Bryan W. Shaw, Ph.D., Chairman

Buddy Garcia, Commissioner

Carlos Rubinstein, Commissioner REeElVED

Mark R. Vickery, P.G., Executive Director

12 fEB 28 PH 5: 33

TEXAS COMMISSION ON ENVIRONMENTAL~~~~ECTIOH

Protecting Texas by Reducing and Preventing Pollution

February 22, 2012

Mr. Thomas Diggs, Assistant Director

Air Programs

U.S. Environmental Protection Agency, Region 6

1445 Ross Avenue

Dallas, Texas 75202-2733

Dear Mr. Diggs:

We have scheduled a public hearing in Austin on March 29, 2012, at 10:00 a.m. at the

Texas Commission on Environmental Quality complex, Building E, Room 201S, 12100

Park 35 Circle. The purpose ofthis hearing is to receive public testimony concerning the

proposed revisions to 30 TAC Chapter 116, Control ofAir Pollution by Permits for New

Construction or Modification, and corresponding revisions to the state implementation

plan. Enclosed for your information is a copy ofthe proposal that will be discussed and

a hearing notice. Please submit comments regarding this proposal to Michael Parrish at

the address listed in the enclosed hearing notice. Comments may now be submitted

online by accessing the e-comments Web page located at

http://www5.tceq.texas.gov/rules/ecomments.

Ifyou have any questions or need additional information, please contact Blake Stewart,

(512) 239-6931.

Sincerely,

Patricia Duron

General Law Division

PD/kg

cc: Mr. Lawrence E. Starfield, Acting Regional Administrator, U.S. Environmental

Protection Agency, Region 6, Dallas

Enclosures

P.O. Box 13087 • Austin, Texas 78711-3087 • 5'2-239-1000 • tceq.texas.gov

How is our customer service? tceq.texas.gov/customersurvey

printed on recycled paper
Bryan W. Shaw, Ph.D., Chairman

Buddy Garcia, Commissioner

Carlos Rubinstein, Commissioner

Mark R. Vickery, P.G., Executive Director

TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

Protecting Texas by Reducing and Preventing Pollution

NOTICE OF PUBLIC HEARING ON PROPOSED REVISIONS TO 30 TAC

CHAPTER 116AND TO THE STATE IMPLEMENTATION PLAN

The Texas Commission on Environmental Quality (commission) will conduct a public

hearing to receive testimony regarding proposed revisions to 30 Texas Administrative

Code (TAC) Chapter 116, Control ofAir Pollution by Permits for New Construction or

Modification, §§116.12, 116.150, 116.151, 116.180, and 116.186, and corresponding

revisions to the state implementation plan (SIP) under the requirements of Texas

Health and Safety Code, §382.017; Texas Government Code, Chapter 2001, Subchapter

B; and 40 Code of Federal Regulations §51.102 ofthe United States Environmental

Protection Agency (EPA) concerning SIPs.

The proposed rulemaking would remove a reference to flexible permits in the definition

of plant-wide applicability limit, include references to federal terminology, and state

that the failure to use monitoring required in a plant-wide applicability limit permit

would render that permit invalid.

The commission will hold a public hearing on this proposal in Austin on March 29,

2012, at 10:00 a.m. in Building E Room 20IS, at the commission's central office located

at 12100 Park 35 Circle. The hearing is structured for the receipt of oral or written

comments by interested persons. Individuals may present oral statements when called

upon in order ofregistration. Open discussion will not be permitted during the hearing;

however, commission staff members will be available to discuss the proposal 30 minutes

prior to the hearing.

Persons who have special communication or other accommodation needs who are

planning to attend the hearing should contact Sandy Wong, Office of Legal Services at

(512) 239-1802. Requests should be made as far in advance as possible.

Written comments may be submitted to Michael Parrish, MC 205, Office of Legal

Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas

78711-3087, or faxed to (512) 239-4808. Electronic comments may be submitted at:

http://wwws.tceq.texas.gov/rules/ecommentsj. File size restrictions may apply to

comments being submitted via the eComments system. All comments should reference

Rule Project Number 2012-015-116-AI. The comment period closes April 9, 2012.

Copies ofthe proposed rulemaking can be obtained from the commission's Web site at

http://www.tceq.texas.gov/nav/rules/propose_adopt.html. For further information,

please contact Blake Stewart, Air Permits Division, (512) 239-6931.

P.O. Box 13087 • Austin, Texas 78711-3087 • 512-239-1000 • tceq.texas.gov

How is our customer service? tceq.texas.govjgotojcustomersurvey

printed on recycled paper
Texas Commission on Environmental Quality Page 1

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-1l6-AI

The Texas Commission on Environmental Quality (commission or TCEQ) proposes

amendments to §§116.12, 116.150, 116.151, 116.180, and 116.186.

The proposed amendments to §§116.12, 116.150, 116.151, 116.180, and 116.186 will be

submitted to the United States Environmental Protection Agency (EPA) as revisions to

the State Implementation Plan (SIP).

Background and Summary ofthe Factual Basis for the Proposed Rules

On June 10, 2005, the TCEQ submitted amendments to §116.12 to the EPA as revisions

to the New Source Review (NSR) SIP and §116.150 as revisions to the Nonattainment

New Source Review (NNSR) SIP, both adopted on May 25, 2005. On January 11, 2006,

the TCEQ repealed §§116.180 - 116.183,116-410, and 116.617; amended §§116.12,

116.150, 116.151, 116.160, and 116.610; and adopted new §§116.121, 116.180, 116.182,

116.184, 116.186, 116.188, 116.190, 116.192, 116.194, 116.196, 116.198, 116-400, 116-402,

116-404,116-406,116.617, and 116.1200. The TCEQ submitted these to the EPA as

revisions to the NSR SIP to implement EPA's NSR Reform rules which became final on

December 31, 2002. On September 23, 2009, the EPA published notice ofthe proposed

disapproval ofthese revisions to the Texas SIP on September 23, 2009 (74 Federal

Register 48467). The EPA's final disapproval notice was published September 15, 2010

(75 Federal Register 56423).
Texas Commission on Environmental Quality Page 2

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

On February 9, 2011, in response to the EPA's final disapproval, the TCEQ repealed

§116.121, adopted amendments to §§116.12, 116.115, 116.150, 116.180, 116.182, 116.186,

116.188, 116.190, 116.192, 116.601, and 116.617; and adopted new §116.127. These were

published in the February 25, 2011, issue ofthe Texas Register (36 TexReg 1305 and

1324). On March 11, 2011, the TCEQ submitted a revised SIP package that was based on

the rule amendments, with the exception of §116.617, adopted on February 9,2011, and

addressed the issues outlined in the EPA's disapproval. On September 30,2011, the

EPA expressed its intent to propose conditional approval ofTCEQ rules implementing

the changes to the NSR SIP and the NSR Reform and requested a dialog to resolve

certain EPA concerns and facilitate a final approval. This rulemaking addresses those

concerns.

This rulemaking is at least as stringent as the federal rules it implements because it

includes the applicable elements ofthe major NSR and plant-wide applicability limit

(PAL) permit programs. The rulemaking action also ensures that the rulemaking, if

adopted, will meet the requirements of Federal Clean Air Act (FCAA), §110 which,

among other requirements, requires that the elements ofthe SIP be enforceable, ensure

compliance, include replicable elements, and ensure accountability. The specific

changes to the PAL rules meet these basic requirements.
Texas Commission on Environmental Quality Page 3

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-Al

Section by Section Discussion

§116.12, Nonattainment and Prevention ofSignificant Deterioration Review

Definitions

The commission proposes to amend the definition ofthe term "Plant-wide applicability

limit" effective date in §116.12(23) to remove language that references the date that a

flexible permit was issued. Since PAL permits and flexible permits are addressed by two

different sets of rules in Chapter 116, it is inappropriate to reference flexible permits in

the definition ofthe term plant-wide applicability limit effective date. The proposed

change would remove this obsolete language, clarify permitting requirements and

ensure consistency with federal requirements regarding NSR permits.

§116.150, New Major Source or Major Modification in Ozone NonattainmentAreas

The federal term "emissions unit" as defined in federal rules is similar to the term

"facility" as defined in the Texas Clean Air Act (TCAA). In order to ensure clarity and

consistency with federal requirements, the commission is proposing to add the language

"or emissions unit" where the terms "facility" or "facilities" are used (Le., §116.150(a),

(d)(l) and (3)).

§116.151, New Major Source or Major Modification in NonattainmentArea Other Than

Ozone

The federal term "emissions unit" as defined in federal rules is similar to the term
Texas Commission on Environmental Quality Page 4

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

"facility" as defined in the TCAA. In order to ensure clarity and consistency with federal

requirements, the commission is proposing to add the language "or emissions unit"

where the terms "facility" or "facilities" are used in §116.151(a), (C)(1) and (3)).

In response to EPA's proposed disapproval notice published September 23, 2009, the

commission's executive director submitted comments replying to EPA's solicitation from

the TCEQ to comment on EPA's interpretation ofTexas law and the Texas NSR SIP with

respect to the term "facility," stating that it is critical to EPA's understanding ofthe

Texas Permitting Program. TCEQ's comments stated, in part, that the definition ofthe

term "facility" is one ofthe cornerstones ofthe air permitting program in Texas under

the TCAA. The comments specifically stated that the TCEQ's interpretation ofTexas law

differs from that of EPA.

In its final disapproval notice on September 15, 2010, (75 Federal Register 56423), EPA

carried forward text from its proposed disapproval from September 23, 2009, by stating

in footnote 7 on page 56433 and also on page 56438, "{i}t is our understanding of State

law, that a "facility" can be an "emissions unit," i.e., any part of a stationary source that

emits or may have the potential to emit any air contaminant. A 'facility' also can be a

piece of equipment, which is smaller than an "emissions unit." A 'facility' can be a 'major

stationary source' as defined by Federal law. A 'facility' under State law can be more

than one 'major stationary source.' It can include every emissions point on a company
Texas Commission on Environmental Quality Page 5

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

site, without limiting these emissions points to only those belonging to the same

industrial grouping (SIC code)." In the same notice in footnote 15 on page 56438, EPA

acknowledges that TCEQ's definition of "facility" is part ofthe approved Texas SIP.

Under the TCAA in Texas Health and Safety Code (THSC), §382.003(6) and in

§116.1O(4), "facility" is defined as "a discrete or identifiable structure, device, item,

equipment, or enclosure that constitutes or contains a stationary source, including

appurtenances other than emission control equipment. A mine, quarry, well test, or

road is not considered to be a facility." A facility may constitute or contain a stationary

source -- a point of origin of a contaminant, as defined in THSC, §382.003(12) and in

§116.1O(15), a definition that is approved into the Texas SIP. As a discrete point, a

facility can constitute but cannot contain a "major stationary source" as defined by

federal law and in the TCEQ's SIP approved rule §116.12(17). A facility is subject to

major and minor NSR requirements, depending on the facts ofthe specific application.

The TCEQ and its predecessor agencies have consistently interpreted facility to preclude

inclusion of more than one stationary source, in contrast to EPA's stated understanding.

Likewise, TCEQ does not interpret facility to include "every emissions point on a

company site, even if limiting these emission points to only those belonging to the same

industrial grouping (SIC code)." The federal definition of "major stationary source" in

40 Code of Federal Regulations (CFR) §51.166(b)(I)(i)(a) is not equivalent to the state
Texas Commission on Environmental Quality Page 6

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

definition of"source." A "major stationary source" can include more than one "facility"

as defined under Texas law, which is consistent with EPA's interpretation of a "major

stationary source" including more than one emissions unit.

Under major NSR, EPA uses the term "emissions unit" (generally) when referring to

part of a "stationary source;" TCEQ translates "emissions unit" to mean "facility." The

commission's SIP-approved Prevention of Significant Deterioration (PSD) permitting

rule in §116.160(c)(3) states, "{t}he term 'facility' shall replace the words 'emissions unit'

in the referenced sections ofthe CFR."

The above interpretation ofthe term "facility" has been consistently applied by the

TCEQ and its predecessor agencies for more than 30 years. The TCEQ's interpretation

ofTexas statutes enacted by the Texas Legislature is addressed by the Texas Code

Construction Act. More specifically, words and phrases that have acquired a technical or

particular meaning, whether by legislative definition or otherwise, shall be construed

accordingly, as per Texas Government Code, §311.011(b).

In response to the proposed disapproval, the commission proposed adding the phrase

"or emissions unit" in its PAL rules, but did not do so in the nonattainment permitting

rules because ofthe long term use ofthe term in the Texas permitting rules and the

approved Texas SIP, which included earlier versions ofthese rules, and because in the
Texas Commission on Environmental Quality Page 7

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-116-AI

intervening time EPA had approved the definition of "facility" into the SIP.

The proposed changes to §116.1S0 and §116.1S1 would allow EPA to approve the updated

rules that implement the federal nonattainment permitting program.

§116.180, Applicability

The commission proposes to correct a typographical error in §n6.180(a)(s) by changing

a reference to the federal rules from 40 CFR §S1.16S(iv)(A) to 40 CFR

§S1.16s(a)(1)(iv)(A). Additionally, the commission is adding a reference to the federal

definition of major stationary source in 40 CFR §S1.166(b)(1). Adding this reference

strengthens the TCEQ's PAL rules by limiting the applicability of a PAL to a source that

conforms to the federal definition of a major stationary source in 40 CFR §S1.166(b)(1).

The proposed changes would clarify permitting requirements and ensure consistency

with federal requirements regarding NSR permits.

§116.186, General and Special Conditions

The commission proposes to amend §n6.186(b)(9) to state that failure to use the

required monitoring would render the PAL permit invalid. The change is proposed to

ensure consistency with federal rule requirements.

In both its proposed and final disapproval notices for the NSR Reform rules (as
Texas Commission on Environmental Quality Page 8

Chapter n6 - Control ofAir pollution by Permits for New Construction or Modification

Rule Project No. 2012-01s-n6-A!

mentioned elsewhere in this preamble), the EPA stated that the specific monitoring

definitions are essential for the enforceability of and providing the means for

determining compliance with a PAL program. EPA also specifically stated that one of

the bases for disapproval ofthe commission's PAL rules is that the rules lacked a

mandate that failure ofthe monitoring system to meet the requirements ofthis section

renders a PAL permit invalid. In response, the commission specifically amended its PAL

rules to address the monitoring systems, and also added §n6.186(b)(9) specifying that

failure to use a monitoring system is a violation ofthe PAL permit. EPA did not provide

comment on that amendment, nor §n6.186(b)(9). The commission understood that the

proposed changes were satisfactory for SIP approval. However, §n6.186(b)(9) did not

address EPA's concerns, which were related to the installation and general use of

monitoring systems rather than compliance issues, such as monitoring downtime, the

latter which is addressed in §n6.186(b)(8). As discussed elsewhere in this preamble,

EPA contacted the commission in 20n regarding its review ofthe submitted rules and

raised the issue of ensuring that the commission's rules adequately adopted the EPA's

requirement that a PAL permit is invalid ifthe required monitoring system is not

required by the permit nor installed by the permittee.

EPA's general monitoring requirements for PAL permits are in 40 CFR

§S1.l6S(f)(12)(i)(A) - (D) and 40 CFR §S1.l66(w)(12)(i)(a) - (d). Subparagraph (i)

requires enforceable requirements for a monitoring system in each PAL permit that is
Texas Commission on Environmental Quality Page 9

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

based on sound science and meets generally acceptable scientific procedures for data

quality and manipulation; those systems must be one ofthe four general monitoring

approaches in the federal PAL rules. Clauses (D) and (d) provide that failure to use a

monitoring system that meets the applicable federal rule requirements renders the PAL

invalid (See discussion at 67 Federal Register 80211 - 80214, December 31, 2002).

Therefore, based on the text and context of both the rule and the accompanying

preamble, the phrase "failure to use" in EPA's rule means a failure to install or failure to

operate the prescribed monitoring device or system to operate under a PAL permit,

rather than an inadvertent malfunction or maintenance downtime ofthe monitoring

device or system. The proposed change to §116.186(b)(g) would address EPA's concern

that the commission's rules fully incorporate all PAL permit requirements.

Any invalidation of a PAL permit will be subject to necessary and appropriate

procedures in Texas statutes and TCEQ rules. Texas Water Code (TWC), §7.302,

regarding Grounds for Revocation or Suspension of Permit, provides the commission

the authority to revoke and suspend or reissue a permit on prescribed grounds after

notice and hearing. Prior to any invalidation of a PAL permit, the commission

anticipates enforcement action that could include a request for revocation. Generally,

circumstances which could lead to invalidation (e.g., failure to install or use monitoring

equipment) are not expected to occur, and thus few, if any, revocation proceedings are

anticipated.
Texas Commission on Environmental Quality Page 10

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

Fiscal Note: Costs to State and Local Government

Nina Chamness, Analyst, Strategic Planning and Assessment, has determined that for

the first five-year period the proposed rules are in effect, no significant fiscal

implications are anticipated for the agency or other units ofstate or local governments

as a result of administration or enforcement ofthe proposed rules.

In 2005 and 2006, the agency submitted new and amended rules to Chapter 116 as

revisions to the NSR SIP to the EPA for approval. On September 15, 2010, EPA

disapproved these SIP revisions. On March 11, 2011, the TCEQ submitted a revised SIP

package that addressed the issues outlined in the EPA's disapproval. On September 30,

2011, the EPA expressed its intention to propose a conditional approval ofthe package

and requested a dialog to resolve certain EPA concerns regarding terminology and a

typographical error to facilitate a final approval. The proposed amendments address

EPA concerns by correcting typographical errors, using federal terms instead ofstate

equivalents, and removing unnecessary date references in definitions. The proposed

amendments are administrative in nature and do not change existing federal or state

requirements to obtain a permit nor do they mandate the use of additional controls or

change any monitoring or testing requirements. No fiscal implications are anticipated

for any regulated entity.
Texas Commission on Environmental Quality Page 11

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

State agencies or local governments that operate under an NSR permit should not

experience any fiscal implications as a result ofthe proposed rules since despite any

administrative discrepancy between state rules (which were submitted as revisions to

the SIP) and the federal regulations, the proposed rules do not change existing federal or

state requirements to obtain a permit nor do they mandate the use of additional controls

or change any monitoring or testing requirements. The proposed amendments are

administrative in nature and continue to ensure that state regulations are consistent

with federal regulations so that regulated entities can more easily understand and

comply with those requirements with regard to NSR permits.

Public Benefits and Costs

Nina Chamness also determined that for each year ofthe first five years the proposed

rules are in effect, the public benefit anticipated from the changes seen in the proposed

rules will be consistency between federal and state requirements, assurance that state

rules for the SIP NSR program are at least as stringent as federal rules, and EPA

approval ofthe SIP.

The proposed rules are not expected to have a fiscal impact on individuals or large

businesses because, despite any administrative discrepancies in language between state

rules which were submitted as revisions to the SIP, and the federal regulations, they do

not change existing federal or state requirements to obtain a permit nor do they
Texas Commission on Environmental Quality Page 12

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

mandate the use of additional controls or change any monitoring or testing

requirements. The proposed amendments are administrative in nature and continue to

ensure that state regulations are consistent with federal regulations so that regulated

entities can more easily understand and comply with those requirements with regard to

NSR permits.

Small Business and Micro-Business Assessment

No adverse fiscal implications are anticipated for small or micro-businesses as a result of

the proposed rules because, despite any administrative discrepancies in language

between state rules, which were submitted as revisions to the SIP, and the federal

regulations, they do not change existing federal or state requirements to obtain a permit

nor do they mandate the use of additional controls or change any monitoring or testing

requirements. The proposed rules continue to clarify state requirements and ensure

consistency with federal requirements regarding NSR permits.

Small Business Regulatory Flexibility Analysis

The commission has reviewed this proposed rulemaking and determined that a small

business regulatory flexibility analysis is not required because the proposed rules are

required to comply with federal regulations. The agency is required to implement the

proposed rules to obtain federal approval for the SIP.
Texas Commission on Environmental Quality Page 13

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

Local Employment Impact Statement

The commission has reviewed this proposed rulemaking and determined that a local

employment impact statement is not required because the proposed rules do not

adversely affect a local economy in a material way for the first five years that the

proposed rules are in effect.

Draft Regulatory Impact Analysis Determination

The commission reviewed the proposed rulemaking in light ofthe regulatory impact

analysis requirements ofTexas Government Code, §2001.0225, and determined that the

rulemaking does not meet the definition of a major environmental rule as defined in that

statute, and in addition, ifit did meet the definition, would not be subject to the

requirement to prepare a regulatory impact analysis.

A major environmental rule means a rule, the specific intent of which is to protect the

environment or reduce risks to human health from environmental exposure, and that

may adversely affect in a material way the economy, a sector ofthe economy,

productivity, competition, jobs, the environment, or the public health and safety ofthe

state or a sector ofthe state. The specific intent ofthe proposed revisions is to include

definitions for, and make other changes to the PAL rules to meet federal requirements.

Additionally, even ifthe rules met the definition of a major environmental rule, the
Texas Commission on Environmental Quality Page 14

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-116-Al

rulemaking does not meet any ofthe four applicability criteria for requiring a regulatory

impact analysis for a major environmental rule, which are listed in Texas Government

Code, §2001.022s(a). Texas Government Code, §2001.022S, applies only to a major

environmental rule, the result of which is to: 1) exceed a standard set by federal law,

unless the rule is specifically required by state law; 2) exceed an express requirement of

state law, unless the rule is specifically required by federal law; 3) exceed a requirement

of a delegation agreement or contract between the state and an agency or representative

ofthe federal government to implement a state and federal program; or 4) adopt a rule

solely under the general powers ofthe agency instead of under a specific state law.

The proposed rules would implement requirements ofthe FCAA. Under 42 United

States Code (USC), §741O, each state is required to adopt and implement a SIP

containing adequate provisions to implement, attain, maintain, and enforce the National

Ambient Air Quality Standards (NAAQS) within the state. While 42 USC, §741O

generally does not require specific programs, methods, or emission reductions in order

to meet the standard, state SIPs must include specific requirements as specified by 42

USC, §741O. The provisions ofthe FCAA recognize that states are in the best position to

determine what programs and controls are necessary or appropriate in order to meet the

NAAQS. This flexibility allows states, affected industry, and the public, to collaborate on

the best methods for attaining the NAAQS for the specific regions in the state. Even

though the FCAA allows states to develop their own programs, this flexibility does not
Texas Commission on Environmental Quality Page 15

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

relieve a state from developing a program that meets the requirements of 42 USC,

§741O. States are not free to ignore the requirements of 42 USC, §741O, and must

develop programs to assure that their SIPs provide for implementation, attainment,

maintenance, and enforcement ofthe NAAQS within the state. One ofthe requirements

of 42 USC, §741O is for states to include programs for the regulation ofthe modification

and construction of any stationary source within the area covered by the plan as

necessary to assure that the NAAQS are achieved, including a permit program as

required in FCAA, Parts Cand D, or NSR. Additionally, once states have developed

SIPs, and those plans are approved by the EPA, the FCAA prescribes, in 42 USC,

§7502(e) that the EPA, in modifying a NAAQS, shall promulgate rules that apply to all

areas that have not attained the previous NAAQS that provide for controls that are no

less stringent than the controls that previously applied to the area. This rulemaking will

address those sections submitted as revisions to the NSR SIP and subsequently were

proposed for disapproval by the EPA. Specifically, those concern definitions for and

other changes to the PAL rules to meet federal requirements.

The requirement to provide a fiscal analysis of regulations in the Texas Government

Code was amended by Senate Bill (SB) 633 during the 75th Legislature, 1997. The intent

of SB 633 was to require agencies to conduct a regulatory impact analysis of

extraordinary rules. These are identified in the statutory language as major

environmental rules that will have a material adverse impact and will exceed a
Texas Commission on Environmental Quality Page 16

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-Al

requirement ofstate law, federal law, or a delegated federal program, or are adopted

solely under the general powers ofthe agency. With the understanding that this

requirement would seldom apply, the commission provided a cost estimate for SB 633

that concluded, "based on an assessment of rules adopted by the agency in the past, it is

not anticipated that the bill will have significant fiscal implications for the agency due to

its limited application." The commission also noted that the number of rules that would

require assessment under the provisions ofthe bill was not large. This conclusion was

based, in part, on the criteria set forth in the bill that exempted rules from the full

analysis unless the rule was a major environmental rule that exceeds a federal law.

Because ofthe ongoing need to meet federal requirements, the commission routinely

proposes and adopts rules incorporating or designed to satisfy specific federal

requirements. The legislature is presumed to understand this federal scheme. If each

rule proposed by the commission to meet a federal requirement was considered to be a

major environmental rule that exceeds federal law, then each ofthose rules would

require the full regulatory impact analysis (RIA) contemplated by SB 633. This

conclusion is inconsistent with the conclusions reached by the commission in its cost

estimate and by the Legislative Budget Board in its fiscal notes. Since the legislature is

presumed to understand the fiscal impacts ofthe bills it passes, and that presumption is

based on information provided by state agencies and the Legislative Budget Board, the

commission believes that the intent of SB 633 was only to require the full RIA for rules
Texas Commission on Environmental Quality Page 17

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

that are extraordinary in nature. While the proposed rules may have a broad impact,

that impact is no greater than is necessary or appropriate to meet the requirements of

the FCAA, and in fact creates no additional impacts since the proposed rules do not

exceed the requirement to attain and maintain the NAAQS. For these reasons, the

proposed rules fall under the exception in Texas Government Code, §2001.0225(a),

because they are required by, and do not exceed, federal law.

The commission has consistently applied this construction to its rules since this statute

was enacted in 1997. Since that time, the legislature has revised the Texas Government

Code, but left this provision substantially unamended. It is presumed that "when an

agency interpretation is in effect at the time the legislature amends the laws without

making substantial change in the statute, the legislature is deemed to have accepted the

agency's interpretation." (Central Power & Light Co. v. Sharp, 919 S.W.2d 485, 489

(Tex. App. Austin 1995), writ denied with per curiam opinion respecting another issue,

960 S.W.2d 617 (Tex. 1997); Bullock v. Marathon Oil Co., 798 S.w.2d 353,357 (Tex.

App. Austin 1990, no writ). Cf Humble Oil & Refining Co. v. Calvert, 414 S.W.2d 172

(Tex. 1967); Dudney v. State Farm Mut. Auto Ins. Co., 9 S.W.3d 884,893 (Tex. App.

Austin 2000); Southwestern Life Ins. Co. v. Montemayor, 24 S.W.3d 581 (Tex. App.

Austin 2000, pet. denied); and Coastal Indust. Water Auth. v. Trinity Portland Cement

Div., 563 S.w.2d 916 (Tex. 1978).)
Texas Commission on Environmental Quality Page 18

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-Al

The commission's interpretation ofthe RIA requirements is also supported by a change

made to the Administrative Procedure Act (APA) by the legislature in 1999. In an

attempt to limit the number of rule challenges based upon APA requirements, the

legislature clarified that state agencies are required to meet these sections ofthe APA

against the standard of "substantial compliance" (Texas Government Code, §2001.035).

The legislature specifically identified Texas Government Code, §2001.0225 as falling

under this standard. As discussed in this analysis and elsewhere in this preamble, the

commission has substantially complied with the requirements ofTexas Government

Code, §2001.0225.

The proposed rules implement requirements ofthe FCAA, specifically to adopt and

implement SIPs to attain and maintain the NAAQS, including a requirement to adopt

and implement permit programs. The specific intent ofthe proposed rulemaking is to

address those sections submitted as revisions to the NSR SIP and subsequently were

proposed for disapproval by the EPA. Specifically, those concern definitions for and

other changes to the PAL rules to meet federal requirements. The proposed rules were

not developed solely under the general powers ofthe agency, but are authorized by

specific sections ofTHSC, Chapter 382 (also known as the TCAA), and the TWC, which

are cited in the Statutory Authority section ofthis preamble. Therefore, this proposed

rulemaking action is not subject to the regulatory analysis provisions ofTexas

Government Code, §2001.0225(b).
Texas Commission on Environmental Quality Page 19

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-116-A!

Written comments on the draft regulatory impact analysis determination may be

submitted to the contact person at the address listed under the Submittal of Comments

section ofthis preamble.

Takings Impact Assessment

Under Texas Government Code, §2007.002(S), taking means a governmental action that

affects private real property, in whole or in part or temporarily or permanently, in a

manner that requires the governmental entity to compensate the private real property

owner as provided by the Fifth and Fourteenth Amendments to the United States

Constitution or Texas Constitution §17 or §19, Article I; or a governmental action that

affects an owner's private real property that is the subject ofthe governmental action, in

whole or in part or temporarily or permanently, in a manner that restricts or limits the

owner's right to the property that would otherwise exist in the absence ofthe

governmental action; and is the producing cause of a reduction of at least 2S% in the

market value ofthe affected private real property, determined by comparing the market

value ofthe property as ifthe governmental action is not in effect and the market value

ofthe property determined as ifthe governmental action is in effect.

The commission completed a takings impact analysis for the proposed rulemaking

action under the Texas Government Code, §2007.043. The primary purpose ofthis
Texas Commission on Environmental Quality Page 20

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-116-A!

proposed rulemaking action, as discussed elsewhere in this preamble, is to address those

sections submitted as revisions to the NSR SIP and subsequently were proposed for

disapproval by the EPA. Specifically, the proposed changes concern definitions for and

other changes to the PAL rules to meet federal requirements.

The proposed rules will not create any additional burden on private real property. The

proposed rules will not affect private real property in a manner that would require

compensation to private real property owners under the United States Constitution or

the Texas Constitution. The proposal also will not affect private real property in a

manner that restricts or limits an owner's right to the property that would otherwise

exist in the absence ofthe governmental action. Therefore, the proposed rulemaking

will not cause a taking under Texas Government Code, Chapter 2007.

Consistency with the Coastal Management Program

The commission determined that this rulemaking action relates to an action or actions

subject to the Texas Coastal Management Program (CMP) in accordance with the

Coastal Coordination Act of 1991, as amended (Texas Natural Resources Code, §§33.201

etseq.), and commission rules in 30 TAC Chapter 281, Subchapter B, concerning

Consistency with the Texas Coastal Management Program. As required by §281.4s(a)(3)

and 31 TAC §SOS.11(b)(2), relating to Actions and Rules Subject to the CMP,

commission rules governing air pollutant emissions must be consistent with the
Texas Commission on Environmental Quality Page 21

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-u6-Al

applicable goals and policies ofthe CMP. The commission reviewed this action for

consistency with the CMP goals and policies in accordance with the rules ofthe Coastal

Coordination Council, and determined that the action is consistent with the applicable

CMP goals and policies.

The CMP goal applicable to this rulemaking action is the goal to protect, preserve, and

enhance the diversity, quality, quantity, functions, and values of coastal natural resource

areas (31 TAC §S01.12(l)). The CMP policy applicable to this rulemaking action is the

policy that commission rules comply with federal regulations in 40 CFR to protect and

enhance air quality in the coastal areas (31 TAC §S01.14(q)). Therefore, in accordance

with 31 TAC §Sos.22(e), the commission affirms that this rulemaking action is

consistent with CMP goals and policies.

Written comments on the consistency ofthe proposed rulemaking may be submitted to

the contact person at the address listed under the Submittal of Comments section ofthis

preamble.

Effect on Sites Subject to the Federal Operating Permits Program

Chapter 116 is an applicable requirement of 30 TAC Chapter 122, Federal Operating

Permits Program. Ifthe proposed rules are adopted, owners or operators subject to the

federal operating permit program must, consistent with the revision process in Chapter
Texas Commission on Environmental Quality Page 22

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

122, upon the effective date ofthe adopted rulemaking, revise their operating permit to

include the new Chapter 116 requirements. Additionally, sources subject to the rules

may become subject to the federal operating permit program.

Announcement ofHearing

The commission will hold a public hearing on this proposal in Austin on March 29,

2012, at 10:00 a.m. in Building E Room 201S, at the commission's central office located

at 12100 Park 35 Circle. The hearing is structured for the receipt of oral or written

comments by interested persons. Individuals may present oral statements when called

upon in order ofregistration. Open discussion will not be permitted during the hearing;

however, commission staff members will be available to discuss the proposal 30 minutes

prior to the hearing.

Persons who have special communication or other accommodation needs who are

planning to attend the hearing should contact Sandy Wong, Office of Legal Services at

(512) 239-1802. Requests should be made as far in advance as possible.

Submittal ofComments

Written comments may be submitted to Michael Parrish, MC 205, Office of Legal

Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas

78711-3087, or faxed to (512) 239-4808. Electronic comments may be submitted at:
Texas Commission on Environmental Quality Page 23

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-Al

http://wwws.tceq.texas.gov/rules/ecommentsj. File size restrictions may apply to

comments being submitted via the eComments system. All comments should reference

Rule Project Number 2012-015-116-Al. The comment period closes April 9, 2012.

Copies ofthe proposed rulemaking can be obtained from the commission's Web site at

http://www.tceq.texas.gov/nav/rules/propose_adopt.html. For further information,

please contact Blake Stewart, Air Permits Division, (512) 239-6931.
Texas Commission on Environmental Quality Page 24

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-116-AI

SUBCHAPTER A: DEFINITIONS.

§U6.12

STATUTORY AUTHORITY

The amendment is proposed under Texas Water Code (TWC), §S.102, concerning

General Powers, which provides the commission with the general powers to carry out its

duties under the TWC; TWC, §S.103, concerning Rules, which authorizes the

commission to adopt rules necessary to carry out its powers and duties under the TWC;

TWC, §S.lOS, concerning General Policy, which authorizes the commission by rule to

establish and approve all general policy ofthe commission; and under Texas Health and

Safety Code (THSC), §382.017, concerning Rules, which authorizes the commission to

adopt rules consistent with the policy and purposes ofthe Texas Clean Air Act. The

amendment is also proposed under THSC, §382.002, concerning Policy and Purpose,

which establishes the commission's purpose to safeguard the state's air resources,

consistent with the protection of public health, general welfare, and physical property;

THSC, §382.011, concerning General Powers and Duties, which authorizes the

commission to control the quality ofthe state's air; and THSC, §382.012, concerning

State Air Control Plan, which authorizes the commission to prepare and develop a

general, comprehensive plan for the proper control ofthe state's air; THSC, §382.016,

concerning Monitoring Requirements; Examination of Records, which authorizes the

commission to prescribe reasonable requirements for measuring and monitoring the
Texas Commission on Environmental Quality Page 25

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

emissions of air contaminants from a source or from an activity causing or resulting in

the emission of air contaminants; THSC, §382.021, concerning Sampling Methods and

Procedures, which authorizes the commission to prescribe sampling methods and

procedures to be used in determining violations of and compliance with the

commission's rules; THSC, §382.040, concerning Documents; Public Property, which

provides that all information, documents, and data collected by the commission in

performing its duties are state property; THSC, §382.051, concerning Permitting

Authority of Commission; Rules, which authorizes the commission to issue permits for

construction of new facilities or modifications to existing facilities that may emit air

contaminants; THSC, §382.0511, concerning Permit Consolidation and Amendment,

which authorizes the commission to consolidate various authorizations; THSC,

§382.0512, concerning Modification of Existing Facility, which prescribes how the

commission will evaluate modifications of existing facilities; THSC, §382.0513,

concerning Permit Conditions, which authorizes the commission to establish and

enforce permit conditions; THSC, §382.0514, concerning Sampling, Monitoring, and

Certification, which authorizes the commission to require sampling and monitoring of a

permitted federal source or facility; THSC, §382.0515, concerning Application for

Permit, which specifies permit application requirements; and THSC, §382.0518,

concerning Preconstruction Permit, which authorizes the commission to issue

preconstruction permits. The amendment is also proposed under Federal Clean Air Act

(FCAA), 42 United States Code (USC), §§7401, etseq., which requires states to submit
Texas Commission on Environmental Quality Page 26

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

state implementation plan revisions that specify the manner in which the national

ambient air quality standard will be achieved and maintained within each air quality

control region ofthe state.

The proposed amendment implements THSC, §§382.002, 382.011, 382.012, 382.016,

382.017,382.021,382.°4°,382.051,382.0511 - 382.0515, and 382.0518, and FCAA, 42

USC, §§7401 etseq.

§116.12. Nonattainment and Prevention ofSignificant Deterioration Review

Definitions.

Unless specifically defined in the Texas Clean Air Act (TCAA) or in the rules ofthe

commission, the terms used by the commission have the meanings commonly ascribed

to them in the field of air pollution control. The terms in this section are applicable to

permit review for major source construction and major source modification in

nonattainment areas. In addition to the terms that are defined by the TCAA, and in

§101.1 ofthis title (relating to Definitions), the following words and terms, when used in

Chapter 116, Subchapter B, Divisions 5 and 6 ofthis title (relating to Nonattainment

Review Permits and Prevention of Significant Deterioration Review); and Chapter 116,

Subchapter C, Division 1ofthis title (relating to Plant-Wide Applicability Limits), have

the following meanings, unless the context clearly indicates otherwise.
Texas Commission on Environmental Quality Page 27

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-116-AI

(1) Actual emissions--Actual emissions as of a particular date are equal to

the average rate, in tons per year, at which the unit actually emitted the pollutant during

the 24-month period that precedes the particular date and that is representative of

normal source operation, except that this definition shall not apply for calculating

whether a significant emissions increase has occurred, or for establishing a plant-wide

applicability limit. Instead, paragraph (3) ofthis section relating to baseline actual

emissions shall apply for this purpose. The executive director shall allow the use of a

different time period upon a determination that it is more representative of normal

source operation. Actual emissions shall be calculated using the unit's actual operating

hours, production rates, and types of materials processed, stored, or combusted during

the·selected time period. The executive director may presume that the source-specific

allowable emissions for the unit are equivalent to the actual emissions, e.g., when the

allowable limit is reflective of actual emissions. For any emissions unit that has not

begun normal operations on the particular date, actual emissions shall equal the

potential to emit ofthe unit on that date.

(2) Allowable emissions--The emissions rate of a stationary source, calculated

using the maximum rated capacity ofthe source (unless the source is subject to federally

enforceable limits that restrict the operating rate, or hours of operation, or both), and

the most stringent ofthe following:
Texas Commission on Environmental Quality Page 28

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(A) the applicable standards specified in 40 Code of Federal

Regulations Part 60 or 61;

(B) the applicable state implementation plan emissions limitation

including those with a future compliance date; or

(C) the emissions rate specified as a federally enforceable permit

condition including those with a future compliance date.

(3) Baseline actual emissions--The rate of emissions, in tons per year, of a

federally regulated new source review pollutant.

(A) For any existing electric utility steam generating unit, baseline

actual emissions means the average rate, in tons per year, at which the unit actually

emitted the pollutant during any consecutive 24-month period selected by the owner or

operator within the five-year period immediately preceding when the owner or operator

begins actual construction ofthe project. The executive director shall allow the use of a

different time period upon a determination that it is more representative of normal

source operation.
Texas Commission on Environmental Quality Page 29

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(B) For an existing facility (other than an electric utility steam

generating unit), baseline actual emissions means the average rate, in tons per year, at

which the facility actually emitted the pollutant during any consecutive 24-month period

selected by the owner or operator within the ten-year period immediately preceding

either the date the owner or operator begins actual construction ofthe project, or the

date a complete permit application is received for a permit. The rate shall be adjusted

downward to exclude any emissions that would have exceeded an emission limitation

with which the major stationary source must currently comply with the exception of

those required under 40 Code of Federal Regulations Part 63, had such major stationary

source been required to comply with such limitations during the consecutive 24-month

period.

(C) For a new facility, the baseline actual emissions for purposes of

determining the emissions increase that will result from the initial construction and

operation ofsuch unit shall equal zero; and for all other purposes during the first two

years following initial operation, shall equal the unit's potential to emit.

(D) The actual average rate shall be adjusted downward to exclude

any non-compliant emissions that occurred during the consecutive 24-month period.

For each regulated new source review pollutant, when a project involves multiple

facilities, only one consecutive 24-month period must be used to determine the baseline
Texas Commission on Environmental Quality Page 30

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-Al

actual emissions for the facilities being changed. A different consecutive 24-month

period can be used for each regulated new source review pollutant. The average rate

shall not be based on any consecutive 24-month period for which there is inadequate

information for determining annual emissions, in tons per year, and for adjusting this

amount. Baseline emissions cannot occur prior to November 15, 1990.

(E) The actual average emissions rate shall include fugitive

emissions to the extent quantifiable. Until March 1, 2016, emissions previously

demonstrated as resulting from planned maintenance, startup, or shutdown activities;

historically unauthorized; and subject to reporting under Chapter 101 ofthis title

(relating to General Air Quality Rules) shall be included to the extent that they have

been authorized, or are being authorized.

(4) Basic design parameters--For a process unit at a steam electric

generating facility, the owner or operator may select as its basic design parameters

either maximum hourly heat input and maximum hourly fuel consumption rate or

maximum hourly electric output rate and maximum steam flow rate. When establishing

fuel consumption specifications in terms of weight or volume, the minimum fuel quality

based on British thermal units content shall be used for determining the basic design

parameters for a coal-fired electric utility steam generating unit. The basic design

parameters for any process unit that is not at a steam electric generating facility are
Texas Commission on Environmental Quality Page 31

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

maximum rate offuel or heat input, maximum rate of material input, or maximum rate

of product output. Combustion process units will typically use maximum rate offuel

input. For sources having multiple end products and raw materials, the owner or

operator shall consider the primary product or primary raw material when selecting a

basic design parameter. The owner or operator may propose an alternative basic design

parameter for the source's process units to the executive director ifthe owner or

operator believes the basic design parameter as defined in this paragraph is not

appropriate for a specific industry or type of process unit. Ifthe executive director

approves ofthe use of an alternative basic design parameter, that basic design parameter

shall be identified and compliance required in a condition in a permit that is legally

enforceable.

(A) The owner or operator shall use credible information, such as

results of historic maximum capability tests, design information from the manufacturer,

or engineering calculations, in establishing the magnitude ofthe basic design parameter.

(B) If design information is not available for a process unit, the

owner or operator shall determine the process unit's basic design parameter(s) using the

maximum value achieved by the process unit in the five-year period immediately

preceding the planned activity.
Texas Commission on Environmental Quality Page 32

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

(C) Efficiency of a process unit is not a basic design parameter.

(5) Begin actual construction--In general, initiation of physical on-site

construction activities on an emissions unit that are of a permanent nature. Such

activities include, but are not limited to, installation of building supports and

foundations, laying of underground pipework, and construction of permanent storage

structures. With respect to a change in method of operation, this term refers to those onsite activities other than preparatory activities that mark the initiation ofthe change.

(6) Building, structure, facility, or installation--All ofthe pollutantemitting activities that belong to the same industrial grouping, are located in one or

more contiguous or adjacent properties, and are under the control ofthe same person

(or persons under common control). Pollutant-emitting activities are considered to be

part ofthe same industrial grouping ifthey belong to the same "major group" (Le., that

have the same two-digit code) as described in the Standard Industrial Classification

Manual, 1972, as amended by the 1977 supplement.

(7) Clean coal technology--Any technology, including technologies applied

at the precombustion, combustion, or post-combustion stage, at a new or existing

facility that will achieve significant reductions in air emissions ofsulfur dioxide or
Texas Commission on Environmental Quality Page 33

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

oxides of nitrogen associated with the utilization of coal in the generation of electricity,

or process steam that was not in widespread use as of November 15, 1990.

(8) Clean coal technology demonstration project--A project using funds

appropriated under the heading "Department of Energy-Clean Coal Technology," up to a

total amount of $2.5 billion for commercial demonstration of clean coal technology, or

similar projects funded through appropriations for the United States Environmental

Protection Agency. The federal contribution for a qualifying project shall be at least 20%

ofthe total cost ofthe demonstration project.

(9) Commence--As applied to construction of a major stationary source or

major modification, means that the owner or operator has all necessary preconstruction

approvals or permits and either has:

(A) begun, or caused to begin, a continuous program of actual onsite construction ofthe source, to be completed within a reasonable time; or

(B) entered into binding agreements or contractual obligations,

which cannot be canceled or modified without substantial loss to the owner or operator,

to undertake a program of actual construction ofthe source to be completed within a

reasonable time.
Texas Commission on Environmental Quality Page 34

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(10) Construction--Any physical change or change in the method of

operation (including fabrication, erection, installation, demolition, or modification of an

emissions unit) that would result in a change in actual emissions.

(11) Contemporaneous period--For major sources the period between:

(A) the date that the increase from the particular change occurs;

and

(B) 60 months prior to the date that construction on the particular

change commences.

(12) De minimis threshold test (netting)--A method of determining if a

proposed emission increase will trigger nonattainment or prevention ofsignificant

deterioration review. The summation ofthe proposed project emission increase in tons

per year with all other creditable source emission increases and decreases during the

contemporaneous period is compared to the significant level for that pollutant. Ifthe

significant level is exceeded, then prevention ofsignificant deterioration and/or

nonattainment review is required.
Texas Commission on Environmental Quality Page 35

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-Al

(13) Electric utility steam generating unit--Any steam electric generating

unit that is constructed for the purpose ofsupplying more than one-third ofits potential

electric output capacity and more than 25 megawatts electrical output to any utility

power distribution system for sale. Any steam supplied to a steam distribution system

for the purpose of providing steam to a steam-electric generator that would produce

electrical energy for sale is included in determining the electrical energy output capacity

ofthe affected facility.

(14) Federally regulated new source review pollutant--As defined in

subparagraphs (A) - (D) ofthis paragraph:

(A) any pollutant for which a national ambient air quality standard

has been promulgated and any constituents or precursors for such pollutants identified

by the United States Environmental Protection Agency;

(B) any pollutant that is subject to any standard promulgated under

Federal Clean Air Act (FCAA), §111;

(C) any Class I or II substance subject to a standard promulgated

under or established by FCAA, Title VI; or
Texas Commission on Environmental Quality Page 36

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

(D) any pollutant that otherwise is subject to regulation under the

FCAA; except that any or all hazardous air pollutants either listed in FCAA, §112 or

added to the list under FCAA, §112(b)(2), which have not been delisted under FCAA,

§112(b)(3), are not regulated new source review pollutants unless the listed hazardous

air pollutant is also regulated as a constituent or precursor of a general pollutant listed

under FCAA, §108.

(15) Lowest achievable emission rate--For any emitting facility, that rate of

emissions of a contaminant that does not exceed the amount allowable under applicable

new source performance standards promulgated by the United States Environmental

Protection Agency under 42 United States Code, §7411, and that reflects the following:

(A) the most stringent emission limitation that is contained in the

rules and regulations of any approved state implementation plan for a specific class or

category offacility, unless the owner or operator ofthe proposed facility demonstrates

that such limitations are not achievable; or

(B) the most stringent emission limitation that is achieved in

practice by a specific class or category of facilities, whichever is more stringent.
Texas Commission on Environmental Quality Page 37

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-116-AI

(16) Major facility--Any facility that emits or has the potential to emit 100

tons per year or more ofthe plant-wide applicability limit (PAL) pollutant in an

attainment area; or any facility that emits or has the potential to emit the PAL pollutant

in an amount that is equal to or greater than the major source threshold for the PAL

pollutant in Table I ofthis section for nonattainment areas.

(17) Major stationary source--Any stationary source that emits, or has the

potential to emit, a threshold quantity of emissions or more of any air contaminant

(including volatile organic compounds (VOCs)) for which a national ambient air quality

standard has been issued. The major source thresholds are identified in Table I ofthis

section for nonattainment pollutants and the major source thresholds for prevention of

significant deterioration pollutants are identified in 40 Code of Federal Regulations

(CFR) §S1.166(b)(1). A source that emits, or has the potential to emit a federally

regulated new source review pollutant at levels greater than those identified in 40 CFR

§S1.166(b)(1) is considered major for all prevention ofsignificant deterioration

pollutants. A major stationary source that is major for VOCs or nitrogen oxides is

considered to be major for ozone. The fugitive emissions of a stationary source shall not

be included in determining for any ofthe purposes ofthis definition whether it is a

major stationary source, unless the source belongs to one ofthe categories ofstationary

sources listed in 40 CFR §S1.16s(a)(1)(iv)(C).
Texas Commission on Environmental Quality Page 38

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(18) Major modification--As follows.

(A) Any physical change in, or change in the method of operation of

a major stationary source that causes a significant project emissions increase and a

significant net emissions increase for any federally regulated new source review

pollutant. At a stationary source that is not major prior to the increase, the increase by

itself must equal or exceed that specified for a major source. At an existing major

stationary source, the increase must equal or exceed that specified for a major

modification to be significant. The major source and significant thresholds are provided

in Table I ofthis section for nonattainment pollutants. The major source and significant

thresholds for prevention ofsignificant deterioration pollutants are identified in 40

Code of Federal Regulations §51.166(b)(1) and (23), respectively.

Figure: 30 TAC §116.12(18)(A) (No change)

(B) A physical change or change in the method of operation shall

not include:

(i) routine maintenance, repair, and replacement;
Texas Commission on Environmental Quality Page 39

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(ii) use of an alternative fuel or raw material by reason of an

order under the Energy Supply and Environmental Coordination Act of 1974, §2(a) and

(b) (or any superseding legislation) or by reason of a natural gas curtailment plan under

the Federal Power Act;

(iii) use of an alternative fuel by reason of an order or rule of

42 United States Code, §7425;

(iv) use of an alternative fuel at a steam generating unit to

the extent that the fuel is generated from municipal solid waste;

(v) use of an alternative fuel or raw material by a stationary

source that the source was capable of accommodating before December 21, 1976 (unless

such change would be prohibited under any federally enforceable permit condition

established after December 21, 1976) or the source is approved to use under any permit

issued under regulations approved under this chapter;

(vi) an increase in the hours of operation or in the

production rate (unless the change is prohibited under any federally enforceable permit

condition that was established after December 21, 1976);
Texas Commission on Environmental Quality Page 40

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(vii) any change in ownership at a stationary source;

(viii) any change in emissions of a pollutant at a site that

occurs under an existing plant-wide applicability limit;

(ix) the installation, operation, cessation, or removal of a

temporary clean coal technology demonstration project, provided that the project

complies with the state implementation plan and other requirements necessary to attain

and maintain the national ambient air quality standard during the project and after it is

terminated;

(x) for prevention ofsignificant deterioration review only,

the installation or operation of a permanent clean coal technology demonstration

project that constitutes re-powering, provided that the project does not result in an

increase in the potential to emit of any regulated pollutant emitted by the unit. This

exemption shall apply on a pollutant-by-pollutant basis; or

(xi) for prevention ofsignificant deterioration review only,

the reactivation of a clean coal-fired electric utility steam generating unit.
Texas Commission on Environmental Quality Page 41

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(19) Necessary preconstruction approvals or permits--Those permits or

approvals required under federal air quality control laws and regulations and those air

quality control laws and regulations that are part ofthe applicable state implementation

plan.

(20) Net emissions increase--The amount by which the sum ofthe

following exceeds zero: the project emissions increase plus any sourcewide creditable

contemporaneous emission increases, minus any sourcewide creditable

contemporaneous emission decreases. Baseline actual emissions shall be used to

determine emissions increases and decreases.

(A) An increase or decrease in emissions is creditable only ifthe

following conditions are met:

0) it occurs during the contemporaneous period;

(ii) the executive director has not relied on it in issuing a

federal new source review permit for the source and that permit is in effect when the

increase in emissions from the particular change occurs; and
Texas Commission on Environmental Quality Page 42

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

(iii) in the case of prevention ofsignificant deterioration

review only, an increase or decrease in emissions ofsulfur dioxide, particulate matter, or

nitrogen oxides that occurs before the applicable minor source baseline date is

creditable only if it is required to be considered in calculating the amount of maximum

allowable increases remaining available.

(B) An increase in emissions is creditable ifit is the result of a .

physical change in, or change in the method of operation of a stationary source only to

the extent that the new level of emissions exceeds the baseline actual emission rate.

Emission increases at facilities under a plant-wide applicability limit are not creditable.

(C) A decrease in emissions is creditable only to the extent that all

ofthe following conditions are met:

(i) the baseline actual emission rate exceeds the new level of

emissions;

(ii) it is federally enforceable at and after the time that actual

construction on the particular change begins;
Texas Commission on Environmental Quality Page 43

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

(iii) the executive director has not relied on it in issuing a

prevention ofsignificant deterioration or a nonattainment permit;

(iv) the decrease has approximately the same qualitative

significance for public health and welfare as that attributed to the increase from the

particular change; and

(v) in the case of nonattainment applicability analysis only,

the state has not relied on the decrease to demonstrate attainment or reasonable further

progress.

(D) An increase that results from a physical change at a source

occurs when the emissions unit on which construction occurred becomes operational

and begins to emit a particular pollutant. Any replacement unit that requires shakedown

becomes operational only after a reasonable shakedown period, not to exceed 180 days.

(21) Offset ratio--For the purpose ofsatisfying the emissions offset

reduction requirements of 42 United States Code, §7503(a)(1)(A), the emissions offset

ratio is the ratio oftotal actual reductions of emissions to total emissions increases of

such pollutants. The minimum offset ratios are included in Table I ofthis section under

the definition of major modification. In order for a reduction to qualify as an offset, it
Texas Commission on Environmental Quality Page 44

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

must be certified as an emission credit under Chapter 101, Subchapter H, Division 1 or 4

ofthis title (relating to Emission Credit Banking and Trading; or Discrete Emission

Credit Banking and Trading), except as provided for in §116.17o(b) ofthis title (relating

to Applicability of Emission Reductions as Offsets). The reduction must not have been

relied on in the issuance of a previous nonattainment or prevention ofsignificant

deterioration permit.

(22) Plant-wide applicability limit--An emission limitation expressed, in

tons per year, for a pollutant at a major stationary source, that is enforceable and

established in a plant-wide applicability limit permit under §116.186 ofthis title (relating

to General and Special Conditions).

(23) Plant-wide applicability limit effective date--The date ofissuance of

the plant-wide applicability limit permit. [The plant-wide applicability limit effective

date for a plant-wide applicability limit established in an existing flexible permit is the

date that the flexible permit was issued.]

(24) Plant-wide applicability limit major modification--Any physical

change in, or change in the method of operation ofthe plant-wide applicability limit

source that causes it to emit the plant-wide applicability limit pollutant at a level equal

to or greater than the plant-wide applicability limit.
Texas Commission on Environmental Quality Page 45

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(25) Plant-wide applicability limit permit--The new source review permit

that establishes the plant-wide applicability limit.

(26) Plant-wide applicability limit pollutant--The pollutant for which a

plant-wide applicability limit is established at a major stationary source.

(27) Potential to emit--The maximum capacity of a stationary source to

emit a pollutant under its physical and operational design. Any physical or enforceable

operational limitation on the capacity ofthe stationary source to emit a pollutant,

including air pollution control equipment and restrictions on hours of operation or on

the type or amount ofmaterial combusted, stored, or processed, may be treated as part

ofits design only ifthe limitation or the effect it would have on emissions is federally

enforceable. Secondary emissions, as defined in 40 Code of Federal Regulations

§51.165(a)(1)(viii), do not count in determining the potential to emit for a stationary

source.

(28) Project net--The sum ofthe following: the project emissions increase,

minus any sourcewide creditable emission decreases proposed at the source between the

date of application for the modification and the date the resultant modification begins

emitting. Baseline actual emissions shall be used to determine emissions increases and
Texas Commission on Environmental Quality Page 46

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

decreases. Increases and decreases must meet the creditability criteria listed under the

definition of net emissions increase in this section.

(29) Projected actual emissions--The maximum annual rate, in tons per

year, at which an existing facility is projected to emit a federally regulated new source

review pollutant in any rolling 12-month period during the five years following the date

the facility resumes regular operation after the project, or in anyone ofthe ten years

following that date, ifthe project involves increasing the facility's design capacity or its

potential to emit that federally regulated new source review pollutant. In determining

the projected actual emissions, the owner or operator ofthe major stationary source

shall include unauthorized emissions from planned maintenance, startup, or shutdown

activities, which were historically unauthorized and subject to reporting under Chapter

101 ofthis title, to the extent they have been authorized, or are being authorized; and

fugitive emissions to the extent quantifiable; and shall consider all relevant information,

including, but not limited to, historical operational data, the company's own

representations, the company's expected business activity and the company's highest

projections of business activity, the company's filings with the state or federal regulatory

authorities, and compliance plans under the approved state implementation plan.

(30) Project emissions increase--The sum of emissions increases for each

modified or affected facility determined using the following methods:
Texas Commission on Environmental Quality Page 47

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-116-Al

(A) for existing facilities, the difference between the projected actual

emissions and the baseline actual emissions. In calculating any increase in emissions

that results from the project, that portion ofthe facility's emissions following the project

that the facility could have accommodated during the consecutive 24-month period used

to establish the baseline actual emissions and that are also unrelated to the particular

project, including any increased utilization due to product demand growth may be

excluded from the project emission increase. The potential to emit from the facility

following completion ofthe project may be used in lieu ofthe projected actual emission

rate; and

(B) for new facilities, the difference between the potential to emit

from the facility following completion ofthe project and the baseline actual emissions.

(31) Replacement facility--A facility that satisfies the following criteria:

(A) the facility is a reconstructed unit within the meaning of 40

Code of Federal Regulations §60.1S(b)(1), or the facility replaces an existing facility;

(B) the facility is identical to or functionally equivalent to the

replaced facility;
Texas Commission on Environmental Quality Page 48

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

(C) the replacement does not alter the basic design parameters of

the process unit;

(D) the replaced facility is permanently removed from the major

stationary source, otherwise permanently disabled, or permanently barred from

operation by a permit that is enforceable. Ifthe replaced facility is brought back into

operation, it shall constitute a new facility. No creditable emission reductions shall be

generated from shutting down the existing facility that is replaced. A replacement

facility is considered an existing facility for the purpose of determining federal new

source review applicability.

(32) Secondary emissions--Emissions that would occur as a result ofthe

construction or operation of a major stationary source or major modification, but do not

come from the source or modification itself. Secondary emissions must be specific, welldefined, quantifiable, and impact the same general area as the stationary source or

modification that causes the secondary emissions. Secondary emissions include

emissions from any off-site support facility that would not be constructed or increase its

emissions, except as a result ofthe construction or operation ofthe major stationary

source or major modification. Secondary emissions do not include any emissions that
Texas Commission on Environmental Quality Page 49

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

come directly from a mobile source such as emissions from the tail pipe of a motor

vehicle, from a train, or from a vessel.

(33) Significant facility--A facility that emits or has the potential to emit a

plant-wide applicability limit (PAL) pollutant in an amount that is equal to or greater

than the significant level for that PAL pollutant.

(34) Small facility--A facility that emits or has the potential to emit the

plant-wide applicability limit (PAL) pollutant in an amount less than the significant level

for that PAL pollutant.

(35) Stationary source--Any building, structure, facility, or installation that

emits or may emit any air pollutant subject to regulation under 42 United States Code,

§§7401 et seq.

(36) Temporary clean coal technology demonstration project--A clean coal

technology demonstration project that is operated for a period offive years or less, and

that complies with the state implementation plan and other requirements necessary to

attain and maintain the national ambient air quality standards during the project and

after it is terminated.
Texas Commission on Environmental Quality Page So

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. ZOlZ-01S-116-A!

SUBCHAPfER B: NEW SOURCE REVIEW PERMITS

DIVISION 5: NONATfAlNMENT REVIEW PERMITS

§116.150, §116.151

STATUTORY AUTHORITY

The amendments are proposed under Texas Water Code (TWC), §S.lOZ, concerning

General Powers, which provides the commission with the general powers to carry out its

duties under the TWC; TWC, §S.103, concerning Rules, which authorizes the

commission to adopt rules necessary to carry out its powers and duties under the TWC;

TWC, §S.lOS, concerning General Policy, which authorizes the commission by rule to

establish and approve all general policy ofthe commission; and under Texas Health and

Safety Code (THSC), §38z.017, concerning Rules, which authorizes the commission to

adopt rules consistent with the policy and purposes ofthe Texas Clean Air Act. The

amendments are also proposed under THSC, §38z.00z, concerning Policy and Purpose,

which establishes the commission's purpose to safeguard the state's air resources,

consistent with the protection of public health, general welfare, and physical property;

THSC, §38z.011, concerning General Powers and Duties, which authorizes the

commission to control the quality ofthe state's air; and THSC, §38z.01z, concerning

State Air Control Plan, which authorizes the commission to prepare and develop a

general, comprehensive plan for the proper control ofthe state's air; THSC, §38z.0S1,

concerning Permitting Authority ofCommission; Rules, which authorizes the
Texas Commission on Environmental Quality Page 51

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

commission to issue permits for construction of new facilities or modifications to

existing facilities that may emit air contaminants; THSC, §382.0511, concerning Permit

Consolidation and Amendment, which authorizes the commission to consolidate various

authorizations; THSC, §382.0512, concerning Modification of Existing Facility, which

prescribes how the commission will evaluate modifications of existing facilities; THSC,

§382.0513, concerning Permit Conditions, which authorizes the commission to establish

and enforce permit conditions; THSC, §382.0515, concerning Application for Permit,

which specifies permit application requirements; and THSC, §382.0518, concerning

Preconstruction Permit, which authorizes the commission to issue preconstruction

permits. The amendments are also proposed under Federal Clean Air Act (FCAA), 42

United States Code (USC), §§7401, etseq., which requires states to submit state

implementation plan revisions that specify the manner in which the national ambient air

quality standard will be achieved and maintained within each air quality control region

ofthe state.

The proposed amendments implement THSC, §§382.002, 382.011, 382.012, 382.017,

382.051, 382.0511, 382.0512, 382.0513, 382.°515, and 382.0518, and FCAA, 42 USC,

§§7401 et seq.
Texas Commission on Environmental Quality Page 52

Chapter 116 - Control ofAir pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

§u6.150. New Major Source or Major Modification in Ozone Nonattainment

Areas.

(a) This section applies to all new source review authorizations for new

construction or modification offacilities or emissions units that will be located in any

area designated as nonattainment for ozone under 42 United States Code (USC), §§7407

etseq. as ofthe date ofissuance ofthe permit, unless the following apply on the date of

issuance ofthe permit:

(1) the United States Environmental Protection Agency (EPA) has made a

finding of attainment;

(2) the EPA has approved the removal of nonattainment New Source

Review (NSR) requirements from the area;

(3) the EPA has determined that Prevention of Significant Deterioration

requirements apply in the area; or

(4) the EPA determines that nonattainment NSR is no longer required for

purposes of antibacksliding.
Texas Commission on Environmental Quality Page 53

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(b) The owner or operator of a proposed new major stationary source, as defined

in §116.12 ofthis title (relating to Nonattainment and Prevention of Significant·

Deterioration Review Definitions) of volatile organic compound (VOC) emissions or

nitrogen oxides (NOx) emissions, or the owner or operator of an existing stationary

source ofVOC or NOx emissions that will undergo a major modification, as defined in

§116.12 ofthis title with respect to VOC or NOx, shall meet the requirements of

subsection (d)(1) - (4) ofthis section, except as provided in subsection (e) ofthis section.

Table I, located in the definition of major modification in §116.12 ofthis title, specifies

the various classifications of nonattainment along with the associated emission levels

that designate a major stationary source and significant level for those classifications.

(c) Except as noted in subsection (e) ofthis section regarding NOx, the de

minimis threshold test (netting) is required for all modifications to existing major

sources ofVOC or NOx , unless at least one of the following conditions are met:

(1) the proposed emissions increases associated with a project, without

regard to decreases, is less than five tons per year (tpy) ofthe individual nonattainment

pollutant in areas classified under Federal Clean Air Act (FCAA), Title I, Part D, Subpart

2 (42 USC, §7511) classified as Serious or Severe;
Texas Commission on Environmental Quality Page 54

Chapter n6 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-n6-A!

(2) the proposed emissions increases associated with a project, without

regard to decreases, is less than 40 tpy ofthe individual nonattainment pollutant in

areas classified under FCAA, Title I, Part D, Subpart 1 (42 USC, §7502) and for tllose

under FCAA, Title I, Part D, Subpart 2 (42 USC, §75n) classified as Marginal or

Moderate; or

(3) tlle project emissions increases are less than the significant level stated

in Table I located in tlle definition of major modification in §n6.12 ofthis title and when

coupled with project actual emissions decreases for the same pollutant, summed as the

project net, are less than or equal to zero tpy.

(d) In applying tlle de minimis threshold test, iftlle net emissions increases are

greater than the significant levels stated in Table I located in the definition of major

modification in §n6.12 ofthis title, the following requirements apply.

(1) The proposed facility or emissions unit shall comply with the lowest

achievable emission rate (LAER) as defined in §n6.12 ofthis title for the nonattainment

pollutants for which the facility or emissions unit is a new major source or major

modification except as provided in paragraph (3)(B) ofthis subsection and except for

existing major stationary sources that have a potential to emit (PTE) ofless than 100 tpy

ofthe applicable nonattainment pollutant. For these sources, best available control
Texas Commission on Environmental Quality Page 55

Chapter n6 - Control ofAir pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-n6-AI

technology (BACT) can be substituted for LAER. LAER shall otherwise be applied to

each new facility or emissions unit and to each existing facility or emissions unit at

which the net emissions increase will occur as a result of a physical change or change in

method of operation ofthe unit.

(2) All major stationary sources owned or operated by the applicant (or by

any person controlling, controlled by, or under common control with the applicant) in

the state must be in compliance or on a schedule for compliance with all applicable state

and federal emission limitations and standards.

(3) At the time the new or modified facility or emissions unit or facilities or

emissions units commence operation, the emissions increases from the new or modified

facility or emissions unit or facilities or emissions units must be offset. The proposed

facility or emissions unit shall use the offset ratio for the appropriate nonattainment

classification as defined in §n6.12 ofthis title and shown in Table I located in the

definition of major modification in §n6.12 ofthis title. Internal offsets that are

generated at the source and that otherwise meet all creditability criteria can be applied

as follows.

(A) Major stationary sources located in a serious or severe ozone

nonattainment area with a PTE ofless than 100 tpy of an applicable nonattainment
Texas Commission on Environmental Quality Page 56

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

pollutant are not required to undergo nonattainment new source review under this

section, ifthe project increases are offset with internal offsets at a ratio of at least 1.3 to

1.

(B) Major stationary sources located in a serious or severe ozone

nonattainment area with a PTE of greater than or equal to 100 tpy of an applicable

nonattainment pollutant can substitute federal BACT (as identified in §116.160(c)(I)(A)

ofthis title (relating to Prevention of Significant Deterioration Requirements) for LAER,

ifthe project increases are offset with internal offsets at a ratio of at least 1.3 to 1.

Internal offsets used in this manner can also be applied to satisfy the offset requirement.

(4) In accordance with the FCAA, the permit application must contain an

analysis of alternative sites, sizes, production processes, and control techniques for the

proposed source. The analysis must demonstrate that the benefits ofthe proposed

location and source configuration significantly outweigh the environmental and social

costs ofthat location.

(e) For sources located in the EI Paso ozone nonattainment area as defined in 40

Code of Federal Regulations, Part 81, the requirements ofthis section do not apply to

NOx emissions.
Texas Commission on Environmental Quality Page 57

Chapter n6 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-n6-A!

§U6.151. New Major Source or Major Modification in Nonattainment Area

Other Than Ozone.

(a) This section applies to applications for new construction or modification of

facilities or emissions units located in a designated nonattainment area for an air

contaminant other than ozone. The owner or operator of a proposed new or modified

facility or emissions unit that will be a new major stationary source for that

nonattainment air contaminant, or the owner or operator of an existing major stationary

source that will undergo a major modification with respect to that nonattainment air

contaminant, shall meet the additional requirements ofsubsection (C)(l) - (4) ofthis

section. Table I located in the definition ofmajor modification in §n6.12 ofthis title

(relating to Nonattainment and Prevention of Significant Deterioration Review

Definitions) specifies the various classifications of nonattainment along with the

associated emission levels that designate a major stationary source.

(b) The de minimis threshold test (netting) is required for all modifications to

existing major sources offederally regulated new source review pollutants, unless the

proposed emissions increases associated with a project, without regard to decreases, are

less than the major modification threshold for the pollutant identified in Table I located

in the definition of major modification in §n6.12 ofthis title.
Texas Commission on Environmental Quality Page 58

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(c) In applying the de minimis threshold test, ifthe net emissions increases are

greater than the major modification levels stated in Table I located in the definition of

major modification in §116.12 ofthis title, the following requirements apply.

(1) The proposed facility or emissions unit shall comply with the lowest

achievable emission rate (LAER) as defined in §116.12 ofthis title for the nonattainment

pollutants for which the facility or emissions unit is a new major source or major

modification. LAER shall be applied to each new facility or emissions unit and to each

existing facility or emissions unit at which the net emissions increase will occur as a

result of a physical change or change in method of operation ofthe unit.

(2) All major stationary sources owned or operated by the applicant (or by

any person controlling, controlled by, or under common control with the applicant) in

the state shall be in compliance or on a schedule for compliance with all applicable state

and federal emission limits and standards.

(3) At the time the new or modified facility or emissions unit or facilities or

emissions units commence operation, the emission increases from the new or modified

facility or emissions unit or facilities or emissions units shall be offset. The proposed

facility or emissions unit shall use the offset ratio for the appropriate nonattainment
Texas Commission on Environmental Quality Page 59

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

classification as defined in §116.12 ofthis title and shown in Table I located in the

definition of major modification in §116.12 ofthis title.

(4) In accordance with the Federal Clean Air Act, the permit application

shall contain an analysis of alternative sites, sizes, production processes, and control

techniques for the proposed source. The analysis shall demonstrate that the benefits of

the proposed location and source configuration significantly outweigh the

environmental and social costs ofthat location.
Texas Commission on Environmental Quality Page 60

Chapter u6 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01S-u6-A!

SUBCHAPTER C: PLANe-WIDE APPLICABILITY LIMITS

DIVISION 1: PLANe-WIDE APPLICABILITY LIMITS

§116.180, §116.186

STATUTORY AUTHORITY

The amendments are proposed under Texas Water Code (TWC), §S.102, concerning

General Powers, which provides the commission with the general powers to carry out its

duties under the TWC; TWC, §S.103, concerning Rules, which authorizes the

commission to adopt rules necessary to carry out its powers and duties under the TWC;

TWC, §S.lOS, concerning General Policy, which authorizes the commission by rule to

establish and approve all general policy ofthe commission; TWC, §7.02, concerning

Enforcement Authority, which provides the commission the authority to enforce the

statutes under itsjurisdiction; TWC, §7.301, concerning Definition, which defines terms

used in Chapter 7, Subchapter G; TWC, §7.302, concerning Grounds for Revocation or

Suspension of Permit, which provides the commission the authority to revoke and

suspend or revoke and reissue a permit on prescribed grounds after notice and hearing;

and under Texas Health and Safety Code (THSC), §382.017, concerning Rules, which

authorizes the commission to adopt rules consistent with the policy and purposes ofthe

Texas Clean Air Act. The amendments are also proposed under THSC, §382.o02,

concerning Policy and Purpose, which establishes the commission's purpose to

safeguard the state's air resources, consistent with the protection of public health,

general welfare, and physical property; THSC, §382.OU, concerning General Powers and
Texas Commission on Environmental Quality Page 61

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-n6-Al

Duties, which authorizes the commission to control the quality ofthe state's air; and

THSC, §382.012, concerning State Air Control Plan, which authorizes the commission to

prepare and develop a general, comprehensive plan for the proper control ofthe state's

air; THSC, §382.016, concerning Monitoring Requirements; Examination ofRecords,

which authorizes the commission to prescribe reasonable requirements for measuring

and monitoring the emissions of air contaminants from a source or from an activity

causing or resulting in the emission of air contaminants; THSC, §382.021, concerning

Sampling.Methods and Procedures, which authorizes the commission to prescribe

sampling methods and procedures to be used in determining violations of and

compliance with the commission's rules; THSC, §382.040, concerning Documents;

Public Property, which provides that all information, documents, and data collected by

the commission in performing its duties are state property; THSC, §382.051, concerning

Permitting Authority of Commission; Rules, which authorizes the commission to issue

permits for construction of new facilities or modifications to existing facilities that may

emit air contaminants; THSC, §382.0511, concerning Permit Consolidation and

Amendment, which authorizes the commission to consolidate various authorizations;

THSC, §382.0512, concerning Modification of Existing Facility, which prescribes how

the commission will evaluate modifications of existing facilities; THSC, §382.0513,

concerning Permit Conditions, which authorizes the commission to establish and

enforce permit conditions; THSC, §382.0514, concerning Sampling, Monitoring, and

Certification, which authorizes the commission to require sampling and monitoring of a
Texas Commission on Environmental Quality Page 62

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-Al

permitted federal source or facility; THSC, §382.0515, concerning Application for

Permit, which specifies permit application requirements; and THSC, §382.0518,

concerning Preconstruction Permit, which authorizes the commission to issue

preconstruction permits. The amendments are also proposed under Federal Clean Air

Act (FCAA), 42 United States Code (USC), §§7401, et seq., which requires states to

submit state implementation plan revisions that specify the manner in which the

national ambient air quality standard will be achieved and maintained within each air

quality control region ofthe state.

The proposed amendments implement THSC, §§382.002, 382.011, 382.012, 382.016,

382.0515, and 382.0518, and FCAA, 42 USC, §§7401 et seq.

§116.180. Applicability.

(a) The following requirements apply to a plant-wide applicability limit (PAL)

permit.

(1) Only one PAL may be issued for each pollutant at an existing major

stationary source.
Texas Commission on Environmental Quality Page 63

Chapter n6 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01s-n6-AI

(2) A PAL permit may include more than one PAL.

(3) A PAL permit may not cover facilities or emissions units at more than

one existing major stationary source.

(4) A PAL permit may be consolidated with a new source review permit at

the existing major stationary source.

(S) A PAL permit can be issued only for an existing major stationary

source; it may not be issued for a new major stationary source as defined in 40 Code of

Federal Regulations §S1.16s(a)(1)Civ)(A) and §s1.166(b)C!) [§S1.16s(iv)(A)].

(b) The new owner of a major stationary source shall comply with §n6.no(e) of

this title (relating to Applicability), provided that all facilities, or emissions units at a

major stationary source, covered by a PAL permit change ownership at the same time

and to the same person, or both the new owner and existing permit holder must obtain a

PAL permit alteration allocating the emission prior to the transfer ofthe permit by the

commission. After the sale of a facility, or emissions unit at a major stationary source,

but prior to the transfer of a permit requiring a permit alteration, the original PAL

permit holder remains responsible for ensuring compliance with the existing PAL

permit and all rules ofthe commission.
Texas Commission on Environmental Quality Page 64

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(c) The owner ofthe facility, emissions unit at a major stationary source, group of

facilities, or account or the operator ofthe facility, emissions unit at a major stationary

source, group offacilities, or account that is authorized to act for the qwner is

responsible for complying with this section, except as provided by subsection (b) ofthis

section.

§116.186. General and Special Conditions.

(a) The plant-wide applicability limit (PAL) will impose an annual emission

limitation in tons per year, that is enforceable for all facilities, or emissions units at a

major stationary source, that emit the PAL pollutant. For each month during the PAL

effective period after the first 12 months of establishing a PAL, the major stationary

source owner or operator shall demonstrate that the sum ofthe monthly emissions from

each facility under the PAL for the previous 12 consecutive months is less than the PAL

(a 12-month average, rolled monthly). For each month during the first 11 months from

the PAL effective date, the major stationary source owner or operator shall demonstrate

that the sum of the preceding monthly emissions from the PAL effective date for each

facility under the PAL is less than the PAL. Each PAL must include emissions of only one

pollutant. The PAL must include all emissions, including fugitive emissions, to the
Texas Commission on Environmental Quality Page 65

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

extent quantifiable, from all facilities or emissions units at a major stationary source

included in the PAL that emit or have the potential to emit the PAL pollutant.

(b) The following general conditions are applicable to every PAL permit.

(1) Applicability. This section does not authorize any facility to emit air

pollutants but establishes an annual emissions level below which new and modified

facilities, or emissions units at a major stationary source, will not be subject to major

new source review for that pollutant.

(2) Sampling requirements. Ifsampling ofstacks or process vents is

required, the PAL permit holder shall contact the commission's Office of Compliance

and Enforcement prior to sampling to obtain the proper data forms and procedures. All

sampling and testing procedures must be approved by the executive director and

coordinated with the appropriate regional office ofthe commission. The PAL permit

holder is also responsible for providing sampling facilities and conducting the sampling

operations or contracting with an independent sampling consultant.

(3) Equivalency of methods. The permit holder shall demonstrate the

equivalency of emission control methods, sampling or other emission testing methods,

and monitoring methods proposed as alternatives to methods indicated in the
Texas Commission on Environmental Quality Page 66

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

conditions of the PAL permit. Alternative methods must be applied for in writing and

must be reviewed and approved by the executive director prior to their use in fulfilling

any requirements ofthe permit.

(4) Recordkeeping and reporting.

(A) A copy ofthe PAL permit along with information and data

sufficient to demonstrate continuous compliance with the emission caps contained in

the PAL permit must be maintained in a file at the plant site and made available at the

request of personnel from the commission or any air pollution control program having

jurisdiction. For facilities that normally operate unattended, this information must be

maintained at the nearest staffed location within Texas specified by the permit holder in

the permit application. This information must include, but is not limited to, emission

cap and individual emission limitation calculations based on a 12-month rolling basis

and production records and operating hours. Additional recordkeeping requirements

may be specified in special conditions attached to the PAL permit.

(B) The owner or operator shall retain a copy of the PAL permit

application and any applications for revisions to the PAL, each annual certification of

compliance under §122.146 ofthis title (relating to Compliance Certification Terms and
Texas Commission on Environmental Quality Page 67

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-01s-n6-AI

Conditions), and the data relied on in certifying the compliance for the duration ofthe

PAL plus five years.

(C) A semiannual report shall be submitted to the executive director

within 30 days ofthe end of each reporting period that contains:

(i) the identification of owner and operator and the permit

number;

(ii) total annual emissions (in tons per year) based on a 12-

month rolling total for each month in the reporting period;

(iii) all data relied upon, including, but not limited to, any

quality assurance or quality control data, in calculating the monthly and annual PAL

pollutant emissions;

(iv) a list of any facility modified or added to the major

stationary source during the preceding six-month period;

(v) the number, duration, and cause of any deviations or

monitoring malfunctions (other than the time associated with zero and span calibration
Texas Commission on Environmental Quality Page 68

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

checks), and any corrective action taken. This may be satisfied by referencing the PAL

permit number in the semiannual report for the site submitted under §122.145 ofthis

title (relating to Reporting Terms and Conditions);

(vi) a notification of a shutdown of any monitoring system,

whether the shutdown was permanent or temporary, the reason for the shutdown, the

anticipated date that the monitoring system will be fully operational or replaced with

another monitoring system, and whether the emissions unit monitored by the

monitoring system continued to operate, and the calculation ofthe emissions ofthe

pollutant or the number determined by method included in the permit; and

(vii) a signed statement by the responsible official, as defined

in §122.10 ofthis title (relating to General Definitions), certifying the truth, accuracy,

and completeness ofthe information provided in the report.

(D) The owner or operator shall submit the results of any

revalidation test or method to the executive director within three months after

completion ofsuch test or method.

(5) Maintenance of emission control. The facilities covered by the PAL

permit will not be operated unless all air pollution emission capture and abatement
Texas Commission on Environmental Quality Page 69

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

equipment is maintained in good working order and operating properly during normal

facility operations.

(6) Compliance with rules. Acceptance of a PAL permit by a permit

applicant constitutes an acknowledgment and agreement that the holder will comply

with all rules and orders ofthe commission issued in conformity with the Texas Clean

Air Act and the conditions precedent to the granting ofthe permit. Ifmore than one

state or federal rule or PAL permit condition is applicable, the most stringent limit or

condition will govern and be the standard by which compliance must be demonstrated.

Acceptance includes consent to the entrance of commission employees and agents into

the permitted premises at reasonable times to investigate conditions relating to the

emission or concentration of air contaminants, including compliance with the PAL

permit.

(7) Effective period. A PAL is effective for ten years.

(8) Absence of monitoring data. A source owner or operator shall record

and report maximum potential emissions without considering enforceable emission

limitations or operational restrictions for a facility during any period oftime that there

is no monitoring data, unless another method for determining emissions during such

periods is specified in the PAL permit special conditions.
Texas Commission on Environmental Quality Page 70

Chapter n6 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-n6-Al

(9) Monitoring system requirements. Failure to use a monitoring system

that meets the requirements ofthis section renders the PAL permit invalid [is a violation

ofthe PAL permit].

(10) Revalidation. All data used to establish the PAL pollutant must be

revalidated through performance testing or other scientifically valid means approved by

the executive director. Such testing must occur at least once every five years after

issuance ofthe PAL.

(n) Renewal. If a PAL renewal application is submitted to the executive

director in accordance with §n6.196 ofthis title (relating to Renewal of a Plant-wide

Applicability Limit Permit), the PAL shall not expire at the end ofthe PAL effective

period. It shall remain in effect until a renewed PAL permit is issued by the executive

director or the application is voided.

(c) Each PAL permit must include special conditions that satisfy the following

requirements.

(1) For the purposes ofthis subchapter, the definitions ofthe following

terms are the same as those provided in 40 Code of Federal Regulations §51.165.
Texas Commission on Environmental Quality Page 71

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(A) Continuous emission monitoring system (CEMS).

(B) Continuous emissions rate monitoring system (CERMS).

(C) Continuous parameter monitoring system (CPMS).

(D) Predictive emissions monitoring system (PEMS).

(2) The PAL monitoring system must accurately determine all emissions of

the PAL pollutant in terms of mass per unit oftime. Any monitoring system authorized

for use in the PAL permit must be based on sound science and meet generally acceptable

scientific procedures for data quality and manipulation.

(3) The PAL monitoring system must employ one or more ofthe general

monitoring approaches meeting the minimum requirements as described in

subparagraphs (A) - (D) ofthis paragraph.

(A) An owner or operator using mass balance calculations to

monitor PAL pollutant emissions from activities using coating or solvents shall meet the

following requirements:
Texas Commission on Environmental Quality Page 72

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

(i) provide a demonstrated means of validating the published

content ofthe PAL pollutant that is contained in, or created by, all materials used in or

at the facility;

(ii) assume that the facility emits all ofthe PAL pollutant that

is contained in, or created by, any raw material or fuel used in or at the facility, if it

cannot otherwise be accounted for in the process; and

(iii) where the vendor of a material or fuel that is used in or

at the facility publishes a range of pollutant content from such material, the owner or

operator shall use the highest value ofthe range to calculate the PAL pollutant emissions

unless the executive director determines that there is site-specific data or a site-specific

monitoring program to support another content within the range.

(B) An owner or operator using a CEMS to monitor PAL pollutant

emissions shall meet the following requirements.

(i) The CEMS must comply with applicable performance

specifications found in 40 Code of Federal Regulations Part 60, Appendix B.
Texas Commission on Environmental Quality Page 73

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(ii) The CEMS must sample, analyze, and record data at least

every 15 minutes while the emissions unit is operating.

(C) An owner or operator using CPMS or PEMS to monitor PAL

pollutant emissions shall meet the following requirements.

(i) The CPMS or the PEMS must be based on current sitespecific data demonstrating a correlation between the monitored parameter(s) and the

PAL pollutant emissions across the range of operation ofthe facility.

(ii) Each CPMS or PEMS must sample, analyze, and record

data at least every 15 minutes or at another less frequent interval approved by the

executive director, while the facility is operating.

(D) An owner or operator using emission factors to monitor PAL

pollutant emissions shall meet the following requirements.

(i) All emission factors must be adjusted, if appropriate, to

account for the degree of uncertainty or limitations in the factors' development.
Texas Commission on Environmental Quality Page 74

Chapter 116 - Control of Air Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-A!

(ij) The facility must operate within the designated range of

use for the emission factor, if applicable.

(iii) Iftechnically practicable, the owner or operator of a

significant facility that relies on an emission factor to calculate PAL pollutant emissions

shall conduct validation testing to determine a site-specific emission factor within six

months of PAL permit issuance, unless the executive director determines that testing is

not required.

(E) An alternative monitoring approach must meet the

requirements in paragraph (1) ofthis subsection and be approved by the executive

director.

(4) Where an owner or operator of a facility cannot demonstrate a

correlation between a monitored parameter(s) and the PAL pollutant emissions rate at

all operating points ofthe facility, the executive director shall:

(A) establish default value(s) for determining compliance with the

PAL based on the highest potential emissions reasonably estimated at such operating

point(s); or
Texas Commission on Environmental Quality Page 75

Chapter 116 - Control ofAir Pollution by Permits for New Construction or Modification

Rule Project No. 2012-015-116-AI

(B) determine that operation of the facility during operating

conditions when there is no correlation between monitored parameter(s) and the PAL

pollutant emissions is a violation ofthe PAL.