existing emissions unit
would emit a regulated NSR pollutant. [See]{.underline},
[e.g.]{.underline}, 40 CFR 52.21(b)(41)(i). This definition provides
that an owner or operator may use the emissions unit's potential to
emit, in tons per year, in lieu of a projection. Under the second step,
which is referred to as netting, you net the contemporaneous emissions
decreases and increases that occurred at the source against the
emissions increase determined under the first step. If the net amount
equals or exceeds the significant level, then the change triggers NSR.
(\"Significant levels\" for regulated NSR pollutants are commonly called
\"significance levels\" or \"significance thresholds,\" and these terms
are used interchangeably for purposes of this proposed action.)

It is the first step of the major NSR applicability test (described
above) that may trigger the \"reasonable possibility\" requirements. The
\"reasonable possibility\" standard only applies to changes affecting a
major stationary source (other than a change at a source with a PAL),
and it only applies to a change that relies on a projection of
post-change actual emissions (as opposed to potential to emit) in order
to demonstrate that the change is not a major modification. Because the
\"reasonable possibility\" standard is triggered only at the first step
of the applicability test, and not the second step (netting), the
recordkeeping requirements may apply even if the emissions increase from
the change is fully offset by contemporaneous emissions decreases. (For
purposes of this proposed action, we refer to the physical or
operational change as, interchangeably, a change or a project.)

In the reform rules ([see]{.underline} 40 CFR 51.165(a)(6), 40 CFR
51.166(r), and 40 CFR 52.21(r)), EPA determined that a source making a
change need not keep records of its emissions (including data on which
the source based its projections and data of actual emissions going
forward) unless the source believes there is a Areasonable possibility@
that the change may result in a significant emissions increase.
[See]{.underline}, [e.g.]{.underline}, 40 CFR 52.21(r)(6).

The provisions of this paragraph (r)(6) apply to projects at an existing
emissions unit at a major stationary source (other than projects at \...
a source with a PAL) in circumstances where there is a reasonable
possibility that a project that is not a part of a major modification
may result in a significant emissions increase and the owner or operator
elects to use the method specified in paragraphs (b)(41)(ii)(a) through
(c) of this section for calculating projected actual emissions.

To determine whether a change at an existing emissions unit will result
in an emissions increase, you must use an actual-to-projected-actual
applicability test. Note, however, that you may opt to use the source=s
potential to emit as its projected actual emissions ([see]{.underline},
e.g., 40 CFR 52.21(b)(41)(ii)([d]{.underline})).

The \"reasonable possibility\" standard requires that a source keep
records if it meets the following three requirements: (i) The source
projects post-change actual emissions and does not use the
actual-to-potential test. (ii) The source determines that the change
would not trigger NSR. (iii) The source nevertheless believes that there
is a reasonable possibility that the change may significantly increase
emissions.[^1] For subject sources, the \"reasonable possibility\"
recordkeeping requirements apply to all regulated NSR pollutants, and
they apply to each emissions unit that could be affected by the project.
Further, if the project increases design capacity or PTE of any
regulated NSR pollutant, the recordkeeping and reporting requirements
apply for 10 years instead of 5 years.

More specifically, if your change or project has a reasonable
possibility of resulting in a significant emissions increase, then you
must: (1) keep certain records that are created before construction
(description of the project, identification of emissions units affected
by the project, and a description of the applicability test); and (2)
monitor emissions, calculate annual emissions, and maintain records of
emissions for 5 years (or 10 years in certain cases) once the change is
completed. If the change\'s annual emissions for a calendar year exceed
the baseline by a significant amount and also differ from the
projection, then you are additionally required to report emissions for
the calendar year.

[]{#__RefHeading___Toc151351573 .anchor}D. Court Remand of Reasonable
Possibility Standard

In the [New York]{.underline} case, the Court held, \"Because EPA has
failed to explain how it can ensure NSR compliance without the relevant
data, we will remand for it either to provide an acceptable explanation
for its \'reasonable possibility\' standard or to devise an
appropriately supported alternative.\" 413 F.3d at 35-36. The Court
explained:

The problem is that EPA has failed to explain how, absent recordkeeping,
it will be able to determine whether sources have accurately concluded
that they have no \'reasonable possibility\' of significantly increased
emissions. We recognize that less burdensome requirements may well be
appropriate for sources with little likelihood of triggering NSR, but
EPA needs to explain how its recordkeeping and reporting requirements
allow it to identify such sources.

413 F.3d at 34. The Court added:

\[T\]he intricacies of the actual-to-projected-actual methodology will
aggravate the enforcement difficulties stemming from the absence of
data. The methodology mandates that projections include fugitive
emissions, malfunctions, and start-up costs, and exclude demand growth
unrelated to the change\.... Each such determination requires sources to
predict uncertain future events. By understating projections for
emissions associated with malfunctions, for example, or overstating the
demand growth exclusion, sources could conclude that a significant
emissions increase was not reasonably possible. Without paper trails,
however, enforcement authorities have no means of discovering whether
the exercise of such judgment was indeed \"reasonable.\"

[Id.]{.underline} at 35.

We are proposing options for determining the circumstances under which a
change would have a reasonable possibility of significantly increasing
emissions. With the final rulemaking, we intend to clarify the meaning
of the \"reasonable possibility\" standard through the selected
option(s) and thus fully address the Court's remand.

[]{#__RefHeading___Toc151351574 .anchor}E. Interim Interpretation of
Reasonable Possibility in Appendix S

After the remand in the [New York]{.underline} case, we promulgated an
interim interpretation of the reasonable possibility test in the
Appendix S rulemaking **\[###add cite once published\]**. In that
rulemaking, EPA revised the NSR requirements that are applicable to a
State after EPA has promulgated a revised NAAQS but before the State has
received EPA approval for its NSR SIP. The purpose of the revisions was
to reflect the requirements of the 2002 NSR reform rule, taking into
account the decision in [New York]{.underline}.

For purposes of Appendix S, we provided an interim interpretation of
\"reasonable possibility\" to apply during the period until we
promulgate our clarification of the \"reasonable possibility\" standard.
Under the interim interpretation, we concluded, there is a \"reasonable
possibility\" that the change would result in a significant emissions
increase if the change\'s projected actual emissions increase equals or
exceeds 50 percent of the applicable NSR significance level for any
pollutant. We based this conclusion on an assumption that the magnitude
of projected actual emissions correlates positively to the likelihood of
a significant emissions increase. This test may be termed the
\"percentage increase trigger\" that we propose in this action, as
described below.

[]{#__RefHeading___Toc151351575 .anchor}III. Description of This
Proposed Action

This action responds to the Court\'s remand by proposing two options for
determining the circumstances under which a change or project must be
considered to have a \"reasonable possibility\" of significantly
increasing emissions. We explain our basis for why each option is
enforceable and solicit input from the public.

In this section, we also solicit comment on how the \"reasonable
possibility\" standard is generally applied and what is to be recorded
and reported in the case of a change or project for which there is a
reasonable possibility that the change will result in a significant
emissions increase.

[]{#__RefHeading___Toc151351576 .anchor}A. Application of \"Reasonable
Possibility\" Standard

This proposed action makes clear that the requirements of the
"reasonable possibility" standard are triggered on a pollutant-specific
basis and apply on a project-wide basis. This approach is consistent
with our 2002 NSR reform rules. In 40 CFR 52.21(r)(6)(iii), for example,
we require the owner or operator to monitor \"emissions of any regulated
NSR pollutant that could increase as a result of the project\" for which
there is a reasonable possibility of a significant emissions increase.
While this proposed approach is our preferred approach to triggering and
applying the recordkeeping and reporting requirements, we solicit
comment on this and other approaches, such as whether to extend the
requirements to apply to all regulated NSR pollutants at the project.

Note that the \"reasonable possibility\" standard is specific to
projects at a major stationary source ([see]{.underline},
[e.g.]{.underline}, 40 CFR 52.21(r)(6)). Therefore, the proposal to
clarify this standard does not apply to existing minor sources. As a
result, existing minor sources will not become subject to the
\"reasonable possibility\" recordkeeping and reporting standard, even
when they make changes that would, if they were major sources, trigger
the applicability of those requirements. Minor sources remain subject to
other recordkeeping and reporting requirements.

Note further that \"synthetic minor modifications\" are also not subject
to the \"reasonable possibility\" standard. When a major stationary
source undertakes a project that would be a major modification (as
defined at 40 CFR 52.21(b)(2) and elsewhere) except that the source
accepts a practically enforceable restriction in order to limit the
project\'s increase in emissions to less than significant emissions
increase level, the project is termed a \"synthetic minor
modification.\" Such a source must keep records as part of the
practically enforceable restriction ([e.g.]{.underline}, under a
State\'s minor source NSR program) in order to demonstrate that the
increase in potential emissions resulting from the project remains below
the significance levels. However, these \"synthetic minor
modifications\" are not subject to the \"reasonable possibility\"
standard.

When we finalize this action to clarify the \"reasonable possibility\"
standard, we intend to apply the clarification where we refer to
\"reasonable possibility\" in 40 CFR 51.165(a)(6), 51.166(r), 52.21(r),
and part 51 appendix S. Our final rule will supersede the interim
interpretation of \"reasonable possibility\" promulgated with the
**\[###add date, January 2007?\]** revisions for Appendix S.

[]{#__RefHeading___Toc151351577 .anchor}B. Options for Circumstances
Under Which \"Reasonable Possibility\" Standard Applies

We propose the following two options for identifying the circumstances
under which the increase in emissions caused by a project triggers the
\"reasonable possibility\" recordkeeping and reporting requirements. Our
preferred option is the \"percentage increase trigger,\" and as an
alternative we propose the \"potential emissions trigger.\" The
amendatory rule language included in this proposed rule is specific to
the \"percentage increase trigger\" option. We believe the \"potential
emissions trigger\" option would be effective without need for
amendatory rule language.

[]{#__RefHeading___Toc151351578 .anchor}1. Percentage Increase Trigger

As our preferred option, we propose what we refer to as the \"percentage
increase trigger\" option for applying the \"reasonable possibility\"
standard. This \"percentage increase trigger\" is also our interim
interpretation for Appendix S purposes, as described above. Under this
proposed option, you would conclude there is a reasonable possibility
that your change will result in a significant emissions increase if the
change's projected actual emissions increase equals or exceeds a
percentage of the applicable NSR significance level for any pollutant.
We propose to use 50 percent of the significance level for the relevant
regulated NSR pollutant as the trigger, but we solicit comment on use of
a different percentage to trigger recordkeeping and reporting, such as
25 percent or 33 percent.

Table 1 lists the significance levels for regulated NSR pollutants under
40 CFR 51.166. The first five of these pollutants are also listed in 40
CFR 51.165 (concerning nonattainment), and for them, the significance
levels in 40 CFR 51.165 are identical to the significance levels listed
in this table.

Table 1. Significance Levels for Regulated NSR Pollutants

Under 40 CFR 51.166

  -----------------------------------------------------------------------
  Pollutant                                   Emissions Rate (tpy)
  ------------------------------------------- ---------------------------
  Carbon monoxide                             100

  Nitrogen oxides                             40

  Sulfur dioxide                              40

  Ozone                                       40 tpy of volatile organic
                                              compounds or NOx

  Lead                                        0.6

  Particulate matter                          25 tpy of particulate
                                              matter emissions; 15 tpy of
                                              PM~10~ emissions

  Fluorides                                   3 tpy

  Sulfuric acid mist                          7 tpy

  Hydrogen sulfide (H~2~S)                    10 tpy

  Total reduced sulfur (including H~2~S)      10 tpy

  Reduced sulfur compounds (including H~2~S)  10 tpy

  Municipal waste combustor organics          3.2 x 10^-6^ megagrams per
  (measured as total tetra- through octa-     year (3.5 x 10^-6^ tpy)
  chlorinated dibenzo-p-dioxins and           
  dibenzofurans)                              

  Municipal waste combustor metals (measured  14 megagrams per year (15
  as particulate matter)                      tpy)

  Municipal waste combustor acid gases        36 megagrams per year (40
  (measured as sulfur dioxide and hydrogen    tpy)
  chloride)                                   

  Municipal solid waste landfill emissions    45 megagrams per year (50
  (measured as nonmethane organic compounds)  tpy)
  -----------------------------------------------------------------------

As noted above, the Court found that EPA had not explained how, under
the \"reasonable possibility\" methodology, EPA can ensure NSR
compliance without a source\'s maintaining relevant data. The Court
explained that for each major NSR applicability determination, the
methodology requires sources to:

> \'\...predict uncertain future events. By understating projections for
> emissions associated with malfunctions, for example, or overstating
> the demand growth exclusion, sources could conclude that a significant
> emissions increase was not reasonably possible. Without paper trails,
> however, enforcement authorities have no means of discovering whether
> the exercise of such judgment was indeed \"reasonable.\"\'

413 F.3d at 35.

We believe that the proposed \"percentage increase trigger\" option
addresses these concerns. The Court observed, \"We recognize that less
burdensome requirements may well be appropriate for sources with little
likelihood of triggering NSR, but EPA needs to explain how its
recordkeeping and reporting requirements allow it to identify such
sources.\" [Id.]{.underline} at 34. The \"reasonable possibility\"
requirements apply only in the case of a change that the source
considers small, in that the source believes it increases projected
emissions by only a small amount. That is, the requirements apply only
with respect to a change that may result in a \"significant emissions
increase.\"

As illustrated in Table 1 above, \"Significance Levels for Regulated NSR
Pollutants Under 40 CFR 51.166,\" the significance levels are on their
face small. Thus, the projects associated with these amounts are
relatively small. This is particularly so because under the \"reasonable
possibility\" standard, the requirements are triggered only by projects
that may result in the specified levels of increased emissions, without
taking into account netting. For the same reasons, very large sources
are less likely to make changes that are covered by the \"reasonable
possibility\" standard because virtually any change that a very large
source makes may be expected to increase emissions above the
significance levels.

Moreover, under our proposal, the project would avoid triggering the
\"reasonable possibility\" requirements only if the source believed that
the emissions increase would be no more than 50 percent of the
significance levels. Therefore, our proposal considerably limits the
number of projects that could avoid \"reasonable possibility\"
requirements. By assuming that the magnitude of projected actual
emissions correlates positively to the likelihood of a significant
emissions increase, this \"percentage increase trigger\" option provides
that you keep records for projects with a reasonable possibility of
significant emissions increases but also takes into account the
impracticality of your having to keep records when anticipating only a
small increase in emissions. Thus, EPA believes this interpretation
addresses the issues identified by the Court in the [New
York]{.underline} case, in that we are providing a clear distinction,
prior to construction, between projects more and less likely to trigger
NSR. Table 2 below illustrates by example how the \"percentage increase
trigger\" option would apply to two hypothetical projects at a major
stationary source.

**Table 2. Example Application of P**ercentage Increase Trigger

  ------------------------------- -------------------- -------------------
                                  **Project 1 Example  **Project 2 Example
                                  -- Smaller increase  -- Larger increase
                                  in actual            in actual
                                  emissions**          emissions**

  Example pollutant\'s NSR        40                   
  significance level (tpy)                             

  Trigger level, based on 50      20                   
  percent of significance level                        
  (tpy)                                                

  Baseline actual emissions (tpy) 50                   50

  Projected actual emissions      60                   90
  after change (tpy)                                   

  Increase in actual emissions    10                   40
  (tpy)                                                

  Does project trigger            **No**, because      **Yes**, because
  \"reasonable possibility\"      \"increase in actual \"increase in
  requirements?                   emissions\" (10 tpy) actual emissions\"
                                  is less than         (40 tpy) is greater
                                  \"trigger level\"    than \"trigger
                                  (20 tpy)             level\" (20 tpy)
  ------------------------------- -------------------- -------------------

Under the \"percentage increase trigger\" option, we acknowledge that a
source with projected actual emissions below 50 percent (or some other
percentage) of the NSR significance levels would be able to avoid
\"reasonable possibility\" recordkeeping and reporting requirements.
However, we believe that EPA has numerous means of enforcing the NSR
provisions against such a source, even in the absence of records kept
under the \"reasonable possibility\" standard. Two types of records a
source owner or operator is generally expected to keep are: (1) records
to report emissions; and (2) records for business purposes. Records for
business purposes could include corporate minutes, blueprints, plant
manager logs, records of capital costs and purchases of materials, and
other documents that would describe the types of changes made at the
source (wholly apart from changes in emissions that result from the
changes). Businesses also have incentives to maintain design parameter
information for safety and maintenance reasons. We note that these
records give EPA an adequate basis to bring to bear certain enforcement
tools, such as the authority to compel document production, conduct
inspections, and compel oral testimony, in order to enforce the
\"reasonable possibility\" standard. We solicit comment on the types of
records sources kept for business purposes.

We request comment on whether to adopt a percentage increase trigger for
recordkeeping requirements under the \"reasonable possibility\"
standard.

[]{#__RefHeading___Toc151351579 .anchor}2. Potential Emissions Trigger

We propose an alternative interpretation, what we refer to as the
\"potential emissions trigger\" option. Under this option, you would
conclude there is a reasonable possibility that your change will result
in a significant emissions increase if the post-change potential to emit
equals or exceeds NSR significance levels (even though the source opts
to base its determination as to whether NSR applies on projected actual
emissions).

The EPA believes the \"potential emissions trigger\" approach resolves
the issues identified by the Court in the [New York]{.underline} case.
The Court raised the concern that the \"reasonable possibility\"
methodology, as it currently stands, fails to explain how EPA can ensure
NSR compliance without the source\'s maintaining relevant data. We
explain below that potential emissions represent the upper bound of
post-change emissions, and so under the \"potential emissions trigger,\"
records of projected actual emissions are unnecessary for the purpose of
ascertaining whether post-change emissions increased beyond
expectations. As long as a project\'s post-change potential emissions
are at or above significance levels, then the source will either trigger
major NSR or will be subject to recordkeeping and reporting requirements
under the \"potential emissions trigger.\" If the project\'s post-change
potential emissions are below significance levels, then clearly the
project\'s projected actual emissions would also necessarily be below
significance levels, and the \"reasonable possibility\" standard would
not apply. Thus, short of requiring recordkeeping and reporting for all
projects that do not trigger major NSR, the \"potential emissions
trigger\" requires recordkeeping and reporting of the greatest number of
projects under the \"reasonable possibility\" standard.

Table 3 illustrates our interpretation of the "reasonable possibility"
standard under the \"potential emissions trigger\" interpretation. As
this table illustrates, the reasonable possibility standard is triggered
on a pollutant-by-pollutant basis. **Table 3. Hypothetical Case Examples
of \"Potential Emissions Trigger\" Interpretation of Reasonable
Possibility Standard for a Project That Involves Two Pollutants**

  ---------- ---------------- ------------------ ----------------------------
  **Case**   **When the       **And the change's **Then "reasonable
             change's         potential          possibility" recordkeeping
             projected actual emissions          and reporting
             emissions        are\...**          requirements\...**
             are\...**                           

  1          Above SEI for    Above SEI for both **Do not apply** to the
             both Pollutants  Pollutants 1 and 2 change, because change is
             1 and 2                             significant for both
                                                 Pollutants 1 and 2.

  2          Above SEI for    Above SEI for both **Apply** to the change for
             Pollutant 1, but Pollutants 1 and 2 Pollutant 2, because
             below SEI for                       potential to emit exceeds
             Pollutant 2                         the significance level. **Do
                                                 not apply** for Pollutant 1,
                                                 because change is
                                                 significant for Pollutant 1.

  3          Above SEI for    Above SEI for      **Do not apply** to the
             Pollutant 1, but Pollutant 1, but   change, because change is
             below SEI for    below SEI for      significant for Pollutant 1
             Pollutant 2      Pollutant 2        and, in light of potential
                                                 to emit, cannot be
                                                 significant for Pollutant 2.

  4          Below SEI for    Above SEI for      **Apply** to the change
             both Pollutants  Pollutant 1 and 2  because potential to emit,
             1 and 2                             the change cannot be
                                                 significant for either
                                                 Pollutant 1 or Pollutant 2.

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

Notes:

Pollutant = Regulated NSR pollutant

SEI = significant emissions increase level

Projected actual emissions are necessarily less than or equal to
potential emissions.

[]{#__RefHeading___Toc151351580 .anchor}C. What Is Recorded and Reported
Under the \"Reasonable Possibility\" Requirements

The 2002 NSR reform rules require keeping records of two types of
information: preconstruction (initial emissions projection) and
post-construction (emissions tracking). For the \"percentage increase
trigger\" option, we solicit comment on requiring that: (1) you keep
records of initial emissions projections for all projects that do not
trigger major NSR; and (2) if your initial emissions projections
(projected actual emissions) exceed the specified percentage trigger for
any regulated NSR pollutant, then you also track emissions for the
pollutant. We solicit comment on whether to separate the recordkeeping
requirements such that certain projects are subject to recordkeeping
only for initial emissions projections while other projects are subject
to recordkeeping for both initial emissions projections and 5 years (or
10 years) of emissions tracking. We are specifically considering this
bifurcated approach in combination with the \"percentage increase
trigger\" option, but we solicit comment on a different use of this
approach.

The Court remanded only the recordkeeping provisions of the \"reasonable
possibility\" standard and did not address its reporting provisions. We
are not proposing to revise any reporting provisions. However, the two
proposals described above---the \"percentage increase trigger\" and the
\"potential emissions trigger\"---would apply for both recordkeeping and
reporting purposes.

[]{#__RefHeading___Toc151351581 .anchor}IV. Statutory and Executive
Order Reviews

[]{#__RefHeading___Toc151351582 .anchor}A. Executive Order 12866 -
Regulatory Planning and Review

Under Executive Order (EO) 12866 Number range CHAPTER(58 FR 51735,
October 4, 1993), this action is a significant regulatory action. Number
range CHAPTERThe action was determined to be a \"significant regulatory
action\" because it raises policy issues arising from the President's
priorities. Accordingly, EPA submitted this action to the Office of
Management and Budget (OMB) for review under EO 12866 and any changes
made in response to OMB recommendations have been documented in the
docket for this action.

[]{#__RefHeading___Toc151351583 .anchor}B. Paperwork Reduction Act

This action does not impose any new information collection burden. We
are not promulgating any new paperwork requirements ([e.g.,]{.underline}
monitoring, reporting, recordkeeping) as part of this proposed action.
However, the Office of Management and Budget (OMB) has previously
approved the information collection requirements contained in the
existing regulations (40 CFR parts 51 and 52) under the provisions of
the Paperwork Reduction Act, 44 U.S.C. 3501 [et seq.]{.underline}, and
has assigned OMB control number 2060-0003, EPA ICR number 1230.17. A
copy of the OMB approved Information Collection Request (ICR) EPA ICR
number 1230.17 may be obtained from Susan Auby, Collection Strategies
Division; U.S. Environmental Protection Agency (2822T); 1200
Pennsylvania Avenue, NW, Washington, DC 20460 or by calling (202)
566-1672.

Burden means the total time, effort, or financial resources expended by
persons to generate, maintain, retain, or disclose or provide
information to or for a Federal agency. This includes the time needed to
review instructions; develop, acquire, install, and utilize technology
and systems for the purposes of collecting, validating, and verifying
information, processing and maintaining information, and disclosing and
providing information; adjust the existing ways to comply with any
previously applicable instructions and requirements; train personnel to
be able to respond to a collection of information; search data sources;
complete and review the collection of information; and transmit or
otherwise disclose the information.

An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a currently
valid OMB control number. The OMB control numbers for EPA\'s regulations
in 40 CFR are listed in 40 CFR part 9.

[]{#__RefHeading___Toc151351584 .anchor}C. Regulatory Flexibility
Analysis (RFA)

The RFA generally requires an agency to prepare a regulatory flexibility
analysis of any rule subject to notice and comment rulemaking
requirements under the Administrative Procedure Act or any other statute
unless the Agency certifies that the rule will not have a significant
economic impact on a substantial number of small entities. Small
entities include small businesses, small organizations, and small
governmental jurisdictions.

For purposes of assessing the impacts of this action on small entities,
a small entity is defined as: (1) a small business as defined by the
Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2)
a small governmental jurisdiction that is a government of a city,
county, town, school district, or special district with a population of
less than 50,000; or (3) a small organization that is any not-for-profit
enterprise that is independently owned and operated and is not dominant
in its field.

After considering the economic impacts of this proposed action on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. This proposed
rule will not impose any requirements on small entities. We continue to
be interested in the potential impacts of the proposed rule on small
entities and welcome comments on issues related to such impacts.

[]{#__RefHeading___Toc151351585 .anchor}D. 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 as to 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. This rule contains no Federal mandates
(under the regulatory provisions of Title II of the UMRA) for State,
local, or Tribal governments or the private sector.

Thus, this rule is not subject to the requirements of sections 202 and
205 of the UMRA.

[]{#__RefHeading___Toc151351586 .anchor}E. Executive Order 13132 -
Federalism

Executive Order 13132, entitled \"Federalism\" (64 FR 43255, August 10,
1999), requires EPA to develop an accountable process to ensure
\"meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.\"
\"Policies that have federalism implications\" is defined in the
Executive Order to include regulations that have \"substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.\"

This proposal rule does not have federalism implications. It will not
have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government, as
specified in Executive Order 13175. Thus, Executive Order 13175 does not
apply to this action.

In the spirit of Executive Order 13132, and consistent with EPA policy
to promote communications between EPA and State and local governments,
EPA is soliciting comment on this proposal from State and local
officials.

[]{#__RefHeading___Toc151351587 .anchor}F. Executive Order 13175 -
Consultation and Coordination with Indian Tribal Governments

Executive Order 13175, entitled AConsultation and Coordination with
Indian Tribal Governments@ (65 FR 13175, November 9, 2000), requires EPA
to develop an accountable process to ensure Ameaningful and timely input
by tribal officials in the development of regulatory policies that have
tribal implications.@ This proposed rule does not have tribal
implications, as specified in Executive Order 13175. There are no tribal
authorities currently issuing major NSR and title V permits. Thus,
Executive Order 13175 does not apply to this rule.

Although Executive Order 13175 does not apply to this proposed rule, EPA
specifically solicits comment on this proposed rule from Tribal
officials.

[]{#__RefHeading___Toc151351588 .anchor}G. Executive Order 13045 -
Protection of Children from Environmental Health Risks and Safety Risks

Executive Order 13045, entitled \"Protection of Children from
Environmental Health Risks and Safety Risks\" (62 FR 19885, April 23,
1997), applies to any rule that: (1) is determined to be \"economically
significant\" as defined under Executive Order 12866; and (2) concerns
an environmental health or safety risk that EPA has reason to believe
may have a disproportionate effect on children. If the regulatory action
meets both criteria, the Agency must evaluate the environmental health
or safety effects of the planned rule on children, and explain why the
planned regulation is preferable to other potentially effective and
reasonably feasible alternatives considered by the Agency.

This action is not subject to the Executive Order because it is not
economically significant as defined in Executive Order 12866, and
because the Agency does not have reason to believe the environmental
health or safety risks addressed by this action present a
disproportionate risk to children. This proposed action is not expected
to present a disproportionate environmental health or safety risk for
children.

[]{#__RefHeading___Toc151351589 .anchor}H. Executive Order 13211 -
Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use

This action is not a Asignificant energy action@ as defined in Executive
Order 13211, AActions Concerning Regulations That Significantly Affect
Energy Supply, Distribution, or Use@ (66 FR 28355, May 22, 2001) because
it is not likely to have a significant adverse effect on the supply,
distribution, or use of energy.

[]{#__RefHeading___Toc151351590 .anchor}I. National Technology Transfer
and Advancement Act

Section 12(d) of the National Technology Transfer and Advancement Act of
1995 (NTTAA), Public Law 104‑113, section 12(d) (15 U.S.C. 272 note),
directs EPA to use voluntary consensus standards in its regulatory
activities unless to do so would be inconsistent with applicable law or
otherwise impractical.

Voluntary consensus standards are technical standards (for example,
materials specifications, test methods, sampling procedures, and
business practices) that are developed or adopted by voluntary consensus
standards bodies. The NTTAA directs EPA to provide Congress, through
OMB, explanations when the Agency decides not to use available and
applicable voluntary consensus standards.

This action does not involve technical standards. Therefore, EPA did not
consider the use of any voluntary consensus standards.

[]{#__RefHeading___Toc151351591 .anchor}V. Statutory Authority

The statutory authority for this action is provided by sections
307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42
U.S.C. 7401, 7411, 7414, 7416, and 7601). This notice is also subject to
section 307(d) of the CAA (42 U.S.C. 7407(d)).

**List of Subjects**

**40 CFR Part 51**

Environmental protection, Administrative practice and procedure, Air
pollution control, Carbon monoxide, Intergovernmental relations, Lead,
Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur oxides, Transportation, Volatile organic compounds.

**40 CFR Part 52**

Environmental protection, Administrative practice and procedure, Air
pollution control, Carbon monoxide, Intergovernmental relations, Lead,
Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping
requirements, Sulfur oxides, Transportation, Volatile organic compounds.

Dated:

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Stephen L. Johnson,

Administrator.

For the reasons set out in the preamble, title 40, chapter I of the Code
of Federal Regulations is proposed to be amended as set forth below.

**PART 51---\[AMENDED\]**

1\. The authority citation for part 51 continues to read as follows:

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

**Subpart I---\[Amended\]**

2\. Section 51.165 is amended by revising paragraph ( a)(6) introductory
text and adding paragraph (a)(6)(vi) to read as follows:

§ 51.165 Permit requirements.

\(a\) \* \* \*

\(6\) Each plan shall provide that the following specific provisions
apply with respect to any regulated NSR pollutant emitted from projects
at existing emissions units at a major stationary source (other than
projects at a source with a PAL) in circumstances where there is a
reasonable possibility, within the meaning of paragraph (a)(6)(vi) of
this section, that a project that is not a part of a major modification
may result in a significant emissions increase of such pollutant, and
the owner or operator elects to use the method specified in paragraphs
(a)(1)(xxviii)(B)([1]{.underline}) through ([3]{.underline}) of this
section for calculating projected actual emissions. Deviations from
these provisions will be approved only if the State specifically
demonstrates that the submitted provisions are more stringent than or at
least as stringent in all respects as the corresponding provisions in
paragraphs (a)(6)(i) through (vi) of this section.

\* \* \* \* \*

\(vi\) A "reasonable possibility" under paragraph (a)(6) of this section
occurs when the owner or operator calculates the project to result in
projected actual emissions increases of at least 50 percent of the
amount that is a "significant emissions increase," as defined under
paragraph (a)(1)(xxvii) of this section (without reference to the amount
that is a significant net emissions increase), for the regulated NSR
pollutant.

\* \* \* \* \*

3\. Section 51.166 is amended by revising paragraph (r)(6) introductory
text and adding paragraph (r)(6)(vi) to read as follows:

§ 51.166 Prevention of significant deterioration of air quality.

\(r\) \* \* \*

\(6\) Each plan shall provide that the following specific provisions
apply with respect to any regulated NSR pollutant emitted from projects
at existing emissions units at a major stationary source (other than
projects at a source with a PAL) in circumstances where there is a
reasonable possibility, within the meaning of paragraph (r)(6)(vi) of
this section, that a project that is not a part of a major modification
may result in a significant emissions increase of such pollutant, and
the owner or operator elects to use the method specified in paragraphs
(b)(40)(ii)([a]{.underline}) through ([c]{.underline}) of this section
for calculating projected actual emissions. Deviations from these
provisions will be approved only if the State specifically demonstrates
that the submitted provisions are more stringent than or at least as
stringent in all respects as the corresponding provisions in paragraphs
(r)(6)(i) through (vi) of this section.

\* \* \* \* \*

\(vi\) A "reasonable possibility" under paragraph (r)(6) of this section
occurs when the owner or operator calculates the project to result in
projected actual emissions increases of at least 50 percent of the
amount that is a "significant emissions increase," as defined under
paragraph (b)(39) of this section (without reference to the amount that
is a significant net emissions increase), for the regulated NSR
pollutant.

\* \* \* \* \*

4\. Appendix S to Part 51 is amended by revising paragraph IV.J
introductory text and adding paragraph IV.J.6 to read as follows:

Appendix S to Part 51---Emission Offset Interpretative Ruling.

\* \* \* \* \*

IV\. \* \* \*

J. [Provisions for projected actual emissions]{.underline}. The
provisions of this paragraph IV.J apply with respect to any regulated
NSR pollutant emitted from projects at existing emissions units at a
major stationary source (other than projects at a source with a PAL) in
circumstances where there is a reasonable possibility, within the
meaning of paragraph IV.J.6 of this Ruling, that a project that is not a
part of a major modification may result in a significant emissions
increase of such pollutant, and the owner or operator elects to use the
method specified in paragraphs II.A.24(ii)([a]{.underline}) through
([c]{.underline}) of this Ruling for calculating projected actual
emissions.

\* \* \* \* \*

6\. A "reasonable possibility" under paragraph IV.J of this Ruling
occurs when the owner or operator calculates the project to result in
projected actual emissions increases of at least 50 percent of the
amount that is a "significant emissions increase," as defined under
paragraph II.A.23 of this Ruling (without reference to the amount that
is a significant net emissions increase), for the regulated NSR
pollutant.

\* \* \* \* \*

**PART 52---\[AMENDED\]**

5\. The authority citation for part 52 continues to read as follows:

**Authority:** 42 U.S.C. 7401, [et seq.]{.underline}

**Subpart A---\[Amended\]**

6\. Section 52.21 is amended by revising paragraph (r)(6) introductory
text and adding paragraph (r)(6)(vi) to read as follows:

§ 52.21 Prevention of significant deterioration of air quality.

\(r\) \* \* \*

\(6\) The provisions of this paragraph (r)(6) apply with respect to any
regulated NSR pollutant emitted from projects at existing emissions
units at a major stationary source (other than projects at a source with
a PAL) in circumstances where there is a reasonable possibility, within
the meaning of paragraph (r)(6)(vi) of this section, that a project that
is not a part of a major modification may result in a significant
emissions increase of such pollutant, and the owner or operator elects
to use the method specified in paragraphs (b)(41)(ii)([a]{.underline})
through ([c]{.underline}) of this section for calculating projected
actual emissions.

\* \* \* \* \*

\(vi\) A "reasonable possibility" under paragraph (r)(6) of this section
occurs when the owner or operator calculates the project to result in
projected actual emissions increases of at least 50 percent of the
amount that is a "significant emissions increase," as defined under
paragraph (b)(40) of this section (without reference to the amount that
is a significant net emissions increase), for the regulated NSR
pollutant.

**\* \* \* \* \***

[^1]: The \"reasonable possibility\" standard covers both EUSGUs and
    non-EUSGUs. As noted above, prior to promulgation of the
    \"reasonable possibility\" standard, an EUSGU that made a change
    that did not result in a significant emissions increase (under the
    actual-to-projected-actual measure) was required to provide the
    permitting authority with at least 5 years of data to confirm the
    accuracy of the projection.