[Federal Register: September 15, 2010 (Volume 75, Number 178)]
[Rules and Regulations]
[Page 56423-56453]
[DOCID:fr15se10-31]

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Part IV

Environmental Protection Agency

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40 CFR Part 52

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

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

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

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

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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

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

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

FOR FURTHER INFORMATION CONTACT: Mr. Stanley M. Spruiell, Air Permits
Section (6PD-R), Environmental Protection Agency, Region 6, 1445 Ross
Avenue, Suite 700, Dallas, Texas 75202-2733, telephone<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'' and ``CAA'' means Clean Air Act.
     ``40 CFR'' means Title 40 of the Code of Federal
Regulations-Protection of the 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.
     ``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.
     ``Major NSR'' means any new or modified source that is
subject to NNSR and/or PSD.
     ``TSD'' means the Technical Support Document for this
action.
     ``NAAQS'' means national ambient air quality standards
promulgated under section 109 of that Act and 40 CFR part 50.
     ``PAL'' means ``plantwide applicability limitation.''
     ``PCP'' means ``pollution control project.''
     ``TCEQ'' means ``Texas Commission on Environmental
Quality.''

Table of Contents

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

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

I. What action is EPA taking?

A. What regulations is EPA disapproving?

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

B. What other actions is EPA taking?

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

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

II. What is the background?

A. Summary of Our Proposed Action

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

B. Summary of the Submittals Addressed in This Final Action

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

                     Table 1--Summary of Each SIP Submittal That Is Affected by This Action
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                                                    Date       Date of
            Title of SIP submittal               submitted      state       Regulations affected in this action
                                                   to EPA      adoption
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Qualified Facilities and Modification to          3/13/1996    2/14/1996  30 TAC 116.10--definition of ``BACT''.
 Existing Facilities.
NSR Rule Revisions; section 112(g) Rule Review    7/22/1998    6/17/1998  30 TAC 116.10(3)--definition of
 for Chapter 116.                                                          ``BACT''.
New Source Review for Eight-Hour Ozone            6/10/2005    5/25/2005  30 TAC 116.12 and 115.150.
 Standard.
Federal New Source Review Permit Rules Reform.     2/1/2006    1/11/2006  30 TAC 116.12, 116.121, 116.150,
                                                                           116.151, 116.180, 116.182, 116.184,
                                                                           116.186, 116.188, 116.190, 116.192,
                                                                           116.194, 116.196, 116.198, 116.400,
                                                                           116.402, 116.404, 116.406, 116.610,
                                                                           116.617, and 116.1200.
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                       Table 2--Summary of Each Regulation That Is Affected by This Action
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                                                          Submittal
            Section                       Title             dates      Description of change     Final action
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              Chapter 116--Control of Air Pollution by Permits for New Construction or Modification
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                                            Subchapter A--Definitions
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30 TAC 116.10(3)...............  Definition of ``BACT''    3/13/1996  Added new definition..  Disapproval.
                                                           7/22/1998  Repealed and a new
                                                                       definition submitted
                                                                       as paragraph (3).
30 TAC 116.12..................  Nonattainment Review      6/10/2005  Changed several         Disapproval.
                                  Definitions.                         definitions to
                                                                       implement Federal
                                                                       phase I rule
                                                                       implementing 8-hour
                                                                       ozone standard.
                                 Nonattainment Review       2/1/2006  Renamed section and     Disapproval.
                                  and Prevention of                    added and revised
                                  Significant                          definitions to
                                  Deterioration                        implement Federal NSR
                                  Definitions.                         Reform regulations.
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                                     Subchapter B--New Source Review Permits
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                                         Division 1--Permit Application
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30 TAC 116.121.................  Actual to Projected        2/1/2006  New Section...........  Disapproval.
                                  Actual Test for
                                  Emissions Increase.
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                                        Division 5--Nonattainment Review
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30 TAC 116.150.................  New Major Source or       6/10/2005  Revised section to      Disapproval.
                                  Major Modification in                implement Federal
                                  Ozone Nonattainment                  phase I rule
                                  Area.                                implementing 8-hour
                                                                       ozone standard.
                                                        --------------------------------------------------------
                                                            2/1/2006  Revised section to      Disapproval.
                                                                       implement Federal NSR
                                                                       Reform regulations.
                                                        --------------------------------------------------------
30 TAC 116.151.................  New Major Source or        2/1/2006  Revised section to      Disapproval.
                                  Major Modification in                implement Federal NSR
                                  Nonattainment Areas                  Reform regulations.
                                  Other Than Ozone.
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                                  Subchapter C--Plant-Wide Applicability Limits
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                                   Division 1--Plant-Wide Applicability Limits
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30 TAC 116.180.................  Applicability.........     2/1/2006  New Section...........  Disapproval.
30 TAC 116.182.................  Plant-Wide                 2/1/2006  New Section...........  Disapproval.
                                  Applicability Limit
                                  Permit Application.
30 TAC 116.184.................  Application Review         2/1/2006  New Section...........  Disapproval.
                                  Schedule.
30 TAC 116.186.................  General and Special        2/1/2006  New Section...........  Disapproval.
                                  Conditions.
30 TAC 116.188.................  Plant-Wide                 2/1/2006  New Section...........  Disapproval.
                                  Applicability Limit.
30 TAC 116.190.................  Federal Nonattainment      2/1/2006  New Section...........  Disapproval.
                                  and Prevention of
                                  Significant
                                  Deterioration Review.
30 TAC 116.192.................  Amendments and             2/1/2006  New Section...........  Disapproval.
                                  Alterations.
30 TAC 116.194.................  Public Notice and          2/1/2006  New Section...........  Disapproval.
                                  Comment.
30 TAC 116.196.................  Renewal of a Plant-        2/1/2006  New Section...........  Disapproval.
                                  Wide Applicability
                                  Limit Permit.
30 TAC 116.198.................  Expiration and             2/1/2006  New Section...........  Disapproval.
                                  Voidance.
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 Subchapter E--Hazardous Air Pollutants: Regulations Governing Constructed and Reconstructed Sources (FCAA, Sec.
                                           112(g), 40 CFR Part 63) \a\
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30 TAC 116.400.................  Applicability.........     2/1/2006  Recodification from     No action.
                                                                       section 116.180.
30 TAC 116.402.................  Exclusions............     2/1/2006  Recodification from     No action.
                                                                       section 116.181.
30 TAC 116.404.................  Application...........     2/1/2006  Recodification from     No action.
                                                                       section 116.182.
30 TAC 116.406.................  Public Notice              2/1/2006  Recodification from     No action.
                                  Requirements.                        section 116.183.
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                                         Subchapter F--Standard Permits
----------------------------------------------------------------------------------------------------------------
30 TAC 116.610.................  Applicability.........     2/1/2006  Revised paragraphs      - Disapproval of
                                                                       (a), (a)(1) through     paragraph (a)
                                                                       (a)(5), (b), and (d)   - No action on
                                                                       \b\.                    paragraph (d)
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30 TAC 116.617.................  State Pollution            2/1/2006  Replaced former 30 TAC  Disapproval.
                                  Control Project                      116.617--Standard
                                  Standard Permit.                     Permit for Pollution
                                                                       Control Projects \c\.
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                                       Subchapter K--Emergency Orders \d\
----------------------------------------------------------------------------------------------------------------
30 TAC 116.1200................  Applicability.........     2/1/2006  Recodification from 30  No action.
                                                                       TAC 116.410.
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\a\ Recodification of former Subchapter C. These provisions are not SIP-approved.
\b\ 30 TAC 116.610(d) is not SIP-approved.
\c\ 30 TAC 116.617 is not SIP-approved.
\d\ Recodification of former Subchapter E. These provisions are not SIP-approved.

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

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

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

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

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

IV. What are the grounds for these actions?

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

A. The Submitted Minor NSR State BACT Definition SIP Revision

    EPA proposed to disapprove this severable definition of BACT in 30
TAC 116.10(3), submitted March 13, 1996, and July 22, 1998, when EPA
proposed to disapprove the Texas Qualified Facilities Program (under
Docket No. EPA-R06-OAR-2005-TX-0025). See 74 FR 48450, at 48463-48464.
The submittals on March 13, 1996, and July 22, 1998, include a new
regulatory definition for the Texas Clean Air Act's definition of
``BACT,'' defining it as BACT with consideration given to the technical
practicability and economical reasonableness of reducing or eliminating
emissions.
1. What is the background for the submitted definition of BACT under 30
TAC 116.10(3) as proposed under Docket No. EPA-R06-OAR-2005-TX-0025?
    On July 27, 1972, the State of Texas revised its January 1972
permitting rules, then Regulation VI at rule 603.16, to add the Texas
Clean Air Act statutory requirement that a proposed new facility and
proposed modification utilize BACT, with consideration to the technical
practicability and economical reasonableness of reducing or eliminating
the emissions from the facility. EPA approved the revised 603.16 into
the Texas SIP \2\ and that provision is presently codified in the Texas
SIP at 30 TAC 116.111(a)(2)(C).
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    \2\ The January 1972 Texas NSR rules, as revised in July 1972,
require a proposed new facility or modification to utilize ``best
available control technology, with consideration to the technical
practicability and economic reasonableness of reducing or
eliminating the emissions resulting from the facility.'' This
definition of BACT is from the Texas Clean Air Act. EPA approved
this into the Texas NSR SIP possibly in the 1970's and definitely on
August 13, 1982 (47 FR 35193). When EPA approved the Texas PSD
program SIP revision submittals, including the State's incorporation
by reference of the Federal definition of PSD BACT, in 1992, both
EPA and Texas interpreted the use of the TCAA BACT definition to be
for Minor NSR SIP permitting purposes only. EPA specifically found
that the State's TCAA BACT definition did not meet the Federal PSD
BACT definition. We required the use of the Federal PSD BACT
definition for PSD SIP permitting purposes. See the proposal and
final approval of the Texas PSD SIP at 54 FR 52823 (December 22,
1989) and 57 FR 28093 (June 24, 1992).
---------------------------------------------------------------------------

    The Texas NSR SIP includes not only the PSD BACT definition \3\ but
also a requirement for a source to perform a BACT analysis. See 30 TAC
116.111(a)(2)(C). EPA relied upon this SIP provision in its 1992
original approval of the Texas PSD SIP as meeting the PSD requirement
of 40 CFR 52.21(j). See 54 FR 52823, at 52824-52825, and 57 FR 28093,
at 28096-28096. Both Texas and EPA interpreted this SIP provision to
require either a Minor NSR BACT determination or a Major PSD BACT
determination. Since EPA's approval of the Texas PSD SIP in 1992, there
has been some confusion about the distinction between a State Minor NSR
BACT definition and a PSD Major NSR BACT definition and the requirement
that a source must perform the relevant BACT analysis.
---------------------------------------------------------------------------

    \3\ Texas's current PSD SIP incorporates by reference the
Federal PSD definition of BACT in 40 CFR 52.21(b)(12). See current
SIP at 30 TAC 116.160(a). On February 1, 2006, TCEQ submitted a
revision that reorganized 30 TAC 116.160 and removed the reference
to the BACT definition. On September 23, 2009, EPA proposed to
disapprove the 2006 revision to section 116, because of the removal
of the reference to the Federal PSD BACT definition. On July 16,
2010, Texas submitted a revision to section 116.160 that reinstated
the reference to the PSD BACT definition in 40 CFR 52.21(b)(12). See
30 TAC 116.160(c)(1)(A), submitted July 16, 2010. EPA is addressing
the 2006 and 2010 revisions to 30 TAC 116.160 in a separate action
published in today's Federal Register.
---------------------------------------------------------------------------

    TCEQ in 1996 submitted a regulatory definition of the TCAA BACT
statutory provision but failed to distinguish the submitted regulatory
BACT definition as the Minor NSR BACT definition. See the proposed
disapproval of the BACT definition in 30 TAC 116.10(3) at 74 FR 48450,
at 40453 (footnote 2), 48463-48464, TCEQ's proposed revisions to its
Qualified Facilities Program rulemaking, and EPA's June 7, 2010,
comment letter on TCEQ's Qualified Facilities Program, for further
information.

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

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

1. What is the background for the submitted anti-backsliding Major NSR
SIP requirements for the 1-hour ozone NAAQS?
    On July 18, 1997, EPA promulgated a new NAAQS for ozone based upon
8-hour average concentrations. The 8-hour averaging period replaced the
previous 1-hour averaging period, and the level of NAAQS was changed
from 0.12 parts per million (ppm) to 0.08 ppm (62 FR 38865).\4\ On
April 30, 2004 (69 FR 23951), we published a final rule that addressed
key elements related to implementation of the 1997 8-hour ozone NAAQS
including, but not limited to: revocation of the 1-hour NAAQS and how
anti-backsliding principles will ensure continued progress toward
attainment of the 1997 8-hour ozone NAAQS. We codified the anti-
backsliding provisions governing the transition from the revoked 1-hour
ozone NAAQS to the 1997 8-hour ozone NAAQS in 40 CFR 51.905(a). The 1-
hour ozone major nonattainment NSR SIP requirements indicated that
certain 1-hour ozone standard requirements were not part of the list of
anti-backsliding requirements provided in 40 CFR 51.905(f).
---------------------------------------------------------------------------

    \4\ On March 12, 2008, EPA significantly strengthened the 1997
8-hour ozone standard, to a level of 0.075 ppm. EPA is developing
rules needed for implementing the 2008 revised 8-hour ozone standard
and has received the States' submittals identifying areas with their
boundaries they identify to be designated nonattainment. EPA is
reviewing the States' submitted data.
---------------------------------------------------------------------------

    On December 22, 2006, the DC Circuit vacated the Phase 1
Implementation Rule in its entirety. South Coast Air Quality Management
District, et al., v. EPA, 472 F.3d 882 (DC Cir. 2006), reh'g denied 489
F.3d 1245 (2007) (clarifying that the vacatur was limited to the issues
on which the court granted the petitions for review). EPA requested
rehearing and clarification of the ruling and on June 8, 2007, the
Court clarified that it was vacating the rule only to the extent that
it had upheld petitioners' challenges. Thus, the Court vacated the
provisions in 40 CFR 51.905(e) that waived obligations under the
revoked 1-hour standard for NSR. The court's ruling, therefore,
maintains major nonattainment NSR applicability thresholds and emission
offsets pursuant to classifications previously in effect for areas
designated nonattainment for the 1-hour ozone NAAQS.
    On June 10, 2005 and February 1, 2006, Texas submitted SIP
revisions to 30 TAC 116.12 and 30 TAC 116.150 which relate to the
transition from the major nonattainment NSR requirements applicable for
the 1-hour ozone NAAQS to implementation of the major nonattainment NSR
requirements applicable to the 1997 8-hour ozone NAAQS. Texas's
revisions at 30 TAC 116.12(18) (Footnote 6 under Table I under the
definition of ``major modification'') and 30 TAC 116.150(d)
introductory paragraph, effective as State law on June 15, 2005,
provide that for ``the Houston-Galveston-Brazoria, Dallas-Fort Worth,
and Beaumont-Port Arthur eight hour ozone nonattainment areas, if the
United States Environmental Protection Agency promulgates rules
requiring new source review permit applications in these areas to be
evaluated for nonattainment new source review according to the area's
one-hour standard classification,'' then ``each application will be
evaluated

according to that area's one-hour standard classification'' and ``* * *
the de minimis threshold test (netting) is required for all
modifications to existing major sources of VOC or NOX in
that area * * *.'' The footnote 6 and the introductory paragraph add a
new requirement for an affirmative regulatory action by EPA on the
reinstatement of the 1-hour ozone NAAQS major nonattainment NSR
requirements before the legally applicable major nonattainment NSR
requirements under the 1-hour ozone standard will be implemented in the
Texas 1-hour ozone nonattainment areas.
    The currently approved Texas major nonattainment NSR SIP does not
require such an affirmative regulatory action by EPA before the 1-hour
ozone major nonattainment NSR requirements come into effect in the
Texas 1-hour ozone nonattainment areas. The current SIP states at 30
TAC 116.12(18) (Footnote 1 under Table I) that ``Texas nonattainment
area designations are specified in 40 Code of Federal Regulations Sec.
81.344.'' That section includes designations for the one-hour standard
as well as the eight-hour standard. Moreover, the submitted revisions
to 30 TAC 116.12(18) and 116.150(d) do not comport with the South Coast
decision as discussed above.
    The court opinion maintains the lower applicability thresholds and
more stringent offset ratios for a 1-hour ozone nonattainment area
whose classification under that standard was higher than its
nonattainment classification under the 8-hour standard. In the
submitted rule revision, the lower applicability thresholds and more
stringent offset ratios for a classified 1-hour ozone nonattainment
area would not be required in a Texas 1-hour ozone nonattainment area
unless and until EPA promulgated a rulemaking implementing the South
Coast decision. Although EPA proposed that the Texas revision relaxes
the requirements of the approved SIP and we stated that EPA lacks
sufficient information to determine whether this relaxation would not
interfere with any applicable requirement concerning attainment and
reasonable further progress, or any other applicable requirement of the
Act (see 74 FR 48467, at 48473) we have now determined that it is
unnecessary to reach this issue because the revision nonetheless fails
to comply with the CAA, whereas, the existing approved SIP meets CAA
requirements.
2. What is EPA's response to comments on the submitted anti-backsliding
Major NSR SIP requirements for the 1-Hour Ozone NAAQS?
    Comment 1: TCEQ commented that the anti-backsliding issue
associated with the status of the requirements for compliance with the
1-hour ozone NAAQS with the implementation of the 8-hour ozone NAAQS
was delayed by litigation that took several years to become final. TCEQ
adopted changes to 30 TAC 116.12(18) in June, 2005, prior to the
resolution of the litigation. After the South Coast decision, EPA
subsequently stated it would conduct rulemaking to address the 1-hour
ozone NAAQS requirements.\5\ TCEQ commits to work with EPA to ensure
that the rule is revised to comply with current law.
---------------------------------------------------------------------------

    \5\ See New Source Review (NSR) Aspects of the Decision of the
U.S. Court of Appeals for the District of Columbia Circuit on the
Phase I Rule to Implement the 8-Hour Ozone National Ambient Air
Quality Standards (NAAQS), from Robert J. Meyers, Principal Deputy
Assistant Administrator, to EPA Regional Administrators, dated
October 3, 2007. This memorandum is in the docket for this action
numbered EPA-R06-OAR-2006-0133-0007 and is available at: http://
www.regulations.gov/search/Regs/
home.html#documentDetail?R=09000064801987ff.
---------------------------------------------------------------------------

    Response: EPA acknowledges TCEQ's commitment to revise its State
rules to implement the Major NSR anti-backsliding requirement. However,
the 2007 Meyers Memorandum cited in the comment did not indicate that
States should await EPA rulemaking before taking any necessary steps to
comply with the South Coast decision. Rather, the memorandum encouraged
the Regions to ``have States comply with the court decision as quickly
as possible.'' The memorandum's reference to ``rulemaking to conform
our NSR regulations to the court's decision'' was not intended to
suggest that States could simply ignore the court's decision until EPA
had updated its regulations to reflect the vacatur.
    Comment 2: The Clinic commented that Texas rules limit enforcement
of the 1-hour ozone NAAQS in violation of South Coast Air Quality
Management District v. EPA. As a result of this decision, States must
immediately comply with the formerly revoked 1-hour ozone requirements,
including NNSR applicability thresholds and emission offset
requirements. Texas rules include two provisions that require EPA to
conduct rulemaking before TCEQ can begin enforcing the one-hour
standard classification requirements for NAAQS. See 30 TAC 116.12(18),
Table I, and 116.150(d).
    Response: See response to Comment 1.
    Comment 3: BCCA, TIP, TCC, commented that the Texas rules regarding
the 1-hour/8-hour transition are neither inconsistent with the CAA, nor
the court's decision in South Coast. With its remand to EPA following
vacatur of parts of the Phase 1 transition rule, the South Coast court
did not offer specific direction concerning implementation of the
backsliding requirements as they apply to NSR. However, the court in
its Opinion on Petitions for Rehearing ``urged'' EPA ``to act promptly
in promulgating a revised rule that effectuates the statutory mandate
by implementing the eight-hour standard * * *.'' South Coast Air
Quality Mgmt. Dist. v. EPA, 489 F.3d 1245, 1248-49 (DC Cir. 2007).
    The commenters note that consistent with the court's direction in
South Coast, the language of CAA Sec.  172(e) suggests that EPA must
take definite action to implement anti-backsliding requirements:

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

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

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

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

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

determination regarding whether Major NSR applies for a pollutant
should be based upon the designation of the area in which the source is
located on the date of issuance of the Major NSR permit. EPA also
interprets the Act and its rules that if an area is designated
nonattainment on the date of issuance of a Major NSR permit, then the
Major NSR permit must be a NNSR permit, not a PSD permit. If the area
is designated attainment/unclassifiable, then under EPA's
interpretation of the Act and its rules, the Major NSR permit must be a
PSD permit on the date of issuance. See the following: sections 160,
165, 172(c)(5) and 173 of the Act; 40 CFR 51.165(a)(2)(i) and
51.166(a)(7)(i). EPA's interpretation of these statutory and regulatory
requirements is guided by the memorandum issued March 11, 1991, and
titled ``New Source Review (NSR) Program Transitional Guidance,''
issued March 11, 1991, by John S. Seitz, Director, Office of Air
Quality Planning and Standard.\6\
---------------------------------------------------------------------------

    \6\ You can access this document at: http://www.epa.gov/ttn/nsr/
gen/nstrans.pdf.
---------------------------------------------------------------------------

    Revised 30 TAC 116.150(a), as submitted June 10, 2005 and February
1, 2006, now reads as follows under State law:
    (a) This section applies to all new source review authorizations
for new construction or modification of facilities as follows:
    (1) For all applications for facilities that will be located in any
area designated as nonattainment for ozone under 42 United States Code
(U.S.C.), 7407 et seq. on the effective date of this section, the
issuance date of the authorization; and
    (2) For all applications for facilities that will be located in
counties for which nonattainment designation for ozone under 42 U.S.C.
7407 et seq. becomes effective after the effective date of this
section, the date the application is administratively complete.\7\
---------------------------------------------------------------------------

    \7\ It is our understanding of State law, that a ``facility''
can be an ``emissions unit,'' i.e., any part of a stationary source
that emits or may have the potential to emit any air contaminant. A
``facility'' also can be a piece of equipment, which is smaller than
an ``emissions unit.'' A ``facility'' can be a ``major stationary
source'' as defined by Federal law. A ``facility'' under State law
can be more than one ``major stationary source.'' It can include
every emissions point on a company site, without limiting these
emissions points to only those belonging to the same industrial
grouping (SIC code).
---------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Under the Major NSR SIP requirements, for any physical or

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

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

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

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

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

    Response: EPA welcomes the clarification concerning TCEQ's
interpretation of Texas law and the Texas SIP with respect to the term
``facility.'' However, we have determined that Texas's use of the term
``facility,'' as it applies to the NNSR non-PALs rules, is overly
vague, and therefore, unenforceable. TCEQ comments that it translates
``emissions unit'' to mean ``facility.'' Although Texas's PSD non-PAL
rules explicitly limit the definition of ``facility'' to ``emissions
unit,'' the NNSR non-PALs rules fail to make such a limitation. See 74
FR 48467, at 48473, footnote 6, and 48475; compare 30 TAC 116.10(6) to
30 TAC 116.160(c)(3). The State clearly thought the prudent legal
course was to limit ``facility'' explicitly to ``emissions unit'' in
its PSD SIP non-PALs revision. Furthermore, TCEQ did not submit
information sufficient to demonstrate that the lack of this explicit
limitation in the submitted NNSR non-PALs is at least as stringent as
the revised definition in the PSD non-PALs definition.
    We recognize that TCEQ should be accorded a level of deference to
interpret the State's statutes and regulations; however, such
interpretations must meet the applicable requirements of the Act and
implementing regulations under 40 CFR part 51 to be approvable into the
SIP as Federally enforceable requirements. The State has failed to
provide any case law or SIP citation that confirms TCEQ's
interpretation for ``facility'' under the NNSR non-PALs that would
ensure Federal program scope.
    Comment 2: The Clinic comments that Texas's use of the term
``facility'' makes its rules unacceptably vague. Texas's use of this
term is problematic because of its dual definitions and broad meanings.
The commenter compares Texas's definition of ``facility'' in 30 TAC
116.10 with the definition of ``stationary source'' in 30 TAC 116.12
and the definition of ``building, structure, facility, or
installation'' in 30 TAC 116.12 and concludes that these definitions
are quite similar. The commenter acknowledges that this argument