P.1 

OAR Box 1787 

Prepped by Ollie Stewart 

Document Number: 

79) ll-C-37 

Docket Number: 

A-90-37 

Printed 11/4/200810:22:19 AM Sheet 79 of 147 
r 

tot*. 

P.2 

i £ * \ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY P ^ ^ 

1Sffi z ? o ,ce °1 £l.

 Qualit y PlanTMg and Standards -W S - r. n 

y***~f Research Triangle Park, North Carolina 27711 -U ' L -3 I 

MAY - 8 I990 

%-^t f 

Mr. Art Fraas 

Information and Regulatory Affairs 

Office of Management and Budget 

New Executive Office Building 

Room 3019 

Washington, D.C. 20503 

Dear Mr. Fraas: 

Enclosed for your information is a clarification of the 

Environmental Protection Agency's (EPA's) final approval of the 

Kentucky rules for the prevention of significant deterioration 

(PSD). This action clarifies EPA's intent in an action taken in 

September 1989. Specifically, it explains that EPA guidance 

documents and interpretations do not have binding regulatory 

effects on States. It does not involve any of the issues or 

concerns addressed by Mr. MacRae's March 5, 1990 letter regarding 

the top-down policy. I have forwarded this package to senior EPA 

management for signature and publication. Nevertheless, given 

your staff's interest in actions relating to PSD, I am forwarding 

it to you for information. As I am sure you will agree, this 

action addresses a number of concerns raised by Kentucky and 

others regarding the role of policy and guidance and more 

accurately describes EPA's legal relationship with a State upon 

approval of a State PSD rule. 

If you have any questions or concerns regarding this 

package, please call me or Mike Shapiro. However, EPA has been 

litigated on this rulemaking action. In order to meet our 

commitments to the court, I am seeking to have the package signed 

by May 11, 1990. 

Sincerely, 

^John Calcagn^ 

Director/ 

Air Quality(Management DivisionEnclosure 

cc: M. Shapiro 
P.3 

04/24/90 16:03 U.S. - E.P.ft. AIR DIU. 002 

\-S52 / UNITEO STATES ENVIRONMENTAU PROTECTION AGENCY 

**«'-w^ REGION IV 

» « „ .« — J4SCOUHTLANO STRICT 

APR 1 6 1890 ATLANTA, OKO*OIA IOI«| 

ACTION MEMORANDUM 

SUBJECT: Prevention of Significant Deterioration and Visibility 

New Source Review in Attainment Areas for Kentucky 

FROM: Greer C. Tidwell ^_.- ._ i\ . ~? 

Regional Administrator 

TO: William K. Reilly 

Administrator 

THRU: SIP Coordination Office, Office of Air Quality Planning 

and Standards (MD-15) 

IDENTIFICATION OF ACTION 

The attached notice clarifies certain interpretive statements 

contained in the Federal Register notice approving revisions to 

the Kentucky SIP for PSD and Visibility. The action being taken 

is a Notice of Clarification for the interpretive statements and 

does not have an effect on the approved PSD and Visibility 

regulations. 

SUMMARY OF ACTION 

On February 20, 1986, the Commonwealth of Kentucky submitted 

regulations for Prevention of Significant Deterioration and 

Visibility for approval as implementation plan revisions. EPA 

published the final approval on September 1, 1989 (54 FR 36307). 

The September 1, 1989, notice described EPA's view of the 

relationship between BPA and the states under the Clean Air Act, 

and of the legal effect of BPA's approval of SIP measures 

implementing various programs under the Act. 

On November 17, 1989, Mr. William C. Eddins, Director, 

Division of Air Quality, Natural Resources and Environmental 

Protection Commission (NREPC), submitted a letter regarding the 

preamble language in the September 1, 1989 notice. NREPC stated 

that an agreement by the state to comply with future guidelines 

and policies adopted by BPA would be a delegation of legislative 

power prohibited by the state constitution, and sought to clarify 

certain points regarding the September 1, 1989, notice. In 

addition, NREPC stated that EPA should refrain from using 

policies and guidelines to implement substantive changes to 

regulatory and statutory requirements. 
P.4 

0^/24/90 16:03 U.S. -E.P.A. AIR DIU. 803 

-2-

A company sought judicial review of the interpretive language 

(Westvaco Corp. v. EPA, No. 89-3975 (6th Cir.)). In its brief, 

Westvaco assarted, inter glia. that the interpretive language in 

question constituted an improper imposition of binding regulatory 

requirements without proper rulemaking procedures. 

in response to the concerns expressed by the state and 

Westvaco, this notice clarifies EPA intent. Specifically, it 

clarifies that guidance documents and intrepretatlons issued by 

EPA do not have binding regulatory effects on the state. In 

March the court ordered a deferral of the briefing schedule. 

EPA's brief is due May 18, 1990. This notice should be published 

at least 10 days prior to that date to allow Westvaco time to 

withdraw the litigation or alternatively, allow EPA time to seek 

an appropriate revision of the briefing schedule. 

COORDINATION WITH STATE 

This notice should resolve the concerns the state has. 

ISSUES 

The main issue is EPA's involvement in overseeing the state 

implementation of a NSR permitting program. The purpose of this 

clarification notice is to accurately describe the legal 

relationship between EPA and the Commonwealth of Kentucky with 

respect to the NSR program. 

PROCEDURAL REVIEW 

This notice clarifies a final action classified as a Table 1 

SIP and ia exempt from OMB review. It should be reviewed by 

AWMD, OPA, OGC, and SSCD. Please sign this notice and forward it 

to the Office of the Federal Register for publication in the 

notices section o£ the Federal Register. Questions on this 

package may be directed to Richard A. Schutt at FTS 257-2864 or 

Dennis Crumpler at FTS 629-0871. 

Attachment 
_^____ _ P.5 

04/24/90 16:04' " " U.S."- E.P.A. AIR DIU. 004 

ENVIRONMENTAL PROTECTION AGENCY 

40 CFR PART 52 

APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS, 

KENTUCKY; STATE REGULATION FOR PREVENTION OF SIGNIFICANT 

DETERIORATION AND VISIBILITY NEW SOURCE REVIEW 

IN ATTAINMENT AREAS 

[KY - 030) 

AGENCY: Environmental Protection Agency (EPA). 

ACTION: Notice of Clarification. 

SUMMARY: In this notice, EPA is clarifying certain interpretive 

statements contained in the Federal Register notice approving 

revisions to the Kentucky State Implementation Plan (SIP) under 

the Clean Air Act, 42 U.S.C.§$7401-7642. That action, published 

on September 1, 1989 (54 FR 36307), was a final rule approving 

Kentucky's regulation for prevention of significant deterioration 

(PSD), a visibility monitoring strategy, and regulations for 

visibility new source review (NSR) in attainment areas. The 

purpose of today's notice is to clarify EPA's intent regarding 

certain interpretive language contained in that earlier notice.. 

Today's action does not alter EPA's approval of the SIP revisions 

which were the subject of the earlier final action notice, but it 

does supersede the interpretive statements in that notice. 
04/24/90 16:04 U.S. - E.P.A. AIR DIU. f)05 

P.6 

DATE: This notice is effective immediately. 

ADDRESSES: Copies of the documents relevant to this action are 

available for public inspection during normal business hours at 

the following location: 

Environmental Protection Agency 

Region IV, Air Programs Branch, 

345 Courtland Street NE, 

Atlanta, Georgia 30365 

FOR FURTHER INFORMATION CONTACTt 

For information regarding this notice of clarlfication, 

contact Dennis Crumpler, EPA, New Source Review section, Office 

of Air Quality Planning and Standards (MD-15), Research Triangle 

Park, North Carolina 27711, telephone (919) 541-0871, FTS 

629-0871. For information regarding the September 1, 1989, 

approval of Kentucky's regulation for PSD, contact Richard A. 

Schutt at the above Region IV address or telephone (404) 

347-2864, FTS 257-2864. 

-2-
P.7 

04/24/90 16:05 U.S. -E.P.A. AIR DIU. 006 

SUPPLEMENTARY INFORMATION: 

Following a December 30, 1985, public hearing in conformity 

with 40 CFR 51.102 (previously 40 CFR 51.4), the Commonwealth of 

Kentucky's Natural Resources and Environmental Protection Cabinet 

(NREPC) adopted regulation changes involving PSD and visibility 

and submitted them to EPA on February 20, 1986, for approval as 

implementation plan revisions. EPA proposed to approve the 

revisions on March 17, 1987 (52 FR 8311). The final action 

notice of September 1, 1989 (54 FR 36307) finalised that 

approval. Specifically, EPA found that Kentucky's regulations 

for PSD (including stack heights and dispersion techniques), 

visibility monitoring, and visibility new source review in 

attainment areas are adequate to meet the requirements contained 

in 40 CFR 51.166, 51.305, and 51.307(a) and (d), respectively. 

See 54 FR 36310-11. 

The Diaputed Language in EPA's Approval of Kentucky's SIP . 

Revisions. The September 1, 1989, notice described EPA'8 view of 

the relationship between BPA and the states under the Clean Air 

Act, and of the legal effect of EPA's approval of SIP measures 

Implementing various programs under the Act. See 54 FR 36307-06. 

BPA pointed out that in adopting the Clean Air Act, congress 

designated BPA as the agency primarily responsible for 

interpreting the Act and overseeing its implementation by the 

states. EPA also noted that it must approve state programs that 

meet the requirements of 40. CFR Part 51. However, the Agency 

-3-
P.8 

04/24/90 16:05 U.S. -E.P.A. AIR DIU. 007 , / 

also referred to the very complex and dynamic nature of the Act's 

PSD requirements (including stack heights and dispersion 

techniques), and new source review and visibility programs. 

Consequently, EPA noted, it would be administratively 

impracticable and legally unnecessary to include all statutory 

interpretations in the BPA regulations and the SIPs of the 

various states, or to amend the regulations and the SIPs 

everytime EPA interprets the statute or regulations or issues 

guidance regarding the proper implementation of the NSR program. 

Rather, BPA maintained that federal approval of these NSR-related 

regulations and narrative as part of the Kentucky SIP required 

the state to follow EPA's current and future interpretations of 

the Act's provisions and regulations, as well as EPA's operating 

policies and guidance, but only to the extent that such policies 

are intended to guide the implementation of approved state NSR 

programs. In making this assertion, EPA was careful to emphasize 

that as a matter of course, any fundamental changes in the 

administration of NSR would have to be accomplished through 

amendments to the regulations in 40 CFR Part 51 and subsequent 

SIP revisions. 

SPA then explained the consequences of lta approval of these 

portions of Kentucky's NSR programs in light of the Agency's 

views regarding the federal-state relationship under the Act. 

BPA noted that it will continue to oversee implementation of this 

-4-
""037257-30 lb: 0b =—U.b; - t. K. W. H1W U1U. 033 ~ 

important program by reviewing and commenting upon proposed 

permits as appropriate. Specifically, EPA stated, it will 

comment upon proposed permits that do not implement the letter of 

the law, as well as EPA's statutory and regulatory 

interpretations and applicable guidance. If a final permit is 

issued which still does not reflect consideration of the relevant 

factors, EPA stated that it may view the permit as inadequate for 

purposes of implementing the requirements of the Act and 

Kentucky's SIP, and may consider enforcement action under 

Sections 113 and 167 of the Act to address the permit deficiency. 

Kentucky's Letter of November 17. 1989. On November 17, 

1989, Mr. William C. Eddins, Director, Division of Air Quality, 

NREPC, submitted a letter regarding the. preamble language in the 

September 1, 1989 notice discussed above. NREPC stated that an 

agreement by the state to comply with future guidelines and 

policies adopted by EPA would be a delegation of legislative 

power prohibited by the state constitution, and sought to clarify 

certain points regarding the September 1 Federal Register notice. 

In addition, NREPC stated that EPA should refrain from using 

policies and guidelines to implement substantive changes to 

regulatory and statutory requirements. 

Litigation Reqardin-g the S»ptemftt^ 1. 1989 Notice. A 

company sought judicial review of the interpretive language in 

the September 1, 1989, Federal Register notice. Westvaco Corp. 

v. EPA, No. 89-3975 (6th Cir.). In its brief, Westvaco asserted, 

-5-
04/24/90 16:07 U.S. -E.P.A. AIR DIU. 009,, 

P.10 

i 

4 ' 

inter filial that the interpretive language in question 

constituted an improper imposition of binding regulatory 

requirements without proper rulemaking procedures. 

EPA Clarification of Interpretive language in the September 

1, 1989 Notice. NREPC and Westvaco apparently have 

misinterpreted both the purpose and effect of the language in 

question. In response to the concerns expressed by NREPC and 

Westvaco, EPA today clarifies that it did not Intend to suggest 

that Kentucky is required to follow EPA's Interpretations and 

guidance issued under the Clean Air Act ln the sense that those 

pronouncements have independent status as enforceable provisions 

of the Kentucky SIP, such that mere failure to follow such 

pronouncements, standing alone, would constitute a violation of 

the Clean Air Act. Rather, as discussed below, EPA's intent was 

merely to place the state and the public at large on notice of 

EPA's longstanding views that the Agency must continue to oversee 

and enforce the NSR provisions of the Act following approval of a 

state program, and that EPA's judgment as to what constitutes 

compliance with the law is at all times informed by the Agency's 

interpretive rulings and policy statements. As such, strictly 

speaking the language in question was neither part of nor a 

condition of EPA's approval of Kentucky's SIP, and it has no 

binding effect. Rather than creating new rights or obligations, 

it advised the public of EPA's views regarding obligations that 

already exist by operation pf the statutory scheme. 

-6-
p.11 

04/24/90 16:07 U.S. - E.P.A. AIR DIU. 010 

The issuance of NSR permits and other actions by the state 

in the administration of the federal Clean Air Act must conform 

to the requirements of the Act and the SlPi See sections 167 and 

113, 42 U.S.C. SS 7477 and 7413. In making judgments as to what 

constitutes compliance with the Act and regulations issued 

thereunder, EPA looks to (among other sources) its policy 

statements and interpretive rulings regarding those binding 

statutory and regulatory requirements. 

It follows that state actions Implementing the federal Clean 

Air Act which do not conform to the Act, as viewed in light of 

EPA's policies and interpretations, may lead to potential 

enforcement action by EPA. However, in defending against such an 

enforcement action, a party is free to assert that EPA's 

statements in fact do not reasonably interpret the underlying 

statutory and regulatory provisions. 

EPA's approval of a state NSR program or some portion of it 

does not divest the Agency of the duty to continue a vigorous 

oversight and enforcement role under sections 167 and 113. For 

example, section 167 provides that EPA shall take whatever 

enforcement action may be necessary to prevent construction of a 

major stationary source that does not "conform to the 

requirements o f the PSD program. Thus, as to PSD, the purpose 

of the preamble language in the September 1 notice was to advise 

Kentucky and the public of EPA's view that approval of a state's 

PSD program does not bar EPA from relying on its own interstitial 

interpretations in deciding whether a state-issued PSD permit 

-7-
04/24/90 16:08 U.S. -E.P.A. AIR DIU. 011. 

conforms to the Act's PSD requirements. 

Following SIP approval, then, EPA remains as the 

congressionally designated agency with ultimate authority to 

interpret the federal law under the Act and to base its 

enforcement actions on those interpretations. in addition, 

because EPA's interpretations and policies are only interstitial, 

relating back to the existing federal statute and regulations, 

they guide EPA's enforcement actions irrespective of whether they 

are issued before or after approval of a SIP. 

EPA acknowledges that states have the primary role in 

administering and enforcing the various components of the NSR 

program. For the most part, the states have been successful in 

this effort, and EPA's involvement in interpretative and 

enforcement issues is limited to only a small number of cases. 

Consequently, EPA's continuing oversight role under the Clean Air 

Act leaves Kentucky and other states with considerable discretion 

to implement the NSR program as they see fit. First, as noted in 

the September 1 notice, EPA may not institute fundamental changes 

in the requirements set forth in its own regulations or state 

implementation plans through interpretive rulings or policy 

statements. The creation of new rights or obligations can only 

be accomplished by revisions to the regulations in 40 CFR Parts 

51 and 52 and by SIP revisions, in accordance with applicable 

rulemaking procedures. Second, EPA's interpretations and 

policies often are intended in whole or in part to guide only EPA 

-8-
P.13 

04/24/90 16:08 U.S. - E.P.A. AIR DIU. 012 

Regional Offices, and in such instances they have no Implications 

whatsoever for a state's administration of its program. Third, 

there are many aspects of the NSR program that EPA has not 

addressed in guidance or interpretive rulings. In these areas, 

states remain free to follow their own course, provided that 

state action is consistent with the letter and spirit of the SIP, 

when read in conjunction with the Clean Air Act and EPA's 

regulations. 

In sum, EPA believes that the language in question in the 

September 1, 1989, notice, as clarified here, accurately 

describes the legal relationship between EPA and the Commonwealth 

of. Kentucky with respect to the NSR program. 

Under 5 U.S.C. 5605(b), I certify that this notice will not 

have a significant economic impact on a substantial number of 

small entities. 

The Office of Management and Budget has exempted this rule 

from the requirements of Section 3 of Executive Order 12291. 

List of Subjects in 40 CFR Part 52: Air pollution control, 

intergovernmental relations. 

Authority: 42 U.S.C. 7401-7642. 

Dated: 

William K. Reilly, Administrator. 

-9-
85/14/2001 11:25 9194840122 ECR Jj2LS •••rt-. 

(Sz) UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

Office of Air Quality Planning and Standards 

Research Triangle Park. North Carolina 27711 

HAY - 8 1920 

Mr- Art Fraa s 

Information and Regulatory Aff airs 

offic e of Management and Budget 

Mew Executive offic e Building 

Roon 3019 

Washington, o.c. 20503 

Dear Mr. Fraas: 

Enclosed for your information is a clarification of the 

Environmental Protection Agency's (EPA's) final approval or the 

Kentucky rules for the prevention of significant deterioration 

(PSD). This action clarifies EPA's intent in nn action taken in 

September 19S9. Specifically, it explains that EPA guidance 

documents and Interpretations do not have binding regulatory 

effects on states. It doee not involve any of the.issues or 

concerns addressed by Kr. MacRae*s March S, 1990 letter regarding 

the top-down policy. I have forwarded this package to senior EPA 

management for signature and publication. Heverthelass, given 

your staff's interest in actions relating to PSD. I am forwarding 

it to you for information. As I am sure you will agree, this 

action addresses a number of concerns raised by Kentucky and 

others regarding the role of policy and guidance and more 

accurately describes EPA's legal relationship with a State upon 

approval of a state PSD rule. 

If you have any questions or concern* regarding this 

package, please call me or Hikw Shapiro. However, EPA has been 

litigated on this rulemaking action. In order to meet our 

commitments to the court, I am seeking to nave the package reigned 

by May 11, 1990. 

Sincerely, 

rohn Calcagn 

Director' 

Air Quality (Management Divisi 

Enclosure 

cc: M- Shapiro 

& 
P.15 

f-M»JL- **»W 

B5/14/2001 11:25 9134848122 &* 

0 4<24/9 0 16=03 U.S. - E.P.A. fllR DIU. 002 

{mj ; UNITCO STATES CNVIRONM5NTAI. PROTECTION AGENCY 

S mei*' ecoion iv 

l«S COUMTLAMP •THC T 

APR I 6 I860 *TI»HT» . acosoi * »om 

ACTION MEMORANDUM 

SUBJECT» Prevention of Significan t Deterioration and Visibilit y 

Mew Source Review ln Attainment Areas for Kentucky 

PROXi Greer C. Tldwell ^^, fV~? ^ _ Jft.L^ * 

Regional Administrator *' • " "p^-

TOi William X. Reilly 

Administrator 

THRO: SIP Coordination Office, Offlee of Air Quality Planning 

and Standards (MD-15) 

IDENTIFICATION OF ACTION 

The attached notice clarifies certain Interpretive statements 

contained in the Federal Register notice approving revisions to 

che Kentucky SIP for PSD and Visibility. The action being taken 

is a Notice of Clarification for the interpretive statements and 

does not have an effect on the approved PSD and Visibility 

regulations. 

SUMMARY OF ACTION 

On February 20, 1986, the Commonwealth of Kentucky submitted 

regulations for Prevention of Significant Deterioration and 

Visibility for approval as implementation plan revisions. EPA 

published the final approval on September 1, 1989 (54 PR 36307). 

The September 1, 1989, notice described EPA's viaw of the 

relationship between EPA and the states under the Clean Air Act, 

and of the legal effect of BPA'a approval of SIP measures 

implementing various programs under the Act. 

On November 17, 1989, Mr. William C. Sddlns, Director, 

Division of Air Quality, Natural Resources and Environmental 

Protection Commission (NREPC), submitted a letter regarding the 

preamble language in the September 1, 1989 notice. NREPC stated 

that an agreement by the state to comply vlth future guidelines 

and policies adopted by EPA would be a delegation of legislative 

power prohibited by the state constitution, and sought to clarity 

certain points regarding the September 1, 1989, notice. In 

addition, NREPC stated that EPA should refrain from using 

policies and guidelines to implement substantive changes to 

regulatory and statutory requirements. 

<§> 
P.16 

.' 05/14/2001 11:25 9134940122 « * — — 

0<a^24/"30 XS:83 U.S. - E. P.p. ftlR DIU. 933 

- 2 -

A company sought judicial review of the interpretive lanouaae 

(Westvaco Corp. v. EPA, No. 89-3975 (6th Cir.)). In its brief 

Westvaco asserted, An£s*: AUA / that the integrative language in 

question constituted an improper imposition pf binding regulatory 

requirements without proper rulemaking procedures. 

in response to the concerns expressed by the state and 

Westvaco, this notice clarifies EPA Intent. Specifically, it 

clarifies that guidance documents and lntrepretatlona issued by 

BPA de not have binding regulatory affects on the state. In 

March the court ordered a deferral of the briefing scheduleEPA's brief ls due May IB, 1990. This notice ahould be published 

at least 10 days prior to that date to allow Westvaco time to 

withdraw che litigation or alternatively, allow EPA time to seek 

en appropriate revision of the briefing schedule. 

COORDINATION WITH STATS 

This notice should resolve the concerns the state has. 

ISSUES , .•'••; 

The main issue is BPA'a involvement in overseeing the state 

implementation of a HSR permitting program, the purpose of this 

clarification notiee ls to accurately describe the legal 

relationship between EPA and the Commonwealth of Kentucky -with 

respect to the NSR program. 

PROCEDURAL RKVIBtf 

This notice clarifies a final action classified as a Table 1 

SIP and is exempt from OMB review.. It should be reviewed by 

AWMD, OPA, OGC, and SSCD. Please sign this notice and forward it 

to the Office of the Federal Register for publication in the 

notices section of the Federal Reqlg^er. Questions on this 

package may be directed to Richard A. Schutt at FTS 257-2864 or 

Dennis Crumpler at PTS 629-0871. 

Attachment 

(3 
P.17 

05/14/5B0 1 11:2 5 giyqaatji: ^ CJ K

 rHa t 88/i b 

e^2«V90 16:0<* U.S. - E.P.fl. PIR DIU. 0 0 4 

ENVIRONMENTAL PROTECTION ACENCY 

40 CFR PART 52 

APPHOVAL AND PROMULGATION OF IMPLEMENTATION PLANS..* 

KENTUCKY, STATE REGULATION FO* PREVENTION OF SIGNIFICANT 

DETERIORATION AND VISIBILITY NEW SOURCE RSVIEW 

IN ATTAINMENT AREAS 

[XY - 030] 

AQKMcYi Environmental Protection Agency (BPA). 

ACTZONt Notice of Clarification. 

* 

SUMMARYi In this notice , BPA is clarifying certain lntaTrrprativa 

statements Contained in the Federal Register notice approving 

revisions t o the Kentucky State Implementation Plan (SIP) under 

the Clean Air Act, 42 U.S.C £$7401-7642 - That action, published 

on September 1, 1989 (54 FR 36307), was a final rule approving 

Kentucky's regulation fox- prevention of significant deterioration 

(PSD), a visibilit y monitoring strategy, and regulations for 

visibilit y ne** source review (NSR) in attainment areas. The 

purpose of today's notice is to Clarify EPA's intent regarding 

certain interpretive language contained ln that earlie r notice . 

Today's action does not alte r SPA'a approval of che SIP revisions 

which were the aubjoct of the earlie r final action notice , but it 

does supersede tho interpretive statements in that notice . 

© 
P.18 

85/14/2001 11:25 919dB40122 ECR 

04^24/^0 16:04 U.S. - E. P. P. PIR DIU. 085 

DATEi This notice is effective immediately. 

ADDRESSES i Copies of the documents relevant to this action are 

available for public inapectlon during normal business hours at 

the following locationi 

Environmental Protraction Agency 

Region IV, Air Programs Branch, 

345 Courtland Street NE, 

Atlanta, Georgia 30365 

FOR FURTHER INFORMATION CONTACTI 

For information regarding this notice of clarification, 

contact Dennis Crumpler, EPA* New Source Review Section, Office 

of Air Quality Planning and Standards (MD~15), Research Triangle 

Park, North Carolina 27711, telephone (919) 541-0071, FTS 

629-0871. For information regarding the September I, 1989, 

approval of Kentucky's regulation for PSD, contact Richard A. 

Schutt at the above Region IV addresa or telephone (404) 

347-2864, FTS 257-2864. 

-2-

© 
P.19 

05/14/2001 11:25 9194840122 ECR •"««. A«,,iU 

04'24/30 16J 0S U.S. - E. P. P. RIR DIU. 006 

SUPPLEMENTARY INFORMATION i 

Following a December 30, 1985, public hearing in conformity 

with 40 CFR 51.102 (previously 40 CFR 51,4), the Conwionweejrth of 

Kentucky's Natural Resources and Environmental Protection Cabinet 

(HRSFC) adopted regulation changes involving PSD and visibility 

and submitted them to EPA oh February 20, 1986, for approval as 

implementation plan revisions. BPA proposed to approve the 

revisions on March 17, 1987 (52 TR 8311). Tho final action 

notice of September l, 1989 (54 FR 36307) finalised that 

approval. Specifically, EPA found that Kentucky's regulations 

far PSO (including stack heights and dispersion techniques), 

visibility monitoring, and visibility new source review in 

attainment areas are adequate to meat the requirements contained 

in 40 CFR 51*166, 51.305, and 51.307(a) and (d), respectively. 

See 54 FR 36310-11. 

The Diapufce^ Lancniao. In EPA's Approval of Kentucky's SIP . 

Revisions. Tha September 1, 1989, notice described EPA'S View of 

ths relationship between BPA and the states under the clean Air 

Act, and of the legal effect of SPA'S approval of SIP measures 

implementing various programs under the Act. See 54 FR 36307-08. 

SPA pointed out that in adopting the Clean Air Act, congress 

designated SPA as the agency primarily responsible for 

interpreting tha Act end overseeing its implementation by tha 

states. BPA also noted that it must approve state programs that 

mast the requirements of 40. CFR Part 51. However, the Agency 

-3-

© 
P.20 

05/14/2001 ll1- 25 3194840122 « * 

04^2<i'S0 16:0S U.S. - E.P.P. fllf* DIU. 007 ' 

also referred to the very complex and dynamic nature of the Act's 

PSD requirements (including stack heights and diapersIon • 

techniques), and new source review and visibility programs.** 

Consequently, EPA noted, it would be administratively 

impracticable and legally unnecessary to include all statutory 

Interpretations in the BPA regulations and the SIPs ot the 

various states, or to amend the regulations and the SIPs 

everytime BPA interprets the statuta or regulatlona or issues 

guldane* regarding tha proper implementation of the NSR program. 

Rathar, BPA maintained that federal approval of these NSR-related 

regulations and narrative aa port of the Ken tua ky SIP required 

the state to follow RPA's current and future interpretations of 

tha Act's provisions and regulations, as well aa EPA "a operating 

policies and guidance, but only to the. extent that such policies 

are intended to guide the implementation of approved state NSR 

programs. In making thia assertion, BPA was careful to emphasize 

that as a matter of course. atiy fundamental changes in the 

administration of NSR would have to be accomplished through 

amendments to the regulations in 40 CFR Part 51 and subsequent 

S IP revisions. 

EPA then explained the consequences of its approval of these 

portions of Kentucky's NSR programs in light of the Agency's 

vlaws regarding the federal-state relationship under the Act. 

BPA noted that it will continue to oversee implementation of this 

-4-

CT3) 
P.21 

05/14/2001 U:2 5 9194B40122 ECR 

04^24^ 0 16:06 U.S. - E. P. R. RIR DIU. 00Q 

important program by reviewing end commenting upon proposed 

permits as appropriate. Specifically, EPA stated, it will 

ooimaant upon propoaed permits that do not implement the letter of 

the lav, as well aa EPA's statutory end regulatory 

interpretations and applicable guidance. If a final permit is 

Issued which still does not-reflect consideration of che relevant 

factors, EPA stated that It may view the permit ae inadequate for 

purposes of implementing the requirements Of the Act and 

Kentucky's SIP, and may consider enforcement action under 

Sections 113 and 167 of the Act to address the permit deficiency. 

Kentucky's Let^ef of November 17. Igf9. On November 17, 

1989, Kr. William c. Bddlns, Director, Division of Air Quality, 

NREPC, submitted a letter regarding the.- preamble language In the 

September 1, 1999 notice discussed above. NREPC stated that an 

agreement by the state to comply with future guidelines and 

polio les adopted by EPA would be a delegation Of legislative 

powar prohibited by tho state constitution, and sought to clarify 

certain points regarding the September 1 Federal yegiftt^f notice. 

In addition, NREPC stated that BPA should refrain from using 

policies and guidelines to Implement substantive changes to 

regulatory and statutory requirements. 

y^jgatlow Baaagdlntr the September 1. 1989 Notice. A 

company sought judlaiel raview of the interpretive language in 

the September 1, 1989, Federal RgglBtfC notice. Keatvaco Corp. 

v. EPA, No. 89-3975 (6th Ci,r.)- in Its brief, Vestvaco asserted. 

-SG) 
P.22 

05/14/2001 11:25 9194840122

 ECK . fc 

04^24/^0 16:07 U.S. - E.P.R. PIR DIU. 009 

inter aULA, that the interpretive language in question 

constituted an Improper imposition of binding regulatory 

4-

requirements without proper rulemaking procedures. 

EPA Clarification of Interpretive language ln the September 

1, 19B9 Notice. NREPC and Westvaco apparently have 

misinterpreted both the purpose and effect of the language in 

question. In response to the concerns expressed by NREPC and 

Waatvaoo, EPA today clarifies that it did not Intend to suggest 

that Kentucky is required to follow EPA's interpretations and 

guidance Issued under the clean Air Act ln the sense that those 

pronouncements have independent status as enforceable provisions 

of the Kentucky SIP, such that mere failure to follow such 

pronouncements, standing alone, would constitute a violation of 

the Clean Air Act. Rather, as discussed below, EPA's intent was 

merely to place the state and the public at larga on notice of 

EPA's longstanding views that the Agency must continue to oversee 

and enforce the N8R provisions of the Act following approval of a 

state program, and that EPA's judgment as to what constitutes 

compliance with the lew Is at all times informed by the Agency's 

Interpretive rulings and policy statements. As auch, strictly 

speaking the language in question was neither part of nor a 

condition of BPA'* approval of Kentucky's SIP, and it has no 

binding offeat. Rather than creating new rights or obligations, 

it advised the public of BPA's views regarding obligations that 

already exist by operation of the statutory scheme. 

-6-

®> 
P.23 

05/14/2001 11:25 9194840122 ECR PAGE 1«V1G 

0^24x9 0 16:07 U.S. - E. P. fl. PIR DIU. 01 0 

The issuance of NSR permits and other actions by the stata 

in the administration of the federal Clean Air Act must conform 

to th« requirements of the Act and tho SIP^ See sections 167 and 

113. 42 U.S.C. SS 7477 and 7413, m making Judgments as to what 

constitutes compliance with the Act and regulations issued 

thereunder, EPA looks to (among other Sources) its policy 

statements and interpretive rulings regarding those binding 

statutory and regulatory requirements. 

It follows that state aotlona implementing the federal clean 

Air Aot which do not conform to the Act, as viewed in light of 

EPA's policies and interpretations, may lead to potential 

enforcement action by EPA- However, in defending against such an 

enforcement action, a party is free to assert that EPA's 

statements in faat do not reasonably interpret the underlying 

statutory and. regulatory provision*. 

EPA's approval of a state NSR program or some portion of it 

does not divest the Agency of the duty to continue a vigorous 

oversight and enforcement role under sections 167 and 113. For 

example, section 167 provides that EPA shall take whatever 

enforcement action may be necessary to prevent construction of a 

major stationary source that does not "conform to the 

requirements of* the PSD program. Thus, as to PSD, the purpose 

of the preamble language in tha September 1 notice was to advise 

Kentuaky and tha publia of EPA's view chat approval of a state's 

PSD program does not bar EPA from relying on its own interstitial 

interpretations in deciding whether a state-Issued PSD permit 

-7-
P.24 

05/14/2001 11:25 9194B40122 _ EGR ^ . 

04^24^90 16:00 U.S. - £.P;fi.: RIR DIU. 0 1 : 

conforms to the Act's PSD requirements. 

Following SIP approval, then, BPA remains as the 

congressionally designated agency with ultimate authority td 

interpret the federal law under tha Act and to base lta 

enforcement actions on those interpretations. In addition , 

beaauee EPA's interpretations and policies are only interstitial, 

relating back to the existing federal! statute and regulations* 

they guide EPA's enforcement actions Irrespective of whether they 

are issued before or after approval of a SIP. 

EPA acknowledges that states have the primary role in 

administering and enforcing the various components of the NIIR 

program. For the most part, the states have been successful In 

this effort, and EPA's involvement: ln interpretative and 

anforaement issues is limited to only a small number of cae^e. 

Consequently, EPA's continuing oversight role under the Clcnn Air 

Act leaves Kentucky and other states! with conaiderable dlsc:ir«tloti 

to implement the NSll program as thisy see fit. First, as nctetfl in 

i i 

the September 1 notice, EPA may not institute fundamental changes 

ln the requirements set forth in its' own regulations or »citm 

implementation plans through interpretive rulings or policy 

statements. The creation of new rights or obligations can only 

be accomplished by revisions to the regulations ln 40 CFR :?a.rts 

si and 52 and by S3P revisions, in accordance with applicable 

x-ulemaking procedures. Second, EPA's interpretations and 

polioies often are intended in whole or in part to guide mily EPA 

& 
P.25 

,5/14/2881 11:25 9194840122 

04/24>'g0 IS". 09 

ECfc\ 

U.S; - E.PJ A. AIR DIU. 01; 

Regional Offices , and i n such i^Stan|| | the y have no Implication s 

whatsoeve r fo r . state' s administrat| | of it . program. Third, 

ther . ar e many aspects o f th e kSR pxf§|am tha t EPA ha s no t * 

addr.— d i n guidanc e o r int-r^xj.ti^|||ullng . • In thes e are , , , 

.tate s remain fre e t o follo w thei r «<=ourse , provide d that: 

stat e actio n 1 . consen t wit h th e f*t. r and spiri t o f th e SIP, 

when read i n conjunctio n wit h th e c||j|i-Ai r Ac t and EPA's 

regulations. fpjfc:-

i n sum, EPA believe o tha * th e fjpP«3 - *" questio n i n l.h» 

September 1 . 1969, notice , .as-ftarij||a ' here , accuratel y 

d .a~lb. s th a lega l relationshi p beffffen SPA and th e Co^on , TMit h 

of Kentucky wit h respec t t o the! NSl|^6gr« a 

If . S:7'.-.y'r--. • 

„„«« S U.S.C. St>3<b>, jic.ri|| ««t «hl.«*ie. -ill « * 

W . . .!**«« « .iconic i^--- || « -ub.«ntl.l au»b.r --

small entities. IMiS • 

The Office of Management and Ifiget ha- exempted this rule 

from th. requirement, of Section 31 | Executive Order 12291. 

jjjjpjtjkir pollution control .• 

intergovemmantal relations. 

Author 

ity« 42 tl-S-C. 7401-76*2. 

Dated i. 

William K. Reilly* Adminintrator.