[Federal Register Volume 62, Number 13 (Tuesday, January 21, 1997)]
[Rules and Regulations]
[Pages 2910-2914]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-1084]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CO35-1-6190, CO41-1-6826, CO40-1-6701, CO42-1-6836; FRL-5664-5]


Clean Air Act Approval and Promulgation of State Implementation 
Plans; Colorado; New Source Review

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving the State implementation plan (SIP) revisions 
submitted by the Governor of Colorado on November 12, 1993, August 25, 
1994, September 29, 1994, November 17, 1994, and January 29, 1996. 
These submittals revised Colorado Regulation No. 3 and the Common 
Provisions Regulation pertaining to the State's new source review (NSR) 
permitting requirements. The submittals included revisions to make the 
State's NSR rules more compatible with its title V operating permit 
program, the addition of nonattainment NSR provisions for new and 
modified major sources of PM-10 precursors locating in the Denver PM-10 
nonattainment area, a change from the dual ``source'' definition to the 
plantwide definition of ``source'' in the State's nonattainment NSR 
permitting requirements, and correction of deficiencies in the State's 
construction permitting rules. EPA proposed approval of these SIP 
revisions in the August 28, 1996 Federal Register, and no comments were 
received. EPA is approving these regulatory revisions because they 
provide for consistency with the Clean Air Act (Act), as amended, and 
the corresponding Federal regulations and guidance.
    Also, EPA is revising 40 CFR 52.320 to list various sections of the 
Common Provisions Regulation in the ``Incorporation by reference'' 
section which EPA approved in past actions but which EPA did not list 
in the CFR. Last, EPA is deleting two NSR rule disapprovals listed in 
40 CFR 52.324(c) and 52.343(a)(1) because the State has submitted, and 
EPA has approved, revisions addressing the disapprovals.

EFFECTIVE DATE: This action is effective February 20, 1997.

ADDRESSES: Copies of the State's submittals and other information are 
available for inspection during normal business hours at the following 
locations: Air Program, Environmental Protection Agency, Region VIII, 
999 18th Street, Suite 500, Denver, Colorado 80202-2405; Air Pollution 
Control Division, Colorado Department of Public Health and Environment, 
4300 Cherry Creek Drive South, Denver, Colorado 80222-1530; and The Air 
and Radiation Docket and Information Center, 401 M Street, SW, 
Washington, DC 20460.

FOR FURTHER INFORMATION CONTACT: Vicki Stamper at (303) 312-6445.

SUPPLEMENTARY INFORMATION:

I. Background

    On November 12, 1993, the Governor of Colorado submitted revisions 
to its construction permitting requirements in Regulation No. 3, 
including the State's nonattainment NSR provisions, for approval as 
part of the SIP. The State made numerous revisions to Regulation No. 3 
as a result of the State's adoption of its title V operating permit 
program. In order to address deficiencies identified by EPA in the 
November 12, 1993 submittal, the State submitted additional revisions 
to Regulation No. 3 on September 29, 1994 and January 29, 1996. On 
August 25, 1994, the State also submitted PM-10 precursor NSR 
requirements applicable in the Denver PM-10 nonattainment area. In 
addition, on November 17, 1994, the State submitted a change in the 
definition of ``source,'' to switch from the dual definition of source 
to the plantwide definition of source in its nonattainment NSR rules. 
On August 28, 1996, EPA proposed to approve all of the revisions 
submitted, with the exception of Section IV.C. of Part A of Regulation 
No. 3 (see 61 FR 44264-44269). A sixty-day public comment period was 
provided, and no public comments were received on the proposal.

A. November 12, 1993, September 29, 1994, and January 29, 1996 
Submittals

    The revisions to the State's construction permitting program 
submitted on November 12, 1993 were adopted at the same time as the 
State's title V operating permit program, and the majority of the 
changes were adopted to make the two permitting programs work together 
and to allow for implementation of certain title V provisions. In 
addition, the State completely restructured Regulation No. 3 in the 
November submittal, so it is now divided into four parts:
    1. Part A contains all definitions and provisions that apply to 
both the construction permit and operating permit programs. In this 
part, Colorado extended the administrative permit amendment provisions 
and some of the operational flexibility provisions of 40 CFR part 70 to 
the construction permit program;
    2. Part B contains provisions which apply only to the construction 
permit program (including the nonattainment NSR and prevention of 
significant deterioration (PSD) programs). The State made revisions to 
allow certain aspects of the operating permit program to also apply to 
construction permits (e.g., combined permits and general permits) and 
to allow certain operational flexibility provisions to be implemented 
through the operating permit program without requiring construction 
permits (e.g., minor modifications, SIP equivalency, and other permit 
changes);
    3. Part C contains provisions which apply solely to the State's 
operating permit program; and
    4. Part D contains the Statements of Basis and Purpose for each 
revision to Regulation No. 3.
    Parts A and B of Regulation No. 3 were submitted for approval as 
part of the SIP in the November 12, 1993 SIP submittal. Parts A and C 
of Regulation No. 3 were submitted for approval as part of the State's 
title V operating permit program on November 5, 1993.
    In a September 19, 1994 letter to the State, EPA identified many 
deficiencies in the State's November 12, 1993 SIP submittal. In that 
letter, EPA identified deficiencies that needed to be addressed by the 
State before EPA would proceed to act on the November 1993 SIP 
submittal. EPA also recommended other revisions to provide for clarity 
in the State's permitting regulations.
    Some of the deficiencies identified by EPA in the State's November 
12, 1993 SIP submittal were also identified as deficiencies in the 
State's title V operating permit program which EPA required the State 
to address before EPA would proceed with interim approval of the 
State's title V program. Those deficiencies included (1) the fact that 
the State does not currently have a SIP-approved generic emissions 
trading program under which the trading described in Section IV.B. of 
Part A of Regulation No. 3 would be allowed, and (2) the allowing of 
alternative emission limits to be developed in permits when Section 
IV.D.1.i. of Part B of Regulation No. 3 did not adequately provide for 
this flexibility. The State adopted revisions intended to address these 
deficiencies (as well as to address other deficiencies in its title V 
operating permit program) on August 18, 1994 and submitted these 
revisions for approval in the SIP and for revision to its title V 
program on September 29, 1994.
    EPA's review of the September 29, 1994 submittal found that the 
State adequately addressed these SIP/title V deficiencies by clarifying 
that Section IV.B. of Part A could only be implemented if the SIP 
included an EPA-approved trading program and by

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deleting Section IV.D.1.i. of Part B. Based on this September 29, 1994 
title V program revision (which also included correction of other title 
V program deficiencies), EPA granted interim approval of Colorado's 
operating permit program on January 24, 1995 (60 FR 4563).
    On March 16, 1995, the State adopted further revisions to 
Regulation No. 3 intended to address the remaining deficiencies EPA 
identified in the State's November 12, 1993 SIP submittal. Those 
revisions were submitted to EPA for approval on January 29, 1996 and 
include the following:
    1. Changes to the definitions of ``lowest achievable emission rate 
(LAER)'' and ``net emissions increase'' to be consistent with the 
Federal definitions in 40 CFR 51.165(a)(1)(xiii) and 40 CFR 
51.165(a)(1)(vi), respectively;
    2. Consolidation of the State's definitions of ``air pollution 
source,'' ``stationary source,'' and ``new source'' so that only the 
term ``stationary source,'' which is consistent with the Federal 
definition, is used in the provisions of Regulation No. 3. The State 
also retained the definition of ``air pollution source'' because it 
reflects the definition found in State statute, but it is no longer 
used in Regulation No. 3;
    3. The addition of a requirement to the definition of ``volatile 
organic compound (VOC)'' requiring EPA approval prior to use of any 
test method that is not an EPA reference test method;
    4. Revisions to the administrative process in Section II.D.5. of 
Part A of Regulation No. 3 which allows for processing individual 
requests to exempt additional sources from the State's Air Pollution 
Emission Notice (APEN) requirements (and, consequently, from 
construction permit requirements) to require EPA approval of any new 
exemptions prior to use;
    5. Revisions to the definition of ``surplus'' in Section V.C.10. of 
Part A of Regulation No. 3 to be consistent with EPA's Emission Trading 
Policy Statement (see 51 FR 43832, 12/4/86);
    6. The addition of a provision to Section V.E. of Part A of 
Regulation No. 3 to ensure that new source growth cannot interfere with 
reasonable further progress towards attainment, in order to be 
consistent with section 173(a)(1)(A) of the Act;
    7. The addition of a reference to the State's definition of ``net 
emission increase'' in Section V.I. of Part A of Regulation No. 3 
(which discusses netting);
    8. The addition of a requirement to Section IV.C.1. of Part B of 
Regulation No. 3 requiring the opportunity for public comment on 
permits for sources trying to obtain Federally enforceable limits on 
their potential to emit; and
    9. The deletion of an exemption from nonattainment NSR requirements 
for sources undergoing fuel switches due to lack of adequate fuel 
supply (which is not allowed by EPA). EPA believes these regulatory 
revisions adequately address the deficiencies described above.
    The State addressed some of EPA's other comments with an opinion 
from the State Attorney General's office dated July 3, 1995. Those 
comments and the State's responses are as follows:
    1. EPA recommended adding definitions to Regulation No. 3 of 
``begin actual construction,'' ``necessary preconstruction approvals or 
permits,'' and ``construction'' to be consistent with the Federal 
definitions. The State did not add these definitions because the State 
contends that its definitions of ``commenced construction,'' 
``construction'' in the Common Provisions Regulation, and 
``modification'' made the addition of these definitions unnecessary. 
After further review of the definitions referred to by the State, EPA 
agrees with the State's contention; and
    2. Section IV.A. of Part A of Regulation No. 3 allows for 
alternative operating scenarios to be included in a construction 
permit, and this provision is based on the title V provision in 40 CFR 
70.6(a)(9). However, in order to approve this provision for 
construction permits, EPA wanted assurances from the State that it 
would require compliance with all PSD or nonattainment NSR provisions 
(e.g., ambient air quality analysis or net air quality benefit) for 
every scenario allowed under the permit. The State's July 3, 1995 
letter included an interpretation that compliance with all PSD or 
nonattainment NSR requirements (whichever was applicable) would be 
ensured under the provision in Section IV.A.2. of Regulation No. 3, 
which requires that the permit contain conditions to ensure each 
scenario meets all applicable Federal and State requirements. This 
satisfies EPA's concern.
    EPA believes the comments discussed above were adequately addressed 
by the State in its revisions to Regulation No. 3 adopted on March 16, 
1995 and its opinion from the State Attorney General's office. In 
addition, the State also addressed many of EPA's recommended revisions 
to Regulation No. 3, which EPA believes will help to strengthen the 
State's construction permit regulations.
    EPA had also commented on Section IV.C. of Part A of Regulation No. 
3, which provides for a construction permit (as well as a title V 
operating permit) to contain terms and conditions allowing for the 
trading of emissions decreases and increases under a permit cap, as 
long as certain conditions are met. This provision is based on the 
title V operating permit requirement in 40 CFR 70.4(b)(12)(iii), but 
EPA had concerns with the use of this provision in construction 
permitting. EPA is currently working on revisions to the Federal NSR 
regulations as part of the ``NSR Reform'' rules that would allow a 
source to establish a cap in its construction permit (termed a 
plantwide applicability limit or PAL) for NSR applicability under which 
emissions trading might be allowed. EPA proposed these NSR Reform rules 
for public comment on July 23, 1996 (see 61 FR 38250). Until the final 
EPA regulations are promulgated on this issue, EPA does not believe it 
is appropriate to approve the State's provision allowing trading under 
permit caps for construction permits, as EPA could be approving a rule 
that is inconsistent with the forthcoming Federal regulations. However, 
as discussed in the preamble to the July 23, 1996 rulemaking, Colorado 
may be able to consider the issuance of permits with emissions caps on 
a case-by-case basis under EPA's existing regulations (see 61 FR 
38264).
    EPA believes the State adequately addressed all of the deficiencies 
EPA identified in the State's November 12, 1993 SIP submittal. Thus, 
EPA is approving the revisions to Regulation No. 3 submitted on 
November 12, 1993, September 29, 1994, and January 29, 1996. However, 
as discussed above, EPA is not acting on Section IV.C. of Part A of 
Regulation No. 3 at this time. For further details, see the Technical 
Support Document (TSD) accompanying this document.

B. August 25, 1994 SIP Submittal of Nonattainment NSR Rules for New and 
Modified Sources of PM-10 Precursors

    When the Act was amended in 1990, it included, among other things, 
revised requirements for nonattainment areas which are set out in part 
D of title I of the Act. It also set out specific deadlines for 
submittals of SIP revisions addressing these new requirements, 
including the submittal of nonattainment NSR rules for which the 
deadlines varied depending on the type and designation of the 
nonattainment area. In response to those requirements, the Governor of 
Colorado submitted a

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SIP revision on January 14, 1993 to bring the State's nonattainment NSR 
rules up to date with the requirements of the amended Act. EPA acted on 
that submittal on August 18, 1994 (59 FR 42500). Specifically, EPA 
approved the State's nonattainment NSR rules as meeting the 
requirements of the amended Act for the State's ozone and carbon 
monoxide areas, as well as for the Canon City, Pagosa Springs, and 
Lamar PM-10 nonattainment areas. However, EPA only partially approved 
the State's NSR submittal in that action for the Aspen, Telluride, and 
Denver moderate PM-10 nonattainment areas because the State had not 
submitted NSR regulations for new and modified major sources of PM-10 
precursors and because, at the time of publication of the August 18, 
1994 Federal Register document, EPA had not promulgated findings that 
such sources of PM-10 precursors did not contribute significantly to 
exceedances of the PM-10 national ambient air quality standards (NAAQS) 
in any of these three areas. 1 (See 59 FR 42503-42504 for further 
details.)
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    \1\ Section 189(e) of the amended Act requires that the control 
requirements applicable to major stationary sources of PM-10 must 
also apply to major stationary sources of PM-10 precursors, except 
where the Administrator of EPA has determined that such sources do 
not contribute significantly to PM-10 levels which exceed the 
standard in the area. Any such determination that sources of 
PM10 precursors do not contribute significantly is generally 
made concurrently with EPA's promulgation of an action on a SIP 
submittal for a PM10 nonattainment area.
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    Since that August 18, 1994 Federal Register action, EPA has 
promulgated findings that sources of PM-10 precursors do not contribute 
significantly to PM-10 NAAQS exceedances in the Aspen and Telluride PM-
10 nonattainment areas (see 59 FR 47092-47093, September 14, 1994, and 
59 FR 47809, September 19, 1994, respectively), resulting in fully 
approved NSR provisions for these two PM-10 nonattainment areas. 
However, in the Denver moderate PM-10 nonattainment area, EPA has 
indicated that it does consider major stationary sources of PM-10 
precursors (specifically oxides of nitrogen (NOX) and sulfur 
dioxide (SO2)) to contribute significantly to exceedances of the 
PM-10 NAAQS (see 58 FR 66331, December 20, 1993).
    On February 17, 1994, the State adopted nonattainment NSR 
provisions for new and modified major sources of PM-10 precursors 
(defined as SO2 and NOX) in the Denver metropolitan moderate 
PM-10 nonattainment area. These Regulation No. 3 revisions were 
formally submitted to EPA for approval into the SIP on August 25, 1994.
    As discussed in EPA's August 28, 1996 proposed rulemaking on the 
State's submittal, EPA believes the State's August 25, 1994 submittal 
of NSR revisions adequately addresses all of the PM-10 precursor NSR 
requirements in the Denver moderate PM-10 nonattainment area. 
Specifically, those requirements include requiring new major stationary 
sources (based on the 100 ton per year major source threshold) of PM-10 
precursors in the Denver moderate PM-10 nonattainment area, as well as 
major modifications of PM-10 precursors (based on the major 
modification significance levels for SO2 and NOX), to meet 
all of the nonattainment NSR permitting requirements (including, among 
other things, application of lowest achievable emission rate (LAER) and 
the requirements to obtain emission offsets providing a net air quality 
benefit).
    The State adopted specific provisions regarding NSR offsets for new 
and modified major stationary sources of PM-10 and PM-10 precursors, as 
follows: In Section V.F.1. of Part A of Regulation No. 3 which 
identifies the criteria for approval of all emissions trading 
transactions including NSR offsets, the State added provisions 
explaining which interpollutant trades between PM-10 and PM-10 
precursors are allowed for NSR offsets. Specifically, Section V.F.1. 
provides that new or modified major sources of a PM-10 precursor can 
obtain offsets from reductions in that same precursor or in PM-10, 
while new or modified major sources of PM-10 can only obtain offsets 
from reductions in PM-10. This is consistent with EPA's current policy 
regarding offsets for PM-10.
    However, the State did adopt an exception to this requirement in 
Section V.H.9. of Part A of Regulation No. 3. Specifically, Section 
V.H.9. allows interpollutant offsets other than those discussed in 
Section V.F.1. to be approved on a case-by-case basis, provided that 
the applicant demonstrates, on the basis of EPA-approved methods where 
possible, that the emissions increases for the new or modified source 
will not cause or contribute to a violation of the NAAQS. Section 
V.H.9. further provides that the source's permit application will not 
be approved by the State until written approval has been received from 
the EPA. Because written approval will be required from EPA before a 
permit will be issued which allows an interpollutant trade for 
offsetting (other than those trades allowed in Section V.F.1.), EPA 
believes that it will be able to ensure any interpollutant offsets will 
meet the requirements of the Act concerning NSR. Thus, this exception 
is acceptable to EPA.
    Thus, EPA is fully approving the State's nonattainment NSR rules 
for the Denver moderate PM-10 nonattainment area. For further details 
on the State's August 25, 1994 SIP submittal, see the August 28, 1996 
notice of proposed rulemaking (61 FR 44266-44267) and the TSD.

C. November 17, 1994 SIP Submittal Revising the Definition of 
``Source''

    On October 14, 1981, EPA deleted the dual source definition from 
the nonattainment NSR permitting requirements and replaced it with the 
plantwide definition to give States the option of adopting the 
plantwide definition of source in nonattainment areas (see 46 FR 
50766). Under the dual source definition, emissions increases that 
occurred either at an individual piece of process equipment or at the 
entire plant were reviewed to determine whether a major modification 
had occurred. This dual source definition precluded major sources 
undergoing a modification at an individual piece of process equipment 
from considering other emission decreases within the plant in 
determining the net emissions increase of the modification.
    In the October 1981 Federal Register document, EPA set forth its 
rationale for allowing use of the plantwide definition (46 FR 50766-
50769). EPA reasoned that, since part D of the Act requires States to 
adopt adequate SIPs which demonstrate attainment and maintenance of the 
NAAQS, ``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). EPA also added that, by 
bringing more plant modifications into the NSR permitting process, the 
dual source definition may discourage replacement of older, dirtier 
processes and, hence, retard not only economic growth but also progress 
toward clean air. Last, EPA pointed out that, under the plantwide 
definition, new equipment would still be subject to any applicable new 
source performance standard (NSPS). Thus, EPA regarded changing to 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 and, at best, the potential for air quality 
improvements driven by the marketplace. In 1984, the Supreme Court 
upheld EPA's action as a reasonable accommodation of the

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conflicting purposes of part D of the Act and, hence, well within EPA's 
broad discretion. Chevron, U.S.A., Inc. v. NRDC, Inc., 104 S.Ct. 2778.
    Consequently, on November 17, 1994, Colorado submitted revisions to 
the Common Provisions Regulation and Regulation No. 3 to change from 
the dual definition of ``source'' to the plantwide ``source'' 
definition in its nonattainment NSR permitting requirements.
    In the October 14, 1981 Federal Register which deleted the dual 
source definition from the Federal nonattainment NSR permitting 
requirements, EPA 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 source or similar definition and had relied on those reductions in 
an attainment strategy that EPA later approved, then the State needed 
to revise its attainment strategy as necessary to accommodate reduced 
NSR permitting under the plantwide definition (see 46 FR 50767 and 
50769).
    This 1981 ruling allowing States to adopt a plantwide definition 
assumed that nonattainment areas already had, or shortly would have, 
approved part D plans in place. However, the Act was amended in 1990, 
creating new requirements and deadlines for submittal of attainment 
plans for areas which were not in attainment of the NAAQS. In light of 
these changes, EPA will now approve adoption of the plantwide 
definition into SIPs for nonattainment areas that need but lack 
adequate part D attainment plans approved by EPA only if the State has 
demonstrated that it is making, and will continue to make, reasonable 
efforts to adopt and submit complete plans for timely attainment in 
these areas.
    For the majority of Colorado's nonattainment areas that are 
required to have part D attainment plans, the State has EPA-approved 
part D plans. The only areas for which the State does not yet have 
fully approved part D attainment plans are the Denver PM-10, Denver 
carbon monoxide (CO), Longmont CO, and Steamboat Springs PM-10 
nonattainment areas. The State has submitted part D plans for all of 
these areas, but EPA has not yet completed action on these submittals. 
Thus, EPA believes the State has adequately demonstrated that it has 
made, and will continue to make, reasonable efforts to get an approved 
part D attainment plan in place for these areas.
    Further, the State has certified that it did not, and will not, 
rely on any emissions reductions from the operation of the NSR program 
using the dual source definition in any of its nonattainment area 
demonstrations of attainment. EPA's examination of the State's 
attainment demonstrations confirmed the State's certification. 
Therefore, EPA believes it is appropriate to approve Colorado's switch 
to a plantwide definition of source in accordance with EPA's 1981 
action, inasmuch as the State has demonstrated that it is making, and 
will continue to make, reasonable efforts to get approved part D 
attainment plans in place for all of its nonattainment areas.

II. Final Action

    EPA is approving the revisions to Colorado's construction 
permitting program in Regulation No. 3 submitted on November 12, 1993, 
August 25, 1994, September 29, 1994, November 17, 1994, and January 29, 
1996. EPA is also approving the revisions to the Common Provisions 
Regulation submitted on November 17, 1994. However, for the reasons 
discussed above, EPA is taking no action, at this time, on Section 
IV.C. of Part A of Regulation No. 3.
    EPA would also like to clarify its action regarding the State's 
provisions for trading of emission reduction credits in Section V. of 
Part A of Regulation No. 3. The State initially submitted those 
provisions to EPA on November 17, 1988, along with other revisions to 
Regulation No. 3, for approval as a generic emissions trading rule. 
However, in EPA's June 17, 1992 rulemaking on the State's November 17, 
1988 SIP submittal, EPA stated that the State's emission reduction 
credit trading rule was only being approved as a rule which requires 
case-by-case SIP revisions for approval of all bubbles. (See 57 FR 
26999.) In the SIP submittals being acted on in this action, the State 
did not submit any revisions intended to change EPA's June 17, 1992 
rulemaking regarding the State's emissions trading provisions. Thus, in 
this action, EPA is only approving Section V. of Part A as a rule that 
requires case-by-case SIP revisions for approval of all bubbles.
    Also in this action, EPA is revising 40 CFR 52.320 to list in the 
``Incorporation by reference'' section various sections of the Common 
Provisions Regulation that EPA approved in past actions but that EPA 
did not list in the CFR, as follows:
    A. Section I.A. and the definitions of ``emission control 
regulation'' and ``volatile organic compound,'' which were part of the 
State's January 14, 1993 SIP submittal that EPA approved on August 18, 
1994 (59 FR 42500-42506); and
    B. The definitions of ``baseline area'' and ``reconstruction,'' 
which were part of the State's April 9, 1992 SIP submittal that EPA 
approved on September 27, 1993 (58 FR 50269-50271).
    Last, EPA is deleting two NSR rule disapprovals listed at 40 CFR 
52.324(c) and 52.343(a)(1). The State corrected deficiencies in these 
rules in its January 14, 1993 SIP submittal, which EPA approved on 
August 18, 1994 (see 59 FR 42504). Therefore, these disapprovals no 
longer apply to Colorado's NSR program.
    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 a SIP shall be 
considered separately in light of specific technical, economic, and 
environmental factors and in relation to relevant statutory and 
regulatory requirements.

III. Administrative Requirements

A. Executive Order 12866

    This action has been classified as a Table 3 action for signature 
by the Regional Administrator under the procedures published in the 
Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a 
July 10, 1995 memorandum from Mary Nichols, Assistant Administrator for 
Air and Radiation. The Office of Management and Budget (OMB) has 
exempted this regulatory action from E.O. 12866 review.

B. Regulatory Flexibility Act

    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 economic 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 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

[[Page 2914]]

inquiry into the economic reasonableness of state action. The Act 
forbids EPA to base its actions concerning SIPs on such grounds. Union 
Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (1976); 42 U.S.C. 
7410(a)(2).

C. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the approval action proposed does not 
include a Federal mandate that may result in estimated costs of $100 
million or more to either State, local, or tribal governments in the 
aggregate, or to the private sector. This Federal action approves pre-
existing requirements under State or local law, and imposes no new 
requirements. Accordingly, no additional costs to State, local, or 
tribal governments, or to the private sector, result from this action.

D. Submission to Congress and the General Accounting Office

    Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives, and the Comptroller General of the 
General Accounting Office prior to publication of this rule in today's 
Federal Register. This rule is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

E. Petitions for Judicial 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 March 24, 1997. 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 must 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, Incorporation by 
reference, Intergovernmental relations, Particulate matter, Reporting 
and recordkeeping requirements.

    Dated: December 5, 1996.
Jack W. McGraw,
Acting Regional Administrator

    Chapter I, title 40 of the Code of Federal Regulations is amended 
as follows:

PART 52--[AMENDED]

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

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

Subpart G--Colorado

    2. Section 52.320 is amended by adding paragraph (c)(72) to read as 
follows:


Sec. 52.320  Identification of plan.

* * * * *
    (c) * * *
    (72) On November 12, 1993, August 25, 1994, September 29, 1994, 
November 17, 1994, and January 29, 1996, the Governor of Colorado 
submitted revisions to the State's construction permitting requirements 
in Regulation No. 3 and the Common Provisions Regulation. These 
revisions included nonattainment new source review permitting 
requirements for new and modified major sources of PM-10 precursors 
locating in the Denver moderate PM-10 nonattainment area, changing from 
the dual source definition to the plantwide definition of source in 
nonattainment new source review permitting, other changes to Regulation 
No. 3 to make the construction permitting program more compatible with 
the State's title V operating permit program, and correction of 
deficiencies. In addition, the Governor submitted revisions to the 
Common Provisions Regulation on April 9, 1992 and January 14, 1993.
    (i) Incorporation by reference.
    (A) Common Provisions Regulation, 5 CCR 1001-2, Section I.G., 
definitions of ``baseline area'' and ``reconstruction;'' adopted 10/17/
91, effective 11/30/91.
    (B) Common Provisions Regulation, 5 CCR 1001-2, Section I.G., 
definitions of ``net emissions increase'' and ``stationary source;'' 
adopted 8/20/92, effective 9/30/92.
    (C) Common Provisions Regulation, 5 CCR 1001-2, Section I.A. and 
Section I.G., definitions of ``emission control regulation'' and 
``volatile organic compound;'' adopted 11/19/92, effective 12/30/92.
    (D) Regulation No. 3, Air Contaminant Emissions Notices, 5 CCR 
1001-5, revisions adopted 8/18/94, effective 9/30/94, as follows: Part 
A (with the exception of Section IV.C.) and Part B. This version of 
Regulation No. 3, as incorporated by reference here, supersedes and 
replaces all versions of Regulation No. 3 approved by EPA in previous 
actions.
    (E) Regulation No. 3, Air Contaminant Emissions Notices, 5 CCR 
1001-5, revisions adopted on 3/16/95, effective 5/30/95, as follows: 
Part A: Sections I.B.12., I.B.31., I.B.32., I.B.35.B., I.B.36., 
I.B.37., I.B.41., I.B.50., I.B.57., I.B.66., II.D.5.c., II.D.5.d., 
V.B., V.C.6., V.C.10., V.E.1.c., V.E.1.d., V.H.4. through V.H.8., 
V.I.1., VI.C.1.f., and VII.A.; Part B: Sections III.D.2., III.D.3., 
IV.B.4., IV.C.1., IV.D.1.a., IV.D.2.c.(i)(E), IV.D.4.a., and IV.J.
    (ii) Additional material.
    (A) July 3, 1995 letter from Martha E. Rudolph, First Assistant 
Attorney General, Colorado Office of the Attorney General, to Jonah 
Staller, EPA.
* * * * *


Sec. 52.324  [Amended]

    3. Section 52.324 is amended by removing paragraph (c).
    4. Section 52.329 is amended by adding paragraph (b) to read as 
follows:


Sec. 52.329  Rules and regulations.

* * * * *
    (b) On January 14, 1993 and on August 25, 1994, the Governor of 
Colorado submitted revisions to the State's nonattainment new source 
review permitting regulations to bring the State's regulations up to 
date with the 1990 Amendments to the Clean Air Act. With these 
revisions, the State's regulations satisfy the part D new source review 
permitting requirements for the Denver metropolitan moderate PM-10 
nonattainment area.


Sec. 52.343  [Amended]

    5. Section 52.343 is amended by removing paragraph (a)(1) and by 
redesignating paragraphs (a)(2), (a)(3), and (a)(4) as (a)(1), (a)(2) 
and (a)(3) respectively.

[FR Doc. 97-1084 Filed 1-17-97; 8:45 am]
BILLING CODE 6560-50-P