TECHNICAL SUPPORT DOCUMENT 

30 TAC Chapter 116, Subchapter B 

Use of Emission Reductions in New Source Review Permitting 

§§ 116.116(f), 116.174, 116.175 

 

July 25, 2011

FOR FURTHER INFORMATION CONTACT: Ms. Erica Le Doux, United States 

Environmental Protection Agency Region 6, Air Permits Section (6PD-R), 1445 Ross Avenue, 

Dallas, Texas 75202-2733, (214) 665-7265. 
2

Subject: 30 TAC Chapter 116, Subchapter B, Use of Emission Reductions in New 

Source Review Permitting, §§ 116.116(f), 116.174, 116.175 

Contents:

I. Executive Summary 

II. Summary of State Submittals 

III. Technical Review of State Submittals 

IV. Conclusion 
3

I. Executive Summary

What actions are evaluated in this Technical Support Document?

This technical support document (TSD) reviews severable portions of three proposed revisions to 

the Texas State Implementation Plan (SIP) concerning the use of emission credits in the New 

Source Review (NSR) Permitting Program. This review will determine if the revisions are 

consistent with the requirements of the Clean Air Act and EPA’s policy and guidance. 

August 31, 1993

• On August 16, 1993 the Texas Air Control Board (TACB)1

 adopted revisions to Regulation 

VI, Concerning Control of Air Pollution by Permits for New Construction or Modified 

Sources, including the adoption of new sections 116.174 and 116.175 concerning the use of 

emission reductions in NSR permitting. Governor Ann Richards submitted these revisions to 

the Texas SIP in a letter dated August 31, 1993. 

• On August 16, 1993, the TACB also adopted other revisions to Regulation VI to reorganize 

the permitting section. With the exception of the revisions to section 116.410 concerning 

emergency orders, EPA has already acted on the other components of the 1993 SIP submittal. 

EPA is under a Consent Decree to take final action on the Emergency Order provisions no 

later than December 31, 2012. 

• The revisions to sections 116.174 and 116.175 are severable from the remainder of the 1993 

submittal and are the only portion of the 1993 submittal under review in this document. 

 

July 22, 1998

• On June 17, 1998, the Texas Natural Resource Conservation Commission (TNRCC)2

adopted new section 116.116(f) concerning the use of discrete emission reduction credits in 

NSR permitting and revisions to section 116.174. Governor George W. Bush submitted 

these provisions as a revision to the Texas SIP in a letter dated July 22, 1998, for rule project 

number 98001-116-AI. 

• New section 116.116(f) is severable from the remainder of the submittal because it addresses 

the use of discrete emission reduction credits in NSR permitting. 

• The revision to section 116.174 is severable from the remainder of the submittal because it 

addresses the criteria used by the Executive Director to authorize the use of emission 

reductions in NSR permitting. 

• On June 17, 1998, the TNRCC also adopted other amendments to Subchapters A through D, 

F, and G of Chapter 116. These amendments were also submitted by Governor Bush as part 

of rule project number 98001-116-AI. With the exception of sections 116.311(a), 116.312, 

and 116.620, EPA has already taken final actions on this submittal. 

                                                           

1

 The Texas Air Control Board (TACB) is a predecessor name for the Texas Commission on Environmental Quality. 

The remainder of this document will refer to actions taken by the TCEQ to promote clarity. 

2

 The Texas Natural Resource Conservation Commission (TNRCC) is a predecessor name for the TCEQ. The 

remainder of this document will refer to actions taken by the TCEQ to promote clarity. 
4

• EPA is under a Consent Decree to take final action on section 116.620 for Installation and/or 

Modification of Oil and Gas Facilities no later than October 31, 2011. EPA plans to act on 

this SIP in a separate action. 

• EPA will address section 116.311(a), concerning qualified facilities for permit renewals, in a 

later action when the subsequent submissions of the qualified facilities program are 

addressed. 

• EPA will address section 116.312, concerning public participation for permit renewals, in a 

later action when subsequent submissions for public participation are addressed. 

October 5, 2010

• On September 15, 2010, the TCEQ adopted revisions to section 116.116(f) to update internal 

cross-references. Bryan W. Shaw, Chairman of the TCEQ, submitted these revisions to the 

Texas SIP in a letter dated October 5, 2010. 

• On September 15, 2010, the TCEQ also adopted amendments to the qualified facilities 

program. These revisions are severable from the amendments to section 116.116(f) and will 

be addressed in a later rulemaking. 

 
5

II. Summary of State Submittals

August 31, 1993 Submittal

• Section 116.174 – Determination by Executive Director to Authorize Reductions 

The TCEQ adopted section 116.174 on August 16, 1993, to provide the criteria by which the 

Executive Director will determine whether emission reductions can be used for purposes of 

NSR permitting. Section 116.174 requires that the Executive Director approve reductions for 

use pursuant with requirements set forth in SIP-approved section 116.170. Additionally, any 

emission reductions approved for use by the Executive Director must be made enforceable 

permit conditions. 

• Section 116.175 – Recordkeeping 

The TCEQ adopted new section 116.175 on August 16, 1993, to establish that the 

recordkeeping burden for the generation and use of emission reductions in NSR permitting is 

that of the applicant. The TCEQ will only maintain records associated with the permit 

application and files. The permit applicant is responsible for making all records related to the 

emission reductions available upon request by the Executive Director. 

July 22, 1998 Submittal

• Section 116.116(f) – Use of credits 

The TCEQ adopted new section 116.116(f) on June 17, 1998, to provide that DERCs 

generated under the commission’s banking and trading provisions at 30 TAC former Section 

101.29 can be used to exceed permit allowables, if all applicable requirements of section 

101.29 are satisfied. The use of DERCs cannot be used to authorize any physical changes to 

a facility. 

• Section 116.174 – Determination by Executive Director to Authorize Reductions 

The TCEQ adopted amendments to section 116.174 on June 17, 1998, to remove outdated 

references to the Texas Air Control Board, and to update references to other sections of the 

Texas NSR permitting regulations where emission reductions can be used in permits. 

October 5, 2010 Submittal

• Section 116.116(f) – Use of credits 

The TCEQ adopted amendments to section 116.116(f) on September 15, 2010, to update the 

outdated references to section 101.29 to the current SIP-approved section 101.376. 
6

III. Technical Review of State Submittal

This technical review of the August 31, 1993, submittal of sections 116.174 and 175; the July 22, 

1998, submittal of sections 116.116(f) and revisions to 116.174; and the October 5, 2010, 

submittal of revisions to section 116.116(f) consists of a comparison between the relevant CAA 

requirements and the corresponding sections in the SIP submittal. Each SIP submittal is 

separately reviewed for completeness as a SIP submittal under Part 51, Appendix V. Next, a 

section-by-section review of the three submittals in comparison to 40 CFR Part 51 is presented to 

determine whether the submittals satisfy the requirements for preparation, adoption, and 

submittal of a SIP revision. Then the three proposed SIP revisions are analyzed with respect to 

the current SIP-approved NSR program and subsequent revisions. A comparison of the three 

proposed SIP revisions with section 110(l) of the CAA is presented to determine whether the 

proposed revisions interfere with any applicable CAA provisions. These analyses produce a 

written evaluation that will be used to make a determination of whether or not the provisions 

concerning emission reductions in NSR permitting in the August 31, 1993, July 22, 1998, and 

October 5, 2010, SIP submittals are in agreement with the CAA, other EPA policies or guidance. 

A. Part 51, Appendix V Evaluation 

1. August 31, 1993 SIP Submittal 

2. July 22, 1998 SIP submittal 

3. October 5, 2010 SIP Submittal 

B. Review with respect to Part 51 

C. Section-by-Section Review 

D. Review with respect to Section 110(l) of CAA 
7

III.A. Part 51, Appendix V Evaluation 

1. Evaluation of the August 31, 1993 SIP Submittal with respect to Part 51, Appendix 

V 

The criteria for completeness determination are found in Appendix V to Part 51 - Criteria for 

determining the completeness of plan submissions and are outlined below: 

1.0 Purpose: This appendix V sets forth the minimum criteria for determining whether a 

State implementation plan submitted for consideration by EPA is an official submission 

for purposes of review under § 51.103. 

1.1 The EPA shall return to the submitting official any plan or revision thereof which fails to 

meet the criteria set forth in this appendix V, and request corrective action, identifying 

the component(s) absent or insufficient to perform a review of the submitted plan. 

1.2 The EPA shall inform the submitting official whether or not a plan submission meets the 

requirements of this appendix V within 60 days of EPA's receipt of the submittal, but no 

later than 6 months after the date which the State was required to submit the plan or 

revision. If a completeness determination is not made by 6 months from receipt of a 

submittal, the submittal shall be deemed complete by operation of law on the date 6 

months from receipt. A determination of completeness under this paragraph means that 

the submission is an official submission for purposes of §51.103. 

The attached checklist outlines the basic criteria included under 2.1, 2.2, and 2.3 of Appendix V. 
8

SIP Completeness Checklist for the August 31, 1993 SIP Submittal

Rule Log No: Regulation VI General Rules and Standard Exemption List 

Administrative Materials (2.1) 

1. The package is sent with a formal submittal letter from the Governor or his or her 

designee requesting EPA's approval of the revision. 

The SIP revision was submitted by a letter from Governor Ann W. Richards, dated August 

31, 1993. The SIP submittal was received by EPA Region 6 External Affairs on October 

1, 1993. 

2. Evidence is included that the State has adopted the revision in the State code or body of 

regulations, or that the State has issued the permit, order, consent agreement (hereafter 

document) in final form. This evidence would include the date of adoption or final 

issuance and the effective date of revision, if different from adoption/issuance date. 

The revisions were adopted by the Texas Air Control Board on August 16, 1993, and 

became effective September 13, 1993. 

3. Evidence is included that the State has necessary legal authority under State law to adopt 

and implement the revision, e.g., a citation of the appropriate State authority. 

The authority for promulgating changes to the Texas State Implementation is found in the 

Texas Clean Air Act, Chapter 382 of the Texas Health and Safety Code. 

4. A copy is included of the actual regulation or document submitted for approval and 

incorporation by reference into the SIP including an indication of the changes made to the 

existing approved plan where applicable. The submittal shall be a copy of the official 

State regulation document signed, stamped, and dated by the appropriate State official 

indicating that it is fully enforceable by the State. The effective date of the regulation 

document shall, whenever possible, be indicated in the document itself. 

 

The August 31, 1993, submittal included a copy of the official State regulation document, 

submitted by Governor Ann Richards. 

5. Evidence is included that the State followed all the procedural requirements of its laws 

and/or its constitution in the conducting and completing the adoption/issuance of the 

plan. 

The SIP submittal package included a certification that demonstrated the SIP submittal 

was developed pursuant to 40 CFR 51.104. 
9

6. Evidence is included that public notice was given of the proposed changes consistent 

with the procedures approved by EPA, including the date of publication of such notice, 

(e.g., notarized or certified copies of any public notices published in newspapers). (The 

notice should be at least 30 days prior to the public hearing(s). 

Notices of public hearings were published in the following newspapers on the date listed: 

• Austin American Statesman: February 11, 1993 

• El Paso Times/Herald Post: February 11, 1993 

• Fort Worth Star Telegram: February 12, 1993 

• Houston Chronicle: February 10, 1993 and March 12, 1993 

• Lubbock Avalanche-Journal: February 11, 1993. 

A public hearing was held in Austin, Texas, on March 16, 1993. 

7. A certification is included indicating that public hearing(s) was/were held in accordance 

with the information provided in the public notice(s) and the State's laws and 

constitution, if applicable. 

An order adopting revisions to the SIP was included. This order states that the public 

hearing was conducted pursuant to Texas Health and Safety Code § 382.017, Texas 

Government Code Chapter 2001, and 40 CFR § 51.102. 

8. A compilation of public comments and the State's response is included. 

The SIP submittal package did include a compilation of comments. TCEQ received 

written testimony from 46 parties during the comment period, including EPA Region 6. 

Oral testimony was received from 19 parties during the March 16, 1993 public hearing. 

Technical Support (2.2) 

The State should include the following technical information in its SIP revision request package. 

1. Identification of all regulated pollutants affected by the revision is included. 

The SIP submittal addresses the use of emission reductions in NSR permitting; therefore 

the SIP submittal has the potential to address all regulated NSR pollutants. 

2. Identification of the locations of affected sources including the EPA 

attainment/nonattainment designation of the locations and the status of the attainment 

plan for the affected area(s) is included. 

The provisions to use emission reductions in NSR permitting can be applied statewide 

based on relevant permitting regulations for a specific area. 
10

3. Quantification of the changes in SIP allowable emissions from the affected sources is 

included. (Examples include estimates of changes in current actual emissions from 

affected sources and/or, where appropriate, quantification of changes in actual emissions 

from affected sources through calculations of the differences between certain baseline 

levels and allowable emissions anticipated if the revisions were approved.) 

The provisions for using emission reductions in NSR permitting do not need to include 

quantification of the changes in SIP allowable emissions from the affected sources. The 

mechanics of the NSR permitting process ensure appropriate amounts of permitted 

emissions are approved. 

4. Demonstration is included that the NAAQS/PSD increments/RFP demonstration and 

visibility as applicable would be protected if the revision were approved and 

implemented. 

The provisions for using emission reductions in NSR permitting do not need to include a 

demonstration that NAAQS/PSD increments/RFP/visibility is protected. The emission 

reduction provisions, when used in the NSR permitting process, will be protective of the 

NAAQS/PSD increment/RFP/visibility as appropriate. 

5. FOR REDESIGNATIONS: 

 a. Is there a fully approved maintenance plan for the primary ambient air quality 

standards for at least 10 years as required by §175A of the Clean Air Act? 

 Not applicable. 

 b. Are contingency measures included? 

 Not applicable. 

6. Modeling information, if applicable, is required to support the proposed revision. 

Modeling information is not necessary to support this SIP revision. Dispersion modeling 

is required as part of the NSR permitting process, but is not part of the use of emission 

reductions. 

7. Evidence is included where necessary, that emission limitations are based on continuous 

emission reduction technology (e.g., add-on controls, industrial/process equipment 

designs, reformulated materials, etc.). 

The use of emission reductions in NSR permitting does not in itself establish emission 

limitations. The NSR permitting program will implement emission limitations on a 

permit-by-permit basis as appropriate. 
11

8. Evidence is included indicating that a SIP revision contains emission limitations, work 

practice standards, and recordkeeping/reporting requirements to ensure stated emission 

levels. 

The emission reduction provisions do include a recordkeeping component for the use of 

the emission reductions. Additionally, each individual NSR permit will include separate 

emission limitations, work practice standards and recordkeeping/reporting requirements 

sufficient to ensure permitted emission levels. 

9. Compliance/enforcement strategies including how compliance will be determined in 

practice (including at what frequency). 

The emission reduction provisions do not need to include compliance/enforcement 

strategies. Compliance/enforcement of the NSR permitting program will be determined 

on a permit-by-permit basis. 

10. As appropriate, special economic and technological justifications are included per 

applicable EPA policies or an explanation why such justifications are not necessary 

should be included. For example, requests for alternative RACT may require such 

justification. 

 These justifications are not necessary for this SIP revision. 

The August 31, 1993 SIP submittal (Rule Project No. Regulation VI General Rules and 

Standard Exemption List) meets the completeness criteria established in 40 CFR part 51, 

Appendix V. 

 
12

III.A. Part 51, Appendix V Evaluation 

2. Evaluation of the July 22, 1998, SIP submittal with respect to Part 51, Appendix V 

Part 51, Appendix V Completeness Checklists 

The criteria for completeness determination is Appendix V to Part 51 - Criteria for determining 

the completeness of plan submissions and is outlined below: 

1.0 Purpose: This appendix V sets forth the minimum criteria for determining whether a 

State implementation plan submitted for consideration by EPA is an official submission 

for purposes of review under § 51.103. 

1.1 The EPA shall return to the submitting official any plan or revision thereof which fails to 

meet the criteria set forth in this appendix V, and request corrective action, identifying 

the component(s) absent or insufficient to perform a review of the submitted plan. 

1.2 The EPA shall inform the submitting official whether or not a plan submission meets the 

requirements of this appendix V within 60 days of EPA's receipt of the submittal, but no 

later than 6 months after the date which the State was required to submit the plan or 

revision. If a completeness determination is not made by 6 months from receipt of a 

submittal, the submittal shall be deemed complete by operation of law on the date 6 

months from receipt. A determination of completeness under this paragraph means that 

the submission is an official submission for purposes of §51.103. 

The attached checklist outlines the basic criteria included under 2.1, 2.2 and 2.3 of Appendix V. 
13

SIP Completeness Checklist for the July 22, 1998 SIP Submittal

Rule Log No: 98001-116-AI

When preparing a SIP revision request, the SIP reviewer should go through this list to help 

identify that the package submitted to EPA is complete. States can use the check list to assure 

SIP submittals meet Appendix V criteria. 

Administrative Materials (2.1) 

1. The package is sent with a formal submittal letter from the Governor or his or her 

designee requesting EPA's approval of the revision. 

The SIP revision was submitted by a letter from Governor George W. Bush, dated July 

22, 1998. 

2. Evidence is included that the State has adopted the revision in the State code or body of 

regulations, or that the State has issued the permit, order, consent agreement (hereafter 

document) in final form. This evidence would include the date of adoption or final 

issuance and the effective date of revision, if different from adoption/issuance date. 

The revisions were adopted by the Texas Natural Resource Conservation Commission on 

June 17, 1998, and became effective July 8, 1998. 

3. Evidence is included that the State has necessary legal authority under State law to adopt 

and implement the revision, e.g., a citation of the appropriate State authority. 

The authority for promulgating changes to the Texas State Implementation Plan, Chapter 

101, Subchapter A – General Rules; Subchapter H – Emissions Banking and Trading is 

found in Chapter 382 of the Texas Health and Safety Code. 

4. A copy is included of the actual regulation or document submitted for approval and 

incorporation by reference into the SIP including an indication of the changes made to the 

existing approved plan where applicable. The submittal shall be a copy of the official 

State regulation document signed, stamped, and dated by the appropriate State official 

indicating that it is fully enforceable by the State. The effective date of the regulation 

document shall, whenever possible, be indicated in the document itself. 

 

The July 22, 1998, submittal included a copy of the official State regulation document, 

signed, stamped, and dated by Eugenia K. Brumm, PhD, Chief Clerk of the Texas Natural 

Resource Conservation Commission. 

5. Evidence is included that the State followed all the procedural requirements of its laws 

and/or its constitution in the conducting and completing the adoption/issuance of the 

plan. 
14

The authority for promulgating changes to the Texas State Implementation Plan is found 

in the Texas Clean Air Act, Chapter 382 of the Texas Health and Safety Code. 

6. Evidence is included that public notice was given of the proposed changes consistent 

with the procedures approved by EPA, including the date of publication of such notice, 

(e.g., notarized or certified copies of any public notices published in newspapers). (The 

notice should be at least 30 days prior to the public hearing(s). 

Notices of public hearings were published in the following newspapers on the date listed: 

• Austin American Statesman: March 10, 1998, 

• Beaumont Enterprise-Journal: March 11, 1998 

• Fort Worth Star-Telegram: March 11, 1998 

• Houston Chronicle: March 13, 1998 

7. A certification is included indicating that public hearing(s) was/were held in accordance 

with the information provided in the public notice(s) and the State's laws and 

constitution, if applicable. 

The order adopting the new and amended sections to 30 TAC Chapter 116 provided 

evidence that the public hearing was conducted pursuant to Texas Health and Safety 

Code § 382.017 and 40 CFR § 51.102. The adoption order was stamped and signed by 

Eugenia K. Brumm, PhD, Chief Clerk of the Texas Natural Resource Conservation 

Commission, July 1, 1998. 

8. A compilation of public comments and the State's response is included. 

The SIP submittal package did include a compilation of public comments and the State’s 

responses. The TCEQ received written comments from three parties including EPA 

Region 6; no oral testimony was received at the public hearing. 

Technical Support (2.2) 

The State should include the following technical information in its SIP revision request package. 

1. Identification of all regulated pollutants affected by the revision is included. 

The SIP submittal addresses the use of emission reductions in NSR permitting; therefore 

the SIP submittal has the potential to address all regulated NSR pollutants. 

2. Identification of the locations of affected sources including the EPA 

attainment/nonattainment designation of the locations and the status of the attainment 

plan for the affected area(s) is included. 

The provisions to use emission reductions in NSR permitting can be applied statewide 

based on relevant permitting regulations for a specific area. 
15

3. Quantification of the changes in SIP allowable emissions from the affected sources is 

included. (Examples include estimates of changes in current actual emissions from 

affected sources and/or, where appropriate, quantification of changes in actual emissions 

from affected sources through calculations of the differences between certain baseline 

levels and allowable emissions anticipated if the revisions were approved.) 

The provisions for using emission reductions in NSR permitting do not need to include 

quantification of the changes in SIP allowable emissions from the affected sources. The 

mechanics of the NSR permitting process ensure appropriate amounts of permitted 

emissions are approved. New section 116.116(f) does provide for the use of discrete 

emission reduction credits (DERCs) to be used in NSR permitting, the DERC generation 

and use provisions that have been separately submitted and evaluated by EPA provide 

adequate assurances that generation and use of DERCs will not negatively impact the 

SIP, (see71 FR 52703 and 75 FR 27644). 

4. Demonstration is included that the NAAQS/PSD increments/RFP demonstration and 

visibility as applicable would be protected if the revision were approved and 

implemented. 

The provisions for using emission reductions in NSR permitting do not need to include a 

demonstration that NAAQS/PSD increments/RFP/visibility is protected. The emission 

reduction provisions, when used in the NSR permitting process, will be protective of the 

NAAQS/PSD increment/RFP/visibility as appropriate. New section 116.116(f) does 

provide for the use of discrete emission reduction credits to be used in NSR permitting, 

the DERC generation and use provisions that have been separately submitted and 

evaluated by EPA provide adequate assurances that generation and use of DERCs will 

not negatively impact the SIP. 

5. FOR REDESIGNATIONS: 

 a. Is there a fully approved maintenance plan for the primary ambient air quality 

standards for at least 10 years as required by §175A of the Clean Air Act? 

 Not applicable. 

 b. Are contingency measures included? 

 Not applicable. 

7. Modeling information, if applicable, is required to support the proposed revision. 

Modeling information is not necessary to support this SIP revision. Dispersion modeling 

is required as part of the NSR permitting process, but is not part of the use of emission 

reductions. 
16

7. Evidence is included where necessary, that emission limitations are based on continuous 

emission reduction technology (e.g., add-on controls, industrial/process equipment 

designs, reformulated materials, etc.). 

The use of emission reductions in NSR permitting does not in itself establish emission 

limitations. The NSR permitting program will implement emission limitations on a 

permit-by-permit basis as appropriate. 

8. Evidence is included indicating that a SIP revision contains emission limitations, work 

practice standards, and recordkeeping/reporting requirements to ensure stated emission 

levels. 

The emission reduction provisions do include a recordkeeping component for the use of 

the emission reductions. Additionally, each individual NSR permit will include separate 

emission limitations, work practice standards and recordkeeping/reporting requirements 

sufficient to ensure permitted emission levels. 

9. Compliance/enforcement strategies including how compliance will be determined in 

practice (including at what frequency). 

The emission reduction provisions do not need to include compliance/enforcement 

strategies. Compliance/enforcement of the NSR permitting program will be determined 

on a permit-by-permit basis. 

10. As appropriate, special economic and technological justifications are included per 

applicable EPA policies or an explanation why such justifications are not necessary 

should be included. For example, requests for alternative RACT may require such 

justification. 

 These justifications are not necessary for this SIP revision. 

The July 22, 1998, SIP submittal (Rule Project No. 98001-116-AI) meets the completeness 

criteria established in 40 CFR part 51, Appendix V. 

 
17

III.A. Part 51, Appendix V Evaluation 

3. Evaluation of the October 5, 2010, SIP submittal with respect to Part 51, Appendix 

V 

Part 51, Appendix V Completeness Checklists 

The criteria for completeness determination is Appendix V to Part 51 - Criteria for determining 

the completeness of plan submissions and is outlined below: 

1.0 Purpose: This appendix V sets forth the minimum criteria for determining whether a 

State implementation plan submitted for consideration by EPA is an official submission 

for purposes of review under § 51.103. 

1.1 The EPA shall return to the submitting official any plan or revision thereof which fails to 

meet the criteria set forth in this appendix V, and request corrective action, identifying 

the component(s) absent or insufficient to perform a review of the submitted plan. 

1.2 The EPA shall inform the submitting official whether or not a plan submission meets the 

requirements of this appendix V within 60 days of EPA's receipt of the submittal, but no 

later than 6 months after the date which the State was required to submit the plan or 

revision. If a completeness determination is not made by 6 months from receipt of a 

submittal, the submittal shall be deemed complete by operation of law on the date 6 

months from receipt. A determination of completeness under this paragraph means that 

the submission is an official submission for purposes of §51.103. 

The attached checklist outlines the basic criteria included under 2.1, 2.2 and 2.3 of Appendix V. 
18

SIP Completeness Checklist for the October 5, 2010, SIP Submittal

Rule Log No: 2010-006-116-PR

When preparing a SIP revision request, the SIP reviewer should go through this list to help 

identify that the package submitted to EPA is complete. States can use the check list to assure 

SIP submittals meet Appendix V criteria. 

Administrative Materials (2.1) 

1. The package is sent with a formal submittal letter from the Governor or his or her 

designee requesting EPA's approval of the revision. 

The SIP revision was submitted by a letter from Bryan W. Shaw, PhD, Chairman of the 

Texas Commission on Environmental Quality, dated October 5, 2010. Governor Rick 

Perry designated that the Chairman of the Texas Commission on Environmental Quality 

would be his designee for SIP submittals in a letter dated May 21, 2002. 

2. Evidence is included that the State has adopted the revision in the State code or body of 

regulations, or that the State has issued the permit, order, consent agreement (hereafter 

document) in final form. This evidence would include the date of adoption or final 

issuance and the effective date of revision, if different from adoption/issuance date. 

The revisions were adopted by the Texas Commission on Environmental Quality on 

September 15, 2010, and became effective October 7, 2010. 

3. Evidence is included that the State has necessary legal authority under State law to adopt 

and implement the revision, e.g., a citation of the appropriate State authority. 

The authority for promulgating changes to the Texas State Implementation Plan, Chapter 

101, Subchapter A – General Rules; Subchapter H – Emissions Banking and Trading is 

found in Chapter 382 of the Texas Health and Safety Code. 

4. A copy is included of the actual regulation or document submitted for approval and 

incorporation by reference into the SIP including an indication of the changes made to the 

existing approved plan where applicable. The submittal shall be a copy of the official 

State regulation document signed, stamped, and dated by the appropriate State official 

indicating that it is fully enforceable by the State. The effective date of the regulation 

document shall, whenever possible, be indicated in the document itself. 

 

The October 5, 2010, submittal included a copy of the official State regulation document, 

signed, stamped, and dated by Steve Hagle, Air Permits Division Director of the Texas 

Commission on Environmental Quality. 
19

5. Evidence is included that the State followed all the procedural requirements of its laws 

and/or its constitution in the conducting and completing the adoption/issuance of the 

plan. 

The authority for promulgating changes to the Texas State Implementation Plan is found 

in the Texas Clean Air Act, Chapter 382 of the Texas Health and Safety Code. 

6. Evidence is included that public notice was given of the proposed changes consistent 

with the procedures approved by EPA, including the date of publication of such notice, 

(e.g., notarized or certified copies of any public notices published in newspapers). (The 

notice should be at least 30 days prior to the public hearing(s). 

Notices of public hearings were published in the following newspapers on the date listed: 

• Austin American Statesman: April 2, 2010 

• Fort Worth Star-Telegram: April 2, 2010 

• Houston Chronicle: April 2, 2010 

7. A certification is included indicating that public hearing(s) was/were held in accordance 

with the information provided in the public notice(s) and the State's laws and 

constitution, if applicable. 

The order adopting the new and amended sections to 30 TAC Chapter 116 provided 

evidence that the public hearing was conducted pursuant to Texas Health and Safety 

Code § 382.017 and 40 CFR § 51.102. The adoption order was stamped and signed by 

LaDonna Castanuela, Chief Clerk of the Texas Commission on Environmental Quality, 

September 21, 2010. 

8. A compilation of public comments and the State's response is included. 

The SIP submittal package did include a compilation of public comments and the State’s 

responses. The TCEQ received written comments from six parties including EPA Region 

6; no oral testimony was received at the public hearing. 

Technical Support (2.2) 

The State should include the following technical information in its SIP revision request package. 

1. Identification of all regulated pollutants affected by the revision is included. 

The SIP submittal addresses the use of emission reductions in NSR permitting; therefore 

the SIP submittal has the potential to address all regulated NSR pollutants. 

2. Identification of the locations of affected sources including the EPA 

attainment/nonattainment designation of the locations and the status of the attainment 

plan for the affected area(s) is included. 
20

The provisions to use emission reductions in NSR permitting can be applied statewide 

based on relevant permitting regulations for a specific area. 

3. Quantification of the changes in SIP allowable emissions from the affected sources is 

included. (Examples include estimates of changes in current actual emissions from 

affected sources and/or, where appropriate, quantification of changes in actual emissions 

from affected sources through calculations of the differences between certain baseline 

levels and allowable emissions anticipated if the revisions were approved.) 

The provisions for using emission reductions in NSR permitting do not need to include 

quantification of the changes in SIP allowable emissions from the affected sources. The 

mechanics of the NSR permitting process ensure appropriate amounts of permitted 

emissions are approved. Amended section 116.116(f) does provide for the use of discrete 

emission reduction credits to be used in NSR permitting, the DERC generation and use 

provisions that have been separately submitted and evaluated by EPA provide adequate 

assurances that generation and use of DERCs will not negatively impact the SIP. 

4. Demonstration is included that the NAAQS/PSD increments/RFP demonstration and 

visibility as applicable would be protected if the revision were approved and 

implemented. 

The provisions for using emission reductions in NSR permitting do not need to include a 

demonstration that NAAQS/PSD increments/RFP/visibility is protected. The emission 

reduction provisions, when used in the NSR permitting process, will be protective of the 

NAAQS/PSD increment/RFP/visibility as appropriate. Amended section 116.116(f) does 

provide for the use of discrete emission reduction credits to be used in NSR permitting, 

the DERC generation and use provisions that have been separately submitted and 

evaluated by EPA provide adequate assurances that generation and use of DERCs will 

not negatively impact the SIP. 

5. FOR REDESIGNATIONS: 

 a. Is there a fully approved maintenance plan for the primary ambient air quality 

standards for at least 10 years as required by §175A of the Clean Air Act? 

 Not applicable. 

 b. Are contingency measures included? 

 Not applicable. 

8. Modeling information, if applicable, is required to support the proposed revision. 

Modeling information is not necessary to support this SIP revision. Dispersion modeling 

is required as part of the NSR permitting process, but is not part of the use of emission 

reductions. 
21

7. Evidence is included where necessary, that emission limitations are based on continuous 

emission reduction technology (e.g., add-on controls, industrial/process equipment 

designs, reformulated materials, etc.). 

The use of emission reductions in NSR permitting does not in itself establish emission 

limitations. The NSR permitting program will implement emission limitations on a 

permit-by-permit basis as appropriate. 

8. Evidence is included indicating that a SIP revision contains emission limitations, work 

practice standards, and recordkeeping/reporting requirements to ensure stated emission 

levels. 

The emission reduction provisions do include a recordkeeping component for the use of 

the emission reductions. Additionally, each individual NSR permit will include separate 

emission limitations, work practice standards and recordkeeping/reporting requirements 

sufficient to ensure permitted emission levels. 

9. Compliance/enforcement strategies including how compliance will be determined in 

practice (including at what frequency). 

The emission reduction provisions do not need to include compliance/enforcement 

strategies. Compliance/enforcement of the NSR permitting program will be determined 

on a permit-by-permit basis. 

10. As appropriate, special economic and technological justifications are included per 

applicable EPA policies or an explanation why such justifications are not necessary 

should be included. For example, requests for alternative RACT may require such 

justification. 

 These justifications are not necessary for this SIP revision. 

The October 5, 2010, submittal (Rule Project No. 2010-006-116-AI) meets the completeness 

criteria established in 40 CFR part 51, Appendix V. 
22

III.B. Review with respect to Part 51 

Requirements for the preparation, adoption, and submittal of implementation plans can be found 

in 40 CFR Part 51. The August 31, 1993; July 22, 1998; and October 5, 2010, proposed 

revisions for using emission reductions in NSR permitting were evaluated against the applicable 

requirements in Part 51. This analysis is included in Table III-B below. This analysis only 

addresses the sections under review in this TSD: specifically, sections 116.116(f), 116.174 and 

116.175. All other sections submitted in these three SIP submittals will be evaluated with 

respect to Part 51 requirements when EPA takes action on those sections. 

Table III-B: Analysis of Part 51 Requirements 

Part 51 – Requirements for Preparation, 

Adoption, and Submittal of Implementation 

Plans 

Use of Emission Reductions in NSR Permitting 

30 TAC §§ 116.116(f), 116.174, and 116.175 

Subpart A – Emission Inventory Reporting 

Requirements 

The submitted sections for the use of emission 

reductions in the SIP-approved NSR permitting 

program do not affect the current TX SIP 

requirements for Emission Inventory Reporting. 

Subparts B – E [Reserved] Not applicable. 

Subpart F – Procedural Requirements Subpart F – Procedural Requirements 

§ 51.100 Definitions § 51.100 is not applicable to the submitted sections 

in the three SIP submittals under review in this 

TSD. 

§ 51.101 Stipulations § 51.101 is not applicable to the submitted sections 

in the three SIP submittals under review in this 

TSD.. 

§ 51.102 Public Hearings 

• States must conduct one or more public 

hearings 

• Public hearings will only be held after 

reasonable notice, given at least 30 days prior 

to the date of the hearing 

• The state must submit with the revision a 

certification that the hearing was held in 

accordance with this section 

Please see section III.A of this TSD for the 

evaluation of the three submitted SIP revisions with 

respect to the Part 51, Appendix V Checklist. 

The three SIP submissions met the requirements of 

51.102 for notification of public hearings, as 

detailed in the Part 51, Appendix V Checklists and 

certified by appropriate state officials. 

§ 51.103 Submission of plans, preliminary review 

of plans 

• The state makes an official plan submission to 

EPA only when the submission conforms to the 

requirements of Part 51, Appendix V. 

• The state delivers 5 copies of the plan with a 

letter giving notice of the action to the EPA 

regional office. 

Please see section III.A of this TSD for the 

evaluation of the three submitted SIP revisions with 

respect to the Part 51, Appendix V Checklist. 

These SIP submissions meet the requirements for 

completeness. 

§ 51.104 Revisions 

• States may revise the plan from time to time 

• EPA will approve revisions only after 

appropriate public hearing requirements have 

been met 

• Revisions must be submitted in accordance 

with 51.103 

Please see section III.A of this TSD for the 

evaluation of the three submitted SIP revisions with 

respect to the Part 51, Appendix V Checklist. 

The three SIP submissions met the requirements of 

51.103 and 51.104 for notification of public 

hearings and submission of revisions, as detailed in 

the Part 51, Appendix V Checklists and certified by 

appropriate state officials. 
23

Subpart G – Control Strategy Subpart G – Control Strategy 

§ 51.110 Attainment and Maintenance of National 

Standards 

Requirements found in § 51.110 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. These three sections 

provide for the use of emission reductions in the 

Texas NSR permitting program. The NSR 

permitting program has been submitted separately 

and evaluated by EPA as sufficient to not interfere 

with attainment and maintenance of the NAAQS. 

§ 51.111 Description of Control Measures Requirements found in § 51.111 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. These three sections 

provide for the use of emission reductions in the 

Texas NSR permitting program and do not provide 

control strategies. The NSR permitting program has 

been submitted separately and evaluated by EPA as 

sufficient to provide necessary control strategies for 

permitted facilities on a permit-by-permit basis. 

§ 51.112 Demonstration of Adequacy Requirements found in § 51.112 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. These three sections 

provide for the use of emission reductions in the 

Texas NSR permitting program. The NSR 

permitting program has been submitted separately 

and evaluated by EPA as sufficient to not interfere 

with attainment and maintenance of the NAAQS. 

§ 51.113 Reserved Not applicable. 

§ 51.114 Emissions Data and Projections Requirements found in § 51.113 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. These three sections 

provide for the use of emission reductions in the 

Texas NSR permitting program. The NSR 

permitting program has been submitted separately 

and evaluated by EPA as sufficient to not interfere 

with attainment and maintenance of the NAAQS. 

As such, these three sections do not need to provide 

a detailed emission inventory and summary of 

projected emission levels after the implementation 

of control strategies. 

§ 51.115 Air Quality Data and Projections Requirements found in § 51.113 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. These three sections 

provide for the use of emission reductions in the 

Texas NSR permitting program. The NSR 

permitting program has been submitted separately 

and evaluated by EPA as sufficient to not interfere 

with attainment and maintenance of the NAAQS. 

As such, these three sections do not need to include 

data on existing air quality or summarize expected 

air quality impacts from the implementation of 

control strategies. 

§ 51.116 Data Availability 

The State must make available to the public all data 

and calculations used in the preparation of each plan 

Requirements found in § 51.116 are applicable to 

the three sections in the three SIP submittals under 

review in this document. 

The TCEQ provided the public the opportunity to 
24

or plan revision. 

Each plan must provide for public availability of 

emission data reported by source owners or 

operators. 

participate in stakeholder meetings in the 

rulemaking development process, and the public 

received comment periods on the three proposed 

SIP revisions. 

The Texas Clean Air Act, Texas Health and Safety 

Code at Section 382.040 requires that all 

information submitted to the TCEQ for compliance 

purposes be made available to the public, unless a 

written request for nondisclosure is approved. 

§ 51.117 Additional provisions for lead Requirements found in § 51.117 are not applicable 

to the SIP submittal under review in this document. 

Section 116.116(f) provides for the use of DERCs 

to exceed permit allowable; the SIP-approved 

DERC program does not permit the generation or 

use of DERCs for lead requirements. Section 

116.174 requires the TCEQ Executive Director to 

authorize the use of emission reductions consistent 

with the SIP-approved requirements at 116.170. 

Section 116.170 requires the emission reductions to 

be generated and banked under the TCEQ ERC and 

DERC programs – both of which prohibit the 

generation or use of emission reductions from lead. 

Section 116.175 establishes the recordkeeping 

burden for section 116.174 and therefore also does 

not involve lead emissions. 

§ 51.118 Stack Height Provisions Requirements found in § 51.118 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. These three sections 

provide for the use of emission reductions in the 

Texas NSR permitting program and do not involve 

good engineering practices for stack heights. 

§ 51.119 Intermittent Control Systems Requirements found in § 51.119 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. These three sections 

provide for the use of emission reductions in the 

Texas NSR permitting program and do not require 

or address intermittent control systems. 

§ 51.120 Requirements for State Implementation 

Plan Revisions relating to Motor Vehicles 

Requirements found in § 51.120 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. These three sections 

provide for the use of emission reductions in the 

Texas NSR permitting program. The ERC and 

DERC programs under which the emission 

reductions used in NSR permitting must be certified 

do provide for the generation and use of mobile 

emission reductions, but this is not related to the 

part 51 requirements for SIP revisions relating to 

motor vehicles. 

§ 51.121 Findings and requirements for submission 

of State Implementation Plan Revisions relating to 

emissions of oxides of nitrogen 

Requirements found in § 51.121 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. § 51.121 establishes 

the requirements for the NOX SIP Call; Texas was 

not subject to the NOX SIP Call. 

§ 51.122 Emissions reporting requirements for SIP 

revisions relating to budgets for NOX emissions. 

Requirements found in § 51.122 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. § 51.122 establishes 
25

the emission reporting requirements for the NOX

SIP Call; Texas was not subject to the NOX SIP 

Call. 

§ 51.123 Findings and requirements for submission 

of State Implementation Plan Revisions relating to 

Emissions of Oxides of Nitrogen pursuant to the 

Clean Air Interstate Rule 

Requirements found in § 51.123 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. § 51.123 establishes 

the requirements for the NOX Annual and Ozone 

season programs for the Clean Air Interstate Rule 

(CAIR). 

§ 51.124 Findings and requirements for submission 

of State Implementation Plan Revisions relating to 

Emissions of Sulfur Dioxide pursuant to the Clean 

Air Interstate Rule 

Requirements found in § 51.124 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. § 51.124 establishes 

the program requirements for the CAIR SO2

Programs. 

§ 51.125 Emissions reporting requirements for SIP 

revisions relating to budgets for SO2 and NOX

emissions. 

Requirements found in § 51.125 are not applicable 

to the three sections in the three SIP submittals 

under review in this document. § 51.125 establishes 

the emission reporting requirements for the CAIR 

NOX and SO2 trading programs. 

Subpart H – Prevention of Air Pollution Emergency 

Episodes 

Requirements found in 51, Subpart H are not 

applicable to the three sections in the three SIP 

submittals under review in this document. These 

three sections provide for the use of emission 

reductions in the Texas NSR permitting program. 

and are not part of the Texas air pollution 

emergency episode plan. 

Subpart I – Review of New Sources and 

Modifications 

Part 51, Subpart I requirements are applicable to the 

three sections in the three SIP submittals under 

review in this document. Please see the section-bysection analysis for more details about how each 

section satisfies the CAA and Part 51, Subpart I 

requirements for NSR permitting. 

Subpart J – Ambient Air Quality Surveillance Requirements found in 51, Subpart J are not 

applicable to the three sections in the three SIP 

submittals under review in this document. These 

three sections provide for the use of emission 

reductions in the Texas NSR permitting program. 

Ambient air quality surveillance is not part of the 

NSR permitting program. 

Subpart K – Source Surveillance Subpart K – Source Surveillance 

§ 51.210 Each plan must provide for monitoring the 

status of compliance with rules and regulations that 

set forth any portion of the control strategy. 

The Texas NSR program, and the three sections 

under review in this document, was developed and 

submitted in accordance with the Texas Health and 

Safety Code. Texas enforcement provisions are not 

typically in the State’s individual rules but are 

separately codified. Texas Water Code Chapter 7 

contains the State’s statutory provisions for 

enforcement of programs developed according to 

the Texas Health and Safety Code; i.e., the Texas 

ERC program. Section 382.111 of the Texas Health 

and Safety Code provides the ability to enter and 

periodically inspect stationary sources. Section 

382.021 establishes that the Texas Commission on 

Environmental Quality can determine the necessary 

sampling and detection methods used to 

§ 51.211 The plan must provide for legally 

enforceable procedures for requiring stationary 

sources to maintain records and report the following 

to the State: 

• Information on the nature and amount of 

emissions from the stationary source; and 

• Other information as necessary for the State to 

determine whether the sources are in 

compliance. 

§ 51.212 The plan must provide for periodic testing 

and inspection of stationary sources. Additionally, 

the plan must establish a system for detecting 
26

violations and include enforceable test methods. demonstrate compliance with an emission 

limitation. 

§ 51.213 The plan must contain procedures for 

obtaining and maintaining data on actual emissions 

reductions achieved as a result of implementing 

transportation control measures. 

§ 51.213 is not applicable to the three sections in the 

three SIP submittals under review in this document. 

These three sections provide for the use of emission 

reductions in the Texas NSR permitting program. 

The ERC and DERC programs under which the 

emission reductions used in NSR permitting must 

be certified do provide for the generation and use of 

mobile emission reductions, but these reductions 

must be surplus to transportation control measures 

in the SIP. 

§ 51.214 The plan must contain legally enforceable 

procedures to require stationary sources subject to 

emission standards as part of the applicable plan to 

install, calibrate, maintain, and operate continuous 

emission monitoring systems. 

§ 51.213 is not applicable to the three sections in the 

three SIP submittals under review in this document. 

These three sections provide for the use of emission 

reductions in the Texas NSR permitting program. 

The NSR permitting program has separate 

provisions for establishing emission standards. 

Subpart L – Legal Authority Subpart L – Legal Authority 

§ 51.230 Each plan must show that the State has the 

necessary legal authority to carry out the plan, 

including the authority to adopt emission standards 

and limitations necessary for attainment of the 

NAAQS, enforce applicable laws and regulations 

and seek injunctive relief. 

The Texas NSR program, and the three sections 

under review in this document, was developed and 

submitted in accordance with the Texas Clean Air 

Act, Chapter 382 of the Texas Health and Safety 

Code. The Texas Health and Safety Code and the 

enforcement provisions in the Texas Water Code 

provide TCEQ the necessary legal authority to 

implement the SIP. 

§ 51.231 The provision of law or regulation which 

the State determines provides the authorities 

required must be specifically identified and copies 

must be submitted with the plan. 

Texas identified in the three submittal packages that 

each SIP revision was developed in accordance with 

the Texas Health and Safety Code. Please see 

section III.A of this document for the Part 51, 

Appendix V checklist for each submittal. EPA 

Region 6 does not require the State to submit copies 

of laws and regulations that have been submitted for 

prior SIP submittals. 

§ 51.232 A state government agency other than the 

State air pollution control agency may be assigned 

responsibility for carrying out a portion of the plan. 

Each of the three SIP submittals identified the 

TCEQ as the agency responsible for implementing 

the SIP. Please see section III.A of this document 

for the Part 51, Appendix V checklist for each 

submittal. 

Subpart M – Intergovernmental Consultation 

Each plan must identify organizations by title that 

will participate in the development, implementation, 

and enforcement of the plan. 

Each of the three SIP submittals identified the 

TCEQ as the agency responsible for developing, 

implementing, and enforcing the SIP. Please see 

section III.A of this document for the Part 51, 

Appendix V checklist for each submittal. 

Subpart N – Compliance Schedule The three sections under review in this document 

establish provisions for the use of emission 

reduction in NSR permitting. They do not establish 

a compliance schedule for any NAAQS, and 

therefore do not need to address the requirements of 

40 CFR part 51, subpart N. 

Subpart O – Miscellaneous Plan Content 

Requirements 

Each of the three SIP revisions identified that no 

fiscal implications are anticipated for TCEQ or any 

other state/local government through the 

implementation of these rules. Additionally, it was 
27

estimated that the public benefit as a result of 

implementing these revisions would be a continued 

reduction in air contaminants. 

Subpart P – Protection of Visibility None of the three SIP revisions under review in this 

document was submitted as part of Texas’s plan to 

protect visibility. 

Subpart Q – Reports The three sections being reviewed here for using 

emission reductions in NSR permitting do not revise 

the existing reporting requirements for the emission 

inventory in the Texas SIP. EPA approved the 

emission inventory requirements at 30 TAC § 

101.10 on August 26, 1994 (59 FR 44036). 

Subpart R – Extensions Requirements found in 51, Subpart R are not 

applicable to any of the three SIP submittal under 

review in this document; none of these SIP revision 

submittals is a request for an 18-month extension. 

Subpart S – Inspection/Maintenance Program 

Requirements 

Requirements found in 51, Subpart S for an 

inspection/maintenance program are not applicable 

to the three sections providing for the use of 

emission reductions in NSR permitting. 

Subpart T – Conformity to State or Federal 

Implementation Plans of Transportation Plans, 

Programs, and Projects Developed, Funded, or 

Approved Under Title 23 U.S.C or the Federal 

Transit Laws 

The three sections under review in this document 

provide for the use of emission reductions in NSR 

permitting and will not interfere with the 

transportation conformity budgets developed for 

each nonattainment and maintenance area pursuant 

to subpart T. The emission reductions used in NSR 

permitting under these three sections must be 

generated and banked as either ERCs or DERCs. 

Both the ERC and DERC programs provide that 

mobile sources can generate mobile emission 

credits, but these credits most be surplus to the 

baseline emissions in the SIP. 

Subpart U – Economic Incentive Programs 40 CFR part 51, subpart U establishes requirements 

for statutorily mandated economic incentive 

programs under sections 182(g)(3), 182(g)(5), 

187(d)(3), or 187(g) of the CAA. The three sections 

under review in this document revise the NSR 

permit program and are not part of a mandatory 

Economic Incentive Program under Subpart U. 

Subpart W – Determining Conformity of General 

Federal Actions to State or Federal Implementation 

Plans 

The three sections providing for the use of emission 

reductions in NSR permitting do not interfere with 

the requirements for general conformity in subpart 

W. All emission reductions used in NSR permitting 

under these three sections must be generated and 

banked as ERCs or DERCs, whether from stationary 

or mobile sources, and must be surplus to the 

baseline emissions in the SIP. 

Subpart X – Provisions for Implementation of 8-hr 

Ozone NAAQS 

Requirements found in 51, Subpart X are for the 

implementation of the 8-hour ozone NAAQS. 

These requirements are not applicable to the three 

sections providing for the use of emission 

reductions in NSR permitting. 

Subpart Y – Mitigation Requirements The three sections under review in this document 

providing for the use of emission reductions in NSR 

permitting do not create procedures by which Texas 
28

could exclude air quality data due to exceptional 

events. 

Subpart Z – Provisions for Implementation of 

PM2.5 National Ambient Air Quality Standards 

Requirements found in 51, Subpart X are for the 

implementation of the PM2.5 NAAQS. These 

requirements are not applicable to the three sections 

providing for the use of emission reductions in NSR 

permitting. 

 
29

III.C. Section-by-Section Review 

The following analysis will review each of the three submitted sections, 116.116(f), 116.174, and 

116.175, from original adoption through subsequent revisions to further analyze whether the 

submitted revisions as a whole support the CAA, EPA policy and guidance for NSR permitting. 

Table III-C.1: Revisions to § 116.116(f) – Use of Credits 

Adopted State Language 

June 17, 1998 

Rule Project No: 98001-116-AI 

Adopted State Language 

September 15, 2010 

Rule Project No.: 2010-006-116-AI 

116.116(f) Use of credits. 

Notwithstanding any other subsection of this 

section, discrete emission reduction credits 

may be used to exceed permit allowables as 

described in § 101 .29(d)(4)(v) of this title 

(relating to Emission Credit Banking and 

Trading) if all applicable conditions of §101.29 

of this title are met. This subsection does not 

authorize any physical changes to a facility. 

116.116(f) Use of credits. 

Notwithstanding any other subsection of this 

section, discrete emission reduction credits 

may be used to exceed permit allowables as 

described in § 101 .29(d)(4)(v) of this title 

(relating to Emission Credit Banking and 

Trading) §101.376(b) of this title (relating to 

Discrete Emission Credit Use) if all applicable 

conditions of §101.29 §101.376 of this title are 

met. This subsection does not authorize any 

physical changes to a facility. 

TCEQ adopted new section 116.116(f) on June 17, 1998, and submitted this section as a SIP 

revision on July 22, 1998. TCEQ adopted amendments to section 116.116(f) and submitted 

these amendments as a SIP revision on October 5, 2010. The provisions in section 116.116(f) 

allow a permit holder to exceed permit allowable through the use of discrete emission reduction 

credits (DERCs), pursuant to the appropriate DERC regulations. At the time of the initial 

adoption on June 17, 1998, the DERC regulations were codified at 30 TAC Chapter 101, section 

101.29(d)(4)(v). The TCEQ subsequently recodified the DERC regulations to30 TAC Chapter 

101, section 101.376(b). This recodification is captured in the amendment to section 116.116(f) 

adopted September 15, 2010, and submitted October 5, 2010. 

EPA reviewed and approved the DERC program on September 6, 2006, see 71 FR 52703. At 

that time we reviewed the use provisions for DERCs and found them consistent with the CAA 

and EPA’s Economic Incentive Program Guidance. Specifically, the use of DERCs to exceed 

permit allowables is limited to the following instances: 

(1) in ozone nonattainment areas, permitted facilities may use discrete emission credits to 

exceed permit allowables by no more than ten tons for nitrogen oxides or five tons for 

volatile organic compounds in a 12-month period as approved by the executive 

director. This use is limited to one exceedance, up to 12 months within any 24-month 

period, per use strategy. The user shall demonstrate that there will be no adverse 

impacts from the use of discrete emission credits at the levels requested; or 
30

(2) at permitted facilities in counties or portions of counties designated as attainment or 

unclassified, discrete emission credits may be used to exceed permit allowables by 

values not to exceed the prevention of significant deterioration significance levels as 

provided in 40 Code of Federal Regulations (CFR) §52.21(b)(23), as approved by the 

executive director prior to use. This use is limited to one exceedance, up to 12 

months within any 24-month period, per use strategy. The user shall demonstrate that 

there will be no adverse impacts from the use of discrete emission credits at the levels 

requested; 

A further restriction on DERC usage to exceed permit allowables is that all requirements of 

section 101.376 must be satisfied. This means that for a permit holder to exceed permit 

allowables as described above a demonstration must be made that the usage will result in no 

adverse impacts on the attainment or nonattainment area, and the user must retire 10% more 

DERCs than are necessary for the use as an environmental contribution. For these reasons, EPA 

approved this usage provision of the DERC rule as consistent with section 110(l) of the CAA. 

Because the provisions at section 116.116(f) reference SIP-approved provisions, EPA finds that 

the original August 31, 1993, submission of section 116.116(f) with the amendments submitted 

October 5, 2010, is approvable into the Texas SIP. 

Table III-C.2: § 116.174 – Determination by Executive Director to Authorize Reductions

Adopted State Language 

August 16, 1993 

Rule Project No.: Regulation VI General Rules 

and Standard Exemption List 

Adopted State Language 

June 17, 1998 

Rule Project No: 98001-116-AI 

116.174. Determination by Executive Director 

to Authorize Reductions. 

The Executive Director may grant authority to 

a permit applicant to use prior emission 

reductions and emission reductions granted to 

the applicant by another entity (either public 

or private) in accordance with S116.170 if the 

Texas Air Control Board determines that the 

prior emission reductions have, in fact, 

occurred and, when considered with other 

emission reductions that may be required by 

the permit as well as contaminants that will be 

emitted by the new source, will result in 

compliance with §116 .150(b) of this title 

(relating to New Major Source or Major 

Modification Required), §116 .160 of this title 

(relating to Prevention of Significant 

Deterioration Requirements), and §116 .152 of 

this title (relating to Evaluation of Air Quality 

116.174. Determination by Executive Director 

to Authorize Reductions. 

The executive director may grant authority to a 

permit applicant to use prior emission 

reductions and emission reductions granted to 

the applicant by another entity (either public or 

private) in accordance with §116 .170 of this 

title (relating to Applicability for Reduction 

Credits) if the Texas Air Control Board if the 

commission determines that the prior emission 

reductions have, in fact, occurred and, when 

considered with other emission reductions that 

may be required by the permit as well as 

contaminants that will be emitted by the new 

source, will result in compliance with 

§116.150(b) of this title (relating to New Major 

Source or Major Modification Required), 

§116.160 of this title (relating to Prevention of 

Significant Deterioration Requirements), and 
31

Impacts), as applicable, in the area where the 

new source is to be located. Prior as well as 

future emission reductions to be used as an 

offset shall be made conditions for granting 

authority to construct the proposed new source 

and shall be enforced. 

§116 .152 of this title (relating to Evaluation of 

Air Quality Impacts)§116.150 of this title 

(relating to New Major Source or Major 

Modification in Ozone Nonattainment Areas), 

§ 116.151 of this title (relating to New Major 

Source or Major Modification in nonattainment 

Areas Other Than Ozone), § 116 .160 of this 

title (relating to Prevention of Significant 

Deterioration Requirements), and § 116 .162 of 

this title (relating to Evaluation of Air Quality 

Impacts), as applicable, in the area where the 

new source is to be located. Prior as well as 

future emission reductions to be used as an 

offset shall be made conditions for granting 

authority to construct the proposed new source 

and shall be enforced. 

TCEQ adopted new section 116.174 on August 16, 1993, and submitted this section as a SIP 

revision on August 31, 1993. Amendments to section 116.174 were adopted on June 17, 1998, 

and submitted as a SIP revision on July 22, 1998. The intent of new section 116.174 is to specify 

that the Executive Director must approve the use of emission reductions in NSR permitting 

consistent with the provisions in section 116.170. The revisions submitted July 22, 1998, 

remove the reference to the Texas Air Control Board and update the references to the specific 

Texas NSR permitting provisions, but the intent of the section remains the same. The TCEQ 

Executive Director may only approve emission reductions to be used in a permitting action 

consistent with the requirements at section 116.170. Further, section 116.174 specifies that 

emission reductions (prior as well as future) must be enforceable permit conditions. 

EPA reviewed section 116.170 and SIP-approved the provisions for the applicability of the use 

of emission reductions as offsets on March 20, 2009, see 74 FR 11851. We found that the 

following provisions from section 116.170 are consistent with the requirements for offsets at 

sections 171 and 173 of the CAA. 

116.170 – Applicability of Emission Reductions as Offsets 

(a) No reduction may be used as an offset unless it has been certified as an emission credit 

under Chapter 101, Subchapter H, Division 1 or 4 of this title (relating to Emission Credit 

Banking and Trading; or Discrete Emission Credit Banking and Trading), except as 

provided for in subsection (c) of this section. 

(b) Existing reductions not yet certified and banked as an emission credit must be certified 

and banked with the executive director by September 1, 2004 in order to be considered 

for use as an offset. 

(c) A future reduction may be used as an offset for a permit provided that: 

(1) the permit contains special conditions that specify the date by which the permit holder 

must submit to the executive director appropriate and sufficient data to verify that the 

reduction has occurred and the reduction is provided by start of operation; 
32

(2) the reduction must be achieved prior to commencement of the permitted emissions 

for which the offset is required; 

(3) the reduction meets all of the requirements of Chapter 101, Subchapter H, Division 1 

or 4 of this title when submitted to the executive director for review per the 

requirements of the issued permit; and 

(4) the permit holder agrees to obtain additional offsets if the review by the executive 

director indicates the reductions do not satisfy the original offset requirements. 

Therefore, when the TCEQ Executive Director approves the use of an emission reduction in a 

permitting action under section 116.174, this approval must be consistent with the provisions in 

section 116.170. Section 116.170 requires that the reduction be certified and banked as either an 

emission reduction credit or a DERC under TCEQ’s SIP-approved Emissions Banking and 

Trading provisions at 30 TAC Chapter 101, Subchapter H, Divisions 1 and 4, and that the 

reductions will be in place, real and enforceable by the start of operation. Section 116.174 works 

together with section 116.170 to ensure only appropriate emission reductions are approved for 

use in NSR permitting. As such, the original August 31, 1993, submission and subsequent July 

22, 1998 submitted revisions to section 116.174 are approvable by EPA into the Texas SIP. 

Table III-C.3: § 116.175 Recordkeeping 

Adopted State Language 

August 16, 1993 

Rule Project No: Regulation VI General Rules and Standard Exemption List 

116.175 – Recordkeeping 

The Executive Director will maintain no records of emission offset credits claimed by an 

applicant in accordance with §116 .170 other than those contained in permit application and 

permit files. The applicant shall maintain all records necessary to substantiate claims of emission 

reductions and shall make such records available for inspection upon request of the Executive 

Director. 

The TCEQ adopted section 116.175 on August 16, 1993, and submitted this section as a SIP 

revision on August 31, 1993. New section 116.175 was adopted to place the recordkeeping 

burden on the use of emission reductions in NSR permitting in accordance with section 116.170 

on the permit applicant rather than the TCEQ. The TCEQ will maintain records contained in the 

permit application and permit files, all other necessary information to verify the emission 

reductions used in the permit are the responsibility of the permit holder and must be made 

available at the request of the TCEQ Executive Director. Placing the burden of proof on the 

permit holder is consistent with the requirements in NSR and PSD permitting that the permit 

holder maintain all necessary records to substantiate emission reductions and verify emission 

limitations. Further, the SIP-approved Emissions Banking and Trading Provisions at 30 TAC 

Chapter 101, Subchapter H, Divisions 1 and 4 for the Emission Reduction Credit and DERC 

programs, makes clear that the generator and user of the emission reductions is responsible for 
33

maintaining all necessary records to substantiate the reduction – not the TCEQ. Therefore, EPA 

finds that the August 16, 1993, adoption of section 116.175 is approvable into the Texas SIP. 

 
34

III.D. Evaluation with respect to section 110(l) of the CAA 

This section 110(l) analysis will be conducted considering the three sections submitted in the 

three SIP submittals as one component of the Texas NSR permitting program. Specifically, 

these three sections provide the regulations for the use of DERCs to exceed permit allowables, 

the authority of the TCEQ Executive Director to approve the use of emission reductions 

consistent with section 116.170, and the recordkeeping requirements for using emission 

reductions in NSR permitting. 

Section 110(l) of the Clean Air Act states: 

Each revision to an implementation plan submitted by a State under this Act shall be 

adopted by such State after reasonable notice and public hearing. The Administrator 

shall not approve a revision of a plan if the revision would interfere with any applicable 

requirement concerning attainment and reasonable further progress (as defined in 

section 171), or any other applicable requirement of this Act. 

Thus, under section 110(l), sections 116.116(f), 116.174, and 116.175 must not interfere with 

attainment or reasonable further progress or any other applicable requirement of the Act. The 

three sections are necessary components of the Texas NSR permitting program. Without these 

provisions, permit applicants will not have the necessary flexibility provided them in the Texas 

SIP and the CAA. 

Section 116.116(f) will not interfere with attainment, reasonable further progress, or any other 

applicable requirement of the Act. Section 116.116(f) refers to a SIP-approved usage of DERCs 

to exceed permit allowable. This use of DERCs to exceed permit allowables was previously 

SIP-approved by EPA on September 6, 2006, to be consistent with section 110(l) of the CAA, 

see 71 FR 52703. In our proposed approval notice of the DERC program we stated that: 

We have also considered whether the potential use of DECs to exceed allowable emission 

levels under 30 TAC § 101.376(b)(1) is contrary to section 110(l) in that it could allow 

sources to exceed limits in their CAA Title V permits, which are “applicable 

requirements” under the Act. We conclude that this aspect of the rule does not violate 

section 110(l), for the following reasons. First, EPA has addressed the interface of Title 

V permits and trading programs in the EIP guidance, which provides: 

If a facility that has a title V operating permit wishes to participate in your 

approved EIP, you must modify the facility’s operating permit to include the 

detailed compliance provisions necessary to assure compliance with the EIP. 

Thus, the permit becomes a valuable tool to ensure the source meets the 

requirements of the EIP. 

Once the permit includes terms and conditions necessary to implement the EIP 

(as described below), the source may typically make individual trades under the 

EIP without the need for future formal permit revisions. This is true because most 

trading activity under such a permit would already be addressed and allowed by 
35

the specific terms and conditions of the permit and such trading would not 

normally conflict with the permit. This is the principle expressed by section 

70.6(a)(8) of the CFR, which states that permit revisions are not required for 

trading program changes that are “provided for” in the permit. 

(EIP Guidance, Appendix 16.8.) Texas has modified its Title V permit template so as to 

address the permissible use of DECs to meet Title V permit requirements. As further 

explained in this TSD, we find that the Texas permit language satisfies the concerns 

identified in Appendix 16.8. 

In reaching this conclusion, we also considered that a Title V permit is not itself a source 

of substantive limits. Rather, it incorporates applicable requirements under other permits 

and programs. In Texas, as elsewhere, many of the allowable emission levels in Title V 

permits are determined through New Source Performance Standards (NSPS), Best 

Available Control Technology (BACT), Lowest Achievable Emission Rate (LAER), or 

National Emission Standards for Hazardous Air Pollutants (NESHAPs). Under the Texas 

rules, DECs may not be used for compliance with any of these programs. The rule does 

allow DECs to be used for compliance with Reasonably Available Control Technology 

(RACT) standards, in accordance with EPA’s guidance. Specifically, the guidance 

provides that “[i]f your EIP allows sources to avoid direct application of RACT 

technology, your EIP must ensure that the level of emission reductions resulting from 

implementation of the EIP will be equal to those reductions expected from the direct 

application of RACT.” (EIP Guidance, Appendix 16.7) The Texas program ensures 

consistency with that element of the EIP Guidance through the requirement that a user of 

DECs must retire 10 percent more credits than are needed. Accordingly, any use of DECs 

for RACT compliance will have been preceded by a ten percent greater reduction. 

The above discussion concerns criteria pollutants for which an area is classified as 

nonattainment. As for pollutants for which an area is in attainment, EPA believes that the 

DERC rule is consistent with section 110(l). Discrete credit use in attainment areas could 

potentially result in temporary local increases in such attainment pollutants, but only in 

the sense of authorizing limited exceedances of state-only permit requirements. That is, in 

attainment areas in Texas, the Federally enforceable permit limits are all based on 

programs, such as BACT and NSPS, for which DEC use is not authorized under the 

Texas rule. DEC use for attainment pollutants can therefore only affect non-SIP 

requirements. Irrespective of the DERC rule, such non-SIP requirements are subject to 

change without undergoing a 110(l) analysis. Accordingly, the DERC SIP revision is not 

itself causing any increases in attainment pollutants that might be contrary to section 

110(l). 

[See 70 FR 58165 – 58166, October 5, 2002] 

Section 116.174 will not interfere with attainment, reasonable further progress, or any other 

applicable requirement of the Act. Section 116.174 states that the TCEQ Executive Director will 

approve the use of emission reductions for NSR permitting consistent with the requirements of 

section 116.170. EPA SIP-approved section 116.170 as consistent with section 110(l) on March 

20, 2009 (74 FR 11851). 
36

Section 116.175 will not interfere with attainment, reasonable further progress, or any other 

applicable requirement of the Act. Section 116.175 states that the recordkeeping burden for 

emission reduction usage will be the responsibility of the permit holder. These recordkeeping 

requirements will not violate 110(l). 
37

IV. Conclusion

The technical analysis provided in the preceding sections has compared the applicable sections 

of the CAA and 40 CFR Part 51 to TCEQ’s August 31, 1993, submission of sections 116.174 

and 116.175; the July 22, 1998, submission of sections 116.116(f) and 116.174; and the October 

5, 2010 submission of section 116.116(f). 

This analysis found that the adoption of the new sections 116.174 and 116.175 submitted on 

August 31, 1993, is consistent with the CAA and 40 CFR Part 51. EPA also finds that the 

adoption of new section 116.116(f) and the revisions to section 116.174 submitted on July 22, 

1998, is consistent with the CAA and 40 CFR Part 51. Additionally, EPA finds that the adoption 

of revisions to section 116.116(f) submitted on October 5, 2010, is consistent with the CAA and 

40 CFR Part 51. 

Because our review of sections 116.116(f), 116.174, and 116.175 finds that the intent of these 

sections is to reference other SIP-approved sections or to establish the burden for recordkeeping 

requirements, we have determined that this action should be considered noncontroversial. It is 

recommended that direct final approval of these revisions be published.