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Citation: 80 Fed. Reg. 14044 2015

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-- The search text of this PDF is generated from uncorrected OCR text.Federal Register/Vol. 80, No. 52/Wednesday, March 18, 2015/Proposed Rules

List ofSubjects in 40 CFRPart 52

Environmental protection, Air pollution control, Intergovernmental relations, Incorporation by reference, Ozone, Reporting and recordkeeping requirements.

Authority: 42 U.S.C. 7401 etseq. Dated: March 6, 2015. William C. Early, ActingRegionalAdministrator, RegionIlL
[FRDoe. 2015-06220 Filed 3-17-15; 8:45 am]
BILLING CODE 6560-50-P

ENVIRONMENTAL PROTECTION
AGENCY

40 CFR part 52 [EPA-R09-OAR-2015-0187; FRL-9924-48- Region 9]

Revisions to Air Plan; Arizona; Stationary Sources; New Source Review
AGENCY: Environmental Protection Agency (EPA). ACTION: Proposed rule.
SUMMARY: The Environmental Protection Agency (EPA) is proposing a limited approval and limited disapproval of revisions to the Arizona Department of Environmental Quality (ADEQ) portion ofthe applicable state implementation plan (SIP) for the State ofArizona. These revisions are primarily intended
to serve as a replacement ofADEQ's existing SIP-approved rules for the issuance ofNew Source Review (NSR) permits for stationary sources, including but not limited to review andpermitting ofmajor sources and major modifications under the Clean Air Act (CAA or Act). After a lengthy stakeholder process, the State of Arizona developed and submitted a NSR program for SIP approval that satisfies most ofthe applicable Clean Air Act and NSR regulatory requirements, and will significantly update ADEQ's existing SIP-approved NSR program. Italso represents an overall strengthening ofADEQ's SIPapproved NSR program by clarifying and enhancing the NSR permitting requirements for major and minor stationary sources. This proposed action will update the applicable plan and set the stage for remedying certain deficiencies in these rules. We are seeking comment on our proposed action and plan to followwith a final action.
DATES: Any comments must arrive by April 17, 2015.
ADDRESSES: Submit comments, identified by docket number EPA-R09- OAR-2015-0187, by one ofthe following methods: 1.FederaleRulemakingPortal: www.regulations.gov. Followthe online instructions.

2. Email:R9airpermits@epa.gov. 3.Mailordeliver:Gerardo Rios (Air3), U.S. Environmental Protection Agency, Region 9, 75 Hawthorne Street, San Francisco, CA 94105-3901. Deliveries are only accepted during the Regional Office's normal hours of operation.

Instructions:All comments will be included in the public docket without change and maybe made available online at www.regulations.gov, including any personal information provided, unless the comment includes Confidential Business Information (CBI)

or otherinformation whose disclosure is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through www.regulations.govor email. www.regulations.govis an "anonymous access" system, and EPA will notknow
your identity or contact information unless you provide itin the body of your comment. Ifyou send email directly to EPA, your email address will be automatically captured and included

as part ofthe public comment. IfEPA
cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA maynot be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses.

Docket:Generally, documents in the docket for this action are available electronically at www.regulations.gov and in hard copy at EPA Region 9, 75 Hawthorne Street, San Francisco, California. While all documents inthe docket are listed at www.regulations.gov,some information may be publicly available only atthe hard copy location (e.g., copyrighted material, large maps), and some may not be publicly available in either location (e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normalbusiness hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section. FOR FURTHER INFORMATION CONTACT: Lisa Beckham, EPA Region 9, (415) 972- 3811, beckham.lisa@epa.gov.
SUPPLEMENTARY INFORMATION: Throughout this document, the terms "we," "us," and "our" refer to EPA.

Table ofContents

I.The State's Submittals A. Whichrules or statutory provisions did the State submit? B. Are there previous versions ofthe

statutory provisions orrules in the Arizona SIP? C. What is the purpose ofthis proposed

rule? II. EPA's Evaluation

A. How is EPA evaluating the rules and

statutory provisions? B. Do the rules meet the evaluation criteria

for Minor New Source Review? 1.Legally Enforceable Procedures 2. ADEQ's Program Under 40 CFR

51.160(e) 3. Public Availability ofInformation 4. Administrative Procedures 5. Stack Height Procedures C. Do the rules meet the evaluation criteria

for Prevention of Significant Deterioration (PSD)? 1.General PSDProgram Requirements 2. Restrictions onArea Classifications 3. Redesignations 4. Impacts on Class IAreas 5. Public Participation 6. Plantwide Applicability Limits 7. Definitions 8. PM 2. 5 Significant Monitoring Concentration 9. Definition forBasic Design Parameter D. Do therules meet the evaluation criteria

for Nonattainment New Source Review? 1.General Nonattainment NSR Program

Requirements 2.Plantwide Applicability Limits 3. Definitions 4. Definition forBasic Design Parameter 5. Additional Provisions for Particulate

Matter Nonattainment Areas E. Review ofNon-NSR Related Rules and

Statutory Provisions F. Review ofRules and Statutory

Provisions Requested To Be Removed From the SIP G. Do therules meet the evaluation criteria

under Sections 110(1) and 193 ofthe Act? H. Conclusion III. Public Comment and Proposed Action IV. Incorporation by Reference V. Statutory and Executive Order Reviews
Definitions

For the purpose ofthis document, we
are giving meaning to certain words or initials as follows:

(i)The words orinitials Act or CAA mean

orreferto the Clean Air Act, unless the
context indicates otherwise.

(ii)The initialsADEQ mean orrefer to the Arizona Department ofEnvironmental Quality.

(iii)The initials A.R.S. mean orrefer to the Arizona Revised Statutes.

(iv)The initials BACTmean orrefer to Best Available Control Technology.

(v)The initials CFRmean orreferto Code ofFederal Regulations.

(vi)The initials COmeans orrefer to carbonmonoxide.

(vii)The words EPA,we, us or ourmean

or referto the United States Environmental Protection Agency.

(viii)The initialsFIPmean orrefer to Federal Implementation Plan. 

### 14044Federal Register/Vol. 80, No. 52/Wednesday, March 18, 2015/Proposed Rules

(ix) The initials GHGmean or refer to greenhouse gas.

(x) The initialsIBF mean or refer to incorporation by reference.

(xi)The initials LAER mean or refer to Lowest Achievable Emissions Rate.

(xii)The initials NAAQS mean orrefer to National Ambient Air Quality Standards.

(xiii)The initials NA-NSF mean orrefer to Nonattainment New Source Review.

(xiv)The initials NOx mean or refer to nitrogen oxides.

(xv)The initials NSF mean orrefer to New Source Review.

(xvi)The initials PAL mean orrefer to Plantwide Applicability Limits.

(xvii)The initials PMlo mean or refer to particulate matter with an aerodynamic diameter ofless than or equal to 10 micrometers (coarse particulate matter).

(xviii)The initials PM 2.5mean or refer to particulate matter with an aerodynamic diameter ofless than or equal to 2.5 micrometers (fine particulate matter).

(xix)The initials PSD mean or refer to Prevention ofSignificant Deterioration.

(xx) The initials PTEmean or refer to potential to emit.

(xxi)The initials FACTmean or refer to reasonable available control technology.

(xxii)The initials SIPmean or refer to State Implementation Plan.

(xxiii)The initials SMC mean orrefer to significant monitoring concentration.

(xxiv)The initials S02 mean or refer to sulfur dioxide.

(xxv)The words State orArizona mean the State ofArizona, unless the context indicates otherwise. (xxvi) The initials TSDmean orreferto the technical support document forthis action.

(xxvii)The initials VOCmean orrefer to volatile organic compound.

I. The State's Submittals

A. Which rules orstatutory provisions didtheState submit?

OnJuly 28, 2011 and October 29, 2012, ADEQ submitted revisions to the ADEQ portion ofthe Arizona SIP. On May 16, 2014, ADEQ supplemented the July 28, 2011 submittal. On September 6, 2013, July 2, 2014, and February 16, 2015, ADEQ supplemented the October 29, 2012 submittal. Collectively, these submittals generally comprise ADEQ's
current program for preconstruction review and permitting ofnew or modified stationary sources under ADEQ's jurisdiction inArizona (as described below).' The NSR SIP revisions that are the subject ofthis action, 2 referred to herein asthe "NSR SIP submittal" represent a comprehensive revision to ADEQ's preconstruction review and permitting
program and are intended to satisfy the requirements under both part C (prevention ofsignificant deterioration) (PSD) and part D (nonattainment new

source review) oftitle Iofthe Act as well as the general preconstruction review requirements under section 110(a)(2)(C) ofthe Act. 3 The preconstruction review and permitting
programs are often collectively referred
to as "New Source Review" (NSR).

The proposed revisions to the SIP that

are subject to this action cover those

areas ofArizona where ADEQhas jurisdiction. Currently, ADEQhas permitting jurisdiction for the following stationary source categories in all areas ofArizona: Smelting of metal ores, coalfired electric generating stations, petroleum refineries, Portland cement plants, and portable sources. ADEQ also has permitting jurisdiction for major and minor sources in the following counties: Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Mohave, Navajo, Santa Cruz, Yavapai, and Yuma. Finally, ADEQ has permitting jurisdiction over major

sources in Pinal County4 andthe Rosemont Copper Mine in Pima County.

Table 1lists the rules we are proposing for approval in today's action with the corresponding effective dates and submittal dates. The submitted rules are from the Arizona Administrative Code, Title 18- Environmental Quality, Chapter 2- Department ofEnvironmental QualityAir Pollution Control, Articles 1, 2,3, and4. The submitted statutory provision is from Title 49 ofthe Arizona Revised Statutes, Chapter 1,Article 1.

TABLE 1-SUBMITTED STATUTES AND RULES PROPOSED FOR APPROVAL IN THIS ACTION

State Rule or statute Title effective Submitted date

A.R.S §49-107

........................................................... R18-2-101 [only definitions (2), (32), (87), (109),

and (122)]. R1

8

- 2

-217

.................................................................. R1

8

- 2

-218

..................................................................

R18

- 2

-301

.................................................................. R18

- 2

-302

.................................................................. R18-2-302.01

............................................................. R18

- 2

-303

..................................................................

R18

- 2

-304

.................................................................. R18

- 2

-306

.................................................................. R18-2-306.01

.............................................................

R18-2-306.02

............................................................. R1

8

- 2

-311

.................................................................. Local delegation of state authority

............................ D

efinition s
.................................................................. Designation and Classification of Attainment Areas Limitation of Pollutants in Classified Attainment

Areas. D

efinition s
.................................................................. Applicability; Registration; Classes of Permits

.......... Source Registration Requirements

............................ Transition from Installation and Operating Permit

Program to Unitary Permit Program; Registration transition; Minor NSR transition. Permit Application Processing Procedures

............... Permit Contents

......................................................... Permits Containing Voluntarily Accepted Emission

Limitations and Standards. Establishment of an Emissions Cap

.......................... Test Methods and Procedures

.................................. 08/18/1987 08/07/2012

11/15/1993 08/07/2012

08/07/2012 08/07/2012 08/07/2012 08/07/2012

08/07/2012 12/20/1999 01/01/2007

09/22/1999 11/15/1993 07/2/2014 10/29/2014

10/29/2014 10/29/2014

10/29/2014 10/29/2014 10/29/2014 10/29/2014

10/29/2014 10/29/2014 10/29/2014

10/29/2014 07/28/2011

'In addition, these submittals and our current action also address two rules and one statutory provision that are not directly related to NSR.

2We note that portions ofADEQ's SIP-approved

rule R18-2-310, which provides affirmative defenses for excess emissions during malfunctions (R18-2-310(B)) and for excess emissions during startup or shutdown (R18-2-310(C)), are currently the subject ofa separate rulemaking action byEPA.
In a 2013 notice of proposed rulemaking, and a 2014 supplemental notice ofproposed rulemaking that revised certain ofthe findings described in the 2013 notice, EPA proposed to find R18-2-310(B) and R18-2-310(C) substantially inadequate to meet CAA requirements and proposed to issue a SIP call with respect to these provisions. See 78 FR 12460, 12533-34, Feb. 22, 2013; 79 FR 55920, 55946-47, Sept. 17, 2014. ADEQ's R18-2-310 is not part ofthe ADEQ SIP submittal that is under consideration in this action, and this rule is not being evaluated or otherwise addressed byEPA as part ofour current action on ADEQ's SIP submittal.

3 Rules R18-2-301 through R18-2-334 (Article 3 rules) also contain requirements to address the CAA title V requirements for operating permit programs, but we are not evaluating these rules for title V
purposes at this time. We will evaluate the Article 3 rules for compliance with the requirements oftitle V ofthe Act andEPA's implementing regulations in 40 CFRpart 70 following receipt ofan official part 70 program revision submittal from ADEQ.

4ADEQhas delegated implementation of the major sourceprogram to the Pinal County Air Quality Control District. 

### 14045

### Federal Register/Vol. 80, No. 52/Wednesday, March 18, 2015/Proposed Rules

TABLE 1-SUBMITTED STATUTES AND RULES PROPOSED FOR APPROVAL IN THIS ACTION-Continued

State Rule or statute Title effective Submitted date

R18-2-312

.................................................................. Performance Tests

................... .......... ............. 11/15/1993 07/28/2011 R18-2-315

.................................................................. Posting of Perm it

........... ............................ 11/15/1993 10/29/2014 R18-2-316

.................................................................. Notice by Building Permit Agencies

.......................... 05/14/1979 10/29/2014 R18-2-319

.................................................................. M

inor Permit Revisions

............................................ 08/07/2012 10/29/2014 R18-2-320

.................................................................. Significant Permit Revisions

.................... ..... ........... 08/07/2012 10/29/2014 R18-2-321

.................................................................. Permit Reopenings; Revocation and Reissuance

..... 08/07/2012 10/29/2014

R18-2-323

.................................................................. PermitTransfers

....... ............................ 02/03/2007 10/29/2014 R18-2-330

.................................................................. Public Participation

..................... ......... ............. 08/07/2012 10/29/2014 R18-2-332

.................................................................. Stack Height Limitation

............................................ . 11/15/1993 10/29/2014 R18-2-334

.................................................................. M

inor New Source Review

.................... ..... ............ 08/07/2012 10/29/2014 R18-2-401 [excluding definition (3)]

.......................... Definitions

.................................................................. 08/07/2012 10/29/2014 R18- 2-402

.................................................................. General

...................................................................... 08/07/2012 10/29/2014 R18-2-403

.................................................................. Permits for Sources Located in Nonattainment 08/07/2012 10/29/2014

Areas.
R18-2-404

.................................................................. Offset Standards

........................................................ 08/07/2012 10/29/2014 R18-2-405

.................................................................. Special Rule for Major Sources of VOC or Nitrogen 08/07/2012 10/29/2014

Oxides in Ozone Nonattainment Areas Classified

as Serious or Severe. R18-2-406

.................................................................. Permit Requirements for Sources Located in Attain- 08/07/2012 10/29/2014

ment and Unclassifiable Areas. R18-2-407 [excluding subsection (H)(1)(c)]

.............. Air Quality Impact Analysis and Monitoring Require- 08/07/2012 10/29/2014

ments. R18-2-409

.................................................................. Air Quality M odels

................... ....... ............... . 11/15/1993 10/29/2014 R18- 2-412

.................................................................. PALs

.......................................................................... 08/07/2012 10/29/2014

On December 28, 2012, April 29, B. Are therepreviousversions ofthe reduction credits in nonattainment 2013, and December 2, 2014, ADEQ's statutory provisionsorrulesin the areas. July 28, 2011, October 29, 2012, and Arizona SIP? Consistent with ADEQ's stated intent July 2, 2014 submittals, respectively, EPA has not approved significant to have the submitted NSR rules replace

were deemed complete by operation of revisions or updates to ADEQ's SIP- the existing NSR program in the SIP, law to meet the completeness criteria in approved NSR program since the 1980s. EPA's approval of the regulations 40 CFR part 51, appendix V, which The existing SIP-approved NSR program identified above in Table 1 generally

must be met before formal EPA review, for new or modified stationary sources would have the effect ofsuperseding Each ofthese submittals includes under ADEQ's jurisdiction generally our prior approval ofthe current SIPevidence ofpublic notice and adoption consists ofthe rules identified below in approved NSR program.5 Table 2 lists
ofthe regulation. Our technical support Table 2 that we are proposing to the existing rules in the Arizona SIP that
document (TSD) provides additional supersede in or delete fromthe Arizona would be superseded or removed from background information on each ofthe SIP. Collectively, these regulations the Arizona SIP as a result ofour submitted rules. established the NSR requirements for proposed action. IfEPA were to take both major and minor stationary sources final action as proposed herein, these under ADEQjurisdiction in Arizona, rules generally would be replaced in, or including requirements for the otherwise deleted from, the SIP by the generation and use ofemission submitted set of rules listed in Table 1.

TABLE 

### 2-SIP RULES SUPERSEDED OR REMOVED FROM ARIZONA 

### SIP IN THIS ACTION

A 

# 1a Federal Rule or statute Title EPA Approval Register citation

R9

- 3

- 1 01

.................................................................... R9-3-217(B)

............................................................... R9-3-301, [excluding subsections (I), (K)]

................. R9

- 3

- 302

.................................................................... R9

- 3

- 303

.................................................................... R9-3-304, [excluding subsection (H)]

........................ R9

- 3

- 305

.................................................................... R9

- 3

- 306

.................................................................... R9

- 3

- 307

.................................................................... R9

- 3

- 308

.................................................................... R9

- 3

- 311

.................................................................... R9

- 3

- 31 4

.................................................................... R9

- 3

- 31 5

....................................................................

5Except for certain sections that ADEQ requested that we notremove from the SIP at this time. D efinition s
.................................................................. Attainment Areas: Classification and Standards

....... Installation Permits: General

..................................... Installation Permits in Nonattainment Areas

............. Offset Standards

........................................................ Installation Permits in Attainment Areas

................... Air Quality Analysis and Monitoring Requirements

... Source Registration Requirements

............................ Replacemen t

.............................................................. Permit Conditions

...................................................... Air Quality Models

..................................................... Excess Emissions Reporting

..................................... Posting of Permits

..................................................... Various 04/23/1982 05/03/1983 08/10/1988 08/10/1988 05/03/1983 05/03/1983 05/03/1983 05/05/1982 04/23/1982 04/23/1982 04/23/1982 04/23/1982 Various 47 FR 17486 48 FR 198879

53 FR 30220 53 FR 30220 48 FR 19879 48 FR 19879 48 FR 19879 47 FR 19328 47 FR 17485 47 FR 17485 47 FR 17485 47 FR 17485 

### 14046Federal Register/Vol. 80, No. 52/Wednesday, March 18, 2015/Proposed Rules

TABLE 

### 2-SIP RULES SUPERSEDED OR REMOVED FROM ARIZONA 

### SIP IN THIS 

### ACTION-Continued

Federal Rule or statute Title EPA Approval Register date citation

R9-3-316

.................................................................... Notice by Building Permit Agencies

.......................... 04/23/1982 47 FR 17485 R9-3-317

.................................................................... Permit Non-transferrable; Exception

......................... 04/23/1982 47 FR 17485 R9-3-318

.................................................................... Denial or Revocation of Installation or Operating 04/23/1982 47 FR 17485 Permit. R8-3-319

.................................................................... Permit Fees

....... ................................ 04/23/1982 47 FR 17485 R9-3-322

.................................................................... Temporary Conditional Permits

................................. 10/19/1984 49 FR 41026 R9- 3- 1101

.................................................................. Jurisdiction

................................................................. 05/03/1983 48 FR 19879 Appendix 4

.................................................................. Fee Schedule for Installation and Operating Permits 09/19/1977 42 FR 16926 Appendix 5

.................................................................. Fee Schedule for Conditional Permits

....................... 09/19/1977 42 FR 46926

C. What isthepurposeofthisproposed rule?

The purpose ofthis proposed rule is
to present our evaluation under the CAA and EPA's regulations ofrules and statutory provisions submitted byADEQ

onJuly 28, 2011, October 29, 2012, and July 2, 2014, which are identified in Table 1. We provide our reasoning in general terms below, and include our

more detailed analysis inthe TSD, which is available inthe docket for this proposed rulemaking.

II. EPA's Evaluation

A. HowisEPA evaluatingtherulesand statutory provisions?
EPA has reviewed the provisions submitted by ADEQthat are the subject ofthis action, including those governing NSR for stationary sources under ADEQ jurisdiction for compliance with the CAA's general requirements for SIPs in CAA section 110(a)(2), EPA's regulations for stationary source permitting programs in 40 CFRpart 51, sections 51.160 through 51.166, and the CAA requirements for SIP revisions in CAA section 110(1) and 193.6

With respect to procedures, CAA sections 110(a) and 110(1) require that revisions to a SIP be adopted by the State after reasonable notice andpublic hearing. EPA has promulgated specific procedural requirements for SIP revisions in 40 CFR part 51, subpart F. These requirements include publication

6CAA section 110(1) requires SIPrevisions to be subject to reasonable notice and public hearing prior to adoption and submittal by States to EPA and prohibits EPA from approving any SIPrevision that would interfere with any applicable requirement concerning attainment andreasonable further progress, or any other applicable requirement of the CAA. CAA section 193, which

was addedby the CAA Amendments of1990, includes a savings clause that provides, in pertinent part: "No control requirement in effect, orrequired
to be adoptedby an order, settlement agreement, or plan in effect before November 15, 1990, in anyarea which is a nonattainment area for any airpollutant maybe modified after November 15, 1990, inany

manner unless the modification insures equivalent

or greater emission reductions ofsuch air pollutant." ofnotices, by prominent advertisement in the relevant geographic area, of a public hearing on the proposed revisions, a public comment period of at least 30 days, and an opportunity for a public hearing.

Based on our review ofthe public process documentation included in the July 28, 2011, October 29, 2012 andJuly 2, 2014 submittals, we find that ADEQ has provided sufficient evidence of public notice and opportunity for
comment andpublic hearings prior to adoption and submittal ofthese rules to EPA.

With respect to substantive requirements, we have generally reviewed the ADEQ provisions that are the subject ofour current action in accordance with the CAA and applicable regulatory requirements, focusing primarily on those that apply
to: (1) General preconstruction review programs, including for minor sources, under section 110(a)(2)(C) ofthe Act; (2) PSD permit programs under part C of title I ofthe Act; and (3)Nonattainment NSR permit programs under part D of title I ofthe Act (NA-NSR). Forthe most part, ADEQ's submittal satisfies applicable CAA requirements, specifically including the applicable requirements for these three preconstruction review programs and would strengthen the applicable SIP by updating the regulations and adding requirements to address new orrevised NSR permitting and other requirements promulgated by EPA,but the submitted rules also contain specific deficiencies that prevent full approval. Below, we discuss generally our evaluation of ADEQ's submittal and the deficiencies that are thebasis for our proposed action on these rules. Our TSD contains

a more detailed evaluation as well as additional recommendations for program improvements.

B. Dothe rulesmeet the evaluation criteria forMinorNew SourceReview?
Section 110(a)(2)(C) requires each SIP
to include a program forthe regulation ofthe modification and construction of
any stationary source within the areas covered by the plan as necessary to

assure attainment and maintenance of the National Ambient Air Quality Standards (NAAQS). In addition to the permit programs required underparts C and D ofthe CAA for PSD sources and nonattainment NSR sources, respectively, which are discussed below, EPA's regulations at 40 CFR 51.160-51.164 provide general programmatic requirements to implement this statutory mandate commonly referred to as the "minor NSR program." These minorNSR program regulations impose requirements for SIP approval ofState and local programs that are more general in nature as compared with the specific statutory and regulatory requirements for PSD and NA-NSR permitting programs. Under EPA's regulations governing the minor NSR
program, States and local air agencies retain a level ofdiscretion to define the types and sizes of sources subject to the program, whereas under the PSD and nonattainment NSR permitting
programs, the sources subject to regulation are specified by EPA regulations. The substantive requirements for the preconstruction review and permitting ofminor stationary sources under ADEQ jurisdiction are ADEQrules R18-2- 302.01 and R18-2-334. These rules, and other administrative rules included in the minorNSR portion ofthe SIP submittal, satisfy most ofthe statutory andregulatory requirements for minor NSR programs, but these rules also contain several deficiencies thatform the basis for our proposed limited disapproval, as discussed below.

We are proposing a limited approval and limited disapproval ofADEQ's minor NSR program because itis not fully consistent with the requirements of40 CFR 51.160, 40 CFR 51.161, 40 

### CFR 51.163 and 40

### CFR 51.164, as describedbelow. We find that approval 

### 14047Federal Register/Vol. 80, No. 52/Wednesday, March 18, 2015/Proposed Rules

ofADEQ's updated minor NSRprogram will substantially strengthen the SIP overall, as the submitted minor NSR program generally has more extensive requirements for minor sources and non-major modifications than ADEQ's
current SIP-approved program and lower permitting thresholds that will provide additional mechanisms for protecting the NAAQS, as well as updating the SIP with current State regulations for minor sources andnonmajor modifications. However, specific provisions ofthe minorNSR program submittal are inconsistent with federal minor NSR program requirements, and these deficiencies must be addressed before we can fully approve ADEQ's minor NSR program into the SIP. The deficiencies that we have identified with ADEQ's minor NSR program that provide the basis for our limited approval and limited disapproval are describedbelow.

1.Legally Enforceable Procedures

40 CFR 51.160 requires that each NSR program contain certain legally enforceable procedures. We have identified several deficiencies with ADEQ's program as it pertains to these requirements.

First, as required by 40 CFR 51.160(a), ADEQ's permitting procedures are not enforceable in all instances. ADEQ's program allows certain sources to begin construction when a "proposed final permit" is issuedby ADEQ, rather than preventing construction until a final permit has been issued. See R18-2- 101(114), R18-2-302(G), R18-2-334(B), R18-2-402(C). The definition for "proposed final permit" in R18-2-101 does not specify that such an action is

afinal decision for NSR purposes. As a result, the program does notprovide ADEQ with clear authority to prevent construction or modification before it issues a final decision onthe request for authority to construct as is required per 40 CFR 51.160(a) and (b). ADEQhas clarified that, in effect, underADEQ's rules, a proposed final permit is treated

as a final authorization to construct, and that itwill treat proposed final permit

as a final, appealable agency action under Arizona law. 7 Nevertheless, a revision to ADEQ's NSR program is necessary to ensure that these types of permit actions clearly serve as a final authority to construct in order to satisfy the federal NSR program requirement that the agency be able to prevent construction until and unless it has

7 ADEQMemo-Proposed Final Permits to be Treated as Appealable Agency Actions, dated February 10, 2015 and ADEQ's February 23, 20157 supplement at 2. issued afinal decision on the request for authority to construct. Second, ADEQ's program does not contain adequate enforceable procedures to ensure compliance by

sources subject to review under its NSR
program with the NAAQS as required by 40 CFR 51.160(a)(2) and (b)(2). Although NAAQS is a defined term in ADEQ's regulations, see R18-2-101(85), ADEQ's NSR program generally does
not refer to the NAAQS and instead generally references the State's ambient air standards in Article 2ofADEQ's air program. See R18-2-302.01, R18-2- 334, and R18-2-406.8 Also, in some instances, ADEQ's NSR regulations simply refer to Arizona ambient air quality standards with no specific reference to Article 2,which makes the applicable standards ambiguous. 9 See R18-2-218, R18-2-406, and R18-2- 407. In some instances, ADEQ's NSR program does not ensure that a source would not interfere with attainment or maintenance ofthe NAAQS in neighboring areas outside ADEQ's permitting jurisdiction, as is required under 40 CFR 51.160(a) and (b), as the State air standards are not generally applicable in neighboring States,'1 and the NSR Program submittal does not demonstrate that they are applicable in neighboring States for purposes of ADEQ's NSR program. See R18-2- 302.01(C); R18-2-334(C)(2), (F), and (G); and R18-2-406(A)(5)(a) and (b). Also, for minor sources subject topermitting under R18-2-334, the rule does not meet these federal requirements as it does not require ADEQto evaluate whether the project under review will interfere with attainment or maintenance ofthe NAAQS in all cases, and instead allows sources to apply reasonably available control technology (RACT) in lieu of such an evaluation and, in some cases, appears to allow

sources with lower levels ofemissions
to avoid both substantive NAAQS review and RACT requirements. See

8 ADEQ's list ofstate air standards does not contain the current PM2 .5annual NAAQS of 12 pg/

m 3 PM2.5-.See 78 FR 3086, Jan. 13, 2013. This is
not a disapproval issue for ADEQ's minor NSR and
NA-NSR programs, which have three years toadopt
programs implementing the new NAAQS. However, the new NAAQS is applied immediately uponits effective date to sources subject to the PSD program.

9Forexample, R18-2-407(B) contains "any such pollutant forwhich no Arizona ambient air quality standard exists." "Arizona ambient air quality standard" is not a defined termin ADEQ's regulations.

10See, for example, the definition of "attainment
area" in R18-2-101, limiting attainment areas to those in Arizona. A.R.S. §49-106 provides, in relevant part: "The rules adopted by the department apply and shall be observed throughout this state,

or as provided by their terms, and the appropriate local officer, council or board shall enforce them." R18-2-334(C)(1)(a)-(b). ADEQhas not demonstrated that this approach ensures that all sources subject to review under its NSR program will notinterfere with attainment or maintenance ofthe NAAQS. While R18-2-334(G) allows Director's discretion to require a NAAQS analysis on a case-by-case basis, we find this discretion too great to ensure compliance with this requirement. Finally, R18-2- 302.01(C)(4) needs to include a reference to "or maintenance" ofa standard, instead ofjust "attainment of

a standard."

Third, for sources subject to ADEQ's registration program at R18-2-302.01, ADEQ has not demonstrated that its NSR program meets the requirement to

ensure that sources subject to NSR review comply with the applicable portions ofthe control strategy as required by40 CFR 51.160(b)(1).

Fourth, ADEQ's registration program in R18-2-302.01 does not contain enforceable procedures for the owner or operator to submit the necessary information for ADEQto determine whether a source will violate the applicable control strategy or interfere with attainment or maintenance ofthe NAAQS as required by 40 CFR 51.160(c). R18-2-302.01(A)(3) requires applicants to calculate a source's uncontrolled potential to emit, but then references provisions in anotherrule, R18-2-327(C), that are used to calculate "actual" emissions. As such, ADEQ's
program contains conflicting procedures for calculating potential emissions. In addition, rule R18-2-327, is notin the Arizona SIP, and has not been submitted to EPA for SIP approval.

Fifth, ADEQ's program does not meet the requirement that the applicant submitinformation related to the nature and amounts ofemissions, for certain kinds ofemissions units as required by 40 CFR 51.160(c)(1). For Class I and Class II permits, R18-2-304(E)(9) allows

sources to avoid providing emission information for "insignificant activities," as defined in R18-2-101(68). The term "insignificant activities" is generally associated withthe titleV program. Many ofthe activities listed in ADEQ's definition ofinsignificant activity are activities that would not be expected to emitregulated NSR pollutants. However, this is not true for all activities, such asthose listed under R18-2-101(68)(a-c) that include liquid storage tanks, combustion engines, and "low-emitting processes."

Sixth, for sources subject to R18-2- 302.01, ADEQ's program does not meet the requirement in 40 CFR 51.160(d) that itsprocedures provide that approval ofconstruction or modification 

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will not affect the responsibility ofthe

owner or operator to comply with applicable portions ofthe control strategy.

Finally, for sources subject to ADEQ's registration program under R18-2- 302.01, ADEQ's program does not meet the requirement to use Appendix Wto 40 CFR part 51 for air quality modeling

asrequired by 40 CFR 51.160(f)(1).

2.ADEQ's Program Under 40 CFR 51.160(e)

40 CFR 51.160(e) requires ADEQ's submittal toprovide abasis forthe types and sizes offacilities, buildings, structures, or installations that will be subject to review under40 CFR 51.160. Such exclusions are appropriate so long

as such sources and modifications are not environmentally significant, consistent with the deminimis exemption criteria set forth inAla. PowerCo. v. Costle, 636 F.2d 323, at 360-361 (D.C. Cir. 1979). Here, we discuss our evaluation ofthebasis provided by ADEQfor the types and sizes offacilities, buildings, structures

orinstallations itwill subject to review under its minor NSR program. Historically, ADEQ's minor NSR program required permitting ofminor

sources and non-major modifications causing an increase in potential emissions ofa criteria pollutant at or above the significant emission rates under the PSD program in 40 CFR 51.166(b)(23)(i). In a May 22, 1996 letter
to ADEQ, EPA Region 9 indicated that the significant emission rates used by ADEQ for its minor NSR permitting program did not represent an acceptable threshold for applying the basic preconstruction requirements for minor NSR purposes. To address EPA's
concerns, ADEQ assessed other potential permitting thresholds for its minor NSR program and selected revised thresholds for its minor NSR
program following this assessment. A detailed analysis ofADEQ's assessment is provided in our TSD. ADEQ's new minor NSR program established a minimum preconstruction review threshold for new or modified stationary

sources with potential emissions or emissions increases of: 50 tonsper year (tpy)ofcarbon monoxide; 20 tpy of NOx, SO 2,and VOC; 7.5 tpy for PM1o; 

### 5tpy for PM2.5; and 0.3 tpy for lead. We find ADEQ's general approach to meeting 40 CFR 51.160(e) acceptable. We are proposing a limited disapproval ofADEQ's minor NSR program based in part on the following issues concerning the approach:

First, ADEQ's submittal does not provide a clear basis for concluding that the exemption thresholds selected by ADEQ will ensure a sufficient percentage ofminor sources are subject
to review in nonattainment areas. As ADEQ points out in its submittal, ADEQ's analysis isbased on data for Maricopa County ", which has lower NSR permitting thresholds than the exemption thresholds adoptedby ADEQ due to Maricopa County's local air quality problems. In addition, (1) some ofthe other permitting programs in Table 3 above have lower permitting thresholds in nonattainment areas than those applicable in attainment areas under theirjurisdiction; (2)in looking at

a similar analysis ofminor source emissions for another permitting program in Region 9, which has local air quality problems, the permitting agency generally set thresholds that include a larger percentage ofemissions in the NSR program than the percentage included in ADEQ's program 12; and (3) typically, nonattainment areas have

more control requirements that apply to smaller minor sources, as compared to attainment areas. As such, ADEQ's basis does not clearly address how its adopted preconstruction review exemption thresholds adequately address nonattainment areas.' 3 Second, while EPA agrees that, in general, certain types ofequipment may be exempted from the minor NSR
program, ADEQmust provide abasis under 40 CFR 51.160(e) to demonstrate that regulation ofthe equipment exempted in R18-2-302(C) and A.R.S. §49-426(B) is not needed for ADEQ's program to meet federal NSR requirements for attainment and maintenance ofthe NAAQS or review for compliance withthe control strategy. Such demonstration must address: (1) An explanation ofwhether the regulatory exemption in R18-2-302(C) for "agricultural equipment usedin normal farm operations" constitutes an interpretation or refinement ofthe exemption for such sources in A.R.S.

11ADEQ does not havejurisdiction for permitting ofminor sources inMaricopa County, AZ.

12 SeeEPA's Technical SupportDocument for
Revision ofAir QualityImplementationPlan; California;SacramentoMetropolitan Air Quality Management District;StationarySourcePermits,78 FR10589, Feb. 2, 2014, at 6-7, describing the thresholds applicable in Sacramento as generally excluding less than 5% ofthe emissions inventory except for SO 2.

13In addressing this deficiency, ADEQ does not necessarily have to consider lower permitting exemption thresholds in nonattainment areas. For example, ADEQ could provide further analysis to demonstrate that the adopted thresholds are appropriate fornonattainment areas orconsider a different approach, such as requiring minor sources in nonattainment areas subject to a SIP requirement for the nonattainment pollutant, orits precursors, to obtain a registration, ifADEQ can demonstrate that such anapproach would serve to satisfy the requirements of40CFR 51.160. §49-426(B), and howthe two provisions apply to ADEQ'sNSR
program; (2)Identification ofthe types ofequipment ADEQconsiders tobe "agricultural equipment used innormal farm operations" and whether this type ofequipment could potentially be expected to occur at a stationary source subject to title V ofthe Act, 40 CFR parts 60, 61, or 63, or major NSR, and, if so, whether such equipment is subject
to NSR review at such sources; (3) ADEQ's basis for determining that "agricultural equipment used innormal farm operations" does not need to be regulated as part ofADEQ's minorNSR program under 40 CFR 51.160(e); and (4) ADEQ's interpretation ofthe exemption for fuel burning equipment in A.R.S. §49-426(B) and howit does,

ordoes not, apply in the context ofits major and minor NSR programs, and, to the extent such equipment is not subject
to NSR review, ADEQ'sbasis for determining that equipment exempted under this provision does notneed to be reviewed as part ofADEQ's minorNSR program under 40 CFR 51.160(e).

Finally, ADEQ's minorNSR program sets a permitting exemption threshold for PM2. 5 of5tons per year, but ADEQ's analysis does not provide a basis for this threshold.

3.Public Availability ofInformation

40 CFR 51.161 requires that each NSR program contain certain procedures related to public participation. We have identified several deficiencies with ADEQ's program as it pertains to these requirements.

First, ADEQ's program does not

ensure that NSR review for all minor

sources regulated under ADEQ's NSR program, as ADEQdefines it pursuant to 40 CFR 51.160(e), is subject topublic notice and comment consistent with 40 CFR 51.161(a). 40 CFR 51.161(a) requires that the program under 51.160 provide for public comment on the information submittedby owners or operators. In addition, the public information must include ADEQ's analysis ofthe effects ofconstruction or modification on ambient air, including ADEQ's proposed approval or disapproval. ADEQ's program does not meet this requirement because: (1) "modification" ofexisting sources that become subject to the registration program under R18-2-302.01 (currently only "construction" ofa source) are not subject to public notice (see R18-2- 302.01(B)(3)); (2)R18-2-334(G) exempts most modifications from public notice; (3)R18-2-330 does not clearly define which public notice requirements apply
to registrations; and (4) public participation does not appear tobe 

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required for a proposed disapproval of

an application for any portion of ADEQ's NSR program (registration, minor NSR, or major NSR).

Second, ADEQ's registration program atR18-2-302.01(F) does not contain the
necessary enforceable procedures for

sources taking "elective limits" to limit their potential to emit in a manner that allows the source to avoid the public participation requirements in 40 CFR 51.161(a), while otherwise being subject
to the registration program. See R18-2- 302.01(B)(3)(b) and R18-2-302(E)(1). While ADEQ's rule contains requirements for monitoring, recordkeeping, and reporting ofelective limits, these requirements are not sufficiently enforceable for purposes of limiting the source's potential to emit, and thereby avoiding public notice, as well other substantive requirements of ADEQ's minor NSR program when issuing aregistration. In order to meet practical enforceability requirements for limiting the potential to emit (PTE), R18-2-302.01(F) must also contain (1) a technically accurate limitation and the portions ofthe source subject to the limitation and (2)the timeperiod for the limitations (hourly, daily, monthly, etc.). Further, ifthe limitation is over a period longer than daily, R18-2- 302.01(F) must specify when to compile daily records to show compliance with the elected limit. Additional detail on this issue is provided in our TSD.

Third, ADEQ's NSR program does not
ensure, for all sources subject to NSR review, the availability forpublic inspection, in at least one location in the area affected, ofthe information submitted by the owner or operator and ofADEQ's analysis on the effect on air quality as required by this federal regulation. R18-2-330(D)(11) requires the public notice to identify the nearest ADEQ office where documents can be inspected, but there are only two department offices for ADEQ. See 40 CFR 51.161(b)(1). We do not interpret this provision as meeting the requirement to make information available in the "area affected." In addition, the public notice requirements do not make reference to providing ADEQ's analysis for public inspection. Potentially, this is covered by "all other materials available to the Director that

are relevant to the permit decision".14 But it isnot clear that ADEQwould interpret this to mean the Director's own analysis.

Finally, ADEQ's NSR program does provide notice to the necessary parties in 40 CFR 51.161(d) for sources required

14This requirement is met for ADEQ's registration
program at R18-2-302.01(B)(3)(a). to obtain registrations under R18-2- 302.01.

4. Administrative Procedures

40 CFR 51.163 requires each NSR program to include administrative procedures that will be followed in making the determinations specified in 40 CFR 51.160(a). While ADEQ's program generally meets the requirements ofthis provision, ADEQ's submittal contains references to other ADEQ rules, R18-2-317 and R18-2- 317.02, which are not in the SIP and have not been submitted for SIP approval. See R18-2-306.02(D), R18-2- 319(I), R18-2-304(J), R18-2-306(A), and R18-2-306.02(D).

5. StackHeight Procedures

40 CFR 51.164 requires thateach NSR program contain certain provisions related to good engineering practice for stack heights. In addition to reviewing ADEQ's submittal as compared with the NSR program requirements of40 CFR 51.164, we also reviewed ADEQ's submittal as itrelates to certain general SIP program requirements in 40 CFR 51.100 and 51.118. The stack height provisions in the NSR program rely on the general stack heightprovisions in 40 CFR 51.118(b), which in turn references the definitions in 40 CFR 51.100(hh) through (kk).We have identified several deficiencies with ADEQ'sprogram asit pertains to these requirements.

First, ADEQ's submittal does not meet the public hearing requirements in 40 CFR 51.164 and 51.118(a). While R18- 2-332(E) contains a reference to holding

a public hearing, when required, the provision references ADEQ's public hearing provision in R18-1-402. R18- 1-402 is not in the SIP and has not been submitted for SIP approval.

Second, ADEQ's submittal does not contain language that meets the exception in 40 CFR 51.118(b): "except where pollutants are being emitted from such stacks or using such dispersion techniques by sources, as defined in section 111(a)(3) ofthe Clean Air Act, which were constructed, or reconstructed, or for which major modifications, as defined in §§51.165(a)(1)(v)(A), 51.166(b)(2)(i) and 52.21(b)(2)(i), were carried out after December 31, 1970." In addition, R18- 2-332(A)(3) incorrectly references July 1, 1975 instead ofJuly 1, 1957 as that date appears in 40 CFR 51.118(b).

Third, ADEQ's submittal does not contain a requirement that owners or operators seeking torely on the equation in 40 CFR 51.100(ii)(2)(i) produce evidence thatthe equation was actually relied on in establishing an emission limitation. See R18-2-332(B)(2). Finally, ADEQ's submittal contains a provision at R18-2-332(D) that provides additional provisions for sources "seeking credit because ofplume impaction which results in concentrations in violation ofnational ambient air quality standards or applicable maximum allowable increases." This provision is not contained in the federal regulations and appears to allow for the use ofstack heights beyond GEP stack height, as defined in 40 CFR 51.100(ii).

In sum, while we have identified several disapproval issues with ADEQ's minor NSR program requirements as they correspond to federal minor NSR program requirements, compared to the existing SIP, approving ADEQ's minor NSR program into the Arizona SIP nonetheless represents a significant overall strengthening ofADEQ's NSR program, as discussed above. Thus,we

are proposing a limited approval and limited approval ofADEQ's minor NSR program submittal.

C.Do therulesmeet the evaluation criteria forPreventionofSignificant Deterioration(PSI)?

Part C oftitle I ofthe Act contains the provisions for the prevention of significant deterioration (PSD)of air quality in areas designated "attainment"

or "unclassifiable" for the NAAQS, including preconstruction permit requirements for new major sources or major modifications proposing to construct in such areas. EPA's regulations for SIP-approved PSD permit programs are found in 40 CFR 51.166.

ADEQ rules R18-2-402 and R18-2- 406 contain the substantive requirements for review and permitting ofPSD sources under ADEQ's jurisdiction. These regulations satisfy
most ofthe statutory andregulatory requirements for PSD permit programs, but these and other rules in the NSR SIP submittal contain several deficiencies that form the basis for our proposed limited disapproval, or proposed disapprovals as discussed below.

Although ADEQ's submittal meets most PSD program requirements, we are proposing to disapprove two specific aspects ofADEQ's PSD program. The ADEQ rule provisions that we are proposing to disapprove are directly comparable to federal PSD rule provisions that havebeen vacated by federal courts, and we find that they are separable from the remainder ofADEQ's PSD program. Accordingly, we find these provisions suitable for disapproval
atthis time. These provisions are describedbelow in Sections II.C.8 and 9. 

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For the remainder ofADEQ's PSD program submittal, we are proposing limited approval and limited disapproval. We find that approval of ADEQ's updated PSD program, aside from the two aspects that are separable and will be disapproved as mentioned above, will substantially strengthen the SIP overall, particularly as the current SIP-approved PSD program is significantly out ofdate when compared with current federal PSD regulatory requirements as well as current State regulations. See our discussion in Section Gbelow. However, specific provisions ofthe PSD SIP program submittal are inconsistent with PSD program requirements, and these deficiencies must be addressed before

we can fully approve ADEQ's PSD program. The deficiencies that we have identified with ADEQ'sPSD program that provide the basis for our limited disapproval are described below in Sections II.C.i through 7.

1.General PSD Program Requirements

First, ADEQ's submittal often refers to Articles 9 and/or 11 ofADEQ's regulations where the federal regulations refer to 40 CFR parts 60, 61,

or 63; or, similarly, sections 111 or 112 ofthe Act. See R18-2-101(53)(a), (122)(b); R18-2-401(10); R18-2- 402(G)(2); and R18-2-406(A)(4). Articles 9 and 11 are where ADEQ incorporates by reference the federal regulations in 40 CFR part 60, 61, and 63 (whichEPA implements under sections 111 and 112 ofthe Act). However, these Articles are not in the SIP, have not been submitted for SIP approval, and do not contain provisions equivalent to all ofthe subparts in parts 60, 61, and 63. See 40 CFR 51.166(b)(1)(iii)(aa),(b)(12), (b)(16)(i), (b)(17), (b)(47)(ii)(c),(b)(49)(ii), (i)(1)(ii)(aa), and (j).

Second, ADEQ's submittal uses the
term "increment" or "incremental ambient standard," but does not specifically define these terms or otherwise identify what is meantby these terms. While the PSD program does not specifically define the term "increment" either, the term is introduced at 40 CFR 51.166(c)- Ambient air incrementsandother

measures.(emphasis added) 40 CFR 51.166(c) then goes on to identify the specific increment values as "maximum allowable increases." ADEQappears to have taken the approach ofusing the
term "maximum allowable increase" to refer to the increments, which is acceptable. ADEQadopted the increments, or maximum allowable increases, in R18-2-218-Limitationof Pollutantsin Classified Attainment Areas.However, in other rules ADEQ

uses "increment" or "incremental ambient standard" where itappears the intent is to refer to the increments established in R18-2-218 and identified in ADEQ's rules as the "maximum allowable increases." See R18-2-406(E), R18-2-412(G)(b), R18-2-101(51), R18- 2-319,R18-2-320.

Third, onJanuary 15, 2013, EPA issued afinal rule revising the NAAQS for PM2. 5 for the annual averaging period, lowering the level ofthe NAAQS from 15.0 to 12.0 mg/mt , effective March 18, 2013 (see 78 FR 3086). This new NAAQS is required to be implemented for PSD sources (unless otherwise grandfathered under provisions at 40 CFR 51.166(i)(10)) beginning with the effective date ofthe NAAQS. However, ADEQ's PSD
program does not provide for the review ofnew or modified sources for compliance with this new NAAQS as required in 40 CFR 51.166(b)(2)(iii)(i)(2), (b)(35), (d), (g)(3)(iii), (k), and (m)(1). Instead, ADEQ's PSD program currently references state ambient air quality standards, which are set at levels that

are equivalent to all ofthe current NAAQS, except for this newly adopted PM2. 5NAAQS. See R18-2-218(F)(b)(ii), R18-2-401(25), R18-2-406(A) and R18- 2-407(B). Because ofthe general approach used in ADEQ's NSR program with respect to incorporating the NAAQS, i.e., the program's reference to state air quality standards instead ofthe NAAQS, any changes EPA makes to the NAAQS will not be included inADEQ's program until ADEQrevises its air quality standards rules to adoptthe revised NAAQS as state air quality standards. This does not relieve any

owner or operator from the requirement
to comply with allNAAQS at the time

a final PSD permitis issued, including the recently revised new PM2. 5NAAQS (unlessotherwise grandfathered under 40 CFR 51.166). See CAA section 165(a)(3).

Fourth, R18-2-406(A) contains a reference to R18-2-408, but R18-2-408 is not in the SIP andhas not been submitted for SIP approval.

Fifth, ADEQ's submittal allows a

source at R18-2-302(G) and R18-2- 402(C) to begin actual construction upon the issuance ofa proposed final permit. As previously discussed, ADEQ's program is ambiguous as to whether a proposed final permit, as defined in R18-2-101(114), constitutes final actionby the Director. While ADEQ has issued guidance clarifying that ittreats "proposed final permits" as final actions for purposes of preconstruction permitting 15, to obtain full PSD program approval, ADEQ's regulations must make clear that a
source may notbegin actual construction before a final determination on a PSD permit application is made by the Director.

Sixth, ADEQ's NSR submittal contains provisions that allow for exclusions from increment consumption, for certain temporary emissions, that do not conform to the requirements in the analogous federal rule. First, ADEQ's rule at R18-2- 218(F)(5) requires only the ADEQ Director's approval for temporary emissions beyond two years, but the federal program requirements at 40 CFR 51.166(f)(i)(v) and 51.166(f)(4) require the Administrator's approval to allow temporary emissions that exceed two years. In addition, ADEQ's program language does not reference a specific time period beyond two years that it would allow for exclusions from increment consumption, which is not consistent with the federal regulation's requirement at 40 CFR 51.166(f)(4) that the time for such exclusions be specified in the plan. Finally, the provision at R18-2-218(F)(5)(b)(ii), which references the state ambient air quality standards, mustbe applied to "any" air quality control region.As currently written this provision does not clearly apply to areas outside ofArizona where Arizona's standards wouldnot generally apply.

Seventh, ADEQ's submittal contains a provision at R18-2-406(E) providing an exemption for certain portable stationary sources with aprior permit that contains requirements equivalent to the PSD requirements in 40 CFR 51.166 (j)through (r), as allowed by40 CFR 51.166(i)(1)(iii). However, ADEQ's rule
at R18-2-406(E) is wordedbroadly to also allow an exemption forportable

sources thathave been permitted under Article 4 ofADEQ's regulations, which also includes nonattainment NSR permits and PAL permits. We do not interpret this federal exemption as generally applying to such permits, asit is not clear that suchpermits contain requirements "equivalent" to those in 40 CFR 51.166(j) through (r).

Eight, ADEQ's submittal contains conditions generally meeting the requirements of40 CFR 51.166(k)(1) in rule R18-2-406(A)(5)(a). However, R18- 2-406(A)(5) contains an "or" between subsections (a) and (b)that couldbe interpreted as allowing a source to demonstrate itwill not contribute to an

15See ADEQ memo dated February 10, 2015 related to proposedfinal permits, and ADEQ's February 23, 2015 Supplement at 2. 

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increase above the significance levels in

an adjacent nonattainment area in lieu ofthe demonstration required by R18- 2-406(A)(5)(a). The provisions of subsection (b)relate torequirements under a different portion ofthe NSR program-specifically under 40 CFR 51.165. As such, itislikely ADEQ would interpret subsections (a) and (b)

as separate requirements with which a

source must demonstrate compliance. Nevertheless, the potential for misinterpretation ofthis substantive requirement ofthe PSD program provides abasis for our limited disapproval ofthe PSD program submittal. In addition, R18-2- 406(A)(5)(a) requires that a person applying for a PSD permit demonstrate that the project would not cause a violation ofany maximum allowable increase over the baseline concentration in "any attainment or unclassifiable area." However, ADEQ's definition for "attainment area" in the SIP atR18-2- 101(19) limits attainment areas to those "in the state." In addition, as discussed previously, it is not clear that ADEQ's references to the state's ambient air standards would apply in areas outside ofArizona.

Ninth, ADEQ's submittal includes R18-2-406(A)(6)(b), which specifies that the use ofa modified or substituted model mustbe subject to public notice and the opportunity forpublic comment, but neither the rule nor the submittal makes clear the procedures that wouldbe usedfor notice and
comment for this purpose or demonstrates that such procedures would be consistent with 40 CFR 51.102, as required by 40 CFR 51.166(1)(2).

Tenth, ADEQ's PSD SIP submittal does not appear to specifically address the requirements of40 CFR 51.166(n)(1) and (3), which require that the SIP must require that (1)the owner or operator of

aproposed source or modification shall submit all information necessary to perform any analysis or make any determination required under procedures established in accordance with 40 CFR 51.166, and (2)upon request ofthe state, the owner or operator shall also provide specified information concerning air quality impacts and growth. ADEQ's submittal
atR18-2-304, R18-2-402(G) and R18- 2-407 identifies the information necessary for a complete application under this program and requires applicants to respond to deficiencies in the application, but these provisions do
not appear to fully address the requirements of40 CFR 51.166(n)(1) and (3). Eleventh, ADEQ's submittal contains

an apparent typographical error inR18- 2-402(F)(1)(c), which includes a crossreference to R18-2-401(20)(b)(iii) rather than R18-2-401(20)(b)(iv). See 40 CFR 51.166(r)(6).

Finally, ADEQ's submittal does not require owners or operators to make information required under 40 CFR 51.166(r)(6) available for review upon request by the Director or the general public pursuant to the requirements in 40 CFR 70.4(b)(3)(viii) as is required by 40 CFR 51.166(r)(7).

2.Restrictions on Area Classifications

40 CFR 51.166(e) contains provisions related to restrictions on area classifications (Class1,11, or II). We have identified several deficiencies in ADEQ's program with respect to these provisions.

First, ADEQ's submittal contains requirements for area classifications in R18-2-217. However, ADEQ's submittal does not completely meet the requirements of40 CFR 51.166(e) and section 162(a) ofthe Act, which require certain areas in existence on August 7, 1977 to be designated as Class I areas. Such designations apply to any boundary changes made to those Class I areas after August 7, 1977. While ADEQ generally includes this requirement atR18-2-217(B), itsrule limits suchboundary changes to those made prior to March 12, 1993. Second, ADEQ's NSR submittal at R18-2-217 does not contain aprovision consistent with the federal regulatory requirement for Class I area redesignations prior to August 7, 1977 in rule R18-2-217 or elsewhere as required by 40 CFR 51.166(e)(2). Even if it isthe case that there are no areas in Arizona that were redesignated Class I prior to August 7, 1977, ADEQ's program must recognize Class I area designations under this provision that
may have been made in other states for which sources within ADEQmay have

an impact. See 40 CFR 51.166(e)(2).

Finally, ADEQ's NSR submittal does
not include a provision that is fully consistent with 40 CFR 51.166(e)(3). While ADEQ's rules generally meet this requirement atR18-2-217(D), thisrule does not fully meet the requirements of 40 CFR 51.166(e)(3) because (1)it is not clear what ismeant in ADEQ's rule by "all other areas" and (2)it does not contain a provision that ensures that ADEQ recognizes federal legislation that specified the area classification of a particular area.
3.Redesignations

40 CFR 51.166(g) contains provisions allowing certain areas classified as Class 1,11, or III to be redesignated to another classification. We have identified several deficiencies in ADEQ's program with these provisions.

First, ADEQ's submittal contains provisions at R18-2-217(A) identifying that attainment and unclassifiable areas in the State shall be designated as Class 1,11, or III. However, this portion ofthe PSD program applies to all areas ofthe State. That is, all areas ofthe State must be designated as Class 1,11, or III irrespective oftheir attainment designation under Section 107 ofthe Act. See 40 CFR 51.166(g)(1).

Second, ADEQ's submittal contains provisions at R18-2-217(E) for allowing the state to redesignate certain areas, but the submittal does not adequately meet the public participation requirements specified in the federal regulation at 40 CFR 51.166(g)(2)(i), which requires a public hearing consistent with the procedures in 40 CFR 51.102. ADEQ's redesignation provisions do not specify the public hearing procedures that will be used. See 40 CFR 51.166(g)(2)(i).

Third, ADEQ's provisions for redesignating areas to Class III do not clearly identify which areas may be designated as Class III as specified in 40 CFR 51.166(g)(3).

Fourth, R18-2-217(E) allows for the redesignation tobe approved by the Governor or the Governor's designee. However, the federal program at40 CFR 51.166(g)(3)(ii) specifically requires the Governor's approval and does not allow for this approval to be delegated. See 40 CFR 51.166(g)(3)(ii).

Fifth, R18-2-217(F)(4) contains a reference to "maximum allowable concentration" which appears torefer to R18-2-218(E). However, R18-2-218(E) references the "ambient air quality standards in this Article." The state's ambient air quality standards donot generally apply in areas outside of Arizona, and ADEQ's NSR submittal does not demonstrate that they would apply outside ofArizona for purposes of R18-2-217(F)(4). See 40 CFR 51.166(g)(3)(iii).

Finally, ADEQ's provisions do not clearly require that a permit application that can onlybe approved ifan area is redesignated to Class III, and material submitted aspart ofthat application,
must be available for public inspection prior to the public hearing onthe redesignation to Class III. See 40 CFR 51.166(g)(3)(iv).

4. Impacts on Class IAreas

40 CFR 51.166(p) contains additional requirements related to protection of Federal Class Iareas. We have identified several deficiencies in ADEQ's program with these provisions. 14052Federal Register/Vol. 80, No. 52/Wednesday, March 18, 2015/Proposed Rules

First, ADEQ's submittal does not address the requirements of40 CFR 51.166(p)(1), but they are generally addressed by existing SIP requirements in R9-3-304(H). However, the existing SIP only requires application information to be submitted to the Federal Land Manager, and does not require that this information be provided to EPA as required by this provision. Consistent with 40 CFR 51.166(p)(2), the Federal Land Manager works in consultation withEPA onthe protection ofClass Ilands.

Second, ADEQ's submittal does not address the requirement under40 CFR 51.166(p)(3), but it is addressed by the existing SIP requirement in R9-3- 304(H)(1). However, the existing SIP contains outdated maximum allowable increases that must be updated. See 40 CFR 51.166(p)(3).

Finally, ADEQ's submittal generally includes the provisions of40 CFR 51.166(p)(4) at R18-2-406(F)(2), but contains the phrase "no significant adverse impacts," which is inconsistent with the federal regulation which requires a demonstration of"no adverse impacts." The addition ofthe word "significant" is somewhat ambiguous in this context, but appears to allow variances under circumstances not allowed under the analogous federal regulation.

5.Public Participation

40 CFR 51.166(q) contains several specific public participation requirements for issuing PSD permits. We have identified several public participation deficiencies in ADEQ's
program.

First, ADEQ's submittal does not

ensure that materials available during the public comment period are available in each region in which the proposed

source wouldbe constructed as required by 40 CFR 51.166(q)(2)(ii). While ADEQ's program at R18-2-330(D)(11) requires these materials to be available
atthe nearest Department office, ADEQ onlyhas two Department offices. As such, itis not clear that in allinstances the public affected by a proposed project would have reasonable access in their region to the materials specified in 40 CFR 51.166(q)(2)(ii).

Second, ADEQ's submittal does not require ADEQ to notify the public of(1) the degree ofincrement consumption that is expected from the source or modification, or (2)the Director's preliminary determination, as required by 40 CFR 51.166(q)(2)(iii).

Third, ADEQ's submittal does not require ADEQ to make the public
comments and the written notification ofits final determination available in the same location as the preliminary documents as required by 40 CFR 51.166(q)(2)(vi) and (viii).

Finally, ADEQ's submittal requires the Director totake final action on an application within one year ofreceipt of

a complete application-R18-2- 402(I)(3). See 40 CFR 51.166(q)(2)(vii). However, ADEQ's program also indicates that a source may begin actual construction once a "proposed final permit" is obtained. See R18-2-402(C) and R18-2-302(G). ADEQ's regulations

are ambiguous as to whether aproposed final permit, as defined in R18-2- 101(114), constitutes final action bythe Director that is subject to administrative and/or judicial review. As EPA has stated previously in the context ofour actions on other State SIP submittals,

we interpret the CAA to require an opportunity forjudicial review ofa decision to grant or deny a PSDpermit, whether issued byEPA orby a State under a SIP-approved or delegated PSD program. 77 FR 65305, 65306, Oct. 26, 2012 (EPA's approval ofthe SanJoaquin Valley Unified Air Pollution Control District's PSD program intothe California SIP); see also 61 FR 1880, 1882. Jan. 24, 1996 (EPA's proposed disapproval ofVirginia's PSD program SIP revision due to State law standing requirements that limitedjudicial review); 72 FR 72617, 72619, Dec. 21, 2007 (in approving South Dakota's PSD program, EPA stated that itinterprets the CAA and regulations to require at minimum an opportunity for state judicial review ofPSD permits). EPA continues to interpret the relevant provisions ofthe Act as described in these prior rulemaking actions. While ADEQ has issued guidance clarifying that ittreats "proposed final permits" as "appealable agency actions," under Arizona law,16 in order to obtain full PSD program approval, ADEQ's regulations must make clear that a

source may notbegin actual construction before a final determination on a PSD permit application ismade bythe Director, which wouldbe subject to administrative and/or judicialreview.

6. Plantwide Applicability Limits

ADEQ's rules contain provisions for using plantwide applicability limits (PALs) in R18-2-412. We have identified the following deficiencies with ADEQ's PALs provisions program

as they relate to the PSD program.

First, neither the ADEQregulatory provisions for PALs at R18-2-412 nor

16See ADEQ memo dated February 10, 2015 related to proposed final permits. ADEQ submitted this memo inits February 23, 2015 supplement. the ADEQregulatory definitions in R18- 2-401 that apply in the context ofmajor

sources and major modifications contain

a definition for majoremissions unitas is required by 40 CFR 51.166(w)(2)(iv). (Thisterm is also not included in the definitions at R18-2-101 or R18-2-301 that ADEQsubmitted for approval as part ofthis action.)

Second, ADEQ's PAL provision for calculating baseline emissions at R18- 2-412(B)(2) does not specify that baseline actual emissions are to include emissions associated not only with operation ofthe unit, but also emissions associated with startup, shutdown and malfunction, as isrequired by 40 CFR 51.166(w)(3)(ii).

Third, ADEQ's PAL provisions at R18-2-412(H) contain an incorrect reference to (H)(4) instead ofthe definition for major modification, and R18-2-412(H)(5) uses "eliminated" where the federal regulation uses "established." See 40 CFR 51.166(w)(9).

Finally, ADEQ's PAL renewal provisions at R18-2-412(I)(1) must contain a reference to subsection (D) of R18-2-412 instead of (F). In addition, R18-2-(I)(4)(a) must reference subsection (E) ofR18-2-412. See 40 CFR 51.166(w)(10).

7.Definitions

ADEQ's submittal contains definitions applicable to the PSD program that do
not fully meet the requirements of40 CFR 51.166(b)(1), which requires each State plan to contain specific definitions for the PSD program. Deviations from the wording are approvable ifthe State specifically demonstrates that the submitted definition is more stringent,

or at least as stringent, in all respects as the corresponding definition in 40 CFR 51.166(b). We have carefully reviewed the definitions used in ADEQ's PSD program as compared with the federal PSD definitions in 40 CFR 51.166(b) and have found that, generally, ADEQ's submittal contains the definitions necessary to implement a PSD program. However, a number ofADEQ's definitions do not meet the requirements of40 CFR 51.166(b)(1) because their wording deviates from the wording in the corresponding federal regulatory definitions in 40 CFR 51.166(b)(1) in a manner that maybe less stringent than the federal definitions, and the State has not demonstrated otherwise.

Majorstationary sourceat 40 CFR 51.166(b)(1)-language from subparagraph 40 CFR 51.166(b)(1)(i)(c)
not included in the definition atR18- 2-101(75). See also discussion below of the definition of "stationary source" in 40 CFR 51.166(b)(5). 14053

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Net emissionsincreaseat 40 CFR 51.166(b)(3)-ADEQ's definition at R18- 2-101(87)(c) identifies that an increase

ordecrease in actual emissions is creditable only to the extentthat the Director has not relied on it in issuing

apermit. However, this definition is broader than the definition in the PSD program, which only specifies that the reviewing authority has not relied on the increase or decrease in issuing a PSD permit. In some respects this makes ADEQ's definition more stringent (decreases), but in other respects less stringent (increases). In addition, the equivalent ofparagraph 40 CFR 51.166(b)(3)(viii) is not included in ADEQ's definition at R18-2-101(87). Stationarysourceat 40 CFR 51.166(b)(5)-the federal regulation at 40 CFR 51.166(b)(5) defines this term as "any building, structure, facility or installation which emits or may emit a regulated NSR pollutant," with "regulated NSR pollutant" alsobeing a federally defined term at 40 CFR 51.166(b)(49), whereas ADEQ's regulation at R18-2-101(39) defines "stationary source" as "any building, structure, facility or installation subject
to regulation pursuant to A.R.S. §49- 426(A) which emits or may emit any air pollutant," with "air pollutant" being

an undefined term in ADEQ's regulation. We note that A.R.S. §49- 426(A) provides a cross-reference to certain exemptions from permitting identified in A.R.S. §49-426(B), specifically agricultural equipment used in normal farm operations and certain fuel burning equipment, which do not appear tobe consistent with the federal PSD definition. The federal definition for stationary source isvery broad and does not exclude these source categories. We agree that itis acceptable for ADEQ to limitits NSR program to certain kinds ofstationary sources, as specified in 40 CFR 51.160(e), but the federal definition for a stationary source in the context ofthe PSDprogram is not the appropriate place for such an exclusion, as it does not allow exclusions for certain source categories.

Majorsourcebaselinedate at40 CFR 51.166(b)(14)-language equivalent to paragraph 40 CFR 51.166(b)(14)(iv) is
not included at ADEQ's definition in R18-2-218(B)(1).

Baselinearea40 CFR 51.166(b)(15)- ADEQ's definition at R18-2-218(D) contains an incorrect reference to R18- 2-217 rather than referring to section 107(d)(1)(A)(ii) or (iii)ofthe Act orthe equivalent; also, language equivalent to that in paragraph 40 CFR 51.166(b)(15)(iii) is not included.

Allowable emissionsat40 CFR 51.166(b)(16)-ADEQ's definition at R18-2-101(13)(b) does not include the "future compliance date" language that is in 40 CFR 51.166(b)(16)(ii) and ADEQ has not demonstrated that itsregulatory language is at least as stringent as the federal definition.

Federallyenforceableat 40 CFR 51.166(b)(17)-ADEQ's definition at R18-2-101(53)(d) identifies that requirements included in permits pursuant to R18-2-306.01 or R18-2- 306.02 are included in the definition of federally enforceable requirements, but excludes those requirements that are identified as "enforceable only by the state." With this action, we approving R18-2-306.01 and R18-2-306.02 into the SIP, making requirements pursuant to these rules federally enforceable. As such, ADEQdoes nothave the discretion to identify some ofthose requirements as only enforceable bythe
state. Completeat 40 CFR 51.166(b)(22)- ADEQ's definition at R18-2-401(4) is missing the second sentence ofthe federal definition.

Significantat 40 CFR 51.166(b)(23)- ADEQ definition at R18-2-101(130)(e)

uses "milligrams" instead of "micrograms" as required inparagraph 40 CFR 51.166(b)(23)(iii).

Projectedactualemissionsat 40 CFR 51.166(b)(40)-ADEQ's definition at R18-2-401(20)(b)(iii) does not specifically require inclusion of emissions from malfunctions inthe determination ofprojected actual emissions, and exempts emissions from

a shutdown associated with a malfunction from such determination, while the federal definition at 40 CFR 51.166(b)(40)(ii)(b) requires that emissions from both shutdowns and malfunctions be included. Subject to regulationat 40 CFR 51.166(b)(48)-this definition is not included in ADEQ's NSR SIP submittal. ADEQ did not adopt a definition forthe
term "subject to regulation" or include such definition as part ofthe NSR SIP submittal, presumably because the federal definition ofthe term contains the requirements ofthe Greenhouse Gas (GHG)Tailoring Rule, and GHGs cannot be regulated under Arizona state law.17 We note, however, that while the GHG program requirements are contained as part ofthe definition ofthe term "subject to regulation," the federal definition ofthis term also contains

17ADEQis currently subject to a Federal Implementation Plan under the PSDprogram for GHGsbecause ADEQ did not adopt a PSD program for the regulation ofGHGs. See 40CFR 52.37. ADEQ's NSR SIP submittal does not attempt to correct this program deficiency, as regulation of GHG emissions currently is not permitted under
State law. See A.R.S. § 49-191. non-GHG-specific program elements for determining when a pollutant is "subject toregulation." As such, ADEQ
must add a definition to its PSD regulations to address these elements of the term "subject toregulation" in order
to obtain full program approval.

RegulatedNSR pollutantat 40 CFR 51.166(b)(49)-ADEQ's regulatory definition at R18-2-101(122) does not include the final two sentences of40 CFR 51.166(b)(49)(i)(a)or the language at 40 CFR 51.166(b)(49)(iv); ADEQ's definition also includes an incorrect cross-reference tohazardous air pollutants listed under R18-2-1101 that is not consistent with the requirements in 40 CFR 51.166(b)(49)(v); and ADEQ's regulatory definition needs to update the July 1, 2010 date in the crossreference to CAA section 108.

8. PM2. 5 Significant Monitoring Concentration

On January 22, 2013, the U.S. DC Circuit Court ofAppeals in SierraClub

v. EPA, 705 F.3d458, vacated the parts oftwo federal PSD rules (40 CFR 51.166(i)(5)(i)(c) and 40 CFR 52.21(i)(5)(i)(c)) establishing a PM2.5 significant monitoring concentration (SMC), finding thatEPA was precluded from using the PM2.5 SMC to exempt permit applicants from the statutory requirement to compile and submit preconstruction monitoring data aspart of a complete PSD application. On December 9, 2013, revisions to 40 CFR 51.166 and 52.21 were published in the Federal Register to remove these vacated rule elements, effective as of that date. See 78 FR 73698.

ADEQ's submittal at R18-2- 407(H)(1)(c) contains the equivalent of the PM2.5 SMC that was vacated by the Court ofAppeals and which has been removed from the federal PSD regulations. As the Court ofAppeals found application ofthis SMC impermissible, and because ADEQ's regulation incorporating this SMC is a separable portion ofADEQ's PSD
program, we are proposing a partial disapproval ofADEQ's submitted PSD program, to disapprove R18-2- 407(H)(1)(c).

9. Definition for Basic Design Parameter

ADEQ's submittal contains a definition forbasic design parameter at R18-2-401(3) thatreflects the definition that EPA originally developed as part of its Equipment Replacement Provisions. See 68 FR 61248 Oct. 27, 2003. However, the definition for basic design parameter, and other elements related to the Equipment Replacement Provisions,

were vacated bythe DCCircuit Court of Appeals in State of New York v. EPA, 

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443 F.3d 880 (D.C. Cir. 2006). While the federal PSD regulations still contain a reference to "basic design parameter," this term is no longer specifically defined under the federal PSD regulations, and application ofthe definition contained in the Equipment Replacement Provisions that were vacated by the Court ofAppeals is inconsistent with federal PSD requirements. As the Court ofAppeals found this Equipment Replacement Provisions and, therefore, this definition, impermissible, and because ADEQ's regulation incorporating this definition is a separable portion of ADEQ's PSD program, we are proposing

apartial disapproval of ADEQ's submitted PSD program, to disapprove R18-2-401(3).

D.Dotherulesmeet theevaluation criteria forNonattainmentNew Source Review?

Part D oftitle Iofthe Act contains the general requirements for areas designated "nonattainment" for the NAAQS, including preconstruction permit requirements for new major

sources or major modifications proposing to construct in such nonattainment areas, commonly referred
to as "Nonattainment New Source Review" or "NA-NSR." EPA's regulations for NA-NSR permit programs are found in 40 CFR 51.165. Most areas under ADEQ's jurisdiction

are currently designated as "attainment"

or "unclassifiable/attainment" for all NAAQS pollutants. However, there are
some areas under ADEQ's jurisdiction that are nonattainment and warrant a NA-NSR program. See 40 CFR 81.303.

R18-2-402 through 405 contain the substantive NA-NSR requirements for review and permitting ofmajor sources and major modifications in nonattainment areas under ADEQ jurisdiction in Arizona. These regulations satisfy mostof the statutory andregulatory requirements for NANSR permit programs, but these rules contain several deficiencies thatthat do
not allow us to fully approve the NANSR program submittal that is the subject ofthis action, as discussed below.

Although ADEQ's NA-NSR program submittal meets most NA-NSR program requirements, we are proposing to disapprove one specific aspect of ADEQ's NA-NSR program relating to the definition of "basic design parameter." The ADEQ ruleprovision that we are proposing to disapprove is directly comparable to a federal NANSR rule provision that has been vacated by a federal court, and we find that itis separable from the remainder ofADEQ's NA-NSR program. Accordingly, we find this provision suitable for disapproval at thistime. This issue is described in more detail below in Section II.D.4.

For most ofthe remainder ofADEQ's NA-NSR program submittal, we are proposing limited approval and limited disapproval. We find thatapproval of ADEQ's updated NA-NSR program, aside from the aspect that is separable and is proposed for disapproval as mentioned above, will substantially strengthen the SIP overall, particularly

as the current SIP-approved NA-NSR program is significantly out ofdate when compared with current federal NA-NSR regulatory requirements as well as current State regulations. See

our discussion in Section Gbelow. However, specific provisions ofthe NANSR SIP program submittal are inconsistent with NA-NSRprogram requirements, and these deficiencies
must be addressed before we canfully approve ADEQ's NA-NSR program into the SIP. The deficiencies that we have identified with ADEQ's NA-NSR program that provide the basis for our limited approval and limited disapproval are described immediately below in Sections II.D.1 through 3.18

1.General Nonattainment NSR Program Requirements

First, as discussed above with respect to ADEQ's PSD program submittal, ADEQ's NA-NSR program submittal often refers to Articles 9 and/or 11 of ADEQ's regulations where the federal regulations refer to 40 CFR parts 60, 61,

or 63; or, similarly, sections 111 or 112 ofthe Act. See R18-2-101(122)(b); R18- 2-401(10); R18-2-402(G)(2); and R18- 2-406(A)(4). Articles 9 and 11 are where ADEQ incorporates by reference the federal regulations in40 CFR parts 60, 61, and 63 (whichEPA implements under sections 111 and 112 ofthe Act). However, these Articles are not in the SIP, have not been submitted for SIP approval, and do not necessarily contain provisions equivalent to allofthe subparts in parts 60, 61, and 63. See 40 CFR 51.165(a)(1)(xiii)-lowest achievable emission rate, (a)(1)(xxxvii)-regulated NSR pollutant, and (a)(1)(xl)-best available control technology. Second, the nonattainment NSR program requirements at 40 CFR

18For one other aspect ofADEQ's NA-NSR SIP submittal, we areproposing limited approval at this time. We cannot determine at this time whether ADEQ's NA-NSR SIP submittal adequately addresses all of elements necessary to satisfy the CAA's titleI, partD, subpart 4 requirements regarding NSR permitting of PM2 .5and PM10 precursors under CAA section 189(e). This issue is discussed indetail in Section II.D.5 below. 51.165(a)(2) require each plan to have a preconstruction review program to satisfythe requirements ofsections 172(c) and 173 ofthe Act. However, as previously discussed in thispreamble, ADEQ's submittal allows a source at R18-2-302(G) and R18-2-402(C) to begin actual construction upon the issuance ofa proposed final permit. ADEQ's program is ambiguous as to whether a proposed final permit, as defined in R18-2-101(114), constitutes final action by the Director. While ADEQ has issued guidance clarifying that ittreats "proposed final permits" as final actions for purposes of preconstruction permitting, 19to obtain full NA-NSR program approval, ADEQ's regulations must make clear that a

source may notbegin actual construction before a final determination on an NA-NSR permit application is made by the Director.

Third, 40 CFR 51.165(a)(3)(ii)(G) requires that credit for emission reductions canbe claimed only to the
extent that the reviewing authority has
not relied on itin issuing any permit under regulations approved pursuant to 40 CFR 51 subpart Ior the State has not relied on itin demonstration of attainment or reasonable further
progress. ADEQ's NSR submittal generally addresses this requirement at R18-2-404(H), but also needs to include references to rules R18-2-302.01 and R18-2-334, which are to be approved as part ofADEQ's NSR regulations under Subpart I.

Fourth, ADEQ's submittal contains an apparent typographical error in R18-2- 402(F)(1)(c), which includes a crossreference to R18-2-401(20)(b)(iii) rather than R18-2-401(20)(b)(iv). This error must be corrected to ensure that the requirement in 40 CFR 51.165(a)(6)(i)(c) for owners and operators to document and maintain a record ofcertain applicability-related information is satisfied.

Fifth, ADEQ's submittal does not require owners or operators to make information required under 40 CFR 51.165(a)(6) available for review upon request bythe Director or the general public pursuant to the requirements in 40 CFR 70.4(b)(3)(viii) asis required by 40 CFR 51.165(a)(7).

Sixth, 40 CFR 51.165(a)(9)(i) requires that increases in emissions shall be offsetby reductions in emissions using

aratio ofemission decreases to emission increases ofat least 1to 1. ADEQ's NANSR submittal contains this requirement at R18-2-404(A), but could

19See ADEQ Memo dated February 10, 2015 related to proposedfinal permits and ADEQ's February 23, 2015 Supplement at 2. 

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be interpreted as establishing the ratio

as increases to decreases, instead of decreases to increases-"emission increases shall be offset by emission decreases at a ratio ofat least 1to 1." In addition, R18-2-404(A) refers to additional offset requirements in R18- 2-405, but does not refer to the offset requirement in R18-2-404(J).

Seventh, 40 CFR 51.165(a)(11) requires emission offsets tobe obtained for the same regulated NSR pollutant, unless interprecursor offsetting is permitted for a particular pollutant, as further specified in the rule. ADEQ's NA-NSR SIP submittal does not address interprecursor offsets, and it is not required to, but the submittal does not contain a specific requirement that offsets must be for the same regulated pollutant.

Eighth, 40 CFR 51.165(b) requires that ADEQ have a preconstruction program that satisfies the requirements ofsection 110(a)(2)(D)(i) ofthe Act for any new major stationary source or major modification that would locate in an attainment area, but would cause or contribute to aviolation of aNAAQS in
any adjacent area. ADEQ'sprogram contains provisions for 40 CFR 51.165(b) at R18-2-406(A)(5)(a)-(b) that generally meet this requirement. However, ADEQ's regulations atR18-2- 406(A)(5)(b) refer to the "Arizona primary or secondary ambient air quality standards," which is not a defined term, whereas the analogous federal program provisions refer to the NAAQS. As a result, ADEQ's program does not fully meet the requirements in 40 CFR 51.165(b)(1) and (2) as ADEQ's regulations do not make clear which standards arebeing referred to, andthe submittal does not demonstrate that such standards would apply to areas outside ofArizona for purposes of ADEQ's NSR review. Similarly, ADEQ's regulation at R18-2-406(A)(5)(a) references the state's ambient air quality standards in Article 2, which would not clearly apply to areas outside of Arizona.

Finally, Section 173(a)(4) ofthe Act requires that NA-NSR permit programs shall provide that permits to construct and operate may be issued if "the Administrator has not determined that the applicable implementation plan is
not being adequately implemented for the nonattainment area in which the proposed source is tobe constructed or modified." However, ADEQ's program does not contain a provision that would prohibit the issuance ofNA-NSR permits in areas where the Administrator has made this determination or that requires that ADEQ conduct a review to ensure that this requirement is met. To obtain full
program approval, ADEQmust add a provision to its NA-NSR program requirements that ensures compliance with CAA section 173(a)(4).

2.Plantwide Applicability Limits

ADEQ's rules contain provisions for using plantwide applicability limits (PALs) in R18-2-412. We have identified the following deficiencies with ADEQ's PALs provisions program

as they relate to the NA-NSR program.

First, ADEQ's provision for PALs does
not specify that modifications under a PAL do not need approval through the nonattainment major NSR program. Only the PSD program ismentioned. ADEQ's submittal does not contain a definition for nonattainment major NSR program (see 40 CFR 51.165(a)(1)(xxx)). ADEQ should either add this definition

or considering referencing R18-2-403. See 40 CFR 51.165(f)(1)(iii)(B). Second, neither the ADEQregulatory provisions for PALs at R18-2-412 nor the ADEQregulatory definitions in R18- 2-401 that apply in the context ofmajor

sources and major modifications contain

a definition for majoremissions unitas is required by 40 CFR 51.165(f)(2)(iv).

Third, ADEQ's PAL provision for calculating baseline emissions at R18- 2-412(B)(2) does not specify that baseline actual emissions are to include emissions associated not only with operation ofthe unit, but also emissions associated with startup, shutdown and malfunction, as is required by 40 CFR 51.165(f)(3)(ii).

Fourth, ADEQ's PAL provisions at R18-2-412(H) contain an incorrect reference to R18-2-412(H)(4) instead of the definition for major modification and R18-2-412(H)(5) uses "eliminated" where the federal regulation uses "established." See 40 CFR 51.165(f)(9).

Finally, ADEQ's program contains incorrect cross-references in meeting the requirements of40 CFR 51.165(f)(1), as follows: ADEQ's PAL renewal provisions at R18-2-412(I)(1) must contain a reference to subsection (D) of R18-2-412 instead of (F), and R18-2- (I)(4)(a)must reference subsection (E) of R18-2-412.

3.Definitions

ADEQ's submittal contains definitions applicable to the nonattainment NSR program that do notfully meet the requirements of40 CFR 51.165(a)(1), which requires each State plan to contain specific definitions for the nonattainment NSR program. Deviations from the wording are approvable ifthe State specifically demonstrates that the submitted definition ismore stringent,

or atleast as stringent, in all respects as the corresponding definition in 40 CFR 51.165(a)(1). We have carefully reviewed the definitions used in ADEQ's nonattainment NSR program as compared with the federal PSD definitions in 40 CFR 51.165(a)(1) and have found that generally, ADEQ's submittal contains the definitions necessary to implement a NA-NSR
program. However, a number ofADEQ's definitions do not meet the requirements of40 CFR 51.165(a)(1) because their wording deviates from the wording in the corresponding federal regulatory definitions in 40 CFR 51.165(a)(1) in a manner that may be less stringent than the federal definitions, and the State has not demonstrated otherwise.

Stationarysourceat 40 CFR 51.165(a)(1)(i)-the federal regulation at 40 CFR 51.165(a)(1)(i) defines this term

as "any building, structure, facility or installation which emits or may emit a regulated NSR pollutant," with "regulated NSR pollutant" alsobeing a federally defined term at 40 CFR 51.165(a)(1)(xxxvii), whereas ADEQ's regulation at R18-2-101(139) defines "stationary source" as "any building, structure, facility or installation subject
to regulation pursuant to A.R.S. §49- 426(A) which emits or may emit any air pollutant," with "air pollutant" being

an undefined term in ADEQ's regulation. However, A.R.S. §49-426(A) provides a cross-reference to certain exemptions from permitting identified in A.R.S. §49-426(B), specifically agricultural equipment used innormal farm operations and certain fuel burning equipment, which do not appear to be consistent with federal NA-NSR definition. The federal definition of stationary source at 40 CFR 51.165(a)(1)(i) isverybroad and does
not exclude these source categories from the definition. We agree that it is acceptable for ADEQ to limit its NSR program to certain kinds of stationary
sources, as discussed in detail above with respect to40 CFR 51.160(e), but the federal definition for a stationary

source in the context ofthe major NANSR program is not the appropriate place for such an exclusion, as it does
not allow exclusions for certain source categories. ADEQ must demonstrate that its definition of stationary source is at least as stringent asthe federal definition at 40 CFR 51.165(a)(1)(i) in all respects.

Majorstationary sourceat 40 CFR 51.165(a)(1)(iv)-language from subparagraph 40 CFR 51.165(a)(1)(iv)(A)(3) not included in the definition at R18-2-101(75); also see comments above on definition of 

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"stationary source" in 40 CFR 51.165(a)(1)(i).

Net emissionsincreaseat 40 CFR 51.165(a)(1)(vi)-The requirement of paragraph 40 CFR 51.165(a)(1)(vi)(E)(3) is not metbecause not allrequirements
to be approved under subpart I are listed (i.e.,R18-2-302.01) inthe definition at R18-2-101(87). In addition, the equivalent ofparagraph 40 CFR 51.165(a)(1)(vi)(G) is not included in ADEQ's definition at R18-2-101(87). Significantat 40 CFR 51.165(a)(1)(x)- ADEQ's definition at R18-2-101(130)(b) refers to R18-2-405 for determining significant emissions in serious and

severe ozone nonattainment areas. The definition for "significant" atR18-2- 405(B) does not use the term "net emissions increase," which is a term defined by the federal regulations at 40 CFR 51.165(a)(1)(vi).

Allowable emissionsat40 CFR 51.165(a)(1)(xi)-ADEQ's definition at R18-2-101(13)(b) does not include the "future compliance date" language that is in 40 CFR 51.165(a)(1)(xi)(B) and (C) and ADEQ has not demonstrated that its regulatory language is at least as stringent as the federal definition.

Federallyenforceableat 40 CFR 51.165(a)(1)(xiv)-ADEQ's definition at R18-2-101(53)(d) identifies that requirements included in permits pursuant to R18-2-306.01 or R18-2- 306.02 are included in the definition of federally enforceable requirements, but excludes those requirements that are identified as "enforceable only bythe state." With this action, we are approving R18-2-306.01 and R18-2- 306.02 into the SIP, making requirements pursuant to these rules federally enforceable. As such, ADEQ does not have the discretion to identify

some ofthose requirements as only enforceable by the state.

RegulatedNSRpollutantat 40 CFR 51.165(a)(1)(xxxvii)-ADEQ's definition is missing this language from paragraph 40 CFR 51.165(a)(1)(xxxvii)(C): "provided that such constituent or precursor pollutant may onlybe regulated under NSR as part of regulation ofthe general pollutant" at R18-2-101(122)(a).

Projectedactualemissionsat 40 CFR 51.165(a)(1)(xxviii)-ADEQ's definition
atR18-2-401(20)(b)(iii) does not specifically require inclusion of emissions from malfunctions in the determination ofprojected actual emissions, and exempts emissions from

a shutdown associated with a malfunction from such determination, while the federal definition at 40 CFR 51.165(a)(1)(xxxvii)(C) requires that emissions fromboth shutdowns and malfunctions be included. 4. Definition for Basic Design Parameter ADEQ's submittal contains a definition forbasic design parameter at R18-2-401(3) thatreflects the definition that EPA originally developed as part of its Equipment Replacement Provisions. See 68 FR 61248, Oct. 27, 2003. However, the definition for basic design parameter, and other elements related to the Equipment Replacement Provisions,

were vacatedby the DC Circuit Court of Appeals in State of New York v. EPA, 443 F.3d 880 (D.C. Cir. 2006). While the federal NA-NSR regulations still contain a reference to "basic design parameter," this term is no longer specifically defined under the federal NA-NSR regulations, and application of the definition contained in the Equipment Replacement Provisions that

were vacatedby the Court ofAppeals is inconsistent with federal NA-NSR requirements. As the Court ofAppeals found this Equipment Replacement Provisions and, therefore, this definition, impermissible, and because ADEQ's regulation incorporating this definition is a separable portion of ADEQ's NA-NSR program, we are proposing a partial disapproval of ADEQ's submitted NA-NSR program, to disapprove R18-2-401(3).

5.Additional Provisions for Particulate Matter Nonattainment Areas
OnJanuary 4, 2013, the U.S. Court of Appeals for the District ofColumbia Circuit, inNatural ResourcesDefense Councilv. EPA,2 0 issued a decision that remanded the EPA's 2007 and 2008 rules implementing the 1997 PM2.5 NAAQS. EPA's 2008 implementation rule addressed by the court decision, "Implementation ofNew Source Review (NSR)Program for Particulate Matter Less Than 2.5 Micrometers (PM 2. 5)" (the 2008 NSR PM2.5Rule),21 promulgated NSR requirements for implementation ofPM2.5in both nonattainment areas (underthe NA-NSR program) and attainment/unclassifiable areas (under the PSD program). The Court ofAppeals found that EPA erred in implementing the PM2.5NAAQS in these rules for nonattainment areas solely pursuant to the general implementation provisions of subpart 1ofpart D oftitle Iofthe CAA, rather than pursuant to the additional implementation provisions specific to particulate matter nonattainment areas in subpart 4. The Court ofAppeals ordered the EPA to "repromulgate these rules pursuant to Subpart 4 consistent with this opinion." 706 F.3d at 437. Although the Court of

20706 F.3d 428 (D.C. Chi. 2013).

2173 FR 28321 May 16, 2008. Appeals declined to establish a deadline for EPA's response to the remand, EPA intends to promulgate new generally applicable implementation regulations for the PM 2.5 NAAQS in accordance with the requirements of subpart 4. In the interim, however, states and EPA still need to proceed with implementation ofthe PM 2.5 NAAQS in

a timely and effective fashionin order
to meet statutory obligations under the CAA and to assure the protection of public health intended by those NAAQS.

ADEQ's NSR SIP submittal generally includes requirements for the PM 2.5 NA-NSR program consistent with the provisions promulgated in the 2008 NSR PM 2. 5 Rule. Specifically, ADEQ's NSR SIP submittal includes the PM 2.5 significant emission rates atR18-2- 101(130), regulation ofcertain PM 2. 5 precursors (S0 2 and NOx) at R18-2- 101(130), the regulation ofPM 1oand
PM 2.5 condensable emissions at R18-2- 101(122)(f), and the emissions offset requirements at R18-2-403(A)(3). Separate and aside from the issues identified above thathave resulted in

our proposing limited approval and limited disapproval ofADEQ's NA-NSR submittal, EPA has determined that it is
not prepared at this time to grant full approval to ADEQ's NSR SIP submittal

as to the PM 2. 5 NA-NSR program requirements, in light ofthe Court's remand of the 2008 NSR PM2.5 Rule, and for the reasons explained below.

EPA isin the process ofevaluating the requirements of subpart 4 as they pertain to NA-NSR. In particular, subpart 4 includes section 189(e) ofthe CAA, which requires the control of major stationary sources ofPM1o precursors (andhence under the court decision, PM 2. 5 precursors) "except where the Administrator determines that such sources do not contribute significantly to PM-10 levels which exceed the standard in the area." Although ADEQ's NSR SIP submittal does include regulation of S0 2 and NOx

as PM 2. 5 precursors, it does not include the regulation ofVOCs or ammonia. Nor does the NSR SIP submittal include a demonstration as to whether or notthe regulation ofVOCs or ammonia is
necessary under section 189(e). The evaluation ofwhich precursors need to be controlled to achieve the standard in

aparticular area is typically conducted in the context ofthe state's preparing and the EPA's reviewing an area's attainment plan SIP. In this case, there

are two designated PM 2. 5 nonattainment

areas in Arizona, the Nogales (portion of Santa Cruz County, AZ) and West Central Pinal (portion ofPinal County, AZ) areas. Both are designated 

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nonattainment for the 2006 annual PM2
.5NAAQS. However, on January 7, 2013 and September 4, 2013, EPA finalized determinations of attainment for these areas, respectively (78 FR 887 and 78 FR 54394), which suspended the requirement for the state to submit,
among other things, an attainment plan SIP for the area. 22Accordingly, PM2.5 attainment plans for SIP approval are not currently before Region 9 for these

areas. As Region 9 does not havebefore it the state's analysis as to which precursors need to be controlled in these areas pursuant to section 189(e) of the Act, as would be generally contained in an attainment plan SIP, it
cannot fully approve as complying with the CAA anonattainment NSR SIP that only addresses a subset ofthe scientific PM2.5precursors recognized byEPA.

On the other hand, while ADEQ's submittal may not yet contain all ofthe elements necessary to satisfy the CAA requirements when evaluated under subpart 4, the NA-NSR SIP submittal represents a considerable strengthening ofthe currently approved Arizona SIP, which does not address NSR permitting for PM2. 5 at all. Therefore, EPA is proposing to grant limited approval to the PM2.5NA-NSR provisions in ADEQ's NSR submittal forthe Nogales andWest Central Pinal PM2.5 nonattainment areas.

For the reasons explained above, EPA is not evaluating at this time whether ADEQ's NA-NSR submittal willrequire additional revisions relating to PM 2.5to satisfythe subpart 4 requirements. Once EPA re-promulgates the Federal PM2. 5 regulations withrespect to NA-NSR permitting in response to the Court's remand, EPA will consider whether a limited disapproval should also be proposed for ADEQ's PM2. 5NA-NSR
program based on this issue.

In addition, section 189(e) ofthe CAA requires that ADEQ's NSR program for PM10 nonattainment areas apply to major stationary sources ofPM1o precursors, except where the Administrator determines that such

sources do not contribute significantly
to PM1olevels which exceed the standard in the area. As discussed below, we have identified one area under ADEQ's jurisdiction, the West Pinal PM10 nonattainment area, for which we are proposing a limited approval with respect to PM1 ounder section 189(e) ofthe Act.

On September 4, 2013, the West Pinal

area was redesignated to nonattainment for the 1987 p.m.10 standard. ADEQ's

22

Priorto the Court's decision,EPA would not have reviewed PM 2.5attainment plan submittals for compliance with Section 189. NSR SIP submittal generally includes NA-NSR requirements for PM10 nonattainment areas such as the PM10 significant emission rate at R18-2- 101(130), the regulation ofPM10 and PM2
. 5 condensable emissions at R18-2- 101(122)(f), and the emissions offset requirements at R18-2-403(A)(3). However, separate and aside from the issues identified above thathave resulted in our proposing limited approval and limited disapproval of ADEQ's NA-NSR submittal, EPA has determined that itis notprepared at this time to grant full approval to ADEQ's NSR SIP submittal as to the PM10 nonattainment NSR program requirements for the West Pinal nonattainment area. The evaluation of which precursors need to be controlled
to achieve the standard in aparticular

area istypically conducted in the
context ofthe state's preparing and the EPA's reviewing ofan area's attainment plan SIP. On February 19, 2014, ADEQ withdrew from EPA's consideration the ArizonaStateImplementationPlan Revisionfor the West PinalCountyPM1o Nonattainment Area (submitted on December 30, 2013). Accordingly, a PM10 attainment plan for WestPinal is
not currentlybefore Region 9. As such, Region 9 does not have before itthe state's analysis as to which precursors need to be controlled in this area pursuant to section 189(e) ofthe Act, as would be generally contained in an attainment plan SIP, and cannot fully
approve as complying with the CAA a nonattainment NSR SIP that does not address scientific PM1oprecursors recognized byEPA.

While ADEQ's submittal may not yet contain all ofthe elements necessary to satisfy the CAA NA-NSR requirements when evaluated under subpart 4,the proposed revisions to ADEQ's NA-NSR program represent a considerable strengthening ofthe currently approved Arizona SIP, which does not address NSR requirements for PM1oat all. Therefore, EPA is proposing to grant limited approval to the PM10 NA-NSR provisions in ADEQ's NSR submittal as they apply to the West Pinal nonattainment area. Once ADEQ submits anew PMo attainment plan for this area, EPA will consider whether a limited disapproval should also be proposed based on this issue.

E.Review of Non-NSR RelatedRules andStatutoryProvisions

In addition to ADEQ's NSR SIP submittal, we are taking action on rules R18-2-311 and R18-2-312. These rules

were submitted to EPA for SIP approval in aseparate submittal on July 28, 2011. We delayed acting on rules R18-2-311 and R18-2-312 in a previous action, and are therefore now evaluating and taking action on the rules. We are also taking action on A.R.S. §49-107, an Arizona statutory provision concerning local delegation of state authority.

First, ADEQ's rule R18-2-311 specifies the test methods and procedures which can be used to determine compliance with requirements established under ADEQ's air program. On October 19, 1984, EPA approved an earlier version ofthis rule into the SIP.23 See 49 FR 41026. The
current submittal, adopted effective November 15, 1993, renumbers the earlier rule and expands on the previous version by listing additional test methods that maybe used to determine compliance. While the current rule improves on the earlier version, we cannot recommend it for full approval into the SIP. We are proposing alimited disapproval because Section D ofthe rule allows the State to approve alternatives to the applicable SIP without EPA approval, in conflict with the requirements ofCAA sections 110(a)(2)(A) and 110(i).24

Second, ADEQ's rule R18-2-312 requires stationary sources to conduct a performance test within 60 days of achieving the capability to operate at its maximum production rate, but no later than 180 days after initial start-up. The rule also specifies that testing shall be conducted under such conditions specified by State, including, but not limited to appropriate test methods, notification to the State, data reduction, records, and number oftest runs. On April 23, 1982 (47 FR 17485) EPA approved aversion ofthis rule into the SIP.25 The current submittal, adopted effective November 15, 1993, renumbers the earlier rule and expands onthe previous versionby including conditions when a test may be stopped and allows compliance tobe determined with continuous emission monitoring as long as the applicable quality assurance procedures are followed. While the
current rule improves onthe earlier version, we cannot recommend it for full approval into the SIP. We are proposing alimited disapproval because Section B ofthe rule allows the State to approve the use ofequivalent and alternative test methods withoutEPA approval, in conflict with CAA sections 110(a)(2)(A) and 110(i).26

23The rule was previously numbered R9-3-310.

24See, e.g., "Guidance Document for Correcting
VOC Rule Deficiencies," U.S. EPA Region 9,April 1991,revised August 21, 2001 (LittleBluebook).

25The rule was previously numbered R9-3-312.

26See, e.g., Little Bluebook. 

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Third, A.R.S. §49-107 is the current Arizona state law thatprovides ADEQ with authority to "delegate to alocal environmental agency, county health department, public health services district ormunicipality any functions,
powers or duties which the director believes can be competently, efficiently andproperly performed by the local agency ifthe local agency accepts the delegation and agrees toperform the delegated functions, powers and duties according to the standards of performance required by lawand prescribed by the director," and other related authorities. This statutory provision establishes that ADEQhas clear authority to delegate various functions under the CAA, including NSR permitting, to county and other local government agencies and, as such,

we find it tobe approvable andpropose to approve itinto the SIP. This provision will replace 7-1-8.3(R9-3- 803)-Delegationof Authority,an older ADEQ currently in the SIP, which we

are proposing to remove fromthe SIP as part ofthis action.

F. Review of Rules andStatutory ProvisionsRequestedTo Be Removed FromtheSIP

In Table 2ofthis preamble we identify the rules and statutory provisions we are proposing to remove

or supersede from the SIP as part ofthis action. ADEQ's existing SIP-approved NSR rules are generally outdated, as we have not acted to approve substantial revisions to ADEQ's NSR rules since the 1980s. Further, the ADEQNSR rules currently in the SIP havebeen repealed for purposes of State law byADEQ. Significant changes have been made to the Act and the underlying implementing federal NSR regulations since our last substantial action on ADEQ's NSR SIP. Therefore, replacing the existing, outdated NSR SIP rules with the updated ADEQrules in this submittal that we propose to approve into the SIP is appropriate and generally

serves as an overall strengthening of Arizona's SIP. In some cases, we approved updated versions ofthese rules into the SIP in previous rulemaking actions, and a few ofthe rules proposed for removal are no longer
necessary for other reasons. Our TSD provides additional detail.

G.Dotherulesmeet theevaluation criteriaunderSection 110() and 193 of theAct?

CAA Section 110(1) states: "Each revision to an implementation plan submitted by a State under this chapter shallbe adoptedby such State after reasonable notice and public hearing. The Administrator shall not approve a revision of a plan ifthe revision would interfere with any applicable requirement concerning attainment and reasonable further progress (as defined in section 7501 ofthis title), or any other applicable requirement ofthis chapter."

With respect to the procedural requirements ofCAA section 110(1), based on our review ofthe public process documentation included in the July 28, 2011, October 29, 2012 andJuly 2, 2014 submittals, we find that ADEQ has provided sufficient evidence of public notice and opportunity for
comment andpublic hearings prior to submittal ofthis SIP revision andhas satisfied these procedural requirements under CAA section 110(1).

With respect to the substantive requirements of section 110(1), as discussed further below, we have determined that our approval ofthe ADEQ NSR SIP Submittal and the other rules and statutory provisions that we

are proposing to act on in this action (includingbut not limited to the rescission ofnumerous existing NSR SIP rules), as described above in this preamble, would strengthen the applicable SIP in most respects. Taken in its entirety, we find that the SIP revision represents a strengthening of ADEQ's minor NSR, PSD, andNA-NSR programs as compared to the existing SIP-approved NSR program for ADEQ that was last substantially revised in the SIP in the early 1980s, and that our approval ofthis SIP submittal would not interfere with any applicable requirement concerning attainment and reasonable further progress (RFP) or any other applicable requirement ofthe Act.

First, this proposed action would
correct a number ofdeficiencies in ADEQ's current SIP-approved NSR program. ADEQ's existing SIP-approved
program does not currently contain these significant program elements: (1) Implementation ofNSR requirements for PM10; (2)implementation ofNSR requirements for PM2. 5; (3)regulation of
NOx as a precursor to ozone; (4) inclusion ofcondensable particular
matter in NSR permitting for determining PM10 and PM2.5 emissions; and (5)ensuring that the construction or modification ofcertain non-major

sources and non-major modifications will (1)not interfere with attainment or maintenance ofthe NAAQS and (2) comply withthe applicable SIP.

Further, ADEQ has also updated its program to provide for additional permitting flexibilities thathave been added to the federal NSR program, such

as PALs and the 2002 NSR Reforms. Second, most ofthe deficiencies identified with the ADEQ rule provisions on which we are taking action fit into one oftwo categories: (1) Deficiencies that relate to an NSR program element thathas been added since ADEQ's NSR program was approved into the SIP (e.g., the deficiency related to the omission ofthe definition for majoremissions unitin the PALs provisions), or (2)deficiencies that exist in the current SIP that were not identified as deficiencies when the provisions were approved into the SIP (e.g., ensuring protection ofthe NAAQS in areas outside ofArizona from stationary source emissions regulated under the NSR program). Therefore, in considering whether our proposed approval ofthe NSR SIP submittal will interfere with attainment or reasonable further progress, we only consider those deficiencies in the first category, as the deficiencies in the second category are already a part ofthe current applicable requirements for attainment and RFP in the Arizona SIP. In many cases, the deficiencies in the second category occurred because ofthe numerous changes to the NSR program since ADEQ's NSR rules were last approved into the SIP. Thatis, language thatmay have been approvable previously isno longer approvable.

The most significant deficiency that

we have identified, as discussed in detail above in thisnotice, is the absence ofprovisions that ensure protection ofthe 2012 PM 2.5NAAQS for the PSD program. This deficiency is the
most likely to affect the substantive requirements ofthe overall application ofthe PSD program, compared to other deficienciesthat we do not expect would significantly affect the review of emission impacts (e.g., administrative requirements for permit issuance). However, the 2012 PM2. 5NAAQS came into effect after ADEQ submitted the NSR SIP submittal to EPA. In addition, although such standard is currently applicable in the context ofthe PSD program, the implementation requirements for this standard are not due until 2016. Accordingly, there are

no applicable requirements in the existing ADEQ SIP-approved NSR program related to this NAAQS that would be affected by the deficiencies in the submitted NSR rules we are approving.

In addition,ADEQ has relaxed its definition of"major stationary source." ADEQ's previous definition applied the PSD and NA-NSR program requirements to existing non-major

sources when a project would cause such a stationary sourceto become a "major stationary source." ADEQ

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revised itsprogram to instead subject existing non-major sources to the major NSR program only ifthe project constitutes a "major stationary source" in and ofitself,consistent with federal NSR program requirements. We do not find this relaxation to interfere with attainment or reasonable further progress because ADEQ is also strengthening its minorNSR program to address emissions fromlarger modifications that do not qualify as major modifications under ADEQ's revised NSR program. While these modifications would no longer be subject to the major NSR program, ADEQ's minor NSR program would nonetheless apply and ensure the modification does not interfere with attainment or RFP.

In summary, we find that, onbalance, the improvements ADEQis makingto its NSR program and otherportions of the SIP that are the subject ofthis section outweigh the deficiencies discussed above as compared to ADEQ's existing SIP-approved NSR program. In addition, we are unaware ofany reliance by ADEQ on the continuation ofany specific aspect ofthe permitrelated rules currently inthe ADEQ portion ofthe Arizona SIP for the purpose ofcontinued attainment or maintenance ofthe NAAQS. Given all these considerations, we propose to conclude that our approval ofthe ADEQ regulations and statute that are the subject ofthis action into the Arizona SIP would not interfere with any applicable requirement concerning attainment and RFP or any other applicable requirement ofthe Act.27

Conclusion.Forthe reasons setforth above, we can approve the ADEQ SIP revision as proposed in this action under section 110(1) ofthe Act.

Section 193 ofthe Act, which was added by the CAA Amendments of 1990, includes a savings clause that provides, in pertinent part: "No control requirement in effect, or required to be adopted by an order, settlement agreement, or plan in effect before November 15, 1990, in any area which is a nonattainment area for any air pollutant maybe modified after

27Our analysis and conclusion here also apply to

our approval ofR18-2-311 and R18-2-312, which

are not generally related to NSR permitting. We
note that theserules do not contain any substantive changes inthe procedures for performance tests or test methods as compared with the analogous rules in the current SIP. Similarly, ouranalysis and conclusion herealso extends to our approval of A.R.S. §49-107 into the SIP. The provisions in this
state statute relate specifically to local delegation of
state authority and thus would notinterfere with
any applicable requirement concerning attainment and RFP or anyother applicable requirement ofthe Act. November 15, 1990, in any manner unless the modification insures equivalent or greater emission reductions ofsuch air pollutant."

We find that the provisions included in ADEQ's NSR SIP submittal would

ensure equivalent or greater emission reductions compared to the SIPapproved NSR program in the nonattainment areas under ADEQ's jurisdiction. In particular, the NSR provisions in ADEQ's NSR SIP submittal cover stationary sources in

areas that are nonattainment for the PM10, PM2. 5 and 1-hr SO 2NAAQS. ADEQ's current SIP-approved NSR program was approved prior to EPA establishing these NAAQS and the
current NSR provisions in the SIP do
not reference the current, recently SIPapproved Arizona air quality standards that are comparable to these NAAQS. In addition, ADEQ's updated NSRrules and our action to approve them into the SIP will expand ADEQ'sreview of minor sources in nonattainment areas to require review ofsmaller sources. We therefore conclude that ADEQ's NSR SIP submittal will provide for equivalent or greater emissions reductions as compared to the existing SIP-approved ADEQNSR program for the nonattainment pollutants PM10, PM2. 5 and SO2. Conclusion.For the reasons set forth above, we can approve the submitted NSR program under section 193 ofthe Act.

H. Conclusion

For the reasons stated above and explained further in our TSD, we find that the submitted NSR rules satisfy
most ofthe applicable CAA and regulatory requirements for minor NSR, PSD, and nonattainment NSR permit programs under CAA section 110(a)(2)(C) and parts C and D oftitle I ofthe Act but also contain certain deficiencies that prevent us from proposing a full approval ofthe NSR SIP submittal. Therefore, we are proposing a limited approval and limited disapproval ofthe submitted NSR rules. We do sobased also on our finding that, while the rules do not meet all ofthe applicable requirements, the rules would represent an overall strengthening ofthe SIP by clarifying and enhancing the NSR permitting requirements for major and minor stationary sources under ADEQ's jurisdiction in Arizona. In addition, we

are also proposing to remove the existing statutes and rules listed in Table 2from the SIP, which are outdated and mostlybeing superseded by our proposed action. As discussed above, we are proposing apartial disapproval oftwo elements ofADEQ's program, which have been vacated from the PSD program (andis one case also from the NA-NSR program)by the
courts. We are also proposing alimited approval ofADEQ's nonattainment NSR program for the Nogales and West Central Pinal PM2.5nonattainment areas and the West Pinal PM1ononattainment

area under section 189(e) ofthe Act. Finally, we are proposing a limited approval and limited disapproval oftwo ADEQ rules relating to test methods and procedures and performance tests, and proposing to approve into the SIP an Arizona statutory provision relating to local delegation of state authority.

III.Public Comment andProposed Action

Pursuant to section 110(k) ofthe CAA and for the reasons provided above, EPA is proposing a limited approval and limited disapproval ofrevisions to the ADEQ portion ofthe Arizona SIP that govern preconstruction review and the issuance ofpreconstruction permits for stationary sources, including the review and permitting ofmajor sources and major modifications under parts C and D oftitle Iofthe CAA. Specifically, EPA is proposing a limited approval and limited disapproval ofthe new and amended ADEQregulations listed in Table 1, above, as a revision to the ADEQ portion ofthe Arizona SIP. We

are also proposing to remove the existing statutes and rules listed in Table 2from the SIP, which are outdated and mostly being superseded by our proposed action. In addition, we

are also proposing to partially disapprove two provisions ofADEQ's NSR program that havebeen vacated by the courts. We are proposing a limited approval ofADEQ's nonattainment NSR program in certain nonattainment areas under section 189 ofthe Actrelated to PM10 and PM2.5precursors. Finally, we

are proposing a limited approval and limited disapproval oftwoADEQ rules relating to test methods andprocedures and performance tests, and proposing to approve into the SIP an Arizona statutory provision relating to local delegation ofstate authority.

EPA isproposing this action because, although we find that the new and amended rules meet most ofthe applicable requirements for such permit programs and that the SIP revisions improve the existing SIP, we have found certain deficiencies that preventfull approval, as explained further in this preamble and in the TSD for this rulemaking. The intended effect ofour proposed limited approval and limited disapproval action isto update the applicable SIP with current ADEQ 

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regulations and to set the stage for remedying deficiencies in these regulations.

Iffinalized as proposed, our limited disapproval action would trigger an obligation onEPA to promulgate a Federal Implementation Plan unless the State ofArizona corrects the deficiencies, and EPA approves the related plan revisions, withintwo years ofthe final action. Additionally, for those deficiencies thatrelate to the Nonattainment NSR requirements under part D oftitleI ofthe Act, the offset sanction in CAA section 179(b)(2) would apply in the ADEQ nonattainment areas 18 months after the effective date ofa final limited disapproval, and the highway funding sanctions in CAA section 179(b)(1) would apply in these areas six months after the offset sanction is imposed. Neither sanction will be imposed under the CAA ifArizona submits and we approve, prior to the implementation of the sanctions, SIP revisions that correct the deficiencies that we identify in our final action. The EPA intends to work with ADEQto correct the deficiencies identified in this action in a timely

manner.

We will accept comments from the public on this proposed action for the
next 30 days.

IV. Incorporation by Reference

In this rule, the EPA is proposing to include in a final EPA rule regulatory
text that includes incorporation by reference. In accordance with requirements of 1CFR 51.5, the EPA is proposing to incorporate by reference the ADEQrules and Arizona statutory provisions listed in Table 1ofthis preamble. The EPA has made, and will continue to make, these documents generally available electronically through www.regulations.govand/orin hard copy atthe appropriate EPA office (see the ADDRESSES section ofthis preamble for more information).

V. Statutory and Executive Order Reviews

A. Executive Order12866:Regulatory PlanningandReviewandExecutive Order13563:ImprovingRegulationand RegulatoryReview

This proposed action is not a "significant regulatory action" under the terms ofExecutive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

B. Paperwork ReductionAct
This action does not impose an information collection burden under the provisions ofthe Paperwork Reduction Act, 44 U.S.C. 3501 etseq. Burdenis defined at 5CFR 1320.3(b).

C.RegulatoryFlexibility Act
The Regulatory Flexibility Act (RFA) generally requires an agency to conduct

a regulatory flexibility analysis ofany rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule willnot have a significant economic impact on

a substantial number of small entities. Small entities include smallbusinesses, small not-for-profit enterprises, and small governmental jurisdictions.

This rule will not have a significant impact on a substantial number of small entities because SIP approvals or disapprovals under section 110 and subchapter I ofthe Clean AirAct donot create any new requirements but simply approve or disapprove requirements that the State is already imposing. Therefore, because EPA's proposed limited approval/limited disapproval does not create any new requirements, I certify thatthis action will not have a significant economic impact on a substantial number of small entities.

Moreover, due to the nature ofthe Federal-State relationship under the Clean Air Act, preparation offlexibility analysis would constitute Federal inquiry into the economic reasonableness ofState action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds. UnionElectricCo., v. U.S. EPA,427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

D. UnfundedMandatesReformAct

Title II ofthe Unfunded Mandates Reform Act of 1995 (UMRA), 2U.S.C. 1531-1538, requires Federal agencies, unless otherwise prohibited by law,to

assess the effects oftheirregulatory actions on State, local, and tribal governments and the private sector. Federal agencies must also develop a plan to provide notice to small governments that might be significantly

or uniquely affected by any regulatory requirements. The plan must enable officials ofaffected small governments to have meaningful and timely input in the development ofEPA regulatory proposals with significant Federal intergovernmental mandates and must inform, educate, and advise small governments on compliance with the regulatory requirements.

This proposed rule does notinclude

a Federal mandate that may result in estimated costs of$100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector in any one year. Thus, this rule is not subject to the requirements of section 202 or 205 of UMRA. This Federal action proposes to approve and disapprove pre-existing requirements under State or local law, and imposes no newrequirements.

This proposed rule is also not subject
to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. This proposed rule does not impose regulatory requirements on any government entity.

E.Executive Order13132,Federalism

This action does not have federalism implications. It will nothave substantial direct effects on the states, on the relationship between the national government and the states, or in the distribution ofpower and responsibilities among the various levels ofgovernment, as specified in Executive Order 13132. In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed action from State and local officials.

F.Executive Order13175, Coordination WithIndian TribalGovernments

Under Executive Order 13175 (65 FR 67249, November 9, 2000), EPA maynot issue a regulation thathas tribal implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the federal government provides the funds necessary topay the direct compliance
costs incurred by tribal governments, or EPA consults with tribal officials early in the process ofdeveloping the proposed regulation and develops a tribal summary impact statement.

This proposed rule does not have tribal implications, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule. EPA specifically solicits additional
comment on this proposed rule from tribal officials. The SIP is not approved
to apply on any Indian reservation land

orin any other area where EPA or an Indian tribe has demonstrated that a tribe hasjurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175.

G.Executive Order13045,Protectionof ChildrenFromEnvironmentalHealth Risks andSafetyRisks

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as 

### 14061Federal Register/Vol. 80, No. 52/Wednesday, March 18, 2015/Proposed Rules

applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 ofthe Executive Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045, because it proposes to approve a State rule implementing a Federal standard.

H. Executive Order13211,Actions That Significantly Affect EnergySupply, Distribution,or Use

This rule is not subject to Executive Order 13211, "Actions Concerning Regulations That Significantly Affect Energy Supply,Distribution, or Use" (66 FR 28355, May 22, 2001) because itis
not a significant regulatory action under Executive Order 12866.

L NationalTechnologyTransferand AdvancementAct

Section 12(d) ofthe National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104- 113, 12 (10) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards (VCS) in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. VCS are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that

are developed or adoptedby the VCS bodies. The NTTAA directs EPA to provide Congress, through annual reports to OMB, with explanations when the Agency decides notto use available and applicable VCS. EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use ofVCS.

J.Executive Order12898:Federal Actions ToAddressEnvironmental Justicein MinorityPopulations and Low-Income Population

Executive Order (EO) 12898 (59FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law,to make environmental justice part oftheir mission by identifying and addressing,

as appropriate, disproportionately high and adverse human health or environmental effects oftheirprograms, policies, and activities on minority populations and low-income populations in the United States.

EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects

onminority or low-income populations because it does not change the level of environmental protection for any affected populations.

Dated: March 4, 2015. JaredBlumenfeld, RegionalAdministrator, RegionIX.
[FRDoe. 2015-06143 Filed 3-17-15; 8:45 am]

BILLING CODE 6560-50-P

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Part 52 [EPA-R07-OAR-2015-0123; FRL-9924-54- Region 7]
Approval and Promulgation of Implementation Plans; State of Missouri,Construction Permits Required

AGENCY: Environmental Protection Agency. ACTION: Proposed rule.

SUMMARY: The Environmental Protection Agency (EPA) is proposing to approve revisions to the State Implementation Plan (SIP) for the State ofMissouri submitted on October 2,2013. This proposed rulemaking will amend the SIP to update the construction permits rule to incorporate by reference recent EPA actions related toplantwide applicability limitations (PALs) for greenhouse gases (GHGs) and to correct the definition of "regulated NSR pollutant." Other revisions include modifying the notification period for initial equipment start-up and clarifying de minimis permit air quality analysis requirements.
DATES: Comments mustbe received on

or before April 17, 2015. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R07- OAR-2015-0123, by one ofthe following methods:

1. www.regulations.gov. Follow the on-line instructions for submitting
comments.

2. Email:Higbee.paula@epa.gov. 3.MailorHandDelivery:Paula Higbee, Environmental Protection Agency, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219.

Instructions:Direct your comments to Docket ID No. EPA-R07-OAR-2015- 0123. EPA's policy isthat all comments received willbe included in the public docket without change and may be made available online at www.regulations.gov,including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit through www.regulations.govor email information that you consider to be CBI

orotherwise protected. The www.regulations.govWeb site is an "anonymous access" system, which

means EPA will not know your identity

orcontact information unless you provide itin the body ofyour comment. Ifyou send an email comment directly
to EPA without going through www.regulations.gov,your email address will be automatically captured and included as part ofthe comment that isplaced in the public docket and made available on the Internet. Ifyou submit an electronic comment, EPA recommends that you include your

name and other contact information in the body ofyour comment andwith any disk orCD-ROM you submit. IfEPA
cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may notbe able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, andbe free of any defects or viruses.

Docket:All documents in the docket

are listed in the www.regulations.gov index. Although listed in the index,

some information is not publicly available, i.e., CBIor other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in www.regulations.govorin hard copy at the Environmental Protection Agency, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219. The Regional Office's official hours ofbusiness are Monday through Friday, 8:00 to 4:30 excluding legal holidays. The interested persons wanting to examine these documents should make an appointment with the office at least 24hours in advance.

FOR FURTHER INFORMATION CONTACT: Paula Higbee, Environmental Protection Agency, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219 at 913-551-7028

orby email at Higbee.paula@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document "we," "us,"

or "our" refer to EPA. This section provides additional information by addressing the following:

I. What is being addressed in this document? II.Background III. Have the requirements for approval ofa SIP revisionbeenmet? 

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