Document ID: EPA-R06-OAR-2011-0332-0001
Agency: epa
Document Type: Proposed Rule
Title: TX118.01 Approval and Promulgation of Implementation Plans; Texas; Revisions to the New Source Review (NSR) State Implementation Plan (SIP); Antibacksliding of Major NSR SIP Requirements for the One-Hour Ozone National Ambient Air Quality Standards (NAAQS); Major Nonattainment NSR (NNSR) SIP Requirements for the 1997 Eight-Hour Ozone NAAQS; and Major NSR Reform Program. 17 pages s6k
Posted Date: 2012-06-20T04:00Z

[Federal Register Volume 77, Number 119 (Wednesday, June 20, 2012)]
[Proposed Rules]
[Pages 36964-36980]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-15049]

=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2011-0332; FRL-9687-6]

Approval and Promulgation of Implementation Plans; Texas; 
Revisions to the New Source Review (NSR) State Implementation Plan 
(SIP); Antibacksliding of Major NSR SIP Requirements for the One-Hour 
Ozone National Ambient Air Quality Standards (NAAQS); Major 
Nonattainment NSR (NNSR) SIP Requirements for the 1997 Eight-Hour Ozone 
NAAQS; and Major NSR Reform Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: EPA is proposing to approve revisions to the SIP for the State 
of Texas that relate to antibacksliding of Major NSR SIP Requirements 
for the one-hour ozone NAAQS; Major NNSR SIP requirements for the 1997 
eight-hour ozone NAAQS; Major NSR Reform Program with Plantwide 
Applicability Limit (PAL) provisions; and non-PAL aspects of the Major 
NSR SIP requirements. EPA proposes to find that these changes to the 
Texas SIP comply with the Federal Clean Air Act (the Act or CAA) and 
EPA regulations and are consistent with EPA policies. Texas submitted 
revisions to these programs on June 10, 2005, and February 1, 2006. EPA 
disapproved these SIP revisions on September 15, 2010 (75 FR 56424). In 
response to the 2010 disapproval, Texas submitted revisions to these 
programs in two separate SIP submittals on March 11, 2011. These SIP 
submittals include resubmittal of the rules that were previously 
submitted June 10, 2005, and February 1, 2006, and subsequently 
disapproved by EPA on September 15, 2010. On February 22, 2012, Texas 
proposed further revisions to the NSR Reform Program to further clarify 
and ensure compliance with Federal requirements relating to NSR Reform. 
On May 3, 2012, Texas provided a letter to EPA which requested that EPA 
parallel process the revisions proposed February 22, 2012, and included 
a demonstration showing how its submitted rules are at least as 
stringent as the Federal NSR Reform Program. Texas has requested that 
EPA parallel process the revisions proposed February 22, 2012, and 
consider the May 3, 2012, letter in the review of the March 11, 2011, 
SIP submittals. Today, EPA is proposing to find that the March 11, 
2011, SIP submittals; the February 22, 2012, proposed revisions; and 
the May 3, 2012, letter, address each of the grounds for EPA's 
September 15, 2010, disapproval and other issues related to the Texas 
NSR Reform revisions as identified later. Accordingly, EPA proposes to 
approve these two March 11, 2011, revisions; the February 22, 2012, 
proposed revisions for which Texas has requested parallel processing; 
and the May 3, 2012, letter as part of the Texas NSR SIP. EPA is 
proposing this action under section 110 and parts C and D of the Act.

DATES: Comments must be received on or before July 20, 2012.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2011-0332 by one of the following methods:
    (1) Federal eRulemaking Portal: http://www.regulations.gov. Follow 
the on-line instructions for submitting comments.
    (2) Email: Mr. Stanley M. Spruiell at spruiell.stanley@epa.gov.
    (3) U.S. EPA Region 6 ``Contact Us'' Web site: http://epa.gov/region6/r6coment.htm. Please click on ``6PD'' (Multimedia) and select 
``Air'' before submitting comments.
    (4) Fax: Mr. Stanley M. Spruiell, Air Permits Section (6PD-R), at 
fax number 214-665-6762.
    (5) Mail: Mr. Stanley M. Spruiell, Air Permits Section (6PD-R), 
Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, 
Texas 75202-2733.
    (6) Hand or Courier Delivery: Mr. Stanley M. Spruiell, Air Permits 
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, 
Suite 1200, Dallas, Texas 75202-2733. Such deliveries are accepted only 
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal 
holidays. Special arrangements should be made for deliveries of boxed 
information.
    Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-
2011-0332. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
http://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through http://www.regulations.gov or email. The http://www.regulations.gov Web site 
is an ``anonymous access'' system, which means that EPA will not know 
your identity or contact information unless you provide it in the body 
of your comment. If you send an email comment directly to EPA without 
going through http://www.regulations.gov your email address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the http://www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in http://www.regulations.gov or in hard copy at the Air Permits 
Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, 
Suite 700, Dallas, Texas 75202-2733. The file will be made available by 
appointment for public inspection in the Region 6 Freedom of 
Information Act Review Room between the hours of 8:30 a.m. and 4:30 
p.m. weekdays except for legal holidays. Contact the person listed in 
the FOR FURTHER INFORMATION CONTACT paragraph below or Mr. Bill Deese 
at (214) 665-7253 to make an appointment. If possible, please make the 
appointment at least two working days in advance of your visit. There 
will be a 15 cent per page fee for making photocopies of documents. On 
the day of the visit, please check in at the EPA

[[Page 36965]]

Region 6 reception area at 1445 Ross Avenue, Suite 700, Dallas, Texas.
    The State submittals, which are part of the EPA docket, are also 
available for public inspection at the State Air Agency during official 
business hours by appointment: Texas Commission on Environmental 
Quality (TCEQ), Office of Air Quality, 12124 Park 35 Circle, Austin, 
Texas 78753.

FOR FURTHER INFORMATION CONTACT: Mr. Stanley M. Spruiell, Air Permits 
Section (6PD-R), Environmental Protection Agency, Region 6, 1445 Ross 
Avenue, Suite 700, Dallas, Texas 75202-2733; telephone (214) 665-7212; 
fax number (214) 665-6762; email address spruiell.stanley@epa.gov.

SUPPLEMENTARY INFORMATION: Throughout this document whenever any 
reference to ``we,'' ``us,'' or ``our'' is used, we mean EPA.

Table of Contents

I. The State's Submittals
    A. What is the background of the Texas Programs for Major NSR 
for the eight-hour National Ambient Air Quality Standard for ozone 
and for NSR reform?
    1. Major NSR for the Eight-Hour NAAQS for ozone
    2. NSR Reform
    B. What changes did Texas submit?
    C. Why are we ``parallel processing'' and how does it work?
II. What action is EPA proposing to take on the antibacksliding 
Major NSR SIP requirements for the one-hour ozone NAAQS?
    A. Background
    B. What were the grounds for the September 15, 2010, 
disapproval?
    C. What did Texas submit to address the grounds for disapproval?
    D. What is EPA's evaluation of the submitted SIP revision to 
address the grounds for disapproval?
III. What action is EPA proposing to take on the Major Nonattainment 
NSR SIP requirements for the 1997 eight-hour ozone NAAQS?
    A. Background
    B. What were the grounds for the September 15, 2010, 
disapproval?
    C. What did Texas submit to address the grounds for disapproval?
    D. What is EPA's evaluation of the submitted SIP revision to 
address the grounds for disapproval?
IV. What Action is EPA proposing to take on the Major NSR Reform 
Program with Plantwide Applicability (PAL) provisions?
    A. Background
    B. EPA's Evaluation of the Grounds for Disapproval and Texas' 
Revisions to Address These Grounds
    1. The February 1, 2006, SIP Submittal Lacked a Provision That 
Limits Applicability of a PAL to an Existing Major Stationary Source
    2. The February 1, 2006, SIP Submittal Had No Provisions That 
Relate to PAL Re-Openings
    3. There Was No Mandate That Failure To Use a Monitoring System 
That Meets the Requirements in the PAL Renders the PAL Invalid
    4. The February 1, 2006, Submittal of 30 TAC 116.182 and 116.186 
Provided for an Emission Cap That May Not Account for all of the 
Emissions of a Pollutant at a Major Stationary Source
    5. The February 1, 2006, Submittal of Baseline Actual Emissions 
Did Not Provide That Emissions Be Calculated in Terms of the Average 
Rate, in Tons per Year
    6. The State Failed To Include Specific Definitions of 
Continuous Emissions Monitoring System (CEMS), Continuous Emissions 
Rate Monitoring System (CERMS), Continuous Parameter Monitoring 
System (CPMS), and Predictive Emissions Monitoring System (PEMS)
    C. Other Concerns With the Major NSR Reform Program With 
Plantwide Applicability Limit (PAL) Provisions
    1. Submittal of 30 TAC 116.12(23)--Definition of ``Plant-Wide 
Applicability Limit Effective Date''
    2. Submittal of 30 TAC 116.12(22)--Definition of ``Plant-Wide 
Applicability Limit''--and 30 TAC 116.186(a)
    3. Submittal of 30 TAC 116.186(c)(2) Does Not Specifically 
Provide That Monitoring Data Must Meet Minimum Legal Requirements 
for Admissibility in a Judicial Proceeding to Enforce the PAL
    4. Submittal of 30 TAC 116.186(a)
V. What action is EPA proposing to take on the non-PAL aspects of 
the Major NSR SIP requirements?
    A. Background
    B. EPA Evaluation of the Grounds for Disapproval and Texas' 
Revisions to Address These Grounds
    1. The March 11, 2011-1 Submitted Rule Did Not Explicitly Limit 
the Definition of ``Facility'' to an Emissions Unit
    2. The Definition of ``Baseline Actual Emissions'' Submitted 
March 11, 2011-2 to 30 TAC 116.12(3)(E) Does Not Require the 
Inclusion of Emissions Resulting From Startups, Shutdowns, and 
Malfunctions, as Required Under Federal Regulations
    3. The February 1, 2006, Submitted Definition ``Baseline Actual 
Emissions'' Does Not Provide That the Emissions Must Be Calculated 
in Terms of the Average Rate, in Tons per Year
VI. Does approval of Texas' rule revisions interfere with 
attainment, reasonable further progress, or any other applicable 
requirement of the Act?
VII. Proposed Action
VIII. Statutory and Executive Order Reviews

I. The State's Submittals

A. What is the background of the Texas programs for Major NSR for the 
eight-hour National Ambient Air Quality Standard for ozone and for NSR 
Reform?

1. Major NSR for the Eight-Hour NAAQS for Ozone
    On April 30, 2004 (69 FR 23858), EPA promulgated regulations that 
included requirements for implementing Major NSR for the 1997 eight-
hour ozone NAAQS. On May 25, 2005, the TCEQ adopted SIP revisions to 
implement these requirements and submitted them to EPA on June 10, 
2005. The EPA disapproved these regulations September 15, 2010 (75 FR 
56424). On March 11, 2011, the TCEQ resubmitted the revisions adopted 
May 25, 2005, and submitted further revisions, adopted February 9, 
2011, to address EPA's September 15, 2010, disapproval.\1\ Section I.B 
of this preamble includes further details of what TCEQ submitted.
---------------------------------------------------------------------------

    \1\ In the remainder of this document, we will refer to the 
Eight-Hour Ozone NSR SIP submittal as submitted March 11, 2011-1, 
which includes the resubmittal of the NSR Reform revisions adopted 
May 25, 2005, and additional revisions adopted February 9, 2011.
---------------------------------------------------------------------------

2. NSR Reform
    On December 31, 2002 (67 FR 80186), EPA promulgated its NSR Reform 
Program. On November 7, 2003 (68 FR 63021), EPA promulgated a final 
action on its reconsideration of the December 31, 2002, NSR Reform. On 
January 11, 2006, TCEQ adopted its regulations for NSR Reform and on 
February 1, 2006, submitted these regulations to EPA for SIP approval. 
The EPA disapproved these regulations September 15, 2010 (75 FR 56424). 
On March 11, 2011, the TCEQ resubmitted the revisions adopted January 
11, 2006, and submitted further revisions, adopted February 9, 2011, to 
address the grounds for EPA's September 15, 2010, disapproval.\2\ On 
February 22, 2012, TCEQ proposed additional revisions to these 
regulations and requested that EPA parallel process these revisions 
with the revisions submitted March 11, 2011-2, based upon the revisions 
that TCEQ proposed February 22, 2012, and subsequent submittal of those 
revisions following final adoption. TCEQ further submitted a letter 
dated May 3, 2012, to EPA to meet its Federal NSR Reform Program 
demonstration requirements that provides its interpretation of certain

[[Page 36966]]

NSR Reform rules to further clarify and ensure implementation 
consistent with the Federal NSR Reform Program. Section I.B of this 
preamble includes further details of what TCEQ submitted.
---------------------------------------------------------------------------

    \2\ In the remainder of this document, we will refer to the NSR 
Reform submittal as submitted March 11, 2011-2, which includes the 
resubmittal of the NSR Reform revisions adopted January 11, 2006, 
and additional revisions adopted February 9, 2011.
---------------------------------------------------------------------------

B. What changes did Texas submit?

    On March 11, 2011, the TCEQ submitted the following revisions to 
the Texas SIP:
     New Source Review for Eight-Hour Ozone Standard; Rule 
Project Number 2005-009-116-AI, adopted May 25, 2005. These revisions 
were originally submitted on June 10, 2005. EPA disapproved these SIP 
revisions on September 15, 2010, 75 FR 56424. The revisions submitted 
March 11, 2011-1, included the resubmittal of the 2005 revisions in 
order to reinstate before us for a new action, the rules that we 
disapproved in 2010.
     Federal New Source Review Permit Rules Reform; Rule 
Project Number 2006-010-116-PR, adopted January 11, 2006. These 
revisions were originally submitted on February 1, 2006. EPA 
disapproved these SIP revisions on September 15, 2010, 75 FR 56424. The 
revisions submitted March 11, 2011-2, included the resubmittal of the 
2006 revisions in order to reinstate before us for a new action, the 
rules that we disapproved in 2010.
     New Source One-Hour Ozone Major Source Thresholds and 
Emission Offsets; Rule Project Number 2008-030-116-PR, submitted March 
11, 2011-1.
     New Source Review (NSR) Reform; Rule Project Number 2010-
008-116-PR, submitted March 11, 2011-2.
    On February 22, 2012, the TCEQ proposed revisions to its NSR Reform 
Program and requested that the EPA parallel process these revisions. On 
May 3, 2012, Texas provided a letter to EPA which requested that EPA 
parallel process the revisions proposed February 22, 2012, and included 
a demonstration showing that certain of its submitted rules are at 
least as stringent as the Federal NSR Reform Program. The following 
tables summarize the rules and provide additional information relating 
to the submitted regulations and the revisions proposed February 22, 
2012, for parallel processing and the May 3, 2012, letter. Additional 
information is also provided in a Technical Support Document (TSD) for 
this proposed action and which is in the docket.

                 Table 1--Rules Submitted in Each SIP Submittal That is Affected by This Action
----------------------------------------------------------------------------------------------------------------
                                                         Date
  Description of SIP submittal   Texas rule project  submitted to   Adopted by   Effective as   Rules addressed
                                         No.              EPA          State      State rule     in this action
----------------------------------------------------------------------------------------------------------------
New Source Review for Eight-     2005-009-116-AI,    a 3/11/2011-     5/25/2005     6/15/2005  Amended 30 TAC
 Hour Ozone Standard.             2008-030-116-PR.              1                               116.12\c\, and
                                                                                                116.150.
Federal New Source Review (NSR)  2005-010-116-PR,    b 3/11/2011-     1/11/2006      2/1/2006   Amended
 Permit Rules Reform.             2010-008-116-PR.              2                               30 TAC 116.12c,
                                                                                                116.150,
                                                                                                116.151,
                                                                                                116.160, and
                                                                                                116.610;
                                                                                                Repeal
                                                                                                of 30 TAC
                                                                                                116.617; and
                                                     ............  ............  ............   New 30
                                                                                                TAC 116.121,
                                                                                                116.180,
                                                                                                116.182,
                                                                                                116.184,
                                                                                                116.186,
                                                                                                116.188,
                                                                                                116.190,
                                                                                                116.192,
                                                                                                116.194,
                                                                                                116.196, and
                                                                                                116.198.
One Hour Ozone Major Source      2008-030-116-PR...   3/11/2011-1      2/9/2011      3/3/2011  Amended 30 TAC
 Thresholds and Emission                                                                        101.1\d\,
 Offsets.                                                                                       116.12\c\, and
                                                                                                116.150
New Source Review (NSR) Reform.  2010-008-116-PR...   3/11/2011-2      2/9/2011      3/3/2011   Amended
                                                                                                30 TAC
                                                                                                116.12\c\,
                                                                                                116.115,
                                                                                                116.180,
                                                                                                116.182,
                                                                                                116.186,
                                                                                                116.188,
                                                                                                116.190,
                                                                                                116.192, and
                                                                                                116.601;
                                                     ............  ............  ............   Repealed
                                                                                                30 TAC 116.121;
                                                                                                and
                                                     ............  ............  ............   New 30
                                                                                                TAC 116.127.
NSR Reform Revisions...........  2012-015-116-AI...         (\e\)         (\e\)         (\e\)   Amended
                                                                                                30 TAC
                                                                                                116.12(23);
                                                                                                116.150(a),
                                                                                                (d)(1), and
                                                                                                (d)(3);
                                                                                                116.151(a),
                                                                                                (c)(1), and
                                                                                                (c)(3);
                                                                                                116.180(a)(5);
                                                                                                116.186(b)(9).
                                                     ............  ............  ............   Proposed
                                                                                                revision
                                                                                                submitted for
                                                                                                parallel
                                                                                                processing.
Letter of explanation and        N/A...............           (f)           (f)           (f)  Letter dated May
 interpretation of the Texas                                                                    3, 2012, from
 SIP for NSR Reform.                                                                            TCEQ to EPA
                                                                                                which explains
                                                                                                and clarifies
                                                                                                TCEQ's
                                                                                                interpretation
                                                                                                of sections
                                                                                                116.12(22) and
                                                                                                116.186(a),
                                                                                                (b)(9), and
                                                                                                (c)(2).
----------------------------------------------------------------------------------------------------------------
a Originally submitted June 10, 2005. Following disapproval on September 15, 2010, TCEQ on March 11, 2011-1,
  resubmitted the provisions that were previously disapproved to ensure that EPA considers the prior submittals
  in its action on the revisions submitted on March 11, 2011-1.
b Originally submitted February 1, 2006. Following disapproval on September 15, 2010, TCEQ on March 11, 2011-2,
  resubmitted the provisions that were previously disapproved to ensure that EPA considers the prior submittals
  in its action on the revisions submitted on March 11, 2011-2.
c The following provisions of 30 TAC 116.12 were addressed separately in the Texas Infrastructure SIP: The
  revised title, the introductory paragraph, and paragraphs (14), (17), and (18). These revisions were adopted
  in the two revisions under Texas Rule Project Nos. 2008-030-116-PR and 2010-008-116-PR, each adopted February
  9, 2011, submitted March 11, 2011-1 and March 11, 2011-2.
d 30 TAC 101.1 was addressed separately in the Texas Infrastructure SIP.
e Proposed by TCEQ on February 22, 2012, for parallel SIP processing.
f Letter dated May 3, 2012, with explanation and interpretation of the Texas SIP for NSR Reform.

[[Page 36967]]

                       Table 2--Summary of Individual Revisions to Each Section Evaluated
----------------------------------------------------------------------------------------------------------------
                                                                  Date
           Section--Title             Texas rule project No.  submitted to   Adopted by          Comments
                                                                   EPA          State
----------------------------------------------------------------------------------------------------------------
30 TAC 116.12--Nonattainment and      2005-009-116-AI, 2008-  a 3/11/2011-     5/25/2005  Amended paragraphs
 Prevention of Significant             030-116-PR.                       1  ............   (7), (11), and (13).d
 Deterioration Review Definitions.    2005-010-116-PR, 2010-  ............     1/11/2006  (c d)
                                       008-116-PR.            b 3/11/2011-  ............  ......................
                                      2010-008-116-PR.......             2      2/9/2011  Amended paragraphs
                                                              ............                 (3), (20) and (29).d
                                                               3/11/2011-2
                                      2012-015-116-AI.......           (e)           (e)  Amended paragraph
                                                                                           (23).
                                      N/A...................           (f)           (f)  TCEQ's letter dated
                                                                                           May 3, 2012, explains
                                                                                           and clarifies TCEQ's
                                                                                           interpretation of the
                                                                                           definition of ``plant-
                                                                                           wide applicability
                                                                                           limit'' in paragraph
                                                                                           (22).
30 TAC 116.115--General and Special   2010-008-116-PR.......   3/11/2011-2      2/9/2011  Amended subparagraph
 Conditions.                                                                               (b)(2)(F).
30 TAC 116.127--Actual to Projected   2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Submitted as 30 TAC
 Actual and Emission Exclusion Test    008-116-PR.                       2  ............   116.127.
 for Emissions.                       2010-008-116-PR.......  ............      2/9/2011  ......................
                                                               3/11/2011-2                Repealed; Replaced w/
                                                                                           new 30 TAC 116.127.
30 TAC 116.150--New Major Source or   2005-009-116-AI, 2008-  a 3/11/2011-     5/25/2005  Amended subsections
 Major Modification in Ozone           030-116-PR.                       1                 (a);
 Nonattainment Area.                                                                      New subsections (b),
                                                                                           (c), (d), and (e);
                                                                                          Renamed subsection (b)
                                                                                           to subsection (f).
                                      2005-010-116-PR, 2012-  b 3/11/2011-     1/11/2006  Amended subsections
                                       015-116-AI.                       1                 (a), (b), (c), (d),
                                                                                           and (e).
                                      2008-030-116-PR.......   3/11/2011-1      2/9/2011  Amended subsections
                                                                                           (a) and (b);
                                                              ............  ............  Removed subsection
                                                                                           (d);
                                                                                          Renamed subsection (e)
                                                                                           to subsection (d);
                                                              ............  ............  Amended subsection (d)
                                                                                           as renamed.
                                      2012-015-116-AI.......           (e)           (e)  Amended paragraphs
                                                                                           (a), (d)(1), and
                                                                                           (d)(3).\e\
30 TAC 116.151--New Major Source or   2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Amended subsections
 Major Modification in Nonattainment   008-116-PR.                       2  ............   (a), (b), and (c).
 Areas Other Than Ozone.              2008-030-116-PR.......  ............      2/9/2011  ......................
                                      2012-015-116-AI.......   3/11/2011-1           (e)  Resubmitted with no
                                                                       (e)                 additional changes.
                                                                                          Amended paragraphs
                                                                                           (a), (c)(1), and
                                                                                           (c)(3).e
30 TAC 116.180--Applicability.......  2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal.
                                       008-116-PR.                       2
                                      2010-008-116-PR.......   3/11/2011-2      2/9/2011  Amended subsection
                                                                                           (a).
                                      2012-015-116-AI.......           (e)           (e)  Amended paragraph
                                                                                           (a)(5).e
30 TAC 116.182--Plant-Wide            2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal.
 Applicability Limit Permit.           008-116-PR.                       2  ............  ......................
                                      2010-008-116-PR.......  ............      2/9/2011  Amended paragraph (1).
                                                               3/11/2011-2
30 TAC 116.184--Application Review    2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal
 Schedule.                             008-116-PR.                       2                 resubmitted with no
                                                                                           additional changes.
30 TAC 116.186--General and Specific  2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal.
 Conditions.                           008-116-PR.                       2  ............  ......................
                                      2010-008-116-PR.......  ............      2/9/2011  Amended subsections
                                                               3/11/2011-2                 (a) and (b).
                                      2012-015-116-AI.......           (e)           (e)  Amended paragraph
                                                                                           (b)(9).e
                                      N/A...................           (f)           (f)  TCEQ's letter dated
                                                                                           May 3, 2012, explains
                                                                                           and clarifies TCEQ's
                                                                                           interpretation of
                                                                                           paragraphs (a),
                                                                                           (b)(9) and (c)(2).
30 TAC 116.188--Plant-Wide            2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal.
 Applicability Limit.                  008-116-PR.                       2  ............  ......................
                                      2010-008-116-PR.......  ............      2/9/2011  Amended main
                                                               3/11/2011-2                 paragraph.
30 TAC 116.190--Federal               2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal.
 Nonattainment and Prevention of       008-116-PR.                       2  ............  ......................
 Significant Deterioration Review.    2010-008-116-PR.......  ............      2/9/2011  Amended subsection
                                                               3/11/2011-2                 (a).
30 TAC 116.192--Amendments and        2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal.
 Alterations.                          008-116-PR.                       2  ............  ......................
                                      2010-008-116-PR.......  ............      2/9/2011  Amended subsection
                                                               3/11/2011-2                 (c).
30 TAC 116.196--Renewal of a Plant-   2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal
 Wide Applicability Limit Permit.      008-116-PR.                       2                 resubmitted with no
                                                                                           additional changes.
30 TAC 116.198--Expiration and        2005-010-116-PR, 2010-  b 3/11/2011-     1/11/2006  Initial submittal
 Voidance.                             008-116-PR.                       2                 resubmitted with no
                                                                                           additional changes.
----------------------------------------------------------------------------------------------------------------
a Originally submitted June 10, 2005. Following disapproval on September 15, 2010, TCEQ on March 11, 2011-1,
  resubmitted the provisions that were previously disapproved to ensure that EPA considers the prior submittals
  in its action on the revisions submitted on March 11, 2011-1).
b Originally submitted February 1, 2006. Following disapproval on September 15, 2010, TCEQ on March 11, 2011-2,
  resubmitted the provisions that were previously disapproved to ensure that EPA considers the prior submittals
  in its action on the revisions submitted on March 11, 2011-2.

[[Page 36968]]

 
c In the February 1, 2006, SIP submittal (resubmitted March 11, 2011), 30 TAC 116.12 included the following
  revisions:
 The addition of new paragraphs (3)-(4), (7)-(8), (13)-(14), (16), (22)-(26), (29)-(31), (33)-(34), and
  (36).
 The following paragraphs were renumbered, consistent with the new paragraphs identified above, as
  follows:
--Existing paragraphs (3)-(4) to paragraphs (5)-(6), respectively;
--Existing paragraphs (5)-(8) to paragraphs (9)-(12), respectively;
--Existing paragraph (9) to paragraph (15);
--Existing paragraphs (10)-(14) to paragraphs (17)-(21), respectively;
--Existing paragraphs (15)-(16) to paragraphs (27)-(28), respectively;
--Existing paragraph (17) to paragraph (32); and
--Existing paragraph (18) to paragraph (35).
 The following existing paragraphs, as renumbered, were further revised: (1), (11), (12), (17), (18),
  and (20).
d This includes portions of 30 TAC 116.12 that were separately approved in the Texas Infrastructure SIP in which
  EPA approved. See 76 FR 81371, December 28, 2011. In this action, EPA approved the following: The revised
  title of 30 TAC 116.12; the introductory paragraph to 30 TAC 116.12; the definition of ``federally regulated
  NSR pollutant'' in 30 TAC 116.12(14), the definition of ``major stationary source'' in 30 TAC 116.12(17), and
  the definition of ``major modification'' in 30 TAC 116.12(18).''
e Proposed by TCEQ on February 22, 2012, for parallel SIP processing.
f Letter dated May 3, 2012, with explanation and interpretation of the Texas SIP for NSR Reform.

C. Why are we ``parallel processing'' and how does it work?

    On February 22, 2012, Texas proposed revisions to 30 TAC 
116.12(23); 116.150(a), (d)(1), and (d)(3); 116.151(a), (c)(1), and 
(c)(3); 116.180(a)(5); and 116.186(b)(9). In its letter dated May 3, 
2012, TCEQ requested parallel processing of these proposed revisions 
with our processing of the two SIP revisions submitted March 11, 2011. 
Texas requested parallel processing to expedite the processing of its 
submitted and proposed revisions.
    Parallel processing means that EPA proposes action on a state rule 
before it becomes final under state rule. See 40 CFR part 51, Appendix 
V, section 2.3. Under parallel processing, EPA takes final action on 
the State's proposal if the State's final submission is adopted 
substantially unchanged from the submission on which this proposed 
rulemaking is based, or if significant changes in the final state 
submission are anticipated and adequately described in EPA's proposed 
rulemaking, or result from needed corrections determined by the State 
to be necessary through review of issues described in EPA's proposed 
rulemaking. Final rulemaking action by EPA will occur only after the 
SIP revision has been fully adopted by Texas and submitted formally to 
EPA for incorporation into the SIP. A further discussion of these rules 
that we are parallel processing can be found in later sections.

II. What Action is EPA proposing to take on the antibacksliding Major 
NSR SIP requirements for the one-hour ozone NAAQS?

A. Background

    On September 15, 2010, EPA disapproved provisions submitted June 
10, 2005, and February 1, 2006, that relate to the antibacksliding 
Major NSR SIP requirements for the one-hour ozone NAAQS. Specifically, 
EPA disapproved 30 TAC 116.12(18) \3\ and 116.150(d), because these 
submitted rules do not comply with the CAA as interpreted by the Court 
in South Coast Air Quality Management District, et al. v. EPA, 472 F.3d 
882 (DC Cir. 2006), reh'g denied 489 F.3d 1245 (2007) (clarifying that 
the vacatur was limited to the issues on which the court granted the 
petitions for review). As explained below, this opinion does not 
require further action by EPA with respect to NSR. See 75 FR 56424, at 
56429-56431.
---------------------------------------------------------------------------

    \3\ In a separate action, EPA approved the submitted revisions 
to 30 TAC 116.12(18)--definition of major modification--in the Texas 
Infrastructure SIP. We approved the Texas Infrastructure SIP on 
December 28, 2011 (76 FR 81371). Accordingly, this evaluation only 
addresses the submitted revisions to 30 TAC 116.150(d). All 
references, herein, to the portions of 30 TAC 116.12 that were 
approved in the Texas Infrastructure SIP are for informational 
purposes only.
---------------------------------------------------------------------------

B. What were the grounds for the September 15, 2010, disapproval?

    On July 18, 1997, EPA promulgated a new NAAQS for ozone based upon 
eight-hour average concentrations. The eight-hour averaging period 
replaced the previous one-hour averaging period, and the level of NAAQS 
was changed from 0.12 parts per million (ppm) to 0.08 ppm (62 FR 
38865). On April 30, 2004 (69 FR 23951), EPA published a final Phase 1 
Implementation Rule that addressed key elements related to 
implementation of the 1997 eight-hour ozone NAAQS, including, but not 
limited to: (1) Revocation of the one-hour NAAQS; and (2) How anti-
backsliding principles will ensure continued progress toward attainment 
of the 1997 eight-hour ozone NAAQS. We codified the anti-backsliding 
provisions governing the transition from the revoked one-hour ozone 
NAAQS to the 1997 eight-hour ozone NAAQS in 40 CFR 51.905(a). The one-
hour ozone major nonattainment NSR SIP requirements indicated that 
certain one-hour ozone standard requirements were not part of the list 
of anti-backsliding requirements provided in 40 CFR 51.905(f).
    On December 22, 2006, the DC Circuit vacated the Phase 1 
Implementation Rule in its entirety in the South Coast decision. EPA 
requested rehearing and clarification of the ruling; and on June 8, 
2007, the Court clarified that it was vacating the rule only to the 
extent that it had upheld petitioners' challenges. Thus, the Court 
vacated the provisions in 40 CFR 51.905(e) that waived obligations 
under the revoked one-hour standard for NSR. The court's ruling, 
therefore, maintains major nonattainment NSR applicability thresholds 
and emission offset ratios pursuant to classifications previously in 
effect for areas designated nonattainment for the one-hour ozone NAAQS.
    On June 10, 2005, and February 1, 2006, Texas submitted SIP 
revisions to 30 TAC 116.150 which relate to the transition from the 
major nonattainment NSR requirements applicable for the one-hour ozone 
NAAQS to implementation of the major nonattainment NSR requirements 
applicable to the 1997 eight-hour ozone NAAQS. Texas' revisions to the 
introductory paragraph to subsection (d) of 30 TAC 116.150, effective 
as state law on June 15, 2005, provided that for ``the Houston-
Galveston-Brazoria, Dallas-Fort Worth, and Beaumont-Port Arthur eight-
hour ozone nonattainment areas, if the United States Environmental 
Protection Agency promulgates rules requiring new source review permit 
applications in these areas to be evaluated for nonattainment new 
source review according to the area's one-hour standard 
classification,'' then ``each application will be evaluated according 
to that area's one-hour standard classification'' and ``* * * the de 
minimis threshold test (netting) is required for all modifications to 
existing major sources of VOC or NOX in that area * * *'' 
The introductory paragraph of 30 TAC 116.150(d) adds a new requirement 
for an affirmative

[[Page 36969]]

regulatory action by EPA on the reinstatement of the one-hour ozone 
NAAQS major NNSR requirements before the legally applicable major NNSR 
requirements under the one-hour ozone standard will be implemented in 
the Texas one-hour ozone nonattainment areas.
    The approved Texas major NNSR SIP did not require such an 
affirmative regulatory action by EPA before the one-hour ozone major 
NNSR requirements come into effect in the Texas one-hour ozone 
nonattainment areas. The SIP had stated at 30 TAC 116.12(11) \4\ 
(Footnote 1 under Table I) that ``Texas nonattainment area designations 
are specified in 40 Code of Federal Regulations Sec.  81.344.'' That 
section included designations for the one-hour standard as well as the 
eight-hour standard. Moreover, the submitted revisions to 30 TAC 
116.150(d) did not comport with the South Coast decision as discussed 
above.
---------------------------------------------------------------------------

    \4\ The currently approved 30 TAC 116.12(11) was renumbered to 
30 TAC 112.12(18) in the February 1, 2006, submittal. This 
renumbering of, and revisions to, the definition, as resubmitted 
March 11, 2011-1, was approved December 28, 2011, in our action on 
the Texas Infrastructure SIP.
---------------------------------------------------------------------------

    The court opinion maintains the lower applicability thresholds and 
more stringent offset ratios for a one-hour ozone nonattainment area 
whose classification under that standard was higher than its 
nonattainment classification under the eight-hour standard. In the June 
10, 2005, and February 1, 2006, submitted rule revisions, the lower 
applicability thresholds and more stringent offset ratios for a 
classified one-hour ozone nonattainment area were not required in a 
Texas one-hour ozone nonattainment area unless and until EPA 
promulgated a rulemaking implementing the South Coast decision. See 75 
FR 56424, at 56429 and 56431.

C. What did Texas submit to address the grounds for disapproval?

    On March 11, 2011-1, the TCEQ submitted the following amendments to 
30 TAC 116.150: \5\
---------------------------------------------------------------------------

    \5\ TCEQ also submitted revisions to 30 TAC 116.12(18)(A)(1) 
concerning major modification and 30 TAC 101.1 to address this 
ground for SIP disapproval. EPA addressed these rules separately in 
the Texas Infrastructure SIP which contains the evaluation of the 
revisions to these sections. This action only addresses the 
revisions to 30 TAC 116.150 that were submitted to address this 
ground for disapproval.
---------------------------------------------------------------------------

     The removal of paragraphs (a)(1) through (a)(2) and 
subsection (d); and
     Revised the introductory paragraph to subsection (a) and 
added new paragraphs (a)(1) through (a)(4) which clarify that permitted 
facilities in areas that were designated nonattainment for the one-hour 
ozone standard are subject to the major source thresholds and emission 
offset requirements of the one-hour ozone standard unless one of the 
four exceptions identified in 30 TAC 116.150(a) apply. TCEQ amended 30 
TAC 116.150(a) to add a requirement for continued applicability of NNSR 
until: (1) EPA has made a finding of attainment; (2) EPA has approved 
the removal of NNSR requirements from the area; (3) EPA has determined 
that the Prevention of Significant Deterioration (PSD) requirements 
apply in the area; or (4) NNSR is no longer required for purposes of 
antibacksliding.
    As the result of EPA's comments received on the proposal of these 
amendments the TCEQ changed 30 TAC 116.150(a)(1) through (a)(4) to make 
clear that the conditions on which these exceptions are based must 
exist on the date of issuance of the permit.
    The TCEQ also removed 30 TAC 116.150(d) from the rule. Subsection 
(d) contained language that indicated that the EPA must complete 
rulemaking before NSR applications are evaluated according to their 
one-hour classification. As stated above, the South Coast decision is 
self-implementing, did not require rulemaking by the EPA to be 
effective, and NSR applications should be evaluated based upon one-hour 
classifications if they are more stringent than an area's eight-hour 
classification. TCEQ also renumbered the remainder of 30 TAC 116.150 to 
reflect the removal of 30 TAC 116.150(d) and minor changes to 
references in 30 TAC 116.150(b) to reflect the renumbering. TCEQ also 
changed 30 TAC 116.150(e) to reflect changes in a concurrent rulemaking 
in Chapter 101.\6\
---------------------------------------------------------------------------

    \6\ The SIP revision submitted on March 11, 2011-1, includes a 
nonsubstantive revision to 30 TAC 116.150(e) which provides that the 
requirements for nitrogen oxides (NOX) do not apply in 
the El Paso nonattainment area. The revision removes the reference 
to areas as defined in 30 TAC 101.1 and replaced it with the area as 
defined in 40 CFR part 81. In this SIP submittal, Texas also made 
similar changes to 30 TAC 101.1 to refer to the areas as defined in 
40 CFR part 81. EPA approved these revisions to 30 TAC 101.1 in its 
action on the Texas Infrastructure SIP on December 28, 2011.
---------------------------------------------------------------------------

    TCEQ states that these changes ensure that when changes are made to 
maintenance areas and nonattainment areas as a result of Federal 
action, these rules will not be rendered incorrect. Also, for the one-
hour ozone NAAQS, the designations and classifications in 40 CFR Part 
81 were retained by EPA for purposes of anti-backsliding (See 70 FR 
44470, August 3, 2005). The TCEQ also removed the language ``to prevent 
anti-backsliding'' and replaced it with ``for the purposes of anti-
backsliding'' since the intent of the rule is to prevent backsliding 
and promote anti-backsliding.

D. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?

    The submitted revisions to 30 TAC 116.150 now meet the Federal 
requirements regarding antibacksliding under South Coast. The submitted 
revision to 30 TAC 116.150(a), as discussed above, ensures that TCEQ 
will continue to require compliance with the NNSR requirements of the 
one-hour ozone standard until: (1) EPA has made a finding of 
attainment; (2) EPA has approved the removal of NNSR requirements from 
the area; (3) EPA has determined that PSD requirements apply in the 
area; or (4) NNSR is no longer required for purposes of 
antibacksliding.
    The TCEQ also removed 30 TAC 116.150(d) from the rule. Subsection 
(d) had provided that the permitting requirements for the one-hour 
ozone nonattainment areas would not apply unless EPA later promulgates 
rules that reinstate the permitting requirements for the one-hour ozone 
standard. The removal of subsection (d) reinstates the requirement to 
follow the NNSR requirements of the one-hour ozone standard unless the 
EPA makes any of the findings described in subsection (a)(1) through 
(a)(4), as described above.
    These revisions satisfy the requirements of South Coast as 
discussed above and address EPA concerns related to Anti-Backsliding 
Major NSR SIP Requirements for the one-hour Ozone NAAQS. Accordingly, 
these revisions satisfy the requirements for SIP approval. EPA proposes 
to approve the submitted revisions to 30 TAC 116.150 as described 
herein.

III. What action is EPA proposing to take on the Major Nonattainment 
NSR SIP requirements for the 1997 eight-hour ozone NAAQS?

A. Background

    On September 15, 2010, EPA disapproved revisions to 30 TAC 
116.150(a) submitted June 10, 2005, and February 1, 2006. EPA 
disapproved this rule because it provided that an applicability 
determination for a Major NNSR permit is to be based upon the date of 
administrative completeness, rather than the date of permit issuance. 
This would allow more sources to avoid the Major NSR requirements where 
there is a nonattainment designation between the date of administrative 
completeness and the date of issuance.

[[Page 36970]]

B. What were the grounds for the September 15, 2010, disapproval?

    EPA interprets its Major NSR SIP rules to require that an 
applicability determination regarding whether Major NSR applies for a 
pollutant should be based upon the designation of the area in which the 
source is located on the date of issuance of the Major NSR permit. EPA 
also interprets the Act and its rules to require that if an area is 
designated nonattainment on the date of issuance of a Major NSR permit, 
then the Major NSR permit must be an NNSR permit, not a PSD permit. If 
the area is designated attainment/unclassifiable on the date of 
issuance of a Major NSR permit, then under EPA's interpretation of the 
Act and its rules, the Major NSR permit must be a PSD permit. See 
sections 160, 165, 172(c)(5) and 173 of the Act; and 40 CFR 
51.165(a)(2)(i) and 51.166(a)(7)(i). EPA's interpretation of these 
statutory and regulatory requirements is guided by the memorandum 
issued March 11, 1991, and titled ``New Source Review (NSR) Program 
Transitional Guidance,'' by John S. Seitz, Director, Office of Air 
Quality Planning and Standard (1991 Transitional Guidance).\7\
---------------------------------------------------------------------------

    \7\ You can access the 1991 Transitional Guidance at: http://www.epa.gov/ttn/nsr/gen/nstrans.pdf.
---------------------------------------------------------------------------

    The revisions to 30 TAC 116.150(a), submitted June 10, 2005, and 
February 1, 2006, were not clear as to when and where the applicability 
date will be set by the date the application is administratively 
complete and when and where the applicability date will be set by the 
issuance date of the authorization. The rule, adopted and submitted in 
2005, relied on the date of administrative completeness of a permit 
application, not the date of permit issuance and applied to NSR 
authorizations that are administratively complete after June 15, 2004 
(the effective date of eight-hour ozone nonattainment designations). 
The submitted 2006 rule added the date of permit issuance. 
Unfortunately, the 2006 rule introduced a bifurcated structure which 
created vagueness rather than clarity. The effective date of that new 
bifurcated structure was February 1, 2006. It was unclear whether this 
revision meant that the permit issuance date was to be used in existing 
nonattainment areas designated nonattainment for ozone before and up 
through February 1, 2006. Thus, the proposed revision lacked clarity on 
its face and was therefore not enforceable.
    Furthermore, to the extent that the date of application 
completeness was used in certain instances to establish the 
applicability date for NNSR requirements, such use is contrary to EPA's 
interpretation of the Act and the governing EPA regulations, as 
discussed above.
    Thus, based upon the above and in the absence of any explanation by 
the State, EPA disapproved the SIP revision submittals for not meeting 
the Major NNSR SIP requirements for the 1997 eight-hour ozone standard. 
See 75 FR 56424, at 56431-56432 and 56433.

C. What did Texas submit to address the grounds for disapproval?

    On March 11, 2011-1, the TCEQ amended 30 TAC 116.150(a) to apply 
its requirements as of the date of issuance of the permit.

D. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?

    The submitted revision to 30 TAC 116.150 now applies its 
requirements as of the date of issuance of the permit. This amendment 
satisfies the requirements of sections 160, 165, 172(c)(5), and 173 of 
the Act; and 40 CFR 51.165(a)(2)(i) and 51.166(a)(7)(i). It also meets 
EPA's interpretation of these statutory and regulatory requirements as 
guided by the 1991 Transitional Guidance. These revisions satisfy the 
requirements for SIP approval. Accordingly, EPA proposes to approve the 
submitted revisions to 30 TAC 116.150 as described above.

IV. What action is EPA proposing to take on the Major NSR Reform 
Program with Plantwide Applicability Limit (PAL) provisions?

A. Background

    On September 15, 2010, EPA disapproved provisions of the SIP 
revisions submitted February 1, 2006, which relate to the Major NSR 
Reform Program with Plantwide Applicability Limit (PAL) provisions. The 
reasons for this disapproval are described below.

B. EPA's Evaluation of the Grounds for Disapproval and Texas' Revisions 
To Address These Grounds

1. The February 1, 2006, SIP Submittal Lacked a Provision That Limits 
Applicability of a PAL to an Existing Major Stationary Source
a. What were the grounds for the September 15, 2010, disapproval?
    The February 1, 2006, submittal failed to limit the applicability 
of PALs to existing major stationary sources, as required under 40 CFR 
51.165(f)(1)(i) and 40 CFR 51.166(w)(1)(i). In EPA's November 2002 
Technical Support Document for the revised Major NSR Regulations,\8\ we 
state on pages I-7-27 and 28 that actuals PALs are available only for 
existing major stationary sources, because actuals PALs are based on a 
source's actual emissions. Without at least 2 years of operating 
history, a stationary source has not established actual emissions upon 
which to base an actuals PAL. This is consistent with EPA's 
longstanding interpretation of the Act. Therefore, an actuals PAL can 
be obtained only for an existing major stationary 
source.9 10 See 75 FR 56424, at 56433, 56435, and 56438.
---------------------------------------------------------------------------

    \8\ The Technical Support Document for the 2002 NSR rule making 
is available at: http://www.epa.gov/air/nsr/documents/nsr-tsd_11-22-02.pdf.
    \9\ A PAL Permit at an existing major stationary source may 
include individual emissions units that have operated for less than 
two years (i.e., new emissions units). For new emissions units on 
which actual construction began after the 24-month baseline period, 
the PAL would include the potential to emit of new emissions units. 
See 40 CFR 51.165(f)(6)(ii) and 51.166(w)(2)(ii).
    \10\ Moreover, the development of an alternative method to 
provide new major stationary sources with the option of obtaining a 
PAL based on allowable emissions was foreclosed by the Court in New 
York v. EPA, 413 F.3d 3 at 38-40 (DC Cir. 2005) (``New York I'') 
(holding that the Act since 1977 requires a comparison of existing 
actual emissions before the change and projected actual (or 
potential emissions) after the change in question is required).
---------------------------------------------------------------------------

b. What did Texas submit to address the grounds for disapproval?
    On March 11, 2011-2, TCEQ submitted a revision to 30 TAC 116.180 
that added a new paragraph (a)(5) which restricted the issuance of PAL 
permits to existing major stationary sources. This revision only 
addressed the ground for disapproval for nonattainment pollutants but 
failed to provide a corresponding requirement for addressing this 
ground in the case of PSD pollutants.
    In the State's February 22, 2012, proposed rulemaking parallel 
reviewed by EPA for this proposal action, the TCEQ proposed two 
revisions to paragraph (a)(5) as follows: (1), TCEQ proposed to correct 
the citation to the Federal definition of ``major stationary source'' 
in 40 CFR 51.165 (applicable to nonattainment pollutants); and (2) TCEQ 
proposed to add a citation of the definition of ``major stationary 
source'' in 40 CFR 51.166 (applicable to PSD pollutants).
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    As described above, the revisions to 30 TAC 116.180(a)(5) submitted 
March 11, 2011-2, and the revisions proposed February 22, 2012, and 
reviewed by EPA for this proposal action revise this section to provide 
that a PAL can only

[[Page 36971]]

be issued for an existing major stationary source as defined in 40 CFR 
51.165(a)(1)(iv)(A) and 40 CFR 51.166(b)(1). These revisions fully 
address this ground for disapproval of the submitted PAL Program. 
Accordingly, EPA proposes to approve these amendments to 30 TAC 
116.180(a)(5) as submitted March 11, 2011-2, and the proposed 
amendments to this rule proposed February 22, 2012.
2. The February 1, 2006, SIP Submittal Had No Provisions That Relate to 
PAL Re-Openings
a. What were the grounds for the September 15, 2010, disapproval?
    The February 1, 2006, SIP submittal had no provisions that relate 
to PAL re-openings, as required by 40 CFR 51.165(f)(8)(ii) and 
51.166(w)(8)(ii). The Federal rules provide for PAL re-openings for the 
following: correction of typographical/calculation errors in setting 
the PAL; reduction of the PAL to create creditable emission reductions 
for use as offsets; reductions to reflect newly applicable Federal 
requirements (for example, New Source Performance Standards (NSPS)) 
with compliance dates after the PAL; PAL reduction consistent with any 
other requirement, that is enforceable as a practical matter, and that 
the State may impose on the major stationary source under the SIP; and 
PAL reduction if the reviewing authority determines that a reduction is 
necessary to avoid causing or contributing to a NAAQS or PSD increment 
violation, or an adverse impact on an air quality related value that 
has been identified for a Federal Class I area by a Federal Land 
Manager for which information is available to the general public. Texas 
had submitted no demonstration, as required for a customized Major NSR 
SIP revision submittal, that the lack of provisions for PAL re-openings 
is at least as stringent as the Federal PAL Program SIP requirements. 
See 75 FR 56424, at 56433, 56435-56436, and 56438.
b. What did Texas submit to address the grounds for disapproval?
    In revisions submitted March 11, 2011-2, TCEQ addressed this issue 
by the addition of 30 TAC 116.192(c) which provides that during the PAL 
effective period the Executive Director shall reopen a PAL: to correct 
typographical calculation errors made in setting the PAL or to reflect 
a more accurate determination of emissions used to establish a PAL; to 
decrease the PAL limit that the owner or operator of a major stationary 
source creates to establish creditable emissions reductions that meet 
the requirements of 40 CFR 51.165(a)(3)(ii) for use as offsets; and to 
revise the PAL to reflect an increase in the PAL provided the owner or 
operator complies with the requirements of 40 CFR 52.21(aa)(11) and 
51.165(f)(11).
    This revision also provides that the Executive Director may reopen 
a PAL: to revise the PAL to reflect newly applicable Federal 
requirements (for example, NSPS) with compliance dates after the PAL 
effective date; to revise the PAL to be consistent with any other 
requirement that is enforceable as a practical matter and that the 
State may impose on the major stationary source under the SIP; or to 
reduce the PAL if the reviewing authority determines that a reduction 
is necessary to avoid causing or contributing to a NAAQS or PSD 
increment violation, or to an adverse impact on an air quality related 
value that has been identified for a Federal Class I area by a Federal 
Land Manager for which information is available to the general public.
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    As discussed above, the revisions submitted March 11, 2011-2 to 30 
TAC 116.192(c) and TCEQ's evaluation of these revisions meet the 
requirements of 40 CFR 51.165(f)(8)(ii) and 51.166(w)(8)(ii). 
Accordingly, EPA proposes to approve the revisions to 30 TAC 116.192(c) 
submitted March 11, 2011-2.
3. There Was No Mandate That Failure To Use a Monitoring System That 
Meets the Requirements in the PAL Renders the PAL Invalid
a. What were the grounds for the September 15, 2010, disapproval?
    The rules submitted February 1, 2006, had no provision requiring 
that the failure to use a monitoring system that meets the requirements 
for a PAL renders the PAL invalid, as required by 40 CFR 
51.165(f)(12)(i)(D) and 51.166(w)(12)(i)(d). See 75 FR 56424, at 56433 
and 56438.
b. What did Texas submit to address the grounds for disapproval?
    On March 11, 2011-2, TCEQ submitted revisions to 30 TAC 116.186 
that added a new paragraph (b)(9) to provide that ``[f]ailure to use a 
monitoring system that meets the minimum requirements of this section 
is a violation of the PAL permit.''
    In the State's February 22, 2012, proposed parallel rulemaking 
parallel reviewed by EPA for this proposal action, TCEQ proposed 
revisions to paragraph (b)(9) to remove the text ``is a violation of 
the PAL permit'' and replaced that text with ``renders the PAL 
invalid.''.
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    The revision submitted March 11, 2011-2, to add 30 TAC 
116.186(b)(9), differed from the Federal requirements at 40 CFR 
51.165(f)(12)(i)(D) and 51.166(w)(12)(i)(d). The submitted rule 
provided that failure to use a monitoring system that meets the minimum 
requirements of this section is a violation of the PAL permit, whereas 
the Federal requirements provide that such failure renders the PAL 
permit invalid. By providing that such failure to use a required 
monitoring system is simply a violation of the PAL permit, the source 
retained its PAL notwithstanding the enforcement liability that could 
result from such failure to use the required monitoring and did not 
comport with the Federal requirement that provides that failure to use 
the required monitoring renders the PAL invalid. As submitted March 11, 
2011-2, paragraph (b)(9) does not meet the requirements for SIP 
approval. However, the revision proposed February 22, 2012, would amend 
paragraph (b)(9) to state that failure to use the required monitoring 
would render the PAL permit invalid.
    In the State's February 22, 2012, proposed rulemaking parallel 
reviewed by EPA for this proposal action, TCEQ proposes to amend 30 TAC 
116.186(b)(9) to remove the language that failure to use the required 
monitoring is a violation of PAL permit and to replace it with language 
that provides that such failure renders the PAL Permit invalid. The 
State's proposed February 22, 2012, rulemaking would meet the Federal 
requirements at 40 CFR 51.165(f)(12)(i)(D) and 51.166(w)(12)(i)(d). 
Accordingly, EPA proposes to approve 30 TAC 116.186(b)(9) as submitted 
March 11, 2011-2, and the revision proposed to this rule on February 
22, 2012.
4. The February 1, 2006, Submittal of 30 TAC 116.182 and 116.186 
Provided for an Emission Cap That May Not Account for All of the 
Emissions of a Pollutant at a Major Stationary Source
a. What were the grounds for the September 15, 2010, disapproval?
    The February 1, 2006, submittal at 30 TAC 116.182 and 116.186 
provided for an emissions cap that may not account for all of the 
emissions of a pollutant at the major stationary source. Texas required 
the owner or operator to

[[Page 36972]]

submit a list of all facilities to be included in the PAL, such that 
not all of the facilities at the entire major stationary source may be 
specifically required to be included in the PAL. See 30 TAC 116.182(1) 
and 116.186(a). However, the Federal rules require the owner or 
operator to submit a list of all emissions units at the source. See 40 
CFR 51.165(f)(3)(i) and 40 CFR 51.166(w)(3)(i). The Texas submittal was 
unclear as to whether the PAL would apply to all of the emission units 
at the entire major stationary source and therefore appeared to be less 
stringent than the Federal rules. In the absence of any demonstration 
from the State, EPA disapproved 30 TAC 116.186 and 30 TAC 116.182(1) as 
not meeting the revised Major NSR SIP requirements. See 75 FR 56424, at 
56433-56434 and 56438.
b. What did Texas submit to address the grounds for disapproval?
    On March 11, 2011-2, Texas submitted the following revisions to 
address these grounds for disapproval:
    30 TAC 116.180, Applicability. The following revisions were 
submitted:
     Removal of the term ``account site'' from 30 TAC 
116.180(a)(1) and replacement with the term ``existing major stationary 
source'' to make this requirement more consistent with Federal 
requirements. Similar changes were made to 30 TAC 116.180(a)(3) and 
(4).
     The term ``facility'' as defined in the Texas Clean Air 
Act (TCAA) was defined to correspond Federal term ``emissions unit,'' 
by adding the language ``or emissions unit'' whenever the term facility 
is used (i.e., 30 TAC 116.180(a)(3), (b) and (c)).\11\
---------------------------------------------------------------------------

    \11\ See section V.B.1 of this preamble for further discussion 
on how TCEQ addresses the use of ``facility'' for ``emissions unit'' 
in its Non-PAL NNSR Program.
---------------------------------------------------------------------------

     Additionally, the proposed revision's use of the phrase 
``at a major stationary source'' and the term ``emissions unit'' in a 
corresponding fashion in this section and elsewhere in the Commission's 
PAL rules was clarified, by adding the phrase ``at a major stationary 
source'' to each instance of the term ``emissions unit.'' This removed 
any ambiguity by clarifying that both terms are being used 
interchangeably and in a manner that is consistent with EPA's use of 
the term in NSR permitting.
    30 TAC 116.182 Plant-Wide Applicability Limit Permit Application. 
To address EPA's concern that 30 TAC 116.182(1) might not require all 
facilities to be included in the PAL, the TCEQ amended 30 TAC 
116.182(1) by adding the phrase ``at a major stationary source'' where 
appropriate to make clear that PALs are applicable to major sources 
only. Additionally, as the result of comments in the EPA's final 
disapproval (75 FR 56424, September 15, 2010), the TCEQ added language 
to require that all emission units at the major stationary source that 
emit the PAL pollutant be included in the PAL permit application.
    30 TAC 116.186 General and Special Conditions. To address EPA's 
concern that 30 TAC 116.186 might not require all facilities to be 
included in the PAL, the TCEQ amended 30 TAC 116.186 by adding the 
language ``or emissions unit'' where the term facility is used in 
subsection (a) and paragraph (b)(1) and changing the word ``Federal'' 
to ``major'' in paragraph (b)(1) to clarify the type of NSR referenced 
in this paragraph. Also, the TCEQ added the phrase ``at a major 
stationary source'' where appropriate to make clear that PALs are 
applicable to major stationary sources only. Also, as the result of 
comments in the EPA's final disapproval, the TCEQ added language to 
require that all emission units at the major stationary source that 
emit the PAL pollutant be included in the PAL permit.
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    As discussed above, the revisions submitted March 11, 2011-2, meet 
the requirements of 40 CFR 51.165(f)(3)(i) and 51.166(w)(3)(i). 
Accordingly, EPA is proposing to approve these revisions to 30 TAC 
116.180, 116.182, and 116.186.
5. The February 1, 2006, Submittal of Baseline Actual Emissions Did Not 
Provide That Emissions Be Calculated in Terms of the Average Rate, in 
Tons per Year
a. What were the grounds for the September 15, 2010, disapproval?
    The Federal definition of the ``baseline actual emissions'' 
provides that these emissions must be calculated in terms of ``the 
average rate, in tons per year, at which the unit actually emitted the 
pollutant during any consecutive 24-month period.'' See 40 CFR 
51.165(a)(1)(xxxv)(A), (B), (D), and (E) and 51.166(b)(47)(i), (ii), 
(iv), and (v). Emphasis added. Texas' February 1, 2006, submittal of 
the definition of ``baseline actual emissions'' at 30 TAC 116.12(3)(A), 
(B), (D), and (E), differed from the Federal definition by providing 
that the baseline shall be calculated as ``the rate, in tons per year 
at which the unit actually emitted the pollutant during any consecutive 
24-month period.'' The definition omits reference to the ``average 
rate.'' The definition differed from the Federal definition but the 
State failed to provide a demonstration showing how the different 
definition is at least as stringent as the Federal definition. 
Therefore, EPA disapproved the different definition of ``baseline 
actual emissions'' found at 30 TAC 116.12(3) as not meeting the revised 
Major NSR SIP requirements. On the same grounds for lacking a 
demonstration, EPA disapproved 30 TAC 116.182(2) that refers to 
calculations of the baseline actual emissions for a PAL, as not meeting 
the revised Major NSR SIP requirements. See 75 FR 56424, at 56434-
56435, and 56438.
b. What did Texas submit to address the grounds for disapproval?
    On March 11, 2011-2, the TCEQ submitted revisions to the definition 
of ``baseline actual emissions'' at 30 TAC 116.12(3)(A), (B), (D), and 
(E), that specify that the rate is an average rate.
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    As described above, the submitted change to the definition of 
``baseline actual emissions'' in 30 TAC 116.12(3)(A), (B), (D), and 
(E), to specify that the rate is an average rate, now meets the Federal 
requirements under 40 CFR 51.165(a)(1)(xxxv)(A), (B), (D), and (E) and 
51.166(b)(47)(i), (ii), (iv), and (v). Accordingly, EPA is proposing to 
approve the revisions to 30 TAC 116.12(3)(A), (B), (D), and (E). For 
further information see the TSD for this proposal.\12\
---------------------------------------------------------------------------

    \12\ A similar issue in the Non-PAL Program is addressed in 
section V.B.3 of this preamble.
---------------------------------------------------------------------------

6. The State Failed To Include Specific Definitions of Continuous 
Emissions Monitoring System (CEMS), Continuous Emissions Rate 
Monitoring System (CERMS), Continuous Parameter Monitoring System 
(CPMS), and Predictive Emissions Monitoring System (PEMS)
a. What were the grounds for the September 15, 2010, disapproval?
    The TCEQ failed to include the following specific monitoring 
definitions in the March 11, 2011-2, submittal: ``continuous emissions 
monitoring system (CEMS)'' as defined in 40 CFR 51.165(a)(1)(xxxi) and 
51.166(b)(43); ``continuous emissions rate monitoring system (CERMS)'' 
as defined in 40 CFR 51.165(a)(1)(xxxiv)

[[Page 36973]]

and 51.166(b)(46); ``continuous parameter monitoring system (CPMS)'' as 
defined in 40 CFR 51.165(a)(1)(xxxiii) and 51.166(b)(45); and 
``predictive emissions monitoring system (PEMS)'' as defined in 40 CFR 
51.165(a)(1)(xxxii) and 51.166(b)(44). All of these definitions 
concerning the monitoring systems in the revised Major NSR SIP 
requirements are essential for the enforceability of and providing the 
means for determining compliance with a PALs program. Additionally, 
whereas here, a State has made a SIP revision that does not contain 
definitions that are required in the revised Major NSR SIP program, EPA 
may approve such a revision only if the State specifically demonstrates 
that, despite the absence of the required definitions, the submitted 
revision is more stringent, or at least as stringent, in all respects, 
as the Federal program. See 40 CFR 51.165(a)(1) (non-attainment SIP 
approval criteria); 40 CFR 51.166(b) (PSD SIP definition approval 
criteria). Texas did not provide such a demonstration. Therefore, EPA 
disapproved the submitted rule based on the lack of these definitions 
as not meeting the revised Major NSR SIP requirements. See 75 FR 56424, 
at 56434 and 56438.
b. What did Texas submit to address the grounds for disapproval?
    On March 11, 2011-2, TCEQ submitted revisions to 30 TAC 
116.186(c)(1) which provided that the definitions of CEMS, CERMS, CPMS, 
and PEMS are the same as provided in 40 CFR 51.165.
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    The revisions described above incorporate the Federal definitions 
of CEMS, CERMS, CPMS, and PEMS into the State's PAL Program and 
therefore meet the applicable Federal requirements. Accordingly, EPA 
proposes to approve the revisions to 30 TAC 116.186(c)(1) which 
incorporates these definitions.

C. Other Concerns With the Major NSR Reform Program With Plantwide 
Applicability Limit (PAL) Provisions

1. Submittal of 30 TAC 116.12(23)--Definition of ``Plant-Wide 
Applicability Limit Effective Date''
a. Background
    On February 1, 2006, Texas submitted the definition of ``plant-wide 
applicability limit effective date'' at 30 TAC 116.12(23). On September 
15, 2010 (75 FR 56424) EPA disapproved the Texas NSR Reform SIP 
revisions submitted February 1, 2006, including 30 TAC 116.12(23). On 
March 11, 2011-2, Texas resubmitted 30 TAC 116.12(23) without 
additional changes.
    In the State's February 22, 2012, proposed rulemaking parallel 
reviewed by EPA for this proposal action, TCEQ proposed to revise the 
definition to remove language that references the date that a Flexible 
Permit was issued. Since PAL Permits and Flexible Permits are addressed 
by two different sets of rules in Chapter 116, it is inappropriate to 
reference Flexible Permits in the definition of ``plant-wide 
applicability limit effective date.''
b. What is EPA's evaluation of the submitted SIP revision of 30 TAC 
116.12(23)?
    The definition of ``plant-wide applicability limit effective date'' 
at 30 TAC 116.12(23), submitted February 1, 2006, and resubmitted March 
11, 2011-2, includes a provision that such effective date for a PAL 
established in an existing Flexible Permit is the date that the 
Flexible Permit was issued. Because EPA disapproved Texas' Flexible 
Permit Program on July 15, 2010 (75 FR 41312), this provision appears 
to say that a source with a Flexible Permit could get a SIP-approved 
PAL that could retroactively recognize a prior Flexible Permit that 
should not have been issued.
    The State's proposed February 22, 2012, rulemaking reviewed by EPA 
for this proposal action would remove the reference to Flexible Permits 
from the definition of ``plant-wide applicability limit effective 
date'' at 30 TAC 116.12(23). This will address these concerns. 
Accordingly, EPA proposes to approve the definition of ``plant-wide 
applicability limit effective date'' in 30 TAC 116.12(23) as submitted 
March 11, 2011-2, and the amendments proposed February 22, 2012, to 
remove the language that refers to Flexible Permits.
2. Submittal of 30 TAC 116.12(22)--Definition of ``Plant-Wide 
Applicability Limit''--and 30 TAC 116.186(a)
a. Background
    The TCEQ submitted this definition on March 11, 2011-2. This 
definition does not specifically provide that the emission limitation 
in a PAL must be ``enforceable as a practical matter'' or ``practical 
enforceability'' as required by 40 CFR 51.165(f)(2)(v) and 
51.166(w)(2)(v). Similarly, the provisions of 30 TAC 116.186(a), 
submitted on March 11, 2011-2, likewise do not specifically provide 
that the emission limitation in a PAL must be ``enforceable as a 
practical matter'' as required by 40 CFR 51.165(f)(4)(i)(A) and 
51.166(w)(4)(i)(a). The omission of the requirement that the PAL be 
enforceable as a practical matter raises the question of how the rules 
meet Federal enforceability requirements.
b. What is EPA's evaluation of the submitted revisions to 30 TAC 
116.12(22) and 116.186(a)?
    The 2002 NSR Reform rule discusses practical enforceability in the 
preamble of its NSR Reform rule. Here we say that ``[p]ractical 
enforceability for a source-specific permit will be achieved if the 
permit's provisions specify: (1) A technically accurate limitation and 
the portions of the source subject to the limitation; (2) the time 
period for the limitation (hourly, monthly, and annual limits such as 
rolling annual limits); and (3) the method to determine compliance, 
including appropriate monitoring, recordkeeping, and reporting.'' See 
67 FR 80186, at 80190-80191, December 31, 2002. For PALs, EPA discussed 
the monitoring, recordkeeping, and reporting requirements for a PAL and 
characterized these requirements as addressing a number of issues 
associated with practical enforceability of PALs. See 67 FR 80186, at 
80211-80214.
    EPA's interpretation of the term ``practical enforceability'' in 
the context of the CAA is discussed in the guidance memorandum Options 
for Limiting the Potential to Emit (PTE) of a Stationary Source Under 
Section 112 and Title V of the Clean Air Act (Act), by John S. Seitz, 
Director, Office of Air Quality Planning and Standards, and Robert I. 
Heuvelen, Director, Office of Regulatory Enforcement, dated January 
25,1995.\13\ See pages 46 and 47 of the guidance.
---------------------------------------------------------------------------

    \13\ This guidance is available on-line at http://www.epa.gov/region07/air/title5/t5memos/ptememo.pdf.
---------------------------------------------------------------------------

    On May 3, 2012, the TCEQ forwarded a letter to EPA which includes a 
written demonstration as required by 40 CFR 51.165(a)(1) and 51.166(b); 
section 110(l) of the CAA \14\; and the discussion at 67 FR 80186, at 
80341 (December 31, 2002) \15\ for how the definition of ``plantwide 
applicability limit'' provides that emission limits in its PAL Permits 
meets the Federal requirements for

[[Page 36974]]

being enforceable as a practical matter.\16\ In its letter TCEQ 
acknowledges that a practically enforceable permit includes conditions 
which establish clear legal obligations and allow compliance with these 
obligations to be verified. TCEQ further acknowledges that EPA's final 
PAL rules discuss the PAL monitoring, recordkeeping, and reporting 
requirements and characterizes these requirements as addressing a 
number of issues associated with the practical enforceability of PALs. 
TCEQ discussed how its PAL program meets the requirements for practical 
enforceability in each of the three elements identified in the 2002 NSR 
Reform Rule at 67 FR 80186, at 80190-80191 as follows:
---------------------------------------------------------------------------

    \14\ Section 110(l) of the Act provides that a SIP revision must 
not ``interfere with any applicable requirement concerning 
attainment or reasonable further progress * * *, or any other 
applicable requirement of this Act.''
    \15\ Here we state ``[e]ver since our current NSR Regulations 
were adopted in 1980, we have taken the position that States may 
meet the requirements of part 51 `with different but equivalent 
regulations,' 45 FR 52676.''
    \16\ The federal rules at 40 CFR 51.165(f)(2)(v), 
51.165(f)(4)(i)(A), 51.166(w)(2)(v), and 51.166(w)(4)(i)(a) rules 
provide that the PAL must be enforceable as a practical matter. The 
omission of this requirement raises the question of how the rules 
meet federal enforceability requirements and is critical to the 
enforceability of a PAL. Accordingly, if the plan lacks such 
requirement, there must be a demonstration how the State has ensured 
that the PAL is enforceable as a practical matter or that the State 
otherwise has the ability to enforce the PAL in the absence of 
practical enforceability.
---------------------------------------------------------------------------

     A technically accurate limitation and the portions of the 
source subject to the limitation. Texas established its PAL Program 
based on 30 TAC 116.180, 116.182, and 116.186(a). These rules satisfy 
the requirements of 40 CFR 51.165(f)(3)(i), (f)(4)(i)(A) and (E), and 
(f)(6)(1) and 40 CFR 51.166(w)(3)(i), (w)(4)(i)(a) and (e), and 
(w)(6)(1). These rules meet the Federal requirements for establishing a 
technically accurate limitation for a PAL and identifies that all 
emissions units at the major stationary source that will be subject to 
the PAL. This ensures that the TCEQ's PAL meets this requirement for 
practical enforceability.
     The time period for the limitation (hourly, monthly, and 
annual limits such as rolling annual limits). Texas' rules state that 
the PAL limit must be met on a 12-month rolling average (30 TAC 
116.182(3) and 116.186(a)). These rules meet the Federal requirements 
at 40 CFR 51.165(f)(4)(i)(A) & (E) and 51.166(w)(4)(i)(a) and (e) and 
therefore ensure that the PAL Program and PAL permits issued under the 
program meet this requirement for practically enforceable.
     The method to determine compliance, including appropriate 
monitoring, recordkeeping, and reporting. Texas' rules at 30 TAC 
116.186 include detailed monitoring, recordkeeping, and reporting that 
is consistent with the Federal PAL requirements. These monitoring, 
recordkeeping, and reporting provisions also meet this requirement for 
practical enforceability. Specific requirements are at 30 TAC 
116.186(b)(4) and (8), and (c) which meet the Federal requirements at 
40 CFR 51.165(f)(13)-(14) and 51.166(w)(13) (14). These monitoring, 
recordkeeping, and reporting provisions meet Federal PAL requirements 
and ensure that the program and PAL permits meets this requirement for 
practically enforceable.
    The May 3, 2012, letter is included in the docket for this proposed 
rule. Accordingly, EPA is proposing to approve 30 TAC 116.12(22) 
submitted March 11, 2011-2, and 30 TAC 116.186(a) as submitted March 
11, 2011-2, consistent with the demonstration included in the May 3, 
2012, letter.
3. Submittal of 30 TAC 116.186(c)(2) Does Not Specifically Provide That 
Monitoring Data Must Meet Minimum Legal Requirements for Admissibility 
in a Judicial Proceeding To Enforce the PAL
a. Background
    On February 1, 2006, TCEQ submitted 30 TAC 116.186(c)(1) which 
provided that the PAL monitoring system must accurately determine all 
emissions of the PAL pollutant in terms of mass per unit of time. It 
further provided that any such monitoring system must be based upon 
sound science and it must meet generally accepted scientific procedures 
for data quality and manipulation. Finally, this rule provided that the 
information generated by such monitoring system must meet minimum legal 
requirements for admissibility in a judicial proceeding to enforce the 
PAL Permit. As submitted, this provision met the Federal requirements 
of 40 CFR 51.165(f)(12)(i) and 51.166(w)(12)(i).
    On March 11, 2011-2, the TCEQ resubmitted this rule, now designated 
as 30 TAC 116.186(c)(2), and which included a revision which removed 
the requirement that the information generated by such monitoring 
system must meet minimum legal requirements for admissibility in a 
judicial proceeding to enforce the PAL Permit. EPA considers the 
admissibility of monitoring data critical to a State's ability to 
enforce a regulatory requirement, including a PAL Permit requirement.
b. What is EPA's evaluation of the submitted SIP revision of 30 TAC 
116.186(c)(2)?
    On May 3, 2012, the TCEQ forwarded a letter to EPA which includes a 
written demonstration consistent with EPA's implementation of section 
110(l) of the CAA; and the discussion at 67 FR 80186, at 80341 
(December 31, 2002); on how the data from a monitoring system meets the 
minimum legal requirements for admissibility in a judicial proceeding 
to enforce the PAL Permit.\17\ In its letter TCEQ referred to its 
statutes and rules which establish the jurisdiction of the TCEQ, as 
well as permit conditions, which require owners and operators of 
facilities that may emit air contaminants which are authorized for 
construction and operation to maintain data necessary to demonstrate 
compliance with the terms and conditions of their authorizations. That 
authority is found in Tex. Health & Safety Code Sections 382.011, 
382.012, 382.014, 382.016, 382.051, 382.0513, 382.0514, and 382.0515; 
Tex. Water Code sections 5.013(a)(11), 7.179, 7.180, and 7.181; and 
TCEQ rules 30 TAC 116.111, 116.115 (which are, for the most part, SIP 
approved). Additionally, the Texas Legislature has provided the TCEQ 
with the enforcement authority in Tex. Water Code Chapter 7 to initiate 
an action to enforce the statutes within the jurisdiction of the TCEQ, 
such as 30 TAC 7.179, 7.180, and 7.181.
---------------------------------------------------------------------------

    \17\ The federal rules at 40 CFR 51.165(f)(12)(i) and 
51.166(w)(12)(i) include requirements relating to the information 
generated by a PAL monitoring system. Among the requirements is that 
the information generated by such monitoring system must meet 
minimum legal requirements for admissibility in a judicial 
proceeding to enforce the PAL Permit. EPA considers the 
admissibility of monitoring data critical to a State's ability to 
enforce a regulatory requirement, including a PAL Permit 
requirement. Accordingly, if the plan lacks such requirement, there 
must be a demonstration that the State has the ability to enforce 
the PAL based upon the information generated by the monitoring 
system.
---------------------------------------------------------------------------

    The TCEQ adopted the requirement that the Texas Rules of Evidence, 
as applied in nonjury civil cases in the district courts of the State, 
be followed in all hearings. See 30 TAC 80.127. The initial factor 
affecting admissibility is relevance, and the relevance of offered 
evidence--evidence of non-compliance in an enforcement hearing--will 
support admissibility. However, if the data is not sufficient to 
support admissibility, or is non-existent, then the Executive Director 
of TCEQ may pursue an enforcement action for failing to maintain the 
data necessary to demonstrate compliance.
    The May 3, 2012, letter is included in the docket for this proposed 
rule. Accordingly, EPA is proposing to approve 30 TAC 116.186(c)(2) 
submitted March 11, 2011-2, consistent with the demonstration included 
in the May 3, 2012, letter.

[[Page 36975]]

4. Submittal of 30 TAC 116.186(a)
a. Background
    On March 11, 2011-2, TCEQ submitted 30 TAC 116.186(a). This rule 
provides that the PAL limit will be enforced on a 12-month rolling 
average. However, this rule does not clearly specify that for 
compliance purposes, the emission calculations must include emissions 
from startups, shutdowns, and malfunctions, as required by 40 CFR 
51.165(f)(7)(iv) and 51.166(w)(7)(iv).
b. What is EPA's evaluation of the submitted SIP revision of 30 TAC 
116.186(a)?
    On May 3, 2012, the TCEQ forwarded a letter to EPA which included a 
written demonstration consistent with EPA's implementation of 40 CFR 
51.165(a)(1) and 51.166(b); section 110(l) of the CAA; and the 
discussion at 67 FR 80186, at 80341 (December 31, 2002); on how TCEQ 
addresses emissions from startups, shutdowns, and malfunctions, in the 
enforcement of its PAL Permits.\18\ In this letter, the TCEQ states 
that a PAL permit limit can be generally enforced like any other permit 
limit, and the TCEQ has authority to enforce all permit requirements. 
This authority is found in Tex. Water Code, Chapter 7, and Tex. Health 
& Safety Code sections 382.011, 382.015, 382.016, 382.0515, 382.0516, 
382.022, 382.023, and 382.085, as well as in certain rules found in 30 
TAC Chapter 101, Subchapters A and F. In addition, TCEQ rule 30 TAC 
101.201 requires regulated entities, regardless of whether they have a 
PAL permit, to record (and in some cases report) emissions events, 
which includes unscheduled maintenance, startup, and shutdown (MSS) 
activity emissions. Emissions from malfunctions are unauthorized 
emissions as defined in 30 TAC 101.1(107); therefore, they are 
unauthorized (non-compliant) emissions. Exceedances of a PAL limit, 
such as emissions from malfunctions, are unauthorized emissions and are 
subject to enforcement. TCEQ represented to EPA Region 6 that 
unscheduled MSS activity emissions are functionally equivalent to EPA's 
definition of malfunction.\19\
---------------------------------------------------------------------------

    \18\ The federal rules at 40 CFR 51.165(f)(7)(iv) and 
51.166(w)(7)(iv) require that for purposes of enforcement of a PAL, 
the emission calculations must include emissions from startups, 
shutdowns, and malfunctions. The inclusion of these emissions is 
critical to the enforcement of the PAL. Accordingly, if the plan 
lacks such requirement, there must be a demonstration that the State 
has the ability to enforce the PAL.
    \19\ Letter from John Steib, Deputy Director, TCEQ Office of 
Compliance & Enforcement to John Blevins, Director, Compliance 
Assurance and Enforcement Division, USEPA, Region-6 Dallas, April 
17, 2007.
---------------------------------------------------------------------------

    Furthermore, Texas' PAL also requires semiannual reports which 
include ``the total annual emissions (in tons per year) based upon a 
12-month rolling total for each month in the reporting period.'' See 30 
TAC 116.186(b)(4)(C)(ii). Emphasis added. This requires reporting of 
all emissions from the PAL, including authorized and unauthorized 
emissions.
    The May 3, 2012, letter is included in the docket for this proposed 
rule. Accordingly, EPA is proposing to approve 30 TAC 116.186(a) as 
submitted March 11, 2011-2 consistent with the demonstration included 
in the May 3, 2012, letter.

V. What action is EPA proposing to take on the non-PAL aspects of the 
major NSR SIP requirements?

A. Background

    On September 15, 2010, EPA disapproved these provisions for the 
reasons described below.

B. EPA Evaluation of the Grounds for Disapproval and Texas' Revisions 
To Address These Grounds

1. The March 11, 2011-1 Submitted Rule Did Not Explicitly Limit the 
Definition of ``Facility'' to an Emissions Unit
a. What were the grounds for the September 15, 2010, disapproval?
    The NNSR non-PAL rules at 30 TAC 116.150 and 116.151, submitted 
February 1, 2006,\20\ did not explicitly limit the definition of 
``facility'' \21\ to an ``emissions unit'' as do the submitted PAL 
rules and approved PSD non-PAL rules. It is our understanding of State 
law that a ``facility'' can be an ``emissions unit,'' i.e., any part of 
a stationary source that emits or may have the potential to emit any 
air contaminant, as the State explicitly provides in the revised PSD 
rule at 30 TAC 116.160(c)(3). A ``facility'' also can be a piece of 
equipment, which is smaller than an ``emissions unit.'' A ``facility'' 
can include more than one ``major stationary source.'' It can include 
every emissions point on a company site, without limiting these 
emissions points to only those belonging to the same industrial 
grouping (SIC code). Regardless, the State clearly thought the prudent 
legal course was to limit ``facility'' explicitly to ``emissions unit'' 
in its PSD SIP non-PALs rules. TCEQ did not submit a demonstration 
showing how the lack of this explicit limitation in the non-PALs NNSR 
SIP revision is at least as stringent as the revised Major NSR SIP 
requirements. Therefore, EPA disapproved the submitted non-PAL NNSR 
rules and its use as not meeting the revised Major NNSR non-PALs SIP 
requirements. See 75 FR 56424, at 56438, 56439-56440, and 56443.
---------------------------------------------------------------------------

    \20\ The February 1, 2006, submittal was resubmitted March 11, 
2011-1.
    \21\ ``Facility'' is defined in the SIP approved 30 TAC 
116.10(6) as ``a discrete or identifiable structure, device, item, 
equipment, or enclosure that constitutes or contains a stationary 
source, including appurtenances other than emission control 
equipment.''
---------------------------------------------------------------------------

b. What did Texas submit to address the grounds for disapproval?
    In its SIP revisions submitted March 11, 2011-1 and March 11, 2011-
2, Texas did not address these grounds relating to the use of the term 
``facility'' for ``emissions unit'' in its non-PAL aspects of the Major 
Source SIP requirements for NNSR. In the March 11, 2011-1, submittal, 
the revisions to 30 TAC 116.150 only relate to the antibacksliding 
Major NSR SIP requirements for the one-hour ozone NAAQS, and the Major 
Nonattainment NSR SIP requirements for the 1997 eight-hour ozone 
NAAQS.\22\ In the March 11, 2011-2 submittal, Texas only discussed the 
use of ``facility'' for the term ``emissions unit'' in relation to its 
changes to its PAL rules at 30 TAC 116.180, 116.182, 116.186, and 
116.190. In each of these PAL rules, TCEQ states that the Federal term 
``emissions unit'' is defined very similarly to the term ``facility'' 
as defined in the TCCA. In these PAL rules, the TCEQ added the language 
``or emissions unit'' whenever the term ``facility'' is used.\23\
---------------------------------------------------------------------------

    \22\ These requirements are addressed in sections III and IV of 
this preamble.
    \23\ See section IV.B.4 of this preamble for further discussion 
on how TCEQ addressed the use of ``facility'' for ``emissions unit'' 
in its PAL Program.
---------------------------------------------------------------------------

    In the State's February 22, 2012, proposed rulemaking parallel 
reviewed by EPA for this proposal action, TCEQ proposed revisions to 30 
TAC 116.150 and 116.151. To ensure clarity, TCEQ proposed to add the 
language ``or emissions unit'' where the terms ``facility'' or 
``facilities'' are used. The TCEQ proposed this change in 30 TAC 
116.150(a), (d)(1), and (d)(3) and in 30 TAC 116.151(a), (c)(1), and 
(c)(3), and requested parallel processing of these proposed revisions.
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    As discussed above, the submittals dated March 11, 2011-1 and March 
11, 2011-2, did not address how TCEQ limits the definition of 
``facility'' to an ``emission unit'' in the Non-PAL

[[Page 36976]]

Aspects of the Major NSR SIP Requirements in 30 TAC 116.150 and 
116.151. The TCEQ did not submit a demonstration in these submittals 
showing how the lack of this explicit limitation in the NNSR SIP non-
PALs revision is at least as stringent as the revised Major NSR SIP 
requirements.
    However, the State's proposed February 22, 2012, rulemaking 
parallel reviewed by EPA for this proposal action, addresses the use of 
the term ``facility'' for ``emissions unit'' as used in 30 TAC 116.150 
and 116.151.
    The revisions submitted March 11, 2011-1 for non-PAL NNSR include 
30 TAC 116.150, New Major Source or Major Modification in Ozone 
Nonattainment Area, and 30 TAC 116.151, New Major Source or Major 
Modification in Ozone Nonattainment Area. In these sections, TCEQ uses 
the term ``facility'' in 30 TAC 116.150(a), (d)(1) and (d)(3) and in 30 
TAC 116.151(a), (c)(1), and (c)(3). In the State's February 22, 2012, 
proposed rulemaking, TCEQ proposed to revise these paragraphs to add 
the language ``or emissions unit'' following each use of ``facility'' 
to ensure clarity and consistency with Federal requirements. The TCEQ 
stated that the Federal term ``emissions unit'' as defined in Federal 
rules is similar to the term ``facility'' as defined in the Texas Clean 
Air Act. The TCEQ addressed this matter in the following statements:

    A facility may constitute or contain a stationary source--a 
point of origin of a contaminant, as defined in THSC, Sec.  
382.003(12) and in Sec.  116.10(15), a definition that is approved 
into the Texas SIP. As a discrete point, a facility can constitute 
but cannot contain a ``major stationary source'' as defined by 
federal law and in the TCEQ's SIP approved rule Sec.  116.12(17). A 
facility is subject to major and minor NSR requirements, depending 
on the facts of the specific application.

See the TCEQ February 22, 2012, proposal, page 3. TCEQ further stated:

    The TCEQ and its predecessor agencies have consistently 
interpreted facility to preclude inclusion of more than one 
stationary source, in contrast to EPA's stated understanding. 
Likewise, TCEQ does not interpret facility to include ``every 
emissions point on a company site, even if limiting these emission 
points to only those belonging to the same industrial grouping (SIC 
code).'' The federal definition of ``major stationary source'' in 40 
Code of Federal Regulations (CFR) 51.166(b)(1)(i)(a) is not 
equivalent to the state definition of ``source.'' A ``major 
stationary source'' can include more than one ``facility'' as 
defined under Texas law, which is consistent with EPA's 
interpretation of a ``major stationary source'' including more than 
one emissions unit.
    Under major NSR, EPA uses the term ``emissions unit'' 
(generally) when referring to part of a ``stationary source;'' TCEQ 
translates ``emissions unit'' to mean ``facility.'' The commission's 
SIP-approved Prevention of Significant Deterioration (PSD) 
permitting rule in Sec.  116.160(c)(3) states, ``{t{time} he term 
`facility' shall replace the words `emissions unit' in the 
referenced sections of the CFR.''
    The above interpretation of the term ``facility'' has been 
consistently applied by the TCEQ and its predecessor agencies for 
more than 30 years. The TCEQ's interpretation of Texas statutes 
enacted by the Texas Legislature is addressed by the Texas Code 
Construction Act. More specifically, words and phrases that have 
acquired a technical or particular meaning, whether by legislative 
definition or otherwise, shall be construed accordingly, as per 
Texas Government Code, Sec.  311.011(b).
    In response to the proposed disapproval, the commission proposed 
adding the phrase ``or emissions unit'' in its PAL rules, but did 
not do so in the nonattainment permitting rules because of the long 
term use of the term in the Texas permitting rules and the approved 
Texas SIP, which included earlier versions of these rules, and 
because in the intervening time EPA had approved the definition of 
``facility'' into the SIP.
    The proposed changes to Sec.  116.150 and Sec.  116.151 would 
allow EPA to approve the updated rules that implement the federal 
nonattainment permitting program.

See the TCEQ February 22, 2012, proposal, pages 4 through 7.
    As discussed above, the TCEQ in its February 22, 2012, proposed 
rulemaking parallel reviewed by EPA for this proposal action, provides 
a demonstration that for the purposes of 30 TAC 116.150 and 116.151, 
the use of the term ``facility'' is the same as the use of the term 
``emissions unit.'' The changes proposed for 30 TAC 116.150 and 116.151 
are the same changes adopted in the TCEQ's PAL Program, submitted March 
11, 2011-2, to address that ``emissions unit'' means ``facility.'' The 
proposed changes are also consistent with the approved Texas PSD 
Program at 30 TAC 116.160(c)(3) which states ``{t{time} he term 
`facility' shall replace the words `emissions unit' '' in the 
referenced sections of the CFR. Accordingly, EPA is proposing to 
approve the revisions to 30 TAC 116.150 and 116.151 submitted March 11, 
2011-1 and the revisions proposed on February 22, 2012.
2. The Definition of ``Baseline Actual Emissions'' Submitted March 11, 
2011-2, to 30 TAC 116.12(3)(E) Did Not Require the Inclusion of 
Emissions Resulting From Startups, Shutdowns, and Malfunctions, as 
Required Under Federal Regulations
    EPA disapproved the definition of ``baseline emissions'' as 
submitted February 1, 2006, in 30 TAC 116.12(3)(E) because it does not 
require the inclusion of emissions resulting from startups, shutdowns, 
and malfunctions, as required under Federal regulations.
a. What were the grounds for the September 15, 2010, disapproval?
    Under the Major NSR SIP requirements, for any physical or 
operational change at a major stationary source, a source must include 
emissions resulting from startups, shutdowns, and malfunctions, in its 
determination of baseline actual emissions (40 CFR 
51.165(a)(1)(xxxv)(A)(1) and (B)(1) and 51.166(b)(47)(i)(a) and 
(ii)(a)) and projected actual emissions (40 CFR 51.165(a)(1)(xxviii)(B) 
and 51.166(b)(40)(ii)(b)). The definition of the term ``baseline actual 
emissions,'' as submitted February 1, 2006, in 30 TAC 116.12(3)(E), did 
not require the inclusion of emissions resulting from startups, 
shutdowns, and malfunctions.\24\ Our understanding of State law is that 
the use of the term ``may'' creates discretionary authority or grants 
permission or a power. See Section 311.016 of the Texas Code 
Construction Act. Similarly, the submitted definition of ``projected 
actual emissions'' at 30 TAC 116.12(29) does not require that emissions 
resulting from startups, shutdowns, and malfunctions be included. These 
submitted definitions differed from the Federal SIP definitions and the 
State had not provided information demonstrating that these definitions 
are at least as stringent as the Federal SIP definitions. Therefore, 
based upon the lack of a demonstration from the State, EPA disapproved 
the definitions of ``baseline actual emissions'' at 30 TAC 116.12(3) 
and ``projected actual emissions'' at 30 TAC 116.12(29) as not meeting 
the revised Major NSR SIP requirements. Specifically, the State had not 
provided:
---------------------------------------------------------------------------

    \24\ The definition of ``baseline actual emissions,'' in 30 TAC 
116.12(3)(E) submitted February 1, 2006, provided: ``* * * Until 
March 1, 2016, emissions previously demonstrated as emissions events 
or historically exempted under Chapter 101 of this title * * * may 
be included to the extent they have been authorized, or are being 
authorized, in a permit action under Chapter 116. 30 TAC 
116.12(3)(E).'' (Emphasis added.)
---------------------------------------------------------------------------

     A replicable procedure for determining the basis for which 
emissions associated with maintenance, startup, and shutdown (MSS) will 
and will not be included in the baseline actual emissions;
     The basis for including emissions associated with 
maintenance in baseline actual emissions;
     The basis for not including MSS emissions, in the 
projected actual emissions; and

[[Page 36977]]

     Provisions for how it will handle MSS emissions after 
March 1, 2016.
    Therefore, based upon the lack of a demonstration from the State, 
as is required for a customized Major NSR SIP revision submittal, EPA 
disapproved the definitions of ``baseline actual emissions'' at 30 TAC 
116.12(3) and ``projected actual emissions'' at 30 TAC 116.12(29) as 
not meeting the revised Major NSR SIP requirements.
    Texas stated that it had excluded emissions associated with 
malfunctions from the calculation of baseline actual emissions and 
projected actual emissions because including such emissions would 
inflate the baseline and would narrow the gap between baseline actual 
emissions and projected actual emissions. EPA agrees with the reasons 
Texas uses to exclude malfunction emissions from baseline actual 
emissions and projected actual emissions and which are comparable to 
the reasons EPA used for excluding malfunction emissions from other 
States in which EPA approved such exclusion. Notwithstanding Texas' 
exclusion of malfunctions from these definitions, Texas must address 
the other grounds for disapproval as discussed above. This includes 
mandating the exclusion of malfunction emissions in both definitions. 
See 75 FR 56424, at 56438-56439 and 56443.
b. What did Texas submit to address the grounds for disapproval?
    On March 11, 2011-2, TCEQ submitted revisions to address this 
concern. TCEQ removed the term ``exempted'' from 30 TAC 116.12(3)(E) 
and replaced it with ``unauthorized'' since emissions events were not 
exempt under 30 TAC Chapter 101, General Air Quality Rules, and must be 
reported.\25\ TCEQ noted that in EPA's final disapproval of the 
definition of baseline actual emissions, EPA agreed that the inclusion 
of emission events \26\ in the definition of baseline actual emissions 
would have the effect of inflating the baseline and narrowing that gap 
between the baseline actual emissions and the planned emission rate. 
See 75 FR 56424, at 56443. EPA noted that the definition of baseline 
actual emissions included emission events and stated that to be 
approvable the definition must exclude emission events. This is because 
EPA noted that the definitions of ``baseline actual emissions'' and 
``projected actual emissions'' must both exclude or include malfunction 
emissions. The TCEQ stated that its long-standing policy is not to 
reward emissions from events which are upset events and unplanned MSS 
activities. TCEQ stated that the term ``unplanned MSS activities'' 
substitutes for EPA's term ``unscheduled MSS.'' TCEQ further stated 
that unplanned MSS activities are the functional equivalent of 
malfunctions, as are all upset emissions. TCEQ also noted that EPA 
objects to the use of the word ``may,'' because it indicates discretion 
without replicable procedures for such determinations.
---------------------------------------------------------------------------

    \25\ These requirements are in the SIP at 30 TAC Chapter 101, 
Subchapter F, and approved November 10, 2010 (75 FR 68989).
    \26\ The current SIP-approved definition of ``emission event'' 
approved November 10, 2010 (75 FR 68989), at 30 TAC 101.1(28) 
states: ``Emissions event--Any upset event or unscheduled 
maintenance, startup, or shutdown activity, from a common cause that 
results in unauthorized emissions of air contaminants from one or 
more emissions points at a regulated entity.''
---------------------------------------------------------------------------

    Accordingly, TCEQ reworded 30 TAC 116.12(3)(E) to clarify that MSS 
emissions reported under Chapter 101 shall be included in the 
calculation of baseline actual emissions but only to the extent that 
they have been authorized or are being authorized. Because unauthorized 
emissions are not included, they are therefore excluded in the 
calculation of baseline actual emissions. The TCEQ does not authorize 
emission events, which are emissions from upsets and unscheduled MSS 
activities. While the text, as adopted in 2006, implemented that long 
standing policy, it was not written to clearly limit the inclusion of 
only planned MSS emissions that have been authorized or in the process 
of being authorized during a defined time period. These changes ensure:
     That there is no discretion as to inclusion of only 
certain planned MSS emissions (and consequently the exclusion of 
emission events) in the baseline actual emissions calculation, and
     That the definitions of ``baseline actual emissions'' and 
``projected actual emissions'' are comparable and are therefore 
approvable.
    Additionally, the TCEQ made changes from its proposal by retaining 
in 30 TAC 116.12(3)(E) the phrase ``or are being authorized,'' relating 
to planned MSS emissions. Further, 30 TAC 116.12(3)(D) provides that 
non-compliant emissions are excluded from baseline actual emissions. To 
the extent that there are planned MSS emissions that remain 
unauthorized on or after March 1, 2016, those will necessarily be 
``non-compliant'' and therefore, no longer included in the 
determination of baseline actual emissions under the requirements of 
subparagraph (D). This is consistent with the Commission's policy 
regarding authorization of planned MSS emissions.
    Additionally, the TCEQ amended the definition of ``projected actual 
emissions'' in 30 TAC 116.12(29). The Commission is replacing the 
phrase ``unauthorized emissions from startup and shutdown activities'' 
with ``emissions from planned maintenance, startup, or shutdown 
activities, which were historically unauthorized and subject to 
reporting under Chapter 101 to the extent that they have been 
authorized or are being authorized.'' Emphasis added. This change is 
necessary to ensure that this definition is compatible with the 
definition of ``baseline actual emissions.'' As discussed earlier, the 
definition of ``baseline actual emissions'' is being amended to ensure 
TCEQ's intent of the types of emissions that can be included in the 
calculation is clear. While the TCEQ intended that these two 
definitions be compatible when adopted in 2006, the EPA's comments 
indicated that this may not be the case. The EPA commented that the 
term ``projected actual emissions'' does not include emissions from 
startups, shutdowns, and malfunctions. However, as stated in the 
original adoption preamble for this rule in 2006, the TCEQ excluded 
malfunction emissions in compliance with long-standing Commission 
policy to exclude noncompliant emissions. The EPA in its final 
disapproval (see September 15, 2010 (75 FR 56424)) agreed that the 
inclusion of emissions events, which are similar to the Federal term 
``malfunctions'' in the definition of ``baseline actual emissions'' 
would be inappropriate. Further, EPA has approved definitions in other 
states that also exclude malfunctions. (See September 15, 2010 (75 FR 
56441)). These amendments are necessary to ensure that both definitions 
are approvable as revisions to the SIP.
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    Texas submitted revisions on March 11, 2011-2, that address each of 
the items that EPA identified as needing to be addressed. Texas 
addressed these items as follows:
     A replicable procedure for determining the basis for which 
emissions associated with MSS will, and will not, be included in the 
baseline actual emissions.
    TCEQ stated that its long-standing policy is not to reward 
emissions from emission events, which are upset events and unplanned 
MSS activities. TCEQ's term ``unplanned MSS activities'' substitutes 
for EPA's term ``unscheduled MSS.'' Unplanned MSS activities are

[[Page 36978]]

the functional equivalent of malfunctions, as are all upset emissions.
    EPA also objected to the use of the word ``may'' stating that it 
indicates discretion without replicable procedures for such 
determinations. The submitted revision no longer uses the word ``may.''
    TCEQ addressed through its revisions to 30 TAC 116.12(3)(E) to 
clarify that MSS emissions reported under Chapter 101 shall be included 
in the calculation of baseline actual emissions but only to the extent 
that they have been authorized, or are being authorized. Unauthorized 
emissions are not included and are therefore excluded in the 
calculation of baseline actual emissions. TCEQ stated that it does not 
authorize emission events, which are emissions from upsets and 
unscheduled MSS activities.
    Consequently, TCEQ reworded 30 TAC 116.12(3)(E) to clarify that MSS 
emission reported under Chapter 101 shall be included in the 
calculation of baseline actual emissions but only to the extent that 
they have been authorized or are being authorized. Because unauthorized 
emissions are not included, they are therefore excluded in the 
calculation of baseline actual emissions. The TCEQ does not authorize 
emission events, which are emissions from upsets and unscheduled MSS 
activities. These changes ensure:

--That there is no discretion as to inclusion of only certain planned 
MSS emission (and consequently the exclusion of emission events) in the 
baseline actual emissions calculation, and
--That the definitions of ``baseline actual emissions'' and ``projected 
actual emissions'' are comparable and are therefore approvable.

     The basis for including emissions associated with 
maintenance in baseline actual emissions.
    The TCEQ includes MSS emissions to the extent that they have been 
authorized or are being authorized. The MSS includes authorized 
emission from maintenance. The bases for including authorized MSS 
emissions (which include authorized emissions from maintenance) are 
discussed above in section V.B.2.b. As discussed above, unauthorized 
emissions, including unauthorized emissions from maintenance 
activities, are not included in the calculation of the baseline actual 
emissions. TCEQ does not authorize emission events which are emissions 
from upsets and unscheduled MSS activities (including maintenance).
     The basis for not including unauthorized MSS emissions in 
the projected actual emissions.
    TCEQ described its adopted changes to the definition of ``projected 
actual emissions'' in 30 TAC 116.12(29) as a replacement of the phrase 
``unauthorized emissions from startup and shutdown activities'' with 
``unauthorized emissions from startup and shutdown activities which 
were historically unauthorized and subject to reporting under Chapter 
101 to the extent that they have been authorized or are being 
authorized.'' This change ensures that this definition is compatible 
with the definition of ``baseline actual emissions.'' The TCEQ excluded 
malfunction emissions consistent with its long-standing policy to 
exclude non-compliant emissions, as discussed above in section V.B.2.b 
of this preamble.
     Provisions for how it will handle maintenance, startup, 
and shutdown emissions after March 1, 2016.
    Under 30 TAC 116.12(3)(D), TCEQ excludes non-compliant emissions 
from the baseline actual emissions. To the extent that these emissions 
are planned MSS emissions that remain after March 1, 2016, those 
emissions are necessarily ``non-compliant'' and will be excluded from 
the calculation of the baseline actual emissions under subparagraph 
(D).
    In summary, the TCEQ has addressed the grounds for disapproval, as 
discussed above, and demonstrated that the submitted revisions meet the 
following Federal requirements:
     Inclusion of planned MSS activities to the extent they 
have been authorized, or are being authorized, in the calculation of 
baseline actual emissions. These revisions meet the requirements of 40 
CFR 51.165(a)(1)(xxxv)(A)(1) and (B)(1) and 40 CFR 51.166(b)(40)(ii)(a) 
and (b)(47)(i)(a) and (ii)(a); and
     Inclusion of planned MSS activities to the extent they 
have been authorized, or are being authorized, in the calculation of 
projected actual emissions. These revisions meet the requirements of 40 
CFR 51.165(a)(1)(xxviii)(B)(2); and 40 CFR 51.166(b)(40)(ii)(b).
    These revisions therefore satisfy the requirements for SIP 
approval. Accordingly, EPA is proposing to approve the revisions to the 
definitions of ``baseline actual emissions'' and ``projected actual 
emissions'' in 30 TAC 116.12(3) and (29) submitted March 11, 2011-2.
3. The Submitted Definition ``Baseline Actual Emissions'' Does Not 
Provide That the Emissions Must Be Calculated in Terms of the Average 
Rate, in Tons per Year
a. What were the grounds for the September 15, 2010, disapproval?
    The Federal definition of the ``baseline actual emissions'' 
provides that these emissions must be calculated in terms of ``the 
average rate, in tons per year at which the unit actually emitted the 
pollutant during any consecutive 24-month period.'' The submitted 
definition of the term ``baseline actual emissions'' found at 30 TAC 
116.12(3)(A), (B), (D), and (E) differed from the Federal definition by 
leaving out the word ``average'' and instead providing that the 
baseline shall be calculated as ``the rate, in tons per year at which 
the unit actually emitted the pollutant during any consecutive 24-month 
period.'' Texas did not provide any demonstration, as required for a 
customized major NSR SIP revision submittal, showing how this different 
definition is at least as stringent as the Federal definition. See 75 
FR 56424, at 56439, and 56443.
b. What did Texas submit to address the grounds for disapproval?
    On March 11, 2011-2 the TCEQ submitted revisions to the definition 
of ``baseline actual emissions'' in 30 TAC 116.12(3)(A), (B), (D), and 
(E), that specify that the rate is an average rate.
c. What is EPA's evaluation of the submitted SIP revision to address 
the grounds for disapproval?
    A submitted change to the definition of ``baseline actual 
emissions'' in 30 TAC 116.12(3)(A), (B), (D), and (E), is to specify 
that the rate is an average rate. The revised definition meets the 
Federal requirements under 40 CFR 51.165(a)(1)(xxxv)(A), (B), (D) and 
(E) and 51.166(b)(47)(i), (ii), (iv), and (v). These revisions satisfy 
the requirements for SIP approval. Accordingly, EPA is proposing to 
approve the revisions to the definition of ``baseline actual 
emissions'' in 30 TAC 116.12 submitted March 11, 2011-2.\27\
---------------------------------------------------------------------------

    \27\ A similar issue in the PAL Program is addressed in section 
IV.B.5 of this preamble.
---------------------------------------------------------------------------

VI. Does approval of Texas' rule revisions interfere with attainment, 
reasonable further progress, or any other applicable requirement of the 
act?

    The Act provides in section 110(l) that:

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

[[Page 36979]]

adopted by such State after reasonable notice and public hearing. 
The Administrator shall not approve a revision of a plan if the 
revisions would interfere with any applicable requirement concerning 
attainment and reasonable further progress * * *, or any other 
applicable requirement of the Act.

    EPA's November 2002 rulemaking for NSR Reform Rules included the 
``Supplemental Analysis of the Environmental Impact of the 2002 Final 
NSR Improvement Rules'' which demonstrated the 2002 NSR Reform Rules 
were compliant with this requirement.\28\
---------------------------------------------------------------------------

    \28\ This document is available at http://www.epa.gov/air/nsr/documents/nsr-analysis.pdf.
---------------------------------------------------------------------------

    In EPA's Notice of Reconsideration of the final December 31, 2002, 
NSR Reform rule we stated:

    During the rulemaking process, we strived to take into 
consideration relevant and reliable information on environmental 
effects. We did in fact take account of environmental considerations 
in formulating the final rules, and believe the final rules are 
properly supported and justified in this regard.

See 68 FR 44620, at 44624 (July 30, 2003). We further stated:

    In the supplemental environmental analysis, we found that the 
overall effect of the final rule would be a net benefit to the 
environment compared to the former NSR rules because the final rule 
would result in reductions in emissions of air pollution. We found 
that four of the five provisions in the final rule would result in 
environmental benefits, and the other provision would have no 
significant effect. Specifically, for each of the rule's five 
provisions, the analysis concludes the following:
    (1) The PAL provisions will result in tens of thousands of tons 
per year (tpy) of volatile organic compounds (VOC) reductions from 
just three industrial categories where PALs are likely to be used 
most often. Overall reductions will be greater because it is likely 
that PALs also will be adopted in other source categories.
* * * * *
    (4) The portion of the rule addressing baseline actual emissions 
will not have a significant environmental impact. The former program 
already allowed sources to use a more representative baseline 
period, with the approval of the reviewing authority, instead of the 
two-year period before the change specifically delineated in the 
former rules. The final rules provide an expanded time frame from 
which you may select a representative baseline but eliminate the 
option of going beyond this period of time. While the new rules may 
allow a small number of existing emissions units to use higher 
baselines, other units will be required to use lower baselines due 
to the requirement to adjust the baseline downward to account for 
any new emission limitations at that emissions unit. The changes' 
overall impact will be small because the portion of the rule 
addressing baseline actual emissions does not affect new sources, 
new units built at existing sources, electric utilities, and many 
modified sources.
    (5) The change to the actual-to-projected-actual test will have 
a net environmental benefit, but a relatively small one. The benefit 
stems from removing: (1) Incentives to keep actual emissions high 
before making a change, and (2) barriers to projects that will 
reduce emissions. The size of this benefit nationally is uncertain. 
Its impact would be small because the change in emissions 
calculation methodology does not affect either of the following: (1) 
New sources, new units built at existing industrial facilities, and 
electric utilities, or (2) any modifications at existing facilities 
that actually result in significant increases in emissions. 
Historically, under the previous major NSR rule, virtually all other 
sources making a physical or operational change have accepted 
``permit limits'' so as to be confident that they will not trigger 
major NSR. Our analysis concludes that the benefits from this aspect 
of the program are likewise largely unaffected because such sources 
must still assure that actual emissions do not significantly 
increase as a result of a change.
    The supplemental environmental analysis uses quantitative 
information where possible but also notes limitations on our ability 
to quantify impacts of the rule. We used qualitative information to 
supplement the analysis when such limitations are present. We also 
noted that the final rules will result in economic benefits that 
stem from improved flexibility, increased certainty, and reduced 
administrative burden. These benefits are important, but were not 
quantified as part of this environmental analysis.

See 68 FR 44624-44625 (July 30, 2003). In the final reconsideration 
action, we stated:

    After carefully considering the information that was submitted, 
we have determined that none of the new information presented leads 
us to conclude that the analysis was incorrect or substantially 
flawed. Therefore, we are re-affirming the validity of the original 
conclusions. A summary of the comments received and our responses to 
these comments can be found in our Technical Support Document.

See 68 FR 63021, at 63023 (November 7, 2003). The Technical Support 
Document for the reconsideration is available at http://www.epa.gov/air/nsr/documents/petitionresponses10-30-03.pdf.

    In this instance Texas has adopted new rules that are at least as 
stringent as the applicable Federal rules and correspond with the 2002 
Final NSR Improvement Rules. There are no data currently available that 
would show that implementation of Texas' NSR Reform Program would 
result in interference with any applicable requirement concerning 
attainment or reasonable further progress or any other applicable 
requirement of the Act. We anticipate that Texas' NSR Reform Program 
will be have the same impact as the Federal PAL rules as described in 
the 2002 Supplemental Analysis and the 2003 reconsideration.
    The Texas PAL will result in lower emissions than the allowable 
emissions on the face of the permit in effect before issuance to the 
PAL Permit. This is because the PAL Permit is based upon actual 
emissions which will generally be less than the emissions allowed in 
the permit in effect prior to issuance of the PAL permit. The PAL is 
established as the sum of the baseline actual emissions from all 
emissions units at the major stationary source plus the significant 
level for the PAL pollutant, See 30 TAC 116.188. Furthermore, the 
average emissions for each emissions unit must be adjusted downward to 
exclude any non-compliant emissions during the consecutive 24-month 
baseline period that is used to establish the baseline actual emissions 
for the PAL. See 30 TAC 116.12(3)(D) under the definition of ``baseline 
actual emissions.'' As discussed in section IV.B.1 in this preamble, a 
PAL can only be established at an existing major stationary source 
which has had at least two years of operating history to establish an 
actuals PAL. Consequently, the PAL will generally be established at a 
level that is lower than the allowable emissions established in the 
pre-existing permit. Finally, in the 2002 NSR Reform rulemaking, we 
note that a PAL provides operational flexibility for an owner or 
operator to manage source-wide emissions without triggering major NSR 
when the changes do not result in emissions above the PAL. This creates 
incentive for an owner or operator to create room for growth by 
employing innovative control technologies and pollution control 
measures to create emissions reductions to facilitate economic 
expansion. See 67 FR 80186, at 80206-80207 (December 31, 2002).
    For the reasons stated above, we are proposing to find that the 
submitted SIP revisions will not interfere with any applicable 
requirement concerning attainment and reasonable further progress, or 
any other applicable requirement of the Act.

VII. Proposed Action

    Under section 110(k)(3) and parts C and D of the Act and for the 
reasons stated above, EPA proposes to approve the following revisions 
to the Texas SIP:
     Revisions to 30 TAC 116.12--Nonattainment and Prevention 
of Significant Deterioration Review Definitions--submitted June 10, 
2005, and resubmitted March 11, 2011-1; February 1, 2006, and 
resubmitted

[[Page 36980]]

March 11, 2011-1; revisions submitted March 11, 2011-2; the revisions 
proposed February 22, 2012, for parallel processing; and the letter 
from TCEQ to EPA dated May 3, 2012, which clarifies TCEQ's 
interpretation of 30 TAC 116. 12.
     Revisions to 30 TAC 116.115--General and Special 
Conditions--submitted March 11, 2011-2.
     New 30 TAC 116.127--Actual to Projected Actual and 
Emission Exclusion Test for Emissions--submitted February 1, 2006 (as 
30 TAC 116.121) and resubmitted March 11, 2011-2 (as redesignated to 30 
TAC 116.127).
     Revisions to 30 TAC 116.150--New Major Source or Major 
Modification in Ozone Nonattainment Area--submitted June 10, 2005, and 
resubmitted March 11, 2011-1; February 1, 2006, and resubmitted March 
11, 2011-1; revisions submitted March 11, 2011-1; and the revisions 
proposed February 22, 2012, for parallel processing.
     Revisions to 30 TAC 116.151--New Major Source or Major 
Modification in Nonattainment Areas Other Than Ozone--submitted 
February 1, 2006, and resubmitted March 11, 2011-2 (without further 
revision); and the revisions proposed February 22, 2012, for parallel 
processing.
     New 30 TAC 116.180--Applicability--submitted February 1, 
2006, and resubmitted March 11, 2011-2; revisions submitted March 11, 
2011-2; and the revisions proposed February 22, 2012, for parallel 
processing.
     New 30 TAC 116.182--Plant-Wide Applicability Permit--
Submitted February 1, 2006, and resubmitted March 11, 2011-2; and 
revisions submitted March 11, 2011-2.
     New 30 TAC 116.184--Application Review Schedule--Submitted 
February 1, 2006, and resubmitted March 11, 2011-2 (without further 
revision).
     New 30 TAC 116.186--General and Specific Conditions--
Submitted February 1, 2006, and resubmitted March 11, 2011-2; revisions 
submitted March 11, 2011-2; the revisions proposed February 22, 2012, 
for parallel processing; and the letter from TCEQ to EPA dated May 3, 
2012, which clarifies TCEQ's interpretation of 30 TAC 116.12.
     New 30 TAC 116.188--Plant-Wide Applicability Limit--
Submitted February 1, 2006, and resubmitted March 11, 2011-2; and 
revisions submitted March 11, 2011-2.
     New 30 TAC 116.190--Federal Nonattainment and Prevention 
of Significant Deterioration Review--Submitted February 1, 2006, and 
resubmitted March 11, 2011-2; and revisions submitted March 11, 2011-2.
     New 30 TAC 116.192--Amendments and Alterations--Submitted 
February 1, 2006, and resubmitted March 11, 2011-2; and revisions 
submitted March 11, 2011-2.
     New 30 TAC 116.196--Renewal of a Plant-Wide Applicability 
Limit Permit--Submitted February 1, 2006; and resubmitted March 11, 
2011-2 (without further revision).
     New 30 TAC 116.198--Expiration or Voidance--Submitted 
February 1, 2006, and resubmitted March 11, 2011-2 (without further 
revision).

VIII. Statutory and Executive Order Reviews

    Under the Clean Air Act, 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 Clean Air Act. 
Accordingly, this notice 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:
     Is not a ``significant regulatory action'' subject to 
review by the Office of Management and Budget under Executive Order 
12866 (58 FR 51735, October 4, 1993);
     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 Clean Air Act; 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).
    In addition, this rule does not have tribal implications as 
specified by Executive Order 13175 (65 FR 67249, November 9, 2000), 
because the SIP is not approved to apply in Indian country located in 
the state, and EPA notes that it will not impose substantial direct 
costs on tribal governments or preempt tribal law.

List of Subjects in 40 CFR Part 52

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

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

    Dated: June 7, 2012.
Samuel Coleman,
Acting Regional Administrator, Region 6.
[FR Doc. 2012-15049 Filed 6-19-12; 8:45 am]
BILLING CODE 6560-50-P