Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Rules and Regulations 72607 

Management and Budget grants an 

exception. Pursuant to the guidelines in 

the OMB Circular, the IRS has 

calculated its cost of providing services 

under the enrolled actuaries program. 

The IRS has determined that the full 

cost of administering the enrollment 

and re-enrollment processes is $250 per 

enrolled actuary per process. 

The final user fees will be 

implemented under the authority of the 

IOAA of 1952 and the OMB Circular. 

On October 31, 2007, a notice of 

proposed rulemaking (REG–134923–07) 

was published in the Federal Register 

[72 FR 61583]. No comments were 

received from the public in response to 

the notice of proposed rulemaking. No 

public hearing was requested or held. 

The proposed regulations are adopted 

by this Treasury decision. 

Special Analyses 

It has been determined that this final 

rule is not a significant regulatory action 

as defined in Executive Order 12866. 

Therefore, a regulatory assessment is not 

required. It is hereby certified that these 

regulations will not have a significant 

economic impact on a substantial 

number of small entities. Accordingly, a 

regulatory flexibility analysis is not 

required. This certification is based on 

the information that follows. These final 

rules affect enrolled actuaries, of which 

there are currently 4,600 active. The 

economic impact of these regulations on 

any small entity would result from a 

small entity, including a sole proprietor, 

being required to pay a fee prescribed by 

these regulations in order to obtain a 

particular service. The appropriate 

NAICS codes for enrolled actuaries 

relate to Insurance Other (524298) and 

Administrative and General 

Management Consulting, Including 

Financial Consulting (541611). Entities 

identified under these codes are 

considered small under the SBA size 

standards (13 CFR 121.201) if their 

annual revenue is less than $6.5 million. 

The IRS estimates that as many as 2,070 

enrolled actuaries may be operating as 

or employed by small entities. 

Therefore, the IRS has determined that 

these final rules will affect a substantial 

number of small entities. The dollar 

amounts of the fees are not, however, 

substantial enough to have a significant 

economic impact on any entity subject 

to the fees. The amounts of the fees are 

commensurate with, if not less than, the 

amount charged by professional 

organizations. Persons who elect to 

apply for enrollment or renewal of 

enrollment also receive benefits from 

obtaining the enrolled actuary 

designation. Pursuant to section 7805(f) 

of the Internal Revenue Code, the NPRM 

preceding this regulation was submitted 

to the Chief Counsel for Advocacy of the 

Small Business Administration for 

comment on its impact. 

Drafting Information 

The principal author of these 

regulations is Kimberly A. Mattonen of 

the Office of the Associate Chief 

Counsel (Procedure & Administration). 

List of Subjects in 26 CFR Part 300 

Reporting and recordkeeping 

requirements, User fees. 

Adoption of Amendments to the 

Regulations 

■ Accordingly, 26 CFR Part 300 is 

amended as follows: 

PART 300—USER FEES 

■ Paragraph 1. The authority citation 

for part 300 continues to read as 

follows: 

Authority: 31 U.S.C. 9701. 

■ Par. 2. Section 300.0 is amended as 

follows: 

■ 1. Paragraphs (b)(7) and (b)(8) are 

added. 

■ 2. Paragraph (c) is revised. 

■ The additions and revision read as 

follows: 

§ 300.0 User fees, in general. 

* * * * * 

(b) * * * 

(7) Enrolling an enrolled actuary. 

(8) Renewing the enrollment of an 

enrolled actuary. 

(c) Effective/applicability date. This 

part 300 is applicable March 16, 1995, 

except that the user fee for processing 

offers in compromise is applicable 

November 1, 2003; the user fee for the 

special enrollment examination, 

enrollment, and renewal of enrollment 

for enrolled agents is applicable 

November 6, 2006; the user fee for 

entering into installment agreements on 

or after January 1, 2007, is applicable 

January 1, 2007; the user fee for 

restructuring or reinstatement of an 

installment agreement on or after 

January 1, 2007, is applicable January 1, 

2007; and the user fee for the enrollment 

and renewal of enrollment for enrolled 

actuaries is applicable January 22, 2008. 

■ Par. 3. Section 300.7 is added to read 

as follows: 

§ 300.7 Enrollment of enrolled actuary fee. 

(a) Applicability. This section applies 

to the initial enrollment of enrolled 

actuaries with the Joint Board for the 

Enrollment of Actuaries pursuant to 20 

CFR Part 901. 

(b) Fee. The fee for initially enrolling 

as an enrolled actuary with the Joint 

Board for the Enrollment of Actuaries is 

$250.00. 

(c) Person liable for the fee. The 

person liable for the enrollment fee is 

the applicant filing for enrollment as an 

enrolled actuary with the Joint Board for 

the Enrollment of Actuaries. 

■ Par. 5. Section 300.8 is added to read 

as follows: 

§ 300.8 Renewal of enrollment of enrolled 

actuary fee. 

(a) Applicability. This section applies 

to the renewal of enrollment of enrolled 

actuaries with the Joint Board for the 

Enrollment of Actuaries pursuant to 20 

CFR Part 901. 

(b) Fee. The fee for renewal of 

enrollment as an enrolled actuary with 

the Joint Board for the Enrollment of 

Actuaries is $250.00. 

(c) Person liable for the fee. The 

person liable for the renewal of 

enrollment fee is the person renewing 

their enrollment as an enrolled actuary 

with the Joint Board for the Enrollment 

of Actuaries. 

Linda E. Stiff, 

Deputy Commissioner for Services and 

Enforcement. 

Eric Solomon, 

Assistant Secretary of the Treasury (Tax 

Policy). 

[FR Doc. 07–6156 Filed 12–18–07; 2:32 pm] 

BILLING CODE 4830–01–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 51 and 52 

[EPA–HQ–OAR–2001–0004; FRL–8508–4] 

RIN–2060–AN88 

Prevention of Significant Deterioration 

and Nonattainment New Source 

Review: Reasonable Possibility in 

Recordkeeping 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: This rule finalizes proposed 

revisions to the regulations governing 

the major new source review (NSR) 

programs mandated by parts C and D of 

title I of the Clean Air Act (CAA). These 

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 

criteria under which an owner or 

operator of a major stationary source 

undergoing a physical change or change 

in the method of operation that does not 


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72608 Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Rules and Regulations 

1As noted in our proposal (72 FR 10449), the 

‘‘reasonable possibility’’ standard does not apply to 

existing minor sources or to ‘‘synthetic minor 

modifications.’’

trigger major NSR permitting 

requirements must keep records. The 

standard also specifies the 

recordkeeping and reporting 

requirements on such sources. As noted 

in the proposal, the U.S. Court of 

Appeals for the DC Circuit in New York 

v. EPA, 413 F.3d 3 (DC Cir. 2005) (New 

York) 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, the EPA is clarifying what 

constitutes ‘‘reasonable possibility’’ and 

when the ‘‘reasonable possibility’’

recordkeeping requirements apply. 

DATES: This final rule is effective on 

January 22, 2008. 

ADDRESSES: Docket. The EPA has 

established a docket for this action 

under Docket ID No. [EPA–HQ–OAR–

2001–0004]. All documents in the 

docket are listed on the http:// 

www.regulations.gov Web site. Although 

listed in the index, some information is 

not publicly available, e.g., Confidential 

Business Information 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 through 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 Air 

and Radiation Docket and Information 

Center telephone number is (202) 566–

1742. The Public Reading Room is open 

from 8:30 a.m. to 4:30 p.m., Monday 

through Friday, excluding legal 

holidays. The Public Reading Room is 

located in the EPA Headquarters 

Library, Room Number 3334 in the EPA 

West Building, located at 1301 

Constitution Ave., NW., Washington, 

DC. The telephone number for the 

Public Reading Room is (202) 566–1744. 

Visitors are required to show 

photographic identification, pass 

through a metal detector, and sign the 

EPA visitor log. All visitor materials 

will be processed through an X-ray 

machine as well. Visitors will be 

provided a badge that must be visible at 

all times. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Lisa Sutton, Air Quality Policy Division, 

Office of Air Quality Planning and 

Standards (C504–03), Environmental 

Protection Agency, Research Triangle 

Park, NC 27711, telephone number: 

(919) 541–3450; fax number: (919) 541–

5509, e-mail address: 

sutton.lisa@epa.gov. 

SUPPLEMENTARY INFORMATION: The 

information presented in this preamble 

is organized as follows: 

I. General Information 

A. Does this action apply to me? 

B. Where can I obtain additional 

information? 

II. Background and History of the Reasonable 

Possibility Standard 

III. Summary of the Final Rule 

IV. Legal and Policy Rationale for Action 

A. Purpose of the Reasonable Possibility 

Standard 

B. How Our Final Rule Differs From 

Proposal 

C. Why Recordkeeping Trigger Is at 50 

Percent of NSR Significant Levels 

D. Fugitive Emissions and Emissions Due 

to Startup and Malfunction 

E. Additional Methods Supporting 

Compliance 

V. Effective Date of This Rule and 

Requirements for State Implementation 

Plans 

VI. Statutory and Executive Order Reviews 

A. Executive Order 12866—Regulatory 

Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act 

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 

J. Executive Order 12898—Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Congressional Review Act 

VII. Judicial Review 

VIII. Statutory Authority 

I. General Information 

A. Does this action apply to me? 

Entities affected by this final rule 

include major stationary sources in all 

industry groups.1 The majority of 

sources potentially affected are expected 

to be in the following groups: 

Industry group SIC a NAICSb

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 Products ................................................ 289 325520, 325920, 325910, 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. 

aStandard Industrial Classification. 

b North American Industry Classification System. 

Entities affected by the rule also 

include States, local permitting 

authorities, and Indian country. 

B. Where can I obtain additional 

information? 

In addition to being available in the 

docket, an electronic copy of this 

preamble and final amendments will 

also be available on the World Wide 

Web. Following signature by the EPA 

Administrator, a copy of this notice will 

be posted on the EPA’s NSR Web site, 


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Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Rules and Regulations 72609 

2Under the actual-to-projected-actual 

methodology, a source may opt to use potential to 

emit as its projected actual emissions. See, e.g., 40 

CFR 52.21(b)(41)(ii)(d). 

3For example, we required that owners/operators 

record the netting calculations for a project if the 

owners/operators used emissions reductions 

elsewhere at the source to conclude that the project 

was not a major modification. 67 FR at 80197. 

4 In this rulemaking, the terms ‘‘we,’’ ‘‘us,’’ and 

‘‘our’’ refer to the EPA and the terms ‘‘you’’ and 

‘‘your’’ refer to the owners or operators of major 

stationary sources of air pollution. 

5Use of the term ‘‘projected actual emissions’’ in 

this preamble has the same meaning for both major 

NSR applicability and the ‘‘reasonable possibility’’

recordkeeping and reporting requirements. 

under Regulations & Standards, at 

http://www.epa.gov/nsr. 

II. Background and History of the 

Reasonable Possibility Standard 

We recognized that the long-standing 

major NSR applicability test based on 

‘‘actual-to-potential’’ methodology was 

the subject of claims by industry 

representatives that the actual-topotential methodology resulted in 

‘‘confiscation’’ of unused plant capacity 

following a modification project. 

Accordingly, in a proposal in 1996, we 

proposed to allow non-utility units to 

use an actual-to-future-actual 

methodology, similar to what we had 

already extended to electric utility 

steam generating units (other than new 

units or the replacement of existing 

units) in the 1992 WEPCO rule. 61 FR 

at 38255. Some States commented that 

the accuracy of applicability 

determinations for major NSR was 

compromised by the potential for error 

in calculations of future actual 

projections. As a result, in 1998, we 

issued a supplemental proposal 

requesting comment on an actual-tofuture-enforceable-actual methodology. 

To use this test, a source would be 

required to accept a permit limit equal 

to its future actual projection. 63 FR 

39857. That proposal received many 

negative comments, particularly from 

States that were concerned about 

increases in resource burdens and in 

paperwork related to creating and 

enforcing the future actual emissions 

limit. 

In the 2002 NSR reform rules (67 FR 

80186, December 31, 2002), we 

promulgated an actual-to-projectedactual methodology for major NSR 

applicability determinations.2 That rule 

further provides that if a source 

calculates its projected actual emissions 

for the project below major NSR 

significant levels, the source must 

comply with recordkeeping and, in 

some cases, reporting requirements, if 

there is a ‘‘reasonable possibility’’ that 

the project would result in a significant 

emissions increase. We included these 

requirements to respond to concerns 

that a source’s projection could 

erroneously understate emissions and 

that the project could result in an 

emissions increase greater than the 

significant levels. Our goal for 

developing the ‘‘reasonable possibility’’

standard was to strike a balance 

between, on the one hand, States’

concerns with possible calculation 

errors in applicability determinations 

and, on the other hand, sources’ and 

States’ concerns about resource burdens. 

Specifically, we promulgated the 

‘‘reasonable possibility’’ standard to 

apply ‘‘* * * in circumstances where 

there is a reasonable possibility that a 

project that is not part of a major 

modification may result in a significant 

emissions increase * * *’’ (e.g., 40 CFR 

52.21(r)(6)).3 We did not define the term 

‘‘reasonable possibility’’ or identify the 

criteria under which a ‘‘reasonable 

possibility’’ would arise. Sources whose 

project resulted in a reasonable 

possibility of a significant emissions 

increase were required to keep prechange and post-change records. Prechange records include a description of 

the project, identification of units that 

could be affected, a description of the 

applicability test used, and netting 

calculations (if applicable). For 

purposes of pre-change recordkeeping, 

the description of the applicability test 

addresses baseline actual emissions, 

projected actual emissions, and 

emissions excluded (such as due to 

demand growth) with an explanation as 

to why they are excluded. (See, e.g., 40 

CFR 52.21(r)(6)(i).) The post-change 

recordkeeping requirement—actually a 

recordkeeping and monitoring 

requirement—entailed monitoring 

emissions of those regulated NSR 

pollutants for which there was a 

reasonable possibility of a significant 

emissions increase and calculating and 

maintaining records of the annual 

emissions for 5 (or 10) years. (See, e.g., 

40 CFR 52.21(r)(6)(iii).) Further, for 

certain cases, sources whose project 

resulted in a reasonable possibility of a 

significant emissions increase were 

required to submit pre-change and/or 

post-change reports to the reviewing 

authority. The reporting requirements 

applied depending on whether the unit 

was an electric utility steam generating 

unit and on whether the project’s 

annual emissions exceeded the baseline 

by a significant amount. (See, e.g., 40 

CFR 52.21(r)(6)(ii), (iv), and (v).) 

In the New York case, the Court held, 

‘‘[b]ecause 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 supportive 

alternative.’’ 413 F.3d at 35–36. This 

final action addresses the Court’s 

remand by including regulatory changes 

that clarify the reasonable possibility 

standard and specify the criteria under 

which records must be kept for a 

physical change or change in the 

method of operation that does not 

trigger major NSR permitting 

requirements. (For purposes of this 

action, we refer to the physical or 

operational change interchangeably as a 

change or a project.) Two options were 

proposed in the March 8, 2007 proposal 

(45 FR 10445, March 8, 2007). These 

options include the ‘‘percentage 

increase trigger’’ and the ‘‘potential 

emissions trigger.’’ Based on our 4

evaluation and consideration of 

comments received on the two main 

options proposed for clarifying the 

‘‘reasonable possibility’’ standard, we 

are finalizing the ‘‘percentage increase 

trigger’’ option with refinements to 

address concerns raised by commenters. 

Other background information for this 

action is included in the notice of 

proposed rulemaking (72 FR 10445, 

March 8, 2007), and this notice assumes 

familiarity with that information. 

III. Summary of the Final Rule 

This rule finalizes the ‘‘percentage 

increase trigger’’ option, with a few 

changes from what we proposed as our 

preferred option. Under the proposed 

‘‘percentage increase trigger’’ option, 

there was a reasonable possibility that 

your change would result in a 

significant emissions increase if the 

projected increase in emissions of a 

pollutant—determined by comparing 

baseline actual emissions to projected 

actual emissions—equaled or exceeded 

50 percent of the applicable NSR 

significant level for that pollutant. The 

proposed rule imposed recordkeeping, 

emissions monitoring, and reporting 

requirements on any source projecting 

that a change could result in a 

reasonable possibility of a significant 

emissions increase. 

By definition in our regulations, 

‘‘projected actual emissions’’ excludes 

emissions attributable to an 

independent factor 5 (such as demand 

growth); see, e.g., 40 CFR 52.21(b)(41). 

Likewise, in our proposal, we excluded 

emissions attributable to independent 

factors from the projected increase in 

emissions to which the ‘‘reasonable 

possibility’’ recordkeeping trigger 

applied. In this final action, based on 

the comments received, we are requiring 


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72610 Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Rules and Regulations 

that emissions attributable to 

independent factors (such as demand 

growth) be considered for purposes of 

the ‘‘percentage increase’’ test. We are 

retaining the proposed approach, which 

requires sources to compare baseline 

actual emissions to projected actual 

emissions to determine whether this 

value equals or exceeds 50 percent of 

the applicable NSR significant level. 

The final rule requires these sources to 

comply with both the pre-change and 

the post-change recordkeeping and 

reporting requirements, as in the 

proposed rule. This final rule includes 

the additional requirement that sources 

whose projected actual emissions 

increase is less than 50 percent of the 

applicable NSR significant level must 

determine whether emissions 

attributable to demand growth that is 

unrelated to the change would cause the 

post-project emissions increase to 

exceed 50 percent of the applicable NSR 

significant level. If so, then under the 

final rule, these sources also have a 

reasonable possibility of causing a 

significant emissions increase, but 

under these circumstances, the final 

rule requires such sources to comply 

with only the pre-change recordkeeping 

requirements and not the pre-change 

reporting requirements or post-change 

recordkeeping and reporting 

requirements. 

At the same time that we proposed 

the 50-percent ‘‘percentage increase 

trigger’’ option, we included that 

approach as an interim interpretation in 

appendix S of 40 CFR part 51. In this 

final rule, we are amending appendix S 

to include the additional requirement 

concerning independent factors (such as 

demand growth) described earlier in 

this section. 

IV. Legal and Policy Rationale for 

Action 

A. Purpose of the Reasonable Possibility 

Standard 

From the standpoint of compliance, 

project-related records allow permitting 

authorities and enforcement officials to 

evaluate a source’s claim that any 

emissions increase from a project does 

not trigger NSR. If ease of enforcement 

were our only consideration, it would 

point us toward the most inclusive of 

recordkeeping and reporting 

requirements. Nonetheless, agencies do 

not invariably require the regulated 

community to keep records to prove the 

nonapplicability of a requirement. In 

imposing recordkeeping requirements in 

this case, we strove for a balance 

between ease of enforcement and 

avoidance of requirements that would 

be unnecessary or unduly burdensome 

on reviewing authorities or the 

regulated community. 

Initially, in promulgating the 

‘‘reasonable possibility’’ standard, we 

intended to limit recordkeeping 

requirements to those projects for which 

variability in calculating emissions 

creates an interest in obtaining 

additional information in order to 

confirm that the appropriate 

applicability outcome is reached. 

Nonetheless, the Court expressed 

concerns with the lack of definition for 

the standard and with the uncertainty 

that accompanies particular elements of 

the calculations, including demand 

growth and fugitive emissions, as well 

as startups and malfunctions. The 

regulated community expressed concern 

that the lack of a bright-line test left 

them uncertain about their 

recordkeeping and reporting obligations. 

As a result, our proposal in response to 

the Court’s remand in New York 

included a bright-line, 50-percent test 

for the ‘‘reasonable possibility’’

standard. We stated that the closer the 

projected actual emissions are to the 

significant level, the greater the 

likelihood that the project could 

ultimately result in a significant 

emissions increase, and that the brightline test will capture most if not all 

projects that have a higher probability of 

variability and/or error in projected 

actual emissions. Thus, we proposed the 

bright-line test to create certainty for the 

regulated community and reviewing 

authorities. 

B. How Our Final Rule Differs From 

Proposal 

We are finalizing the ‘‘percentage 

increase trigger’’ option with one 

difference from the proposed option. 

This final rule requires consideration of 

‘‘demand growth’’ emissions and 

additionally requires pre-change 

recordkeeping (specified, e.g., at 40 CFR 

52.21(r)(6)(i)) of a project whose 

emissions increase would equal or 

exceed 50 percent of the applicable NSR 

significant level only if emissions due to 

independent factors (such as demand 

growth) are included. As proposed, 

under the ‘‘percentage increase’’ test, 

‘‘reasonable possibility’’ recordkeeping 

and reporting requirements are triggered 

in the case of a 50 percent or greater 

increase in emissions, calculated as the 

difference of ‘‘baseline actual 

emissions’’ and ‘‘projected actual 

emissions.’’ Under our NSR regulations, 

the calculation of ‘‘projected actual 

emissions’’ excludes ‘‘that portion of the 

unit’s emissions following the project 

that an existing unit could have 

accommodated during the consecutive 

24-month period used to establish the 

baseline actual emissions * * * and 

that are also unrelated to the particular 

project, including any increased 

utilization due to product demand 

growth.* * *’’ See, e.g., 40 CFR 

52.21(b)(41). This exclusion is 

commonly called the ‘‘demand growth 

exclusion.’’

The Court, in its order on remand of 

the reasonable possibility provision to 

EPA, specifically cited as a problem the 

possibility that sources would overstate 

the demand growth exclusion: 

[T]he intricacies of the actual-to-projectedactual 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.’’

413 F.3d at 35 (emphasis added). 

Following our proposal to treat 50 

percent of the applicable NSR 

significant level as the trigger for 

‘‘reasonable possibility’’ recordkeeping 

and reporting requirements, we received 

numerous comments expressing 

continued concerns about ‘‘demand 

growth’’ emissions. These commenters 

argued that a source’s inaccurate or 

improper use of the demand growth 

exclusion could allow projects to go 

unreviewed under the proposed rule 

trigger. 

We have decided to refine the 

‘‘percentage increase’’ test by providing 

for recordkeeping to document 

projections of an emissions increase that 

would exceed the 50-percent threshold 

if emissions attributable to independent 

factors (such as demand growth) are 

counted. Thus, this final rule requires 

sources to include emissions from 

demand growth for purposes of 

applying the ‘‘percentage increase’’ test. 

Several commenters specifically 

recommended this approach. Some 

commenters suggested applying the 

trigger at 100 percent of the significant 

level where demand growth is 

concerned. However, we believe that 

such an approach would complicate the 

regulatory requirements by applying 

two different percentages depending on 

the circumstances. For ease of 

implementation, we are applying the 

same trigger—50 percent of the 

significant level—that applies to sources 


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Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Rules and Regulations 72611 

6See comment letter from Hon. Andrew M. 

Cuomo, New York Attorney General, et al., at 

Docket Item EPA–HQ–OAR–2001–0004–0810.1, 

page 9, footnote 2. 

not relying on excluding emissions 

caused by independent factors. 

A project that triggers ‘‘reasonable 

possibility’’ recordkeeping and 

reporting requirements but does so only 

when counting emissions due to an 

independent factor (such as demand 

growth) will be subject to only prechange recordkeeping requirements. 

The project will not be subject to prechange reporting requirements or postchange recordkeeping or reporting 

requirements. According to the 

‘‘reasonable possibility’’ standard of our 

existing rules, the source owner/ 

operator must make a pre-change report 

prior to construction if the unit is an 

electric utility steam generating unit. 

(See, e.g., 40 CFR 52.21(r)(6)(ii).) Under 

this final rule, however, the pre-change 

reporting requirement does not apply to 

the utility project unless the projected 

actual emissions increase alone equals 

or exceeds 50 percent of the NSR 

significant levels. 

We believe this pre-change 

recordkeeping requirement establishes 

an adequate paper trail to allow 

enforcement authorities to evaluate the 

source’s claims concerning what 

amount of an emissions increase is 

related to the project and what amount 

is attributable to demand growth. In 

most cases, it is unlikely that ‘‘demand 

growth’’ emissions could ultimately be 

found to be related to changes made at 

a facility. Accordingly, NSR 

applicability is not affected by whether 

a source overestimates or 

underestimates demand growth 

emissions. Nonetheless, we recognize 

that for some limited types of projects, 

additional information may be required 

to determine whether a projected 

emissions increase is related to the 

change. The source must retain prechange records that describe the project, 

identify the units that could be affected, 

describe the baseline actual emissions, 

the projected actual emissions, and the 

emissions excluded due to demand 

growth with an explanation as to why 

they were excluded. These records 

provide permitting authorities and 

enforcement officials sufficient 

information to determine whether the 

type of project undertaken could have a 

causal link to increases in emissions 

due to demand growth. With these 

records, enforcement authorities will 

have an adequate starting point to make 

further inquiries and to access other 

types of records, as discussed later in 

this preamble, to verify post-project 

demand growth and enforce NSR 

requirements. 

In imposing a recordkeeping 

requirement on projects that attribute 

any emissions to demand growth, we 

believe our ‘‘percentage increase test’’

further addresses the Court’s concerns 

that a source might overstate the 

demand growth exclusion but not retain 

records to support its exclusion of 

emissions attributable to demand 

growth. The rule imposes pre-change 

recordkeeping requirements on projects 

that have a higher probability of 

variability and/or error in projected 

actual emissions. This approach 

balances ease of enforcement with 

avoidance of requirements that would 

be unnecessary or unduly burdensome 

on reviewing authorities or the 

regulated community. Because sources 

that rely on the demand growth 

exclusion already conduct the necessary 

calculations to determine whether the 

project would trigger major NSR 

requirements, requiring the source to 

retain this calculation adds little 

additional burden. 

The following example illustrates the 

difference between the ‘‘percentage 

increase trigger’’ as proposed and as 

finalized with the refinement for 

demand growth. Consider an owner/ 

operator who calculates a post-project 

emissions increase of 60 tpy for a 

pollutant with a 40-tpy significant level. 

The owner/operator attributes 10 tons of 

the increase to the project and the other 

50 tons to demand growth. The owner/ 

operator correctly concludes that the 

project is not a ‘‘major modification’’

that triggers major NSR requirements 

because the emissions increase of 10 tpy 

is below the significant level for the 

pollutant. Under our proposal, the 

project would not have triggered any 

recordkeeping or reporting requirements 

because the projected increase of 10 tpy 

is below 50 percent of the applicable 

significant level of 40 tpy (i.e., below 

the 20-tpy threshold level that triggers 

‘‘reasonable possibility’’ recordkeeping 

and reporting requirements). In contrast, 

under this final rule, the source must 

take the additional step of determining 

whether the project has a reasonable 

possibility of a significant emissions 

increase before subtracting the 50 tpy of 

emissions attributed to demand growth. 

Because 60 tpy exceeds the 20-tpy 

threshold level (and even though the 

owner/operator attributes only 10 tons 

of the increase to the project), the 

project would trigger pre-change 

recordkeeping requirements as 

described earlier in this section. The 

project would not trigger pre-change 

reporting or post-change recordkeeping 

(which includes emissions monitoring) 

or reporting. 

C. Why Recordkeeping Trigger Is at 50 

Percent of NSR Significant Levels 

Our final rule (like our proposal) uses 

50 percent of the applicable NSR 

significant level as the trigger for 

‘‘reasonable possibility’’ recordkeeping 

and reporting requirements, but we 

solicited comment on use of a different 

percentage, such as 25, 33, 66 or 75 

percent. Commenters who supported 

the ‘‘percentage increase trigger’’ option 

expressed support for a trigger of not 

less than 50 percent. We are using 50 

percent because it balances competing 

interests, as described by the Court. 

Specifically, the Court stated: 

We recognize that less burdensome 

requirements may well be appropriate for 

sources with little likelihood of triggering 

NSR. * * * 

413 F.3d at 34. 

Agencies have authority under 

circumstances such as these to establish 

a bright-line test, as opposed to making 

case-by-case determinations. See, e.g., 

Time Warner Entertainment Co. L.P. v. 

F.C.C., 240 F.3d 1126, 1141 (DC Cir. 

2001). We believe a bright-line test at 50 

percent will capture projects that have 

a higher probability of variability and/ 

or error in projected emissions. 

Projects with projected increases 

below the 50-percent threshold, 

especially when emissions from 

demand growth are included in 

projections, are, we believe, sufficiently 

small that any variability or error in 

calculations is less likely to be large 

enough for the change to have increased 

emissions to the significant level. This 

view seems to be consistent with 

comments submitted by the group of 

States that successfully challenged the 

‘‘reasonable possibility’’ rule.6 Other 

commenters included general objections 

to the 50-percent threshold but did not 

give specific examples of projects for 

which sources would project emissions 

increases of less than 50 percent of the 

significant level but which would 

nevertheless be likely to cause 

emissions increases above the 

significant level. For projects with a 

projected increase of more than 50 

percent of the significant level, the 

increase is large enough that we 

conclude there is a reasonable 

possibility of a significant emissions 

increase, due to variability in emissions 

and the possibility of error in the 

projection. As a result, for these 

projects, we do not believe the 

imposition of ‘‘reasonable possibility’’

recordkeeping and reporting 


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7We are not concerned about fugitive, startup, or 

malfunction emissions from new units at a project, 

because their emissions increases are based on 

potential to emit. 

requirements to be unnecessarily 

burdensome. The project-specific 

records and reports created pursuant to 

this rule (see, e.g., 40 CFR 52.21(r)(6)) 

will provide an adequate paper trail for 

reviewing authorities and will be 

supplemented with records that are kept 

for other purposes for use by a 

reviewing agency in determining 

whether enforcement action is 

warranted. 

Some commenters expressed concern 

that a threshold at 50 percent of NSR 

significant levels would capture too 

many small projects, including routine 

maintenance projects. The ‘‘reasonable 

possibility’’ standard applies when a 

major source undergoes a physical 

change or change in the method of 

operation. We point out that in defining 

‘‘major modification,’’ the major NSR 

regulations specify that a ‘‘physical 

change or change in the method of 

operation’’ excludes routine 

maintenance, repair, and replacement, 

certain uses of alternative fuel or raw 

material, certain increases in hours of 

operation or production rate, changes in 

ownership, and certain activities 

associated with clean coal technology. 

(See, e.g., 40 CFR 52.21(b)(2).) Thus, a 

project that is not a ‘‘physical change or 

change in the method of operation’’ is 

not subject to ‘‘reasonable possibility’’

recordkeeping and reporting 

requirements. 

D. Fugitive Emissions and Emissions 

Due to Startup and Malfunction 

Under the actual-to-projected-actual 

methodology of the major NSR 

applicability test, projected actual 

emissions include fugitive emissions as 

well as emissions anticipated to be 

caused by startups and malfunctions. 

One of the concerns expressed by the 

Court in remanding the ‘‘reasonable 

possibility’’ standard was that sources 

may underestimate future emissions by 

understating fugitive, startup, or 

malfunction emissions. 

We do not believe projections of 

fugitive, startup, or malfunction 

emissions are likely to be significant 

causes of variability or error that would 

lead to underestimates of emissions 

increases from existing units.7 The types 

of emissions at issue are included in the 

project’s baseline actual emissions, and 

we have no reason to expect greater 

amounts of these types of emissions in 

the post-project projections. Thus, any 

variability or error in estimating these 

types of emissions is not likely to lead 

to underestimates of emissions increases 

due to the project. Indeed, because the 

types of the projects at issue are often 

small improvements—that is, they are 

relatively small physical or operational 

changes, many of which would make 

nonroutine repairs or other types of 

improvements or make the source 

operations run more smoothly—such 

projects would, if anything, reduce 

these types of emissions from the 

amounts included in the baseline. 

E. Additional Methods Supporting 

Compliance 

We believe that the reasons described 

earlier are sufficient to support the 50- 

percent bright-line test, with the 

demand growth refinement. In addition, 

we believe that as a practical matter, 

existing records will aid in permitting 

and enforcement. 

For projects that do not trigger 

recordkeeping and reporting 

requirements under the ‘‘reasonable 

possibility’’ standard, many source 

owners/operators will have various 

types of records that, collectively, 

provide information on the baseline 

actual emissions and projected actual 

emissions, as well as post-change 

emissions. These records will also be 

valuable for projects that trigger the 

‘‘reasonable possibility’’ recordkeeping 

and reporting requirements but are not 

required to track post-change emissions. 

Such records include but are not limited 

to reports submitted to reviewing 

authorities pursuant to title V operating 

permit program requirements of 40 CFR 

parts 70 and 71, State minor NSR permit 

application data, business records, and 

emissions inventory data. 

In the New York case, the Court 

questioned whether reporting 

requirements of the CAA’s title V 

program would provide the information 

enforcement authorities need, noting, 

‘‘EPA fails to explain how emissions 

reported under title V can be traced to 

a particular physical or operational 

change.’’ 413 F.3d at 35. We recognize 

the Court’s concern that records kept in 

connection with monitoring and 

compliance under the title V operating 

permit program do not necessarily 

provide specific information on 

emissions increases from particular 

projects. Even so, many of these records 

will be useful in allowing enforcement 

authorities to identify an emissions 

increase from a particular piece of 

equipment, which can provide a starting 

point for inquiry as to whether a 

particular project was associated with 

such an increase. The enforcement 

authority could determine whether the 

source has kept records of changes that 

caused those emissions increases and, if 

not, whether the source has an adequate 

explanation for the emissions increases. 

Sources annually quantify and report 

emissions to reviewing authorities for 

purposes of computing annual permit 

program emission fees. Some sources 

calculate their reported emissions based 

on stack testing and emission factors. 

Other sources submit emissions data 

collected from continuous emissions 

monitoring (CEM). This information, in 

conjunction with title V permit 

applications, can allow enforcement 

authorities to determine whether 

emissions increases are associated with 

a particular piece of equipment. 

In addition, major sources are subject 

to periodic monitoring and 

recordkeeping requirements for every 

individual applicable requirement in 

the source’s operating permit. See 71 FR 

75422. These requirements frequently 

apply on an emissions-unit-byemissions-unit basis. In many cases, 

physical changes or changes in the 

method of operation associated with a 

project occur at the emission unit level, 

so that these emissions records provide 

enforcement authorities a starting point 

for further inquiry as to whether a 

project at that unit is associated with 

such increase. Large emissions 

equipment is also subject to additional 

monitoring and recordkeeping under the 

‘‘compliance assurance monitoring’’

(CAM) regulations at 40 CFR part 64. 

The CAM rule requires sources to 

establish monitoring or recordkeeping 

sufficient to assure compliance on a 

pollutant-specific basis at each 

emissions unit for which there is a limit, 

standard, or similar pollution control 

requirement. Monitoring assures proper 

operation of active pollution control 

devices in order to reduce the amount 

of downtime which would cause 

emissions increases. Typically, 

parameters are monitored that show 

proper operation of the control device, 

and if these parameters fall outside 

acceptable ranges or limits, then it is 

possible that there has been an 

emissions increase. In certain cases, 

CEMS (continuous emission monitoring 

systems), COMS (continuous opacity 

monitoring systems), PM CEMS 

(particulate matter continuous emission 

monitoring systems), or similar direct 

monitoring, is required to be used for 

CAM. In many such cases, these devices 

would be providing direct evidence of 

emissions increases. Monitoring 

compliance data includes logs of 

operations, visible emissions and 

instrumental opacity readings, stack test 

reports, analytically generated mass 

balances, and strip charts from 

continuous direct emissions and 

parametric monitors. These records can 


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8Major stationary sources are also subject to State 

reporting requirements. In addition to data 

collected from sources for purposes of title V permit 

program emission fees, as noted earlier, States may 

also collect emissions data from sources for local 

ambient air quality planning purposes. 

9See Supporting Statement for Information 

Collection Request, EPA ICR Number 1230.17, at 

Docket Item EPA–HQ–OAR–2004–0001–0835, p. 

14. 

10The EPA’s Central Data Exchange (http:// 

www.epa.gov/cdx/) is the point of entry on the 

Environmental Information Exchange Network for 

environmental data submissions to the Agency. 

11Currently, there are no tribal permitting 

agencies with an approved TIP to implement the 

major NSR permitting program. 

also allow enforcement authorities to 

identify an emissions increase at a 

particular piece of equipment, which 

provides a starting point for further 

inquiry about projects associated with 

that equipment.8

Regarding State minor source 

programs, the Court also expressed 

concern: 

* * *[R]eliance on state programs to 

establish minimum recordkeeping and 

reporting standards means that states 

unwilling to impose stricter rules are free to 

retain the 2002 rule’s approach. * * * 

413 F.3d at 35. 

While we recognize the Court’s 

concern that States have latitude in 

structuring their minor source review 

programs, we recently collected 

information confirming that, as a 

practical matter, existing State minor 

NSR programs already provide data that 

assist reviewing authorities and 

enforcement authorities in identifying 

major modifications. Specifically, CAA 

110(a)(2)(C) requires States to regulate 

construction and modification of 

stationary sources. Accordingly, States 

have adopted programs that require the 

owner/operator to provide notification 

or obtain a permit before construction or 

modification. These steps allow 

reviewing authorities to confirm the 

source’s preconstruction projections and 

non-major NSR applicability 

determination. Minor NSR programs by 

definition apply to emissions increases 

less than the major NSR significant 

level, and only activities that a State 

qualifies as ‘‘insignificant activities’’

under the SIP-approved program may be 

excluded from review. Thus, reviewing 

authorities have an opportunity to 

review virtually all projects causing an 

emissions increase before construction 

begins. Moreover, our regulations (40 

CFR 51.161) provide for public review 

of information submitted by owners/ 

operators for purposes of minor NSR 

review. Thus, information provided for 

purposes of minor NSR programs is also 

of value in determining applicability of 

major NSR. 

In October 2004, the EPA published 

an Information Collection Request (ICR) 

covering changes to the major NSR 

regulations. Our ICR analysis resulted in 

an estimate of 25,000 minor NSR permit 

applications per year processed by State 

and local agencies at major sources 

(specifically, 74,609 applications over a 

3-year period).9 These permit 

applications include descriptions of the 

projects and other data that enforcement 

authorities can use in evaluating the 

applicability of NSR. 

Business records include such 

routinely maintained operation-related 

records as production records, capital 

project development and appropriation 

requests, work orders, purchase records, 

and sales records. This information is 

readily available to reviewing 

authorities. In addition, publicly 

available information on production 

levels and growth in various industrial 

sectors can be used by authorities to 

determine if unexplained actual 

emissions increases are occurring at a 

source that might have constructed, 

installed, or modified equipment 

without NSR review. 

Sources report the earlier-described 

title V data and State minor source 

permit data to the States, and, in turn, 

States must submit certain emissions 

data to the EPA. All information that the 

source submits to the State is available 

to assist EPA enforcement authorities, 

regardless of whether the information is 

included in the State’s data submittal to 

EPA. States submit emissions inventory 

data directly to the EPA through the 

EPA’s Central Data Exchange.10 Under 

the Consolidated Emissions Reporting 

Rule (CERR) (at 40 CFR part 51, subpart 

A), States must report criteria pollutant 

emissions from large point sources 

every year and must report emissions 

for all point sources, at the process 

level, at 3-year intervals. 

States develop emissions inventories 

in support of their State Implementation 

Plans (SIPs) and submit the data to the 

EPA through the Governor or his/her 

designee. The EPA interprets CAA 

110(a)(2)(F) as requiring SIPs to provide 

for the reporting of criteria air pollutant 

emissions from stationary sources for all 

areas under the general SIP 

requirements of section 110. In addition, 

EPA interprets section 172(c)(3) as 

providing the Administrator with 

discretionary authority to require other 

emissions data from stationary sources 

as deemed necessary for SIP 

development in nonattainment areas to 

attain the National Ambient Air Quality 

Standards (NAAQS). 

Another source of data is the National 

Emissions Inventory (NEI). Produced by 

the EPA every 3 years, the NEI is an 

inventory of criteria air pollutant and 

hazardous air pollutant emissions from 

stationary sources. The EPA uses data 

submitted by States under the CERR (as 

well as data from other sources) to 

develop the NEI. The NEI has several 

applications, including support for 

trends analyses and national 

rulemakings. 

Enforcement authorities can use all of 

these earlier-described information 

sources to examine whether emissions 

from particular sources and, in some 

cases, particular pieces of equipment 

have increased. Such increases could 

give an enforcement authority a starting 

point for further inquiry. Upon 

inquiring, the enforcement authority 

could determine whether the source has 

kept records of changes that caused 

those emissions increases, and if not, 

whether the source has an adequate 

explanation for the emissions increases. 

V. Effective Date of This Rule and 

Requirements for State Implementation 

Plans 

These changes will take effect in the 

Federal PSD and Federal nonattainment 

NSR programs on January 22, 2008. This 

means we will apply these rules in any 

area without a SIP-approved PSD or SIPapproved nonattainment NSR program 

for which we are the reviewing 

authority or for which we have 

delegated our authority to issue permits 

to a State, local, or tribal reviewing 

authority. 

We are establishing these 

requirements as minimum program 

elements of the PSD and nonattainment 

NSR programs. Notwithstanding these 

requirements, it may not be necessary 

for a State or local authority to revise its 

SIP program to begin to implement 

these changes.11

Some State or local authorities may be 

able to adopt these changes through a 

change in interpretation of the term 

‘‘reasonable possibility’’ without the 

need to revise the SIP. For any State or 

local authority that can implement the 

changes without revising its approved 

SIP, the changes will become effective 

when the reviewing authority publicly 

announces that it accepts these changes 

by interpretation. In the case of NSR SIP 

revisions that include the term 

‘‘reasonable possibility’’ but that EPA 

has not yet approved, we will approve 

the SIP revision if the State or local 

authority commits to implementing the 

‘‘reasonable possibility’’ standard in a 

manner consistent with our final rule. 


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Although no SIP revision may be 

necessary in certain areas that adopt 

these changes by interpretation, we 

encourage State and local authorities in 

such areas to revise their SIPs to adopt 

these changes, in order to enhance the 

clarity of the existing rules. 

For State and local authorities that 

revise their SIPs to adopt these changes, 

the changes are not effective in such 

areas until we approve the SIP revision. 

These State and local authorities must 

submit revisions to SIPs to EPA for 

approval within 3 years. 

State and local authorities may adopt 

or maintain NSR program elements that 

have the effect of making their 

regulations more stringent than these 

rules. Several State and local authorities 

have regulations already approved into 

their SIPs that are more stringent than 

these rules. These State and local 

authorities must submit notice to EPA 

within 3 years to acknowledge that their 

regulations fulfill these requirements. 

VI. Statutory and Executive Order 

Reviews 

A. Executive Order 12866—Regulatory 

Planning and Review 

Under Executive Order (EO) 12866 

(58 FR 51735, October 4, 1993), this 

action is a ‘‘significant regulatory 

action’’ because it raises policy issues 

arising from the President’s priorities. 

Accordingly, the EPA submitted this 

action to the Office of Management and 

Budget (OMB) for review under 

Executive Order 12866 and any changes 

made in response to OMB’s 

recommendations have been 

documented in the docket for this 

action. 

B. Paperwork Reduction Act 

This action does not impose any new 

information collection burden as the 

burden imposed by this rule has already 

been taken into account in previously 

approved information collection 

requirement actions under the NSR 

program. The OMB has previously 

approved the information collection 

requirements contained in the existing 

40 CFR parts 51 and 52 regulations 

under the provisions of the Paperwork 

Reduction Act, 44 U.S.C. 3501 et seq., 

and has assigned OMB control number 

2060–0003, EPA ICR number 1230.19. A 

copy of the OMB-approved Information 

Collection Request (ICR), EPA ICR 

number 1230.19 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. 

It is necessary that certain records and 

reports be collected by a State or local 

agency (or the EPA Administrator in 

non-delegated areas), for example, to: (1) 

Confirm the compliance status of 

stationary sources, including identifying 

any stationary sources subject/not 

subject to the rule, and (2) ensure that 

the stationary source control 

requirements are being achieved. The 

information is then used by the EPA or 

State enforcement personnel to ensure 

that the subject sources are applying the 

appropriate control technology and that 

the control requirements are being 

properly operated and maintained on a 

continuous basis. Based on the reported 

information, the State, local, or tribal 

agency can decide which plants, 

records, or processes should be 

inspected. Such information collection 

requirements for sources and States are 

currently reflected in the approved ICR 

referenced above for the NSR program. 

Burden means the total time, effort, or 

financial resources expended by persons 

to generate, maintain, retain, 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; disclosing and providing 

information; adjusting 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. 

C. Regulatory Flexibility Act 

The Regulatory Flexibility Act (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 statue unless the Agency certifies 

that this action 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 

that is a small industrial entity as 

defined in the U.S. Small Business 

Administration (SBA) size standards 

(see 13 CFR 121.201); (2) a small 

governmental jurisdiction that is a 

government of a city, county, town, 

school district, or special district with a 

population of less than 50,000; or (3) a 

small organization that is any not-forprofit enterprise that is independently 

owned and operated and is not 

dominant in its field. 

After considering the economic 

impacts of this action on small entities, 

I certify that this action will not have a 

significant economic impact on a 

substantial number of small entities. 

This action will not impose any 

requirements on small entities. 

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, 

the EPA generally must prepare a 

written statement, including a costbenefit 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 costeffective 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. 


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The EPA has determined that this 

action does not contain a Federal 

mandate that may result in expenditures 

of $100 million or more for State, local, 

and tribal governments, in the aggregate, 

or the private sector in any one year. 

Thus, this rule is not subject to the 

requirements of sections 202 and 205 of 

the UMRA because this action merely 

provides explanation of an existing 

recordkeeping and reporting standard. 

EPA has determined that this rule 

contains no regulatory requirements that 

might significantly or uniquely affect 

small governments. 

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 final 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 13132. This action 

merely provides explanation of an 

existing recordkeeping and reporting 

standard. Thus, Executive Order 13132 

does not apply to this rule. 

F. Executive Order 13175—Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 13175, entitled 

‘‘Consultation and Coordination With 

Indian Tribal Governments’’ (65 FR 

13175, November 9, 2000), requires EPA 

to develop an accountable process to 

ensure ‘‘meaningful and timely input by 

tribal officials in the development of 

regulatory policies that have tribal 

implications.’’ This action does not have 

tribal implications, as there are no tribal 

authorities currently issuing major NSR 

permits. Thus, Executive Order 13175 

does not apply to this action. 

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. 

The EPA interprets Executive Order 

13045 as applying only to those 

regulatory actions that concern health or 

safety risks, such that the analysis 

required under section 5–501 of the 

Executive Order has the potential to 

influence the regulation. This action 

does not establish an environmental 

standard intended to mitigate health or 

safety risks but rather provides 

explanation of an existing 

recordkeeping and reporting standard. 

H. Executive Order 13211—Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This action does not constitute a 

‘‘significant energy action’’ as defined in 

Executive Order 13211, ‘‘Actions 

Concerning Regulations That 

Significantly Affect Energy Supply, 

Distribution, or Use’’ (66 FR 28355, May 

22, 2001), because it will not likely have 

a significant adverse effect on the 

supply, distribution, or use of energy. 

I. National Technology Transfer and 

Advancement Act 

As noted in the proposed rule, section 

12(d) of the National Technology 

Transfer and Advancement Act of 1995 

(NTTAA), Public Law 104–113, 12(d) 

(15 U.S.C. 272 note), directs 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. 

J. Executive Order 12898—Federal 

Actions To Address Environmental 

Justice in Minority Populations and 

Low-Income Populations 

Executive Order 12898 (59 FR 7629 

(Feb. 16, 1994)) establishes Federal 

executive policy on environmental 

justice. Its main provision directs 

Federal agencies, to the greatest extent 

practicable and permitted by law, to 

make environmental justice part of their 

mission by identifying and addressing, 

as appropriate, any disproportionately 

high and adverse human health or 

environmental effects of their programs, 

policies, and activities on minority 

populations and low-income 

populations in the United States. 

The EPA has determined that this 

action will not have disproportionately 

high and adverse human health or 

environmental effects on minority or 

low-income populations. The reason for 

EPA’s determination is because this 

action does not affect the level of 

protection provided to human health or 

the environment as it merely provides 

an explanation of an existing 

recordkeeping and reporting standard. 

K. Congressional Review Act 

The Congressional Review Act, 5 

U.S.C. 801 et seq., as added by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996, generally provides 

that before a rule may take effect, the 

agency promulgating the rule must 

submit a rule report, which includes a 

copy of the rule, to each House of the 

Congress and to the Comptroller General 

of the United States. EPA will submit a 

report containing this rule and other 

required information to the U.S. Senate, 

the U.S. House of Representatives, and 

the Comptroller General of the United 

States prior to publication of the rule in 

the Federal Register. A major rule 

cannot take effect until 60 days after it 

is published in the Federal Register. 

This action does not constitute a ‘‘major 

rule’’ as defined by 5 U.S.C. 804(2). 

Therefore, this action will be effective 

January 22, 2008. 

VII. Judicial Review 

Under section 307(b)(1) of the Act, 

judicial review of this final action is 

available by filing of a petition for 

review in the U.S. Court of Appeals for 

the District of Columbia Circuit by 

February 19, 2008. Any such judicial 

review is limited to only those 

objections that are raised with 

reasonable specificity in timely 

comments. Under section 307(b)(2) of 

the Act, the requirements of this final 


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72616 Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Rules and Regulations 

action may not be challenged later in 

civil or criminal proceedings brought by 

us to enforce these requirements. 

VIII. 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 action 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. 

List of Subjects 

40 CFR Part 52 

Environmental protection, Air 

pollution control, Carbon monoxide, 

Intergovernmental relations, Lead, 

Nitrogen dioxide, Ozone, Particulate 

matter, Reporting and recordkeeping 

requirements, Sulfur oxides, Volatile 

organic compounds. 

Dated: December 14, 2007. 

Stephen L. Johnson, 

Administrator. 

■ For reasons stated in the preamble, 

title 40, chapter I of the Code of Federal 

Regulations is 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–

7671q. 

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, 

except as otherwise provided in 

paragraph (a)(6)(vi) of this section, 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) through (3) 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 either: 

(A) A projected actual emissions 

increase 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; or 

(B) A projected actual emissions 

increase that, added to the amount of 

emissions excluded under paragraph 

(a)(1)(xxviii)(B)(3), sums to 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. For a project for which 

a reasonable possibility occurs only 

within the meaning of paragraph 

(a)(6)(vi)(B) of this section, and not also 

within the meaning of paragraph 

(a)(6)(vi)(A) of this section, then 

provisions (a)(6)(ii) through (v) do not 

apply to the project. 

* * * * * 

■ 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, 

except as otherwise provided in 

paragraph (r)(6)(vi) of this section, 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) 

through (c) 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 either: 

(a) A projected actual emissions 

increase 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; or 

(b) A projected actual emissions 

increase that, added to the amount of 

emissions excluded under paragraph 

(b)(40)(ii)(c), sums to 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. For a 

project for which a reasonable 

possibility occurs only within the 

meaning of paragraph (r)(6)(vi)(b) of this 

section, and not also within the 

meaning of paragraph (a)(6)(vi)(a) of this 

section, then provisions (a)(6)(ii) 

through (v) do not apply to the project. 

* * * * * 

■ 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. 

Except as otherwise provided in paragraph 

IV.J.6(ii) of this Ruling, 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) through 


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Federal Register / Vol. 72, No. 245 / Friday, December 21, 2007 / Rules and Regulations 72617 

(c) 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 either: 

(i) A projected actual emissions increase 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; or 

(ii) A projected actual emissions increase 

that, added to the amount of emissions 

excluded under paragraph II.A.24(ii)(c), sums 

to 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. For a project for 

which a reasonable possibility occurs only 

within the meaning of paragraph IV.J.6(ii) of 

this Ruling, and not also within the meaning 

of paragraph IV.J.6(i) of this Ruling, then 

provisions IV.J.2 through IV.J.5 do not apply 

to the project. 

* * * * * 

PART 52—[AMENDED] 

■ 5. The authority citation for part 52 

continues to read as follows: 

Authority: 42 U.S.C. 7401, et seq. 

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) Except as otherwise provided in 

paragraph (r)(6)(vi)(b) of this section, 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) through (c) 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 either: 

(a) A projected actual emissions 

increase 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; or 

(b) A projected actual emissions 

increase that, added to the amount of 

emissions excluded under paragraph 

(b)(41)(ii)(c) of this section, sums to 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. For a project for which a 

reasonable possibility occurs only 

within the meaning of paragraph 

(r)(6)(vi)(b) of this section, and not also 

within the meaning of paragraph 

(r)(6)(vi)(a) of this section, then 

provisions (r)(6)(ii) through (v) do not 

apply to the project. 

* * * * * 

[FR Doc. E7–24714 Filed 12–20–07; 8:45 am] 

BILLING CODE 6560–50–P 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Part 52 

[EPA–R08–OAR–2006–0928; FRL–8509–4] 

Approval and Promulgation of Air 

Quality Implementation Plan; South 

Dakota; Revisions to New Source 

Review Rules 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: EPA is approving revisions to 

Chapter 74:36:09 of the South Dakota 

Administrative Rules (Prevention of 

Significant Deterioration) for 

incorporation into the South Dakota 

State Implementation Plan (SIP). South 

Dakota adopted these rule revisions on 

August 29, 2006 and May 14, 2007, and 

submitted the requests for approval to 

EPA on September 1, 2006 and June 28, 

2007. One rule provision that EPA had 

proposed to disapprove has been 

corrected by South Dakota. Therefore, 

EPA is also approving that provision. 

South Dakota was granted delegation of 

authority by EPA on July 6, 1994, to 

implement and enforce the federal 

Prevention of Significant Deterioration 

(PSD) permitting regulations. As part of 

this final rule EPA is rescinding South 

Dakota’s delegation of authority for 

implementing the federal PSD 

regulations. This action is being taken 

under section 110 of the Clean Air Act 

(CAA). 

DATES: Effective Date: This final rule is 

effective January 22, 2008. 

ADDRESSES: EPA has established a 

docket for this action under Docket ID 

No. EPA–R08–OAR–2006–0928. All 

documents in the docket are listed on 

the www.regulations.gov Web site. 

Although listed in the index, some 

information is not publicly available, 

e.g., Confidential Business Information 

(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 through 

www.regulations.gov or in hard copy at 

the Air and Radiation Program, 

Environmental Protection Agency 

(EPA), Region 8, 1595 Wynkoop Street, 

Denver, Colorado 80202–1129. EPA 

requests that if at all possible, you 

contact the individual listed in the FOR

FURTHER INFORMATION CONTACT section to 

view the hard copy of the docket. You 

may view the hard copy of the docket 

Monday through Friday, 8 a.m. to 4 

p.m., excluding Federal holidays. 

FOR FURTHER INFORMATION CONTACT: 

Cindy Cody, Air and Radiation Program, 

U.S. Environmental Protection Agency, 

Region 8, 1595 Wynkoop Street, Denver, 

Colorado 80202–1129, (303) 312–6228, 

cody.cynthia@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Definitions 

For the purpose of this document, we 

are giving meaning to certain words or 

initials as follows: 

(i) The words or initials Act or CAA 

mean or refer to the Clean Air Act, 

unless the context indicates otherwise. 

(ii) The words EPA, we, us or our 

mean or refer to the United States 

Environmental Protection Agency. 

(iii) The initials SIP mean or refer to 

State Implementation Plan. 

(iv) The words State or South Dakota 

mean the State of South Dakota, unless 

the context indicates otherwise. 

Table of Contents 

I. What is being addressed in this document? 

II. What are the changes that EPA is 

approving? 

III. What were the comments received and 

EPA’s response? 

IV. What action is EPA taking? 

V. Statutory and Executive Order Reviews 

I. What is being addressed in this 

document? 

Chapter 74:36:09 was submitted to 

EPA for inclusion in the State 


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