BryanW. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner 

## REeElVED Mark R. Vickery, P.G., ExecutiveDirector 

### 12 fEB 28 PH 5: 33 TEXAS COMMISSION ON**ENVIRONMENTAL~~~~ECTIOH** Protecting Texas byReducing andPreventingPollution 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 publichearing in Austin on March 29, 2012, at 10:00 a.m. atthe Texas Commission on Environmental Quality complex, Building E, Room 201S, 12100 Park 35 Circle. The purpose ofthis hearing is to receive publictestimony concerning the proposedrevisions to 30 TAC Chapter 116, Control ofAir Pollutionby Permits for New Construction or Modification, and corresponding revisions to the state implementation plan. Enclosedfor yourinformation is a copy ofthe proposal that will be discussedand a hearing notice. Please submit comments regarding this proposal to Michael Parrish at the address listedin the enclosedhearing notice. Comments may nowbe submitted online by accessing the e-comments Web page locatedat 

### 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 RegionalAdministrator, 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 paperBryanW. Shaw, Ph.D., Chairman Buddy Garcia, Commissioner Carlos Rubinstein, Commissioner Mark R. Vickery, P.G., ExecutiveDirector TEXAS COMMISSION ON ENVIRONMENTAL QUALITY Protecting Texas byReducing andPreventing Pollution
NOTICE OF PUBLIC HEARINGON 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 proposedrevisions 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) underthe requirements of Texas Health and Safety Code, §382.017; Texas Government Code, Chapter 2001, Subchapter B; and 40 Code ofFederal Regulations §51.102 ofthe United States Environmental Protection Agency (EPA) concerning SIPs. The proposedrulemaking would remove a reference to flexible permits in the definition ofplant-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 structuredfor the receipt oforal or written comments by interestedpersons. Individuals may present oral statements when called upon in order ofregistration. Open discussion will notbe permitted during the hearing; however, commission staffmembers will be available to discuss the proposal 30 minutes priorto the hearing. Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact SandyWong, Office ofLegal Services at (512) 239-1802. Requests shouldbe made as far in advance as possible. Written comments maybe submittedto Michael Parrish, MC 205, Office ofLegal 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 submittedvia the eComments system. All comments should reference Rule Project Number 2012-015-116-AI. The commentperiod closes April 9, 2012. Copies ofthe proposed rulemaking can be obtainedfrom 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 paperTexas 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 orTCEQ) 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 submittedto 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 submittedthese 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 EPApublished notice ofthe proposed disapproval ofthese revisions to the Texas SIP on September 23, 2009 (74Federal Register48467). The EPA's final disapproval notice was published September 15, 2010 (75 FederalRegister56423).Texas Commission on Environmental Quality Page 2 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule ProjectNo. 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 publishedin 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 expressedits intentto 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 afinal approval. This rulemaking addresses those concerns.
This rulemaking is at least as stringent as the federal rules itimplements because it includes the applicable elements ofthe major NSR and plant-wide applicability limit (PAL) permit programs. The rulemaking action also ensures thatthe rulemaking, if adopted, will meetthe requirements ofFederal CleanAirAct (FCAA), §110 which, among other requirements, requires that the elements ofthe SIPbe enforceable, ensure compliance, include replicable elements, and ensure accountability. The specific changes to the PALrules meetthesebasic requirements.Texas Commission on Environmental Quality Page 3 Chapter 116
- Control ofAir Pollution by Permits for New Construction or Modification Rule Project No. 2012-015-116-Al 

### Section

### by Section Discussion §116.12, 

### Nonattainment andPrevention of SignificantDeteriorationReview 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 permitwas issued. Since PAL permits and flexible permits are addressed bytwo different sets ofrules in Chapter 116, it is inappropriate to reference flexible permits in the definition ofthe term plant-wide applicability limiteffective 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

### MajorModification in 

### Ozone NonattainmentAreas The federal term "emissions unit" as defined in federal rules is similarto the term "facility" as defined in the Texas Clean AirAct (TCAA). In orderto ensure clarity and consistency with federal requirements, the commission is proposingto 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

### MajorModification in

### NonattainmentArea Other Than Ozone The federal term "emissions unit" as defined in federal rules is similarto the termTexas Commission on Environmental Quality Page 4 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI "facility" as defined in the TCAA. In orderto ensure clarity and consistency with federal requirements, the commission is proposing to addthe 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 solicitationfrom the TCEQ to comment on EPA's interpretation ofTexas law and the Texas NSR SIP with respectto 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 airpermitting program in Texas under the TCAA. The comments specifically statedthat the TCEQ's interpretation ofTexas law differs from that ofEPA.
In its final disapproval notice on September 15, 2010, (75 FederalRegister 56423), EPA carriedforward textfrom its proposed disapproval from September 23, 2009, by stating in footnote 7 onpage 56433 and also on page 56438, "{i}t is our understanding ofState law, that a "facility" can be an "emissions unit," i.e., any part ofa stationary source that emits or may have the potential to emit any air contaminant. A 'facility' also can be a piece ofequipment, which is smallerthan an "emissions unit." A 'facility' can be a 'major stationary source' as defined by Federal law. A 'facility' under State lawcan be more than one 'major stationary source.' It can include every emissions point on a companyTexas Commission on Environmental Quality Page 5 Chapter 116
- Control ofAir Pollutionby 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 thatTCEQ'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 otherthan emission control equipment. Amine, quarry, well test, or road is not consideredto be afacility." Afacility may constitute or contain a stationary source -- a point oforigin ofa 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). Afacility is subjectto major and minor NSR requirements, depending on the facts ofthe specific application.
The TCEQ and its predecessor agencies have consistently interpretedfacility to preclude inclusion ofmore than one stationary source, in contrastto EPA's statedunderstanding. Likewise, TCEQ does not interpretfacility to include "every emissions point on a company site, even iflimiting these emission points to only those belonging to the same industrial grouping (SIC code)." The federal definition of"major stationary source" in 40 Code ofFederal Regulations (CFR) §51.166(b)(I)(i)(a) is not equivalent to the stateTexas 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 underTexas law, which is consistentwith EPA's interpretation ofa "major stationary source" including more than one emissions unit.
Under major NSR, EPA uses the term "emissions unit" (generally) when referring to part ofa "stationary source;" TCEQ translates "emissions unit" to mean "facility." The commission's SIP-approved Prevention ofSignificant 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 enactedby the Texas Legislature is addressedby the Texas Code Construction Act. More specifically, words and phrases thathave acquired a technical or particular meaning, whetherby legislative definition orotherwise, shall be construed accordingly, as perTexas 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 earlierversions ofthese rules, and because in theTexas Commission on Environmental Quality Page 7 Chapter 116
- Control ofAir Pollutionby 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 EPAto approve the updated rules that implement the federal nonattainment permitting program.
§116.180, 

### Applicability The commission proposes to correct a typographical errorin §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 ofmajor stationary source in 40 CFR §S1.166(b)(1). Adding this reference strengthens the TCEQ's PALrules by limiting the applicability ofa PAL to a source that conforms to the federal definition ofa major stationary source in 40 CFR §S1.166(b)(1). The proposed changes would clarify permitting requirements and ensure consistency with federal requirements regarding NSRpermits.
§116.186, 

### GeneralandSpecial Conditions The commission proposes to amend §n6.186(b)(9) to state thatfailure to use the required monitoring would render the PAL permit invalid. The change is proposed to ensure consistencywith federal rule requirements.
In both its proposed and final disapproval notices for the NSR Reform rules (asTexas 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 statedthat the specific monitoring definitions are essential for the enforceability ofand providing the means for determining compliance with a PAL program. EPA also specifically statedthat one of the bases for disapproval ofthe commission's PAL rules is that the rules lacked a mandate that failure ofthe monitoring system to meetthe requirements ofthis section renders a PALpermitinvalid. 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 PALpermit. EPA didnotprovide comment on that amendment, nor §n6.186(b)(9). The commission understoodthat 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 contactedthe commission in 20n regarding its review ofthe submitted rules and raisedthe issue ofensuring that the commission's rules adequately adopted the EPA's requirementthat a PALpermitis invalidifthe required monitoring system is not required by the permitnorinstalledby the permittee.
EPA's general monitoring requirements for PAL permits are in 40 CFR §S1.l6S(f)(12)(i)(A)

- (D) and40 CFR §S1.l66(w)(12)(i)(a)

- (d). Subparagraph (i) requires enforceable requirements for a monitoring system in each PALpermitthatisTexas Commission on Environmental Quality Page 9 Chapter 116
- Control ofAir Pollutionby 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 mustbe 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 FederalRegister 80211
- 80214, December 31, 2002). Therefore, based on the text and context ofboth the rule and the accompanying preamble, the phrase "failure to use" in EPA's rule means a failure to install orfailure to operate the prescribed monitoring device or system to operate under a PALpermit, 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 ofa PAL permitwill be subjectto necessary and appropriate procedures in Texas statutes and TCEQ rules. Texas Water Code (TWC), §7.302, regarding Grounds for Revocation or Suspension ofPermit, provides the commission the authority to revoke and suspend or reissue a permit on prescribed grounds after notice and hearing. Priorto any invalidation ofa PAL permit, the commission anticipates enforcement action that couldinclude a requestfor revocation. Generally, circumstances which couldlead to invalidation (e.g., failure to install oruse monitoring equipment) are not expectedto occur, andthus few, ifany, revocation proceedings are anticipated.Texas Commission on Environmental Quality Page 10 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule ProjectNo. 2012-015-116-AI

Fiscal Note: Costs to State and Local Government Nina Chamness, Analyst, Strategic Planning andAssessment, 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 otherunits ofstate orlocal governments as a result ofadministration or enforcement ofthe proposedrules.

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 disapprovedthese SIP revisions. On March 11, 2011, the TCEQ submitted a revised SIP package that addressed the issues outlinedin the EPA's disapproval. On September 30, 2011, the EPA expressedits intention to propose a conditional approval ofthe package and requested a dialog to resolve certain EPA concerns regarding terminology and a typographical errorto 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 ofadditional controls or change any monitoring ortesting 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 orlocal 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 ofadditional controls or change any monitoring ortesting 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 expectedto have afiscal 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 theyTexas Commission on Environmental Quality Page 12 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI mandate the use ofadditional controls or change any monitoring ortesting requirements. The proposed amendments are administrative in nature and continue to ensure that state regulations are consistentwith federal regulations so that regulated entities can more easily understand and comply with those requirements with regard to NSR permits.


### Small Business and Micro-BusinessAssessment 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 ofadditional controls or change any monitoring ortesting requirements. The proposed rules continue to clarify state requirements and ensure consistencywith federal requirements regarding NSR permits.


### Small Business Regulatory FlexibilityAnalysis The commission has reviewed this proposed rulemaking and determined that a small business regulatoryflexibility analysis is not requiredbecause the proposed rules are required to comply with federal regulations. The agency is required to implementthe 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 employmentimpact 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 ImpactAnalysis 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 meetthe definition ofa major environmental rule as defined in that statute, and in addition, ifit did meetthe definition, would notbe subjectto the requirementto prepare a regulatory impact analysis.
Amajor environmental rule means a rule, the specific intent ofwhich is to protectthe environment or reduce risks to human health from environmental exposure, and that may adversely affectin a material way the economy, a sectorofthe economy, productivity, competition,jobs, the environment, orthe 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 metthe definition ofa major environmental rule, theTexas Commission on Environmental Quality Page 14 Chapter 116
- Control ofAir Pollution by Permits for New Construction or Modification Rule ProjectNo. 2012-01S-116-Al rulemaking does not meet any ofthe four applicability criteriafor requiring a regulatory impact analysis for a major environmental rule, which are listedin Texas Government Code, §2001.022s(a). Texas Government Code, §2001.022S, applies onlyto a major environmental rule, the result ofwhich is to: 1) exceed a standard setby federal law, unless the rule is specifically requiredby state law; 2) exceed an express requirement of state law, unless the rule is specifically requiredbyfederal law; 3) exceed a requirement ofa delegation agreement or contractbetween the state and an agency or representative ofthe federal governmentto implement a state and federal program; or 4) adopt a rule solely under the general powers ofthe agency instead ofunder a specific state law.
The proposedrules would implement requirements ofthe FCAA. Under 42 United States Code (USC), §741O, each state is requiredto adopt and implement a SIP containing adequate provisions to implement, attain, maintain, and enforce the National AmbientAir Quality Standards (NAAQS) within the state. While 42 USC, §741O generally does not require specific programs, methods, or emission reductions in order to meetthe standard, state SIPs mustinclude specific requirements as specifiedby 42 USC, §741O. The provisions ofthe FCAArecognize that states are in the bestposition to determine what programs and controls are necessary or appropriate in order to meetthe NAAQS. This flexibility allows states, affected industry, andthe 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 notTexas Commission on Environmental Quality Page 15 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI relieve a state from developing a program that meets the requirements of42 USC, §741O. States are not free to ignore the requirements of42 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 of42 USC, §741O is for states to include programs for the regulation ofthe modification and construction ofany stationary source within the area coveredby the plan as necessaryto 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, andthose plans are approvedby the EPA, the FCAA prescribes, in 42 USC, §7502(e) that the EPA, in modifying a NAAQS, shall promulgate rules that applyto all areas that have not attained the previous NAAQS thatprovide for controls that are no less stringentthan 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 bythe EPA. Specifically, those concern definitions for and other changes to the PAL rules to meet federal requirements.
The requirementto provide a fiscal analysis ofregulations in the Texas Government Code was amendedby Senate Bill (SB) 633 during the 75th Legislature, 1997. The intent ofSB 633 was to require agencies to conduct a regulatory impact analysis of extraordinary rules. These are identified in the statutorylanguage as major environmental rules that will have a material adverse impact and will exceed aTexas Commission on Environmental Quality Page 16 Chapter 116
- Control ofAir Pollutionby 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 thatthis requirement would seldom apply, the commission provided a cost estimate for SB 633 that concluded, "based on an assessment ofrules adopted by the agency in the past, it is not anticipated that the bill will have significantfiscal implications for the agency due to its limited application." The commission also notedthat the number ofrules that would require assessmentunder the provisions ofthe bill was not large. This conclusion was based, in part, on the criteria set forth inthe bill that exemptedrules from the full analysis unless the rule was a major environmental rule that exceeds a federal law.
Because ofthe ongoing needto meet federal requirements, the commission routinely proposes and adopts rules incorporating or designed to satisfy specific federal requirements. The legislature is presumedto understand this federal scheme. Ifeach rule proposedby the commission to meet a federal requirement was consideredto be a major environmental rule that exceeds federal law, then each ofthose rules would require the full regulatory impact analysis (RIA) contemplatedby SB 633. This conclusion is inconsistent with the conclusions reached by the commission in its cost estimate and by the Legislative Budget Boardin its fiscal notes. Sincethe legislature is presumedto understand the fiscal impacts ofthe bills it passes, and that presumption is based on information providedby state agencies and the Legislative Budget Board, the commissionbelieves that the intent ofSB 633 was only to require the full RIAfor rulesTexas 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 abroad impact, that impact is no greater than is necessary or appropriate to meetthe 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. Forthese reasons, the proposed rules fall under the exception in Texas Government Code, §2001.0225(a), because they are requiredby, and do not exceed, federal law.
The commission has consistently applied this construction to its rules since this statute was enactedin 1997. Since that time, the legislature has revised the Texas Government Code, but leftthis provision substantially unamended. It is presumed that "when an agency interpretation is in effect atthe time the legislature amends the laws without making substantial change in the statute, the legislature is deemed to have accepted the agency's interpretation." 

### (CentralPower & 

### Light Co. v. Sharp, 919 S.W.2d 485, 489 (Tex. App. Austin 1995), 

### writdeniedwithper 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). CfHumble Oil & 

### Refining Co. v. Calvert, 414 S.W.2d 172 (Tex. 1967); 

### Dudney v. State FarmMut. 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 

### CoastalIndust. WaterAuth. v. Trinity Portland Cement Div., 563 S.w.2d 916 (Tex. 1978).)Texas Commission on Environmental Quality Page 18 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-Al The commission's interpretation ofthe RIA requirements is also supportedby a change made to the Administrative Procedure Act (APA) bythe legislature in 1999. In an attemptto limitthe number ofrule challenges basedupon APA requirements, the legislature clarifiedthat state agencies are required to meetthese sections ofthe APA against the standard of"substantial compliance" (Texas Government Code, §2001.035). The legislature specificallyidentifiedTexas 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 implementrequirements ofthe FCAA, specificallyto adopt and implement SIPs to attain and maintain the NAAQS, including a requirementto adopt and implementpermitprograms. The specific intentofthe proposed rulemaking is to address those sections submitted as revisions to the NSR SIP and subsequentlywere proposed for disapproval bythe EPA. Specifically, those concern definitions for and other changes to the PAL rules to meetfederal requirements. The proposed rules were not developed solelyunder the general powers ofthe agency, but are authorizedby specific sections ofTHSC, Chapter 382 (also known as the TCAA), andthe TWC, which are citedin the StatutoryAuthority section ofthis preamble. Therefore, this proposed rulemaking action is not subjectto 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 maybe submittedto the contact person at the address listed under the Submittal ofComments section ofthis preamble. Takings ImpactAssessment Under Texas Government Code, §2007.002(S), taking means a governmental action that affects private real property, in whole or in part ortemporarily or permanently, in a manner that requires the governmental entity to compensate the private real property owner as providedbythe Fifth and Fourteenth Amendments to the United States Constitution orTexas Constitution §17 or §19, Article I; or a governmental actionthat affects an owner's private real propertythatis the subject ofthe governmental action, in whole or in part or temporarily or permanently, in a manner that restricts orlimits the owner's right to the property that would otherwise existin the absence ofthe governmental action; and is the producing cause ofa reduction ofat least 2S% in the marketvalue ofthe affected private real property, determined by comparing the market value ofthe property as ifthe governmental action is notin effect and the marketvalue 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 ofthisTexas 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 meetfederal requirements.
The proposed rules will not create any additional burden on private real property. The proposedrules will not affectprivate real property in a mannerthatwould 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 mannerthat restricts orlimits 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 underTexas Government Code, Chapter 2007. 

### Consistencywith the Coastal Management Program The commission determinedthat this rulemaking action relates to an action or actions subjectto 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 requiredby §281.4s(a)(3) and 31 TAC §SOS.11(b)(2), relating to Actions and Rules Subjectto the CMP, commission rules governing air pollutant emissions mustbe consistentwith theTexas Commission on Environmental Quality Page 21 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-01S-u6-Al applicable goals and policies ofthe CMP. The commission reviewedthis action for consistency with the CMP goals and policies in accordance with the rules ofthe Coastal Coordination Council, and determined that the action is consistentwith 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 ofcoastal 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 CFRto 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 submittedto the contact person at the address listed under the Submittal ofComments section ofthis preamble.
Effect on Sites Subjectto the Federal Operating Permits Program Chapter 116 is an applicable requirement of30 TAC Chapter 122, Federal Operating Permits Program. Ifthe proposedrules are adopted, owners oroperators subjectto the federal operating permit program must, consistent with the revision process in ChapterTexas 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 subjectto the rules maybecome 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 structuredfor the receipt oforal or written comments by interested persons. Individuals may present oral statements when called upon in order ofregistration. Open discussion will notbe permitted during the hearing; however, commission staffmembers will be available to discuss the proposal 30 minutes priorto the hearing.
Persons who have special communication or other accommodation needs who are planning to attend the hearing should contact SandyWong, Office ofLegal Services at (512) 239-1802. Requests shouldbe made as far in advance as possible.
Submittal ofComments Written comments maybe submittedto Michael Parrish, MC 205, Office ofLegal Services, Texas Commission on Environmental Quality, P.O. Box 13087, Austin, Texas 78711-3087, or faxed to (512) 239-4808. Electronic comments maybe submitted at:Texas Commission on Environmental Quality Page 23 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-Al 

### http://wwws.tceq.texas.gov/rules/ecommentsj. File size restrictions may applyto 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 obtainedfrom the commission's Web site at 

### http://www.tceq.texas.gov/nav/rules/propose_adopt.html. Forfurther information, please contact Blake Stewart, Air Permits Division, (512) 239-6931.Texas Commission on Environmental Quality Page 24 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-01S-116-AI SUBCHAPTERA: DEFINITIONS. §U6.12
STATUTORYAUTHORITY The amendment is proposedunderTexas 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 necessaryto carry out its powers and duties under the TWC; TWC, §S.lOS, concerning General Policy, which authorizes the commissionby rule to establish and approve all general policy ofthe commission; and underTexas Health and Safety Code (THSC), §382.017, concerning Rules, which authorizes the commission to adopt rules consistentwith the policy and purposes ofthe Texas Clean AirAct. The amendment is also proposedunderTHSC, §382.002, concerning Policy and Purpose, which establishes the commission's purpose to safeguardthe state's air resources, consistentwith the protection ofpublic 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 ofRecords, which authorizes the commission to prescribe reasonable requirements for measuring and monitoring theTexas Commission on Environmental Quality Page 25 Chapter 116
- Control ofAirPollution by Permits for New Construction or Modification Rule Project No. 2012-015-116-AI emissions ofair contaminants from a source orfrom an activity causing or resulting in the emission ofair 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 ofand 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 ofCommission; Rules, which authorizes the commission to issue permits for construction ofnewfacilities or modifications to existing facilities that may emit air contaminants; THSC, §382.0511, concerning Permit Consolidation andAmendment, which authorizes the commission to consolidate various authorizations; THSC, §382.0512, concerning Modification ofExisting Facility, which prescribes how the commission will evaluate modifications ofexisting 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 ofa permittedfederal source orfacility; 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 amendmentis also proposed under Federal Clean AirAct (FCAA), 42 United States Code (USC), §§7401, 

### etseq., which requires states to submitTexas Commission on Environmental Quality Page 26 Chapter 116
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state implementation plan revisions that specifythe mannerin which the national ambient air quality standard will be achieved and maintainedwithin each air quality control region ofthe state.
The proposed amendmentimplements 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 AirAct (TCAA) or in the rules ofthe commission, the terms usedby the commission have the meanings commonly ascribed to them in the field ofair pollution control. The terms in this section are applicable to permit reviewfor major source construction and major source modification in nonattainment areas. In addition to the terms that are definedby 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 ofSignificant Deterioration Review); and Chapter 116, SubchapterC, Division 1 ofthis 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
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(1) Actual emissions--Actual emissions as ofa particular date are equal to the average rate, in tons peryear, at which the unit actually emittedthe pollutant during the 24-month period that precedes the particulardate and that is representative of normal source operation, except that this definition shall not apply for calculating whether a significant emissions increase has occurred, orfor 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 allowthe use ofa different time periodupon a determination that it is more representative ofnormal source operation. Actual emissions shall be calculatedusing the unit's actual operating hours, production rates, andtypes ofmaterials 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 ofactual 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 ofa stationary source, calculated using the maximum rated capacity ofthe source (unless the source is subjectto federally enforceable limits that restrict the operating rate, or hours ofoperation, orboth), and the most stringent ofthe following:Texas Commission on Environmental Quality Page 28 Chapter 116
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(A) the applicable standards specified in 40 Code ofFederal Regulations Part 60 or 61; (B) the applicable state implementation plan emissions limitation including those with afuture compliance date; or (C) the emissions rate specified as afederally enforceable permit condition including those with a future compliance date. (3) Baseline actual emissions--The rate ofemissions, in tons peryear, ofa federally regulated new source review pollutant. (A) For any existing electric utility steam generating unit, baseline actual emissions means the average rate, in tons peryear, at which the unit actually emittedthe pollutant during any consecutive 24-month period selectedbythe owneror operatorwithin the five-year period immediately preceding when the owner or operator begins actual construction ofthe project. The executive director shall allowthe use ofa differenttime periodupon a determination thatit is more representative ofnormal source operation.Texas Commission on Environmental Quality Page 29 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI (B) For an existing facility (otherthan an electric utility steam generating unit), baseline actual emissions means the average rate, in tons peryear, at which the facility actually emittedthe pollutant during any consecutive 24-month period selectedby the owner or operatorwithin the ten-year periodimmediately preceding eitherthe date the owner or operatorbegins actual construction ofthe project, orthe date a complete permit application is received for a permit. The rate shall be adjusted downwardto 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 ofFederal Regulations Part 63, had such major stationary source been required to comply with such limitations during the consecutive 24-month period. (C) For a newfacility, 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 downwardto exclude any non-compliant emissions that occurred during the consecutive 24-month period. For each regulated new source reviewpollutant, when a projectinvolves multiple facilities, only one consecutive 24-month period mustbe usedto determine the baselineTexas 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. Adifferent consecutive 24-month period can be used for each regulated new source review pollutant. The average rate shall notbe 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 occurpriorto November 15, 1990. (E) The actual average emissions rate shall include fugitive emissions to the extentquantifiable. Until March 1, 2016, emissions previously demonstrated as resulting from planned maintenance, startup, or shutdown activities; historically unauthorized; and subjectto reporting under Chapter 101 ofthis title (relating to General Air Quality Rules) shall be included to the extentthat 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 heatinput and maximum hourly fuel consumption rate or maximum hourly electric output rate and maximum steam flow rate. When establishing fuel consumption specifications in terms ofweight orvolume, 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 unitthat is not at a steam electric generating facility areTexas 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 orheat input, maximum rate ofmaterial input, or maximum rate ofproduct output. Combustion process units will typically use maximum rate offuel input. For sources having multiple endproducts and raw materials, the owner or operator shall considerthe primary product or primary raw material when selecting a basic design parameter. The owner oroperator may propose an alternative basic design parameterfor the source's process units to the executive directorifthe owneror operatorbelieves the basic design parameter as defined in this paragraph is not appropriate for a specific industry ortype ofprocess unit. Ifthe executive director approves ofthe use ofan alternative basic design parameter, thatbasic design parameter shall be identified and compliance required in a condition in a permitthat is legally enforceable. (A) The owner or operator shall use credible information, such as results ofhistoric maximum capability tests, design information from the manufacturer, or engineering calculations, in establishing the magnitude ofthe basic design parameter. (B) Ifdesign 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 unitin the five-year periodimmediately preceding the planned activity.Texas Commission on Environmental Quality Page 32 Chapter 116
- Control ofAir Pollution by Permits for New Construction or Modification Rule Project No. 2012-015-116-A! (C) Efficiency ofa process unit is not abasic design parameter. (5) Begin actual construction--In general, initiation ofphysical on-site construction activities on an emissions unitthat are ofa permanent nature. Such activities include, but are not limited to, installation ofbuilding supports and foundations, laying ofunderground pipework, and construction ofpermanent storage structures. With respect to a change in method ofoperation, this term refers to those onsite activities otherthan preparatory activities that markthe initiation ofthe change. (6) Building, structure, facility, or installation--All ofthe pollutantemitting activities thatbelong to the same industrial grouping, are located in one or more contiguous or adjacentproperties, and are underthe control ofthe same person (or persons under common control). Pollutant-emitting activities are consideredto be partofthe same industrial grouping ifthey belong to the same "majorgroup" (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 orexisting facility that will achieve significant reductions in air emissions ofsulfur dioxide orTexas Commission on Environmental Quality Page 33 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI oxides ofnitrogen associatedwith the utilization ofcoal in the generation ofelectricity, or process steamthat was not in widespread use as ofNovember 15, 1990. (8) Clean coal technology demonstration project--Aprojectusing funds appropriated under the heading "Department ofEnergy-Clean Coal Technology," up to a total amount of $2.5 billion for commercial demonstration ofclean coal technology, or similarprojects 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 appliedto construction ofa 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 tobegin, a continuous program ofactual onsite construction ofthe source, to be completedwithin a reasonable time; or (B) enteredintobinding agreements or contractual obligations, which cannotbe canceled or modified without substantial loss to the owner or operator, to undertake a program ofactual construction ofthe source tobe completedwithin a reasonable time.Texas Commission on Environmental Quality Page 34 Chapter 116
- Control ofAir Pollutionby Permits for New Construction orModification Rule Project No. 2012-015-116-AI

(10) Construction--Any physical change orchange in the method of operation (including fabrication, erection, installation, demolition, or modification ofan emissions unit) that would result in a change in actual emissions.
(11) Contemporaneous period--Formajor sources the periodbetween: (A) the date thatthe increase from the particularchange occurs; and (B) 60 months priorto the date that construction on the particular change commences.
(12) De minimis threshold test (netting)--A method ofdetermining ifa proposed emission increase will trigger nonattainment orprevention ofsignificant deterioration review. The summation ofthe proposedproject emission increase in tons peryear with all other creditable source emission increases and decreases during the contemporaneous period is comparedto the significantlevel for thatpollutant. Ifthe significantlevel is exceeded, then prevention ofsignificant deterioration and/or nonattainment review is required.Texas Commission on Environmental Quality Page 35 Chapter 116
- Control ofAir Pollutionby 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 constructedfor the purpose ofsupplying more than one-third ofits potential electric output capacity and more than 25 megawatts electrical output to anyutility powerdistribution system for sale. Any steam suppliedto a steam distribution system for the purpose ofproviding 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 orprecursors for such pollutants identified bythe United States Environmental ProtectionAgency; (B) any pollutant that is subjectto any standardpromulgatedunder Federal Clean AirAct (FCAA), §111; (C) any Class I or II substance subject to a standard promulgated under or establishedby FCAA, Title VI; orTexas Commission on Environmental Quality Page 36 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-A! (D) any pollutantthat otherwise is subjectto regulation under the FCAA; exceptthat any or all hazardous airpollutants eitherlistedin FCAA, §112 or added to the list under FCAA, §112(b)(2), which have notbeen delisted under FCAA, §112(b)(3), are not regulated new source review pollutants unless the listedhazardous air pollutantis also regulated as a constituent or precursorofa general pollutantlisted under FCAA, §108.
(15) Lowest achievable emission rate--For any emitting facility, that rate of emissions ofa contaminant that does not exceed the amount allowable under applicable new source performance standards promulgatedby the United States Environmental Protection Agency under 42 United States Code, §7411, andthatreflects the following: (A) the most stringent emission limitation that is containedin the rules and regulations ofany 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 categoryoffacilities, whicheveris more stringent.Texas Commission on Environmental Quality Page 37 Chapter 116
- Control ofAir Pollutionby 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 emitthe PAL pollutant in an amountthat 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 ofemissions or more ofany air contaminant (including volatile organic compounds (VOCs)) for which a national ambient air quality standardhas 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 identifiedin 40 Code ofFederal 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 identifiedin 40 CFR §S1.166(b)(1) is considered majorfor all prevention ofsignificant deterioration pollutants. Amajor stationary source thatis major for VOCs or nitrogen oxides is consideredtobe major for ozone. The fugitive emissions ofa stationary source shall not be includedin determining for any ofthe purposes ofthis definition whether it is a major stationary source, unless the source belongs to one ofthe categories ofstationary sources listedin 40 CFR §S1.16s(a)(1)(iv)(C).Texas Commission on Environmental Quality Page 38 Chapter 116
- Control ofAir Pollutionby 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 ofoperation of a major stationary source that causes a significant projectemissions 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 itselfmust equal or exceed that specified for a major source. At an existing major stationary source, the increase must equal or exceed that specifiedfor 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 identifiedin 40 Code ofFederal Regulations §51.166(b)(1) and (23), respectively. Figure: 30 TAC §116.12(18)(A) (No change) (B) Aphysical change or change in the method ofoperation shall not include: (i) routine maintenance, repair, and replacement;Texas Commission on Environmental Quality Page 39 Chapter 116
- Control ofAirPollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI (ii) use ofan alternative fuel or raw material by reason ofan orderunder the Energy Supply and Environmental Coordination Act of 1974, §2(a) and (b) (or any superseding legislation) orby reason ofa natural gas curtailment plan under the Federal PowerAct; (iii) use ofan alternative fuel by reason ofan orderor rule of 42 United States Code, §7425; (iv) use ofan alternative fuel at a steam generating unit to the extent that the fuel is generatedfrom municipal solid waste; (v) use ofan alternative fuel orraw material by a stationary source that the source was capable ofaccommodating before December 21, 1976 (unless such change would be prohibitedunder any federally enforceable permit condition established after December 21, 1976) orthe source is approved to use under any permit issued underregulations approved under this chapter; (vi) an increase in the hours ofoperation or in the production rate (unless the change is prohibitedunder any federally enforceable permit condition that was established after December 21, 1976);Texas Commission on Environmental Quality Page 40 Chapter 116
- Control ofAir Pollutionby 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 ofa pollutant at a site that occurs under an existing plant-wide applicability limit; (ix) the installation, operation, cessation, or removal ofa 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 afterit is terminated; (x) for prevention ofsignificant deterioration review only, the installation or operation ofa permanent clean coal technology demonstration projectthat constitutes re-powering, provided thatthe project does not resultin an increase in the potential to emit ofany regulated pollutant emittedbythe unit. This exemption shall apply on a pollutant-by-pollutantbasis; or (xi) for prevention ofsignificant deterioration review only, the reactivation ofa clean coal-fired electric utility steam generating unit.Texas Commission on Environmental Quality Page 41 Chapter 116
- Control ofAir Pollutionby 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 andthose air quality control laws and regulations that are part ofthe applicable state implementation plan.
(20) Net emissions increase--The amountbywhich 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 directorhas 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; andTexas Commission on Environmental Quality Page 42 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-A! (iii) in the case ofprevention ofsignificant deterioration review only, an increase ordecrease in emissions ofsulfur dioxide, particulate matter, or nitrogen oxides that occurs before the applicable minor source baseline date is creditable only ifit is required to be consideredin calculating the amount ofmaximum allowable increases remaining available. (B) An increase in emissions is creditable ifit is the result ofa . physical change in, or change in the method ofoperation ofa stationary source only to the extentthat the new level ofemissions exceeds the baseline actual emission rate. Emission increases atfacilities under a plant-wide applicabilitylimit are not creditable. (C) Adecrease 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) itis federally enforceable at and afterthe 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 ProjectNo. 2012-015-116-A! (iii) the executive directorhas notrelied on itin issuing a prevention ofsignificant deterioration or a nonattainmentpermit; (iv) the decrease has approximately the same qualitative significance for public health and welfare as that attributedto the increase from the particularchange; and (v) in the case ofnonattainment applicability analysis only, the state has notrelied on the decrease to demonstrate attainment orreasonable further progress. (D) An increase thatresults from a physical change at a source occurs when the emissions unit on which construction occurredbecomes operational andbegins to emit a particular pollutant. Any replacementunitthatrequires shakedown becomes operational only after a reasonable shakedown period, not to exceed 180 days. (21) Offset ratio--Forthe purpose ofsatisfying the emissions offset reduction requirements of42 United States Code, §7503(a)(1)(A), the emissions offset ratio is the ratio oftotal actual reductions ofemissions to total emissions increases of such pollutants. The minimum offset ratios are included in Table I ofthis section under the definition ofmajor modification. In orderfor a reduction to qualify as an offset, itTexas Commission on Environmental Quality Page 44 Chapter 116
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mustbe certified as an emission creditunder Chapter 101, Subchapter H, Division 1 or4 ofthis title (relating to Emission Credit Banking andTrading; or Discrete Emission Credit Banking and Trading), except as providedfor in §116.17o(b) ofthis title (relating to Applicability ofEmission Reductions as Offsets). The reduction must nothave been relied on in the issuance ofa previous nonattainment orprevention ofsignificant deterioration permit.
(22) Plant-wide applicabilitylimit--An emission limitation expressed, in tons peryear, for a pollutant at a major stationary source, that is enforceable and establishedin a plant-wide applicabilitylimit permitunder §116.186 ofthis title (relating to General and Special Conditions). (23) Plant-wide applicabilitylimit effective date--The date ofissuance of the plant-wide applicability limitpermit. [The plant-wide applicability limit effective date for a plant-wide applicabilitylimitestablished in an existing flexible permitis the date thatthe flexible permitwas issued.] (24) Plant-wide applicability limit major modification--Anyphysical change in, or change in the method ofoperation ofthe plant-wide applicabilitylimit source that causes itto emitthe plant-wide applicabilitylimitpollutant at a level equal to or greaterthan the plant-wide applicability limit.Texas Commission on Environmental Quality Page 45 Chapter 116
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(25) Plant-wide applicabilitylimit permit--The new source review permit that establishes the plant-wide applicability limit. (26) Plant-wide applicability limit pollutant--The pollutantfor which a plant-wide applicability limitis established at a major stationary source. (27) Potential to emit--The maximum capacity ofa stationary source to emit a pollutantunder 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 ofoperation or on the type or amount ofmaterial combusted, stored, orprocessed, maybe treated as part ofits design only ifthe limitation orthe effect it would have on emissions is federally enforceable. Secondary emissions, as defined in 40 Code ofFederal 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 ofapplication for the modification and the date the resultant modification begins emitting. Baseline actual emissions shall be usedto determine emissions increases andTexas Commission on Environmental Quality Page 46 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule ProjectNo. 2012-015-116-AI decreases. Increases and decreases must meetthe creditability criterialisted under the definition ofnet emissions increase in this section. (29) Projected actual emissions--The maximum annual rate, in tons per year, at which an existing facility is projectedto emit afederally regulated new source review pollutantin any rolling 12-month period during the five years following the date the facility resumes regular operation afterthe project, orin anyone ofthe ten years following that date, ifthe projectinvolves increasing the facility's design capacity orits potential to emitthatfederally regulated new source review pollutant. In determining the projected actual emissions, the owner or operatorofthe 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 expectedbusiness activity and the company's highest projections ofbusiness activity, the company's filings with the state orfederal regulatory authorities, and compliance plans under the approved state implementation plan. (30) Project emissions increase--The sum ofemissions increases for each modified or affected facility determined using the following methods:Texas Commission on Environmental Quality Page 47 Chapter 116
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(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 couldhave 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 productdemand growth may be excludedfrom the project emission increase. The potential to emitfrom the facility following completion ofthe project may be used in lieu ofthe projected actual emission rate; and (B) for newfacilities, the difference between the potential to emit from the facility following completion ofthe project and the baseline actual emissions. (31) Replacementfacility--A facility that satisfies the following criteria: (A) the facility is a reconstructed unit within the meaning of40 Code ofFederal Regulations §60.1S(b)(1), orthe facility replaces an existing facility; (B) the facility is identical to orfunctionally equivalentto the replaced facility;Texas Commission on Environmental Quality Page 48 Chapter 116
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(C) the replacement does not alterthe basic design parameters of the process unit; (D) the replaced facility is permanently removed from the major stationary source, otherwise permanently disabled, or permanentlybarredfrom operation by a permit that is enforceable. Ifthe replaced facility is broughtbackinto operation, it shall constitute a new facility. No creditable emission reductions shall be generated from shutting down the existing facility that is replaced. Areplacement facility is considered an existing facility for the purpose ofdetermining federal new source review applicability.
(32) Secondary emissions--Emissions that would occur as a result ofthe construction or operation ofa major stationary source or major modification, but do not come from the source or modification itself. Secondary emissions mustbe specific, welldefined, quantifiable, and impactthe same general area as the stationary source or modification that causes the secondary emissions. Secondary emissions include emissions from any off-site supportfacility that would notbe constructed orincrease its emissions, except as a result ofthe construction or operation ofthe major stationary source or major modification. Secondary emissions do notinclude any emissions thatTexas Commission on Environmental Quality Page 49 Chapter 116
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come directly from a mobile source such as emissions from the tail pipe ofa motor vehicle, from a train, or from a vessel. (33) Significantfacility--A facility that emits orhas the potential to emit a plant-wide applicabilitylimit (PAL) pollutantin an amount thatis equal to or greater than the significantlevel for that PAL pollutant. (34) Small facility--A facility that emits orhas the potential to emitthe plant-wide applicabilitylimit (PAL) pollutantin an amount less than the significant level for that PAL pollutant. (35) Stationary source--Anybuilding, structure, facility, orinstallation that emits or may emit any air pollutant subjectto regulation under 42 United States Code, §§7401 et seq.(36) Temporary clean coal technology demonstration project--A clean coal technology demonstration project thatis operatedfor a period offive years orless, and that complies with the state implementation plan and other requirements necessaryto attain and maintain the national ambient air quality standards during the project and afterit is terminated.Texas Commission on Environmental Quality Page So Chapter 116
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SUBCHAPfERB: NEW SOURCE REVIEW PERMITS DIVISION 5: NONATfAlNMENT REVIEW PERMITS §116.150, §116.151 STATUTORYAUTHORITY The amendments are proposed underTexas Water Code (TWC), §S.lOZ, concerning General Powers, which provides the commission with the general powers to carry outits duties under the TWC; TWC, §S.103, concerning Rules, which authorizes the commission to adopt rules necessaryto carry outits 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 underTexas Health and Safety Code (THSC), §38z.017, concerning Rules, which authorizes the commission to adoptrules consistentwith the policy and purposes ofthe Texas CleanAirAct. The amendments are also proposed underTHSC, §38z.00z, concerning Policy and Purpose, which establishes the commission's purpose to safeguardthe state's air resources, consistent with the protection ofpublic 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 theTexas Commission on Environmental Quality Page 51 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI commission to issue permits for construction ofnew 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 ofExisting Facility, which prescribes how the commission will evaluate modifications ofexisting 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 AirAct (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, 382.017, 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 ofAirpollutionby 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 nonattainmentfor ozone under42 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 ofattainment;
(2) the EPAhas approved the removal ofnonattainment New Source Review (NSR) requirements from the area; (3) the EPAhas determined that Prevention ofSignificant Deterioration requirements applyin the area; or (4) the EPAdetermines that nonattainment NSRis no longer required for purposes ofantibacksliding.Texas Commission on Environmental Quality Page 53 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI (b) The owner or operator ofa proposed new major stationary source, as defined in §116.12 ofthis title (relating to Nonattainment and Prevention ofSignificant· Deterioration Review Definitions) ofvolatile organic compound (VOC) emissions or nitrogen oxides (NOx) emissions, orthe owner or operator ofan 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 meetthe requirements of subsection (d)(1)

- (4) ofthis section, except as providedin subsection (e) ofthis section. Table I, located in the definition ofmajor modification in §116.12 ofthis title, specifies the various classifications ofnonattainment along with the associated emission levels that designate a major stationary source and significantlevel 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 ofthe following conditions are met: (1) the proposed emissions increases associated with a project, without regard to decreases, is less than five tons peryear (tpy) ofthe individual nonattainment pollutant in areas classified under Federal CleanAirAct (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 ofAir Pollution by Permits for New Construction or Modification Rule ProjectNo. 2012-015-n6-A! (2) the proposed emissions increases associated with a project, without regard to decreases, is less than 40 tpy ofthe individual nonattainmentpollutantin areas classifiedunder 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 ofmajor modification in §n6.12 ofthis title andwhen coupledwith 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 thresholdtest, iftlle netemissions increases are greater than the significantlevels statedin Table I locatedin the definition ofmajor 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 providedin paragraph (3)(B) ofthis subsection and exceptfor existing major stationary sources thathave a potential to emit (PTE) ofless than 100 tpy ofthe applicable nonattainment pollutant. For these sources, best available controlTexas Commission on Environmental Quality Page 55 Chapter n6
- Control ofAir pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-n6-AI technology (BACT) canbe substitutedfor LAER. LAER shall otherwise be appliedto each newfacility or emissions unit andto each existing facility or emissions unit at which the net emissions increase will occur as a result ofa physical change orchange in method ofoperation ofthe unit.
(2) All major stationary sources owned or operatedbythe applicant (orby any person controlling, controlledby, orunder common control with the applicant) in the state mustbe in compliance or on a schedule for compliance with all applicable state and federal emission limitations and standards. (3) Atthe time the new or modifiedfacility or emissions unit orfacilities or emissions units commence operation, the emissions increases from the new ormodified facility oremissions unit or facilities or emissions units mustbe 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 locatedin the definition ofmajor 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 ofan applicable nonattainmentTexas Commission on Environmental Quality Page 56 Chapter 116
- Control ofAir Pollution by Permits for New Construction or Modification Rule ProjectNo. 2012-015-116-A! pollutant are notrequiredto undergo nonattainment new source reviewunderthis section, ifthe projectincreases are offsetwith internal offsets at a ratio ofat least 1.3 to 1. (B) Major stationary sources locatedin a serious or severe ozone nonattainment area with a PTE ofgreaterthan or equal to 100 tpy ofan applicable nonattainmentpollutant can substitute federal BACT (as identified in §116.160(c)(I)(A) ofthis title (relating to Prevention ofSignificant Deterioration Requirements) for LAER, ifthe projectincreases are offsetwith internal offsets at a ratio ofat least 1.3 to 1. Internal offsets used in this manner can also be applied to satisfythe offset requirement. (4) In accordance with the FCAA, the permit application must contain an analysis ofalternative 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 ofFederal Regulations, Part 81, the requirements ofthis section do not applyto NOx emissions.Texas Commission on Environmental Quality Page 57 Chapter n6
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§U6.151. New Major Source or Major Modification in NonattainmentArea 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 otherthan ozone. The owneror operator ofa 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 ofan 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 locatedin the definition ofmajor modification in §n6.12 ofthis title (relating to Nonattainment and Prevention ofSignificant Deterioration Review Definitions) specifies the various classifications ofnonattainment 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 reviewpollutants, unless the proposed emissions increases associated with a project, without regard to decreases, are less than the major modification threshold for the pollutantidentified in Table I located in the definition ofmajor modification in §n6.12 ofthis title.Texas Commission on Environmental Quality Page 58 Chapter 116
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(c) In applying the de minimis threshold test, ifthe net emissions increases are greaterthan the major modification levels statedin Table I locatedin 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 ofa physical change or change in method ofoperation ofthe unit.
(2) All major stationary sources owned or operatedby the applicant (orby any person controlling, controlledby, 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 orfacilities or emissions units commence operation, the emission increases from the new or modified facility or emissions unit orfacilities or emissions units shall be offset. The proposed facility or emissions unit shall use the offset ratio for the appropriate nonattainmentTexas Commission on Environmental Quality Page 59 Chapter 116
- Control ofAir Pollutionby 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 locatedin the definition ofmajor modification in §116.12 ofthis title. (4) In accordance with the Federal Clean AirAct, the permit application shall contain an analysis ofalternative 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 ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-01S-u6-A! SUBCHAPTER C: PLANe-WIDEAPPLICABILITY LIMITS DIVISION 1: PLANe-WIDEAPPLICABILITY LIMITS §116.180, §116.186 STATUTORY AUTHORITY The amendments are proposed underTexas 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 EnforcementAuthority, which provides the commission the authorityto 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 ofPermit, which provides the commission the authority to revoke and suspend or revoke and reissue a permit on prescribed grounds after notice and hearing; and underTexas Health and Safety Code (THSC), §382.017, concerning Rules, which authorizes the commission to adopt rules consistentwith the policy andpurposes ofthe Texas CleanAirAct. The amendments are also proposed underTHSC, §382.o02, concerning Policy and Purpose, which establishes the commission's purpose to safeguardthe state's air resources, consistent with the protection ofpublic health, general welfare, and physical property; THSC, §382.OU, concerning General Powers andTexas Commission on Environmental Quality Page 61 Chapter 116
- Control ofAir Pollutionby 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 ofair contaminants from a source orfrom an activity causing orresulting in the emission ofair 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 ofand compliance with the commission's rules; THSC, §382.040, concerning Documents; Public Property, which provides that all information, documents, and data collectedby the commission in performing its duties are state property; THSC, §382.051, concerning Permitting Authority ofCommission; Rules, which authorizes the commission to issue permits for construction ofnewfacilities 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 ofExisting Facility, which prescribes how the commission will evaluate modifications ofexisting 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 ofaTexas Commission on Environmental Quality Page 62 Chapter 116
- Control ofAir PollutionbyPermits for New Construction or Modification Rule Project No. 2012-015-116-Al permittedfederal source or facility; THSC, §382.0515, concerning Application for Permit, which specifies permit application requirements; andTHSC, §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 specifythe 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 implementTHSC, §§382.002, 382.011, 382.012, 382.016,
382.0515, and 382.0518, and FCAA, 42 USC, §§7401 

### etseq. §116.180. Applicability. (a) The following requirements applyto a plant-wide applicability limit (PAL) permit.
(1) Only one PAL maybe issued for each pollutant at an existing major stationary source.Texas Commission on Environmental Quality Page 63 Chapter n6
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-01s-n6-AI (2) A PAL permit may include more than one PAL. (3) APAL permitmay 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 notbe 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 ofa 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, coveredby a PAL permitchange ownership at the same time and to the same person, orboththe new owner and existing permit holder must obtain a PAL permit alteration allocating the emission priorto the transfer ofthe permitby the commission. Afterthe sale ofa facility, or emissions unit at a major stationary source, but priorto the transfer ofa 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
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(c) The owner ofthe facility, emissions unit at a major stationary source, group of facilities, or account orthe operator ofthe facility, emissions unit at a major stationary source, group offacilities, or account that is authorized to act for the qwneris responsible for complying with this section, except as providedby 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 peryear, that is enforceable for all facilities, or emissions units at a major stationary source, that emitthe PAL pollutant. For each month during the PAL effective period afterthe first 12 months ofestablishing 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 oroperator shall demonstrate that the sum ofthe preceding monthly emissions from the PAL effective date for each facility under the PAL is less than the PAL. Each PAL must include emissions ofonly one pollutant. The PAL must include all emissions, including fugitive emissions, to theTexas Commission on Environmental Quality Page 65 Chapter 116
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extent quantifiable, from all facilities or emissions units at a major stationary source included in the PALthat emit orhave 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 belowwhich new and modified facilities, oremissions units at a major stationary source, will notbe subject to major new source review for that pollutant. (2) Sampling requirements. Ifsampling ofstacks orprocess vents is required, the PAL permit holder shall contact the commission's Office ofCompliance and Enforcement priorto sampling to obtain the proper data forms and procedures. All sampling and testing procedures mustbe approved bythe executive director and coordinated with the appropriate regional office ofthe commission. The PAL permit holderis also responsible for providing sampling facilities and conducting the sampling operations or contracting with an independent sampling consultant. (3) Equivalencyofmethods. The permit holder shall demonstrate the equivalency ofemission control methods, sampling orother emission testing methods, and monitoring methods proposed as alternatives to methods indicated in theTexas Commission on Environmental Quality Page 66 Chapter 116
- Control ofAirPollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI conditions ofthe PAL permit. Alternative methods mustbe applied for in writing and mustbe reviewed and approvedby the executive director priorto their use in fulfilling any requirements ofthe permit. (4) Recordkeeping and reporting. (A) Acopy ofthe PAL permit along with information and data sufficientto demonstrate continuous compliance with the emission caps containedin the PAL permit mustbe maintained in a file at the plant site and made available at the request ofpersonnel from the commission or any airpollution control program having jurisdiction. Forfacilities that normally operate unattended, this information mustbe maintained at the nearest staffedlocation within Texas specifiedby the permitholder in the permit application. This information must include, butis notlimitedto, emission cap and individual emission limitation calculations based on a 12-monthrollingbasis and production records and operating hours. Additional recordkeeping requirements maybe specifiedin special conditions attached to the PAL permit. (B) The owner or operator shall retain a copy ofthe 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 andTexas Commission on Environmental Quality Page 67 Chapter 116
- Control ofAirPollutionby 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 submittedto the executive director within 30 days ofthe end ofeach reporting period that contains: (i) the identification ofowner and operator and the permit number; (ii) total annual emissions (in tons peryear) based on a 12- month rolling total for each month in the reporting period; (iii) all datarelied upon, including, but notlimitedto, any quality assurance or quality control data, in calculating the monthly and annual PAL pollutant emissions; (iv) a list ofany facility modified or added to the major stationary source during the preceding six-month period; (v) the number, duration, and cause ofany deviations or monitoring malfunctions (otherthan the time associatedwith zero and span calibrationTexas Commission on Environmental Quality Page 68 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-A! checks), and any corrective action taken. This maybe satisfiedby referencing the PAL permit number in the semiannual report for the site submittedunder §122.145 ofthis title (relating to Reporting Terms and Conditions); (vi) a notification ofa shutdown ofany monitoring system, whetherthe shutdown was permanent ortemporary, the reason for the shutdown, the anticipated date that the monitoring system will be fully operational or replacedwith another monitoring system, andwhetherthe emissions unit monitoredby the monitoring system continuedto operate, and the calculation ofthe emissions ofthe pollutant or the number determinedby method included in the permit; and (vii) a signed statementbythe 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 submitthe results ofany revalidation test or method to the executive director within three months after completion ofsuch test or method. (5) Maintenance ofemission control. The facilities coveredbythe PAL permitwill notbe operatedunless all air pollution emission capture and abatementTexas 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 ofa PAL permitby a permit applicant constitutes an acknowledgment and agreementthat the holder will comply with all rules and orders ofthe commission issued in conformity with the Texas Clean AirAct and the conditions precedent to the granting ofthe permit. Ifmore than one state orfederal rule or PAL permit condition is applicable, the most stringentlimit or condition will govern andbe the standardby which compliance mustbe demonstrated. Acceptance includes consent to the entrance ofcommission employees and agents into the permittedpremises at reasonable times to investigate conditions relating to the emission or concentration ofair contaminants, including compliance with the PAL permit. (7) Effective period. A PAL is effective for ten years. (8) Absence ofmonitoring data. A source owner or operator shall record and report maximum potential emissions without considering enforceable emission limitations or operational restrictions for afacility during anyperiod oftime that there is no monitoring data, unless another method for determining emissions during such periods is specifiedin the PAL permit special conditions.Texas Commission on Environmental Quality Page 70 Chapter n6
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(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 revalidatedthrough performance testing or other scientifically valid means approved by the executive director. Suchtesting must occur at least once every five years after issuance ofthe PAL.
(n) Renewal. Ifa PAL renewal application is submittedto the executive director in accordance with §n6.196 ofthis title (relating to Renewal ofa 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 issuedby the executive director orthe 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 ofFederal Regulations §51.165.Texas Commission on Environmental Quality Page 71 Chapter 116
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(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 ofmass per unit oftime. Any monitoring system authorized for use in the PAL permit must be based on sound science and meetgenerally 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
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(i) provide a demonstrated means ofvalidating the published content ofthe PAL pollutant that is contained in, or createdby, all materials used in or at the facility; (ii) assume that the facility emits all ofthe PAL pollutant that is contained in, or createdby, any raw material or fuel used in or at the facility, ifit cannot otherwise be accounted for in the process; and (iii) where the vendor ofa material orfuel that is used in or at the facility publishes a range ofpollutant contentfrom 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 contentwithin the range. (B) An owner or operatorusing a CEMS to monitor PAL pollutant emissions shall meetthe following requirements. (i) The CEMS must comply with applicable performance specifications found in 40 Code ofFederal Regulations Part 60, Appendix B.Texas Commission on Environmental Quality Page 73 Chapter 116
- Control ofAir 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 unitis operating. (C) An owner or operatorusing CPMS or PEMS to monitor PAL pollutant emissions shall meet the following requirements. (i) The CPMS orthe PEMS mustbe based on current sitespecific data demonstrating a correlation between the monitored parameter(s) and the PAL pollutant emissions across the range ofoperation ofthe facility. (ii) Each CPMS or PEMS must sample, analyze, and record data at least every 15 minutes or at anotherless frequent interval approvedbythe executive director, while the facility is operating. (D) An owner or operatorusing emission factors to monitor PAL pollutantemissions shall meet the following requirements. (i) All emission factors mustbe adjusted, ifappropriate, to account for the degree ofuncertainty orlimitations in the factors' development.Texas Commission on Environmental Quality Page 74 Chapter 116
- Control ofAir Pollutionby 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, ifapplicable. (iii) Iftechnically practicable, the owner or operator ofa significant facility that relies on an emission factor to calculate PAL pollutant emissions shall conductvalidation testing to determine a site-specific emission factor within six months ofPAL permit issuance, unless the executive director determines that testing is not required. (E) An alternative monitoring approach must meetthe requirements in paragraph (1) ofthis subsection and be approved bythe executive director. (4) Where an owner or operator ofa facility cannot demonstrate a correlationbetween 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 PALbased on the highest potential emissions reasonably estimated at such operating point(s); orTexas Commission on Environmental Quality Page 75 Chapter 116
- Control ofAir Pollutionby Permits for New Construction or Modification Rule Project No. 2012-015-116-AI (B) determine that operation ofthe facility during operating conditions when there is no correlationbetween monitored parameter(s) andthe PAL pollutant emissions is a violation ofthe PAL.