[Federal Register Volume 63, Number 34 (Friday, February 20, 1998)]
[Rules and Regulations]
[Pages 8573-8577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4003]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MI58-01-7266; FRL-5967-3]


Approval and Promulgation of State Implementation Plans; Michigan

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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

SUMMARY: This rulemaking finalizes the United States Environmental 
Protection Agency's (USEPA) disapproval of the State Implementation 
Plan (SIP) revision submitted by Michigan containing start-up, shutdown 
and malfunction (SSM) regulations which would apply generally to 
sources covered under the applicable SIP. This action is being taken 
under section 110 of the Clean Air Act (Act).

DATES: This final rule is effective March 23, 1998.

ADDRESSES: Copies of the documents relevant to this action are 
available for public inspection during normal business hours at the 
U.S. Environmental Protection Agency, Region 5, Air and Radiation 
Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. (Please 
telephone Kathleen D'Agostino at (312) 886-1767 before visiting the 
Region 5 Office.)

FOR FURTHER INFORMATION CONTACT: Kathleen D'Agostino, Environmental 
Engineer, Regulation Development Section, Air Programs Branch (AR-18J), 
U.S. Environmental Protection Agency, Region 5, Chicago, Illinois 
60604, (312) 886-1767.

SUPPLEMENTARY INFORMATION:

I. Background

    On March 20, 1997 (62 FR 13357), the USEPA published a document 
proposing disapproval of a SIP revision containing Rules 336.1912, 
336.1913 and 336.1914, which was submitted by the Michigan Department 
of Environmental Quality (MDEQ) on May 16 1996. Rule 336.1912 requires 
that a source be operated in a manner consistent with good air 
pollution control practices for minimizing emissions during start-ups, 
shutdowns and malfunctions, and contains notice and reporting 
requirements in the event of start-up, shutdown or malfunction. Rules 
336.1913 and 336.1914 excuse excess emissions resulting from start-ups, 
shutdowns or malfunctions, providing that the notice and reporting 
requirements in Rule 336.1912 are met. The rationale for USEPA's 
proposed action is explained in the notice of proposed rulemaking and 
will not be restated here.

II. Public Comments/Response to Comments

    This section summarizes the comments submitted during the public 
comment period for the notice of proposed rulemaking and provides 
USEPA's response to those comments. The comment period closed April 21, 
1997. Adverse comments were received from the Michigan Department of

[[Page 8574]]

Environmental Quality, the Michigan Chamber of Commerce, the Michigan 
Manufacturers Association, General Motors Corporation and the American 
Automobile Manufacturers Association.
    Comment: USEPA's proposed disapproval is not supported by section 
110 of the Clean Air Act (CAA). There is no specific language in 
section 110 that provides the USEPA with the authority to disapprove 
Michigan's SSM rules. Section 110 contains no provisions that prohibit 
the type of exemption and affirmative defense contained in the SSM 
rules.
    Response: It is true that section 110 does not explicitly address 
SSM regulations. However, under section 110 of the Act, USEPA is 
required to determine whether a SIP submission, inter alia, provides 
for the attainment and maintenance of the National Ambient Air Quality 
Standards (NAAQS). Because SIPs are developed to attain and maintain 
ambient-based standards, any emissions above the SIP-approved limits 
may cause or contribute to violations of the NAAQS. USEPA believes that 
SSM regulations which are too broadly drawn can threaten attainment and 
maintenance of the NAAQS. Therefore, EPA believes that it is reasonable 
to interpret section 110 to prohibit generally applicable SSM 
provisions.
    In addition, Sec. 110(a)(2)(A) of the Act requires that SIP 
submissions contain enforceable limitations. Enforceability 
deficiencies, i.e., overly broad bypass provisions and definitions of 
``malfunction,'' are discussed further below. (See USEPA's response to 
the comment that Michigan's SSM rules are consistent with the 1983 
memorandum from Kathleen Bennett.)
    Comment: Because CAA regulations, e.g., 40 CFR part 63, already 
allow for protection which is broader than that proposed in the 
Michigan rules, the USEPA is without authority to proclaim that 
enforcement discretion is the only avenue for an SSM process to 
proceed. It is illogical to argue that Michigan's SSM rules do not 
comply with the CAA when CAA regulations provide for at least as broad 
protection against enforcement.
    Response: The statutory and regulatory focus of NESHAPS (and NSPS) 
is fundamentally different from the SIP program and different policies 
apply, i.e., technology-based standards as opposed to the air quality 
objectives of section 110. The Bennett memoranda recognize that the 
attainment and maintenance of the NAAQS cannot be assured with overly-
broad SSM provisions. EPA continues to believe that the health-based 
objective of SIPs make general SSM provisions unacceptable, even though 
such provisions may be appropriate for technology-based standards such 
as NESHAP and NSPS.
    Comment: There is a substantive difference between the position set 
forth in the Bennett memoranda and the protections afforded by both 40 
CFR 63 and the Michigan SSM rules. The promulgated Federal and State 
rules provide that there is no violation if the requirements of the 
rules are met. In contrast, the USEPA's memoranda position provides 
that there is a substantive violation of the CAA which then becomes 
subject to its enforcement discretion.
    Response: The USEPA acknowledges that the Bennett memoranda 
recognize all periods of excess emissions as violations of the 
applicable SIP standard whereas periods of excess emissions occurring 
during start-ups, shutdowns or malfunctions may be excused under 40 CFR 
part 63 for NESHAPS. For the reasons discussed in response to the 
previous comment, USEPA believes that this is a reasonable distinction.
    Comment: The USEPA misconstrues its authority under section 110 of 
the CAA. The United States Court of Appeals for the District of 
Columbia Circuit recently affirmed that the USEPA is not authorized 
under section 110 to dictate to states the methods to be used to 
achieve and maintain compliance with the National Ambient Air Quality 
Standards (NAAQS). Rather the D.C. Circuit recognized the relationship 
between the states and USEPA as one in which the states determine how 
best to regulate emission sources to achieve and maintain compliance 
with the NAAQS while USEPA is limited to determining whether each 
state's program will achieve the required air quality standards.
    In promulgating the SSM statutory provisions and corresponding 
regulations, Michigan has exercised its power to ``determine which 
sources would be burdened by regulations and to what extent.'' Provided 
that attainment and maintenance of the NAAQS is the result of 
Michigan's overall implementation plan, the USEPA is not authorized, 
under section 110, to reject portions of Michigan's SIP that differ 
from the USEPA's enforcement policy.
    Response: USEPA agrees that the CAA places primary responsibility 
upon the states to formulate requirements it deems appropriate to 
protect air quality. However, the CAA does not grant states unfettered 
discretion. Rather, the CAA and USEPA policy form a framework which 
states must work within when developing SIPs. (Some programs and 
requirements are expressly set forth in the CAA, e.g. inspection and 
maintenance, reasonably available control technology.) Furthermore, the 
Act charges USEPA with the determination as to whether the state's 
choices will result in attainment and maintenance of the NAAQS. For the 
reasons previously discussed, USEPA believes that the effect of 
Michigan's SSM regulations is to create uncertainty as to whether this 
statutory goal can be accomplished. In addition, Sec. 110(a)(2)(A) of 
the Act requires that SIP submissions contain enforceable limitations. 
Enforceability deficiencies, i.e., overly broad bypass provisions and 
definitions of ``malfunction,'' are discussed further below. (See 
USEPA's response below to the comment that Michigan's SSM rules are 
consistent with the 1983 memorandum from Kathleen Bennett.)
    Comment: Inconsistency with USEPA policy is not a valid reason for 
disapproval of a State Implementation Plan (SIP) revision. There is no 
reference to the Bennett memoranda, or any other policy, in section 110 
of the CAA. Therefore, it is inappropriate to base the disapproval of 
Michigan's SSM rules on such policy memoranda. Statutory authority, and 
not policy memoranda, should be the basis for the disapproval.
    Response: As noted previously, it is appropriate for USEPA to 
clarify regulations and statutes with written policies and guidance 
documents. In the context of rulemakings on SIP submissions, the public 
has an opportunity to comment and respond to USEPA's policies that 
interpret the relevant statutes and regulations. Through rulemaking 
actions, such as this, USEPA can determine whether to modify its policy 
or whether it still stands by its policy interpretation in light of any 
public comments. In this case, USEPA continues to support the policy 
established by the Bennet memoranda for the reasons stated in those 
memoranda and in this rulemaking action.
    Comment: EPA's disapproval of Michigan's regulations, based on 
internal policy memoranda, is groundless. The SSM rules are the result 
of a publicly conducted work group, and were promulgated in accordance 
with all applicable State laws. The rationale offered by USEPA is not 
the result of a lawfully conducted notice and comment rulemaking 
process, nor does it cite any specific portion of any rule or statute 
with which the SSM rules are inconsistent. The substantive rights

[[Page 8575]]

of the regulated community are affected by the enforcement discretion 
interpretation contained in the Bennett memoranda. Therefore, 
rulemaking is required in order for the interpretation contained in the 
policy memoranda to be enforceable.
    Response: Policy documents generally interpret the statute and do 
not establish binding requirements. Therefore, they are not subject to 
notice and comment rulemaking. As discussed above, rulemaking such as 
this provides the public with an opportunity to comment and to question 
USEPA's policy interpretations. If a sufficient basis had been provided 
for USEPA to revise or deviate from its policy, the Agency would do so. 
However, the comments submitted have not persuaded the Agency to change 
the existing policy, nor its application with respect to the Michigan 
SSM rule.
    Comment: The enforcement discretion approach is insufficient 
following recent statutory and program changes. Title V of the CAA 
requires that the Responsible Official certify, under penalty of 
imprisonment, all data as truthful, accurate, and complete and requires 
periodic submittal of certifications by the Responsible Official 
detailing the compliance status of each facility. Thus, the Responsible 
Official for each Title V source has a duty to disclose any 
noncompliance with any applicable regulation. In addition, the 1990 
Amendments provided enhanced criminal penalty provisions and revised 
the citizen suit provisions, increasing the likelihood of CAA 
enforcement actions. If an owner or operator of a source has knowledge 
that a process during startup or shutdown would possibly violate an 
emission limitation and proceeds to startup or shutdown the process, 
that knowledge could satisfy the intent requirement for a criminal 
prosecution. In many cases, compliance with applicable regulations 
during startup, shutdown, or malfunctions is technically or 
economically impossible. The SSM regulations contained in Michigan's 
SIP provide owners and operators of facilities with the appropriate 
protection against prosecution for startup problems of older 
facilities.
    The enforcement discretion approach asks the regulated industry to 
rely on the exercise of discretion by both state and federal agencies. 
In addition, if such dual discretion does occur, nothing prevents 
citizens from pursuing a civil action to impose penalties on the source 
for the emission violations. Because of the enhanced federal and state 
statutes, the creation of criminal liability, and the lack of 
protection from citizen suits, a reliance on enforcement discretion is 
insufficient.
    Response: With respect to start-up and shutdown situations, it is 
USEPA's general policy, as set forth in the Bennett memoranda, that: 
``Startup and shutdown of process equipment are part of the normal 
operation of a source and should be accounted for in the planning, 
design and implementation of operating procedures for the process and 
control equipment. Accordingly, it is reasonable to expect that careful 
and prudent planning and design will eliminate violations of emission 
limitations during such periods.'' If there are circumstances where a 
source cannot comply with the SIP during start-up, shutdown or 
maintenance situations despite careful and prudent planning and design, 
the State should address these particular problems in development of 
(or revision to) the underlying rules applicable to those sources and 
not through overarching excess emissions provisions. (Any revision made 
to the state's rules to address these concerns must be submitted to 
USEPA as a SIP revision request.)
    USEPA is cognizant of the various remedies under the Clean Air Act 
for SIP violations, including those available under the criminal suit 
provisions of Section 113(c). It should be noted, however, that no 
criminal action may be brought under that section unless a person 
knowingly violates the applicable requirement ``* * * more than 30 days 
after having been notified * * * that such person is violating such 
requirement or prohibition* * *.'' Thus, the scenario envisioned by the 
commentor is not realistic, unless appropriate notice is given and the 
violations continue. As discussed earlier, where there is such a 
likelihood of continuing violation, sources should seek relief through 
the SIP revision process.
    USEPA also believes that the commentor's concern about the 
perceived inadequacy of an enforcement discretion approach is 
misplaced. The CAA has long provided for enforcement of SIP violations. 
Moreover, the revisions to enforcement provisions in 1990 were not 
intended to impact substantive regulations. Rather they were included 
with the recognition that the CAA has, at times, been difficult to 
enforce. USEPA further notes that reliance on the judicial system and 
courts' equitable discretion provides further protection.
    Comment: Michigan's SSM provisions are consistent with the February 
15, 1983 memorandum from Kathleen M. Bennett, Assistant Administrator 
for Air, Noise and Radiation to the Regional Administrators entitled 
``Policy on Excess Emissions During Startup, Shutdown, Maintenance and 
Malfunctions.'' The SSM rules contain all of the criteria required to 
be considered by the regulator in determining whether enforcement 
action or discretion is warranted.
    Response: The criteria referenced above are to be considered when 
determining whether to exercise enforcement discretion for periods of 
excess emissions caused by a malfunction, not to excuse those 
emissions. As discussed previously, because SIPs protect ambient-based 
standards, any emissions above the allowable may cause or contribute to 
violations of the NAAQS, and therefore cannot be excused. State and 
federal agencies (and citizens) need to be able to seek relief where 
public health may be threatened by periods of excess emissions.
    Furthermore, the criteria referenced above apply only in the case 
of malfunctions. They do not apply to periods of excess emissions 
caused by startup, shutdown or maintenance (unless the excess is 
attributable to a malfunction occurring during those times). Start-up 
and shutdown of process equipment are part of the normal operation of a 
source and should be accounted for in the design and implementation of 
the operating procedure for the process and control equipment. 
Accordingly, it is reasonable to expect that, in most cases, careful 
planning will eliminate violations of emission limitations during such 
periods.
    Moreover, even if USEPA did determine that the state could excuse 
these emissions, there remain issues which make the rules unapprovable. 
The definitions of ``malfunction,'' contained in 324.5509(1), part 55 
of the Michigan Natural Resources and Environmental Protection Act and 
R 336.1113(d), Michigan administrative code, do not limit malfunctions 
to failures that are ``infrequent'' and ``not reasonably preventable,'' 
and are therefore too broad. [See e.g. 40 CFR 60.2] Frequent or 
reasonably preventable excess emissions would tend to indicate an 
underlying problem with the design, operating procedures or maintenance 
of a source and therefore should not be considered a malfunction. The 
State's bypass provisions in SIP R 336.1913(3)(b) and R 336.1914(4)(b) 
are also too broad. USEPA policy regarding bypass states that ``* * * 
if effluent gasses are bypassed which cause an emission limitation to 
be exceeded, this excess need not be treated as a violation

[[Page 8576]]

if the source can show that the excesses could not have been prevented 
through careful and prudent planning and design and that bypassing was 
unavoidable to prevent loss of life, personal injury or severe property 
damage.'' [Memorandum dated February 15, 1983, from Kathleen M. 
Bennett, Assistant Administrator for Air, Noise and Radiation entitled 
``Policy on Excess Emissions During Startup, Shutdown, Maintenance, and 
Malfunctions'']. The USEPA continues to believe that this is a 
necessary policy, and that the bypass provisions contained in the 
State's rule are inadequate for the reasons stated in that policy.
    In addition, the alternate emission limitations for startups and 
shutdowns in R 336.1914(4)(d) could (impermissibly) allow relaxations 
of Act requirements, including NSR limitations, New Source Performance 
Standards, toxics requirements (NESHAP, MACT), etc. Finally, the State 
SSM regulations provide no authority for MDEQ to review and require 
revisions to a source's written emission minimization plan for normal 
or usual startups and shutdowns. Such authority is necessary to ensure 
that operating practices for startups and shutdowns meet good 
engineering practice for minimizing emissions, similar to the authority 
R 336.1911 currently provides for State review and revision of written 
preventative maintenance and malfunction abatement plans.
    Comment: The USEPA's position is not consistent with existing, 
long-standing regulations, and not consistent with its own rulemakings 
in other state's SIPs. Unless the USEPA intends to rescind 40 CFR 63 
and other state SIPS as being inconsistent with the CAA, and then 
propose a general rule consistent with its internal memoranda, the 
USEPA's argument that Michigan's SSM rules do not comply with the CAA 
is without merit.
    Response: As previously discussed, the difference in approach 
between the technology-based NESHAP rules and air quality-based SIP 
rules merits the different treatment for provisions concerning SSM 
excess emissions. With regard to the suggestion that USEPA's action on 
the Michigan submission is somehow inconsistent with its action(s) with 
other state submission, without additional information on which 
state(s) the commentor is referencing, USEPA cannot reasonably respond 
to this comment. However, as noted previously, USEPA continues to 
support the policy established by the Bennett memoranda for the reasons 
stated in those memoranda and in this rulemaking action. It should 
nonetheless be noted that, even if the commentor had identified such an 
inconsistent action, USEPA would not be precluded from disapproving 
Michigan's SSM submission. Southwestern Pennsylvania Growth Alliance v. 
Browner, 121 F. 3d 106 (3d Cir. 1997).
    Comment: The USEPA does not identify any deficiencies with Rule 
912. Therefore, Rule 912 should be approved as part of the SIP.
    Response: USEPA acknowledges that it did not cite any deficiencies 
for Rule 912 in its notice of proposed rulemaking. However, USEPA 
believes that when Rule 912 was adopted by Michigan, it was promulgated 
as an integral part of the SSM regulations; i.e., the protection 
granted in Rules 913 and 914 is contingent on meeting the operating, 
notification and reporting requirements in Rule 912. In this case, 
approving Rule 912 while disapproving Rules 913 and 914 would result in 
establishing operating, notification and reporting requirements for 
sources without granting the protection to them contemplated by the 
companion rules. Under existing case law, USEPA may not partially 
approve a state SIP submission if such action will result in the 
approved rules being more stringent than was intended by the state when 
they were adopted. See Bethlehem Steel Corp. v. Gorsuch, 742 F. 2d 1028 
(7th Cor. 1984); Indiana and Michigan Elec. Co. v. U.S.E.P.A., 733 F. 
2d 489 (7th Cir. 1984).

III. Final Rulemaking Action

    To determine the approvability of a rule, USEPA must evaluate the 
rule for consistency with the requirements of the Act, USEPA 
regulations and the USEPA's interpretation of these requirements as 
expressed in USEPA policy guidance documents. While USEPA understands 
the concerns raised by the commentors, rules 913 and 914 remain 
inconsistent with the Act and the applicable policies by which USEPA 
must evaluate submittals. Therefore, in today's action, USEPA is 
finalizing the disapproval proposed on March 20, 1997.
    Nothing in this action should be construed as permitting, allowing 
or establishing a precedent for any future request for revision to any 
SIP. The EPA shall consider each request for revision to the SIP in 
light of specific technical, economic, and environmental factors and in 
relation to relevant statutory and regulatory requirements.

IV. Administrative Requirements

A. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.

B. Regulatory Flexibility

    Under the Regulatory Flexibility Act, 5 U.S.C. Sec. 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. Secs. 603 and 
604). Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    USEPA's disapproval of the State request under Section 110 and 
subchapter I, part D of the Clean Air Act does not affect any existing 
requirements applicable to small entities. Any pre-existing Federal 
requirements remain in place after this disapproval. Federal 
disapproval of the state submittal does not affect its state 
enforceability. Moreover, USEPA's disapproval of the submittal does not 
impose any new Federal requirements. Therefore, USEPA certifies that 
this disapproval action does not have a significant impact on a 
substantial number of small entities because it does not remove 
existing requirements and impose any new Federal requirements.

C. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995, 
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 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.
    The EPA has determined that the disapproval action promulgated 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 disapproval 
action imposes no new requirements. Accordingly, no additional costs to

[[Page 8577]]

State, local, or tribal governments, or to the private sector, result. 
No new Federal requirements are imposed. Accordingly, no additional 
costs to state, local, or tribal governments, or the private sector, 
result from this action.

D. Small Business Regulatory Enforcement Fairness Act

    The Congressional Review Act, 5 U.S.C. Sec. 801 et seq., as added 
by the Small Business Regulatory Enforcement Fairness Act of 1996, 
generally provides that before a rule may take effect, the agency 
promulgating the rule must submit a rule report, which includes a copy 
of the rule, to each House of the Congress and to the Comptroller 
General of the United States. USEPA will submit 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 United 
States prior to publication of the rule in the 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 April 21, 1998. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. See section 307(b)(2).

V. List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Intergovernmental 
relations, Reporting and recordkeeping requirements.

    Authority: 42 U.S.C. Sec. 7401 et seq.

    Dated: January 30, 1998.
David A. Ullrich,
Acting Regional Administrator, Region V.
[FR Doc. 98-4003 Filed 2-19-98; 8:45 am]
BILLING CODE 6560-50-P