[Federal Register Volume 60, Number 145 (Friday, July 28, 1995)]
[Proposed Rules]
[Pages 38777-38780]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-18618]



-----------------------------------------------------------------------


ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52

[NV 11-1-7118; FRL-5265-3]


Clean Air Act Approval and Promulgation of New Source Review 
Implementation Plan for Clark County, NV

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The EPA proposes to approve with a contingency, and disapprove 
in 

[[Page 38778]]
the alternative, a requested State Implementation Plan (SIP) revision 
submitted by the State of Nevada on behalf of Clark County for the 
purpose of meeting requirements of the Clean Air Act, as amended in 
1990 (CAA or 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. This submittal also satisfies the requirements for a Prevention of 
Significant Deterioration (PSD) program. This proposed approval is 
contingent upon Clark County correcting existing deficiencies in its 
NSR and PSD submittal before EPA promulgates a final rulemaking on this 
submittal. Should Clark County fail to correct all deficiencies in this 
submittal, then this document will serve as a proposed disapproval of 
the submittal.

DATES: Comments on this proposed action must be received in writing by 
August 28, 1995.

ADDRESSES: To submit comments or receive further information, please 
contact: Jennifer Fox, Environmental Engineer, New Source Section, Air 
& Toxics Division (A-5-1), EPA Region 9, 75 Hawthorne Street, San 
Francisco, CA 94105. Copies of the State's submittal and other 
information are available for inspection during normal business hours 
at the following locations: (1) EPA Region 9, 75 Hawthorne Street, San 
Francisco, CA 94105; (2) State of Nevada Department of Conservation and 
Natural Resources, Division of Environmental Protection, Capitol 
Complex, 333 W. Nye Lane, Carson City, Nevada 89710; (3) Clark County 
Health District, 625 Shadow Lane, Las Vegas, NV 89127.

FOR FURTHER INFORMATION CONTACT: Jennifer Fox at (415) 744-1257.

SUPPLEMENTARY INFORMATION: The air quality planning requirements for 
nonattainment NSR are set out in part D of title I of the Clean Air 
Act. EPA has issued a ``General Preamble'' describing EPA's preliminary 
views on how EPA intends to review SIPs and SIP revisions submitted 
under part D, including those State submittals containing nonattainment 
NSR SIP requirements [see 57 FR 13498 (April 16, 1992) and 57 FR 18070 
(April 28, 1992)]. Because EPA is describing its interpretations here 
only in broad terms, the reader should refer to the General Preamble 
for a more detailed discussion. EPA is currently developing a proposed 
rule to implement the changes under the 1990 Amendments in the new 
source review provisions in Parts C and D of Title I of the Act. EPA 
expects to propose this rule sometime during 1995. Upon promulgation of 
those regulations, EPA will review those NSR SIP submittals on which it 
has taken final action to determine whether additional SIP revisions 
are necessary.

Procedural Background

    The Act requires States to observe certain procedural requirements 
in developing implementation plans and plan revisions for submission to 
EPA. Section 110(a)(2) and section 110(l) of the Act provide that each 
implementation plan or revision to an implementation plan submitted by 
a State must be adopted after reasonable notice and public 
hearing.1

    \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 Clark County Health District held a public hearing on April 22, 
1993 to entertain public comment on the new source review rules. On 
July 29, 1993, the rules were adopted by the District and submitted to 
the State. On November 30, 1993 the rules were submitted to EPA as a 
proposed revision to the Nevada SIP.
    The SIP revision was not reviewed by EPA within six months to 
determine completeness, and was therefore deemed complete by default. 
The submittal has since been reviewed and found to be complete but 
lacking certain requirements that would make it fully approvable. Clark 
County has, however, expressed an interest in revising their SIP to 
make the required changes and has submitted draft versions of the rule 
which address the deficiencies described below. Therefore, contingent 
on the submittal of a fully approvable SIP, EPA proposes to approve the 
Clark County Health District's nonattainment NSR and attainment PSD SIP 
submittal. If the District fails to address the deficiencies before 
EPA's final action on this submittal (which we expect will be within 6 
months), then EPA's final action will be a disapproval.

Summary of Rule Contents

    The Air Pollution Control Division of the Clark County Health 
District submitted to EPA for adoption into the applicable NSR SIP 
Rules 0 (Definitions), 12 (Preconstruction Review for New or Modified 
Stationary Sources), and 58 (Emission Reduction Credits). Rules 0, 12, 
and 58 are intended to replace existing NSR SIP Rules 1 (Definitions) 
and 15 (Source Registration).
    These submitted rules constitute the District's new source 
permitting regulations. Rule 0 consists of definitions of all terms 
relating to new sources and modifications to existing sources of air 
pollution, and their regulation. Rule 12 contains new and modified 
source permitting requirements, including applicability, major source 
definitions, offsets, increment analysis, and Lowest Achievable 
Emission Rate/Best Available Control Technology. Rule 58 establishes 
procedures for the creation, banking, and use of emission reduction 
credits. This last rule has indirect bearing on new source review, as 
these credits can be obtained by new sources and used as offsets.
    In Clark County, the Las Vegas Valley, Boulder City, and El Dorado 
Valley are currently designated as Serious nonattainment for PM-10 and 
Moderate nonattainment (>12.7 ppm) for CO. All other areas within the 
District are designated as attainment or unclassifiable with respect to 
the NAAQS. District nonattainment rules must therefore apply to all 
major new or modified stationary sources proposing to emit CO or PM-10 
in the areas noted above. The nonattainment provisions must also apply 
to any source which would contribute to a violation of the NAAQS. The 
PSD provisions submitted by the District apply to certain new sources 
or modifications proposing to emit attainment pollutants in specified 
amounts.
    The Clean Air Act requirements are found at sections 172 and 173 
for nonattainment NSR permitting and at section 165 for PSD permitting. 
With certain exceptions, described below, Clark County's submittal 
satisfies these requirements. For a detailed description of how the 
submitted rule meets the applicable requirements, please refer to EPA's 
technical support document.

Rule Deficiencies That Must Be Corrected

Rule 0

    Modification: The definition of ``modification'' in the submitted 
rule differs from the federal definition. The CFR defines a 
modification as a change resulting in a ``net emissions increase.'' A 
net emissions increase is based on an increase in actual emissions for 
a physical or operational change, or an increase in potential emissions 
in the case of sources which have not yet constructed.
    The submitted rule, however, defines a ``modification'' as an 
increase in a source's ``potential to emit.'' As a result the rule 
fails to require review for 

[[Page 38779]]
modifications which involve a ``major'' increase in actual emissions, 
but no increase in potential to emit. To correct this deficiency, 
calculations in the District rule must be based on increases in actual 
emissions (and for sources which have not begun normal operations, 
actual emissions shall equal the potential to emit). Because the 
district has correctly defined ``potential to emit'' and ``actual 
emissions,'' this change can be made by incorporating the federal 
definition of ``net emissions increase'' into the District rule 
definition of ``modification.''
    Regulated Air Pollutant: The definition of ``regulated air 
pollutant'' in the submitted rule contains a list of emissions which 
are ``regulated by sections containing Emission limits and by Section 
12.'' The list of ``Chemical Substances Requiring BACT and Public 
Notification'' in Section 12.2.7, however, contains substances which 
are not included in the definition of ``regulated air pollutant.'' This 
oversight should be corrected for rule consistency.
    Volatile Organic Compound: The definition of ``volatile organic 
compound'' in the submitted rule contains a list of substances exempt 
from regulation as VOCs which is inconsistent with the exemption list 
in 40 CFR 51.100(s). This discrepancy should be corrected to avoid 
granting VOC emission reduction credits, as well as requiring VOC 
offsets, for exempt compounds. The definition in the CFR should be 
adopted verbatim into this section.

Rule 12

    Public Notice: The submitted rule does not specify that public 
comments regarding an air quality permit application will be 
considered, except in the event of a public hearing. A thirty-day 
public comment period should be required for each permit application, 
as specified by 40 CFR 51.166(q). All public comment, oral and written, 
received within the specified time, should be considered in making the 
final decision on the approvability of the permit application.
    Variance to Rule Requirements: The submitted rule outlines the 
procedure by which the Board of Health may grant a variance to 
subsection 12.2.10.6 (which requires impact analysis for NOx 
sources of 100 tpy or greater). The District has explained that this 
variance is intended to refer to the lowered major source applicability 
threshold of 50 tpy for NOx sources in the Las Vegas Valley. If 
so, this must be clarified in the rule, so that no variance may be 
granted to a source required by federal standards to undergo new source 
review.
    Fugitive Emissions: The submitted rule contains a definition of 
potential to emit which includes fugitive emissions only for sources of 
PM-10 in the nonattainment area. Fugitives must also be included in the 
major source applicability determination, defined by a source's 
potential to emit, for all other regulated pollutants, if the source 
belongs to one of the source categories listed in 40 CFR 
51.165(a)(1)(iv)(C).
    Additional Impact Analysis for Attainment Pollutants: In many 
cases, the submitted rule correctly requires major sources to perform 
an additional impact analysis, as required in 40 CFR 51.166(i) and 
51.166(o). However, the rule fails to require the analysis for VOC, 
lead and CO in sections 12.2.5, 12.2.8, and 12.2.13, respectively. In 
addition, the rule fails to require the analysis for major 
modifications. The rule must be amended to require the additional 
impact analysis for pollutant subject to regulation under the Act which 
will be emitted by the new source or modifications.
    Alternative Siting Analysis: The submitted rule lacks a requirement 
that an alternative siting analysis be performed by all permit 
applicants for sources located within a nonattainment area. This 
analysis, required by CAA 173(a)(5), would demonstrate that the 
benefits of a proposed source significantly outweigh the environmental 
and social costs imposed as a result of its location, construction, or 
modification.
    Class I Area Visibility Protection: The submitted rule lacks the 
visibility protection requirements of section 169A of the CAA and 
described in 40 CFR 51.307. These provisions require review of major 
sources and modifications that may have an impact on visibility in any 
mandatory Class I Federal Area. This may have been overlooked, because 
there are currently no Class I areas in Clark County. Nonetheless, this 
requirement should be included in the event that such an area be 
designated in the future, or that a source may impact a Class I area 
outside of Clark County.
    PSD Ambient Air Increments: The submitted rule lacks provisions 
which set the maximum allowable increases in PM-10, SO2, and 
NO2 to those increments listed in 40 CFR 51.166(c), for designated 
attainment or unclassifiable areas. The increments must be listed in 
the rule.
    Offsets: The submitted rule states that, when required, offsets 
must be obtained by a source either prior to, or within thirty days of, 
the issuance of the Operating Permit, depending on the pollutant. 
Section 173 of the CAA, however, requires that offsets be federally 
enforceable prior to the issuance of an Authority to Construct Permit, 
and in effect by the time operation commences. This requirement must be 
changed in order to make the rule approvable.
    Additional Requirements: The submitted rule contains no provisions 
which require new source review for a source or modification which 
becomes major due to a relaxation in a federally-enforceable limit. As 
described in 40 CFR 51.165(a)(5)(ii), such sources and modifications 
are subject to major new source review ``as though construction had not 
yet commenced.'' The submitted rule must add this requirement.
    Hazardous Air Pollutants: The list of hazardous air pollutants in 
the submitted rule must be expanded to include those pollutants listed 
in 40 CFR 51.166(b)(23)(i), which are not also regulated by Section 
112(b)(1) of the Act. These pollutants and their significance levels 
must be listed.

Rule 58

    RACT Adjustment: The submitted rule lacks provisions requiring that 
existing and future emission reduction credits (ERCs) are surplus to 
Reasonably Available Control Technology (RACT) requirements at time of 
use. EPA interprets section 172(c)(1) of the Act to require a RACT 
level of reductions on ERCs as well as on all applicable sources. This 
ensures that all ERCs will be surplus at their time of use, since any 
banked credits that predate a RACT requirement will not be able to be 
counted as a credit toward meeting that requirement.
    Prior Shutdowns: The submitted rule does not disallow ``prior 
shutdown'' credits as required in 40 CFR 51.165(a)(1)(xxv). As defined 
by this CFR section, prior shutdown credits are generated by facilities 
which apply for credit after the facility has already ceased to 
operate. The provision limiting shutdown credits applies either when 
the District attainment plan has been disapproved, or when this plan is 
not yet due, but a due date during the creation of this plan is missed. 
In this case, sources which seek ERCs due to a shutdown must do so at 
the time operation of the source ceases.
    Property Rights: The submitted rule refers to procedures which 
allow banking of ERCs ``in a legally protected manner.'' This language 
suggests that banked ERCs could be protected under property rights 
laws, or that their adjustment or rescission could be legally contested 
by the owner of the ERCs. EPA cannot approve such language, and 
encourages the District to 

[[Page 38780]]
add language explicitly stating that banking does not guarantee ERCs 
under any property rights laws.
    Mobile and Area Sources: The submitted rule allows reductions 
generated by mobile and area sources to be credited as ERCs which may 
be used as offsets. The rule fails, however, to provide for the federal 
enforceability of these credits. In addition, the submitted rule lacks 
language detailing how these emissions are to be quantified. Both the 
federal Emissions Trading Policy Statement (ETPS, 51 FR 43814, 4 
December 1986) and the Economic Incentive Program Rules (EIP, 58 FR 
11110, 23 February 1993) contain provisions concerning this issue. 
Unless language is added which describes how mobile and area source 
reductions are to be quantified and made federally-enforceable, EPA 
requires that all references to area and mobile source reductions be 
removed.
Proposed Action

    EPA is proposing to approve, with disapproval in the alternative, 
the plan revisions submitted by Clark County on November 30, 1993. Full 
approval as a final action on these rules is contingent upon the 
District making the required changes listed above.
    If the specified changes are not made before EPA's final action on 
this submittal, then EPA's final action will be a disapproval. If 
finalized, this disapproval would constitute a disapproval under 
section 179(a)(2) of the Act (see 57 FR 13566-67). As provided under 
section 179(a) of the Act, Clark County would have up to 18 months 
after a final SIP disapproval to correct the deficiencies that are the 
subject of the disapproval before EPA is required to impose sanctions. 
If the District 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.
    EPA is requesting comments on all aspects of the requested SIP 
revision and EPA's proposed rulemaking action. Comments received by 
date indicated above will be considered in the development of EPA's 
final rule.

Administrative Review

    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future request for 
revision to any state implementation plan. Each request for revision to 
the state implementation plan shall be considered separately 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., EPA 
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, EPA 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.
    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 EPA 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).
    The Office of Management and Budget has exempted this rule from the 
requirements of section 3 of Executive Order 12291.

List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Hydrocarbons, 
Intergovernmental relations, New source review, Nitrogen dioxide, 
Particulate matter, Reporting and recordkeeping requirements, Sulfur 
dioxide, Volatile organic compounds.

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

    Dated: July 17, 1995.
Felicia Marcus,
Acting Regional Administrator.
[FR Doc. 95-18618 Filed 7-27-95; 8:45 am]
BILLING CODE 6560-50-P