[Federal Register Volume 75, Number 178 (Wednesday, September 15, 2010)]
[Rules and Regulations]
[Pages 56424-56453]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-22670]



[[Page 56423]]

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Part IV





Environmental Protection Agency





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40 CFR Part 52



Approval and Promulgation of Implementation Plans; Texas; Revisions to 
the New Source Review (NSR) State Implementation Plan (SIP); 
Nonattainment NSR (NNSR) for the 1-Hour and the 1997 8-Hour Ozone 
Standard, NSR Reform, and a Standard Permit; Final Rule

Federal Register / Vol. 75 , No. 178 / Wednesday, September 15, 2010 
/ Rules and Regulations

[[Page 56424]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2006-0133 and EPA-R06-OAR-2005-TX-0025; FRL--9199-6]


Approval and Promulgation of Implementation Plans; Texas; 
Revisions to the New Source Review (NSR) State Implementation Plan 
(SIP); Nonattainment NSR (NNSR) for the 1-Hour and the 1997 8-Hour 
Ozone Standard, NSR Reform, and a Standard Permit

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: EPA is taking final action to disapprove submittals from the 
State of Texas, through the Texas Commission on Environmental Quality 
(TCEQ), to revise the Texas Major and Minor NSR SIP. We are 
disapproving the submittals because they do not meet the 2002 revised 
Major NSR SIP requirements. We are also disapproving the submittals as 
not meeting the Major Nonattainment NSR SIP requirements for 
implementation of the 1997 8-hour ozone national ambient air quality 
standard (NAAQS) and the 1-hour ozone NAAQS. EPA is disapproving the 
submitted Standard Permit (SP) for Pollution Control Projects (PCP) 
because it does not meet the requirements of the CAA for a minor NSR 
Standard Permit program. Finally, EPA is also disapproving a submitted 
severable definition of best available control technology (BACT) that 
is used by TCEQ in its Minor NSR SIP permitting program.
    EPA is not addressing the submitted revisions concerning the Texas 
Major PSD NSR SIP, which will be addressed in a separate action. EPA is 
taking no action on severable provisions that implement section 112(g) 
of the Act and is restoring a clarification to an earlier action that 
removed an explanation that a particular provision is not in the SIP 
because it implements section 112(g) of the Act. EPA is not addressing 
severable revisions to definitions submitted June 10, 2005, submittal, 
which will be addressed in a separate action. We are taking no action 
on a severable provision relating to Emergency and Temporary Orders, 
which we will address in a separate action.
    EPA is taking these actions under section 110, part C, and part D, 
of the Federal Clean Air Act (the Act or CAA).

DATES: This rule is effective on October 15, 2010.

ADDRESSES: EPA has established a docket for this action on New Source 
Review (NSR) Nonattainment NSR (NNSR) Program for the 1-Hour Ozone 
Standard and the 1997 8-Hour Ozone Standard, NSR Reform, and a specific 
Standard Permit under Docket ID No. EPA-R06-OAR-2006-0133. The docket 
for the action on the definition of BACT is in Docket ID No. EPA-R06-
OAR-2005-TX-0025. All documents in these dockets are listed on the 
http://www.regulations.gov Web site. Although listed in the index, some 
information is not publicly available, e.g., confidential business 
information or other information whose disclosure is restricted by 
statute. Certain other material, such as copyrighted material, is not 
placed on the Internet and will be publicly available only in hard copy 
form. Publicly available docket materials are available either 
electronically through http://www.regulations.gov or in hard copy at 
the Air Permits Section (6PD-R), Environmental Protection Agency, 1445 
Ross Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made 
available by appointment for public inspection in the Region 6 FOIA 
Review Room between the hours of 8:30 a.m. and 4:30 p.m. weekdays 
except for legal holidays. Contact the person listed in the FOR FURTHER 
INFORMATION CONTACT paragraph below to make an appointment. If 
possible, please make the appointment at least two working days in 
advance of your visit. There will be a 15 cent per page fee for making 
photocopies of documents. On the day of the visit, please check in at 
the EPA Region 6 reception area at 1445 Ross Avenue, Suite 700, Dallas, 
Texas.
    The State submittal, which is part of the EPA record, is also 
available for public inspection at the State Air Agency listed below 
during official business hours by appointment:
    Texas Commission on Environmental Quality, Office of Air Quality, 
12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT: Mr. Stanley M. Spruiell, Air Permits 
Section (6PD-R), Environmental Protection Agency, Region 6, 1445 Ross 
Avenue, Suite 700, Dallas, Texas 75202-2733, telephone (214) 665-7212; 
fax number 214-665-7263; e-mail address <a href="/cdn-cgi/l/email-protection#12616260677b777e7e3c6166737c7e776b527762733c757d64"><span class="__cf_email__" data-cfemail="b2c1c2c0c7dbd7dede9cc1c6d3dcded7cbf2d7c2d39cd5ddc4">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 
    Throughout this document, the following terms have the meanings 
described below:
    <bullet> ``We,'' ``us,'' and ``our'' refer to EPA.
    <bullet> ``Act'' and ``CAA'' means Clean Air Act.
    <bullet> ``40 CFR'' means Title 40 of the Code of Federal 
Regulations-Protection of the Environment.
    <bullet> ``SIP'' means State Implementation Plan as established 
under section 110 of the Act.
    <bullet> ``NSR'' means new source review, a phrase intended to 
encompass the statutory and regulatory programs that regulate the 
construction and modification of stationary sources as provided under 
CAA section 110(a)(2)(C), CAA Title I, parts C and D, and 40 CFR 51.160 
through 51.166.
    <bullet> ``Minor NSR'' means NSR established under section 110 of 
the Act and 40 CFR 51.160.
    <bullet> ``NNSR'' means nonattainment NSR established under Title 
I, section 110 and part D of the Act and 40 CFR 51.165.
    <bullet> ``PSD'' means prevention of significant deterioration of 
air quality established under Title I, section 110 and part C of the 
Act and 40 CFR 51.166.
    <bullet> ``Major NSR'' means any new or modified source that is 
subject to NNSR and/or PSD.
    <bullet> ``TSD'' means the Technical Support Document for this 
action.
    <bullet> ``NAAQS'' means national ambient air quality standards 
promulgated under section 109 of that Act and 40 CFR part 50.
    <bullet> ``PAL'' means ``plantwide applicability limitation.''
    <bullet> ``PCP'' means ``pollution control project.''
    <bullet> ``TCEQ'' means ``Texas Commission on Environmental 
Quality.''

Table of Contents

I. What action is EPA taking?
II. What is the background?
III. Did we receive public comments on the proposed rulemaking?
IV. What are the grounds for these actions?
    A. The Submitted Minor NSR Definition of BACT SIP Revision
    1. What is the background for the submitted definition of BACT 
under 30 TAC 116.10(3) as proposed under Docket No. EPA-R06-OAR-
2005-TX-0025?
    2. What is EPA's response to comments on the submitted minor NSR 
definition of BACT SIP revision?
    3. What are the grounds for disapproval of the submitted minor 
NSR definition of BACT SIP revision?
    B. The Submitted Anti-Backsliding Major NSR SIP Requirements for 
the 1-hour Ozone NAAQS
    1. What is the background for the submitted anti-backsliding 
major NSR SIP requirements for the 1-hour ozone NAAQS?
    2. What is EPA's response to comments on the submitted anti-
backsliding major NSR SIP requirements for the 1-hour ozone NAAQS?

[[Page 56425]]

    3. What are the grounds for disapproval of the submitted anti-
backsliding major NSR SIP requirements for the 1-hour ozone NAAQS?
    C. The Submitted Major Nonattainment NSR SIP Requirements for 
the 1997 8-hour Ozone NAAQS
    1. What is the background for the submitted major nonattainment 
NSR SIP requirements for the 1997 8-hour ozone NAAQS?
    2. What is EPA's response to comments on the submitted major 
nonattainment NSR SIP requirements for the 1997 8-hour ozone NAAQS?
    3. What are the grounds for disapproval of the submitted major 
nonattainment NSR SIP requirements for the 1997 8-hour ozone NAAQS?
    D. The Submitted Major NSR Reform SIP revision for Major NSR 
with PAL Provisions
    1. What is the background for the submitted major NSR reform SIP 
revision for major NSR with PAL provisions?
    2. What is EPA's response to comments on the submitted major NSR 
reform SIP revision for major NSR with PAL provisions?
    3. What are the grounds for disapproval of the submitted major 
NSR reform SIP revision for major NSR with PAL provisions?
    E. The Submitted Non PAL Aspects of the Major NSR SIP 
Requirements
    1. What is the background for the submitted non PAL aspects of 
the major NSR SIP requirements?
    2. What is EPA's response to comments on the submitted non PAL 
aspects of the major NSR SIP requirements?
    3. What are the grounds for disapproval of the submitted non-PAL 
aspects of the major NSR SIP requirements?
    F. The Submitted Minor NSR Standard Permit for Pollution Control 
Project SIP Revision
    1. What is the background for the submitted minor NSR standard 
permit for pollution control project SIP revision?
    2. What is EPA's response to comments on the submitted minor NSR 
standard permit for pollution control project SIP revision?
    3. What are the grounds for disapproval of the submitted minor 
NSR standard permit for pollution control project SIP revision?
    G. No Action on the Revisions to the Definitions under 30 TAC 
101.1
    H. No Action on Provisions that Implement Section 112(g) of the 
Act and for Restoring an Explanation that a Portion of 30 TAC 
116.115 is not in the SIP Because it Implements Section 112(g) of 
the Act.
    I. No Action on Provision Relating to Emergency and Temporary 
Orders.
    J. Responses to General Comments on the Proposal
V. Final Action
VI. Statutory and Executive Order Reviews

I. What action is EPA taking?

A. What regulations is EPA disapproving?

    We are disapproving the SIP revisions submitted by Texas on June 
10, 2005, and February 1, 2006, as not meeting the Act and the 1997 8-
hour ozone Major Nonattainment NSR SIP requirements, and as not meeting 
the Act and Major Nonattainment NSR SIP requirements for the 1-hour 
ozone NAAQS. We are disapproving the SIP revision submitted by Texas on 
February 1, 2006, as not meeting the Major NSR Reform SIP requirements 
for PAL provisions and the Major NSR Reform SIP requirements without 
the PAL provisions. We are disapproving the Standard Permit for PCP 
submitted February 1, 2006, as not meeting the Act and Minor NSR SIP 
requirements. We proposed to disapprove the above SIP revision 
submittals on September 23, 2009 (74 FR 48467). We are disapproving the 
State's regulatory definition for its Texas Clean Air Act's statutory 
definition for ``BACT'' that was submitted in 30 TAC 116.10(3) on March 
13, 1996, and July 22, 1998, because it is not clearly limited to minor 
sources and minor modifications. We proposed to disapprove this 
severable definition of BACT under our action on Qualified Facilities. 
See 74 FR 48450, at 48463 (September 23, 2009). It is EPA's position 
that each of these six identified portions in the SIP revision 
submittals, 8-hour ozone, 1-hour ozone, PALs, non-PALs, PCP Standard 
Permit, and Minor NSR definition of BACT, is severable from each other 
and from the remaining portions of the SIP revision submittals.
    We have evaluated the SIP submissions to determine whether they 
meet the Act and 40 CFR Part 51, and are consistent with EPA's 
interpretation of the relevant provisions. Based upon our evaluation, 
EPA has concluded that each of the six portions of the SIP revision 
submittals, identified below, does not meet the requirements of the Act 
and 40 CFR part 51. Therefore, each portion of the State submittals is 
not approvable. As authorized in sections 110(k)(3) and 301(a) of the 
Act, where portions of the State submittal are severable, EPA may 
approve the portions of the submittal that meet the requirements of the 
Act, take no action on certain portions of the submittal,\1\ and 
disapprove the portions of the submittal that do not meet the 
requirements of the Act. When the deficient provisions are not 
severable from the all of the submitted provisions, EPA must disapprove 
the submittals, consistent with section 301(a) and 110(k)(3) of the 
Act. Each of the six portions of the State submittals is severable from 
each other. Therefore, EPA is disapproving each of the following 
severable provisions of the submittals:
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    \1\ In this action, we are taking no action on certain 
provisions that are either outside the scope of the SIP or which 
revise an earlier submittal of a base regulation that is currently 
undergoing review for appropriate action.
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    <bullet> The submitted 1997 8-hour ozone NAAQS Major Nonattainment 
NSR SIP revision,
    <bullet> The submitted 1-hour ozone NAAQS Major NNSR SIP revision,
    <bullet> The submitted Major NSR reform SIP revision with PAL 
provisions,
    <bullet> The submitted Major NSR reform SIP revision with no PAL 
provisions,
    <bullet> The submitted Minor NSR Standard Permit for PCP SIP 
revision, and
    <bullet> The submitted definition of ``BACT'' under 30 TAC 
116.10(3) for Minor NSR.
    The provisions in these submittals for each of the six portions of 
the SIP revision submittals were not submitted to meet a mandatory 
requirement of the Act. Therefore, this final action to disapprove the 
submitted six portions of the State submittals does not trigger a 
sanctions or Federal Implementation Plan clock. See CAA section 179(a).

B. What other actions is EPA taking?

    EPA is taking action in a separate rulemaking action published in 
today's Federal Register on the severable revisions that relate to 
Prevention of Significant Deterioration. The affected provision that is 
being acted upon separately in today's Federal Register is 30 TAC 
116.160.
    We are taking no action on 30 TAC 116.400, 116.402, 116.404, and 
116.406, submitted February 1, 2006. These provisions implement section 
112(g) of the Act, which is outside the scope of the SIP. We are also 
making an administrative correction relating to 30 TAC 
116.115(c)(2)(B)(ii)(I). In our 2002 approval of 30 TAC 116.115 we 
included an explanation in 40 CFR 52.2270(c) that 30 TAC 
116.115(c)(2)(B)(ii)(I) is not in the SIP because it implements section 
112(g) of the Act, which is outside the scope of the SIP. In a separate 
action published April 2, 2010 (75 FR 16671), we inadvertently removed 
the explanation that states that this provision is not part of the SIP.
    We are taking no action on severable portions of the June 10, 2005, 
submittal concerning 30 TAC 101.1 Definitions. We will take action on 
these portions of the submittal in a later rulemaking.
    Finally, we are taking no action on severable portions of the 
February 1, 2006, submittal which relate to

[[Page 56426]]

Emergency and Temporary Orders. We will take action on these portions 
of the submittal in a later rulemaking.

II. What is the background?

A. Summary of Our Proposed Action

    On September 23, 2009, under Docket No. EPA-R06-OAR-0133, EPA 
proposed to disapprove revisions to the SIP submitted by the State of 
Texas that relate to revisions to the New Source Review (NSR) State 
Implementation Plan (SIP); (1) Prevention of Significant Deterioration 
(PSD), (2) Nonattainment NSR (NNSR) for the 1997 8-Hour Ozone Standard, 
(3) NNSR for the 1-Hour Ozone Standard, (4) Major NSR Reform for PAL 
provisions, (5) The Major NSR Reform SIP requirements without the PAL 
provisions and (6) The Standard Permit for PCP. See 74 FR 48467. These 
affected provisions that we proposed to disapprove were 30 TAC 116.12, 
116.121, 116.150, 116.151, 116.160, 116.180, 116.182, 116.184, 116.186, 
116.188, 116.190, 116.192, 116.194, 116.196, 116.198, 116.610(a), and 
116.617 under Chapter 116, Control of Air Pollution by Permits for New 
Construction or Modification. EPA also proposed on September 23, 2009, 
under Docket No. EPA-R06-OAR-2005-TX-0025 (see 74 FR 48450, at 48463-
48464), to disapprove a revision to the SIP submitted by the State that 
relates to the State's Minor NSR definition of BACT. The affected 
definition that we proposed to disapprove was 30 TAC 116.10(3). See 74 
FR 48450, at 48463-48464. EPA finds that each of these six submitted 
provisions is severable from each other. EPA also finds that the 
submitted definition is severable from the other submittals.
    EPA is taking action in a separate rulemaking action published in 
today's Federal Register on the severable revisions that relate to 
Prevention of Significant Deterioration. The affected provision that is 
being acted upon separately in today's Federal Register is 30 TAC 
116.160.
    EPA proposed on September 23, 2009, under Docket No. EPA-R06-OAR-
0133, no action on the following regulations:
    <bullet> 30 TAC 116.400, 116.402, 116.404, 116.406, 116.610(d). 
These regulations implement section 112(g) of the CAA and are outside 
the scope of the SIP;
    <bullet> 30 TAC 116.1200. This regulation relates to Emergency and 
Temporary Orders and will be addressed in a separate action under the 
Settlement Agreement in BCCA Appeal Group v. EPA, Case No. 3:08-cv-
01491-N (N.D. Tex).

B. Summary of the Submittals Addressed in This Final Action

    Tables 1 and 2 below summarize the changes that are in the SIP 
revision submittals. A summary of EPA's evaluation of each section and 
the basis for this final action is discussed in sections III through V 
of this preamble. The TSD (which is in the docket) includes a detailed 
evaluation of the submittals.

                     Table 1--Summary of Each SIP Submittal That Is Affected by This Action
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                                                    Date       Date of
            Title of SIP submittal               submitted      state       Regulations affected in this action
                                                   to EPA      adoption
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Qualified Facilities and Modification to          3/13/1996    2/14/1996  30 TAC 116.10--definition of ``BACT''.
 Existing Facilities.
NSR Rule Revisions; section 112(g) Rule Review    7/22/1998    6/17/1998  30 TAC 116.10(3)--definition of
 for Chapter 116.                                                          ``BACT''.
New Source Review for Eight-Hour Ozone            6/10/2005    5/25/2005  30 TAC 116.12 and 115.150.
 Standard.
Federal New Source Review Permit Rules Reform.     2/1/2006    1/11/2006  30 TAC 116.12, 116.121, 116.150,
                                                                           116.151, 116.180, 116.182, 116.184,
                                                                           116.186, 116.188, 116.190, 116.192,
                                                                           116.194, 116.196, 116.198, 116.400,
                                                                           116.402, 116.404, 116.406, 116.610,
                                                                           116.617, and 116.1200.
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                       Table 2--Summary of Each Regulation That Is Affected by This Action
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                                                          Submittal
            Section                       Title             dates      Description of change     Final action
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              Chapter 116--Control of Air Pollution by Permits for New Construction or Modification
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                                            Subchapter A--Definitions
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30 TAC 116.10(3)...............  Definition of ``BACT''    3/13/1996  Added new definition..  Disapproval.
                                                           7/22/1998  Repealed and a new
                                                                       definition submitted
                                                                       as paragraph (3).
30 TAC 116.12..................  Nonattainment Review      6/10/2005  Changed several         Disapproval.
                                  Definitions.                         definitions to
                                                                       implement Federal
                                                                       phase I rule
                                                                       implementing 8-hour
                                                                       ozone standard.
                                 Nonattainment Review       2/1/2006  Renamed section and     Disapproval.
                                  and Prevention of                    added and revised
                                  Significant                          definitions to
                                  Deterioration                        implement Federal NSR
                                  Definitions.                         Reform regulations.
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                                     Subchapter B--New Source Review Permits
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                                         Division 1--Permit Application
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30 TAC 116.121.................  Actual to Projected        2/1/2006  New Section...........  Disapproval.
                                  Actual Test for
                                  Emissions Increase.
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[[Page 56427]]

 
                                        Division 5--Nonattainment Review
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30 TAC 116.150.................  New Major Source or       6/10/2005  Revised section to      Disapproval.
                                  Major Modification in                implement Federal
                                  Ozone Nonattainment                  phase I rule
                                  Area.                                implementing 8-hour
                                                                       ozone standard.
                                                        --------------------------------------------------------
                                                            2/1/2006  Revised section to      Disapproval.
                                                                       implement Federal NSR
                                                                       Reform regulations.
                                                        --------------------------------------------------------
30 TAC 116.151.................  New Major Source or        2/1/2006  Revised section to      Disapproval.
                                  Major Modification in                implement Federal NSR
                                  Nonattainment Areas                  Reform regulations.
                                  Other Than Ozone.
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                                  Subchapter C--Plant-Wide Applicability Limits
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                                   Division 1--Plant-Wide Applicability Limits
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30 TAC 116.180.................  Applicability.........     2/1/2006  New Section...........  Disapproval.
30 TAC 116.182.................  Plant-Wide                 2/1/2006  New Section...........  Disapproval.
                                  Applicability Limit
                                  Permit Application.
30 TAC 116.184.................  Application Review         2/1/2006  New Section...........  Disapproval.
                                  Schedule.
30 TAC 116.186.................  General and Special        2/1/2006  New Section...........  Disapproval.
                                  Conditions.
30 TAC 116.188.................  Plant-Wide                 2/1/2006  New Section...........  Disapproval.
                                  Applicability Limit.
30 TAC 116.190.................  Federal Nonattainment      2/1/2006  New Section...........  Disapproval.
                                  and Prevention of
                                  Significant
                                  Deterioration Review.
30 TAC 116.192.................  Amendments and             2/1/2006  New Section...........  Disapproval.
                                  Alterations.
30 TAC 116.194.................  Public Notice and          2/1/2006  New Section...........  Disapproval.
                                  Comment.
30 TAC 116.196.................  Renewal of a Plant-        2/1/2006  New Section...........  Disapproval.
                                  Wide Applicability
                                  Limit Permit.
30 TAC 116.198.................  Expiration and             2/1/2006  New Section...........  Disapproval.
                                  Voidance.
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 Subchapter E--Hazardous Air Pollutants: Regulations Governing Constructed and Reconstructed Sources (FCAA, Sec.
                                           112(g), 40 CFR Part 63) \a\
----------------------------------------------------------------------------------------------------------------
30 TAC 116.400.................  Applicability.........     2/1/2006  Recodification from     No action.
                                                                       section 116.180.
30 TAC 116.402.................  Exclusions............     2/1/2006  Recodification from     No action.
                                                                       section 116.181.
30 TAC 116.404.................  Application...........     2/1/2006  Recodification from     No action.
                                                                       section 116.182.
30 TAC 116.406.................  Public Notice              2/1/2006  Recodification from     No action.
                                  Requirements.                        section 116.183.
----------------------------------------------------------------------------------------------------------------
                                         Subchapter F--Standard Permits
----------------------------------------------------------------------------------------------------------------
30 TAC 116.610.................  Applicability.........     2/1/2006  Revised paragraphs      - Disapproval of
                                                                       (a), (a)(1) through     paragraph (a)
                                                                       (a)(5), (b), and (d)   - No action on
                                                                       \b\.                    paragraph (d)
----------------------------------------------------------------------------------------------------------------
30 TAC 116.617.................  State Pollution            2/1/2006  Replaced former 30 TAC  Disapproval.
                                  Control Project                      116.617--Standard
                                  Standard Permit.                     Permit for Pollution
                                                                       Control Projects \c\.
----------------------------------------------------------------------------------------------------------------
                                       Subchapter K--Emergency Orders \d\
----------------------------------------------------------------------------------------------------------------
30 TAC 116.1200................  Applicability.........     2/1/2006  Recodification from 30  No action.
                                                                       TAC 116.410.
----------------------------------------------------------------------------------------------------------------
\a\ Recodification of former Subchapter C. These provisions are not SIP-approved.
\b\ 30 TAC 116.610(d) is not SIP-approved.
\c\ 30 TAC 116.617 is not SIP-approved.
\d\ Recodification of former Subchapter E. These provisions are not SIP-approved.

C. Other Relevant Actions on the Texas Permitting SIP Revision 
Submittals

    Final action on the submitted Major NSR SIP elements and the 
Standard Permit is required by August 31, 2010, as provided in the 
Consent Decree entered on January 21, 2010 in BCCA Appeal Group v. EPA, 
Case No. 3:08-cv-01491-N (N.D. Tex). As required by the Consent Decree, 
EPA published its final actions for the following SIP revisions: (1) 
Texas Qualified Facilities

[[Page 56428]]

Program and its associated General Definitions on April 14, 2010 (See 
75 FR 19467); and (2) Texas Flexible Permits Program on July 15, 2010 
(See 75 FR 41311).
    TCEQ submitted on July 16, 2010, a proposed SIP revision addressing 
the PSD SIP requirements. We are acting upon the previous PSD SIP 
revision submittal of February 1, 2006, and the newly submitted PSD SIP 
revision in a separate rulemaking. Additionally, EPA acknowledges that 
TCEQ is developing a proposed rulemaking package to address EPA's 
concerns with revisions to the New Source Review (NSR) State 
Implementation Plan (SIP); Nonattainment NSR (NNSR) for the 1997 8-Hour 
Ozone Standard and the 1-Hour Ozone Standard, NSR Reform, and the PCP 
Standard Permit. We will, of course, consider any rule changes if and 
when they are submitted to EPA for review. However, the rules before us 
today are those of Texas's current 1997 8-Hour Ozone Standard NNSR 
Program, 1-Hour Ozone Standard NNSR Program, NSR Reform Program, PCP 
Standard Permit, and we have concluded that these current Programs are 
not approvable for the reasons set out in this notice.

III. Did we receive public comments on the proposed rulemaking?

    In response to our September 23, 2009, proposal, we received 
comments from the following: Association of Electric Companies of Texas 
(AECT); Austin Physicians for Social Responsibility (PSR); Baker Botts, 
L.L.P., on behalf of BCCA Appeal Group (BCCA); Baker Botts, L.L.P., on 
behalf of Texas Industrial Project (TIP); Bracewell & Guiliani, L.L.P., 
on behalf of the Electric Reliability Coordinating Council (ERCC); 
Citizens of Grayson County; Gulf Coast Lignite Coalition (GCLC); Office 
of the Mayor--City of Houston, Texas (City of Houston); Harris County 
Public Health and Environmental Services (HCPHES); Sierra Club--Houston 
Regional Group (Sierra Club); Sierra Club Membership Services 
(including 2,062 individual comment letters) (SCMS); Texas Chemical 
Council (TCC); Texas Commission on Environmental Quality (TCEQ); Texas 
Association Business; Members of the Texas House of Representatives; 
Texas Association of Business (TAB); Texas Oil and Gas Association 
(TxOGA); and University of Texas at Austin School of Law--Environmental 
Clinic (the Clinic) on behalf of Environmental Integrity Project, 
Environmental Defense Fund, Galveston-Houston Association for Smog 
Prevention, Public Citizen, Citizens for Environmental Justice, Sierra 
Club Lone Star Chapter, Community-In-Power and Development Association, 
KIDS for Clean Air, Clean Air Institute of Texas, Sustainable Energy 
and Economic Development Coalition, Robertson County: Our Land, Our 
Lives, Texas Protecting Our Land, Water and Environment, Citizens for a 
Clean Environment, Multi-County Coalition, and Citizens Opposing Power 
Plants for Clean Air.
    We respond to these comments in our evaluation and review under 
this final action in section IV below.

IV. What are the grounds for these actions?

    This section includes EPA's evaluation of each part of the 
submitted rules. The evaluation is organized as follows: (1) A 
discussion of the background of the submitted rules; (2) a summary and 
response to each comment received on the submitted rule; and (3) the 
grounds for final action on each rule.

A. The Submitted Minor NSR State BACT Definition SIP Revision

    EPA proposed to disapprove this severable definition of BACT in 30 
TAC 116.10(3), submitted March 13, 1996, and July 22, 1998, when EPA 
proposed to disapprove the Texas Qualified Facilities Program (under 
Docket No. EPA-R06-OAR-2005-TX-0025). See 74 FR 48450, at 48463-48464. 
The submittals on March 13, 1996, and July 22, 1998, include a new 
regulatory definition for the Texas Clean Air Act's definition of 
``BACT,'' defining it as BACT with consideration given to the technical 
practicability and economical reasonableness of reducing or eliminating 
emissions.
1. What is the background for the submitted definition of BACT under 30 
TAC 116.10(3) as proposed under Docket No. EPA-R06-OAR-2005-TX-0025?
    On July 27, 1972, the State of Texas revised its January 1972 
permitting rules, then Regulation VI at rule 603.16, to add the Texas 
Clean Air Act statutory requirement that a proposed new facility and 
proposed modification utilize BACT, with consideration to the technical 
practicability and economical reasonableness of reducing or eliminating 
the emissions from the facility. EPA approved the revised 603.16 into 
the Texas SIP \2\ and that provision is presently codified in the Texas 
SIP at 30 TAC 116.111(a)(2)(C).
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    \2\ The January 1972 Texas NSR rules, as revised in July 1972, 
require a proposed new facility or modification to utilize ``best 
available control technology, with consideration to the technical 
practicability and economic reasonableness of reducing or 
eliminating the emissions resulting from the facility.'' This 
definition of BACT is from the Texas Clean Air Act. EPA approved 
this into the Texas NSR SIP possibly in the 1970's and definitely on 
August 13, 1982 (47 FR 35193). When EPA approved the Texas PSD 
program SIP revision submittals, including the State's incorporation 
by reference of the Federal definition of PSD BACT, in 1992, both 
EPA and Texas interpreted the use of the TCAA BACT definition to be 
for Minor NSR SIP permitting purposes only. EPA specifically found 
that the State's TCAA BACT definition did not meet the Federal PSD 
BACT definition. We required the use of the Federal PSD BACT 
definition for PSD SIP permitting purposes. See the proposal and 
final approval of the Texas PSD SIP at 54 FR 52823 (December 22, 
1989) and 57 FR 28093 (June 24, 1992).
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    The Texas NSR SIP includes not only the PSD BACT definition \3\ but 
also a requirement for a source to perform a BACT analysis. See 30 TAC 
116.111(a)(2)(C). EPA relied upon this SIP provision in its 1992 
original approval of the Texas PSD SIP as meeting the PSD requirement 
of 40 CFR 52.21(j). See 54 FR 52823, at 52824-52825, and 57 FR 28093, 
at 28096-28096. Both Texas and EPA interpreted this SIP provision to 
require either a Minor NSR BACT determination or a Major PSD BACT 
determination. Since EPA's approval of the Texas PSD SIP in 1992, there 
has been some confusion about the distinction between a State Minor NSR 
BACT definition and a PSD Major NSR BACT definition and the requirement 
that a source must perform the relevant BACT analysis.
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    \3\ Texas's current PSD SIP incorporates by reference the 
Federal PSD definition of BACT in 40 CFR 52.21(b)(12). See current 
SIP at 30 TAC 116.160(a). On February 1, 2006, TCEQ submitted a 
revision that reorganized 30 TAC 116.160 and removed the reference 
to the BACT definition. On September 23, 2009, EPA proposed to 
disapprove the 2006 revision to section 116, because of the removal 
of the reference to the Federal PSD BACT definition. On July 16, 
2010, Texas submitted a revision to section 116.160 that reinstated 
the reference to the PSD BACT definition in 40 CFR 52.21(b)(12). See 
30 TAC 116.160(c)(1)(A), submitted July 16, 2010. EPA is addressing 
the 2006 and 2010 revisions to 30 TAC 116.160 in a separate action 
published in today's Federal Register.
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    TCEQ in 1996 submitted a regulatory definition of the TCAA BACT 
statutory provision but failed to distinguish the submitted regulatory 
BACT definition as the Minor NSR BACT definition. See the proposed 
disapproval of the BACT definition in 30 TAC 116.10(3) at 74 FR 48450, 
at 40453 (footnote 2), 48463-48464, TCEQ's proposed revisions to its 
Qualified Facilities Program rulemaking, and EPA's June 7, 2010, 
comment letter on TCEQ's Qualified Facilities Program, for further 
information.

[[Page 56429]]

2. What is EPA's response to comments on the submitted Minor NSR 
definition of BACT SIP revision?
    Comment 1: TCEQ commented (under Docket No. EPA-R06-OAR-2005-TX-
0025) on the proposed disapproval of BACT in the Qualified Facilities 
proposal that it will consider EPA's comments in connection with its 
disapproval of the definition of BACT and plans to revise its 
definition of BACT to correct the deficiencies identified in the 
proposal.
    Response: EPA acknowledges TCEQ's consideration of our comments 
regarding our disapproval of the definition of BACT as well as TCEQ's 
plans to revise its definition of BACT to correct the deficiencies 
identified in our proposal. TCEQ proposed to revise this definition on 
March 30, 2010. On June 7, 2010, we forwarded comments to TCEQ on this 
proposed rule. In our comments, we stated that the definition of the 
TCAA BACT must be revised to indicate more clearly that the definition 
is for any air contaminant or facility that is not subject to the 
Federal permitting requirements for PSD. The proposed substantive 
revisions to the regulatory definition are acceptable. Nonetheless, as 
we explained in our comment letter, we believe that the TCAA BACT 
regulatory definition should be given a distinguishable name, e.g., 
State, Texas, Minor NSR Best Available Control Technology. We recognize 
that the State must continue to use the term BACT since it is in the 
TCAA; we believe that TCEQ could add before ``BACT'' however, Texas, 
State, or Minor NSR, to clearly distinguish this BACT definition from 
the Federal PSD BACT definition.
    Comment 2: The Clinic commented (under Docket No. EPA-R06-OAR-2005-
TX-0025) on the proposed disapproval and agrees that this definition 
cannot be substituted for the Federal definition of BACT for purposes 
of PSD. The Clinic further comments that rather than limiting the 
applicability of the definition of ``Texas BACT'' to minor sources and 
modifications, Texas should use a different acronym for its minor NSR 
technology requirement. The use of dual definitions of BACT within the 
same program is too confusing, as evidenced by the ongoing application 
of Texas BACT in the Texas PSD permitting proceedings.
    Response: EPA agrees with the Clinic that the TCAA BACT regulatory 
definition cannot be substituted for the Federal definition of PSD 
BACT. EPA takes note of the Clinic's comment regarding the dual use of 
the definition of ``Texas BACT'' within the same program and ensuing 
confusion. See Response to Comment 1 above for further information.
3. What are the grounds for disapproval of the submitted Minor NSR 
definition of BACT SIP revision?
    EPA is disapproving the submitted definition of BACT under 30 TAC 
116.10(3) as proposed under Docket No. EPA-R06-OAR-2005-TX-0025. EPA 
proposed to disapprove this severable definition of BACT in 30 TAC 
116.10(3), submitted March 13, 1996, and July 22, 1998, when EPA 
proposed to disapprove the submitted Texas SIP revisions for 
Modification of Existing Qualified Facilities Program and General 
Definitions (under Docket No. EPA-R06-OAR-2005-TX-0025). See 74 FR 
48450, at 48463-48464.
    EPA received comments from TCEQ and the Clinic regarding the 
proposed disapproval of this submitted definition as a revision to the 
Texas NSR SIP. See our response to these comments in section IV.A.2 
above. The submitted regulatory BACT definition of the TCAA provision 
at 30 TAC 116.10(3) fails to apply clearly only for minor sources and 
minor modifications at major stationary sources. See the proposed 
disapproval of the BACT definition in 30 TAC 116.10(3) at 74 FR 48450, 
at 40453 (footnote 2), 48463-48464, TCEQ Qualified Facilities proposal, 
and EPA's Qualified Facilities comment letter, for further information. 
Moreover, we strongly recommend, as suggested in comments from the 
Clinic, that Texas adopt a prefatory term before its TCAA BACT 
definition, e.g., State, Texas, or Minor NSR, to avoid any confusion 
with the term BACT as used by the CAA and the major source PSD program.

B. The Submitted Anti-Backsliding Major NSR SIP Requirements for the 1-
Hour Ozone NAAQS

1. What is the background for the submitted anti-backsliding Major NSR 
SIP requirements for the 1-hour ozone NAAQS?
    On July 18, 1997, EPA promulgated a new NAAQS for ozone based upon 
8-hour average concentrations. The 8-hour averaging period replaced the 
previous 1-hour averaging period, and the level of NAAQS was changed 
from 0.12 parts per million (ppm) to 0.08 ppm (62 FR 38865).\4\ On 
April 30, 2004 (69 FR 23951), we published a final rule that addressed 
key elements related to implementation of the 1997 8-hour ozone NAAQS 
including, but not limited to: revocation of the 1-hour NAAQS and how 
anti-backsliding principles will ensure continued progress toward 
attainment of the 1997 8-hour ozone NAAQS. We codified the anti-
backsliding provisions governing the transition from the revoked 1-hour 
ozone NAAQS to the 1997 8-hour ozone NAAQS in 40 CFR 51.905(a). The 1-
hour ozone major nonattainment NSR SIP requirements indicated that 
certain 1-hour ozone standard requirements were not part of the list of 
anti-backsliding requirements provided in 40 CFR 51.905(f).
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    \4\ On March 12, 2008, EPA significantly strengthened the 1997 
8-hour ozone standard, to a level of 0.075 ppm. EPA is developing 
rules needed for implementing the 2008 revised 8-hour ozone standard 
and has received the States' submittals identifying areas with their 
boundaries they identify to be designated nonattainment. EPA is 
reviewing the States' submitted data.
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    On December 22, 2006, the DC Circuit vacated the Phase 1 
Implementation Rule in its entirety. South Coast Air Quality Management 
District, et al., v. EPA, 472 F.3d 882 (DC Cir. 2006), reh'g denied 489 
F.3d 1245 (2007) (clarifying that the vacatur was limited to the issues 
on which the court granted the petitions for review). EPA requested 
rehearing and clarification of the ruling and on June 8, 2007, the 
Court clarified that it was vacating the rule only to the extent that 
it had upheld petitioners' challenges. Thus, the Court vacated the 
provisions in 40 CFR 51.905(e) that waived obligations under the 
revoked 1-hour standard for NSR. The court's ruling, therefore, 
maintains major nonattainment NSR applicability thresholds and emission 
offsets pursuant to classifications previously in effect for areas 
designated nonattainment for the 1-hour ozone NAAQS.
    On June 10, 2005 and February 1, 2006, Texas submitted SIP 
revisions to 30 TAC 116.12 and 30 TAC 116.150 which relate to the 
transition from the major nonattainment NSR requirements applicable for 
the 1-hour ozone NAAQS to implementation of the major nonattainment NSR 
requirements applicable to the 1997 8-hour ozone NAAQS. Texas's 
revisions at 30 TAC 116.12(18) (Footnote 6 under Table I under the 
definition of ``major modification'') and 30 TAC 116.150(d) 
introductory paragraph, effective as State law on June 15, 2005, 
provide that for ``the Houston-Galveston-Brazoria, Dallas-Fort Worth, 
and Beaumont-Port Arthur eight hour ozone nonattainment areas, if the 
United States Environmental Protection Agency promulgates rules 
requiring new source review permit applications in these areas to be 
evaluated for nonattainment new source review according to the area's 
one-hour standard classification,'' then ``each application will be 
evaluated

[[Page 56430]]

according to that area's one-hour standard classification'' and ``* * * 
the de minimis threshold test (netting) is required for all 
modifications to existing major sources of VOC or NO<INF>X</INF> in 
that area * * *.'' The footnote 6 and the introductory paragraph add a 
new requirement for an affirmative regulatory action by EPA on the 
reinstatement of the 1-hour ozone NAAQS major nonattainment NSR 
requirements before the legally applicable major nonattainment NSR 
requirements under the 1-hour ozone standard will be implemented in the 
Texas 1-hour ozone nonattainment areas.
    The currently approved Texas major nonattainment NSR SIP does not 
require such an affirmative regulatory action by EPA before the 1-hour 
ozone major nonattainment NSR requirements come into effect in the 
Texas 1-hour ozone nonattainment areas. The current SIP states at 30 
TAC 116.12(18) (Footnote 1 under Table I) that ``Texas nonattainment 
area designations are specified in 40 Code of Federal Regulations Sec.  
81.344.'' That section includes designations for the one-hour standard 
as well as the eight-hour standard. Moreover, the submitted revisions 
to 30 TAC 116.12(18) and 116.150(d) do not comport with the South Coast 
decision as discussed above.
    The court opinion maintains the lower applicability thresholds and 
more stringent offset ratios for a 1-hour ozone nonattainment area 
whose classification under that standard was higher than its 
nonattainment classification under the 8-hour standard. In the 
submitted rule revision, the lower applicability thresholds and more 
stringent offset ratios for a classified 1-hour ozone nonattainment 
area would not be required in a Texas 1-hour ozone nonattainment area 
unless and until EPA promulgated a rulemaking implementing the South 
Coast decision. Although EPA proposed that the Texas revision relaxes 
the requirements of the approved SIP and we stated that EPA lacks 
sufficient information to determine whether this relaxation would not 
interfere with any applicable requirement concerning attainment and 
reasonable further progress, or any other applicable requirement of the 
Act (see 74 FR 48467, at 48473) we have now determined that it is 
unnecessary to reach this issue because the revision nonetheless fails 
to comply with the CAA, whereas, the existing approved SIP meets CAA 
requirements.
2. What is EPA's response to comments on the submitted anti-backsliding 
Major NSR SIP requirements for the 1-Hour Ozone NAAQS?
    Comment 1: TCEQ commented that the anti-backsliding issue 
associated with the status of the requirements for compliance with the 
1-hour ozone NAAQS with the implementation of the 8-hour ozone NAAQS 
was delayed by litigation that took several years to become final. TCEQ 
adopted changes to 30 TAC 116.12(18) in June, 2005, prior to the 
resolution of the litigation. After the South Coast decision, EPA 
subsequently stated it would conduct rulemaking to address the 1-hour 
ozone NAAQS requirements.\5\ TCEQ commits to work with EPA to ensure 
that the rule is revised to comply with current law.
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    \5\ See New Source Review (NSR) Aspects of the Decision of the 
U.S. Court of Appeals for the District of Columbia Circuit on the 
Phase I Rule to Implement the 8-Hour Ozone National Ambient Air 
Quality Standards (NAAQS), from Robert J. Meyers, Principal Deputy 
Assistant Administrator, to EPA Regional Administrators, dated 
October 3, 2007. This memorandum is in the docket for this action 
numbered EPA-R06-OAR-2006-0133-0007 and is available at: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=09000064801987ff.
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    Response: EPA acknowledges TCEQ's commitment to revise its State 
rules to implement the Major NSR anti-backsliding requirement. However, 
the 2007 Meyers Memorandum cited in the comment did not indicate that 
States should await EPA rulemaking before taking any necessary steps to 
comply with the South Coast decision. Rather, the memorandum encouraged 
the Regions to ``have States comply with the court decision as quickly 
as possible.'' The memorandum's reference to ``rulemaking to conform 
our NSR regulations to the court's decision'' was not intended to 
suggest that States could simply ignore the court's decision until EPA 
had updated its regulations to reflect the vacatur.
    Comment 2: The Clinic commented that Texas rules limit enforcement 
of the 1-hour ozone NAAQS in violation of South Coast Air Quality 
Management District v. EPA. As a result of this decision, States must 
immediately comply with the formerly revoked 1-hour ozone requirements, 
including NNSR applicability thresholds and emission offset 
requirements. Texas rules include two provisions that require EPA to 
conduct rulemaking before TCEQ can begin enforcing the one-hour 
standard classification requirements for NAAQS. See 30 TAC 116.12(18), 
Table I, and 116.150(d).
    Response: See response to Comment 1.
    Comment 3: BCCA, TIP, TCC, commented that the Texas rules regarding 
the 1-hour/8-hour transition are neither inconsistent with the CAA, nor 
the court's decision in South Coast. With its remand to EPA following 
vacatur of parts of the Phase 1 transition rule, the South Coast court 
did not offer specific direction concerning implementation of the 
backsliding requirements as they apply to NSR. However, the court in 
its Opinion on Petitions for Rehearing ``urged'' EPA ``to act promptly 
in promulgating a revised rule that effectuates the statutory mandate 
by implementing the eight-hour standard * * *.'' South Coast Air 
Quality Mgmt. Dist. v. EPA, 489 F.3d 1245, 1248-49 (DC Cir. 2007).
    The commenters note that consistent with the court's direction in 
South Coast, the language of CAA Sec.  172(e) suggests that EPA must 
take definite action to implement anti-backsliding requirements:

    If the Administrator relaxes a national primary ambient air 
quality standard * * * the Administrator shall, within 12 months 
after the relaxation, promulgate requirements applicable to all 
areas which have not attained that standard as of the date of such 
relaxation. Such requirements shall provide for controls which are 
not less stringent than the controls applicable to areas designated 
nonattainment before such relaxation.

42 U.S.C. 7502(e) (emphasis added). Commenters claim that an October 
2007 memorandum from EPA Deputy Administrator Robert Meyers stated that 
EPA intends to undertake rulemaking to conform the Agency's NSR 
regulations to the South Coast decision and yet EPA has not yet 
proposed such a rule. The footnote 6 and introductory paragraph cited 
in EPA's proposed disapproval are consistent with CAA Sec.  172(e) and 
not a basis for disapproval of the proposed SIP revision. TCC stated 
that it is reasonable for TCEQ to understand that some EPA action is 
necessary before it proceeds with appropriate rule changes to reinstate 
the major NNSR applicability thresholds and emission offset 
requirements, and this is not a rational basis to justify disapproving 
the State's rules.
    Response: EPA disagrees with the claim that States are under no 
obligation to take steps to comply with the South Coast decision until 
EPA updates its regulations. Neither the court's vacatur of the 
provision that waived States' obligation to include in their SIPs NSR 
provisions meeting the requirements for the 1-hour standard nor section 
172(e) mandate that EPA promulgate a rule before such a requirement 
applies.
    As EPA provided in the preamble to the Phase 1 Implementation Rule 
and as

[[Page 56431]]

recognized by the Court in South Coast, CAA Sec.  172(e) does not apply 
because the 1997 8-hour NAAQS was a strengthening, rather than a 
relaxation, of the 1-hour NAAQS. See 69 FR 23951, at 23972 (April 30, 
2004); 489 F.3d at 1248. However, in the preamble to the Phase I 
Implementation Rule, we cited to section 172(e) of the CAA and stated 
that ``if Congress intended areas to remain subject to the same level 
of control where a NAAQS was relaxed, they also intended that such 
controls not be weakened where the NAAQS is made more stringent.'' See 
69 FR 23951, at 23972 (April 30, 2004). Thus, even if, as suggested 
upon revocation of a standard in the absence of an EPA rule retaining 
them pursuant to section 172(e), that would hold true only where 
section 172(e) directly applied, i.e., where EPA had promulgated a less 
stringent NAAQS. Regardless, EPA disagrees with that interpretation of 
section 172(e). Rather, EPA interprets the CAA as retaining 
requirements applicable to any area, but allowing EPA through 
rulemaking to develop alternatives approaches or processes that would 
apply, so long as such alternatives ensure that the requirements are no 
less stringent than what applies under the Act. Thus, in the case, once 
the Court vacated EPA determination under the principles of section 
172(e) that NSR as it applied for the 1-hour NAAQS should no longer 
apply, that requirement, as established under the CAA, once again 
applied. We do not believe that the interpretation suggested by the 
commenters is a reasonable interpretation as it would allow areas to 
discontinue implementing measures mandated by Congress with respect to 
a revoked standard in the absence of EPA rulemaking specifically 
retaining such obligations. Such a result would be counter to the 
health-protective goals of the CAA and inconsistent with the South 
Coast decision, which upheld EPA's authority to revoke standards but 
only where adequate anti-backsliding requirements were in place.
    Nor do we believe that the language cited by the commenter from the 
South Coast decision supports their claim that rulemaking is necessary 
before the statutory 1-hour NSR requirement applies. The quoted 
language from the court's opinion immediately follows a sentence that 
pertains to the classification issue that was decided by the Court. 
Specifically, the Court notes that some parties objected to a partial 
vacatur of the rule because it would ``inequitably exempt Subpart 1 
areas from regulation while the remand is pending.'' See 489 F.3d at 
1248. In other words, certain States with areas subject to subpart 2 
claimed it would be inequitable for such areas to remain subject to 
planning obligations while subpart 1 areas would be ``exempt.'' The 
Court responded by saying that a complete vacatur ``would only serve to 
stall progress where it is most needed'' and then urges EPA ``to act 
promptly in promulgating a revised rule.'' See 489 F.3d at 1248. Thus, 
this portion of the opinion expressly addressed the need for EPA to 
promulgate a rule quickly so that areas that had been classified as 
subpart 1 would no longer be ``exempt'' from planning requirements for 
the 1997 ozone NAAQS, which requirements are linked to whether an area 
is subject only to subpart 1 or also subpart 2 and to an area's 
classification under subpart 2.
    For these reasons, the effect of the portion of the court's ruling 
that vacated the waiver of the 1-hour NSR obligation is to restore the 
statutory obligation for areas that were nonattainment for the 1-hour 
standard at the time of designation for the 1997 8-hour standard to 
include in their SIPs major nonattainment NSR applicability thresholds 
and emission offsets pursuant to the area's classifications for the 1-
hour ozone NAAQS at the time of designation for the 1997 ozone NAAQS.
    In addition, the Court specifically concluded that withdrawing 1-
hour NSR from a SIP ``would constitute impermissible backsliding.'' See 
472 F.3d at 900. Thus, it would be inconsistent with the South Coast 
decision for Texas to withdraw the 1-hour NSR applicability thresholds 
and emission offsets from its SIP. Texas's proposed addition of SIP 
language conditioning implementation of the 1-hour NSR thresholds and 
offsets on an affirmative regulatory action by EPA would be equivalent, 
in terms of human health impact, to a temporary withdrawal of those 
requirements from the SIP, and therefore would be inconsistent with the 
Court's decision.
    Finally, we note that the 2007 Meyers Memorandum cited in the 
comment did not indicate that States should await EPA rulemaking before 
taking any necessary steps to comply with the South Coast decision. 
Rather, the memorandum encouraged the Regions to ``have States comply 
with the court decision as quickly as possible.'' The memorandum's 
reference to ``rulemaking to conform our NSR regulations to the court's 
decision'' was not intended to suggest that States could simply ignore 
the court's decision until EPA had updated its regulations to reflect 
the vacatur. EPA proposed to remove the vacated provisions from its 
regulations on January 16, 2009 (74 FR 2936).
3. What are the grounds for disapproval of the submitted anti-
backsliding Major NSR SIP requirements for the 1-hour ozone NAAQS?
    EPA is disapproving the submitted Anti-Backsliding Major NSR SIP 
revisions for the 1-hour ozone NAAQS. This includes the SIP revisions 
submitted June 10, 2005, and February 1, 2006, with changes to 30 TAC 
116.12 and 30 TAC 116.150 which relate to the transition from the major 
nonattainment NSR requirements applicable for the 1-hour ozone NAAQS to 
implementation of the major nonattainment NSR requirements applicable 
to the 1997 8-hour ozone NAAQS. See section B.1, first three 
paragraphs, for the information regarding EPA's promulgation of the new 
1997 8-hour ozone NAAQS, EPA's Phase 1 Implementation Rule, the court 
history, and the description of the submitted SIP revisions.
    The currently approved Texas major nonattainment NSR SIP does not 
require such an affirmative regulatory action by EPA before the 1-hour 
ozone major nonattainment NSR requirements can be implemented in the 
Texas 1-hour ozone nonattainment areas. However, the submitted 
revisions to 30 TAC 116.12(18) and 116.150(d) do not comply with the 
CAA as interpreted by the Court in the South Coast decision because the 
opinion does not require further action by EPA with respect to NSR, as 
discussed above.
    EPA received comments from TCEQ, the Clinic, and industry regarding 
the proposed disapproval of these submitted SIP revisions. See our 
response to these comments in section IV.B.2 above. We are disapproving 
the revisions as not meeting part D of the Act as interpreted by the 
Court in South Coast for the Major NNSR SIP requirements for the 1-hour 
ozone NAAQS. See the proposal at 74 FR 48467, at 48472-48473, our 
background for these submitted SIP revisions in section IV.B.1 above, 
and our response to comments on these submitted SIP revisions in 
section IV.B.2 above for additional information.

C. The Submitted Major Nonattainment NSR SIP Requirements for the 1997 
8-Hour Ozone NAAQS

1. What is the background for the submitted Major Nonattainment NSR SIP 
requirements for the 1997 8-hour ozone NAAQS?
    EPA interprets its Major NSR SIP rules to require that an 
applicability

[[Page 56432]]

determination regarding whether Major NSR applies for a pollutant 
should be based upon the designation of the area in which the source is 
located on the date of issuance of the Major NSR permit. EPA also 
interprets the Act and its rules that if an area is designated 
nonattainment on the date of issuance of a Major NSR permit, then the 
Major NSR permit must be a NNSR permit, not a PSD permit. If the area 
is designated attainment/unclassifiable, then under EPA's 
interpretation of the Act and its rules, the Major NSR permit must be a 
PSD permit on the date of issuance. See the following: sections 160, 
165, 172(c)(5) and 173 of the Act; 40 CFR 51.165(a)(2)(i) and 
51.166(a)(7)(i). EPA's interpretation of these statutory and regulatory 
requirements is guided by the memorandum issued March 11, 1991, and 
titled ``New Source Review (NSR) Program Transitional Guidance,'' 
issued March 11, 1991, by John S. Seitz, Director, Office of Air 
Quality Planning and Standard.\6\
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    \6\ You can access this document at: http://www.epa.gov/ttn/nsr/gen/nstrans.pdf.
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    Revised 30 TAC 116.150(a), as submitted June 10, 2005 and February 
1, 2006, now reads as follows under State law:
    (a) This section applies to all new source review authorizations 
for new construction or modification of facilities as follows:
    (1) For all applications for facilities that will be located in any 
area designated as nonattainment for ozone under 42 United States Code 
(U.S.C.), 7407 et seq. on the effective date of this section, the 
issuance date of the authorization; and
    (2) For all applications for facilities that will be located in 
counties for which nonattainment designation for ozone under 42 U.S.C. 
7407 et seq. becomes effective after the effective date of this 
section, the date the application is administratively complete.\7\
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    \7\ It is our understanding of State law, that a ``facility'' 
can be an ``emissions unit,'' i.e., any part of a stationary source 
that emits or may have the potential to emit any air contaminant. A 
``facility'' also can be a piece of equipment, which is smaller than 
an ``emissions unit.'' A ``facility'' can be a ``major stationary 
source'' as defined by Federal law. A ``facility'' under State law 
can be more than one ``major stationary source.'' It can include 
every emissions point on a company site, without limiting these 
emissions points to only those belonging to the same industrial 
grouping (SIC code).
---------------------------------------------------------------------------

    The submitted rule raises two concerns. First, the revised language 
in the submitted 30 TAC 116.150(a) is not clear as to when and where 
the applicability date will be set by the date the application is 
administratively complete and when and where the applicability date 
will be set by the issuance date of the authorization. The rule, 
adopted and submitted in 2005, applies the date of administrative 
completeness of a permit application, not the date of permit issuance, 
where setting the date for determination of NSR applicability after 
June 15, 2004 (the effective date of ozone nonattainment designations). 
The submitted 2006 rule adds the date of permit issuance. 
Unfortunately, the submitted 2006 rule by introducing a bifurcated 
structure creates vagueness rather than clarity. The effective date of 
this new bifurcated structure is February 1, 2006. It is unclear 
whether this means under subsection (1) that the permit issuance date 
is used in existing nonattainment areas designated nonattainment for 
ozone before and up through February 1, 2006. Thus, the proposed 
revision lacks clarity on its face and is therefore not enforceable.
    Second, to the extent that the date of application completeness is 
used in certain instances to establish the applicability date for 
Nonattainment NSR requirements, such use is contrary to EPA's 
interpretation of the governing EPA regulations, as discussed above.
    Thus, based upon the above and in the absence of any explanation by 
the State, EPA proposed to disapprove the SIP revision submittals for 
not meeting the Major NNSR SIP requirements for the 1997 8-hour ozone 
standard. See the proposal at 74 FR 48467, at 48473-48474, for 
additional information.
2. What is EPA's response to comments on the submitted Major 
Nonattainment NSR SIP requirements for the 1997 8-hour ozone NAAQS?
    Comment 1: TCEQ commented that in 2006 it had revised the rule to 
clarify and implement EPA interpretation that the applicability date is 
the date of permit issuance, as well as provide for the possibility of 
new nonattainment areas. The 2006 submittal also added a new bifurcated 
structure to the rule for when applicability is based upon date of 
submittal of a complete application and when applicability is based 
upon the date of permit issuance. TCEQ further agrees that this new 
bifurcated structure is unclear. TCEQ commits to work with EPA to 
comply with current rule and practice.
    Response: EPA acknowledges TCEQ's commitment to revise the rule to 
clarify and implement EPA's interpretation of the Act that the 
applicability date is the date of permit issuance for all nonattainment 
areas, including applicability in newly designated nonattainment areas.
    Comment 2: TCEQ, the Clinic, BCC, TIP, and TCC commented on the 
definition of ``facility'' as used in its submitted Major Nonattainment 
NSR SIP Requirements for the 1997 8-hour ozone NAAQS. They also 
commented on this definition under the evaluation of the Submitted Non-
PAL Aspects of the Major NSR SIP Requirements in section IV.
    Response: See section IV.E.2, Comments 1 through 3, for the 
comments and EPA's response on the definition of facility.
    Comment 3: The Clinic commented that TCEQ's rules fail to require 
all NSR applicability determinations to be based on the applicable 
attainment status of an area on the date of permit issuance, as 
required under the CAA. Texas rule authorize certain sources to 
construct or modify in a nonattainment area to comply with PSD 
requirements rather than NNSR requirements if the facility's permit 
application is administratively complete prior to the area's 
designation to nonattainment. See 30 TAC 116.150(a). While the rules 
are vague as to what constitutes the ``effective date of this 
section,'' 30 TAC 116.150(a)(2) clearly is not approvable because it 
authorizes facilities to base applicability determination on the area's 
attainment status as of the date their applications are 
administratively complete.
    Response: EPA agrees with this comment.
    Comment 4: BCCA, TIP, TCC, commented that the applicability cutoff 
established in TCEQ rules is not inconsistent with the CAA or EPA 
rules. While it may be inconsistent with EPA's interpretation of that 
rule language, the use of application completeness as an applicability 
date is not inconsistent with Part 51 itself. As a result, the 
applicability cutoff dates, established in 30 TAC 116.150(a), are not 
appropriate grounds for disapproval of the proposed SIP revision. EPA 
concerns regarding applicability dates are properly addressed through 
comments on individual permits, and not through a disapproval of the 
SIP revision. TCC further commented that TCEQ rules state that for 
facilities located in areas that are designated nonattainment areas 
after the effective date of TCEQ rules, the NNSR requirements apply the 
day the application is administratively complete. The day the 
application is determined to be administratively complete occurs prior 
to the issuance date of the permit; therefore, the State's rules are 
more stringent than the Federal rules in this regard.
    Response: EPA disagrees with this comment. The applicability cutoff 
established in the submitted revision is inconsistent with the CAA and 
EPA rules. EPA interprets EPA's NSR SIP

[[Page 56433]]

rules to require that an applicability determination regarding whether 
Major NSR applies for a pollutant should be based upon the attainment 
or nonattainment designation of the area in which the source is located 
on the date of issuance of the Major NSR permit. EPA also interprets 
its rules that if an area is designated nonattainment on the date of 
issuance of a Major NSR permit, then the Major NSR permit must be a 
NNSR permit, not a PSD permit. If the area is designated attainment/
unclassifiable, then under EPA's interpretation of the Act and its 
rules, the Major NSR permit must be a PSD permit on the date of 
issuance. See the following: sections 160, 165, 172(c)(5) and 173 of 
the Act; 40 CFR 51.165(a)(2)(i) and 51.166(a)(7)(i). EPA's 
interpretation of these statutory and regulatory requirements is guided 
by the memorandum issued March 11, 1991, and titled ``New Source Review 
(NSR) Program Transitional Guidance,'' issued March 11, 1991, by John 
S. Seitz, Director, Office of Air Quality Planning and Standard. See 
section IV.C.1 above for further information. The submitted revision 
provides the regulatory framework for administering individual permits, 
thus it is necessary to ensure it is consistent with the equivalent 
Federal requirements. The submitted revision applies the date of 
administrative completeness of a permit application, not the date of 
permit issuance, where setting the date for determination of NSR 
applicability after June 15, 2004 (the effective date of ozone 
nonattainment designations). The submitted revision also appears to 
apply the date of permit issuance in existing nonattainment areas 
designated nonattainment for ozone before and up through February 1, 
2006. This regulatory structure creates ambiguity and lacks clarity. 
Thus, the proposed revision lacks clarity on its face and is therefore 
not enforceable.
3. What are the grounds for disapproval of the submitted Major 
Nonattainment NSR SIP requirements for the 1997 8-hour ozone NAAQS?
    EPA is disapproving the submitted Major Nonattainment NSR SIP 
requirements for the 1997 8-hour ozone NAAQS. An applicability 
determination for a Major Nonattainment NSR (NNSR) permit based upon 
the date of administrative completeness, rather than date of issuance, 
would allow more sources to avoid the Major NSR requirements where 
there is a nonattainment designation between the date of administrative 
completeness and the date of issuance, and thus this submitted revision 
will reduce the number of sources subject to Major NNSR requirements. 
The submitted revised rule does not apply the date of permit issuance 
in all cases and therefore violates the Act, as discussed previously.
    The submitted revised 2006 rule by introducing a bifurcated 
structure creates vagueness rather than clarity. The effective date of 
this new bifurcated structure is February 1, 2006. Thus, the proposed 
revision lacks clarity on its face and is therefore not enforceable.
    EPA received comments from TCEQ, the Clinic, and industry regarding 
the proposed disapproval of these submitted SIP revisions. See our 
response to these comments in section IV.C.2 above. See the proposal at 
74 FR 48467, at 48473-48474, our background for these submitted SIP 
revisions in section IV.C.1 above, and our response to comments on 
these submitted SIP revisions in section IV.C.2 above for additional 
information.

D. The Submitted Major NSR Reform SIP Revision for Major NSR With PAL 
Provisions

1. What is the background for the submitted Major NSR reform SIP 
revision for Major NSR with PAL provisions?
    We proposed to disapprove the following non-severable revisions 
that address the revised Major NSR SIP requirements with Plant-Wide 
Applicability Limitation (PAL) provisions: 30 TAC Chapter 116 submitted 
February 1, 2006: 30 TAC 116.12--Definitions; 30 TAC 116.180--
Applicability; 30 TAC 116.182--Plant-Wide Applicability Limit Permit 
Application; 30 TAC 116.184--Application Review Schedule; 30 TAC 
116.186--General and Special Conditions; 30 TAC 116.188--Plant-Wide 
Applicability Limit; 30 TAC 116.190--Federal Nonattainment and 
Prevention of Significant Deterioration Review; 30 TAC 116.192--
Amendments and Alterations; 30 TAC 116.194--Public Notice and Comment; 
30 TAC 116.196--Renewal of a Plant-Wide Applicability Limit Permit; 30 
TAC 116.198--Expiration or Voidance.
    We proposed disapproval of the PAL Provisions because of the 
following:
    <bullet> The submittal lacks a provision which limits applicability 
of a PAL only to an existing major stationary source, and which 
precludes applicability of a PAL to a new major stationary source, as 
required under 40 CFR 51.165(f)(1)(i) and 40 CFR 51.166(w)(1)(i), which 
limits applicability of a PAL to an existing major stationary source. 
In the absence of such limitation, this submission would allow a PAL to 
be authorized for the construction of a new major stationary source. In 
EPA's November 2002 TSD for the revised Major NSR Regulations, we 
respond on pages I-7-27 and 28 that actuals PALs are available only for 
existing major stationary sources, because actuals PALs are based on a 
source's actual emissions.\8\ Without at least 2 years of operating 
history, a source has not established actual emissions upon which to 
base an actuals PAL. However, for individual emissions units with less 
than two years of operation, allowable emissions would be considered as 
actual emissions. Therefore, an actuals PAL can be obtained only for an 
existing major stationary source even if not all emissions units have 
at least 2 years of emissions data. Moreover, the development of an 
alternative to provide new major stationary sources with the option of 
obtaining a PAL based on allowable emissions was foreclosed by the 
Court in New York v. EPA, 413 F.3d 3 at 38-40 (DC Cir. 2005) (``New 
York I'') (holding that the Act since 1977 requires a comparison of 
existing actual emissions before the change and projected actual (or 
potential emissions) after the change in question is required).
---------------------------------------------------------------------------

    \8\ The TSD for the 2002 NSR rule making is in the docket for 
this action as document no. EPA-R06-OAR-2006-0133-0010. You can 
access this document at: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480a2b968.
---------------------------------------------------------------------------

    <bullet> The submittal has no provisions that relate to PAL re-
openings, as required by 40 CFR 51.165(f)(8)(ii), (ii)(A) through (C), 
and 51.166(w)(8)(ii) and (ii)(a).
    <bullet> There is no mandate that failure to use a monitoring 
system that meets the requirements of this section renders the PAL 
invalid, as required by 40 CFR 51.165(f)(12)(i)(D) and 
51.166(w)(12)(i)(d).
    <bullet> The Texas submittal at 30 TAC 116.186 provides for an 
emissions cap that may not account for all of the emissions of a 
pollutant at the major stationary source. Texas requires the owner or 
operator to submit a list of all facilities to be included in the PAL, 
such that not all of the facilities at the entire major stationary 
source may be specifically required to be included in the PAL. See 30 
TAC 116.182(1). However, the Federal rules require the owner or 
operator to submit a list of all emissions units at the source. See 40 
CFR 51.166(f)(3)(i) and 40 CFR 51.166(w)(3)(i). The Texas submittal is 
unclear as to whether the PAL would apply to all of the emission units 
at the entire major stationary source and

[[Page 56434]]

therefore appears to be less stringent than the Federal rules. In the 
absence of any demonstration from the State, EPA proposed to disapprove 
30 TAC 116.186 and 30 TAC 116.182(1) as not meeting the revised Major 
NSR SIP requirements.
    <bullet> Submitted 30 TAC 116.194 requires that an applicant for a 
PAL permit must provide for public notice on the draft PAL permit in 
accordance with 30 TAC Chapter 39--Public Notice--for all initial 
applications, amendments, and renewals or a PAL Permit.\9\ Although 
this submitted rule relates to the public participation requirements of 
the PAL program, it is is not severable from the PAL program. Because 
we proposed to disapprove the PAL program, we likewise proposed to 
disapprove 30 TAC 116.194.
---------------------------------------------------------------------------

    \9\ ``The submittals do not meet the following public 
participation provisions for PALs: 1) For PALs for existing major 
stationary sources, there is no provision that PALs be established, 
renewed, or increased through a procedure that is consistent with 40 
CFR 51.160 and 51.161, including the requirement that the reviewing 
authority provide the public with notice of the proposed approval of 
a PAL permit and at least a 30-day period for submittal of public 
comment, consistent with the Federal PAL rules at 40 CFR 
51.165(f)(5) and (11) and 51.166(w)(5) and (11). 2) For PALs for 
existing major stationary sources, there is no requirement that the 
State address all material comments before taking final action on 
the permit, consistent with 40 CFR 51.165(f)(5) and 51.166(w)(5). 3) 
The applicability provision in section 39.403 does not include PALs, 
despite the cross-reference to Chapter 39 in Section 116.194.'' See 
73 FR 72001 (November 26, 2008) for more information on Texas's 
public participation rules and their relationship to PALs. The 
November 2008 proposal addressed the public participation provisions 
in 30 TAC Chapter 39, but did not specifically propose action on 30 
TAC 116.194.
---------------------------------------------------------------------------

    <bullet> The Federal definition of the ``baseline actual 
emissions'' provides that these emissions must be calculated in terms 
of ``the average rate, in tons per year at which the unit actually 
emitted the pollutant during any consecutive 24-month period.'' See 40 
CFR 51.165(a)(1)(xxxv)(A), (B), (D) and (E) and 51.166(b)(47)(i), (ii), 
(iv), and (v). Emphasis added. Texas's submitted definition of the term 
``baseline actual emissions'' found at 30 TAC 116.12(3)(A), (B), (D), 
and (E) differs from the Federal definition by providing that the 
baseline shall be calculated as ``the rate, in tons per year at which 
the unit actually emitted the pollutant during any consecutive 24-month 
period.'' The submitted definition omits reference to the ``average 
rate.'' The definition differs from the Federal SIP definition but the 
State failed to provide a demonstration showing how the different 
definition is at least as stringent as the Federal definition. 
Therefore, EPA proposed to disapprove the different definition of 
``baseline actual emissions'' found at 30 TAC 116.12(3) as not meeting 
the revised Major NSR SIP requirements. On the same grounds for lacking 
a demonstration, EPA proposed to disapprove 30 TAC 116.182(2) that 
refers to calculations of the baseline actual emissions for a PAL, as 
not meeting the revised Major NSR SIP requirements.
    <bullet> The State also failed to include the following specific 
monitoring definitions: ``Continuous emissions monitoring system 
(CEMS)'' as defined in 40 CFR 51.165(a)(1)(xxxi) and 51.166(b)(43); 
``Continuous emissions rate monitoring system (CERMS)'' as defined in 
40 CFR 51.165(a)(1)(xxxiv) and 51.166(b)(46); ``Continuous parameter 
monitoring system (CPMS)'' as defined in 40 CFR 51.165(a)(1)(xxxiii) 
and 51.166(b)(45); and ``Predictive emissions monitoring system 
(PEMS)'' as defined in 40 CFR 51.165(a)(1)(xxxii) and 51.166(b)(44). 
All of these definitions concerning the monitoring systems in the 
revised Major NSR SIP requirements are essential for the enforceability 
of and providing the means for determining compliance with a PALs 
program. Therefore, we proposed to disapprove the State's lack of these 
four monitoring definitions as not meeting the revised Major NSR SIP 
requirements. Additionally, where, as here, a State has made a SIP 
revision that does not contain definitions that are required in the 
revised Major NSR SIP program, EPA may approve such a revision only if 
the State specifically demonstrates that, despite the absence of the 
required definitions, the submitted revision is more stringent, or at 
least as stringent, in all respects as the Federal program. See 40 CFR 
51.165(a)(1) (non-attainment SIP approval criteria); 51.166(b) (PSD SIP 
definition approval criteria). Texas did not provide such a 
demonstration. Therefore, EPA proposed to disapprove the lack of these 
definitions as not meeting the revised Major NSR SIP requirements.
    None of the provisions and definitions in the February 1, 2006, SIP 
revision submittal pertaining to the revised Major NSR SIP requirements 
for PALs is severable from each other. Therefore, we proposed to 
disapprove the portion of the February 1, 2006, SIP revision submittal 
pertaining to the revised Major NSR PALs SIP requirements as not 
meeting the Act and the revised Major NSR SIP regulations. See the 
proposal at 74 FR 48467, at 48474-48475, for additional information.
2. What is EPA's response to comments on the submitted Major NSR Reform 
SIP Revision for Major NSR With PAL provisions?
    Comment 1: TCEQ commented that it does not use a rate that differs 
from the Federal NSR requirement relating to baseline actual emissions. 
TCEQ definition of ``actual emissions'' includes the modifier 
``average,'' and ``actual emissions'' are included in the definition of 
``baseline actual emissions'' rate. In practice, TCEQ contends that a 
reading of the entire definition, including parts (a)-(d), results in 
an average emission rate being used to establish a baseline actual 
emission rate. This is because to determine an actual emission rate in 
tons per year from a consecutive 24-month period requires averaging the 
emissions over 24 months to obtain an annual emission rate (an average 
annual emission rate).
    TCEQ is willing to work with EPA to address any changes necessary 
to clarify the definition, and specifically reference that a baseline 
actual emission rate is an average emission rate, in tons per year, of 
a Federally regulated new source review pollutant.
    Response: We appreciate the State's willingness to work with EPA to 
address any changes necessary to clarify the definition, and 
specifically reference that a baseline actual emission rate is an 
average emission rate, in tons per year, of a NSR regulated pollutant, 
but disagree with TCEQ's comment. We acknowledge that the SIP-approved 
definition of ``actual emissions'' at 30 TAC 116.12(1) is based upon 
average emissions but the lack of a specific provision in the 
definition of ``baseline actual emissions'' to require such emissions 
to be calculated as average emissions can be interpreted to be less 
stringent than the Federal minimum requirements because readers can 
interpret ``the'' emissions rate to be the highest rate instead of an 
average rate. It does not necessarily follow that the reading of the 
entire definition and the requirement to determine an actual emission 
rate in tons per year from a consecutive 24-month period to obtain an 
annual emission rate would result in an average emission rate.
    Comment 2: BCCA and TIP commented that the substance of EPA's 
concern appears to be that the Texas rules are missing the word 
``average.'' The missing term is not grounds for disapproval of the 
Texas definition of ``baseline actual emissions.'' The omission of the 
term ``average'' from this phrase in the 30 TAC 116.12(3) definition 
does not render the definition invalid or inconsistent with the

[[Page 56435]]

equivalent provision in 40 CFR Part 51. EPA cites a distinction without 
a substantive difference, as application of the two definitions will 
reach the same conclusion with regard to the tons per year (``tpy'') 
emission rate over the 24-month baseline period. The Texas definition 
of ``baseline actual emissions'' in the proposed SIP revision is 
equivalent to the Federal definition in this regard and should be 
approved.
    Response: EPA disagrees with this comment. See the response to 
comment 1 above.
    Comment 3: TCEQ commented on EPA's statements that TCEQ's rules do 
not include the following PAL requirements:
    <bullet> Provisions for PAL re-openings;
    <bullet> Requirements concerning the use of monitoring systems (and 
associated definitions);
    <bullet> A provision which limits applicability of a PAL only to an 
existing major stationary source;
    <bullet> A provision that requires all facilities at a major 
source, emitting a PAL pollutant be included in the PAL;
    <bullet> A provision that a PAL include every emissions point at a 
site, without limiting these emissions points to only those belonging 
to the same industrial grouping (SIC) code; and
    <bullet> Notwithstanding the ``lack of explicit limitation,'' i.e., 
defining facility to equal emissions unit; that is how TCEQ applies the 
rule.
    TCEQ will address these items in a future rulemaking.
    Response: We appreciate the State's willingness to work with EPA to 
address any changes necessary to clarify these concerns relating to PAL 
re-openings; requirements concerning the use of monitoring systems (and 
associated definitions); a provision which limits applicability of a 
PAL only to an existing major stationary source; the lack of regulatory 
provisions relating to emissions to be included in a proposed PAL, the 
lack of provisions to require that all facilities at a major source, 
emitting a pollutant for which a PAL is being requested, be included in 
the PAL; and the concern that PAL can include every emissions point at 
a site, without limiting these emissions points to only those belonging 
to the same industrial grouping (SIC) code. However, our evaluation is 
based on the submitted rule currently before us.
    Comment 4: The Clinic comments that Texas illegally allows PALs for 
new sources based upon allowable emissions. Federal regulations allow 
an agency to approve a PAL for ``any existing major stationary 
source.'' See 40 CFR 51.166(f)(1)(i). PALs are intended to serve as 
thresholds for determining when emission increases trigger NNSR and PSD 
permitting review. As the DC Circuit found in New York v. EPA, 
``Congress clearly intended to apply NSR to changes that increase 
actual emissions. New York v. EPA, 413 F.3d 3, 38-40 (DC Cir. 2005.) 
Because new sources do not have past actual emissions, they cannot be 
subject to a PAL. 67 FR 80186, 80285 (December 31, 2002). The submitted 
Texas PAL rules do not limit their applicability to existing major 
sources.
    Response: EPA agrees with this comment. The Federal PAL regulations 
provide that ``[t]he reviewing authority may approve the use of an 
actuals PAL for any existing major stationary source * * *.'' See 40 
CFR 51.165(f)(1) and 51.166(w)(1). Emphasis added. See the discussion 
in the proposal at 74 FR 48467, at 48474, and section IV.D.1 above, for 
further information.
    Comment 5: Regarding limiting issuance of PAL permits only to 
existing major stationary sources, BCCA, TIP, and TCC comment that the 
absence of a reference to ``existing'' facilities is not grounds for 
disapproval of the Texas PAL rules. Even absent a reference to existing 
facilities, the Texas PAL rules are substantively similar to and 
closely track the Federal PAL regulations, as TCEQ explained in 
adopting the Texas PAL program.\10\ The Texas PAL rules' applicability 
provisions are consistent with the Federal PAL program in 40 CFR Part 
51, and should be approved as part of the Texas SIP on that basis. 
Moreover, the Federal scheme contemplates that ``new'' units may be 
included when calculating the baseline actual emissions for a PAL.\11\ 
The preamble goes on to provide, ``For any emission unit * * * that is 
constructed after the 24-month period, emissions equal to its PTE must 
be added to the PAL level.'' \12\ Additionally, EPA issued PALs before 
NSR reform and these PALs showed a degree of flexibility tailored to 
the specific sites. For example, in its flexible permit pilot study, 
EPA examined a hybrid PAL issued to the Saturn plant in Spring Hill, 
Tennessee. This permit consisted of PSD permit for a major expansion 
with permitted emissions based on projected future actual emissions in 
combination with a PSD permit for existing emissions units with 
allowable emissions based on current actual emissions at the existing 
emissions units. According to EPA, that plant's hybrid PAL permit 
enabled Saturn to add and modify new lines ``in a timely manner, while 
ensuring that best available pollution control technologies are 
installed and that air emissions remain under approved limits.'' 
Texas's PAL provisions are consistent with the Federal PAL provisions, 
and so should be approved. EPA concerns regarding TCEQ's implementation 
of the Texas rules are properly addressed through comments on 
individual permits, and not through a disapproval of the SIP revision.
---------------------------------------------------------------------------

    \10\ See 31 Tex. Reg. 516, 527 & 528 (Jan. 27, 2006).
    \11\ 67 FR 80,186, at 80,208 (Dec. 31, 2002).
    \12\ Id.
---------------------------------------------------------------------------

    Response: EPA disagrees that Texas's rules are consistent with the 
Federal PAL provisions, and we find the absence to a reference to 
``existing'' major stationary sources to be grounds for disapproval. 
The Federal regulations generally adhere to the basic tenet that the 
PAL level is based on actual, historical operations. Such information 
is absent for new major stationary sources, and thus, EPA chose not to 
allow PALs for new major stationary sources. The commenters' reference 
to a hybrid PAL issued to the Saturn plant in Spring Hill, Tennessee, 
is not relevant to the approvability of the Texas's rules. This 
facility was permitted under a flexible permit pilot study, not under 
the provisions under 40 CFR 51.165(f) and 51.166(w), which specify the 
minimum requirements for an approvable State PAL SIP Program. Moreover, 
TCEQ provided no demonstration that its submitted program is at least 
as stringent as the Federal minimum PAL SIP Program requirements 
despite its broader applicability. EPA's concerns with the submitted 
PAL Program revisions are a result of its evaluation of these 
revisions. EPA disapproval is due to programmatic deficiencies, not 
problems associated with individual permits. Moreover, implementation 
by the State of its State PAL program is outside the scope of this 
rulemaking action.
    Comment 6: The Clinic comments that Texas's rules fail to include 
adequate reopening provisions. Federal rules allow a permitting 
authority to re-open a PAL permit to correct errors in calculating a 
PAL or to reduce the PAL based on new Federal or State requirements or 
changing NAAQS levels or a change in attainment status. See 40 CFR 
51.165(f)(8). The Texas rules do not provide for such reopening and are 
less stringent than Federal regulations.
    Response: EPA agrees with this comment. The Federal rules require 
PAL re-openings as provided under 40 CFR 51.165(f)(8)(ii)) and 
51.166(w)(8)(ii). The State did not provide any demonstration, as 
required for a customized Major NSR SIP revision submittal, showing how 
its submitted program is at least as

[[Page 56436]]

stringent as the Federal PAL SIP Program requirements.
    Comment 7: Regarding PAL re-openings, BCCA, TIP, TCC, and TxOGA 
comment that the current provisions of 30 TAC 116.192 regarding 
amendments and alterations of PALs provide adequate safeguards to 
ensure that appropriate procedural requirements are followed, both to 
increase a PAL through an amendment and to decrease a PAL through a 
permit alteration. See, e.g., 30 TAC 116.190(b), requiring the decrease 
of a PAL for any emissions reductions used as offsets. The absence of 
rule language using the specific term ``reopening'' does not prevent 
TCEQ from implementing and enforcing the program in a manner consistent 
with Part 51 and is not an appropriate basis for disapproval of the SIP 
revision. The Texas PAL rules should be approved as a revision to the 
Texas SIP.
    Response: EPA disagrees with this comment. The provisions in 30 TAC 
116.192 relate to amendments and alterations. The Federal rules provide 
for PAL re-openings for other causes which include the following: 
correction of typographical/calculation errors in setting the PAL; 
reduction of the PAL to create creditable emission reductions for use 
as offsets; reductions to reflect newly applicable Federal requirements 
(for example, NSPS) with compliance dates after the PAL; PAL reduction 
consistent with any other requirement, that is enforceable as a 
practical matter, and that the State may impose on the major stationary 
source under the SIP; and PAL reduction if the reviewing authority 
determines that a reduction is necessary to avoid causing or 
contributing to a NAAQS or PSD increment violation, or an adverse 
impact on an air quality related value that has been identified for a 
Federal Class I area by a Federal Land Manager for which information is 
available to the general public. See 40 CFR 51.165(f)(4)(i)(A) and 
(f)(6)(i), and 51.166(w)(4)(i)(a) and (w)(6)(i). Texas has submitted no 
demonstration, as required for a customized Major NSR SIP revision 
submittal, that the lack of provisions for PAL re-openings is at least 
as stringent as the Federal PAL Program SIP requirements.
    Comment 8: The Clinic comments that Texas illegally allows for 
``partial PALs.'' Federal rules require that all units at a source be 
subject to the PAL cap. See 40 CFR 52.21(aa)(6)(i)-(ii). Texas rules do 
not require PALs to include all units at the source that emit the PAL 
pollutant. See 30 TAC 116.182(1). EPA stated in its proposal that 
inclusion of all units at the source that emit the PAL pollutant is an 
``essential feature of the Federal PAL.'' Texas failure to require such 
provision justifies disapproval of the Texas PAL rules.
    Response: The 2002 final rules require States to include PALs as a 
minimum program element in the SIP-approved major NSR program. The 
minimum Federal requirement for an approvable PAL regulations must 
include all emissions units at a major stationary source that emit the 
PAL pollutant as provided under 40 CFR 51.165(f)(6)(i) and 
51.166(w)(6)(i). We reviewed the approvability of the Texas submitted 
program against these criteria, and determined, inter alia, that the 
submitted program does not meet these minimum program elements.
    EPA has not taken a position on whether a State could include a 
``partial PAL'' program, separate and apart from a PAL program that 
meets the Federal minimum program requirements, as an element in its 
major or minor NSR program. Nonetheless, the State did not submit its 
PAL Program with a request to have it reviewed by EPA on a case-by-case 
basis for approvability as a program, separate and apart from the 
Federal source-wide PAL program. Nor did it submit it for approval as a 
Minor NSR SIP revision. TCEQ did not provide any demonstration, as 
required for a customized Major NSR SIP revision submittal, showing how 
the allowing of an emission cap that does not include all emissions 
units at the major stationary source that emit the PAL pollutant is at 
least as stringent as the Federal PAL Program SIP requirements, nor 
does the record show whether Texas's submission will interfere with any 
applicable requirement concerning attainment and reasonable further 
progress or any other CAA requirement.
    Comment 9: Concerning the lack of provision that a PAL include all 
emissions units at the major stationary source that emit the PAL 
pollutant, BCCA, TIP, TCC, and TxOGA commented that EPA's 
interpretation of the Texas PAL rules, which are consistent with the 
Federal PAL, is not grounds for disapproval of the SIP revision. The 
Texas PAL rules are substantively similar to and closely track the 
Federal PAL regulations, as TCEQ explained in adopting the Texas PAL 
program. EPA concerns regarding TCEQ's implementation of the Texas 
rules are properly addressed through comments on individual permits and 
not through a disapproval of the SIP revision. The Texas rules require 
that applicants for a PAL specify the facilities and pollutants to be 
covered by the PAL. Specifically, an applicant must detail ``[A] list 
of all facilities, including their registration or permit number to be 
included in the PAL * * *.'' See 30 TAC 116.182. This requirement 
closely tracks the Federal provisions. Moreover, logic dictates, and 
the Federal rules recognize, that not every facility emits every 
regulated pollutant. Under the Federal rules ``[e]ach PAL shall 
regulate emissions of only one pollutant.'' See 40 CFR 52.21(aa)(4)(e). 
Additionally, EPA has recognized that States may implement PAL programs 
in a more limited manner. In its 1996 proposal for the PAL concept, EPA 
noted ``States may choose * * * to adopt the PAL approach on a limited 
basis. For example, States may choose to adopt the PAL approach only in 
attainment/unclassifiable areas, or only in nonattainment areas, for 
specified source categories, or only for certain pollutants in these 
areas.'' See 61 FR 38250, at 38265 (July 23, 1996) (emphasis added). 
The Texas PAL provisions track the Federal regulations, and so should 
be approved.
    Response: EPA disagrees with this comment. The Federal rules at 40 
CFR 51.165(f)(4)(i)(A) and (f)(6)(i), and 51.166(w)(4)(i)(a) and 
(w)(6)(i) require a PAL to include each emissions unit at a major 
stationary source that emits the PAL pollutant. The Federal rules do 
not require a PAL to include an emissions unit that does not emit, or 
has the potential to emit, the relevant PAL pollutant. In 1996, EPA 
proposed to allow States to pick and choose from the menu of reform 
options. In 2002, we rejected this proposed approach in favor of making 
all the reform options minimum program elements. See 67 FR 80185, at 
80241, December 31, 2002. Accordingly, our final rule requires States 
to adopt the Federal PAL provisions as a minimum program element, or to 
demonstrate that an alternative program is equivalent or more stringent 
in effect. Texas has submitted no demonstration, as required for a 
customized Major NSR SIP revision submittal, that the difference in its 
program is at least as stringent as the Federal PAL Program SIP 
requirements.
    Comment 10: The Clinic comments that Texas fails to prohibit the 
use of PALs in ozone extreme areas. Federal rules prohibit the use of 
PALs in extreme ozone nonattainment areas. See 40 CFR 51.165(f)(1)(ii). 
The Texas rules contain no such prohibition, and are less stringent 
than the Federal rules and not protective of air quality.
    Response: EPA agrees that 40 CFR 51.165(f)(1)(ii) requires the 
prohibition and the submittal lacks such a prohibition. Texas currently 
has no extreme ozone nonattainment areas so it is not clear how that 
requirement

[[Page 56437]]

applies. We do not need to reach the issue, however, because the scope 
of our disapproval, i.e., the entire Texas PALs Program, is not changed 
even if we added this as a basis for disapproval.
    Comment 11: TCEQ commented that it will address EPA's concerns 
regarding public participation for PALs in a separate rulemaking 
regarding public participation for the NSR permitting program.
    Response: TCEQ adopted revised rules for public participation on 
June 2, 2010; these rules became effective on June 24, 2010. TCEQ 
submitted these revised rules to EPA on July 2, 2010. EPA is reviewing 
these submitted regulations and will address the submittal in a 
separate action. Because this 30 TAC 116.740 relates to the public 
participation requirements of the PAL program, this section is not 
severable from the PAL program. Because we are disapproving the PAL 
program, we are also disapproving the submitted 30 TAC 116.194.
    Comment 12: The Clinic commented that the PAL rules lack adequate 
public participation. Texas's rules do not require PALs to be 
established, renewed, or increased through a procedure that is 
consistent with 40 CFR 51.160 and 51.161. In particular, the PAL rules 
are missing the requirements that the reviewing authority provide the 
public with notice of the proposed approval of a PAL permit and at 
least 30 day period for submittal of public comment on the draft permit 
as required under 40 CFR 51.165(f)(5) and (11) and 51.166(w)(5) and 
(11). Further the rules lack provisions for public participation for 
PAL renewals or emission increases. There is no requirement that TCEQ 
address all material comments before taking final action on the permit. 
Accordingly, these rules are less stringent than the Federal rules.
    Response: EPA agrees with these comments. The submitted rule does 
not meet the public participation requirements for PAL as required in 
40 CFR 51.165(f)(5) and (11) and 51.166(w)(5) and (11). These rules 
require that PALs be established, renewed, or increased through a 
procedure that is consistent with 40 CFR 51.160 and 51.161; and which 
require the program to include provisions for public participation for 
PAL renewals or emission increases. The Federal rules further require 
that TCEQ address all material comments before taking final action on 
the permit. Because the submitted rule lacks these requirements it is 
not consistent with the Federal rules.
    Comment 13: Concerning the lack of provisions in the Texas PAL that 
meet the public participation requirements in 40 CFR 51.160 and 51.161, 
BCCA and TIP commented that EPA appears to be concerned that there is 
not an explicit reference to PALs in the public participation 
provisions. The Texas rules make clear that PALs are subject to public 
notice and participation. The absence of a reference to PALs in the 
applicability section of 30 TAC 39.403 is not significant. Section 
116.194 of the PAL rules provides the clear cross-references to the 
applicable provisions of Chapter 39. A reference back from Chapter 39 
to the PAL rules is redundant and unnecessary, and not grounds for 
disapproval of the Texas PAL rules.
    Response: EPA disagrees with this comment. Submitted 30 TAC 116.194 
requires that an applicant for a PAL permit must provide for public 
notice on the draft PAL permit in accordance with 30 TAC Chapter 39--
Public Notice--for all initial applications, amendments, and renewals 
of a PAL Permit.\13\ See 73 FR 72001 (November 26, 2008) for more 
information on Texas's public participation rules and their 
relationship to PALs. The November 2008 proposal addressed the public 
participation provisions in 30 TAC Chapter 39, but did not specifically 
propose action on 30 TAC 116.194. In the September 23, 2009, proposal, 
we proposed to address 30 TAC 116.194. Because this section relates to 
the public participation requirements of the PAL program, this section 
is not severable from the PAL program. Because we are disapproving the 
PAL program, we are also disapproving the submitted 30 TAC 116.194.
---------------------------------------------------------------------------

    \13\ ``The submittals do not meet the following public 
participation provisions for PALs: (1) For PALs for existing major 
stationary sources, there is no provision that PALs be established, 
renewed, or increased through a procedure that is consistent with 40 
CFR 51.160 and 51.161, including the requirement that the reviewing 
authority provide the public with notice of the proposed approval of 
a PAL permit and at least a 30-day period for submittal of public 
comment, consistent with the Federal PAL rules at 40 CFR 
51.165(f)(5) and (11) and 51.166(w)(5) and (11). (2) For PALs for 
existing major stationary sources, there is no requirement that the 
State address all material comments before taking final action on 
the permit, consistent with 40 CFR 51.165(f)(5) and 51.166(w)(5). 
(3) The applicability provision in section 39.403 does not include 
PALs, despite the cross-reference to Chapter 39 in Section 
116.194.''
---------------------------------------------------------------------------

    Comment 14: The Clinic commented that Texas fails to include 
required monitoring definitions for PALs. While the Federal regulations 
define ``continuous emission monitoring system (CEMS),'' ``continuous 
emission rate monitoring system (CERMS),'' ``continuous parameter 
monitoring system (CPMS),'' and ``predictive emissions monitoring 
system (PEMS)'' (see 40 CFR 51.165(a)(1)(xxxi), (xxxiv), (xxxiii), and 
(xxxii)), the Texas rules omit definitions. Because these definitions 
are crucial to enforcing and monitoring PALs, the lack of these 
definitions in Texas's PAL rules make the PAL rules less stringent that 
the Federal rules.
    Response: EPA agrees with this comment. See 74 FR 48467, at 48475, 
and section IV.D.I of this action.
    Comment 15: BCCA and TIP commented that EPA appears to be concerned 
that the monitoring provisions are not separately and discretely 
defined. They comment that Texas PAL rules in 30 TAC 116.192(c) contain 
monitoring requirements that are equivalent to the Federal PAL rules. 
They also comment that the absence of definitions of CEMS, CERMS, CPMS 
and PEMS does not render the rules unenforceable. They maintain that 
the rules themselves identify and define each type of monitoring 
system, and identify Federal-equivalent requirements that each 
monitoring system must satisfy. They cite, as an example, 30 TAC 
116.192(c)(2)(B) as providing that an owner or operator using a CEMS to 
monitor PAL pollutant emissions shall comply with applicable 
performance specifications found in 40 CFR Part 60, Appendix B and 
sample, analyze, and record data at least every 15 minutes while the 
emissions unit is operating. Similar requirements are included for mass 
balance calculations, CPMS, PEMS and emissions factors used to monitor 
PAL pollutant emissions. They claim that the absence of separate 
definitions does not impact the enforceability of Texas PALs. The Texas 
provisions adequately address monitoring requirements for PALs, and 
should therefore be approved.
    Response: EPA disagrees with this comment. In the proposal we 
stated that ``[a]ll definitions concerning the monitoring systems in 
the revised Major SIP requirements are essential for the enforceability 
of and providing the means for determining compliance with a PALs 
program.'' We acknowledge that 40 CFR 51.165(f)(12)(i)(C) and 
51.166(w)(12)(i)(c) allow a State program to include alternative 
monitoring, but the alternative monitoring must be approved by EPA as 
meeting the requirements of 40 CFR 51.165(f)(12)(A) and 
51.166(w)(12)(a). The State did not provide any request for approval 
for alternative monitoring. Furthermore, the State did not provide any 
demonstration, as required for a customized Major NSR SIP revision

[[Page 56438]]

submittal, showing how the absence of these PAL monitoring definitions, 
is at least as stringent as the Federal PAL Program SIP requirements.
    Comment 16: BCCA, TIP, TCC, and TxOGA commented that the Texas PAL 
rules make clear that monitoring is mandatory for a PAL. They comment 
that the rules establish monitoring requirements in 30 TAC 116.186(c) 
that are consistent with the Federal PAL monitoring requirements. They 
also comment the monitoring requirements are, most importantly, cast in 
terms of requirements that ``shall'' or ``must'' be met. Examples 
include:
    <bullet> 30 TAC 116.186(c)(1): ``The PAL monitoring system must 
accurately determine all emissions of the PAL pollutant in terms of 
mass per unit of time.''
    <bullet> 30 TAC 116.186(c)(2) further specifies requirements that 
shall be met for any permit holder using mass balance equations, 
continuous emissions monitoring system (``CEMS''), continuous parameter 
monitoring system (``CPMS'') predictive emissions monitoring system 
(``PEMS''), or emission factors.
    The commenters claim that these provisions adequately address the 
monitoring requirements required under the Federal PAL provisions. They 
assert that any additional statement that the PAL is rendered invalid 
unless the permit holder complies with these requirements is 
unnecessary in light of the clearly mandatory monitoring requirements 
that are equivalent to Federal requirements.
    Response: EPA disagrees with this comment. The rules referred to by 
the commenters only provide that the required monitoring be met, but 
has no provision that the PAL becomes invalid whenever a major 
stationary source with a PAL Permit or any emissions unit under such 
PAL is operated without complying with the required monitoring, as 
required under 40 CFR 51.165(f)(12)(i)(D) and 51.166(w)(i)(d). TCEQ did 
not provide any demonstration, as required for a customized Major NSR 
SIP revision submittal, showing how the lack of a requirement 
invalidating the PAL if there is no compliance with the required 
monitoring, is at least as stringent as the Federal PAL Program SIP 
requirements.
3. What are the grounds for disapproval of the submitted Major NSR 
Reform SIP revision for Major NSR with PAL provisions?
    EPA is disapproving the submitted Major NSR Reform SIP Revision for 
Major NSR with PAL provisions. We are disapproving the following non-
severable revisions that address the revised Major NSR SIP requirements 
with a PALs provision: 30 TAC Chapter 116 submitted February 1, 2006: 
30 TAC 116.12--Definitions; 30 TAC 116.180--Applicability; 30 TAC 
116.182--Plant-Wide Applicability Limit Permit Application; 30 TAC 
116.184--Application Review Schedule; 30 TAC 116.186--General and 
Special Conditions; 30 TAC 116.188--Plant-Wide Applicability Limit; 30 
TAC 116.190--Federal Nonattainment and Prevention of Significant 
Deterioration Review; 30 TAC 116.192--Amendments and Alterations; 30 
TAC 116.194--Public Notice and Comment; 30 TAC 116.196--Renewal of a 
Plant-Wide Applicability Limit Permit; 30 TAC 116.198--Expiration or 
Voidance.
    We are disapproving the submitted PAL revisions for the following 
reasons: (1) The submittal lacks a provision which limits applicability 
of a PAL only to an existing major stationary source; (2) the submittal 
has no provisions that relate to PAL re-openings; (3) there is no 
mandate that failure to use a monitoring system that meets the 
requirements of this section renders the PAL invalid; (4) the Texas 
submittal at 30 TAC 116.186 provides for an emissions cap that may not 
account for all of the emissions of a pollutant at the major stationary 
source; (5) the submitted 30 TAC 116.194 does not require that: (a) 
PALs be established, renewed, or increased through a procedure that is 
consistent with 40 CFR 51.160 and 51.161, including the requirement the 
reviewing authority provide the public with notice of the proposed 
approval of a PAL permit and at least a 30-day period for submittal of 
public comment; (b) that the State address all material comments before 
taking final action on the permit; and (c) include a cross-reference to 
30 TAC Chapter 39--Public Notice; (6) the Federal definition of the 
``baseline actual emissions'' provides that these emissions must be 
calculated in terms of the average rate, in tons per year at which the 
unit actually emitted the pollutant during any consecutive 24-month 
period; \14\ and (7) the State also failed to include the following 
specific monitoring definitions for CEMS, CERMS, CPMS, PEMS.
---------------------------------------------------------------------------

    \14\ See section IV.E.3 of this preamble for further information 
on the basis for disapproval of the submitted definitions ``baseline 
actual emission'' for not determining baseline emissions as average 
emissions.
---------------------------------------------------------------------------

    EPA received comments from TCEQ, the Clinic, and industry regarding 
the proposed disapproval of these submitted SIP revisions. See our 
response to these comments in section IV.D.2 above. None of the 
provisions and definitions in the February 1, 2006, SIP revision 
submittal pertaining to the revised Major NSR SIP requirements for PALs 
is severable from each other. Therefore, we are disapproving the 
portion of the February 1, 2006, SIP revision submittal pertaining to 
the revised Major NSR PALs SIP requirements as not meeting the Act and 
the revised Major NSR SIP regulations. See the proposal at 74 FR 48467, 
at 48474-48475, our background for these submitted SIP revisions in 
section IV.D.1 above, and our response to comments on these submitted 
SIP revisions in section IV.D.2 above for additional information.

E. The Submitted Non-PAL Aspects of the Major NSR SIP Requirements

1. What is the background for the submitted non-PAL aspects of the 
Major NSR SIP requirements?
    The submitted NNSR non-PAL rules do not explicitly limit the 
definition of ``facility'' \15\ to an ``emissions unit'' as do the 
submitted PSD non-PAL rules. It is our understanding of State law that 
a ``facility'' can be an ``emissions unit,'' i.e., any part of a 
stationary source that emits or may have the potential to emit any air 
contaminant, as the State explicitly provides in the revised PSD rule 
at 30 TAC 116.160(c)(3). A ``facility'' also can be a piece of 
equipment, which is smaller than an ``emissions unit.'' A ``facility'' 
can include more than one ``major stationary source.'' It can include 
every emissions point on a company site, without limiting these 
emissions points to only those belonging to the same industrial 
grouping (SIP code). In our proposed action on the Texas Qualified 
Facilities State Program, EPA specifically solicited comment on the 
definition for ``facility'' under State law. Regardless, the State 
clearly thought the prudent legal course was to limit ``facility'' 
explicitly to ``emissions unit'' in its PSD SIP non-PALs revision. TCEQ 
did not submit a demonstration showing how the lack of this explicit 
limitation in the NNSR SIP non-PALs revision is at least as stringent 
as the revised Major NSR SIP requirements. Therefore, EPA is 
disapproving the submitted definition and its use as not meeting the 
revised Major NNSR non-PALs SIP requirements.
---------------------------------------------------------------------------

    \15\ ``Facility'' is defined in the SIP approved 30 TAC 
116.10(6) as ``a discrete or identifiable structure, device, item, 
equipment, or enclosure that constitutes or contains a stationary 
source, including appurtenances other than emission control 
equipment.''
---------------------------------------------------------------------------

    Under the Major NSR SIP requirements, for any physical or

[[Page 56439]]

operational change at a major stationary source, a source must include 
emissions resulting from startups, shutdowns, and malfunctions in its 
determination of the baseline actual emissions (see 40 CFR 
51.165(a)(1)(xxxv)(A)(1) and (B)(1) and 40 CFR 51.166(b)(47)(i)(a) and 
(ii)(a)) and the projected actual emissions (see 40 CFR 
51.165(a)(1)(xxviii)(B) and 40 CFR 51.166(b)(40)(ii)(b)). The 
definition of the term ``baseline actual emissions,'' as submitted in 
30 TAC 116.12(3)(E), does not require the inclusion of emissions 
resulting from startups, shutdowns, and malfunctions.\16\ Our 
understanding of State law is that the use of the term ``may'' 
``creates discretionary authority or grants permission or a power. See 
Section 311.016 of the Texas Code Construction Act. Similarly, the 
submitted definition of ``projected actual emissions'' at 30 TAC 
116.12(29) does not require that emissions resulting from startups, 
shutdowns, and malfunctions be included. The submitted definitions 
differ from the Federal SIP definitions and the State has not provided 
information demonstrating that these definitions are at least as 
stringent as the Federal SIP definitions. Therefore, based upon the 
lack of a demonstration from the State, EPA is disapproving the 
definitions of ``baseline actual emissions'' at 30 TAC 116.12(3) and 
``projected actual emissions'' at 30 TAC 116.12(29) as not meeting the 
revised Major NSR SIP requirements.
---------------------------------------------------------------------------

    \16\ The submitted definition of ``baseline actual emissions,'' 
is as follows: Until March 1, 2016, emissions previously 
demonstrated as emissions events or historically exempted under 
Chapter 101 of this title * * * may be included to the extent they 
have been authorized, or are being authorized, in a permit action 
under Chapter 116. 30 TAC 116.12(3)(E) (emphasis added).
---------------------------------------------------------------------------

    The Federal definition of the ``baseline actual emissions'' 
provides that these emissions must be calculated in terms of ``the 
average rate, in tons per year at which the unit actually emitted the 
pollutant during any consecutive 24-month period.'' The submitted 
definition of the term ``baseline actual emissions'' found at 30 TAC 
116.12 (3)(A), (B), (D), and (E) differs from the Federal definition by 
leaving out the word ``average'' and instead providing that the 
baseline shall be calculated as ``the rate, in tons per year at which 
the unit actually emitted the pollutant during any consecutive 24-month 
period.''
    None of the provisions and definitions in the February 1, 2006, SIP 
revision submittal pertaining to the revised Major NSR SIP requirements 
for non-PALs is severable from each other. Therefore, we proposed to 
disapprove the portion of the February 1, 2006, SIP revision submittal 
pertaining to the revised Major NSR non-PALs SIP requirements as not 
meeting the Act and the revised Major NSR SIP regulations.
    See the proposal at 74 FR 48467, at 48475, for additional 
information.
2. What is EPA's response to comments on the submitted non-PAL aspects 
of the Major NSR SIP requirements?
    Comment 1: TCEQ responded to EPA's request concerning its 
interpretation of Texas law and the Texas SIP with respect to the term 
``facility.'' The definition of ``facility'' is the cornerstone of the 
Texas Permitting Program under the Texas Clean Air Act. In addition, to 
provide clarity and consistency, TCEQ also provides similar comments in 
regard to Docket ID No. EPA-R06-OAR-2005-TX-0025 and EPA-R06-OAR-2005-
TX-0032. EPA believes that the State uses a ``dual definition'' for the 
term facility. Under the TCAA and TCEQ rule, ``facility'' is defined as 
``a discrete or identifiable structure, device, item, equipment, or 
enclosure that constitutes or contains a stationary source, including 
appurtenances other than emission control equipment. Tex. Health & 
Safety Code 382.003(6); 30 TAC 116.10(6). A mine, quarry, well test, or 
road is not considered to be a facility.'' A facility may contain a 
stationary source--point of origin of a contaminant. Tex. Health & 
Safety Code 382.003(12). As a discrete point, TCEQ contends that, under 
Federal law, a facility can constitute but cannot contain a major 
stationary source as defined by Federal law. A facility is subject to 
Major and Minor NSR requirements, depending on the facts of the 
specific application. Under Major NSR, EPA uses the term ``emissions 
unit'' (generally) when referring to a part of a ``stationary source,'' 
TCEQ translates ``emissions unit'' to mean ``facility,'' \17\ which 
TCEQ contends is at least as stringent as Federal rule. TCEQ and its 
predecessor agencies have consistently interpreted facility to preclude 
inclusion of more than one stationary source, in contrast to EPA's 
stated understanding. Likewise, TCEQ does not interpret facility to 
include ``every emissions point on a company site, even if limiting 
these emission points to only those belonging to the same industrial 
grouping (SIC Code).'' The Federal definition of ``major stationary 
source'' is not equivalent to the state definition of ``source.'' 40 
CFR 51.166(b)(1)(a). A ``major stationary source'' \18\ can include 
more than one ``facility'' as defined under Texas law--which is 
consistent with EPA's interpretation of a ``major stationary source'' 
including more than one emissions unit. The above interpretation of 
``facility'' has been consistently applied by TCEQ and its predecessor 
agencies for more than 30 years. TCEQ's interpretation of Texas 
statutes enacted by the Texas Legislature is addressed by the Texas 
Code Construction Act. More specifically, words and phrases that have 
acquired a technical or particular meaning, whether by legislative 
definition or otherwise, shall be construed accordingly. Tex. Gov't 
Code 311.011(b). While Texas law does not directly refer to the two 
steps allowing deference enunciated in Chevron U.S.A., Inc. v. Natural 
Resources Defense Council, Inc., Texas law and judicial interpretation 
recognize Chevron \19\ and follow similar analysis as discussed below. 
The Texas Legislature intends an agency created to centralize expertise 
in a certain regulatory area ``be given a large degree of latitude in 
the methods it uses to accomplish its regulatory function.'' Phillips 
Petroleum Co. v. Comm'n on Envtl. Quality, 121 S.W.3d 502, 508 
(Tex.App.--Austin 2003, no pet.), which cites Chevron to support the 
following: ``Our task is to determine whether an agency's decision is 
based upon a permissible interpretation of its statutory scheme.'' 
Further, Texas courts construe the test of an administrative rule under 
the same principles as if it were a statute. Texas Gen. Indem. Co. v. 
Finance Comm'n, 36 S.W.3d 635,641 (Tex.App.--Austin 2000, no pet.). 
Texas Administrative agencies have the power to interpret their own 
rules, and their interpretation is entitled to great weight and 
deference. Id. The agency's construction of its rule is controlling 
unless it is plainly erroneous or inconsistent. Id. ``When the 
construction

[[Page 56440]]

of an administrative regulation rather than a statute is at issue, 
deference is even more clearly in order.'' Udall v. Tallman, 380 U.S. 
1, 17 (1965). This is particularly true when the rule involves complex 
subject matter. See Equitable Trust Co. v. Finance Comm'n, 99 S.W.3d 
384, 387 (Tex.App.--Austin 2003, no pet.). Texas courts recognize that 
the legislature intends an agency created to centralize expertise in a 
certain regulatory area ``be given a large degree of latitude in the 
methods it uses to accomplish its regulatory function.'' Reliant 
Energy, Inc. v. Public Util. Comm'n, 62 S.W.3d 833,838 (Tex.App.--
Austin 2001, no pet.)(citing State v. Public Util. Comm'n, 883 S.W.2d 
190, 197 (Tex. 1994). In summary, TCEQ translates ``emissions unit'' to 
mean ``facility.'' Just as an ``emissions unit'' under Federal law is 
construed by EPA as part of a major stationary source, a ``facility'' 
under Texas law can be a part of a major stationary source. However, a 
facility cannot include more than one stationary source as defined 
under Texas law.
---------------------------------------------------------------------------

    \17\ The term ``facility'' shall replace the words ``emissions 
unit'' in the referenced sections of the CFR. 30 TAC 116.160(c)(3).
    \18\ Tex. Health & Safety Code Sec.  382.003(12).
    \19\ Chevron U.S.A., Inc. v. Natural Resources Defense Council, 
Inc., 467 U.S. 387, 842-43 (1984). ``When a court reviews an 
agency's construction of the statute which it administers, it is 
confronted with two questions. First, always is the question whether 
Congress has directly spoken to the precise question at issue. If 
the intent of Congress is clear, that is the end of the matter, for 
the court, as well as the agency, must give effect to the 
unambiguously express intent of Congress. If, however, the court 
determines Congress has not directly addressed the precise question 
at issue, the court does not simply impose its own construction on 
the statute, as would be necessary in the absence of an 
administrative interpretation. Rather, if the statute is silent or 
ambiguous with respect to the specific issue, the question for the 
court is whether the agency's answer is based on a permissible 
construction of the statute.''
---------------------------------------------------------------------------

    Response: EPA welcomes the clarification concerning TCEQ's 
interpretation of Texas law and the Texas SIP with respect to the term 
``facility.'' However, we have determined that Texas's use of the term 
``facility,'' as it applies to the NNSR non-PALs rules, is overly 
vague, and therefore, unenforceable. TCEQ comments that it translates 
``emissions unit'' to mean ``facility.'' Although Texas's PSD non-PAL 
rules explicitly limit the definition of ``facility'' to ``emissions 
unit,'' the NNSR non-PALs rules fail to make such a limitation. See 74 
FR 48467, at 48473, footnote 6, and 48475; compare 30 TAC 116.10(6) to 
30 TAC 116.160(c)(3). The State clearly thought the prudent legal 
course was to limit ``facility'' explicitly to ``emissions unit'' in 
its PSD SIP non-PALs revision. Furthermore, TCEQ did not submit 
information sufficient to demonstrate that the lack of this explicit 
limitation in the submitted NNSR non-PALs is at least as stringent as 
the revised definition in the PSD non-PALs definition.
    We recognize that TCEQ should be accorded a level of deference to 
interpret the State's statutes and regulations; however, such 
interpretations must meet the applicable requirements of the Act and 
implementing regulations under 40 CFR part 51 to be approvable into the 
SIP as Federally enforceable requirements. The State has failed to 
provide any case law or SIP citation that confirms TCEQ's 
interpretation for ``facility'' under the NNSR non-PALs that would 
ensure Federal program scope.
    Comment 2: The Clinic comments that Texas's use of the term 
``facility'' makes its rules unacceptably vague. Texas's use of this 
term is problematic because of its dual definitions and broad meanings. 
The commenter compares Texas's definition of ``facility'' in 30 TAC 
116.10 with the definition of ``stationary source'' in 30 TAC 116.12 
and the definition of ``building, structure, facility, or 
installation'' in 30 TAC 116.12 and concludes that these definitions 
are quite similar. The commenter acknowledges that this argument 
assumes that one can rely on the Nonattainment NSR rules to interpret 
the general definitions. If one cannot use the Nonattainment NSR 
definitions to interpret the general definition of ``facility,'' then 
one must resort to the definition of ``source'' in 30 TAC 116.10(17), 
which is defined as ``a point of origin of air contaminants, whether 
privately or publicly owned or operated.'' Pursuant to this reading, a 
facility is more like a Federal ``emissions unit.'' 40 CFR 
51.165(a)(1)(vii). `` `Emissions unit' means any part of a stationary 
source that emits or would have the potential to emit any regulated NSR 
pollutant * * *'' At least in the Qualified Facility rules, it appears 
that TCEQ use of the definition of ``facility'' is more like a Federal 
``emissions unit.'' The circular nature of these definitions, and the 
existence of two different definitions of ``facility'' without clear 
description of their applicability, makes Texas's rules, including the 
Qualified Facility rules, vague. The commenter urges EPA to require 
Texas to clarify its definition of ``facility'' and to ensure that its 
use of the term throughout the rules is consistent with that 
definition.
    Response: EPA agrees with this comment. See our response to comment 
1 above for further information.
    Comment 3: Concerning the definition of ``facility,'' BCCA, TIP, 
and TCC commented that the term ``facility'' is defined in Chapter 116 
and in the Texas Clean Air Act, and is used in a consistent manner 
throughout. The term has identical meaning in the NNSR non-PAL rules 
and the PSD non-PAL rules. Any failure to ``explicitly limit the 
definition'' in one part of Chapter 116 is not grounds for disapproval, 
given the well-established definition of ``facility'' in the context of 
Texas air permitting and that it is comparable to the Federal 
definition of ``emissions unit.'' TCEQ regulations in 30 TAC 116.10(6) 
defines a facility as: ``A discrete or identifiable structure, device, 
item, equipment, or enclosure that constitutes or contains a stationary 
source, including appurtenances other than emission control equipment. 
A mine, quarry, well test, or road is not a facility.'' See 30 TAC 
116.10(6). Section 116.10 states that the definitions contained in the 
section apply to all uses throughout Chapter 116. 30 TAC 116.10 
(``[T]he following words and terms, when used in this chapter, shall 
have the following meanings, unless the context clearly indicates 
otherwise.'') This definition is similar to the definition of 
``emission unit'' in Texas's Title V rules. There, ``emissions unit'' 
is defined as: ``A discrete or identifiable structure, device, item, 
equipment, or enclosure that constitutes or contains a stationary 
source, including appurtenances other than emission control equipment. 
See 30 TAC 122.10(8). Under the express terms of 30 TAC 116.10, the 
definition of ``facility'' is clear, and is equivalent to the Federal 
definition of ``emission unit'' in the nonattainment NSR non-PAL rules, 
as it is throughout Chapter 116.
    Response: EPA disagrees with these comments. See our response to 
comment 1 above for further information.
    Comment 4: TCEQ comments that TCEQ rules includes maintenance, 
startup and shutdown emissions in the development of ``baseline actual 
emissions'' to the extent that the permit reviewer can verify that 
these emissions occurred, were properly quantified and reported as part 
of the baseline, and were creditable. Otherwise, startup and shutdown, 
as well as maintenance emissions, are treated as unauthorized and, as 
such, have a baseline actual emission rate of zero. Further, TCEQ rules 
do not authorize malfunction emissions. TCEQ has concerns about 
crediting a major source with an emission associated with 
malfunctioning of equipment when the source determines baseline actual 
emissions. TCEQ is concerned that including malfunction emissions would 
inflate the baseline and narrow the gap between baseline actual 
emissions and the planned emission rate. Therefore, the number of 
``major'' sources or modifications would be reduced. It is unclear how 
emissions that are not authorized would be considered creditable within 
the concept of NSR applicability.
    EPA has approved the exclusion of malfunction emissions from the 
baseline calculation in other States' rules. TCEQ considers the 
exclusion of malfunction emissions from baseline actual emissions to be 
at least as stringent as the Federal rule. TCEQ is willing to work with 
EPA to clarify the inclusion of startup and shutdown emissions when 
determining baseline actual emissions.

[[Page 56441]]

    Response: EPA disagrees with this comment. We note two fundamental 
concerns with the Texas definitions, as discussed in this response. 
First, the Texas definition of ``baseline actual emissions'' provides 
discretion to include emissions from malfunctions, startups, and 
shutdowns, but does not contain specific, objective, and replicable 
criteria for determining whether TCEQ's choice of emissions events to 
be included in the baseline actual emissions will be effective in terms 
of enforceability, compliance assurance, and ambient impacts. Second, 
the Texas definition of ``projected actual emissions'' does not include 
emissions from startups, shutdowns and malfunctions in contrast to the 
Federal definition which includes such emissions.
    The Federal definition of ``baseline actual emissions'' requires 
such emissions to include emissions associated with startups, 
shutdowns, and malfunctions. See 40 CFR 51.165(a)(1)(xxxv)(A)(1) and 
(B)(1) and 51.166(b)(47)(i)(a) and (ii)(a). In contrast, Texas's 
submitted definition of ``baseline actual emissions'' at 30 TAC 
116.12(3)(E) differs from the Federal definition by providing that 
``[u]ntil March 1, 2016, emissions previously demonstrated as emissions 
events or historically exempted under [30 TAC] Chapter 101 of this 
title * * * may be included the extent they have been authorized, or 
are being authorized, in a permit action under Chapter 116.'' Emphasis 
added. EPA's understanding of State law is that the use of the term 
``may'' creates discretionary authority or grants permission or power. 
See section 311.016 of the Texas Code Construction Act.
    TCEQ considers emission events as unauthorized emissions associated 
with the startup, shutdown, and malfunction related activities. See 30 
TAC 101.1(28). Texas has adopted an affirmative defense approach to 
handle such emissions. See 30 TAC 101.222. For emissions associated 
with the planned maintenance, startup or shutdown activities, the State 
rule has adopted a phased-in approach to allow a source to file an 
application to permit its planned maintenance, startup or shutdown 
related emissions in a source's NSR permit. This approach is based on 
the source's SIC code. See 101.222(h) and (i). For EPA's proposed 
rulemaking action on the State's Emission Events rule, see May 13, 2010 
(75 FR 26892). The State's submitted definition provides director 
discretion whether to include these types of emissions. Such director 
discretion provisions are not acceptable for inclusion in SIPs, unless 
each director decision is required under the plan to be submitted to 
EPA for approval as a single-source SIP revision. This Program does not 
contain specific, objective, and replicable criteria for determining 
whether the Executive Director's choice of emissions events to be 
included in the baseline actual emissions will be effective in terms of 
enforceability, compliance assurance, and ambient impacts. This would 
include a replicable procedure for use of any discretionary decision to 
determine which maintenance, startup, and shutdown emissions are 
properly quantified and reported as part of the baseline, and are 
creditable; and for determining that maintenance, startup, and shutdown 
emissions then do not meet such criteria and can be excluded because 
they are unauthorized.
    The State did not provide any demonstration, as required for a 
customized Major NSR SIP revision submittal, that the submitted 
provision that may exclude any emissions from maintenance, startup, and 
shutdown from the definition of baseline actual emissions, is at least 
as stringent as the definition in the Federal non-PAL Program SIP 
requirements. Texas also includes authorized maintenance emissions in 
its baseline actual emissions. Because maintenance emissions are not 
specifically required in the Federal definition, the State must provide 
a demonstration, as required for a customized Major NSR SIP revision 
submittal, that including these emissions in the baseline actual 
emissions is at least as stringent as the definition in the Federal 
non-PAL Program SIP requirements.
    With respect to ``projected actual emission,'' the Federal 
definition of ``projected actual emissions'' requires the projected 
emissions to include emissions associated with startups, shutdowns, and 
malfunctions. See 40 CFR 51.165(a)(1)(xxviii)(B)(2) and 
51.166(b)(40)(ii)(b). Texas's submitted definition of ``projected 
actual emissions'' at 30 TAC 116.12(29) differs from the Federal 
definitions by not including emissions associated with startups, 
shutdowns, and malfunctions. The exclusion of these emissions in the 
projected actual emissions while providing for the possible inclusion 
of these emissions from baseline actual emissions does not provide a 
comparable estimation of emissions increases associated with the 
project and could narrow the gap between baseline actual emissions and 
the projected actual emissions in a way that allows facilities to avoid 
NSR requirements. The State did not provide a demonstration, as 
required for a customized Major NSR SIP revision, that excluding these 
emissions from projected actual emissions, is at least as stringent as 
the Federal non-PALs SIP requirements. (EPA also wishes to note that 
the submitted definition of baseline actual emissions is unclear how 
TCEQ will include authorized emissions events as baseline actual 
emissions and projected actual emissions on and after March 1, 2016.)
    With respect to one aspect specifically related to emissions 
associated with malfunctions, EPA appreciates Texas's concern that 
including malfunction emissions in the baseline and projected actual 
emissions would inflate the baseline and narrow the gap between 
baseline and planned emissions. EPA acknowledges that it has approved 
the exclusion of malfunction emissions from the baseline calculation in 
other States' rules. This includes the approval of such exclusions in 
Florida (proposed April 4, 2008 at 73 FR 18466 and final approval on 
June 27, 2008 at 73 FR 36435) and South Carolina (proposed September 
12, 2007 at 72 FR 52031 and final approval on June 2, 2008 at 73 FR 
31368) and the proposed exclusion in Georgia (proposed September 4, 
2008 at 73 FR 51606). EPA's review of these actions indicates that in 
each State, malfunctions were excluded from both baseline actual 
emissions and projected actual emissions. This exclusion was based upon 
the difficulty of quantifying past malfunction emissions and estimating 
future malfunction emissions as part of the projected actual emissions. 
Georgia's rules specify that if malfunction emissions are omitted from 
projected actual emissions, they must also be omitted from baseline 
emissions, and vice versa, so as to provide a comparable estimation of 
emissions increases associated with the project. Florida is also 
concerned about the possibility that including malfunction emissions 
may result in the unintended rewarding of the source's poor operation 
and maintenance, by allowing malfunction to be included in the baseline 
emissions that will be used to calculate emissions changes and 
emissions credits.
    After reviewing Texas's comments on exclusion of malfunctions from 
its baseline actual emissions and projected actual emissions, we note 
that TCEQ voices concerns similar to Florida, Georgia, and South 
Carolina. Accordingly, we agree with TCEQ's concern that including 
malfunction emissions would inflate the baseline and narrow the gap 
between baseline actual emissions and the planned emission rate. 
Therefore, the number of ``major'' sources or modifications would

[[Page 56442]]

be reduced. It is unclear how emissions that are not authorized would 
be considered creditable within the concept of NSR applicability. 
Nevertheless, we must review the submitted definitions pending before 
EPA for action. Both definitions do not exclude malfunctions emissions. 
Furthermore, the baseline actual emissions definition allows the 
discretionary inclusion of malfunction emissions. To be approvable, 
both definitions must mandate the exclusion of malfunction emissions.
    Comment 5: BCCA, TIP, TCC, and TxOGA commented that the Texas 
rules' treatment of startups, shutdowns, and malfunctions is not a 
proper basis for disapproval of the proposed SIP revision. The Federal 
and Texas definitions both require that non-compliant emissions be 
excluded from the determination of baseline actual emissions.\20\ Based 
on the Texas rules' integration of pending Chapter 101 revisions on 
startup, shutdown, and malfunction emissions (as requested by EPA), the 
proposed SIP revision's treatment of these types of emissions is a 
reasonable approach.
---------------------------------------------------------------------------

    \20\ 30 TAC 116.12(3)(D) (``The actual rate shall be adjusted 
downward to exclude any non-compliant emissions that occurred during 
the consecutive 24-month period.'')
---------------------------------------------------------------------------

    EPA has approved rules for baseline calculations that exclude some 
of the elements they assert should be included in Texas's definition. 
For example, Georgia's PSD regulations give applicants the option of 
excluding malfunction emissions from the calculation of baseline 
emissions.\21\ In approving this approach, EPA noted ``The intent 
behind this optional calculation methodology is that it may result in a 
more accurate estimate of emission increases. The Federal rules allow 
for some flexibility, and EPA supports EPD's analysis that the Georgia 
rule is at least as stringent as the Federal rule.'' \22\ Similarly, 
Texas's approach to the baseline calculation attempts for a more 
accurate estimate of emissions.
---------------------------------------------------------------------------

    \21\ GA. COMP. R. & REGS. 391-3- 1-.02(7)(a)2.(ii)(II)II (2009).
    \22\ 73 FR 51,606, at 51,609 (Sept. 4, 2008).
---------------------------------------------------------------------------

    Moreover, TCEQ is underway in permitting maintenance, startup and 
shutdown emissions through Chapter 116 preconstruction permits, and a 
SIP revision reflecting the maintenance, startup, and shutdown 
permitting initiative has been submitted to EPA for approval. TCEQ is 
distinguishing between planned and unplanned maintenance, startup, and 
shutdown emissions, and working to authorize those planned maintenance, 
startup, and shutdown emissions in Texas air permits. It is reasonable 
and appropriate that the maintenance, startup, and shutdown permitting 
initiative be properly integrated with the definition of ``baseline 
actual emissions.'' The proposed SIP revision recognizes that such 
emissions may be added to the baseline in the future, based on TCEQ's 
ongoing process of authorizing maintenance, startup, and shutdown 
emissions. The proposed SIP revision and TCEQ's current approach is 
sound and reasonable based on historical treatment of maintenance, 
startup, and shutdown emissions in Texas air permits, and is not 
grounds for disapproval of the proposed SIP revision.
    Response: EPA disagrees with this comment. See the response to 
Comment 4 above for more information.
    Comment 6: The Clinic comments that Texas's definition of 
``baseline actual emissions'' is less stringent than the Federal 
definition. The Federal regulations define ``baseline actual 
emissions'' as ``the average rate, in tons per year, at which the unit 
actually emitted the pollutant during any consecutive 24-month 
period.'' See 40 CFR 51.165(a)(1)(xxxv)(A) and (B). This definition 
further provided that the average rate ``shall include emissions 
associated with startups, shutdowns, and malfunctions.'' See 40 CFR 
51.165(a)(1)(xxxv)(A)(1).
    Texas rules define ``baseline actual emissions'' as ``the rate, in 
tons per year, at which the unit actually emitted the pollutant during 
any consecutive 24-month period.'' See 30 TAC 116.12(3)(A). The Texas 
rules do not require baseline actual emissions to include emissions 
associated with maintenance, startups, and shutdowns. Instead, the 
rules state that maintenance, startup, and shutdown events ``may be 
included to the extent they have been authorized, or are being 
authorized.'' See 30 TAC 116.12(3)(E). Texas's failure to incorporate 
the Federal definition and the express failure to require incorporation 
of maintenance, startup, and shutdown emissions in the average rate 
renders the definition as inconsistent with Federal regulations.
    The commenter further notes that Texas's failure to include 
maintenance, startup, and shutdown emissions is related to a larger 
problem with Texas's program. Texas is allowing sources to authorize 
their maintenance, startup, and shutdown emissions separately from 
their routine emissions. For example, Texas allows sources that have 
individual major NSR or PSD permits to authorize their maintenance, 
startup, and shutdown emissions through a stand-alone permit-by-rule. 
See 30 TAC 106.263. This allows sources to avoid considering their 
maintenance, startup, and shutdown emissions in determining potential 
to emit, as well as in determining the magnitude of any emission 
increases. EPA has repeatedly informed Texas that its approach for 
permitting maintenance, startup, and shutdown emissions violates the 
Act.\23\ EPA should take action to ensure that Texas follows the Act 
when permitting maintenance, startup, and shutdown emissions.
---------------------------------------------------------------------------

    \23\ See ``Letter to Richard Hyde, TCEQ, Director, Air Permits 
Division'' from Jeff Robinson, EPA, Region 6, Chief, Air Permits 
Section (May 21, 2008) (Attachment 7 in the Clinic's comments).
---------------------------------------------------------------------------

    Response: EPA agrees with the comment relating to not calculating 
baseline actual emissions as average emission rates. See section 
IV.D.2, responses to comments 1 and 2 for further information.
    EPA agrees with this comment related to the inclusion of emissions 
associated with authorized maintenance, startup, and shutdown in the 
baseline actual emissions. See the response to comment 4 above. The 
comments relating to authorizing maintenance, startup, and shutdown 
emissions separately from routine emissions are outside the scope of 
this action.
    Comment 7: The Clinic comments that Texas's definition of 
``projected actual emissions'' is less stringent than the Federal 
definition. The Federal regulations define ``projected actual 
emissions'' to include maintenance, startup, and shutdown emissions. 
See 40 CFR 51.165(a)(1)(xxviii)(b) and 51.166(b)(40)(ii)(b). Texas's 
definition of ``projected actual emissions'' fails to include 
maintenance, startup, and shutdown emissions. See 30 TAC 116.12(29). 
Even where such emissions are included in a source's baseline actual 
emissions, there is no provision to require such emission in the 
projected actual emissions. The commenter states that facilities in 
Texas often have extremely large maintenance, startup, and shutdown 
emissions. See Attachment 8 of the comments (Facility emission event 
information). Under Texas's definitions, a source which would trigger a 
major modification under Federal rules could avoid a major modification 
by failing to include maintenance, startup, and shutdown in their 
projected actual emissions. The commenter states that any company that 
includes maintenance, startup, and shutdown in its baseline actual 
emissions should be required to include a realistic estimate of 
maintenance,

[[Page 56443]]

startup, and shutdown emissions in its projected actual emissions.
    Response: EPA agrees with this comment. See our response to Comment 
4 above for further information.
3. What are the grounds for disapproval of the submitted non-PAL 
aspects of the major NSR SIP requirements?
    EPA is disapproving the submitted NNSR non-PAL rules because they 
do not explicitly limit the definition of ``facility'' to an 
``emissions unit.'' It is our understanding of State law that a 
``facility'' can be an ``emissions unit,'' i.e., any part of a 
stationary source that emits or may have the potential to emit any air 
contaminant, as the State explicitly provides in the revised PSD rule 
at 30 TAC 116.160(c)(3). A ``facility'' also can be a piece of 
equipment, which is smaller than an ``emissions unit.'' A ``facility'' 
can include more than one ``major stationary source.'' It can include 
every emissions point on a company site, without limiting these 
emissions points to only those belonging to the same industrial 
grouping (SIP code). Regardless, the State clearly thought the prudent 
legal course was to limit ``facility'' explicitly to ``emissions unit'' 
in its PSD SIP non-PALs revision. TCEQ did not submit a demonstration 
showing how the lack of this explicit limitation in the NNSR SIP non-
PALs revision is at least as stringent as the revised Major NSR SIP 
requirements. Therefore, EPA is disapproving the use of the submitted 
definition as not meeting the revised Major NNSR non-PALs SIP 
requirements.
    Under the Major NSR SIP requirements, for any physical or 
operational change at a major stationary source, a source must include 
emissions resulting from startups, shutdowns, and malfunctions in its 
determination of the baseline actual emissions. The definition of the 
term ``baseline actual emissions,'' as submitted in 30 TAC 
116.12(3)(E), does not require the inclusion of emissions resulting 
from startups, shutdowns, and malfunctions as required under Federal 
regulations. The submitted definition of baseline actual emissions 
provides that until March 1, 2016, emissions previously demonstrated as 
emissions events or historically exempted under [30 TAC] Chapter 101 of 
this title may be included the extent they have been authorized, or are 
being authorized, in a permit action under Chapter 116. The submitted 
definition of ``projected actual emissions'' at 30 TAC 116.12(29) 
differs from the Federal definitions by not including emissions 
associated with startups, shutdowns, and malfunctions. The authorized 
emission events under the submitted definition include emissions 
associated with maintenance, startups, and shutdowns. Our understanding 
of State law is that the use of the term ``may'' creates discretionary 
authority or grants permission or a power. See Section 311.016 of the 
Texas Code Construction Act. Similarly, the submitted definition of 
``projected actual emissions'' at 30 TAC 116.12(29) does not require 
that emissions resulting from startups, shutdowns, and malfunctions be 
included. The submitted definitions differ from the Federal SIP 
definitions and the State has not provided information demonstrating 
that these definitions meet the Federal SIP definitions. Specifically, 
the State has not provided: (1) A replicable procedure for determining 
the basis for which emissions associated with maintenance, startup, and 
shutdown will and will not be included in the baseline actual 
emissions, (2) the basis for including emissions associated with 
maintenance in baseline actual emissions, (3) the basis for not 
including maintenance, startup, and shutdown emissions in the projected 
actual emissions, and (4) provisions for how it will handle 
maintenance, startup, and shutdown emissions after March 1, 2016. 
Therefore, based upon the lack of a demonstration from the State, as is 
required for a customized Major NSR SIP revision submittal, EPA is 
disapproving the definitions of ``baseline actual emissions'' at 30 TAC 
116.12(3) and ``projected actual emissions'' at 30 TAC 116.12(29) as 
not meeting the revised Major NSR SIP requirements.
    Texas stated that it has excluded emissions associated with 
malfunctions from the calculation of baseline actual emissions and 
projected actual emissions because including such emissions would 
inflate the baseline and narrow the gap between baseline and project 
emissions. EPA agrees with the reasons Texas uses to exclude 
malfunction emissions from baseline actual emissions and projected 
actual emissions are comparable to the reasons EPA used for excluding 
malfunction emissions from other States in which EPA approved such 
exclusion. Notwithstanding Texas's exclusion of malfunctions from these 
definitions, Texas must address the other grounds for disapproval as 
discussed above. This includes mandating the exclusion of malfunction 
emissions in both definitions.
    The Federal definition of the ``baseline actual emissions'' 
provides that these emissions must be calculated in terms of ``the 
average rate, in tons per year at which the unit actually emitted the 
pollutant during any consecutive 24-month period.'' The submitted 
definition of the term ``baseline actual emissions'' found at 30 TAC 
116.12 (3)(A), (B), (D), and (E) differs from the Federal definition by 
providing that the baseline shall be calculated as ``the rate, in tons 
per year at which the unit actually emitted the pollutant during any 
consecutive 24-month period.''
    Texas has not provided any demonstration, as is required for a 
customized Major NSR SIP revision submittal, showing how this different 
definition is at least as stringent as the Federal SIP definition. 
Therefore, EPA is disapproving the submitted definition of ``baseline 
actual emissions'' found at 30 TAC 116.12(3) as not meeting the revised 
major NSR SIP requirements.
    EPA received comments from TCEQ, the Clinic, and industry regarding 
the proposed disapproval of these submitted SIP revisions. See our 
response to these comments in section IV.E.2 above. None of the 
provisions and definitions in the February 1, 2006, SIP revision 
submittal pertaining to the revised Major NSR SIP requirements for non-
PALs is severable from each other. Therefore, we are disapproving the 
portion of the February 1, 2006, SIP revision submittal pertaining to 
the revised Major NSR non-PALs SIP requirements as not meeting the Act 
and the revised Major NSR SIP regulations. See the proposal at 74 FR 
48467, at 48475, our background for these submitted SIP revisions in 
section IV.E.1 above, and our response to comments on these submitted 
SIP revisions in section IV.E.2 above for additional information.

F. The Submitted Minor NSR Standard Permit for Pollution Control 
Project SIP Revision

1. What is the background for the submitted Minor NSR Standard Permit 
for Pollution Control Project SIP revision?
    EPA approved Texas's general regulations for Standard Permits in 30 
TAC Subchapter F of 30 TAC Chapter 116 on November 14, 2003 (68 FR 
64548) as meeting the minor NSR SIP requirements. The Texas Clean Air 
Act provides that the TCEQ may issue a standard permit for ``new or 
existing similar facilities'' if it is enforceable and compliance can 
be adequately monitored. See section 382.05195 of the TCAA. EPA 
approved the State's Standard Permit program as part of the Texas Minor 
NSR SIP program on November 14, 2003 (68 FR 64548). In the final FRN, 
EPA noted that the submitted provisions provide for a

[[Page 56444]]

streamlined mechanism for approving the construction or modification of 
certain sources in categories that contain numerous similar sources. 
EPA approved the provisions for issuing and modifying standard permits 
because, among other things, the submitted rules required the 
following: (1) No major stationary source or major modification subject 
to part C or part D of the Act could be issued a standard permit; (2) 
sources qualifying for a standard permit are required to meet all 
applicable requirements under section 111 of the Act (NSPS), section 
112 of the Act (NESHAPS and MACT), and the TCEQ rules (this includes 
the Texas SIP control strategies); (3) sources have to register their 
emissions with the TCEQ and this registration imposes an enforceable 
emissions limitation; (4) maintenance of records sufficient to 
demonstrate compliance with all the permit's conditions; and (5) 
periodic reporting of the nature and amounts of emissions necessary to 
determine whether a source is in compliance. TCEQ must conduct an air 
quality impacts analysis of the anticipated emissions from the similar 
facilities before issuing and modifying any standard permit. All new or 
revised standard permits are required to undergo public notice and a 
30-day comment period, and TCEQ must address all comments received from 
the public before finalizing its action to issue or revise a standard 
permit. Based upon the above and as further described in the TSD for 
the approval action, EPA found that the submitted Texas Minor NSR 
Standard Permits Program was adequate to protect the NAAQS and 
reasonable further progress (RFP) and was enforceable.
    One of the primary reasons why EPA found that the Standard Permits 
Program was enforceable is that these types of Minor NSR permits were 
to be issued for similar sources. The issuance of a Minor NSR permit 
for similar sources eliminates the need for a case-by-case review and 
evaluation to ensure that the NAAQS and RFP are protected and the 
permit is enforceable. The provisions of the Texas Standard Permits 
Program also ensured that the terms and conditions of an individual 
standard permit would be replicable. This is a key component for the 
EPA authorization of a generic preconstruction permit. Replicable 
methodologies eliminate any director discretion issues. Otherwise, if 
there are any director discretion issues, EPA requires that they be 
addressed in a case-by-case Minor NSR SIP permit.
    When EPA approved the Texas Standard Permits Program as part of the 
Texas Minor NSR SIP, it explicitly did not approve the Pollution 
Control Project (PCP) Standard Permit (30 TAC 116.617). See 68 FR 
64543, at 64547. On February 1, 2006, Texas submitted a repeal of the 
previously submitted PCP Standard Permit and submitted the adoption of 
a new PCP Standard Permit at 30 TAC 116.617--State Pollution Control 
Project Standard Permit.\24\ One of the main reasons Texas adopted a 
new PCP Standard Permit was to meet the new Federal requirements to 
explicitly limit this PCP Standard Permit only to Minor NSR. In State 
of New York, et al v. EPA, 413 F.3d 3 (DC Cir. June 24, 2005), the 
Court vacated the Federal pollution control project provisions for NNSR 
and PSD. Although the new PCP Standard Permit explicitly prohibits the 
use of it for Major NSR purposes, TCEQ has failed to demonstrate how 
this particular Standard Permit meets the Texas Standard Permits NSR 
SIP since it applies to numerous types of pollution control projects, 
which can be used at any source that wants to use a PCP, and is not an 
authorization for similar sources.
---------------------------------------------------------------------------

    \24\ The 2006 submittal also included a revision to 30 TAC 
116.610(d), that is a rule in Subchapter F, Standard Permits, to 
change an internal cross reference from Subchapter C to Subchapter 
E, consistent with the re-designation of this Subchapter by TCEQ. 
See section IV.H, and 74 FR 48467, at 48476, for further information 
on this portion of the 2006 submittal.
---------------------------------------------------------------------------

    Under the Texas Standard Permits Minor NSR SIP, an individual 
Standard Permit must be limited to new or existing similar sources, 
such that the affected sources can meet the Standard Permit's 
standardized permit conditions. This particular PCP Standard Permit 
does not lend itself to standardized, enforceable, replicable permit 
conditions. Because of the broad types of source categories covered by 
the PCP Standard Permit, this Standard Permit lacks replicable 
standardized permit conditions specifying how the Director's discretion 
is to be implemented for the individual determinations, e.g., the air 
quality determination, the controls, and even the monitoring, 
recordkeeping, and reporting. Rather, the types of sources covered by a 
Pollution Control Project are better designed for case-by-case 
additional authorization, source-specific review, and source-specific 
technical determinations. For case-by-case additional authorization, 
source-specific review, and source specific technical determinations, 
under the minor NSR SIP rules, if these types of determinations are 
necessary, under the Texas Minor NSR SIP, the State is required to use 
its minor NSR SIP case-by-case permit process under 30 TAC 
116.110(a)(1).
    Because of the lack of replicable standardized permit conditions 
and the lack of enforceability, the PCP Standard Permit is not the 
appropriate vehicle for authorizing PCPs. EPA proposed to disapprove 
the PCP Standard Permit, as submitted February 1, 2006. See the 
proposal at 74 FR 48467, at 48475-48476, for additional information.
2. What is EPA's response to comments on the submitted Minor NSR 
Standard Permit for Pollution Control Project SIP revision?
    Comment 1: TCEQ commented that its PCP Standard Permit has been 
used to implement control technologies required by regulatory changes, 
statutory changes, and/or EPA consent decree provisions. As such, 
control devices may be applied to numerous different facility types and 
industry types, ranging from storage tanks to fired units. TCEQ 
understands EPA's comments and will work with EPA to develop an 
approvable authorization(s) that will achieve the same goals and 
emission reductions.
    Response: EPA appreciates TCEQ's understanding of our comments and 
intention to work with us to develop an approvable rule revision. 
However, our evaluation is based on the submitted rule currently before 
us.
    Comment 2: The Clinic comments that the Texas PCP Standard Permit 
does not meet Federal NNSR and PSD requirements. See New York v. EPA, 
413 F.3d 4 (DC Cir. 2005). The PCP Standard Permit also fails to meet 
the minimum standards for minor authorizations as provided by the Act 
at 42 U.S.C. 7410(a)(2)(C) and (C) and at 40 CFR 51.160(a) and (b). 
Texas's PCP Standard Permit is not limited to a particular source-
category and can apply to various pollution control projects at any 
source type. See 30 TAC 116.617(a). Further, the permit itself does not 
have emission limits or monitoring; instead, a facility is permitted to 
include site-specific limits and monitoring requirements in its 
application for coverage under a PCP Standard Permit. See 30 TAC 
116.617(d)(2). The PCP Standard Permit includes a generic statement 
that the permit must not be used to authorize changes for which the 
Executive Director at TCEQ determines whether ``there are health 
effects concerns or the potential to exceed a national ambient air 
quality standard criteria pollutant or contaminant that results from an 
increase in emissions of any air contaminant until those concerns are 
addressed by the

[[Page 56445]]

registrant.'' See 30 TAC 116.617(a)(3)(B). This provision itself, 
without specific emission limits and monitoring requirements in the PCP 
Standard Permit, in inadequate to protect the NAAQS, and is an 
acknowledgement that provisions on the face of the PCP Standard Permit 
are not sufficient to assure protection of the NAAQS and PSD 
increments. The commenter supports EPA taking action to disapprove and 
to further require facilities that have emissions authorized under the 
PCP Standard Permit to seek a Federally valid authorization.
    Response: EPA agrees with the comments that the submitted PCP 
Standard Permit does not meet the requirements of the Texas Minor NSR 
Standard Permits SIP.
    Comment 3: BCCA, TIP, TCC, GCLC, TxOGA, and TAB commented that the 
PCP standard permit does contain on its face all requirements 
applicable to its use. See 30 TAC 116.617(d). The rule requires that a 
permittee make a submittal to TCEQ, but does not require the Executive 
Director to act to approve the submittal. Under the rules, if the 
Executive Director does not act, the authorization under the permit 
stands. Review by the Executive Director is not to make case-by-case 
determination, but rather to review for impacts on air quality and 
disallow use if air quality would be negatively impacted. See 30 TAC 
116.617(a)(3)(B). This is an important distinction. The Texas PCP 
permit is more stringent than a program that lacks a discretionary 
denial provision.
    Moreover, the PCP is a minor NSR authorization. The CAA does not 
establish requirements for a State's minor NSR programs. The Federal 
regulations that govern minor NSR programs at 40 CFR 51.160-.164 
provide States great flexibility in establishing SIP approvable minor 
NSR programs. Indeed, EPA's Environmental Appeals Board (``EAB'') has 
recognized the flexibility provided States in establishing a non-PSD, 
non-nonattainment NSR permitting program, noting that Federal 
requirements do not mandate a particular minor NSR applicability 
methodology or test.\25\
---------------------------------------------------------------------------

    \25\ In re Tennessee Valley Authority, 9 EAD 357, 461 (EAB Sept. 
15, 2000).
---------------------------------------------------------------------------

    In light of this flexibility, the Texas PCP standard permit is an 
acceptable part of the State's minor NSR SIP. Notably, EPA cites no 
statutory authority or provision of Part 51 in suggesting a bar on 
approval of general or standard permits. The manner in which TCEQ 
implements the PCP standard permit is reasonable and practical, and a 
decision to reject the PCP standard permit is a decision to reject an 
important minor NSR tool used by Texas sources to authorize 
environmentally beneficial projects in an expedited fashion. Site-
specific traditional NSR permitting for such projects is impractical, 
inefficient and detrimental to the environment.
    Response: EPA disagrees with this comment. We are not disapproving 
the Texas PCP Standard Permit because under the Texas Minor NSR SIP, 
Texas cannot issue general or standard permits. In fact, EPA has 
approved the Texas Standard Permits Program as part of the Texas Minor 
NSR SIP. EPA's approval authorizes Texas to issue so-called general 
permits, i.e., the Texas standard permits. Our approval of the Texas 
Standard Permit Program as part of the Texas Minor NSR SIP was based on 
the statutory and regulatory requirements, including section 110 of the 
Act, in particular section 110(a)(2)(C), and 40 CFR 51.160, which 
require EPA to determine that the State has adequate procedures in 
place in the submitted Program to ensure that construction or 
modification of sources will not interfere with attainment of a 
National Ambient Air Quality Standard (NAAQS) or Reasonable Further 
Progress (RFP).
    This particular submitted individual Standard Permit does not meet 
the requirements of the Texas Standard Permits Minor NSR SIP. The 
submitted revision allows the Executive Director to selectively review 
for impacts on air quality and disallow use if air quality would be 
negatively impacted or even revise the emission limit to avoid negative 
air quality impacts. It grants the Executive Director too much 
discretion to act selectively and make site-specific determinations 
outside the scope of the PCP Standard Permit and fails to include 
replicable procedures for the exercise of such discretion. It fails to 
include replicable procedures for the exercise of such discretion. 
Under the Texas Minor NSR Standard Permits SIP, each Standard Permit 
promulgated by Texas is required to include replicable standardized 
permit terms and conditions. Each Standard Permit is required to stand 
on its own. No further action on the part of the Executive Director for 
holders of a Standard Permit is authorized under the SIP because each 
individual Standard Permit is required to contain upfront all the 
replicable standardized terms and conditions. The replicability of a 
Standard Permit issued pursuant to the SIP rules eliminates any 
director discretion. EPA approval will not be required in each 
individual case as the TCEQ evaluates (and perhaps revises) a source's 
PCP Standard Permit. If the Director retains the authority to exercise 
discretion in the evaluation of each PCP Standard Permit holder's 
impact on air quality, this undermines EPA's rationale for approving 
the Texas Standard Permits Program as part of the Texas Minor NSR SIP. 
Under the SIP, any case-by-case determination must be made through the 
vehicle of the case-by-case Minor NSR SIP permit, not using a Minor NSR 
SIP Standard Permit as the vehicle. While Minor NSR SIP permit programs 
are given great flexibility, they cannot interfere with attainment and 
must meet the requirements for minor NSR. The Executive Director's 
selective application of his discretion on a case-by-case basis, 
without specific replicable criteria, exceeds the scope of EPA's 
approval of the Standard Permits Program in 30 TAC Subchapter F of 30 
TAC Chapter 116 as approved on November 14, 2003 (68 FR 64548).
    The submitted PCP Standard Permit revision has no replicable 
conditions that specify how the Director's discretion is to be 
exercised and delineated. We are particularly concerned that the 
Executive Director may exercise such discretion in case-specific 
determinations in the absence of generic, replicable enforceable 
requirements. These replicable methodologies and enforceable 
requirements should be in the submitted individual Standard Permit 
itself, not in the Executive Director's after the fact case-specific 
determinations made in issuing a customized Standard Permit to a 
source. If an individual Standard Permit requires any customizations 
for a holder, then this particular Standard Permit no longer meets the 
requirements for the Texas Standard Permit Program SIP. This customized 
Standard Permit has morphed into a case-by-case Minor NSR SIP permit 
and must meet the Texas NSR SIP requirements for this type of permit.
    Comment 4: BCCA, TIP, TCC, GCLC, and TAB commented that the manner 
in which TCEQ has defined pollution control projects is reasonable and 
practical, and a decision to reject the PCP Standard Permit is a 
decision to reject an important minor NSR tool used by Texas sources to 
authorize environmentally beneficial projects in an expedited fashion. 
TCC further comments that EPA does not, and cannot, question that the 
Standard Permit for PCPs provides for the regulation of stationary 
sources as necessary to assure that that NAAQS are achieved. TCC also 
comments that Parts C (PSD) and D (NNSR) are not implicated because PCP 
Standard

[[Page 56446]]

Permits are expressly made unavailable to major sources and major 
modifications. All commenters indicated that narrowing the scope of 
projects that can qualify for the expedited standard permit approval 
(or requiring TCEQ to promulgate source category-specific PCP standard 
permits for every source category in Texas) is impractical, 
inefficient, and detrimental to the environment.
    Response: EPA agrees that the submitted PCP Standard Permit does 
not apply to major stationary sources and major modifications subject 
to PSD or NNSR. While the manner in which TCEQ has defined pollution 
control projects may be reasonable and practical, using the Texas 
Standard Permits SIP to issue one individual Standard Permit for all 
types of PCPs does not meet the SIP's requirements.
    The scope of a Standard Permit promulgated by TCEQ is governed by 
the TCAA and the SIP's general regulations for Standard Permits in 30 
TAC Subchapter F of 30 TAC Chapter 116. These do not provide for the 
issuance of a Standard Permit for dissimilar sources. They provide for 
the issuance of a Standard Permit for similar sources so that its 
permit terms and conditions are determined upfront in the promulgation 
of the individual Standard Permit. There is no need for any director 
discretion or customization of the individual Standard Permit. This is 
not to say that TCEQ is precluded from issuing various individual 
Standard Permits for PCPs; TCEQ can issue various individual Standard 
Permits for PCPs that cover similar sources.
    Comment 5: ERCC commented that PCP authorizations are not unique to 
Texas and EPA's concerns with Texas PCP Standard Permit is too broad, 
is misplaced, and fails to recognize the regulatory restrictions in 
place, and the benefits that allow efficient emission reduction 
projects to proceed in the State. The commenter refers to two States 
with pollution control exemptions from the definition of modification 
which allow PCPs to proceed with significantly fewer limitations than 
the Texas PCP Standard Permit: Ohio and Oregon. Neither of these States 
limits PCP by a category of pollution control techniques or industrial 
sources. These SIP-approved provisions fail to provide any guidance for 
an application, director review, recordkeeping, or monitoring 
requirements. The Texas PCP program is highlighted for disapproval 
because it placed too much emphasis on the requirements and limitations 
of the PCP program. The Texas program has more safeguards than Oregon 
and Ohio. The Texas PCP program is solely a Minor NSR Program. By 
proposing disapproval of the Texas PCP program, EPA is holding Texas to 
a vastly more stringent approach and is designed to judge Texas in a 
way that EPA has not proposed for any other State.
    Response: See response to Comments 3 and 4. EPA also wishes to note 
that that the cited Oregon and Ohio PCP exemptions from Major NSR were 
approved by EPA before the court held that EPA lacked the authority to 
exempt PCPs from the Major NSR SIP requirements. See State of New York 
v. EPA, 413 F 3d. 3 (DC Cir. 2005). These exemptions of PCPs from Major 
NSR are not the same as a Minor NSR Standard Permit for PCPs. Moreover, 
they have no relationship to the Texas Minor NSR Standard Permits SIP.
    Comment 6: TAB commented on the history of the PCP programs at EPA 
and in Texas and states that Texas has been issuing Standard Permits 
for PCP Projects since 1994. TAB comments that the standard permit 
program was administered for several years with no suggestion of 
programmatic abuses, and more importantly, no examples given by anyone 
of unintended consequences. TAB also asserts that 13 years after Texas 
adopted its pollution control project standard permit, EPA finally 
commented on it in the proposal. TAB asserts that EPA cannot question 
that TCEQ's Minor NSR program, including the PCP Standard Permit, meets 
this provision of the Act.
    Response: EPA disagrees with the comment. EPA had no need to 
comment on the administration of the general Standard Permit Program in 
this action because EPA approved Texas' general regulations for 
Standard Permits in 30 TAC Subchapter F of 30 TAC Chapter 116 on 
November 14, 2003 (68 FR 64548) as meeting the minor NSR SIP 
requirements. That approval describes how the Standard Permit rules met 
EPA's requirements for new minor sources and minor modifications. The 
scope of EPA's disapproval in this action is limited to Texas's 
submission of a SIP revision, on February 1, 2006, adopting a Standard 
Permit for PCPs at 30 TAC 116.617--State Pollution Control Project 
Standard Permit. CAA section 110 sets out the process for EPA's review 
of State SIP submittals. Nothing in the Act suggests EPA is foreclosed 
from disapproving a submittal because it failed to comment on it during 
the State's rulemaking process. For further response to the remainder 
of the comment, see response to comments 3 and 4.
    Comment 7: TAB discussed numerous guidance memoranda that EPA used 
to support its position that the PCP Standard Permit is unapprovable 
because it is not limited to a particular narrowly defined source 
category that the permit is designed to cover and can be used to make 
site-specific determinations that are outside the scope of this type 
permit. The commenter states that these memos are not law, and cannot 
conceivably be used as an independent basis to deny approval of a SIP 
revision. Any EPA pronouncement that purports to be binding must be 
adopted through notice and comment rulemaking. See Appalachian Power 
Company v. EPA, 208 F.3d 1015, 1023 (DC Cir. 2000). The commenter 
concludes that if EPA wants to disapprove a submitted SIP revision of a 
Standard Permit because it is not limited to a particular narrowly 
defined source category and that allow site specific determinations, 
then EPA must adopt a rule that says so. TAB comments that even if the 
memos could legally support EPA's position, that the PCP Standard 
Permit is unapprovable because it not limited to a particular narrowly 
defined source category that the permit is designed to cover and can be 
used to make site-specific determinations that are outside the scope of 
this type permit, neither of the cited memos actually says so. The 
commenter reviewed each cited memo and found nothing to suggest any 
intent to fill gaps or qualify any provision of 40 CFR 51.160. TAB 
further comments on EPA's cites to a series of Federal Registers on 
actions taken on other States' minor NSR programs. The commenter states 
that these actions offer no explanation of how these particular actions 
illuminate EPA's proposal to disapprove Texas' PCP Standard Permit. TAB 
further comments on EPA's cites to a series of Federal Registers on 
actions taken on other States' minor NSR programs. The commenter states 
that these actions offer no explanation of how these particular actions 
illuminate EPA's proposal to disapprove Texas' PCP Standard Permit.
    Response: EPA disagrees with this comment. Section 110 of the Act, 
in particular section 110(a)(2)(C), and 40 CFR 51.160, require the EPA 
to determine that the State has adequate procedures to ensure that 
construction or modification of sources will not interfere with 
attainment of a National Ambient Air Quality Standard (NAAQS). The CAA 
grants EPA the authority to ensure that the construction or 
modification of sources will not interfere with attainment of a 
National

[[Page 56447]]

Ambient Air Quality Standard (NAAQS). The memoranda cited in the 
proposal were cited for the purpose of providing documentary evidence 
of how EPA has exercised its discretionary authority when reviewing 
general permit programs similar to the Texas Standard Permits SIP. They 
also collectively provide an historical perspective on how EPA has 
exercised its discretion in reviewing regulatory schemes similar to the 
submitted PCP Standard Permit. The utility of these citations is not in 
the specific subject matter they address, but in their discussion of 
the regulatory principles to be applied in reviewing permit schemes 
that adopt emission limitations created through standardized protocols. 
For example, the memorandum titled Approaches to Creating Federally-
Enforceable Emissions Limits, Memorandum from John S. Seitz, OAQPS, 
November 3, 1993, on page 5 discusses EPA recognition that emissions 
limitations can be created through standardized protocols. Likewise, 
the memorandum titled Guidance on Enforceability Requirements for 
Limiting Potential to Emit through SIP and section 112 rules and 
General permits, Memorandum from Kathie A Stein, Office of Enforcement 
and Compliance Assurance, January 25, 1995, discusses on page 6 the 
essential characteristics of a general permit that covers a homogenous 
group of sources.
    Again, the Federal Register citations provided in the proposal 
serve to further highlight EPA's practical application of the policies 
enunciated in the above referenced memoranda. These documents 
demonstrate that EPA has consistently applied these policies with 
respect to approval of the minor source permit programs which feature 
rules which are similar to the Texas Standard Permits SIP. For example 
the Federal Register at 71 FR 5979, final approval of Wisconsin SIP 
revision, February 6, 2006, states on page 5981 that EPA regards the 
prohibitory rules and general permits are essentially similar and goes 
on to discuss requirements for approval of permit schemes of this 
nature. The cited notices address requirements for approval of general 
permit programs submitted as SIP revisions and are illustrative of 
regulatory policy applied by EPA in reviewing Standard Permit programs 
for SIP approval.
    The cumulative effect of these documents is to provide the public 
with an insight to EPA's policy with regard to its application of 
discretionary authority in reviewing a variety of proposed general 
permit schemes. In this instance, EPA interprets the applicable 
statutes and rules to require that Standard Permits be limited to 
similar sources and they cannot be used to make site-specific 
determinations that are outside the scope of this type of permit. This 
is consistent with EPA's prior policy pronouncements on this subject as 
evidenced by the memoranda. EPA's interpretation is circumscribed by 
the statutory requirement that such a permit program not interfere with 
the attainment of the NAAQS. Consequently, the commenter's failure to 
find relevant information to illuminate EPA's decision to disapprove 
the submitted Texas' PCP Standard Permit is not a reflection on the 
utility of the cited documents.
    Comment 8: TAB concludes by observing that there is no evidence of 
Standard Permit Program failure or adverse comments. The commenter 
criticizes EPA for not taking action on the PCP Standard Permit Program 
which the CAA required action long before 2009. EPA is further 
criticized for failing to review the record to determine the negative 
impacts of the PCP Standard Permit Program during the intervening time 
during which TCEQ has been issuing PCP authorizations under this 
program. EPA offers no example of a PCP Project that failed to protect 
public health or welfare, or could not be enforced, or that did not 
accomplish its valuable purpose of quickly, but carefully, authorizing 
emission reduction projects.
    Response: EPA disagrees with this comment. The standard for review 
in this context is not the existence of adverse comments or failure in 
the implementation of a Standard Permit Program SIP. EPA reviews a SIP 
revision submission for its compliance with the Act and EPA 
regulations. CAA 110(k)(3). See also BCCA Appeal Group v. EPA, 355 F 
3d. 817, 822 (5th Cir. 2003); Natural Resources Defense Council, Inc. 
v. Browner, 57 F.3d 1122, 1123 (DC Cir. 1995). This includes an 
analysis of the submitted regulations for their legal interpretation. 
The existence of adverse comments is not the exclusive criteria for 
review of submitted revisions. In this particular instance, EPA's 
review is limited to Texas's submission of a SIP revision for a new PCP 
Standard Permit at 30 TAC 116.617, not a SIP revision for general 
Standard Permits Program. EPA has already approved Texas' general 
regulations for Standard Permits in 30 TAC Subchapter F of 30 TAC 
Chapter 116 on November 14, 2003 (68 FR 64548) as meeting the minor NSR 
SIP requirements.
3. What are the grounds for disapproving the submitted Minor NSR 
Standard Permit for Pollution Control Project SIP revision?
    EPA is disapproving the submitted Minor NSR Standard Permit for 
Pollution Control Project SIP revision because the PCP Standard Permit, 
as adopted and submitted by Texas to EPA for approval into the Texas 
Minor NSR SIP, does not meet the requirements of the Texas Minor NSR 
Standard Permits Program. It does not apply to similar sources. Because 
it does not apply to similar sources, it lacks the requisite replicable 
standardized permit terms specifying how the Director's discretion is 
to be implemented for the case-by-case determinations.
    EPA received comments from TCEQ, the Clinic, and industry regarding 
the proposed disapproval of these submitted SIP revisions. See our 
response to these comments in section IV.F.2 above. Because the PCP 
Standard Permit, in 30 TAC 116.617, does not meet the Texas Minor NSR 
SIP requirements for Standard Permits, EPA is disapproving the PCP 
Standard Permit, as submitted February 1, 2006. See the proposal at 74 
FR 48467, at 48475-48476, our background for these submitted SIP 
revisions in section IV.F.1 above, and our response to comments on 
these submitted SIP revisions in section IV.F.2 above for additional 
information.

G. No Action on the Revisions to the Definitions Under 30 TAC 101.1

    We proposed to take no action upon the June 10, 2005, SIP revision 
submittal addressing definitions at 30 TAC Chapter 101, Subchapter A, 
section 101.1, because previous revisions to that section are still 
pending review by EPA. See 74 FR 48467, at 48476. We received no 
comments on this proposal. Accordingly, we will take appropriate action 
on the submittals concerning 30 TAC 101.1 in a separate action. As 
noted previously, these definitions are severable from the other 
portions of the two SIP revision submittals.

H. No Action on Provisions That Implement Section 112(g) of the Act and 
for Restoring an Explanation That a Portion of 30 TAC 116.115 Is Not in 
the SIP Because It Implements Section 112(g) of the Act

    Texas originally submitted a new Subchapter C--Hazardous Air 
Pollutants: Regulations Governing Constructed and Reconstructed Sources 
(FCAA, Sec.  112(g), 40 CFR Part 63) on July 22, 1998. EPA has not 
taken action upon the 1998 submittal. In the February 1,

[[Page 56448]]

2006, SIP revision submittal, this Subchapter C is recodified to 
Subchapter E and sections are renumbered. This 2006 submittal also 
includes an amendment to 30 TAC 116.610(d) to change the cross-
reference from Subchapter C to Subchapter E. These SIP revision 
submittals apply to the review and permitting of constructed and 
reconstructed major sources of hazardous air pollutants (HAP) under 
section 112 of the Act and 40 CFR part 63, subpart B. The process for 
these provisions is carried out separately from the SIP activities. 
SIPs cover criteria pollutants and their precursors, as regulated by 
NAAQS. Section 112(g) of the Act regulates HAPs, this program is not 
under the auspices of a section 110 SIP, and this program should not be 
approved into the SIP. These portions of the 1998 and 2006 submittals 
are severable. For these reasons we proposed to take no action on this 
portion relating to section 112(g) of the Act. See 74 FR 48467, at 
48476-48477. We received no comments on this proposal. Accordingly, we 
are taking no action on the recodification of Subchapter C to 
Subchapter (d) and 30 TAC 116.610(d).
    In a related matter, we are making an administrative correction to 
an earlier action which inadvertently removed an explanation that 30 
TAC 116.115(c)(2)(B)(ii)(I) is not in the SIP. When we approved 30 TAC 
116.115 in the SIP on September 18, 2002, we excluded 30 TAC 
116.115(c)(2)(B)(ii)(I) because it implemented the requirements of 
section 112(g) of the Act. See 67 FR 58679, at 58699. In a separate 
action, we approved revisions to 30 TAC 116.115 on April 2, 2010 (75 FR 
16671), which are unrelated to the excluded provisions of 30 TAC 
116.115(c)(2)(B)(ii)(I). However, that action inadvertently removed the 
explanation that excluded 116.115(c)(B)(ii)(I) from the SIP. In this 
action, we are making an administrative correction to restore into the 
Code or Federal Regulations the explanation that the SIP does not 
include 30 TAC 116.115(c)(B)(ii)(I).

I. No Action on Provision Relating to Emergency and Temporary Orders

    We proposed to take no action upon the February 1, 2006, SIP 
revision submittal which recodified the severable provisions relating 
to Emergency Orders from 30 TAC Chapter 116, Subchapter E to a new 
Subchapter K. See 74 FR 48467, at 48477. We received no comments on 
this proposal. Accordingly, we will take appropriate action on the 
Emergency Order requirements in a separate action, according to the 
Consent Decree schedule.

J. Responses to General Comments on the Proposal

    Comment 1: The following commenters support EPA's proposal to 
disapprove the Texas NSR Reform Program, 1-hour NNSR, 1997 8-hour NNSR, 
and PCP Standard Permit: HCPHES; several members of the Texas House of 
Representatives; the Sierra Club; the City of Houston, and the Clinic.
    Response: Generally, these comments support EPA's analysis of 
Texas's NSR Reform Program, 1-hour NNSR, 1997 8-hour NNSR, and PCP 
Standard Permit, as discussed in detail at in the proposal at 74 FR 
48467, at 40471-48476, and further support EPA's action to disapprove 
the Texas NSR Reform Program submission.
    Comment 2: The SCMS and PSR sent numerous similar letters via e-
mail that relate to this action. These comments include 1,789 identical 
letters from SCMS (sent via e-mail) and a comment letter from PSR, 
which support EPA's proposed ruling that major portions of TCEQ air 
permitting program do not adhere to the CAA and should be thrown out. 
While agreeing that the proposed disapprovals are a good first step, 
the commenters state that EPA should take bold actions such as halting 
any new air pollution permits being issued by TCEQ utilizing TCEQ's 
current illegal policy; creating a moratorium on the operations of any 
new coal fired power plants; reviewing all permits issued since TCEQ 
adopted its illegal policies and requiring that these entities resubmit 
their applications in accordance with the Federal CAA; and putting 
stronger rules in place in order to reduce global-warming emissions and 
to make sure new laws and rules do not allow existing coal plants to 
continue polluting with global warming emissions.
    The commenters further state that Texas: (1) Has more proposed coal 
and petroleum coke fired power plants than any other State in the 
nation; (2) Is number one in carbon emissions; and (3) Is on the list 
for the largest increase in emissions over the past five years. Strong 
rules are needed to make sure the coal industry is held responsible and 
that no permits are issued under TCEQ's illegal permitting process. 
Strong regulations are vital to cleaning up the energy industry and 
putting Texas on a path to clean energy technology that boosts economic 
growth, creates jobs in Texas, and protects the air quality, health, 
and communities.
    In addition, SCMS sent 273 similar letters (sent via e-mail) that 
contained additional comments that Texas should rely on wind power, 
solar energy, and natural gas as clean alternatives to coal. Other 
comments expressed general concerns related to: impacts on global 
warming, lack of commitment by TCEQ to protect air quality, the need 
for clean energy efficient growth, impacts upon human health, 
endangerment of wildlife, impacts on creation of future jobs in Texas, 
plus numerous other similar concerns. The PSR further commented that as 
health care professionals, they are concerned about the health effects 
they are seeing in their patients due to environmental toxins in the 
air and water.
    Response: To the extent that the SCMS and PSR letters comment on 
the proposed disapproval of the submitted 1-hour ozone standard, 1997 
8-hour ozone standard, and NSR Reform Programs, they support EPA's 
action to disapprove these submitted rules. The remaining comments are 
outside the scope of our actions in this rulemaking.
    Comment 3: TCEQ understands that EPA's review was conducted by 
applying the current applicable law. The Executive Director will 
conduct a review of all EPA comments and propose changes to the rules 
proposed for disapproval.
    TCEQ understands EPA's concerns with issues regarding, among other 
things, applicability, clarity, enforceability, replicable procedures, 
recordkeeping, and compliance assurance. Specifically, the Executive 
Director will consider rulemaking to address the following concerns:
    <bullet> Clarify references for major stationary sources and major 
modifications to EPA rules for nonattainment and maintenance area 
definitions and removing rule language indicating that the 1-hour 
thresholds and offsets are not effective unless EPA promulgates rules, 
and clarifying the applicability of nonattainment permitting rules;
    <bullet> Clarify the definition of baseline actual emission rate, 
and clarify the inclusion of maintenance, startup, and shutdown 
emissions when determining baseline actual emissions; and
    <bullet> Add missing items and clarify the existing requirements to 
obtain and comply with a PAL to meet FNSR requirements.
    New and amended rules will be subject to the statutory and 
regulatory requirements for a SIP revision, as interpreted in EPA 
policy and guidance on SIP revisions, as well as applicable Texas law. 
The revised program will ensure protection of the NAAQS, and

[[Page 56449]]

demonstrate noninterference with the Texas SIP control strategies and 
reasonable further progress.
    In addition, and as noted, TCEQ will address EPA's concerns 
regarding public participation in a separate rulemaking action.
    Response: EPA appreciates TCEQ's commitment to consider rulemaking 
to correct the deficiencies in the submitted 1-hour ozone standard, 
1997 8-hour ozone standard, and NSR Reform Programs. However, our 
evaluation is based on the submitted rules that are currently before 
us.
    Comment 4: The Clinic further asks that EPA take action to halt 
Texas's use of permits-by-rule that, like the PCP standard permit, fail 
to meet minimum standards for minor source permitting and for general 
permits and exclusionary rules. Texas has adopted and is applying a 
number of permits-by-rule that are not source specific, do not include 
specific emission limitations or monitoring, and are inadequate to 
protect the NAAQS. These include the permits-by-rule in Subchapter K of 
Chapter 106 of the Texas rules. In addition, like the PCP, some of 
these permits--rather than authorizing specific types of minor emission 
source categories--can be used to increase authorized emissions from 
any type of facility.\26\ EPA has repeatedly stated that Texas's 
current use of permit-by-rule violates the Act and Texas's approved 
SIP.\27\ Yet EPA has failed take action to stop the illegal use of 
permits-by-rule.
---------------------------------------------------------------------------

    \26\ For example, 30 TAC 106.261, 106.262, 106.263, and 106.264.
    \27\ See ``Letter to Dan Eden, TCEQ Deputy Director'' from Carl 
Edlund, EPA Region 6, Director Multimedia Planning and Permitting 
Division (March 12, 2008) (``EPA has consistently expressed concern 
about PBRs that authorize a category of emissions, such as startup 
or shutdown emissions, or that modify an existing NSR permit.'') 
(Attachment 10 of the Clinic's comments); ``Letter to Richard Hyde, 
TCEQ, Director, Air Permits Division'' from Jeff Robinson, EPA 
Region 6, Chief, Air Permits Section (November 16, 2007) (Attachment 
11 of then Clinic's comments); ``Letter to Steve Hagle, TCEQ, 
Special Assistant, Air Permits Director'' from David Neleigh, EPA 
Region 6, Chief, Air Permits Section (March 30, 2006) (Attachment 12 
of the Clinic's comments); ``Letter to Lola Brown, TCEQ, Office of 
Legal Services'' from David Neleigh, EPA Region 6, Chief, Air 
Permits Section (February 3, 2006) (Attachment 13 of the Clinic's 
comments).
---------------------------------------------------------------------------

    Response: Any action on Texas's use of permits-by-rule, as 
requested by the commenter, is outside the scope of our actions in this 
rulemaking.
    Comment 5: Concerned Citizens of Grayson expressed concerns about a 
hot mix asphalt plant located near the small town of Pottsboro, TX, 
which is located near public schools and private residences and has 
caused significant disruptions in the lives of those liming nearby 
because or ``the noxious stench repeatedly emitted from the plant.'' 
The commenters are concerned because the plant was authorized under a 
Standard Permit issued by TCEQ which only had public participation and 
comment when TCEQ issued the Standard Permit for hot mix asphalt plants 
and there was no opportunity for public participation and comment on a 
source that applied for authorization under a Standard Permit for a 
specific source after the Standard Permit has been authorized.
    Response: These comments do not relate to the submitted Standard 
Permit for Pollution Control Projects that EPA is reviewing in this 
action. These comments, which relate to a Standard Permit for Hot Mix 
Asphalt Plants, are outside the scope of this action.
    Comment 6: AECT believes that EPA's proposed disapproval has 
injected uncertainty into the Texas permitting program, will cause 
tremendous operational-uncertainty for companies-in light of 
significant air emission rule proposals considered by EPA (e.g. mercury 
MACT, PSD Tailoring Rule), this and other disapprovals may jeopardize 
or substantially delay the ability of electric generators to obtain 
necessary air permits to install pollution controls that will be 
necessary to comply with current and future rules; and prompt EPA 
approval of the proposed TCEQ NSR SIP Revisions is needed in order to 
provide the regulatory certainty necessary for economic development, 
creation of critically needed jobs, and generation of affordable, 
reliable electricity in Texas.
    Response: We are disapproving the submitted Texas NSR Reform 
Program, 1-hour NNSR, and PCP Standard Permit programs because they do 
not meet applicable requirements of the Act, as discussed herein. EPA 
is required to review a SIP revision for its compliance with the Act 
and EPA regulations. See CAA section 110(k)(3); see also BCCA Appeal 
Group v. EPA, 355 F 3d.817, 822 (5th Cir 2003); Natural Resources 
Defense Council, Inc. v. Browner, 57 F.3d 1122, 1123 (DC Cir. 1995).
    Comment 7: BCCA and TIP comment that under Texas's integrated air 
permitting regime, air quality in the State is demonstrating strong, 
sustained improvement. The commenters cite to substantial reductions in 
nitrogen oxides and improvements in the ozone concentrations in the 
Houston-Galveston and Dallas-Fort Worth ozone nonattainment areas.
    Response: We are disapproving the submitted Texas NSR Reform 
Program, 1997 8-hour NNSR, 1-hour NNSR, and PCP Standard Permit 
programs because they do not meet applicable requirements of the Act, 
as discussed herein. EPA is required to review a SIP revision 
submission for its compliance with the Act and EPA regulations. CAA 
110(k)(3); See also BCCA Appeal Group v. EPA, 355 F 3d. 817, 822 (5th 
Cir. 2003); Natural Resources Defense Council, Inc. v. Browner, 57 F.3d 
1122, 1123 (DC Cir. 1995).
    Even if the commenters' premises are to be accepted, they fail to 
substantiate their claim that the Texas NSR Reform Program, 1-hour 
NNSR, 1997 8-hour NNSR, and PCP Standard Permit programs have had a 
significant impact on improving air quality in Texas by producing data 
showing that any such gains are directly attributable to the submitted 
Programs, and are not attributable to the SIP-approved control 
strategies (both State and Federal programs) or other Federal and State 
programs. They provide no explanation or basis for how their numbers 
were derived.
    Furthermore, since the commenters thought EPA was acting 
inconsistently, they should have identified SIPs that are inconsistent 
with our actions and provided technical, factual information, not bare 
assertions.
    Comment 8: GCLC, TIP, BCCA, AECT, and TCC comment that EPA ignores 
the fact that the Texas NSR Program has had a significant impact on 
improving air quality in Texas. TCEQ commented that significant 
emission reductions have been achieved by the submitted Program through 
the large number of participating grandfathered facilities, which 
resulted in improved air quality based upon the monitoring data.
    BCCA, TAB, TxOGA, and ERCC comment that the legal standard for 
evaluating a SIP revision for approval is whether the submitted 
revision mitigates any efforts to attain compliance with a NAAQS. EPA's 
failure to assess the single most important factor in the submitted 
Program, the promotion of continued air quality improvement, is 
inconsistent with case law and the Act and is a deviation from the SIP 
consistency process and national policy. EPA should perform a detailed 
analysis of approved SIP programs through the United States and 
initiate the SIP consistency process within EPA to ensure fairness to 
Texas industries.
    Response: EPA is required to review SIP revisions submission for 
their compliance with the Act and EPA regulations. CAA 110(k)(3); See 
also BCCA Appeal Group v. EPA, 355 F 3d. 817, 822 (5th Cir. 2003); 
Natural Resources Defense Council, Inc. v. Browner, 57 F.3d 1122, 1123 
(DC Cir. 1995). EPA is not disapproving the

[[Page 56450]]

entire Texas NSR SIP. Specifically, on September 23, 2009, EPA proposed 
to disapprove revisions to the Texas NSR SIP submitted by the State of 
Texas that relate to the Nonattainment NSR (NNSR) Program for the 1-
Hour Ozone Standard and the 1997 8-Hour Ozone Standard, NSR Reform, and 
a specific Standard Permit. Further, EPA is not required to initiate 
the SIP consistency process within EPA unless the pending SIP revision 
appears to meet all the requirements of the Act and EPA's regulations 
but raises a novel issue. EPA is disapproving the submitted revisions 
because they fail to meet the Act and EPA's regulations. Because the 
submitted revisions fail to meet the requirements for a SIP revision, 
the SIP consistency process is not relevant.
    Comment 9: The ERCC comments that to avoid negative economic 
consequences EPA should exercise enforcement discretion statewide for 
sources that obtained government authorization in good faith and as 
required by TCEQ, the primary permitting authority. EPA should not 
require any injunctive relief and should consider penalty only cases in 
this rulemaking.
    Response: EPA enforcement of the CAA in Texas is outside the scope 
of our actions.

V. Final Action

    Under section 110(k)(3) of the Act and for the reasons stated 
above, EPA is disapproving the following: (1) The submitted definition 
of ``best available control technology'' in 30 TAC 116.10(3); (2) Major 
NSR in areas designated nonattainment for the 1-hour ozone NAAQS; (3) 
Major NSR in areas designated nonattainment for the 1997 8-hour ozone 
NAAQS; (4) Major NSR SIP requirements for PALs; (5) Non-PAL aspects 
Major NNSR SIP requirements; and (6) submittals for a Minor Standard 
Permit for PCP. EPA is also proposing to take no action on certain 
severable revisions submitted June 10, 2005, and February 1, 2006.
    Specifically, we are disapproving the following regulations:
    <bullet> Disapproval of the definition of best available control 
technology at 30 TAC 116.10(3), submitted March 13, 1996, and July 22, 
1998;
    <bullet> Disapproval of revisions to 30 TAC 116.12 and 116.150 as 
submitted June 10, 2005;
    <bullet> Disapproving revisions to 30 TAC 116.12, 116.150, 116.151; 
and disapproving new sections at 30 TAC 116.121, 116.180, 116.182, 
116.184, 116.186, 116.188, 116.190, 116.192, 116.194, 116.196, 116.198, 
116.610(a), and 116.617, as submitted February 1, 2006.
    We are also taking no action on the provisions identified below:
    <bullet> The revisions to 30 TAC 101.1--Definitions, submitted June 
10, 2005;
    <bullet> The recodification of the existing Subchapter C under 30 
TAC Chapter 116 to a new Subchapter E under 30 TAC Chapter 116;
    <bullet> The provisions of 30 TAC 116.610(d); and
    <bullet> The recodification of the existing Subchapter E under 30 
TAC Chapter 116 to a new Subchapter K under 30 TAC Chapter 116.
    Finally, we are making administrative corrections to reinstate an 
explanation to the SIP-approved 30 TAC 116.115, that was inadvertently 
removed in a separate action on April 2, 2010 (75 FR 16671).
    Sources are reminded that they remain subject to the requirements 
of the Federally approved Texas Major NSR SIP and subject to potential 
enforcement for violations of the SIP (See EPA's Revised Guidance on 
Enforcement During Pending SIP Revisions, dated March 1, 1991).

VI. Statutory and Executive Order Reviews

A. Executive Order 12866, Regulatory Planning and Review

    This final action has been determined not to be a ``significant 
regulatory action'' subject to review by the Office of Management and 
Budget under Executive Order 12866 (58 FR 51735, October 4, 1993).

B. Paperwork Reduction Act

    This action does not impose an information collection burden under 
the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., 
because this SIP disapproval under section 110 and subchapter I, part D 
of the Clean Air Act will not in-and-of itself create any new 
information collection burdens but simply disapproves certain State 
requirements for inclusion into the SIP. Burden is defined at 5 CFR 
1320.3(b). Because this final action does not impose an information 
collection burden, the Paperwork Reduction Act does not apply.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to conduct a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities. Small entities include small 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions. For purposes of assessing the impacts of today's rule on 
small entities, small entity is defined as: (1) A small business as 
defined by the Small Business Administration's (SBA) regulations at 13 
CFR 121.201; (2) a small governmental jurisdiction that is a government 
of a city, county, town, school district or special district with a 
population of less than 50,000; and (3) a small organization that is 
any not-for-profit enterprise which is independently owned and operated 
and is not dominant in its field. This rule will not have a significant 
impact on a substantial number of small entities because SIP approvals 
and disapprovals under section 110 and part D of the Clean Air Act do 
not create any new requirements but simply approve or disapprove 
requirements that the States are already imposing.
    Furthermore, as explained in this action, the submissions do not 
meet the requirements of the Act and EPA cannot approve the 
submissions. The final disapproval will not affect any existing State 
requirements applicable to small entities in the State of Texas. 
Federal disapproval of a State submittal does not affect its State 
enforceability. After considering the economic impacts of today's 
rulemaking on small entities, and because the Federal SIP disapproval 
does not create any new requirements or impact a substantial number of 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. Moreover, 
due to the nature of the Federal-State relationship under the Clean Air 
Act, preparation of flexibility analysis would constitute Federal 
inquiry into the economic reasonableness of State action. The Clean Air 
Act forbids EPA to base its actions concerning SIPs on such grounds. 
Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 
7410(a)(2).

D. Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of 
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 
1531-1538 ``for State, local, or Tribal governments or the private 
sector.'' EPA has determined that the disapproval action does not 
include 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. This Federal action determines 
that pre-existing requirements under State or

[[Page 56451]]

local law should not be approved as part of the Federally approved SIP. 
It imposes no new requirements. Accordingly, no additional costs to 
State, local, or Tribal governments, or to the private sector, result 
from this action.

E. Executive Order 13132, Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have Federalism implications.'' 
``Policies that have Federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    This action does not have Federalism implications. It will not have 
substantial direct effects on the States, on the relationship between 
the national government and the States, or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132, because it merely disapproves 
certain State requirements for inclusion into the SIP and does not 
alter the relationship or the distribution of power and 
responsibilities established in the Clean Air Act. Thus, Executive 
Order 13132 does not apply to this action.

F. Executive Order 13175, Coordination With Indian Tribal Governments

    This action does not have Tribal implications, as specified in 
Executive Order 13175 (59 FR 22951, November 9, 2000), because the SIP 
EPA is disapproving would not apply in Indian country located in the 
State, and EPA notes that it will not impose substantial direct costs 
on Tribal governments or preempt Tribal law. This final rule does not 
have Tribal implications, as specified in Executive Order 13175. It 
will not have substantial direct effects on Tribal governments, on the 
relationship between the Federal government and Indian Tribes, or on 
the distribution of power and responsibilities between the Federal 
government and Indian Tribes. This action does not involve or impose 
any requirements that affect Indian Tribes. Thus, Executive Order 13175 
does not apply to this action.

G. Executive Order 13045, Protection of Children From Environmental 
Health Risks and Safety Risks

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) 
as applying only to those regulatory actions that concern health or 
safety risks, such that the analysis required under section 5-501 of 
the Executive Order has the potential to influence the regulation. This 
action is not subject to Executive Order 13045 because it is not an 
economically significant regulatory action based on health or safety 
risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). 
This SIP disapproval under section 110 and subchapter I, part D of the 
Clean Air Act will not in-and-of itself create any new regulations but 
simply disapproves certain State requirements for inclusion into the 
SIP.

H. Executive Order 13211, Actions That Significantly Affect Energy 
Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211 (66 FR 28355, May 
22, 2001) because it is not a significant regulatory action under 
Executive Order 12866.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (``NTTAA''), Public Law 104-113, section 12(d) (15 U.S.C. 
272 note) directs EPA to use voluntary consensus standards in its 
regulatory activities unless to do so would be inconsistent with 
applicable law or otherwise impractical. Voluntary consensus standards 
are technical standards (e.g., materials specifications, test methods, 
sampling procedures, and business practices) that are developed or 
adopted by voluntary consensus standards bodies. NTTAA directs EPA to 
provide Congress, through the Office of Management and Budget, 
explanations when the Agency decides not to use available and 
applicable voluntary consensus standards.
    EPA believes that this action is not subject to requirements of 
Section 12(d) of NTTAA because application of those requirements would 
be inconsistent with the Clean Air Act. Today's action does not require 
the public to perform activities conducive to the use of VCS.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, (February 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 of their mission 
by identifying and addressing, as appropriate, disproportionately high 
and adverse human health or environmental effects of their programs, 
policies, and activities on minority populations and low-income 
populations in the United States.
    EPA lacks the discretionary authority to address environmental 
justice in this action. In reviewing SIP submissions, EPA's role is to 
approve or disapprove State choices, based on the criteria of the Clean 
Air Act. Accordingly, this action merely disapproves certain State 
requirements for inclusion into the SIP under section 110 and 
subchapter I, part D of the Clean Air Act and will not in-and-of itself 
create any new requirements. Accordingly, it does not provide EPA with 
the discretionary authority to address, as appropriate, 
disproportionate human health or environmental effects, using 
practicable and legally permissible methods, under Executive Order 
12898.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. section 801 et seq., as 
added by the Small Business Regulatory Enforcement Fairness Act of 
1996, generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. EPA will submit a report containing this 
rule and other required information to the U.S. Senate, the U.S. House 
of Representatives, and the Comptroller General of the United States 
prior to publication of the rule in the Federal Register. A major rule 
cannot take effect until 60 days after it is published in the Federal 
Register. This action is not a ``major rule'' as defined by 5 U.S.C. 
804(2).

L. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by November 15, 2010. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to

[[Page 56452]]

enforce its requirements. See section 307(b)(2).

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Incorporation by reference, Intergovernmental relations, Lead, Nitrogen 
dioxide, Ozone, Particulate matter, Reporting and recordkeeping 
requirements, Sulfur oxides, Volatile organic compounds.

    Dated: August 31, 2010.
Al Armendariz,
Regional Administrator, Region 6.

0
40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

0
1. The authority citation for part 52 continues to read as follows:

    Authority: 42 U.S.C. 7410 et seq.

Subpart SS--Texas

0
2. The table in Sec.  52.2270(c) entitled ``EPA-Approved Regulations in 
the Texas SIP'' is amended by revising the entry for section 116.115 to 
read as follows:


Sec.  52.2270  Identification of plan.

* * * * *
    (c) * * *

                                   EPA--Approved Regulations in the Texas SIP
----------------------------------------------------------------------------------------------------------------
                                                     State approval/
        State citation             Title/subject     submittal date   EPA approval date         Explanation
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
          Chapter 116 (Reg 6)--Control of Air Pollution by Permits for New Construction or Modification
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                     Subchapter B--New Source Review Permits
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
                                         Division 1--Permit Application
----------------------------------------------------------------------------------------------------------------
Section 116.115..............  General and Special        8/20/2003  4/2/2010, 75 FR      The SIP does not
                                Conditions.                           16671.               include subsection
                                                                                           116.115(c)(2)(B)(ii)(
                                                                                           I).
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------

* * * * *

0
3. Section 52.2273 is amended by adding a new paragraph (d) to read as 
follows:


Sec.  52.2273  Approval status.

* * * * *
    (d) EPA is disapproving the Texas SIP revision submittals under 30 
TAC Chapter 116--Control of Air Pollution by Permits for New 
Construction and Modification as follows:
    (1) The following provisions in 30 TAC Chapter 116, Subchapter A--
Definitions:
    (i) 30 TAC 116.10--General Definitions--the definition of ``BACT'' 
in 30 TAC 116.10(3), adopted February 14, 1996, and submitted March 13, 
1996; and repealed and readopted June 17, 1998, and submitted July 22, 
1998;
    (ii) The revisions to 30 TAC 116.12--Nonattainment Review 
Definition, adopted May 25, 2005, and submitted June 10, 2005;
    (iii) The revisions to 30 TAC 116.12--Nonattainment and Prevention 
of Significant Deterioration Definitions, adopted January 11, 2006, and 
submitted February 1, 2006 (which renamed the section title);
    (2) The following section in 30 TAC Chapter 116, Subchapter B--New 
Source Review Permits, Division 1--Permit Application: 30 TAC 116.121--
Actual to Projected Actual Test for Emission Increase, adopted January 
11, 2006, and submitted February 1, 2006;
    (3) The following sections in 30 TAC Chapter 116, Subchapter B--New 
Source Review Permits, Division 5--Nonattainment Review:
    (i) Revisions to 30 TAC 116.150--New Major Source or Modification 
in Ozone Nonattainment Area--revisions adopted May 25, 2005, and 
submitted June 10, 2005; and revisions adopted January 11, 2006, and 
submitted February 1, 2006;
    (ii) Revisions to 30 TAC 116.151--New Major Source or Modification 
in Nonattainment Areas Other Than Ozone--revisions adopted January 11, 
2006, and submitted February 1, 2006;
    (4) The following sections in 30 TAC Chapter 116, Subchapter C--
Plant-Wide Applicability Limits, Division 1--Plant-Wide Applicability 
Limits:
    (i) 30 TAC 116.180--Applicability--adopted January 11, 2006, and 
submitted February 1, 2006;
    (ii) 30 TAC 116.182--Plant-Wide Applicability Limit Permit 
Application--adopted January 11, 2006, and submitted February 1, 2006;
    (iii) 30 TAC 116.184--Application Review Schedule--adopted January 
11, 2006, and submitted February 1, 2006;
    (iv) 30 TAC 116.186--General and Special Conditions--adopted 
January 11, 2006, and submitted February 1, 2006;
    (v) 30 TAC 116.188--Plant-Wide Applicability Limit--adopted January 
11, 2006, and submitted February 1, 2006;
    (vi) 30 TAC 116.190--Federal Nonattainment and Prevention of 
Significant Deterioration Review--adopted January 11, 2006, and 
submitted February 1, 2006;
    (vii) 30 TAC 116.192--Amendments and Alterations--adopted January 
11, 2006, and submitted February 1, 2006;
    (viii) 30 TAC 116.194--Public Notice and Comment--adopted January 
11, 2006, and submitted February 1, 2006;
    (ix) 30 TAC 116.196--Renewal of a Plant-Wide Applicability Limit 
Permit--adopted January 11, 2006, and submitted February 1, 2006;
    (x) 30 TAC 116.198--Expiration and Voidance--adopted January 11, 
2006, and submitted February 1, 2006;

[[Page 56453]]

    (5) The following sections in 30 TAC Chapter 116, Subchapter F--
Standard Permits:
    (i) Revisions to 30 TAC 116.610--Applicability--paragraphs (a)(1) 
through (a)(5) and (b)--revisions adopted January 11, 2006, and 
submitted February 1, 2006;
    (ii) 30 TAC 116.617--State Pollution Control Project Standard 
Permit--adopted January 11, 2006, and submitted February 1, 2006;

[FR Doc. 2010-22670 Filed 9-14-10; 8:45 am]
BILLING CODE 6560-50-P


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