[Federal Register Volume 68, Number 146 (Wednesday, July 30, 2003)]
[Rules and Regulations]
[Pages 44620-44631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-19356]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 51 and 52

[Docket No. A-90-37; FRL -7538-1, E-Docket ID No. A-2001-0004 (Legacy 
Docket ID No. A-90-37)]


Prevention of Significant Deterioration (PSD) and Non-Attainment 
New Source Review (NSR): Reconsideration

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of reconsideration of final rule; request for public 
comment; notice of public hearing.

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SUMMARY: On December 31, 2002 and March 10, 2003, EPA revised 
regulations governing the major New Source Review (NSR) programs 
mandated by parts C and D of title I of the Clean Air Act (CAA or Act). 
Following these actions, the Administrator received a number of 
petitions for reconsideration. Today, the EPA is announcing our 
reconsideration of certain issues arising from the final rules of 
December 31, 2002. We (the EPA) are requesting public comment on six 
issues for which we are granting reconsideration. The issues are 
described in section IV of the SUPPLEMENTARY INFORMATION section of 
this preamble. We plan to issue a final decision on these issues and 
other issues raised in the various petitions by October 28, 2003.
    We are only seeking comment on provisions of the major NSR rules as 
specifically identified in this notice. We will not respond to any 
comments addressing any other provisions of the NSR rules or program.

DATES: Comments. Comments must be received on or before August 29, 
2003.
    Public Hearing. The public hearing will convene at 9 a.m. and will 
end after all registered speakers have had an opportunity to speak but 
no later than 10 p.m. on August 14, 2003. Because of the need to 
resolve the issues raised in this notice in a timely manner, EPA will 
not grant requests for extension beyond this date. For additional 
information on the public hearing and requesting to speak, see the 
SUPPLEMENTARY INFORMATION section of this preamble.

ADDRESSES: Comments. Comments may be submitted by mail to U.S. 
Environmental Protection Agency, EPA West (Air Docket), 1200 
Pennsylvania Ave., NW., Room: B108, Mail Code: 6102T, Washington, DC, 
20460, Attention E-Docket ID No. OAR-2001-0004 (Legacy Docket ID No. A-
90-37). Comments may also be submitted electronically, by facsimile, 
through hand delivery/courier, or by phone.
    Public Hearing. A public hearing will be held at the Sheraton 
Imperial Hotel & Convention Center, 4700 Emperor Boulevard, Durham, 
North Carolina 27703, telephone (919) 941-5050.

FOR FURTHER INFORMATION CONTACT: Ms. Lynn Hutchinson, Information 
Transfer and Program Integration Division (C339-03), U.S. Environmental 
Protection Agency, Research Triangle Park, NC 27711, telephone (919) 
541-5795, or electronic mail at [email protected].

SUPPLEMENTARY INFORMATION: 

I. General Information

A. What Are the Regulated Entities?

    Entities potentially affected by the subject rule for today's 
action include sources in all industry groups. The majority of sources 
potentially affected are expected to be in the following groups.

----------------------------------------------------------------------------------------------------------------
                       Industry group                           SIC a                    NAICS b
----------------------------------------------------------------------------------------------------------------
Electric Services..........................................        491   221111, 221112, 221113, 221119, 221121,
                                                                          221122
Petroleum Refining.........................................        291   324110
Industrial Inorganic Chemicals.............................        281   325181, 325120, 325131, 325182, 211112,
                                                                          325998, 331311, 325188
Industrial Organic Chemicals...............................        286   325110, 325132, 325192, 325188, 325193,
                                                                          325120, 325199
Miscellaneous Chemical Products............................        289   325520, 325920, 325910, 325182, 325510
Natural Gas Liquids........................................        132   211112
Natural Gas Transport......................................        492   486210, 221210
Pulp and Paper Mills.......................................        261   322110, 322121, 322122, 322130
Paper Mills................................................        262   322121, 322122
Automobile Manufacturing...................................        371   336111, 336112, 336211, 336992, 336322,
                                                                          336312, 336330, 336340, 336350,
                                                                          336399, 336212, 336213

[[Page 44621]]

 
Pharmaceuticals............................................        283   325411, 325412, 325413, 325414
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\a\ Standard Industrial Classification.
\b\ North American Industry Classification System.

    Entities potentially affected by the subject rule for today's 
action also include State, local, and tribal governments that are 
delegated authority to implement these regulations.

B. How can I Get Copies of This Document and Other Related Information?

    1. Docket. EPA has established an official public docket for this 
action under E-Docket ID No. OAR-2001-0004 (Legacy Docket ID No. A-90-
37). The official public docket consists of the documents specifically 
referenced in this action, any public comments received, and other 
information related to this action. Although a part of the official 
docket, the public docket does not include Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. The official public docket is the collection of materials 
that is available for public viewing at the EPA Docket Center, (Air 
Docket), U.S. Environmental Protection Agency, 1301 Constitution Ave., 
NW., Room: B108, Mail Code: 6102T, Washington, DC, 20460. The EPA 
Docket Center Public Reading Room is open from 8:30 a.m. to 4:30 p.m., 
Monday through Friday, excluding legal holidays. The telephone number 
for the Reading Room is (202) 566-1742. A reasonable fee may be charged 
for copying.
    2. Electronic Access. You may access this Federal Register document 
electronically through the EPA Internet under the ``Federal Register'' 
listings at http://www.epa.gov/fedrgstr/.
    An electronic version of a portion of the public docket is 
available through EPA's electronic public docket and comment system, 
EPA Dockets. Interested persons may use EPA Dockets at http://www.epa.gov/edocket/ to submit or view public comments, access the 
index listing of the contents of the official public docket, and access 
those documents in the public docket that are available electronically. 
Once in the system, select ``search,'' then key in the appropriate 
docket identification number.
    Certain types of information will not be placed in the EPA Dockets. 
Information claimed as CBI and other information whose disclosure is 
restricted by statute, which is not included in the official public 
docket, will not be available for public viewing in EPA's electronic 
public docket. EPA's policy is that copyrighted material will not be 
placed in EPA's electronic public docket but will be available only in 
printed, paper form in the official public docket. To the extent 
feasible, publicly available docket materials will be made available in 
EPA's electronic public docket. When a document is selected from the 
index list in EPA Dockets, the system will identify whether the 
document is available for viewing in EPA's electronic public docket. 
Although not all docket materials may be available electronically, you 
may still access any of the publicly available docket materials through 
the docket facility identified in section I.B.1. EPA intends to work 
towards providing electronic access to all of the publicly available 
docket materials through EPA's electronic public docket.
    For public commenters, it is important to note that EPA's policy is 
that public comments, whether submitted electronically or in paper, 
will be made available for public viewing in EPA's electronic public 
docket as EPA receives them and without change, unless the comment 
contains copyrighted material, CBI, or other information whose 
disclosure is restricted by statute. When EPA identifies a comment 
containing copyrighted material, EPA will provide a reference to that 
material in the version of the comment that is placed in EPA's 
electronic public docket. The entire printed comment, including the 
copyrighted material, will be available in the public docket.
    Public comments submitted on computer disks that are mailed or 
delivered to the docket will be transferred to EPA's electronic public 
docket. Public comments that are mailed or delivered to the Docket will 
be scanned and placed in EPA's electronic public docket. Where 
practical, physical objects will be photographed, and the photograph 
will be placed in EPA's electronic public docket along with a brief 
description written by the docket staff.
    For additional information about EPA's electronic public docket 
visit EPA Dockets online or see 67 FR 38102, May 31, 2002.

C. How and to Whom Do I Submit Comments?

    You may submit comments electronically, by mail, by facsimile, 
through hand delivery/courier, or by phone. To ensure proper receipt by 
EPA, identify the appropriate docket identification number in the 
subject line on the first page of your comment. Please ensure that your 
comments are submitted within the specified comment period. Comments 
received after the close of the comment period will be marked ``late.'' 
EPA is not required to consider these late comments. If you wish to 
submit CBI or information that is otherwise protected by statute, 
please follow the instructions in section I.D. Do not use EPA Dockets 
or e-mail to submit CBI or information protected by statute.
    1. Electronically. If you submit an electronic comment as 
prescribed below, EPA recommends that you include your name, mailing 
address, and an e-mail address or other contact information in the body 
of your comment. Also include this contact information on the outside 
of any disk or CD ROM you submit, and in any cover letter accompanying 
the disk or CD ROM. This ensures that you can be identified as the 
submitter of the comment and allows EPA to contact you in case EPA 
cannot read your comment due to technical difficulties or needs further 
information on the substance of your comment. EPA's policy is that EPA 
will not edit your comment, and any identifying or contact information 
provided in the body of a comment will be included as part of the 
comment that is placed in the official public docket, and made 
available in EPA's electronic public docket. If EPA cannot read your 
comment due to technical difficulties and cannot contact you for 
clarification, EPA may not be able to consider your comment.
    a. EPA Dockets. Your use of EPA's electronic public docket to 
submit comments to EPA electronically is EPA's preferred method for 
receiving comments. Go directly to EPA Dockets at http://www.epa.gov/edocket, and follow the online instructions for submitting comments. To 
access EPA's electronic public docket from the EPA Internet Home Page, 
select ``Information Sources,'' ``Dockets,'' and ``EPA Dockets.'' Once 
in the system, select ``search,'' and then key in either Docket

[[Page 44622]]

ID No. A-90-37 or E-Docket ID No. OAR-2001-0004 (for which A-90-37 is 
now a legacy number). The system is an ``anonymous access'' system, 
which means EPA will not know your identity, e-mail address, or other 
contact information unless you provide it in the body of your comment.
    b. E-mail. Comments may be sent by electronic mail (e-mail) to [email protected], Attention E-Docket ID No. OAR-2001-0004 
(Legacy Docket ID No. A-90-37). In contrast to EPA's electronic public 
docket, EPA's e-mail system is not an ``anonymous access'' system. If 
you send an e-mail comment directly to the Docket without going through 
EPA's electronic public docket, EPA's e-mail system automatically 
captures your e-mail address. E-mail addresses that are automatically 
captured by EPA's e-mail system are included as part of the comment 
that is placed in the official public docket, and made available in 
EPA's electronic public docket.
    c. Disk or CD ROM. You may submit comments on a disk or CD ROM that 
you mail to the mailing address identified in section I.C.2. These 
electronic submissions will be accepted in WordPerfect or ASCII file 
format. Avoid the use of special characters and any form of encryption.
    2. By Mail. Send two copies of your comments to: U.S. Environmental 
Protection Agency, EPA West (Air Docket), 1200 Pennsylvania Ave., NW., 
Room: B108, Mail Code: 6102T, Washington, DC, 20460, Attention E-Docket 
ID No. OAR-2001-0004 (Legacy Docket ID No. A-90-37).
    3. By Hand Delivery or Courier. Deliver your comments to: EPA 
Docket Center, (Air Docket), U.S. Environmental Protection Agency, 1301 
Constitution Ave., NW., Room: B108, Mail Code: 6102T, Washington, DC, 
20460, Attention Docket ID No. A-90-37. Such deliveries are only 
accepted during the Docket's normal hours of operation as identified in 
section I.B.1.
    4. By Facsimile. Fax your comments to the EPA Docket Center at 
(202) 566-1741, Attention Docket ID No. A-2001-0004 (Legacy Docket ID 
No. A-90-37).
    5. By Phone. You may call and leave oral comments on a public 
comment phone line. The number is (919) 541-0211. EPA will log and 
place in E-Docket ID No. OAR-2001-0004 (Legacy Docket ID No. A-90-37) 
any comments received through this phone number.

D. How Should I Submit CBI to the Agency?

    Do not submit information that you consider to be CBI 
electronically through EPA's electronic public docket or by e-mail. 
Send or deliver information identified as CBI only to the following 
address: Mr. David Svendsgaard, c/o OAQPS Document Control Officer 
(C339-03), U.S. Environmental Protection Agency, Research Triangle 
Park, NC 27711, Attention E-Docket ID No. OAR-2001-0004 (Legacy Docket 
ID No. A-90-37). You may claim information that you submit to EPA as 
CBI by marking any part or all of that information as CBI. (If you 
submit CBI on disk or CD ROM, mark the outside of the disk or CD ROM as 
CBI and then identify electronically within the disk or CD ROM the 
specific information that is CBI.) Information so marked will not be 
disclosed except in accordance with procedures set forth in 40 CFR part 
2.
    In addition to one complete version of the comment that includes 
any information claimed as CBI, a copy of the comment that does not 
contain the information claimed as CBI must be submitted for inclusion 
in the public docket and EPA's electronic public docket. If you submit 
the copy that does not contain CBI on disk or CD ROM, mark the outside 
of the disk or CD ROM clearly that it does not contain CBI. Information 
not marked as CBI will be included in the public docket and EPA's 
electronic public docket without prior notice. If you have any 
questions about CBI or the procedures for claiming CBI, please consult 
the person identified in the FOR FURTHER INFORMATION CONTACT section.

E. What Should I Consider as I Prepare My Comments for EPA?

    You may find the following suggestions helpful for preparing your 
comments.
    [sbull] Explain your views as clearly as possible.
    [sbull] Describe any assumptions that you used.
    [sbull] Provide any technical information and/or data you used that 
support your views.
    [sbull] If you estimate potential burden or costs, explain how you 
arrived at your estimate.
    [sbull] Provide specific examples to illustrate your concerns.
    [sbull] Offer alternatives.
    [sbull] Make sure to submit your comments by the comment period 
deadline identified.
    [sbull] To ensure proper receipt by EPA, identify the appropriate 
docket identification number in the subject line on the first page of 
your response. It would also be helpful if you provided the name, date, 
and Federal Register citation related to your comments.

F. What Information Should I Know About the Public Hearing?

    The public hearing will provide interested parties the opportunity 
to present data, views, or arguments concerning the issues raised in 
this notice. Person interested in attending or presenting oral 
testimony are encouraged to register in advance by contacting Ms. 
Chandra Kennedy, OAQPS, Integrated Implementation Group, Information 
Transfer and Program Integration Division (C339-03), U.S. Environmental 
Protection Agency, Research Triangle Park, NC 27711; telephone number 
(919) 541-5319 or e-mail [email protected] no later than August 
11, 2003. Presentations will be limited to 5 minutes each. We will 
assign speaking times to speakers who make a timely request to speak at 
the hearing. We will notify speakers of their assigned times by August 
13, 2003. We will attempt to accommodate all other persons who wish to 
speak, as time allows.
    The EPA's planned seating arrangement for the hearing is theater 
style, with seating available on a first come first served basis for 
about 250 people. Attendees should note that the use of pickets or 
other signs will not be allowed on hotel property.
    As of the date of this announcement, the Agency intends to proceed 
with the hearing as announced; however, unforeseen circumstances may 
result in a postponement. Therefore, members of the public who plan to 
attend the hearing are advised to contact Ms. Chandra Kennedy at the 
above referenced address to confirm the location and date of the 
hearing. You may also check our New Source Review Web site at http://www.epa.gov/nsr for any changes in the date or location.
    The record for this action will remain open until September 15, 
2003 to accommodate submittal of information related to the public 
hearing.

G. Where Can I Obtain Additional Information?

    In addition to being available in the docket, an electronic copy of 
today's notice is also available on the World Wide Web through the 
Technology Transfer Network (TTN). Following signature by the EPA 
Administrator, a copy of today's notice will be posted on the TTN's 
policy and guidance page for newly proposed or promulgated rules at 
http://www.epa.gov/ttn/oarpg. The TTN provides information and 
technology exchange in various areas of air pollution control. If more 
information regarding the TTN is needed, call the TTN HELP line at 
(919) 541-5384.

[[Page 44623]]

H. How Is This Preamble Organized?

    The information presented in this preamble is organized as follows:

I. General Information
    A. What are the regulated entities?
    B. How can I get copies of this document and other related 
information?
    1. Docket
    2. Electronic Access
    C. How and to whom do I submit comments?
    1. Electronically
    2. By Mail
    3. By Hand Delivery or Courier
    4. By Facsimile
    5. By Phone
    D. How should I submit CBI to the Agency?
    E. What should I consider as I prepare my comments for EPA?
    F. What information should I know about the public hearing?
    G. Where can I obtain additional information?
    H. How is this preamble organized?
II. Background
III. Today's Action
    A. Grant of Reconsideration
    B. Request for Stay of Final Rules
IV. Discussion of Issues
    A. Analysis of Environmental Impact of Final Rule
    B. Plantwide Applicability Limitations (PALs)
    1. Background
    2. Emission Units for Which you Begin Actual Construction After 
Baseline Period
    3. Elimination of Synthetic Minor Limits [(r)(4) Limits]
    C. Actual-to-Projected-Actual Test
    1. Background
    2. Reasonable Possibility
    3. Replacement Units
    D. Clean Unit
    1. Background
    2. Effect of Redesignation on Clean Unit Status
V. Statutory and Executive Order Reviews
    A. Executive Order 12866--Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 
U.S.C. 601 et seq.
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132--Federalism
    F. Executive Order 13175--Consultation and Coordination with 
Indian Tribal Governments
    G. Executive Order 13045--Protection of Children from 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act
VI. Statutory Authority

II. Background

    In the early 1990's, the Environmental Protection Agency (``we'' or 
``the Agency'') began an effort to revise the major NSR regulations to 
respond to concerns expressed by regulated industry and State and local 
permitting authorities that the major NSR regulations were too complex 
and burdensome. This effort involved the solicitation of ideas and 
recommendations from the Clean Air Act Advisory Committee and the 
public. The goal of this effort, known as NSR Reform (or NSR 
Improvement), was to eliminate as much of the program complexity, 
administrative burden and resultant project delays as possible without 
sacrificing the current level of environmental protection and benefits 
derived from the program.
    On July 23, 1996 (61 FR 38250), we proposed changes to various 
aspects of the NSR program based primarily on consideration of 
recommendations provided through the NSR Reform effort, but also based 
on our own independent initiatives to further clarify the major NSR 
program. The proposed changes addressed baseline emission 
determinations, actual-to-future-actual emissions measurement 
methodology, Plantwide Applicability Limitations (PALs), Clean Units, 
and Pollution Control Projects (PCPs), as well as other changes.
    Following the 1996 proposal, we held two public hearings and more 
than 50 stakeholder meetings. Environmental groups, industry, and 
State, local, and Federal agency representatives participated in these 
many discussions. We received several hundred public comments on the 
1996 proposal rule. As a result of comments received and further review 
of the issues by the Agency, we sought further comment on some issues 
in the proposed rule. On July 24, 1998, we published a Federal Register 
Notice of Availability (NOA) that requested additional comment on three 
of the proposed changes-- baseline emissions determination, the actual-
to-future-actual-methodology, and PALs. We received several hundred 
public comments on the NOA. Following the NOA, we convened various 
stakeholder meetings concerning NSR Reform over a number of years. 
Information on these meetings can be found in Docket ID No. A-90-37.
    On December 31, 2002, we issued a final rule (67 FR 80186) that 
revised regulations governing the major NSR programs (final rules).\1\ 
The revisions included five major changes to the major NSR program that 
will reduce burden, maximize operating flexibility, improve 
environmental quality, provide additional certainty, and promote 
administrative efficiency. These elements include baseline actual 
emissions, actual-to-projected-actual emissions methodology, PALs, 
Clean Units, and PCPs. The final rules also codified our longstanding 
policy regarding the calculation of baseline emissions for electric 
utility steam generating units (EUSGUs). In addition, the final action: 
(1) Responded to comments we received on a proposal to adopt a 
methodology, developed by the American Chemistry Council (formerly 
known as the Chemical Manufacturers Association (CMA)) and other 
industry petitioners, to determine whether a major stationary source 
has undertaken a major modification based on its potential emissions; 
and (2) included a new section that spells out in one place how a major 
modification is determined under the various major NSR applicability 
options. This topic had previously been addressed primarily in the 
definition section of the major NSR regulations. We also clarified 
where to find the provisions in the revised rules and codified a 
definition of ``regulated NSR pollutant'' that clarifies which 
pollutants are regulated under the Act for purposes of major NSR.
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    \1\ The December 31, 2002 first rules did not act on several 
issues proposed in 1996. We intend to act on some or all issues from 
the 1996 proposal in a subsequent Federal Register notice.
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    On February 28, 2003, we sent notice to affected States that, 
consistent with our proposal in 1996, we were revising the references 
to 40 CFR 52.21 in delegated States' plans to reflect the December 31, 
2002 changes to the Prevention of Significant Deterioration (PSD) 
Federal Implementation Plan (FIP) (40 CFR 52.21(a)(2) and (b) through 
(bb)). This FIP applies in any area that does not have an approved PSD 
program in the State Implementation Plan (SIP), and in all Indian 
country. The notice was subsequently published in the Federal Register 
on March 10, 2003 (68 FR 11316).
    Following publication of the December 31, 2002 and March 10, 2003 
Federal Register notices, the Administrator received numerous 
petitions, filed pursuant to section 307(d)(7)(B) of the CAA, 
requesting reconsideration of many aspects of the final rules.\2\ The 
purpose of today's

[[Page 44624]]

notice is to initiate a process for responding to several issues raised 
in these petitions.
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    \2\ Petitions for reconsideration of the December 31, 2002 final 
rule were filed by: Northeastern States (CT, ME, MD, MA, NH, NJ, NY, 
PA, RI, VT); South Coast Air Quality Management District (CA); and 
Environmental Groups (led by NRDC, Earthjustice, Clean Air Task 
Force, and Environmental Defense). Additional petitions joined 
existing petitions: The People of California and California Air 
Resources Board (joined South Coast and Northeastern States 
petitions); Yolo-Solano Air Quality Management District (CA) (joined 
South Coast petition); Santa Barbara, Ventura, and Monterey Air 
Pollution Control Districts (CA); and Sacramento Air Quality 
Management District (CA) (joined South Coast petition). Petitions 
for reconsideration of the FIP rule were filed by: Delegated States 
(CA, CT, IL, MA, NJ, NY, DC, South Coast Air Quality Management 
District (CA), and Santa Barbara Air Pollution Control District 
(CA)); and Environmental Groups (essentially the same groups that 
filed petitions to reconsider the December 31, 2002 rule).
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III. Today's Action

A. Grant of Reconsideration

    At this time, we have decided to grant reconsideration on six 
issues raised by petitioners.\3\ The first involves a document we 
released in November 2002, entitled, ``Supplemental Analysis of the 
Environmental Impact of the 2002 Final NSR Improvement Rules.''\4\ This 
analysis provides the Agency and other interested parties with 
additional information on the environmental effects of the final rules. 
The analysis shows that the final rules will result in greater 
emissions reductions than the former program. Petitioners assert that 
the final rules are flawed because we did not rely on this document in 
promulgating the rule and hence that we promulgated the final rule 
without having adequately evaluated its environmental impacts. In the 
alternative, they assert that, to the extent we relied on the analysis 
for that assessment, we did so improperly because we did not make the 
analysis available for public comment. Petitioners further assert that 
our analysis does not properly analyze the environmental effects of the 
rule and did not take into account recent information about the health 
impacts of air pollution and the effects of the final rule on air 
pollutant emissions.\5\
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    \3\ In this notice, the term ``petitioners'' refers only to 
those entities that filed petitions for reconsideration with EPA.
    \4\ Available through our NSR website at http://www.epa.gov/nsr 
and in docket ID No. A-90-37, Document IV-A-7.
    \5\ See. e.g., Environmental Groups petition at 25: Northeastern 
States petition at 5, 6.
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    We disagree with Petitioners' assertions. During the rulemaking 
process, we strived to take into consideration relevant and reliable 
information on environmental effects. We did in fact take account of 
environmental considerations in formulating the final rules, and 
believe the final rules are properly supported and justified in this 
regard. However, we want Petitioners and others to have every 
opportunity to comment on the work that we have done to date and to 
provide additional information that they believe to be relevant to the 
inquiry. For these reasons, we have chosen to grant the petitions as 
they relate to these issues. In short, we have no reason to believe our 
analysis of environmental effectiveness is incorrect or flawed. 
Nevertheless, we do think the supplemental analysis provides additional 
support for the final rules, so we are making it available for public 
comment, and we will reevaluate our conclusions in light of the 
comments and information submitted.
    The remaining issues for which we grant reconsideration involve 
five narrow aspects of the final rule. For each of the five, 
Petitioners claim that the final provision did not sufficiently reflect 
the ideas set forth in the proposed rule and, therefore, that they did 
not have an adequate opportunity to provide input during the designated 
public comment period. Without prejudging the information that will be 
provided in response to this notice, we note that to date Petitioners 
have not provided information which persuades us that our final 
decisions are erroneous or inappropriate. While we do not agree with 
Petitioners' claim, we have decided to grant reconsideration on these 
issues in an interest of ensuring a full opportunity for comment. Each 
of these issues is described in detail below.
    Our final decision on reconsideration for all the remaining issues 
in the petitions for reconsideration will be issued no later than the 
date by which we take final action on the issues for which we have 
decided to grant reconsideration. We plan to take final action on all 
issues no later than 90 days after publication of today's notice.

B. Request for Stay of Final Rules

    We are not granting a stay of the final rules pending our 
reconsideration of these issues. Under sections 307(b)(1) and 
307(d)(7)(B) of the Act, the effectiveness of the final rules is not 
automatically postponed by our granting the petitions for 
reconsideration on certain issues. The Administrator (or the court), 
however, may stay the rules pending our reconsideration for a period 
not to exceed three months. 42 U.S.C. 7607(d)(7)(B). Petitioning States 
and Environmental Groups requested that we exercise our discretion 
under this section and grant a stay of the final rules during 
reconsideration.\6\
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    \6\ See Environmental Groups petition at 1, 145; Northeastern 
States petition at 47.
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    We do not believe that a stay is warranted. We believe that the 
final rules are a reasonable exercise of our discretion under the CAA, 
and will result in greater emission reductions compared to the former 
program.\7\ Moreover, although we have decided to reconsider certain 
aspects of the final rules, at this time we do not have reason to 
believe that the substantive decisions reflected in the final rule are 
erroneous. We are also concerned about the impact of a stay on 
facilities located in delegated States. The new requirements are 
currently in effect in these areas. We believe that it would be 
inappropriate to revert to the former program when it is likely that 
the current program would be reinstated 60 to 90 days later. Further, 
we do not believe our decision to deny a stay will have any significant 
effect on facilities subject to a SIP-approved major NSR program. We 
have provided these States up to three years to make appropriate 
changes to their SIP-approved programs. We intend to complete our 
reconsideration of the final rules regarding the issues discussed in 
this Federal Register notice quickly (i.e., in approximately 90 days), 
thus, any uncertainty regarding the final rules caused by our partial 
granting of the petitions for reconsideration will be for a short 
period. States will still have ample time after our final decision on 
reconsideration to revise their SIPs to implement the rule (and any 
changes resulting from our reconsideration). As a result, we do not 
think it would be appropriate to stay the effectiveness of the rule 
while we address a few issues raised in the petitions.\8\
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    \7\ See EPA'S Response to Emergency Motion For Stay of the New 
Source Review Rule (Feb. 21, 2003) (D.C. Cir. Docket No. 02-1387); 
see also Supplemental Analysis of the Environmental Impact of the 
2002 Final NSR Improvement Rules (EPA Docket ID No. A-90-37; 
Document IV-A-7).
    \8\ If during the course of reconsideration we determine that 
significant aspects of the final NSR rules should be revised, we 
could reevaluate whether to stay the effectiveness of the rules, or 
portions thereof, pending issuance of our final decision on 
reconsideration.
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IV. Discussion of Issues

A. Analysis of Environmental Impact of Final Rule

    In November 2002, we released a document entitled, ``Supplemental 
Analysis of the Environmental Impact of the 2002 Final NSR Improvement 
Rules.'' As we noted at that time, the analysis was intended to provide 
the interested public with supplemental information on the potential 
environmental effects of the NSR Improvement rules that we were 
finalizing.
    In the supplemental environmental analysis, we found that the 
overall effect of the final rule would be a net benefit to the 
environment compared to the

[[Page 44625]]

former NSR rules because the final rule would result in reductions in 
emissions of air pollution. We found that four of the five provisions 
in the final rule would result in environmental benefits, and the other 
provision would have no significant effect. Specifically, for each of 
the rule's five provisions, the analysis concludes the following:
    (1) The PAL provisions will result in tens of thousands of tons per 
year (tpy) of volatile organic compounds (VOC) reductions from just 
three industrial categories where PALs are likely to be used most 
often. Overall reductions will be greater because it is likely that 
PALs also will be adopted in other source categories.
    (2) The Clean Unit Test will be environmentally neutral for most 
sources, but some sources will likely control emissions earlier or more 
extensively than under the former rules, and, as a result, a net 
benefit will occur. The amount of this benefit is uncertain nationally, 
but likely will be significant in individual cases, like the estimated 
9,300 tpy reduction in smog-causing VOC seen in one example.
    (3) The PCP Exclusion will lead to a small increase in the number 
of environmentally beneficial projects because it removes NSR barriers 
to such projects. The amount of this benefit is uncertain nationally, 
but will likely be relatively small.
    (4) The portion of the rule addressing baseline actual emissions 
will not have a significant environmental impact. The former program 
already allowed sources to use a more representative baseline period, 
with the approval of the reviewing authority, instead of the two-year 
period before the change specifically delineated in the former rules. 
The final rules provide an expanded time frame from which you may 
select a representative baseline but eliminate the option of going 
beyond this period of time. While the new rules may allow a small 
number of existing emissions units to use higher baselines, other units 
will be required to use lower baselines due to the requirement to 
adjust the baseline downward to account for any new emission 
limitations at that emissions unit. The changes overall impact will be 
small because the portion of the rule addressing baseline actual 
emissions does not affect new sources, new units built at existing 
sources, electric utilities, and many modified sources.
    (5) The change to the actual-to-projected-actual test will have a 
net environmental benefit, but a relatively small one. The benefit 
stems from removing: (1) Incentives to keep actual emissions high 
before making a change, and (2) barriers to projects that will reduce 
emissions. The size of this benefit nationally is uncertain. Its impact 
would be small because the change in emissions calculation methodology 
does not affect either of the following: (1) New sources, new units 
built at existing industrial facilities, and electric utilities, or (2) 
any modifications at existing facilities that actually result in 
significant increases in emissions. Historically, under the previous 
major NSR rule, virtually all other sources making a physical or 
operational change have accepted ``permit limits'' so as to be 
confident that they will not trigger major NSR. Our analysis concludes 
that the benefits from this aspect of the program are likewise largely 
unaffected because such sources must still assure that actual emissions 
do not significantly increase as a result of a change.
    The supplemental environmental analysis uses quantitative 
information where possible but also notes limitations on our ability to 
quantify impacts of the rule. We used qualitative information to 
supplement the analysis when such limitations are present. We also 
noted that the final rules will result in economic benefits that stem 
from improved flexibility, increased certainty, and reduced 
administrative burden. These benefits are important, but were not 
quantified as part of this environmental analysis.
    The analysis is available in the docket for today's action and is 
also available on the Internet at http://www.epa.gov/nsr. We request 
comment on all aspects of the environmental impact of the final rule.

B. Plantwide Applicability Limitations (PALs)

1. Background
    The December 31, 2002 final major NSR rule included an innovative 
approach to managing major NSR applicability at major stationary 
sources based on actual plantwide annual emissions. Under these 
provisions, an owner or operator (you) of a major stationary source 
(source) may elect to establish a source-wide cap on emissions, known 
as a ``plantwide applicability limitation'' (PAL), based on your 
source's baseline actual emissions. As long as you do not exceed this 
``actuals PAL,'' a significant emissions increase has not occurred. 
Without a significant emissions increase, no change at your facility is 
considered a major modification, and you are not subject to major NSR.
    Today, we are soliciting comment on two aspects of the PAL final 
rules. These issues are discussed below.
2. Emission Units for Which You Begin Actual Construction After the 
Baseline Period
    In general, the PAL level is established as the sum of the baseline 
actual emissions of the PAL pollutant for each emissions unit at your 
major stationary source. The baseline period may be any consecutive 24-
month period during the preceding 10 years, but you must use the same 
baseline period for all existing emissions units. However, the final 
rules contain special provisions for an emissions unit on which you 
began actual construction after the 24-month baseline period. The 
reviewing authority must use the potential to emit (PTE) of such 
emissions units in establishing the PAL. See 40 CFR 51.165(f)(6), 
51.166(w)(6), 52.21(aa)(6). This provision is intended to serve as a 
counterpart to the requirement to exclude from the PAL level any 
emissions from emissions units that were permanently shut down after 
the baseline period.
    We included these provisions in recognition that the set of 
emissions units at your source at the time of PAL permit issuance may 
be different from the set of emissions units that existed during the 
baseline period. You may have constructed additional emissions units, 
permanently shut down previously existing emissions units, or both. The 
actuals PAL rule is designed to ensure that the PAL level is adjusted 
to reflect the present-day configuration of emissions units at your 
source. Thus, it instructs the reviewing authority to exclude from the 
PAL level emissions from permanently shut down units and to add to the 
PAL level the PTE of emissions units on which you began actual 
construction after the baseline period.
    We considered applying the procedures for determining baseline 
actual emissions at 40 CFR 51.165(a)(1)(xxxv), 51.166(b)(47), and 
52.21(b)(48); however, under these procedures the baseline actual 
emissions of the existing emissions units on which you began actual 
construction after the selected baseline period would be zero. When 
these procedures are used for determining applicability of the major 
NSR requirements, we believe this is an appropriate outcome because 
such determinations ordinarily involve a limited set of emissions units 
(those that are part of a modification) at the major stationary source 
and issues related to start up and shutdown of emissions

[[Page 44626]]

units are typically not implicated. You have the ability to choose the 
24-month baseline period that accommodates the integrated operations of 
this limited set of emissions units. Moreover, the baseline actual 
emissions are only used as a measure to determine whether a project 
will trigger major NSR review. It is not used as an enforceable 
restriction on the ability of the emissions units to operate.
    In contrast, setting a PAL involves all of the emissions units at 
the major stationary source. Selecting a single 24-month period that 
accommodates the integrated operations of all of these emissions units 
is more difficult and will often involve emission units that start up 
or shut down after the baseline period. Moreover, establishing a 
baseline actual emissions of zero is an unrealistic reflection of how 
the emissions unit will be operated and could require you to 
unreasonably restrict operations at the major stationary source to 
ensure you comply with the PAL.
    We also considered but rejected several other approaches. First, we 
considered requiring you to use the immediately preceding 24 months to 
establish an average annual emissions rate for such emissions units, or 
requiring all existing emissions units to follow this approach. 
However, as discussed in the December 31, 2002 preamble (67 FR 80191), 
this approach does not account for normal fluctuations in operations 
and may not be representative of source operations.
    We also considered making no adjustments for either shut down 
emissions units or newly constructed emissions units, but this approach 
seemed to be least representative of a major stationary source's 
current operations. And finally, we considered allowing you to select 
different 24-month periods for each existing emissions unit at the 
major stationary source or allowing you to select any 24-month period 
since operations began for the recently constructed emissions units.
    We believe that the former approach would unnecessarily complicate 
the procedures for establishing PALs and allow you to inappropriately 
maximize source-wide emissions. The latter approach has some advantage 
in that it provides a measure of past emissions; however, we rejected 
this approach in favor of using the PTE of the emissions unit. This is 
because we believe that most emissions units that have been constructed 
after the baseline period are likely to have undergone major or minor 
NSR review.\9\ Thus, the PTE of the emissions unit reflects 
requirements to comply with recent control technology requirements and 
other emission limitations that are representative of how you intend to 
actually operate the emissions unit. The past emissions of such 
emissions units, when measured over a shortened period of time, may not 
be representative of intended operations.
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    \9\ In 1997, we conducted an informal review of several State 
minor NSR programs. While this report is still considered draft, it 
provides a good overview of the types ofr requirements contained in 
many State minor NSR requirements and serves to confirm our belief 
that many projects that are not subject to major NSR review will be 
required to comply with requirements under State minor NSR programs. 
We have included a copy of this draft report in the docket for 
today's action and invite comment on whether this document 
accurately reflects State or local requirements.
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    In view of all of these considerations, we believe that including 
the PTE of the emissions unit in the PAL baseline is the most 
appropriate measure of actual operations of such emissions units for 
the purpose of establishing an enforceable limitation on your 
operations. We believe such a provision falls within the discussion of 
PALs in the proposed rule. Nevertheless, we request comment on this 
approach, the approaches we rejected, and any other method for 
assessing emissions from these emissions units.
3. Elimination of Synthetic Minor Limits [(r)(4) Limits]
    A synthetic minor limit is a limit that is included in a permit by 
a reviewing authority at the request of a source to reduce the 
potential to emit (PTE) of a facility or emissions unit below a level 
that would otherwise subject the facility or emissions unit to some 
regulatory requirement. Such limits are often used by a facility to 
reduce emissions below a level that would subject a project to the 
major NSR requirements. (They are also used for similar purposes under 
other regulatory programs.)
    Under the major NSR program, we refer to these emission or 
operational limitations as (r)(4) limits because provisions relating to 
these types of restrictions are contained in paragraph (r)(4) of the 
Federal Prevention of Significant Deterioration (PSD) Program. See 40 
CFR 52.21(r)(4). Similar provisions are contained in the requirements 
for State programs. See 40 CFR 52.165(a)(5)(ii), 51.166(r)(2).
    In the December 31, 2002 final rule, we specified that a reviewing 
authority can eliminate (r)(4) limits for a PAL pollutant if you 
previously took these limits to avoid major NSR. In the absence of a 
PAL, relaxation of such limits would cause you to determine major NSR 
applicability as if construction had not yet commenced on the new or 
modified emissions units. See 40 CFR 52.165(a)(5)(ii), 51.166(r)(2), 
52.21(r)(4). Under a PAL, such limits may be relaxed or removed without 
triggering major NSR for the PAL pollutant. 67 FR 80210; 40 CFR 
165(f)(1)(iii)(C), 166(w)(1)(ii)(c), 52.21(aa)(1)(ii)(c). The (r)(4) 
limits do not reappear upon PAL expiration. 67 FR 80209; 40 CFR 
51.165(f)(9)(v), 51.166(w)(9)(v), 52.21(aa)(9)(v). Instead, they are 
reapportioned, along with the PAL, among the existing emissions units. 
We believe the approach adopted in the final rules reflect the purpose 
of a PAL, which is to maximize operational flexibility without 
sacrificing environmental protection.
    We view the PAL as the functional substitute for any unit-specific 
(r)(4) limits that you may have taken to reduce emissions below a level 
that would subject a project to major NSR requirements. Both the PAL 
and the (r)(4) limits serve to keep you from triggering major NSR. 
Emissions from emissions units with (r)(4) limits are incorporated into 
the PAL at a level that is at or, in most cases, below those limits. 
Therefore, the PAL is an effective substitute for those limits. More 
importantly, we believe that removal of these limits is essential to 
allow you to benefit from the operational flexibility and corresponding 
environmental benefits that the PAL is intended to provide.
    We considered reinstating (r)(4) limits if a PAL expires. However, 
we rejected this approach because we recognize that you may have made 
changes to the emissions unit or associated operations, and it may not 
be practical to return the emissions unit to its pre-PAL operations. 
Instead, the final rules ensure that the (r)(4) limitations that are 
incorporated into the PAL continue to play a role after PAL expiration, 
although not in the same form.
    Before a PAL expires, you must submit a proposal for distributing 
the PAL among individual emissions units or groups of emissions units. 
The reviewing authority will make the final decision on PAL emissions 
distribution. Following expiration, you must ensure that the individual 
emissions units or groups of emissions units comply with their limits 
as assigned by the reviewing authority. In this way, the emission 
restrictions associated with an (r)(4) limitation are accounted for 
after PAL expiration. However, the new emission limitation(s) would not 
be subject to the requirements of 40 CFR 52.21(r)(4).

[[Page 44627]]

    We are proposing to retain our approach for removing and 
superseding (r)(4) limits with a PAL. We request comment on this 
approach.

C. Actual-to-Projected-Actual Test

1. Background
    In 1996, we proposed to allow use of the ``future-actual 
methodology'' to compute whether a physical change in or change in the 
method of operation of the major stationary source would result in a 
significant emissions increase. Previously, this methodology was only 
available to EUSGUs under the WEPCO rule.\10\ Our 1996 notice proposed 
to extend a version of the WEPCO rule to all source categories. In that 
proposal, we sought comment on several issues including whether the 5-
year reporting provision is working as intended and whether it should 
be changed in any way. We adopted a modified WEPCO approach in the 
final rules. We call this approach the ``actual-to-projected-actual'' 
applicability test. This test is similar to the WEPCO rule in that it 
allows you to consider ``demand growth'' in determining post-change 
emissions, but it contains recordkeeping and reporting requirements 
that differ from those in the WEPCO rule.\11\ (There are other 
differences between the two approaches, but these differences are not 
relevant to the following discussions.)
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    \10\ See 57 FR 32314, July 21, 1992. This rule is called the 
``WEPCO rule'' because a court case involving the Wisconsin Power 
and Electric Company (WEPCO) was the reason behind the rulemaking.
    \11\ We use the term ``demand growth'' to refer broadly to 
independent factors that may cause remissions increases from an 
emission unit, but which the emissions unit could have accommodated 
during the consecutive 24-month period used to establish the 
baseline actual emissions, and that are also unrelated to the 
particular project.
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    Today, we are soliciting comments on an issue related to the 
recordkeeping and reporting requirements under the actual-to-projected-
actual applicability test and on allowing replacement units to use the 
actual-to-projected-actual applicability test. These issues are 
discussed below.
2. Reasonable Possibility
    As noted above, the recordkeeping and reporting requirements in the 
final rules differ from those in the WEPCO rule. The WEPCO rules 
required EUSGUs that relied on the actual-to-representative-future-
actual-annual emissions test to submit annual emission reports. In 
contrast, the final rules require non-EUSGUs (that project future 
emissions rather than relying on potential emissions as a measure of 
future emissions) to: maintain certain records related to the emissions 
projection and records of the post-change emissions (for either 5 years 
or 10 years depending on the nature of the change); and report if there 
is a significant emission increase in post-change emissions which is 
inconsistent with the source's preconstruction projection.\12\ For 
EUSGUs (that project future emissions rather than relying on potential 
emissions as a measure of future emissions), the final rules require 
you to send a copy of the information to the reviewing authority that 
you are required to keep relating to your projection. However, all of 
these reporting and recordkeeping requirements apply to non-EUSGUs and 
EUSGUs only if there is a ``reasonable possibility'' that the project 
will result in a significant emissions increase.
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    \12\ If you rely on potential emissions as a measure of future 
emissions, you have no recordkeeping requirements related to your 
applicability determination under the final rules.
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    We included these changes to respond to comments we received in 
response to our request for comments on whether the 5-year reporting 
provisions of the WEPCO rule were working as intended and whether these 
requirements should be changed. Some commenters indicated that the 5-
year recordkeeping and reporting requirements were onerous. Commenters 
also noted that the requirements were unnecessary because similar 
information is available through the title V permitting program and 
State emission inventories. Other commenters requested that we retain 
an option to use the actual-to-potential approach, which does not 
require recordkeeping or reporting. We retained that option within the 
actual-to-projected-actual applicability test.
    In 1998, we solicited additional comment on an approach that would 
have required you to obtain a federally enforceable permit to limit 
your post-change emissions to your projected levels (the actual-to-
future-enforceable-actual test), and again solicited comment on the 
appropriate recordkeeping and reporting requirements. In general, 
commenters were supportive of a 5-year recordkeeping requirement. 
Responses were mixed as to whether we should extend the requirement to 
10 years if the permitting authority believed it appropriate. Again, we 
received comments that reporting and recordkeeping requirements were 
duplicative of those required by other programs. Also, we received 
comments from State agencies concerned with the resource burden that 
would be imposed by requirements of the actual-to-future-actual test.
    In an effort to balance the need for information to determine 
compliance and the associated burden of recordkeeping and reporting, we 
finalized the changes to the proposed recordkeeping and reporting 
requirements. We included the ``reasonable possibility'' provision 
because we were concerned that without some qualifier on when you need 
to retain records and report, our rules would encompass any physical or 
operational change you undertake no matter how inconsequential and 
unlikely that an emissions increase would result.
    We believe that, in some circumstances, the requirements to record 
and report emissions following completion of certain types of projects 
is a substantial strengthening over the former regulatory requirements 
that applied to non-EUSGUs. The former rules contained no reporting or 
recordkeeping requirements when you determined that major NSR did not 
apply. For example, the former rules allowed you to make your own 
determination as to whether major NSR applied to a project. If you 
determined that an emissions increase from a project was less than 
significant, you could proceed with the project, and there were no 
subsequent recordkeeping or reporting requirements under the major NSR 
program. The same result occurred if you determined your project would 
result in a significant emissions increase but you were able to ``net'' 
the project out of review. Under the revised rules, if you project 
future emissions rather than relying on potential emissions as a 
measure of future emissions, you (whether an EUSGU or non-EUSGU) are 
required to record and report any project for which you avoid the major 
NSR requirements through ``netting,'' because you will have already 
determined that such projects will result in a significant emissions 
increase.
    We are proposing to retain the ``reasonable possibility'' 
requirement for triggering the applicability of the recordkeeping and 
reporting provisions discussed above. We believe these provisions are 
appropriate based on our proposal and the comments received thereon; 
nevertheless, we are requesting comment on this approach.
3. Replacement Unit
    The WEPCO rule precluded use of the actual-to-representative-
future-actual-annual emissions test for replacement units. See 40 CFR 
52.21(b)(921)(v)(2002). Although the

[[Page 44628]]

1996 preamble recognized this preclusion in our discussion of extending 
the WEPCO rule to other industrial sectors, see 62 FR 38267, the 
proposed regulatory language removed the preclusion and would have 
allowed all emissions units (EUSGUs and non-EUSGUs), including 
replacement units, to use the actual-to-future-actual emissions test. 
See proposed 40 CFR 52.21(b)(21)(ii), 61 FR 38338.
    In the final rules, we concluded we should not preclude use of the 
actual-to-projected-actual test either for EUSGUs or non-EUSGUs 
replacement units. We explained the basis for our conclusion in the 
final rule. See 67 FR 80194. Although we discussed this issue in the 
proposal, we are seeking comment on our determination on this issue and 
the basis for it set forth in the preamble to the final rules.

D. Clean Unit

1. Background
    Our December 31, 2002 final rules finalize provisions that provide 
added flexibility to emissions units that install state-of-the-art 
emissions controls. Specifically, we promulgated a new type of major 
NSR applicability test for emissions units that are designated as Clean 
Units.
    The Clean Unit applicability test (``Clean Unit Test'') measures 
whether an emissions increase occurs, based on whether a project 
affects the Clean Unit status of the emissions unit. The Clean Unit 
Test provides that when you meet emission limitations based on 
installing state-of-the-art emissions control technologies (add-on 
controls, pollution prevention, or work practices) that are determined 
to be BACT or LAER (or comparable to BACT or LAER), you may make any 
physical or operational change to the unit without triggering major 
NSR, provided that the change does not (1) necessitate a revision in 
the emission limitations or work practice requirements in the permit 
for the unit that were adopted in conjunction with BACT, LAER, or Clean 
Unit determinations; or (2) alter any physical or operational 
characteristics that formed the basis for the BACT, LAER, or Clean Unit 
determination for the unit.
    Today, we are requesting comment on one aspect of the final rules 
for Clean units. This issue is discussed below.
2. Effect of Redesignation on Clean Unit Status
    The final rules allow you to maintain Clean Unit status at an 
emissions unit even if the area in which you are located was attainment 
for the pollutant at the time the emissions unit was designated clean 
but is subsequently redesignated to nonattainment. Our 1996 proposal 
did not specifically address this issue. It did, however, propose that 
Clean Unit status would presumptively apply for the 10 years following 
issuance of the major NSR permit, and it did not indicate that the 
presumption would be revoked if the area was redesignated. Therefore, 
we believe a natural implication of the proposal is that the Clean Unit 
status would presumptively continue to apply even if the area were 
redesignated.
    We continue to believe that you should be allowed to maintain your 
Clean Unit status even if your area is redesignated from attainment to 
nonattainment for the pollutant for which your emissions unit is 
designated clean. This approach is most consistent with our current 
practices and fundamental to the policy of creating incentives to 
reduce emissions.
    As a general rule, permitting decisions are not per se invalid, or 
retroactively changed by virtue of a change in an area's attainment 
status. For example, we do not require sources that have applied BACT 
to upgrade controls to comply with LAER or obtain offsets when an 
area's designation changes.
    Moreover, a fundamental premise in creating the Clean Unit Test is 
to provide you with an incentive to install better emissions control 
technologies even when there is no State, local or Federal regulation 
requiring this level of control. We believe that this incentive will be 
undermined if you are unable to know with certainty that the added 
flexibility will be available to you for the full 10-year period.
    We also believe that this approach is consistent with the Clean Air 
Act. The requirements of section 173 of the Act, including the 
requirements to apply LAER and obtain offsets, apply only if a project 
will result in an emissions increase. As long as an emissions unit 
maintains its status as a Clean Unit, it has not increased emissions. 
Thus, the provisions of section 173 do not apply to such emissions 
units.
    Finally, because States will have established the Clean Units 
either through the major NSR permitting process or another permitting 
process, the State will be aware of which emissions units qualify as 
Clean Units at the time an area is redesignated. Thus, States that are 
concerned that Clean Units may have adverse impact on their attainment 
demonstrations if the full effect of their potential emissions is 
realized are able to make appropriate adjustments in their attainment 
demonstrations to account for these permitted emissions. In this 
respect, we believe that the Clean Unit Test provides States with a 
better planning tool than may otherwise exist in the absence of the 
Clean Unit Test.
    As noted above, we proposed in 1996 that an emission unit's Clean 
Unit status would remain in place for 10 years, and implicitly 
indicated that nonattainment redesignation would not affect the unit's 
status during that 10 years. We, however, request comment on this 
approach and the rationale set forth above.

V. Statutory and Executive Order Reviews

    On December 31, 2002, we finalized rule changes to the regulations 
governing the NSR programs mandated by parts C and D of title I of the 
Act. With today's action we are proposing no changes to the final 
rules, and are seeking additional comments on some of the provisions 
finalized in the December 2002 Federal Register notice (67 FR 80186). 
Accordingly, we believe that the rationale provided with the final 
rules is still applicable and sufficient.

A. Executive Order 12866--Regulatory Planning and Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to Office of Management and Budget (OMB) review 
and the requirements of the Executive Order. The Order defines 
``significant regulatory action'' as one 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 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, OMB has notified 
EPA that it considers this a ``significant regulatory action'' within 
the meaning of the Executive Order. EPA has submitted this action to 
OMB for review. Changes made in response to

[[Page 44629]]

OMB suggestions or recommendations will be documented in the public 
record.

B. Paperwork Reduction Act

    This action does not impose any new information collection burden. 
We are not proposing any new paperwork (e.g., monitoring, reporting, 
recordkeeping) as part of today's notice. With this action we are 
seeking additional comments on some of the provisions finalized in the 
December 2002 Federal Register Notice (67 FR 80186). However, OMB has 
previously approved the information collection requirements contained 
in the existing regulations [40 CFR Parts 51 and 52] under the 
provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., and 
has assigned OMB control number 2060-0003, EPA ICR number 1230.11. A 
copy of the OMB approved Information Collection Request (ICR) may be 
obtained from Susan Auby, Collection Strategies Division; U.S. 
Environmental Protection Agency (2822T); 1200 Pennsylvania Ave., NW., 
Washington, DC 20460 or by calling (202) 566-1672.
    Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the time 
needed to review instructions; develop, acquire, install, and utilize 
technology and systems for the purposes of collecting, validating, and 
verifying information, processing and maintaining information, and 
disclosing and providing information; adjust the existing ways to 
comply with any previously applicable instructions and requirements; 
train personnel to be able to respond to a collection of information; 
search data sources; complete and review the collection of information; 
and transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations in 40 CFR are listed in 40 CFR part 9.

C. Regulatory Flexibility Act (RFA), as Amended by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601 et 
seq.

    The RFA generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to notice and comment 
rulemaking requirements under the Administrative Procedure Act or any 
other statute unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Small entities include small businesses, small organizations, and small 
governmental jurisdictions.
    For purposes of assessing the impacts of today's notice on small 
entities, small entity is defined as: (1) A small business that is a 
small industrial entity as defined in the U.S. Small Business 
Administration (SBA) size standards. (See 13 CFR 121.201); (2) a small 
governmental jurisdiction that is a government of a city, county, town, 
school district, or special district with a population of less than 
50,000; or (3) a small organization that is any not-for-profit 
enterprise that is independently owned and operated and is not dominant 
in its field.
    After considering the economic impacts of today's notice on small 
entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. In 
determining whether a rule has a significant economic impact on a 
substantial number of small entities, the impact of concern is any 
significant adverse economic impact on small entities, since the 
primary purpose of the regulatory flexibility analyses is to identify 
and address regulatory alternatives ``which minimize any significant 
economic impact of the proposed rule on small entities.'' 5 U.S.C. 
sections 603 and 604. Thus, an agency may certify that a rule will not 
have a significant economic impact on a substantial number of small 
entities if the rule relieves regulatory burden, or otherwise has a 
positive economic effect, on all of the small entities subject to the 
rule. A Regulatory Flexibility Act Screening Analysis (RFASA), 
developed as part of a 1994 draft Regulatory Impact Analysis (RIA) and 
incorporated into the September 1995 ICR renewal analysis, showed that 
the changes to the NSR program due to the 1990 Clean Air Act amendments 
would not have an adverse impact on small entities. This analysis 
encompassed the entire universe of applicable major sources that were 
likely to also be small businesses (approximately 50 ``small business'' 
major sources). Because the administrative burden of the NSR program is 
the primary source of the NSR program's regulatory costs, the analysis 
estimated a negligible ``cost to sales'' (regulatory cost divided by 
the business category mean revenue) ratio for this source group. 
Currently, and as reported in the current ICR, there is no economic 
basis for a different conclusion.
    We believe the rule changes in the December 31, 2002 final rule 
will reduce the regulatory burden associated with the major NSR program 
for all sources, including all small businesses, by improving the 
operational flexibility of owners and operators, improving the clarity 
of requirements, and providing alternatives that sources may take 
advantage of to further improve their operational flexibility. We do 
not expect that today's action will change our overall assessment of 
regulatory burden so substantially as to result in a significant 
adverse impact on any source. As a result, we do not expect that 
today's action will result in a significant adverse impact on any small 
entity.
    We continue to be interested in the potential impacts of today's 
action on small entities and welcome comments on issues related to such 
impacts.

D. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures to State, local, and tribal governments, in 
the aggregate, or to the private sector, of $100 million or more in any 
1 year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation as to why 
that alternative was not adopted. Before EPA establishes any regulatory 
requirements that may significantly or uniquely affect small 
governments, including tribal governments, it must have developed under 
section 203 of the UMRA a small government agency plan.
    The plan must provide for notifying potentially affected small 
governments, enabling officials of affected small governments to have 
meaningful and timely input in the development of EPA regulatory 
proposals with significant Federal intergovernmental mandates, and 
informing, educating, and advising

[[Page 44630]]

small governments on compliance with the regulatory requirements.
    We have determined that today's notice does not contain a Federal 
mandate that may result in expenditures of $100 million or more for 
State, local, and tribal governments, in the aggregate, or the private 
sector in any 1 year. Although initially the changes in the December 
31, 2002 final rule are expected to result in a small increase in the 
burden imposed upon reviewing authorities in order for them to be 
included in the State's SIP, as well as other small increases in burden 
discussed under ``Paperwork Reduction Act'' in the preamble to the 
December 31, 2002 final rule, those revisions will ultimately provide 
greater operational flexibility to sources permitted by the States, 
which will in turn reduce the overall burden of the program on State 
and local authorities by reducing the number of required permit 
modifications. In addition, we believe the 2002 rule changes will 
actually reduce the regulatory burden associated with the major NSR 
program by improving the operational flexibility of owners and 
operators, improving the clarity of requirements, and providing 
alternatives that sources may take advantage of to further improve 
their operational flexibility. Because we are proposing no changes to 
the final rule, we believe that the same is true for today's notice. It 
is highly unlikely that today's action would increase regulatory burden 
to the extent of requiring expenditures of $100 million or more by 
State, local, and tribal governments, in the aggregate, or the private 
sector in any 1 year. Thus, today's action is not subject to the 
requirements of sections 202 and 205 of the UMRA.
    For the same reasons stated above, we have determined that today's 
notice contains no regulatory requirements that might significantly or 
uniquely affect small governments. Thus, today's action is not subject 
to the requirements of section 203 of the UMRA.

E. Executive Order 13132--Federalism

    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    Today's action does not have federalism implications. It will not 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132. While the final rule published 
on December 31, 2002 will result in some expenditures by the States, we 
expect those expenditures to be limited to $331,250 per year. This 
figure includes the small increase in the burden imposed upon reviewing 
authorities in order for them to revise the State's SIP. However, the 
revisions contained in the December 31, 2002 final rule provide greater 
operational flexibility to sources permitted by the States, which will 
in turn reduce the overall burden of the program on State and local 
authorities by reducing the number of required permit modifications. 
Because we are proposing no changes to the final rules, we do not 
expect that today's notice would increase regulatory burden to the 
extent that it would result in substantial direct effects on the 
States. Thus, Executive Order 13132 does not apply to today's notice.
    In the spirit of Executive Order 13132, and consistent with EPA 
policy to promote communications between EPA and State and local 
governments, EPA specifically solicits comment on today's action from 
State and local officials.

F. Executive Order 13175--Consultation and Coordination With Indian 
Tribal Governments

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' Today's action does not have 
tribal implications as specified in Executive Order 13175. Thus, 
Executive Order 13175 does not apply to this action.
    The purpose of the December 31, 2002 final rule is to add greater 
flexibility to the existing major NSR regulations. Those changes will 
benefit permitting authorities and the regulated community, including 
any major source owned by a tribal government or located in or near 
tribal land, by providing increased certainty as to when the 
requirements of the NSR program apply. Taken as a whole, the December 
31, 2002 final rule should result in no added burden or compliance 
costs and should not substantially change the level of environmental 
performance achieved under the previous rules.
    EPA anticipates that initially the changes in the December 31, 2002 
final rule will result in a small increase in the burden imposed upon 
Reviewing Authorities in order for them to be included in the State's 
SIP. Nevertheless, those revisions will ultimately provide greater 
operational flexibility to sources permitted by the States, which will 
in turn reduce the overall burden of the program on State and local 
authorities by reducing the number of required permit modifications. In 
comparison, no tribal government currently has an approved tribal 
implementation plan (TIP) under the Clean Air Act to implement the NSR 
program. The Federal government is currently the NSR permitting 
authority in Indian country. Thus, tribal governments should not 
experience added burden from the December 31, 2002 final rule, nor 
should their laws be affected with respect to implementation of that 
rule. Additionally, although major stationary sources affected by the 
December 31, 2002 final rule could be located in or near Indian country 
and/or be owned or operated by tribal governments, such sources would 
not incur additional costs or compliance burdens as a result of that 
rule. Instead, the only effect on such sources should be the benefit of 
the added certainty and flexibility provided by that rule. For the 
reasons stated above, we do not believe that any changes resulting from 
today's notice would increase burden for tribal governments. In 
addition, we do not anticipate that any such changes would have 
substantial direct effects on sources located in or near Indian country 
or sources owned or operated by tribal governments.
    EPA specifically solicits additional comment on today's notice from 
tribal officials.

G. Executive Order 13045--Protection of Children From Environmental 
Health Risks and Safety Risks

    Executive Order 13045, entitled ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997), applies to any rule that: (1) Is determined to be ``economically 
significant'' as defined under Executive Order 12866; and (2) concerns 
an environmental health or safety risk that EPA has reason to believe 
may have a disproportionate effect on children. If the regulatory 
action meets both criteria, the Agency must evaluate the environmental 
health or safety effects of

[[Page 44631]]

the planned rule on children, and explain why the planned regulation is 
preferable to other potentially effective and reasonably feasible 
alternatives considered by the Agency.
    Today's action is not subject to the Executive Order because it is 
not economically significant as defined in Executive Order 12866, and 
because the Agency does not have reason to believe the environmental 
health or safety risks addressed by this action present a 
disproportionate risk to children. We believe that the December 31, 
2002 final rule as a whole will result in equal or better environmental 
protection than provided by earlier regulations, and do so in a more 
streamlined and effective manner. Similarly, today's notice is not 
expected to change substantially the level of environmental protection 
provided by the December 31, 2002 final rule, and as a result, it is 
not expected to present a disproportionate environmental health or 
safety risk for children.

H. Executive Order 13211--Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    Today's notice is not a ``significant energy action'' as defined in 
Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 
28355, May 22, 2001) because it is not likely to have a significant 
adverse effect on the supply, distribution, or use of energy. The 
December 31, 2002 final rule improves the ability of sources to 
undertake pollution prevention or energy efficiency projects, switch to 
less polluting fuels or raw materials, maintain the reliability of 
production facilities, and effectively utilize and improve existing 
capacity. That rule also includes a number of provisions to streamline 
administrative and permitting processes so that facilities can quickly 
accommodate changes in supply and demand. It provides several 
alternatives that are specifically designed to reduce administrative 
burden for sources that use pollution prevention or energy efficient 
projects. We do not expect that today's action would result in changes 
to the final rules that are so substantial as to have a significant 
adverse effect on the supply, distribution, or use of energy.

I. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (NTTAA), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) 
directs EPA to use voluntary consensus standards in its regulatory 
activities unless to do so would be inconsistent with applicable law or 
otherwise impractical.
    Voluntary consensus standards are technical standards (for example, 
materials specifications, test methods, sampling procedures, and 
business practices) that are developed or adopted by voluntary 
consensus standards bodies. The NTTAA directs EPA to provide Congress, 
through OMB, explanations when the Agency decides not to use available 
and applicable voluntary consensus standards.
    Today's notice does not involve technical standards. Therefore, EPA 
is not considering the use of any voluntary consensus standards.

VI. Statutory Authority

    The statutory authority for this action is provided by sections 
307(d)(7)(B), 101, 111, 114, 116, and 301 of the CAA as amended (42 
U.S.C. 7401, 7411, 7414, 7416, and 7601). This notice is also subject 
to section 307(d) of the CAA (42 U.S.C. 7407(d)).

List of Subjects in 40 CFR Parts 51 and 52

    Environmental protection, Administrative practice and procedure, 
Air pollution control, BACT, Baseline emissions, Carbon monoxide, Clean 
Units, Hydrocarbons, Intergovernmental relations, LAER, Lead, Major 
modifications, Nitrogen oxides, Ozone, Particulate matter, Plantwide 
applicability limitations, Pollution control projects, Reporting and 
recordkeeping requirements, Sulfur oxides.

    Dated: July 25, 2003.
Jeffrey Holmstead,
Assistant Administrator, Office of Air and Radiation.
[FR Doc. 03-19356 Filed 7-29-03; 8:45 am]
BILLING CODE 6560-50-P