[Federal Register: September 23, 2009 (Volume 74, Number 183)]
[Proposed Rules]
[Page 48450-48467]
[DOCID:fr23se09-19]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[EPA-R06-OAR-2005-TX-0025; FRL-8958-8]

Approval and Promulgation of Implementation Plans; Texas;
Revisions to the New Source Review (NSR) State Implementation Plan
(SIP); Modification of Existing Qualified Facilities Program and
General Definitions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing disapproval of revisions to the SIP submitted
by the State of Texas that relate to the Modification of Existing
Qualified Facilities (the Texas Qualified Facilities State Program or
the Program). EPA proposes disapproval of the Texas Qualified
Facilities State Program because it does not meet the Minor NSR SIP
requirements nor does it meet the NSR SIP requirements for a substitute
Major NSR SIP revision.
    EPA also proposes to take action on revisions to the SIP submitted
by Texas for definitions severable from the definitions in the
Qualified Facilities submittals. EPA proposes to take action on some of
the submitted severable definitions (General Definitions). We propose
to approve three definitions, grandfathered facility, maximum allowable
emission rate table (MAERT), and new facility. We propose to disapprove
the definition for best available control technology (BACT) and two
subparagraphs, A and B, and paragraph G under the definition for
modification of existing facility. We propose to make an administrative
correction to the SIP-approved definition of facility, and take no
action on the addition to the SIP-approved definition of federally
enforceable because it relates to a Federal program that is implemented
separately from the SIP. Third, EPA is proposing to take no action on a
provision not in the Texas SIP that includes, among other things, a
trading provision containing a cross-reference that no longer is in
Texas' rules; EPA will act upon all of it in a separate notice.
    We are proposing action under section 110, part C, and part D of
the Federal Clean Air Act (the Act or CAA). EPA is taking comments on
this proposal and intends to take a final action.

DATES: Comments must be received on or before November 23, 2009.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-R06-
OAR-2005-TX-0025, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov.
Follow the on-line instructions for submitting comments.
     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.
     E-mail: Mr. Stanley M. Spruiell at
<EMAIL_ADDRESS>     Fax: Mr. Stanley M. Spruiell, Air Permits Section (6PD-R),
at fax number<PHONE_NUMBER>.
     Mail: Mr. Stanley M. Spruiell, Air Permits Section (6PD-
R), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200,
Dallas, Texas 75202-2733.
     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 8:00 a.m. and 4:00 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-
2005-TX-0025. 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 e-mail. The http://www.regulations.gov Web site
is an ``anonymous access'' system, which means EPA will not know your
identity or contact information unless you provide it in the body of
your comment. If you send an e-mail comment directly to EPA without
going through http://www.regulations.gov your e-mail 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. For additional information about EPA's public docket, visit
the EPA Docket Center homepage at http://www.epa.gov/epahome/
dockets.htm.
    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), Air Branch, Multimedia Planning and Permitting
Division, Environmental Protection Agency, 1445 Ross Avenue, Suite 700,
Dallas, Texas 75202-2733. The file will be made available by
appointment for public inspection in the Region 6 FOIA Review Room
between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal
holidays. Contact the person listed in the FOR FURTHER INFORMATION
CONTACT paragraph below to make an appointment. If possible, please
make the appointment at least two working days in advance of your
visit. There will be a 15 cent per page fee for making photocopies of
documents. On the day of the visit, please check in at the EPA Region 6
reception area at 1445 Ross Avenue, Suite 700, Dallas, Texas.
    The State 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, 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<PHONE_NUMBER>;
fax number<PHONE_NUMBER>; e-mail address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: Throughout this document, the following
terms have the meanings described below:
     ``We,'' ``us,'' and ``our'' refer to EPA.
     ``Act'' or ``CAA'' means Federal Clean Air Act.
     ``40 CFR'' means Title 40 of the Code of Federal
Regulations--Protection of Environment.
     ``SIP'' means State Implementation Plan as established
under section 110 of the Act.
     ``NSR'' means new source review, a phrase intended to
encompass the statutory and regulatory programs that regulate the
construction and modification of stationary sources as provided under
CAA section 110(a)(2)(C), CAA Title I, parts C and D, and 40 CFR 51.160
through 51.166.
     ``Minor NSR'' means NSR established under section 110 of
the Act and 40 CFR 51.160.
     ``Major NSR'' means any new or modified source that is
subject to NNSR and/or PSD.
     ``NNSR'' means nonattainment NSR established under Title
I, section 110 and part D of the Act and 40 CFR 51.165.
     ``PSD'' means prevention of significant deterioration of
air quality established under Title I, section 110 and part C of the
Act and 40 CFR 51.166.
     ``Program'' means the SIP revision submittals from the
TCEQ concerning the Texas Qualified Facilities State Program.
     ``NAAQS'' means any national ambient air quality standard
established under 40 CFR part 50.
     ``TSD'' means the Technical Support Document for this
action.

Table of Contents

I. What Action is EPA Proposing?
II. What are the Other Relevant Proposed Actions on the Texas
Permitting SIP Revision Submittals?
III. What has the State Submitted?
IV. Is the Texas Qualified Facilities State Program a Submittal for
a Major or Minor NSR SIP Revision?
    A. Description of the Submitted Program
    B. Is the Submitted Program Clearly a Minor NSR SIP Revision?
V. What is EPA's Evaluation of the Submitted Texas Qualified
Facilities State Program as a Substitute Major NSR SIP Revision?
    A. What are the Requirements for EPA's Review of a Submitted
Major NSR SIP Revision?
    B. Does the Submitted Program Prohibit Circumvention of Major
NSR?
    C. Does the Submitted Program Meet the Major NSR Applicability
Determination Criteria?
    D. Does the Submitted Program Meet the CAA and Major NSR SIP
Requirements for a Major Modification?
    E. Does the Submitted Program Meet Section 110(l) of the Act for
a Major NSR SIP Revision?
VI. What is EPA's Evaluation of the Submitted Texas Qualified
Facilities State Program as a Minor NSR SIP Revision?
    A. Does the Submitted Program meet the Minor NSR SIP
Requirements for Noninterference with the Major NSR SIP
Requirements?
    B. Does the Submitted Program meet the Request for an Exemption
or a Relaxation from the Minor NSR SIP Requirements?
    C. What is EPA's Summary of whether the Submitted Program Meets
the Requirements for a Minor NSR SIP Revision?
VII. What is EPA's Evaluation of the Submitted General Definitions?
    A. Which Submitted General Definitions Meet the NSR SIP
Requirements?
    B. Which Submitted General Definitions do not Meet the NSR SIP
Requirements?
    C. What is the Administrative Correction Related to the
Submitted General Definition of ``facility?''
    D. Why are we not Taking any Action on the Severable Submitted
Portion of the Definition of Federally Enforceable?
VIII. Why is EPA Proposing to Take No Action on a Severable
Submitted Provision?
IX. Proposed Action
X. Statutory and Executive Order Reviews

I. What Action is EPA Proposing?

    We are proposing to disapprove the Texas Qualified Facilities State
Program, as submitted by Texas in Title 30 of the Texas Administrative
Code (30 TAC) at 30 TAC Chapter 116--Control of Air Pollution by
Permits for New Construction or Modification. This includes the
following regulations under Chapter 116: 30 TAC 116.116 (e), 30 TAC
116.117, 30 TAC 116.118, and the definitions in 30 TAC 116.10 for
qualified facility, actual emissions, allowable emissions, and
modification of existing facility at (E) for qualified facilities, as
not meeting the Act and EPA's NSR regulations. It is EPA's position
that none of these identified elements for the submitted Qualified
Facilities State Program is severable from each other.
    First, we are proposing to disapprove the submitted Texas Qualified
Facilities State Program as not meeting the requirements for a
substitute Major NSR SIP revision. Our grounds for proposing
disapproval as a substitute Major NSR SIP revision include the
following:
     It is not clearly limited to Minor NSR thereby allowing
major modifications to occur without a Major NSR permit;
     It has no regulatory provisions clearly prohibiting the
use of this Program from circumventing the Major NSR SIP requirements
thereby allowing changes at existing facilities to avoid the
requirement to obtain preconstruction permit authorizations for
projects that would otherwise require a Major NSR preconstruction
permit;
     It does not require that first an applicability
determination be made whether the modification is subject to Major NSR
thereby exempting new major stationary sources and major

modifications from the EPA Major NSR SIP requirements;
     It does not include a demonstration from the TCEQ showing
how the use of ``modification'' is at least as stringent as the
definition of ``modification'' in the EPA Major NSR SIP program;
     It does not include the requirement to make Major NSR
applicability determinations based on actual emissions and on emissions
increases and decreases (netting) that occur within a major stationary
source;
     It fails to meet the statutory and regulatory requirements
for a SIP revision;
     It is not consistent with applicable statutory and
regulatory requirements as interpreted in EPA policy and guidance on
SIP revisions; and
     It fails to ensure protection of the national ambient air
quality standards (NAAQS), and noninterference with the Texas SIP
control strategies and reasonable further progress (RFP).
    We are proposing to disapprove the submitted Program as not meeting
the Minor NSR SIP requirements. It is not clearly limited to Minor NSR.
It has no regulatory provisions clearly prohibiting the use of this
Program from circumventing the Major NSR SIP requirements. This Program
does not require that first an applicability determination be made
whether the modification is subject to Major NSR.
    In addition to the failures to protect Major NSR SIP requirements,
EPA cannot find that the submitted Program, as a Minor NSR SIP program,
will ensure protection of the NAAQS, and noninterference with the Texas
SIP control strategies and RFP. We are proposing to disapprove this
Program as a Minor NSR SIP revision because it does not meet certain
provisions of the Act and EPA's Minor NSR SIP requirements. Our grounds
for proposing disapproval as a Minor NSR SIP revision include the
following:
     It is not clearly limited to Minor NSR thereby allowing
major modifications to occur without a Major NSR permit;
     It has no regulatory provisions clearly prohibiting the
use of this Program from circumventing the Major NSR SIP requirements
thereby allowing sources to avoid the requirement to obtain
preconstruction permit authorizations for projects that would otherwise
require a Major NSR preconstruction permit;
     It does not require that first an applicability
determination be made whether the modification is subject to Major NSR
thereby exempting new major stationary sources and major modifications
from the EPA Major NSR SIP requirements;
     It fails to meet the statutory and regulatory requirements
for a SIP revision;
     It is not consistent with applicable statutory and
regulatory requirements as interpreted in EPA policy and guidance on
SIP revisions;
     It is not an enforceable Minor NSR permitting program;
     It lacks safeguards to ensure that the changes will not
violate a Texas control strategy and would not interfere with
attainment and maintenance of a NAAQS;
     It fails to demonstrate that the requested relaxation to
the Texas Minor NSR SIP will not interfere with any applicable
requirement concerning attainment and RFP, or any other applicable
requirement of the Act.
    Secondly, in a proposed action separate from the above action on
the submitted Texas Qualified Facilities State Program, we are
proposing to disapprove severable definitions as submitted by Texas for
``best available control technology (BACT)'' and subparagraphs (A) and
(B) addressing insignificant increases and subparagraph (G) of
``modification of existing facility,'' as not meeting the Act and EPA's
NSR regulations. We are proposing to approve the severable definitions
as submitted for ``grandfathered facility,'' ``new facility'' and
``maximum allowable emission rate table (MAERT).'' We are proposing to
take no action on the submitted severable new subparagraph relating to
the SIP definition of ``federally enforceable'' because it is outside
the scope of the SIP and the submitted severable provision in 30 TAC
116.116(f) concerning trading for which we will take action later in a
separate notice. It is EPA's position that these definitions are
separate from those in the submitted Texas Qualified Facilities State
Program; moreover, each is severable from each other but for
subparagraphs (A) and (B) in the definition for ``modification of
existing facility.'' Subparagraphs (A) and (B) in ``modification of
existing facility'' are not severable from each other. The submitted
definition for ``best available control technology'' is not severable,
however, from another action appearing in today's Federal Register. See
sections IV through VIII for further information.
    We have evaluated the submitted Texas Qualified Facilities State
Program. Based upon our evaluation, we have concluded that the portions
of the submitted SIP revisions specifically applicable to the Program
do not meet the requirements of the Act and 40 CFR part 51. All these
portions of the submittals for the Program are not severable and
therefore are not approvable.
    We have evaluated other (but not all) additional definitions in the
submitted General Definitions that are not part of the submitted Texas
Qualified Facilities State Program. Based upon our evaluation, we have
concluded that some of the evaluated definitions do not meet the
Federal requirements and therefore, are not approvable whereas other
evaluated definitions meet the Federal requirements and are approvable.
Each definition that we evaluated in the submitted General Definitions
(that is not identified above as part of the Program) is severable from
each other but for the subparagraphs (A) and (B) identified above.
    As authorized in sections 110(k)(3) and 301(a) of the Act, where
portions of the State submittals are severable, EPA may approve the
portions of the submittals that meet the requirements of the Act, take
no action on certain portions of the submittals,\1\ and disapprove the
portions of the submittals that do not meet the requirements of the
Act. When the deficient provisions are not severable from all of the
submitted provisions, EPA must propose disapproval of the submittals,
consistent with sections 301(a) and 110(k)(3) of the Act. The submitted
provisions work together to form the Texas Qualified Facilities State
Program and are not severable from each other. Therefore, EPA is
proposing disapproval of the submitted Program. The submitted
provisions for the General Definitions that EPA evaluated do not work
together and are severable from each other. Therefore, EPA is proposing
to disapprove the submitted definition for BACT and subparagraphs (A)
and (B) (that are not severable from each other), and subparagraph (G)
in the definition for modification of existing facility. The submitted
definition for BACT is not severable from another action proposed in
today's Federal Register. See section II and footnote 2 for additional
information.
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    \1\ In this action, we are taking no action on a submitted
revision to a definition that is outside the scope of the SIP and a
submitted revision to a regulatory provision that is currently
undergoing review for appropriate action.
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    Under section 179(a) of the CAA, final disapproval of a submittal
that addresses a mandatory requirement of the Act starts a sanctions
clock and a Federal Implementation Plan (FIP) clock. The provisions in
these submittals relating to the Texas Qualified Facilities State
Program and the General Definitions were not

submitted to meet a mandatory requirement of the Act. Therefore, if EPA
takes final action to disapprove the submitted Texas Qualified
Facilities State Program or to disapprove either the submitted
definition for BACT or subparagraphs (A) and (B) or subparagraph (G) in
the submitted definition of modification of existing facility in the
General Definitions, no sanctions and FIP clocks will be triggered.

II. What Are the Other Relevant Proposed Actions on the Texas
Permitting SIP Revision Submittals?

    This proposed action should be read in conjunction with two other
proposed actions appearing elsewhere in today's Federal Register, (1)
proposed action on the Texas NSR SIP, including PSD, NNSR for the 1997
8-Hour Ozone Standard, NSR Reform, and a Minor NSR Standard Permit (NSR
SIP); \2\ and (2) proposed action on the Texas NSR SIP, Flexible
Permits. On November 26, 2008, EPA proposed limited approval/limited
disapproval of the Texas submittals relating to public participation
for air permits of new and modified facilities (73 FR 72001). EPA
believes these actions should be read in conjunction with each other
because the permits issued under these State programs are the vehicles
for regulating a significant universe of the air emissions from sources
in Texas and thus directly impact the ability of the State to achieve
and maintain attainment of the NAAQS and to protect the health of the
communities where these sources are located. Our proposal is based upon
our interpretation of the Texas preconstruction permitting program,
which is outlined in each notice and accompanying technical support
document (TSD). Those interested in any one of these actions are
encouraged to review and comment on the other proposed actions as well.
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    \2\ In that proposed action, the submitted definition of BACT is
not severable from the proposed action on the PSD SIP revision
submittals. EPA may choose to take final action on the definition of
BACT in the final action on the NSR SIP rather than on the Qualified
Facilities or the General Definitions final action. EPA is obligated
to take final action on the submitted definitions in the General
Definitions for those identified as part of the Texas Qualified
Facilities State Program, the Texas Flexible Permits Program, Public
Participation, Permit Renewals (there will be a proposed action
published at a later date), and this BACT definition as part of the
NSR SIP.
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    EPA intends to take final action on the State's Public
Participation SIP revision submittals in November 2009. EPA intends to
take final action on the submitted Texas Qualified Facilities State
Program by March 31, 2010, the submitted Texas Flexible Permits State
Program by June 30, 2010, and the NSR SIP on August 31, 2010. These
dates are expected to be mandated under a Consent Decree (see, Notice
of Proposed Consent Decree and Proposed Settlement Agreement, 74 FR
38015, July 30, 2009).
    After review of public comment, we may take action to finalize the
approvable portions of the submittals and the disapprovable portions of
the submittals in separate actions; wherever severable, we may take
final action on some portions in a separate action.

III. What Has the State Submitted?

    This notice provides a summary of our evaluation of Texas' March
13, 1996, SIP revision submittal, as replaced by severable portions in
the July 22, 1998 SIP revision submittal; and as revised by severable
portions in the September 11, 2000; July 31, 2002, and September 4,
2002, SIP revision submittals. We provide our reasoning in general
terms in this preamble, but provide a more detailed analysis in the TSD
that has been prepared for this proposed rulemaking. Because we are
proposing to disapprove this submitted Program based on the
inconsistencies and deficiencies discussed herein, we have not
attempted to review and discuss all of the issues that would need to be
addressed for approval of this submitted Program as a Major NSR SIP
revision.

A. Qualified Facilities State Program Submittals

    On March 13, 1996, Texas submitted revisions affecting 30 TAC
Chapter 116--Control of Air Pollution by Permits for New Construction
or Modification. These revisions include adding a new (e) to 30 TAC
116.116--Changes to Facilities, concerning Qualified Facilities, a new
30 TAC 116.117--Documentation and Notification of Changes at Qualified
Facilities, a new 116.118--Pre-Change Qualification, a new definition
relating to modifications of existing Qualified Facilities in 30 TAC
116.10, and new definitions in 30 TAC 116.10 for ``qualified
facility,'' ``actual emissions,'' and ``allowable emissions.'' On July
22, 1998, Texas submitted severable revisions that included the repeal
of the contents of the 1996 submittal. Among other things, the 1998
submittal included a new 30 TAC 116.10, General Definitions, ``actual
emissions'' at (1), ``allowable emissions'' at (2), ``modification of
existing facility'' at (9)(F), and ``qualified facility'' at (16), a
new 30 TAC 116.116(e), a new 30 TAC 116.117, and a new 30 TAC 116.118.
On September 11, 2000, Texas submitted a revision in 30 TAC 116.10 to
the definition of ``allowable emissions'' and a revision to
subparagraph (e)(5)(B) of 30 TAC 116.116. On September 4, 2002, TCEQ
submitted a revision to 30 TAC 116.10 that included the renumbering of
the definitions.

General Definitions Submittals

    On March 13, 1996, Texas submitted revisions to 30 TAC 116.10--
General Definitions. This submittal included, among other definitions,
new state regulatory definitions for ``BACT,'' ``facility,''
``grandfathered facility,'' ``maximum allowable emission rate table
(MAERT),'' ``modification of existing facility'' at subparagraphs (A),
(B), and (G), and ``new facility.'' On July 22, 1998, Texas submitted
severable revisions that included, among other things, repeal of the
1996 submitted definitions. Texas adopted a new 30 TAC 116.10--General
Definitions, that included among other definitions, new definitions for
``BACT,'' ``facility,'' ``grandfathered facility,'' ``maximum allowable
emission rate table (MAERT),'' ``modification of existing facility,''
and ``new facility.'' On September 11, 2000, Texas submitted a new
definition for ``federally enforceable.'' On July 31, 2002, Texas
submitted a revision to the definition of ``facility.'' On September 4,
2002, Texas submitted a revision to add two new definitions in 30 TAC
116.10 and renumber the other definitions to accommodate the new
definitions.
    On September 18, 2002 (67 FR 58697), EPA approved the definition of
``federally enforceable,'' introductory paragraph and (A) through (E),
as submitted July 22, 1998. On September 6, 2006 (71 FR 52698), EPA
approved the definition ``facility'' as submitted July 22 1998. On
August 28, 2007 (72 FR 49198), EPA approved the two new definitions
submitted on September 4, 2002, and the renumbering of existing SIP
approved definitions. EPA's August 28, 2007, action also included a
typographical error that inadvertently removed the definition of
``facility'' that was previously approved September 6, 2006, as part of
the Texas SIP.

Summary of the Submittals Addressed in This Proposed Action

    The table below summarizes the changes that are in the SIP revision
submittals. A summary of EPA's evaluation of each section and the basis
for this proposal is discussed in sections IV through VIII of this
preamble. The

TSD includes a detailed evaluation of the submittals.

                     Table 1--Summary of Each SIP Submittal That Is Affected by This Action
----------------------------------------------------------------------------------------------------------------
                                                          Submittal       Description of
            Section                      Title              dates             change           Proposed action
----------------------------------------------------------------------------------------------------------------
                                        30 TAC 116.10 General Definitions
----------------------------------------------------------------------------------------------------------------
30 TAC 116.10(1)...............  Definition of             03/13/1996  Added new definition  Disapproval.
                                  ``actual
                                  emissions''.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (1).
30 TAC 116.10(2)...............  Definition of             03/13/1996  Added new definition  Disapproval.
                                  ``allowable
                                  emissions''.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (2).
                                                           09/11/2000  Revised paragraphs
                                                                        (2)(A) through (D).
30 TAC 116.10(3)...............  Definition of             03/13/1996  Added new definition  Disapproval.
                                  ``BACT''.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (3).
30 TAC 116.10(6)...............  Definition of             03/13/1996  Added new definition  Administrative
                                  ``facility''.                                               correction to
                                                                                clarify the
                                                                                definition of
                                                                                ``facility'' is in
                                                                                the SIP.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (4).
                                                                       Approved 09/06/06
                                                                        (71 FR 52698).
                                                           09/04/2002  Redesignated to
                                                                        paragraph (6).
                                                                       Inadvertently
                                                                        identified as non-
                                                                        SIP provision in 08/
                                                                        28/07 SIP revision.
30 TAC 116.10(7)...............  Definition of               09/11/00  New subparagraph      No action.
                                  ``Federally                           (5)(F).
                                  enforceable''.
                                                             09/04/02  Subparagraph (5)(F)
                                                                        redesignated to
                                                                        subparagraph
                                                                        (7)(F).
                                                                       Implements section
                                                                        112(g) of Act.
30 TAC 116.10(8)...............  Definition of             03/13/1996  Added new definition  Approval.
                                  ``grandfathered
                                  facility''.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (6).
                                                           07/31/2002  Revised definition.
                                                           09/04/2002  Redesignated to
                                                                        paragraph (8).
30 TAC 116.10(10)..............  Definition of             03/13/1996  Added new definition  Approval,
                                  ``maximum allowable
                                  emission rate
                                  table''.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (8).
                                                           09/04/2002  Redesignated to
                                                                        paragraph (10).
30 TAC 116.10(11)..............  Definition of             03/13/1996  Added new definition  Disapproval of (A),
                                  ``modification of                                           (B), (E), and (G).
                                  existing facility''.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (9).
                                                           09/11/2000  Revised paragraph
                                                                        (9).
                                                           09/04/2002  Redesignated to
                                                                        paragraph (11).
30 TAC 116.10(12)..............  Definition of ``new       03/13/1996  Added new definition  Approval.
                                  facility''.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (10).
                                                           09/04/2002  Redesignated to
                                                                        paragraph (12).
30 TAC 116.10(16)..............  Definition of             03/13/1996  Added new definition  Disapproval.
                                  ``qualified
                                  facility''.
                                                           07/22/1998  Repealed and a new
                                                                        definition
                                                                        submitted as
                                                                        paragraph (14).
                                                           09/04/2002  Redesignated to
                                                                        paragraph (16).
30 TAC 116.116.................  Changes to                03/13/1996  Added subsection (e)  Disapproval.
                                  Facilities.
                                                           07/22/1998  Repealed and a new    Disapproval.
                                                                        116.116 (e)
                                                                        submitted.
30 TAC 116.117.................  Documentation and         03/13/1996  Added new section...  Disapproval.
                                  Notification of
                                  Changes to
                                  Qualified
                                  Facilities.
                                                           07/22/1998  Repealed and a new
                                                                        116.117
                                                                        resubmitted.
30 TAC 116.118.................  Pre-Change                03/13/1996  Added new section...  Disapproval.
                                  Qualification.
                                                           07/22/1998  Repealed and a new
                                                                        116.118 submitted.
----------------------------------------------------------------------------------------------------------------

IV. Is the Texas Qualified Facilities State Program Submittal for a
Major or Minor NSR SIP Revision?

A. Description of the Submitted Program

    This part of today's action describes the Qualified Facilities
State Program submitted by Texas to EPA for approval into the State's
SIP. The submitted Program adds an exemption under State law allowing a
change to an existing facility that is ``qualified,'' to net out of the
NSR SIP permitting requirements.
    First, EPA wishes to acknowledge that its interpretation of the
Texas law and the Texas NSR SIP inclines it to the legal position that
the State uses a ``dual definition'' for the term ``facility.'' It is
our understanding of State law, that a ``facility'' can be an
``emissions unit,'' i.e., any part of a stationary source that emits or
may have the potential to emit any air contaminant. A ``facility'' also
can be a piece of equipment, which is smaller than an ``emissions
unit.'' A ``facility'' can be a ``major stationary source'' as defined
by Federal law. A ``facility'' under State law can be more than one
``major stationary source.'' It can include every emissions point on a
company site, without limiting these emissions points to only those
belonging to the same industrial grouping (SIC code). EPA encourages
comment on whether its understanding of Texas law is correct for the
definition of ``facility.'' If a commenter does not believe this legal
position is correct, we encourage the commenter to submit any
applicable case law, Texas legislative history, etc., that can further
our legal understanding of the State's meaning of the term
``facility.'' The State legal meaning of the term ``facility'' is
critical to EPA's understanding of the Texas permitting program, both
minor and major. We also are requesting comment on the meaning of ``a
TCEQ air quality account number.'' This too is critical to our legal
positions discussed today in this notice.
    The SIP revision submittals establish the criteria by which a
physical change in, or change in the method of operation of, an
existing minor or major Qualified Facility is not a modification and
does not trigger the permitting requirements for a case-by-case NSR SIP
permit, amendment, or alteration, or coverage under a minor NSR SIP
permit by rule or standard permit. They also include the criteria for
becoming a Qualified Facility, the permitting process required for a
Qualified Facility, and the methods for determining the net effect of
emission increases and decreases, compound interchanges,\3\ and
intraplant trading of emissions (i.e., relying upon emission reductions
from other existing Qualified Facilities in the applicability netting
analysis).
---------------------------------------------------------------------------

    \3\ Section 382.003(2) of the TCAA defines ``air contaminant''
as ``particulate matter, radioactive matter, dust, fumes, gas, mist,
smoke, vapor, or odor, including any combination of those items,
produced by processes other than natural.'' SB 1126 did not revise
this statutory term. TCEQ interpreted the legislative intent to
allow individual compounds to be interchanged with other compounds
in the same air contaminant category. Submitted 30 TAC
116.116(e)(3)(F) defines an ``air contaminant category'' as ``a
group of related compounds, such as VOCs, particulate matter,
nitrogen oxides, and sulfur compounds.'' An example is if the owner
or operator wishes to make a change that will increase emissions of
heptane, a VOC. The reductions relied upon in the applicability
netting analysis will be acetone, another VOC. TCEQ has established
an ``interchange'' methodology to ensure that compounds within the
VOCs air contaminant category, as interchanged, will have an
equivalent impact on the air quality.
---------------------------------------------------------------------------

    Under the submittals, a facility \4\ is designated as a Qualified
Facility if either of the following criteria is met:
---------------------------------------------------------------------------

    \4\ ``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. A
mine, quarry, well test, or road is not a facility.'' In this
action, we are also proposing an administrative correction to
clarify that the definition of ``facility'' is in the SIP. See
section VII.C.
---------------------------------------------------------------------------

    (1) The existing facility was issued a case-by-case Major or Minor
NSR SIP permit or permit amendment, or was covered under a Minor NSR
SIP permit by rule, within 10 years before the change occurs. See
submittals at 30 TAC 116.10(11)(E)(i).
    (2) The existing facility was issued a case-by case Major or Minor
NSR permit or permit amendment, or was covered under a Minor NSR SIP
permit by rule, for the voluntarily installed additional air pollution
control methods (see submittals at 30 TAC 116.116(e)(6)), within 10
years before the change occurs (see submittals at 30 TAC 116.10(1)). We
request comment on whether our interpretation of the regulatory
language is correct that a permit is required for a facility to be a
Qualified Facility. This interpretation is critical to our position on
whether all Qualified Facilities have undergone an ambient air quality
analysis, as required before issuance of any Minor or Major NSR SIP
permit in Texas.
    Under the second criterion, the additional air pollution controls
methods must be at least as effective as the Minor NSR BACT \5\ that
would have been required in a case-by-case Minor NSR SIP permit or
permit amendment at the time the additional control methods were
applied. An emissions limitation is established based upon the
application of Minor NSR SIP BACT, which is reflected as an allowable
emission rate in a permit. See the submittals at 30 TAC
116.116(e)(6)(A) and (B) and page 148 of the 1996 SIP revision
submittal. The permit under the second criterion must have been issued
within 10 years before the change occurs. See the submittals at 30 TAC
116.10(1) and (11)(E). The Texas legislature envisioned this second
criterion as a ``carrot'' to encourage grandfathered facilities \6\ to
apply for a permit to become qualified and thereby be able to
participate in the netting. See e.g., submittals at 30 TAC
116.10(2)(C). At the time of the State's adoption of this submitted
Program, the State did not have the statutory authority to impose
controls on or require permits for grandfathered facilities.
---------------------------------------------------------------------------

    \5\ Texas adopted a revised NSR State rule on July 27, 1972, to
add the requirement that a proposed new facility and proposed
modification utilize at least best available control technology
(BACT), with consideration to the technical practicability and
economical reasonableness of reducing or eliminating the emissions
from the facility. EPA approved the revised 603.16 into the Texas
SIP, presently codified in the Texas SIP at 30 TAC 116.111(a)(2)(C).
The Federal definition for PSD BACT is part of the Texas SIP as
codified in the SIP at 30 TAC 116.160(a). (This current SIP rule
citation was adopted by the State on October 10, 2001, and EPA
approved this recodified SIP rule citation on July 22, 2004 (69 FR
43752).) EPA approved the Texas PSD program SIP revision submittals,
including the State's incorporation by reference of the Federal
definition of BACT, in 1992. See proposal and final approval of the
Texas PSD SIP at 54 FR 52823 (December 22, 1989) and 57 FR 28093
(June 24, 1992). EPA specifically found that the SIP BACT
requirement (now codified in the Texas SIP at 30 TAC
116.111(a)(2)(C)) did not meet the Federal PSD BACT definition. To
meet the PSD SIP Federal requirements, Texas chose to incorporate by
reference, the Federal PSD BACT definition, and submit it for
approval by EPA as part of the Texas PSD SIP. Upon EPA's approval of
the Texas PSD SIP submittals, both EPA and Texas interpreted the SIP
BACT provision now codified in the SIP at 30 TAC 116.111(a)(2)(C) as
being a minor NSR SIP requirement for minor NSR permits.
    \6\ Grandfathered facilities are facilities that were once
exempt from most State air permitting requirements because the
facilities predated the 1971 Texas Clean Air Act that required
preconstruction review and operating permits for construction of any
new source and modification of any existing source that may emit air
contaminants into the atmosphere of the State.
---------------------------------------------------------------------------

    The submitted Program applies only to Qualified Facilities with the
same TCEQ air quality account number.\7\ See submittals at 30 TAC
116.116(e)(2). The first step in determining whether there is a
modification subject to NSR review

is to evaluate the type of proposed change. The change cannot be an
increase in emissions of any air contaminant not previously emitted.
See submittals at 30 TAC 116.116(e)(1)(B). The change cannot be any
physical change to the existing permitted Major or Minor Qualified
Facility that creates a discrete or identifiable structure, device,
item, equipment, or enclosure, which constitutes or contains a
stationary source. See submittals at 30 TAC 116.116(e)(5)(A). If the
change is not either of these types of change, next one evaluates
whether the change's increased emissions will be above the most
stringent of the Qualified Facility's permitted emissions rate or an
applicable state or federal rule. There is no modification subject to
NSR review if the change does not cause an increase in emissions above
the Facility's most stringent applicable emissions rate (imposed by NSR
SIP permit or applicable state or federal rule). See the submittals at
30 TAC 116.116(e)(3) and 30 TAC 116.116(e)(1)(A)-(B). In no way can a
Qualified Facility's existing most stringent applicable emissions rate
be lessened by using this submitted Program. See submittals at 30 TAC
116.116(e)(8).
---------------------------------------------------------------------------

    \7\ ``Account'' for NSR purposes is defined in 30 TAC 101.1(1),
second sentence, as ``any combination of sources under common
ownership or control and located on one or more contiguous
properties, or properties contiguous except for intervening roads,
railroads, rights-of way, waterways, or similar divisions.'' This
definition was approved as part of the Texas SIP (March 30, 2005 (70
FR 16129)).
---------------------------------------------------------------------------

    If the change will cause an increase in emissions above the
Qualified Facility's most stringent applicable emissions rate (imposed
by NSR SIP permit or applicable state or federal rule), then the holder
of the permit may perform an applicability netting analysis. The
applicability netting analysis considers emissions increases from the
change and reductions from the Qualified Facility making the change and
reductions from any other existing permitted minor or major Qualified
Facility at the same air quality account number. These reductions
relied upon in the applicability netting analysis must be surplus to
each Qualified Facility's most stringent applicable emissions rate
(imposed by NSR SIP permit or applicable state or federal rule). See
the submittals at 30 TAC 116.116(e)(2) -(3) and 30 TAC 116.10(2). See
also Texas NSR SIP-codified rule at 30 TAC 116.115(b)(2)(I)(ii).
    No emissions increases are considered from the other participating
existing permitted minor or major permitted Qualified Facilities. If
the sum of the increase in emissions from the projected change and an
equivalent decrease in emissions from the Qualified Facility making the
change is zero, i.e., no net increases, the change is not a
modification and is not subject to the NSR permitting requirements. See
submittals at 30 TAC 116.116(e)(3). If the sum is above zero, then the
holder of the permit that is making the change can use the netting
process to offset the change by an equivalent decrease at other
participating Qualified Facilities. Id. If the sum is zero, i.e., no
net increases, the change is not a modification and not subject to NSR
permitting requirements. Id. If the sum is above zero, i.e., net
increases, the change is a modification subject to NSR permitting
requirements. See submittals at 30 TAC 116.116(e)(1(A).

B. Is the Submitted Program Clearly a Minor NSR SIP Revision?

    Our evaluation of Texas' submitted SIP revisions is guided by
whether the submitted Qualified Facilities State Program applies to
Major NSR or Minor NSR, or both. From our review of the record with the
SIP revision submissions and other correspondence and TCEQ guidance, we
believe that Texas intends its Qualified Facilities State Program to
apply only to minor modifications at minor and major existing Qualified
Facilities. See e.g., 20 Tex. Reg. 8306 (October 10, 1995), 21 Tex.
Reg. 1579 (1996), the 1996 SIP revision submittal particularly at pages
141, 142, 143, 148, 153, 154 of 215 pages, December 2000 Guidance for
Air Quality, Qualified Changes under Senate Bill 1126, Air Permits
Division, TCEQ (see particularly pages 3, 20), and TCAA Section
382.003(9), introductory paragraph and (A)-(G). As a matter of fact,
EPA sent a comment letter to Texas during its public comment period and
EPA said in its 1995 letter that Texas had adequately satisfied our
concern that its Qualified Facilities State Program, as proposed, would
not circumvent or supersede any Major NSR SIP requirements. Since we
sent the 1995 letter, however, the State legislators have revised the
Texas Clean Air Act (TCAA) significantly.
    For the submitted Program, the TCAA definition for ``modification
of existing facility'' at Section 382.003, Health and Safety Code, was
revised by Senate Bill 1126 of the 1995 74th Texas Legislature. The
statutory definition was revised to add, among other things, subsection
at (E), a new category for when a physical change in, or change in the
method of operation of, an existing major or minor NSR Qualified
Facility is not a modification subject to the NSR SIP permitting
requirements.\8\ It provides that increases in emissions are not a
modification if the increases occur at an existing permitted Qualified
Facility and there are sufficient emission reductions from it and other
participating existing permitted Qualified Facilities, to offset the
increase.
---------------------------------------------------------------------------

    \8\ At the time of this 1995 statutory revision to the
definition of ``modification of existing facility,'' the consensus
legal interpretation of this definition was that it applied only to
minor modifications, not major modifications.
---------------------------------------------------------------------------

    The Legislature in 1995 also changed the factors for determining
whether a modification occurs by adding a new subsection (b) to TCAA
Section 382.0512. In all situations but for modifications of existing
Qualified Facilities, in determining whether a proposed change at an
existing facility is a modification, there can be no consideration of
the effect on emissions of any pollution control method applied to the
source and no consideration of any decreases in emissions from other
sources, including the source proposing to make the change. See TCAA
Section 382.0512 (a), introductory paragraph, and (1)-(2). The
legislative intent was to allow under the Qualified Facilities State
Program, consideration of any pollution control method applied to the
Qualified Facility (see the submittals at 30 TAC 116.116(e) (2)) and
any decreases in emissions from other Qualified Facilities in
determining if an increase in emissions had occurred by a change made
at a Qualified Facility, i.e., a netting analysis now was allowed to
net out of minor NSR permitting requirements. Additionally,
grandfathered facilities could voluntarily install emission controls,
obtain a permit reflecting the highest achievable actual emissions rate
after the installation of the emission controls, and participate in
this new Program. See SB 1126 Bill Analysis, April 10, 1995.
    In 1999, the Texas legislature made extensive revisions to the
TCAA. Relevant to today's proposed action is the legislature's adding
an explicit statutory prohibition against the use of an Exemption or
Permit by Rule or a Standard Permit for major modifications. See
sections 382.05196 and .057. These 1999 legislative actions required a
new legal review of the statutory definition for ``modification of
existing facility'' to see if it was still limited to minor
modifications. It is EPA's interpretation that the 1999 legislative
changes made this statutory definition ambiguous.
    The statutory definition on its face does not prohibit the use of
the Program for a major modification as defined by the CAA and EPA's
Major NSR SIP regulations. This Texas statutory definition has never
been explicitly revised to prohibit major modifications. There are no
prohibitions against using the submitted Program for major
modifications, as there now are for the minor NSR SIP permits/
exemptions by rule and standard permits. There are no

statutory provisions in the TCAA that clearly limit modifications under
the submitted Program to minor modifications.
    Similarly, the regulatory provisions submitted by Texas do not
prohibit the use of the submitted Program for major modifications of
existing minor and major stationary sources. The submitted rules do not
limit the use of the Program to Minor NSR. The Program does not contain
any emissions limitations, applicability statement, or regulatory
provision restricting the modification to minor as do the Texas Minor
NSR SIP rules for Permits by Rule in Chapter 106 and Standard Permits
in Chapter 116, Subchapter F.\9\ Moreover, unlike the Minor NSR SIP
rules for Standard Permits in 30 TAC 116.610(b) and Permits by Rule in
30 TAC 106.4(a)(4), the submitted rules do not require that a major
modification, as defined in the Major NSR SIP regulations, must meet
the Major NSR permitting requirements.
---------------------------------------------------------------------------

    \9\ The Texas SIP does not include the State Pollution Control
Project Standard Permit. In a separate action in today's Federal
Register, EPA is proposing action on this individual standard
permit. Please see the proposal notice concerning the Texas NSR SIP
submittals for PSD, NNSR for the 1997 8-hour ozone NAAQS, NSR
Reform, and a Standard Permit. Those interested in this other action
are encouraged to review and comment on it as well.
---------------------------------------------------------------------------

    Although there are recordkeeping requirements in the Program at new
30 TAC 116.117(a)(4) requiring owners and operators to maintain
documentation containing sufficient information as may be necessary to
demonstrate that the project will comply with the Federal CAA, Title I,
parts C and D, these are the same general provisions as those in the
Minor NSR SIP Permits by Rule, Minor NSR SIP Standard Permits, and the
general provisions of the SIP at 30 TAC 116.111 (a) (2)(H) and (I) for
Minor and Major NSR SIP permits. These recordkeeping requirements,
although necessary for NSR SIP approvability, cannot substitute for a
clear and enforceable provision that limits applicability in the
submitted Program to Minor NSR and to minor modifications only.
    If Texas truly intends for the submitted Qualified Facilities State
Program to apply only to Minor NSR, at a minimum, Texas must amend its
rules to include additional provisions that clearly limit this
Program's applicability to Minor NSR as it did in the Texas Minor NSR
SIP at 30 TAC Chapter 106 for Permits by Rule and 30 TAC Chapter 116
Subchapter F for Standard Permits.
    The submittals contain no applicability statement or regulatory
provision that limits applicability to minor modifications. Without a
clear statement of the applicability of the Program, the Program as
submitted is confusing to the public, regulated sources, government
agencies, or a court, because it can be interpreted as an alternative
to evaluating the new modification as a major modification under Major
NSR requirements. The Program fails to limit clearly its use to only
the Texas Minor NSR SIP requirements. Because of the overbroad nature
of the regulatory language in the State's SIP revision submittal and
the lack of any Texas statutory prohibitions, we propose to find that
the State has failed to limit its submitted Program only to Minor NSR.
    Consequently, we are compelled to evaluate this submitted Program
as being a substitute for the Texas Major NSR SIP. Accordingly, as
discussed below in Section V, we evaluated whether the submitted
Program meets the requirements for a Major NSR SIP revision, the
general requirements for regulating construction of any stationary
sources contained in Section 110(a)(2)(C) of the CAA, and the
applicable statutory and regulatory requirements for an approvable SIP
revision. Below is a summary of our evaluation of the submitted Program
as a Substitute Major NSR SIP revision submittal. Section VI contains a
summary of our evaluation of the submitted Program as a Minor NSR SIP
revision submittal.

V. What is EPA's Evaluation of the Submitted Texas Qualified Facilities
State Program as a Substitute Major NSR SIP Revision?

A. What Are the Requirements for EPA's Review of a Submitted Major NSR
SIP Revision?

    Before EPA's 1980 revised Major NSR SIP regulations, 45 FR 52676
(August 7, 1980), States were required to adopt and submit a Major NSR
SIP revision where the State's provisions and definitions were
identical to or individually more stringent than the Federal rules.
Under EPA's 1980 revised Major NSR SIP regulations, States could submit
provisions in a Major NSR SIP revision different from those in EPA's
Major NSR rules, as long as the State provision was equivalent to a
rule identified by EPA as appropriate for a ``different but
equivalent'' State rule. If a State chose to submit definitions that
were not verbatim, the State was required to demonstrate any different
definition has the effect of being as least as stringent. (Emphasis
added.) See 45 FR 52676, at 52687. The demonstration requirement was
explicitly expanded to include not just different definitions but also
different programs in the EPA's revised Major NSR regulations, as
promulgated on December 31, 2002 (67 FR 80186) and reconsidered with
minor changes on November 7, 2003 (68 FR 63021). Therefore, to be
approved as meeting the 2002 revised Major NSR SIP requirements, a
State submitting a customized Major NSR SIP revision must demonstrate
why its program and definitions are in fact at least as stringent as
the Major NSR revised base program. (Emphasis added). See 67 FR 80186,
at 80241.
    Moreover, because there is an existing Texas Major NSR SIP, the
submitted Program must meet the requirements in section 110(l) where
EPA may not approve a SIP revision if it will interfere with any
applicable requirement concerning attainment and reasonable further
progress or any other applicable requirement of the Act. Furthermore,
any submitted SIP revision must meet the applicable SIP regulatory
requirements and the requirements for SIP elements in section 110 of
the Act, and be consistent with EPA SIP policy and guidance. These can
include, among other things, enforceability, compliance assurance,
replicability of an element in the program, accountability, test
methods, whether the submitted rules are vague. There are four
fundamental principles for the relationship between the SIP and any
implementing instruments, e.g., Major NSR permits. These four
principles as applied to the review of a Major or Minor NSR SIP
revision include: (1) The baseline emissions from a permitted source be
quantifiable; (2) the NSR program be enforceable by specifying clear,
unambiguous, and measurable requirements, including a legal means for
ensuring the sources are in compliance with the NSR program, and
providing means to determine compliance; (3) the NSR program's measures
be replicable by including sufficiently specific and objective
provisions so that two independent entities applying the permit
program's procedures would obtain the same result; and (4) the Major
NSR permit program be accountable, including means to track emissions
at sources resulting from the issuance of permits and permit
amendments. See EPA's April 16, 1992, ``General Preamble for the
Implementation of Title I of the Clean Air Act Amendments of 1990'' (57
FR 13498) (``General Preamble''). In particular, there is a specific
discussion illustrating the principles and elements of SIPs that apply
to sources in implementing a SIP's control strategies

beginning on page 13567 of the General Preamble.

B. Does the Submitted Program Prohibit Circumvention of Major NSR?

    There are no express regulatory provisions in the submitted Program
similar to the Texas Minor NSR SIP provisions for Minor NSR Permits by
Rule and Minor NSR Standard Permits that prohibit circumvention of the
Major NSR requirements. See 30 TAC 106.4(b) and 30 TAC 116.610(c). Both
the SIP-codified Chapter 106, Subchapter A for Permits by Rule and the
SIP-codified Chapter 116, Subchapter F for Standard Permits, contain
clear regulatory applicability requirements limiting their use to Minor
NSR, clear regulatory requirements prohibiting their use for any
project that constitutes a major modification subject to Major NSR, and
clear regulatory provisions prohibiting the use of these Minor NSR
permits from circumventing Major NSR. There are no similar regulatory
applicability requirements, regulatory provisions prohibiting the use
for Major NSR, and no regulatory provisions prohibiting circumvention
of Major NSR, in the submitted Qualified Facilities State Program's
rules and definitions.
    There is no express provision clearly requiring that this submitted
Program cannot be used to circumvent the requirements of Major NSR. We
are proposing to find that the State failed to demonstrate that the
submitted Program prevents the circumvention of Major NSR. Therefore,
we are proposing to disapprove the Program as not meeting the Major NSR
SIP requirements to prevent circumvention of Major NSR.

C. Does the Submitted Program Meet the Major NSR Applicability
Determination Criteria?

    Because there is no express provision in the TCAA and/or in the
submitted Program clearly limiting this Program to Minor NSR, and there
is no explicit provision prohibiting circumvention of the Major NSR SIP
requirements, we must evaluate the submitted Program with respect to
the criteria for Major stationary source NSR applicability
determinations. This includes the absence of a requirement to evaluate
if a project triggers Major NSR pursuant to the applicability criteria
of the applicable regulations.
    We do not find any provisions in the submitted Program that require
a Major NSR applicability determination for changes. The submitted
Program's rules and definitions are not clear on their face that first
one must determine the threshold question of whether the change is a
major stationary source or a major modification subject to Major NSR.
The modifications that would be authorized under the submitted Program
can include major modifications. The change that could be a major
modification, including PSD BACT or NNSR LAER, could bypass the Major
NSR SIP requirements, in the absence of an express requirement to
perform the Major NSR SIP applicability review.
    The submitted Program fails to require that the applicability of
the Major NSR requirements be evaluated prior to considering whether
making a change can be authorized to use the Program. We are proposing
to find that the State failed to demonstrate that the Program requires
an evaluation of Major source NSR applicability based on the currently
approved SIP provisions or upon the current federal rules. Therefore,
we are proposing to disapprove the Program as not meeting the Major NSR
SIP requirements that require the Major NSR applicability requirements
be met.

D. Does the Submitted Program Meet the CAA and Major NSR SIP
Requirements for a Major Modification?

    In evaluating Major NSR SIP revision submittals impacting ``major
modifications,'' that differ from EPA's, our review is primarily guided
by section 111(a)(4) of the Act that describes when a ``source'' is to
be considered modified: ``The term `modification' means any physical
change in, or change in the method of operation of, a stationary source
which increases the amount of any air pollutant emitted by such source
or which results in the emission of any air pollutant not previously
emitted.'' Texas did not submit any demonstration showing how its use
of the definition ``modification'' was at least as stringent as the
definition of ``modification'' in EPA's revised Major NSR SIP rules.
    In conducting our review, we particularly were mindful of the
United States Court of Appeals for the District of Columbia Circuit
regarding the scope and requirements of Section 111(a)(4) for
determining whether a change is a ``major modification.'' See e.g., New
York v. EPA, 413 F.3d 3 (D.C. Cir. 2005) (``New York I'') (evaluating
EPA's 2002 revised major NSR rules and interpreting Section 111(a)(4)).
As discussed below, there are a number of principles associated with
Section 111(a)(4) that the Program appears to violate. Moreover, the
State failed to submit a demonstration showing how its use of
``modification'' is at least as stringent as the definition of
``modification'' in EPA's revised Major NSR SIP rules.
1. Does the Submitted Program require an evaluation of Emission
Increases from the Major Stationary Source?
    As noted above, Section 111(a)(4) requires an evaluation of whether
a project has resulted in an increase in emissions from ``such
source.'' Under this requirement, an evaluation of whether a physical
change has resulted in an emission increase must be evaluated based on
whether the project resulted in an emission increase across the major
stationary source, not by an evaluation of increases outside the major
stationary source or a subset of units at the major stationary source.
See Alabama Power v. Costle, 636 F.2d 323, 401-403 (D.C. Cir. 1980)
(holding that Agency appropriately allowed consideration of emission
increases across the stationary source); Asarco v. EPA, 578 F.2d 320
(D.C. Cir. 1978) (holding that EPA inappropriately allowed a
determination if a modification had occurred based on emission
decreases from outside of the facility).\10\ We are concerned that the
submitted Program in certain circumstances, may allow an emission
increase to be avoided by taking into account emission decreases
outside of the major stationary source and, in other circumstances,
allow an evaluation of emissions of a subset of units at a major
stationary source.
---------------------------------------------------------------------------

    \10\ While the court's analysis regarding the scope of what
constitutes a source in these two cases was rejected by the Supreme
Court in Chevron that decision did not call into question the
holding that once the EPA has defined what constitutes a ``source''
(facility for Major Stationary Source) that this is the unit of
analysis for applicability. See Chevron U.S.A. Inc. v. NRDC, 467
U.S. 837 (1984).
    Given the plain language of Section 111, EPA agrees that the
appropriate unit of analysis for determining if there is an emission
increase is the ``source'' as section 111(a)(4) provides that a
modification occurs if the project ``increases the amount * * *
emitted by such source.''
---------------------------------------------------------------------------

    First, we are concerned that the submitted Program violates the
requirements of the Act and the Major NSR SIP rules, because
applicability can be determined based on decreases outside of the major
stationary source. The submitted Program allows for netting reductions
to come from outside a major stationary source, as defined by the Major
NSR rules. It allows existing permitted Qualified Facilities at the
same air quality account site, to participate in the applicability
netting analysis for another Qualified Facility on the company site
that is making the change. The Texas SIP defines an ``account'' to
include an entire company site, which could include more than one plant
and certainly more than one major stationary source. SIP rule 30 TAC
101.1(1), second sentence. Accordingly,

under the Program, the netting analysis can include multiple
participating major stationary sources \11\, and if there is no net
emission increase, Major NSR preconstruction review is not triggered.
---------------------------------------------------------------------------

    \11\ The Federal regulations define a stationary source as,
among other things, all of the pollutant emitting activities that
belong to the same industrial grouping. An industrial grouping is
defined based on the Standard Industrial Classification (SIC code).
See, e.g. 40 CFR 51.166(b)(5) and (6). If a stationary source has
the potential to emit or actually emits at certain specified levels
then the stationary source is a ``major stationary source'' for
purposes of major NSR applicability. See Id. at 166(b)(1). By not
limiting an ``account'' to pollutant-emitting activities within the
same SIC code, an account can include pollutant-emitting activity
that includes one or more major stationary sources. While under
certain circumstances it may be appropriate to lump units/facilities
from differing SIC codes into a single stationary source, this is
generally based on an interdependence of the various units. Texas's
rule does not require such interdependence.
---------------------------------------------------------------------------

    The submitted SIP revisions may allow a major stationary source to
net a significant emissions increase against a decrease occurring
outside the major stationary source, from facilities on the account's
site that are participating in the netting analysis by contributing
offsetting emission reductions. This approach is not consistent with
the Court's findings in Alabama Power and Asarco, and it does not meet
the CAA's definition of modification and the Major NSR SIP
requirements.
    Second, we are concerned that the submitted Program may allow an
emission increase to be determined based on an evaluation of a subset
of facilities within a major stationary source. There are no regulatory
provisions addressing how one meets the applicable Major NSR netting
requirements at a site when the unit making the change and the
participating units contributing emission reductions are not all of the
facilities within a major stationary source. Under the submitted
Program, not all emission points, units, facilities, major stationary
sources, minor modifications at the site or their increases in
emissions are required to be evaluated in the applicability netting
analysis. In essence, neither the submitted regulations nor the
supporting documentation from Texas explain how emissions increases are
calculated (both the significant emissions increase from a project, and
a significant net emissions increase over the contemporaneous period)
for the entire major stationary source if the major stationary source
is subject to two different permitting regulations, the Qualified
Facilities regulations and the Major NSR SIP regulations. As a result,
the regulated community may apply these regulations inconsistently and
in a way that fails to evaluate emissions changes at the entire major
stationary source correctly as required by the Major NSR SIP
regulations. This approach is not consistent with the Court's finding
in Alabama Power, and it does not meet the CAA's definition of
modification and the Major NSR SIP requirements.
    Therefore, we propose to find that the State has failed to
demonstrate the approaches are consistent with the Court's findings in
Alabama Power and Asarco, meet the Act, and include the necessary
replicability and accountability for approval as a SIP revision.
Therefore, we are proposing to disapprove the submitted Program as not
meeting the Major NSR SIP requirements that require an evaluation of
emission increases from the major stationary source.
2. Does the Submitted Program require the Use of Actual Emissions,
rather than Allowables?
    Under Section 111(a)(4) of the Act since the 1977 CAA Amendments, a
comparison of existing actual emissions before the change and projected
actual (or potential emissions) after the change in question is
required. See New York I at 38-40. Therefore, to determine whether a
change at a unit will be subject to Major NSR requires an evaluation
that, after netting, an actual to projected actual test or an actual to
potential emissions test (or alternatively a PAL based on actual
emissions) be used. See 40 CFR 51.165(f) and 51.166(w). EPA lacks the
authority to approve any submitted Program that does not meet this
statutory requirement. We therefore are proposing disapproval because
the submitted Program would authorize existing allowable, rather than
actual emissions to be used to determine applicability in violation of
the Act and the Major NSR SIP requirements.
    Our concerns arise regarding the requirement that an increase in
emissions must be measured based on actual emissions, not permitted or
potential. Under the submitted Program, the project's increases in
emissions are calculated based upon its projected allowable emissions.
The baseline uses the permitted allowable emission rate (lowered by any
applicable state or federal requirement) if the Facility qualified
under option 1. Otherwise, the baseline uses the permitted actual
emission rate (minus any applicable state or federal requirement). See
30 TAC 116.10(2). In the applicability netting analysis, the baseline
for all the other participating minor and major existing Qualified
Facilities is calculated in the same way. The emission reductions are
calculated similarly, i.e., reductions beyond the permitted allowable
or actual emission rates (minus the applicable state and federal
requirements). Thus, this submitted Program allows an evaluation using
allowable, not actual emissions as the baseline to calculate the
project's proposed emission increase and for many of the netting
emission reductions, thereby in many cases possibly circumventing the
major modification applicability requirements under the Major NSR
rules, rules that are based upon using actual emissions to calculate
baseline emissions. Baseline actual emissions are required in the Major
NSR SIP requirements for major source netting as the starting point
from which the amount of creditable emission increases or decreases is
determined.
    We propose to find that the State's procedures do not meet the CAA
and EPA's Major NSR SIP requirements that emissions increases from
facility changes must be measured in terms of changes from existing
baseline actual emissions, rather than allowable emissions.

E. Does the Submitted Program Meet Section 110(l) of the Act for a
Major NSR SIP Revision?

    Section 110(l) of the Act prohibits EPA from approving any revision
of a SIP if the revision would interfere with any applicable
requirement concerning attainment and RFP, or any other applicable
requirement of the Act.
    The State did not provide any demonstration showing how the
submitted Program would not interfere with any applicable requirement
concerning attainment and reasonable further progress, or meet any
other CAA requirement.

VI. What Is EPA's Evaluation of the Submitted Texas Qualified
Facilities State Program as a Minor NSR SIP Revision?

    Section 110(a)(2)(C) of the Act requires that States have Minor NSR
SIP permitting programs as well as Major NSR SIP permitting programs
under part C (PSD) and part D (nonattainment NSR) of Title I. 40 CFR
51.160-51.163 contain the Minor NSR SIP regulatory requirements and
provide that a Minor NSR SIP must include legally enforceable
procedures enabling the State to determine whether construction or
modification would violate a control strategy or interfere with
attainment or maintenance of a NAAQS. 40 CFR 51.160(e) provides that
States may exempt certain sources from regulation based on the type and
size of the facility

and requires that ``the plan must discuss the basis for determining
which facilities will be subject to review.''
    At a minimum, a minor NSR SIP revision must include the requirement
for minor sources and modifications to undergo public review, be
subject to enforceable emissions limits, monitoring, recordkeeping, and
reporting requirements, and inspection and enforcement provisions.
Additionally, the State must demonstrate that the Minor NSR SIP
revision does not violate a control strategy or interfere with
attainment or maintenance of a NAAQS.

A. Does the Submitted Program Meet the Minor NSR SIP Requirements for
Noninterference With the Major NSR SIP Requirements?

    There are no statutory and/or regulatory provisions that clearly
prohibit the use of the Program for major modifications. Nor are there
any statutory and/or regulatory provisions clearly limiting the use of
the Program to minor modifications. There are no provisions that
prohibit the use of the Program for major modifications of existing
major stationary sources and minor sources. There are no regulatory
applicability requirements limiting use of the Program to Minor NSR and
no regulatory requirements prohibiting using it for Major NSR. There is
no express provision in the submittals requiring that this Program
cannot be used to circumvent the requirements of Major NSR. There are
no statutory and/or regulatory provisions clearly prohibiting
circumvention of Major NSR. The Program further fails to require that
the applicability of the Major NSR requirements be evaluated prior to
considering whether the making of a change can be netted out from the
Minor NSR SIP requirements. The regulatory provisions in the submitted
Program fail to require that first one must determine the threshold
question of whether the change is a major stationary source or a major
modification subject to Major NSR, based upon an actual emissions
baseline. See section V and the TSD for additional discussion and
information.
    Therefore, EPA is proposing to find that the submitted Program
fails to prevent noninterference with the Texas Major NSR SIP
requirements. We are proposing to disapprove the submitted Program as
not meeting the Minor NSR SIP requirements to ensure that the Major NSR
SIP requirements continue to be met.

B. Does the Submitted Program Meet the Request for an Exemption or a
Relaxation From the Minor NSR SIP Requirements?

    As noted above, EPA may approve an exemption to a State's Minor NSR
SIP if certain statutory requirements are met. But any such exemption
must be consistent with the requirement at 40 CFR 51.160(a)-(b) that a
plan contain legally enforceable procedures to ensure that the
construction or modification of a source will not result in a violation
of applicable portions of a control strategy or interfere with NAAQS
attainment. Consequently, EPA may approve exempting certain sources and
modifications from obtaining a Minor NSR permit as part of a State's
Minor NSR SIP, if the Act and regulations are met and the State shows
that the sources will have only a de minimis effect.
    Moreover, the approvability of a State's proposed de minimis
threshold is not determined solely by mechanically comparing it with
other thresholds approved for other states. The legal test for whether
a plan's threshold can be approved is whether it is consistent with the
need for a plan to include legally enforceable procedures to ensure
that the State will not permit a source that will violate the control
strategy or interfere with NAAQS attainment. That is a requirement that
all minor source thresholds must meet.
    The submitted Program could be considered an exemption from Minor
NSR. It is a netting program allowing certain changes to net out of
being subject to Minor NSR. These certain changes without the netting
would be Minor NSR modifications subject to Minor NSR. To be approvable
as an exemption from the Texas Minor NSR SIP, the State must
demonstrate that this exemption will not permit changes that will
violate the Texas control strategies or interfere with NAAQS
attainment.
    Furthermore, EPA does view the submitted Program as a SIP
relaxation. In order to approve a SIP relaxation, EPA must find
pursuant to section 110(l) that the SIP relaxation does not interfere
with any applicable requirements concerning attainment and reasonable
further progress, or any other applicable requirement of the Act.
1. Noninterference With the NAAQS and State Control Strategies by the
Existing Qualified Facilities
    The Minor NSR and Major NSR existing Qualified Facilities, no
matter by which of the two options they chose to become qualified, will
have a Minor or Major NSR SIP permit. A Minor and Major NSR SIP permit
under the Texas NSR SIP requirements includes an air quality analysis,
i.e., a demonstration there will be no adverse impact on the NAAQS.
Each of the Minor or Major NSR SIP permits for the existing Qualified
Facilities will include emissions limitations based on the chosen
control technology, with a determination that the permitted Qualified
Facility will not interfere with attainment and maintenance of the
NAAQS or violate any State control strategies. As noted above in IV.A,
we request comment on whether our interpretation of the State's
regulatory language is correct that a permit is required for a facility
to be a Qualified Facility.
2. Ensuring Noninterference With the NAAQS and State Control Strategies
by the Netting Reductions
    We propose to find that because the participating Qualified
Facilities are permitted through an existing SIP approved process, the
allowable level established in that permit assures that the Qualified
Facility can operate up to that level of emissions without interfering
with attainment and maintenance of the NAAQS and not violating any
State control strategy, as required by the Texas NSR SIP. The next step
requires EPA to evaluate whether the Minor NSR applicability netting
analysis itself includes sufficient safeguards to protect the NAAQS and
State control strategies. For aid in evaluating this submitted
applicability netting analysis as a Minor NSR SIP revision submittal,
EPA used the fundamental principles of the Major NSR SIP netting
requirements as a yardstick for appropriate comparison since their
intent is to prevent violations of the NAAQS and State control
strategies.
    Before the netting analysis comes into play, there must be a
physical or operational change at the Qualified Facility. The change
must result in an emissions increase above the authorized allowable
(the most stringent of the SIP permit, permit amendment, standard
permit, or permit by rule or any applicable state or federal
requirement) at that Qualified Facility. Under the Texas Minor NSR SIP,
the change must cause an increase in the emission rate of any source,
change the method of control of emissions, or cause a change in the
character of the emissions. See SIP-codified rule at 30 TAC
116.116(b)(1)(A)--(C). If any of these three changes are to occur, the
owner or operator must obtain a Minor or Major NSR SIP permit amendment
or coverage under a Minor NSR SIP permit by rule. Therefore, the Texas
Minor NSR SIP

relies upon allowable emissions, i.e., the most stringent emissions
rate for a facility, as required by the most stringent of the SIP
permit or any applicable state or federal requirement, to determine
whether a modification has occurred.\12\
---------------------------------------------------------------------------

    \12\ The Texas Minor NSR SIP requires that the holder of any
type of Minor NSR SIP permit must meet its representations in its
permit application or registered certification. The registered
certification applies to the Minor NSR SIP standard permits and
permits by rule. The permit application refers to the Minor NSR SIP
case-by-case permit or amendment. The operating hours, operating
procedures, capacity, etc., must be included in the permit
application or registered certification. They become conditions from
which it is unlawful to vary. See, e.g., SIP-codified rules at 30
TAC 116.116(a)-(d) and 30 TAC 106.6.
---------------------------------------------------------------------------

    Once the Minor NSR netting comes into play, we compared the
fundamental principles of Major NSR netting to the submitted Minor NSR
netting program. We did this because these fundamental principles were
established to ensure there would be no interference with the NAAQS and
control strategies by using the Major NSR netting. The Major NSR
netting program includes the following: (1) An identified
contemporaneous period, (2) the reductions must be contemporaneous and
creditable, (3) the reductions must be of the same pollutant as the
change, (4) the reductions must be real, (5) the reductions must be
permanent, and (6) the reductions must be quantifiable. See the
definition of ``net emissions increase at 40 CFR 51.165(a)(1)(vi) and
51.166(b)(3). To be considered creditable, the reduction's old level of
emissions must exceed the new level of emissions, the reduction must be
enforceable as a practical matter at and after the time the actual
change begins, and the reduction must have approximately the same
qualitative significance for public health and welfare as that
attributed to the increase from the particular change.
    Major NSR netting is based upon all contemporaneous increases and
decreases at the same major stationary source. The submitted Program's
netting is not based upon all contemporaneous increases at the same
major stationary source and not all decreases at the same major
stationary source. We propose, however, to find that such an approach
satisfies the minimum requirements for an approvable Minor NSR netting
program as long as the ambient air is protected in the trading.
    The reductions in the Program's netting are based upon the most
stringent of the permitted emissions rate (which includes the highest
achievable actual emission rate) or any applicable state or federal
rule. Therefore, this Program's netting is not based totally on changes
in actual emissions. We are proposing to find that this still is
acceptable as a Minor NSR netting program as long as the ambient air is
protected in the trading.
    It is not clear in the submitted rules when the equivalent
decreases in emissions must have occurred, other than it is clear that
they must occur before the change occurs. The intent of the State was
that there would be no look back period, i.e., no window or
contemporaneous period. The State discusses in the SIP revision
submittals and in its Texas Register that any relied-upon reductions
must occur simultaneously at the time of the increase. See 21 Tex. Reg.
1573 (February 27, 1996). It wanted to ensure that there would not be
any net reductions associated with this Program available to be used
later in a demonstration of attainment or reasonable further progress
in the Texas SIP. See page 154 of the 1996 SIP revision submittal. In
this vein, it did not want a netting window; the State saw a netting
window as an unnecessary complication for this Program. Therefore, the
State's clear intent was that each time there is a proposed change
wishing to use the Program's netting, the holder of the permit is
required to perform a new, separate netting analysis to demonstrate
that a net increase has not occurred.
    Each project was to require a separate demonstration that a net
increase has not occurred. As each project requires a separate
demonstration, the decrease can be used only for that project. For an
additional separate project, the reductions must occur at the time of
that additional project which will need to obtain additional reductions
to net out. This should prevent double counting of the netting
reductions. EPA specifically solicits comment on this point of double
counting.
    Although the State's intent is clear, EPA cannot find any
provisions in the Program that address this, much less require there be
a separate netting analysis performed for each proposed change.
Therefore, the State at a minimum, must revise its rule at 30 TAC
116.116(e) to explicitly require that each proposed change requires a
new, separate netting analysis.
    Concerning the fifth principle that the reductions must be
permanent, we cannot find any provision in the submitted rules that
specifically addresses this. Texas should include a prohibition against
future increases at the Qualified Facility, or include regulatory
language that assures that any future increase at a Qualified Facility
at which a previous netting reduction occurred is analyzed in totality
to assure that the NAAQS remains protected from the original increase.
For example, we are concerned that if Qualified Facility ``A'' relies
on decreases from Qualified Facility ``B,'' Qualified Facility ``B''
could undertake a future change and increase emissions above its new
allowable level. Although under the State's program, Qualified Facility
``B'' would have to seek emission reductions from another Qualified
Facility before increasing emissions and there is no net change in
emissions from the account site, we remain concerned that reductions
from a third qualified facility may not be sufficient to offset
potential air quality impacts from the original change at Qualified
Facility ``A.'' In other words, the submitted rules do not prohibit a
shift in emissions from Qualified Facility ``A'' to ``B'' and then to
``C,'' or otherwise assure that the ambient air quality remains
protected with regards to the original change at Qualified Facility
``A.'' Consequently, the State at a minimum must revise its rules to
require that the reductions be permanent.
    The reductions must be of the same pollutant as the change. See
submitted 116.116(e)(3). We propose to find that the State has gone
beyond this fundamental principle and established an interchange
requirement at submitted 30 TAC 116.116(e)(3) for determining whether
the interchange of different compounds within the same air contaminant
category will result in an equivalent decrease in emissions, e.g., one
VOC for another VOC. The emission rates for each different compound
must be adjusted using a ratio of the effects screening levels of the
compounds. See 30 TAC 116.116(e)(3)(B) through (E). TCEQ has
established an ``interchange'' methodology to ensure that compounds
within for example the VOC air contaminant category, as interchanged,
will have an equivalent impact on the air quality.
    We also propose to find that the reductions also meet the principle
for being quantifiable by the submitted 30 TAC 116.10(1) and (2) that
describe how to calculate the reductions but nonetheless, we request
comment on whether these regulatory provisions provide clear direction
on the appropriate calculation procedures.
    As an example of the quantifiability of the reductions, if the
reductions come from a Qualified Facility under a Minor NSR permit by
rule, its allowable emissions are the most stringent of the emissions
rate allowed in the SIP rules for Minor NSR permits by rule, the
emissions rate specified in a particular

permit by rule, or the maximum emissions rate represented in the
required certified registration. The Texas Minor NSR SIP provides that
the holder of a Minor NSR permit by rule may submit a certified
registration that includes in it maximum emissions rates (lower than
the rates allowed in the SIP rule) and includes a certification that
the maximum emissions rates listed on the registration reflect the
maximum for operation of the facility. Additionally, the lowest
computed emissions rate must be reduced again by the application of any
applicable (promulgated since the issuance of the permit) state or
federal requirement. This means that not only are the reductions
quantifiable but the first prong for creditability is met. The
reduction's old level of emissions exceeds the new level of emissions.
    Notwithstanding our proposed finding that the submitted Program
satisfies the basic criteria that emissions reductions be quantifiable,
we request comment on one additional aspect of the netting calculation
procedures. The submitted rules provide that a Qualified Facility nets
its emissions increase on the same basis as its allowable emissions
limitation. See 30 TAC 116.116(e)(3)(A). For example, we are concerned
that if a Qualified Facility took a decrease in its hourly rate that it
could offset that emissions decrease by increasing its hours of
operation; if such an increase were not prohibited the decrease is
effectively negated. We request comment on whether netting on such a
basis is sufficiently quantifiable, and whether any additional
provisions are necessary to assure that the entire emissions increase
is properly netted against reductions from the other Qualified
Facility.
    The State also has established a methodology whenever there is a
different location of emissions because of the intraplant trading. For
example, where the netting has the effect of moving emissions closer to
the plant property line than the Qualified Facility to be changed,
there is a pre-notification process to analyze whether there could be
an increase in off-site impacts. We propose to find that this will
ensure the reductions have approximately the same qualitative
significance for public health and welfare, the third prong for
creditability of the reductions. See submitted 116.117(b)(5).
    Nonetheless, EPA has some concern on the protection of the ambient
air quality and proposes to find that the netting provisions are
inadequate to assure protection of the ambient air quality.
Specifically, the State must add language to its Program's rule at 30
TAC 116.116(e) that explicitly requires the netting process assures
protection of the NAAQS by providing that the netting must result in
the same air quality benefit. We are requiring this because although
the State's intent is clear the netting process must have this result,
there is no corresponding explicit requirement in the Program's rules.
The State could also consider whether in nonattainment and near-
nonattainment areas, the rules should require that the netting must not
result in an adverse air quality impact. Secondly, even though the
State's intent is clear, to ensure that the NAAQS are protected, the
State must add language to its Program's rule at 30 TAC 116.117,
requiring the owner or operator to maintain the information and
analysis showing how it concluded that there will be no adverse impact
on ambient air quality before undertaking the change.
3. Minor NSR SIP Enforceability Requirements
    Section 110(a)(2)(A) of the Act requires that a SIP revision
include enforceable emission limitations and other means, as may be
necessary or appropriate to meet the Act's requirements. This includes
the requirement that minor modifications have enforceable emissions
limits. The Program is not clear that each Qualified Facility involved
in the netting transaction must submit a permit application and obtain
a permit revision reflecting all of the changes made to reduce
emissions (relied upon in the netting analysis) as well as reflecting
the change itself that increased emissions.
    The Texas NSR SIP rule at 30 TAC 116.111(a)(1) is clear that in
order to be granted a case-by-case Minor or Major NSR SIP permit or
permit amendment, an application must be submitted that includes a
complete Form PI-1. For coverage under a Minor NSR permit by rule or
standard permit, there is an applicable permit with an emissions
limitation.
    The Program's rules at 30 TAC 116.116(e)(4) and 116.117(b)(1)-(3)
are not clear that it is a permit application or registration that must
be submitted and that a revised permit must be issued by the TCEQ to
reflect the changes made by all of the participating Qualified
Facilities. It is not clear that the referenced notification of change,
Form PI-E, is a permit application. There is no discussion of when the
TCEQ issues the revised permit. See the submittals at 30 TAC
116.117(b).
    If the change would affect the Special Conditions in the Permit for
any participating Qualified Facility, notification must be made prior
to the change and approval is required by the TCEQ. This requirement
also is not clear, however, that a permit application is required. Nor
is it clear when the TCEQ is required to issue the revised permit.
    EPA acknowledges that 116.117(b)(1) through (3) reference a PI-E
Form and this name is similar to the Form PI-1 referenced in the SIP
rules, which is the TCEQ standard permit application form.
Nevertheless, the Program's rules refer to the submittal of this Form
PI-E as if it were a reporting or notification requirement, not as the
submittal of a form to the TCEQ that begins the permit revision
process.
    There are no provisions in 30 TAC 116.117(b) requiring a permit
application be submitted to the TCEQ. There also are no provisions in
30 TAC 116.117(b) clearly indicating TCEQ must issue a revised permit
for the changes made by all of the participating Qualified Facilities.
At a minimum, the State must revise its rules to make it clear that a
permit application must be submitted by each participating Qualified
Facility and the changes made by the participating Qualified Facilities
are reflected in revised permits issued by the TCEQ.
4. Potential Impact of Time Lag Upon Protection of the NAAQS
    EPA also is concerned about the lapse of time before each Qualified
Facility's permit is revised. The Qualified Facility making the change
without relying upon any reductions outside of it, must submit the
request by August 1 of each year, showing the changes made during the
preceding annual period of July 1-June 30. We believe that this is too
long of a lag time between submitting the permit applications and TCEQ
revising them downward to reflect the relied-upon emission reductions
or the change being made. This lag time can lead to the State not
knowing within an appropriate timeframe that the change violated the
NAAQS and/or State control strategies or that the relied-upon
reductions for whatever reason did not ensure protection of the NAAQS
and the control strategies. The State also may not find out about such
problems until after the source(s) has made the changes and incurred
significant associated expenses. Therefore, we are proposing that this
time should be no longer than six months, rather than a year, but
nonetheless we request comment on whether six months is an acceptable
lapse of time to ensure noninterference with the NAAQS and control
strategies.
    In summary, there is no explicit requirement that a permit
application must be submitted for the change and

for any relied-upon emissions reductions in the netting analysis
thereby making the new Program unenforceable. There is too long a lag
time before a revised permit is issued in certain circumstances that
can lead to a violation of a NAAQS, RFP, or control strategy without
the TCEQ becoming aware of it in a timely manner. There is not
sufficient information before EPA to make a determination that the
exempted changes from the Minor NSR requirements will have only a de
minimis effect and that the requested SIP revision relaxation does not
interfere with any applicable requirements concerning attainment and
reasonable further progress, or any other applicable requirement of the
Act, as required by section 110(l).\13\
---------------------------------------------------------------------------

    \13\ The State may be able to provide additional information
during the public comment period showing how the exemption meets all
the requirements of the Act, including enforceability, protecting
all NAAQS, RFP, and control strategies. For example, there may be
information enabling a reliable estimate of the exempted changes
over the life thus far of the Program, e.g., the average percentage
of participating Qualified Facilities that require a preconstruction
review because of their permit's conditions. This percentage may be
a high percentage of the participating universe, and the State could
provide documentation of how many of these pre-notification changes
it reviews and authorizes as a revised permit, within the 45 days.
This could be broken down into the tpy of exempted changes. EPA also
notes that under the submitted Program's rules, the change cannot be
a physical change that creates a discrete or identifiable structure,
device, item, equipment, or enclosure, that constitutes or contains
a stationary source. Texas may be able to provide information that
this prohibition reduces the numbers and types of changes that are
authorized under the submitted Program. There also could be
available information illustrating the changes before netting, are
truly de minimis for a minor NSR SIP program, taking into account
the nonattainment and near-nonattainment areas within the State of
Texas. The State will need to provide a thorough account of future
growth potential. Modeling may be required to show the expected
impacts on ambient air quality (particularly for sources in complex
terrain areas). EPA is willing to work with the State on what is an
approvable enforceable permitting limitations process and what is an
approvable exemption for this Texas Qualified Facilities State
Program.
---------------------------------------------------------------------------

C. What Is EPA's Summary of Whether the Submitted Program Meets the
Requirements for a Minor NSR SIP Revision?

    The Program is not clearly limited to Minor NSR and does not
prevent circumvention of the Major NSR SIP requirements. The submitted
Program does not require that first one must determine whether a change
is subject to Major NSR and actual emissions are used for determining
whether a change is subject to Major NSR. The Program lacks
requirements necessary for enforcement of the applicable emissions
limitations, including a permit application and issuance process.
Overall, the Program fails to include sufficient enforceable safeguards
to ensure that the NAAQS and control strategies are protected.
Furthermore, there is no information to determine whether the Program's
exemption from the Texas Minor NSR SIP would not violate the NAAQS or
the State's control strategies and whether the SIP relaxation would not
interfere with NAAQS attainment, reasonable further progress, or
otherwise meet any other requirement of the Act.
    Therefore, we are proposing to disapprove the submitted Qualified
Facilities State Program as not meeting sections 110(a)(2)(C) and
110(l) of the Act and 40 CFR 51.160.

II. What Is EPA's Evaluation of the Submitted General Definitions?

A. Which Submitted General Definitions Meet the NSR SIP Requirements?

    We are proposing to approve the following provisions of the SIP
submittals as meeting 40 CFR Part 51 and the CAA.
    30 TAC 116.10(8)--``grandfathered facility.''
    This submitted definition is approvable because it defines which
facilities are exempt from the NSR requirements, i.e., those that were
constructed or modified before the date that TCEQ began permitting new
and modified facilities, which was August 30, 1971. This submitted
definition is independent of and severable from the other submitted
definitions. We are proposing to approve this submitted definition as
meeting the Federal requirements.
    30 TAC 116.10(10)--``maximum allowable emissions rate table
(MAERT).''
    The submitted definition is approvable because it is the same as
the SIP-codified 30 TAC 116.115(b)(2)(G). This submitted definition is
independent of and severable from the other submitted definitions. We
are proposing to approve this submitted definition as meeting the
Federal SIP requirements.
    30 TAC 116.10(12)--``new facility.''
    This submitted definition is approvable because it establishes the
date of August 30, 1971 for when facilities that commence construction
or modification must obtain preconstruction authorization. This
submitted definition is independent of and severable from the other
submitted definitions. We are proposing to approve this submitted
definition as meeting the Federal requirements.

B. Which Submitted General Definitions Do Not Meet the NSR SIP
Requirements?

    30 TAC 116.10(3)--``BACT.''
    The submittals include a new regulatory definition for ``BACT,''
defining it as BACT with consideration given to the technical
practicability and economical reasonableness of reducing or eliminating
emissions. TCEQ revised its January 1972 permitting rules, then
Regulation VI at rule 603.16, on July 27, 1972, to add the requirement
that a proposed new facility and proposed modification utilize BACT,
with consideration to the technical practicability and economical
reasonableness of reducing or eliminating the emissions from the
facility. EPA approved the revised 603.16 into the Texas SIP, presently
codified in the Texas SIP at 30 TAC 116.111(a)(2)(C).
    It is not clear whether EPA approved this State BACT requirement as
part of the Texas NSR SIP on July 6, 1977 (42 FR 34517) or August 13,
1982 (47 FR 35193). Approval of the original 1972 Texas SIP on May 31,
1972 (37 FR 10896) included State SIP submittals of January 28,
February 25, May 2, and May 3, 1972. Since the State revised its rules
to add the BACT requirement after May 3, 1972, EPA could not have
approved this Texas BACT requirement as part of the original 1972 SIP.
    EPA's approval on July 6, 1977 included action on the State SIP
revision submittals of 1973, 1974, 1975, and 1977 revisions to Section
X: The Permit System. The 1973 SIP revision submittal that included the
1973 revised Section X discussed the application forms and included
copies of them. Revised Section X also describes the permit review
process and states that the ``review will answer the following
questions.'' The list of seven questions includes the following and
tracks the State's July 27, 1972 rules:
    A. Will the new facility or the modification comply with all Rules
and Regulations and the intent of the TCAA?
    B. Will the new facility or the modification prevent the
maintenance or attainment of the NAAQS?
    C. Will the new facility or the modification cause significant
deterioration of existing ambient air quality in an area?
    D. Will the new facility or modifications have provisions for
measuring the emission of significant air contaminants?
    E. Will the new facility or modification be located in accordance
with proper land use planning?
    F. Will the new facility or modification utilize the best available

control technology with consideration to the technical practicability
and economic reasonableness of reducing or eliminating the emissions
resulting from the facility?
    G. Will the design criteria for the new facility or modification
achieve the performance specified in the application?
    The 1982 SIP approval included action on Texas SIP revision
submittals of May 9, 1975, October 13, 1978, April 13, 1979, and July
20, 1981. These submittals included revisions to the July 27, 1972
Regulation VI, as revised March 27, 1975, August 15, 1975, February 12,
1978, March 6, 1979, November 25, 1979, August 20, 1980, and April 16,
1981. The 1981 rules as submitted and approved by EPA in this 1982
rulemaking recodified the minor NSR and NNSR SIP requirements from
Regulation VI into a new Chapter 116. Regardless of which year, it is
clear that the State BACT requirement was approved as part of the Texas
NSR SIP, either in 1977 or 1982.
    The Federal definition for BACT for PSD is part of the Texas SIP as
codified in the SIP at 30 TAC 116.160(a). (This current SIP rule
citation was adopted by the State on October 10, 2001, and EPA approved
this recodified SIP rule citation on July 22, 2004 (69 FR 43752).) EPA
approved the Texas PSD program SIP revision submittals, including the
State's incorporation by reference of the Federal definition of BACT,
in 1992. See proposal and final approval of the Texas PSD SIP at 54 FR
52823 (December 22, 1989) and 57 FR 28093 (June 24, 1992). EPA
specifically found that the SIP BACT requirement (now codified in the
Texas SIP at 30 TAC 116.111 (a)(2)(C)) did not meet the Federal PSD
BACT definition. To meet the PSD SIP Federal requirements, Texas chose
to incorporate by reference the Federal PSD BACT definition and submit
it for SIP approval by EPA. Upon EPA's approval of the Texas PSD SIP
submittals, both EPA and Texas interpreted the SIP BACT provision, now
codified in the SIP at 30 TAC 116.111(a)(2)(C), as a minor NSR SIP
requirement for minor NSR permits.
    As discussed earlier in section I.B of this preamble, in another
Federal Register notice, EPA is proposing disapproval of the Texas NSR
SIP submittals for PSD, NNSR for the 1997 8-hour ozone NAAQS, NSR
Reform, and a Standard Permit. One of the bases for proposed
disapproval of the PSD SIP revision submittals is that Texas has
removed from its state rules the Federal PSD definition of BACT. Those
interested in this proposed action are encouraged to review and comment
on it.
    While we continue to approve the inclusion of Texas' minor NSR BACT
requirement in the Texas SIP to establish emissions limitations or
operational restrictions requirements for minor NSR permits, Texas must
revise the submitted BACT definition at 30 TAC 116.10(3) to clearly
apply only in the minor NSR SIP and only for minor sources and minor
modifications.
    30 TAC 116.10(11)(A) and 30 TAC 116.10(11)(B)--Insignificant
increases are not a modification requiring a permit.
    The submittals include a new regulatory definition for
``Modification of existing facility'' in which insignificant increases
of emissions are not modifications requiring a permit. Pursuant to the
TCAA of 1971, Texas was required to establish a NSR program. The TCAA
required that any person intending to construct a new facility or
modify a facility that may emit air contaminants first apply for an air
quality permit, which must be granted before that person could begin
construction or make any changes. On the other hand, the TCAA allowed
Texas to ``exempt'' certain facilities or types of facilities from the
permitting requirements if it found that the facilities or types of
facilities ``would not make a significant contribution of air
contaminants to the atmosphere.'' The 1971 TCAA, however, did not
authorize Texas to set a threshold in its NSR program below which no
preconstruction authorization was required. The TCAA required Texas to
regulate all new emissions. To complicate matters further, the
statutory definition for what was a modification of an existing
facility excluded ``insignificant increases'' of emissions.
    To reconcile the statutory provision requiring regulation of new
emissions, the statutory provision requiring permits for construction
and modifications causing new emissions, the statutory definition
excluding new (insignificant) emissions from obtaining a permit to
construct or modify, and yet implement the exemption from permitting
authority, Texas adopted rules that allowed it to make determinations
whether construction of, or modification to, a facility or type of
facilities, would make a significant contribution of emissions. If the
Agency determined that the emissions from construction of, or
modification to, a facility or type would be insignificant, i.e., not
significant (contribution), it issued an exemption for a facility or a
type of facilities. These ``exempted'' facilities or types of
facilities were ``insignificant'' sources of emissions. EPA approved
into the Texas SIP on May 31, 1972 (37 FR 10896) the TCAA provisions
described above, particularly the TCAA provision that excluded the
increase of ``insignificant emissions'' from being a modification, and
the regulations in Rules 606 and 607 (EPA later approved their
recodification into Chapter 116, and they now are codified in the Texas
SIP at 30 TAC Chapter 106), allowing the State to issue so-called
``exemptions'' and to maintain a List of the Exemptions. Consequently,
any exemption issued by Texas automatically became part of the Texas
SIP. Any new facility or modification was subject to federal
enforcement action if it failed to have an exemption before it began to
construct or make any changes. It was subject to federal enforcement if
it violated the terms and conditions of any applicable exemption(s).
    Although not approved as part of the Texas SIP, Texas in 1985
adopted through rulemaking the SIP Exemptions contained in the SIP List
of Standard Exemptions, and adopted general requirements for the
issuance of Exemptions. As part of this 1985 State rulemaking, the
State added emission limitations for the first time defining by Texas
regulation the minimum level of emissions above which there would be a
``significant contribution'' requiring a NSR permit rather than an
Exemption. Moreover, under the State's rules, no proposed new facility
or modification under any Exemption could be a major source or major
modification subject to NNSR and PSD. Later the State moved these
Exemption State rules of general requirements and the State-codified
Exemptions from Chapter 116 to a new Chapter 106, entitled Exemptions.
In early 2000, the State renamed Chapter 106 to Permits by Rule,
because the TCAA was revised in 1999 to allow the State to establish
standard permits for similar facilities and to adopt permits by rule or
exempt sources by rule if it determines the increased emissions will
not make a significant contribution of air contaminants to the
atmosphere. EPA approved the general requirements for Permits by Rule
in Subchapter A of Chapter 106 on November 14, 2003 (68 FR 64543), as
meeting the NSR requirements for a minor NSR SIP program. EPA
recognized that each State-codified Permit by Rule in the remaining
Subchapters of Chapter 106 was already part of the SIP since each was
an Exemption previously issued by the State under the SIP Exemption
requirements. See page 64545.
    The following provisions of the TCAA are not part of the Texas SIP
and Texas

has not submitted them for approval by EPA into the SIP. Under section
382.05196 of the TCAA enacted in 1999, the Commission may not adopt a
Permit by Rule authorizing any facility defined as a ``major facility''
under any applicable preconstruction permitting requirements of the
Federal CAA or regulations adopted under that Act. Under section
382.057 of the TCAA, the Commission may not adopt any Exemption by Rule
or Standard Permit for any modification of an existing facility defined
as a ``major modification'' under any applicable preconstruction
permitting requirements of the Federal CAA or regulations adopted under
that Act.
    The TCAA seems to be clear that a Permit by Rule, Standard Permit,
or an Exemption by Rule cannot be used for a major source or major
modification. EPA is aware that in the past the State has reasonably
interpreted and applied the SIP term ``insignificant'' for allowing
only minor modifications and minor sources. Because of the history of
the two agencies' interpretations, ordinarily the State's submittal of
its relevant 1999 statutory provisions for approval into the SIP would
prove sufficient to support that modifications under the submitted 30
TAC 116.10(11)(A) and (B) would apply only to minor modifications and
minor sources. There is information; however, e.g., the State's
adoption of a Permit by Rule for Startup, Shutdown, and Maintenance
Emissions that belies the EPA being able to rely upon such a submittal
of the relevant statutory provisions. This type of Permit by Rule
cannot be construed to apply only to minor modifications and
construction of minor sources. A submittal by the State of the
applicable statutory sections for EPA to approve as part of the Texas
SIP no longer seems sufficient in view of the issuance of this
particular Permit by Rule.
    There is another ground for proposing disapproval of the two
portions of the submitted definition ``modification of existing
facility.'' The public, the regulated community, and governmental
agencies consistently over the years have not had a clear and common
understanding of the term, ``insignificant'' and its inter-relationship
with the SIP rules for Standard Permits and Permits by Rule, in which
``insignificant increases'' are delineated. Very few people even are
aware of the history of the TCAA, the State's interpretation and
implementation of the TCAA over more than three decades, EPA's history
of the Texas SIP approvals over more than three decades, and EPA's
legal interpretations over three decades of the State's implementing
regulations. If the public, the regulated community, and governmental
agencies do not share, a clear and common understanding of the term,
``insignificant,'' the submittals will not perform according to what we
believe is the original intent.
    With the State's issuance of the Startup, Shutdown, and Maintenance
Permit by Rule that is not clearly limited to minor modifications and
the continued expressions by the public, regulated entities, and
government entities on the lack of clarity in the submittals' language
of (A) and (B), EPA is proposing to disapprove the submittals for 30
TAC 116.10(11)(A) and (B) because they are vague and unenforceable.
    30 TAC 116.10(11)(G).
    The submittals provide that changes at certain natural gas
processing, treating, or compression facilities are not modifications
if the change does not result in an annual emissions rate of any air
contaminant in excess of the volume emitted at the maximum design
capacity for grandfathered facilities. The ``annual emissions rate'' is
the same as the ``volume emitted at the maximum design capacity'';
therefore, this would provide an exemption for these sources from
permit review for any emission increases at these facilities. 40 CFR
51.160(e) allows States to identify facilities which will be subject to
review under their minor NSR program and requires the minor NSR SIP to
discuss the basis for determining which facilities will be subject to
review.
    The submittals, however, do not contain an applicability statement
or regulatory provision limiting this type of change to minor NSR.
There is no explanation of the reason for exempting this type of change
from the permitting SIP requirements. Without the submittal by the
State of an analysis describing how this exemption does not negate the
major NSR SIP requirements and meets the minor NSR SIP requirements in
40 CFR 51.160 and the Act's anti-backsliding requirements in section
110(l), EPA proposes to disapprove this submitted definition.

C. What Is the Administrative Correction Related to the Submitted
General Definition of ``Facility?''

    This definition was initially submitted March 13, 1996, and
revisions submitted July 22, 1998. On September 6, 2006 (71 FR 52698),
EPA approved the definition of ``Facility,'' as codified at 30 TAC
116.10(4) in the July 22, 1998, submittal. In a SIP revision submitted
September 4, 2002, Texas revised 30 TAC 116.10 to add two new
definitions and to renumber several existing definitions to accommodate
the new definitions. In that revision, the definition of ``facility''
was renumbered from 30 TAC 116.10(4) to 30 TAC 116.10(6). On August 28,
2007 (72 FR 49198), EPA approved portions of the revisions to 30 TAC
116.10 to add the two new definitions and to approve the renumbering of
the previously approved definitions. However, EPA's August 28, 2007,
approval included a typographical error that identified 30 TAC
116.10(6) ``facility'' as not being in the SIP. The definition of
``facility'' is severable from the other submitted definitions.
Accordingly, in this action, EPA proposes to correct the typographical
error in 72 FR 49198 to clarify that the definition of ``facility'' as
codified at 30 TAC 116.10(6) was approved as part of the Texas SIP in
2006 and remains part of the Texas SIP.

D. Why Are We Not Taking Any Action on the Severable Submitted Portion
of the Definition of Federally Enforceable?

    30 TAC 116.10(7)(F)--``federally enforceable.''
    The submitted paragraph (F) in the definition of ``federally
enforceable'' identifies as federally enforceable requirements, any
permit requirements established under Subchapter C \14\ of Chapter 116.
This paragraph implements the CAA section 112(g) program. This program
is implemented separately from the SIP and is outside the scope of the
SIP; therefore, we are proposing to take no action. See 67 FR 58699-
58700 (September 18, 2002) for further information on why we are
proposing no action on this provision. Paragraphs (A) through (E) in
the definition of ``federally enforceable'' remain part of the Texas
SIP, as codified at 30 TAC 116.10(7). EPA approved them on September
18, 2002 (67 FR 58697).
---------------------------------------------------------------------------

    \14\ In a SIP revision submitted February 1, 2006, the
provisions on Subchapter C were redesignated to a new Subchapter E.
EPA intends to take action on the new Subchapter E later in a
separate action.
---------------------------------------------------------------------------

VIII. Why is EPA Proposing To Take No Action on a Severable Submitted
Provision?

    This submitted added provision to 30 TAC 116.116(f) is not in the
SIP and it addresses the use of discrete emission reduction credits. It
includes a cross-reference to a State rule that no longer exists.
Moreover, both the State and the Texas SIP contain the Emissions
Trading and Banking rules in Subchapter H of Chapter 116. To date,
Texas has not submitted a SIP revision revising this cross-reference
appropriately. EPA proposes to take no action today on the submitted 30
TAC

116.116(f) and intends to take action later in a separate action.

IX. Proposed Action

    EPA is proposing disapproval of revisions to the SIP submitted by
the State of Texas that relate to the Modification of Qualified
Facilities, identified in the Tables in Section III of this preamble.
These affected provisions include regulatory provisions and definitions
and a severable portion of the definition at (E) ``modification of
existing facility,'' under Texas' General Definitions in Chapter 116,
Control of Air Pollution by Permits for New Construction or
Modification. EPA is proposing to find that these submitted provisions
and definitions in the submittals affecting the Texas Qualified
Facilities State Program are not severable from each other.
    EPA is proposing disapproval of the submitted Texas Qualified
Facilities State Program, as a substitute major NSR SIP revision,
because it does not meet the Act and EPA's regulations. We also are
proposing disapproval of the submitted Qualified Facilities Texas State
Program as a minor NSR SIP revision because it does not meet the Act
and EPA's regulations.
    EPA also proposes to take action on revisions to the SIP submitted
by Texas that relate to the General Definitions in Chapter 116. EPA
proposes to approve three of these severable submitted definitions,
``grandfathered facility,'' ``maximum allowable emissions rate table
(MAERT),'' and ``new facility.'' We propose to disapprove the severable
submitted definition, ``best available control technology (BACT)'' and
to disapprove two severable portions, subparagraphs (A) and (B), in the
submitted definition of ``modification of existing facility,'' and the
severable portion subparagraph (G) in the submitted definition of
``modification of existing facility.'' The subparagraphs (A) and (B)
are not severable from each other. EPA proposes to make an
administrative correction to the severable submittal for the SIP-
approved definition of ``facility.'' EPA proposes to take no action on
the severable submitted subparagraph (F) for the SIP-approved severable
definition of ``federally enforceable'' because the submitted paragraph