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Page 1 of 326 6560-50-P
ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 49 and 51 [EPA-HQ-OAR-2003-0076; FRL- ] RIN 2060-AH37 Review of New Sources and Modifications in Indian C ountry
AGENCY : Environmental Protection Agency (EPA).

ACTION : Final Rule.

SUMMARY : The EPA is finalizing a Federal Implementation P lan (FIP) under the Clean Air Act (CAA or Act) for trib es in Indian country. The FIP includes two New Source Review (N SR) regulations for the protection of air resources in Indian country. The first rule applies to new and modifie d minor stationary sources (minor sources) and to minor mod ifications at existing major stationary sources (major sources) t hroughout Indian country. The second rule (nonattainment maj or NSR rule) applies to new and modified major sources in areas of Indian country that are designated as not attaining the Na tional Ambient Air Quality Standards (NAAQS). These rules will be implemented by EPA, or a delegate tribal agency ass isting EPA with administration of the rules, until replaced by an EPAapproved Tribal Implementation Plan (TIP).

DATES : This final rule is effective on [INSERT DATE 60 DAYSDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 2 of 326 AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]

. ADDRESSES: The EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2003-0076. All docu ments in the docket are listed on the www.regulations.gov Web site. Although listed in the index, some information is not public ly available,

e.g. , CBI or other information whose disclosure is rest ricted by statute. Certain other material, such as copyright ed 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.regulat ions.gov or in hard copy at the Air and Radiation Docket and In formation Center, EPA/DC, EPA West, Room 3334, 1301 Constitut ion Ave., NW, Washington, DC. The Public Reading Room is open fr om 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding lega l holidays. The telephone number for the Public Reading Room is (202) 566- 1744, and the telephone number for the Air and Radi ation Docket and Information Center is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT : Ms. Jessica Montañez, Air Quality Policy Division, Office of Air Quality Plan ning and Standards (C504-03), U.S. Environmental Protection Agency, Research Triangle Park, North Carolina 27711, telep hone number (919) 541-3407, facsimile number (919) 541-5509, e- mail address: montanez.jessica@epa.gov

.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 3 of 326 SUPPLEMENTARY INFORMATION : The information in this preamble is organized as fo llows: I. General Information A. Does this action apply to me? B. Where can I get a copy of this document and othe r related information? II. Overview of the Final Rules III. Background A. What is the New Source Review (NSR) program? 1. What are the general requirements of the major NSR program? 2. What are the general requirements of the minor NSR program? B. What is the basis for EPA’s authority to implement CAA programs in Indian country? C. What is the status of the NSR air quality progra ms in Indian country? D. What consultation and outreach has been done wit h tribal leaders and representatives? IV. Final Minor NSR Program for Indian Country A. General Provisions under the Minor NSR Program 1. What is a minor source and which minor sources are subject to this rule? a. Minor Stationary Source Definition b. Determining Applicability for New Minor Sources 2. What is a modification and which h modifications are subject to this rule? a. Definition of “Modification” b. Determining Applicability for Modifications 3. What are the minor NSR thresholds? 4. What emissions units and activities at stationary sources are exempt from this rule? B. Site-Specific Permits 1. What are the requirements for permit applications? 2. What technical reviews must the reviewing authority conduct? a. Control Technology Review b. Air Quality Impacts Analysis (AQIA) 3. What are the permit content requirements? a. Emissions Limitations b. Monitoring, Recordkeeping and ReportingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 4 of 326 c. Other Permit Content Requirements 4. What are the permit issuance procedures, permit term and public participation requirements? a. Permit Issuance Process b. Permit Term c. Public Participation Requirements 5. What are the provisions for final action on a permit, permit reopenings, administrative permit revisions, and administrative and judicial review procedures? a. Final Action on a Permit b. Permit Reopenings c. Administrative Permit Revisions d. Administrative and Judicial Review Procedures C. General Permits 1. What is a “General Permit”? 2. What is the process for issuing general permits? 3. For what categories will general permits be issued? 4. What are the permit content requirements for general permits? 5. What is the process that you may use for obtaining coverage under a general permit? D. Synthetic minor source permits E. Case-By-Case MACT Determinations under Section 112( g) of the Act F. Treatment of Existing Minor Sources under the Final Minor NSR Program V. Final Major NSR Program for Nonattainment Areas in Indian Country A. What are the requirements for major source permitti ng under Appendix S? B. How is EPA addressing the lack of available offsets in Indian country? 1. Economic Development Zone Option 2. Appendix S, Paragraph VI Option C. How do I meet the statewide compliance certificatio n requirement of the Act and Appendix S? D. What are the public participation requirements of t his program? E. What are the provisions for final action on a permi t, permit reopenings, and administrative and judicial review procedures? F. How is EPA revising Appendix S?Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 5 of 326 VI. Legal Basis, Statutory Authority and Jurisdicti onal Issues A. What is the basis for EPA’s authority to implement these NSR programs in Indian country? B. How does a tribe receive delegation to assist EPA w ith administration of the federal minor and major NSR rules? C. What happens to permits previously issued by states to sources in Indian country? VII. Implementation Issues A. Are tribes allowed to collect fees for NSR permitti ng? B. Who retains enforcement authority in Indian country ? C. What is the implementation schedule for the final rules? VIII. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act (RFA) D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordin ation with Indian Tribal Governments G. Executive Order 13045: Protection of Children f rom Environmental Health & Safety Risks H. Executive Order 13211: Actions that Significant ly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions to Addres s Environmental Justice in Minority Populations and L owIncome Population K. Congressional Review Act IX. Statutory Authority

I. General Information

A. Does this action apply to me? Entities potentially affected by this final rule in clude owners and operators of emission sources in all ind ustry groups located in Indian country, EPA, and tribal governme nts that are delegated administrative authority to assist EPA wi th the implementation of these federal regulations. Categ ories andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 6 of 326 entities potentially affected by this action are ex pected to include: Category NAICS a Examples of regulated entities Industry .......... 21111 Oil and gas production/operations 211111 Crude Petroleum and Natural

Gas Extraction 211112 Natural Gas Liquid Extraction 212321 Sand and Gravel Mining 22111 Electric power generation 221210 Natural Gas Distribution 22132 Sewage treatment facilities 23899 Sand and shot blasting operations 311119 Animal food manufacturing 3116 Beef Cattle Complex, Slaughter House and Meat Packing Plant 321113 Sawmills 321212 Softwood Veneer and Plywood Manufacturing 32191 Millwork (wood products mfg) 323110 Printing operations (lithographic) 324121 Asphalt hot mix 3251 Chemical preparation 32711 Clay and ceramics operations (kilns) 32732 Concrete batching plant 3279 Fiber glass operations 331511 Casting Foundry (Iron) 3323 Fabricated structural metal 332812 Surface coating operationsDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 7 of 326 3329 Fabricated metal products 33311 Machinery manufacturing
33711 Wood kitchen cabinet manufacturing 42451 Grain Elevator 42471 Gasoline bulk plant 4471 Gasoline station 54171 Professional, Scientific, and Technical Services 562212 Solid Waste Landfill 72112 Other (natural gas-fired boilers) b 811121 Auto body refinishing

Federal government 924110 Administration of Air and Water Resources and Solid Waste Management Programs State/local/tribal government ........ 924110 Administration of Air and Water Resources and Solid Waste Management Programs

a North American Industry Classification System.

b Used NAICS code designated for casino hotels. Howev er, the projected new and modified sources listed under “ot her (natural gas–fired boilers)” include not only boilers at cas ino hotels, but also new sources listed as “boilers” and new tr ibal government facilities assumed to have natural gas f ired boilers.

This table is not intended to be exhaustive, but ra ther provides a guide for readers regarding entities lik ely to be regulated by this action. To determine whether you r facility is regulated by this action, you should examine the ap plicabilityDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 8 of 326 criteria in the final minor and major NSR programs for Indian country, 40 CFR 49.153 and 49.168, respectively. I f you have any questions regarding the applicability of this a ction to a particular entity, contact the person listed in the preceding
FOR FURTHER INFORMATION CONTACT section.

B. Where can I get a copy of this document and other r elated information? In addition to being available in the docket, an el ectronic copy of this final rule will also be available on t he World Wide Web. Following signature by the EPA Administrator, a copy of this final rule will be posted in the regulations a nd standards section of our NSR home page located at http://www. epa.gov/nsr and on the tribal air home page at http://www.epa.gov/oar/tribal

. II. Overview of the Final Rules The EPA is ensuring that air resources in Indian co untry will be protected in the manner intended by the Act by establishing a preconstruction permitting program f or new or modified minor sources; minor modifications at majo r sources; and new major sources or major modifications in non attainment areas. In addition, we are establishing a minor so urce permitting mechanism for major sources that wish to voluntarilyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 9 of 326 limit emissions to become synthetic minor sources 1 and for approving case-by-case maximum achievable control t echnology (MACT) determinations. 2 Prior to this action, there has been no permitting mechanism for stationary sources in Indi an country, except for major stationary sources in areas of Ind ian country meeting the NAAQS. These final rules will fill thi s regulatory gap. In addition, these rules will provide regulat ory certainty to allow for environmentally sound economic growth in Indian country. The minor NSR rule applies to new and modified mino r sources and to minor modifications at major sources . New minor

1 Sources located within the exterior boundaries of Indian reservations in Idaho, Oregon, and Washington can a pply for a non-title V operating permit to establish synthetic minor status under the FIPs applicable to those reservations unt il this rule becomes effective. See 40 CFR 49.139 and 40 CFR part 49, subpart M. However, after the effective date of th is rule, sources seeking synthetic minor status within the e xterior boundaries of Indian reservations in these three st ates as well as in Indian country in all other states must apply for synthetic minor source permits under the provisions of this rule.

2 As described in section IV.E of this preamble, if the Administrator has not established a MACT standard f or a source category, the Act requires that MACT must be determ ined on a case-by-case basis. The requirement for a case-by- case MACT determination prior to construction or reconstructi on of a major source of hazardous air pollutants is found in our regulations at 40 CFR 63.42(c) and under that section, we provi de a number of review options for these determinations. This r ule will serve as one of the possible review options for cas e-by-case MACT determinations.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 10 of 326 sources with a potential to emit (PTE) equal to or greater than the minor NSR thresholds or modifications at minor sources with allowable emissions incre ases equal to or greater than the minor NSR thresholds must apply for and obtain a minor NS R permit prior to commencing construction of the new source or modification. At an existing major source, if a pr oposed modification does not qualify as a major modificati on (which would be subject to major NSR) based on the actual- to-projectedactual test, it is considered a minor modification and is subject to the minor NSR program requirements, if t he emissions increase from the actual-to-projected-actual test i s equal to or exceeds the minor NSR thresholds listed in Table 1 of section IV.A.3 of this preamble. A major source with such a minor modification must apply for and obtain a minor NSR permit prior to commencing construction of the minor modificatio n. In addition, these sources must install and operate co ntrol technology as determined by the reviewing authority on a caseby-case basis. At the discretion of the reviewing authority, such sources may also be required to submit air qua lity impact analyses as part of their permit applications. As an alternative to a site-specific permit, some sources can applyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 11 of 326 for a general permit. 3 This rule will also allow otherwise major sources i n Indian country to voluntarily accept emission limitations on their PTE to become “synthetic minor sources.” Synthetic min or sources may include sources that emit regulated NSR polluta nts and/or hazardous air pollutants (HAPs) 4 and any limitations on PTE must be enforceable as a practical matter (that is, both legally and practically enforceable). The practice of creating synthetic minor sources to avoid major NSR and title V is com mon under most state and local minor NSR permitting programs. However, outside of Idaho, Oregon, and Washington, no such m inor source permitting mechanism has been available in federal regulations for Indian country, which discouraged sources that could qualify

3 As described in section IV.C of this preamble, a g eneral permit is a preconstruction permit that may be appl ied to a number of similar emission units or stationary sour ces. The purpose of a general permit is to simplify the perm it application and issuance process for similar facili ties so that a reviewing authority’s limited resources need not be expended for site-specific permit development for such facil ities.

4 In such cases, these sources will be subject to th e minor NSR regulations under 40 CFR 49.151-49.165 and not the major NSR regulations under 40 CFR 52.21 (PSD), 40 CFR 49.167 (nonattainment major NSR), the major source MACT re gulations under 40 CFR part 63, and/or the title V operating permit regulations. For information on when a major HAP s ource can obtain federally enforceable limits on its potentia l to emit, see the policy memorandum titled “Potential to Emit f or MACT Standards – Guidance on Timing Issues,” John S. Sei tz, EPA, May 16, 1995.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 12 of 326 as synthetic minors from locating in areas of India n country outside these three states. We therefore believe t hat inclusion of this provision in the final rules will significa ntly benefit tribes by encouraging larger sources that can quali fy as synthetic minors to locate in Indian country, there by promoting environmentally sound economic growth. Synthetic minor sources will undergo site-specific permitting; that is, general permits will not be is sued to synthetic minor sources. However, we intend to dev elop general permits for some common types of emissions units an d minor sources to streamline the permitting process. The initial establishment of the general permit will include co ntrol technology review and associated emission limits. Thus, sources will not be required to conduct a case-by-case cont rol technology review when they apply for coverage unde r a general permit. Under the nonattainment major NSR rule, affected so urces are required to comply with the provisions of 40 CF R part 51, Appendix S, a transitional rule which generally app lies to areas that do not have an approved nonattainment major NS R program for a particular pollutant in their State Implementatio n Plan (SIP). Sources subject to this rule must meet requirements for Lowest Achievable Emission Rate (LAER) control technology, emissionsDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 13 of 326 offsets, and compliance certification. We are adopting these final rules after further eva luation of the proposed provisions and consideration of the public comments. On August 21, 2006 (71 FR 48696), EPA pr oposed the Review of New Sources and Modifications in Indian C ountry (i.e. , Tribal NSR rules). The EPA held an extensive outre ach and consultation period (described in section III.D of this preamble), along with an extensive public comment p eriod that ended on March 20, 2007. The comments provided det ailed information specific to Indian country, and the fin al rules incorporate many of the suggestions we received. W e respond to many of these comments in explaining our rationale for the final rules, which is described in sections IV through VI

. The final rules adopt many elements of the proposal , but differ from the proposal in several important respe cts. For the minor NSR rule, we had proposed a 30-day public com ment period for the initial establishment of the general permit and also proposed that coverage of individual sources under general permits would not undergo a public comment period. However, upon further evaluation we are retaining the 30-day public comment period for the initial establishment of the general permit and are finalizing a 30-day public comment p eriod for when an individual source seeks coverage under the generalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 14 of 326 permit. For the minor NSR rule, we had also proposed Plantw ide Applicability Limitations (PALs) and project nettin g. A minor source PAL would have been a source-wide limitation on allowable emissions of a regulated NSR pollutant expressed in tons per year (tpy) that was enforceable as a practical matt er. However, we are not finalizing minor source PALs after consi deration of the comments we received. Under the proposed proje ct netting approach in the minor NSR program, the total emissi ons increase that would result from a proposed modification woul d have been calculated by summing both the increases and decrea ses resulting from the modification. We are not finalizing this approach at this time for this program since we decided not to take final action on project netting for the major NSR program . (See Prevention of Significant Deterioration (PSD) and N onattainment New Source Review (NSR): Aggregation and Project Ne tting; 74 FR 2376.) Regarding the proposed list of emissions units and activities that will be exempted from the minor NSR program, we are finalizing an amended list. This list takes in to consideration the comments received and the recent developments in greenhouse gas regulations. We are also committ ing to the development of a supplemental rule to determine if additionalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 15 of 326 exempted units/activities should be added to the li st. Furthermore, under the minor NSR program existing t rue minor sources will not be subject to the requiremen ts of the minor NSR program until they propose a modification . Existing true minor sources will, however, be required to re gister within 18 months from the effective date of this rule, tha t is, by [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]

. For the major NSR rule, we are not finalizing the p roposed Appendix S, paragraph VI as an option for offset 5 waivers due to certain comments raising concerns with implementati on of this waiver. Relative to the compliance certification a rea, 6 we are finalizing a state-wide compliance requirement cons istent with section 173(a)(3) of the Act. We are finalizing the minor NSR and the nonattainme nt major

5 Under the CAA, emissions reductions (offsets) from existing sources in the area of the proposed source (whether or not under the same ownership) are obtained such tha t there will be reasonable progress towards attainment of the ap plicable NAAQS. See section 173(a)(1) of the Act.

6 Also under the CAA, a permit applicant must certif y that all existing major sources owned or operated by the applicant (or any entity controlling, controlled by, or under common control with the applicant) in the same state as th e proposed source are in compliance with (or under a federally -enforceable compliance schedule for) all applicable emission li mitations and standards under the Act. See section 173(a)(3) of the Act.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 16 of 326 NSR permit programs pursuant to section 110(a)(2)(C ), part D of title I, and section 301(d) of the Act.

III. Background

A. What is the New Source Review (NSR) program? 1. What are the general requirements of the major NSR program? The major NSR program contained in parts C and D of title I of the Act is a preconstruction review and permitti ng program applicable to new major sources and major modificat ions at such sources. In areas not meeting health-based NAAQS a nd in ozone transport regions (OTR), the program is implemented under the requirements of part D of title I of the Act. We c all this program the "nonattainment" major NSR program. In areas meeting the NAAQS ("attainment" areas) or for which there i s insufficient information to determine whether they meet the NAAQS ("unclassifiable" areas), the NSR requirement s under part C of title I of the Act apply. We call this p rogram the Prevention of Significant Deterioration (PSD) progr am. Collectively, we also commonly refer to these progr ams as the major NSR program. These rules are contained in ti tle 40 of the Code of Federal Regulations (CFR), §§51.165, 51.166 , 52.21, and 52.24 (40 CFR 51.165, 51.166, 52.21, and 52.24), an d 40 CFR part 51, Appendices S and W. For newly constructed, "greenfield" sources, theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 17 of 326 determination of whether a source is subject to the major NSR program is based on the source’s PTE. The Act, as implemented by our rules, sets applicability thresholds for maj or sources in both attainment and nonattainment areas. For nonat tainment areas, these thresholds are 100 tpy of any pollutan t subject to regulation under the Act, or smaller amounts, depen ding on the nonattainment classification. For attainment areas the thresholds are 100 or 250 tpy, depending on the sou rce type. 7 A new source with a PTE at or above the applicable th reshold amount "triggers," or is subject to, major NSR. For existing major sources, major NSR applies to a major modification. For a modification to be major, the following three criteria have to be met: (1) A physical change in or change in the method o f operation of a major stationary source must occur; (2) The increase in emissions resulting from this change must be significant (equal to or above the signific ance levels defined in 40 CFR 52.21(b)(23) for PSD or 40 CFR pa rt 51,

7 Sources listed in section 169(l) of the Act are su bject to a threshold of 100 tpy (see 40 CFR 52.21(b)(1)(i)(a )). All other sources are subject to a 250 tpy threshold. (See 40 CFR 52.21(b)(1)(i)(b ).) In addition, under the recently finalized “Greenhouse Gas Tailoring Rule,” greenhouse gases w ill be phased into the PSD program with higher applicability thre sholds (75 FR 31514).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 18 of 326 Appendix S, paragraph II.A.10 for nonattainment maj or NSR); and (3) The increase in emissions resulting from the c hange must result in a significant net emissions increase . In other words, when the increase from the project is added to other contemporaneous increases and decreases in actual e missions 8 at the source, the net emissions increase must be sign ificant (equal to or above the significance levels defined in 40 CFR 52.21(b)(23) for PSD or 40 CFR part 51, Appendix S, paragraph II.A.10 for nonattainment major NSR). Major sources and major modifications subject to nonattainment major NSR must apply state-of-the-art emissions control technologies, including any pollution preve ntion measures, to achieve the lowest achievable emission rate. The lowest achievable emission rate is based on the mos t stringent emission limitation in the implementation plan of a ny state, or achieved in practice, for the source category under review. Each major source subject to nonattainment major NS R must also offset its emissions increase by obtaining emi ssions

8 In approximate terms, "contemporaneous" emissions increases or decreases are those that have occurred between the date 5 years immediately preceding the proposed phy sical or operational change and the date that the increase f rom the change occurs. See 40 CFR 52.21(b)(3)(ii) for PSD. For nonattainment major NSR, see , 40 CFR part 51, Appendix S, paragraph II.A.6(ii).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 19 of 326 reductions from other sources in the area, or in an area of equal or higher nonattainment classification that c ontributes to nonattainment in the proposed major source’s area. The ratio of the offset relative to the proposed increase must b e at least one-to-one and is based on the severity of the area ’s nonattainment classification. For ozone and partic ulate matter less than or equal to 10 microns in aerodynamic dia meter (PM 10 ), the more polluted the air is where the source is lo cating or expanding, the greater the required offset ratio is . The emissions reductions to be used as offsets must be surplus (not otherwise required by the Act), quantifiable, feder ally enforceable, and permanent. See sections 173(a) and (c) of the Act and 40 CFR 51.165(a)(3). Additionally, each nonattainment major NSR permit a pplicant must also conduct an analysis of alternative sites, sizes, production processes, and environmental control tec hniques demonstrating that the benefits of the proposed emi ssions source significantly outweigh the environmental and social costs of its location, construction, or modification. Moreover, each nonattainment major NSR permit applicant must demon strate that all other major sources under her/his control in th e same state are in compliance or on a schedule of compliance wi th all emission limitations and standards of the Act.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 20 of 326 Under the PSD program for attainment areas, a major source or modification must apply Best Available Control T echnology (BACT), which may be based on pollution prevention techniques. In addition, the source must analyze the impact of the project on ambient air quality to assure that no violation of the NAAQS or PSD increments will result, and must analyze imp acts on soil, vegetation, and visibility. Sources or modificatio ns that would impact Class I areas (e.g. , national parks) may be subject to additional requirements to protect air quality rela ted values (AQRVs) that have been identified for such areas. 2. What are the general requirements of the minor NSR program? Section 110(a)(2)(C) of the Act requires that every SIP include a program to regulate the construction and modification of stationary sources, including a permit program a s required by parts C and D of title I of the Act, to ensure atta inment and maintenance of NAAQS. Parts C and D address the ma jor NSR program for major sources, and the permitting progr am for minor sources is addressed by section 110(a)(2)(C) of the Act. We commonly refer to the latter program as the minor N SR program. A minor source means a source whose PTE is lower th an the major NSR applicability threshold for a particular pollut ant as defined in the applicable nonattainment major NSR p rogram or PSD

program.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 21 of 326 States must develop minor NSR programs to attain an d maintain the NAAQS and the federal requirements for state minor NSR programs are outlined in 40 CFR 51.160 through 51.164. These federal requirements for minor NSR programs a re considerably less prescribed than those for major s ources and as a result there is a larger variation of requirement s in the state minor NSR programs. Furthermore, Section 110(a)(2)(C) of the Act provid es us with a broad degree of discretion in developing a p rogram to regulate new and modified minor source construction activities in Indian country.

B. What is the basis for EPA’s authority to implement CAA programs in Indian country? The Tribal Authority Rule (TAR) authorizes eligible Indian tribes to implement EPA-approved nonattainment majo r NSR (part D of title I of the Act), PSD (part C of title I of t he Act), and other programs under the Act in the same manner as states. This is accomplished when Indian tribes develop TIPs, pl ans similar to SIPs. If a tribe develops a TIP to implement a CAA program, the TIP, once it is approved, will replace the fede ral program as the requirement for that area of Indian country and the tribe will become responsible for implementing that parti cular program. However, if Indian tribes are unable, or choose not,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 22 of 326 to include a CAA program such as NSR in a TIP, we w ill implement the program. The Act provides us with broad authority to protect air resources throughout the Nation, including air reso urces in Indian country. See , for example, the preamble discussion for the proposed and final TAR (59 FR 43956, 43958-61, August 25, 1994; 63 FR 7254, 7262-64, February 12, 1998) and t he preamble discussion for the proposed revisions to the part 7 1 federal operating permits program for Indian country (62 FR 13748, 13750, March 21, 1997). In the preambles to the pr oposed and final TAR, we discussed generally the legal basis u nder the Act for EPA and tribal regulation of sources of air pol lution in Indian country. We concluded that the Act constitu tes a statutory delegation of federal authority to eligib le tribes over all sources of air pollution within the exteri or boundaries of their reservations. Further, under the Act, tribes may also apply to ad minister tribal air quality programs for non-reservation are as over whichDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 23 of 326 they can show jurisdiction. 9 See 63 FR 7254-7259; 59 FR 43958- 43960; Arizona Public Service Co. v. EPA , 211 F.3d 1280 (D.C. Cir. 2000), cert. den., 532 U.S. 970 (2001). In the preamble to the TAR, we also concluded that the Act

9 We believe that in the context of programs under t he Act, states generally lack the authority to regulate air quality in Indian country. See Alaska v. Native Village of Ve netie Tribal Government , 522 U.S. 520, 527 fn. 1 (1998) (“Generally speaki ng, primary jurisdiction over land that is Indian count ry rests with the Federal Government and the Indian tribe inhabit ing it, and not with the States.”), California v. Cabazon Band of Mission Indians , 480 U.S. 202 (1987), and HRI v. EPA , 198 F.3d 1224 (10 th Cir. 2000); see also discussion in EPA’s final rule for the federal operating permits program (64 FR 8251-8255, February 19, 1999). To provide additional certainty to regulate d entities, we believe it is helpful to clarify the extent to w hich state NSR programs have force in Indian country. We inte rpret past approvals and delegations of NSR programs as not ex tending to Indian country unless the state has made an explici t demonstration of jurisdiction over Indian country, and we have explicitly approved or delegated the state's progra m for such area. This is consistent with Congress’ requiremen t that we approve state and tribal programs only where there is a demonstration of adequate authority. See sections 110(a)(2)(E), 110(o), and 301(d) of the Act and 40 CFR part 49. Since states generally lack the authority to regulate air resour ces in Indian country, we do not believe it would be appropriate for us to approve state programs under the Act as covering In dian country where there has not been an explicit demonstration of adequate jurisdiction and where we have not explicitly indic ated our intent to approve the state program for an area of Indian country. In state NSR program approvals and delega tions, we generally were not faced with state assertions of a uthority to regulate sources in Indian country. However, to th e extent states or others may have interpreted our past appr ovals or delegations that were not based on explicit demonst rations of adequate authority and did not explicitly grant app roval in Indian country, as approvals to operate NSR program s in Indian country, we wish to clarify any such misunderstandi ng.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 24 of 326 authorizes us to protect air quality throughout Ind ian country.

See 63 FR 7262, 59 FR 43960-43961 citing sections 101( b)(1), 301(a), and 301(d) of the Act. In addition, section 301(a) of the Act provides us broad authority to issue such regulations as are necessar y to carry out the mandates of the Act. Several provisions of the Act call for federal implementation of a program where, for example, a state, or in this case a tribe, fails to adopt a pr ogram or adopts an inadequate program. See , for example, sections 110(c)(1), 502(d)(3), and 502(i)(4) of the Act. Th ese provisions exist in part to ensure that the benefit s of the Act are realized throughout the United States, whether or not local governments choose to participate in implementing t he Act. Especially in light of the problems associated with transport of air pollution across state and tribal boundaries, i t follows that Congress intended that we have the authority t o operate a federal program in the absence of an adequately imp lemented EPAapproved program. See , for example, 59 FR 43958-61, August 25, 1994; 62 FR 13750, March 21, 1997; and 63 FR 7262-6 4, February 12, 1998. This interpretation is most evident from Congress’ grant of authority to the EPA under section 301(d)(4) of the Act. Section 301(d)(4) authorizes the Administrator to d irectlyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 25 of 326 administer provisions of the Act so as to achieve t he appropriate purpose where tribal implementation of those provisions is inappropriate or administratively inf easible. We determined that it is inappropriate to subject trib es, among other things, to the mandatory submittal deadlines and to the related federal oversight mechanisms in section 110 (c)(1) of the Act, which are triggered when we make a finding tha t states have failed to meet required deadlines or disapprove a p lan submittal. See 40 CFR 49.4(d). By determining that tribes should not be treated si milarly to states for purposes of the specific FIP obligati on under section 110(c)(1) of the Act, we are not relieved o f the general obligation under the Act to ensure the protection o f air quality throughout the Nation, including throughout Indian country. Rather, consistent with the provisions of sections 301(a) and 301(d)(4) of the Act, we expressed our intent to pr omulgate without unreasonable delay a FIP (where necessary o r appropriate) to protect air quality if tribal effor ts do not result in adoption and approval of tribal plans or programs. See 63 FR 7265, 40 CFR 49.11. Under section 301(d)(4) of the Act, Congress author ized the EPA to maintain the territorial approach by impleme nting the Act in Indian country in the absence of an EPA-approved program. WeDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 26 of 326 believe that Congress authorized us, consistent wit h our Indian policy, to avoid the checker-boarding of Indian cou ntry based on land ownership by federally implementing the Act ov er all reservation sources in the absence of an EPA-approv ed tribal program. See S. Rep. No. 228, 101 st Cong., 1 st Sess. 79 (1989) (implementation of the Act to be in a manner consis tent with EPA’s Indian policy). In addition, section 301(d)( 4) authorized us to implement the Act in non-reservation areas of Indian country in order to fill any gap in program coverag e and to ensure an efficient and effective transition to EPA -approved

programs. Our interpretation of section 301(d) of the Act as authorizing our implementation throughout Indian co untry is also supported by the legislative history. See S. Rep. No. 228, 101 st Cong., 1 st Sess. 80 (1989) (noting that section 301(d) of the Act authorizes the EPA to implement provisions of the A ct throughout “Indian country” when there is no approved tribal p rogram); Id. at 80 (noting that criminal sanctions are to be lev ied by the EPA, “consistent with the Federal government’s gene ral authority in Indian country”); Id. at 79 (the purpose of sect ion 301(d) of the Act is to “improve the environmental quality of the air within Indian country in a manner consistent with t he EPA Indian Policy”).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 27 of 326 Therefore with these final rules, we will exercise our authority to administer the minor NSR permitting pr ogram and the nonattainment major NSR program in Indian country, which is generally the area over which a tribe may potential ly receive approval of programs under the Act. As noted in th e final TAR, we interpret the Act as establishing a territorial approach to implementation of the Act within Indian country by delegating to eligible tribes authority over all reservation sour ces without differentiating among the various categories of on- reservation lands (63 FR 7254-7258). In addition, the Act auth orizes eligible tribes to implement tribal programs under the Act in non-reservation areas over which a tribe has jurisd iction, generally including all areas of Indian country (63 FR 7258- 7259). In order to further our commitment to use our autho rity under the Act to protect air quality throughout Ind ian country by directly implementing the Act’s requirements, we are now exercising the rulemaking authority entrusted to us by Congress to directly implement the minor NSR permitting prog ram and nonattainment major NSR permitting program througho ut all areas of Indian country. See generally, Chevron USA, Inc. v. NRDC , 467 U.S. 837, 842-45 (1984).
C. What is the status of the NSR air quality programs inDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 28 of 326 Indian country? No tribe is currently administering an EPA-approved PSD program. Therefore, EPA has been implementing a FI P for major sources in attainment areas and has been issuing PS D permits in Indian country. See 40 CFR 52.21. For the nonattainment major NSR program or the minor NSR program 10 in Indian country, no tribe has been administering an EPA-approved progra m either and there has been no FIP in place to implement these p rograms until now. Hence, there was a regulatory gap in Indian c ountry. This final rule will allow us to address that gap, and m ore fully implement the NSR program in Indian country. We ar e finalizing the minor NSR program at 40 CFR 49.151 through 49.1 65 and the nonattainment major NSR program at 40 CFR 49.166 th rough 49.175 and these programs will continue to apply except wh ere we explicitly approve an implementation plan for such programs for a specific area in Indian country. 11 The requirements finalized under these rules do not apply to State permitting programs. As we stated previously, sections 301(d) and 110(o ) of the

10 EPA recently proposed to approve a TIP for the Gil a River Indian Community that includes a minor NSR program, as well as other provisions (see 75 FR, August 12, 2010).

11 Although many states have developed regulatory pro grams for minor sources, those programs do not apply in I ndian country unless explicitly approved by EPA for such areas.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 29 of 326 Act give the tribes the authority to develop their own tribal programs and we encourage eligible tribes to develo p their own minor and nonattainment major NSR programs for inco rporation into TIPs. However, we understand that not all tri bes have the resources to design and implement NSR programs; the refore, in the absence of an EPA-approved program, this final rulemaking provides a federal program for implementing the min or NSR and the major NSR program in nonattainment areas of Ind ian country. Tribes may use this program as a model if they choo se to develop their own tribal implementation plans and obtain ou r approval. Since, in most cases and in the absence of an EPA-a pproved program, it would be neither practical nor administ ratively feasible for us to develop and implement a separate program for each area of Indian country; these final rules will implement a flexible FIP for Indian country that provides new a nd modified minor sources and major sources in nonattainment ar eas with procedures to demonstrate that they will be operati ng in a manner that is protective of air resources and the NAAQS. In addition, these rules will ensure that any economic growth occurring in Indian country will be in harmony with the preservation of Clean Air Act resources.

D. What consultation and outreach has been done with t ribal leaders and representatives?Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 30 of 326 Prior to undertaking this rulemaking, we sought to include tribes early in the rulemaking process. On June 24 , 2002, we sent approximately 500 letters to tribal leaders se eking their recommendations for effective consultation and thei r involvement in developing these rules. We received responses from 75 tribes. Of these 75 tribes, 69 designated an environmental staff member to work with us on developing the rules. Aside from the designated st aff, many tribal leaders asked that we keep them informed of our progress through e-mail, meetings with the EPA Regional Offi ces, newsletters, and Web sites. In addition, 53 percen t of the tribal leaders also requested direct phone calls or conference calls to discuss the subject and only 16 percent of the respondents requested face-to-face consultation. O f these, only six tribes requested senior EPA staff to meet with tribal leaders. As a result of this feedback, we developed a consul tation plan that included three meetings held at the reser vations of the Menominee Tribe in Wisconsin, the Mohegan Tribe in Connecticut, and the Chehalis Tribe in Washington. A fourth meeting was held in conjunction with the Institute of Tribal Environmental Professionals’ (ITEP) 10 th anniversary meeting in Flagstaff, Arizona. In addition to conducting thes e meetings,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 31 of 326 we also visited tribal environmental staff in India n country. Over 30 tribes attended these meetings. We also pa rticipated in numerous national and regional forums including the National Tribal Forums sponsored by the ITEP, two National T ribal Air Association meetings, and meetings with tribal cons ortia, such as the National Tribal Environmental Council, Unite d Southern and Eastern Tribes, Inter-Tribal Environmental Coun cil, Inter Tribal Council of Arizona, and others. Although much of our effort focused on outreach to the tribes, we also interacted with state and local air pollution control agencies during development of these rules. We had two meetings with the State and Territorial Air Polluti on Program Administrators and the Association of Local Air Pol lution Control Officers (STAPPA/ALAPCO) to present the dra ft rules. 12 We considered feedback from all stakeholders and pr oposed the “Review of New Sources and Modifications in Ind ian Country” rules on August 21, 2006 (71 FR 48696). However, t ribal government representatives expressed concerns that the long gap between consultation/outreach and action by the Age ncy undermined the effectiveness of these interactions. Thus, after proposal of the rule, we started an extensive outre ach program

12 This organization has since changed its name to th e National Association of Clean Air Agencies (NACAA).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 32 of 326 in the years 2006 and 2007 to inform and seek comme nts from the public, especially tribes. We again sent over 500 letters to tribal leaders to inform them about the proposal. We did not receive any fo rmal responses to these letters and did not receive any request for formal consultation from the tribes, but they conta cted us either through e-mail or phone calls and asked to k eep them informed of our progress through e-mail, meetings, training sessions, newsletters, and/or Web sites. To enhanc e understanding of the proposal, and what it would me an for Indian country, we supplemented the 2006 outreach efforts by holding four training sessions using web conferencing not o nly for tribes, but also for EPA Regional Offices, air prog ram managers, and tribal organizations. We also held training se ssions in 2006 and at the request of the tribes for intereste d tribal and other environmental professionals at the Pechanga B and of Luiseño Indians in California and Salt River Pima-M aricopa Indian Community in Arizona. In addition, we held training sessions for all interested parties at EPA Region V ’s Tribal Air Meeting in Illinois (2006) and EPA's Region X’s off ice in Washington (2007). We participated in numerous national and regional f orums including the forums sponsored by the Institute of TribalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 33 of 326 Environmental Professionals, the National Tribal Ai r Association, and at meetings with tribal consortia, such as the United Southern and Eastern Tribes. We also intera cted with state and local air pollution agencies during this outreach period and had meetings with the NACAA. Furthermore, we extended and reopened the comment p eriod for the proposed rules twice (from November 20, 200 6 to January 19, 2007 and from January 19, 2007 to March 20, 200 7) at the request of the tribes. During this time, we also r ecorded and presented a webcast video for all interested stakeh olders to train more environmental professionals about the NS R program and the rules themselves. In addition, to address the concern about the long gap between the proposal and finalization of the rules, we have held a series of meetings in 2010 with the National Trib al Operations Committee, interested Regional Tribal Operations Co mmittees, and interested tribal environmental staff on implementa tion of the rules to ensure that the tribes are aware of the ru les and their provisions. After these rules are promulgated, we intend to con duct similar outreach efforts with all stakeholders, inc luding extensive training to facilitate easier implementat ion of the rules.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 34 of 326 IV. Final Minor NSR Program for Indian Country This rulemaking finalizes provisions for a minor NS R program in Indian country, codified at 40 CFR 49.15 1 through 49.165. The program includes requirements for prec onstruction review for minor sources and minor modifications, g eneral permits, and synthetic minor source permits. The m inor NSR program also serves as a mechanism for case-by-case MACT determinations and establishes a registration syste m for existing minor sources to improve the tribal source emission inventory. Our primary goal in developing this program is to e nsure that air resources in Indian country will be protec ted in the manner intended by the Act. In addition, we seek t o establish a flexible preconstruction permitting program for min or sources in Indian country that is comparable to similar progra ms in neighboring states in order to create a more level regulatory playing field for owners and operators within and o utside of Indian country. This final rulemaking is not intended to establish a new set of minimum criteria that a tribe, or a state, w ould need to follow in developing its own minor source permittin g program. Rather, these rules simply represent how we will im plement the program in Indian country in the absence of an EPA- approved TIP.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 35 of 326 However, if a tribe is developing its own program, this can serve as one example of a program that meets the ob jectives and requirements of the Act. This final minor source p ermitting program addresses, on a national level, many enviro nmental and regulatory issues that are specific to Indian count ry. We understand that different tribes may face different issues, and may therefore, like states developing SIPs, choose to develop TIPs tailored to their individual tribal circumstan ces and needs. This rule will allow tribes to develop thei r own TIPs, consistent with the overarching requirement that th e tribe ensure that the TIP will not interfere with any app licable requirement of the CAA.

A. General Provisions under the Minor NSR Program 1. What is a minor source and which minor sources are subject to this rule?

a. Minor Stationary Source Definition We proposed that a minor stationary source means a source whose PTE is lower than an applicable major source threshold, or, more specifically, a “minor stationary source” or “minor source” means a source that emits or has the potent ial to emit regulated NSR pollutants in amounts that are less t han the major stationary source thresholds in 40 CFR section 49.1 67 or 52.21, as applicable. We also proposed that the term “min or stationaryDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 36 of 326 source” applies independently to each regulated NSR pollutant that the source has the potential to emit. Some commenters asked us to accommodate in the min or stationary source definition references to the de m inimis exceptions (i.e. , minor NSR thresholds) or insignificant source categories or activities being finalized under this rule. After considering these comments, we believe it is approp riate to do so. Accordingly, we have amended the final minor s ource definition to specifically refer to the minor NSR t hresholds and the exempted emissions units and activities. In ad dition, since the source can only be a minor source if the PTE of each regulated NSR pollutant for that source is less tha n the corresponding major source thresholds, we deleted f rom the definition the statement that read: “the term “mino r stationary source” applies independently to each regulated NSR pollutant that the source has the potential to emit.” Furthermore, we have amended the minor stationary s ource definition to specify that the PTE of a source incl udes fugitive emissions, to the extent that they are quantifiable , only if the source belongs to one of the source categories list ed in 40 CFR 52.21(b)(1)(iii) (for PSD) and 40 CFR part 51, Appe ndix S, paragraph II.A.4(iii) (for nonattainment major NSR) of the major NSR rules pursuant to section 302(j) of the Act.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 37 of 326 Hence, we are finalizing under 40 CFR 49.152 that a minor stationary source means a source, not including the exempt emissions units and activities listed in §49.153(c) , that has the potential to emit regulated NSR pollutants in a mounts that are less than the major stationary source threshold s in 40 CFR §49.167 or §52.21, as applicable, but equal to or g reater than the minor NSR thresholds in §49.153. The potential to emit includes fugitive emissions, to the extent that the y are quantifiable, only if the source belongs to one of the source categories listed in 40 CFR part 51, Appendix S, pa ragraph II.A.4(iii) or 52.21(b)(1)(iii), as applicable. A source’s PTE for a pollutant is expressed in tpy and generally is calculated by multiplying the maximum hourly emissions rate in pounds per hour (lbs/hr) times 8, 760 hours (which is the number of hours in a year) and dividi ng by 2,000 (which is the number of pounds in a ton). If a sou rce is restricted by permit conditions that limit its emis sions and are enforceable as a practical matter, its PTE (and all owable emissions) are calculated based on the permit restr ictions. For the NSR program in Indian country, the major so urce thresholds are defined in the PSD program (see 40 CFR 52.21) and in the nonattainment major NSR program being finali zed in this action (see 40 CFR 49.167), as applicable. These thresholds m ayDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 38 of 326 differ in attainment areas and nonattainment areas for the same pollutant. For example, in attainment areas the ma jor source threshold for nitrogen oxides (NO x ) is 250 tpy, unless the source belongs to a source category that is listed in the major NSR rules (see 40 CFR 52.21(b)(1)(i)(a )), in which case the major source threshold is 100 tpy. In contrast, the majo r source threshold for NO x in ozone nonattainment areas can vary from 10 tpy in an extreme ozone nonattainment area to 100 t py in a marginal ozone nonattainment area (see 40 CFR part 51, Appendix S, paragraph II.A.4(i)). The final rule establishes minor NSR thresholds as discussed in section IV.A.3 of this preamble. b. Determining Applicability for New Minor Sources As stated in the proposal, in all NSR applicabilit y determinations, you must evaluate each regulated NS R pollutant individually because the area where your source is located may be attainment for some pollutants and nonattainment for others. For a given new source or modification, a particula r pollutant may be subject to review under PSD, nonattainment m ajor NSR, or minor NSR, or may not be subject to any of these pr ograms. For proposed new sources, the first step is to calc ulate the potential to emit of each regulated NSR polluta nt. The second step is to determine whether the source is s ubject to theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 39 of 326 applicable major NSR program (i.e

. , 40 CFR 49.166 through 49.175 or 40 CFR 52.21 for nonattainment and attainment ar eas, respectively). If your proposed source’s potential to emit for a particular pollutant is equal to or greater than the applicable major source threshold, the source is su bject to review under major NSR and not the minor NSR progra m for that regulated NSR pollutant. Under the nonattainment m ajor NSR program, this step is repeated for each regulated N SR pollutant the source has the potential to emit. Under the PS D program, if the source’s potential to emit is greater than the major source threshold for one pollutant, then PSD applies to an y other pollutants for which the potential to emit is above the level defined as “significant” in the PSD regulations. 13 The significance level is typically lower than the majo r source threshold; for example, the significance level for PM 10 is 15 tpy while the major source threshold is 100 or 250 tpy. If your proposed new source is not subject to majo r NSR for a particular regulated NSR pollutant, the next step is to determine whether the source is subject to the requ irements of this minor NSR rule for that pollutant, i.e. , if the source’s potential to emit of the pollutant is equal to or g reater than

13 The significance levels are defined in 40 CFR 52.21(b)(23).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 40 of 326 the applicable minor NSR threshold listed in Table 1 of this final rule. These steps are repeated for every reg ulated NSR pollutant the source has the potential to emit. Ho wever, for a source to be considered a minor source, the PTE of each NSR pollutant for that source must be less than the cor responding major source threshold. We sought comment in the proposal as to whether in calculating these emission levels for applicability purposes, you should include fugitive emissions, to the exten t they are quantifiable, for all sources, or include them only for source categories listed pursuant to section 302(j) of the Act, or exclude them for all sources. Several of the commenters supported the approach of including fugitive emissions for all sources. They stated that fugitive emissions are a large proportion of the ai r pollutants in Indian country and hence EPA must require fugiti ve emissions to be included in determining applicability because the mandate of the minor NSR program is based on protection of air quality throughout the nation. However, many commenters argued that fugitive emiss ions at minor sources are minuscule, and a requirement to i nclude them would be excessive. Some of these commenters belie ved that the costs for complying with minor NSR for fugitive emi ssions couldDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 41 of 326 potentially be substantial and that fugitive emissi ons are inherently difficult to quantify. In addition, one commenter added that fugitive emissions should only be includ ed for source categories listed under section 302(j) of the Act, citing an extensive analysis of the history of regulating fug itive emissions under NSR. Based on the comments received, we are finalizing provisions that require including fugitive emission s in the minor NSR applicability determination, to the exten t that they are quantifiable, only if the stationary source belongs to one of the source categories listed pursuant to section 302(j) of the Act (i.e. , the source categories listed in 40 CFR part 51, Appendix S, paragraph II.A.4(iii) and in 40 CFR 52.21(b)(1)(iii)). We believe that the number of s ources that would be excluded from the minor source permitting program because their fugitive emissions were not included in their applicability determinations would be small compare d to the regulatory and economic burden that we would impose on minor sources in Indian country if we were to require the estimation of fugitive emissions for all minor sources. See final 40 CFR 49.153(a). 2. What is a modification and which modifications are subject to this rule?Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 42 of 326 a. Definition of “Modification” For the purposes of the minor NSR program, we propo sed (at 40 CFR 49.152(d)) that a “modification” is defined as any physical or operational change at a stationary sour ce that would cause an increase in the allowable emissions of the affected emissions units for any regulated NSR pollutant or that would cause the emission of any regulated NSR pollutant n ot previously emitted. The following exemptions apply:

• A physical or operational change does not include routine maintenance, repair, or replacement.

• An increase in the hours of operation or in the production rate is not considered an operational change unless such change is prohibited under any permit condition that is enforceable as a practical

matter.

• A change in ownership at a stationary source is not considered a modification. Several commenters supported our proposal to adopt a definition for the term “modification” for the mino r NSR program in Indian country based on an increase in allowable emissions (allowable-to-allowable test). These commenters be lieved that an allowable-to-allowable test would be a simpler t est than the actual-to-projected-actual test that applies to the major NSRDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 43 of 326 program; it will be less costly, less time consumin g, and less complicated for tribal minor sources; and it is leg al under the CAA and consistent with some state and local minor NSR programs that we have approved in SIPs pursuant to section 1 10 of the

Act. On the other hand, other commenters opposed the al lowable emissions test because they believed that it is les s stringent than the alternative tests and/or it is contrary to the Act and recent court decisions. They also believed that th e allowableto-allowable test will be inconsistent with the maj or NSR program, and it does not ensure that the NAAQS are achieved (i.e. , it could lead to unreviewed increases in emission s that would be detrimental to air quality). Furthermore, some of these commenters believed that an allowable-to-allo wable test will not capture those sources that escape major NS R review. For these reasons, opposing commenters suggested th e use of an actual-emissions-based test which could include an actual-topotential, actual-to-projected-actual, or an actual -to-futureactual test. For the most part, we agree with those commenters that endorsed the concept of defining the term modificat ion for the minor NSR program as a change in allowable emission s. As we stated in the proposal (71 FR 48696), we evaluated the threeDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 44 of 326 basic types of applicability tests (actual-to-poten tial, actualto-projected-actual, and allowable-to-allowable) an d determined that the allowable-to-allowable test is the most su itable for Indian country because, apart from being a simple t est, it will help with easier implementation of the program for the minor sources in Indian country that, to date, have littl e experience with any air regulations. Since minor sources in I ndian country have been unregulated until now, many of these sour ces have not kept track of actual emissions data, making the ini tial application of any test based on actual emissions v irtually impossible. In addition, we understand that some s tate minor NSR programs use an allowable-to-allowable test whi ch would make this program for Indian country consistent with the programs in these states. However, we share the concerns of co mmenters who believe that an allowable-to-allowable test may not capture some modifications at major sources that escape major NS R review because they will cause actual emissions increases that will not be large enough to qualify as major modifications u nder the actual-emissions-based test of the major NSR progra m, and might not show any increases in emissions under the allow able-toallowable test, avoiding any permitting requirement s at all. In addition, we disagree with those commenters tha t believed that using an allowable-to-allowable test is contraryDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 45 of 326 to the Act and recent court decisions and therefore will be tied up in litigation. As we discussed in the proposal preamble, we believe that we have the discretion to use an allow able-toallowable test for this minor NSR program because t he statutory basis for minor NSR is section 110(a)(2)(C) of the Act. By contrast, parts C and D of title I of the Act provi de the statutory basis for the major NSR program and refer to section 111(a)(4) of the Act (the definition of “modificati on” for purposes of the new source performance standards (N SPS)) in defining “modification” for purposes of the major N SR program. The D.C. Circuit Court of Appeals has ruled that, b ased on the wording of the definition of “modification” in sect ion 111(a)(4) of the Act, the applicability of major NSR to modif ications must be based on changes in actual emissions (State of N ew York v.
U.S. EPA , 413 F. 3d 3 (D.C. Cir. 2005). However, that reas oning based on the definition in section 111 of the Act d oes not apply to minor source permitting because the statutory ba sis for the minor NSR program is section 110(a)(2)(C) of the Ac t, which does not define or refer to a definition of “modificatio n.” Thus, we believe that we have discretion in defining the ter m for the minor NSR program in Indian country, and we do not believe that the decision of the D.C. Circuit Court of Appeals a pplies to the minor NSR program.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 46 of 326 Therefore, to address the concerns of those commen ters who expressed that the allowable-to-allowable test is l ess stringent than an actual-emissions-based test or that this te st is at odds with section 110(a)(2)(C) of the Act, we commit to conducting a study to collect actual emissions data for a period of 5 years from the minor source registration program 14 we are finalizing with this rule to assess the feasibility of impleme nting an actual-emissions-based test. If our study conclude s that adequate actual emissions data are available for mi nor sources, we will undertake a rulemaking to determine whether or not the adoption of an actual-emissions based test for mino r sources is appropriate within 2 years from the end of the 5-ye ar study period. Furthermore, because of our concern that some minor modifications at major sources might completely esc ape review under the minor NSR program as proposed, we have de cided that the applicability of the minor NSR program to minor modifications at major sources should be based on t he actual-toprojected-actual test used in the applicable major NSR program. Thus, in the final rule, if a proposed modification at an

14 We are requiring minor sources to register within 18 months from the effective date of this rule. See section IV.F of this preamble for more details about the registr ation program.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 47 of 326 existing major source does not qualify as a major m odification (which would be subject to major NSR) based on the actual-toprojected-actual test, it is considered a minor mod ification and is subject to the minor NSR program if the emission s increase from the actual-to-projected-actual test is equal t o or exceeds the minor NSR thresholds listed in Table 1 in secti on IV.A.3 of this preamble. The rationale for using an allowabl e-toallowable test for minor sources in Indian country – that actual emissions data are not available for minor sources and an actual-emissions-based test would be beyond the cap abilities of many minor sources – does not apply to major source s. Major sources must first determine whether a proposed mod ification is subject to major NSR using the actual-to-projected- actual test of the major NSR program. It would be far simpler and more efficient to use the results of the actual-to-proje cted-actual test that has already been used to determine whethe r the proposed modification is subject to major NSR as th e basis for permitting the source under the minor source progra m, rather than complicating and extending the process by requ iring the use of a second, allowable-to-allowable test for the mi nor NSR program. Hence, we are revising the definition of modification under 40 CFR 49.152 accordingly. We are also making a change to the definition ofDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 48 of 326 modification related to the treatment of fugitive e missions. Now this definition includes provisions to account for fugitive emissions, to the extent they are quantifiable, onl y if the stationary source belongs to one of the source cate gories listed pursuant to section 302(j) of the Act (see previous section for more information). Therefore, under the final rule , a modification means any physical or operational chan ge at a stationary source that would cause an increase in t he allowable emissions of a minor source or an increase in the a ctual emissions (based on the applicable test under the m ajor NSR program) of a major source for any regulated NSR po llutant, or that would cause the emission of any regulated NSR pollutant not previously emitted. Allowable emissions of a minor source include fugitive emissions, to the extent that they are quantifiable, only if the source belongs to one of the source categories listed in 40 CFR 52.21(b)(1)(iii) for PS D and 40 CFR part 51, Appendix S, paragraph II.A.4(iii) for nona ttainment major NSR. The following exemptions apply:

• A physical or operational change does not include routine maintenance, repair, or replacement.

• An increase in the hours of operation or in the production rate is not considered an operational change unless such change is prohibited under anyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 49 of 326 permit condition that is enforceable as a practical

matter.

• A change in ownership at a stationary source. b. Determining Applicability for Modifications In our proposal we stated that this rule applies to certain modifications at minor sources and to minor modific ations (not major modifications as defined in 40 CFR 49.167 and in 40 CFR 52.21) at major sources, and that to be a modificat ion, the change must cause an increase in allowable emission s at your source. At proposal, we also asked for comments as to whether minor sources in Indian country should be allowed t o take credit for concurrent emissions reductions that would resu lt from a proposed modification under the concept commonly kn own as “project netting.” 15 Several commenters supported our proposal to allow “project netting” in the minor NSR program for determining w hether a proposed project qualifies as a modification. Howe ver, we are not finalizing the “project netting” concept at thi s time to be consistent with our position in the major NSR progr am. In a January 15, 2009 (74 FR 2376) final rule titled: “P revention of

15 As proposed, “project netting” means that both in creases and decreases in allowable emissions are summed whe n determining the total emission increase that would result from a proposed modification.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 50 of 326 Significant Deterioration (PSD) and Nonattainment N ew Source Review (NSR): Aggregation and Project Netting,” we stated that we were not taking action at that time on the Septe mber 14, 2006, proposed rule that would have allowed project netting for major sources. Until we decide on whether and how to proceed with project netting, nothing in the September 14, 2006, proposed amendments on project netting or the Augus t 21, 2006, Tribal NSR rules proposal should be taken as establ ishing any change in the Agency’s interpretation of its curren t rules nor as establishing any new rules for project netting f or either minor or major sources. To determine if your proposed physical or operation al change is subject to the minor NSR program, you mus t first determine whether the change is subject to the appl icable major NSR program (i.e

. , 40 CFR part 51, Appendix S or 40 CFR 52.21 for nonattainment and attainment areas, respectivel y). For physical or operational changes at your existing ma jor source, you would determine whether the modification qualif ies as a major modification using the procedures in the appl icable major NSR program (i.e. , the actual-to–projected-actual applicability test). As discussed in the previous section, under this final rule, if the change does not qualify as a major mod ification under that test, it is considered a minor modificat ion if theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 51 of 326 emissions increase from the actual-to-projected-act ual test is equal to or greater the minor NSR thresholds listed in Table 1 of section IV.A.3 of this preamble. A major source with such a minor modification must apply for and obtain a mino r NSR permit prior to commencing construction of the minor modif ication. For a physical or operational change at your existi ng minor source, you will first determine if the change qual ifies as a major stationary source by itself (e.g. , when a source owner adds one or more large emissions units to his minor source) using the provisions of the applicable major NSR pr ogram (see , e.g. , 40 CFR 52.21(b)(1)(i)(c )). If it is, then the change is subject to the applicable major NSR program. For modifications at existing minor sources that do not qualify as major sources by themselves, the total i ncrease in allowable emissions resulting from the proposed cha nge at your source, including fugitive emissions to the extent they are quantifiable, only if the stationary source belongs to one of source categories listed pursuant to section 302(j) of the Act, would be the sum of the following:

• For each new emissions unit that is to be added, th e emissions increase would be the potential to emit o f the unit.

• For each emissions unit with an allowable emissionsDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 52 of 326 limit that is to be changed or replaced, the emissi ons increase would be the allowable emissions of the emissions unit after the change or replacement minu s the allowable emissions prior to the change or replacement. However, this may not be a negative value. If the allowable emissions of an emissions unit would be reduced as a result of the change or replacement, use zero in the calculation.

• For each unpermitted emissions unit (i.e. , a unit without any enforceable permit conditions) that is to be changed or replaced, the emissions increase woul d be the allowable emissions of the unit after the change or replacement 16 minus the potential to emit prior to the change or replacement. 17 However, this may not be a negative value. If the allowable emissions of an emissions unit would be reduced as a

16 The minor NSR permit for the modification must inc lude an annual allowable emissions limit for each affected emissions unit per final 40 CFR 49.155(a)(2). The post-chang e allowable emissions limit can be the uncontrolled potential t o emit or can be lower depending on the outcome of the reviewing authority’s control technology review as well as any other rest rictions that you propose for the emissions unit (e.g. , for purposes of NSR applicability).

17 It is necessary to use potential to emit since the se emissions units will not have an allowable emission s limit prior to the change.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 53 of 326 result of the change or replacement, use zero in th e calculation. If the total increase in allowable emissions result ing from your proposed modification at your minor source cau ses an increase in allowable emissions for one or more reg ulated NSR pollutants above the applicable minor NSR threshold (see Table 1 in section IV.A.3 of this preamble), the modificati on is subject to this program. See final 40 CFR 49.153(b). If the total allowable emissions increase from your modification is less than the corresponding minor N SR threshold listed in Table 1, the modification is not subject to preconstruction permitting under the minor NSR rule . Under this scenario, if a permitted allowable emissions limit of one or more emissions units increases, you must apply for an administrative permit revision to amend the allowab le emissions limit for that emissions unit(s). See section IV.B.5 of this preamble or final 40 CFR 49.153(a)(2) and 49.159(f) for more information on administrative permit revisions. 3. What are the minor NSR thresholds? As proposed, the “minor NSR thresholds” establish c utoff levels for which sources with emissions lower than the thresholds would typically be exempt from the minor NSR rules (see Table 1). We believe that this approach is approp riate inDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 54 of 326 Indian country because new sources and modification s with emissions below the thresholds are usually inconseq uential to attainment and maintenance of the NAAQS; thus they assure that the NAAQS are attained and maintained, and many min or NSR programs in surrounding states include such thresho lds. Therefore, we believe that the minor source thresho lds will allow us to begin leveling the playing field with t he surrounding state programs and the minor NSR thresh olds will result in a more cost-effective program by reducing the burden on sources and reviewing authorities.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 55 of 326 Table 1. Minor NSR Thresholds a

Regulated NSR pollutant Minor NSR thresholds for nonattainment areas (tpy) Minor NSR

thresholds for attainment areas (tpy) Carbon monoxide (CO)............. 5 10 Nitrogen oxides (NO x ) ............ 5 b 10 Sulfur dioxide (SO 2 ) ............. 5 10 Volatile Organic Compounds (VOC). 2 b 5 PM............................... 5 10 PM 10 ............................. 1 5 PM 2.5 ............................. 0.6 3 Lead............................. 0.1 0.1 Fluorides........................ NA 1 Sulfuric acid mist............... NA 2 Hydrogen sulfide (H 2 S) ........... NA 2 Total reduced sulfur (including H 2 S) ........................... NA 2 Reduced sulfur compounds (including H 2 S) ................ NA 2 Municipal waste combustor emissions ...................... NA 2 Municipal solid waste landfill emissions (measured as nonmethane organic compounds) .. NA 10

a If part of a tribe's area of Indian country is desi gnated as attainment and another part as nonattainment, the a pplicable threshold for a proposed source or modification is determined based on the designation where the source would be located. If the source straddles the two areas, the more string ent thresholds apply. b In extreme ozone nonattainment areas, section 182( e)(2) of the Act requires any change at a major source that resu lts in any increase in emissions to be subject to major NSR pe rmitting. In other words, any changes to existing major sources in extreme ozone nonattainment areas are subject to a “0” tpy threshold, but that threshold does not apply to minor sources. Therefore,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 56 of 326 these numbers were changed from the proposal. Various commenters supported the development of min or NSR thresholds and no comments specifically opposed the minor NSR thresholds. Nevertheless, some commenters wanted u s to finalize less stringent thresholds, especially for VOC and C O, while a few commenters expressed concern that the source di stribution analysis that we used to support the proposed thres holds did not accurately reflect the number of sources currently in existence in Indian country. One commenter also wanted us to finalize more stringent thresholds for minor modifications. After consideration of comments and further evaluat ion, we are finalizing the minor NSR thresholds as proposed , except for the NO x and VOC thresholds in extreme ozone nonattainment areas. We are amending the proposed “0” tpy NO x and VOC thresholds for the minor NSR program in extreme ozone nonattainmen t areas because we believe that these thresholds, while req uired under section 182(e)(2) of the Act and appropriate as sig nificance levels for major sources located in extreme ozone n onattainment areas, are not appropriate for minor sources. Ther efore, we are finalizing minor NSR thresholds for NO x and VOC in extreme nonattainment areas as 5 and 2 tpy respectively. W e also want to clarify, as one commenter suggested, that the PM 2.5 threshold applies to direct PM 2.5 emissions, and does not represent theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 57 of 326 contribution of its precursors (e.g. , SO 2 or NO x ). Furthermore, we continue to believe that the source s with emissions below the thresholds will be inconsequent ial to attainment or maintenance of the NAAQS because the national source distribution analysis in the proposal (71 FR 48702) applied to the national source distribution at the time (sources inside and outside of Indian country) and not only to estimates of the possible number of existing sources in India n country. For each pollutant, we found that only around 1 per cent (or less) of total emissions would be exempt from revie w under the minor NSR program. At the same time, the threshold s would promote an effective balance between environmental protection and source burden because anywhere from 42 percent to 76 percent of sources (depending on the pollutant) would be to o small to be subject to preconstruction review. Therefore, we believe that the thresholds we are fi nalizing are neither the most stringent nor the least string ent of the levels found in existing state minor NSR rules. Th ese threshold levels represent a reasonable balance between envir onmental protection and economic growth, since we did not wa nt them to be so high that they were not environmentally protecti ve or so low that they ensured environmental protection at the c ost of discouraging economic growth. Nevertheless, to add ress anyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 58 of 326 concerns about the stringency of the thresholds, we will evaluate the information we collect as part of the registration provisions for minor sources we are finalizing unde r this rule (see section IV.F of this preamble for more information ) and will consider changing the minor NSR thresholds as appropriate 18

. 4. What emissions units and activities at stationary s ources are exempt from this rule? Certain emissions units and activities at stationar y sources either do not emit regulated NSR pollutants to the ambient air or emit these pollutants in negligible amounts. Therefore, we proposed a list of emissions units an d activities at stationary sources that would be exempt from the requirements of this minor NSR program. As described in the pro posal’s preamble, this list included: 1. Air-conditioning units used for comfort that are no t subject to applicable requirements under title VI o f the Act and do not exhaust air pollutants into the ambient air from any manufacturing or other industr ial processes; 2. Ventilating units used for comfort that do not exha ust

18 We might also consider proposing thresholds for greenhouse gases and in accordance with the provisi ons under the rule titled: “Prevention of Significant Deteriorati on and Title V Greenhouse Gas Tailoring Rule” (75 FR 31514).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 59 of 326 air pollutants into the ambient air from any manufacturing or other industrial process; 3. Heating units used for comfort that do not exhaust air pollutants into the ambient air from any manufactur ing or other industrial process; 4. Noncommercial food preparation;
5. Consumer use of office equipment and products; 6. Janitorial services and consumer use of janitorial products; 7. Internal combustion engines used for landscaping purposes; 8. Bench scale laboratory activities, except for laboratory fume hoods and vents; and 9. Any emissions unit or activity that does not have t he potential to emit a regulated NSR pollutant or HAP, so long as that emissions unit or activity is not part of a process unit that emits or has the potential to e mit a regulated NSR pollutant or HAP. We received numerous comments on the proposed list of exempted emissions units and activities. These com menters noted that state and local agencies often exempt many mor e types of emissions units and activities, and suggested that we should expand the exemptions included in the final minor N SR rule.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 60 of 326 Some of these commenters also argued that failure t o expand the list of exemptions will significantly burden operat ors of minor sources wishing to locate in Indian country, especi ally the oil and gas industry, and will thereby disadvantage tri bes. In light of the comments received, we agree that t he list of exempted units and activities might need to be e xpanded. Therefore, we intend to propose and finalize a sepa rate rule to seek public comment on the issue of whether additio nal units or activities should be exempted from the minor NSR pr ogram. Furthermore, we are finalizing an amended list of e xempted units and activities by not exempting air-condition ing units for comfort and heating units for comfort until we can study the implications of the new rules for greenhouse gases (see Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 FR 31514) on these units. I n addition, and also in light of a comment received, we are del eting the last exemption in the proposed list of exemptions ( any emissions unit or activity that does not have the potential t o emit a regulated NSR pollutant or HAP, so long as that emi ssions unit or activity is not part of a process unit that emit s or has the potential to emit a regulated NSR pollutant or HAP) because we agree with the commenter that argued that this exem ption can be confusing and redundant.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 61 of 326 Finally, we would like to clarify that the list of exemptions included in the proposal’s regulatory te xt included mobile sources, although mobile sources were inadve rtently left out of the exempted units and activities discussion in the proposal’s preamble. We have decided to keep mobil e sources in the list of exempted units and activities in this f inal rule because we continue to believe that it is not appro priate to include mobile sources in a stationary source permi tting program, and we did not receive any comments sugges ting that mobile sources should be removed from the list of e xemptions. Therefore, the units and activities at stationary s ources that are exempt from this rule are being finalized under 40 CFR 49.153(c) and are limited to the following: 1. Mobile sources; 2. Ventilating units for comfort that do not exhaust a ir pollutants into the ambient air from any manufactur ing of other industrial processes; 3. Noncommercial food preparation; 4. Consumer use of office equipment and products.
5. Janitorial services and consumer use of janitorial products. 6. Internal combustion engines used for landscaping

purposes.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 62 of 326 7. Bench scale laboratory activities, except for laboratory fume hoods and vents.

B. Site-Specific Permits 1. What are the requirements for permit applications? We proposed that as the owner or operator of a prop osed new minor source or a proposed modification that is sub ject to the rule, you must submit a complete application to the reviewing authority requesting a minor NSR permit specific to your source (unless you are seeking a “general permit”). In ad dition to basic information identifying and describing your s ource, your application must include a list of all affected emi ssions units. “Affected emissions units” are defined as all the e missions units at your proposed new minor source or all the new, modified, and replacement emissions units that comp rise your proposed modification (excluding the exempt emissio ns units and activities listed in proposed 40 CFR 49.153(c)). We also proposed that your application must also do cument the increase in emissions of regulated NSR pollutan ts that will result from your new source or modification so that the reviewing authority can verify that you are subject to this minor NSR program, rather than to major NSR. For e ach new emissions unit that you list, you must provide the PTE in tpy for each regulated NSR pollutant, along with suppor tingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 63 of 326 documentation. For any modified or replacement uni t that you list, you must provide the allowable emissions of e ach regulated NSR pollutant in tpy before and after the modificat ion or replacement, along with supporting documentation. For emissions units that do not have an established allowable emi ssions level prior to the modification, you must report the pre- change PTE. For the post-change allowable emissions for these u nits, you may report the unrestricted post-change PTE or may prop ose a lower level of allowable emissions. The allowable emissi ons for any emissions unit are calculated considering any emiss ions limitations that are enforceable as a practical mat ter on the unit’s PTE. In calculating these emissions levels for applicability purposes, we sought comment on whethe r you should include fugitive emissions, to the extent they are quantifiable, for all sources, or include them only for source ca tegories listed pursuant to section 302(j) of the Act, or ex clude them for all sources. Furthermore, we proposed that you may include in yo ur application proposed emission limitations for the l isted emissions units. If you do, you must account for t hese limitations in your calculations for post-construct ion PTE and/or allowable emissions. The application also m ust identify and describe any existing air pollution control equ ipment andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 64 of 326 compliance monitoring devices or activities relevan t to the affected emissions units, as well as any existing e missions limitations or work practice requirements to which any affected emissions units are subject. We also proposed that you may request that the revi ewing authority establish an annual minor source plantwid e applicability limitation (minor source PAL) for one or more of the regulated NSR pollutants emitted by your new or existing minor stationary source. A minor source PAL is a s ource-wide limitation on allowable emissions of a regulated NS R pollutant, expressed in tpy, that is enforceable as a practica l matter. No commenters expressed concern with the proposed p ermit applications requirements described above except fo r the concept of plantwide applicability limitations. One commen ter believed such provisions will not ensure compliance with the statutory mandates applicable to minor NSR programs under sec tion 110(a)(2)(C) of the Act to ensure that NAAQS are at tained and maintained. Further, the commenter maintained that such limits would likely be unenforceable as a practical matter at most sources and offered extensive arguments for his pos ition. On the other hand, a couple of commenters expressed su pport for minor source PALs, with one of these commenters bel ieving that it is very important that aspects of permitting pro grams at theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 65 of 326 federal and state level outside of Indian country t hat provide operator flexibility, including the creation of PAL s, should also be afforded to operators currently in or wishi ng to locate in Indian country. Based on the comments received, we are finalizing t he permit application requirements mainly as proposed, with only two exceptions. See final 40 CFR 49.154. First, we are not finalizing the minor source PAL provisions at this time because we agree with the opposing commenter that stated, f or example, that finalizing the PAL provisions without more spe cific criteria, including provisions for extensive monito ring, recordkeeping and reporting requirements, would not be enforceable. Second and as we explained in section s IV.A.1 and IV.A.2, we are finalizing provisions that will requ ire you, the source owner, to include fugitive emissions in the minor NSR applicability determinations, to the extent they ar e quantifiable, only for those source categories list ed pursuant to section 302(j) of the Act. In addition, we would like to clarify that if your source is in a source category covered by a general permit issued under proposed 40 CFR 49.156, you may apply for the gener al permit for that source category instead of a site-specific per mit. The permit application requirements for a particular ge neral permitDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 66 of 326 will be specified in that general permit. General permits, including the comments we received about them, are discussed further in section IV.C of this preamble. 2. What technical reviews must the reviewing authority conduct? After determining that your application is complet e (see section IV.B.4 for more information about this proc ess), we proposed that the reviewing authority must do 2 typ es of technical reviews – a control technology review and a review of the probable impact on air quality of the proposed new source or modification. These reviews are discussed further in the following subsections.

a. Control Technology Review As required under section 110(a)(2)(C) of the Act, we proposed that this minor NSR permitting program for Indian country is primarily designed to assure that the NA AQS are achieved, and to prohibit any stationary source fro m emitting any air pollutant in amounts that would contribute to nonattainment or interfere with maintenance of the NAAQS. Therefore, with this single program applicable to a ll areas of Indian country, we are trying to ensure the NAAQS p rotection required by the CAA, while still allowing sufficien t flexibility in control technology requirements for minor source s located inDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 67 of 326 Indian country. In addition, we proposed that by c ontrol technology, we mean pollution prevention techniques ; add-on pollution control equipment; design and equipment specifications; work practices; and operational res trictions. For this review, the reviewing authority will consi der local air quality needs, typical control technology used by s imilar sources in surrounding areas, anticipated economic growth in the area, and cost-effective control alternatives. At a minimum, the reviewing authority must require control techno logy that assures that the NAAQS are achieved and that each a ffected emissions unit will comply with all requirements of 40 CFR parts 60, 61, and 63 that apply. The required control te chnology resulting from such a review may range from no cont rol technology, to control technology that is less stri ngent than the reasonably available control technology (RACT) level of control (which is typically required for existing m ajor sources in nonattainment areas), to technology that is the BACT level of control (which is the level required for new major sources and major modifications in attainment areas). The cont rol technology chosen would depend on the air quality n eeds of the area, other applicable regulatory programs of the A ct, and technical and economic feasibility. Furthermore, we proposed that based on the results of theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 68 of 326 control technology review, the emission limitations required by the reviewing authority may consist of numerical li mits on the quantity, rate, or concentration of emissions; poll ution prevention techniques; design standards; equipment standards; work practice standards; operational standards; or any combination thereof. If it is technically and econ omically feasible, the reviewing authority must require a nu merical limit on the quantity, rate, or concentration of emission s for each affected emissions unit at your source. For a new minor source that is subject to this rule , we proposed that the case-by-case control technology r eview would be conducted for all emissions units (except the ex empt emissions units and activities discussed in section IV.A.4 and listed in the final 40 CFR 49.153(c)) that emit or have the potential to emit the pollutant(s) for which the so urce is subject to this rule. For a modification, such con trol technology review would apply only to the affected emissions unit(s) at your source. At proposal, we specifically sought comment on the proposed case-by-case control technology review for all new and modified sources subject to this minor NSR program. We also asked for comments on whether the program should have a contr ol technology requirement at all because section 110(a)(2)(C) of the ActDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 69 of 326 requires a minor NSR program that assures that the NAAQS are achieved, but does not mandate that the program inc lude a control technology requirement. Therefore, we soug ht comment on whether a control technology requirement is necessa ry to achieve the purposes of the Act, or whether other approache s can achieve these purposes just as well with less cost and admi nistrative burden. Several commenters supported the case-by-case contr ol technology review. These commenters believed that a case-bycase control technology review would allow and prom ote economic growth and development that is tailored to the need s in Indian country, while one of these commenters added that h aving no capacity to impose controls on minor sources would seem to defeat the purpose of a permitting process for such facilities because a paper permit that could not impose any co ntrols adds nothing to existing regulation or protection of pub lic health and the environment. Furthermore, several commente rs supported a clearly defined, standardized method for determin ing the required level of control, while one commenter stat ed that a system that requires a single set of controls for a ll minor sources across Indian country does not provide the needed flexibility to adapt regulation to the needs of ind ividual reservations or to take into account the benefit of a levelDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 70 of 326 playing field with the surrounding jurisdictions. On the other hand, other commenters opposed any co ntrol technology requirement. These commenters believed that a federal program is likely to be applied inconsisten tly, resulting in a competitive disadvantage for sources located in certain areas; EPA has no authority to impose a con trol technology requirement under section 110(A)(2)(C) o f the Act; and a separate control technology review process un der minor NSR is unnecessary when the threat of PSD review will o therwise accomplish the ultimate objective – protection of a ir resources (i.e. , the PSD review is generally so complex, time-cons uming, and expensive, that most sources will design their projects to remain below the applicable PSD thresholds, even if that means installing more efficient controls, switching to cl eaner fuel, or restricting production or operating hours). We disagree with commenters that oppose any contro l technology requirement or who suggested that we hav e no authority to require such controls. Section 110(a )(2)(c) requires us to assure that the NAAQS are achieved, and we believe that requiring control technologies when ne cessary will ensure the NAAQS are protected as established in th is section. Furthermore, section 110(a)(2)(c) does not preclude us from requiring additional provisions that will further t he goal ofDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 71 of 326 NAAQS protection and the fact that the statutory la nguage requires a control technology review under some sta tutory provisions does not mean that the statute prohibits EPA from requiring it under other provisions. We also disagree with those commenters that would like us to implement consistent control technologies across the nation. As we stated in the proposal, it would be impossibl e to create a single program that creates precisely equivalent re gulations among all areas of Indian country. We wish to ensu re that Indian country is not seen as a potential “pollutio n haven” where minor sources can go to escape air pollution control requirements, and we also do not want to put tribes or owners and operators locating in Indian country at a compe titive disadvantage by requiring substantially more string ent controls in a particular area of Indian country than are req uired in the surrounding areas. Therefore, a case-by-case contr ol technology review provides the reviewing authority with the fl exibility to create requirements that protect public health and environment, but also takes into consideration the needs of the area in question based on its current air quality situation , the potential air quality impacts from the growth assoc iated with the source, and the technological and economic feas ibility of the control technology as well as the control techn ologies inDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 72 of 326 use in the surrounding states. Therefore, we are finalizing the case-by-case contr ol technology review requirements as proposed. The fi nal rules require your reviewing authority to perform a contr ol technology review on a case-by-case basis when issuing a site- specific minor NSR permit. See the final 40 CFR 49.154(c). For general permits, the control technology review will be perf ormed at the time when the general permit is developed. More de tails on general permits are provided in section IV.C of thi s preamble. b. Air Quality Impacts Analysis (AQIA) As discussed in the proposal, the primary purpose of a minor NSR program under the Act is to assure that t he NAAQS are achieved. However, we do not believe that most ind ividual minor sources are likely to be consequential for attainme nt and maintenance of the NAAQS. Thus, we proposed that t ypically for a new or modified minor source permit application, your reviewing authority will not require an Air Quality Impacts Analysis (AQIA). In rare instances, if your review ing authority has reason to be concerned that the construction of your minor source or modification could cause or contribute to a NAAQS or PSD increment violation, your reviewing authority m ay require you to conduct an AQIA using dispersion modeling in accordance with 40 CFR part 51, Appendix W, to determine the i mpacts thatDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 73 of 326 will result from your new source or modification. If the AQIA demonstrates that the construction of your source o r modification would cause or contribute to a NAAQS o r PSD increment violation, you would be required to furth er reduce its impact before you could obtain a permit. Various commenters supported requiring an AQIA and added that they would like us to develop guidance on when and how an AQIA analysis should be performed. On the other ha nd, several commenters believed that AQIAs would be excessive, very costly, and time consuming for small businesses. Based on the comments received, we are finalizing t he AQIA provisions as proposed at 40 CFR 49.154(d). We con tinue to believe that allowing reviewing authority discretio n for when an AQIA might be required ensures that construction of new minor sources or modifications at existing minor sources do not cause or contribute to a NAAQS or PSD increment violation when needed, but limits overburdening all minor sources in India n country with these types of air quality analysis. Neverthe less, to aid the reviewing authorities in the determination of w hen an AQIA might be needed for minor NSR sources in Indian cou ntry and to address the commenters’ suggestions, we intend to d evelop guidance that will consider the suggestions present ed by these commenters. We are also eliminating the language i n theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 74 of 326 proposal preamble that stated (71 FR 48704) that AQ IAs will be required “[i]n rare instances.” Since the reviewin g authority has the discretion to require an AQIA, it is diffic ult to predict that such AQIAs will be required only in ra re instances. 3. What are the permit content requirements? The requirements for permits issued pursuant to si tespecific preconstruction review were proposed under 40 CFR 49.155. The typical permit information requirement s proposed at 49.155(a)(1) include the following:

• The effective date of the permit and the date by wh ich you must commence construction on your approved project in order for your permit to remain valid (i.e. , 18 months after the permit effective date).

• The emissions units subject to the permit and their associated emissions limitations.

• Monitoring, recordkeeping, reporting, and testing requirements to assure compliance with the emission limitations. In addition, we proposed that the permit should inc lude a number of standard permit terms. These include emi ssion limitations, monitoring recordkeeping and reporting requirements as well as terms such as a severability clause (to ensure the continued validity of the other portions of the per mit in theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 75 of 326 event of a challenge to a portion of the permit), a requirement to comply with all conditions of the permit, a requ irement that the permitted source does not cause or contribute t o a NAAQS violation, and inspection and entry provisions requ iring that you allow representatives of the reviewing authorit y to enter and inspect your source.

a. Emissions Limitations We proposed under 40 CFR 49.155(a)(2) that your per mit must include 2 types of emission limitations:

• The emissions limitations for each affected emissio ns unit determined by the reviewing authority based on the case-by-case technology review discussed previously in section IV.B.2 of this preamble.

• Limits on annual allowable emissions in tpy. Emission limitation, as proposed under 40 CFR 49.15 2, means a requirement established by the reviewing authorit y that limits the quantity, rate, or concentration of emissions o f air pollutants on a continuous basis, including any req uirement relating to the operation or maintenance of a sourc e to assure continuous emissions reduction, and any design stan dard, equipment standard, work practice, operational stan dard or pollution prevention technique. Furthermore, we pr oposed under 40 CFR 49.152 that allowable emissions means “allow ableDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 76 of 326 emissions” as defined in 40 CFR 52.21(b)(16), excep t that the allowable emissions for any emissions unit are calc ulated considering any emissions limitations that are enfo rceable as a practical matter on the emissions units’ potential to emit. Once established in the permit, annual allowable em issions become the basis for determining whether a later ch ange at your source will result in an increase in allowable emis sions subject to permitting under this program. We did not specifically receive comments on these t wo types of emissions limitations that must be included in y our permit. Therefore we are finalizing these emissions limitat ions at 40 CFR 49.155(a)(2) as proposed. Additionally, we would like to clarify, as some com menters requested, a couple of terms or conditions. One co mmenter interpreted the proposal to only require annual emi ssions limits in the minor source permits, while one commenter as ked us to clarify if the term “on a continuous basis” in the definition of emissions limitation implies that every emission li mitation must be complied with on an instantaneous time period an d accompanied by a continuous emission monitoring system (CEMS). Therefore, we want to clarify that the reviewing a uthority may not only require annual emissions limits in the minor NSR permits, but also short-term limits as necessary. Short-termDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 77 of 326 emission limits may also be required as part of any enforceable emission limitation and, if applicable, depending o n the relevant ambient air quality standard associated wi th the regulated pollutant. Furthermore, the term “on a continuous basis” in th e definition of emission limitation does not imply th at every emission limitation must be complied with on an ins tantaneous time period and accompanied by a CEMS. The term “o n a continuous basis,” as the commenter suggests, means that the limitation applies “at all times”, but not that the emission limitation has to be accompanied by a CEMS. There are various ways to monitor compliance with limitations that ap ply on a continuous basis as we mention in the next section. b. Monitoring, Recordkeeping, and Reporting As noted in the proposal preamble (71 FR 48715), se ctions 110(a)(2)(A) and (C) of the Act require that a prec onstruction permitting program provide for the enforcement of m easures that include “enforceable emission limitations and other control measures, means, or techniques * * * as well as sch edules and timetables for compliance.” Section 110(a)(2)(F) a dditionally requires that a permitting program may require the “installation, maintenance, and replacement of equi pment, and the implementation of other necessary steps by owne rs andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 78 of 326 operators of stationary sources to monitor emission s from such sources,” as well as “periodic reports on the natur e and amounts of emissions and emission-related data from such so urces.” Monitoring requirements . As proposed, the permit must include monitoring requirements sufficient to assur e compliance with any emissions limitations contained in the per mit. Monitoring approaches may include CEMS, predictive emissions monitoring systems (PEMS), continuous parameter mon itoring systems (CPMS), periodic manual logging of monitor readings, equipment inspections, mass balances, periodic perf ormance tests, and/or emission factors, as appropriate for your minor source based on the types of emissions units, magni tude of emissions, and air quality considerations. Such mo nitoring shall assure use of terms, test methods, units, and averaging periods consistent with the control technology and emission limitations required for your source. Recordkeeping requirements . As proposed, the permit must include recordkeeping requirements sufficient to as sure compliance with the enforceable emission limitation s in your permit. Records of required monitoring information must include all calculations using emissions factors, all stack tests or sampling information including date and time of tes t or sampling, the name of the company or entity that pe rformed theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 79 of 326 analyses, the analytical techniques or methods used , the results of such analyses and the operating conditions exist ing at the time of sampling or measurement. All such records including support information must be retained for 5 years fr om the date of the record. Support information may include all calibration and maintenance records and all original strip-char t recordings or electronic records for continuous monitoring ins trumentation. Reporting requirements . As proposed, you must provide annual monitoring reports showing whether you have complied with your permit emission limitations. You also must pr ovide prompt reports of deviations from permit requirements, inc luding those attributable to upset conditions as defined in the permit, the probable cause of such deviations, and any correcti ve actions or preventive measures taken. Within a permit, the re viewing authority must define “prompt” in relation to the d egree and type of deviation likely to occur. We did not receive any comments regarding the monit oring and recordkeeping requirements, but several comment ers commented on the reporting requirements. Some of these comme nters specifically asserted that requiring annual monitor ing reports for minor sources is overly burdensome, while anoth er commenter would like us to require monitoring reports to be s ubmitted at least annually, to give the reviewing authority fle xibility toDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 80 of 326 require semiannual monitoring reports and in accord ance with the title V reporting schedule. Other commenters recom mended that for reporting deviations the word “prompt” should b e defined within the regulation. We disagree with those commenters that state that t he reporting requirements are too burdensome because, as stated previously and in the proposal, sections 110(a)(2)( A) and 110(a)(2)(C) of the Act require that a preconstruct ion permitting program provide for the enforcement of m easures that include “enforceable emission limitations and other control measures, means, or techniques * * * as well as sch edules and time-tables for compliance.” In addition, section 110(a)(2)(F) requires that a permitting program may require “the installation, maintenance, and replacement of equip ment, and the implementation of other necessary steps by owners a nd operators of stationary sources to monitor emissions from suc h sources,” as well as periodic reports on the nature and amoun ts of emissions and emissions-related data from such sour ces. Therefore, we believe that annual reporting requir ements will ensure that sources are complying with their a nnual emissions limits as well as any other limits determ ined by the reviewing authority. However, we do not believe that requiring monitorin gDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 81 of 326 reports more frequently than annually, as one comme nter suggested, would be appropriate for minor sources. Minor sources are typically much smaller than the title V sources the commenter is referring to and therefore requiring m onitoring reports more frequently than annually might be over ly burdensome for these sources. However, we encourage reviewing authorities to develop annual monitoring schedules in accordanc e with title V permit monitoring schedules if that facilitates t he reporting of emissions to the reviewing authority. We also disagree with the commenters that would li ke us to define the word “prompt” for the reporting of devia tions. We continue to believe that deferring the definition o f this term to the reviewing authority is more appropriate to e nsure that the respective permits are protective of the NAAQS while also ensuring that the particular needs of the area wher e the source is being permitted are considered. For example, if a source is locating in a particular area of Indian country, th e reviewing authority might consider the provisions of the stat e and/or the air quality control districts surrounding the area of Indian country where the source is locating as well as tec hnical and economical feasibility to define this term. Therefore, we are finalizing the monitoring, record keeping and reporting requirements as proposed and these re quirementsDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 82 of 326 will be included in each permit as necessary to ass ure compliance with the source’s emission limitations. The monitoring requirements are being finalized in 40 C FR 49.155(a)(3), the recordkeeping requirements under 49.155(a)(4), and the reporting requirements under 40 CFR 49.155( a)(5).

c. Other Permit Content Requirements As we stated previously, we proposed other permit requirements. However, we did not receive comments about these requirements except for the inspection and entry pr ovisions requiring that you allow representatives of the rev iewing authority to enter and inspect your source. Specif ically, we proposed under 40 CFR 49.155(a)(7)(vii) that upon p resentation of proper credentials, you, as the permittee, must allow a representative of the reviewing authority to:

• Enter upon your premises where a source is located or emissions-related activity is conducted, or where records are required to be kept under the condition s of the permit;

• Have access to and copy, at reasonable times, any records that are required to be kept under the conditions of the permit;

• Inspect, during normal business hours or while the source is in operation, any facilities, equipmentDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 83 of 326 (including monitoring and air pollution control equipment), practices, or operations regulated or required under the permit;

• Sample or monitor, at reasonable times, substances or parameters for the purpose of assuring compliance w ith the permit or other applicable requirements; and

• Record any inspection by use of written, electronic , magnetic and photographic media. Nevertheless, a few commenters wanted us to add a p rovision under to 40 CFR 49.155(a)(7)(vii) to clarify that t he reviewing authority “must comply with the safety requirements of the permittee” as the reviewing authority representativ e enters the source premises for any inspection. We believe tha t this language is appropriate for the inspection provisio ns we are finalizing with this rule and therefore we are incl uding inspection and entry provisions that require the re presentative of the reviewing authority to comply with the safet y requirements of the permittee. See final 40 CFR 49.155(a)(7)(vii). 4. What are the permit issuance procedures, permit ter m, and public participation requirements?

a. Permit Issuance Process We proposed that within 45 days after receiving you r permitDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 84 of 326 application, your reviewing authority must either d etermine that the permit application is complete enough to commen ce a technical review or request additional information. If you do not receive a request for additional information or a notice of complete application within 50 days of your permitt ing authority’s receipt of your application, your appli cation would be deemed complete. Once the application is comple te, your reviewing authority develops a draft permit and pro vides a public notice seeking comments on the draft permit for a 30-day period. After considering all timely, relevant com ments, if your reviewing authority determines that your new s ource or modification meets all applicable requirements, it will issue you a final permit. Otherwise, the reviewing autho rity will send you a letter denying your permit application w ith reasons for the denial. We received several comments regarding this issue. These commenters believed that the proposed permit issuan ce process is too lengthy and/or too uncertain for minor sources since they argue that state minor NSR programs are bound by sh orter and more definite time lines. In addition, a few comme nters believed that the proposed language could allow a p ermit application to be held without a final decision for an unreasonable period, resulting in serious financial burden, lostDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 85 of 326 business opportunities, a delay in the project, and even cancellation of the project. Based on the comments received, we believe that fin alizing a definite timeframe for the overall minor source p ermit issuance process will be appropriate. This timefra me will provide regulatory certainty for the regulated comm unity and the public, as well as time for the regulated community and the reviewing authority to plan for the permit issuance process. Therefore, we have finalized a permit issuance proc ess timeframe that varies depending on the type of source being r egulated under the minor NSR program and that is described a s follows:

• For minor sources seeking a site-specific permit, t he permit issuance process timeframe includes a period of 45 days for the application completeness review as wel l as a 30-day public comment period. Any site-specific pe rmit will be granted or denied no later than 135 days af ter the date the application is deemed complete and all add itional information necessary to make an informed decision has been provided.

• For minor modifications at major sources seeking coverage under a site-specific permit, the permit i ssuance process timeframe includes a period of 60 days for the application completeness review as well as a 30-day publicDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 86 of 326 comment period. Any site-specific permit will be g ranted or denied no later than 1 year after the date the application is deemed complete and all additional information necessary to make an informed decision has been provided.

• For minor sources seeking coverage under a general permit (discussed in section IV.C of this preamble) , the permit issuance process timeframe includes a period of 45 days for the application completeness review as wel l as a 30-day public comment period. Any general permit w ill be granted or denied no later than 90 days after the d ate the application is deemed complete and all additional information necessary to make an informed decision has been provided. We believe that since the general permit requirements have been public noticed previously, a shorter permit issuance process is warranted.

• For synthetic minor sources (discussed in section I V.D of this preamble), the completeness review period w ill continue to be, as proposed, 60 days long. For any such sources, a permit will be granted or denied no late r than 1 year after the date the application is deemed compl ete and all additional information necessary to make an inf ormed decision has been provided as well.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 87 of 326 In addition, we would like to clarify that we are amending our completeness review procedures, as suggested by some commenters, and we will no longer require that if t he source has not received a notice of completeness or a request for additional information in 50 days, that the applica tion would be deemed complete. We agree that this provision can be confusing. Therefore, we have amended our regulatory language to state that the completeness determination or request for addit ional information for site-specific and general permits s hould be postmarked within 45 days of receipt of the permit application by the reviewing authority (or 60 days for syntheti c minor source permits and minor modifications at major sou rces). If you do not receive a request for additional informa tion or a notice of complete application postmarked within 45 days of receipt of the permit application by the reviewing authority for a site-specific or general permit (or 60 days for s ynthetic minor source permits and minor modifications at maj or sources), your application would be deemed complete. b. Permit Term We proposed that a preconstruction permit does not expire. Your permit remains valid as long as you commence c onstruction on your project within 18 months after the effectiv e date of the permit, you do not discontinue construction for a p eriod of 18Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 88 of 326 months or more, and you complete construction in a reasonable time. We also proposed that your reviewing authori ty may extend the 18-month period where justified and that the 18 -month limit does not apply to the time period between construct ion of approved phases of a phased construction program. In those cases, you must commence construction of each such phase within 18 months of the approved commencement date for tha t phase. We received only one comment about the permit term provisions. This commenter had concerns about the proposal preamble language that stated that: “a preconstruct ion permit does not expire.” This commenter stated that it ma y be appropriate to specify that the permit does expire after a specified period, subject to renewal for a specifie d period upon showing of diligence by the source. If a preconstr uction permit does not expire, the commenter argues that the perm it term provisions may be administratively impractical to i mplement. Upon further review of these provisions, we have no ticed that the language we used in the proposal preamble was not consistent with the provisions we proposed under 40 CFR 49.155(b). Under 40 CFR 49.155(b), we proposed pro visions for when permits become invalid and did not state that “a preconstruction permit does not expire.” Therefore , we have eliminated the proposal preamble language that stat ed thatDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 89 of 326 permits do not expire and we are finalizing the pro posed provisions as stated under 40 CFR 49.155(b). In addition, we would like to clarify that permits under this program would not be revoked at the source’s r equest when there is a rapid decrease in production, as a few c ommenters recommended. In such a case, the limits of these p ermits might be revised appropriately to account for the reducti on, but the permit would not be revoked. Permits will be revok ed only if the source officially shuts down its operation and notifies the reviewing authority about the business closure.

c. Public Participation Requirements Under 40 CFR 49.157 we specifically proposed our pu blic participation requirements. We proposed that the r eviewing authority is required to prepare a draft permit and provide adequate public notice to ensure that the affected community and the general public have reasonable access to the ap plication and draft permit information. The reviewing authority must make such information available for public inspection at the appropriate EPA Regional Office and in at least one location in the area affected by the source, such as the tribal environmental office or a local library. The publi c notice must provide an opportunity for public comment and a pub lic hearing on the draft permit. The appropriate types of noti ce may varyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 90 of 326 depending on the proposed project and the area of I ndian country that would be affected. We also proposed that in all cases, the reviewing a uthority must mail a copy of the notice to you (the permit a pplicant); the appropriate Indian governing body; and the trib al, state, and local air pollution authorities having jurisdic tion in areas outside of the area of Indian country where the sou rce is located. In addition, the proposed rule listed opt ional approaches that the reviewing authority may elect t o use to provide public notice as appropriate for a given si tuation, depending on such factors as the nature and size of your source, local air quality considerations, and the character istics of the population in the affected area. The optional meth ods of notifying the public included the following:

• Mailing or e-mailing a copy of the notice to person s on a mailing list developed by the reviewing author ity consisting of those persons who have requested to b e placed on such a mailing list.

• Posting the notice on its Web site.

• Publishing the notice in a newspaper of general circulation in the area affected by the source. Wh ere possible, the notice may also be published in a tri bal newspaper or newsletter. We do not believe that su chDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 91 of 326 a notice is appropriate for every minor source perm it application since this would require a heavy resour ce commitment for the reviewing authority, while not necessarily being as effective as some other measur es.

• Providing copies of the public notice for posting a t locations in the area affected by your source. We expect that such locations might include post offic es, libraries, tribal environmental offices, community centers, and other gathering places in the communit y.

• Other appropriate means of notification. Furthermore, we proposed that the reviewing authori ty must provide for a 30-day public comment period on the d raft permit. After considering all relevant public comments, the reviewing authority will make a final decision to issue or de ny your permit. The public (including you, the permit appl icant) will have an opportunity to appeal the final decision un der 40 CFR 49.159. Final permit issuance and the opportunity for appeal are discussed further in the next section of this p reamble. Several commenters supported the proposed public participation requirements stating that they like t he proposed mix of mandatory and optional approaches to notices , while others suggested that the overall permitting proces s should be shortened.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 92 of 326 On the other hand, other commenters argued that the proposed public participation requirements are too burdensome, time consuming, and will be open to abuse by person s who oppose any sort of development including development from very small projects. Therefore, some of these opposing commen ters suggested adding a de minimis threshold below which sources would be exempt from the public notice and particip ation requirements in order to match the level of public participation to the environmental significance of the project. In addition, one commenter believed that we should strengthen th e proposed public participation requirements by requiring noti ces to be sent by mail or email to all persons requesting suc h notice, by requiring notices to be published in a tribal newsp aper or newsletter and by requiring other means of publicat ion customary to the tribe, where possible. They also wanted us to hold a public hearing whenever one is requested. After careful consideration of these comments, we a re finalizing our public participation requirements fo r sitespecific permits as proposed with the clarification that the appropriate types of notice will take into consider ation any seasonal activities that may conflict with the publ ic participation of the local community (e.g. , subsistence hunting and fishing or other seasonal cultural practices). We believeDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 93 of 326 these requirements are consistent with the current public availability of information requirements under our existing regulations at 40 CFR 51.161 and they add optional public noticing and participation provisions that will enh ance the permitting process. All the requirements will ensu re that the public is informed about the permitting actions occ urring in Indian country and will also ensure that the partic ular public noticing needs of Indian country are considered. However, we disagree with those commenters that be lieve that these requirements should be strengthened or m atched to the environmental significance of the project. We beli eve that the public has the right to know about any permitting a ctions occurring in their area notwithstanding the environ mental significance of the project and we continue to beli eve that a 30-day public comment period on a permitting action , as in our existing regulations, is an appropriate timeframe f or this purpose. In addition and as we stated previously, we used the existing regulations under 40 CFR 51.161 as the bas is for our public noticing requirements and added additional o ptional provisions to ensure that factors such as the natur e and size of the source, the local air quality, and the characte ristics of the population in the area are considered. Therefo re, we believe that these requirements are more detailed t han theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 94 of 326 requirements in our existing regulations under 40 C FR 51.161 and do not need to be strengthened even further at this time. Nevertheless, to address any concerns about the len gth of the entire permit issuance process, we are finalizing d efinite time periods for the overall permitting process dependin g on source type. See section IV.B.4.a of this preamble for more details about the permit issuance process timeframe. Furthermore, we disagree with the commenter that w ould like us to always hold a public hearing if one is reques ted. Therefore, we believe that the reviewing authority is in the best position to determine whether there is signifi cant interest in a hearing on a case-by-case basis, and to decide whether it is more administrative and economically prudent to ask a small number of commenters to submit their comments in wr iting. We also continue to believe that the reviewing authori ty should be able to hold a public hearing at its own discretion , as proposed. Hence, after consideration of all comments, we are finalizing the public noticing provisions for site- specific permits as proposed at 40 CFR 49.157.
5. What are the provisions for final action on a permi t, permit reopenings, administrative permit revisions, and administrative and judicial review procedures?Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 95 of 326 a. Final Action on a Permit We proposed under 40 CFR 49.159(a) that after a dec ision to issue or deny your permit, the reviewing authority must notify you, the permit applicant, of the decision in writi ng and, if the permit is denied, provide the reasons for the d enial. If the reviewing authority issues a final permit to yo u, the reviewing authority must provide adequate public no tice of the final permit decision to ensure that the affected c ommunity, general public, and any individuals who commented o n the draft permit have reasonable access to the decision and s upporting materials. Depending on the circumstances of your permit, the reviewing authority may elect to provide notice dir ectly to the individuals who commented on the draft permit and/o r use any of the other methods of public notice discussed in the proposal preamble. The reviewing authority’s final decision on your permit must be based on an administrative record, a nd we proposed requirements on what must be in that recor d under 40 CFR 49.159(b) and (c). For example, the records mu st be kept by the reviewing authority for not less than 5 years. In addition, the administrative record must include the applicat ion and any supporting data furnished by the applicant and all comments received during the public comment period, includin g any extension or reopening.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 96 of 326 A few commenters supported the proposed provisions for providing notice of final permit actions. However, these commenters recommended that such notice be provided in the same manner that it was provided during the public comme nt on the draft permit. The commenters believe that numerous inconsistencies will occur if the agency uses subje ctive discretion based upon “depending upon the circumsta nces of your permit.” On the other hand, a few commenters indicated that the proposed notification requirements are excessive. They believed that the proposed requirements are more stringent t han the requirements for major sources under the PSD progra m and/or the part 71 program, which they believed is unwarranted because the impact for minor sources on public health and/or th e environment would be much lower than major sources. Furthermor e, some of these commenters argued that EPA may find the propo sed requirements burdensome and expensive unless the me thod of notice is limited to something such as publication on EPA’s website. Based on the comments received, we agree that, for sitespecific permits and general permits, making a copy of the permit available at all of the locations where the draft permit was made available might be too burdensome for the reviewingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 97 of 326 authorities. Accordingly, we are amending 40 CFR 4 9.159(a) to require a copy of the final letter of approval or d enial to be made available at all of the locations where the dr aft permit was made available for synthetic minor sources and minor modifications at major sources, but we are requirin g the reviewing authority to only elect one or more of th e methods for public noticing under 40 CFR 49.157(b)(1)(ii) for s ite-specific permits and general permits. Regarding the administrative record for a permit de cision, several commenters commented on our proposed provis ions. These commenters agreed with the provision of keeping rec ords for not less than 5 years, while one commenter specifically asked us to require the reviewing authority to retain permit re cords for the life of the source. We believe that keeping permit records for the life of the source will be too burdensome, especially when we d o not require permit records for major sources under the NSR prog ram to be kept for more than 5 years either. Therefore, we a re finalizing these provisions as proposed under 40 CFR 49.159 (b ) and (c). b. Permit Reopenings We proposed provisions under 40 CFR 49.159(e) to a ddress reopening of a permit if it contains a material mis take or fails to assure compliance with the applicable requiremen ts. ForDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 98 of 326 example, we proposed that any person (including the permittee) may petition the reviewing authority to reopen a pe rmit for cause, and the reviewing authority may commence a p ermit reopening on its own initiative. The reviewing aut hority may not reopen a permit for cause unless it contains a material mistake or fails to assure compliance with applicab le requirements. A few commenters addressed this issue. These comm enters argued that the proposal was more stringent than th e reopening provisions in the major source permitting programs, which they contend is unwarranted for minor sources, and that this provision is inconsistent with state minor NSR prog rams. In addition, these commenters believe that allowing an yone – regardless of motive or lack of factual support – t o petition to reopen permits issued to sources of insignificant e missions is a

concern. We agree, as some commenters suggested, that the provisions we proposed might open potential avenues for any pe rson, even if uninformed or maliciously intentioned, to harass an d disrupt permitting operations. In addition, we did not int end to excessively restrict the reasons for why a permit s hould be reopened by us, as the reviewing authority, by stat ing in the proposal that the reviewing authority may not reope n a permitDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 99 of 326 for a cause unless it contains a material mistake o r fails to assure compliance with the applicable requirements. We do agree that the reasons for reopening the permit should no t be limited to the permit containing a material mistake or fail ing to assure compliance with applicable requirements. Therefore , we are amending the provisions we proposed to allow the re viewing authority to reopen a permit for cause, including s ituations such as if it contains a material mistake or if it fails to assure compliance with the applicable requirements. However, except for those permit reopenings that do not incr ease the emissions limitations in the permit, such as permit reopenings that correct typographical, calculation and other e rrors, all other permit reopenings shall be carried out after the opportunity of public notice and comment and in acc ordance with the public participation requirements at 40 CFR 49.157(b)(1)(ii). These provisions are being final ized under 40 CFR 49.159(e).

c. Administrative Permit Revisions Under 40 CFR 49.159(f), we proposed provisions for administrative permit revisions to allow minor chan ges in the permit without being subject to the permit applicat ion, issuance, public participation, or administrative a nd judicial review requirements of the program. For example, a nDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 100 of 326 administrative permit revision is a permit revision that could make a change such as: (1) correcting a typographic al error, (2) requiring more frequent monitoring or reporting by the permittee, or (3) identifying a change in the name, address, or phone number of any person identified in the permit . (See 71 FR 48743 for more information on the proposed list of administrative permit revisions.) In addition, pro posed physical or operational changes that could not be i mplemented within the requirements of an existing permit would necessitate a permit revision, even if they are not otherwise s ubject to major or minor NSR. We believe that this fact will serve to ensure that the types of changes that could signifi cantly alter the dispersion characteristics of air pollutants em itted by your source will be brought to the attention of your rev iewing authority. Thus, the reviewing authority will be i n the position to evaluate whether the change has the pot ential to increase ambient concentrations outside the boundar ies of your source, and if so, the reviewing authority can requ ire measures to mitigate any unacceptable air quality impacts (i .e. , to protect the NAAQS) as part of the permit review pro cess. A few commenters supported our proposed administra tive permit revision provisions. They believed these pr ovisions will allow a source to make minor changes without being subject toDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 101 of 326 the overall permit process. However, one commenter opposed the proposed administrative permit revision provisions. Specifically, the commenter opposed the provision t o allow increases in allowable emission limits through an a dministrative permit revision because, according to the commenter , increases in allowable emission rates must be subject to NSR permitting, review of impacts on air quality, and public notice and review. We agree with those commenters that support the administrative permit revision provisions for the s ituations outlined in the proposal and hence we are finalizin g these provisions as proposed at 40 CFR 49.159(f). We bel ieve that permit changes involving typographical errors, more frequent monitoring and reporting requirements and/or change s in ownership should not go through the overall permitt ing process. We understand, however, that there might be particu lar concerns with the provision at 40 CFR 49.159(f)(v) where an administrative permit revision is allowed for an in crease in an emissions unit’s annual allowable emissions limit f or a regulated NSR pollutant, when the action that neces sitates such increase is not otherwise subject to review under m ajor NSR or under this program. For example, this case could b e one where a source introduces a new coating to a process line t hat will increase the emissions of that unit but the emissio ns increasesDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 102 of 326 from the source will not trigger the minor NSR requ irements. We believe that since this type of change does not trigger the major or the minor NSR thresholds we do not nee d to subject the source owner to the normal public notice and co mment process, but we do believe that we need to account for these changes in emissions in the permit to know the sour ce’s current allowable emissions and to ensure that the source i s complying with the applicable requirements. In other words, an administrative permit revision can be used when the increase in an unit’s annual allowable emissions limit for a re gulated NSR pollutant is not subject to major or minor NSR and the increase in emissions is not part of an enforceable permit c ondition. If the limit is enforceable as a practical matter, the se permit revisions shall be carried out in accordance to the public participation requirements of 40 CFR 49.157. d. Administrative and Judicial Review Procedures We proposed and took comment on two options for rev iewing final permit decisions by reviewing authorities und er 40 CFR 49.159(d). In proposed Option 1, review of minor N SR permits would be similar to review of major PSD permits iss ued under 40 CFR 52.21. To challenge the terms of your permit, you or another party would have to file a petition for rev iew with EPA’s Environmental Appeals Board (EAB). Decisions by the EABDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 103 of 326 could be appealed to the Federal Court of Appeals f or the tribal area. Alternatively, in proposed Option 2, the rev iewing authority’s initial permit could be appealed direct ly to the appropriate Federal Court of Appeals without a requ irement to appeal to the EAB first. Several commenters supported Option 1, filing a pet ition for review with our Environmental Appeals Board. T hese commenters generally preferred this option because they believe that the EAB has greater environmental expertise an d is likely to resolve issues more quickly. These commenters a lso argue that citizen appeals to the EAB represent an easier threshold to meet for the layperson that is aggrieved by a final agency action. They believe it is easier for most citizen s to write a letter to the EAB requesting an appeal than it is t o hire an attorney to sue a governmental agency. Supporting commenters also argued that it makes mor e sense to delay the effective date of the permit while the issues are being resolved (rather than allowing the source to begin construction), while some of these supporting comme nters would like us to allow the permit to become effective imm ediately upon issuance unless a later date is specified. These l atter commenters believe this option will allow for devel opment in tribal lands while encouraging participation from e nvironmentalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 104 of 326 experts should an appeal occur. Other commenters opposed Option 1. These commenter s stated that delaying final permit effectiveness for 30 day s after issuance will compound an already lengthy permittin g process. They also argue that these provisions are not consi stent with the process that most states follow with their mino r NSR programs and that these provisions are ripe for abu se and would encourage challenges from anti-development stakehol ders. On the other hand, several commenters specifically endorsed Option 2, permit decisions may be appealed directly to the appropriate Federal Court of Appeals without a requ irement to appeal to the EAB first. These commenters favor th is option because it allows the source to determine whether t o commence construction at its own risk. Some of these commen ters also noted that this option is more consistent with most state minor NSR programs and it eliminates an intermediate step , the EAB review. These commenters also argue that Option 2 is more appropriate due to the size and amount of emissions from minor NSR sources and it expedites the permitting process . Another commenter added that for Tribes that have, or will be seeking, delegation of the NSR program, the rule should allo w for tribal administrative and tribal court review prior to goi ng to federal

court.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 105 of 326 Based on the comments received, we agree with thos e commenters that support the option of filing a peti tion for permit review through the Environmental Appeals Boa rd. We believe, as some commenters stated, that the EAB ha s greater environmental expertise, is likely to solve issues more quickly, and it will be easier for the public to file a peti tion through the EAB than to hire an attorney to go through the appeals

process. However, we are not allowing permits to become eff ective immediately upon issuance under the EAB option, as some commenters suggested, because the proposed provisio ns are based upon the EAB regulations under 40 CFR 124.15 and we did not propose to allow a different approach under this ru le. The EAB regulations clearly state, under 40 CFR section 124 .15(b), that a final permit decision shall become effective 30 d ays after the service of notice of the decision unless: (1) a lat er effective date is specified in the decision; (2) a review is requested on the permit under 40 CFR 124.19 or (3) no comments r equested a change in the draft permit, in which case the permi t shall become effective immediately upon issuance. In oth er words, EPA regulations specify that the only permits that beco me effective upon issuance are those for which no comments were submitted. Furthermore, we do not believe we can allow sources to constructDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 106 of 326 while the EAB process is pending, because while a p ermit is being reviewed by the EAB, it is not effective, and thus it does not authorize construction. Regarding the commenter that stated that delegated programs should allow for tribal administrative and tribal c ourt review prior to going to federal court, we disagree. This is because under a delegated federal program, any federal requ irement administered by a delegated tribe is subject to EPA enforcement and EPA appeal procedures under federal law. There fore, we are finalizing the administrative and judicial review p rocedures for Option 1 as proposed at 40 CFR 49.159(d).

C. General Permits 1. What Is a “General Permit?” We proposed that a “general permit” is a preconstru ction permit that may be applied to a number of similar e missions units or stationary sources. The purpose of a gene ral permit is to simplify the permit application and issuance pro cess for similar facilities so that a reviewing authority’s limited resources need not be expended for site-specific pe rmit development for such facilities. A general permit may be written to address a single emissions unit, a group of the same type of emissions units, or an entire minor source. We believe that general permits offer a cost-effective means o f issuingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 107 of 326 permits and provide a quicker and simpler alternati ve mechanism for permitting minor sources than the site-specific permitting process discussed previously. We received strong support for the development of g eneral permits. These commenters believe the development of general permits for sources of similar operation and emissi ons will simplify the permit application and issuance proces s. On the other hand, one commenter urged EPA to issue guidan ce for particular source categories rather than use genera l permits to streamline permitting. The commenter believes that developing guidance documents is a better method. We agree with those commenters that support the dev elopment of general permits because we believe, as some comm enters suggested, that general permits will simplify the p ermit application and issuance process, avoid the need fo r case-bycase control technology review for those source cat egories/units for which the general permit was established, and r educe the administrative burden of the reviewing authorities. However, we disagree with the commenter that preferred guidance rather than general permits for the minor NSR program in Indian country. We understand that general permits are not appropriate in all circumstances, but we believe it is appropriate to develop general permits for certain source categories/units , especiallyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 108 of 326 for those source categories/units for which the con trol technology or technologies available are fairly sta ndard. Therefore, we are finalizing the option of developi ng general permits as proposed under 40 CFR 49.156. 2. What is the process for issuing general permits? Under 40 CFR 49.156(b), we proposed that the review ing authority may issue a general permit for a category of emissions units or sources that are similar in nature, have s ubstantially similar emissions, and would be subject to the same or substantially similar requirements governing operat ions, emissions, monitoring, reporting, and recordkeeping . “Similar in nature” refers to size, processes, and operating conditions. We also proposed that a general permit must be issu ed according to the requirements for public participat ion in 40 CFR 49.157 and the requirements for final permit issuan ce and administrative and judicial review in 40 CFR 49.159 . Issuance of a general permit, as proposed, is considered fin al permit action with respect to all aspects of the general p ermit except its applicability to an individual source. The sol e issue that may be appealed after an individual source is appro ved to construct under a general permit is the applicabili ty of the general permit to a particular source. We did not receive comments regarding the proposed generalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 109 of 326 permit issuance procedures under 49.156(b). Conseq uently, we are finalizing the provision under 49.156(b) as pro posed. 3. For what categories will general permits be issued? We proposed, under 40 CFR 49.156(c), that the revie wing authority will determine which categories of indivi dual emissions units, groups of similar emissions units, or sources are appropriate for general permits in its area. We also proposed that general permits may be issued to cover any category of numerous similar sources, pro vided that such sources meet the appropriate criteria. For ex ample, permits can be issued to cover small businesses suc h as gas stations or dry cleaners. General permits may also , in some circumstances, be issued to cover discrete emission s units, such as individual solvent cleaning machines at industri al complexes. In addition, in setting criteria for sources to be covered by general permits, we proposed that your reviewing authority will consider the following factors. First, catego ries of sources or emissions units covered by a general per mit should be generally homogeneous in terms of operations, proce sses, and emissions. All sources or emissions units in the c ategory should have essentially similar operations or proce sses and emit pollutants with similar characteristics. Second, t he sources or emissions units should be expected to warrant the s ame orDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 110 of 326 substantially similar permit requirements governing operation, emissions, monitoring, recordkeeping, and reporting

. A few commenters specifically requested establishin g general permits for the oil and gas sector. Other commenters were more general in their general permits recommen dations and stated that general permits should be adopted for c ategories of similar sources and emissions units, and developed before the minor NSR program is adopted on Indian lands. Thes e commenters also added that EPA needs to define further the cri teria for developing general permits and the categories of em issions sources to which the program may apply. For exampl e, some of these commenters would like us to develop general p ermits that are consistent across all of Indian country. Based on the comments received, we are in the proce ss of developing general permits for various source categ ories under the factors mentioned. The permits will be consist ent across all of Indian country, as some commenters suggested , unless there is a need to develop specific provisions, or a specific general permit, for a particular jurisdiction in In dian country. We also plan to finalize these general permits, aft er the opportunity for public notice and comment, using th e public noticing procedures under 40 CFR 49.157. Furthermo re, we plan to update general permits, also after the opportuni ty of noticeDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 111 of 326 and comment under 40 CFR 49.157, as appropriate to account for advances in control technology or for other pertine nt reasons. However, when we update a general permit, sources o perating under the existing general permit will be able to c ontinue to operate under that existing permit until such time when the source is modified. We are finalizing these provis ions under 40 CFR 49.156(b)(2) and 49.156(c). 4. What are the permit content requirements for genera l permits? We proposed that general permits must contain the s ame permit elements required for permits issued under t he sitespecific preconstruction review rules. These permi t elements are described in section IV.B of this preamble and listed in final 40 CFR 49.155(a). In addition, the general permit must identify the s pecific category of emissions units or sources to which the general permit applies, including any criteria that your em issions unit must meet to be eligible for coverage under the gen eral permit. The general permit must also include information re quired to apply for coverage under the general permit, such a s the name and address of your reviewing authority, how to obt ain application forms, and the information you must pro vide to demonstrate that you are eligible for coverage. Fi nally, theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 112 of 326 reviewing authority may include other general permi t terms and conditions as it deems necessary. We did not receive any comments on the permit conte nt requirements for general permits. Therefore, we ar e finalizing the general permit content requirements as proposed under 49.156(d). 5. What is the process that you may use for obtaining coverage under a general permit? Under 40 CFR 49.156(e), we proposed that once a gen eral permit has been issued for a source category or cat egory of emissions units, you may submit an application to b e covered under the general permit if your proposed new minor source or modification qualifies for coverage under that gene ral permit. Your reviewing authority may grant or deny your req uest to construct under a general permit as expeditiously a s possible, but it must notify you of this decision within 90 d ays. We also proposed that without repeating the public participation procedures required in 40 CFR 49.157, the reviewing authority may grant or deny your request for approval to construct under a general permit. The reviewing authority must send you a letter approving or disapproving th e request to construct under a general permit. This letter is a final permit action for purposes of judicial review (see 40 CFR 49.159) onlyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 113 of 326 for the issue of whether your source qualifies for the general permit. You must post a prominent notice at your s ource of the letter of approval to construct under the general p ermit. In addition, we proposed that if the reviewing auth ority has sent a letter approving the general permit for your source, you must comply with all conditions and terms of th e general permit. You will be subject to enforcement action for failure to obtain a preconstruction permit if you construct the emission unit(s) or source with general permit approval and your source is later determined not to qualify for the conditio ns and terms of the general permit. Any source covered under a letter approving the general permit may request to be excl uded from the general permit by applying for a permit under 40 CF R 49.154. We received a few comments regarding the timeframe in which the reviewing authority must notify you of the fina l decision on a general permit application. These commenters arg ued that the 90-day period for the reviewing authority to approv e the general permit should be eliminated, or at least reduced to 30 days. Furthermore, one of these commenters added that pro jects should be automatically approved if the reviewing authorit y has not responded to the applicant within 30 days. We disagree with those commenters that would like u s to make final decisions on general permit applications in less thanDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 114 of 326 90 days. In addition, upon further evaluation of t hese provisions, we believe that it will also be appropr iate to allow for a 30-day public comment period when you apply f or coverage under a general permit to ensure that the affected community is aware of sources locating in their area. Therefore , to ensure that your permit applications for general permits a re subject to a comprehensive review including a 30-day public co mment period, we have amended the length of the permitting proces s to a total of 135 days. In other words, any general permit ap plication will be granted or denied no later than 90 days aft er the date the application is deemed complete (a 45 day period ) and all additional information necessary to make an informe d decision has been provided 19 . The completeness review period will be 45 days long and the completeness determination or req uest for additional information should be postmarked within 45 days of receipt of the permit application by the reviewing authority. If you do not receive a request for additional info rmation or a notice of complete application postmarked within 45 days of receipt of the general permit application by the re viewing

19 While we are providing up to 135 days to enable th e issuance of general permits, we encourage the revie wing authorities to expedite the issuance of these permi ts.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 115 of 326 authority, your application would be deemed complet e. This permit issuance process timeframe is less than the site-specific permits timeframe since the minor NSR program requi rements, including control technology, if any, have already been established during the development of the general p ermit. Furthermore, we would like to clarify that the publ ic noticing requirements under 49.157 will continue to apply for the development and issuance of a general permit, b ut not for a minor source applying for coverage under a general permit. We received a few comments about the public notice req uirements and these commenters indicated that the final permit ac tion notification requirements for both site-specific pe rmit and general permits are excessive. These commenters be lieve that the proposed requirements are more stringent than t he requirements for major sources under the PSD progra m and/or the part 71 program, which they believe is unwarranted because the impact for minor sources on public health and/or th e environment would be much lower than major sources. Furthermor e, some of these commenters argued that EPA may find the propo sed requirements burdensome and expensive unless the me thod of notice is limited to something such as publication on EPA’s Web site. We agree that public noticing the coverage of an in dividualDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 116 of 326 source under a general permit in the same way as we public notice the development of the general permit will b e excessive. The provisions in the general permit have already b een open for public notice and comment during the development of that general permit and one of the main purposes of the developm ent of general permits is to streamline the permitting pro cess. However, we continue to believe that providing publ ic noticing when a source applies for coverage under a general permit is important as well as when the final action on the g eneral permit is made. Consequently, we are finalizing provision s that will require the reviewing authority to elect one or mor e of the methods for public noticing under 40 CFR 49.157(b)( 1)(ii) for these purposes. Regarding the requirement to post prominent notice of the general permit letter of intent, two commenters bel ieve this requirement should be removed. One of these commen ters added that we should allow the general permit and letter to be maintained at the operator’s closest office to the emission source since specifically many oil and gas sites ar e unmanned. Another commenter believes that requiring an applic ant to post information at the source about the fact that now a general permit will be applied to this source is duplicativ e of the public review and comment period and thus unnecessa ry.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 117 of 326 We continue to believe that, whenever possible, pos ting a copy of the general permit and its approval letter at the source is appropriate. This will facilitate the inspectio n process by the reviewing authority, since a copy of the genera l permit and approval letter will be readily available. The ori ginal copy of the general permit and its approval letter can be k ept in a safe place. Therefore, we are finalizing the general pe rmit issuance procedures under 40 CFR 49.156(e) mainly as propose d. In addition, in the final rule we are including provis ions for addressing when a general permit becomes invalid th at mirror the corresponding site-specific permit provisions.

D. Synthetic minor source permits Some sources have the potential to emit one or more pollutants in major source amounts, but have actual emissions that are below the major source thresholds. These sources are called “synthetic minor sources” and we proposed un der 40 CFR 49.158 that a “synthetic minor source” means a sour ce that otherwise has the potential to emit regulated NSR p ollutants in amounts that are at or above those for major source s in 40 CFR 49.167 or 40 CFR 52.21, as applicable, but has take n a restriction so that its potential to emit is less t han such amounts for major sources. Such restrictions must be enforceable as a practical matter and the term “syn thetic minorDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 118 of 326 source” applies independently for each regulated NS R pollutant that the source has the potential to emit. Furthermore, we proposed that the designation of sy nthetic minor source is allowed for both regulated NSR poll utants and HAPs and that although you may choose to obtain suc h emission limitations at your own discretion, once you have a ccepted an enforceable emission limitation, you must comply wi th that limitation. This is necessary to ensure that you a re legally prohibited from operating as a major source. In ad dition, if you apply for a synthetic minor source or synthetic minor HAP source, you must comply with the same public partic ipation requirements and the same procedures for final perm it issuance and administrative and judicial review found at 40 CFR 49.157 and 40 CFR 49.159 respectively. We also explained in our proposal that our 1999 pol icy memo on synthetic minor sources in Indian country curren tly provides guidance on how sources that would otherwise be maj or sources under section 302 or part D of title I of the Act c an become synthetic minor sources if their actual emissions r emain below 50 percent of the relevant major source PTE thresho ld and theyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 119 of 326 comply with all other requirements of the policy me mo. 20 However, as the memo specifies, this PTE transition policy terminates when we adopt and implement a mechanism that you can use to limit your potential to emit, or we explicit ly approve a tribe's program providing such a mechanism. Additi onally, we proposed that for your existing synthetic minor sou rces under the current policy, you will have 1 year from the e ffective date of the final rules to apply for a permit under the proposed minor NSR program. Several commenters supported the proposal to allow synthetic minor source permits. These commenters n oted that this option has been previously available for sourc es located outside of Indian country. On the other hand, two commenters opposed the proposal to allow for synthetic minor s ource permits since they believe that synthetic minor source perm its are not available outside of Indian country and therefore H AP sources would rush to Indian country to avoid MACT standard s. Another commenter opined that the proposed syntheti c minor rule will hinder some tribes’ ability to develop or maintain their own sustainable title V major source permitti ng programs.

20 John S. Seitz and Eric V. Schaeffer. Policy memo. “Potential to Emit Transition Policy for Part 71 Im plementation in Indian Country.” March 7, 1999.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 120 of 326 This commenter argued that allowing for synthetic m inor source permits in Indian country will decrease the number of major sources under this program thereby reducing the per mitting fees collected and used by tribes to run their title V p ermitting programs. One commenter also added that general pe rmits should be allowed for synthetic minor sources. We agree with those commenters that would like us to allow synthetic minor source permits for both criteria po llutants and HAPs because we believe that allowing synthetic min or source permits could be beneficial to the environment by r educing the amount of pollution that could have been emitted to the air otherwise. In addition, this option has been avail able for sources outside of Indian country for both regulate d NSR pollutants and HAP sources for many years. Thus, w e disagree with the commenter who believes that we will be cre ating pollution havens in Indian country for HAP sources. We do not believe that synthetic minor source perm its will significantly reduce the number of Title V major so urces in Indian country and hence the associated permit fees , since we do not anticipate many sources to change their current status to synthetic minor status once this rule is final. Th e PTE transition policy had already allowed sources in In dian country, until this FIP becomes final, to limit their potent ial to emitDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 121 of 326 to avoid major source status for purposes of the ti tle V program. However, if a tribe is concerned that exi sting title V programs may be unsustainable after a certain numbe r of sources change their existing title V permits to synthetic minor source permits, the tribe will have to consider raising th eir title V fees as necessary to ensure that, as stated in sect ion 502(b)(3) of the Act, the fees collected under the title V pr ogram are “sufficient to cover all reasonable (direct and ind irect) costs required to develop and administer the permit progr am requirements.” We also disagree with the commenter that would lik e us to allow the use of general permits for synthetic mino r sources since these sources are major sources until they ar e approved to construct under a synthetic minor source permit. L arge emissions from these sources warrants a case-by-cas e review of the source and their proposed emission limitations. Therefore, in the final rule, we are not allowing general perm its for synthetic minor sources. In this final rule apart from specifying the circum stances under which a new source may obtain a synthetic min or source permit, we are also clarifying the possible mechani sms under which synthetic minor source permits have been issu ed to date, and the requirements these sources may have to comp ly with afterDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 122 of 326 the effective date of this rule. Consequently, we are finalizing provisions under 40 CFR 49.158 that state that you may obtain a synthetic m inor source permit under this program to establish a synthetic minor source for PSD, nonattainment major NSR, and title V purpo ses and/or a synthetic minor HAP source for MACT standards and t itle V purposes. Any source that becomes a synthetic mino r for NSR and title V purposes but has other applicable requireme nts or becomes a synthetic minor for NSR but is major for title V purposes, must also apply for a part 71 title V per mit. Note that if you propose to construct or modify a synthe tic minor source, you are also subject to the preconstruction permitting requirements in 40 CFR 49.154 and 49.155, except fo r the completeness review and permit issuance timeframe p rovisions. The permit application requirements are specified i n 40 CFR 49.158(a) and the permit completeness review and pe rmit issuance timeframe provisions that apply for sources seeking a synthetic minor permit are specified in 40 CR 49.158(b). Therefore, you, as the permit applicant, will have to submit a perm it application pursuant to the provisions of 40 CFR 49 .158(a) and 40 CFR 49.154 and you will also be subject to the p ermit requirements at 40 CFR 49.155 and 49.158 which incl ude, among other things, case-by-case control technology revie w as well asDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 123 of 326 monitoring, recordkeeping, and reporting requiremen ts. Hence, we are finalizing the synthetic minor source permit application procedures mainly as proposed, with the exception that we are requiring the reviewing authority to no tify you of the permit application completeness determination i n writing and thus eliminating the requirement that you, as the p ermit applicant, should contact the reviewing authority t o find out the date of receipt of the application. The final synthetic minor source permit application requirements state that you must submit a permit application to the reviewing author ity and within 60 days after receipt of an application, the reviewing authority will determine if it contains the informa tion specified in 40 CFR 49.158(a). If the reviewing au thority determines that the application is not complete, it will request additional information from you as necessary to pro cess the application. If the reviewing authority determines that the application is complete, it will notify you in writ ing. The reviewing authority’s completeness determination or request for additional information should be postmarked within 60 days of receipt of the permit application by the reviewing authority. We are also adding a provision, to be consistent wi th the site-specific and general permit provisions, to sta te that if you do not receive a request for additional informa tion or aDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 124 of 326 notice of complete application postmarked within 60 days of receipt of the permit application by the reviewing authority, your application would be deemed complete. The rev iewing authority must provide an opportunity for public pa rticipation and public comment on the draft synthetic minor sou rce permit as set out in 40 CFR 49.157. The final synthetic mino r source permit will be issued and will be subject to admini strative and judicial review as set out in 40 CFR 49.159. The provisions of the final rule address the variou s possible scenarios for synthetic minor source permi ts as follows:

• If you own or operate an existing major source and you wish to obtain a synthetic minor source permit pursuant 40 CFR 49.158 to establish a synthetic min or source and/or a synthetic minor HAP source, you may submit a synthetic minor source permit application on or after the effective date of the final rule, that is, on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] . However, if your permit application for a synthetic minor sourc e and/or synthetic minor HAP source pursuant to the F IPs for reservations in Idaho, Oregon, and Washington h as been determined complete prior to [INSERT DATE 60 DAYSDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 125 of 326 AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] , you do not need to apply for a synthetic minor sour ce permit under this program.

• If you wish to commence construction of a new synthetic minor source and/or a new synthetic minor HAP source, or a modification at an existing synthe tic minor source and/or synthetic minor HAP source, on or after the effective date of the final rule (that is , on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] ), you must obtain a permit pursuant to 40 CFR §49.158 prior to commencing construction.

• If your existing synthetic minor source and/or synthetic minor HAP source was established pursuant to the FIPs applicable to the Indian reservations in Idaho, Oregon, and Washington; or was established under an EPA-approved rule or permit program limiti ng potential to emit, you do not need to take any acti on under this program.

• If your existing synthetic minor source and/or synthetic minor HAP source was established under a permit with enforceable emissions limitations issue d pursuant to the part 71 program, the reviewingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 126 of 326 authority has the discretion to require you to subm it a permit application pursuant to 40 CFR §49.158 for a synthetic minor source permit under this program within 1 year after the effective date of the final rule (that is, by [INSERT DATE 1 YEAR AND 60 DAYS FROM PUBLICATION IN THE FEDERAL REGISTER] ), or to require you to submit a permit application for a synthetic minor source permit under this program (pursuant to 40 CFR §49.158) at the same time that you apply to ren ew your part 71 permit, or to allow you to continue to maintain synthetic minor status through your part 7 1 permit. If the reviewing authority requires you to obtain a synthetic minor source permit and/or a synthetic minor HAP source permit under this progra m (pursuant to 40 CFR §49.158), it also has the discretion to require any additional requirements, including control technology requirements, based on the specific circumstances of the source.

• If your existing synthetic minor source and/or synthetic minor HAP source was established through a mechanism other than those described in preceding paragraphs, including state-issued permits or achieving your existing synthetic minor status byDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 127 of 326 maintaining your actual emissions at less than 50% of the relevant major source threshold, you must submi t an application for a synthetic minor source permit pursuant to 40 CFR §49.158 within 1 year of the effective date of the final rule, that is, by [INSERT DATE 1 YEAR AND 60 DAYS AFTER DATE OF PUBLICATION I N THE FEDERAL REGISTER] . The reviewing authority has the discretion to require any additional requiremen ts, including control technology requirements, based on the specific circumstances of the source. If you submit your application and any requested ad ditional information in the timeframes indicated above, your source will continue to be considered a synthetic minor source or synthetic minor HAP source (as applicable) until your synthet ic minor source permit under this program has been issued. Should you fail to submit your application and any requested a dditional information in the timeframes indicated above, your source will no longer be considered a synthetic minor source or synthetic minor HAP source (as applicable), and will become s ubject to all requirements for major sources.

E. Case-By-Case MACT Determinations under Section 112( g) of the Act We proposed that section 112(g)(2)(B) of the Act pr ovidesDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 128 of 326 that you may not construct or reconstruct a major s ource of HAPs unless you install MACT. If the Administrator has not established a MACT standard for the source category , the Act requires that MACT must be determined on a case-by- case basis. As explained under section 112(g)(2)(B) of the Act, this caseby-case MACT determination is performed by EPA, as the reviewing authority, where there is no delegated program or a n EPAapproved TIP for this kind of determination in Indi an country. The requirement for a case-by-case MACT determinat ion prior to construction or reconstruction of a major source of HAPs is found in our regulations at 40 CFR 63.42(c) and und er that section, we provide a number of review options for these determinations. These options include using a titl e V permit, applying for and obtaining a Notice of MACT Approva l, and “any other administrative procedures for preconstruction review and approval established by the reviewing authority for a state or local jurisdiction which provide for public partici pation...” Currently, no tribes have an EPA-approved title V p ermitting program or the “other administrative procedures” fo r this purpose, although one tribe has been delegated auth ority to assist us with implementation of the federal part 7 1 operating permit program (i.e. , the federal program for issuing title V permits). Furthermore, while we can approve a sect ion 112(g)Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 129 of 326 case-by-case MACT determination through a part 71 p ermit or a Notice of MACT Approval, we believe that if your so urce is a major source only for HAPs and a minor source for r egulated NSR pollutants, the minor NSR program can be used as on e of the “other administrative procedures” for obtaining a c ase-by-case MACT determination. In addition, if your source is or could be minor for regulated NSR pollutants and is or could be major for HAPs, it would also be administratively convenient for you and for us, as the reviewing authority, to combine the construction permit process for both regulated NSR pollutants an d HAPs under the final minor NSR program, rather than to address regulated NSR pollutants under the minor NSR program and also go through the part 71 permit or Notice of MACT Approval proce ss to address HAPs. Note that even with this approach to precons truction review, the source is still a major source for HAP under the MACT program (unless the source becomes a synthetic minor source) and thus you ultimately will have to obtain a part 71 operating permit for your major source of HAPs. Several commenters supported the proposal to provi de for case-by-case MACT determinations in the minor NSR p rogram because they stated this will be consistent with th e practice of most state programs, it would be administratively c onvenient and regulation of HAPs is important to health. On the other hand,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 130 of 326 one commenter argued that if a source is major for HAPs, the source should not apply for a minor source permit b ecause applying for a case-by-case MACT determination unde r the minor NSR program would exempt the source from the MACT p rogram. We agree with those commenters that supported the use of the minor NSR program as one of the mechanisms for obtaining a case-by-case MACT determination. As we stated prev iously, it is administratively convenient for us, as the reviewin g authority, and for you as the source owner to combine the prec onstruction permit review process for both regulated NSR pollut ants and HAPs under this minor NSR program. If not, the minor NS R source that is also major for HAPs would have to apply for a mi nor NSR permit and a separate part 71 permit or Notice of M ACT Approval for its case-by-case MACT determination of its HAP emissions. We want to clarify, however, and as the opposing co mmenter suggested, that using the minor NSR program as the mechanism for a section 112(g) case-by-case MACT determination do es not mean that a major source will escape the major source re quirements under the MACT program. The source still needs to comply with the requirements of 40 CFR 63.43 that apply to all case-by-case MACT determinations. In addition, if the source is a major source for HAPs for the case-by-case MACT determina tion and does not obtain a synthetic minor source permit, the sou rce will haveDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 131 of 326 to obtain a part 71 permit if it actually emits or has the potential to emit 10 tons/year or more of one HAP o r 25 tons/year or more of a combination of HAPs. In addition, we would like to clarify that for case -by-case MACT determinations, we will apply the public notic ing requirements under 40 CFR 49.157 and the administra tive and judicial review procedures under 40 CFR 49.159. Th erefore, as proposed, the final rule allows for review of secti on 112(g) case-by-case MACT determinations through this minor NSR program.
See final 40 CFR 49.153(a)(5) for the provisions relat ed to section 112(g) case-by-case MACT determinations.

F. Treatment of Existing Minor Sources under the Minor NSR Program In the proposal preamble, we raised the question o f whether it may be appropriate to also regulate existing min or sources in Indian country under this minor NSR program to help attain and maintain the NAAQS. At proposal, we discussed four options for the treatment of existing minor sources, as follows :

• Option 1 – No requirements for existing minor sources (until a source wishes to make a modification).

• Option 2 – Require existing synthetic minor sources to become subject to the minor NSR program requirement s (including control technology review and otherDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 132 of 326 requirements as provided in section IV.A.5 through 9 of the proposal preamble) and to submit a permit application within 1 year after the effective date of the program.

• Option 3 - Require all existing minor sources to register within 1 year after the effective date of this program, but not be subject to the permitting requirements.

• Option 4 – Require all existing minor sources to be subject to the minor NSR program requirements (as provided in section IV.A.5 through 9 of the proposa l preamble). Numerous commenters supported Option 1. These com menters believed that this option is consistent with state minor NSR programs, is the least burdensome on existing sourc es, and the EPA and tribes do not have the resources available to implement any of the other options. In addition, these comme nters opined that regulation of existing sources is not needed t o maintain the NAAQS. On the other hand, a few commenters opp osed this option, mainly because they believed it would not a ddress any air quality impacts resulting from existing sources

. Regarding Option 2, a few commenters supported thi s option if it were to be used in combination with other opt ions such asDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 133 of 326 Option 1 or 3. However, two commenters specificall y opposed Option 2 because they believe this option represent s extremely onerous provisions for sources and reviewing author ities. Several commenters supported Option 3 because they believed it would only place a small administrative burden o n existing sources to report their existing emissions while pr oviding tribes with important information about the existin g emissions within their jurisdictions. Nevertheless, one comm enter opposed this option because the commenter believes Option 3 will be unduly burdensome and overbroad and could significa ntly disadvantage minor sources already operating in Ind ian country. A few commenters supported Option 4 by noting that states have generally regulated minor sources and thus tha t experience could aid the implementation of this option. Anoth er commenter added that EPA could meet the requirements under Op tion 4 if we used a “sunset clause.” A “sunset clause” would al low sources some time to come into compliance and thereby avoid undue economic burden all at once. On the other hand, ot her commenters opposed this option because they general ly believe it is extremely onerous for both sources and reviewing authorities. After considering the comments, we have decided to finalize Option 3 for true minor sources. For synthetic mino r sources, we are finalizing provisions as stated in section IV.D of thisDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 134 of 326 proposal preamble, which include provisions that re quire certain sources to obtain permits under this program 1 year after the effective that of this rule. We are not finalizing our preferred option for “tr ue” minor sources, Option 1, because even though we agree tha t this option is consistent with state minor NSR programs and it is the least burdensome option for existing minor sources, we be lieve that collecting source inventory data for minor sources in Indian country is necessary to successfully implement the minor NSR program. In addition, these source inventory data are needed to assess the feasibility of an actual emissions based applicability test and to determine if we need to m odify the minor NSR thresholds at a later time. We are also not finalizing Option 4 at this time because we believe that subjecting all minor sources to the minor NSR progr am is not necessary to achieve the NAAQS as demonstrated by t he existing state minor NSR programs (i.e. , state programs do not require all of their minor sources to be subject to their r espective minor NSR programs in order to achieve the NAAQS in their state) and by the National Emissions Inventory analysis we did to estimate the distribution of sources and emissions that would trigger our proposed minor NSR thresholds (71 FR 48 702). Furthermore, we believe that Option 4 would overwhe lm limitedDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 135 of 326 EPA resources even if we were to use a “sunset clau se.” Thus, under the program we are finalizing, we are c reating a registration program for minor sources in Indian country. Under the minor source registration program, if you own or operate an existing minor source in Indian country (excluding synthetic minor sources), you must register your so urce with the reviewing authority in your area within 18 months a fter the effective date of this program, that is, by [INSERT DATE 20
MONTHS AFTER PUBLICATION OF THE FINAL RULE IN THE F EDERAL REGISTER] . This date has been modified from the 12 months w e proposed to align the registration date for minor s ources with the implementation date for minor sources of this r ule as discussed in section VII.C of this preamble. In ad dition, if construction or modification of your source commenc ed any time on or after [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] and your source is subject to this rule, your permit application information will be used to fulfill the registration requirements described in 40 CFR 49.16 0(c)(2). Additionally, for registration purposes, you must a lso report your source’s actual emissions (if available) as pa rt of your permit application. This registration will be a one-time registration ( not an annual registration) of your source’s estimated act ual andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 136 of 326 allowable emissions as provided in 40 CFR 49.160. For the Indian reservations subject to the registration req uirements under 40 CFR 49.138 (“Rule for the registration of air pollution sources and the reporting of emissions”), the data being collected under that rule will be used to fulfill t he requirements of this national registration program.

V. Final Major NSR Program for Nonattainment Areas in Indian Country In this final action, we are establishing a major N SR program for new major sources and major modificatio ns at existing major sources in nonattainment areas of In dian country at 40 CFR 49.166 through 49.175. This program is d esigned to meet the requirements of part D of title I of the A ct, and, as proposed, sources subject to this program would be required to comply with the requirements of 40 CFR part 51, App endix S (Appendix S). Appendix S is titled “Emission Offset Interpretativ e Ruling” and sets forth preconstruction review requi rements for major sources and modifications locating in nonatta inment areas where the state does not have an EPA-approved nonat tainment major NSR program. In general, Appendix S is a tra nsitional nonattainment major NSR program that covers the per iod after an area has been newly designated as nonattainment, up until theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 137 of 326 state has amended its SIP’s nonattainment major NSR program, as needed, to address the new nonattainment area. The requirements under Appendix S are essentially the same as our re quirements for state nonattainment major NSR programs at 40 CF R 51.165. We are finalizing our proposal to apply Appendix S to nonattainment areas in Indian country for a number of reasons. Primarily, we believe it is appropriate to apply Ap pendix S provisions in Indian country for administrative con venience. Additionally, since Appendix S generally applies in nonattainment areas where there is no approved nona ttainment major NSR program, and since no tribe currently has such a program, we believe that Appendix S should also app ly in Indian country. Another reason for requiring sources subj ect to this program to comply with Appendix S requirements is t hat the EPA Regional Offices (which will be implementing the pr ogram until an EPA-approved implementation plan is in place) an d owners/operators of several major sources in Indian country are familiar with the implementation and provisions of Appendix S. We considered and rejected the option of amending Appendix S to extend its application to Indian country, sinc e we believe that sources in Indian country are more likely to l ook for regulations applicable to them under part 49, which is solely dedicated to regulations that apply in Indian count ry. We alsoDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 138 of 326 considered drafting a parallel major NSR regulation to apply to sources in Indian country, but rejected this option since it would essentially re-propose Appendix S provisions, which have been in effect outside of Indian country for many y ears. We wanted to avoid any potential confusion or possible perception that these parallel regulation requirements would b e different than the Appendix S requirements.

A. What are the requirements for major source permitti ng under Appendix S? Pursuant to paragraph IV of Appendix S, we proposed that a reviewing authority may issue a permit for a new ma jor source or a major modification locating in a nonattainment ar ea, if it complies with the following conditions: 1. The new major source or a major modification meets the LAER for that source using add-on controls or pollution prevention measures. 2. The applicant certifies that all existing major sources owned or operated by the applicant (or any entity controlling, controlled by, or under common control with the applicant) in the same state as th e proposed source are in compliance with (or under a federally-enforceable compliance schedule for) all applicable emission limitations and standards underDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 139 of 326 the Act. 3. Emission reductions (offsets) from existing sources in the area of the proposed source (whether or not und er the same ownership) are obtained such that there wi ll be reasonable progress towards attainment of the applicable NAAQS. 21
4. The emission offsets provide a net air quality bene fit in the affected area. We received only a few comments regarding the use of Appendix S for Indian country. A couple of comment ers did not explicitly support or oppose the use of Appendix S in Indian country, while one commenter suggested that Appendi x S fails to address provisions under the CAA. The commenter po inted out that section 173(a)(5) of the Act provides for perm its in a nonattainment area to be issued if “an analysis of alternative sites, sizes, production processes, and environment al control techniques for such proposed source demonstrates th at benefits

21 In general, only intrapollutant offsets are permit ted (e.g. , NO x for NO x ). As part of the rulemaking to implement the NSR program for PM 2.5 , Appendix S and 40 CFR 51.165 were revised to allow interpollutant trading of emissions of PM 2.5 and its precursors under certain conditions (73 FR 28321, M ay 16, 2008). However, this aspect of the regulations is currentl y under reconsideration by EPA. See letter from Lisa P. Jackson, EPA Administrator, to Paul R. Cort, Earthjustice, April 24, 2009. http://www.epa.gov/nsr/documents/Earthjustice.pdf

.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 140 of 326 of the proposed source significantly outweigh the e nvironmental and social costs imposed as a result of its locatio n, construction, or modification.” The commenter stat ed that this requirement is included in every approved SIP in th e country, but is not present in 40 CFR Part 51, Appendix S. Therefore, by requiring only the provisions of Appendix S, the co mmenter believes that the proposed nonattainment major NSR program fails to satisfy the requirements of the Act. The commen ter suggested that a requirement for an adequate alternate site a ssessment should be added to the proposed regulations as a co mplementary requirement to Appendix S. Upon further review of Appendix S, we agree that t he section 173 alternate site provision is inadvertent ly missing from Appendix S regulations. Therefore, we are ame nding Appendix S to include the section 173 alternatives site provision to ensure that the provisions of the 1990 amendments, including the CAA section 173 alternative sites ana lysis provision, is codified in implementing regulations. See section V.F. of this preamble for more details on the Appen dix S amendments.

B. How is EPA addressing the lack of available offsets in Indian Country? Tribal representatives have repeatedly stated thatDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 141 of 326 requirements for emission offsets are problematic i n Indian country for the following reasons. Many tribes bel ieve that transport is a major cause of pollution in Indian c ountry. Tribes generally do not have many existing sources within their area of Indian country from which offsets can be ob tained. In addition, administrative barriers may hinder tribal access to otherwise available offsets. Therefore, tribal rep resentatives have advocated for additional flexibility to addres s offsets, such as the provision of NSR offset set-asides (whi ch we expect would come from state offset pools or banks). 22 We recognize the unique circumstances that tribes f ace. Unlike states that have a SIP, a huge industrial ba se with several hundred existing sources, and a broad range of measures to attain and maintain NAAQS, a tribe generally has neither a TIP nor many existing sources from which to generat e offsets. Because of these circumstances, we proposed two opt ions to address the lack of availability of offsets for tri bes: (1) the Economic Development Zone (EDZ) option and (2) the Appendix S,

22 Tribal representatives have raised these and other concerns in discussions on implementation of the 8- hour ozone and PM 2.5 standards, and in comments on the 8-hour ozone implementation rule. For example, see the letter from Bill Grantham, National Tribal Environmental Council, to docket EPAHQ-OAR-2003-0076, providing comments on the propose d 8-hour ozone implementation rule (66 FR 32802).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 142 of 326 paragraph VI option. Several commenters gave general support to waiving the requirement for offsets in Indian country, either t hrough support of one or both of the proposed options or t hrough advocating a general waiver on other grounds. For example, some commenters suggested that:

• EPA should allow sources in Indian country to obtai n offsets not just from the Indian area itself, but f rom adjacent or upwind areas. Section 173(c) of the Ac t specifically provides that offsets may be used if t hey are from an area with an equal or higher nonattainm ent classification and if emissions from that area contribute to a violation of the NAAQS in the area needing the offsets.

• EPA should allow tribes to participate in state off set pools. With the approach of opening offset pools t o tribes, those tribes wishing to develop major sourc es in nonattainment areas would still be able to do so , but would be treated like other sources needing to obtain an offset to maintain air quality.

• EPA should implement a set-aside program in which tribes receive a certain amount of offset emissions that would need to be made up by the other sources inDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 143 of 326 the state. The commenter believes that this would be fair because most nonattainment problems in Indian country are caused by sources that are not under tribal control.

• EPA, the states, the tribe, and sources could collaborate to identify acceptable offsets outside of Indian country.

• EPA should launch a concerted effort to improve the availability of offsets in all areas that need them (not just in Indian country) by encouraging the development of protocols to allow the creation of offsets from nontraditional sources, especially mob ile and area/minor sources.

• Tribes should be afforded the opportunity to reques t a permanent offset waiver based on language in the Tribal Authority Rule (TAR). The TAR: “provide[s] an opportunity for Indian Tribes to assume responsibil ity for the development and implementation of CAA progr ams on lands within the exterior boundaries of their reservations or other areas within their jurisdiction.” Thus, the commenter believes that t he waiver will allow the opportunity for tribes to be able to develop and implement the nonattainment maj orDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 144 of 326 NSR program. However, other commenters believe that offsetting of major NSR projects should be a requirement of the nonatta inment major NSR program and no waivers should be given. These commenters opined that offset waivers would: (1) likely be ill egal under the Act, (2) cause air quality concerns, and (3) be unfair for sources located or locating outside of Indian count ry. For example, one of the commenters indicated that there is a significant shortage of offsets in virtually every district in California, while another commenter added that the proposal would create an incentive for industrial sources to find Indian country a kind of refuge from regulatory requiremen ts – resulting in a tilted playing field and exacerbatin g air quality and public health problems on reservations. Other commenters stated that:

• Setting up an offset bank within an area of Indian country would be difficult because no source on tri bal land is currently subject to NSR, and therefore the re are currently no offsets from sources on tribal lan d to be bought or sold. The commenter believes that with no available offsets, when NSR is enacted on tribal lands, the price of the first offsets will b e unaffordable for most if not all sources on tribalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 145 of 326 lands.

• There would be problems in allowing sources on trib al lands access to the State offset banks. The commen ter believes that states will be apprehensive to allow sources on tribal lands access to state-established offset banks because states will not receive the ta x revenue from offsets purchased by sources on tribal lands as they do with sources within the state.

• EPA, state and tribal collaboration should not make it necessary for tribes to go to the states to obtain offsets for economic development on the reservation since it denigrates the government-to-government relations.

• Offsets should not be traded between Indian country and the states due to tribal sovereignty issues and potential for confusion involving monitoring and tracking costs, as well as who receives tax revenue from the offsets. As we stated previously, we recognize the unique circumstances that tribes face as well as the diffi culty in obtaining offsets in certain parts of the country; however, we do not have the legal authority to waive the offset requirement under section 173 of the Act or under the TAR.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 146 of 326 Thus and to address the lack of offsets availabilit y, both inside and outside of Indian country, we encourage states and tribes to work together in the creation and use of offset banks for their lands. We agree that, where appropriate, the tribe can obtain offsets from surrounding areas, but that in many areas it will be difficult politically and practica lly for Tribes to obtain these offsets. Therefore to addre ss this issue, we encourage Tribes to enter into a Memorand um of Understanding (MOU) with its neighboring State to a llow tribal access to offsets in the state offset bank and vice -versa if and when tribes develop their own offset banks. This M OU would contain provisions establishing the criteria for em issions reductions to be used as offsets such as real, quan tifiable, surplus, permanent and enforceable. Furthermore, we are addressing the lack of availab ility of offsets in general. For example, in the final rule titled, “Implementation of the New Source Review (NSR) Prog ram for Particulate Matter Less Than 2.5 Micrometers (PM 2.5 )” (73 FR 28340), we finalized provisions that allow for inte r-pollutant and inter-precursor trading of offsets between dire ct PM2.5 emissions and its precursor emissions. We believe this is a first step in the process of addressing the shortag e of offsets in the nation and we will continue to explore and i mplement, asDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 147 of 326 one commenter suggested, the use of non-traditional sources of offsets such as offsets from mobile sources and are a or minor

sources. Regarding the offset waivers we proposed, we want to clarify that these waivers are currently available under the CAA and implementing regulations for both states and tr ibes. The EDZ option is currently available under section 173 (a)(1)(B) of the Act and the Appendix S paragraph VI option is c urrently available under 40 CFR part 51 Appendix S. Therefo re, we disagree with those commenters that believe that if the proposed offset waivers would only be available for Indian c ountry, then states would be at an economic disadvantage and/or that we would be creating pollution havens in Indian country. Nevertheless, based on the opposing comments we re ceived, including comments from the tribes, regarding the i mplementation issues under the Appendix S Paragraph VI option, we are only allowing the EDZ option that is currently available under the statute for both tribes and States as a potential o ption for offset waiver and not finalizing the Appendix S Par agraph VI option in this final rule. 1. Economic Development Zone Option For this option we rely on section 173(a)(1)(B) of the Act under which the Administrator, in consultation with theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 148 of 326 Secretary of Housing and Urban Development (HUD), m ay identify zones within nonattainment areas as EDZs. To be identified as an EDZ, HUD’s Initiative for Re newal Communities, Urban Empowerment Zones, and Urban Ent erprise Communities generally require that participating co mmunities demonstrate pervasive poverty, high unemployment, a nd general distress throughout the designated area. The Unite d States Department of Agriculture requires similar eligibil ity criteria for participating communities located in rural area s. We believe that many areas of Indian country may meet these criteria and hence could qualify for this offset re lief provision. As we proposed, the Administrator will consult with HUD only once to develop a general set of approval crit eria, such that a consultation with HUD is not required every time a tribe applies for its area of Indian country to be design ated as an EDZ. Also as proposed, EPA intends to provide assi stance as needed for a tribe to complete an EDZ designation r equest. Once the Administrator approves such a request from a tr ibe, a new major source or a major modification locating in th at EDZ would be exempt from the offset provisions. We received a few comments on the use of the EDZ op tion as an offset waiver. Supporting commenters believe th at thisDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 149 of 326 option provides the flexibility for EPA not to requ ire emissions offsets for a project where economic development an d environmental protection are equally important conc erns, while opposing commenters believe that the EDZ option can not lawfully be applied in the present circumstances. According to one commenter, under section 173(a)(1)(B) of the Act, t he affected source must not cause or contribute to emissions le vels “which exceed the allowance permitted for such pollutant f or such area from new or modified stationary sources under secti on 172(c).” The latter section, at section 172(c)(4) of the Act , provides that the implementation plan shall identify and qua ntify the emissions, if any, that will be allowed to be used under section 173(a)(1)(B) (the EDZ section), and shall “ demonstrate to the satisfaction of the Administrator that the e missions quantified for this purpose will be consistent with the achievement of reasonable further progress and will not interfere with attainment of the applicable nationa l ambient air quality standard by the applicable attainment date. ” Thus, the commenter believes that, in the absence of a TIP th at quantifies the allowance and makes the required demonstration, this precondition for offset relief in EDZs would not ge nerally be met within Indian country. Furthermore, another commenter believes that, byDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 150 of 326 definition, the proposed rule does not apply where there is a TIP and thus EPA would need to look at the relevant SIP of the surrounding or adjacent state for the applicable “a llowance of emissions” for EDZ sources. The commenter noted th at in many cases there may be no such allowance, and that even if the relevant State SIP includes an allowance, that allo wance would almost certainly not have been calculated under the assumption that areas in Indian country could access the allow ance. Under these circumstances, the commenter asserted, the af fected state would be entitled under the Act to determine in the first instance what, if any, access to the allowance it w ished to make available to sources in Indian country. The commen ter concluded that as a matter of law the EDZ option is unavailab le unless and until the relevant state creates and makes availabl e an appropriate allowance. Another commenter also noted that as proposed, EPA would consult with the Secretary of Housing and Urban Dev elopment only once to develop a general set of approval criteria for EDZs. The commenter stated that this approach appears to conflict with the language of the Act, which requires consultatio n on each individual zone. After reviewing all the comments received, we belie ve that the EDZ option as established by statute is availab le for offsetDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 151 of 326 relief as long as the area meets the statutory crit eria in order to qualify. In other words, tribes who develop TIP s might request EPA to establish their area as an EDZ so th ey can avail themselves of the offset provision under section 17 3 of the Act. However, we disagree with the commenter who believe s that, by definition, the proposed rule does not apply whe re there is a TIP and thus EPA would need to look at the relevant SIP of the surrounding or adjacent state for the applicable “a llowance of emissions” for EDZ sources. We do not see why the commenter believes that a TIP is not an appropriate mechanism for the EDZ provision under section 173 since the TAR provides that tribes will be treated in the same manner as states for vi rtually all CAA programs and states generally lack jurisdiction under the Act over facilities in Indian country. The ability of an area to qualify would be determ ined on a case-by-case basis, but criteria for including trib es in the EDZs and for consultation with the tribes will need to be developed in advance and in coordination with the S ecretary of Housing and Urban Development. These criteria will ensure that tribal and state input are included and that consid erations are put in place to avoid industries coming into an are a strictly for the offset relief. Therefore, we disagree with the commenter that believes that a general set of appro val criteriaDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 152 of 326 will be in conflict with the language of the Act. 2. Appendix S, Paragraph VI Option Paragraph VI of Appendix S notes that in some cases the dates for attainment of the primary or secondary NA AQS may not have passed. In such cases, Appendix S provides th at a new source locating in a nonattainment area may be exem pt from the requirements of paragraph IV.A of Appendix S (discu ssed in section VI.A of this preamble), including the offse t requirement, if the following conditions are met:

• The new source complies with the applicable implementation plan emission limitations;

• The new source will not interfere with the attainme nt date for a regulated NSR pollutant; and

• We have determined that the preceding two condition s are satisfied and such determination is published i n the Federal Register

. It is important to note that this option only provi des temporary offset relief because it will cease to be available once the attainment date for a pollutant has passed

. We received many comments on the use of Appendix S provisions to provide offset waivers to the tribes. Several commenters support this option because, as one of t hese commenters stated, this option provides equivalent environmentalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 153 of 326 protection. The reviewing agency has to demonstrat e that the proposed source will not interfere with the attainm ent date for the regulated NSR pollutant(s) in the area. However, a number of commenters had misgivings abou t the paragraph VI option, generally based on legal or en vironmental grounds. Two commenters stated that the paragraph VI option is inapplicable and unlawful because: (1) there is no applicable implementation plan in Indian country, so no source can “comply with applicable implementation plan emissions limit ations” (in addition, one of these commenters conceded that if we interpret this to require the source to meet the SIP limits i n the surrounding or adjacent state, this requirement cou ld be met), (2) if there is no applicable implementation plan, it will be impossible to demonstrate that a source will not in terfere with the attainment date for a nonattainment pollutant, (3) the Act requires that for every major source, the source mu st provide sufficient offsetting emissions reductions such tha t there is a reduction in emissions amounting to reasonable furt her progress, when considered together with emissions from other new and existing sources (see section 173(a)1)(A) of the Act), and (4) the 1990 Amendments to the Act set out specific off set ratios which major sources must meet, such as 1.5 to 1 for Extreme Areas, 1.3 to 1 for Severe Areas, etc. (section 182 of the Act).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 154 of 326 These ratios may be met on an aggregate basis (i.e. , individual sources may be exempt from offsets if the state mak es an equivalency demonstration showing that the universe of new sources as a whole meets the applicable ratios). H owever, nothing in paragraph VI requires that equivalency d emonstration to be made. Therefore, the commenter noted that pa ragraph VI on its face violates the 1990 Amendments to the Act. Other commenters stated that the paragraph VI opti on is not acceptable because it would be difficult for some t ribes to meet the criteria. They state that such a waiver does n ot balance legitimate development needs with environmental pro tection or that a major source could not interfere with attain ment. One of these commenters also noted that these waivers woul d expire at attainment dates, and added that these “expiration dates” established by states should not be imposed on trib es. Upon review of comments and further consideration, we are not finalizing the Appendix S provision as proposed , since the provision is only available temporarily and it will be challenging for EPA or the tribe to demonstrate tha t the proposed source will not interfere with the attainm ent date.
C. How do I meet the statewide compliance certificatio n requirement of the Act and Appendix S? Pursuant to the statewide compliance certificationDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 155 of 326 requirements of section 173(a)(3) of the Act, as re flected in Appendix S at Condition 2 of paragraph IV.A, an own er or operator of a proposed new or modified major statio nary source must demonstrate that all other major sources under his/her control in the same state are in compliance or on a schedule for compliance with all emission limitations and standa rds under the Act. In the context of Indian country, we sought c omment on whether this requirement should be expressed as an Indian country-wide compliance certification or remain a s tatewide certification. In other words, we requested commen t on whether you should be required to certify that all your sou rces in the state where your proposed source is locating are in compliance, or that all your sources in all of Indian country a re in compliance. We received a variety of comments on this issue. Several commenters believe that the certification should be on a statewide basis because: (1) it will not provide sources in Indian lands with a competitive advantage over sources in non-Indian lands, and (2) obtaining certification for all of I ndian country would be very difficult since it is a vast area and sources under common control may be operated by different b usiness units of the same parent company. On the other hand, one commenter believes that state-wide compliance certification w ould give EPADraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 156 of 326 overreaching authority to facilities that are opera ting under SIP-approved programs within the state since other sources within the same state may not be within Indian coun try and thus regulated by the state rather than EPA. Regarding the Indian country-wide certification, o ne commenter supports it. The commenter believes this type of certification will benefit tribes by allowing for t he development of compliance databases, assisting trib es with monitoring patterns of noncompliance, minimizing ri sk of noncompliance, and building and enhancing consumer and market confidence. Other commenters provided comments supporting a na tional certification (not proposed) since they believe tha t expanding the requirement will ensure that the sources attemp ting to locate in Indian country will operate within regula tory parameters and several reservations exist in more t han one state; while other commenters support a certificati on for each applicable area of tribal jurisdiction since these commenters believe that: (1) it would be too burdensome to req uire such certification across all of Indian country, and (2) this is more consistent with treatment of individual tribes as s tates under applicable EPA regulations. After consideration of comments, we are finalizing a state-Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 157 of 326 wide compliance certification requirement consisten t with section 173(a)(3) of the Act. We believe that a st ate-wide compliance certification: (1) provides a broad enou gh look at the compliance history of the company, without over burdening the review process, and (2) reflects a geographic appro ach to the certification rather than an approach based on the entity that is sovereign. Thus, an Indian country-wide certifi cation would not have the proximity and geographic contiguity th at a statewide approach would have.

D. What are the public participation requirements for this program? We believe that the public participation requiremen ts of 40 CFR 51.161 apply to permitting under Appendix S. A dditionally, for the nonattainment major NSR program in Indian c ountry, we are finalizing detailed public participation requir ements at 40 CFR 49.171. As proposed, the final public particip ation requirements for the nonattainment major NSR progra m are very similar to those finalized for the minor NSR progra m at 40 CFR 49.157. See section IV.B of this preamble for more information on these requirements and the comments we received.

E. What are the provisions for final action on a permi t, permit reopenings, and administrative and judicial review procedures?Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 158 of 326 The proposed provisions governing final action on a permit, including related notice requirements, as well as p ermit reopening and administrative and judicial review ar e very similar to the ones that govern the minor NSR progr am and are found in final 40 CFR 49.172. For more information about the comments we received related to these provisions, s ee section IV.B of this preamble. Regarding the final action on a permit, the final r ule requires that after making a decision to issue or d eny your permit, the reviewing authority must notify you of the decision in writing and, if the permit is denied, provide th e reasons for the denial. If the reviewing authority issues a fi nal permit to you, the reviewing authority must provide adequate public notice of the final permit decision to ensure that the aff ected community, general public, and any individuals who commented on the draft permit have reasonable access to the deci sion and supporting materials. Depending on the circumstanc es of your permit, the reviewing authority may elect to provid e notice directly to the individuals who commented on the dr aft permit and/or use any of the other methods of public notic e discussed in section IV.B of this preamble (related to public notice of the draft permit). The reviewing authority’s final decision on your pe rmitDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 159 of 326 must be based on an administrative record, and the final rule includes requirements on what must be in that recor d. For example, the administrative record must include the application and any supporting data furnished by the applicant and all comments received during the public comment period, including any extension or reopening. See final 40 CFR 49.172(b) and (c) for a listing of all the requirements. A few commenters largely supported the proposed pro visions for providing notice of final permit actions. Howe ver, the commenters recommended that such notice be provided in the same manner that it was provided during the public comme nt on the draft permit. The commenters believe that numerous inconsistencies will occur if the agency uses subje ctive discretion based upon “depending upon the circumsta nces of your permit.” Based on the comments received, we are finalizing slightly different final permit public notice requirements f or the nonattainment major NSR program and the minor NSR p rogram. We believe that for major sources in nonattainment are as making a copy of the permit available at all of the location s where the draft permit was made available will not be too bur densome for the reviewing authorities and will ensure that the affected community and the general public have reasonable ac cess to theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 160 of 326 applicable information. These provisions are inclu ded in 40 CFR 49.157 of this final rule. However, for minor sour ces, we continue to believe that depending on the circumsta nces of your permit, the reviewing authority may elect to provid e notice directly to the individuals who commented on the dr aft permit and/or use any of the other methods of public notic e discussed in section IV.B.4 of this preamble because providin g the same public noticing procedures as those that were used during the comment period for the draft permit might be too bu rdensome for minor sources. These provisions are included in 40 CFR section 49.157 of this final rule. Regarding the administrative record for a permit decision, we are finalizing these provisions as proposed. Th e records, including any required applications for each draft and final permit or application for permit revision, must be kept by the reviewing authority for not less than 5 years. The se provisions are the same as the ones for the minor NSR program and details of the comments received and the rationale behind f inalizing these provisions are included in section IV.B.3 of this preamble. We did not receive any comments about th ese provisions specifically for the nonattainment major NSR program. Regarding the permit reopening provisions, the fin al rule requires that a permit may be reopened for cause by theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 161 of 326 reviewing authority on its own initiative, such as if it contains a material mistake or fails to assure comp liance with permit requirements. See final 40 CFR section 49.172(e). Details of the comments received and the rationale behind finalizing these provisions are included in section IV.B.5 of this preamble. We did not receive any comments abo ut these provisions specifically for the nonattainment major NSR program.

F. How is EPA revising Appendix S? As we explain in more detail in section V.A. of thi s preamble, we are amending Appendix S to include the alternative sites analysis provisions of CAA section 173. Ther efore, we are finalizing a change to Appendix S that will add a C ondition 5 to the provisions under 40 CFR Appendix S Paragraph IV .A. This condition will state that the permit applicant shal l conduct an analysis of alternative sites, sizes, production pr ocesses, and environmental control techniques for such proposed source that demonstrates that the benefits of the proposed sour ce significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modif ication. In addition and as proposed, we are finalizing a mi nor change to Appendix S that is related to the “emissi on limitations and standards of the Act.” Existing pa ragraph II.B of Appendix S requires the reviewing authority to r eview eachDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 162 of 326 proposed new major source and major modification to determine whether it will meet “any applicable NSPS in 40 CFR part 60, or any national emission standard for HAPs in 40 CFR p art 61.” While we have incorporated this requirement into fi nal 40 CFR 49.169(a), we believe that it should be expanded to include the newer national emission standards for HAPs codified at 40 CFR part 63 (commonly referred to as MACT standards). Accordingly, we are revising paragraph II.B of Appendix S to add these standards under the Act and to match the revised la nguage of this paragraph with the final 40 CFR 49.169(a). We did not receive any comments for this proposed provision.

VI. Legal Basis, Statutory Authority, and Jurisdictiona l Issues

A. What is the basis for EPA’s authority to implement these NSR programs in Indian country? As we have described in section III of this preambl e, in the absence of an EPA-approved program, we are auth orized to develop a FIP to protect air quality by directly im plementing provisions of the Act throughout Indian country. S ee , e.g. , 59 FR 43958-61 (August 25, 1994), 63 FR 7262-64 (Febru ary 12, 1998), and 62 FR 13750 (March 21, 1997). For the P SD program, no tribe is currently administering an EPA-approved PSDDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 163 of 326 program. 23 Therefore, EPA has been implementing a FIP and issuing PSD permits for major sources in attainment areas in Indian country. See 40 CFR 52.21. For the nonattainment major NSR program and the min or NSR

program 24 in Indian country, no tribes are currently administering EPA-approved programs and there has b een no FIP to implement these programs until now. Hence, there w as a regulatory gap in Indian country. This final rule will allow us to address that gap, and more fully implement the N SR program in Indian country. We are finalizing the minor NSR pr ogram at 40 CFR 49.151 through 49.165 and the nonattainment maj or NSR program at 40 CFR 49.166 through 49.175. It is important to recognize, however, that even th ough we are adopting this federal program that applies in I ndian country, the tribes may still develop TIPs, similar to SIPs, to implement these programs. If a tribe develops a TI P to implement NSR, the TIP, once it is approved, will r eplace the

23 Under the Act and the TAR (see 40 CFR part 49, subpart A), eligible tribes may seek approval of their own PSD programs for their reservations and/or for other areas under their jurisdiction.

24 EPA recently proposed to approve a TIP for the Gil a River Indian Community that includes a minor NSR program, as well as other provisions (see 75 FR, August 12, 2010).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 164 of 326 federal program as the requirement for that area of Indian country and the tribe will become the reviewing aut hority. A few commenters remarked upon EPA’s analysis of i ts jurisdiction in Indian country (citing various cour t cases as well as legislative history). These commenters bel ieve that in general Congress placed the primary responsibility of preventing air pollution on states and thus states have the re sponsibility to adopt or enforce any emission standards in India n country. Some of these commenters also added that this FIP v iolates the CAA because the Administrator has failed to make a finding that any specific state or tribe has failed to submit an implementation plan, or that any specific implement ation plan either fails to satisfy the minimum criteria under the Act or has been disapproved in whole or in part. In addit ion, the commenter believes that the Act only authorizes the adoption of a FIP on a jurisdiction-by-jurisdiction basis, not nationally. Two of these commenters also stated that even if th e EPA adopts the proposed nationwide FIP, the FIP cannot superse de, and EPA must acknowledge, the state of Oklahoma’s right to administer its state air quality programs in areas of Indian c ountry within Oklahoma under the Federal Safe, Accountable, Flexi ble, and Efficient Transportation Equity Act: A Legacy for Users (2005). We disagree with these commenters.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 165 of 326 EPA’s Authority to Implement the CAA in Indian Coun try . In the final rule entitled “Indian Tribes: Air Quality Planning and Management,” generally referred to as the “Tribal A uthority Rule” or “TAR,” EPA explains that it intends to use its authority under the CAA “to protect air quality thr oughout Indian country 25 ” by directly implementing the CAA’s requirements where tribes have chosen not to develop or are not implementing an EPA-approved CAA program. 63 FR 7254, February 12, 1998. The final TAR at 40 CFR 49.11 states that EPA would “promulgate without unreasonable delay such FIP provisions as a re necessary or appropriate to protect air quality” for these ar eas. The EPA is exercising its authority under sections 301(a) a nd 301(d)(4) of the CAA and 40 CFR 49.11(a) to promulgate FIPs i n order to remedy an existing regulatory gap under the CAA wit h respect to Indian country.

25 “Indian country” is defined under 18 U.S.C. 1151 a s: (1) All land within the limits of any Indian reservatio n under the jurisdiction of the United States Government, notwi thstanding the issuance of any patent, and including rights-of -way running through the reservation, (2) all dependent Indian c ommunities within the borders of the United States, whether wi thin the original or subsequently acquired territory thereof , and whether within or without the limits of a state, and (3) al l Indian allotments, the Indian titles to which have not bee n extinguished, including rights-of-way running throu gh the same. Under this definition, EPA treats as reservations t rust lands validly set aside for the use of a tribe even if th e trust lands have not been formally designated as a reservation.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 166 of 326 Although many facilities in these areas may have historically followed state and local government ai r quality programs, with only one exception, EPA has never ap proved those governments to exercise regulatory authority under the CAA in any area of Indian country. In addition, EPA has n ever approved a state or local government to implement a minor NS R or nonattainment major NSR program in Indian country. 26 Since the CAA was amended in 1990, EPA has been clear in its approvals of state programs that the approved state program does not extend into Indian country. It is EPA’s position that, ab sent an explicit demonstration of authority by a state to a dminister a CAA program in Indian country, and absent an explic it finding by EPA of such jurisdiction and explicit approval of t he state in Indian country, state and local governments lack au thority under the CAA over air pollution sources, and the owners or operators of air pollution sources, throughout Indian country

. Because only a few tribes have yet sought eligibili ty to

26 For purposes of approving the Washington Department of Ecology (WDOE) operating permits program under 40 C FR part 70, EPA explicitly found that WDOE demonstrated that th e Washington Indian (Puyallup) Land Claims Settlement Act, 25 U. S.C. 1773, gives explicit authority to state and local governm ents to administer their environmental laws on all nontrust lands within the 1873 Survey Area of the Puyallup Reservation in Tacoma, Washington.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 167 of 326 administer a minor NSR program, and no tribe has ye t sought eligibility for the nonattainment major NSR program , a gap for implementation of these programs currently exists i n Indian country. Given the longstanding air quality concer ns in some areas and the need to establish requirements in all areas to maintain CAA standards, EPA believes that these FIP provisions are appropriate to protect air quality in Indian co untry where no EPA-approved minor NSR or nonattainment major NS R program is in place. The rules published are based on the same CAA autho rity as EPA has used elsewhere in rulemaking that have been affirmed by the courts. The EPA’s interpretation of its author ity has been affirmed by the U.S. Court of Appeals for the Distr ict of Columbia Circuit in Arizona Public Service Co. v. E PA , 211 F.3d 1280 (D.C. Cir. 2000), cert. denied 121 S. Ct. 1600 (2001). In addition, EPA’s authority to issue operating permit s to major sources located in Indian country under title V of the Act, pursuant to nationwide regulations at 40 CFR part 7 1, was affirmed in State of Michigan v. EPA , 268 F.3d 1075 (D.C. Cir. 2001). The EPA has used this same authority to iss ue a number of FIPs to address air pollution concerns on a regi onal basis and at specific facilities located in Indian countr y. See Federal Implementation Plans Under the Clean Air Ac t for IndianDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 168 of 326 Reservation in Idaho, Oregon, Washington, 40 CFR pa rt 49, subpart M (70 FR 18074, April 8, 2005) (upheld in S afe Air for Everyone v EPA , 2006 WL 3697684 (9 th Cir. 2006)); FIP for TriCities landfill, 40 CFR 49.22 (64 FR 65664, Novembe r 23, 1999); Salt River Pima-Maricopa Indian Community, 40 CFR 4 9.22 (64 FR 65663, November 23, 1999); FIP for the Astaris-Idah o LLC Facility (formerly owned by FMC Corporation) in the Fort Hall PM-10 Nonattainment Area, 40 CFR 49.10711 (65 FR 51 412, August 23, 2000); and FIP for Four Corners Power Plant, Na vajo Nation, 40 CFR 49.23 (72 FR 25698, May 7, 2007) (upheld in Arizona Public Service Co. v. EPA , 562 F.3d 1116 (10 th Cir. 2009). Effects of State Law

. The rules established by EPA here are in effect under the CAA. The EPA recognizes th at in a few cases, other state or local governmental entities m ay have established air quality requirements that the comme nters believe apply to activities in Indian country. However, un less those rules or requirements have been explicitly approved by EPA under the CAA to apply in Indian country, compliance with those other requirements does not relieve a source from complyi ng with the applicable provision of this FIP. As EPA has state d elsewhere, states generally lack the authority to regulate air quality in Indian country. See Alaska v. Native Village of Venetie Tribal

Government , 522 U.S. 520, 527 fn.1 (1998) (“Generally speakin g,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 169 of 326 primary jurisdiction over land that is Indian count ry rests with the Federal Government and the Indian Tribe inhabit ing it, and not with the States.”), California v. Cabazon Band of Mission Indians , 480 U.S. 202, 216 and n.18 (1987); see also HRI v . EPA , 198 F.3d 1224, 1242 (10th Cir. 2000); see also disc ussion in EPA’s final rule for the federal operating permits program, 64 FR 8251–8255, February 19, 1999. Furthermore, with regard to Indian reservations, EP A interprets the CAA as establishing unitary manageme nt of Indian country air resources and as a delegation of federa l authority to eligible tribes to implement the CAA over all so urces within reservations, including non-Indian sources on fee l ands. Accordingly, even if a state could demonstrate auth ority over non-Indian sources on fee lands within an Indian re servation, EPA believes that the CAA generally provides the Ag ency the discretion to federally implement the CAA over all Indian country sources in order to ensure an efficient and effective transition to tribal CAA programs and to avoid the administratively undesirable checker-boarding of re servation air quality management based on land ownership. The EP A believes that Congress intended that EPA take a territorial view of implementing air programs within reservations. The EPA also believes that air quality planning for a checker-bo arded areaDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 170 of 326 would be more difficult and that it would be ineffi cient if a state were to exercise regulation over piecemeal tr acts of land within Indian country, possibly with similar Indian country sources being subject to different substantive requ irements. The EPA’s approach provides for coherent and consis tent environmental regulation within Indian country. Although EPA does not recognize state or local air regulations as being effective within Indian countr y for purposes of the CAA, absent an express approval by EPA of those regulations for an area of Indian country, this rul emaking does not address the validity of state and local law and regulations with respect to sources in Indian country, or the a uthority of state and local agencies to regulate such sources, for purposes other than the federal CAA. We are specifically no t making a determination that these federal CAA rules override or preempt any other laws that have been established outside t he scope of the federal CAA. The EPA does not, therefore, beli eve that any further preemption analysis suggested by the commen ters is needed in these circumstances. As described above, EPA believes that its authority under the CAA to implement these programs in Indian country is clear and well-established and ha s been upheld by reviewing courts in similar circumstances. With regard to the comments relating to Indian cou ntry andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 171 of 326 the State of Oklahoma, EPA recognizes that the Safe , Accountable, Flexible, Efficient Transportation Equ ity Act of 2005 (SAFETEA) contains a provision (section 10211) relating to implementation of environmental regulatory programs under federal environmental laws, including the CAA, in I ndian country in Oklahoma. However, in promulgating these FIPs, EPA is not acting on any request by the State of Oklahoma to a dminister any CAA or other regulatory program in Indian country, nor is EPA acting on any treatment-in-the-same-manner-as-a-sta te application for an environmental regulatory program by any Indian tribe in Oklahoma. The EPA would address an y such applications when necessary and on a case-by-case b asis. Section 10211 of the SAFETEA is thus not implicated in this rulemaking and is not a relevant consideration in E PA’s promulgation of the minor and nonattainment major N SR programs for Indian country, including Indian country in Okl ahoma.

B. How does a tribe receive delegation to assist EPA w ith administration of the federal minor and major NSR r ules? With this action, we are finalizing the provisions on delegation to tribes as proposed. Our authority fo r such delegations is discussed in the following paragraph s. Under the procedures set forth in the Tribal Air Ru le, tribes may seek to demonstrate eligibility for appr oval ofDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 172 of 326 tribal programs under the Act, including a tribal N SR program, under tribal law 27 . The TAR allows tribes to seek approval for such programs covering their reservations or other areas within their jurisdiction. However, we recognize that som e tribes may choose not to develop tribal NSR programs for submi ssion to EPA for approval under the TAR, but that these tribes m ay still wish to assist us in implementing all or some portion of the federal NSR program for their area of Indian country. This process is known as delegation and by assisting us with admini stration of the federal program, tribes remain appropriately in volved in implementation of an important air quality program and may develop their own capacity to manage such programs in the future should they choose to do so. Therefore final 40 CF R 49.161 and 49.173 of the minor and major NSR rules, respective ly, provide tribal governments the option of seeking delegation from us of the administration of the federal NSR program, or a spects of the program, for their area of Indian country. We have well-established processes for delegating o ur federal authority to states for administering feder al rules under the Act, including conducting NSR under 40 CF R 52.21(u),

27 As noted elsewhere, the TAR contains a process, pu rsuant to section 301(d) of the Act, for tribes to seek tr eatment in a similar manner as a state, treatment as state (TAS) , for various provisions and programs of the Act.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 173 of 326 and issuing federal operating permits under 40 CFR 71.4(j) and 71.10. The process we will follow to delegate the administration of the federal NSR program to a trib al agency is similar to the process we follow to delegate the ad ministration of federal programs to states. 28 Prior to finalizing any delegation agreement with a tribal agency, we will consult with other federal, state, tribal, and local governmenta l entities, or other governmental agencies in the area, as appr opriate. Although sections 110(o) and 301(d) of the Act and the TAR authorize us to review and approve TIPs, neither th e Act nor the regulations provide that approval of tribal program s under tribal law is the sole mechanism available for trib al agencies to take on permitting responsibilities. Accordingl y, we will exercise our discretion to delegate administration of the federal NSR program to interested tribal agencies s atisfying the requirements of final 40 CFR 49.161 and 49.173. This administrative delegation is to be distinguish ed from the TAS process under the TAR whereby tribes seek a pproval to run programs under tribal law. Tribes would not ne ed to seek TAS under the TAR in order to request delegation of

28 The current provisions under 40 CFR 52.21(u) do no t allow a tribe to request delegation of the PSD program. However, we are aware of this deficiency and we are currently w orking on a rulemaking that will amend this provision.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 174 of 326 administration of aspects of these federal NSR prog rams. Tribes would, however, need to provide the relevant applic ation information described in those sections 29 . In addition, program functions delegated under final 40 CFR 49.161 or 49 .173 remain part of the relevant FIP administered under federal law. The delegate tribal agency would simply assist EPA with administration of the program to the extent of the functions delegated. As described in the preamble to the TAR 30 , it is our position that the TAS provision of the Act constitu tes a statutory delegation of authority to eligible tribe s over their

29 This information includes identifying the specific rules and provisions and the area of Indian country for w hich the delegation is requested. In addition, tribal agenc ies seeking delegation must provide a statement by the tribe’s legal counsel or equivalent official including a statement that t he tribe is recognized by the Secretary of the Interior, a desc riptive statement demonstrating that the tribe is currently carrying out substantial governmental duties and powers over a d efined area (this statement should be consistent with the type of information described in 40 CFR 49.7(a)(2), which r elates to the separate process by which tribes apply to be treate d in a similar manner as states for various purposes under the Act), a description of the laws of the tribe that provide a dequate authority to administer the federal rules and provi sions for which the delegation is requested, and a descriptiv e statement demonstrating that the tribal agency has, or will h ave, the technical capability and adequate resources to admi nister the federal rules and provisions for which the delegati on is requested.

30 See 63 FR 7254-59.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 175 of 326 reservations. As described earlier, the TAR establ ished procedures for our approval of tribal eligibility a pplications to operate the programs of the Act under tribal law . Where we approve a tribal eligibility application and approv e a tribal NSR program, the approved tribe will manage the pro gram under tribal law, and the tribal program becomes federall y enforceable. Among the required elements of a trib al eligibility application under the TAR is a demonstr ation of the tribe’s authority, including appropriate enforcemen t authority, to regulate air quality for the areas to be covered by the program. For air resources within the exterior bou ndaries of a tribe’s reservation, the tribe may rely on the Cong ressional delegation of federal authority to operate approved tribal programs. Tribes may also attempt to demonstrate a uthority to operate the programs of the Act over other areas ou tside of their reservations, generally including non-reserva tion areas of Indian country. In contrast, the delegation approach finalized in t hese rules provides for us to delegate administration of the federal program operating under federal law to interested t ribes that provide the information described in proposed 40 CF RDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 176 of 326 49.161(b)(1) and 49.173(b)(1) 31 . Since this program operates throughout Indian country under federal authority, tribes will not need to demonstrate either Congressionally-dele gated authority over air resources within the exterior bo undaries of their reservations or authority of non-reservation areas of Indian country. Instead, tribal agencies will assi st us in implementing the federal program by taking delegati on of the administration of particular activities conducted u nder our authority in Indian country. Under final 40 CFR 49.161(b)(1)(iii)(C) and 49.173(b)(1)(iii)(C), trib es will only need to show that their laws provide adequate capac ity and authority to carry out the delegated activities. F or example, where a tribe seeks administrative delegation for p ermit issuing activities of the federal program, the tribe may, a mong other things, need to show it has in place an appropriate agency with legal authority to review applications and issue pe rmits on

31 Section 301(a)(1) of the Act provides that the Administrator is authorized to prescribe such regul ations as are necessary to carry out his or her functions under t he Act and pursuant to this authority, final 40 CFR 49.161 and 49.173 of the minor and major NSR rules, respectively, provid e that partial administration of the federal NSR programs may be delegated to a tribal agency that submits a request for delegation. However, nothing in the final rules re quires us to delegate administration of any aspect of the federa l program to a tribal agency.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 177 of 326 behalf of the delegate tribal government. For thes e administratively delegated programs, federal progra m requirements will continue to be subject to enforce ment by EPA, not the delegate tribal agency, under federal law. Administrative appeals of permitting decisions will also continue to be made directly to the EAB under our a dministrative procedures with any subsequent judicial review to b e conducted in federal court. In the final rules we make it cl ear that we will not delegate enforcement or appeal components of the program to tribal agencies. In order to be delegated authority to administer th e proposed rules for a particular area of Indian coun try, the authorized representative of a tribal agency must d emonstrate that it has the authority and technical capability to carry out the provisions of the rules for which delegation is requested. When delegation is approved, a Partial Delegation o f Administrative Authority Agreement between the Admi nistrator and the tribal agency will set forth the terms and cond itions of the delegation, and will also specify the rules and pro visions that the tribal agency is authorized to implement. Once the delegation becomes effective, the tribal agency wil l have the authority under the Act, to the extent specified in the Agreement, to administer the rules in effect for th e particularDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 178 of 326 area of Indian country, and to act on behalf of the Administrator. The federal requirements administer ed by the delegate tribal agency will be subject to enforceme nt by EPA under federal law. When we have delegated administration of the portio n of the federal minor or major NSR program that includes re ceipt of permit application materials and preparation of dra ft permits, the delegate tribal agency must provide us a copy o f each permit application (including any application for permit r evision) and each draft permit. 32 In any such delegation, we retain the authority to object to the issuance of any permit t hat we determine not to be in compliance with the requirem ents under the program or other requirements pursuant to regul ations under the Act. For any such objections, we will outline the reasons for the objection in writing, and we will provide a copy of the written statement to the permit applicant. The del egate tribal agency may not issue a permit if we object to its i ssuance in writing. The delegate tribal agency may submit a r evised draft permit to us in response to the objection. However , if it does

32 The proposed minor and major NSR programs provide that the delegate tribal agency may require the applican t to provide a copy of the permit application directly to us. I n addition, with our consent, the delegate tribal agency may su bmit to us a permit application summary form and any relevant po rtion of the permit application.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 179 of 326 not do so within 90 days, we will issue or deny the permit in accordance with the requirements of the federal min or or major NSR program, as applicable. We did not receive any comments expressly supportin g our delegation provisions. However, a number of commen ters opined that when a tribe has administrative delegation of the program, enforcement authority should be delegated to the tr ibes as well. These comments are addressed in section VI.B of thi s preamble. Other commenters oppose delegation of the program t o the tribes. One of these commenters believes that dele gation demonstrations will be approved by EPA based on the ir administrative completeness, rather than on their t echnical merit and thus recommends that any delegation be co ntingent upon an approved TIP. Another commenter maintained that only the TAS process should be used to delegate authority of env ironmental programs to tribes to avoid jurisdictional conflict s between EPA, tribes, and the state (especially in Oklahoma because there have been significant problems there with tribes pr oviding adequate jurisdiction of lands they claim) and to a void confusion for the regulated community. The comment er suggested that if the administrative delegation process is in cluded in the final NSR program, it should include a Federal Regi ster public notice and comment provision. Another commenter be lieves thatDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 180 of 326 because EPA has not made any jurisdictional determi nations in connection with the proposed FIP, delegation of aut hority to tribes to assist in administering the FIP violates the plain requirements of the Act. As described above, EPA continues to believe that t he CAA authorizes us to use the administrative delegation approach to assist EPA in carrying out implementation of our fe deral program. See CAA section 301(a). In addition, although the CAA and the TAR also provide a means for tribal involve ment in implementing CAA programs through the TAS process, neither the statute nor EPA’s regulations provide that approval of tribal programs under tribal law is the sole mechanism ava ilable for tribal agencies to take on permitting or other resp onsibilities. The EPA believes that the administrative delegation provisions establish an appropriate means for tribal involveme nt in EPA’s federal implementation of CAA requirements. Delegation of the authority to assist EPA with administration of elements of the federal NSR progr ams is a process that is distinct from approval of tribal el igibility and tribal programs under CAA section 301(d) and the TA R. To the extent the commenters are concerned that administra tive delegation acts as an approval of tribal authority, EPA reiterates that irrespective of any such delegation , the minorDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 181 of 326 NSR and nonattainment major NSR programs establishe d here will continue to operate under federal authority subject to EPA appeal procedures before EPA’s Environmental Appeal s Board and to enforcement solely by EPA. The administrative d elegation provision simply allows EPA to delegate certain fun ctions to qualified Tribes that may then assist EPA with admi nistration of the programs. This approach provides EPA with addi tional flexibility for implementing the federal programs w here EPA believes that delegation is appropriate. It also a llows qualified Tribes to participate, as appropriate, in administration of the federal programs. EPA also notes that because the minor and nonattain ment major NSR programs will continue to operate under f ederal authority (irrespective of administrative delegatio n of any functions to qualified tribes), none of the jurisdi ctional issues raised in the comments should arise. Indeed , as described elsewhere, EPA’s well-established authori ty to implement CAA programs in Indian country in the abs ence of an EPA-approved program should provide jurisdictional certainty to all sources covered by these programs. Similarly, issues of tribal jurisdiction over covered sources should not arise since no showing or finding of such jurisdiction is neede d for administration of the federal programs and EPA beli eves thatDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 182 of 326 these delegation provisions are consistent with sim ilar wellestablished provisions EPA has used in other contex ts (e.g. , delegation of federal operating permits under 40 CF R 71.4(j) and 71.10; delegation of PSD permits under 40 CFR 52.21 (u); and delegation to tribes of elements of the federal air rules for Indian country in the Pacific Northwest under 40 CF R 49.122). As noted in EPA’s proposal of the minor NSR and nonattainment major NSR rules, EPA also intends to consult with other federal, state, tribal, or local governmental entities, or other governmental agencies in the area, prior to f inalizing a delegation agreement with a tribal agency. Althoug h the CAA does not require such consultations, or any specifi c process, to approve administrative delegations, EPA believes th at this approach provides an appropriate opportunity for su ch governmental entities to express views regarding th e potential delegation agreement and will assist EPA in identif ying any unanticipated issues. The EPA also notes that even when we have establish ed separate criteria for the delegation provisions of the minor and nonattainment major NSR rules for tribes seeking to assist EPA with administration of the federal programs, nothin g in the administrative delegation process changes the crite ria EPA would evaluate in reviewing and acting upon tribal applic ations forDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 183 of 326 TAS under CAA section 301(d) and the TAR. CAA sect ion 301(d) and the TAR at 40 CFR 49.6 and 49.7 establish the c riteria tribes must demonstrate, and the types of informati on to be included in tribal applications, to obtain TAS elig ibility to administer tribal programs under tribal law. Although the TAS and delegation criteria overlap in certain respects, they also contain significant differences , most notably in the required demonstration of authority. Tribes seeking TAS eligibility to administer approved trib al regulatory programs under tribal law must demonstrate their re levant authority, including appropriate enforcement author ity, to regulate air quality in the areas to be covered by the program.
See 40 CFR 49.6(c) and 49.7(a)(3). For air resources within the exterior boundaries of an Indian reservation, eligi ble tribes may rely on the Congressional delegation of federal authority to operate approved tribal programs. Tribes may also attempt to demonstrate authority to operate approved tribal pr ograms under tribal law over other areas outside of their reserv ations, generally including non-reservation areas of Indian country. By contrast, because the minor and nonattainment major NSR programs will, in all circumstances, operate under federal a uthority, tribes requesting to assist EPA through administrat ive delegation need not demonstrate Congressionally-del egatedDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 184 of 326 authority over air resources within the exterior bo undaries of their reservations or authority over non-reservatio ns areas of Indian country. Instead, such tribes would only ne ed to show that their laws provide adequate capacity and autho rity to carry out the delegated activities. For example, where a tribe seeks administrative delegation for permit issuing activi ties of the federal program, the tribe may, among other things, need to show that it has in place an appropriate agency with leg al authority to review applications and issue permits on behalf of the delegate tribal government. These distinctions bet ween the TAS and administrative delegation requirements are impo rtant, and EPA reiterates that nothing in either process is in tended to affect the criteria and requirements for the other.

C. What happens to permits previously issued by states to sources in Indian country? Historically, sources in some areas of Indian count ry may have received permits from states operating EPA-app roved programs. However, states generally lack jurisdict ion under the Act over these facilities and generally were not au thorized under the Act to issue such permits in Indian count ry. See section VI.A. of this preamble for more information . Therefore, this final rulemaking provides a mechanism to chang e state permits issued to major sources of regulated NSR po llutants inDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 185 of 326 nonattainment areas of Indian country to federal ma jor NSR permits. If you own or operate a major stationary source with a state-issued nonattainment major NSR permit, you mu st apply to convert the permit to a federal permit under this p rogram within 1 year of the effective date of this program. In t his case, you would not be subject to any additional requirements under this program as long as the new permit complies with the requirements under the Act as described in this action. See final 40 CFR 49.168(b). We believe that transforming the state permits into federal major NSR permits for major sources in Indi an country is appropriate to protect air quality in Indian countr y, as the tribes take on the effort to develop and/or run the ir own

programs. A couple of commenters believe that the permit reapplication process set out in the proposed 40 CF R 49.158(c)(1) and 49.168(b) seems unnecessarily comp lex and thus these commenters argued that these permits should b e transferred “en masse” from one agency to the other with a simp le notification to the operator of the transfer or jur isdiction. One of these commenters added that if EPA feels tha t the “en masse” transfer methods are impracticable, then the source should be able to transfer the permit by submitting a transfer request (not a complete application) with a copy of the permitDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 186 of 326 to both agencies, while the other commenter stresse d that sources with state minor NSR permits should be gran dfathered into the Indian country program and not required to conduct minor NSR permitting. On the other hand, one commenter maintained that w hile previous state permit conditions may be appropriate to be included in the new federal permit, this should not be automatic. The commenter also stated that governme nt-togovernment consultation between EPA and the affecte d tribe must take place during this process. Furthermore, two c ommenters pointed out that the proposal did not discuss what enforcement mechanism would be used if a source failed to conve rt a state permit to a federal permit in the given time frame and thus one of these commenters recommended that EPA should con sider using tribal courts for this purpose since the infraction would occur on tribal lands and within tribal jurisdiction. After considering these comments, we believe that transforming state nonattainment major NSR permits into federal nonattainment major NSR permits in Indian country i s appropriate to protect air quality in Indian country and as the tribes take on the effort to develop and/or run their own progr ams. However, we do not believe that these permits shoul d be transferred “en masse” from one agency to another o r beDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 187 of 326 automatically transferred because we need to determ ine if the permit complies with the applicable requirements un der the NSR program. If it does not, a new permit with additio nal requirements would have to be public noticed and is sued. If a source fails to obtain a required federal permit by the established timeframe and/or does not meet the appl icable requirements under this rule, it may be subject to potential enforcement action. We also believe that since any failure of a source to convert a state permit into a federal per mit would be a violation of this rule, the violation is of the f ederal requirement and thus administratively enforceable b y EPA and in federal court, not tribal court. Because these pro grams are operated under federal authority, there is no findi ng (and no need for a finding) of tribal jurisdiction.

VII. Implementation Issues

A. Are tribes allowed to collect fees for NSR permitti ng? Many tribal commenters suggested that the NSR progr am should include a mechanism that allows tribes or th e EPA to collect fees to offset the costs of the program, es pecially when a tribe has been given delegation of the program. Two of these commenters pointed out that tribes that do accept d elegation of the program will need resources, such as funds to t rain and support personnel who will be reviewing and comment ing on theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 188 of 326 permitting applications and funds for providing tec hnical assistance to businesses regarding compliance issue s. Some of these commenters also indicated that EPA should pro vide funding for tribal implementation of the NSR program, for e xample, through cooperative agreements and grants. The Agency is aware of and concerned about the res ource needs of the rule, but, unfortunately, the CAA does not give the Agency explicit authority to charge permit fees for preconstruction permitting. However, tribes that deve lop TIPs can charge for permits and Tribes with delegation can d evelop permit fee programs under their authority (e.g. , Navajo’s permit fee program for their delegated title V permit program) . In addition and as stated in the final rule titled: “F ederal Implementation Plans Under the Clean Air Act for In dian Reservations in Idaho, Oregon and Washington,” (70 FR 18080), EPA and the delegated tribe could, as appropriate, establish mechanisms to fund the work by tribal staff, that m ay include federal funding assistance through cooperative agre ements and grants and/or user fees and charges established by the tribe to fund its administrative activities on behalf of EPA

. Furthermore, in the final rule, there are a number of mechanisms to address concerns regarding the resource burden: (1) encouraging delegation of the program through train ings (face-Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 189 of 326 to-face training sessions and through ITEP training ), (2) using model language to request delegation, (3) developin g and using general permits, and (4) using model codes for trib es that want to do TIPs.

B. Who retains enforcement authority in Indian country ? Numerous tribal commenters recommended that the administrative delegation of the program to tribes should include enforcement authority. Where they were spe cific, most of these commenters specified delegation of civil e nforcement authority (including the ability to collect civil p enalties to help support the program), but a number of commente rs also favored delegation of criminal enforcement authorit y. In addition, commenters stated that by declining to administratively delegate enforcement (whether civi l or criminal) of federal permits to tribes, EPA is acti ng inconsistently with other delegations which, in the commenters’ view, withhold only criminal enforcement, but inclu de civil enforcement. Other commenters also added that trib es should be allowed to negotiate the level of enforcement autho rity on a case-by-case basis. We disagree with these comment ers. The EPA believes that these commenters mistake th e distinction between approvals of tribal programs un der tribal law provided for in the TAR and the administrative delegationsDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 190 of 326 at issue here. Where EPA approves an eligible trib e for TAS under CAA section 301(d) and the TAR, EPA will cont inue to review the applicant tribe’s authority, including i ts authority to enforce, in an appropriate tribal forum, any app roved tribal program operated under tribal law. In such circums tances, EPA has recognized that certain limitations on tribal c riminal authority should not constitute a bar to tribal pro gram approval and has determined to fill any gap in tribal crimin al authority by retaining primary criminal enforcement at the fe deral level for all circumstances in which a tribe is precluded from exercising such authority. See 40 CFR 49.7(a)(6), 49.8. In such situations EPA would, however, generally expec t the applicant tribe to demonstrate authority to pursue appropriate civil enforcement under tribal law of any approved tribal

program. By contrast, any permits issued under the federal N SR programs (even where issued by a Tribe acting on EP A’s behalf pursuant to a delegation agreement) remain federal in character and continue to be enforceable (whether civilly or criminally) in federal court because EPA does not believe that it would be appropriate to delegate enforcement of a federal pe rmit in federal court to an Indian tribe assisting EPA with administration of the NSR program. Indeed, in simi larDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 191 of 326 circumstances EPA has consistently withheld enforce ment in federal court from any administratively delegated e ntity, whether a state or a tribe. For instance, under ce rtain other CAA programs (e.g. , EPA’s major source operating permit program under 40 CFR part 70 and EPA’s PSD program under 40 CFR 52.21) EPA may, in appropriate circumstances, delegate adm inistration of elements of the program to non-federal entities. However, while such entities may pursue enforcement in their own courts of parallel non-federal air quality requirements, e nforcement of the federal permit in federal court will always be retained and conducted by EPA. 33 See also 40 CFR 49.122; 70 FR 18074, 18080- 81, April 8, 2005 (discussing EPA’s similar approac h to administrative delegation in the context of FIPs fo r Indian reservations in the Pacific Northwest). The EPA’s approach to administrative delegation of the federal NSR programs is thus consistent with other administrative delegation regulations and with EPA’ s approach to approval of tribal programs under the TAR. The EPA notes that tribes interested in enforcing NSR permits issued i n their areas

33 Most states have sought and obtained EPA approval to administer their own minor and nonattainment major NSR programs administered under state law. To the extent the co mmenters believe that states are pursuing enforcement of NSR programs, EPA notes that such enforcement is likely being tak en pursuant to State law under such approved state programs.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 192 of 326 may continue to seek TAS eligibility and program ap proval pursuant to established procedures under the TAR. Indeed, EPA expects that the approach to administrative delegat ion of elements of the federal NSR program may benefit suc h Tribes by providing opportunities for tribes that are buildin g air quality programs to gain experience by assisting EPA with a dministration of the federal rules without needing to first devel op tribal air programs under tribal law. To the extent such trib es do subsequently obtain TAS eligibility and NSR program approval, their approved tribal programs under tribal law wou ld replace the relevant federal rule. In addition, EPA recogn izes that some Tribes may choose not to develop air programs under tribal law, but may still want to participate in air quali ty management in their areas of Indian country. Administrative d elegation of elements of the federal rules may provide an approp riate opportunity for such tribal involvement. Consequently, EPA believes the distinction between delegation of administration of aspects of the fede ral NSR rules and approval of eligible tribal programs under CAA section 301(d) and the TAR is significant and warrants EPA’ s retention of federal enforcement of federal NSR permits in fe deral court. The EPA also believes that this approach does not c reate any inconsistency with its treatment of tribal programs under theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 193 of 326 TAR or with EPA’s approach to administrative delega tions of other CAA programs to tribes and states.

C. What is the implementation schedule for the final r ules? We received several comments related to EPA’s abil ity to implement these rules. A few of these commenters b elieve that EPA does not have adequate resources to take on the NSR program without significant permitting delays, while one co mmenter added that tribal agencies do not have the resources need ed either. One commenter in particular was very concerned abou t the workload EPA regions will have, especially those re gions that oversee a large number of tribal lands, given EPA’s presupposition that few, if any, tribes will be pre pared to pursue delegation of the responsibility to implemen t these requirements. The commenter is very concerned that this new workload will create significant delays in already- impacted

program areas. We agree that it would be very challenging for us, as the reviewing authority until a tribe requests delegati on or obtains approval of a Tribal implementation plan, to implem ent all elements of the final rules simultaneously beginnin g on the effective date of the rules due to the resource con straints we currently experience and the new workload this rule will create, especially for those EPA regions where EPA, as the reviewingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 194 of 326 authority, oversees a large number of tribes. Cons equently, we have decided to phase in the rules as follows: Existing major sources

• If you wish to commence construction of a minor modification at an existing major stationary source on or after the effective date of the final rule (that is, on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] ), you must obtain a permit pursuant to 40 CFR 49.154 and 49.155 (or a general permit pursuant to 40 CFR 49.156, if applicable) prior to commencing construction.

• If you wish to obtain a synthetic minor source perm it pursuant 40 CFR 49.158 to establish a synthetic min or source and/or a synthetic minor HAP source at your existing major source, you may submit a synthetic minor source permit application on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDER AL REGISTER] . However, if your permit application for a synthetic minor source and/or synthetic minor HAP source pursuant to the FIPs for reservations in Ida ho, Oregon, and Washington has been determined complete prior to [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] , you do not needDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 195 of 326 to apply for a synthetic minor source permit under this program. Synthetic minor sources

• If you wish to commence construction of a new synthetic minor source and/or a new synthetic minor HAP source or a modification at an existing synthet ic minor source and/or synthetic minor HAP source on o r after the effective date of the final rule (that is , on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] ), you must obtain a permit pursuant to 40 CFR §49.158 prior to commencing construction.

• If your existing synthetic minor source and/or synthetic minor HAP source was established pursuant to the FIPs applicable to the Indian reservations in Idaho, Oregon, and Washington; or was established under an EPA-approved rule or permit program limiti ng potential to emit, you do not need to take any acti on under this program.

• If your existing synthetic minor source and/or synthetic minor HAP source was established under a permit with enforceable emissions limitations issue d pursuant to the part 71 program, the reviewingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 196 of 326 authority has the discretion to require you to subm it a permit application for a synthetic minor source permit under this program within 1 year after the effective date of the final rule (that is, by [INSERT DATE 1 YEAR AND 60 DAYS FROM PUBLICATION IN THE FEDERAL REGISTER] and pursuant to 40 CFR §49.158), to require you to submit a permit application for a synthetic minor source permit under this program (pursuant to 40 CFR §49.158) at the same time that you apply to renew your part 71 permit, or to allow you to continue to maintain synthetic minor status through your part 71 permit. If the reviewing authority requires you to obtain a synthetic minor source per mit and/or a synthetic minor HAP source permit under th is program (pursuant to 40 CFR §49.158), it also has t he discretion to require any additional requirements, including control technology requirements, based on the specific circumstances of the source.

• If your existing synthetic minor source and/or synthetic minor HAP source was established through a mechanism other than those described in the precedi ng paragraphs, including state-issued permits or pursu ant to achieving your existing synthetic minor status b yDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 197 of 326 maintaining your actual emissions at less than 50% of the relevant major source threshold, you must submi t an application pursuant to 40 CFR §49.158 for a synthetic minor source permit within 1 year after t he effective date of the final rule, that is, by [INSERT DATE 1 YEAR AND 60 DAYS AFTER DATE OF PUBLICATION I N THE FEDERAL REGISTER] . The reviewing authority has the discretion to require any additional requiremen ts, including control technology requirements, based on the specific circumstances of the source. True minor sources

• If you have an existing true minor source on which construction commenced any time prior to the date 1 8 months after the effective date of the final rule (that is, before [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] ) and that is subject to the registration requirements of 40 CFR 49.160, you must submit the initial registration fo r the source by [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] or within 90 days after the source begins operation, whichever is lat er. You are exempt from this requirement if your source is subject to 40 CFR 49.138 - “Rule for the registrati onDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 198 of 326 of air pollution sources and the reporting of emissions.”

• If you wish to commence construction of a new true minor source or a modification at an existing true minor source on or after [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] , you must obtain a permit pursuant to 40 CFR 49.154 and 49.15 5 (or a general permit pursuant to 40 CFR 49.156, if applicable) prior to commencing construction. If t he proposed new source or modification is subject to t he registration requirements of 40 CFR 49.160, your permit application information will be used to fulf ill the registration requirements under this program. (Your source is not subject to the registration requirements of 40 CFR 49.160 if it is subject to 4 0 CFR 49.138 - “Rule for the registration of air pollution sources and the reporting of emissions.”)

VIII. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Rev iew Under Executive Order 12866 (58 FR 51735, October 4 , 1993), this action is a “significant regulatory action” be cause it raises novel legal or policy issues arising out of legal mandates, the President’s priorities, or the princi ples setDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 199 of 326 forth in the Executive Order. Accordingly, EPA sub mitted this action to the Office of Management and Budget (OMB) for review under Executive Order 12866 and any changes made in response to OMB recommendations have been documented in the doc ket for this action. In addition, EPA prepared an analysis of the potent ial costs and impacts associated with this action. Thi s rule is not considered economically significant because EPA est imates the total annualized costs of the rule to be substantia lly lower than $100 million. The EPA estimates lower bound t otal annualized costs of the rule to be $19.4 million, i ncluding $13.7 million for industry and $5.7 million for the Agency ($2008) while upper bound total annualized costs of this rule are estimated to be approximately $20.1 million per year, including $14.4 million for industry and $5.7 milli on for the Agency ($2008). This analysis is contained in the EIA for this final rule. A copy of the analysis is available in the docket for this action.

B. Paperwork Reduction Act The information collection requirements in this rul e have been submitted for approval to the Office of Manage ment and Budget (OMB) under the Paperwork Reduction Act , 44 U.S.C. 3501

et seq . The information collection requirements are notDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 200 of 326 enforceable until OMB approves them. The information collection requirements resulting f rom this final rule are associated with certain records and reports that are necessary for the tribal agency (or the EPA Adm inistrator in non-delegated areas), for example, to: (1) confirm the compliance status of stationary sources, (2) identi fy any stationary sources not subject to the standards, an d identify stationary sources subject to the rules; and (3) en sure that the stationary source control requirements are being ac hieved. The information would be used by the EPA or tribal enfo rcement personnel to (1) identify stationary sources subjec t to the rules, (2) ensure that appropriate control technolo gy is being properly applied, and (3) ensure that the emission control devices are being properly operated and maintained on a continuous basis. Based on the reported informatio n, the delegate tribes (or the EPA Administrator in non-de legated areas) can decide which plants, records, or process es should be inspected. The nonattainment major NSR rule would have little impact on existing major sources in Indian country because it would only affect such owners and operators if they propo se a major modification and only one is expected during the fi rst 6 years after promulgation. (See the Economic Impact Analysis in theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 201 of 326 docket for this action for more information.) In a ddition, the final rule would only result in an administrative c hange for new major sources in Indian country because, although t he regulatory mechanism to issue permits is not yet available in the form of either a federal nonattainment major NSR rule or a TIP, we are already required to implement the program in Indian country, and have developed source-specific FIPs to do so. As a result, there would be no new or additional burden on indus try. With regard to the minor source permitting rule (in cluding new minor sources, minor modifications at minor sou rces, minor modifications at major sources, and new synthetic m inor sources), it is estimated that 4,326 new or modifie d facilities will be affected for the first 3 years after promul gation of the rule. They will incur approximately 1,699,500 hour s in monitoring, recordkeeping, and reporting burden, in curring an estimated $20.7 million ($2008) in burden during th is 36 month period. In addition, 32,970 existing true and synt hetic minor sources will incur a one-time burden of 169,590 hou rs, incurring an estimated $2.1 million, to complete registration for existing minor sources and new permits for existing syntheti c minor sources. The Agency is estimated to incur 162,470 hours or $17.1 million ($2008) in burden to administer the p rogram during the first 3 years after rule promulgation. Burden is defined atDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 202 of 326 5 CFR 1320.3(b) 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. When this ICR is approved by OMB, the Agen cy will publish a technical amendment to 40 CFR part 9 in t he Federal Register to display the OMB control number for the approved information collection requirements contained in th is final rule.
C. Regulatory Flexibility Act (RFA) The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Admin istrative Procedure Act or any other statute unless the agenc y certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entiti es include small businesses, small organizations, and small go vernmental jurisdictions. For purposes of assessing the impacts of this final rule on small entities, “small entity” is defined as: (1) a small business as defined by the Small Business Administr ation’s regulations at 13 CFR 121.201; (2) a small governme ntalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 203 of 326 jurisdiction that is a government or a city, county , town, school district or special district with a populati on of less than 50,000; and (3) a small organization that is a ny not-forprofit enterprise which is independently owned and operated and is not dominant in its field. After considering the economic impacts of this fina l rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. The small entities potentially regulated by this final rule in Indian country are:

• New and modified minor sources of regulated NSR pollutants;

• Sources of regulated NSR pollutants choosing to acc ept enforceable emission limitations to avoid major sou rce regulations (synthetic minors);

• Sources of HAP choosing to accept enforceable emiss ion limitations to avoid major source regulations (synthetic minors);

• Minor modifications to major sources of regulated N SR pollutants;

• New major sources of regulated NSR pollutants in nonattainment areas; andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 204 of 326 • Major modifications to major sources of regulated N SR pollutants in nonattainment areas. We have determined that the new major sources and m ajor modifications at existing major sources in nonattai nment areas will incur no incremental costs or will experience cost savings due to the final rule because the rule only changes the regulatory mechanism in which these sources can req uest a permit (it does not change the compliance requirements). The costs of the source-specific FIP (the alternative mechanism in the absence of this rule) would have been comparable to the estimated costs of complying with this rule. In ad dition, since the permitting process may be less uncertain under the final rule, new and modifying major sources could potenti ally experience cost savings compared to baseline condit ions. Therefore, the screening assessment focused on cost s for new and modified minor sources, minor modifications at major sources and synthetic minor sources. To analyze po tential impacts to small companies owning such sources, we first estimated the number of new sources that would be s ited in Indian country over the period of 2011 through 2016 . However, since data on minor sources in Indian country are g enerally very limited, we conducted an exhaustive search for info rmation currently available from EPA databases, the Small B usinessDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 205 of 326 Administration, and EPA Regional Offices. We then collected data from the Economic Census (2002) on the number of establishments of each type in each state, and allo cated the establishments to Indian country based on tribes’ s hare of state income. Then, we projected the number of new minor sources of each type that would be created in Indian country b y applying the estimated growth rate for American Indian/Alask a Native (AI/AN) population in each state to the estimated b aseline number of sources in Indian country in the state. Over the 6- year period after the effective date of the rule (2 011 through 2016), we estimate that 7,606 new minor sources wil l be created in Indian country. We used data from financial databases to compute th e share of companies in each sector that are owned by small businesses (based on the Small Business Administration small b usiness size definitions at 13 CFR 121.201). We also examined t he share of existing major and synthetic minor sources in India n Country that are owned by small businesses. Based on our an alysis, EPA estimates that the fewer than 20% of new minor sour ces in Indian Country will be owned by small businesses. Thus, w e estimate that 1,521 new minor source facilities will be crea ted in Indian country by small businesses during the first 6 year s after promulgation. Additionally, we project that 197 of the totalDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 206 of 326 estimated 984 minor modifications to existing minor sources during the period 2011 through 2016 will occur at f acilities owned by small businesses. Furthermore, we estimat e that 10 synthetic minor sources owned by small businesses w ill be created during the period 2011 through 2016. Finally, we estimate that 2 of the 12 major sources in Indian country that make a minor modification to th eir operations between 2011 and 2016 will be owned by s mall businesses. Table 2 summarizes the estimated numbe r of affected facilities and small businesses and table 3 disaggr egates this information by source category (NAICS code).

Table 2. Projected Number of Affected Small Busine sses

(2011 through 2016) a

Source type Projected number of new and modified sources owned by small businesses New Minor Sources 1,521 Modified Minor Sources 197 Synthetic Minor Sources 10 Minor Modifications to Major Sources 2

Total 1,730

a Based on Year 2008 dollars.Draft – September 15, 2010 Do Not Cite or QuoteFor Internal Deliberations OnlyPage 207 of 326Table 3. Source Categories for Projected Number ofAffected Small BusinessesNAICS Sector DescriptionNewMinorSourcesModifiedMinorSourcesSyntheticMinorSourcesMinorModificationsto MajorSourcesTotalProjectedSmallBusinessesby Sector324121 Asphalt hot mix 1 1811121 Auto body refinishing 4 6 103116Beef Cattle Complex,Slaughter House and MeatPacking Plant1 13251 Chemical preparation 1 132711Clay and ceramicsoperations (kilns)4 1 5327320 Concrete batching plant 1 1211111Crude Petroleum andNatural Gas Extraction1,402 150 3 2 1,55722111 Electric power generation 1 13329 Fabricated metal products 1 13323Fabricated structuralmetal1 14471Gasoline station (storagetanks, refueling)19 7 26424510 Grain Elevator 2 1 333311 Machinery manufacturing 3 3221210 Natural Gas Distribution 1 1 221111Oil and gas production/operations1 1Draft – September 15, 2010 Do Not Cite or QuoteFor Internal Deliberations OnlyPage 208 of 32672112Other (natural gas-firedboilers)a11 10 7 28323110Printing operations(lithographic)3 1 454171Professional, Scientific,and Technical Services3 1 4212321 Sand and Gravel Mining 1 1 2238990Sand and shot blastingoperations3 1 4321113 Sawmills 1 1 2221320Sewage treatmentfacilities1 1562212 Solid Waste Landfill 1 1332812Surface coatingoperations5 3 8Other (costs notestimated)b54 8 62TOTAL 1,521 197 10 2 1,730aFor small business analysis, used NAICS code designated for casino hotels. However, theprojected new and modified sources listed under “other (natural gas–fired boilers)”include not only boilers at casino hotels, but alsonew sources listed as “boilers” andnew tribal government facilities assumed to have natural gas fired boilers.bIncludes source categories such as crematories, restaurants, car dealers and socialassistance.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 209 of 326 To conduct our screening analysis of impacts on sma ll businesses, we compared the estimated costs of comp liance for each type of source in each sector with typical sma ll business sales in each sector. Our analysis estimates that small businesses invest ing in new minor source facilities, minor modifications to existing minor sources, minor modifications to existing majo r sources, and new synthetic minor sources over the period 201 1 through 2016 will incur costs that are less than 1 percent of average small company sales revenues for most sectors, but small companies choosing to invest in new auto body refin ishing plants, concrete batching plants, millwork plants, sawmills, solid waste landfills, sand and gravel mines, sand and shot blasting operations, and wood kitchen cabinet manuf acturing facilities have the potential to incur costs betwee n 1 percent and 3 percent of sales under upper bound cost estim ates. The EPA estimates that at most 11 new sources would be owned by small businesses in these sectors (new auto body re finishing plants, concrete batching plants, millwork plants, sawmills, solid waste landfills, sand and gravel mines, sand and shot blasting operations, and wood kitchen cabinet manuf acturing facilities) during the first 6 years following rule promulgation. Because this is a small number of fa cilities, andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 210 of 326 because EPA believes that very few new sources will incur upper bound costs, this is considered an over-estimate of the potential small business impacts. Thus, EPA does n ot believe that the rule will impose significant economic impa cts on a substantial number of small businesses owning new o r modified minor sources. Although this final rule will not have a significant economic impact on a substantial number of small en tities, EPA has tried to reduce the impact of this rule on smal l entities. We are not requiring existing minor sources to obta in a permit once the rule is effective, but we are requiring th em to register within 18 months after the rules effective date. In addition, we are delaying the implementation of the rule for new and modified minor sources until [INSERT 20 MONTHS FROM RULE PUBLICATION IN THE FEDERAL REGISTER] to give the regulated entities and us, the reviewing authority, time to p repare for the implementation of this rule.

D. Unfunded Mandates Reform Act This rule does not contain a federal mandate that m ay result in expenditures of $100 million or more for state, local, and tribal governments, in the aggregate, or the pr ivate sector in any 1 year. The EPA estimates the upper bound t otal annualized costs of this rule are approximately $20 .1 million,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 211 of 326 including $14.4 million for industry and $5.7 milli on for the Agency ($2008). Thus, this rule is not subject to the requirements of sections 202 or 205 of the Unfunded Mandates Reform Act (UMRA). This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulato ry requirements that might significantly or uniquely a ffect small governments. This rule has no requirements applica ble to small governments and as such does not impose obligations upon them.

E. Executive Order 13132: Federalism This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and th e states, or on the distribution of power and responsibilities a mong the various levels of government, as specified in Execu tive Order 13132. This rule has no requirements applicable to states. Thus, Executive Order 13132 does not apply to this rule. In the spirit of Executive Order 13132, and consist ent with EPA policy to promote communications between EPA an d state and local governments, EPA specifically solicited comme nt on the proposed rule from state and local officials. To that end, weDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 212 of 326 had two meetings with the STAPPA/ALAPCO 34 to present the draft preamble and rule. We also met with the National F ederation of Independent Business and provided outreach material through the small business ombudsman’s office to get input from the small businesses that might be affected by this rule.

F. Executive Order 13175: Consultation and Coordinati on with Indian Tribal Governments Subject to the Executive Order 13175 (65 FR 67249, November 9, 2000) EPA may not issue a regulation that has tr ibal implications, that imposes substantial direct compl iance costs, and that is not required by statute, unless the fed eral government provides the funds necessary to pay the direct compliance costs incurred by tribal governments, or EPA consults with tribal officials early in the process of devel oping the proposed regulation and develops a tribal summary i mpact

statement. The EPA has concluded that this action will have t ribal implications. However, it will neither impose subs tantial direct compliance costs on tribal governments, nor preempt tribal law. This action provides two preconstructi on air permitting rules for stationary sources in Indian C ountry, but

34 This organization has since changed its name to th e National Association of Clean Air Agencies (NACAA).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 213 of 326 these rules will neither impose substantial direct compliance costs on tribal governments, or preempt Tribal law because these rules will be implemented by EPA, or a delegate tri bal agency assisting EPA with administration of the rules, unt il replaced by an EPA-approved tribal implementation plan. See section III.D of this final rule preamble for more details on our outreach and consultation efforts.

G. Executive Order 13045: Protection of Children from Environmental Health & Safety Risks The EPA interprets Executive Order 13045 (62 FR 19 885, April 23, 1997) as applying only to those regulator y actions that concern health or safety risks, such t hat the analysis required under section 5-501 of the Execut ive Order has the potential to influence the regulation . This action is not subject to Executive Order 13045 because it does not establish an environmental standard intend ed to mitigate health or safety risks.

H. Executive Order 13211: Actions that Significantly Affect Energy Supply, Distribution, or Use This action is not a “significant energy action” a s defined in Executive Order 13211 (66 FR 28355, May 22, 2001 ), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The number of proj ected newDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 214 of 326 sources in the energy sector due to this rule is a small share (about 1 percent) of the total number of energy sec tor facilities nationwide. Therefore, EPA does not believe that t his action will have a significant effect on energy production . In addition, EPA’s cost analysis, presented in the Eco nomic Impact Analysis (EIA), estimates the total annualized cost of the rule will be substantially less than the $100 million co st and/or benefits trigger identified in EO 12866 and thus th is action is not considered an “economically significant regulat ory action”. With the final rule not being a economically signif icant regulatory action, it is not considered a significa nt energy action.

I. National Technology Transfer and Advancement Act Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law No. 1 04-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary c onsensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impra ctical. Voluntary consensus standards are technical standar ds (e.g. , materials specifications, test methods, sampling pr ocedures, and business practices) that are developed or adopted b y voluntary consensus standards bodies. The NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides notDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 215 of 326 to use available and applicable voluntary consensus standards. This action does not involve technical standards. Therefore, EPA did not consider the use of any volu ntary consensus standards.

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and L ow-Income Populations Executive Order 12898 (59 FR 7629, February 16, 199 4) establishes federal executive policy on environment al justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make en vironmental justice part of their mission by identifying and ad dressing, as appropriate, disproportionately high and adverse hu man health or environmental effects of their programs, policies, and activities on minority populations and low-income p opulations in the United States. The EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income pop ulations because it increases the level of environmental pro tection for all affected populations (which are persons living in Indian country) without having any disproportionately high and adverse human health or environmental effects on any popula tion,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 216 of 326 including any minority or low-income population . Indeed, EPA believes that the two preconstruction air quality r egulations in this FIP would provide regulatory certainty and fil l a regulatory gap in Indian country and result in emis sions reductions from sources complying with these regula tions. Consequently, the regulations are expected to resul t in health benefits to persons living in Indian country, many of whom live in low-income and minority communities.

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 . The 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 Fede ral Register

. A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule wil l be effective 60 days from the date of publication, i.e

. , on [INSERTDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 217 of 326 DATE 60 DAYS AFTER THE DATE OF PUBLICATION IN THE F EDERAL REGISTER]

. Under section 307(b)(1) of the Act, petitions for judicial review of this action must be filed in the United S tates Court of Appeals for the District of Columbia Circuit by [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL RE GISTER] . Any such judicial review is limited to only those objec tions that are raised with reasonable specificity in timely co mments. Filing a petition for reconsideration by the Admini strator of this final rule does not affect the finality of thi s rule for the 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 o r action. Under section 307(b) (2) of the Act, the requiremen ts of this final action may not be challenged later in civil o r criminal proceedings brought by us to enforce these requirem ents.
IX. Statutory Authority The statutory authority for this proposed action is provided by sections 101, 110, 112, 114, 116, and 3 01 of the Act as amended (42. U.S.C. 7401, 7410, 7412, 7414, 7416 , and 7601).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 218 of 326 Page 218 of 326 - Review of New Sources and Modific ations in Indian Country

List of Subjects 40 CFR Part 49 Administrative practices and procedures, Air pollu tion control, Environmental protection, Indians, Intergo vernmental relations, Reporting and recordkeeping requirements

. 40 CFR Part 51 Administrative practices and procedures, Air pollu tion control, Environmental protection, Intergovernmenta l relations.

___________________________ Dated:

____________________________ Lisa P. Jackson, Administrator.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 219 of 326 For the reasons cited in the preamble, title 40, ch apter I of the Code of Federal Regulations is amended as follo ws: PART 49-[AMENDED] 1. The authority citation for part 49 continues to read as follows: Authority : 42 U.S.C. 7401, et seq . Subpart C-[AMENDED] 2. Subpart C of Part 49 is amended by adding an undesignated center heading and §§49.151 through 49 .161, and adding and reserving §§49.162 through 49.165 to rea d as follows: Federal Minor New Source Review Program in Indian C ountry §49.151 Program overview

. (a) What constitutes the federal minor new source review (NSR) program in Indian country? As set forth in this Federal Implementation Plan (FIP), the federal minor NSR pr ogram in Indian country (or “program”) consists of §§49.151 through 49.165. (b) What is the purpose of this program? This program has the following purposes: (1) It establishes a preconstruction permitting pr ogram for new and modified minor sources (minor sources) and minor modifications at major stationary sources located i n Indian country to meet the requirements of section 110(a)( 2)(C) of theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 220 of 326 Act. (2) It establishes a registration system that will allow the reviewing authority to develop and maintain a r ecord of minor source emissions in Indian country. (3) It provides a mechanism for an otherwise major stationary source to voluntarily accept restriction s on its potential to emit to become a synthetic minor sourc e. This mechanism may also be used by an otherwise major so urce of HAPs to voluntarily accept restrictions on its potential to emit to become a synthetic minor HAP source. Such restrict ions must be enforceable as a practical matter. (4) It provides an additional mechanism for case-b y-case maximum achievable control technology (MACT) determ inations for those major sources of HAPs subject to such determi nations under section 112(g)(2) of the Act. (5) It sets forth the criteria and procedures that the reviewing authority (as defined in §49.152(d)) will use to administer the program. (c) When and where does this program apply? (1) The provisions of this program apply in Indian country where there is no EPA-approved minor NSR program, a ccording to the following implementation schedule: (i) Existing major sources.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 221 of 326 (A) If you wish to commence construction of a mino r modification at an existing major stationary source on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN T HE FEDERAL REGISTER] , you must obtain a permit pursuant to §§49.154 and 49.155 (or a general permit pursuant to §49.156, if applicable) prior to commencing construction. (B) If you wish to obtain a synthetic minor source permit pursuant §49.158 to establish a synthetic minor sou rce and/or a synthetic minor HAP source at your existing major s ource, you may submit a synthetic minor source permit applicat ion on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN T HE FEDERAL REGISTER] . However, if your permit application for a synthetic minor source and/or synthetic minor HAP s ource pursuant to the FIPs for reservations in Idaho, Ore gon, and Washington has been determined complete prior to [INSERT DATE 60
DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGIS TER] , you do not need to apply for a synthetic minor source perm it under this

program. (ii) Synthetic minor sources. (A) If you wish to commence construction of a new synthetic minor source and/or a new synthetic minor HAP source or a modification at an existing synthetic minor so urce and/or synthetic minor HAP source on or after [INSERT DATE 60 DAYSDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 222 of 326 AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] , you must obtain a permit pursuant to §49.158 prior to commen cing construction. (B) If your existing synthetic minor source and/or synthetic minor HAP source was established pursuant to the FIPs applicable to the Indian reservations in Idaho, Ore gon, and Washington; or was established under an EPA-approve d rule or permit program limiting potential to emit, you do n ot need to take any action under this program. (C) If your existing synthetic minor source and/or synthetic minor HAP source was established under a permit with enforceable emissions limitations issued pursuant t o part 71 of this chapter, the reviewing authority has the discr etion to require you to submit a permit application for a sy nthetic minor source permit under this program by [INSERT DATE 1 YEAR AND 60 DAYS FROM PUBLICATION IN THE FEDERAL REGISTER] and pursuant to §49.158, to require you to submit a permit applicat ion for a synthetic minor source permit under this program (p ursuant to §49.158) at the same time that you apply to renew y our part 71 permit, or to allow you to continue to maintain syn thetic minor status through your part 71 permit. If the reviewi ng authority requires you to obtain a synthetic minor source per mit and/or synthetic minor HAP source permit under this progra m (pursuantDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 223 of 326 to §49.158) it also has the discretion to require a ny additional requirements, including control technology requirem ents, based on the specific circumstances of the source. (D) If your existing synthetic minor source and/or synthetic minor HAP source was established through a mechanism other than those described in paragraphs (c)(1)(ii) (B) and (C) of this section, including state-issued permits or pursuant to achieving your existing synthetic minor status by m aintaining your actual emissions at less than 50% of the relev ant major source threshold, you must submit an application pu rsuant to §49.158 for a synthetic minor source permit under t his program by [INSERT DATE 1 YEAR AND 60 DAYS AFTER DATE OF PUBLI CATION IN THE FEDERAL REGISTER] . The reviewing authority has the discretion to require any additional requirements, including control technology requirements, based on the speci fic circumstances of the source. (iii) True minor sources. (A) If you have an existing true minor source on w hich construction commenced any time prior to [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] and that is subject to the registration requirements of §49.160 , you must submit the initial registration for the source by [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] orDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 224 of 326 within 90 days after the source begins operation, w hichever is later. You are exempt from this requirement if you r source is subject to §49.138 - “Rule for the registration of air pollution sources and the reporting of emissions.” (B) If you wish to commence construction of a new true minor source or a modification at an existing true minor source on or after [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] and the construction or modification is subject to this program, you must obtain a permit p ursuant to §§49.154 and 49.155 (or a general permit pursuant t o §49.156, if applicable) prior to commencing construction. The proposed new source or modification will also be subject to the registration requirements of §49.160, except for sources that ar e subject to §49.138 - “Rule for the registration of air polluti on sources and the reporting of emissions.” (2) The provisions of this program or portions of this program cease to apply in an area covered by an EPA -approved implementation plan on the date that our approval o f that implementation plan becomes effective, provided tha t the implementation plan includes provisions that comply with the requirements of section 110(a)(2)(C) of the Act for the construction and modification of minor sources and minor modifications at major sources.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 225 of 326 (d) What general provisions apply under this progr am? The following general provisions apply to you as an own er/operator of a stationary source: (1) If you commence construction of a new source o r modification that is subject to this program after the applicable date specified in paragraph (c) of this section without applying for and receiving a permit pursuan t to this program, you will be subject to appropriate enforce ment action. (2) If you do not construct or operate your source or modification in accordance with the terms of your m inor NSR permit, you will be subject to appropriate enforcem ent action. (3) If you are subject to the registration require ments of this program, you must comply with those requiremen ts. (4) Issuance of a permit does not relieve you of t he responsibility to comply fully with applicable prov isions of any EPA-approved implementation plan or FIP and any oth er requirements under applicable law. (5) Nothing in this program prevents a tribe from administering a minor NSR permit program with diffe rent requirements in an approved Tribal Implementation P lan (TIP) as long as the TIP does not interfere with any applica ble requirement of the Act. (e) What is the process for issuing permits under thisDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 226 of 326 program? For the reviewing authority to issue a final perm it decision under this program (other than a general p ermit under §49.156 or a synthetic minor source permit under §4 9.158), all the actions listed in paragraphs (e)(1) through (8) of this section need to be completed. The processes for is suing general permits and synthetic minor source permits are set out in §49.156 and §49.158, respectively. (1) You must submit a permit application that meet s the requirements of §49.154(a). (2) The reviewing authority determines completenes s of the permit application as provided in §49.154(b) within 45 days of receiving the application (60 days for minor modifi cations at major sources). (3) The reviewing authority determines the appropr iate emission limitations and permit conditions for your affected emissions units under §49.154(c). (4) The reviewing authority may require you to sub mit an Air Quality Impact Analysis if it has reason to be concerned that the construction of your minor source or modif ication would cause or contribute to a NAAQS or PSD increment vio lation (5) If an AQIA is submitted, the reviewing author ity determines that the new or modified source will not cause or contribute to a NAAQS or PSD increment violation.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 227 of 326 (6) The reviewing authority develops a draft permi t that meets the permit content requirements of §49.155(a)

. (7) The reviewing authority provides for public participation, including a 30-day period for public comment, according to the requirements of §49.157. (8) The reviewing authority either issues a final permit that meets the requirements of §49.155(a), or denie s the permit and provides reasons for the denial, within 135 day s (or within 1 year for minor modifications at major sources) af ter the date the application is deemed complete and all addition al information necessary to make an informed decision has been provided. §49.152 Definitions

. (a) For sources of regulated NSR pollutants in nonattainment areas, the definitions in §49.167 app ly to the extent that they are used in this program (except f or terms defined in paragraph (d) of this section). (b) For sources of regulated NSR pollutants in att ainment or unclassifiable areas, the definitions in §52.21 of this chapter apply to the extent that they are used in t his program (except for terms defined in paragraph (d) of this section). (c) For sources of HAP, the definitions in §63.2 o f this chapter apply to the extent that they are used in t his programDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 228 of 326 (except for terms defined in paragraph (d) of this section). (d) The following definitions also apply to this p rogram: Affected emissions units means the following emissions units, as applicable: (1) For a proposed new minor source, all the emiss ions units. (2) For a proposed modification, the new, modified , and replacement emissions units involved in the modific ation. Allowable emissions means “allowable emissions” as defined in §52.21(b)(16) of this chapter, except that the a llowable emissions for any emissions unit are calculated con sidering any emission limitations that are enforceable as a prac tical matter on the emissions unit's potential to emit. Emission limitation means a requirement established by the reviewing authority that limits the quantity, rate, or concentration of emissions of air pollutants on a c ontinuous basis, including any requirement relating to the op eration or maintenance of a source to assure continuous emissi ons reduction, and any design standard, equipment stand ard, work practice, operational standard, or pollution preven tion technique. Enforceable as a practical matter means that an emission limitation or other standard is both legally and pr acticallyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 229 of 326 enforceable as follows: (1) An emission limitation or other standard is le gally enforceable if the reviewing authority has the righ t to enforce it. (2) Practical enforceability for an emission limit ation or for other standards (design standards, equipment st andards, work practices, operational standards, pollution prevent ion techniques) in a permit for a stationary source is achieved if the permit's provisions specify: (i) A limitation or standard and the emissions uni ts or activities at the stationary source subject to the limitation or standard; (ii) The time period for the limitation or standar d (e.g. , hourly, daily, monthly, and/or annual limits such a s rolling annual limits); and (iii) The method to determine compliance, includin g appropriate monitoring, recordkeeping, reporting, a nd testing. (3) For rules and general permits that apply to ca tegories of stationary sources, practical enforceability add itionally requires that the provisions: (i) Identify the types or categories of sources th at are covered by the rule or general permit; (ii) Where coverage is optional, provide for notic e to theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 230 of 326 reviewing authority of the source's election to be covered by the rule or general permit; and (iii) Specify the enforcement consequences relevan t to the rule or general permit. Environmental Appeals Board means the Board within the EPA described in §1.25(e) of this chapter. Indian country , as defined in 18 U.S.C. 1151, means the following: (1) All land within the limits of any Indian reser vation under the jurisdiction of the United States governm ent, notwithstanding the issuance of any patent, and inc luding rights-of-way running through the reservation; 1 (2) All dependent Indian communities within the bo rders of the United States whether within the original or su bsequently acquired territory thereof, and whether within or w ithout the limits of a state; and (3) All Indian allotments, the Indian titles to wh ich have not been extinguished, including rights-of-way runn ing through the same. Indian governing body means the governing body of any

1 Under this definition, EPA treats as reservations trust lands validly set aside for the use of a tribe even if the trust lands have not been formally designated as a reserv ation.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 231 of 326 tribe, band, or group of Indians subject to the jur isdiction of the United States and recognized by the United Stat es as possessing power of self-government. Minor modification at a major stationary source means a modification at a major stationary source that does not qualify as a major modification under §49.167 or §52.21 of this chapter, as applicable. Minor NSR threshold means any of the applicability cutoffs for this program listed in Table 1 of §49.153. Minor stationary source or minor source means a source, not including the exempt emissions units and activities listed in §49.153(c), that has the potential to emit regulate d NSR pollutants in amounts that are less than the major stationary source thresholds in §49.167 or §52.21 of this chap ter, as applicable, but equal to or greater than the minor NSR thresholds in §49.153. The potential to emit inclu des fugitive emissions, to the extent that they are quantifiable , only if the source belongs to one of the source categories list ed in part 51, Appendix S, paragraph II.A.4(iii) or §52.21(b)( 1)(iii) of this chapter, as applicable. Modification means any physical or operational change at a stationary source that would cause an increase in t he allowable emissions of a minor source or an increase in the a ctualDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 232 of 326 emissions (based on the applicable test under the m ajor NSR program) of a major source for any regulated NSR po llutant, or that would cause the emission of any regulated NSR pollutant not previously emitted. Allowable emissions of a minor source include fugitive emissions, to the extent that they are quantifiable, only if the source belongs to one of the source categories listed in part 51, Appendix S, paragraph II.A.4(iii) or §52.21(b)(1)(iii) of this chapter, as applicable . The following exemptions apply: (1) A physical or operational change does not incl ude routine maintenance, repair, or replacement. (2) An increase in the hours of operation or in th e production rate is not considered an operational ch ange unless such change is prohibited under any permit conditio n that is enforceable as a practical matter. (3) A change in ownership at a source. Potential to emit means the maximum capacity of a source to emit a pollutant under its physical and operational design. Any physical or operational limitation on the capacity of the source to emit a pollutant, including air pollution contro l equipment and restrictions on hours of operation or on the ty pe or amount of material combusted, stored, or processed, shall be treated as part of its design if the limitation or the effect it would haveDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 233 of 326 on emissions is enforceable as a practical matter. Secondary emissions, as defined at §52.21(b)(18) of this chap ter, do not count in determining the potential to emit of a sou rce. Reviewing authority means the Administrator, or may mean an Indian tribe with an approved TIP or a tribal agenc y assisting EPA with administration of the program through a de legation. Synthetic minor source means a source that otherwise has the potential to emit regulated NSR pollutants in a mounts that are at or above those for major stationary sources in §49.167, §52.21, or §71.2 of this chapter, as applicable, bu t that has taken a restriction so that its potential to emit i s less than such amounts for major stationary sources. Such re strictions must be enforceable as a practical matter. Synthetic minor HAP source means a source that otherwise has the potential to emit HAPs in amounts that are at or above those for major sources of HAP in §63.2 of this cha pter, but that has taken a restriction so that its potential to emit is less than such amounts for major sources. Such res trictions must be enforceable as a practical matter. True minor source means a source that emits or has the potential to emit regulated NSR pollutants in amoun ts that are less than the major stationary source thresholds in §49.167 or §52.21 of this chapter, as applicable, but equal to or greaterDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 234 of 326 than the minor NSR thresholds in §49.153, without t he need to take an enforceable restriction to reduce its poten tial to emit to such levels. That is, a true minor source is a minor source that is not a synthetic minor source. §49.153 Applicability

. (a) Does this program apply to me? The requirements of this program apply to you as set out in paragraphs (a)(1) through (4) of this section. (1) New and modified sources . The applicability of the preconstruction review requirements of this program is determined individually for each regulated NSR poll utant that would be emitted by your new or modified source. F or each such pollutant, determine applicability as set out in th e relevant paragraph (a)(1)(i) or (ii) of this section. (i) New source . Use the following steps to determine applicability for each regulated NSR pollutant. (A) Step 1 . Determine whether your proposed source's potential to emit the pollutant that you are evalua ting is subject to review under the applicable major NSR pr ogram (that is, under §52.21 of this chapter, under the federal major NSR program for nonattainment areas in Indian country a t §§49.166 through 49.175, or under a program approved by the Administrator pursuant to §51.165 or §51.166 of this chapter). I f not, go toDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 235 of 326 Step 2 (paragraph (a)(1)(i)(B) of this section). (B) Step 2 . Determine whether your proposed source's potential to emit the pollutant that you are evalua ting, (including fugitive emissions, to the extent they a re quantifiable, only if the source belongs to one of the source categories listed pursuant to section 302(j) of the Act), is equal to or greater than the corresponding minor NS R threshold in Table 1 of this section. If it is, you are subj ect to the preconstruction requirements of this program for th at pollutant. (ii) Modification at an existing source . Use the following steps to determine applicability for each regulated NSR pollutant. (A) Step 1 . For the pollutant being evaluated, determine whether your proposed modification is subject to re view under the applicable major NSR program. If the modificat ion at your existing major source does not qualify as a major m odification under that program based on the actual-to-projected -actual test, it is considered a minor modification and is subjec t to the minor NSR program requirements, if the emissions in crease from the actual-to-projected-actual test is equal to or exceeds the minor NSR threshold listed in Table 1 of this secti on. For a modification at your existing minor source go to St ep 2 (paragraph (a)(1)(ii)(B) of this section).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 236 of 326 (B) Step 2 . Determine whether the increase in allowable emissions from the proposed modification (calculate d using the procedures of paragraph (b) of this section) would be equal to or greater than the minor NSR threshold in Table 1 of this section for the pollutant that you are evaluating. If it is, you are subject to the preconstruction requirements of this program for that pollutant. If not, go to Step 3 ( paragraph (a)(1)(ii)(C) of this section). (C) Step 3 . If any of the emissions units affected by your proposed modification result in an increase in an annual allowable emissions limit for the pollutant that yo u are evaluating, the proposed modification is subject to paragraph (a)(2) of this section. If not, your proposed modi fication is not subject to this program. (2) Increase in an emissions unit's annual allowab le emissions limit . If you propose a physical or operational change at your minor or major stationary source tha t would increase an emissions unit's allowable emissions of a regulated NSR pollutant above its existing annual allowable e missions limit, you must obtain a permit revision to reflect the increase in the limit prior to making the change. For a phy sical or operational change that is not otherwise subject to review under major NSR or under this program, such increase in t he annualDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 237 of 326 allowable emissions limit may be accomplished throu gh an administrative permit revision as provided in §49.1 59(f). (3) Synthetic minor source permits

. (i) If you own or operate an existing major source and you wish to obtain a synthetic minor source permit purs uant to §49.158 to establish a synthetic minor source and/o r a synthetic minor HAP source, you may submit a synthetic minor source permit application on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] . However, if your permit application for a synthetic minor source and/or syn thetic minor HAP source pursuant to the FIPs for reservations in Idaho, Oregon, and Washington has been determined complete prior

to [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN T HE FEDERAL REGISTER] , you do not need to apply for a synthetic minor so urce permit under this program. (ii) If you wish to commence construction of a new synthetic minor source and/or a new synthetic minor HAP source, or a modification at an existing synthetic minor so urce and/or synthetic minor HAP source, on or after [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] , you must obtain a permit pursuant to §49.158 prior to commen cing construction. (iii) If you own or operate a synthetic minor sourc e orDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 238 of 326 synthetic minor HAP source that was established pri or to the effective date of this rule (that is, prior to [INSERT DATE 60
DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGIS TER]) pursuant to the FIPs applicable to the Indian reser vations in Idaho, Oregon, and Washington or under an EPA-appro ved rule or permit program limiting potential to emit, you do n ot need to take any action under this program. (iv) If you own or operate a synthetic minor source or synthetic minor HAP source that was established pri or to the effective date of this rule (that is, prior to [INSERT DATE 60
DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGIS TER]) through a permit with enforceable emissions limitations iss ued pursuant to the operating permit program in part 71 of this chapter, the reviewing authority has the discretion to require y ou to apply for a synthetic minor source permit under §49.158 o f this program by [INSERT DATE 1 YEAR AND 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] or at the time of part 71 permit renewal or allow you to maintain synthetic m inor status through your part 71 permit. (v) For all other synthetic minor sources or synthe tic minor HAP sources that obtained synthetic minor sta tus or synthetic minor source permits through a mechanism other than those described in paragraphs (iii) and (iv) of thi s section,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 239 of 326 including state-issued permits, you must submit an application for a synthetic minor source permit under this prog ram by [INSERT DATE 1 YEAR AND 60 DAYS AFTER DATE OF PUBLI CATION IN THE FEDERAL REGISTER] under §49.158. (4) Case-by-case maximum achievable control techno logy (MACT) determinations . If you propose to construct or reconstruct a major source of HAPs such that you ar e subject to a case-by-case MACT determination under section 112 (g)(2) of the Act, you may elect to have this determination appro ved under the provisions of this program. (Other options for suc h determinations include a title V permit action or a Notice of MACT Approval under §63.43 of this chapter.) If yo u elect this option, you still must comply with the requirements of §63.43 of this chapter that apply to all case-by-case MACT de terminations. (b) How do I determine the increase in allowable e missions from a physical or operational change at my source? Determine the resulting increase in allowable emissions in to ns per year (tpy) of each regulated NSR pollutant after conside ring all increases from the change. A physical or operation al change may involve one or more emissions units. The total inc rease in allowable emissions resulting from your proposed ch ange, including fugitive emissions, to the extent they ar e quantifiable, only if your source belongs to one of the sourceDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 240 of 326 categories listed pursuant to section 302(j) of the Act, would be the sum of the following: (1) For each new emissions unit that is to be adde d, the emissions increase would be the potential to emit o f the emissions unit. (2) For each emissions unit with an allowable emis sions limit that is to be changed or replaced, the emissi ons increase would be the allowable emissions of the emissions u nit after the change or replacement minus the allowable emissions prior to the change or replacement. However, this may not be a negative value. If the allowable emissions of an emissions unit would be reduced as a result of the change or replacement, u se zero in the calculation. (3) For each unpermitted emissions unit (a unit wi thout any enforceable permit conditions) that is to be ch anged or replaced, the emissions increase is the allowable e missions of the emissions unit after the change or replacement minus the potential to emit prior to the change or replacemen t. However, this may not be a negative value. If an emissions unit’s postchange allowable emissions would less than its pre- change potential to emit, use zero in the calculation. (c) What emissions units and activities are exempt from this program?Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 241 of 326 This program does not apply to the following emissi ons units and activities at a source that are listed in paragraphs (c)(1) through (7) of this section. (1) Mobile sources. (2) Ventilating units for comfort that do not exha ust air pollutants into the ambient air from any manufactur ing of other industrial processes (3) Noncommercial food preparation. (4) Consumer use of office equipment and products. (5) Janitorial services and consumer use of janito rial products. (6) Internal combustion engines used for landscapi ng
purposes. (7) Bench scale laboratory activities, except for laboratory fume hoods or vents.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 242 of 326 Table 1 to §49.153. Minor NSR thresholds

. a

Regulated NSR pollutant Minor NSR thresholds for nonattainment areas (tpy) Minor NSR

thresholds for attainment areas (tpy) Carbon monoxide (CO)............. 5 10 Nitrogen oxides (NO x ) ............ 5 b 10 Sulfur dioxide (SO 2 ) ............. 5 10 Volatile Organic Compounds (VOC). 2 b 5 PM............................... 5 10 PM 10 ............................. 1 5 PM 2.5 ............................. 0.6 3 Lead............................. 0.1 0.1 Fluorides........................ NA 1 Sulfuric acid mist............... NA 2 Hydrogen sulfide (H 2 S) ........... NA 2 Total reduced sulfur (including H 2 S) .......................... NA 2 Reduced sulfur compounds (including H 2 S) ............... NA 2 Municipal waste combustor emissions ...................... NA 2 Municipal solid waste landfill emissions (measured as nonmethane organic compounds) . NA 10

a If part of a tribe's area of Indian country is des ignated as attainment and another part as nonattainment, the a pplicable threshold for a proposed source or modification is determined based on the designation where the source would be located. If the source straddles the two areas, the more string ent thresholds apply. b In extreme ozone nonattainment areas, section 182(e )(2) of the Act requires any change at a major source that resu lts in any increase in emissions to be subject to major NSR pe rmitting. In other words, any changes to existing major sourc es in extreme ozone nonattainment areas are subject to a “0” tpy threshold, but that threshold does not apply to min or sources.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 243 of 326 §49.154 Permit application requirements

. This section applies to you if you are subject to t his program under §49.153(a)(1) for the construction of a new minor source or a modification at an existing source. (A s an alternative, you may apply for a general permit und er §49.156 if an applicable general permit is available for your source type.) In addition, this section applies to you if you wis h to establish a synthetic minor source or a synthetic m inor HAP source (see §49.158). (a) What information must my permit application c ontain? Paragraphs (a)(1) through (3) of this section gover n the content of your application. (1) General provisions for permit applications . The following provisions apply to permit applications u nder this program: (i) The reviewing authority may develop permit app lication forms for your use. (ii) The permit application need not contain infor mation on the exempt emissions units and activities listed in §49.153(c). (iii) The permit application for a modification ne ed only include information on the affected emissions units as defined in §49.152(d).Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 244 of 326 (2) Required permit application content . Except as specified in paragraphs (a)(1)(ii) and (iii) of thi s section, you must include the information listed in paragrap hs (a)(2)(i) through (ix) of this section in your application fo r a permit under this program. The reviewing authority may re quire additional information as needed to process the per mit application. (i) Identifying information, including your name a nd address (and plant name and address if different) a nd the name and telephone number of the plant manager/contact. (ii) A description of your source's processes and products. (iii) A list of all affected emissions units (with the exception of the exempt emissions units and activit ies listed in §49.153(c)). (iv) For each new emissions unit that is listed, t he potential to emit of each regulated NSR pollutant i n tpy (including fugitive emissions, to the extent that t hey are quantifiable, if the emissions unit or source is in one of the source categories listed in part 51, Appendix S, pa ragraph II.A.4(iii) or §52.21(b)(1)(iii) of this chapter, a s applicable), with supporting documentation. In you r calculation of the potential to emit for an emissions unit, you must accountDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 245 of 326 for any proposed emission limitations. (v) For each modified emissions unit and replaceme nt unit that is listed, the allowable emissions of each reg ulated NSR pollutant in tpy both before and after the modifica tion (including fugitive emissions, to the extent that t hey are quantifiable, if the emissions unit or source belon gs to one of the source categories listed in part 51, Appendix S , paragraph II.A.4(iii) or §52.21(b)(1)(iii) of this chapter, a s applicable), with supporting documentation. For em issions units that do not have an allowable emissions limit prior to the modification, report the potential to emit. In you r calculation of annual allowable emissions for an emissions unit after the modification, you must account for any proposed emi ssion limitations. (vi) The following information to the extent it is needed to determine or regulate emissions: fuels, fuel use , raw materials, production rates, and operating schedule s. (vii) Identification and description of any existi ng air pollution control equipment and compliance monitori ng devices or activities. (viii) Any existing limitations on source operatio n affecting emissions or any work practice standards, where applicable, for all NSR regulated pollutants at the source.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 246 of 326 (ix) For each emission point associated with an af fected emissions unit, provide stack or vent dimensions an d flow information. (3) Optional permit application content . At your option, you may propose emission limitations for each affec ted emissions unit, which may include pollution prevention techni ques, air pollution control devices, design standards, equipm ent standards, work practices, operational standards, o r a combination thereof. You may include an explanatio n of why you believe the proposed emission limitations to be app ropriate. (b) How is my permit application determined to be complete? Paragraphs (b)(1) through (3) of this section gov ern the completeness review of your permit application. (1) An application for a permit under this program will be reviewed by the reviewing authority within 45 days of its receipt (60 days for minor modifications at major s ources) to determine whether the application contains all the information necessary for processing the application. (2) If the reviewing authority determines that the application is not complete, it will request additi onal information from you as necessary to process the ap plication. If the reviewing authority determines that the appl ication is complete, it will notify you in writing. The revie wingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 247 of 326 authority’s completeness determination or request f or additional information should be postmarked within 45 days of receipt of the permit application by the reviewing authority ( 60 days for minor modifications at major sources). If you do n ot receive a request for additional information or a notice of c omplete application postmarked within 45 days of receipt of the permit application by the reviewing authority (60 days for minor modifications at major sources), your application w ill be deemed complete. (3) If, while processing an application that has b een determined to be complete, the reviewing authority determines that additional information is necessary to evaluat e or take final action on the application, it may request add itional information from you and require your responses wit hin a reasonable time period. (4) Any permit application will be granted or denie d no later than 135 days (1 year for minor modifications at major sources) after the date the application is deemed c omplete and all additional information necessary to make an inf ormed decision has been provided. (c) How will the reviewing authority determine the emission limitations that will be required in my pe rmit? After determining that your application is complete, the reviewingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 248 of 326 authority will conduct a case-by-case control techn ology review to determine the appropriate level of control, if a ny, necessary to assure that NAAQS are achieved, as well as the c orresponding emission limitations for the affected emissions uni ts at your

source. (1) In carrying out this case-by-case review, the reviewing authority will consider the following fac tors: (i) Local air quality conditions. (ii) Typical control technology or other emissions reduction measures used by similar sources in surro unding areas. (iii) Anticipated economic growth in the area. (iv) Cost-effective emission reduction alternative s. (2) The reviewing authority must require a numeric al limit on the quantity, rate, or concentration of emission s for each regulated NSR pollutant emitted by each affected em issions unit at your source for which such a limit is technicall y and economically feasible. (3) The emission limitations required by the revie wing authority may consist of numerical limits on the qu antity, rate, or concentration of emissions; pollution prevention techniques; design standards; equipment standards; work practic es; operational standards; requirements relating to the operation or maintenance of the source; or any combination there of.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 249 of 326 (4) The emission limitations required by the revie wing authority must assure that each affected emissions unit will comply with all requirements of parts 60, 61, and 6 3 of this chapter as well as any FIPs or TIPs that apply to t he unit. (5) The emission limitations required by the revie wing authority must not be affected in a manner by so mu ch of a stack’s height as exceeds good engineering practice or by any other dispersion technique, except as provided in § 51.118(b) of this chapter. If the reviewing authority proposes to issue a permit to a source based on a good engineering prac tice stack height that exceeds the height allowed by §51.100(i i)(1) or (2) of this chapter, it must notify the public of the a vailability of the demonstration study and must provide opportu nity for a public hearing according to the requirements of §49 .157 for the draft permit. (d) When may the reviewing authority require an ai r quality impacts analysis (AQIA)? Paragraphs (d)(1) through (3) of this section govern AQIA requirements under this program. (1) If the reviewing authority has reason to be co ncerned that the construction of your minor source or modif ication would cause or contribute to a NAAQS or PSD increment vio lation, it may require you to conduct and submit an AQIA. (2) If required, you must conduct the AQIA using t heDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 250 of 326 dispersion models and procedures of part 51, Append ix W of this chapter. (3) If the AQIA reveals that construction of your source or modification would cause or contribute to a NAAQ S or PSD increment violation, the reviewing authority must r equire you to reduce or mitigate such impacts before it can issue you a permit. §49.155 Permit requirements

. This section applies to your permit if you are subj ect to this program under §49.153(a)(1) for construction o f a new minor source or a modification at an existing source, unl ess you applied for a general permit under §49.156 (where a n applicable general permit is available for your source type). In addition, this section applies to your permit if you wish to establish a synthetic minor source or a synthetic minor HAP sou rce (see §49.158). (a) What information must my permit include? Your permit must include the requirements in paragraphs (a)(1) through (7) of this section. (1) General Requirements . The permit must include the following elements: (i) The effective date of the permit and the date by which you must commence construction in order for your pe rmit toDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 251 of 326 remain valid (i.e. , 18 months after the permit effective date). (ii) The emissions units subject to the permit and their associated emission limitations. (iii) Monitoring, recordkeeping, reporting, and te sting requirements to assure compliance with the emission limitations. (2) Emission limitations . The permit must include the emission limitations determined by the reviewing au thority under §49.154(c) for each affected emissions unit. In ad dition, the permit must include an annual allowable emissions l imit for each affected emissions unit and for each regulated NSR pollutant emitted by the unit if the unit is issued an enforc eable emission limitation lower than the potential to emi t of that unit. (3) Monitoring requirements . The permit must include monitoring requirements sufficient to assure compli ance with the emission limitations and annual allowable emissions limits that apply to the affected emissions units at your sourc e. The reviewing authority may require, as appropriate, an y of the requirements in paragraphs (a)(3)(i) and (ii) of th is section. (i) Any emissions monitoring, including analysis procedures, test methods, periodic testing, instrum ental monitoring, and non-instrumental monitoring. Such monitoring requirements shall assure use of test methods, unit s, averagingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 252 of 326 periods, and other statistical conventions consiste nt with the required emission limitations. (ii) As necessary, requirements concerning the use , maintenance, and installation of monitoring equipme nt or methods. (4) Recordkeeping requirements . The permit must include recordkeeping requirements sufficient to assure com pliance with the emission limitations and monitoring requirement s, and it must require the elements in paragraphs (a)(4)(i) a nd (ii) of this section. (i) Records of required monitoring information tha t include the information in paragraphs (a)(4)(i)(A) through (F) of this section, as appropriate. (A) The location, date, and time of sampling or

measurements. (B) The date(s) analyses were performed. (C) The company or entity that performed the analy ses. (D) The analytical techniques or methods used. (E) The results of such analyses. (F) The operating conditions existing at the time of sampling or measurement. (ii) Retention for 5 years of records of all requi red monitoring data and support information for the mon itoringDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 253 of 326 sample, measurement, report, or application. Suppo rt information may include all calibration and mainten ance records, all original strip-chart recordings or digital reco rds for continuous monitoring instrumentation, and copies o f all reports required by the permit. (5) Reporting requirements . The permit must include the reporting requirements in paragraphs (a)(5)(i) and (ii) of this section. (i) Annual submittal of reports of monitoring requ ired under paragraph (a)(3) of this section, including t he type and frequency of monitoring, and a summary of results o btained by monitoring. (ii) Prompt reporting of deviations from permit requirements, including those attributable to upset conditions as defined in the permit, the probable cause of suc h deviations, and any corrective actions or preventive measures t aken. Within the permit, the reviewing authority must define “pr ompt” in relation to the degree and type of deviation likely to occur and the applicable emission limitations. (6) Severability clause . The permit must include a severability clause to ensure the continued validit y of the other portions of the permit in the event of a chal lenge to a portion of the permit.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 254 of 326 (7) Additional provisions . The permit must also contain provisions stating the requirements in paragraphs ( a)(7)(i) through (vii) of this section. (i) You, as the permittee, must comply with all co nditions of your permit, including emission limitations that apply to the affected emissions units at your source. Noncompli ance with any permit term or condition is a violation of the perm it and may constitute a violation of the Act and is grounds fo r enforcement action and for a permit termination or revocation. (ii) Your permitted source must not cause or contr ibute to a NAAQS violation, or in an attainment area, must n ot cause or contribute to a PSD increment violation. (iii) It is not a defense for you, as the permitte e, in an enforcement action that it would have been necessar y to halt or reduce the permitted activity in order to maintain compliance with the conditions of this permit. (iv) The permit may be revised, reopened, revoked and reissued, or terminated for cause. The filing of a request by you, as the permittee, for a permit revision, revoc ation and reissuance, or termination, or of a notification of p lanned changes or anticipated noncompliance does not stay any permit condition. (v) The permit does not convey any property rights of anyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 255 of 326 sort or any exclusive privilege. (vi) You, as the permittee, shall furnish to the r eviewing authority, within a reasonable time, any informatio n that the reviewing authority may request in writing to deter mine whether cause exists for revising, revoking and reissuing, or terminating the permit or to determine compliance w ith the permit. For any such information claimed to be con fidential, you must also submit a claim of confidentiality in accordance with part 2, subpart B of this chapter. (vii) Upon presentation of proper credentials, you , as the permittee, must allow a representative of the revie wing authority (who must comply with the safety requirem ents of the permittee) to: (A) Enter upon your premises where a source is loc ated or emissions-related activity is conducted, or where r ecords are required to be kept under the conditions of the per mit; (B) Have access to and copy, at reasonable times, any records that are required to be kept under the cond itions of the permit; (C) Inspect, during normal business hours or while the source is in operation, any facilities, equipment ( including monitoring and air pollution control equipment), pr actices, or operations regulated or required under the permit;Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 256 of 326 (D) Sample or monitor, at reasonable times, substa nces or parameters for the purpose of assuring compliance w ith the permit or other applicable requirements; and (E) Record any inspection by use of written, elect ronic, magnetic, and photographic media. (b) Can my permit become invalid? Your permit becomes invalid if you do not commence construction within 18 months after the effective date of your permit, if you dis continue construction for a period of 18 months or more, or if you do not complete construction within a reasonable time. Th e reviewing authority may extend the 18-month period upon a sat isfactory showing that an extension is justified. This provi sion does not apply to the time period between construction of th e approved phases of a phased construction project; you must c ommence construction of each such phase within 18 months of the projected and approved commencement date. §49.156 General permits

. This section applies to general permits for the pur poses of complying with the preconstruction permitting requi rements for sources of regulated NSR pollutants under this prog ram. (a) What is a general permit? A general permit is a preconstruction permit issued by a reviewing author ity that may be applied to a number of similar emissions units o r sources.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 257 of 326 The purpose of a general permit is to simplify the permit application and issuance process for similar facili ties so that a reviewing authority's limited resources need not be expended for case-by-case permit development for such facili ties. A general permit may be written to address a single e missions unit, a group of the same type of emissions units, or an entire minor source. (b) How will the reviewing authority issue general permits? The reviewing authority will issue general permit s as follows: (1) A general permit may be issued for a category of emissions units or sources that are similar in natu re, have substantially similar emissions, and would be subje ct to the same or substantially similar requirements governin g operations, emissions, monitoring, reporting, and recordkeeping . “Similar in nature” refers to size, processes, and operating conditions. (2) A general permit must be issued according to t he requirements for public participation in §49.157 an d the requirements for final permit issuance and administ rative and judicial review in §49.159. (3) Issuance of a general permit is considered fin al agency action with respect to all aspects of the ge neral permit except its applicability to an individual source. The soleDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 258 of 326 issue that may be appealed after an individual sour ce is approved to construct under a general permit (see paragraph (e) of this section) is the applicability of the genera l permit to that particular source. (c) For what categories will general permits be is sued? (1) The reviewing authority will determine which categories of individual emissions units, groups of similar emissions units, or sources are appropriate for gen eral permits in its area. (2) General permits will be issued at the discreti on of the reviewing authority. (d) What should the general permit contain? The general permit must contain the permit elements listed in § 49.155(a). In addition, the general permit must contain the in formation listed in paragraphs (d)(1) and (2) of this section . The reviewing authority may specify additional general permit terms and conditions. (1) Identification of the specific category of emi ssions units or sources to which the general permit applie s, including any criteria that your emissions units or source mu st meet to be eligible for coverage under the general permit. (2) Information required to apply for coverage und er a general permit including, but not limited to, the f ollowing:Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 259 of 326 (i) The name and mailing address of the reviewing authority to whom you must submit your application. (ii) The procedure to obtain any standard applicat ion forms that the reviewing authority may have develop ed. (iii) The information that you must provide to the reviewing authority in your application to demonstr ate that you are eligible for coverage under the general permit. (iv) Other application requirements deemed necessa ry by the reviewing authority. (e) What are the procedures for obtaining coverage for a source under a general permit? (1) If your source qualifies for a general permit, you may apply to the reviewing authority for coverage under the general permit. (2) An application for a permit under this program will be reviewed by the reviewing authority within 45 days of its receipt to determine whether the application contai ns all the information necessary for processing the applicatio n. (3) If the reviewing authority determines that your application is not complete, it will request additi onal information from you as necessary to process the ap plication. If the reviewing authority determines that your app lication is complete, it may notify you in writing. The review ingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 260 of 326 authority’s completeness determination or request f or additional information should be postmarked within 45 days of receipt of the permit application by the reviewing authority. If you do not receive a request for additional information or a notice of complete application postmarked within 45 days of r eceipt of the permit application by the reviewing authority, your application will be deemed complete. (4) Any permit application will be granted or denie d no later than 90 days after the date the application i s deemed complete and all additional information necessary t o make an informed decision has been provided. (5) Following one or more the public participation procedures required in §49.157(b)(1)(ii), the revie wing authority may grant or deny your request for approv al to construct under a general permit. The reviewing au thority must send you a letter approving or disapproving the req uest to construct under a general permit. Such a letter is a final permit action for purposes of judicial review (see §49.159) only for the issue of whether your source qualifies for the general permit. (6) If the reviewing authority has sent a letter a pproving the general permit for your source, you must comply with all conditions and terms of the general permit. You wi ll be subjectDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 261 of 326 to enforcement action for failure to obtain a preco nstruction permit if you construct the emissions unit(s) or so urce with general permit approval and your source is later de termined not to qualify for the conditions and terms of the gene ral permit. (7) Your permit becomes invalid if you do not comme nce construction within 18 months after the effective d ate of your permit, if you discontinue construction for a perio d of 18 months or more, or if you do not complete construct ion within a reasonable time. The reviewing authority may exten d the 18- month period upon a satisfactory showing that an ex tension is justified. This provision does not apply to the ti me period between construction of the approved phases of a ph ased construction project; you must commence constructio n of each such phase within 18 months of the projected and ap proved commencement date. (8) Any source covered under a letter approving the general permit may request to be excluded from the general permit by applying for a permit under §49.154. §49.157 Public participation requirements

. This section applies to the issuance of minor sourc e permits and synthetic minor source permits, the ini tial issuance of general permits, and coverage of a particular so urce under a general permit.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 262 of 326 (a) What permit information will be publicly avail able? With the exception of any confidential information as defined in part 2, subpart B of this chapter, the reviewing au thority must make available for public inspection the documents listed in paragraphs (a)(1) through (5) of this section. The reviewing authority must make such information available for public inspection at the appropriate EPA Regional Office a nd in at least one location in the area affected by the sour ce, such as the tribal environmental office or a local library. (1) All information submitted as part of your appl ication for a permit. (2) Any additional information requested by the re viewing authority. (3) The reviewing authority's analysis of the appl ication and any additional information you submitted, inclu ding (for preconstruction permits and the initial issuance of general permits) the control technology review. (4) For minor source permits and the initial issua nce of general permits, the reviewing authority's analysis of the effect of the construction of the minor source or m odification on ambient air quality. (5) For coverage of a particular source under a ge neral permit, the reviewing authority’s analysis of wheth er yourDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 263 of 326 particular emissions unit or source is within the c ategory of emissions units or sources to which the general per mit applies, including whether your emissions unit or source mee ts any criteria to be eligible for coverage under the gene ral permit. (6) A copy of the draft permit or the decision to deny the permit with the justification for denial. (b) How will the public be notified and participat e? (1) Before issuing a permit under this program, t he reviewing authority must prepare a draft permit and must provide adequate public notice to ensure that the affected community and the general public have reasonable access to the ap plication and draft permit information, as set out in paragraphs (b)(1)(i) and (ii) of this section. The public notice must provi de an opportunity for public comment and notice of a publ ic hearing, if any, on the draft permit. (i) The reviewing authority must mail a copy of th e notice to you, the appropriate Indian governing body, and the tribal, state, and local air pollution authorities having j urisdiction in areas outside of the area of Indian country pote ntially impacted by the air pollution source. (ii) Depending on such factors as the nature and s ize of your source, local air quality considerations, and the characteristics of the population in the affected a rea (e.g.,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 264 of 326 subsistence hunting and fishing or other seasonal c ultural practices), the reviewing authority must use approp riate means of notification, such as those listed in paragraphs (b)(1)(ii)(A) through (E) of this section. (A) The reviewing authority may mail or e-mail a c opy of the notice to persons on a mailing list developed b y the reviewing authority consisting of those persons who have requested to be placed on such a mailing list. (B) The reviewing authority may post the notice on its website. (C) The reviewing authority may publish the notice in a newspaper of general circulation in the area affect ed by the source. Where possible, the notice may also be pub lished in a tribal newspaper or newsletter. (D) The reviewing authority may provide copies of the notice for posting at one or more locations in the area affected by the source, such as post offices, trading posts, libraries, tribal environmental offices, community centers, or other gathering places in the community. (E) The reviewing authority may employ other means of notification as appropriate. (2) The notice required pursuant to paragraph (b)( 1) of this section must include the following information at aDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 265 of 326 minimum: (i) Identifying information, including your name a nd address (and plant name and address if different) a nd the name and telephone number of the plant manager/contact. (ii) The name and address of the reviewing authori ty processing the permit action; (iii) For minor source permits, the initial issuan ce of general permits, and coverage of a particular sourc e under a general permit, the regulated NSR pollutants to be emitted, the affected emissions units, and the emission limitati ons for each affected emissions unit; (iv) For minor source permits, the initial issuanc e of general permits, and coverage of a particular sourc e under a general permit, the emissions change involved in th e permit action; (v) For synthetic minor source permits, a descript ion of the proposed limitation and its effect on the poten tial to emit of the source; (vi) Instructions for requesting a public hearing; (vii) The name, address, and telephone number of a contact person in the reviewing authority's office from who m additional information may be obtained; (viii) Locations and times of availability of theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 266 of 326 information (listed in paragraph (a) of this sectio n) for public inspection; and (ix) A statement that any person may submit writte n comments, a written request for a public hearing, o r both, on the draft permit action. The reviewing authority m ust provide a period of at least 30 days from the date of the pub lic notice for comments, and for requests for a public hearing

. (c) How will the public comment, and will there be a public hearing? (1) Any person may submit written comments on the draft permit and may request a public hearing. These com ments must raise any reasonably ascertainable issue with suppo rting arguments by the close of the public comment period (including any public hearing). The reviewing authority must consider all comments in making the final decision. The reviewi ng authority must keep a record of the commenters and of the iss ues raised during the public participation process, and such r ecords must be available to the public. (2) The reviewing authority must extend the public comment period under paragraph (b) of this section to the c lose of any public hearing under this section. The hearing off icer may also extend the comment period by so stating at the hear ing. (3) A request for a public hearing must be in writ ing andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 267 of 326 must state the nature of the issues proposed to be raised at the hearing. (4) The reviewing authority must hold a hearing wh enever there is, on the basis of requests, a significant d egree of public interest in a draft permit. The reviewing a uthority may also hold a public hearing at its discretion, whene ver, for instance, such a hearing might clarify one or more issues involved in the permit decision. The reviewing aut hority must provide notice of any public hearing at least 30 da ys prior to the date of the hearing. Public notice of the hear ing may be concurrent with that of the draft permit, and the t wo notices may be combined. Reasonable limits may be set upon the time allowed for oral statements at the hearing. (5) The reviewing authority must make a tape recor ding or written transcript of any hearing available to the public. §49.158 Synthetic minor source permits

. You may obtain a synthetic minor source permit unde r this program to establish a synthetic minor source for p urposes of the applicable PSD, nonattainment major NSR, or Cle an Air Act title V program and/or a synthetic minor HAP source for purposes of part 63 of the Act or the applicable Clean Air A ct title V program. Any source that becomes a synthetic minor source for NSR and title V purposes but has other applicable r equirements,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 268 of 326 or becomes a synthetic minor for NSR but is major f or title V purposes, remains subject to the applicable title V program. Note that if you propose to construct or modify a s ynthetic minor source, you are also subject to the preconstr uction permitting requirements in §§49.154 and 49.155, exc ept for the permit application content and permit application c ompleteness provisions included in §49.154(a)(2) and §49.154(b)

. (a) What information must my synthetic minor sourc e permit application contain? (1) Your application must include the following information: (i) Identifying information, including your name a nd address (and plant name and address if different) a nd the name and telephone number of the plant manager/contact. (ii) For each regulated NSR pollutant and/or HAP a nd for all emissions units to be covered by an emissions l imitation, the following information: (A) The proposed emission limitation and a descrip tion of its effect on actual emissions or the potential to emit. Proposed emission limitations must have a reasonabl y short averaging period, taking into consideration the ope ration of the source and the methods to be used for demonstrating compliance. (B) Proposed testing, monitoring, recordkeeping, a ndDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 269 of 326 reporting requirements to be used to demonstrate an d assure compliance with the proposed limitation. (C) A description of the production processes. (D) Identification of the emissions units. (E) Type and quantity of fuels and/or raw material s used. (F) Description and estimated efficiency of air po llution control equipment under present or anticipated oper ating conditions. (G) Estimates of the current actual emissions and current potential to emit, including all calculations for t he estimates. (H) Estimates of the allowable emissions and/or po tential to emit that would result from compliance with the proposed limitation, including all calculations for the esti mates. (iii) Any other information specifically requested by the reviewing authority. (2) Estimates of actual emissions must be based up on actual test data, or in the absence of such data, u pon procedures acceptable to the reviewing authority. Any emission estimates submitted to the reviewing authority must be verifiable using currently accepted engineering cri teria. The following procedures are generally acceptable for e stimating emissions from air pollution sources: (i) Source-specific emission tests;Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 270 of 326 (ii) Mass balance calculations; (iii) Published, verifiable emission factors that a re applicable to the source; (iv) Other engineering calculations; or (v) Other procedures to estimate emissions specifi cally approved by the reviewing authority. (b) What are the procedures for obtaining a synthe tic minor source permit? (1) If you wish to obtain a synthetic minor source permit under this program, you must submit a permit applic ation to the reviewing authority. The application must contain the information specified in paragraph (a) of this sect ion. (2) Within 60 days after receipt of an application , the reviewing authority will determine if it contains t he information specified in paragraph (a) of this sect ion. (3) If the reviewing authority determines that the application is not complete, it will request additi onal information from you as necessary to process the ap plication. If the reviewing authority determines that the appl ication is complete, it will notify you in writing. The revie wing authority’s completeness determination or request f or additional information should be postmarked within 60 days of receipt of the permit application by the reviewing authority. If you doDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 271 of 326 not receive a request for additional information or a notice of complete application postmarked within 60 days of r eceipt of the permit application by the reviewing authority, your application will be deemed complete. (4) The reviewing authority will prepare a draft s ynthetic minor source permit that describes the proposed lim itation and its effect on the potential to emit of the source. (5) The reviewing authority must provide an opport unity for public participation and public comment on the draft synthetic minor source permit as set out in §49.157

. (6) After the close of the public comment period, the reviewing authority will review all comments receiv ed and prepare a final synthetic minor source permit. (7) The final synthetic minor source permit will b e granted or denied no later than 1 year after the da te the application is deemed complete and all additional i nformation necessary to make an informed decision has been pro vided. (8) The final synthetic minor source permit will be issued and will be subject to administrative and judicial review as set out in §49.159. (c) What are my responsibilities under this progra m for my source that already has synthetic minor source or s ynthetic minor HAP source status prior to the effective date of this ruleDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 272 of 326 (that is, prior to [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]) ? (1) If your existing synthetic minor source and/or synthetic minor HAP source was established pursuant to the FIPs applicable to the Indian reservations in Idaho, Ore gon, and Washington; or was established under an EPA-approve d rule or permit program limiting potential to emit, you do n ot need to take any action under this program. (2) If your existing synthetic minor source and/or synthetic minor HAP source was established under a permit with enforceable emissions limitations issued pursuant t o part 71 of this chapter, the reviewing authority has the discr etion to do any of the following: (i) Allow you to maintain the synthetic minor stat us for your source through your permit under part 71 of th is chapter, including subsequent renewals of that permit. (ii) Require you to submit an application for a sy nthetic minor source permit under this program by [INSERT DATE 1 YEAR AND 60 DAYS FROM PUBLICATION IN THE FEDERAL REGISTE R], subject to the provisions in paragraphs (a) and (c)(4)(i) t hrough (iii) of this section. The reviewing authority also has the discretion to require any additional requirements, including control technology requirements, based on the speci ficDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 273 of 326 circumstances of the source. (iii) Require you to submit an application for a s ynthetic minor source permit under this program at the same time that you apply to renew your permit under part 71 of this ch apter, subject to the provisions in paragraphs (a) and (c) (4)(i) through (iii) of this section. The reviewing autho rity also has the discretion to require any additional requiremen ts, including control technology requirements, based on the speci fic circumstances of the source. (3) If your existing synthetic minor source and/or synthetic minor HAP source was established through a mechanism other than those described in paragraphs (c)(1) and (c)(2) of this section, including state-issued permits or ach ieving your existing synthetic minor status by maintaining your actual emissions at less than 50% of the relevant major so urce threshold, you must submit an application for a syn thetic minor source permit under this program by [INSERT DATE 1 YEAR AND 60
DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGIS TER] , subject to the provisions in paragraphs (a) and (c)(4)(i) t hrough (iii) of this section (4) If you are required to obtain a synthetic mino r source permit under this program for your existing synthet ic minor source and/or synthetic minor HAP source, the follo wingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 274 of 326 provisions apply: (i) After submitting your synthetic minor source p ermit application, you must respond in a timely manner to any requests from the reviewing authority for additional informa tion. (ii) Provided that you submit your application as required in paragraph (c)(2)(ii), (c)(2)(iii), or (c)(3) (as applicable) and any requested additional information as require d in paragraph (c)(4)(i) of this section, your source wi ll continue to be considered a synthetic minor source or synthe tic minor HAP source (as applicable) until your synthetic minor s ource permit under this program has been issued. Issuance of yo ur synthetic minor source permit under this program will be in a ccordance with the requirements in §§49.154 and 49.155 and al l other provisions under this section. (iii) Should you fail to submit your application a s required in paragraph (c)(2)(ii), (c)(2)(iii), or ( c)(3) (as applicable) or any requested additional information as required in paragraph (c)(4)(i) of this section, your source will no longer be considered a synthetic minor source or sy nthetic minor HAP source (as applicable), and will become subject to all requirements for major sources. In the case of sou rces subject to section (c)(2)(iii) of this section, the renewed part 71 permit will not contain enforceable emissions limit ations andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 275 of 326 instead will include applicable major source requir ements. §49.159 Final permit issuance and administrative a nd judicial review

. (a) How will final action occur, and when will my permit become effective? After decision on a permit, the reviewing authority must notify you of the decision, in writi ng, and if the permit is denied, of the reasons for such denia l. The reviewing authority must provide adequate public no tice of the final permit decision to ensure that the affected c ommunity, general public, and any individuals who commented o n the draft permit have reasonable access to the decision and s upporting materials according to 49.157(b), for synthetic min or sources and minor modifications at major sources, and accor ding to one or more of the provisions in §49.157(b)(1)(ii) for site-specific permits and general permits. A final permit become s effective 30 days after permit issuance, unless: (1) A later effective date is specified in the per mit; or (2) Review of the final permit is requested under paragraph (d) of this section (in which case the sp ecific terms and conditions of the permit that may be the subjec t of the request for review must be stayed); or (3) The reviewing authority may make the permit ef fective immediately upon issuance if no comments requested a change inDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 276 of 326 the draft permit or a denial of the permit. (b) For how long will the reviewing authority reta in my permit-related records? The records, including any required applications for each draft and final permit or app lication for permit revision, must be kept by the reviewing auth ority for not less than 5 years. (c) What is the administrative record for each fin al permit? (1) The reviewing authority must base final permit decisions on an administrative record consisting of : (i) The application and any supporting data furnis hed by you, the permit applicant; (ii) The draft permit or notice of intent to deny the application; (iii) Other documents in the supporting files for the draft permit that were relied upon in the decisionm aking; (iv) All comments received during the public comme nt period, including any extension or reopening; (v) The tape or transcript of any hearing(s) held; (vi) Any written material submitted at such a hear ing; (vii) Any new materials placed in the record as a result of the reviewing authority's evaluation of public c omments; (viii) The final permit; andDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 277 of 326 (ix) Other documents in the supporting files for t he final permit that were relied upon in the decisionmaking. (2) The additional documents required under paragr aph (c)(1) of this section should be added to the recor d as soon as possible after their receipt or preparation by the reviewing authority. The record must be complete on the date the final permit is issued. (3) Material readily available or published materi als that are generally available and that are included in th e administrative record under the standards of paragr aph (c)(1) of this section need not be physically included in the same file as the rest of the record as long as it is specificall y referred to in that file. (d) Can permit decisions be appealed? Permit decisions may be appealed according to the following provisio ns: (1) The Administrator delegates authority to the Environmental Appeals Board (the Board) to issue fi nal decisions in permit appeals filed under this program, includi ng informal appeals of denials of requests for modification, re vocation and re-issuance, or termination of permits under paragr aph (e)(2) of this section. An appeal directed to the Administra tor, rather than to the Board, will be forwarded to the Board f or consideration. This delegation does not preclude t he Board fromDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 278 of 326 referring an appeal or a motion under this program to the Administrator when the Board, in its discretion, de ems it appropriate to do so. When an appeal or motion is referred to the Administrator by the Board, all parties shall b e so notified and the provisions of this program referring to the Board shall be interpreted as referring to the Administrator. (2) Within 30 days after a final permit decision h as been issued, any person who filed comments on the draft permit or participated in the public hearing may petition the Board to review any condition of the permit decision. Any p erson who failed to file comments and failed to participate i n the public hearing on the draft permit may petition for admini strative review only to the extent that the changes from the draft to the final permit or other new grounds were not reasonab ly foreseeable during the public comment period on the draft permit. The 30-day period within which a person ma y request review under this section begins when the reviewing authority has fulfilled the notice requirements for the final permit decision, unless a later date is specified in that notice. (3) The petition must include a statement of the r easons supporting the review, including a demonstration th at any issues identified were raised during the public comment pe riod (including any public hearing) to the extent requir ed by theseDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 279 of 326 regulations, unless the petitioner demonstrates tha t it was impracticable to raise such objections within such period or unless the grounds for such objection arose after s uch period, and, when appropriate, a showing that the condition in question is based on: (i) A finding of fact or conclusion of law that is clearly

erroneous; or (ii) An exercise of discretion or an important pol icy consideration that the Board should, in its discret ion, review. (4) The Board may also decide on its own initiativ e to review any condition of any permit issued under thi s program. (5) Within a reasonable time following the filing of the petition for review, the Board must issue an order either granting or denying the petition for review. To th e extent review is denied, the conditions of the final permi t decision become final agency action. If the Board grants re view in response to requests under paragraph (d)(2) or (4) of this section, public notice must be given as provided in §49.157(b). Public notice must set forth a briefing schedule fo r the appeal and must state that any interested person may file an amicus brief. If the Board denies review, you, the permit applicant and the person(s) requesting review must be notifie d through means that are adequate to assure reasonable access to theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 280 of 326 decision, which may include mailing a notice to eac h party. (6) A petition to the Board under paragraph (d)(2) of this section is, under section 307(b) of the Act, a prer equisite to seeking judicial review of the final agency action. (7) For purposes of judicial review, final agency action occurs when a final permit is issued or denied by t he reviewing authority and agency review procedures are exhauste d. A final permit decision must be issued by the reviewing aut hority: (i) When the Board issues notice to the parties th at review has been denied; (ii) When the Board issues a decision on the merit s of the appeal and the decision does not include a remand o f the proceedings; or (iii) Upon the completion of remand proceedings if the proceedings are remanded, unless the Board's remand order specifically provides that appeal of the remand dec ision will be required to exhaust administrative remedies. (8) Motions to reconsider a final order must be fi led within 10 days after service of the final order. E very such motion must set forth the matters claimed to have b een erroneously decided and the nature of the alleged e rrors. Motions for reconsideration under this provision mu st be directed to, and decided by, the Board. Motions fo rDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 281 of 326 reconsideration directed to the Administrator, rath er than to the Board, will be forwarded to the Board for consi deration, except in cases in which the Board has deferred to the Administrator and the Administrator has issued the final order. A motion for reconsideration must not stay the effe ctive date of the final order unless specifically so ordered by t he Board. (9) For purposes of this section, time periods are computed as follows: (i) Any time period scheduled to begin on the occu rrence of an act or event must begin on the day after the act or event. (ii) Any time period scheduled to begin before the occurrence of an act or event must be computed so t hat the period ends on the day before the act or event, exc ept as otherwise provided. (iii) If the final day of any time period falls on a weekend or legal holiday, the time period must be e xtended to the next working day. (iv) Whenever a party or interested person has the right or is required to act within a prescribed period af ter the service of notice or other paper upon him or her by mail, 3 days must be added to the prescribed time. (e) Can my permit be reopened? The reviewing authority may reopen a permit for cause on its own initiative , such as ifDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 282 of 326 it contains a material mistake or fails to assure c ompliance with applicable requirements. However, except for those permit reopenings that do not increase the emissions limit ations in the permit, such as permit reopenings that correct typo graphical, calculation and other errors, all other permit reop enings shall be carried out after the opportunity of public noti ce and comment and in accordance with one or more of the p ublic participation requirements under §49.157(b)(1)(ii). carol (f) What is an administrative permit revision? The following provisions govern administrative permit r evisions. (1) An administrative permit revision is a permit revision that makes any of the following changes: (i) Corrects typographical errors. (ii) Identifies a change in the name, address, or phone number of any person identified in the permit, or p rovides a similar minor administrative change at the source. (iii) Requires more frequent monitoring or reporti ng by the permittee. (iv) Allows for a change in ownership or operatio nal control of a source where the reviewing authority d etermines that no other change in the permit is necessary, pr ovided that a written agreement containing a specific date for tr ansfer of permit responsibility, coverage, and liability betw een theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 283 of 326 current and new permittee has been submitted to the reviewing authority. (v) Establishes an increase in an emissions unit's annual allowable emissions limit for a regulated NSR pollu tant, when the action that necessitates such increase is not o therwise subject to review under major NSR or under this pro gram. (vi) Incorporates any other type of change that th e reviewing authority has determined to be similar to those in paragraphs (f)(1)(i) through (v) of this section. (2) An administrative permit revision is not subje ct to the permit application, issuance, public participat ion, or administrative and judicial review requirements of this program. §49.160 Registration program for stationary source s in Indian country. (a) Does this section apply to my source? This section applies to you if you are the owner/operator of a s tationary source with any of the following characteristics: (1) Your source is a true minor source on which construction commenced any time prior to [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]

. (2) Your source is a true minor source, subject to this rule, on which construction or modification of this source commenced any time on or after [INSERT DATE 20 MONTHS AFTER DATEDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 284 of 326 OF PUBLICATION IN THE FEDERAL REGISTER]. (b) What is exempted from this section? The exemptions in paragraphs (b)(1) and (b)(2) of this section apply to the registration program of this section. (1) You are exempt from this registration program if any of the following paragraphs applies to your source: (i) Your source is subject to the registration requirements under §49.138 - “Rule for the registra tion of air pollution sources and the reporting of emissions.” (ii) Your source has a part 71 permit. (iii) Your source is a synthetic minor source or a synthetic minor HAP source. (2) For purposes of determining the potential to emit, allowable or actual emissions of your source, you a re not required to include emissions from the emissions un its and activities listed in §49.153(c). (c) What are the requirements for registering you r minor

source? The requirements for registrations are as follows: (1) Due date. The due date of your source registration varies according to the following paragraphs: (i)If construction commenced on your source any tim e prior

to [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] , you must submit your source registration byDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 285 of 326 [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] or within 90 days after the source begins operatio n, whichever is later. (ii) If construction or modification of your sourc e commenced any time on or after [INSERT DATE 20 MONTHS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] and your source is subject to this rule, your permit application information will be used to fulfill the registration requirements de scribed in 40 CFR 49.160(c)(2). Additionally, for registration pu rposes, you must also report your source’s actual emissions (if available) as part of your permit application. (2) Content . You must submit all registration information on forms provided by the reviewing authority. Each registration must include the following information, as applicab le: (i) Identifying information, including your name a nd address (and plant name and address if different) a nd the name and telephone number of the plant manager/contact. (ii) A description of your source's processes and products. (iii) A list of all emissions units (with the exce ption of the exempt emissions units and activities listed in §49.153(c)). (iv) For each emissions unit that is listed, both the allowable and estimated actual annual emissions of eachDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 286 of 326 regulated NSR pollutant in tpy (including fugitive emissions, to the extent that they are quantifiable, if the emiss ions unit or source is in one of the source categories listed in §51, Appendix S, paragraph II.A.4(iii) or §52.21(b)(1)(i ii) of this chapter), with supporting documentation. (v) The following information: fuels, fuel use, ra w materials, production rates, and operating schedule s. (vi) Identification and description of any existin g air pollution control equipment and compliance monitori ng devices or activities. (vii) Any existing limitations on source operation affecting emissions or any work practice standards, where applicable, for all NSR regulated pollutants at the source. (viii) Any other information specifically request ed by the reviewing authority. (3) Procedure for estimating emissions . Your registration should include potential to emit or estimates of th e allowable and actual emissions, in tpy, of each regulated NSR pollutant for each emissions unit at the source. (i) Estimates of allowable emissions must be cons istent with the definition of that term in §49.152(d). Al lowable emissions must be calculated based on 8,760 operati ng hours per year (i.e. , operating 24 hours per day, 365 days per year)Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 287 of 326 unless the reviewing authority approves a different number of annual operating hours as the basis for the calcula tion. (ii) Estimates of actual emissions must take into account equipment, operating conditions, and air pollution control measures. For a source that operated during the en tire calendar year preceding the initial registration submittal, the reported actual emissions typically should be the annual emi ssions for the preceding calendar year, calculated using the a ctual operating hours, production rates, in-place control equipment, and types of materials processed, stored, or combus ted during the preceding calendar year. However, if you belie ve that the actual emissions in the preceding calendar year are not representative of the emissions that your source wi ll actually emit in coming years, you may submit an estimate of projected actual emissions along with the actual emissions fr om the preceding calendar year and the rationale for the p rojected actual emissions. For a source that has not operat ed for an entire year, the actual emissions are the estimated annual emissions for the current calendar year. (iii) The allowable and actual emission estimates must be based upon actual test data or, in the absence of s uch data, upon procedures acceptable to the reviewing authori ty. Any emission estimates submitted to the reviewing autho rity must beDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 288 of 326 verifiable using currently accepted engineering cri teria. The following procedures are generally acceptable for e stimating emissions from air pollution sources: (i) Source-specific emission tests; (ii) Mass balance calculations; (iii) Published, verifiable emission factors that are applicable to the source; (iv) Other engineering calculations; or (v) Other procedures to estimate emissions specif ically approved by the Regional Administrator. (4) Duty to obtain a permit . Submitting a registration does not relieve you of the requirement to obtain a ny required permit, including a preconstruction permit, if your source or any physical or operational change at your source w ould be subject to any minor or major NSR rule. (d) What are the requirements for additional repo rts? After you have registered your source, you must sub mit the following additional reports, when applicable: (1) Report of relocation . After your source has been registered, you must report any relocation of your source to the reviewing authority in writing no later than 30 day s prior to the relocation of the source. However, you need no t submit a report if you obtained a major or minor NSR permit for theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 289 of 326 relocation. Submitting a report of relocation does not relieve you of the requirement to obtain a preconstruction permit if the change is subject to any major NSR or minor NSR rul e. (2) Report of change of ownership . After your source has been registered, the new owner/operator must report any change of ownership of a source to the reviewing authority in writing within 90 days after the change in ownership is eff ective. (3) Report of closure . Except for regular seasonal closures, after your source has been registered, yo u must submit a report of closure to the reviewing authority in w riting within 90 days after the cessation of all operations at yo ur source. §49.161 Administration and delegation of the minor NSR program in Indian country

. (a) Who administers a minor NSR program in Indian country? (1) If the Administrator has approved a TIP that i ncludes a minor NSR program for sources in Indian country t hat meets the requirements of section 110(a)(2)(C) of the Act and §§51.160 through 51.164 of this chapter, the tribe is the re viewing authority, and it will administer the approved mino r NSR program under tribal law. (2) If the Administrator has not approved an implementation plan, the Administrator may delegate the authority to assist EPA with administration of port ions of thisDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 290 of 326 federal minor NSR program implemented under federal authority to a tribal agency upon request, in accordance with th e provisions of paragraph (b) of this section. If the tribal ag ency has been granted such delegation, it will have the authority to assist EPA according to paragraph (b) of this section, and it will be the reviewing authority for purposes of the provisi ons for which it has been granted delegation. (3) If the Administrator has not approved an implementation plan or granted delegation to a trib al agency, the Administrator is the reviewing authority and wi ll directly administer all aspects of this federal minor NSR pr ogram in Indian country under federal authority. (b) Delegation of administration of the federal mi nor NSR program to tribes . This paragraph (b) establishes the process by which the Administrator may delegate authority t o a tribal agency, with or without signature authority, to ass ist EPA with administration of portions of this federal minor NS R program, in accordance with the provisions in paragraphs (b)(1) through (8) of this section. Any federal requirements under th is program that are administered by the delegate tribal agency will be subject to enforcement by EPA under federal law. T his section provides for administrative delegation of the feder al minor NSR program and does not affect the eligibility criteri a under §49.6Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 291 of 326 for treatment in the same manner as a state. (1) Information to be included in the Administrati ve Delegation Request . In order to be delegated authority to assist EPA with administration of this FIP permit p rogram for sources, the tribal agency must submit a request to the Administrator that: (i) Identifies the specific provisions for which delegation is requested; (ii) Identifies the Indian Reservation or other ar eas of Indian country for which delegation is requested; (iii) Includes a statement by the applicant's lega l counsel (or equivalent official) that includes the following information: (A) A statement that the applicant is a tribe reco gnized by the Secretary of the Interior; (B) A descriptive statement that is consistent wit h the type of information described in §49.7(a)(2) demons trating that the applicant is currently carrying out substantial governmental duties and powers over a defined area; and (C) A description of the laws of the tribe that pr ovide adequate authority to administer the federal rules and provisions for which delegation is requested; and (iv) A demonstration that the tribal agency has theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 292 of 326 technical capability and adequate resources to admi nister the FIP provisions for which the delegation is requeste d. (2) Delegation of Partial Administrative Authority Agreement . A Delegation of Partial Administrative Authority Agreement (Agreement) will set forth the terms and conditions of the delegation, will specify the provisions that th e delegate tribal agency will be authorized to implement on be half of EPA, and will be entered into by the Administrator and t he delegate tribal agency. The Agreement will become effective upon the date that both the Administrator and the delegate t ribal agency have signed the Agreement or as otherwise stated in the Agreement. Once the delegation becomes effective, the delegate tribal agency will be responsible, to the extent sp ecified in the Agreement, for assisting EPA with administratio n of the provisions of the federal minor NSR program that ar e subject to the Agreement. (3) Publication of notice of the Agreement . The Administrator will publish a notice in the Federal Register informing the public of any Agreement for a particu lar area of Indian country. The Administrator also will publis h the notice in a newspaper of general circulation in the area a ffected by the delegation. In addition, the Administrator wil l mail a copy of the notice to persons on a mailing list develope d by theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 293 of 326 Administrator consisting of those persons who have requested to be placed on such a mailing list. (4) Revision or revocation of an Agreement . An Agreement may be modified, amended, or revoked, in part or in whole, by the Administrator after consultation with the deleg ate tribal

agency. (5) Transmission of information to the Administrat or . When administration of a portion of the federal min or NSR program in Indian country that includes receipt of permit application materials and preparation of draft perm its has been delegated in accordance with the provisions of this section, the delegate tribal agency must provide to the Administ rator a copy of each permit application (including any applicati on for permit revision) and each draft permit. You, the permit a pplicant, may be required by the delegate tribal agency to provid e a copy of the permit application directly to the Administrato r. With the Administrator's consent, the delegate tribal agency may submit to the Administrator a permit application summary f orm and any relevant portion of the permit application, in plac e of the complete permit application. To the extent practic able, the preceding information should be provided in electro nic format by the delegate tribal agency or by you, the permit ap plicant, as applicable, and as requested by the Administrator. The delegateDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 294 of 326 tribal agency must also submit to the Administrator such information as the Administrator may reasonably req uire to ascertain whether the delegate tribal agency is imp lementing and administering the delegated program in compliance w ith the requirements of the Act and of this program. (6) Waiver of information transmission requirement s . The Administrator may waive the requirements of paragra ph (b)(5) of this section for any category of sources (including any class, type, or size within such category) by transmitting the waiver in writing to the delegate tribal agency. (7) Retention of records . Where a delegate tribal agency prepares draft or final permits or receives applica tions for permit revisions on behalf of EPA, the records for each draft and final permit or application for permit revision must be kept by the delegate tribal agency for a period not less than 5

years. (8) Delegation of signature authority . To receive delegation of signature authority, the legal statem ent submitted by the tribal agency pursuant to paragraph (b)(1) o f this section must certify that no applicable provision o f tribal law requires that a minor NSR permit be issued after a certain time if the delegate tribal agency has failed to take ac tion on the application (or includes any other similar provisio n providingDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 295 of 326 for default issuance of a permit). (c) Are there any non-delegable elements of the fe deral minor NSR program in Indian country? The following authorities cannot be delegated outside of EPA: (1) The Administrator's authority to object to the issuance of a minor NSR permit. (2) The Administrator's authority to enforce permi ts issued pursuant to this program. (d) How will EPA transition its authority to an ap proved minor NSR program? (1) The Administrator will suspend the issuance of minor NSR permits under this program promptly upon public ation of notice of approval of a tribal implementation plan with a minor NSR permit program for that area. (2) The Administrator may retain jurisdiction over the permits for which the administrative or judicial re view process is not complete and will address this issue in the notice of program approval. (3) After approval of a program for issuing minor NSR permits and the suspension of issuance of minor NSR permits by the Administrator, the Administrator will continue to administer minor NSR permits until permits are issued under th e approved tribal implementation plan program.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 296 of 326 §§49.162-49.165 [Reserved]

3. Subpart C of Part 49 is amended by adding an undesignated center heading and §§49.166 through 49 .175 to read as follows: Federal Major New Source Review Program

for Nonattainment Areas in Indian Country §49.166 Program overview

. (a) What constitutes the federal major new source review (NSR) program for nonattainment areas in Indian cou ntry? As set forth in this Federal Implementation Plan (FIP), th e federal major NSR program for nonattainment areas in Indian country (or “program”) consists of §§49.166 through 49.175. (b) What is the purpose of this program? This program has the following purposes: (1) It establishes a preconstruction permitting pr ogram for new major stationary sources and major modifica tions at existing major stationary sources located in nonatt ainment areas in Indian country to meet the requirements of part D of title I of the Act. (2) It requires that major stationary sources subj ect to this program comply with the provisions and require ments of partDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 297 of 326 51, Appendix S of this chapter (Appendix S). Addit ionally, it sets forth the criteria and procedures in Appendix S that the reviewing authority (as defined in §49.167) will us e to approve permits under this program. Note that for the purp oses of this program, the term SIP as used in Appendix S means a ny EPAapproved implementation plan, including a Tribal Im plementation Plan (TIP). While some of the important provisions of Appendix S are paraphrased in various paragraphs of this pro gram to highlight them, the provisions of Appendix S govern

. (3) It also sets forth procedures for appealing a permit issued under this program as provided in §49.172. (c) When and where does this program apply? (1) The provisions of this program apply to new ma jor stationary sources and major modifications at exist ing major stationary sources located in nonattainment areas i n Indian country where there is no EPA-approved nonattainmen t major NSR program beginning on [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER] . The provisions of this program apply only to stationary sources and modifi cations that are major for the regulated NSR pollutant(s) for wh ich the area is designated nonattainment. (2) The provisions of this program cease to apply in an area covered by an EPA-approved implementation plan on the dateDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 298 of 326 that our approval of that plan becomes effective, p rovided that the plan includes provisions that comply with the r equirements of part D of title I of the Act and §51.165 of this chapter for the construction of new major stationary sources an d major modifications at existing major stationary sources in nonattainment areas. (d) What general provisions apply under this progr am? The following general provisions apply to you as an own er/operator of a stationary source: (1) If you propose to construct a new major statio nary source or a major modification at an existing major stationary source in a nonattainment area in Indian country, y ou must obtain a major NSR permit under this program before beginning actual construction. If you commence construction after the effective date of this program without applying for and receiving a permit pursuant to this program, you wi ll be subject to appropriate enforcement action. (2) If you do not construct or operate your source or modification in accordance with the terms of your m ajor NSR permit issued under this program, you will be subje ct to appropriate enforcement action. (3) Issuance of a permit under this program does n ot relieve you of the responsibility to comply fully w ithDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 299 of 326 applicable provisions of any EPA-approved implement ation plan or FIP and any other requirements under applicable law

. (4) Nothing in this program prevents a tribe from administering a nonattainment major NSR permit prog ram with different requirements in an approved TIP as long a s the TIP meets the requirements of part D of title I of the Act. §49.167 Definitions

. For the purposes of this program, the definitions i n part 51, Appendix S, paragraph II.A of this chapter appl y, unless otherwise stated. The following definitions also a pply to this program: Allowable emissions means “allowable emissions” as defined in part 51, Appendix S, paragraph II.A.11 of this c hapter, except that the allowable emissions for any emissio ns unit are calculated considering any emission limitations tha t are enforceable as a practical matter on the emissions unit's potential to emit. Enforceable as a practical matter means that an emission limitation or other standard is both legally and pr actically enforceable as follows: (1) An emission limitation or other standard is le gally enforceable if the reviewing authority has the righ t to enforce it.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 300 of 326 (2) Practical enforceability for an emission limit ation or for other standards (design standards, equipment st andards, work practices, operational standards, pollution prevent ion techniques) in a permit for a stationary source is achieved if the permit's provisions specify: (i) A limitation or standard and the emissions uni ts or activities at the stationary source subject to the limitation or standard; (ii) The time period for the limitation or standar d (e.g. , hourly, daily, monthly, and/or annual limits such a s rolling annual limits); and (iii) The method to determine compliance, includin g appropriate monitoring, recordkeeping, reporting, a nd testing. (3) For rules and general permits that apply to ca tegories of stationary sources, practical enforceability add itionally requires that the provisions: (i) Identify the types or categories of sources th at are covered by the rule or general permit; (ii) Where coverage is optional, provide for notic e to the reviewing authority of the source's election to be covered by the rule or general permit; and (iii) Specify the enforcement consequences relevan t to the rule or general permit.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 301 of 326 Environmental Appeals Board means the Board within the EPA described in §1.25(e) of this chapter. Indian country , as defined in 18 U.S.C. 1151, means the following: (1) All land within the limits of any Indian reser vation under the jurisdiction of the United States governm ent, notwithstanding the issuance of any patent, and inc luding rights-of-way running through the reservation; 1 (2) All dependent Indian communities within the bo rders of the United States whether within the original or su bsequently acquired territory thereof, and whether within or w ithout the limits of a state; and (3) All Indian allotments, the Indian titles to wh ich have not been extinguished, including rights-of-way runn ing through the same. Indian governing body means the governing body of any tribe, band, or group of Indians subject to the jur isdiction of the United States and recognized by the United Stat es as possessing power of self-government.

1 Under this definition, EPA treats as reservations trust lands validly set aside for the use of a tribe even if the trust lands have not been formally designated as a reserv ation.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 302 of 326 Reviewing authority means the Administrator or an Indian tribe in cases where a tribal agency is assisting E PA with administration of the program through a delegation under §49.173. Synthetic minor source means a stationary source that otherwise has the potential to emit regulated NSR p ollutants in amounts that are at or above those for major statio nary sources in Appendix S, but that has taken a restriction suc h that its potential to emit is less than such amounts for maj or stationary sources. Such restrictions must be enforceable as a practical

matter. Synthetic minor HAP source means a stationary source that otherwise has the potential to emit HAPs in amounts that are at or above those for major sources of HAP in §63.2 of this chapter, but that has taken a restriction such that its potential to emit is less than such amounts for maj or sources. Such restrictions must be enforceable as a practica l matter. §49.168 Does this program apply to me?

. (a) In a nonattainment area for a pollutant in Ind ian country, the requirements of this program apply to you under either of the following circumstances: (1) If you propose to construct a new major statio nary source (as defined in part 51, Appendix S, paragrap h II.A.4 ofDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 303 of 326 this chapter) of the nonattainment pollutant. (2) If you propose to construct a major modificati on at your existing major stationary source (as defined i n part 51, Appendix S, paragraph II.A.5 of this chapter), wher e your source is a major stationary source of the nonattainment p ollutant and the proposed modification is a major modification f or the nonattainment pollutant. (b) If you own or operate a major stationary sourc e with a state-issued nonattainment major NSR permit, you mu st apply to convert such permit to a federal permit under this program by [INSERT DATE 1 YEAR AND 60 DAYS AFTER DATE OF PUBLI CATION IN THE FEDERAL REGISTER] . In this case, you would not be subject to any additional requirements under this program as l ong as the state-issued permit complies with the requirements of the Act. (c) If you propose to establish a synthetic minor source or synthetic minor HAP source, or to construct a mi nor modification at your major stationary source, you w ill have to comply with the requirements of the federal minor N SR program in Indian country at §§49.151 through 49.165 or other EPA-approved minor NSR program, as applicable. §49.169 Permit approval criteria

. (a) What are the general criteria for permit appro val? The general review criteria for permits are provide d in part 51,Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 304 of 326 Appendix S, paragraph II.B of this chapter. In sum mary, that paragraph basically requires the reviewing authorit y to ensure that the proposed new major stationary source or ma jor modification would meet all applicable emission req uirements in the EPA-approved implementation plan or FIP, any ap plicable new source performance standard in part 60 of this chap ter, and any applicable national emission standards for hazardou s air pollutants in part 61 or part 63 of this chapter, b efore a permit can be issued. (b) What are the program-specific criteria for per mit approval? The approval criteria or conditions for obtaining a major NSR permit for major stationary sources and m ajor modifications locating in nonattainment areas are g iven in part 51, Appendix S, paragraph IV.A of this chapter. In summary, these are the following: (1) The lowest achievable emission rate (LAER) req uirement for any NSR pollutant subject to this program. (2) Certification that all existing major stationa ry sources owned or operated by you in the same state as the state including the tribal land where the proposed source or modification is locating are in compliance or under a compliance schedule. (3) Emissions reductions (offsets) requirement for anyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 305 of 326 source or modification subject to this program. (4) A demonstration that the emission offsets will provide a net air quality benefit in the affected area. (5) An analysis of alternative sites, sizes, produ ction processes, and environmental control techniques for such proposed source that demonstrates that the benefits of the p roposed source significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modif ication. §49.170 Emission offset requirement exemption

. An Indian governing body may seek an exemption from the emission offset requirement (see §49.169(b)(3)) for major stationary sources and major modifications subject to this program that are located within the tribe's Indian country pursuant to section 173(a)(1)(B) of the Act, under which major stationary sources and major modifications subject to this program may be exempted from the offset requirement if they are located in a zone targeted for economic development by the Administrator, in consultation with the Department of Housing and Urban Development (HUD). Under this Economic D evelopment Zone (EDZ) approach, the Administrator would waive the offset requirement for such sources and modifications, pro vided that: (a) The new major stationary source or major modif ication is located in a geographical area which meets the c riteria forDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 306 of 326 an EDZ, and the Administrator has approved a reques t from a tribe and declared the area an EDZ; and (b) The state/tribe demonstrates that the new perm itted emissions are consistent with the achievement of re asonable further progress pursuant to section 172(c)(4) of t he Act, and will not interfere with attainment of the applicabl e NAAQS by the applicable attainment date. §49.171 Public participation requirements

. (a) What permit information will be publicly avail able? With the exception of any confidential information as defined in part 2, subpart B of this chapter, the reviewing au thority must make available for public inspection the documents listed in paragraphs (a)(1) through (4) of this section. The reviewing authority must make such information available for public inspection at the appropriate EPA Regional Office a nd in at least one location in the area affected by the stat ionary source, such as the tribal environmental office or a local library. (1) All information submitted as part of your appl ication for a permit. (2) Any additional information requested by the re viewing authority. (3) The reviewing authority's analysis of the appl icationDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 307 of 326 and any additional information submitted by you, in cluding the LAER analysis and, where applicable, the analysis o f your emissions reductions (offsets), your demonstration of a net air quality benefit in the affected area and your analy sis of alternative sites, sizes, production processes, and environmental control techniques. (4) A copy of the draft permit or the decision to deny the permit with the justification for denial. (b) How will the public be notified and participat e? (1) Before issuing a permit under this program, th e reviewing authority must prepare a draft permit and must provide adequate public notice to ensure that the affected community and the general public have reasonable access to the ap plication and draft permit information, as set out in paragraphs (b)(1)(i) and (ii) of this section. The public notice must provi de an opportunity for public comment and notice of a publ ic hearing, if any, on the draft permit. (i) The reviewing authority must mail a copy of th e notice to you, the appropriate Indian governing body, and the tribal, state, and local air pollution authorities having j urisdiction in areas outside of the area of Indian country pote ntially impacted by the air pollution source. (ii) Depending on such factors as the nature and s ize ofDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 308 of 326 your stationary source, local air quality considera tions, and the characteristics of the population in the affect ed area (e.g., subsistence hunting and fishing or other sea sonal cultural practices), the reviewing authority must u se appropriate means of notification, such as those li sted in paragraphs (b)(1)(ii)(A) through (E) of this sectio n. (A) The reviewing authority may mail or e-mail a c opy of the notice to persons on a mailing list developed b y the reviewing authority consisting of those persons who have requested to be placed on such a mailing list. (B) The reviewing authority may post the notice on its website. (C) The reviewing authority may publish the notice in a newspaper of general circulation in the area affect ed by the source. Where possible, the notice may also be pub lished in a tribal newspaper or newsletter. (D) The reviewing authority may provide copies of the notice for posting at one or more locations in the area affected by the source, such as Post Offices, trading posts, libraries, tribal environmental offices, community centers, or other gathering places in the community. (E) The reviewing authority may employ other means of notification as appropriate.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 309 of 326 (2) The notice required pursuant to paragraph (b)( 1) of this section must include the following information at a minimum: (i) Identifying information, including your name a nd address (and plant name and address if different) a nd the name and telephone number of the plant manager/contact. (ii) The name and address of the reviewing authori ty processing the permit action; (iii) The regulated NSR pollutants to be emitted, the affected emissions units, and the emission limitati ons for each affected emissions unit; (iv) The emissions change involved in the permit a ction; (v) Instructions for requesting a public hearing; (vi) The name, address, and telephone number of a contact person in the reviewing authority's office from who m additional information may be obtained; (vii) Locations and times of availability of the information (listed in paragraph (a) of this sectio n) for public inspection; and (viii) A statement that any person may submit writ ten comments, a written request for a public hearing, o r both, on the draft permit action. The reviewing authority m ust provide a period of at least 30 days from the date of the pub lic noticeDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 310 of 326 for comments, and for requests for a public hearing

. (c) How will the public comment, and will there be a public hearing? (1) Any person may submit written comments on the draft permit and may request a public hearing. These com ments must raise any reasonably ascertainable issue with suppo rting arguments by the close of the public comment period (including any public hearing). The reviewing authority must consider all comments in making the final decision. The reviewi ng authority must keep a record of the commenters and of the iss ues raised during the public participation process, and such r ecords must be available to the public. (2) The reviewing authority must extend the public comment period under paragraph (b) of this section to the c lose of any public hearing under this section. The hearing off icer may also extend the comment period by so stating at the hear ing. (3) A request for a public hearing must be in writ ing and must state the nature of the issues proposed to be raised at the hearing. (4) The reviewing authority must hold a hearing wh enever there is, on the basis of requests, a significant d egree of public interest in a draft permit. The reviewing a uthority may also hold a public hearing at its discretion, whene ver, forDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 311 of 326 instance, such a hearing might clarify one or more issues involved in the permit decision. The reviewing aut hority must provide notice of any public hearing at least 30 da ys prior to the date of the hearing. Public notice of the hear ing may be concurrent with that of the draft permit, and the t wo notices may be combined. Reasonable limits may be set upon the time allowed for oral statements at the hearing. (5) The reviewing authority must make a tape recor ding or written transcript of any hearing available to the public. §49.172 Final permit issuance and administrative an d judicial review

. (a) How will final action occur, and when will my permit become effective? After making a decision on a permit, the reviewing authority must notify you of the decision , in writing, and if the permit is denied, provide the reasons fo r such denial. If the reviewing authority issues a final permit to you, it must make a copy of the permit available at any location where the draft permit was made available. In addi tion, the reviewing authority must provide adequate public no tice of the final permit decision to ensure that the affected c ommunity, general public, and any individuals who commented o n the draft permit have reasonable access to the decision and s upporting materials. A final permit becomes effective 30 day s afterDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 312 of 326 permit issuance, unless: (1) A later effective date is specified in the per mit; or (2) Review of the final permit is requested under paragraph (d) of this section (in which case the sp ecific terms and conditions of the permit that may be the subjec t of the request for review must be stayed); or (3) The draft permit was subjected to a public com ment period and no comments requested a change in the dr aft permit or a denial of the permit, in which case the reviewing authority may make the permit effective immediately upon issu ance. (b) For how long will the reviewing authority reta in my permit-related records? The records, including any required applications for each draft and final permit or app lication for permit revision, must be kept by the reviewing auth ority for not less than 5 years. (c) What is the administrative record for each fin al permit? (1) The reviewing authority must base final permit decisions on an administrative record consisting of : (i) All comments received during any public commen t period, including any extension or reopening; (ii) The tape or transcript of any hearing(s) held ; (iii) Any written material submitted at such a hear ing;Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 313 of 326 (iv) Any new materials placed in the record as a r esult of the reviewing authority's evaluation of public comm ents; (v) Other documents in the supporting files for th e permit that were relied upon in the decision-making; (vi) The final permit; (vii) The application and any supporting data furn ished by you, the permit applicant; (viii) The draft permit or notice of intent to den y the application or to terminate the permit; and (ix) Other documents in the supporting files for t he draft permit that were relied upon in the decision-making

. (2) The additional documents required under paragr aph (c)(1) of this section should be added to the recor d as soon as possible after their receipt or publication by the reviewing authority. The record must be complete on the date the final permit is issued. (3) Material readily available or published materi als that are generally available and that are included in th e administrative record under the standards of paragr aph (c)(1) of this section need not be physically included in the same file as the rest of the record as long as it is specificall y referred to in that file. (d) Can permit decisions be appealed? Permit decisionsDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 314 of 326 may be appealed according to the following provisio ns: (1) The Administrator delegates authority to the Environmental Appeals Board (the Board) to issue fi nal decisions in permit appeals filed under this program, includi ng informal appeals of denials of requests for modification, re vocation and re-issuance, or termination of permits under paragr aph (e)(2) of this section. An appeal directed to the Administra tor, rather than to the Board, will be forwarded to the Board f or consideration. This delegation does not preclude t he Board from referring an appeal or a motion under this program to the Administrator when the Board, in its discretion, de ems it appropriate to do so. When an appeal or motion is referred to the Administrator by the Board, all parties shall b e so notified and the provisions of this program referring to the Board shall be interpreted as referring to the Administrator. (2) Within 30 days after a final permit decision h as been issued, any person who filed comments on the draft permit or participated in the public hearing may petition the Board to review any condition of the permit decision. Any p erson who failed to file comments and failed to participate i n the public hearing on the draft permit may petition for admini strative review only to the extent that the changes from the draft to the final permit or other new grounds were not reasonab lyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 315 of 326 foreseeable during the public comment period on the draft permit. The 30-day period within which a person ma y request review under this section begins when the reviewing authority has fulfilled the notice requirements for the final permit decision, unless a later date is specified in that notice. (3) The petition must include a statement of the r easons supporting the review, including a demonstration th at any issues identified were raised during the public comment pe riod (including any public hearing) to the extent requir ed by these regulations, unless the petitioner demonstrates tha t it was impracticable to raise such objections within such period or unless the grounds for such objection arose after s uch period, and, when appropriate, a showing that the condition in question is based on: (i) A finding of fact or conclusion of law that is clearly

erroneous; or (ii) An exercise of discretion or an important pol icy consideration that the Board should, in its discret ion, review. (4) The Board may also decide on its own initiativ e to review any condition of any permit issued under thi s program. (5) Within a reasonable time following the filing of the petition for review, the Board must issue an order either granting or denying the petition for review. To th e extentDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 316 of 326 review is denied, the conditions of the final permi t decision become final agency action. If the Board grants re view in response to requests under paragraph (d)(2) or (4) of this section, public notice must be given as provided in §49.171(b). Public notice must set forth a briefing schedule fo r the appeal and must state that any interested person may file an amicus brief. If the Board denies review, you, the permit applicant, and the person(s) requesting review must be notifie d through means that are adequate to assure reasonable access to the decision, which may include mailing a notice to eac h party. (6) A petition to the Board under paragraph (d)(2) of this section is, under section 307(b) of the Act, a prer equisite to seeking judicial review of the final agency action. (7) For purposes of judicial review, final agency action occurs when a final permit is issued or denied by t he reviewing authority and agency review procedures are exhauste d. A final permit decision must be issued by the reviewing aut hority: (i) When the Board issues notice to the parties th at review has been denied; (ii) When the Board issues a decision on the merit s of the appeal and the decision does not include a remand o f the proceedings; or (iii) Upon the completion of remand proceedings if theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 317 of 326 proceedings are remanded, unless the Board's remand order specifically provides that appeal of the remand dec ision will be required to exhaust administrative remedies. (8) Notice of any final agency action on a permit shall promptly be published in the Federal Register

. (9) Motions to reconsider a final order must be fi led within 10 days after service of the final order. E very such motion must set forth the matters claimed to have b een erroneously decided and the nature of the alleged e rrors. Motions for reconsideration under this provision mu st be directed to, and decided by, the Board. Motions fo r reconsideration directed to the Administrator, rath er than to the Board, will be forwarded to the Board for consi deration, except in cases in which the Board has deferred to the Administrator and the Administrator has issued the final order. A motion for reconsideration must not stay the effe ctive date of the final order unless specifically so ordered by t he Board. (10) For purposes of this section, time periods ar e computed as follows: (i) Any time period scheduled to begin on the occu rrence of an act or event must begin on the day after the act or event. (ii) Any time period scheduled to begin before the occurrence of an act or event must be computed so t hat theDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 318 of 326 period ends on the day before the act or event, exc ept as otherwise provided. (iii) If the final day of any time period falls on a weekend or legal holiday, the time period must be e xtended to the next working day. (iv) Whenever a party or interested person has the right or is required to act within a prescribed period af ter the service of notice or other paper upon him or her by mail, 3 days must be added to the prescribed time. (e) Can my permit be reopened? The reviewing authority may reopen a permit for cause on its own initiative , such as if it contains a material mistake or fails to assure c ompliance with applicable requirements. However, except for those permit reopenings that do not increase the emissions limit ations in the permit, such as permit reopenings that correct typo graphical, calculation and other errors, all other permit reop enings shall be carried out after the opportunity of public noti ce and comment and in accordance with one or more of the p ublic participation requirements under §49.171(b)(1)(ii). §49.173 Administration and delegation of the nonat tainment major NSR program in Indian country

. (a) Who administers a nonattainment major NSR prog ram in Indian country?Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 319 of 326 (1) If the Administrator has approved a TIP that i ncludes a major NSR program for stationary sources in nonat tainment areas of Indian country that meets the requirements of part D of title I of the Act and §51.165 of this chapter, the tribe is the reviewing authority and will administer the approve d major NSR program under tribal law. (2) If the Administrator has not approved an implementation plan, the Administrator may delegate the authority to assist EPA with administration of port ions of this federal nonattainment major NSR program implemented under federal authority to a tribal agency upon request, in accordance with the provisions of paragraph (b) of this sectio n. If the tribal agency has been granted such delegation, it will have the authority to assist EPA according to paragraph (b) of this section, and it will be the reviewing authority for purposes of the provisions for which it has been granted delega tion (3) If the Administrator has not approved an implementation plan or granted delegation to a trib al agency, the Administrator is the reviewing authority and wi ll directly administer all aspects of this federal nonattainmen t major NSR program in Indian country under federal authority. (b) Delegation of administration of the federal nonattainment major NSR program to tribes . This paragraph (b)Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 320 of 326 establishes the process by which the Administrator may delegate authority to a tribal agency, with or without signa ture authority, to assist EPA with administration of por tions of this federal nonattainment major NSR program, in accorda nce with the provisions in paragraphs (b)(1) through (8) of this section. Any federal requirements under this program that ar e administered by the delegate tribal agency will be subject to enforcement by EPA under federal law. This section provides for administrative delegation of the federal nonattainm ent major NSR program and does not affect the eligibility criteri a under §49.6 for treatment in the same manner as a state. (1) Information to be included in the Administrati ve Delegation Request . In order to be delegated authority to assist EPA with administration of this FIP permit p rogram for stationary sources, the tribal agency must submit a request to the Administrator that: (i) Identifies the specific provisions for which delegation is requested; (ii) Identifies the Indian Reservation or other ar eas of Indian country for which delegation is requested; (iii) Includes a statement by the applicant's lega l counsel (or equivalent official) that includes the following information:Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 321 of 326 (A) A statement that the applicant is a tribe reco gnized by the Secretary of the Interior; (B) A descriptive statement that is consistent wit h the type of information described in §49.7(a)(2) demons trating that the applicant is currently carrying out substantial governmental duties and powers over a defined area; and (C) A description of the laws of the tribe that pr ovide adequate authority to administer the federal rules and provisions for which delegation is requested; and (iv) A demonstration that the tribal agency has the technical capability and adequate resources to admi nister the FIP provisions for which the delegation is requeste d. (2) Delegation of Partial Administrative Authority Agreement . A Delegation of Partial Administrative Authority Agreement (Agreement) will set forth the terms and conditions of the delegation, will specify the provisions that th e delegate tribal agency will be authorized to implement on be half of EPA, and will be entered into by the Administrator and t he delegate tribal agency. The Agreement will become effective upon the date that both the Administrator and the delegate t ribal agency have signed the Agreement or as otherwise stated in the Agreement. Once the delegation becomes effective, the delegate tribal agency will be responsible, to the extent sp ecified inDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 322 of 326 the Agreement, for assisting EPA with administratio n of the provisions of the federal nonattainment major NSR p rogram that are subject to the Agreement. (3) Publication of notice of the Agreement . The Administrator will publish a notice in the Federal Register informing the public of any Agreement for a particu lar area of Indian country. The Administrator also will publis h the notice in a newspaper of general circulation in the area a ffected by the delegation. In addition, the Administrator wil l mail a copy of the notice to persons on a mailing list develope d by the Administrator consisting of those persons who have requested to be placed on such a mailing list. (4) Revision or revocation of an Agreement . An Agreement may be modified, amended, or revoked, in part or in whole, by the Administrator after consultation with the deleg ate tribal

agency. (5) Transmission of information to the Administrat or . When administration of a portion of the federal non attainment major NSR program in Indian country that includes r eceipt of permit application materials and preparation of dra ft permits has been delegated in accordance with the provision s of this section, the delegate tribal agency must provide to the Administrator a copy of each permit application (in cluding anyDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 323 of 326 application for permit revision) and each draft per mit. You, the permit applicant, may be required by the delega te tribal agency to provide a copy of the permit application directly to the Administrator. With the Administrator's consen t, the delegate tribal agency may submit to the Administra tor a permit application summary form and any relevant portion o f the permit application, in place of the complete permit applic ation. To the extent practicable, the preceding information s hould be provided in electronic format by the delegate triba l agency or by you, the permit applicant, as applicable, and as requested by the Administrator. The delegate tribal agency must also submit to the Administrator such information as the Admini strator may reasonably require to ascertain whether the delegat e tribal agency is implementing and administering the delega ted program in compliance with the requirements of the Act and of this

program. (6) Waiver of information transmission requirement s . The Administrator may waive the requirements of paragra ph (b)(5) of this section for any category of stationary sources (including any class, type, or size within such category) by t ransmitting the waiver in writing to the delegate tribal agency

. (7) Retention of records . Where a delegate tribal agency prepares draft or final permits or receives applica tions forDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 324 of 326 permit revisions on behalf of EPA, the records for each draft and final permit or application for permit revision must be kept by the delegate tribal agency for a period not less than 5

years. (8) Delegation of signature authority . To receive delegation of signature authority, the legal statem ent submitted by the tribal agency pursuant to paragraph (b)(1) o f this section must certify that no applicable provision o f tribal law requires that a major NSR permit be issued after a certain time if the delegate tribal agency has failed to take ac tion on the application (or includes any other similar provisio n providing for default issuance of a permit). (c) Are there any non-delegable elements of the fe deral nonattainment major NSR program in Indian country? The following authorities cannot be delegated outside o f EPA: (1) The Administrator's authority to object to the issuance of a major NSR permit. (2) The Administrator's authority to enforce permi ts issued pursuant to this program. (d) How will EPA transition its authority to an ap proved nonattainment major NSR program? (1) The Administrator will suspend the issuance of nonattainment major NSR permits under this program promptly uponDraft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 325 of 326 publication of notice of approval of a TIP with a m ajor NSR permit program for nonattainment areas. (2) The Administrator may retain jurisdiction over the permits for which the administrative or judicial re view process is not complete and will address this issue in the notice of program approval. (3) After approval of a program for issuing nonatt ainment major NSR permits and the suspension of issuance of nonattainment major NSR permits by the Administrato r, the Administrator will continue to administer nonattain ment major NSR permits until permits are issued under the appr oved tribal implementation plan program. §§49.174-49.175 [Reserved]

PART 51-[AMENDED] 4. The authority citation for part 51 continues to read as follows: Authority : 23 U.S.C. 101; 42 U.S.C. 7401-7671q. Appendix S to Part 51-[Amended] 5. Appendix S to Part 51 is amended by revising pa ragraph II.B and adding a condition to paragraph IV.A to re ads as follows: Appendix S to Part 51-Emission Offset Interpretativ e Ruling

.Draft – September 15, 2010 Do Not Cite or Quote For Internal Deliberations Only

Page 326 of 326 * * * * * II. * * * B. Review of all sources for emission limitation compliance . The reviewing authority must examine each propos ed major new source and proposed major modification 1 to determine if such a source will meet all applicable emission req uirements in the SIP, any applicable new source performance stan dard in 40 CFR part 60, or any national emission standard for hazardous air pollutants in 40 CFR part 61 or part 63. If the re viewing authority determines that the proposed major new so urce cannot meet the applicable emission requirements, the perm it to construct must be denied.
IV. * * * A. Condition 5. The permit applicant shall conduct an analysis of alternative sites, sizes, production pr ocesses, and environmental control techniques for such proposed source that demonstrates that the benefits of the proposed sour ce significantly outweigh the environmental and social costs imposed as a result of its location, construction, or modif ication.
* * * * *

1 Hereafter the term source will be used to denote both any source and any modification.