[Federal Register Volume 59, Number 182 (Wednesday, September 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23349]


[[Page Unknown]]

[Federal Register: September 21, 1994]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[OH53-2-6360; FRL-5076-1]

 

Approval and Promulgation of Implementation Plans; Ohio

AGENCY: U.S. Environmental Protection Agency (USEPA).

ACTION: Final rule.

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SUMMARY: On August 20, 1993, in response to requirements in part D of 
title I of the Clean Air Act, the Ohio Environmental Protection Agency 
(OEPA) submitted materials to USEPA pertaining to new source review 
(NSR) in nonattainment areas. This submittal included no revisions to 
any Ohio regulations. Instead, the submittal relied on existing pre-
1990 NSR rules, described how Ohio intended to implement various 
applicable part D requirements, and presented a rationale that no 
revisions to State regulations would be necessary to satisfy these 
requirements. USEPA disagrees with this rationale and disapproves the 
State's submittal for failure to satisfy applicable requirements, as 
proposed on March 4, 1994.

EFFECTIVE DATE: This final rule becomes effective on October 21, 1994..

ADDRESSES: Copies of the SIP revision request, public comments on the 
rulemaking, and other materials relating to this rulemaking are 
available for inspection at the following address: (It is recommended 
that you telephone John Summerhays at (312) 886-6067 before visiting 
the Region 5 Office.) United States Environmental Protection Agency, 
Region 5, Air and Radiation Division, 77 West Jackson Boulevard (AE-
17J), Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: John Summerhays, Air Enforcement 
Branch, Regulation Development Section (AE-17J), United States 
Environmental Protection Agency, Region 5, Chicago, Illinois 60604, 
(312) 886-6067.

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 172, 173, 182, 189, and other sections of the Clean Air 
Act require States to submit implementation plan provisions for new 
source review in nonattainment areas to USEPA for approval or 
disapproval. Ohio provided various materials to USEPA between November 
1992 and April 1993, but USEPA notified the State on June 1, 1993, that 
these materials did not constitute a complete submittal and that the 
State had failed to submit a complete submittal. On August 20, 1993, 
the Ohio provided new material to USEPA addressing new source review in 
nonattainment areas. USEPA notified OEPA on October 22, 1993, that it 
found this August 1993 submittal complete.
    USEPA published a notice of proposed rulemaking on the State's 
submittal on March 4, 1994 (59 FR 10349). This document summarized the 
history of new source review plans in Ohio, reviewed the submittal of 
August 20, 1993, and proposed disapproval of the submittal. In a cover 
letter accompanying the submittal, the OEPA Director stated that Ohio's 
NSR rules adopted in 1974 were sufficient for USEPA to find the State's 
submission both complete and approvable. According to the OEPA 
Director, ``Ohio EPA believes that the current, federally approved, 
Ohio SIP is adequate for fulfilling the requirements of a NSR SIP, and 
that no changes are necessary. . . . Ohio EPA has thoroughly evaluated 
the basis for this submittal, and has resolved that the 1974 [NSR] 
rules remain the vehicle for the U.S. EPA to review as part of this NSR 
SIP submittal.'' OEPA also submitted a document dated October 1992 
entitled ``Requirements for Major New Sources in Nonattainment Areas'' 
(referenced in this document as ``Ohio's statement of permitting 
criteria''). On page 4 of this latter document, the State again states 
that ``Ohio EPA needs not modify the current rules to conform to the 
legislatively mandated changes under the CAA. In fact, the current 
state law and Ohio EPA requires that the Director account for these new 
requirements in the review of new source applications.'' Ohio thus 
seeks approval of its existing pre-1990 NSR rules, along with its 
statement of permitting criteria, as satisfying the NSR SIP submittal 
requirements of part D of title I of the Act, including the new 
requirements imposed by the Clean Air Act Amendments of 1990 (1990 
Amendments).
    Based on a review of the submittal, USEPA proposed that Ohio's 
submittal failed to satisfy the NSR SIP submittal requirements of part 
D, both for requirements predating the 1990 Amendments as well as new 
requirements imposed by the 1990 Amendments. Concerning requirements 
predating the 1990 Amendments, USEPA explained that the State had 
failed to make any of the necessary changes to its NSR rules since 
USEPA's prior action on September 8, 1993 (58 FR 47211) in which USEPA 
concluded that the State had not satisfied the requirements of part D, 
even as required before 1990, particularly because of exemptions from 
NSR permitting for temporary sources and resource recovery facilities. 
Regarding requirements imposed by the 1990 Amendments, USEPA noted that 
Ohio's statement of permitting criteria ``was not adopted according to 
the full procedures in Ohio for adoption of regulations, even though 
this statement is intended to serve purposes normally served by 
regulations.'' In an extensive discussion, USEPA also concluded that 
``the statement of permitting criteria lacks the specificity, the 
regulatory standing, and the assurance of being enforceable that are 
needed to satisfy Clean Air Act requirements'' and that the State's 
reliance ``on a general regulatory provision (requiring compliance with 
the Clean Air Act)'' fails to authorize the State to impose the 
necessary ``specific, detailed permit conditions.'' Therefore, USEPA 
proposed to disapprove Ohio's submittal.

II. Comments on Proposed Rulemaking

    Subsequent to the proposed rulemaking, Ohio requested an extension 
of the public comment period, which USEPA granted on May 3, 1994 (59 FR 
22776). During the extended comment period, comments were received from 
OEPA, the local air pollution control agency for the Dayton area, a law 
firm, and the State Chamber of Commerce. The following summarizes the 
comments received and USEPA's responses.
    Comment: All four commenters disputed USEPA's proposed conclusion 
that Ohio's 1974 regulations and its statement of permitting criteria 
do not adequately specify applicable new source review requirements. 
The Chamber of Commerce stated that
Ohio's submittal has the same specificity as Federal law, the law is 
sufficiently specific and clear, and Ohio's submittal meets all 
requirements of that law. The State commented that the Clean Air Act 
Amendments of 1990 are very specific and clearly specify applicable 
requirements, such that further efforts to define these requirements by 
regulation would be redundant and unnecessary. Another commenter stated 
that ``specificity and clarity of criteria'' are not an appropriate 
basis for disapproving a submittal which has the same specificity and 
clarity of criteria as the relevant Federal law, and the fourth 
commenter stated that ``[d]isagreement over [the form that Ohio's 
permitting mandates take rather than over the substance of those 
mandates] should not be a basis on which to disapprove Ohio's NSR 
program.''
    Response: As stated in the proposed disapproval, Ohio's statement 
of permitting criteria was not adopted pursuant to the applicable Ohio 
procedures for the adoption of binding, enforceable regulations and did 
not clearly identify detailed decisionmaking criteria, and therefore 
``lacks the specificity, the regulatory standing, and the assurance of 
being enforceable that are needed to satisfy the Clean Air Act 
requirements.'' A fundamental principle for SIPs is that SIP measures 
must be enforceable. See 57 FR 13498, 13568 (April 16, 1982). In its 
comments, OEPA did not dispute USEPA's conclusion that Ohio's statement 
of permitting criteria does not constitute binding regulations and is 
unenforceable. Instead, the State merely responded that ``[t]he 
requirements of the CAAA are clearly enforceable via existing Ohio 
regulations'' (emphasis added). Ohio's response makes it clear that its 
statement of permitting criteria is not enforceable and that Ohio seeks 
approval of its submission based on its existing pre-1990 NSR rules. 
Accordingly, USEPA concludes that it cannot rely on the unenforceable 
statement of permitting criteria to approve Ohio's submittal.
    USEPA also evaluated whether Ohio's existing NSR rules, adopted 
well before the 1990 Amendments, satisfy current NSR SIP requirements. 
As the State conceded in its statement of permitting criteria, several 
applicable sections of the amended Act, including sections 182(a)(2)(C) 
and 189(a)(2)(A), required states to submit revisions to their State 
Implementation Plans for nonattainment NSR permits by various dates in 
1992 and 1993. As described above, the State contends that its existing 
pre-1990 NSR rules are sufficient to meet current requirements because 
they require adherence to ``applicable law,'' including the Clean Air 
Act. Thus, instead of submitting revisions to its rules, Ohio asserted 
that no such revisions are necessary. USEPA disagrees. It should be 
self-evident that Ohio's reliance on its existing pre-1990 NSR rules 
does not satisfy the statutory mandates enacted in 1990 for revisions 
to the State's NSR rules. USEPA reaffirms its view that a reference in 
existing state rules to the Clean Air Act, and references to pre-1990 
sections of the Act, do not satisfy current NSR SIP requirements.
    USEPA believes that the Act requires States to adopt specific, 
enforceable rules to implement the Act's requirements for a 
nonattainment new source review program. Although not mandated by the 
Act, USEPA has already provided general guidance to states concerning 
NSR SIP requirements (See 57 FR 13498, 13552-13556 (April 16, 1982); 57 
FR 55620, 55623-55624 (Nov. 25, 1992)), and plans to issue further 
guidance and rules concerning NSR SIP measures later in 1994. Although 
certain provisions in the Act may present questions of statutory 
interpretation, USEPA finds that Ohio's NSR submission, consisting 
primarily of existing pre-1990 NSR rules supplemented by the 
unenforceable statement of permitting criteria completely fail to 
satisfy the statutory obligation to submit specific revisions to its 
NSR SIP rules.1
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    \1\E.g., lowered major source thresholds, provisions governing 
NOx as an ozone precursor in ozone nonattainment areas, specific 
mandated offset ratios and other provisions governing emission 
offsets, a provision that emission reductions otherwise required by 
the Act are not creditable to satisfy NSR offset requirements, and 
an alternatives analysis requirement for all nonattainment NSR 
permits.
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    This regulatory situation is typical. Statutes usually establish 
general requirements and usually cannot be successfully implemented 
without detailed regulations clearly specifying criteria for evaluating 
individual cases. Thus, the issue is not simply philosophical or 
superficial, but rather a fundamental question of whether Ohio has 
properly set forth a regulatory framework under which to implement the 
mandated provisions, and whether USEPA or a member of the public could 
successfully object if a permit were proposed that would violate NSR 
requirements.
    USEPA believes that it would be difficult and impractical for a 
commenter to object to a proposed permit based on statutory provisions 
in the amended Act where USEPA had approved the SIP as satisfying the 
requirements of the amended Act but where the SIP did not contain 
specific provisions to implement the amended Act. USEPA further 
believes that Federal enforcement of NSR requirements would be severely 
jeopardized by USEPA approval of NSR SIP provisions that fail to 
contain specific provisions implementing the amended Act. Ohio's SIP 
submission fails to provide enforceable NSR provisions which assure 
compliance with the amended Act and therefore are disapproved.
    A discussion of comments and responses below addresses specific 
requirements for offsets, offset ratios, and major source and major 
modification definitions. The technical support document for the 
proposed rulemaking also identified deficiencies with respect to the 
alternatives analysis requirement, and observed that Ohio's statement 
of permitting criteria mistakenly assigns various USEPA 
responsibilities regarding clean coal technology demonstration projects 
to OEPA, such as promulgation of national regulations and review of 
other States' submittals. No comments were submitted on these latter 
deficiencies, and so they remain as additional examples of Ohio's 
submittal being inadequate to implement the mandated requirements.
    Comment: The State further commented regarding emissions offsets 
that ``[t]hese requirements are all contained and specified in either 
Federal rules, the Clean Air Act Amendments of 1990 or in Ohio EPA 
policy.''
    Response: As discussed above, Ohio's existing NSR rules do not 
contain (either directly or by reference) a definition of offset ratios 
reflecting the amended Clean Air Act. Ohio observes that the Clean Air 
Act identifies the values of the ratios to be used in various 
circumstances. However, Ohio does not address the concern identified in 
the NPR with the absence (in either the existing NSR rules or Ohio's 
statement of permitting criteria) of detailed, explicit criteria for 
evaluating offset ratios. Relevant criteria include whether fugitive or 
secondary emissions (with or without mobile source emissions) are to be 
included in computing the ratio, what averaging time to use, whether 
the numerator or denominator is to be potential to emit or actual 
emissions, and where the offsets may occur. Since these criteria are 
not explicit or implicit elements of Ohio's rules, it would be 
difficult and impractical to implement the mandated offset ratios 
effectively and consistent with the Clean Air Act.
    Comment: The State agrees that ``Appendix S is not explicit in 
requiring annual, actual offsets,'' but observes that this requirement 
has been established by OEPA policy and is given in Ohio's submitted 
statement of permitting criteria.
    Response: USEPA acknowledges that OEPA interprets its regulation to 
require annual, actual offsets. However, this requirement should be 
given full regulatory standing by being incorporated into enforceable 
Ohio regulations.
    Comment: The State asserts that it has properly relied on 
definitions which are given in appendix S to 40 CFR part 51.
    Response: The definitions in appendix S are insufficient because of 
differences between appendix S and the amended Clean Air Act. Appendix 
S defines major stationary sources as sources with the potential to 
emit 100 tons per year (or sources modified such that potential to emit 
increases by 100 tons per year). The Clean Air Act provides that the 
term ``major stationary source'' in some areas includes sources with 
lower potential to emit, such as 50 tons per year in Serious ozone 
nonattainment areas. See section 182 of the Act. Since Ohio's 
regulations reference both the Clean Air Act and appendix S, Ohio's 
regulations are unclear as to which cutoffs apply.
    Comment: The State commented on USEPA's uncertainty as to whether 
the State intended in its statement of permitting criteria to lower the 
threshold of nitrogen oxides (NOx) source sizes at which major 
modifications would trigger new source review. The State commented it 
``does not intend to change this threshold.''
    Response: Notwithstanding its recent comments, the State did not 
change its statement of permitting criteria. Thus, Ohio's submittal 
contains a statement of permitting criteria that contradicts the 
criteria for major NOx modifications given by reference (i.e. in 
appendix S) in Ohio's regulations.
    Comment: Three commenters commented that requiring new State 
regulations every time Federal rules change would cause delays and 
reduce the adaptability of the new source review process.
    Response: With respect to the requirements of the 1990 Amendments, 
this rulemaking does not concern whether hypothetical Federal rule 
changes would require State rule revisions but rather whether the 1990 
Amendments require State rule revisions. The Clean Air Act has had 
significant amendments only twice since 1970, whereas Ohio has changed 
its Permit to Install (NSR) rules eight times during the same period. 
The commenters seek an approach that allows one set of State rules to 
impose changing requirements in accordance with changes in Federal 
mandates, but such approaches are prone to be too vague as to the 
precise obligations of regulated entities imposed by the rules and 
statute. In this particular case, the State's reference to the general 
mandates in the amended Clean Air Act does not provide sufficient 
specificity on the implementation of these mandates to be enforceable. 
In any event, Congress clearly provided for States to revise their SIP 
rules in accordance with the 1990 Amendments.
    These comments raise a further issue, namely the extent to which a 
State may change permitting requirements without providing opportunity 
for public input by means of a rule revision process. Ohio argues that 
the State's regulations provide for the applicability of requirements 
resulting from subsequent Clean Air Act amendments even without 
revision of the State rules. Under this view, there would be no reason 
for any State SIP submittal at all, and therefore no opportunity for 
public review and comment on the changed requirements. This runs 
counter to the general principle that regulations are to be interpreted 
based on requirements contemplated at the time of regulation adoption 
and not on the basis of subsequently devised criteria. For this reason 
as well, the State and USEPA would face obstacles in trying to enforce 
the requirements of the Clean Air Act Amendments of 1990.
    Comment: The State comments ``U.S. EPA had expressed a concern 
about certain items that were identified in the Clean Air Act as part 
of the review of new sources which were not identified in either state 
or Federal rules. Ohio EPA proposed a policy that includes these 
additional Federal requirements. The policy was issued in proposed 
format and a public hearing was held on the document. After a review of 
the comments, Ohio EPA submitted that policy as part of the State 
Implementation Plan.''
    Response: The State implicitly agrees that certain requirements in 
the Clean Air Act are not addressed by any rules contained or 
referenced in the State's SIP, which suggests further that these 
requirements have not been given regulatory standing in Ohio. The 
notice of proposed rulemaking focussed on Ohio's statement of 
permitting criteria, which USEPA finds to be an inadequate instrument 
for giving these requirements regulatory standing, notwithstanding that 
this policy statement was subject to public hearing. (Ohio had 
previously provided essentially the same policy statement without 
public review, but USEPA judged this and related material not to 
constitute a complete submittal.)
    Comment: The State commented on USEPA's concern that two source 
categories (certain types of municipal waste combustors and temporary 
sources) are exempted by appendix S and thus by Ohio rules and yet are 
not to be exempted under 40 CFR 51.165. The State commented that Ohio 
permits must comply with Federal law, Federal law does not permit these 
exemptions, and so the State has developed guidance that these 
exemptions do not apply.
    Response: The State did not submit to USEPA the guidance that it 
claims provides that these exemptions do not apply. The State's SIP 
does contain appendix S, incorporated by reference in Rule 3745-31-05, 
and indeed relies on appendix S to interpret applicable new source 
review requirements. Consequently, Ohio's regulations are to be 
interpreted as also providing the exemptions in appendix S and 
therefore do not satisfy even the pre-1990 NSR requirements of part D 
of title I of the Act.
    Comment: A local air pollution control agency comments that USEPA's 
involvement in permit oversight assures that Federal requirements will 
not be misapplied.
    Response: Although USEPA agrees that its permit oversight can 
improve the quality of State permits, such an oversight program is not 
a substitute for an approvable SIP. USEPA cannot through oversight 
establish or correct requirements which are not correctly provided in 
the State regulations.
    Comment: A commenter believes that USEPA acknowledges that Ohio's 
statutes and regulation ``already require that the provisions of the 
amended Clean Air Act be met.''
    Response: The commenter is quoting statements that USEPA used to 
characterize the State's position; these statements do not represent 
USEPA's position.

III. Final Action

    Notwithstanding comments to the contrary, USEPA's review indicates 
that Ohio's submittal does not clearly establish the specific criteria 
required by the Act by which judgments in new source permitting will be 
made. Furthermore, by relying not on properly adopted regulations but 
rather on a general regulatory provision (requiring compliance with the 
Clean Air Act) in conjunction with an unenforceable statement of 
permitting criteria, the State has failed to adopt enforceable SIP 
provisions to implement an NSR program in accordance with the Clean Air 
Act requirements. Furthermore, Ohio's existing regulations exempt two 
types of sources which may not be exempted under the Act and applicable 
USEPA regulations. For these reasons, USEPA takes final action to 
disapprove Ohio's submittal for failure to satisfy part D requirements.
    Under section 179(a)(2), one of the sanctions set forth in section 
179(b) shall apply unless the deficiency has been corrected within 18 
months of the effective date of this disapproval. Extensive discussion 
of USEPA's sanctions procedures is given in the Federal Register of 
August 4, 1994, at 59 FR 39832. Pursuant to 40 CFR 52.31, unless a 
revised plan has been submitted and proposed for approval in the 
meantime, a requirement for two-for-one offsets shall apply to any 
permits issued after [insert date 18 months after 30 days from date of 
publication] for major new sources and modifications in nonattainment 
areas. Highway funding sanctions shall apply [insert date 24 months 
after 30 days from date of publication], again unless a revised plan 
has been submitted and proposed for approval in the meantime.
    Nothing in this action should be construed as permitting, allowing 
or establishing a precedent for any future request for revision to any 
SIP. USEPA shall consider each request for revision to the SIP in light 
of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.
    Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities. (5 U.S.C. 603 and 604.) 
Alternatively, USEPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    USEPA's disapproval of the State request under section 110 and part 
D of the Clean Air Act does not affect any existing requirements 
applicable to small entities. Any pre-existing Federal requirements 
remain in place after this disapproval. Federal disapproval of the 
State submittal does not affect its State enforceability. Moreover, 
USEPA's disapproval of the submittal does not impose any new Federal 
requirements. Therefore, USEPA certifies that this disapproval action 
would not have a significant impact on a substantial number of small 
entities because it does not remove existing requirements nor does it 
impose any new Federal requirements.
    This action has been classified as a Table 2 action by the Regional 
Administrator under the procedures published in the Federal Register on 
January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993 
memorandum from Michael H. Shapiro, Acting Assistant Administrator for 
Air and Radiation. The OMB has exempted this regulatory action from 
Executive Order 12866 review.
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by November 21, 1994. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

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

    Dated: September 8, 1994.
Valdas V. Adamkus,
Regional Administrator.

    Chapter I, part 52, title 40 of the Code of Federal Regulationsis 
amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

    Authority: 42 U.S.C. 7401-7671q.

Subpart KK--Ohio

    2. Section 52.1879 is amended by adding paragraph (a) to read as 
follows:


Sec. 52.1879  Review of new sources and modifications.

    (a) The requirements of sections 172, 173, 182, and 189 for 
permitting of major new sources and major modifications in 
nonattainment areas for ozone, particulate matter, sulfur dioxide, and 
carbon monoxide are not met, because Ohio's regulations exempt source 
categories which may not be exempted and because the State has not 
adopted the new permitting requirements of the Clean Air Act Amendments 
of 1990 in a clear or enforceable manner.
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[FR Doc. 94-23349 Filed 9-20-94; 8:45 am]
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