Document ID: EPA-HQ-OAR-2001-0004-0845
Agency: epa
Document Type: Rule
Title: Prevention of Significant Deterioration and Nonattainment New Source Review: Reasonable Possibility in Recordkeeping
Posted Date: 2007-12-21T05:00Z

[Federal Register: December 21, 2007 (Volume 72, Number 245)]
[Rules and Regulations]               
[Page 72607-72617]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21de07-8]                         

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 52

[EPA-HQ-OAR-2001-0004; FRL-8508-4]
RIN-2060-AN88

 
Prevention of Significant Deterioration and Nonattainment New 
Source Review: Reasonable Possibility in Recordkeeping

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This rule finalizes proposed revisions to the regulations 
governing the major new source review (NSR) programs mandated by parts 
C and D of title I of the Clean Air Act (CAA). These changes clarify 
the ``reasonable possibility'' recordkeeping and reporting standard of 
the 2002 NSR reform rules. The ``reasonable possibility'' standard 
identifies for sources and reviewing authorities the criteria under 
which an owner or operator of a major stationary source undergoing a 
physical change or change in the method of operation that does not

[[Page 72608]]

trigger major NSR permitting requirements must keep records. The 
standard also specifies the recordkeeping and reporting requirements on 
such sources. As noted in the proposal, the U.S. Court of Appeals for 
the DC Circuit in New York v. EPA, 413 F.3d 3 (DC Cir. 2005) (New York) 
remanded for the EPA either to provide an acceptable explanation for 
its ``reasonable possibility'' standard or to devise an appropriately 
supported alternative. To satisfy the Court's remand, the EPA is 
clarifying what constitutes ``reasonable possibility'' and when the 
``reasonable possibility'' recordkeeping requirements apply.

DATES: This final rule is effective on January 22, 2008.

ADDRESSES: Docket. The EPA has established a docket for this action 
under Docket ID No. [EPA-HQ-OAR-2001-0004]. All documents in the docket 
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 and Radiation Docket and Information Center, 
EPA/DC, EPA West Building, Room 3334, 1301 Constitution Ave., NW., 
Washington, DC. The Air and Radiation Docket and Information Center 
telephone number is (202) 566-1742. The Public Reading Room is open 
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal 
holidays. The Public Reading Room is located in the EPA Headquarters 
Library, Room Number 3334 in the EPA West Building, located at 1301 
Constitution Ave., NW., Washington, DC. The telephone number for the 
Public Reading Room is (202) 566-1744. Visitors are required to show 
photographic identification, pass through a metal detector, and sign 
the EPA visitor log. All visitor materials will be processed through an 
X-ray machine as well. Visitors will be provided a badge that must be 
visible at all times.

FOR FURTHER INFORMATION CONTACT: Ms. Lisa Sutton, Air Quality Policy 
Division, Office of Air Quality Planning and Standards (C504-03), 
Environmental Protection Agency, Research Triangle Park, NC 27711, 
telephone number: (919) 541-3450; fax number: (919) 541-5509, e-mail 
address: sutton.lisa@epa.gov.

SUPPLEMENTARY INFORMATION: The information presented in this preamble 
is organized as follows:

I. General Information
    A. Does this action apply to me?
    B. Where can I obtain additional information?
II. Background and History of the Reasonable Possibility Standard
III. Summary of the Final Rule
IV. Legal and Policy Rationale for Action
    A. Purpose of the Reasonable Possibility Standard
    B. How Our Final Rule Differs From Proposal
    C. Why Recordkeeping Trigger Is at 50 Percent of NSR Significant 
Levels
    D. Fugitive Emissions and Emissions Due to Startup and 
Malfunction
    E. Additional Methods Supporting Compliance
V. Effective Date of This Rule and Requirements for State 
Implementation Plans
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866--Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132--Federalism
    F. Executive Order 13175--Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use
I. National Technology Transfer and Advancement Act
    J. Executive Order 12898--Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act
VII. Judicial Review
VIII. Statutory Authority

I. General Information

A. Does this action apply to me?

    Entities affected by this final rule include major stationary 
sources in all industry groups.\1\ The majority of sources potentially 
affected are expected to be in the following groups:
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    \1\ As noted in our proposal (72 FR 10449), the ``reasonable 
possibility'' standard does not apply to existing minor sources or 
to ``synthetic minor modifications.''

------------------------------------------------------------------------
          Industry group             SIC \a\            NAICS \b\
------------------------------------------------------------------------
Electric Services................          491  221111, 221112, 221113,
                                                 221119, 221121, 221122.
Petroleum Refining...............          291  324110.
Industrial Inorganic Chemicals...          281  325181, 325120, 325131,
                                                 325182, 211112, 325998,
                                                 331311, 325188.
Industrial Organic Chemicals.....          286  325110, 325132, 325192,
                                                 325188, 325193, 325120,
                                                 325199.
Miscellaneous Chemical Products..          289  325520, 325920, 325910,
                                                 325182, 325510.
Natural Gas Liquids..............          132  211112.
Natural Gas Transport............          492  486210, 221210.
Pulp and Paper Mills.............          261  322110, 322121, 322122,
                                                 322130.
Paper Mills......................          262  322121, 322122.
Automobile Manufacturing.........          371  336111, 336112, 336211,
                                                 336992, 336322, 336312,
                                                 336330, 336340, 336350,
                                                 336399, 336212, 336213.
Pharmaceuticals..................          283  325411, 325412, 325413,
                                                 325414.
------------------------------------------------------------------------
\a\ Standard Industrial Classification.
\b\ North American Industry Classification System.

    Entities affected by the rule also include States, local permitting 
authorities, and Indian country.

B. Where can I obtain additional information?

    In addition to being available in the docket, an electronic copy of 
this preamble and final amendments will also be available on the World 
Wide Web. Following signature by the EPA Administrator, a copy of this 
notice will be posted on the EPA's NSR Web site,

[[Page 72609]]

under Regulations & Standards, at http://www.epa.gov/nsr.

II. Background and History of the Reasonable Possibility Standard

    We recognized that the long-standing major NSR applicability test 
based on ``actual-to-potential'' methodology was the subject of claims 
by industry representatives that the actual-to-potential methodology 
resulted in ``confiscation'' of unused plant capacity following a 
modification project. Accordingly, in a proposal in 1996, we proposed 
to allow non-utility units to use an actual-to-future-actual 
methodology, similar to what we had already extended to electric 
utility steam generating units (other than new units or the replacement 
of existing units) in the 1992 WEPCO rule. 61 FR at 38255. Some States 
commented that the accuracy of applicability determinations for major 
NSR was compromised by the potential for error in calculations of 
future actual projections. As a result, in 1998, we issued a 
supplemental proposal requesting comment on an actual-to-future-
enforceable-actual methodology. To use this test, a source would be 
required to accept a permit limit equal to its future actual 
projection. 63 FR 39857. That proposal received many negative comments, 
particularly from States that were concerned about increases in 
resource burdens and in paperwork related to creating and enforcing the 
future actual emissions limit.
    In the 2002 NSR reform rules (67 FR 80186, December 31, 2002), we 
promulgated an actual-to-projected-actual methodology for major NSR 
applicability determinations.\2\ That rule further provides that if a 
source calculates its projected actual emissions for the project below 
major NSR significant levels, the source must comply with recordkeeping 
and, in some cases, reporting requirements, if there is a ``reasonable 
possibility'' that the project would result in a significant emissions 
increase. We included these requirements to respond to concerns that a 
source's projection could erroneously understate emissions and that the 
project could result in an emissions increase greater than the 
significant levels. Our goal for developing the ``reasonable 
possibility'' standard was to strike a balance between, on the one 
hand, States' concerns with possible calculation errors in 
applicability determinations and, on the other hand, sources' and 
States' concerns about resource burdens.
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    \2\ Under the actual-to-projected-actual methodology, a source 
may opt to use potential to emit as its projected actual emissions. 
See, e.g., 40 CFR 52.21(b)(41)(ii)(d).
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    Specifically, we promulgated the ``reasonable possibility'' 
standard to apply ``* * * in circumstances where there is a reasonable 
possibility that a project that is not part of a major modification may 
result in a significant emissions increase * * *'' (e.g., 40 CFR 
52.21(r)(6)).\3\ We did not define the term ``reasonable possibility'' 
or identify the criteria under which a ``reasonable possibility'' would 
arise. Sources whose project resulted in a reasonable possibility of a 
significant emissions increase were required to keep pre-change and 
post-change records. Pre-change records include a description of the 
project, identification of units that could be affected, a description 
of the applicability test used, and netting calculations (if 
applicable). For purposes of pre-change recordkeeping, the description 
of the applicability test addresses baseline actual emissions, 
projected actual emissions, and emissions excluded (such as due to 
demand growth) with an explanation as to why they are excluded. (See, 
e.g., 40 CFR 52.21(r)(6)(i).) The post-change recordkeeping 
requirement--actually a recordkeeping and monitoring requirement--
entailed monitoring emissions of those regulated NSR pollutants for 
which there was a reasonable possibility of a significant emissions 
increase and calculating and maintaining records of the annual 
emissions for 5 (or 10) years. (See, e.g., 40 CFR 52.21(r)(6)(iii).) 
Further, for certain cases, sources whose project resulted in a 
reasonable possibility of a significant emissions increase were 
required to submit pre-change and/or post-change reports to the 
reviewing authority. The reporting requirements applied depending on 
whether the unit was an electric utility steam generating unit and on 
whether the project's annual emissions exceeded the baseline by a 
significant amount. (See, e.g., 40 CFR 52.21(r)(6)(ii), (iv), and (v).)
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    \3\ For example, we required that owners/operators record the 
netting calculations for a project if the owners/operators used 
emissions reductions elsewhere at the source to conclude that the 
project was not a major modification. 67 FR at 80197.
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    In the New York case, the Court held, ``[b]ecause EPA has failed to 
explain how it can ensure NSR compliance without the relevant data, we 
will remand for it either to provide an acceptable explanation for its 
``reasonable possibility'' standard or to devise an appropriately 
supportive alternative.'' 413 F.3d at 35-36. This final action 
addresses the Court's remand by including regulatory changes that 
clarify the reasonable possibility standard and specify the criteria 
under which records must be kept for a physical change or change in the 
method of operation that does not trigger major NSR permitting 
requirements. (For purposes of this action, we refer to the physical or 
operational change interchangeably as a change or a project.) Two 
options were proposed in the March 8, 2007 proposal (45 FR 10445, March 
8, 2007). These options include the ``percentage increase trigger'' and 
the ``potential emissions trigger.'' Based on our \4\ evaluation and 
consideration of comments received on the two main options proposed for 
clarifying the ``reasonable possibility'' standard, we are finalizing 
the ``percentage increase trigger'' option with refinements to address 
concerns raised by commenters.
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    \4\ In this rulemaking, the terms ``we,'' ``us,'' and ``our'' 
refer to the EPA and the terms ``you'' and ``your'' refer to the 
owners or operators of major stationary sources of air pollution.
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    Other background information for this action is included in the 
notice of proposed rulemaking (72 FR 10445, March 8, 2007), and this 
notice assumes familiarity with that information.

III. Summary of the Final Rule

    This rule finalizes the ``percentage increase trigger'' option, 
with a few changes from what we proposed as our preferred option. Under 
the proposed ``percentage increase trigger'' option, there was a 
reasonable possibility that your change would result in a significant 
emissions increase if the projected increase in emissions of a 
pollutant--determined by comparing baseline actual emissions to 
projected actual emissions--equaled or exceeded 50 percent of the 
applicable NSR significant level for that pollutant. The proposed rule 
imposed recordkeeping, emissions monitoring, and reporting requirements 
on any source projecting that a change could result in a reasonable 
possibility of a significant emissions increase.
    By definition in our regulations, ``projected actual emissions'' 
excludes emissions attributable to an independent factor \5\ (such as 
demand growth); see, e.g., 40 CFR 52.21(b)(41). Likewise, in our 
proposal, we excluded emissions attributable to independent factors 
from the projected increase in emissions to which the ``reasonable 
possibility'' recordkeeping trigger applied. In this final action, 
based on the comments received, we are requiring

[[Page 72610]]

that emissions attributable to independent factors (such as demand 
growth) be considered for purposes of the ``percentage increase'' test. 
We are retaining the proposed approach, which requires sources to 
compare baseline actual emissions to projected actual emissions to 
determine whether this value equals or exceeds 50 percent of the 
applicable NSR significant level. The final rule requires these sources 
to comply with both the pre-change and the post-change recordkeeping 
and reporting requirements, as in the proposed rule. This final rule 
includes the additional requirement that sources whose projected actual 
emissions increase is less than 50 percent of the applicable NSR 
significant level must determine whether emissions attributable to 
demand growth that is unrelated to the change would cause the post-
project emissions increase to exceed 50 percent of the applicable NSR 
significant level. If so, then under the final rule, these sources also 
have a reasonable possibility of causing a significant emissions 
increase, but under these circumstances, the final rule requires such 
sources to comply with only the pre-change recordkeeping requirements 
and not the pre-change reporting requirements or post-change 
recordkeeping and reporting requirements.
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    \5\ Use of the term ``projected actual emissions'' in this 
preamble has the same meaning for both major NSR applicability and 
the ``reasonable possibility'' recordkeeping and reporting 
requirements.
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    At the same time that we proposed the 50-percent ``percentage 
increase trigger'' option, we included that approach as an interim 
interpretation in appendix S of 40 CFR part 51. In this final rule, we 
are amending appendix S to include the additional requirement 
concerning independent factors (such as demand growth) described 
earlier in this section.

IV. Legal and Policy Rationale for Action

A. Purpose of the Reasonable Possibility Standard

    From the standpoint of compliance, project-related records allow 
permitting authorities and enforcement officials to evaluate a source's 
claim that any emissions increase from a project does not trigger NSR. 
If ease of enforcement were our only consideration, it would point us 
toward the most inclusive of recordkeeping and reporting requirements. 
Nonetheless, agencies do not invariably require the regulated community 
to keep records to prove the nonapplicability of a requirement. In 
imposing recordkeeping requirements in this case, we strove for a 
balance between ease of enforcement and avoidance of requirements that 
would be unnecessary or unduly burdensome on reviewing authorities or 
the regulated community.
    Initially, in promulgating the ``reasonable possibility'' standard, 
we intended to limit recordkeeping requirements to those projects for 
which variability in calculating emissions creates an interest in 
obtaining additional information in order to confirm that the 
appropriate applicability outcome is reached. Nonetheless, the Court 
expressed concerns with the lack of definition for the standard and 
with the uncertainty that accompanies particular elements of the 
calculations, including demand growth and fugitive emissions, as well 
as startups and malfunctions. The regulated community expressed concern 
that the lack of a bright-line test left them uncertain about their 
recordkeeping and reporting obligations. As a result, our proposal in 
response to the Court's remand in New York included a bright-line, 50-
percent test for the ``reasonable possibility'' standard. We stated 
that the closer the projected actual emissions are to the significant 
level, the greater the likelihood that the project could ultimately 
result in a significant emissions increase, and that the bright-line 
test will capture most if not all projects that have a higher 
probability of variability and/or error in projected actual emissions. 
Thus, we proposed the bright-line test to create certainty for the 
regulated community and reviewing authorities.

B. How Our Final Rule Differs From Proposal

    We are finalizing the ``percentage increase trigger'' option with 
one difference from the proposed option. This final rule requires 
consideration of ``demand growth'' emissions and additionally requires 
pre-change recordkeeping (specified, e.g., at 40 CFR 52.21(r)(6)(i)) of 
a project whose emissions increase would equal or exceed 50 percent of 
the applicable NSR significant level only if emissions due to 
independent factors (such as demand growth) are included. As proposed, 
under the ``percentage increase'' test, ``reasonable possibility'' 
recordkeeping and reporting requirements are triggered in the case of a 
50 percent or greater increase in emissions, calculated as the 
difference of ``baseline actual emissions'' and ``projected actual 
emissions.'' Under our NSR regulations, the calculation of ``projected 
actual emissions'' excludes ``that portion of the unit's emissions 
following the project that an existing unit could have accommodated 
during the consecutive 24-month period used to establish the baseline 
actual emissions * * * and that are also unrelated to the particular 
project, including any increased utilization due to product demand 
growth.* * *'' See, e.g., 40 CFR 52.21(b)(41). This exclusion is 
commonly called the ``demand growth exclusion.''
    The Court, in its order on remand of the reasonable possibility 
provision to EPA, specifically cited as a problem the possibility that 
sources would overstate the demand growth exclusion:

    [T]he intricacies of the actual-to-projected-actual methodology 
will aggravate the enforcement difficulties stemming from the 
absence of data. The methodology mandates that projections include 
fugitive emissions, malfunctions, and start-up costs, and exclude 
demand growth unrelated to the change.* * * Each such determination 
requires sources to predict uncertain future events. By understating 
projections for emissions associated with malfunctions, for example, 
or overstating the demand growth exclusion, sources could conclude 
that a significant emissions increase was not reasonably possible. 
Without paper trails, however, enforcement authorities have no means 
of discovering whether the exercise of such judgment was indeed 
``reasonable.''

413 F.3d at 35 (emphasis added).
    Following our proposal to treat 50 percent of the applicable NSR 
significant level as the trigger for ``reasonable possibility'' 
recordkeeping and reporting requirements, we received numerous comments 
expressing continued concerns about ``demand growth'' emissions. These 
commenters argued that a source's inaccurate or improper use of the 
demand growth exclusion could allow projects to go unreviewed under the 
proposed rule trigger.
    We have decided to refine the ``percentage increase'' test by 
providing for recordkeeping to document projections of an emissions 
increase that would exceed the 50-percent threshold if emissions 
attributable to independent factors (such as demand growth) are 
counted. Thus, this final rule requires sources to include emissions 
from demand growth for purposes of applying the ``percentage increase'' 
test. Several commenters specifically recommended this approach. Some 
commenters suggested applying the trigger at 100 percent of the 
significant level where demand growth is concerned. However, we believe 
that such an approach would complicate the regulatory requirements by 
applying two different percentages depending on the circumstances. For 
ease of implementation, we are applying the same trigger--50 percent of 
the significant level--that applies to sources

[[Page 72611]]

not relying on excluding emissions caused by independent factors.
    A project that triggers ``reasonable possibility'' recordkeeping 
and reporting requirements but does so only when counting emissions due 
to an independent factor (such as demand growth) will be subject to 
only pre-change recordkeeping requirements. The project will not be 
subject to pre-change reporting requirements or post-change 
recordkeeping or reporting requirements. According to the ``reasonable 
possibility'' standard of our existing rules, the source owner/operator 
must make a pre-change report prior to construction if the unit is an 
electric utility steam generating unit. (See, e.g., 40 CFR 
52.21(r)(6)(ii).) Under this final rule, however, the pre-change 
reporting requirement does not apply to the utility project unless the 
projected actual emissions increase alone equals or exceeds 50 percent 
of the NSR significant levels.
    We believe this pre-change recordkeeping requirement establishes an 
adequate paper trail to allow enforcement authorities to evaluate the 
source's claims concerning what amount of an emissions increase is 
related to the project and what amount is attributable to demand 
growth. In most cases, it is unlikely that ``demand growth'' emissions 
could ultimately be found to be related to changes made at a facility. 
Accordingly, NSR applicability is not affected by whether a source 
overestimates or underestimates demand growth emissions. Nonetheless, 
we recognize that for some limited types of projects, additional 
information may be required to determine whether a projected emissions 
increase is related to the change. The source must retain pre-change 
records that describe the project, identify the units that could be 
affected, describe the baseline actual emissions, the projected actual 
emissions, and the emissions excluded due to demand growth with an 
explanation as to why they were excluded. These records provide 
permitting authorities and enforcement officials sufficient information 
to determine whether the type of project undertaken could have a causal 
link to increases in emissions due to demand growth. With these 
records, enforcement authorities will have an adequate starting point 
to make further inquiries and to access other types of records, as 
discussed later in this preamble, to verify post-project demand growth 
and enforce NSR requirements.
    In imposing a recordkeeping requirement on projects that attribute 
any emissions to demand growth, we believe our ``percentage increase 
test'' further addresses the Court's concerns that a source might 
overstate the demand growth exclusion but not retain records to support 
its exclusion of emissions attributable to demand growth. The rule 
imposes pre-change recordkeeping requirements on projects that have a 
higher probability of variability and/or error in projected actual 
emissions. This approach balances ease of enforcement with avoidance of 
requirements that would be unnecessary or unduly burdensome on 
reviewing authorities or the regulated community. Because sources that 
rely on the demand growth exclusion already conduct the necessary 
calculations to determine whether the project would trigger major NSR 
requirements, requiring the source to retain this calculation adds 
little additional burden.
    The following example illustrates the difference between the 
``percentage increase trigger'' as proposed and as finalized with the 
refinement for demand growth. Consider an owner/operator who calculates 
a post-project emissions increase of 60 tpy for a pollutant with a 40-
tpy significant level. The owner/operator attributes 10 tons of the 
increase to the project and the other 50 tons to demand growth. The 
owner/operator correctly concludes that the project is not a ``major 
modification'' that triggers major NSR requirements because the 
emissions increase of 10 tpy is below the significant level for the 
pollutant. Under our proposal, the project would not have triggered any 
recordkeeping or reporting requirements because the projected increase 
of 10 tpy is below 50 percent of the applicable significant level of 40 
tpy (i.e., below the 20-tpy threshold level that triggers ``reasonable 
possibility'' recordkeeping and reporting requirements). In contrast, 
under this final rule, the source must take the additional step of 
determining whether the project has a reasonable possibility of a 
significant emissions increase before subtracting the 50 tpy of 
emissions attributed to demand growth. Because 60 tpy exceeds the 20-
tpy threshold level (and even though the owner/operator attributes only 
10 tons of the increase to the project), the project would trigger pre-
change recordkeeping requirements as described earlier in this section. 
The project would not trigger pre-change reporting or post-change 
recordkeeping (which includes emissions monitoring) or reporting.

C. Why Recordkeeping Trigger Is at 50 Percent of NSR Significant Levels

    Our final rule (like our proposal) uses 50 percent of the 
applicable NSR significant level as the trigger for ``reasonable 
possibility'' recordkeeping and reporting requirements, but we 
solicited comment on use of a different percentage, such as 25, 33, 66 
or 75 percent. Commenters who supported the ``percentage increase 
trigger'' option expressed support for a trigger of not less than 50 
percent. We are using 50 percent because it balances competing 
interests, as described by the Court. Specifically, the Court stated:

    We recognize that less burdensome requirements may well be 
appropriate for sources with little likelihood of triggering NSR. * 
* *

413 F.3d at 34.
    Agencies have authority under circumstances such as these to 
establish a bright-line test, as opposed to making case-by-case 
determinations. See, e.g., Time Warner Entertainment Co. L.P. v. 
F.C.C., 240 F.3d 1126, 1141 (DC Cir. 2001). We believe a bright-line 
test at 50 percent will capture projects that have a higher probability 
of variability and/or error in projected emissions.
    Projects with projected increases below the 50-percent threshold, 
especially when emissions from demand growth are included in 
projections, are, we believe, sufficiently small that any variability 
or error in calculations is less likely to be large enough for the 
change to have increased emissions to the significant level. This view 
seems to be consistent with comments submitted by the group of States 
that successfully challenged the ``reasonable possibility'' rule.\6\ 
Other commenters included general objections to the 50-percent 
threshold but did not give specific examples of projects for which 
sources would project emissions increases of less than 50 percent of 
the significant level but which would nevertheless be likely to cause 
emissions increases above the significant level. For projects with a 
projected increase of more than 50 percent of the significant level, 
the increase is large enough that we conclude there is a reasonable 
possibility of a significant emissions increase, due to variability in 
emissions and the possibility of error in the projection. As a result, 
for these projects, we do not believe the imposition of ``reasonable 
possibility'' recordkeeping and reporting

[[Page 72612]]

requirements to be unnecessarily burdensome. The project-specific 
records and reports created pursuant to this rule (see, e.g., 40 CFR 
52.21(r)(6)) will provide an adequate paper trail for reviewing 
authorities and will be supplemented with records that are kept for 
other purposes for use by a reviewing agency in determining whether 
enforcement action is warranted.
---------------------------------------------------------------------------

    \6\ See comment letter from Hon. Andrew M. Cuomo, New York 
Attorney General, et al., at Docket Item EPA-HQ-OAR-2001-0004-
0810.1, page 9, footnote 2.
---------------------------------------------------------------------------

    Some commenters expressed concern that a threshold at 50 percent of 
NSR significant levels would capture too many small projects, including 
routine maintenance projects. The ``reasonable possibility'' standard 
applies when a major source undergoes a physical change or change in 
the method of operation. We point out that in defining ``major 
modification,'' the major NSR regulations specify that a ``physical 
change or change in the method of operation'' excludes routine 
maintenance, repair, and replacement, certain uses of alternative fuel 
or raw material, certain increases in hours of operation or production 
rate, changes in ownership, and certain activities associated with 
clean coal technology. (See, e.g., 40 CFR 52.21(b)(2).) Thus, a project 
that is not a ``physical change or change in the method of operation'' 
is not subject to ``reasonable possibility'' recordkeeping and 
reporting requirements.

D. Fugitive Emissions and Emissions Due to Startup and Malfunction

    Under the actual-to-projected-actual methodology of the major NSR 
applicability test, projected actual emissions include fugitive 
emissions as well as emissions anticipated to be caused by startups and 
malfunctions. One of the concerns expressed by the Court in remanding 
the ``reasonable possibility'' standard was that sources may 
underestimate future emissions by understating fugitive, startup, or 
malfunction emissions.
    We do not believe projections of fugitive, startup, or malfunction 
emissions are likely to be significant causes of variability or error 
that would lead to underestimates of emissions increases from existing 
units.\7\ The types of emissions at issue are included in the project's 
baseline actual emissions, and we have no reason to expect greater 
amounts of these types of emissions in the post-project projections. 
Thus, any variability or error in estimating these types of emissions 
is not likely to lead to underestimates of emissions increases due to 
the project. Indeed, because the types of the projects at issue are 
often small improvements--that is, they are relatively small physical 
or operational changes, many of which would make nonroutine repairs or 
other types of improvements or make the source operations run more 
smoothly--such projects would, if anything, reduce these types of 
emissions from the amounts included in the baseline.
---------------------------------------------------------------------------

    \7\ We are not concerned about fugitive, startup, or malfunction 
emissions from new units at a project, because their emissions 
increases are based on potential to emit.
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E. Additional Methods Supporting Compliance

    We believe that the reasons described earlier are sufficient to 
support the 50-percent bright-line test, with the demand growth 
refinement. In addition, we believe that as a practical matter, 
existing records will aid in permitting and enforcement.
    For projects that do not trigger recordkeeping and reporting 
requirements under the ``reasonable possibility'' standard, many source 
owners/operators will have various types of records that, collectively, 
provide information on the baseline actual emissions and projected 
actual emissions, as well as post-change emissions. These records will 
also be valuable for projects that trigger the ``reasonable 
possibility'' recordkeeping and reporting requirements but are not 
required to track post-change emissions. Such records include but are 
not limited to reports submitted to reviewing authorities pursuant to 
title V operating permit program requirements of 40 CFR parts 70 and 
71, State minor NSR permit application data, business records, and 
emissions inventory data.
    In the New York case, the Court questioned whether reporting 
requirements of the CAA's title V program would provide the information 
enforcement authorities need, noting, ``EPA fails to explain how 
emissions reported under title V can be traced to a particular physical 
or operational change.'' 413 F.3d at 35. We recognize the Court's 
concern that records kept in connection with monitoring and compliance 
under the title V operating permit program do not necessarily provide 
specific information on emissions increases from particular projects. 
Even so, many of these records will be useful in allowing enforcement 
authorities to identify an emissions increase from a particular piece 
of equipment, which can provide a starting point for inquiry as to 
whether a particular project was associated with such an increase. The 
enforcement authority could determine whether the source has kept 
records of changes that caused those emissions increases and, if not, 
whether the source has an adequate explanation for the emissions 
increases.
    Sources annually quantify and report emissions to reviewing 
authorities for purposes of computing annual permit program emission 
fees. Some sources calculate their reported emissions based on stack 
testing and emission factors. Other sources submit emissions data 
collected from continuous emissions monitoring (CEM). This information, 
in conjunction with title V permit applications, can allow enforcement 
authorities to determine whether emissions increases are associated 
with a particular piece of equipment.
    In addition, major sources are subject to periodic monitoring and 
recordkeeping requirements for every individual applicable requirement 
in the source's operating permit. See 71 FR 75422. These requirements 
frequently apply on an emissions-unit-by-emissions-unit basis. In many 
cases, physical changes or changes in the method of operation 
associated with a project occur at the emission unit level, so that 
these emissions records provide enforcement authorities a starting 
point for further inquiry as to whether a project at that unit is 
associated with such increase. Large emissions equipment is also 
subject to additional monitoring and recordkeeping under the 
``compliance assurance monitoring'' (CAM) regulations at 40 CFR part 
64. The CAM rule requires sources to establish monitoring or 
recordkeeping sufficient to assure compliance on a pollutant-specific 
basis at each emissions unit for which there is a limit, standard, or 
similar pollution control requirement. Monitoring assures proper 
operation of active pollution control devices in order to reduce the 
amount of downtime which would cause emissions increases. Typically, 
parameters are monitored that show proper operation of the control 
device, and if these parameters fall outside acceptable ranges or 
limits, then it is possible that there has been an emissions increase. 
In certain cases, CEMS (continuous emission monitoring systems), COMS 
(continuous opacity monitoring systems), PM CEMS (particulate matter 
continuous emission monitoring systems), or similar direct monitoring, 
is required to be used for CAM. In many such cases, these devices would 
be providing direct evidence of emissions increases. Monitoring 
compliance data includes logs of operations, visible emissions and 
instrumental opacity readings, stack test reports, analytically 
generated mass balances, and strip charts from continuous direct 
emissions and parametric monitors. These records can

[[Page 72613]]

also allow enforcement authorities to identify an emissions increase at 
a particular piece of equipment, which provides a starting point for 
further inquiry about projects associated with that equipment.\8\
---------------------------------------------------------------------------

    \8\ Major stationary sources are also subject to State reporting 
requirements. In addition to data collected from sources for 
purposes of title V permit program emission fees, as noted earlier, 
States may also collect emissions data from sources for local 
ambient air quality planning purposes.
---------------------------------------------------------------------------

    Regarding State minor source programs, the Court also expressed 
concern:

    * * *[R]eliance on state programs to establish minimum 
recordkeeping and reporting standards means that states unwilling to 
impose stricter rules are free to retain the 2002 rule's approach. * 
* *

413 F.3d at 35.

    While we recognize the Court's concern that States have latitude in 
structuring their minor source review programs, we recently collected 
information confirming that, as a practical matter, existing State 
minor NSR programs already provide data that assist reviewing 
authorities and enforcement authorities in identifying major 
modifications. Specifically, CAA 110(a)(2)(C) requires States to 
regulate construction and modification of stationary sources. 
Accordingly, States have adopted programs that require the owner/
operator to provide notification or obtain a permit before construction 
or modification. These steps allow reviewing authorities to confirm the 
source's preconstruction projections and non-major NSR applicability 
determination. Minor NSR programs by definition apply to emissions 
increases less than the major NSR significant level, and only 
activities that a State qualifies as ``insignificant activities'' under 
the SIP-approved program may be excluded from review. Thus, reviewing 
authorities have an opportunity to review virtually all projects 
causing an emissions increase before construction begins. Moreover, our 
regulations (40 CFR 51.161) provide for public review of information 
submitted by owners/operators for purposes of minor NSR review. Thus, 
information provided for purposes of minor NSR programs is also of 
value in determining applicability of major NSR.
    In October 2004, the EPA published an Information Collection 
Request (ICR) covering changes to the major NSR regulations. Our ICR 
analysis resulted in an estimate of 25,000 minor NSR permit 
applications per year processed by State and local agencies at major 
sources (specifically, 74,609 applications over a 3-year period).\9\ 
These permit applications include descriptions of the projects and 
other data that enforcement authorities can use in evaluating the 
applicability of NSR.
---------------------------------------------------------------------------

    \9\ See Supporting Statement for Information Collection Request, 
EPA ICR Number 1230.17, at Docket Item EPA-HQ-OAR-2004-0001-0835, p. 
14.
---------------------------------------------------------------------------

    Business records include such routinely maintained operation-
related records as production records, capital project development and 
appropriation requests, work orders, purchase records, and sales 
records. This information is readily available to reviewing 
authorities. In addition, publicly available information on production 
levels and growth in various industrial sectors can be used by 
authorities to determine if unexplained actual emissions increases are 
occurring at a source that might have constructed, installed, or 
modified equipment without NSR review.
    Sources report the earlier-described title V data and State minor 
source permit data to the States, and, in turn, States must submit 
certain emissions data to the EPA. All information that the source 
submits to the State is available to assist EPA enforcement 
authorities, regardless of whether the information is included in the 
State's data submittal to EPA. States submit emissions inventory data 
directly to the EPA through the EPA's Central Data Exchange.\10\ Under 
the Consolidated Emissions Reporting Rule (CERR) (at 40 CFR part 51, 
subpart A), States must report criteria pollutant emissions from large 
point sources every year and must report emissions for all point 
sources, at the process level, at 3-year intervals.
---------------------------------------------------------------------------

    \10\ The EPA's Central Data Exchange (http://www.epa.gov/cdx/) 

is the point of entry on the Environmental Information Exchange 
Network for environmental data submissions to the Agency.
---------------------------------------------------------------------------

    States develop emissions inventories in support of their State 
Implementation Plans (SIPs) and submit the data to the EPA through the 
Governor or his/her designee. The EPA interprets CAA 110(a)(2)(F) as 
requiring SIPs to provide for the reporting of criteria air pollutant 
emissions from stationary sources for all areas under the general SIP 
requirements of section 110. In addition, EPA interprets section 
172(c)(3) as providing the Administrator with discretionary authority 
to require other emissions data from stationary sources as deemed 
necessary for SIP development in nonattainment areas to attain the 
National Ambient Air Quality Standards (NAAQS).
    Another source of data is the National Emissions Inventory (NEI). 
Produced by the EPA every 3 years, the NEI is an inventory of criteria 
air pollutant and hazardous air pollutant emissions from stationary 
sources. The EPA uses data submitted by States under the CERR (as well 
as data from other sources) to develop the NEI. The NEI has several 
applications, including support for trends analyses and national 
rulemakings.
    Enforcement authorities can use all of these earlier-described 
information sources to examine whether emissions from particular 
sources and, in some cases, particular pieces of equipment have 
increased. Such increases could give an enforcement authority a 
starting point for further inquiry. Upon inquiring, the enforcement 
authority could determine whether the source has kept records of 
changes that caused those emissions increases, and if not, whether the 
source has an adequate explanation for the emissions increases.

V. Effective Date of This Rule and Requirements for State 
Implementation Plans

    These changes will take effect in the Federal PSD and Federal 
nonattainment NSR programs on January 22, 2008. This means we will 
apply these rules in any area without a SIP-approved PSD or SIP-
approved nonattainment NSR program for which we are the reviewing 
authority or for which we have delegated our authority to issue permits 
to a State, local, or tribal reviewing authority.
    We are establishing these requirements as minimum program elements 
of the PSD and nonattainment NSR programs. Notwithstanding these 
requirements, it may not be necessary for a State or local authority to 
revise its SIP program to begin to implement these changes.\11\
---------------------------------------------------------------------------

    \11\ Currently, there are no tribal permitting agencies with an 
approved TIP to implement the major NSR permitting program.
---------------------------------------------------------------------------

    Some State or local authorities may be able to adopt these changes 
through a change in interpretation of the term ``reasonable 
possibility'' without the need to revise the SIP. For any State or 
local authority that can implement the changes without revising its 
approved SIP, the changes will become effective when the reviewing 
authority publicly announces that it accepts these changes by 
interpretation. In the case of NSR SIP revisions that include the term 
``reasonable possibility'' but that EPA has not yet approved, we will 
approve the SIP revision if the State or local authority commits to 
implementing the ``reasonable possibility'' standard in a manner 
consistent with our final rule.

[[Page 72614]]

    Although no SIP revision may be necessary in certain areas that 
adopt these changes by interpretation, we encourage State and local 
authorities in such areas to revise their SIPs to adopt these changes, 
in order to enhance the clarity of the existing rules.
    For State and local authorities that revise their SIPs to adopt 
these changes, the changes are not effective in such areas until we 
approve the SIP revision. These State and local authorities must submit 
revisions to SIPs to EPA for approval within 3 years.
    State and local authorities may adopt or maintain NSR program 
elements that have the effect of making their regulations more 
stringent than these rules. Several State and local authorities have 
regulations already approved into their SIPs that are more stringent 
than these rules. These State and local authorities must submit notice 
to EPA within 3 years to acknowledge that their regulations fulfill 
these requirements.

VI. Statutory and Executive Order Reviews

A. Executive Order 12866--Regulatory Planning and Review

    Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), 
this action is a ``significant regulatory action'' because it raises 
policy issues arising from the President's priorities. Accordingly, the 
EPA submitted this action to the Office of Management and Budget (OMB) 
for review under Executive Order 12866 and any changes made in response 
to OMB's recommendations have been documented in the docket for this 
action.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden 
as the burden imposed by this rule has already been taken into account 
in previously approved information collection requirement actions under 
the NSR program. The OMB has previously approved the information 
collection requirements contained in the existing 40 CFR parts 51 and 
52 regulations under the provisions of the Paperwork Reduction Act, 44 
U.S.C. 3501 et seq., and has assigned OMB control number 2060-0003, EPA 
ICR number 1230.19. A copy of the OMB-approved Information Collection 
Request (ICR), EPA ICR number 1230.19 may be obtained from Susan Auby, 
Collection Strategies Division; U.S. Environmental Protection Agency 
(2822T); 1200 Pennsylvania Avenue, NW., Washington, DC 20460 or by 
calling (202) 566-1672.
    It is necessary that certain records and reports be collected by a 
State or local agency (or the EPA Administrator in non-delegated 
areas), for example, to: (1) Confirm the compliance status of 
stationary sources, including identifying any stationary sources 
subject/not subject to the rule, and (2) ensure that the stationary 
source control requirements are being achieved. The information is then 
used by the EPA or State enforcement personnel to ensure that the 
subject sources are applying the appropriate control technology and 
that the control requirements are being properly operated and 
maintained on a continuous basis. Based on the reported information, 
the State, local, or tribal agency can decide which plants, records, or 
processes should be inspected. Such information collection requirements 
for sources and States are currently reflected in the approved ICR 
referenced above for the NSR program.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, disclose, or provide 
information to or for a Federal agency. This includes the time needed 
to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information; processing and maintaining information; 
disclosing and providing information; adjusting the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency 
to prepare a regulatory flexibility analysis of any rule subject to 
notice and comment rulemaking requirements under the Administrative 
Procedure Act or any other statue unless the Agency certifies that this 
action will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this action on small 
entities, a small entity is defined as: (1) A small business that is a 
small industrial entity as defined in the U.S. Small Business 
Administration (SBA) size standards (see 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; or (3) a small organization that is any not-for-profit 
enterprise that is independently owned and operated and is not dominant 
in its field.
    After considering the economic impacts of this action on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. This action 
will not impose any requirements on small entities.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, the 
EPA generally must prepare a written statement, including a cost-
benefit analysis, for proposed and final rules with ``Federal 
mandates'' that may result in expenditures to State, local, and tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any 1 year. Before promulgating an EPA rule for 
which a written statement is needed, section 205 of the UMRA generally 
requires EPA to identify and consider a reasonable number of regulatory 
alternatives and adopt the least costly, most cost-effective or least 
burdensome alternative that achieves the objectives of the rule. The 
provisions of section 205 do not apply when they are inconsistent with 
applicable law. Moreover, section 205 allows EPA to adopt an 
alternative other than the least costly, most cost-effective or least 
burdensome alternative if the Administrator publishes with the final 
rule an explanation as to why that alternative was not adopted. Before 
EPA establishes any regulatory requirements that may significantly or 
uniquely affect small governments, including tribal governments, it 
must have developed under section 203 of the UMRA a small government 
agency plan. The plan must provide for notifying potentially affected 
small governments, enabling officials of affected small governments to 
have meaningful and timely input in the development of EPA regulatory 
proposals with significant Federal intergovernmental mandates, and 
informing, educating, and advising small governments on compliance with 
the regulatory requirements.

[[Page 72615]]

    The EPA has determined that this action does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any one year. Thus, this rule is not subject to the 
requirements of sections 202 and 205 of the UMRA because this action 
merely provides explanation of an existing recordkeeping and reporting 
standard.
    EPA has determined that this rule contains no regulatory 
requirements that might significantly or uniquely affect small 
governments.

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 final rule 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. This action merely provides 
explanation of an existing recordkeeping and reporting standard. Thus, 
Executive Order 13132 does not apply to this rule.

F. Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
With Indian Tribal Governments'' (65 FR 13175, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' This action does not have 
tribal implications, as there are no tribal authorities currently 
issuing major NSR permits. Thus, Executive Order 13175 does not apply 
to this action.

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

    Executive Order 13045, entitled ``Protection of Children From 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997), applies to any rule that: (1) Is determined to be ``economically 
significant'' as defined under Executive Order 12866; and (2) concerns 
an environmental health or safety risk that EPA has reason to believe 
may have a disproportionate effect on children. If the regulatory 
action meets both criteria, the Agency must evaluate the environmental 
health or safety effects of the planned rule on children, and explain 
why the planned regulation is preferable to other potentially effective 
and reasonably feasible alternatives considered by the Agency.
    The EPA interprets Executive Order 13045 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 does not establish 
an environmental standard intended to mitigate health or safety risks 
but rather provides explanation of an existing recordkeeping and 
reporting standard.

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

    This action does not constitute a ``significant energy action'' as 
defined in Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001), because it will not likely have a significant 
adverse effect on the supply, distribution, or use of energy.

I. National Technology Transfer and Advancement Act

    As noted in the proposed rule, section 12(d) of the National 
Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 
104-113, 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 (for example, 
materials specifications, test methods, sampling procedures, and 
business practices) that are developed or adopted by voluntary 
consensus standards bodies. The NTTAA directs EPA to provide Congress, 
through OMB, explanations when the Agency decides not to use available 
and applicable voluntary consensus standards.
    This action does not involve technical standards. Therefore, EPA 
did not consider the use of any voluntary consensus standards.

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

    Executive Order 12898 (59 FR 7629 (Feb. 16, 1994)) establishes 
Federal executive policy on environmental justice. Its main provision 
directs Federal agencies, to the greatest extent practicable and 
permitted by law, to make environmental justice part of their mission 
by identifying and addressing, as appropriate, any 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.
    The EPA has determined that this action will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations. The reason for EPA's 
determination is because this action does not affect the level of 
protection provided to human health or the environment as it merely 
provides an explanation of an existing recordkeeping and reporting 
standard.

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 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 does not constitute a ``major rule'' as defined 
by 5 U.S.C. 804(2). Therefore, this action will be effective January 
22, 2008.

VII. Judicial Review

    Under section 307(b)(1) of the Act, judicial review of this final 
action is available by filing of a petition for review in the U.S. 
Court of Appeals for the District of Columbia Circuit by February 19, 
2008. Any such judicial review is limited to only those objections that 
are raised with reasonable specificity in timely comments. Under 
section 307(b)(2) of the Act, the requirements of this final

[[Page 72616]]

action may not be challenged later in civil or criminal proceedings 
brought by us to enforce these requirements.

VIII. Statutory Authority

    The statutory authority for this action is provided by sections 
307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42 
U.S.C. 7401, 7411, 7414, 7416, and 7601). This action is also subject 
to section 307(d) of the CAA (42 U.S.C. 7407(d)).

List of Subjects

40 CFR Part 51

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Carbon monoxide, Intergovernmental relations, 
Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and 
recordkeeping requirements, Sulfur oxides, Transportation, Volatile 
organic compounds.

List of Subjects

40 CFR Part 52

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

    Dated: December 14, 2007.
Stephen L. Johnson,
Administrator.

0
For reasons stated in the preamble, title 40, chapter I of the Code of 
Federal Regulations is amended as set forth below.

PART 51--[AMENDED]

0
1. The authority citation for part 51 continues to read as follows:

    Authority: 23 U.S.C. 101; 42 U.S.C. 7401-7671q.

Subpart I--[Amended]

0
2. Section 51.165 is amended by revising paragraph (a)(6) introductory 
text and adding paragraph (a)(6)(vi) to read as follows:

Sec.  51.165  Permit requirements.

    (a) * * *
    (6) Each plan shall provide that, except as otherwise provided in 
paragraph (a)(6)(vi) of this section, the following specific provisions 
apply with respect to any regulated NSR pollutant emitted from projects 
at existing emissions units at a major stationary source (other than 
projects at a source with a PAL) in circumstances where there is a 
reasonable possibility, within the meaning of paragraph (a)(6)(vi) of 
this section, that a project that is not a part of a major modification 
may result in a significant emissions increase of such pollutant, and 
the owner or operator elects to use the method specified in paragraphs 
(a)(1)(xxviii)(B)(1) through (3) of this section for calculating 
projected actual emissions. Deviations from these provisions will be 
approved only if the State specifically demonstrates that the submitted 
provisions are more stringent than or at least as stringent in all 
respects as the corresponding provisions in paragraphs (a)(6)(i) 
through (vi) of this section.
* * * * *
    (vi) A ``reasonable possibility'' under paragraph (a)(6) of this 
section occurs when the owner or operator calculates the project to 
result in either:
    (A) A projected actual emissions increase of at least 50 percent of 
the amount that is a ``significant emissions increase,'' as defined 
under paragraph (a)(1)(xxvii) of this section (without reference to the 
amount that is a significant net emissions increase), for the regulated 
NSR pollutant; or
    (B) A projected actual emissions increase that, added to the amount 
of emissions excluded under paragraph (a)(1)(xxviii)(B)(3), sums to at 
least 50 percent of the amount that is a ``significant emissions 
increase,'' as defined under paragraph (a)(1)(xxvii) of this section 
(without reference to the amount that is a significant net emissions 
increase), for the regulated NSR pollutant. For a project for which a 
reasonable possibility occurs only within the meaning of paragraph 
(a)(6)(vi)(B) of this section, and not also within the meaning of 
paragraph (a)(6)(vi)(A) of this section, then provisions (a)(6)(ii) 
through (v) do not apply to the project.
* * * * *

0
3. Section 51.166 is amended by revising paragraph (r)(6) introductory 
text and adding paragraph (r)(6)(vi) to read as follows:

Sec.  51.166  Prevention of significant deterioration of air quality.

    (r) * * *
    (6) Each plan shall provide that, except as otherwise provided in 
paragraph (r)(6)(vi) of this section, the following specific provisions 
apply with respect to any regulated NSR pollutant emitted from projects 
at existing emissions units at a major stationary source (other than 
projects at a source with a PAL) in circumstances where there is a 
reasonable possibility, within the meaning of paragraph (r)(6)(vi) of 
this section, that a project that is not a part of a major modification 
may result in a significant emissions increase of such pollutant, and 
the owner or operator elects to use the method specified in paragraphs 
(b)(40)(ii)(a) through (c) of this section for calculating projected 
actual emissions. Deviations from these provisions will be approved 
only if the State specifically demonstrates that the submitted 
provisions are more stringent than or at least as stringent in all 
respects as the corresponding provisions in paragraphs (r)(6)(i) 
through (vi) of this section.
* * * * *
    (vi) A ``reasonable possibility'' under paragraph (r)(6) of this 
section occurs when the owner or operator calculates the project to 
result in either:
    (a) A projected actual emissions increase of at least 50 percent of 
the amount that is a ``significant emissions increase,'' as defined 
under paragraph (b)(39) of this section (without reference to the 
amount that is a significant net emissions increase), for the regulated 
NSR pollutant; or
    (b) A projected actual emissions increase that, added to the amount 
of emissions excluded under paragraph (b)(40)(ii)(c), sums to at least 
50 percent of the amount that is a ``significant emissions increase,'' 
as defined under paragraph (b)(39) of this section (without reference 
to the amount that is a significant net emissions increase), for the 
regulated NSR pollutant. For a project for which a reasonable 
possibility occurs only within the meaning of paragraph (r)(6)(vi)(b) 
of this section, and not also within the meaning of paragraph 
(a)(6)(vi)(a) of this section, then provisions (a)(6)(ii) through (v) 
do not apply to the project.
* * * * *

0
4. Appendix S to Part 51 is amended by revising paragraph IV.J 
introductory text and adding paragraph IV.J.6 to read as follows:

Appendix S to Part 51--Emission Offset Interpretative Ruling

* * * * *
    IV. * * *
    J. Provisions for projected actual emissions. Except as 
otherwise provided in paragraph IV.J.6(ii) of this Ruling, the 
provisions of this paragraph IV.J apply with respect to any 
regulated NSR pollutant emitted from projects at existing emissions 
units at a major stationary source (other than projects at a source 
with a PAL) in circumstances where there is a reasonable 
possibility, within the meaning of paragraph IV.J.6 of this Ruling, 
that a project that is not a part of a major modification may result 
in a significant emissions increase of such pollutant, and the owner 
or operator elects to use the method specified in paragraphs 
II.A.24(ii)(a) through

[[Page 72617]]

(c) of this Ruling for calculating projected actual emissions.
* * * * *
    6. A ``reasonable possibility'' under paragraph IV.J of this 
Ruling occurs when the owner or operator calculates the project to 
result in either:
    (i) A projected actual emissions increase of at least 50 percent 
of the amount that is a ``significant emissions increase,'' as 
defined under paragraph II.A.23 of this Ruling (without reference to 
the amount that is a significant net emissions increase), for the 
regulated NSR pollutant; or
    (ii) A projected actual emissions increase that, added to the 
amount of emissions excluded under paragraph II.A.24(ii)(c), sums to 
at least 50 percent of the amount that is a ``significant emissions 
increase,'' as defined under paragraph II.A.23 of this Ruling 
(without reference to the amount that is a significant net emissions 
increase), for the regulated NSR pollutant. For a project for which 
a reasonable possibility occurs only within the meaning of paragraph 
IV.J.6(ii) of this Ruling, and not also within the meaning of 
paragraph IV.J.6(i) of this Ruling, then provisions IV.J.2 through 
IV.J.5 do not apply to the project.
* * * * *

PART 52--[AMENDED]

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

    Authority: 42 U.S.C. 7401, et seq.

Subpart A--[Amended]

0
6. Section 52.21 is amended by revising paragraph (r)(6) introductory 
text and adding paragraph (r)(6)(vi) to read as follows:

Sec.  52.21  Prevention of significant deterioration of air quality.

    (r) * * *
    (6) Except as otherwise provided in paragraph (r)(6)(vi)(b) of this 
section, the provisions of this paragraph (r)(6) apply with respect to 
any regulated NSR pollutant emitted from projects at existing emissions 
units at a major stationary source (other than projects at a source 
with a PAL) in circumstances where there is a reasonable possibility, 
within the meaning of paragraph (r)(6)(vi) of this section, that a 
project that is not a part of a major modification may result in a 
significant emissions increase of such pollutant, and the owner or 
operator elects to use the method specified in paragraphs 
(b)(41)(ii)(a) through (c) of this section for calculating projected 
actual emissions.
* * * * *
    (vi) A ``reasonable possibility'' under paragraph (r)(6) of this 
section occurs when the owner or operator calculates the project to 
result in either:
    (a) A projected actual emissions increase of at least 50 percent of 
the amount that is a ``significant emissions increase,'' as defined 
under paragraph (b)(40) of this section (without reference to the 
amount that is a significant net emissions increase), for the regulated 
NSR pollutant; or
    (b) A projected actual emissions increase that, added to the amount 
of emissions excluded under paragraph (b)(41)(ii)(c) of this section, 
sums to at least 50 percent of the amount that is a ``significant 
emissions increase,'' as defined under paragraph (b)(40) of this 
section (without reference to the amount that is a significant net 
emissions increase), for the regulated NSR pollutant. For a project for 
which a reasonable possibility occurs only within the meaning of 
paragraph (r)(6)(vi)(b) of this section, and not also within the 
meaning of paragraph (r)(6)(vi)(a) of this section, then provisions 
(r)(6)(ii) through (v) do not apply to the project.
* * * * *

 [FR Doc. E7-24714 Filed 12-20-07; 8:45 am]

BILLING CODE 6560-50-P