[Federal Register Volume 59, Number 184 (Friday, September 23, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23604]


[[Page Unknown]]

[Federal Register: September 23, 1994]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IL78-1-6007; FRL-5078-3]

 

Proposed Approval and Promulgation of Revisions to the New Source 
Review State Implementation Plan; Illinois

AGENCY: United States Environmental Protection Agency (USEPA).

ACTION: Proposed rule.

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SUMMARY: The USEPA proposes to approve with a contingency, and 
disapprove in the alternative, a requested State Implementation Plan 
(SIP) revision submitted by the State of Illinois for the purpose of 
meeting requirements of the Clean Air Act, as amended in 1990 (amended 
Act) with regard to new source review (NSR) in areas that have not 
attained the national ambient air quality standards (NAAQS). The 
requested revision was submitted by the State to satisfy certain 
Federal requirements for an approvable nonattainment new source review 
SIP for Illinois. This proposed approval is contingent upon the State 
correcting existing deficiencies in its NSR submittal before the USEPA 
promulgates a final rulemaking on this submittal. Should Illinois fail 
to correct all deficiencies in its NSR submittal, then this document 
will serve as a proposed disapproval of the State's submittal.
DATES: Comments on this proposed action must be received in writing by 
November 22, 1994.

ADDRESSES: Comments on this proposed rule should be addressed to: J. 
Elmer Bortzer, Chief, Regulation Development Section, Regulation 
Development Branch (5AR-18J), United States Environmental Protection 
Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.
    Copies of the State's submittal and other information are available 
for inspection during normal business hours at the following location: 
United States Environmental Protection Agency, Region 5, Air and 
Radiation Division, Regulation Development Branch, 77 West Jackson 
Boulevard, Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Jennifer Drury-Buzecky, Environmental 
Protection Specialist, Permits and Grants Section, Regulation 
Development Branch (5AR-18J), United States Environmental Protection 
Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.
    Anyone wishing to come to the Region 5 offices should first contact 
Ms. Drury-Buzecky at (312) 886-3194. Reference file IL78-1-6007.

SUPPLEMENTARY INFORMATION:

I. Background

    The air quality planning requirements for nonattainment NSR are set 
out in part D of title I of the Clean Air Act (Act). The USEPA has 
issued a ``General Preamble'' describing its preliminary views on how 
USEPA intends to review SIPs and SIP revisions submitted under part D, 
including those State submittals containing nonattainment area NSR SIP 
requirements (see 57 FR 13498 (April 16, 1992) and 57 FR 18070 (April 
28, 1992)). Because USEPA is describing its interpretations here only 
in broad terms, the reader should refer to the General Preamble for a 
more detailed discussion of the interpretations of part D advanced in 
this proposal and the supporting rationale. The USEPA is currently 
developing a proposed rule to assist the implementation of the changes 
under the amended Act in the new source review provisions in parts C 
and D of title I of the Act. The USEPA anticipates that the proposed 
rule will be published for public comment in late 1994. If USEPA has 
not taken final action on States' NSR submittals by that time, USEPA 
may refer to the proposed rule as the most authoritative guidance 
available regarding the approvability of the submittals. USEPA expects 
to take final action to promulgate a rule to implement the parts C and 
D changes sometime during 1995. Upon promulgation of those regulations, 
USEPA will review the NSR SIPs of all States to determine whether 
additional SIP revisions are necessary.
    Prior to USEPA approval of a State's NSR SIP submission, the State 
may continue permitting only in accordance with the new statutory 
requirements for permit applications completed after the relevant SIP 
submittal date. This policy was explained in transition guidance 
memoranda from John Seitz dated March 11, 1991 and September 3, 1992.
    As explained in the March 11 memorandum, USEPA does not believe 
Congress intended to mandate the more stringent title I NSR 
requirements during the time provided for SIP development. States were 
thus allowed to continue to issue permits consistent with requirements 
in their current NSR SIPs during that period, or apply 40 CFR part 51, 
appendix S for newly designated areas that did not previously have NSR 
SIP requirements.
    The September 3 memorandum also addressed the situation where 
States did not submit the part D NSR SIP requirements or revisions by 
the applicable statutory deadline. For permit applications found 
complete by the SIP submittal deadline, States may issue final permits 
under the prior NSR rules, assuming certain conditions in the September 
3 memorandum are met. However, for applications completed after the SIP 
submittal deadline, USEPA will consider the source to be in compliance 
with the Act only where the source obtains from the State a permit that 
is consistent with the substantive new NSR part D provisions in the 
amended Act. USEPA believes this guidance continues to apply to 
permitting pending final action on NSR SIP submittals.
    In this rulemaking action on the Illinois nonattainment NSR SIP 
revisions, USEPA is proposing to apply its interpretations taking into 
consideration the specific factual issues presented. Thus, USEPA will 
consider any timely submitted comments before taking final action on 
this proposed rule.

II. Proposed Rulemaking Action

    Section 110(k) of the Act sets out provisions governing USEPA's 
review of SIP submittals (see 57 FR 13565-13566).

A. Analysis of State Submission

1. Procedural Background
    The Act requires States to observe certain procedural requirements 
in developing implementation plans and plan revisions for submission to 
USEPA. Section 110(a)(2) of the Act provides that each implementation 
plan submitted by a State must be adopted after reasonable notice and 
public hearing.1 Section 110(l) of the Act similarly provides that 
each revision to an implementation plan submitted by a State under the 
Act must be adopted by such State after reasonable notice and public 
hearing.
---------------------------------------------------------------------------

    \1\Section 172(c)(7) of the Act provides that plan provisions 
for nonattainment areas shall meet the applicable provisions of 
section 110(a)(2).
---------------------------------------------------------------------------

    The USEPA also must determine whether a submittal is complete and 
therefore warrants further USEPA review and action. (See section 
110(k)(1) and 57 FR 13565 (April 16, 1992).) The USEPA's completeness 
criteria for SIP submittals are set out at 40 CFR part 51, appendix V. 
The USEPA attempts to make completeness determinations within 60 days 
of receiving a submission. However, a submittal is deemed complete by 
operation of law under section 110(k)(1)(B) if a completeness 
determination is not made by USEPA within 6 months after receipt of the 
submission.
    The State of Illinois submitted draft NSR rules to USEPA for 
parallel processing on November 15, 1992. The State of Illinois then 
held public hearings on January 6 and February 5, 1993, to entertain 
public comment on the NSR implementation plan revisions. At those 
hearings, the Illinois Pollution Control Board (Board) formally adopted 
several interpretations of those rules. Following the public hearings, 
the rules were adopted by the State on April 30, 1993, and both the 
rules and interpretations were submitted to USEPA on June 21, 1993, as 
a requested revision to the SIP. The requested SIP revision thus 
includes the NSR rules and the interpretations of those rules adopted 
by the State.
    The SIP revision request was reviewed by USEPA to determine 
completeness shortly after its submittal, in accordance with the 
completeness criteria referenced above. The submittal was found to be 
complete on August 24, 1993, and a letter was sent on that date to the 
Governor's designee, Bharat Mathur, Chief, Bureau of Air, Illinois 
Environmental Protection Agency, indicating the completeness of the 
submittal and the next steps to be taken in the review process. On May 
27, 1994, the State submitted an amendment to its NSR submittal 
consisting of a correction of 35 Ill. Adm. Code Section 203.209 (a)(4). 
USEPA will consider that amendment in this rulemaking.
2. General Nonattainment NSR Requirements
    The statutory requirements for nonattainment new source review SIPs 
and permitting are found at sections 172 and 173 of the Act. Part D of 
title I of the Act requires States to address a number of nonattainment 
NSR provisions in a SIP revision submittal. What follows is a summary 
of the requirements and how the Illinois submittal addresses them.
    a. No growth moratoriums exist in the State of Illinois subsequent 
to USEPA action on December 17, 1992. 57 FR 59928.
    b. Illinois has established provisions according to section 
173(a)(1) to assure that calculations of emissions offsets are based on 
the same emissions baseline used in the demonstration of Reasonable 
Further Progress (RFP).
    c. Illinois has established provisions according to section 
173(c)(1) to allow offsets to be obtained in another nonattainment area 
if the area has an equal or higher nonattainment classification and 
emissions from the other nonattainment area contribute to a NAAQS 
violation in the area in which the source would construct.
    d. Illinois has established provisions according to section 
173(c)(1) that any emissions offsets obtained in conjunction with the 
issuance of a permit to a new or modified source must be in effect and 
enforceable by the time the new or modified source commences operation.
    e. Illinois has established provisions according to section 
173(c)(1) to assure that emissions increases from new or modified 
sources are offset by real reductions in actual emissions.
    f. Illinois has established provisions according to section 
173(c)(2) to prevent emissions reductions otherwise required by the Act 
from being credited for purposes of satisfying part D offset 
requirements.
    g. Illinois has established provisions according to sections 
172(c)(4) and 173(a)(1)(B) that reflect changes in growth allowances; 
specifically: (1) The elimination of existing growth allowances in any 
nonattainment area that received a notice prior to the amended Act that 
the SIP was substantially inadequate or receives such a notice in the 
future; and (2) the restriction of growth allowances to only those 
portions of nonattainment areas formally targeted as special zones for 
economic development. It should be noted that Illinois does not have 
any existing growth allowances in nonattainment areas, nor are there 
currently any existing zones for economic development. The State's 
submittal, however, does restrict growth allowances to special zones 
for economic development in accordance with section 173(a)(1)(B) of the 
amended Act.
    h. Illinois has established provisions according to section 
173(a)(5) that, as a prerequisite to issuing any part D permit, require 
an analysis of alternative sites, sizes, production processes, and 
environmental control techniques for proposed sources that demonstrates 
that the benefits of the proposed source significantly outweigh the 
environmental and social costs imposed as a result of its location, 
construction, or modification.
    i. Illinois has provided according to section 173(d) for the 
supplying of information from nonattainment new source review permits 
to USEPA's Reasonably Available Control Technology, Best Available 
Control Technology, Lowest Achievable Emissions Reduction (RACT/BACT/
LAER) clearinghouse. This provision is contained in the State's 
workplan of its NSR grant.
    j. Illinois has established provisions according to section 173(e) 
that allow any existing or modified source that tests rocket engines or 
motors to use alternative or innovative means to offset emissions 
increases from firing and related cleaning, if four conditions are met: 
(a) The proposed modification is for expansion of a facility already 
permitted for such purposes prior to November 15, 1990; (b) the source 
has used all available offsets and all reasonable means to obtain 
offsets and sufficient offsets are not available; (c) the source has 
obtained a written finding by the appropriate, sponsoring Federal 
agency that the testing is essential to national security; and (d) the 
source will comply with an alternative measure designed to offset any 
emissions increases not directly offset by the source.
    k. Illinois has not established provisions according to section 819 
of the amended Act that effectively exempt activities related to 
stripper wells from the new additional NSR requirements of new subparts 
2, 3, and 4 for Particulate Matter of 10 microns or less (PM-10), 
Ozone, or Carbon Monoxide (CO) nonattainment areas classified as 
serious or less and having a population of less than 350,000. Illinois 
does not presently have any stripper well operations and, therefore, 
this provision does not apply.
    l. Illinois has not established provisions according to section 328 
to assure that sources located on the Outer Continental Shelf (OCS) and 
within 25 miles of the State's seaward boundary, are subject to the 
same requirements applicable if the source were located in the 
corresponding on shore area. Because the State is not located on the 
OCS, section 328 does not apply.
    m. Illinois has established, according to sections 302(z) and 
111(a)(3), a definition of ``stationary source'' to include internal 
combustion engines other than the newly defined category of ``nonroad 
engines''.
    n. Illinois has established provisions under section 173(a)(3) to 
assure that owners or operators of each proposed new or modified major 
stationary source demonstrate, as a condition of permit issuance, the 
compliance of all other major stationary sources under the same 
ownership in the State.
3. Ozone
    According to section 172(c)(5), State implementation plans must 
require permits for the construction and operation of new or modified 
major stationary sources. The statutory permit requirements in ozone 
nonattainment areas are generally contained in section 173, and in 
subpart 2 of part D. These are the minimum requirements that States 
must include in an approvable implementation plan. For all 
classifications of ozone nonattainment areas and for ozone transport 
regions, States must adopt the appropriate major source thresholds and 
offset ratios, and must adopt provisions to ensure that any new or 
modified major stationary source of Oxides of Nitrogen (NOX) 
satisfies the requirements applicable to any major source of Volatile 
Organic Compounds (VOC), unless a special NOX exemption is granted 
by the Administrator under the provision of section 182(f). For serious 
and severe ozone nonattainment areas, State plans must implement 
sections 182(c) (6), (7) and (8) with regard to modifications. For 
emissions of VOC and NOX in ozone nonattainment areas, Illinois 
has established major source thresholds, offset ratios, and included 
provisions for NOX major stationary sources as follows:

------------------------------------------------------------------------
                                    Major                               
       Area classification          source     Offset     NOXprovisions 
                                  threshold    ratio                    
------------------------------------------------------------------------
Marginal........................       100       1.1:1  provided.       
Moderate........................       100      1.15:1  provided.       
Serious.........................        50       1.2:1  provided.       
Severe..........................        25       1.3:1  provided.       
------------------------------------------------------------------------

It should be noted that there are no areas classified as extreme ozone 
nonattainment areas in Illinois. The State has areas classified as 
severe, moderate and marginal.
    In addition, with certain exceptions described below, Illinois' 
plan submittal reflects appropriate modification provisions, including 
a de minimis level of 40 tons for marginal and moderate nonattainment 
areas. Section 203.209 of the State's rules details when a net 
emissions increase is significant. In general, a net emission increase 
is significant if it is equal to the emissions level specified in 
section 203.209(a)(1)-(6) and section 203.209(b). In order to establish 
whether an increase in emissions is significant, the net emissions 
increase must be calculated. USEPA interprets its current regulations 
for areas other than serious and severe ozone nonattainment areas as 
requiring that a proposed modification must by itself result in a 
significant emissions increase to be considered a major modification. 
If it does not result in a significant emissions increase, prior 
accumulated emissions may be ignored. USEPA interprets Illinois' NSR 
rules in the same manner. Traditionally, the calculation of net 
emissions involves adding the creditable increases and decreases over a 
period of time beginning at the time the emission increase is projected 
to occur and going back for the previous consecutive 5 years. Illinois 
seeks to rely on section 182(c)(6) of the amended Act to establish a 
new method of calculating net emission increases in serious and severe 
ozone nonattainment areas.
    Section 203.209(b) of the Illinois rule states that an increase in 
Volatile Organic Material (VOM), an equivalent term to VOC, or NOX 
shall be considered significant if the net emissions increase of such 
air pollutant from a stationary source located within such area exceeds 
25 tons when aggregated with all other net increases in emissions from 
the source over any period of 5 consecutive calendar years which 
includes the calendar year in which such increase occurred. Although 
Illinois' section 203.209(b) is very similar to section 182(c)(6) of 
the Act for netting in serious and severe ozone nonattainment areas, an 
issue exists regarding the proper interpretation of ``5 consecutive 
calendar years'' and ``net emissions increase''.
    USEPA believes that the language of section 203.209(b) by itself 
would be approvable, however, the two written interpretations of 
section 203.209(b) adopted by the State, unless withdrawn, will require 
disapproval of the State's submittal. USEPA, therefore, proposes to 
approve section 203.209(b) contingent upon the actual withdrawal of the 
Board's interpretations prior to final rulemaking. If the Board does 
not withdraw these interpretations by USEPA's final rulemaking, then 
this notice serves as a proposed disapproval of this SIP revision 
submittal. The reasons for USEPA's proposed approval (contingent upon 
withdrawal of these interpretations) are outlined below. For further 
information regarding this rulemaking refer to the technical support 
document included in this docket.
    To accompany section 203.209(b) of the Illinois rule, intended to 
implement section 182(c)(6) of the Act, Illinois submitted two 
interpretations of the rule adopted by the State. The first 
interpretation allows a source in a serious or severe ozone 
nonattainment area to use a contemporaneous 5-year period for netting 
that includes projected emission decreases in future years as well as 
actual decreases from past years. In other words, under Illinois' 
interpretation, a source could propose a modification resulting in a 
significant emission increase and yet not be required to obtain a major 
NSR permit merely because the source asserts that it intends to make a 
future modification resulting in an emission decrease. As discussed 
below, Illinois' rule and interpretations fail to assure that such 
future emission decreases will in fact occur. USEPA is not in this 
rulemaking proposing to decide whether future years are acceptable for 
purposes of netting emission increases and decreases under section 
182(c)(6). In a rulemaking to revise and update its nationally 
applicable NSR rules, USEPA will soon propose its interpretation of 
section 182(c)(6), (7) and (8) and intends to request comments on the 
use of emission decreases in future years as netting credits against 
emission increases from a proposed modification or new construction. 
After this national rulemaking becomes final, USEPA will reexamine all 
NSR SIPs to ensure conformity with USEPA's new regulations to implement 
the amended Act.
    The State's interpretation allowing the use of emission decreases 
in future years does not ensure that these future decreases will be 
federally enforceable. For example, the Illinois interpretation of the 
rule does not require that future decreases be placed in a construction 
permit as a federally enforceable permit condition, nor does the rule 
or interpretation require that these future decreases meet all 
requirements for creditable netting credits. One such requirement is 
that decreases used for netting purposes be actual emission decreases. 
Although USEPA does not intend in this proposed rulemaking to address 
the issue of whether future decreases may ever be used under section 
182(c)(6), USEPA believes that future decreases certainly may not be 
used where the SIP does not require these decreases to be federally 
enforceable. Federal enforceability is essential to assure that the 
projected future netting reductions being relied on to offset the new 
emission increase will actually occur so that the net emission increase 
is less than a significant increase and is not improperly escaping 
review. To summarize, although Illinois' written interpretation of the 
rule is not approvable, the language of the rule, standing alone, would 
be approvable.
    The second interpretation of section 203.209(b) adopted by the 
State concerns whether a net emissions increase of a particular 
pollutant is significant. The interpretation states that the netting 
calculation commences with the date of an area's designation as 
nonattainment. Many of these nonattainment designations occurred after 
the November 15, 1990, effective date of the Act. Using the State's 
interpretation, the 5-year period for calculation of a net emissions 
increase of NOX in the Chicago area would not begin until November 
15, 1992. This would allow a NOX source applying for a NSR permit 
in Chicago on November 15, 1992, to use a 5-year contemporaneous period 
from November 15, 1992, to November 15, 1997. Past emission increases 
occurring before November 15, 1992, would not be included in the 
calculation to determine whether the proposed project would result in a 
significant emissions increase because Illinois' interpretation does 
not allow the netting calculation for NOX to begin until November 
15, 1992.
    The Illinois interpretation of the rule specifically provides: (1) 
The netting calculation for VOM emissions commences no earlier than 
January 6, 1992, in the newly designated nonattainment areas in the 
Chicago area; (2) for sources located in all ozone nonattainment areas 
of the State, the calculation for NOX commences no earlier than 
November 15, 1992; (3) for sources with the potential to emit at least 
25 tons per year (tpy) but less than 100 tpy and which are located in 
the Chicago nonattainment area, the netting calculation for VOM 
emissions commences at either the time that the source became major or 
November 15, 1990, whichever is later; and (4) for sources with 
complete construction permit applications filed (including Prevention 
of Significant Deterioration applications) prior to the date of an area 
as nonattainment, or the dates given above, whichever occurs later, the 
netting calculation shall not include emission increases allowed by 
that permit.
    This four-part second interpretation of section 203.309(b) 
compounds the problems discussed above concerning the first 
interpretation. Whereas the first interpretation allows sources to use 
future decreases, the second interpretation, by cutting off use of past 
years, compels sources in serious and severe ozone nonattainment areas 
to use future years for the netting calculation, again without 
requiring these future emission decreases to be federally enforceable. 
Thus, all interpretations of the rule adopted by the State do not 
ensure the Federal enforceability of all emission decreases in the 
contemporaneous period and fail to account for all emission increases. 
USEPA believes that all interpretations should be disapproved as 
conflicting with the Act. Because the language of the rule, standing 
alone, would be approvable, USEPA proposes to approve section 
203.209(b) adopted by the State contingent upon the Board withdrawing 
all interpretations of section 203.209(b) prior to final USEPA 
rulemaking.
    The USEPA is limited in its ability to disapprove a portion of a 
State rule and approve the remainder if the effect is to make the 
approved portion of the rule more stringent than intended by the State. 
In Bethlehem Steel Corporation v. Gorsuch 742 F. 2d 1028 (7th Cir. 
1984), the Court held that at least in certain circumstances USEPA may 
not approve parts of a SIP request and disapprove other parts if the 
effect of the action is to make the SIP more stringent than the State 
intended. For this reason in order for USEPA to approve the State's NSR 
rule, the interpretations of section 203.209(b) adopted by the Board in 
its final Opinion and Order of the Board must be withdrawn from the 
Opinion and Order.
    The State of Illinois' NSR rules for serious and severe ozone 
nonattainment areas provide that major modifications to existing 
sources that have a potential to emit of less than 100 tpy of VOM or 
NOX shall substitute BACT for LAER and may avoid major NSR by 
internally offsetting the emissions increase by a ratio of 1.3 to 1. 
The State also provides that major modifications to existing sources 
that have a potential to emit of greater than 100 tpy of VOM or 
NOX may avoid LAER requirements by internally offsetting the 
emissions increase by a ratio of 1.3 to 1. For more detail, refer to 
the technical support document included with this docket.
4. Carbon Monoxide
    The statutory NSR requirements for CO nonattainment areas are 
generally contained in section 173, and in subpart 3 of part D. These 
are the minimum requirements that States must include in an approvable 
implementation plan. States must adopt the appropriate major source 
threshold and offset ratio.
    Illinois has established a major source threshold of 50 tpy, and an 
offset ratio of an amount equal to or greater than the amount of 
emission increase for serious CO nonattainment areas. It should be 
noted that there are no CO nonattainment areas in Illinois.
5. PM-10
    The statutory NSR requirements for PM-10 nonattainment areas are 
generally contained in section 173, and in subpart 4 of part D. These 
are the minimum requirements that States must include in an approvable 
implementation plan. For PM-10 nonattainment areas States must adopt 
the appropriate major source threshold, offset ratio, significance 
level for modifications, and provisions for PM-10 precursors.
    Illinois has established major source thresholds, offset ratios, 
modification significance levels, and PM-10 precursor provisions as 
follows: In section 203.209(b)(4) a major source threshold level of 100 
tpy in an area classified as moderate nonattainment, 70 tpy major 
source threshold level in areas classified as serious, and in its 
initial submittal, an incorrect significance level of 25 tpy in section 
203.209. The State, however, amended this incorrect significance level 
to provide for the correct level of 15 tpy in a subsequent rulemaking 
effective April 15, 1994. 35 Ill. Adm. Code 203.209(a)(4). This 
rulemaking was submitted to USEPA on May 27, 1994, to correct the 
deficiency in the original submittal. USEPA is, therefore, proposing to 
take action on the corrected 15 tpy significance level. The general 
offset requirement of an amount equal to or greater than the amount of 
emissions increase is established in section 203.302(a).
    The control requirements which are applicable to major stationary 
sources of PM must also apply to major stationary sources of PM 
precursors unless USEPA determines such sources do not contribute 
significantly to PM levels which exceed the NAAQS in that area (see 
section 189(e) of the Act.) Illinois has four moderate PM-10 
nonattainment areas: McCook, LaSalle, Lake Calumet and Granite City. 
See TSD for definitions of these nonattainment areas. On October 21, 
1993, USEPA promulgated a final rule finding that precursors do not 
significantly contribute to PM concentrations in the LaSalle 
nonattainment area. 58 FR 54291. USEPA also proposed a rulemaking 
asserting that precursors do not significantly contribute to PM 
concentrations in the remaining three nonattainment areas. This 
proposal was published on May 25, 1994. 59 FR 26988. If this action is 
finalized, section 189(e) would no longer require NSR on major PM 
precursor sources. Please see TSD if more information is desired, or 
see the May 25, 1994, proposed rule at 59 FR 26988.
6. Sulfur Dioxide
    The statutory NSR requirements for Sulfur Dioxide (SO2) 
nonattainment areas are generally contained in section 173, and in 
subpart 5 of part D. These are the minimum requirements that States 
must include in an approvable implementation plan. For SO2 
nonattainment areas, States must adopt the appropriate major source 
threshold, offset ratio, and significance level for modifications.
    Illinois has established a major source threshold of 100 tpy, an 
offset ratio of an amount equal to or greater than the amount of 
emissions increased, and a modification significance level of 40 tpy.
7. Lead
    The statutory NSR requirements for lead nonattainment areas are 
generally contained in section 173, and in subpart 5 of part D. These 
are the minimum requirements that States must include in an approvable 
implementation plan. For lead nonattainment areas, States must adopt 
the appropriate major source threshold, offset ratio, and significance 
level for modifications.
    Illinois has established a major source threshold level of 100 tpy, 
an offset ratio of an amount equal to or greater than the amount of 
emissions increased, and a modification significance level of .6 tpy. 
It should be noted that there are presently no lead nonattainment areas 
in Illinois.
8. Nitrogen Dioxide
    The statutory NSR requirements for nitrogen dioxide nonattainment 
areas are generally contained in section 173, and in subpart 5 of part 
D. These are the minimum requirements that States must include in an 
approvable implementation plan. For nitrogen dioxide nonattainment 
areas, States must adopt the appropriate major source threshold, offset 
ratio, and significance level for modifications.
    Illinois has established a major source threshold of 100 tpy, an 
offset ratio of an amount equal to or greater than the amount of 
emissions increased, and a modification significance level of 40 tpy. 
It should be noted that there are presently no nitrogen dioxide 
nonattainment areas in Illinois.
9. Plantwide Source Definition
    On October 4, 1981, the USEPA revised the NSR regulations in 40 CFR 
part 51 to give States the option of adopting the ``plantwide'' 
definition of stationary source which provides that only physical or 
operational changes that result in a net increase in emissions at the 
entire plant require a NSR permit. For example, if a plant decreased 
emissions by the same amount at another piece of process equipment, 
then there would be no net increase in emissions at the plant and 
therefore, no ``modification'' to the ``source.'' The plantwide 
definition is in contrast to the so-called ``dual'' definition [or 
definition of structure like that in the 1979 offset ruling (44 FR 
3274), which has much the same effect as the dual definition]. Under 
the dual definition, the emissions from each physical or operational 
change are gauged without regard to reductions elsewhere at the plant.
    In the October 1981 rule, USEPA set forth its rationale for 
allowing use of the plantwide definition (46 FR 50766-50769). In its 
view, allowing use of the plantwide definition was a reasonable 
accommodation of the conflicting goals of part D of title I of the Act. 
The Act provided for reasonable further progress (RFP) and timely 
attainment of National Ambient Air Quality Standards (NAAQS), while 
also allowing for maximum State flexibility and economic growth. The 
USEPA recognized that the plantwide definition would bring fewer plant 
modifications into the nonattainment permitting process, but emphasized 
that this generally would not interfere with RFP and timely attainment 
primarily because the States under the demands of part D eventually 
would have adequate SIPs in place. For instance, USEPA stated:

    Since demonstration of attainment and maintenance of the NAAQS 
continues to be required, deletion of the dual definition increases 
State flexibility without interfering with timely attainment of the 
ambient standards and so is consistent with Part D [46 FR 50767].

    USEPA also indicated that under the plantwide definition, new 
equipment would still be subjected to any applicable new source 
performance standard and that wholly new plants, as well as any 
modifications that resulted in a significant net emissions increase, 
would still be subject to NSR. Thus, USEPA saw no significant 
disadvantage in the plantwide definition from the environmental 
standpoint, but advantages from the standpoints of State flexibility 
and economic growth. It regarded the plantwide definition as 
presenting, at the very worst, environmental risks that were manageable 
because of the independent impetus to create adequate part D plans.
    As a result, USEPA ruled that a State wishing to adopt a plantwide 
definition generally has complete discretion to do so, and it set only 
one restriction on that discretion. If a State had specifically 
projected emission reductions from its NSR program as a result of a 
dual or similar definition and had relied on those reductions in an 
attainment strategy that USEPA later approved, then the State needed to 
revise its attainment strategy as necessary to accommodate reduced NSR 
permitting under the plantwide definition (46 FR 50767 and 50769).
    In 1984, the Supreme Court upheld USEPA's action as a reasonable 
accommodation of the conflicting purposes of part D of title I of the 
Act, and hence, well within USEPA's broad discretion. Chevron, U.S.A. 
v. NRDC, 104 S.Ct. 2778 (1984). Specifically, the Court agreed that the 
plantwide definition is fully consistent with the Act's goal of 
maximizing State flexibility and allowing reasonable economic growth. 
Likewise, the Court recognized that USEPA had advanced a reasonable 
explanation for its conclusion that the plantwide definition serves the 
Act's environmental objectives as well (see 104 S.Ct. at 2792). In this 
rule USEPA generally reaffirms the rationales stated in the 1981 
rulemaking. Those rationales were left undisturbed by the Supreme Court 
decision.
    The SIP revision USEPA is approving in this action substitutes a 
plantwide definition for a dual definition in Illinois' existing 
nonattainment NSR program. A September 2, 1994, letter from Bharat 
Mathur, Chief, Bureau of Air of IEPA, to Stephen Rothblatt, Chief, Air 
and Radiation Branch, USEPA, states Illinois' rationale for 
implementing the plantwide definition. The letter further states that 
in obtaining USEPA approval of its original part D SIP, Illinois did 
not rely on emission reductions from its existing NSR program. Illinois 
has nonattainment areas for sulfur dioxide, ozone, and fine particulate 
matter. Illinois has submitted several revisions required by the 
amended Act prior to attainment of the NAAQS by the statutory dates, 
which range from 1994 to 2007 for the nonattainment areas in Illinois. 
For example, Illinois has submitted revisions for VOC RACT Rule Fix-
ups, Stage II vapor recovery, employee commute options, 1990 base year 
ozone emissions inventories, and emission statement. These revisions 
have been or will be acted on by USEPA in subsequent actions.
10. Miscellaneous Definitions
    Section 203.123 of the Board's rules adds the definition of 
federally enforceable to the State's NSR SIP. The State's definition is 
consistent with 40 CFR 51.165(a)(i)(xiv).
    Section 203.303 of the Board's rules amends the definition of 
baseline and emission offsets determination. The new definition 
provides that to obtain offsets for a prior shutdown, the proposed new 
or modified source must be a replacement for the shutdown or 
curtailment until USEPA approves an attainment demonstration and State 
trading or marketing rules for the relevant pollutant. This definition 
complies with 40 CFR 51.165(a)(3)(ii)(C).

III. Implications of This Action

Proposed Rulemaking Actions

    As stated above, the Illinois NSR submittal contains a deficiency 
for which USEPA proposes approval of the State's requested SIP revision 
with a contingency and a proposed disapproval in the alternative.
    Illinois adopted written interpretations of section 203.209(b) in 
an attempt to implement the amended Act's special provisions for 
serious and severe ozone nonattainment areas, section 182(c)(6)-(8). 
USEPA proposes to approve section 203.209(b) adopted by the State only 
if the State withdraws its interpretations. The interpretations adopted 
by the State are deficient in that they do not ensure the Federal 
enforceability of any future emission reductions used for netting 
credits and fail to account for all emission increases occurring during 
the contemporaneous period. This proposed approval is contingent upon 
the withdrawal of all Board interpretations of section 203.209(b) as 
soon as possible. If the Board's interpretations of section 203.209(b) 
are not withdrawn before final rulemaking, USEPA proposes in the 
alternative that USEPA's final action would be a disapproval of the 
entire submittal.
    After the completion of the 60-day public comment period, USEPA 
will ordinarily require 30 days to prepare a final notice incorporating 
all comments received. This notice is then forwarded to USEPA 
headquarters for review. Once USEPA headquarters' 45-day review period 
is completed, the final notice will be sent to the Office of the 
Federal Register for publication. USEPA, therefore, expects to take 
final action on this rulemaking within 180 days of publication of this 
proposal.
    USEPA is alternatively proposing disapproval of the State's 
submittal. If finalized, this proposed disapproval would constitute a 
disapproval under section 179(a)(2) of the Act (see generally 57 FR 
13566-13567). As provided under section 179(a) of the Act, the State of 
Illinois would have up to 18 months after a final SIP disapproval to 
correct the deficiencies that are the subject of the disapproval before 
USEPA is required to impose sanctions. If the State does not correct 
its SIP deficiencies within 18 months, then section 179(a)(4) requires 
the immediate application of sanctions. According to 179(b), sanctions 
can take the form of a loss of highway funds or a two to one emissions 
offset ratio. Once the Administrator applies one of the section 179(b) 
sanctions, the State will then have an additional six months to correct 
any deficiencies. Section 179(a)(4) requires that both highway and 
offsets sanctions must be applied if any deficiencies are still not 
corrected after the additional six month period.
    On August 4, 1994, the USEPA finalized its selection of sequence of 
mandatory sanctions for findings made pursuant to section 179 of the 
Act. 59 FR 39832. This rulemaking states that the section 179(b)(2) 
offset sanction applies in an area 18 months from the date when the 
USEPA makes a finding under section 179(a) with regard to that area. 
Furthermore, the section 179(b)(1) highway funding restrictions apply 
in an area 6 months following application of the offset sanction. The 
USEPA will sequence the application of the section 179(b) sanctions in 
this manner in all cases unless the USEPA decides highway sanctions 
apply first by individual notice-and-comment rulemaking. USEPA, 
therefore, anticipates that the first sanction it would impose would be 
the two to one offset sanction. If the State has not corrected its 
deficiency within 6 months thereafter, USEPA must impose the other 
(highway) sanction. Any sanction USEPA imposes must remain in place 
until USEPA determines that the State has come into compliance.
    If the USEPA's proposed disapproval of all or part of the SIP 
submittal for the State's nonattainment new source review provisions 
become a final disapproval, this will constitute a ``finding'' under 
section 179(a) for which sanctions will apply as described above. If 
the State fails to correct the deficiency within 18 months of such 
disapprovals, USEPA is required to impose sanctions per section 179(a) 
and presumably in the order described above. Note also that any final 
disapproval would trigger the section 110(c)(1) Federal Implementation 
Plan (FIP) provision. In the interim between the finding and either the 
State's correction of the SIP or the promulgation of the FIP, the State 
must issue NSR permits that conform with the requirements of the Act. 
These requirements will be embodied in the Federal part D NSR 
permitting regulations at 40 CFR 52.10.

IV. Request for Public Comments

    The USEPA is requesting comments on all aspects of the requested 
SIP revision and USEPA's proposed rulemaking action. Comments received 
by the date indicated above will be considered in the development of 
USEPA's final rulemaking action.

V. Executive Order 12866

    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 Office of Management and Budget (OMB) has 
exempted this regulatory action from Executive Order 12866 review.
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any SIP. Each request for revision to the SIP shall be 
considered separately in light of specific technical, economic, and 
environmental factors and in relation to relevant statutory and 
regulatory requirements.

VI. Regulatory Flexibility

    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 
subchapter I, part D of the 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 does 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.
    SIP approvals under section 110 and subchapter I, part D of the Act 
do not create any new requirements, but simply approve requirements 
that the State is already imposing. Therefore, because the Federal SIP-
approval does not impose any new requirements, I certify that it does 
not have a significant impact on any small entities affected. Moreover, 
due to the nature of the Federal-State relationship under the Act, 
preparation of a regulatory flexibility analysis would constitute 
Federal inquiry into the economic reasonableness of State action. The 
Act forbids USEPA to base its actions concerning SIP's on such grounds. 
Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S. Ct 1976); 
42 U.S.C. 7410(a)(2).

List of Subjects in 40 CFR Part 52

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

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

    Dated: September 15, 1994.
Robert Springer,
Acting Regional Administrator.
[FR Doc. 94-23604 Filed 9-22-94; 8:45 am]
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