[Federal Register Volume 62, Number 95 (Friday, May 16, 1997)]
[Proposed Rules]
[Pages 27158-27166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-12918]



[[Page 27157]]

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Part VII





Environmental Protection Agency





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40 CFR Parts 51 and 52



Prevention of Significant Deterioration of Air Quality (PSD) Program: 
Permit Review Procedures for Sources That May Adversely Affect Air 
Quality in Non-Federal Class I Areas; Proposed Rule

  Federal Register / Vol. 62, No. 95 / Friday, May 16, 1997 / Proposed 
Rules  

[[Page 27158]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 52

[FRL-5826-5]
RIN 2060-AH01


Prevention of Significant Deterioration of Air Quality (PSD) 
Program: Permit Review Procedures for Sources That May Adversely Affect 
Air Quality in Non-Federal Class I Areas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Advance Notice of Proposed Rulemaking (ANPR).

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SUMMARY: Under the Clean Air Act's PSD program, States and Tribes may, 
with EPA approval, redesignate their lands as ``Class I'' areas to 
enhance protection of their air quality resources. This notice requests 
early public input on preliminary issues in clarifying the PSD permit 
review procedures for new and modified major stationary sources that 
may have an adverse effect on the air quality of these non-Federal 
Class I areas. EPA seeks to develop clarifying PSD permit procedures 
that are effective, efficient and equitable.

DATES: Comments. All public comments must be received by August 14, 
1997.
    Public Workshops. EPA will hold public workshops on this 
rulemaking. A Federal Register notice announcing the dates of these 
workshops will be published at least 30 days prior to the workshop.

ADDRESSES: Comments. Comments on this notice should be mailed (in 
duplicate if possible) to: U.S. EPA, Air Docket Section, Air Docket A-
96-53; 401 M Street, S.W., Washington, D.C. 20460.
    Public Workshops. EPA will hold public workshops in Phoenix, 
Arizona and in Chicago, Illinois. A Federal Register notice announcing 
the dates of these workshops will be published at least 30 days prior 
to the workshops. Please contact the EPA official listed under FOR 
FURTHER INFORMATION CONTACT if you are interested in participating in 
the public workshops.
    Public Docket. Supporting information for this rulemaking is 
contained in Docket No. A-96-53. This docket is available for public 
review and copying between 8:00 a.m. and 5:30 p.m., Monday through 
Friday at the EPA's Air Docket Section, 401 M Street, S.W., Washington, 
D.C.; Room M-1500. A reasonable fee may be charged for copying.

FOR FURTHER INFORMATION CONTACT: David LaRoche, U.S. EPA, Office of Air 
and Radiation (6102), 401 M Street, S.W., Washington, D.C. 20460, (202) 
260-7652.

SUPPLEMENTARY INFORMATION:

I. Overview

    The PSD program authorizes States and Tribes to request 
redesignation of their lands as ``Class I'' areas. Over the past twenty 
years, only federally-recognized Tribes have sought redesignation under 
this authority. EPA has approved Class I redesignations for the 
Northern Cheyenne Indian Reservation, the Flathead Indian Reservation, 
the Fort Peck Indian Reservation, and the Spokane Indian Reservation. 
See 40 CFR 52.1382(c) and 52.2497(c). Recently, EPA approved Class I 
redesignation of the Yavapai-Apache Reservation, located in the State 
of Arizona. See 61 FR 56461 (Nov. 1, 1996) (to be codified at 40 CFR 
52.150). EPA has proposed approval of the Forest County Potawatomi 
Community request for redesignation located in the State of Wisconsin. 
See 60 FR 33779 (June 29, 1995). EPA will provide opportunity for 
public comment and hold a public hearing before it makes a final 
decision on this proposed action.
    During EPA's review of the Yavapai-Apache and Forest County 
Potawatomi redesignation requests, nearby States submitted formal 
objections to EPA. A common concern has been confusion about the PSD 
permit review procedures that would apply in these States in the event 
a Class I redesignation request is granted, and what EPA's specific 
role would be in resolving any intergovernmental disputes that arise 
over proposed permits for PSD sources that may adversely affect non-
federal Class I areas. In response to these concerns, EPA has initiated 
this rulemaking to clarify the PSD permit review and dispute resolution 
procedures for proposed new and modified major stationary sources 
locating near non-Federal Class I areas.
    The new procedures established in this rulemaking would apply for 
any State or Tribal lands redesignated as Class I. Thus, the rulemaking 
is intended to clarify PSD permit review procedures for proposed PSD 
sources that may adversely affect the air quality of any State or 
Tribal non-Federal Class I area, and would set forth more specific 
procedures for EPA's resolution of any intergovernmental permit 
disputes which may arise.
    The discussion in part II below contains an overview of the PSD 
program to help provide context and further understanding of the issues 
presented in this notice. Part III of this notice examines preliminary 
issues on which EPA seeks early public input. Part IV describes the 
workshops EPA will hold to facilitate public input.

II. The PSD Program

    The central purpose of the PSD program is to protect clean air 
resources. Thus, the PSD program is an important air pollution 
prevention program. The genesis of the program was a lawsuit to enjoin 
EPA's approval of state implementation plans that allowed air quality 
degradation in areas having air quality better than the national 
ambient air quality standards. Sierra Club v. Ruckelshaus, 344 F.Supp. 
253 (D.D.C. 1972), aff'd per curiam, 4 Env't Rep. Cases 1815 (D.C. Cir. 
1972), aff'd by an equally divided court, sub. nom. Fri v. Sierra Club, 
412 U.S. 541 (1973). The court granted the injunction reasoning that 
the congressionally-declared purpose of the Clean Air Act to ``protect 
and enhance'' the quality of the nation's air resources embodied a non-
degradation policy. Sierra Club, 344 F.Supp. at 255-56.
    In response to the Sierra Club decision EPA adopted a PSD program. 
See 39 FR 42510 (Dec. 5, 1974). The administrative program was 
superseded by a congressionally-crafted program in the 1977 amendments 
to the Clean Air Act. Public Law 95-95, 91 Stat. 685. EPA presently has 
two sets of regulations implementing the 1977 statutory PSD program: 
(1) 40 CFR 51.166 establishes the requirements for State-administered 
PSD programs, and (2) 40 CFR 52.21 provides for Federal implementation 
of PSD requirements in States not having approved programs and for 
federally-recognized Indian Tribes.1
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    \1\ The 1990 amendments to the Clean Air Act made relatively 
minor revisions to the PSD program. Pub. L. 101-549, 104 Stat. 2399. 
Conforming changes have not been made to the implementing 
regulations. Also, EPA has proposed rules under section 301(d) of 
the Clean Air Act that would treat Federally-recognized Indian 
Tribes in the same manner as States for purposes of numerous Clean 
Air Act programs including the PSD program. 59 FR 43 956 (Aug. 25, 
1994). Depending on their final form, these rules may allow Tribes 
to administer Federally-approved PSD permit review programs in the 
same way that States do.
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A. PSD Areas

    Areas nationwide are ``designated'' based on their air quality 
status relative to the national ambient air quality standards (NAAQS). 
The PSD program applies to areas designated ``attainment'' and 
``unclassifiable'' under section 107 of the CAA, 42 U.S.C. Sec. 7407; 
these are areas that meet the NAAQS, or areas that cannot be determined 
on the basis

[[Page 27159]]

of available information as meeting or not meeting the NAAQS.
    PSD areas are further categorized as Class I, II or III. The 
classification of an area determines the maximum increase in pollutant 
concentrations, or ``increment'' of air quality deterioration, allowed 
over a baseline air quality concentration. Class I areas have the 
smallest increments and therefore allow the least amount of air quality 
deterioration. Conversely, Class III areas have the largest air quality 
increments and allow the greatest deterioration. In all instances, the 
NAAQS are the overarching air pollution concentration ceilings. That 
is, regardless of the size of the increment, the NAAQS may not be 
violated in a PSD area.
    There are PSD increments for particulate matter, sulfur dioxide and 
nitrogen dioxide. EPA's PSD regulations establish the incremental 
amount of air quality deterioration allowed for these pollutants in 
Class I, II and III areas. 40 CFR 51.166(c) and 52.21(c).
    When Congress enacted the PSD program in 1977 it provided that 
specified Federal lands, including certain national parks and 
wilderness areas, must be designated as Class I areas and may not be 
redesignated to another classification. Because they may not be 
redesignated, these Federal areas are called mandatory Class I areas. 
CAA Secs. 162 and 163, 42 U.S.C. Secs. 7472 and 7473.
    The statute also carried forward as Class I areas any areas 
redesignated as Class I under EPA's pre-1977 regulations. CAA Sec. 
162(a). The Northern Cheyenne reservation was the only redesignated 
Class I area affected by this provision. See Nance v. EPA, 645 F.2d 701 
(9th Cir. 1981), cert denied, Crow Tribe of Indians v. EPA, 454 U.S. 
1081 (1981).
    All other PSD areas of the country were designated as Class II 
areas under the 1977 Clean Air Act amendments. CAA Sec. 162(b). At the 
same time, States and Tribes were authorized to seek redesignation of 
their Class II areas as Class I or Class III. CAA Sec. 164, 42 U.S.C. 
Sec. 7474. As noted, several Tribes have sought a Class I air quality 
designation. Currently, there are no Class III areas.

B. PSD Sources

    The PSD preconstruction review permit program applies to new and 
modified major stationary sources. Construction, or subsequent 
operation, of new major stationary sources and major modifications to 
existing major stationary sources are prohibited unless the source 
obtains a permit meeting PSD requirements.
    Major stationary sources generally include sources that have the 
potential to emit at least 250 tons of air pollution annually. 40 CFR 
51.166(b)(1)(i)(b) and 52.21(b)(1)(i)(b). Major stationary sources also 
include specific ``listed'' sources that have the potential to emit at 
least 100 tons per year of air pollution. 40 CFR 51.166(b)(1)(i)(a) and 
52.21(b)(1)(i)(a). The listed sources include, among other facilities, 
coal-fired power plants (with more than 250 million British thermal 
units per hour heat input), primary zinc and copper smelters, and 
portland cement plants. Thus, the PSD program applies to relatively 
large stationary sources.
    Major modifications to existing major stationary sources are also 
subject to the PSD preconstruction review permit program. Major 
modifications include a physical or operational change at a major 
stationary source that would result in a significant net emissions 
increase in any regulated air pollutant. 40 CFR 51.166(b)(2) and 
52.21(b)(2).

C. General PSD Preconstruction Review Permit Requirements

    In broad overview, the PSD preconstruction review permit program 
requires the owner or operator of a proposed source to adopt the best 
available control technology (BACT) and analyze the air quality impacts 
associated with the source. CAA Sec. 165(a), 42 U.S.C. Sec. 7475(a). 
BACT is defined in section 169(3) of the CAA, 42 U.S.C. Sec. 7479(3) as 
an emission limitation based on the maximum degree of pollutant 
reduction that is achievable taking into account energy, environmental 
and economic impacts.
    The PSD air quality impact assessment involves several 
considerations. Generally, the owner or operator of the proposed source 
must demonstrate that it will not contribute to air pollution that 
violates any NAAQS or PSD increment. CAA Sec. 165(a)(3). The source 
must also analyze the ambient air quality, climate and meteorology, 
terrain, soils and vegetation, and visibility at the site and in the 
area potentially affected by its emission. CAA Sec. 165(e).

D. Special PSD Program Protection for Class I Areas

    There are additional, special protections under the PSD program 
that apply for Class I areas. As examined in more detail below, the 
statute appears to distinguish between the preconstruction review 
permit procedures that apply for Federal Class I areas and non-Federal 
Class I areas. As a necessary prerequisite, the discussion below first 
explores in more detail the delineation between Federal and non-Federal 
Class I areas.
1. Federal Class I Areas
a. Mandatory Federal Class I Areas
    The Clean Air Act provides two ways for Federal lands to be 
designated as Class I--either by congressional mandate, or by EPA 
approval of a State or Tribal request to redesignate Federal lands. 
Congress specified certain Federal lands as mandatory Class I areas. 
National parks larger than 6000 acres, national memorial parks and 
national wilderness areas larger than 5000 acres, and international 
parks that were in existence on August 7, 1977 are designated by 
statute as mandatory Class I areas. CAA Sec. 162(a). These areas cannot 
be redesignated.
b. Other Federal Class I Areas
    Congress also authorized States and Tribes to seek redesignation of 
other Federal public lands within their boundaries as Class I. These 
are lands currently designated as Class II. To inform such 
redesignation decisions, Congress directed the Federal Land Managers 
(FLM) to review all national monuments, primitive areas and national 
preserves and to recommend the areas having important air quality 
related values (AQRVs) be redesignated as Class I. CAA Sec. 164(d). The 
FLM is defined as the Secretary of the Federal Department with 
authority over the lands.2 CAA Sec. 302(i), 42 U.S.C. Sec. 
7602(i). The recommendations have not resulted in the redesignation of 
any Federal lands from Class II to Class I. The only Federal Class I 
areas that presently exist are the original mandatory areas.
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    \2\ The FLM authority has been delegated to other officials 
within these Departments. For example, the Assistant Secretary for 
Fish and Wildlife and Parks is the FLM for areas under the 
jurisdiction of the National Park Service and the U.S. Fish and 
Wildlife Service.
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2. Non-Federal Class I Areas
    Class I areas may also be created if EPA approves a State or Tribal 
request to redesignate its own lands as Class I. The resulting areas 
would be non-Federal Class I areas. The PSD permit review procedures 
that apply to new or modified PSD sources that may adversely affect 
these non-Federal Class I areas are the central focus of this notice.
    As noted in part I, a few Tribes have exercised their discretion to 
seek heightened air quality protection status under the PSD program by 
requesting redesignation of lands within reservation boundaries as 
Class I areas. States may similarly request

[[Page 27160]]

redesignation of their lands as Class I in accordance with the 
procedures outlined at 40 CFR 51.166(g) and 52.21(g). Thus, the permit 
review procedures developed in this rulemaking would apply equally for 
all non-Federal Class I areas--State or Tribal.
    It is important to understand the differences implied by the use of 
the terms ``Federal'' and ``non-Federal'' areas. The PSD program treats 
as ``Federal'' lands various national public lands that the Federal 
government owns and for which it has stewardship responsibility. These 
public lands include the following: national parks, national memorial 
parks, national wilderness areas, national monuments, national 
lakeshores and seashores, national primitive areas, national preserves, 
national recreation areas, national wild and scenic rivers, national 
wildlife refuges, and other similar national public lands. See, e.g., 
CAA Secs. 160(2), 162(a) and 164(a), (d). The term ``non-Federal'' 
refers to State lands or to lands within the boundaries of an Indian 
reservation that are not Federal lands within the meaning of the CAA's 
PSD program. See, e.g., CAA Sec. 164(c). For example, the legislative 
history distinguishes between the ``Federal lands'' which the Federal 
government manages as a ``property owner * * * under the stewardship of 
various Federal agencies'' and tribal lands. Senate Comm. on 
Environment and Public Works, 95th Cong., 2d Sess., A Legislative 
History of the Clean Air Act Amendments of 1977 724 (Comm. Print 1978) 
(statement of Senator Muskie).
    In a recent proposal to reform the PSD program, EPA explained that 
lands within reservation boundaries may or may not be Federal lands 
within the meaning of the PSD program. In fulfilling its fiduciary 
responsibility toward federally-recognized Indian Tribes, the Federal 
government holds some Tribal lands in ``trust'' for the benefit of the 
Tribe. Such lands may have a federal feature under Federal Indian law 
but are not ``Federal'' lands within the meaning of the PSD program. 
However, national public lands within reservation boundaries, such as 
national monuments, are included within the term ``Federal'' lands. See 
61 FR 38250, 38293, n. 71 (July 23, 1996). Thus, the PSD permit review 
procedures for State lands and lands within Indian reservation 
boundaries that are non-Federal or non-public lands and redesignated as 
Class I are the subject of this notice.
3. PSD Permit Review Provisions for Federal and Non-Federal Class I 
Areas
    A congressionally-declared purpose of the PSD program is to 
preserve, protect, and enhance the air quality in national parks, 
national wilderness areas, national monuments, national seashores, and 
other areas of special national or regional natural, recreational, 
scenic, or historic value. CAA Sec. 160(2). To this end, Congress 
established special PSD permit review procedures that apply to proposed 
PSD sources whose emissions may adversely impact Federal Class I areas. 
Based on the statutory text, statutory structure and legislative 
history it appears that these special permit review procedures, set out 
at section 165(d) of the CAA, are intended to apply only to Federal 
lands originally designated, or subsequently redesignated, as Class I 
areas. The legislative history indicates that these special 
requirements were intended ``to provide additional protection for air 
quality in areas where the Federal Government has a special stewardship 
to protect the natural values of a national resource. Such areas are 
the federally-owned class I areas under the bill.'' S. Rep. No. 127, 
95th Cong., 1st Sess. at 34 (1977) (emphasis added).
    The central focus of the permit review procedures for Federal Class 
I areas is to protect the air quality related values (AQRVs) of these 
areas. The Clean Air Act specifies that AQRVs include visibility. CAA 
Sec. 165(d). The legislative history further provides that for Federal 
Class I areas the term AQRVs includes ``the fundamental purposes for 
which such lands have been established and preserved by the Congress 
and the responsible Federal agency. For example, under the 1916 Organic 
Act to establish the National Park Service (16 U.S.C. 1), the purpose 
of such national park lands `is to conserve the scenery and the natural 
and historic objects and the wildlife therein and to provide for the 
enjoyment of the same in such manner and by such means as will leave 
them unimpaired for the enjoyment of future generations.' '' S. Rep. 
No. 127, 95th Cong., 1st Sess. 36 (1977).
    Specifically, for Federal Class I areas, the statute places an 
``affirmative responsibility'' on the FLM to protect the air quality 
related values of Federal lands. CAA Sec. 165(d)(2)(B).
    The FLMs protect AQRVs through a prescribed statutory role. If the 
proposed source will cause or contribute to a violation of a Class I 
increment, then the owner or operator must demonstrate to the 
satisfaction of the FLM that the emissions will not adversely impact 
AQRVs. If the FLM so certifies, then the permit may be issued. 
Conversely, even if a proposed source will not cause or contribute to a 
violation of a Class I increment, the FLM may nevertheless demonstrate 
to the satisfaction of the permitting authority that the source will 
have an adverse impact on AQRVs. If so demonstrated, then the permit 
shall not be issued. CAA Sec. 165(d)(2)(C). Thus, compliance with the 
Class I increments determines the burden of proof for demonstrating the 
presence or absence of an adverse impact on AQRVs.
    EPA recently proposed significant changes to its PSD and 
nonattainment New Source Review (NSR) program. The proposal includes 
revisions to the PSD permit review procedures for sources that may 
adversely impact Federal Class I areas. See 61 FR 38250, 38282-38295 
(July 23, 1996). The proposed revisions are intended to improve 
coordination and cooperation, and clarify relative responsibilities 
among FLMs, proposed sources, and permitting agencies.
    Part III below examines whether EPA's permit review procedures for 
non-Federal Class I areas should be similar to EPA's recent proposal 
for Federal Class I areas in all respects or whether some differences 
must or should exist. While, as noted above, section 165(d) contains 
specific permit review procedures for Federal Class I areas, the Clean 
Air Act does not contain such specific provisions for non-Federal Class 
I areas. However, the CAA does contain provisions aimed at protecting 
air quality in non-Federal Class I areas when a dispute arises between 
affected States or Tribes. The Clean Air Act recognizes that a PSD 
source proposing to locate in one jurisdiction can have adverse effects 
on the air quality of another jurisdiction. By contrast with the 
provisions that give the FLM responsibility for protecting Federal 
Class I areas, any State or Tribal government, concerned that a 
proposed source outside its jurisdiction may adversely impact the air 
quality of a non-Federal Class I area, may seek to protect such area. 
The Clean Air Act establishes a special dispute resolution process to 
address such intergovernmental disagreements.
    The Clean Air Act provides that the Governor of an affected State 
or the Indian ruling body of an affected Indian Tribe may request the 
EPA Administrator to enter negotiations with the parties involved to 
resolve the dispute. If the parties are unable to reach agreement, the 
Clean Air Act makes EPA the ultimate arbiter of the intergovernmental 
dispute. Section 164(e) of the CAA establishes the special process for 
resolving these

[[Page 27161]]

intergovernmental disputes, and reads in relevant part as follows:

    [I]f a permit is proposed to be issued for any new major 
emitting facility proposed for construction in any State which the 
Governor of an affected State or governing body of an affected 
Indian tribe determines will cause or contribute to a cumulative 
change in air quality in excess of that allowed in this part within 
the affected State or tribal reservation, the Governor or Indian 
ruling body may request the Administrator to enter into negotiations 
with the parties involved to resolve such dispute. If requested by 
any State or Indian tribe involved, the Administrator shall make a 
recommendation to resolve the dispute and protect the air quality 
related values of the lands involved. If the parties involved do not 
reach agreement, the Administrator shall resolve the dispute and his 
determination, or the results of agreements reached through other 
means, shall become part of the applicable plan and shall be 
enforceable as part of such plan.

    Thus, the broad contours of this provision include (but are not 
limited to) intergovernmental PSD permit disputes over potential 
impacts on non-Federal Class I areas.3 This provision is 
codified in 40 CFR 52.21(t).
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    \3\ Further, several additional provisions of the Clean Air Act 
and PSD program are aimed at curbing interjurisdictional air 
pollution transport. A purpose of the PSD program is to assure that 
emissions from a source in one jurisdiction do not interfere with 
PSD in another jurisdiction. CAA Sec. 160(4). State air quality 
management plans are required to contain provisions that prohibit 
in-State emissions from interfering with PSD measures in another 
State. CAA Sec. 110(a)(2)(D). The interstate pollution abatement 
provisions of the CAA direct State Implementation Plans (SIPs) to 
require PSD sources to notify nearby States whose air pollution 
levels may be affected by the source. CAA Sec. 126.
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    In this rulemaking, EPA endeavors to clarify the PSD permit review 
procedures in a manner that will facilitate amicable resolution of 
intergovernmental disputes about potential impacts on non-Federal Class 
I areas without the need for recourse to EPA. Additionally, EPA will 
examine the methods EPA should consider and the procedures it should 
employ in the event it is necessary for EPA to resolve an 
intergovernmental PSD permit dispute. In resolving any 
intergovernmental permit disputes EPA will act consistent with its 
trust responsibilities toward Tribes.

III. Preliminary Issues

    The overall objective of the rulemaking revisions addressed in this 
notice is to clarify and improve the PSD permit review procedures 
applicable to proposed sources that may adversely affect non-Federal 
Class I areas.4 In developing these rules EPA will be guided 
by the core purposes of the Clean Air Act and the PSD program. As 
noted, the genesis of the PSD program was the non-degradation policy 
embodied in section 101(b)(1) to ``protect and enhance'' air quality 
resources to ``promote the public health and welfare.'' The 
congressionally declared objectives of the PSD program include ensuring 
that ``economic growth will occur in a manner consistent with the 
preservation of existing clean air resources'' and ensuring that ``any 
decision to permit increased air pollution'' is made ``only after 
careful evaluation of all the consequences * * * and after adequate 
procedural opportunities for informed public participation.'' CAA Sec. 
160 (3) and (5), 42 U.S.C. 7470 (3) and (5). EPA seeks to develop 
workable rules that consider preservation of existing clean air 
resources and potential impacts on economic growth. EPA intends to 
fashion rules that are clear, sensible and improve the PSD permit 
process.
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    \4\ EPA is not proposing to modify its rules on the PSD 
redesignation process itself. The statute clearly prescribes the 
process and the implementing regulations (i.e., 40 CFR 51.166(g) and 
52.21(g)) provide adequate guidelines.
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    EPA seeks public input on the following preliminary issues for use 
in developing proposed revisions to its PSD permit review procedures at 
40 CFR 51.166 and 52.21. EPA's public workshops, discussed in Part IV 
of this document, will focus on these preliminary issues and other 
issues raised by members of the public. EPA also encourages public 
commenters to address the issues in their written submissions to the 
Agency.

A. Scope of New Rulemaking Initiative

    EPA seeks public input on the appropriate scope of this regulatory 
initiative. Currently, after more than 20 years of authority to 
redesignate, there are five non-Federal Class I areas. By contrast, 
there are more than 150 mandatory Federal Class I areas. Thus, non-
Federal Class I areas are not nationally prevalent in the same manner 
as Federal Class I areas.
    EPA already has detailed PSD permit review procedures in place. In 
addition, EPA's recent proposal to reform its PSD rules includes 
proposed revisions related to permit review procedures for Federal and 
non-Federal Class I areas. 61 FR 38282-38295. For example, EPA proposed 
to define the term ``air quality related value'' for both Federal and 
non-Federal Class I areas as ``a scenic, cultural, physical, 
biological, ecological, or recreational resource which may be affected 
by a change in air quality, as defined by the FLM for Federal lands and 
as defined by a State or Indian Governing Body for non-Federal lands 
within their respective jurisdictions.'' 61 FR 38283-38284.
    EPA has also proposed significance levels for all Class I areas. 61 
FR 38291-38292. Under the proposal, PSD sources with a predicted 
(modeled) air quality impact below the significance levels would be 
excluded from the requirement to conduct a full Class I increment 
analysis. EPA indicated that permitting authorities could use the 
finding of an insignificant impact to determine that the source's 
emissions would not contribute to an increment violation. However, an 
impact below the significance level of the PSD increments would not 
necessarily indicate that the proposed source also has an insignificant 
impact on AQRVs.
    In the pending rulemaking to reform the PSD program, EPA also 
clarified the PSD requirements applicable to non-Federal lands 
redesignated as Class I areas. 61 FR 38293-38295. EPA explained that 
States and Tribes with non-Federal Class I areas may identify AQRVs for 
their lands and may pursue protection of the AQRVs through the 
intergovernmental dispute resolution provisions under section 164(e) of 
the CAA. EPA proposed to adopt a regulation at 40 CFR 51.166(t) to 
implement section 164(e), as a companion to the regulation currently in 
place at 40 CFR 52.21(t). 61 FR 38293-38295. EPA also proposed to 
define ``Federal Class I areas'' to clarify the distinctions between 
Federal and non-Federal Class I areas. 61 FR 38293-38295.
    As noted, section 164(e) provides that a State or Tribe may request 
intergovernmental dispute resolution if a State or Tribe determines 
that emissions from a proposed PSD source ``will cause or contribute to 
a cumulative change in air quality in excess of that allowed in [the 
PSD program] within the affected State or tribal reservation.'' Section 
164(e) further provides that if requested by the State or Tribe 
involved, EPA shall make a recommendation to resolve the dispute and 
``protect the air quality related values of the lands involved.'' If 
the parties do not reach agreement, EPA shall resolve the dispute and 
its determination shall become part of the applicable plan. Because 
section 164(e) specifically provides for protection of AQRVs, EPA has 
previously explained its view that States and Tribes may seek 
protection of AQRVs through these intergovernmental dispute resolution 
provisions. [Letter to George Meyer, Wisconsin Department of Natural 
Resources, from Valdas Adamkus, EPA

[[Page 27162]]

Regional Administrator for Region V (July 27, 1994).]
    In the PSD reform proposal, EPA explained its interpretation of the 
language authorizing intergovernmental dispute resolution if a proposed 
source ``will cause or contribute to a cumulative change in air quality 
in excess of that allowed in [the PSD program].'' EPA stated that a 
State or Tribe may request intergovernmental dispute resolution when a 
State or Tribe determines that a proposed source will cause or 
contribute to a violation of the NAAQS or PSD increment or will harm 
AQRVs identified by the State or Tribe. 61 FR 38294.
    EPA believes its interpretation is supported by the plain language 
of the statute and statutory structure. The statutory language at issue 
is expansive--referring generally to ``changes in air quality.'' The 
increments are a central limit on air quality deterioration established 
under the PSD program and well within the ambit of this language. At 
the same time, increments are explicitly referred to elsewhere in the 
PSD provisions as ``maximum allowable increases'' and ``maximum 
allowable concentrations'' of pollutants. CAA Secs. 163 & 165(a)(3)(A). 
Thus, EPA believes that the language in section 164(e)is not confined 
to PSD increments. The statutory text also appears to encompass adverse 
impacts on AQRVs due to ``changes in air quality.'' EPA believes AQRVs 
are properly a basis for initiating dispute resolution since their 
protection is a stated purpose of the provision. 61 FR 38294. In other 
words, to allow states or tribes to initiate intergovernmental dispute 
resolution because of adverse impacts on AQRVs is consistent with the 
statutory language in section 164(e) that calls for EPA to ``make a 
recommendation to resolve the dispute and protect the air quality 
related values of the land involved.'' Today, EPA seeks further public 
comment on this interpretation.
    The proposed revisions to reform the PSD program are the outgrowth 
of extensive discussions with representatives of State and local 
governments, regulated industry, Federal Land Managers, and 
environmental organizations. EPA held a public hearing in September 
1996 and has provided abundant opportunity for public comment. Except 
for interpretation of section 164(e) discussed immediately above, 
regarding the basis for initiating intergovernmental disputes, EPA does 
not intend to reopen in this rulemaking the proposals advanced in the 
separate rulemaking to reform the PSD program published on July 23, 
1996 (61 FR 38250).
    Thus, the question for this new rulemaking initiative is what 
additional changes to the PSD permit program are needed to clarify and 
improve the permit review procedures for proposed sources that may 
adversely affect air quality in non-Federal Class I areas. EPA requests 
public input on the appropriate scope of this rulemaking, considering 
the previously proposed revisions to improve the PSD program and the 
relatively small number of non-Federal Class I areas.

B. Improving Coordination Between Permitting Authorities and States or 
Tribes With Non-Federal Class I Areas

    The July 1996 proposed rules to reform the PSD program contained 
provisions to address concerns about the PSD permit review procedures 
for Federal Class I areas. 61 FR 38282-38295. The proposal is intended 
to reduce delays and disputes associated with permitting near Federal 
Class I areas by facilitating coordination between the FLM, the permit 
applicant and the permit authority, and clarifying the relative roles 
and responsibilities of the involved parties. A central goal of 
improved coordination is to help identify potential disagreements early 
in the permit process, when it is less disruptive. Roles are clarified 
to ensure that responsibilities are reasonably, and mutually, 
allocated.
    EPA seeks public comment on whether some of the basic policy 
concerns reflected in EPA's recent proposal to revise the PSD rules for 
Federal Class I areas are also concerns that should be addressed when 
developing proposed programmatic improvements for non-Federal Class I 
areas. These basic policy concerns, as they apply to non-Federal Class 
I areas, are outlined below. 5
---------------------------------------------------------------------------

    \5\ As noted, this notice does not seek public comment on EPA's 
proposed revisions to the permit review procedures for Federal Class 
I areas published on July 23, 1996 and already subjected to public 
comment.
---------------------------------------------------------------------------

1. Permit Application Coordination
    A State or Tribe with a non-Federal Class I area will be aware of 
sources proposing to locate within its jurisdiction and can work with 
the permitting authority to review and resolve potential impacts on 
non-Federal Class I areas. However, if the source is located in another 
jurisdiction, a State or Tribe can only effectively protect its non-
Federal Class I area from potentially adverse effects if it knows about 
the proposed source.
    In its July 1996 proposed revisions to the PSD rules, EPA generally 
proposed to require submittal of permit applications to the FLMs for 
sources locating within 100 kilometers (km) of a Federal Class I area. 
EPA also proposed to require basic source information concerning 
sources locating more than 100 km from a Federal Class I area to be 
input into an electronic database in lieu of transmitting entire permit 
applications to the FLMs. The database enables the FLMs to review 
information about proposed PSD sources and determine whether further 
information about the project is needed. 61 FR 38287-38288.
    EPA's current regulations generally require State-administered PSD 
programs to send the public notice of PSD permits to any State or 
Indian Governing Body whose lands may be affected by emissions from the 
source or modification. 40 CFR 51.166(q)(2)(iv). The public notice 
includes the following information: indicates that a PSD permit 
application has been received, states the permitting authority's 
preliminary determination to approve or deny the permit, describes the 
degree of increment consumption that is expected, and addresses the 
opportunity for comment at a public hearing as well as written public 
comment.
    EPA requests public comment on whether EPA should clarify when a 
permit authority must provide an affected State or Tribe with a copy of 
the public notice. EPA also requests comment addressing whether, when a 
non-Federal Class I area may be affected, EPA should also require 
permit authorities to provide affected States or Tribes with copies of 
the permit application or other advance notice before the permit 
authority makes a preliminary determination to grant or deny the 
permit.
    For example, commenters should address whether EPA should establish 
standard procedures for permit application notification of sources that 
may adversely affect non-Federal Class I areas, and how such 
notification could be effectively and efficiently accomplished. Using 
the distance between the proposed source and non-Federal Class I area 
as a basis for determining whether coordination is necessary is 
simplistic and clear. However, rigid distances alone can be over- and 
under-inclusive. For example, if States or Tribes with non-Federal 
Class I areas were required to be notified of all proposed sources 
within 100 km of the Class I area, then this may place a burden on some 
sources that do not threaten the area and exclude some

[[Page 27163]]

large sources that may impact the area. EPA seeks suggestions on how to 
ensure that States and Tribes with non-Federal Class I areas receive 
adequate information about proposed sources that may affect the areas 
without placing undue burdens on PSD permit applicants and permit 
agencies.
    EPA also requests public comment on how to facilitate 
intergovernmental coordination during the permit review process to 
avoid the need for EPA to resolve disputes over potential impacts on 
non-Federal Class I areas. EPA's July 1996 proposal contained several 
potential revisions to the PSD rules that call for consultation between 
the permitting authority and FLM at various key stages of the permit 
process. 61 FR 38283-38295. Intergovernmental consultation may 
facilitate resolution of concerns. Further, the earlier all parties are 
aware of potential concerns, then the sooner the concerns can be 
resolved and constructive discourse can begin. EPA requests public 
comment addressing consultation and other measures that can be taken to 
help resolve intergovernmental permit disputes at an early stage in the 
permit process. Commenters should address whether consultation would be 
productive, what alternative measures would be appropriate, and what 
stages in the permit process consultation should be formalized.
2. Identifying and Disseminating Information About Air Quality Related 
Values
    As noted, EPA's July 1996 proposed PSD revisions define ``AQRVs'' 
for Federal and non-Federal lands as visibility or a scenic, cultural, 
physical, biological, ecological, or recreational resource that may be 
affected by a change in air quality, as defined by the Federal Land 
Manager for Federal lands and as defined by the applicable State or 
Indian Governing Body for non-Federal lands. 61 FR 38284. EPA's July 
1996 notice sought public comment on this proposed definition and EPA 
is not seeking further comment in today's notice.
    However, EPA does request public input on measures to encourage 
identification and dissemination of information about the AQRVs for 
non-Federal lands. EPA's July 1996 proposal included provisions for the 
public dissemination of information about the AQRVs for Federal lands. 
61 FR 38283-86. EPA proposed to place responsibility on the FLM to 
ensure that permit applicants and permit agencies have adequate 
information about any AQRV which the FLM has identified. Public 
commenters should address reasonable steps that can be taken by States 
or Tribes with AQRVs to inform PSD permit agencies and applicants about 
the AQRVs. Commenters should also suggest the type of information that 
would be useful to potential permit applicants and permit agencies.
    A related issue is the level of technical support that should 
accompany identification of AQRVs. Technical or scientific information 
about AQRVs may be necessary for a neighboring permit agency and permit 
applicant to understand and address potential concerns. EPA requests 
comments on whether EPA should propose rules addressing the technical 
support information for AQRVs identified by a State or Tribe, and seeks 
input on approaches that may be appropriate.
3. No Affirmative Responsibility to Protect AQRVs of Non-Federal Lands
    As noted, the Clean Air Act places an affirmative responsibility on 
FLMs to protect the AQRVs of Federal Class I areas. Thus, the FLM has a 
special duty under Federal law to protect the air quality related 
resources of Federal Class I areas.
    However, it does not seem appropriate for a State or Tribe with a 
non-Federal Class I area to be under a similar responsibility to 
protect AQRVs. This is an area where a departure between Federal and 
non-Federal lands seems appropriate. Because a decision by a State or 
Tribe to seek redesignation of its lands as a Class I area is entirely 
discretionary, EPA believes that it would be inappropriate to place an 
affirmative responsibility on a State or Tribe to challenge permit 
applications from proposed sources locating in other jurisdictions. 
Thus, EPA is disinclined in this rulemaking to place any duty on an 
affected State or Tribe to invoke the intergovernmental dispute 
resolution process and intends to leave this entirely within the 
State's or Tribe's discretion. EPA solicits public comment on this 
proposed approach.

C. EPA Resolution of Intergovernmental Permit Disputes

    When a State or Tribe does elect to invoke the dispute resolution 
process, section 164(e) of the CAA makes EPA the arbiter of 
intergovernmental PSD permit disputes. Section 164(e) of the CAA 
provides that if the Governing Body of an affected Indian Tribe or the 
Governor of an affected State determines that a proposed PSD source 
``will cause or contribute to a cumulative change in air quality in 
excess of that allowed [under the PSD program],'' the Tribe or State 
may request EPA to enter into negotiations with the parties involved to 
resolve the dispute. Then, if requested by a State or Tribe, EPA will 
make a recommendation to resolve the dispute and protect the AQRV's of 
the lands involved. If that does not lead to resolution, EPA is 
ultimately called upon to resolve such disputes regardless of whether 
the proposed permit is being reviewed under a State, Tribal, or 
Federally administered program. EPA seeks public input on the issues 
outlined below related to EPA's resolution of permit disputes about 
potential air pollution impacts on non-Federal Class I areas.
1. EPA's Discretion to Fashion Reasonable Solutions
    EPA has broad discretion in crafting solutions to intergovernmental 
permit disputes under section 164(e) of the CAA. The key statutory text 
in section 164(e) provides as follows:

    If requested by any State or Indian tribe involved, the 
Administrator shall make a recommendation to resolve the dispute and 
protect the air quality related values of the lands involved. If the 
parties involved do not reach agreement, the Administrator shall 
resolve the dispute and his determination, or the results of 
agreements reached through other means, shall become part of the 
applicable plan and shall be enforceable as part of such plan.

    Thus, Congress has directed EPA to ``make a recommendation to 
resolve the dispute and protect the air quality related values of the 
lands involved.'' If the parties cannot reach agreement, EPA is 
authorized to ``resolve the dispute.'' The statute does not specify or 
constrain the measures or methods EPA may employ to resolve the 
dispute.
    EPA's discretion to resolve disputes may mean that EPA draws from a 
variety of methods in resolving any particular PSD permit dispute. This 
will enable EPA to tailor a solution to the circumstances and issues 
presented. For example, in the event that EPA is requested to resolve a 
dispute involving a proposed source's potential impacts on AQRVs and 
the affected governments disagree about the nature of the projected 
effects, EPA may need to explore and resolve underlying technical and 
scientific issues. EPA seeks comment on whether it should elaborate how 
it might evaluate such technical or scientific disagreements.
    Post-construction monitoring may be an effective way to resolve 
some disputes conditionally. Where there are irreconcilable disputes 
over the potential impact of a proposed source, post-construction 
monitoring and subsequent evaluation provides a means

[[Page 27164]]

to ascertain actual source impacts and assess the need for any further 
action.
    EPA also requests comment on whether it should address measures 
that could be employed to mitigate effects on AQRVs. In the July 1996 
PSD rulemaking proposal, EPA explored methods to mitigate adverse 
impacts on the AQRVs of Federal Class I areas to allow permitting of 
sources that would otherwise face permit modification or denial. 61 FR 
38290-38291. Similarly, if resolution of an intergovernmental permit 
dispute necessitated permit modification or denial to protect the AQRVs 
of non-Federal Class I areas, mitigation of source impacts through 
emissions offsets from other sources or other mitigation techniques may 
present a means to avoid harsher results.
    It is also possible that a proposed source may not adversely impact 
AQRVs but still exceed Class I increments. If that is the case, EPA may 
consider whether, in certain circumstances and consistent with its 
trust responsibilities toward tribes, it is within EPA's discretion 
under section 164(e) to allow issuance of a permit that exceeds Class I 
increments. It is unclear whether section 164(e) would authorize such 
action by EPA. This issue is examined in more detail below.
    As noted, the Class I increments are the most stringent PSD 
increments. Therefore, it is conceivable that a proposed source could 
exceed a Class I increment and yet not adversely impact AQRVs. The 
Clean Air Act expressly recognizes this situation for Federal Class I 
areas. As noted, under the specific statutory provisions for Federal 
Class I areas at section 165(d)(2) of the CAA, a source's contribution 
to the Class I increments determines who bears the burden of proof for 
demonstrating the presence or absence of an adverse impact on AQRVs and 
is not decisive of whether a permit may be issued. If a proposed source 
will contribute to a Class I increment violation in a Federal Class I 
area, then the owner or operator may nevertheless demonstrate to the 
satisfaction of the FLM that the source will not adversely impact 
AQRVs. Therefore, the FLM may conclude that AQRVs are not threatened 
despite the Class I increment violation. If the FLM certifies that no 
adverse impact will occur despite the source's violation of the Class I 
increment, the permitting authority may issue a PSD permit provided the 
source demonstrates compliance with the Class II increments (as well as 
a more stringent three-hour sulfur dioxide concentration 
level).6 CAA Sec. 165(d)(2)(C)(iv), 40 CFR 51.166(p)(4) and 
52.21(p)(5). Thus, in limited circumstances for Federal Class I areas, 
the Clean Air Act contemplates that a PSD permit could be issued for a 
source that exceeds the Class I increments.
---------------------------------------------------------------------------

    \6\ The source must demonstrate compliance with a concentration 
level for sulfur dioxide measured over three hours that is more 
stringent than the Class II increment but less stringent than the 
Class I increment. CAA Sec. 165(d)(2)(C)(iv), 40 CFR 51.166(p)(4) 
and 52.21(p)(5). If the FLM declines to certify that no adverse 
impact will occur, the permit must be denied or modified. If the 
proposed source may not be constructed because of the sulfur dioxide 
increment for periods of twenty-four hours or less, the Governor may 
grant a variance of the increment if doing so will not adversely 
affect AQRVs and the FLM concurs. If the Governor and FLM do not 
agree, their respective recommendations may be transmitted to the 
President who may grant the variance if it is in the national 
interest and the facility meets specific limits on its sulfur 
dioxide concentrations. CAA Sec. 165(d)(2)(D), 40 CFR 51.166 (p)(5) 
through (p)(7) & 52.21 (p)(6) through (p)(8).
---------------------------------------------------------------------------

    However, section 164(e) does not contain a similar express 
exemption of the Class I increments for non-Federal lands. Further, 
other provisions of the Clean Air Act specify that a proposed source 
must comply with increments to qualify for a PSD permit. For example, 
as underscored, section 163 establishes the Class I increments 
providing that ``the maximum allowable increase in concentrations of 
sulfur dioxide and particulate matter shall not exceed'' certain 
prescribed amounts. See also 40 CFR 51.166(c) and 52.21(c). Further, 
section 165(a) directs PSD sources to demonstrate that emissions will 
not contribute to an increment exceedance more than one time per year. 
Thus, the absence of an explicit statutory exemption to the Class I 
increments for non-Federal Class I areas would suggest that section 
164(e) should not be construed to provide one.
    Additionally, for non-Federal Class I areas, the Class I increments 
appear to have relevance independent of AQRVs. The intergovernmental 
dispute resolution provisions for non-Federal lands provide that a 
State or Tribe may object to a proposed PSD permit if it determines 
that emissions ``will cause or contribute to a cumulative change in air 
quality in excess of that allowed [under Part C of the Act--the PSD 
program] within the affected State or tribal reservation.'' CAA Sec. 
164(e). As noted, EPA has previously proposed to interpret excess air 
quality changes to include a proposed source's contribution to a NAAQS 
violation, PSD increment violation or AQRV impact. 61 FR 38294. Thus, 
EPA interprets this provision to direct EPA mediation, at the request 
of a State or Tribe, when a State or Tribe determines that a proposed 
source will cause or contribute to a violation of a NAAQS or increment, 
or contribute to AQRV impacts. The bases for invoking the PSD 
intergovernmental dispute provisions arguably suggest that Class I 
increments should be among the concerns protected in resolving 
disputes.
    Further, for non-Federal Class I areas, there are additional 
reasons to give the Class I increments consideration independent of 
AQRVs. Because Congress gave States and Tribes broad latitude to seek 
redesignation of non-Federal lands as Class I areas, States and Tribes 
could seek redesignation to prevent incremental air quality 
deterioration without regard to protection of AQRVs. In such a 
situation, compliance with Class I increments enables States and Tribes 
to advance public health and welfare concerns associated with air 
quality degradation independent of AQRVs. Thus, EPA may be requested to 
resolve a dispute involving only a PSD increment, where no AQRV has 
been defined. In that case, it could be argued that EPA should never 
waive a PSD increment in a non-Federal Class I area because the State's 
or Tribe's goal in redesignating the area to Class I may have been 
solely the protection of the increments.
    At the same time, the section 164(e) dispute resolution provisions 
direct EPA to ``make a recommendation to resolve the dispute and 
protect the air quality related values of the lands involved.'' This 
might suggest that AQRVs, not increments, are the principal focus of 
protection under section 164(e). But, relying on the objective of 
protecting AQRVs in section 164(e) as a basis for a Class I increment 
exemption could be very broad since this explanation could conceivably 
justify an exemption of the Class II or III increments. Perhaps in 
exercising its administrative discretion under section 164(e) EPA would 
be confined to a Class I increment exemption, by direct analogy to the 
statutory exemption provisions for Federal Class I areas.
    EPA requests comment on whether EPA should explore in this 
rulemaking EPA's discretion to waive the Class I increments for non-
Federal Class I areas in resolving permit disputes under section 164(e) 
of the CAA. While it is clear that such action is impermissible unless 
AQRVs will also be protected, there may nevertheless be circumstances 
when Class I increment violations occur that do not threaten AQRVs. EPA 
also seeks comment on the circumstances under which it might be 
appropriate for EPA to consider providing an exemption for a Class I

[[Page 27165]]

increment. EPA also requests comment on how to weigh competing concerns 
in determining whether a Class I increment exclusion may be 
appropriate. For example, if a State or Tribe with a Class I area was 
very concerned about increases in direct particulate matter pollution, 
perhaps it would be appropriate for EPA to consider an exclusion from 
the short-term sulfur dioxide increment but not from PM-10.
    In sum, EPA requests public comment on whether EPA should address 
in this rulemaking some of the potential measures and tools that may be 
employed to resolve intergovernmental disputes and, if so, what 
approaches may be appropriate. Alternatively, it may be appropriate for 
EPA to adopt very general rules that enable EPA to take any number of 
actions depending upon the circumstances.
2. Dispute Resolution Procedures
    EPA also seeks input on whether and to what extent EPA should 
prescribe the procedures to be followed in resolving intergovernmental 
permit disputes under section 164(e). For example, EPA is interested in 
the public's views about whether EPA should establish a particular 
dispute resolution process. Further, EPA requests comment on whether 
EPA should address how the dispute resolution process relates to the 
permit proceeding and how the resulting solution is implemented.
3. Incentives for Amicable Dispute Resolution
    Ideally, intergovernmental permit disputes could be amicably 
resolved without recourse to EPA. EPA seeks public comment on 
incentives EPA could create for governments to resolve their concerns 
amicably.

D. Miscellaneous Changes

    EPA also seeks public input on any clarifying, administrative 
changes EPA should make to its existing PSD regulations in light of the 
distinctions between Federal and non-Federal Class I areas. Comments 
regarding consistent use of terminology would be appropriate. For 
example, the existing rules may generally refer to Class I areas where 
the context implies that Federal Class I areas is the intended meaning. 
Technical revisions may help avoid any confusion.
    The public should also comment on whether EPA should make any 
conforming regulatory changes to the Guideline on Air Quality Modeling 
to clarify and improve the PSD permit procedures for non-Federal Class 
I areas. The Guideline prescribes the air quality models employed to 
estimate the air quality impacts of proposed PSD sources and is 
codified at 40 CFR part 51, Appendix W.

E. Summary of the Principal Issues

    To facilitate public input, EPA has summarized the issues raised 
for comment in this notice.
    1. Scope of Rulemaking. What regulatory changes should EPA consider 
in this rulemaking beyond the PSD programmatic revisions proposed in 
EPA's July 23, 1996 Federal Register notice (61 FR 38250)?
    2. Analogy to Federal Class I Area Issues. To what extent should 
EPA draw from the PSD permit review procedures proposed for Federal 
Class I areas in the July 23, 1996 notice in considering rule changes 
for non-Federal Class I?
    3. Permit Application Notification. What effective, and efficient, 
measures should EPA consider to ensure that States and Tribes with non-
Federal Class I areas receive adequate information about proposed 
sources that may adversely impact such areas?
    4. Intergovernmental Coordination. How can EPA facilitate 
intergovernmental consultation and coordination during the permit 
review process in a manner that helps avoid intergovernmental disputes?
    5. Identifying AQRVs. What guidance, if any, should EPA provide 
about the technical support that should accompany identification of 
AQRVs by States and Tribes?
    6. Disseminating Information about AQRVs. What methods should EPA 
consider to ensure that States and Tribes with AQRVs provide adequate, 
timely information about their AQRVs to permit applicants and permit 
agencies?
    7. Responsibility to protect AQRV. Should non-Federal land managers 
have the same affirmative responsibility as Federal land managers to 
protect AQRVs?
    8. EPA Resolution of Intergovernmental Disputes. Should EPA specify 
the procedures, measures and techniques that might be employed in 
resolving intergovernmental permit disputes under section 164(e) and, 
if so, which of these might be appropriate?
    9. Waiver of Class I Increments. Should EPA explore in this 
rulemaking EPA's discretion to waive the Class I increments for non-
Federal Class I areas in resolving permit disputes?
    10. Dispute Resolution Procedures. What rules, if any, should EPA 
consider to govern the manner in which EPA will conduct resolution of 
intergovernmental permit disputes under section 164(e)?
    11. Incentive for Amicable Intergovernmental Dispute Resolution. 
How can EPA create incentives for amicable resolution of 
intergovernmental permit disputes?
    12. Additional Clarifying Regulatory Changes. What regulatory 
revisions are necessary to clarify the distinction between Federal and 
non-Federal Class I areas?
    13. Regulatory Flexibility Act. What steps can EPA take in this 
rulemaking to facilitate public participation by any small entities 
that may be adversely affected and to mitigate any such impacts?
    14. Paperwork Reduction Act. What steps can EPA take in this 
rulemaking initiative to ensure that any informational requirements are 
necessary and of practical utility, and to minimize the burden of any 
information requirements?

IV. Public Workshops

    EPA recognizes the complexities of the issues surrounding the PSD 
permit application process. EPA seeks input from all interested members 
of the public in formulating a reasonable, workable approach to the PSD 
permit review procedures for sources potentially impacting non-Federal 
Class I areas.
    The preceding discussion has attempted to identify some major 
issues in developing an approach to this rulemaking. However, these are 
only preliminary ideas that do not necessarily exhaust all possible 
issues and approaches regarding the PSD permit review process. EPA 
wishes to engage in a public discussion about the PSD permit review 
process and intends to hold public workshops that will provide 
opportunity for interested members of the public to address the issues 
raised in this notice and suggest additional approaches.
    The first of these public workshops will be held in Phoenix, 
Arizona and in Chicago, Illinois. A Federal Register notice announcing 
specific dates, times, and locations of these workshops will be 
published at least 30 days prior to the workshops. If there is public 
interest, additional public workshops will be announced in the Federal 
Register.

V. Additional Information

A. Public Docket

    This rulemaking action involves promulgation or revision of PSD 
regulations. Thus, the rulemaking is subject to the procedures in 
section 307(d) of the CAA, 42 U.S.C. Sec. 7607(d), in accordance with 
section 307(d)(1)(J). The public docket for this rulemaking action is 
A-96-53. The docket is a file of information relied on by EPA in the 
development of

[[Page 27166]]

regulations. All written comments and accompanying materials received 
in response to this notice will be placed in the public docket. The 
docket is available for public review and copying at EPA's Air Docket, 
as indicated in the ADDRESSES section at the beginning of this 
document.

B. Executive Order (EO) 12866

    Section 3(f) of EO 12866 defines ``significant regulatory action'' 
for purposes of centralized regulatory review by the Office of 
Management and Budget (OMB) to mean any regulatory action that is 
likely to result in a rule that may:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.
    A draft of this ANPR and associated materials were reviewed by OMB 
prior to publication. Information related to OMB's review of this ANPR 
has been placed in the public docket referenced at the beginning of 
this notice, including: (1) Materials provided to OMB in conjunction 
with OMB's review of this ANPR; and (2) Materials that identify 
substantive changes made between the submittal of a draft ANPR to OMB 
and this notice, and that identify the changes that were made at the 
suggestion or recommendation of OMB.

C. Regulatory Flexibility Act as Amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996

    Under the RFA, 5 U.S.C. 601-612, EPA must prepare an initial 
Regulatory Flexibility Analyses to accompany notices of proposed 
rulemaking that assess the impact of proposed rules on small entities. 
Small entities include small businesses, small not-for-profit 
enterprises and government entities with jurisdiction over populations 
of less than 50,000. However, the requirement of preparing such 
analyses is inapplicable if the Administrator certifies that the rule 
will not, if promulgated, have a significant economic impact on a 
substantial number of small entities. 5 U.S.C. 605(b).
    The regulatory revisions that are being considered in this 
rulemaking initiative would affect the PSD permit review procedures for 
new major stationary sources and major modifications to existing major 
stationary sources. This regulatory initiative is also intended to 
clarify and improve the existing rules. It is unclear at this stage of 
the rulemaking process whether this rulemaking initiative may have a 
significant adverse impact on a substantial number of small entities. 
Nevertheless, EPA seeks public comment on steps EPA can take in this 
rulemaking to facilitate public participation by any small entities 
that may be adversely affected and to mitigate any such impacts.

D. Paperwork Reduction Act

    EPA requests public comments on steps EPA can take in this 
rulemaking initiative to ensure that any informational requirements are 
necessary and of practical utility, and to minimize the burden of any 
information requirements.

    Dated: May 8, 1997.
Mary D. Nichols,
Assistant Administrator for Air and Radiation.
[FR Doc. 97-12918 Filed 5-15-97; 8:45 am]
BILLING CODE 6560-50-P