[Federal Register: December 21, 2007 (Volume 72, Number 245)]
[Rules and Regulations]
[Page 72607-72617]
[DOCID:fr21de07-8]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 52

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

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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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

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

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

ADDRESSES: Docket. The EPA has established a docket for this action
under Docket ID No. [EPA-HQ-OAR-2001-0004]. All documents in the docket
are listed on the http://www.regulations.gov Web site. Although listed

in the index, some information is not publicly available, e.g.,
Confidential Business Information or other information whose disclosure
is restricted by statute. Certain other material, such as copyrighted
material, is not placed on the Internet and will be publicly available
only in hard copy form. Publicly available docket materials are
available either electronically through http://www.regulations.gov or

in hard copy at the Air and Radiation Docket and Information Center,
EPA/DC, EPA West Building, Room 3334, 1301 Constitution Ave., NW.,
Washington, DC. The Air and Radiation Docket and Information Center
telephone number is<PHONE_NUMBER>. The Public Reading Room is open
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal
holidays. The Public Reading Room is located in the EPA Headquarters
Library, Room Number 3334 in the EPA West Building, located at 1301
Constitution Ave., NW., Washington, DC. The telephone number for the
Public Reading Room is<PHONE_NUMBER>. Visitors are required to show
photographic identification, pass through a metal detector, and sign
the EPA visitor log. All visitor materials will be processed through an
X-ray machine as well. Visitors will be provided a badge that must be
visible at all times.

FOR FURTHER INFORMATION CONTACT: Ms. Lisa Sutton, Air Quality Policy
Division, Office of Air Quality Planning and Standards (C504-03),
Environmental Protection Agency, Research Triangle Park, NC 27711,
telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>, e-mail
address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION: The information presented in this preamble
is organized as follows:

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

I. General Information

A. Does this action apply to me?

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

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

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

B. Where can I obtain additional information?

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

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

II. Background and History of the Reasonable Possibility Standard

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

III. Summary of the Final Rule

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

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

IV. Legal and Policy Rationale for Action

A. Purpose of the Reasonable Possibility Standard

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

B. How Our Final Rule Differs From Proposal

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

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

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

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

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

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

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

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

requirements to be unnecessarily burdensome. The project-specific
records and reports created pursuant to this rule (see, e.g., 40 CFR
52.21(r)(6)) will provide an adequate paper trail for reviewing
authorities and will be supplemented with records that are kept for
other purposes for use by a reviewing agency in determining whether
enforcement action is warranted.
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    \6\ See comment letter from Hon. Andrew M. Cuomo, New York
Attorney General, et al., at Docket Item EPA-HQ-OAR-2001-0004-
0810.1, page 9, footnote 2.
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    Some commenters expressed concern that a threshold at 50 percent of
NSR significant levels would capture too many small projects, including
routine maintenance projects. The ``reasonable possibility'' standard
applies when a major source undergoes a physical change or change in
the method of operation. We point out that in defining ``major
modification,'' the major NSR regulations specify that a ``physical
change or change in the method of operation'' excludes routine
maintenance, repair, and replacement, certain uses of alternative fuel
or raw material, certain increases in hours of operation or production
rate, changes in ownership, and certain activities associated with
clean coal technology. (See, e.g., 40 CFR 52.21(b)(2).) Thus, a project
that is not a ``physical change or change in the method of operation''
is not subject to ``reasonable possibility'' recordkeeping and
reporting requirements.

D. Fugitive Emissions and Emissions Due to Startup and Malfunction

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

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

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

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

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

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

413 F.3d at 35.

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

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

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

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

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

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

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

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

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

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

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

VI. Statutory and Executive Order Reviews

A. Executive Order 12866--Regulatory Planning and Review

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

B. Paperwork Reduction Act

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

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency
to prepare a regulatory flexibility analysis of any rule subject to
notice and comment rulemaking requirements under the Administrative
Procedure Act or any other statue unless the Agency certifies that this
action will not have a significant economic impact on a substantial
number of small entities. Small entities include small businesses,
small organizations, and small governmental jurisdictions.
    For purposes of assessing the impacts of this action on small
entities, a small entity is defined as: (1) A small business that is a
small industrial entity as defined in the U.S. Small Business
Administration (SBA) size standards (see 13 CFR 121.201); (2) a small
governmental jurisdiction that is a government of a city, county, town,
school district, or special district with a population of less than
50,000; or (3) a small organization that is any not-for-profit
enterprise that is independently owned and operated and is not dominant
in its field.
    After considering the economic impacts of this action on small
entities, I certify that this action will not have a significant
economic impact on a substantial number of small entities. This action
will not impose any requirements on small entities.

D. Unfunded Mandates Reform Act

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

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

E. Executive Order 13132--Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August
10, 1999), requires EPA to develop an accountable process to ensure
``meaningful and timely input by State and local officials in the
development of regulatory policies that have federalism implications.''
``Policies that have federalism implications'' is defined in the
Executive Order to include regulations that have ``substantial direct
effects on the States, on the relationship between the national
government and the States, or on the distribution of power and
responsibilities among the various levels of government.''
    This final rule does not have federalism implications. It will not
have substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government,
as specified in Executive Order 13132. This action merely provides
explanation of an existing recordkeeping and reporting standard. Thus,
Executive Order 13132 does not apply to this rule.

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

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

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

    Executive Order 13045, entitled ``Protection of Children From
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23,
1997), applies to any rule that: (1) Is determined to be ``economically
significant'' as defined under Executive Order 12866; and (2) concerns
an environmental health or safety risk that EPA has reason to believe
may have a disproportionate effect on children. If the regulatory
action meets both criteria, the Agency must evaluate the environmental
health or safety effects of the planned rule on children, and explain
why the planned regulation is preferable to other potentially effective
and reasonably feasible alternatives considered by the Agency.
    The EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern health or safety risks, such that the
analysis required under section 5-501 of the Executive Order has the
potential to influence the regulation. This action does not establish
an environmental standard intended to mitigate health or safety risks
but rather provides explanation of an existing recordkeeping and
reporting standard.

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

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

I. National Technology Transfer and Advancement Act

    As noted in the proposed rule, section 12(d) of the National
Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law
104-113, 12(d) (15 U.S.C. 272 note), directs EPA to use voluntary
consensus standards in its regulatory activities unless to do so would
be inconsistent with applicable law or otherwise impractical.
    Voluntary consensus standards are technical standards (for example,
materials specifications, test methods, sampling procedures, and
business practices) that are developed or adopted by voluntary
consensus standards bodies. The NTTAA directs EPA to provide Congress,
through OMB, explanations when the Agency decides not to use available
and applicable voluntary consensus standards.
    This action does not involve technical standards. Therefore, EPA
did not consider the use of any voluntary consensus standards.

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

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

K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the
Small Business Regulatory Enforcement Fairness Act of 1996, generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. EPA will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States prior
to publication of the rule in the Federal Register. A major rule cannot
take effect until 60 days after it is published in the Federal
Register. This action does not constitute a ``major rule'' as defined
by 5 U.S.C. 804(2). Therefore, this action will be effective January
22, 2008.

VII. Judicial Review

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

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

VIII. Statutory Authority

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

List of Subjects

40 CFR Part 51

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

List of Subjects

40 CFR Part 52

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

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

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

PART 51--[AMENDED]

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

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

Subpart I--[Amended]

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

Sec.  51.165  Permit requirements.

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

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

Sec.  51.166  Prevention of significant deterioration of air quality.

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

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

Appendix S to Part 51--Emission Offset Interpretative Ruling

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

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

PART 52--[AMENDED]

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

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

Subpart A--[Amended]

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

Sec.  52.21  Prevention of significant deterioration of air quality.

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

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

BILLING CODE 6560-50-P