[Federal Register Volume 62, Number 30 (Thursday, February 13, 1997)]
[Rules and Regulations]
[Pages 6724-6728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-3577]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[TN-155-1-7178; TN-MEM-149-3-9701; FRL-5669-3]


Approval and Promulgation of Implementation Plans; State of 
Tennessee and Memphis-Shelby County, Tennessee

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is approving revisions to the Tennessee State 
Implementation Plan (SIP) to allow the State to issue Federally 
enforceable state operating permits (FESOP). EPA is also approving 
revisions to the Memphis-Shelby County portion of the Tennessee SIP to 
allow the County to issue Federally enforceable local operating permits 
(FELOP). EPA is also approving the State's FESOP program and the 
County's FELOP program pursuant to section 112 of the Clean Air Act as 
amended in 1990 (CAA or ``the Act'') so that both permitting agencies 
may issue Federally enforceable state operating permits containing 
limits for hazardous air pollutants (HAP).

DATES: This final rule is effective April 14, 1997 unless adverse or 
critical comments are received by March 17, 1997. If the effective date 
is delayed, timely notice will be published in the Federal Register.

ADDRESSES: Written comments should be addressed to Gracy R. Danois at 
the EPA Regional Office listed below. Copies of the documents used in 
developing this action are available for public inspection during 
normal business hours at the locations listed below. Interested persons 
wanting to examine these documents, contained in files TN155 and TN149-
3, should make an appointment with the appropriate office at least 24 
hours before the visiting day:
Air and Radiation Docket and Information Center (Air Docket 6102), U.S. 
Environmental Protection Agency, 401 M Street, SW, Washington, DC 
20460.
U.S. Environmental Protection Agency, Region 4, Air and Radiation 
Technology Branch, Atlanta Federal

[[Page 6725]]

Center, 100 Alabama Street, SW, Atlanta, Georgia 30303.
Tennessee Department of Environment and Conservation, L & C Annex, 401 
Church Street, Nashville, Tennessee, 37243-1531.
Memphis-Shelby County Health Department, 814 Jefferson Avenue, Room 
437-E, Memphis, Tennessee, 38105.

FOR FURTHER INFORMATION CONTACT: Gracy R. Danois, Air and Radiation 
Technology Branch, Air, Pesticides & Toxics Management Division, U.S. 
Environmental Protection Agency, Region 4, Atlanta Federal Center, 100 
Alabama Street, SW, Atlanta, Georgia 30303, 404/562-9119. Reference 
files TN155 and TN149-3.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    On January 10, 1995, and May 3, 1995, Memphis-Shelby County and the 
State of Tennessee, respectively, through the Tennessee Department of 
Environment and Conservation (TDEC), submitted SIP revisions to make 
certain permits issued under the County's and the State's existing 
minor source operating permit program Federally enforceable pursuant to 
the EPA requirements specified in the Federal Register notice entitled 
``Requirements for the Preparation, Adoption, and Submittal of 
Implementation Plans; Approval and Promulgation of Implementation 
Plans'' (see 54 FR 27274, June 28, 1989). Additional materials 
concerning HAPs and the implementation of the FESOP and FELOP programs 
were provided by the State and the County to EPA on March 8, 1996, and 
June 12, 1996, and March 13, 1996, and September 4, 1996, respectively.
    EPA has always had and continues to have the authority to enforce 
state permits which are issued under permit programs approved into the 
SIP. However, EPA has not always recognized, as valid, certain state 
permits which purport to limit a source's potential to emit. The 
principle purpose for adopting the regulations that are the subject of 
this notice is to give the State of Tennessee and Memphis-Shelby County 
a Federally recognized means of expeditiously restricting potential 
emissions such that sources can avoid major source permitting 
requirements. A key mechanism for such limitations is the use of 
Federally enforceable state or local operating permits. The term 
``Federally enforceable,'' when used in the context of permits which 
limit potential to emit, means ``Federally recognized.''
    The voluntary revision that is the subject of this action approves 
Division Rule 1200-3-9-.02(11)(a) into both the State and the County 
portions of the Tennessee SIP. This rule and the additional materials 
provided by the State and the County satisfy the five criteria outlined 
in the June 28, 1989, Federal Register notice. Please refer to section 
II of this notice for the analysis of each of the criteria.

II. Analysis of State and County Submittals

    Memphis-Shelby County has adopted the majority of the State of 
Tennessee's Division Rules in the Memphis City Code. The County 
maintains the numbering system used by the State of Tennessee within 
its regulations. Therefore, all references to the State of Tennessee's 
Division Rules are also applicable to Memphis-Shelby County, unless 
otherwise noted.
    Criterion 1. The state's operating permit program (i.e. the 
regulations or other administrative framework describing how such 
permits are issued) must be submitted to and approved by EPA as a SIP 
revision. On January 10, 1995, and May 3, 1995, respectively, Tennessee 
and Memphis-Shelby County submitted SIP revision requests to EPA 
consisting of Division Rule 1200-3-9-.02(11)(a), amending the 
stationary source general requirements. Additional materials concerning 
hazardous air pollutants and the operating permit program were 
submitted to EPA by Memphis-Shelby County and Tennessee on March 8, 
1996, and June 12, 1996, and on March 13, 1996, and September 4, 1996, 
respectively. These submittals are the subject of this rulemaking 
action.
    Criterion 2. The SIP revision must impose a legal obligation that 
operating permit holders adhere to the terms and limitations of such 
permits (or subsequent revisions of the permit made in accordance with 
the approved operating permit program) and provide that permits which 
do not conform to the operating permit program requirements and the 
requirements of EPA's underlying regulations may be deemed not 
``Federally enforceable'' by EPA. Division Rule 1200-3-9-.02(6) 
requires each air contaminant source to obtain a permit to operate and 
to operate in accordance with ``the provisions and stipulations set 
forth in the operating permit, all provisions of these regulations, and 
all provisions of the Tennessee Air Quality Act.'' In addition, 
Tennessee has committed to include the following statement in all 
operating permits issued pursuant to Division Rule 1200-3-9-.02(11): 
``The permittee is placed on notice that Condition(s) ________ of this 
operating permit contain(s) limitations that allow the permittee to 
opt-out of the major source operating permit program requirements 
specified in Division Rule 1200-3-9-.02(11). Failure to abide by these 
limits will not only subject the permittee to enforcement action by the 
State of Tennessee, but it may also result in the imposition of Federal 
enforcement action by the United States Environmental Protection Agency 
and the loss of being Federally recognized as a conditional major 
source.'' Memphis-Shelby County has committed to incorporate similar 
language in the operating permits it issues pursuant to the same 
Division Rule.
    Criterion 3. The state operating permit program must require that 
all emission limitations, controls, and other requirements imposed by 
such permits will be at least as stringent as any applicable 
limitations and requirements contained in the SIP, or enforceable under 
the SIP, and that the program may not issue permits that waive, or make 
less stringent, any limitations or requirements contained in or issued 
pursuant to the SIP, or that are otherwise ``Federally enforceable'' 
(e.g. standards established under sections 111 and 112 of the Clean Air 
Act). Division Rule 1200-3-9-.02(6) contains regulatory provisions 
which state that operating permits issued by Tennessee and Memphis-
Shelby County will be at least as stringent as any applicable 
requirement. Applicable requirement is defined in Division Rule 1200-3-
9-.02(11)(b)(5) to include all SIP requirements.
    Criterion 4. The limitations, controls and requirements of the 
state's operating permits must be permanent, quantifiable, and 
otherwise enforceable as a practical matter. Division Rules 1200-3-
9-.02(6) and 1200-3-9-.02(11)(a) contain regulatory provisions which 
satisfy this criterion. Permits must contain a statement of basis 
comparing the source's potential to emit with the more restrictive 
limit and the procedures to be followed that will insure that the more 
restrictive limit is not exceeded. Concerning permanence, Division Rule 
1200-3-9-.02(11)(a), establishes that in order to obtain a synthetic 
non-title V permit, the facility must agree to be bound by a permit 
that establishes more restrictive limitations. Also, the State relies 
on the requirements of Division Rule 1200-3-13-.01 as their authority 
to seek enforcement action against a source that violates the 
conditions of an operating permit. Memphis-Shelby County relies

[[Page 6726]]

on the requirements of sections 16-56, 16-59, and 16-77 of the Memphis 
City Code to meet this criterion. Section 16-56, gives the County the 
authority to seek enforcement action against sources that violate any 
of the requirements of the local air pollution code, which includes a 
failure to meet all permit conditions as required by Section 16-77.
    Criterion 5. The state operating permits must be issued subject to 
public participation. This means that the State and the County agree, 
as part of their programs, to provide EPA and the public with timely 
notice of the proposal and issuance of such permits, and to provide 
EPA, on a timely basis, with a copy of each proposed (or draft) and 
final permit intended to be ``Federally enforceable.'' This process 
must also provide for an opportunity for public comment on the permit 
applications prior to issuance of the final permits. Division Rules 
1200-3-9-.02(11)(a), 1200-3-9-.02(11)(f)8. and 1200-3-9-.02(11)(g) 
contain provisions establishing that the State and the County will 
either deny the request for a permit or give EPA and the public notice 
of an intention to issue the permit and provide for a 30 day public 
comment period.

A. Applicability to Hazardous Air Pollutants

    Tennessee and Memphis-Shelby County have also requested approval of 
their FESOP and FELOP programs under section 112(l) of the Clean Air 
Act for the purpose of creating Federally recognized limitations on the 
potential to emit for HAPs. Approval under section 112(l) is necessary 
because the SIP revisions discussed above only extend to criteria 
pollutants for which EPA has established national ambient air quality 
standards under section 109 of the Act. Federally enforceable limits on 
criteria pollutants or their precursors (i.e. VOCs or PM-10) may have 
the incidental effect of limiting certain HAPs listed pursuant to 
section 112(b).<SUP>1 As a legal matter, no additional program approval 
by the EPA is required beyond SIP approval under section 110 in order 
for these criteria pollutant limits to be recognized as Federally 
enforceable. However, section 112 of the Act provides the underlying 
authority for controlling all HAP emissions, regardless of their 
relationship to criteria pollutant controls.
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    \1\ 1 EPA issued guidance on January 25, 1995, addressing the 
technical aspects of how these criteria pollutant limits may be 
recognized for purposes of limiting a source's potential to emit of 
HAPs to below section 112 major source thresholds.
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    EPA has determined that the five criteria, published in the June 
28, 1989, Federal Register notice, used to determine the validity of a 
permit which limits potential to emit for criteria pollutants pursuant 
to section 110 are also appropriate for evaluating the validity of 
permits which limit the potential to emit for HAPs pursuant to section 
112(l). The June 28, 1989, Federal Register notice does not address 
HAPs because it was written prior to the 1990 amendments to the Clean 
Air Act; however, the basic principles established in the June 28, 
1989, Federal Register notice are not unique to criteria pollutants. 
Therefore, these criteria have been extended to evaluations of permits 
limiting the potential to emit of HAPs.
    To be recognized by EPA as a valid permit which limits potential to 
emit, the permit must not only meet the criteria in the June 28, 1989, 
Federal Register notice, but it must meet the statutory criteria for 
approval under section 112(l)(5). Section 112(l) provides that EPA will 
recognize a permit limiting the potential to emit for HAPs only if the 
state program: (1) Contains adequate authority to assure compliance 
with any section 112 standard or requirement; (2) provides for adequate 
resources; (3) provides for an expeditious schedule for assuring 
compliance with section 112 requirements; and (4) is otherwise likely 
to satisfy the objectives of the Act.
    EPA plans to codify in Subpart E of Part 63 the approval criteria 
for programs limiting potential to emit HAPs. EPA anticipates that 
these criteria will mirror those set forth in the June 28, 1989, 
Federal Register notice. Permit programs which limit potential to emit 
for HAPs and are approved pursuant to section 112(l) of the Act prior 
to the planned regulatory revisions under 40 CFR part 63, subpart E, 
will be recognized by EPA as meeting the criteria in the June 28, 1989, 
Federal Register notice. Therefore, further approval actions for those 
programs will not be necessary.
    EPA believes it has authority under section 112(l) to recognize 
FESOP and FELOP programs that limit a source's potential to emit HAPs 
directly under section 112(l) prior to this revision to Subpart E. EPA 
is therefore approving the Tennessee and Memphis-Shelby County FESOP 
and FELOP programs so that Tennessee and Memphis-Shelby County may 
issue permits that EPA will recognize as validly limiting potential to 
emit for HAPs.
    Regarding the statutory criteria of section 112(l)(5) referred to 
above, EPA believes the FESOP and FELOP programs submitted by Tennessee 
and Memphis-Shelby County contain adequate authority to assure 
compliance with section 112 requirements since the third criterion of 
the June 28, 1989, notice is met; that is, Division Rule 1200-3-
9-.02(11)(b)(5) states that all requirements in the permits issued 
under the authority of the operating permit programs must be at least 
as stringent as all other applicable Federally enforceable 
requirements. In connection with EPA's review of the Tennessee and 
Memphis-Shelby County title V operating permit programs, EPA has also 
conducted an extensive analysis of Tennessee and Memphis-Shelby 
County's underlying authority to enforce HAP limits. It should be noted 
that a source that receives a Federally recognized operating permit may 
still need a Title V operating permit under Division Rule 1200-3-9-.02 
if EPA promulgates a MACT standard which requires non-major sources to 
obtain Title V permits.
    Regarding the requirement for adequate resources, Tennessee and 
Memphis-Shelby County have committed to provide for adequate resources 
to support their respective FESOP and FELOP programs. EPA expects that 
resources will continue to be sufficient to administer those portions 
of the minor source operating permit programs under which the subject 
permits will be issued, because both the State of Tennessee and 
Memphis-Shelby County have administered minor source operating permit 
programs for a number of years. However, EPA will monitor the 
implementation of the FESOP and FELOP programs to ensure that adequate 
resources are in fact available.
    EPA also believes that the Tennessee and Memphis-Shelby County 
programs provide for an expeditious schedule which assures compliance 
with section 112 requirements. These programs will be used to allow a 
source to establish a voluntary limit on potential to emit to avoid 
being subject to a CAA requirement applicable on a particular date. 
Nothing in the Tennessee or Memphis-Shelby County programs would allow 
a source to avoid or delay compliance with a CAA requirement applicable 
on a particular date. In addition, nothing in the Tennessee or Memphis-
Shelby County program would allow a source to avoid or delay compliance 
with a CAA requirement if it fails to obtain an appropriate Federally 
recognized limit by the relevant deadline. Finally, EPA believes it is 
consistent with the intent of section 112 of the Act for States to 
provide a mechanism through which a source may

[[Page 6727]]

avoid classification as a major source by obtaining a Federally 
recognized limit on its potential to emit HAPs. EPA has long recognized 
as valid, permit programs which limit potential to emit for criteria 
pollutants as a means for avoiding major source requirements under the 
Act. The portion of this approval which extends Federal recognition to 
permits containing limits on potential to emit for HAPs merely applies 
the same principles to another set of pollutants and regulatory 
requirements under the Act.
    EPA has reviewed this SIP revision and determined that the criteria 
for approval as provided in the June 28, 1989, Federal Register notice 
(54 FR 27282) and in section 112(l)(5) of the Act have been satisfied.

B. Eligibility for Previously Issued Permits

    Eligibility for Federally enforceable permits extends not only to 
permits issued after the effective date of this rule, but also to 
permits issued under the State's and the County's existing rules prior 
to the effective date of today's rulemaking. If the State and County 
followed their own regulations, then each agency issued a permit that 
established a Federally recognized permit condition that was subject to 
public and EPA review. Therefore, EPA will consider all such operating 
permits Federally enforceable upon the effective date of this action 
provided that any permits that the State wishes to make Federally 
enforceable are made available to EPA and are supported by 
documentation that the procedures approved today have been followed. 
EPA may review any such permits to ensure their conformity with the 
program requirements.

III. Final Action

    In this action, EPA is approving Tennessee's FESOP program and 
Memphis-Shelby County's FELOP program. EPA is publishing this action 
without prior proposal because the Agency views this as a 
noncontroversial amendment and anticipates no adverse comments. 
However, in a separate document in this Federal Register publication, 
EPA is proposing to approve the SIP revisions should adverse or 
critical comments be filed. This action will be effective April 14, 
1997 unless, by March 17, 1997, adverse or critical comments are 
received. If EPA receives such comments, this action will be withdrawn 
before the effective date by publishing a subsequent document that will 
withdraw the final action. All public comments received will then be 
addressed in a subsequent final rule based on this action serving as a 
proposed rule.
    EPA will not institute a second comment period on this action. Any 
parties interested in commenting on this action should do so at this 
time. If no such comments are received, the public is advised that this 
action will be effective April 14, 1997.
    This action has been classified as a Table 3 action for signature 
by the Regional Administrator under the procedures published in the 
Federal Register on January 19, 1989, (54 FR 2214-2225), as revised by 
the July 10, 1995, memorandum from Mary Nichols, Assistant 
Administrator for Air and Radiation. Nothing in this action shall be 
construed as permitting or allowing or establishing a precedent for any 
future request for a revision of any SIP. Each request for revision of 
the SIP shall be considered separately in light of specific technical, 
economic, and environmental factors, and in relation to relevant 
statutory and regulatory requirements.

IV. Administrative Requirements

A. Clean Air Act as Amended in 1990

    EPA has reviewed the requests for revision of the Federally-
approved Tennessee SIP described in this notice to ensure conformance 
with the provisions of the Clean Air Act as amended in 1990. EPA has 
determined that this action conforms with those requirements.

B. Petition for Review

    Under section 307(b)(1) of the CAA, 42 U.S.C. 7607 (b)(1), 
petitions for judicial review of this action must be filed in the 
United States Court of Appeals for the appropriate circuit by April 14, 
1997. Filing a petition for reconsideration by the Administrator of 
this final rule does not affect the finality of this rule for purposes 
of judicial review nor does it extend the time within which a petition 
for judicial review may be filed, and shall not postpone the 
effectiveness of such rule or action. This action may not be challenged 
later in proceedings to enforce its requirements. (See section 
307(b)(2) of the CAA, 42 U.S.C. 7607 (b)(2).)

C. Executive Order 12866

    The Office of Management and Budget (OMB) has exempted this 
regulatory action from Executive Order 12866 review.

D. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. 5 U.S.C. 603 and 604. 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    SIP approvals under section 110 and subchapter I, Part D of the CAA 
do not create any new requirements, but simply approve requirements 
that the State is already imposing. Therefore, because approval of 
Federal SIP does not impose any new requirements, I certify that it 
does not have a significant impact on any small entities affected. 
Moreover, due to the nature of the Federal-state relationship under the 
CAA, preparation of a regulatory flexibility analysis would constitute 
Federal inquiry into the economic reasonableness of state action. The 
CAA forbids EPA to base its actions concerning SIPs on such grounds. 
Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct. 1976); 
42 U.S.C. 7410(a)(2) and 7410(R).

E. Unfunded Mandates Reform Act of 1995

    Under sections 202, 203, and 205 of the Unfunded Mandates Reform 
Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22, 
1995, EPA must undertake various actions in association with proposed 
or final rules that include a Federal mandate that may result in 
estimated costs of $100 million or more to the private sector, or to 
State, local, or tribal governments in the aggregate.
    Through submission of this state implementation plan or plan 
revision, the State has elected to adopt the program provided for under 
section 112(l) of the Clean Air Act. These rules may bind the State 
government to perform certain actions and also require the private 
sector to perform certain duties. To the extent that the rules being 
approved by this action would impose no new requirements, such sources 
are already subject to these regulations under State law. Accordingly, 
no additional costs to the State government, or to the private sector, 
result from this action. EPA has also determined that this final action 
does not include a mandate that may result in estimated costs of $100 
million or more to the State government in the aggregate or to the 
private sector.

[[Page 6728]]

F. Small Business Regulatory Enforcement Fairness Act of 1996

    Under 5 U.S.C. 801(a)(1)(A) added by the Small Business Regulatory 
Enforcement Fairness Act of 1996, EPA submitted 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 General 
Accounting Office prior to publication of the rule in today's Federal 
Register. This rule is not a major rule as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Hydrocarbons, Incorporation by reference, Lead, Nitrogen dioxide, 
Intergovernmental relations, Particulate matter, Ozone, Sulfur oxides.

    Dated: December 16, 1996.
A. Stanley Meiburg,
Acting Regional Administrator.

    Part 52 of chapter I, title 40, Code of Federal Regulations, is 
amended as follows:

PART 52--[AMENDED]

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


    Authority: 42.U.S.C. 7401-7671q.

Subpart RR--Tennessee

    2. Section 52.2220 is amended by adding paragraph (c)(145) to read 
as follows:


Sec. 52.2220  Identification of plan.

* * * * *
    (c) * * *
    (145) Revisions to Division Rule 1200--Stationary Sources--General 
Requirements, submitted by the Tennessee Department of Environmental 
Protection on May 3, 1995.
    (i) Incorporation by reference.
    (A) Division of Air Pollution Control Rule 1200-3-9-.02(11)(a), 
effective September 21, 1994.
    (B) Memphis City Code Section 16-77, reference 1200-3-9-.02(11)(a), 
effective October 28, 1994.
    (ii) Other materials. None.

[FR Doc. 97-3577 Filed 2-12-97; 8:45 am]
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