Document ID: EPA-R04-OAR-2017-0542-0001
Agency: epa
Document Type: Proposed Rule
Title: Air Quality State Implementation Plans; Approvals and Promulgations: Tennessee; Knox County New Source Review Reform
Posted Date: 2018-06-20T04:00Z

[Federal Register Volume 83, Number 119 (Wednesday, June 20, 2018)]
[Proposed Rules]
[Pages 28568-28577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-13144]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R04-OAR-2017-0542; FRL-9979-65--Region 4]

Air Plan Approval; Tennessee: Knox County NSR Reform

AGENCY: Environmental Protection Agency.

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing to 
approve several Tennessee State Implementation Plan (SIP) revisions 
submitted by the Tennessee Department of Environment & Conservation 
(TDEC), on behalf of Knox County's Air Quality Management Division, on 
March 7, 2017, and April 17, 2017. The SIP revisions modify the 
Prevention of Significant Deterioration (PSD) and Nonattainment New 
Source Review (NNSR) regulations in the Knox County portion of the 
Tennessee SIP to address changes to the federal new source review (NSR) 
regulations in recent years for the implementation of the national 
ambient air quality standards (NAAQS). Additionally, the SIP revisions 
include updates to Knox County's minor source permitting regulations. 
This action is being proposed pursuant to the Clean Air Act (CAA or 
Act).

DATES: Comments must be received on or before July 20, 2018.

ADDRESSES: Submit your comments, identified by Docket ID No. FDMS 
Docket ID Number EPA-R04-OAR-2017-0542 at http://www.regulations.gov. 
Follow the online instructions for submitting comments. Once submitted, 
comments cannot be edited or removed from Regulations.gov. EPA may 
publish any comment received to its public docket. Do not submit 
electronically any information you consider to be Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Multimedia submissions (audio, video, etc.) must be 
accompanied by a written comment. The written comment is considered the 
official comment and should include discussion of all points

[[Page 28569]]

you wish to make. EPA will generally not consider comments or comment 
contents located outside of the primary submission (i.e. on the web, 
cloud, or other file sharing system). For additional submission 
methods, the full EPA public comment policy, information about CBI or 
multimedia submissions, and general guidance on making effective 
comments, please visit http://www2.epa.gov/dockets/commenting-epa-dockets.

FOR FURTHER INFORMATION CONTACT: Andres Febres of the Air Regulatory 
Management Section, Air Planning and Implementation Branch, Air, 
Pesticides and Toxics Management Division, U.S. Environmental 
Protection Agency, Region 4, 61 Forsyth Street SW, Atlanta, Georgia 
30303-8960. The telephone number is (404) 562-8966. Mr. Febres can also 
be reached via electronic mail at [email protected].

SUPPLEMENTARY INFORMATION: 

Table of Contents

I. What action is EPA proposing?
II. Background
    A. 2002 NSR Reform Rules
    B. PM2.5 NAAQS
    1. Implementation of NSR for the PM2.5 NAAQS and 
Grandfathering Provisions
    2. PM2.5 Condensables Correction Rule
    3. PM2.5 Subpart 4 Litigation
    4. PM2.5 PSD-Increments-SILs-SMC Rule
    C. 1997 8-Hour Ozone NAAQS Phase 2 Rule
    D. Greenhouse Gases and Plant-wide Applicability Limits
    E. Equipment Replacement Provisions
III. Analysis of State's Submittal
    A. Tennessee's March 7, 2017, NNSR and PSD Submittals
    1. Definition of ``Baseline Actual Emissions''
    2. Fugitive Emissions Rule
    3. GHG Tailoring Rule
    B. Tennessee's April 17, 2017, NNSR Changes
    C. Tennessee's April 17, 2017, Minor Source Permit Changes
IV. Incorporation by Reference
V. Proposed Action
VI. Statutory and Executive Order Reviews

I. What action is EPA proposing?

    EPA is proposing to approve changes to the Knox County portion of 
the Tennessee SIP regarding PSD and NNSR permitting, as well as updates 
to minor NSR, submitted by TDEC on behalf of Knox County's Air Quality 
Management Division. On March 7, 2017, Tennessee submitted two SIP 
revisions updating Knox County's Air Quality Management Regulations, 
Section 41.0 entitled ``Regulations for the Review of New Sources,'' 
and Section 45.0 entitled ``Prevention of Significant Deterioration.'' 
On April 17, 2017, Tennessee submitted two additional SIP revisions, 
including additional changes to Section 41, and updates to Section 25.0 
entitled ``Permits.'' These SIP revisions are meant to address changes 
to the federal NSR regulations, as promulgated by EPA in various rules, 
and described below. EPA is proposing to approve the aforementioned SIP 
submittals in their entirety. Additional detail on the analysis of 
these SIP submittals and our reasoning for proposing to approve them is 
presented below.

II. Background

A. 2002 NSR Reform Rules

    On December 31, 2002, EPA published final rule revisions to title 
40 Code of Federal Regulations (CFR) parts 51 and 52, regarding the 
CAA's PSD and NNSR programs. See 67 FR 80186 (hereinafter referred to 
as the 2002 NSR Rule). The revisions included five changes to the major 
NSR program that would reduce burden, maximize operating flexibility, 
improve environmental quality, provide additional certainty, and 
promote administrative efficiency. These elements included baseline 
actual emissions, actual-to-projected-actual emissions methodology, 
plant-wide applicability limits (PALs), Clean Units, and pollution 
control projects (PCPs). The final rule also codified a longstanding 
policy regarding the calculation of baseline emissions for electric 
utility steam generating units and the definition of ``regulated NSR 
pollutant'' that clarifies which pollutants are regulated under the Act 
for purposes of major NSR.
    Following publication of the 2002 NSR Rule, EPA received numerous 
petitions requesting reconsideration of several aspects of the final 
rule, along with portions of EPA's 1980 NSR Rules. See 45 FR 52676 
(August 7, 1980). On July 30, 2003, EPA granted petitions for 
reconsideration of six issues presented by the petitioners and opened a 
new comment period for the public.\1\ As a result of the 
reconsideration, on November 7, 2003 (68 FR 63021), EPA published the 
NSR Reform Reconsideration Rule. In the reconsideration rule, EPA made 
a final determination not to change any of the six issues opened for 
reconsideration, but did make two clarifications to the rule. These two 
clarifications included: (1) Adding the definition of ``replacement 
unit'' to indicate that it is considered an existing unit in terms of 
major NSR applicability, and (2) specifying that the PAL baseline 
calculation procedures for newly constructed units do not apply to 
modified units. The 2002 NSR Rule and the NSR Reform Reconsideration 
Rule are hereinafter collectively referred to as the ``2002 NSR Reform 
Rules.''
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    \1\ For full details on the six issues reconsidered by EPA, 
refer to the July 30, 2003 (68 FR 44624) document.
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    The 2002 NSR Reform Rules were challenged in the U.S. Court of 
Appeals for the District of Columbia Circuit (D.C. Circuit), and the 
court issued a decision on the challenges on June 24, 2005. See New 
York v. United States, 413 F.3d 3 (D.C. Cir. 2005). In summary, the 
D.C. Circuit vacated portions of EPA's NSR rules pertaining to Clean 
Units and PCPs, remanded a portion of the rules regarding recordkeeping 
and the term ``reasonable possibility'' found in 40 CFR 52.21(r)(6), 40 
CFR 51.166(r)(6), and 40 CFR 51.165(a)(6) to EPA, and either upheld or 
did not comment on the other provisions included as part of the 2002 
NSR Reform Rules. On June 13, 2007 (72 FR 32526), EPA took final action 
to revise the 2002 NSR Reform Rules to exclude the portions that were 
vacated by the D.C. Circuit.
    Meanwhile, EPA continued to move forward with its evaluation of the 
portion of its NSR Reform Rules that were remanded by the D.C. Circuit. 
On March 8, 2007 (72 FR 10445), EPA responded to the Court's remand 
regarding the recordkeeping provisions by proposing two alternative 
options to clarify what constitutes ``reasonable possibility'' and when 
the ``reasonable possibility'' recordkeeping requirements apply. The 
``reasonable possibility'' standard identifies the circumstances under 
which a major stationary source must keep records for modifications 
that do not trigger major NSR. EPA later finalized these changes on 
December 21, 2007 (72 FR 72607).
    Separately from the petitions received that led to the 2002 NSR 
Reconsideration Rule, EPA received another petition for reconsideration 
on July 11, 2003. Specifically, the petitioner requested EPA to 
reconsider the inclusion of ``fugitive emissions'' when assessing 
whether a proposed physical or operational change qualified as a 
``major modification.'' On November 13, 2007, EPA granted the petition 
for reconsideration, and on December 19, 2008, finalized the revision 
of the language to clarify which types of sources were required to 
include ``fugitive emissions'' in their calculations. See 73 FR 77882 
(hereinafter referred to as the Fugitive Emissions Rule).
    Finally, on February 17, 2009, EPA received one additional petition 
challenging the Fugitive Emissions Rule. Due to this petition, and 
after

[[Page 28570]]

several stays,\2\ EPA established an interim stay on March 30, 2011 (76 
FR 17548), in which most of the Fugitive Emissions Rule language was 
stayed indefinitely. With the March 30, 2011, stay, EPA specified which 
portions of 40 CFR 51.165, 40 CFR 51.166, and 40 CFR 52.21 were stayed 
indefinitely, which were reinstated, and which were revised, in order 
to revert the federal rules to regulatory language that existed prior 
to the Fugitive Emissions Rule.
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    \2\ EPA originally established a three-month stay that became 
effective September 30, 2009 (74 FR 50115), which was later extended 
for an additional three months, effective December 31, 2009 (74 FR 
65692). In order to allow for more time for the reconsideration and 
for public comment on any potential revisions to the Fugitive 
Emissions Rule, EPA established a longer 18-month stay that became 
effective on March 31, 2010 (75 FR 16012).
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    In summary, after several court decisions and public petitions, the 
federal major NSR program (found in 40 CFR 51.165, 51.166, and 52.21) 
no longer includes the provisions related to Clean Units or PCPs that 
were part of the 2002 NSR reform rules. Additionally, an indefinite 
stay has been placed on the language related to the Fugitive Emissions 
Rule. Knox County is adopting all of the surviving provisions from the 
2002 NSR Reform Rules, and is not adopting all those provisions that 
were either vacated or stayed indefinitely. More details on Knox 
County's adoption of the 2002 NSR Reform Rules and our analysis of its 
submittals can be found in section III below.

B. PM2.5 NAAQS

1. Implementation of NSR for the PM2.5 NAAQS and 
Grandfathering Provisions
    On May 16, 2008 (73 FR 28321), EPA published the ``Implementation 
of the New Source Review (NSR) Program for Particulate Matter Less than 
2.5 Micrometers (PM2.5)'' Final Rule (hereinafter referred 
to as the NSR PM2.5 Rule). The 2008 NSR PM2.5 
Rule revised the NSR program requirements to establish the framework 
for implementing preconstruction permit review for the PM2.5 
NAAQS in both attainment and nonattainment areas. As indicated in the 
2008 NSR PM2.5 Rule, major stationary sources seeking 
permits must begin directly satisfying the PM2.5 
requirements, as of the effective date of the rule, rather than relying 
on PM10 as a surrogate, with two exceptions. The first 
exception was a ``grandfathering'' provision in the federal PSD program 
at 40 CFR 52.21(i)(1)(xi). This grandfathering provision applied to 
sources that had applied for, but had not yet received, a final and 
effective PSD permit before the July 15, 2008, effective date of the 
May 2008 final rule. The second exception was that states with SIP-
approved PSD programs could continue to implement a policy in which 
PM10 served as a surrogate for PM2.5 for up to 
three years (until May 2011) or until the individual revised state PSD 
programs for PM2.5 are approved by EPA, whichever came 
first.\3\
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    \3\ After EPA promulgated the NAAQS for PM2.5 in 
1997, the Agency issued a guidance document entitled ``Interim 
Implementation of New Source Review Requirements for 
PM2.5,'' which allows for the regulation of 
PM10 as a surrogate for PM2.5 until 
significant technical issues were resolved (the ``PM10 
Surrogate Policy''). John S. Seitz, EPA, October 23, 1997.
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    On February 11, 2010 (75 FR 6827), EPA proposed to repeal the 
grandfathering provision for PM2.5 contained in the federal 
PSD program at 40 CFR 52.21(i)(1)(xi) and to end early the 
PM10 Surrogate Policy applicable in states that have a SIP-
approved PSD program. In support of this proposal, EPA explained that 
the PM2.5 implementation issues that led to the adoption of 
the PM10 Surrogate Policy in 1997 had been largely resolved 
to a degree sufficient for sources and permitting authorities to 
conduct meaningful permit-related PM2.5 analyses. On May 18, 
2011 (76 FR 28646), EPA took final action to repeal the 
PM2.5 grandfathering provision at 40 CFR 52.21(i)(1)(xi). 
This final action ended the use of the 1997 PM10 Surrogate 
Policy for PSD permits under the federal PSD program at 40 CFR 52.21. 
In effect, any PSD permit applicant previously covered by the 
grandfathering provision (for sources that completed and submitted a 
permit application before July 15, 2008) \4\ that did not have a final 
and effective PSD permit before the effective date of the repeal will 
not be able to rely on the 1997 PM10 Surrogate Policy to 
satisfy the PSD requirements for PM2.5 unless the 
application includes a valid surrogacy demonstration.
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    \4\ Sources that applied for a PSD permit under the federal PSD 
program on or after July 15, 2008, are already excluded from using 
the 1997 PM10 Surrogate Policy as a means of satisfying 
the PSD requirements for PM2.5. See 73 FR 28321.
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    The NSR PM2.5 Rule also established the following NSR 
requirements to implement the PM2.5 NAAQS: (1) Required NSR 
permits to address directly emitted PM2.5 and precursor 
pollutants; (2) established significant emission rates for direct 
PM2.5 and precursor pollutants (including sulfur dioxide 
(SO2) and oxides of nitrogen (NOX)); (3) 
established PM2.5 emission offsets; and (4) required states 
to account for gases that condense to form particles (``condensables'') 
in PM2.5 and PM10 emission limits in PSD or NNSR 
permits. In addition, the NSR PM2.5 Rule gives states the 
option of allowing interpollutant trading for the purpose of precursor 
offsets under the PM2.5 NNSR program.\5\ Knox County did not 
adopt this optional interpollutant trading in its March 7, 2017, nor 
April 17, 2017, SIP revisions. Knox County is thereby being consistent 
with the State, since Tennessee does not currently have this 
interpollutant trading approved into its SIP.
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    \5\ On July 21, 2011, as a result of reconsidering the 
interpollutant trading (IPT) policy, EPA issued a memorandum 
indicating that the existing preferred precursor offset ratios 
associated with the IPT policy and promulgated in the NSR 
PM2.5 Rule were no longer considered approvable. The 
memorandum stated that any PM2.5 precursor offset ratio 
submitted as part of the NSR SIP for PM2.5 nonattainment 
areas would need to be accompanied by a technical demonstration 
exhibiting how the ratios are suitable for that particular 
nonattainment area. See Memorandum from Gina McCarthy to Regional 
Air Division Directors, ``Revised Policy to Address Reconsideration 
of Interpollutant Trading Provisions for Fine Particles 
(PM2.5)'' (July 21, 2011) (available at https://www3.epa.gov/scram001/guidance/clarification/pm25trade.pdf).
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2. PM2.5 Condensables Correction Rule
    Among the changes included in the 2008 NSR PM2.5 Rule 
mentioned above, the EPA revised the definition of ``regulated NSR 
pollutant'' for PSD to add a paragraph providing that ``particulate 
matter (PM) emissions, PM2.5 emissions and PM10 
emissions shall include gaseous emissions from a source or activity 
which condense to form particulate matter at ambient temperatures'' and 
that on or after January 1, 2011, ``such condensable particulate matter 
shall be accounted for in applicability determinations and in 
establishing emissions limitations for PM, PM2.5 and 
PM10 in permits.'' See 73 FR 28321 at 28348 (May 16, 2008). 
A similar paragraph added to the NNSR rule did not include 
``particulate matter (PM) emissions.'' See 40 CFR 
51.165(a)(1)(xxxvii)(D).
    On October 25, 2012 (77 FR 65107), EPA took final action to amend 
the definition, promulgated in the 2008 NSR PM2.5 Rule, of 
``regulated NSR pollutant'' contained in the PM condensable provision 
at 40 CFR 51.166(b)(49)(vi), 52.21(b)(50)(i) and appendix S to 40 CFR 
part 51 (hereinafter referred to as the PM2.5 Condensables 
Correction Rule). The PM2.5 Condensables Correction Rule 
removed the inadvertent requirement in the 2008 NSR PM2.5 
Rule that the measurement of condensable particulate matter be included 
as part of the measurement and regulation of ``particulate matter 
emissions'' under the PSD program. The term ``particulate

[[Page 28571]]

matter emissions'' includes only filterable particles that are larger 
than PM2.5 and larger than PM10.
3. PM2.5 Subpart 4 Litigation
    On January 4, 2013, the D.C. Circuit issued a judgment \6\ that 
remanded EPA's April 25, 2007 \7\ and May 16, 2008 PM2.5 
implementation rules implementing the 1997 PM2.5 NAAQS. See 
Natural Resources Defense Council v. EPA, 706 F.3d 428 (D.C. Cir. 
2013). The Court found that because the statutory definition of 
PM10 (see section 302(t) of the CAA) included particulate 
matter with an aerodynamic diameter less than or equal to 10 
micrometers, it necessarily includes PM2.5. EPA had 
developed the 2007 and 2008 Rules (or NSR PM2.5 Rule) 
consistent with the general nonattainment area (NAA) requirements of 
subpart 1 of Part D, title I, of the CAA. Relative to subpart 1, 
subpart 4 of Part D, title I includes additional provisions that apply 
to PM10 NAAs and is more specific about what states must do 
to bring areas into attainment. In particular, subpart 4 includes 
section 189(e) of the CAA, which requires the control of major 
stationary sources of PM10 precursors (and hence under the 
court decision, PM2.5 precursors) ``except where the 
Administrator determines that such sources do not contribute 
significantly to PM10 levels which exceed the standard in 
the area.'' The court ordered EPA to re-promulgate the 1997 
PM2.5 implementation rules pursuant to subpart 4, rather 
than subpart 1.
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    \6\ The Natural Resources Defense Council, Sierra Club, American 
Lung Association, and Medical Advocates for Healthy Air challenged 
before the D.C. Circuit EPA's April 25, 2007 Rule entitled ``Clean 
Air Fine Particle Implementation Rule'' (72 FR 20586), which 
established detailed implementation regulations to assist states 
with the development of SIPs to demonstrate attainment for the 1997 
annual and 24-hour PM2.5 NAAQS and the separate May 16, 
2008 NSR PM2.5 Rule (which is considered in this proposed 
rulemaking). This proposed rulemaking only pertains to the impacts 
of the Court's decision on the May 16, 2008 NSR PM2.5 
Rule and not the April 25, 2007 implementation rule as the State's 
May 2, 2011 SIP revision adopts the NSR permitting provisions 
established in the NSR PM2.5 Rule.
    \7\ This rule is entitled ``Clean Air Fine Particle 
Implementation Rule,'' Final Rule, 72 FR 20586 (hereinafter referred 
to as the 2007 Rule).
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    On June 2, 2014 (79 FR 31566), EPA published a final rule \8\ 
which, in part, set a December 31, 2014, deadline for states to make 
any remaining required attainment-related and NNSR SIP submissions, 
pursuant to and considering the application of subpart 4. Requirements 
under subpart 4 for a moderate NAA are generally comparable to subpart 
1, including: (1) CAA section 189(a)(1)(A) (NNSR permit program); (2) 
section 189(a)(1)(B) (attainment demonstration or demonstration that 
attainment by the applicable attainment date is impracticable); (3) 
section 189(a)(1)(C) (reasonably available control measures (RACM) and 
reasonably available control technology (RACT)); and (4) section 189(c) 
(reasonable further progress and quantitative milestones). The 
additional requirements pursuant to subpart 4 as opposed to subpart 1 
correspond to section 189(e) (precursor requirements for major 
stationary sources). Further additional SIP planning requirements are 
introduced by subpart 4 in the case that a moderate NAA is reclassified 
to a serious NAA, or in the event that the moderate NAA needs 
additional time to attain the NAAQS. The additional requirements under 
subpart 4 are not applicable for the purposes of CAA section 
107(d)(3)(E) in any area that has submitted a complete redesignation 
request prior to the due date for those requirements. As discussed 
below, the Knoxville Area \9\ has since been redesignated to attainment 
for the PM2.5 NAAQS.
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    \8\ The rule is entitled ``Identification of Nonattainment 
Classification and Deadlines for Submission of State Implementation 
Plan (SIP) Provisions for the 1997 Fine Particle (PM2.5) 
National Ambient Air Quality Standard (NAAQS) and 2006 
PM2.5 NAAQS'', Final Rule, 79 FR 31566 (June 2, 2014). 
This final rule also identifies the initial classification of 
current 1997 and 2006 PM2.5 nonattainment areas as 
moderate and the EPA guidance and relevant rulemakings that are 
currently available regarding implementation of subpart 4 
requirements.
    \9\ The ``Knoxville Area'' refers to the NAA for the 1997 and 
2006 PM2.5 NAAQS, which has since been redesignated. The 
area was comprised of the entire Anderson, Blount, Knoxville, and 
Loudon Counties, as well as a portion of Roane County, in Tennessee. 
This NAA was also referred to as the Knoxville-Sevierville-La 
Follette, Tennessee Area.
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4. PM2.5 PSD-Increment-SILs-SMC Rule
    On October 20, 2010 (75 FR 64863), EPA published a final rulemaking 
entitled ``Prevention of Significant Deterioration (PSD) for 
Particulate Matter less than 2.5 Micrometers (PM2.5),'' 
amending the requirements for PM2.5 under the federal PSD 
program (also referred to as the PM2.5 PSD-Increments-SILs-
SMC Rule). The October 20, 2010, final rulemaking established the 
following: (1) PM2.5 increments pursuant to section 166(a) 
of the CAA to prevent significant deterioration of air quality in areas 
meeting the NAAQS; (2) PM2.5 Significant Impact Levels 
(SILs) for PSD and NNSR; and (3) Significant Monitoring Concentration 
(SMC) for PSD purposes.
    Subsequently, in response to a challenge to the PM2.5 
SILs and SMC provisions of the PM2.5 PSD-Increment-SILs-SMC 
Rule, the D.C. Circuit vacated and remanded to EPA the portions of the 
rule addressing PM2.5 SILs, except for the PM2.5 
SILs promulgated in EPA's NNSR rules at 40 CFR 51.165(b)(2). See Sierra 
Club v. EPA, 705 F.3d 458, 469 (D.C. Cir. 2013). The D.C. Circuit also 
vacated the parts of the rule establishing a PM2.5 SMC for 
PSD purposes. Id. EPA removed these vacated provisions in a December 9, 
2013 (78 FR 73698), final rule.
    The PM2.5 SILs promulgated in EPA's NNSR regulations at 
40 CFR 51.165(b)(2) were not vacated by the D.C. Circuit because unlike 
the SILs promulgated in the PSD regulations (40 CFR 51.166, 52.21), the 
SILs promulgated in the NNSR regulations at 40 CFR 51.165(b)(2) do not 
serve to exempt a source from conducting a cumulative air quality 
analysis. Rather, the SILs promulgated at 40 CFR 51.165(b)(2) establish 
levels at which a proposed new major source or major modification 
located in an area designated as attainment or unclassifiable for any 
NAAQS would be considered to cause or contribute to a violation of a 
NAAQS in any area. For this reason, the D.C. Circuit left the 
PM2.5 SILs at 40 CFR 51.165(b)(2) in place.
    Consistent with the D.C. Circuit decision, and EPA's removal, Knox 
County did not adopt these vacated portions of the PM2.5 
PSD-Increment-SILs-SMC Rule, regarding the PM2.5 SILs and 
SMC provisions for PSD permitting. Knox County did adopt the remaining 
portions of the PM2.5 PSD-Increment-SILs-SMC Rule, which 
includes the PM2.5 PSD Increments and the NNSR portion of 
the PM2.5 SILs provisions.

C. 1997 8-Hour Ozone NAAQS Phase 2 Rule

    On November 29, 2005 (70 FR 71612), EPA published a final rule 
entitled ``Final Rule To Implement the 8-Hour Ozone National Ambient 
Air Quality Standard--Phase 2; Final Rule To Implement Certain Aspects 
of the 1990 Amendments Relating to New Source Review and Prevention of 
Significant Deterioration as They Apply in Carbon Monoxide, Particulate 
Matter and Ozone NAAQS; Final Rule for Reformulated Gasoline'' 
(hereinafter referred to as the Phase 2 Rule). The Phase 2 Rule 
addressed control and planning requirements as they applied to areas 
designated nonattainment for the 1997 8-hour ozone NAAQS \10\ such as

[[Page 28572]]

reasonably available control technology, reasonably available control 
measures, reasonable further progress, modeling and attainment 
demonstrations, NSR, and the impact to reformulated gasoline for the 
1997 8-hour ozone NAAQS transition. The NSR permitting requirements 
established in the rule included the following provisions: (1) 
Recognized NOX as an ozone precursor for PSD purposes; (2) 
established major stationary thresholds (marginal, moderate, serious, 
severe, and extreme NAA classifications) in the NNSR rules; (3) 
established significant emission rates for the 8-hour ozone, 
PM10 and carbon monoxide NAAQS; and (4) revised the criteria 
for crediting emission reductions credits from operation shutdowns and 
curtailments as offsets, and changes to offset ratios for marginal, 
moderate, serious, severe, and extreme ozone NAA.
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    \10\ On July 18, 1997, EPA promulgated a revised 8-hour ozone 
NAAQS of 0.08 parts per million--also referred to as the 1997 8-hour 
ozone NAAQS. On April 30, 2004, EPA designated areas as 
unclassifiable/attainment, nonattainment and unclassifiable for the 
1997 8-hour ozone NAAQS. In addition, on April 30, 2004 (69 FR 
23951), as part of the framework to implement the 1997 8-hour ozone 
NAAQS, EPA promulgated an implementation rule in two phases (Phase I 
and II). The Phase I Rule (effective on June 15, 2004), provided the 
implementation requirements for designating areas under subpart 1 
and subpart 2 of the CAA.
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    The March 7, 2017, SIP submittals requesting adoption of Knox 
County regulations 41 and 45 adopt all the NSR provisions of the Phase 
2 Rule as they appear in the federal NNSR and PSD rules, effectively 
recognizing NOX as a precursor to ozone as well as 
establishing major stationary thresholds, significant emission rates, 
and offset ratios. The adoption of these provisions is consistent with 
the federal NSR rules as well as TDEC's rules.

D. Greenhouse Gases and Plant-Wide Applicability Limits

    On January 2, 2011, emissions of greenhouse gases (GHGs) were, for 
the first time, covered by the PSD and title V operating permit 
programs.\11\ To establish a process for phasing in the permitting 
requirements for stationary sources of GHGs under the CAA PSD and title 
V programs, on June 3, 2010 (75 FR 31514), the EPA published a final 
rule entitled ``Prevention of Significant Deterioration and Title V 
Greenhouse Gas Tailoring Rule'' (hereinafter referred to as the GHG 
Tailoring Rule). In Step 1 of the GHG Tailoring Rule, which began on 
January 2, 2011, the EPA limited application of PSD and title V 
requirements to sources of GHG emissions only if they were subject to 
PSD or title V ``anyway'' due to their emissions of pollutants other 
than GHGs. These sources are referred to as ``anyway sources.''
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    \11\ See the rule entitled ``Reconsideration of Interpretation 
of Regulations that Determine Pollutants Covered by Clean Air Act 
Permitting Programs,'' Final Rule, 75 FR 17004 (April 2, 2010).
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    In Step 2 of the GHG Tailoring Rule, which applied as of July 1, 
2011, the PSD and title V permitting requirements applied to some 
sources that were classified as major sources based solely on their GHG 
emissions or potential to emit GHGs. Step 2 also applied PSD permitting 
requirements to modifications of otherwise major sources that would 
increase only GHG emissions above the level in the EPA regulations. EPA 
generally described the sources covered by PSD during Step 2 of the GHG 
Tailoring Rule as ``Step 2 sources'' or ``GHG-only sources.''
    Subsequently, EPA published the GHG Step 3 Rule on July 12, 2012 
(77 FR 41051). In this rule, EPA decided against further phase-in of 
the PSD and title V requirements for sources emitting lower levels of 
GHG emissions. Thus, the thresholds for determining PSD applicability 
based on emissions of GHGs remained the same as established in Step 2 
of the Tailoring Rule.
    In addition, the July 12, 2012 (77 FR 41051), final rule revised 
EPA regulations under 40 CFR part 52 for establishing PALs for GHG 
emissions. A PAL establishes a site-specific plantwide emission level 
for a pollutant that allows the source to make changes at the facility 
without triggering the requirements of the PSD program, provided that 
emissions do not exceed the PAL level. Under EPA's interpretation of 
the federal PAL provisions, such PALs are already available under PSD 
for non-GHG pollutants and for GHGs on a mass basis. EPA revised the 
PAL regulations to allow for GHG PALs to be established on a carbon 
dioxide equivalent (CO2e) \12\ basis as well. EPA finalized 
these changes in an effort to streamline federal and SIP PSD permitting 
programs by allowing sources and permitting authorities to address GHGs 
using PALs in a manner similar to the use of PALs for non-GHG 
pollutants.
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    \12\ CO2 equivalent (CO2e) emissions 
refers to emissions of six recognized GHGs other than CO2 
which are scaled to equivalent CO2 emissions by relative 
global warming potential values, then summed with CO2 to 
determine a total equivalent emissions value. See 40 CFR 
51.166(b)(48)(ii) and 52.21(b)(49)(ii).
---------------------------------------------------------------------------

    On June 23, 2014, the U.S. Supreme Court addressed the application 
of stationary source permitting requirements to GHG emissions in 
Utility Air Regulatory Group (UARG) v. EPA, 134 S. Ct. 2427 (2014). The 
Supreme Court upheld EPA's regulation of Step 1--or ``anyway'' 
sources--but held that EPA may not treat GHGs as air pollutants for the 
purposes of determining whether a source is a major source (or a 
modification thereof) and thus require the source to obtain a PSD or 
title V permit. Therefore, the Court invalidated PSD and title V 
permitting requirements for Step 2 sources.
    In accordance with the Supreme Court decision, on April 10, 2015, 
the D.C. Circuit issued an Amended Judgment vacating the regulations 
that implemented Step 2 of the GHG Tailoring Rule, but not the 
regulations that implement Step 1 of the GHG Tailoring Rule. Coalition 
for Responsible Regulation, Inc. v. EPA, 606 Fed. Appx. 6, 7 (D.C. Cir. 
2015). With respect to Step 2 sources, the D.C. Circuit's Judgment 
vacated the EPA regulations under review (including 40 CFR 
51.166(b)(48)(v) and 40 CFR 52.21(b)(49)(v)) ``to the extent they 
require a stationary source to obtain a PSD permit if greenhouse gases 
are the only pollutant (i) that the source emits or has the potential 
to emit above the applicable major source thresholds, or (ii) for which 
there is a significant emissions increase from a modification.'' Id. at 
7-8.
    EPA promulgated a final rule on August 19, 2015, entitled 
``Prevention of Significant Deterioration and Title V Permitting for 
Greenhouse Gases: Removal of Certain Vacated Elements.'' See 80 FR 
50199 (August 19, 2015). The rule removed from the Federal regulations 
the portions of the PSD permitting provisions for Step 2 sources that 
were vacated by the D.C. Circuit (i.e., 40 CFR 51.166(b)(48)(v) and 
52.21(b)(49)(v)). EPA therefore no longer has the authority to conduct 
PSD permitting for Step 2 sources, nor can EPA approve provisions 
submitted by a state for inclusion in its SIP providing this authority. 
In addition, on October 3, 2016 (81 FR 68110), EPA proposed to revise 
provisions in the PSD permitting regulations applicable to GHGs to 
fully conform with UARG and the Amended Judgment, but those revisions 
have not been finalized.
    In Tennessee's March 7, 2017, and April 17, 2017, SIP submittals, 
Knox County adopts Step 1 of the GHG Tailoring Rule only. It does not 
adopt the language pertaining to the Step 2, nor Step 3. This is 
consistent with Tennessee's rules which do not adopt Step 3 provisions 
and which include an automatic rescission clause that renders the Step 
2 language ineffective at the state level due to the vacatur of Step 2 
by the D.C. Circuit.

[[Page 28573]]

E. Equipment Replacement Provisions

    Under Federal regulations, certain activities are not considered to 
be a physical change or a change in the method of operation at a 
source, and thus do not trigger NSR review. One category of such 
activities is routine maintenance, repair and replacement (RMRR). On 
October 27, 2003 (68 FR 61248), EPA published a rule titled 
``Prevention of Significant Deterioration (PSD) and Non-Attainment New 
Source Review (NSR): Equipment Replacement Provision of the Routine 
Maintenance, Repair and Replacement Exclusion'' (hereinafter referred 
to as the ERP Rule). The ERP Rule provided criteria for determining 
whether an activity falls within the RMRR exemption. The ERP Rule 
provided a list of equipment replacement activities that are exempt 
from NSR permitting requirements, while ensuring that industries 
maintain safe, reliable, and efficient operations that will have little 
or no impact on emissions. Under the ERP Rule, a facility undergoing 
equipment replacement would not be required to undergo NSR review if 
the facility replaced any component of a process unit with an identical 
or functionally equivalent component. The rule included several 
modifications to the NSR rules to explain what would qualify as an 
identical or functionally equivalent component.
    Shortly after the October 27, 2003, rulemaking, several parties 
filed petitions for review of the ERP Rule in the D.C. Circuit. The 
D.C. Circuit stayed the effective date of the rule pending resolution 
of the petitions. A collection of environmental groups, public interest 
groups, and States, subsequently filed a petition for reconsideration 
with EPA, requesting that the Agency reconsider certain aspects of the 
ERP Rule. EPA granted the petition for reconsideration on July 1, 2004 
(69 FR 40278).\13\ After the reconsideration, EPA published its final 
response on June 10, 2005 (70 FR 33838), which stated that the Agency 
would not change any aspects of the ERP. On March 17, 2006, the D.C. 
Circuit acted on the petitions for review and vacated the ERP Rule.\14\ 
Knox County did not adopt the vacated language from the ERP Rule in 
Tennessee's March 7, 2017, nor April 17, 2017, SIP submittals.
---------------------------------------------------------------------------

    \13\ The reconsideration granted by EPA opened a new 60-day 
public comment period, and carried out a new public hearing, only on 
three issues of the ERP. These three issues included: (1) The basis 
for determining that the ERP was allowable under the CAA; (2) The 
basis for selecting the cost threshold (20 percent of the 
replacement cost of the process unit) that was used in the final 
rule to determine if a replacement was routine; and (3) A simplified 
procedure for incorporating a Federal Implementation Plan into State 
Plans to accommodate changes to the NSR rules.
    \14\ New York v. EPA, 443 F.3d 880 (D.C. Cir. 2006).
---------------------------------------------------------------------------

III. Analysis of State's Submittal

A. Tennessee's March 7, 2017, NNSR and PSD Submittals

    Knox County currently has a SIP-approved NSR program for new and 
modified stationary sources, including preconstruction regulations for 
PSD found in Section 45.0--``Prevention of Significant Deterioration,'' 
and for NNSR found in Section 41.0--``Regulations for the Review of New 
Sources.'' Tennessee's March 7, 2017, SIP revisions made changes to 
Section 41.0 and Section 45.0 to address changes to the federal NSR 
regulations, as promulgated by EPA in the 2002 NSR Reform Rules, and 
subsequent changes in other relevant rulemakings as described in 
section II, above.
    As part of the changes to Section 41 and Section 45, Knox County 
adopted all the necessary provisions of the federal NNSR rules (found 
in 40 CFR 51.165) and the federal PSD rules (found in 40 CFR 51.166) to 
make them consistent with, and in some cases more stringent than, the 
federal rules. These changes included the adoption of several 
definitions in the federal PSD and NNSR rules, such as the definition 
of ``regulated NSR pollutant,'' as well as provisions regarding major 
NSR applicability procedures, actual-to-projected-actual applicability 
tests, PALs, and recordkeeping. Slight differences between the Knox 
County NSR rules and the federal rules are discussed below in Section 
III.A.1.--3.
    Additionally, in the changes included in the March 7, 2017, SIP 
submittal, Knox County adopted the provisions from the Ozone Phase 2 
Rule, as discussed in section II.C of this rulemaking. Consistent with 
TDEC's rules and the federal NNSR and PSD rules, Knox County adopted 
the same language regarding the Phase 2 rule found at 40 CFR 51.165 and 
40 CFR 51.166. This includes amendments found in the federal NNSR rules 
in Sec.  51.165(a)(1)(iv)(A)(1) through (3), (a)(1)(v)(E) and (F), 
(a)(1)(x), (a)(3)(ii)(C), and (a)(8) and (9), as well as the federal 
PSD rules in Sec.  51.166(b)(1)(ii), (b)(2)(ii), (b)(23)(i), and 
(b)(49)(i).
    EPA believes that the proposed approval of these changes, including 
all amendments mentioned in the following sections, will not have a 
negative impact on air quality in the County.
    First, with these proposed changes, the local Knox County 
regulations will now be consistent with the State's current SIP-
approved NSR program, which is slightly more stringent than the federal 
rules. Tennessee's NSR program already underwent updates concerning the 
2002 NSR reform on September 14, 2007 (72 FR 52472).
    Second, Knox County currently does not have any nonattainment 
areas, and all previous nonattainment areas have been redesignated to 
attainment due to clean data. Table 1, below, shows the most recent air 
quality monitoring design values (DV), in micrograms per meter cubed 
([mu]g/m\3\) and parts per billion (ppb), and the most current 
corresponding NAAQS in each redesignated (i.e., maintenance) area in 
Knox County.\15\ This data shows that air quality in the Knox County 
area has been improving over the years, and most recently the entire 
county has been designated as attainment/unclassifiable for both the 
2010 1-hour SO2 and 2015 8-hour Ozone NAAQS as well.
---------------------------------------------------------------------------

    \15\ Air quality design values for all criteria air pollutants 
are available at: https://www.epa.gov/air-trends/air-quality-design-values.

                                        Table 1--Current Air Quality Status in Knox County for Maintenance Areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                     Margin relative to
         Maintenance areas            NAAQS for which area           Status              Current NAAQS         2015-2017 design      current NAAQS with
                                         is maintenance                                                             value               2014-2017 DV
--------------------------------------------------------------------------------------------------------------------------------------------------------
Knoxville..........................  2008 ozone (75.0 ppb).  Redesignated..........  70 ppb...............  68 ppb...............  -2 ppb (3%)
Knoxville..........................  1997 annual PM2.5       Redesignated..........  12.0 [micro]g/m\3\...  10 [micro]g/m\3\.....  -2 [micro]g/m\3\
                                      (15.0 [micro]g/m\3\).                                                                         (17%)
Knoxville..........................  2006 24-hour PM2.5 (35  Redesignated..........  35 [micro]g/m\3\.....  34 [micro]g/m\3\.....  -1 [micro]g/m\3\ (3%)
                                      [micro]g/m\3\).
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 28574]]

    Finally, any projects (new construction or modifications) that 
would not be subject to major NSR would still be subject to 
preconstruction review and permitting requirements under Knox County's 
SIP-approved minor NSR regulations found in Section 25 of the Knox 
County Air Quality Management Regulations. Under the current SIP-
approved minor NSR regulations, no construction or modification shall 
begin unless a construction permit has been issued by the Director of 
the Knox County Air Quality Management Division (Director), and no 
permit shall be issued unless the applicant can demonstrate that the 
source can be expected to comply with any applicable regulations, 
including the NAAQS. Furthermore, the Director may require additional 
and/or more restrictive permit conditions than required by the Knox 
County regulations, and the minor source construction permit can be 
invalidated if the source violates any applicable regulation. 
Therefore, these revisions should not interfere with attainment or 
maintenance or any other requirement of the CAA.
    Although in most cases Knox County adopted the federal rules as 
enacted at Sec. Sec.  51.165 and 51.166, certain portions were modified 
or not adopted. These differences from the federal NNSR and PSD rules 
include: (1) Adopting a modified definition of ``baseline actual 
emissions,'' more details of which are included in this Section; (2) 
not adopting the stayed language in the Fugitive Emission Rule; and (3) 
not adopting changes from a May 1, 2007, final rule regarding 
facilities that produce ethanol through natural fermentation.\16\ 
Additional differences from the federal NNSR rules in Section 41 of 
Knox County's regulations, particularly regarding the implementation of 
the PM2.5 NAAQS, are covered in Tennessee's April 17, 2017, 
SIP revision and are discussed below in section III.B of this 
rulemaking.
---------------------------------------------------------------------------

    \16\ The May 1, 2007, final rule finalized changes to the 
definition of ``chemical process plants'' as it applies to the 
federal PSD, NNSR and Title V programs, including applicability 
thresholds for PSD and the treatment of fugitive emissions in 
determining applicability for major NSR and title V.
---------------------------------------------------------------------------

1. Definition of ``Baseline Actual Emissions''
    Regarding the definition of ``baseline actual emissions,'' as 
promulgated in 40 CFR 51.165(a)(1)(xxxv) and 40 CFR 51.166(b)(47), Knox 
County adopted into Section 41 and Section 45 of the Knox County Air 
Quality Management Regulations a definition mostly consistent with the 
federal definition. However, Knox County excluded a portion of the 
definition that would allow for different 24-month periods to be chosen 
for each regulated NSR pollutant when calculating baseline actual 
emissions for either PSD or NNSR applicability determinations.
    Knox County's adoption of ``baseline actual emissions'' in Sections 
41 and 45 excludes the last sentence of Sec.  51.165(a)(1)(xxxv)(A)(3) 
and (a)(1)(xxxv)(B)(4) of the federal NNSR rules and Sec.  
51.166(b)(47)(i)(c) and (b)(47)(ii)(d) of the federal PSD rules, which 
states that ``a different consecutive 24-month period can be used for 
each regulated NSR pollutant.'' Instead, Knox County adopts specific 
language at Section 41.1.A.5(3) and Section 45.1.A.5.a(3) as follows: 
``For a regulated NSR pollutant, when a project involves multiple 
emissions units, only one consecutive 24-month period must be used to 
determine the baseline actual emissions for the emissions units being 
changed.'' With this difference in the definition, Knox County is not 
allowing for different baseline periods to be chosen for a single 
project that involves multiple units, which removes an additional 
flexibility built into the federal rules and makes the local rules 
slightly more stringent than the federal rules. Knox County's 
definition is consistent with TDEC's SIP-approved definition of 
``baseline actual emissions'', which also does not allow for different 
pollutant-specific 24-month baseline periods. For the reasons discussed 
above, EPA is proposing to approve the changes to NNSR and PSD rules 
into the Knox County portion of the Tennessee SIP.
    EPA has determined that this difference in determining major NSR 
applicability with the definition of ``baseline actual emissions'' is 
consistent with Tennessee's SIP-approved rules and is more stringent 
than the current federal rules. Therefore, EPA is proposing to approve 
the changes to the definition, including this difference from the 
federal rules, into the Knox County portion of the Tennessee SIP.
2. Fugitive Emissions Rule
    As mentioned in Section II.A of this rulemaking, a portion of the 
Fugitive Emissions Rule was stayed indefinitely on March 30, 2011. For 
this reason, Knox County did not adopt into Section 41 or Section 45 of 
the Knox County Air Quality Management Regulations the language found 
in the federal NNSR rules at 40 CFR 51.165(a)(1)(v)(G) and 
(a)(1)(vi)(C)(3), as well as in the federal PSD rules at 40 CFR 
51.166(b)(2)(v) and (b)(3)(iii)(d), which are part of the stayed 
Fugitive Emissions Rule provisions that can still be found in the CFR.
    Given that the omitted language has been stayed indefinitely, EPA 
is proposing to approve the changes into the Knox County portion of the 
Tennessee SIP as consistent with federal requirements, and the 
Tennessee SIP.
3. GHG Tailoring Rule
    As mentioned in Section II.D of this proposed rulemaking, Knox 
County adopted the provisions of the GHG Tailoring Rule, Step 1, but 
has not adopted Step 2 or Step 3. Consistent with Step 1 of the GHG 
Tailoring Rule, Knox County has adopted provisions in its PSD rules, 
found at Section 45 of the Knox County Air Quality Management 
Regulations, that require sources of GHG emissions to regulate GHGs 
only if they were subject to PSD ``anyway'' due to their emissions of 
pollutants other than GHGs. These sources are referred to as ``anyway 
sources.''
    In Step 2 of the GHG Tailoring Rule, these PSD requirements for 
GHGs applied to some sources that were known as ``GHG-only sources.'' 
Since the D.C. Circuit vacated the GHG Step 2 Rule on April 10, 2015, 
EPA has subsequently removed the provisions from this portion of the 
GHG Tailoring Rule from the Federal PSD rules. With respect to Step 2, 
Knox County's rules are consistent with Tennessee's rules. Although 
Tennessee currently has language related to Step 2 in its SIP, it also 
included an automatic rescission clause that renders any language 
pursuant to Step 2 ineffective at the state level due to the vacatur of 
Step 2 by the D.C. Circuit.
    Finally, Knox County did not adopt the GHG Step 3 Rule, which, 
among other things, established PALs for GHG emissions on a 
CO2e basis. The GHG PALs regulations of the GHG Step 3 Rule 
do not add new requirements for sources or modifications. Rather, the 
PALs provisions provide increased flexibility to sources that wish to 
address their GHG emissions in a PAL by using CO2e instead 
of a mass basis. Given that these provisions are not a requirement, but 
rather an optional way to address GHG PALs, EPA believes that not 
adopting the GHG Step 3 provisions into the Knox County portion of the 
Tennessee SIP is acceptable and will not interfere with Knox County's 
ability to meet all applicable GHG requirements. In addition, Knox 
County is being consistent with Tennessee's rules, which do not include 
the GHG Step 3 provisions.

[[Page 28575]]

    For the reasons discussed above, EPA is proposing to approve the 
Step 1 provisions of the GHG Tailoring Rule into the Knox County 
portion of the Tennessee SIP, as presented in the March 7, 2017 SIP 
submittal.

B. Tennessee's April 17, 2017, NNSR Changes

    The April 17, 2017, SIP revision included two changes to the Knox 
County portion of the Tennessee SIP, one making additional changes to 
Section 41, and another updating Section 25.0 entitled ``Permits'' 
(hereinafter referred to as Section 25). The revisions to Section 41 
include additional changes which are meant to be incorporated with the 
March 7, 2017, revisions of this section.
    Although the March 7, 2017, SIP revision updates Knox County's NNSR 
regulation found in Section 41, it does not include some provisions 
that were part of the NSR PM2.5 Rule, or corrections related 
to the PM2.5 subpart 4 litigation, as described in section 
II.B, above.\17\ The April 17, 2017, SIP revision adds the following 
elements: 1) Under Section 41.1-A.36.a, Knox County adds emissions 
thresholds (in tons per year) for PM2.5 and its precursors, 
for sources to be considered a ``major stationary source'' in any area 
designated as a serious PM2.5 nonattainment area; 2) Under 
Section 41.1-A.56.a(7), Knox County adds emissions increase thresholds 
under PM2.5, for volatile organic compounds (VOC) and 
Ammonia (presumptively regulating both as precursors to 
PM2.5), for an emissions increase to be considered 
``significant;'' and 3) Under Section 41.3-A, Knox County adds a 
sentence clarifying the applicability of NSR in nonattainment areas and 
adds references to the new definitions of Section 41.1-A.52.
---------------------------------------------------------------------------

    \17\ Knox County did not adopt the vacated elements of the 
PM2.5 PSD-Increment-SILs-SMC Rule. However, Knox County 
adopted the remaining elements of the NSR PM2.5 Rule, 
while incorporating the requirements pursuant to Subpart 4 of Part D 
of the CAA, as prescribed following the PM2.5 Subpart 4 
litigation, and the correction to requirements promulgated in the 
PM2.5 Condensables Correction Rule. For more details, see 
Section II.B of this rulemaking.
---------------------------------------------------------------------------

    As part of the PM2.5 Subpart 4 litigation mentioned in 
Section II.B, above, EPA published its June 2, 2014, final rule re-
promulgating the NSR PM2.5 implementation rule and set a 
deadline of December 31, 2014, for states to make any remaining 
required attainment-related and NNSR SIP submissions, pursuant to and 
considering the application of subpart 4. At the time of the June 2, 
2014, final rulemaking, the Knoxville Area was designated nonattainment 
for both the 1997 Annual PM2.5 NAAQS and 2006 24-hour 
PM2.5 NAAQS, under subpart 1.
    Knox County did not meet the December 31, 2014, deadline to submit 
its attainment and NNSR SIP submissions pursuant to subpart 4. However, 
on December 20, 2016, Knox County, through Tennessee, submitted 
maintenance plans and redesignation requests to EPA regarding both 
standards, pursuant to subpart 1 and subpart 4 of Part D of the CAA. 
Included in the request were reasonably available control measure 
(RACM) determinations as well as motor vehicle emission budgets for 
NOX and PM2.5 for the years 2014 and 2008. Since 
then, the area has been redesignated to attainment for both the 1997 
Annual PM2.5 NAAQS and 2006 24-hour PM2.5 NAAQS. 
Specifically, the Knoxville Area was redesignated to attainment on 
August 28, 2017, for the 2006 24-hour PM2.5 NAAQS, and on 
August 29, 2017, for the 1997 Annual PM2.5 NAAQS.
    Additionally, as mentioned above, the April 17, 2017, SIP revision 
adds emissions thresholds (in tons per year) for PM2.5 and 
its precursors for sources to be considered a ``major stationary 
source'' in any area designated as a serious PM2.5 
nonattainment area, as well as emissions increase thresholds under 
PM2.5, for VOC and Ammonia (presumptively regulating both as 
precursors to PM2.5), for an emissions increase to be 
considered ``significant.'' Although Knox County currently has no NAAs 
for PM2.5, and has no major stationary sources of ammonia, 
it still included thresholds for regulating ammonia as a precursor to 
PM2.5 and provided a technical justification for what it 
considers ``significant'' in terms of emissions of ammonia.
    As explained in the technical justification, which can be found in 
the docket for this proposed action, Knox County opted to set the 
emissions threshold at that of the other PM2.5 precursors 
(NOX, SO2, and VOC) set in federal requirements, 
and therefore set it at 40 tons per year. According to Knox County, 
this is a conservative approach since the area currently has no major 
stationary sources of ammonia. EPA agrees with this determination and 
believes that the 40 ton per year threshold will be sufficient to 
determine a significant emissions increase. EPA also agrees that this 
is a conservative approach because, based on the requirements of 40 CFR 
51.165(a)(1)(x)(F), Knox County was not required to establish a 
definition of ``significant'' for ammonia given that they currently 
have no nonattainment areas for PM2.5 and have no major 
stationary sources of ammonia in the county. As previously mentioned, 
Knox County does not have any existing major stationary sources of 
ammonia, and does not currently have any PM2.5 NAAs. 
Nevertheless, if Knox County were to begin operation of a major 
stationary source of ammonia, they would have a reasonable threshold 
for determining major modifications of ammonia for any future 
PM2.5 NAAs.
    These changes to Knox County's Section 41, together with the 
changes mentioned above in section III.A., make Knox County's NNSR 
regulations consistent with the federal requirements (and in some cases 
more stringent, as is the case of the definition of ``baseline actual 
emissions''), and also consistent with TDEC's NNSR rules. With the 
exception of the vacated or stayed portions, as mentioned in section 
II, Knox County has adopted all other necessary provisions of the 
federal NNSR rules, including those promulgated by the NSR reform rules 
and the NSR PM2.5 Rule. Therefore, EPA is proposing to 
approve the aforementioned changes to the Knox County portion of the 
Tennessee SIP.

C. Tennessee's April 17, 2017, Minor Source Permit Changes

    As mentioned above, on April 17, 2017, Tennessee submitted, on 
behalf of Knox County, two additional SIP revisions to update Knox 
County's Air Quality Management Regulations, Section 41.0 and Section 
25.0. As part of the revisions to Section 25, Knox County included 
changes to Sections 25.1--``Construction Permits,'' 25.3--``Operating 
Permits,'' and 25.9--``Minor Source and Synthetic Minor Source Emission 
Fees'' (hereinafter referred to as Section 25.1, Section 25.3 and 
Section 25.9, respectively).
    In Section 25.1, Knox County added two paragraphs, 25.1.F and 
25.1.G, in order to provide more detail on the necessity of a 
construction permit, and revised paragraph 25.1.C in order to clarify 
the duration of validity and expiration of a construction permit if 
construction is not commenced within a certain timeframe or is 
interrupted for a certain timeframe. Paragraph 25.1.F establishes that 
construction of a new source, or modification of an existing source, 
must be in accordance with the construction permit and all applicable 
Knox County Air Quality Management Regulations. Paragraph 25.1.G 
establishes that a construction permit may be issued to a source that 
has already been constructed in order to assure that all regulatory 
requirements are met and asserts that no operating permit will be 
issued until the

[[Page 28576]]

construction permit requirements are met.
    In the current SIP-approved version of paragraph 25.1.C, Knox 
County sets a duration of 1 year for a construction permit, which has 
to be renewed annually. With the changes in the April 17, 2017, SIP 
revision, Knox County establishes that a construction permit will be 
invalidated if construction is not commenced within 18 months, if it is 
discontinued for more than 18 months, or if the construction is not 
completed within a reasonable timeframe. Nevertheless, the revisions 
establish that a permit may be extended by the Director, if such an 
extension is shown to be justified. The revision to the applicable 
timeframe of minor source construction permits is consistent with those 
required for major NSR under the current SIP-approved version of both 
the Tennessee SIP and the Knox County portion of the Tennessee SIP.
    In section 25.3, Knox County revised paragraphs 25.3.A and 25.3.C, 
providing timeframes for applying and issuing operating permits, and 
added two new paragraphs, 25.3.M and 25.3.N, which include additional 
requirements and clarifications for operating permits and stack 
sampling reports. Under the current SIP-approved version of paragraph 
25.3.A, Knox County simply establishes the requirement that a person 
planning to operate a new or modified source, must ``apply for and 
receive'' an operating permit. With the changes in the April 17, 2017, 
SIP revision, Knox County included an additional requirement which, 
provided that paragraph 25.3.C is complied with, requires the operating 
permit to be obtained within 90 days after the initial start-up of a 
source or modification. Additionally, if stack sampling is required for 
the application, this time period may be extended to 60 days after the 
stack sampling report is required to be submitted.
    Under current SIP-approved version of paragraph 25.3.C, Knox County 
establishes a timeframe for ``applying'' for an operating permit only 
when renewing an existing permit. The paragraph only sets a required 
timeframe of 30 days prior to the expiration of an existing operating 
permit. But with the changes in the April 17, 2017, SIP revision, Knox 
County included two additional conditions: (1) When applying for a new 
operating permit, the applicant must submit the application no later 
than 14 days after initial start-up; and (2) When stack sampling is 
required as part of a construction permit, the time period for applying 
for the operating permit is extended to the time specified in the 
construction permit as the date that the sampling reports are required 
to be submitted.
    In the two paragraphs that Knox County added to this section, 
25.3.M and 25.3.N, the local agency has added additional clarification 
on operating permits. In Paragraph 25.3.M, Knox County included a 
requirement that no source can operate without an operating permit, but 
reiterates that a new source or modification may operate with a 
construction permit for a limited period of time, in order to provide 
the source an opportunity to apply for and obtain a new operating 
permit. The conditions and time limits for operating with a 
construction permit are established in paragraph 25.3.A. In paragraph 
25.3.N, Knox County clarifies that any stack sampling reports that were 
required as part of a construction permit, must be part of the 
operating permit application for that source, and that any stack 
sampling required as part of an existing operating permit, must be part 
of the renewal application of the operating permit. These changes to 
Sections 25.1 and 25.3 are meant to establish reasonable timeframes for 
the validity of construction permits and to provide clarification for 
sources applying for and obtaining operating permits.
    EPA is proposing to approve the aforementioned changes into the 
Knox County portion of the Tennessee SIP. The federal requirements for 
state minor NSR programs, outlined in 40 CFR 51.160 through 51.164, are 
considerably less prescriptive than those for major sources to 
facilitate the development of programs that best reflect a state's 
chosen approach to achieving attainment and maintenance of the NAAQS. 
As such, states may customize their minor NSR programs as long as they 
meet the minimum requirements, as Knox County is here.
    Finally, in Section 25.9, Knox County removed the language in 
paragraphs 25.9.F.8 through 25.9.F.10, and substitutes it with 
``Reserved.'' The removed language simply established several permit 
fees that expired on December 31, 2016, which a source, operator, or 
owner had to pay to the Department of Air Quality Management of Knox 
County. Given that these permit fees have since expired, EPA agrees 
with Knox County's decision to remove these paragraphs. Moreover, 
permit fees need not be included explicitly in the SIP. EPA is 
therefore proposing to approve the removal of this language from the 
Knox County portion of the Tennessee SIP.

F. Incorporation by Reference

    In this document, EPA is proposing to include in a final EPA rule 
regulatory text that includes incorporation by reference. In accordance 
with requirements of 1 CFR 51.5, EPA is proposing to incorporate by 
reference Knox County's Air Quality Management Regulations, Section 
25.0--``Permits,'' state effective January 18, 2017, Section 41.0--
``Regulations for the Review of New Sources,'' state effective January 
18, 2017, and Section 45.0--``Prevention of Significant 
Deterioration,'' state effective July 20, 2016. EPA has made, and will 
continue to make, these materials generally available through 
www.regulations.gov and at the EPA Region 4 Office (please contact the 
person identified in the For Further Information Contact section of 
this preamble for more information).

G. Proposed Action

    EPA is proposing to approve the aforementioned changes to the Knox 
County portion of the Tennessee SIP. EPA is proposing to approve the 
changes presented in the March 7, 2017, and April 17, 2017, SIP 
submittals that make changes to Knox County's Air Quality Management 
Regulations, Section 41.0 entitled ``Regulations for the Review of New 
Sources,'' Section 45.0 entitled ``Prevention of Significant 
Deterioration,'' and Section 25.0 entitled ``Permits.'' These SIP 
revisions are meant to address several changes to the federal NSR 
regulations, as promulgated by EPA on December 31, 2002, and 
reconsidered with minor changes on November 7, 2003, which are commonly 
referred to as the ``2002 NSR Reform Rules,'' as well as subsequent 
changes to the federal NSR regulations as described in Section II of 
this proposed rulemaking. Finally, these revisions are meant to make 
Knox County's NSR regulations consistent with those of the State of 
Tennessee.

H. Statutory and Executive Order Reviews

    Under the CAA, the Administrator is required to approve a SIP 
submission that complies with the provisions of the Act and applicable 
Federal regulations. See 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in 
reviewing SIP submissions, EPA's role is to approve state choices, 
provided that they meet the criteria of the CAA. This action merely 
proposes to approve state law as meeting Federal requirements and does 
not impose additional requirements beyond those imposed by state law. 
For that reason, this proposed action:

[[Page 28577]]

     Is not a significant regulatory action subject to review 
by the Office of Management and Budget under Executive Orders 12866 (58 
FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
     Is not an Executive Order 13771 (82 FR 9339, February 2, 
2017) regulatory action because SIP approvals are exempted under 
Executive Order 12866;
     Does not impose an information collection burden under the 
provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);
     Is certified as not having a significant economic impact 
on a substantial number of small entities under the Regulatory 
Flexibility Act (5 U.S.C. 601 et seq.);
     Does not contain any unfunded mandate or significantly or 
uniquely affect small governments, as described in the Unfunded 
Mandates Reform Act of 1995 (Pub. L. 104-4);
     Does not have Federalism implications as specified in 
Executive Order 13132 (64 FR 43255, August 10, 1999);
     Is not an economically significant regulatory action based 
on health or safety risks subject to Executive Order 13045 (62 FR 
19885, April 23, 1997);
     Is not a significant regulatory action subject to 
Executive Order 13211 (66 FR 28355, May 22, 2001);
     Is not subject to requirements of section 12(d) of the 
National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 
note) because application of those requirements would be inconsistent 
with the CAA; and
     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 (59 FR 7629, February 16, 1994).
    The SIP is not approved to apply on any Indian reservation land or 
in any other area where EPA or an Indian tribe has demonstrated that a 
tribe has jurisdiction. In those areas of Indian country, the rule does 
not have tribal implications as specified by Executive Order 13175 (65 
FR 67249, November 9, 2000), nor will it impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, 
Incorporation by reference, Lead, Nitrogen dioxide, Ozone, Particulate 
matter, Sulfur oxides, Volatile organic compounds.

    Dated: June 8, 2018.
Onis ``Trey'' Glenn, III,
Regional Administrator, Region 4.
[FR Doc. 2018-13144 Filed 6-19-18; 8:45 am]
 BILLING CODE 6560-50-P