# Approval and Promulgation of Implementation Plans; Texas; Revisions to the New Source Review (NSR) State Implementation Plan (SIP); Modification of Existing Qualified Facilities Program and General Definitions

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2010-8019

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** April 14, 2010
- **Citation:** 75 FR 19468

## Text

ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52
[EPA-R06-OAR-2005-TX-0025; FRL-9135-7]
Approval and Promulgation of Implementation Plans; Texas; Revisions to the New Source Review (NSR) State Implementation Plan (SIP); Modification of Existing Qualified Facilities Program and General Definitions

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final Rule.

SUMMARY:

EPA is taking final action to disapprove revisions to the SIP submitted by the State of Texas that relate to the Modification of Existing Qualified Facilities (the Qualified Facilities Program or the Program). EPA is disapproving the Texas Qualified Facilities Program because it does not meet the Minor NSR SIP requirements nor does it meet the NSR SIP requirements for a substitute Major NSR SIP revision.

EPA is also approving three definitions that are severable from the Qualified Facilities submittals. These three definitions we are approving are, “grandfathered facility,” “maximum allowable emission rate table (MAERT),” and “new facility.” Moreover, we are making an administrative correction to the SIP-approved definition of “facility.”

We are taking this action under section 110, part C, and part D of the Federal Clean Air Act (the Act or CAA).

DATES:

This rule is effective on May 14, 2010.

ADDRESSES:

EPA has established a docket for this action under Docket ID No. EPA-R06-OAR-2005-TX-0025. All documents in the docket are listed on the
http://www.regulations.gov
Web site. Although listed in the index, some information is not publicly available,
e.g.,
confidential business information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through
http://www.regulations.gov
or in hard copy at the Air Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733. The file will be made available by appointment for public inspection in the Region 6 FOIA Review Room between the hours of 8:30 a.m. and 4:30 p.m. weekdays except for legal holidays. Contact the person listed in the
FOR FURTHER INFORMATION CONTACT
paragraph below to make an appointment. If possible, please make the appointment at least two working days in advance of your visit. There will be a 15 cent per page fee for making photocopies of documents. On the day of the visit, please check in at the EPA Region 6 reception area at 1445 Ross Avenue, Suite 700, Dallas, Texas.

The State submittal, which is part of the EPA record, is also available for public inspection at the State Air Agency listed below during official business hours by appointment: Texas Commission on Environmental Quality, Office of Air Quality, 12124 Park 35 Circle, Austin, Texas 78753.

FOR FURTHER INFORMATION CONTACT:

Mr. Stanley M. Spruiell, Air Permits Section (6PD-R), Environmental Protection Agency, Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas 75202-2733, telephone (214) 665-7212; fax number 214-665-7263; e-mail address
spruiell.stanley@epa.gov
.

SUPPLEMENTARY INFORMATION:

Throughout this document, the following terms have the meanings described below:

• “we,” “us,” and “our” refer to EPA.

• “Act” or “CAA” means Federal Clean Air Act.

• “40 CFR” means Title 40 of the Code of Federal Regulations—Protection of Environment.

• “SIP” means State Implementation Plan as established under section 110 of the Act.

• “NSR” means new source review, a phrase intended to encompass the statutory and regulatory programs that regulate the construction and modification of stationary sources as provided under CAA section 110(a)(2)(C), CAA Title I, parts C and D, and 40 CFR 51.160 through 51.166.

• “Minor NSR” means NSR established under section 110 of the Act and 40 CFR 51.160.

• “Major NSR” means any new or modified source that is subject to NNSR and/or PSD.

• “NNSR” means nonattainment NSR established under Title I, section 110 and part D of the Act and 40 CFR 51.165.

• “PSD” means prevention of significant deterioration of air quality established under Title I, section 110 and part C of the Act and 40 CFR 51.166.

• “Program” means the SIP revision submittals from the TCEQ concerning the Texas Qualified Facilities Program.

• “NAAQS” means any national ambient air quality standard established under 40 CFR part 50.

Table of Contents

I. What Action Is EPA Taking?

II. What Submittals Is EPA Taking No Action On?

A. Subparagraph (F) under the definition of “federally enforceable”

B. Definition of “best available control technology (BACT)”

C. Subparagraphs (A) and (B) of the submitted definition of “modification of existing facility”

D. Subparagraph (G) of the submitted definition of “modification of existing facility”

E. Trading Provision in 30 TAC 116.116(f)

III. What Is the Background for This Action?

A. Summary of Our Proposed Action

B. Summary of the Submittals Addressed in this Final Action

C. Other Relevant Actions on the Texas Permitting SIP Revision Submittals

IV. What Are the Grounds for This Disapproval Action of the Texas Qualified Facilities Program?

A. Why the Qualified Facilities Program Submittal Is Unclear Whether It Is for a Major or Minor NSR SIP Revision

B. Why the Submitted Texas Qualified Facilities Program Is Not Approvable as a Substitute Major NSR SIP Revision

C. Why the Submitted Texas Qualified Facilities Program Is Not Approvable as a Minor NSR SIP Revision

D. Definition of “facility”

V. Response to Comments

A. General Comments

B. Comment That This Action Is Inconsistent With the CAA

C. Comments Addressing Whether the Qualified Facilities Rules Allow Sources to “Net Out” of Major and Minor NSR Through Rules that Are Not Adequate To Protect the NAAQS and State Control Strategies

D. Comments Addressing Whether the Qualified Facilities Rules Are Practically Enforceable

E. Comments Addressing Whether the Qualified Facilities Rules Meet Federal Requirements for Major NSR

F. Comments Addressing Whether the Qualified Facilities Rules Meet Federal Requirements for Minor NSR

G. Comments Addressing Whether Existing Qualified Facilities Have Undergone an Air Quality Analysis

H. Comments on the Definitions of “Grandfathered Facility,” “Maximum Allowable Emission Rate Table,” and “New Facility”

I. Comments on the Definitions of “Actual Emissions,” “Allowable Emissions,” “Modification of Existing Facility” at (E), and “Qualified Facility”

J. Comments on the Definition of “Best Available Control Technology” (“BACT”)

K. Comments on Severable Portions of the Definition of “Modification of Existing Facility” at 30 TAC 116.10(11)(A) and (B)

L. Comments on the Definition of Severable Subsection of “Modification of

Existing Facility” at 30 TAC 116.10(11)(G)

M. Comments on the Reinstatement of the Previously Approved Definition of “Facility”

N. Comments on the Definition of the Term “Air Quality Account Number”

O. Comments on Whether the Qualified Facilities Rules Meet NSR Public Participation Requirements

VI. Final Action

VII. Statutory and Executive Order Reviews

I. What Action Is EPA Taking?

EPA is taking final action to disapprove the Texas Qualified Facilities Program, as submitted by Texas on March 13, 1996, and July 22, 1998, in Title 30 of the Texas Administrative Code (30 TAC) at 30 TAC Chapter 116—Control of Air Pollution by Permits for New Construction or Modification. This includes the following regulations under Chapter 116: 30 TAC 116.116(e), 30 TAC 116.117, 30 TAC 116.118, and the following definitions under 30 TAC 116.10—General Definitions: 30 TAC 116.10(1)—definition of “actual emissions,” 30 TAC 116.10(2)—definition of “allowable emissions,” 30 TAC 116.10(11)(E) under the definition of “modification of existing facility,” and 30 TAC 116.10(16)—definition of “qualified facility.” These regulations and definitions do not meet the requirements of the Act and EPA's NSR regulations. It is EPA's position that none of these identified elements for the submitted Qualified Facilities Program is severable from each other.

Secondly, in an action separate from the above action on the submitted Texas Qualified Facilities Program, we are approving the following severable definitions: 30 TAC 116.10(8)—definition of “grandfathered facility,” 30 TAC 116.10(10)—definition of “maximum allowable emission rate table (MAERT),” and 30 TAC 116.10(12)—definition of “new facility.” It is EPA's position that these definitions are severable from those in the submitted Texas Qualified Facilities Program; moreover, each is severable from each other.

EPA proposed the above actions on September 23, 2009 (74 FR 48450). We accepted comments from the public on this proposal from September 23, 2009, until November 23, 2009. A summary of the comments received and our evaluation thereof is discussed in section V below. In the proposal and in the Technical Support Document (TSD), we described our basis for the actions identified above. The reader should refer to the proposal, the TSD, section IV of this preamble, and the Response to Comments in section V of this preamble for additional information relating to our final action.

We are disapproving the submitted Texas Qualified Facilities Program as not meeting the requirements for a substitute Major NSR SIP revision. Our grounds for disapproval as a substitute Major NSR SIP revision include the following:

• It is not clearly limited to Minor NSR thereby allowing major modifications to occur without a Major NSR permit;

• It has no regulatory provisions clearly prohibiting the use of this Program from circumventing the Major NSR SIP requirements thereby allowing changes at existing facilities to avoid the requirement to obtain preconstruction permit authorizations for projects that would otherwise require a Major NSR preconstruction permit;

• It does not require that first an applicability determination be made whether the modification is subject to Major NSR thereby exempting new major stationary sources and major modifications from the EPA Major NSR SIP requirements;

• It does not include a demonstration from the TCEQ, as required by 40 CFR 51.166(a)(7)(iv), showing how the use of “modification” is at least as stringent as the definition of “modification” in the EPA Major NSR SIP program

• It does not include the requirement to make Major NSR applicability determinations based on actual emissions and on emissions increases and decreases (netting) that occur within a major stationary source;

• It fails to meet the statutory and regulatory requirements for a SIP revision;

• It is not consistent with applicable statutory and regulatory requirements as interpreted in EPA policy and guidance on SIP revisions; and

• EPA lacks sufficient available information to determine that the requested relaxation to the Texas Major NSR SIP will not interfere with any applicable requirement concerning attainment and reasonable further progress (RFP), or any other applicable requirement of the Act.

In addition to the failures to protect Major NSR SIP requirements, EPA cannot find that the submitted Program, as an exemption to the State's Minor NSR SIP program, will ensure noninterference with NAAQS attainment, and there will not be a violation of applicable portions of a Texas SIP control strategy, as required by section 110(a)(2)(D) and 40 CFR 51.160(a)-(b). EPA cannot approve the exempting of certain modifications from obtaining a Minor NSR SIP permit as part of the Texas Minor NSR SIP because the Act and EPA regulations are not met and the State has not shown that the sources will have only a
de minimis
effect. The Program fails to include legally enforceable procedures to ensure that the State will not permit a modification that will violate the control strategies or interfere with NAAQS attainment. Our grounds for disapproval as a Minor NSR SIP revision include the following:

• It is not clearly limited to Minor NSR thereby allowing major modifications to occur without a Major NSR permit;

• It has no regulatory provisions clearly prohibiting the use of this Program from circumventing the Major NSR SIP requirements thereby allowing sources to avoid the requirement to obtain preconstruction permit authorizations for projects that would otherwise require a Major NSR preconstruction permit;

• It does not require that first an applicability determination be made whether the modification is subject to Major NSR thereby exempting new major stationary sources and major modifications from the EPA Major NSR SIP requirements;

• It fails to meet the statutory and regulatory requirements for a SIP revision;

• It is not consistent with applicable statutory and regulatory requirements as interpreted in EPA policy and guidance on SIP revisions;

• It is not an enforceable Minor NSR permitting program;

• It lacks legally enforceable safeguards to ensure that the exempted changes will not violate a Texas control strategy and will not interfere with NAAQS attainment;

• EPA lacks sufficient available information to determine that the requested relaxation to the Texas Minor NSR SIP will not interfere with any applicable requirement concerning attainment and RFP, or any other applicable requirement of the Act.

The provisions in these submittals relating to the Texas Qualified Facilities State Program that include the Chapter 116 regulatory provisions and the nonseverable definitions in the General Definitions were not submitted to meet a mandatory requirement of the Act. Therefore, this final action to disapprove the submitted Texas Qualified Facilities State Program does not trigger a sanctions or Federal Implementation Plan clock.
See
CAA section 179(a).

II. What Submittals Is EPA Taking No Action On?

A. Subparagraph (F) Under the Definition of “Federally Enforceable”

On September 18, 2002 (67 FR 58697), EPA approved the definition of “federally enforceable” in 30 TAC 116.10(7), introductory paragraph and subparagraphs (A) through (E), as submitted July 22, 1998. We proposed to take no action on the submitted severable new subparagraph (F) under the SIP-approved definition of “federally enforceable,” submitted September 11, 2000, because it is outside the scope of the SIP.
See
74 FR 48450, at 48466. EPA is not finalizing action today on the proposal concerning the submitted 30 TAC 116.10(7)(F). This subparagraph (F) is severable from the final rulemaking on the Qualified Facilities Program

B. Definition of “Best Available Control Technology (BACT)”

On September 23, 2009, EPA proposed to disapprove the definition “best available control technology (BACT)” under 30 TAC 1161.10(3). 74 FR 48450, at 48463-48464. EPA is still reviewing approvability of this definition; therefore, we are not taking final action on the proposal today. This definition is severable from the final rulemaking on the Qualified Facilities Program. We will take final action on the definition of BACT when we take action on Texas's submission concerning NSR Reform (Rule Project Number 2005-010-116-PR), which also addresses BACT.
See
74 FR 48450, at 48472.
1

Under the Consent Decree entered on January 21, 2010 in
BCCA Appeal Group
v.
EPA,
Case No. 3:08-cv-01491-N (N.D. Tex), EPA's final action concerning NSR Reform will be finalized by August 31, 2010.

1
EPA made this determination in a separate proposed action published at 74 FR 48467, September 23, 2009. This proposal relates to Prevention of Significant Deterioration (PSD), Nonattainment NSR (NNSR) for the 1997 8-Hour Ozone Standard, NSR Reform, and a Standard Permit.

C. Subparagraphs (A) and (B) of the Submitted Definition of “Modification of Existing Facility”

Also, on September 23, 2009, EPA proposed to disapprove 30 TAC 116.10(11) subparagraphs (A) and (B) of the submitted definition of “modification of existing facility,” which are severable from the other submissions addressed in this notice but not severable from each other. 74 FR 48450, at 48464-48465. EPA is not taking final action today on the proposed disapproval of these submitted subparagraphs under the submitted definition of “modification of existing facility” at 30 TAC 116.0(11)(A) and (B). We are still reviewing the proposed disapproval of these subparagraphs 30 TAC 116.10(11)(A) and (B) which relate to “insignificant increases.” These subparagraphs are severable from this final rulemaking on the Qualified Facilities Program. We will take final action on 30 TAC 116.10(11)(A) and (B) when we act on Texas's submission concerning Air Permits (SB 766) Phase II (Rule Project Number 99029B-116-A1). Under the Settlement Agreement in
BCCA Appeal Group
v.
EPA,
Case No. 3:08-cv-01491-N (N.D. Tex), that action will be finalized by December 31, 2012. Additionally, we have received petitions requesting EPA review of the State's implementation of Texas Commission on Environmental Quality's (TCEQ) permit by rule (PBR) program under Subchapter K (30 TAC Chapter 106).
2

EPA intends to review TCEQ's PBR program and its implementation in response to those petitions.

2
Petitions, August 28, 2008, from the Environmental Integrity Project on behalf of the Galveston-Houston Association for Smog Prevention, Environmental Integrity Project, Texas Campaign for the Environment, Sierra Club, and Public Citizen; and January 5, 2009, supplementing the August 28, 2008, petition (the supplemental petition added the Environmental Defense Fund as an additional petitioner).

D. Subparagraph (G) of the Submitted Definition of “Modification of Existing Facility”

On September 23, 2009, EPA proposed to disapprove the subparagraph (G) at 30 TAC 116.10(11) of the submitted definition of “modification of existing facility.”
See
74 FR 48450, at 48465. EPA is not taking final action today on the proposed disapproval of the submitted subparagraph (G) of the definition of “modification of existing facility.” We are still reviewing the proposed disapproval of this definition. This subparagraph states that changes to certain natural gas processing, treating, or compression facilities are not modifications if the change does not result in an annual emissions rate of any air contaminant in excess of the volume emitted at the maximum design capacity for grandfathered facilities. This definition is severable from this rulemaking on the Qualified Facilities Program.
See
74 FR 48450, at 48452. We will take final action on 30 TAC 116.10(11)(G) when we act on Texas's submission concerning Air Permits (SB 766) Phase II (Rule Project Number 99029B-116-A1). Under the Settlement Agreement in
BCCA Appeal Group
v.
EPA,
Case No. 3:08-cv-01491-N (N.D. Tex), that action will be finalized by December 31, 2012.

E. Trading Provision in 30 TAC 116.116(f)

EPA proposed to take no action on the submitted portion of 30 TAC 116.116(f) that includes, among other things, a trading provision containing a cross-reference that is no longer in Texas's rules.
See
74 FR 48450, at 48465-48466. EPA is not taking final action today on this submitted portion because we are still reviewing approvability of the provision. This portion of the provision is severable from this rulemaking on the Qualified Facilities Program. We will take final action on 30 TAC 116.116(f) when we take action on Texas's submission concerning NSR Rules Revisions; 112(g) Revisions (Rule Project No. 98001-116-AI). Under the Settlement Agreement in BCCA
Appeal Group
v.
EPA,
Case No. 3:08-cv-01491-N (N.D. Tex), that action will be finalized by October 31, 2011.

III. What Is the Background?

A. Summary of Our Proposed Action

Also on September 23, 2009 (74 FR 48450), EPA proposed to disapprove revisions to the SIP submitted by the State of Texas that relate to the Modification of Qualified Facilities. These affected provisions include regulatory provisions at 30 TAC 116.116(e) and definitions of “actual emissions,” “allowable emissions,” a nonseverable portion of the definition at subparagraph (E) of “modification of existing facility,” and “qualified facility” under Texas's General Definitions in Chapter 116, Control of Air Pollution by Permits for New Construction or Modification.
See
30 TAC 116.10(1), (2), (11)(E), and (16), respectively. EPA finds that these submitted provisions and definitions in the submittals affecting the Texas Qualified Facilities Program are not severable from each other.

In the September 23, 2009, EPA also proposed to take action on revisions to the SIP submitted by Texas that relate to the General Definitions in Chapter 116. EPA proposed to approve three of these submitted definitions, “grandfathered facility,” “maximum allowable emissions rate table (MAERT),” and “new facility” at 30 TAC 116.10(8), (10), and (12), respectively. These definitions are severable from the Qualified Facilities Program.

EPA proposed to make an administrative correction to the severable submittal for the SIP-approved

definition of “facility” under 30 TAC 116.10(6). Consistent with our proposal, EPA is finalizing this administrative correction in today's action. Specifically, EPA corrects a typographical error at 72 FR 49198 (August 28, 2007), to clarify that the definition of “facility,” as codified at 30 TAC 116.10(6), was approved as part of the Texas SIP in 2006 and remains part of the Texas SIP. 74 FR 48450, at 48465.

See Sections I and IV for further information on EPA's final action on the above submittals.

Further, EPA proposed to disapprove the following severable definitions: (1) the submitted definition of “best available control technology (BACT)” and (2) subparagraphs (A) and (B) of the submitted definition of “modification of existing facility,” which are severable from the other submissions but not severable from each other, and (3) subparagraph (G) of the submitted definition of “modification of existing facility.” EPA proposed to take no action on the severable submitted subparagraph (F) for the SIP-approved severable definition of “federally enforceable” under 30 TAC 116.10(7) because the submitted paragraph relates to a federal program that is implemented separately from the SIP. In addition, EPA proposed to take no action on the severable submitted portion of a provision at 30 TAC 116.116(f) that includes, among other things, a trading provision containing a cross-reference that no longer is in Texas's rules. See Section II for further information on why EPA is not taking final action today on these submittals.

B. Summary of the Submittals Addressed in this Final Action

Table 1 below summarizes the changes that are in the SIP revision submittals. A summary of EPA's evaluation of each section and the basis for this action is discussed in Sections IV through VI of this preamble. The Technical Support Document includes a detailed evaluation of the submittals.

Table 1—Summary of Each SIP Submittal That is Affected by This Action.

Section
Title
Submittal dates
Description of change
Proposed action

30 TAC 116.10
General Definitions

30 TAC 116.10(1)
Definition of “actual emissions”
3/13/1996
Added new definition
Disapproval.

7/22/1998
Repealed and a new definition submitted as paragraph (1)

30 TAC 116.10(2)
Definition of “allowable emissions”
3/13/1996
Added new definition
Disapproval.

7/22/1998
Repealed and a new definition submitted as paragraph (2)

9/11/2000
Revised paragraphs (2)(A) through (D)

30 TAC 116.10(6)
Definition of “facility”
3/13/1996
Added new definition
Administrative correction to clarify the definition of “facility” is in the SIP.

7/22/1998
Repealed and a new definition submitted as paragraph (4). Approved 9/6/2006 (71 FR 52698)

9/4/2002
Redesignated to paragraph (6). Inadvertently identified as non-SIP provision in 8/28/2007 SIP revision

30 TAC 116.10(8)
Definition of “grandfathered facility”
3/13/1996
Added new definition
Approval.

7/22/1998
Repealed and a new definition submitted as paragraph (6)

7/31/2002
Revised definition

9/4/2002
Redesignated to paragraph (8)

30 TAC 116.10(10)
Definition of “maximum allowable emission rate table”
3/13/1996
Added new definition
Approval.

7/22/1998
Repealed and a new definition submitted as paragraph (8)

9/4/2002
Redesignated to paragraph (10)

30 TAC 116.10(11)
Definition of “modification of existing facility”
3/13/1996
Added new definition
Disapproval of subparagraph (E).

7/22/1998
Repealed and a new definition submitted as paragraph (9)

9/4/2002
Redesignated to paragraph (11)

30 TAC 116.10(12)
Definition of “new facility”
3/13/1996
Added new definition
Approval.

7/22/1998
Repealed and a new definition submitted as paragraph (10)

9/04/2002
Redesignated to paragraph (12)

30 TAC 116.10(16)
Definition of “qualified facility”
3/13/1996
Added new definition
Disapproval.

7/22/1998
Repealed and a new definition submitted as paragraph (14)

9/4/2002
Redesignated to paragraph (16)

30 TAC 116.116
Changes to Facilities
3/13/1996
Added subsection (e)
Disapproval.

7/22/1998
Repealed and a new 116.116(e) submitted
Disapproval.

30 TAC 116.117
Documentation and Notification of Changes to Qualified Facilities
3/13/1996
Added new section
Disapproval.

7/22/1998
Repealed and a new 116.117 resubmitted

30 TAC 116.118
Pre-Change Qualification
3/13/1996
Added new section
Disapproval.

7/22/1998
Repealed and a new 116.118 submitted

C. Other Proposed Relevant Actions on the Texas Permitting SIP Revision Submittals

The Settlement Agreement in
BCCA Appeal Group
v.
EPA,
Case No. 3:08-cv-01491-N (N.D. Tex), as amended, currently provides that EPA will take final action on the State's Public Participation SIP revision submittal on October 29, 2010. EPA intends to take final action on the submitted Texas Flexible Permits State Program by June 30, 2010, and the NSR SIP by August 31, 2010, as provided in the Consent Decree entered on January 21, 2010 in
BCCA Appeal Group
v.
EPA,
Case No. 3:08-cv-01491-N (N.D. Tex).

Additionally, EPA acknowledges and appreciates that TCEQ is developing a proposed rulemaking package to address EPA's concerns with the current Qualified Facilities rules. We will, of course, consider any rule changes if and when they are submitted to EPA for review. However, the rules before us today are those of the current Qualified Facilities program, and we have concluded that the current program is not approvable for the reasons set out in this notice.

IV. What Are the Grounds for This Disapproval Action of the Texas Qualified Facilities Program?

EPA is disapproving revisions to the SIP submitted by the State of Texas that relate to the Modification of Qualified Facilities, identified in the above Table 1. Sources are reminded that they remain subject to the requirements of the Federally- approved Texas SIP and may be subject to enforcement actions for violations of the SIP.
See
EPA's Revised Guidance on Enforcement During Pending SIP Revisions, (March 1, 1991). However, because the Qualified Facilities Program is a permitting exemption, not a permit amendment, this final disapproval action does not affect Federal enforceability of Major and Minor NSR SIP permits.

The provisions affected by this disapproval action include regulatory provisions at 30 TAC 116.116(e), 116.117, and 116.118; and definitions at 30 TAC 116.10(1), (2), (11)(E), and (16) under 30 TAC Chapter 116, Control of Air Pollution by Permits for New Construction or Modification. EPA finds that these submitted provisions and definitions in the submittals affecting the Texas Qualified Facilities Program are not severable from each other. Specifically, EPA is making the following findings and taking the following actions as described below:

A. Why the Qualified Facilities Program Submittal Is Unclear Whether it Is for a Major or Minor NSR SIP Revision

While the TCEQ and other commenters asserted that the program was intended to be limited to Minor NSR, we continue to be concerned that the program is not explicitly limited to Minor NSR. Specifically, EPA finds that the submittals contain no applicability statement or regulatory provision that limits applicability to minor modifications. The Program is analogous to two other Minor NSR programs in Texas's SIP because although they do not exempt facilities from NSR, as does the Qualified Facilities Program, they do exempt facilities from obtaining source-specific (
i.e.,
case-by-case) permits. However, both of the State's other Minor NSR programs include an applicability statement and a regulatory provision that expressly limits applicability to minor modifications.
3

Moreover, the Texas Clean Air Act clearly prohibits the use of these two other Minor NSR programs for Major NSR.
See
Texas Health and Safety Code 382.05196 and .057. Therefore, the absence of these provisions in the Qualified Facilities rules creates an unacceptable ambiguity in the SIP. Without a clear statement of applicability of the Program, the Program as submitted is confusing to the public, regulated sources, government agencies, or a court, because it can be interpreted as an alternative to evaluating the new modification as a major modification under Major NSR requirements. Because of the overbroad nature of the regulatory language in the State's SIP revision submittal, we find that the State has failed to limit its submitted Program only to Minor NSR.
See
74 FR 48450, at 48456-48457 and Section V.E.1 below for further information.

3
The Standard Permits rules require a Major NSR applicability determination at 30 TAC 116.610(b), and prohibit circumvention of Major NSR at 30 TAC 116.610(c). Likewise, the Permits by Rule provisions require a Major NSR applicability determination at 30 TAC 106.4(a)(3), and prohibit circumvention of Major NSR at 30 TAC 106.4(b).

Consequently, we evaluated this submitted Program as being a substitute for the Texas Major NSR SIP. We also evaluated it for approvability as a Minor NSR SIP. Accordingly, we evaluated whether the submitted Program meets the requirements for a Major NSR SIP revision, the general requirements for regulating construction of any stationary sources contained in Section 110(a)(2)(C) of the CAA, and the applicable statutory and regulatory requirements for an approvable SIP revision.
See
74 FR 48450, at 48457.

B. Why the Submitted Texas Qualified Facilities Program Is Not Approvable as a Substitute Major NSR SIP Revision

EPA finds that the State failed to submit information sufficient to demonstrate that the submitted Program's regulatory text explicitly prevents the circumvention of Major NSR. Therefore, EPA is disapproving the Program as not meeting the Major NSR SIP requirements to prevent circumvention of Major NSR.
See
74 FR 48450, at 48458; Sections V.C.2. and E. below for further information.

EPA finds that that the State failed to submit information sufficient to demonstrate that the submitted Program's regulatory text requires an evaluation of Major Source NSR applicability before a change is exempted from permitting. Therefore, EPA is disapproving the Program as not meeting the Major NSR SIP requirements that require the Major NSR applicability requirements be met.
See

74 FR 48450, at 48458; Section V.C.2 below for further information.

We find that the Program is deficient for Major NSR netting for two main reasons. First, the Program may allow an emission increase to net out by taking into account emission decreases outside of the major stationary source and, in other circumstances, allow an evaluation of emissions of a subset of units at a major stationary source. Therefore, the Program does not meet the CAA's definition of “modification” and the Major NSR SIP requirements and is inconsistent with
Alabama Power v. Costle,
636 F.2d 323, 401-403 (DC Cir. 1980) and
Asarco v. EPA,
578 F.2d 320 (DC Cir. 1978). 74 FR 48450, at 48458-48459; Section V.C.1 below. Second, the Program authorizes existing allowable emissions, rather than actual emissions, to be used as a baseline to determine applicability. This use of allowables is inconsistent with the requirements of the Act for Major NSR and is contrary to
New York v. EPA,
413 F.3d 3, 38-40 (DC Cir. 2005) (“New York I”). 74 FR 48450, at 48459; Section V.C.1 below.

EPA finds that it lacks sufficient available information to determine, pursuant to section 110(l) that the requested relaxation to the Texas NSR SIP would not interfere with any applicable requirement concerning attainment and RFP, or any other applicable CAA requirement.
See
74 FR 48450, at 48459 for further information.

C. Why the Submitted Texas Qualified Facilities Program Is Not Approvable as a Minor NSR SIP Revision

EPA finds that the Program is not clearly limited to Minor NSR. The submitted Program also does not prevent circumvention of the Major NSR SIP requirements. The Program lacks requirements necessary for enforcement of the applicable emissions limitations, including a permit application and issuance process. Overall, the Program fails to include sufficient legally enforceable safeguards to ensure that the NAAQS and control strategies are protected. Furthermore, the Program provides a
de minimis
exemption from the Texas Minor NSR SIP, and therefore, it is a SIP relaxation, which creates a risk of interference with NAAQS attainment, RFP, or any other requirement of the Act. EPA lacks sufficient information to determine that this SIP relaxation would not interfere with these requirements. 74 FR 48450, at 48463. Additionally, the legal test for whether a
de minimis
threshold can be approved is whether it is consistent with the need for a plan to include legally enforceable procedures to ensure that the State will not permit a source that will violate the control strategy or interfere with NAAQS attainment, as required by 40 CFR 51.160(a)-(b). 74 FR 48450, at 48460. The State failed to demonstrate that this exemption will not permit changes that will violate the Texas control strategies or interfere with NAAQS attainment. Therefore, we are disapproving the submitted Qualified Facilities Program as a Minor NSR SIP revision because it does not meet sections 110(a)(2)(C) and 110(l) of the Act and 40 CFR 51.160.

The Qualified Facilities Program does not ensure protection of the NAAQS and prevent violations of any State control strategy. First, the Program fails to ensure that all participating Qualified Facilities must have obtained a Texas NSR SIP permit. Without the assurance that all Qualified Facilities have obtained a Texas NSR SIP permit, EPA cannot determine that all Qualified Facilities must have Federally enforceable emission limitations based on the chosen control technology, and that the Qualified Facility will not interfere with attainment and maintenance of the NAAQS or violate any control strategy. Therefore, EPA finds that the Qualified Facilities Program is inadequate to ensure that all Qualified Facilities have an appropriate allowable limit to prevent interference with attainment and maintenance of the NAAQS or violations of any State control strategy that is required by the Texas NSR SIP. See Section V.G.1 for further information. In addition, the Program does not require the owner or operator to maintain the information and analysis showing how it concluded that there will be no adverse impact on ambient air quality before undertaking the change. Therefore, EPA finds that the Qualified Facilities Program is inadequate to ensure that all changes under the Program that are exempted from permitting will not prevent interference with attainment and maintenance of the NAAQS or violations of any State control strategy that is required by the Texas NSR SIP. 74 FR 48450, at 48462; Section V.F.1.

Regarding the State's use of minor source netting in the Qualified Facilities Program, EPA makes the following findings:

The Qualified Facilities Program is inadequate because it fails to provide clear and enforceable requirements for a basic netting program. Therefore, this Program, as submitted, does not meet the fundamental requirements for an approvable Minor NSR netting program. To analyze the Program's Minor NSR netting for approvability, we used the fundamental principles of Major NSR and NSR netting because these principles are designed to ensure that there is no interference with the NAAQS and control strategies.
4

The Major NSR netting program requires the following: (1) An identified contemporaneous period, (2) the reductions must be contemporaneous and creditable, (3) the reductions must be of the same pollutant as the change, (4) the reductions must be real, (5) the reductions must be permanent, and (6) the reductions must be quantifiable.
See
40 CFR 51.165(a)(1)(vi) (the definition of “net emissions increase”); 40 CFR 51.166(b)(3). To be considered creditable, the reduction's old level of emissions must exceed the new level of emissions, the reduction must be enforceable as a practical matter at and after the time the actual change begins, and the reduction must have approximately the same qualitative significance for public health and welfare as that attributed to the increase from the particular change.
See
74 FR 48450, at 48461.

4
However, our analysis of the netting provisions in the Qualified Facilities Program under Minor NSR is not intended to create a binding Agency position on evaluating the approvability of Minor NSR netting.

As discussed below, the Program's netting provisions do not meet all of the requirements; therefore, the Qualified Facilities netting is disapproved as a Minor NSR netting program.

• The Program fails to define a contemporaneous or other period for the netting and that the emission reductions must occur within that specified period. 74 FR 48450, at 48461; Section V.C.1 below.

• Emissions reductions under the Qualified Facilities program are not enforceable as a practical matter at and after the time of the actual change begins; and therefore, not sufficiently creditable. First, the Program fails to ensure a separate netting analysis is performed for each proposed change because the rules are not clear that reductions can only be relied upon once. Therefore, we find that the Program fails to prevent double counting; and consequently these types of reductions are not creditable. Second, the Program does not require that each Qualified Facility involved in the netting transaction must submit a permit application and obtain a permit revision reflecting all of the changes made to reduce emissions (relied upon in the netting analysis) as well as reflecting the change itself that increased emissions. As a result, emissions reductions are not enforceable; and therefore, not

sufficiently creditable. 74 FR 48450, at 48462; Section V.C.1.

• EPA proposed to find that the State's “interchange” methodology, submitted 30 TAC 116.116(e)(3), is consistent with the Federal requirement that reductions must be of the same pollutant as the change.
5

74 FR 48450, at 48461. However, after evaluation of received comments, EPA finds that the term “sulfur compounds” in 30 TAC 116.116(e)(3)(F), is broad enough to include hydrogen sulfide. Hydrogen sulfide is a regulated NSR pollutant (
see
40 CFR 52.21(b)(23)(i) and 52.21(i)(5)(i)) and, in certain instances, may require separate analysis from sulfur oxides in a netting analysis. Therefore, the interchange methodology may not ensure the health impacts of all sulfur compounds will be equal. The State failed to demonstrate that such use of hydrogen sulfide would protect the sulfur dioxides NAAQS. Additionally, this provision allows PM-2.5 to be interchanged with PM-10. However, because PM-10 and PM-2.5 are two separate pollutants and the State failed to demonstrate that such use of PM-10 would protect the PM-2.5 NAAQS, this interchange is inappropriate. Therefore, this provision is unapprovable for the sulfur dioxides and PM NAAQS. Section V.C.1 below.

5
See 40 CFR 51.165(a)(1)(vi)(A) and 51.166(b)(3)(i), which define net emissions increase “with respect to
any regulated NSR pollutant.”
Emphasis added.

• The Program also lacks any provisions that require the reductions to be permanent. Specifically, the submitted Program does not include provisions that either prohibit future increases at the Qualified Facility, or ensure that any future increase at a Qualified Facility at which a previous netting reduction occurred is analyzed in totality to assure that the NAAQS remains protected from the original increase. 74 FR 48450, at 48461; Section V.C.1 below.

Section 30 TAC 116.117(b) lacks any provisions that require a permit application to be submitted to TCEQ for a change under the Program. There are no provisions in 30 TAC 116.117(b) that clearly indicate that TCEQ must issue a revised permit for the changes made by all of the participating Qualified Facilities. Thus, EPA finds that the Program is not approvable because it lacks this requirement and therefore is not enforceable.
See
74 FR 48450, at 48462, Section V.D.1 below.

The Qualified Facilities SIP submittal is a relaxation under CAA section 110(l) because it provides an exemption from NSR permitting not previously available to facilities. As such, this revision creates a risk of interference with NAAQS attainment, RFP, or any other requirement of the Act. EPA lacks information sufficient to make a determination that the requested SIP revision relaxation does not interfere with any applicable requirements concerning attainment and RFP, or any other applicable requirement of the Act, as required by section 110(l).
See
74 FR 48450, at 48463.

For the reasons discussed above in this section and as further discussed below in Section V (Response to Comments), EPA is disapproving the submitted Qualified Facilities Program as not meeting section 110(a)(2)(C) and 110(l) of that Act and 40 CFR 51.160.
See
74 FR 48450, at 48462.

D. Definition of “Facility”

EPA proposed to make an administrative correction to the severable submittal for the SIP-approved definition of “facility” under 30 TAC 116.10(6). Consistent with our proposal, EPA is finalizing this administrative correction in today's action. Specifically, EPA corrects a typographical error at 72 FR 49198 to clarify that the definition of “facility,” as codified at 30 TAC 116.10(6), was approved as part of the Texas SIP in 2006 and remains part of the Texas SIP. 74 FR 48450, at 48465.

However, EPA wishes to note that each part of the Texas NSR program depends greatly upon the definition of “facility” that is applicable to it and upon how that definition is used in context within each part of the program. There are instances where a specific part of the Texas NSR program does not meet the Act and EPA regulations due to the definition of “facility” that applies to that part of the program. For example Texas's PSD non-PAL rules explicitly limit the definition of “facility” to “emissions unit,” but the NNSR non-PAL rules fail to include such a limitation. 74 FR 48450, at 48475;
compare
30 TAC 116.10(6)
to
30 TAC 116.160(c)(3). TCEQ did not provide information to demonstrate that the lack of this explicit limitation in the NNSR SIP non-PALs revision is at least as stringent as the revised Major NSR SIP requirements. 74 FR 48450, at 48455; Section V.M. below.

V. Response to Comments

In response to our September 23, 2009, proposal, we received comments from the following: Sierra Club—Houston Regional Group; Sierra Club Membership Services (including 2,062 individual comment letters); Harris County Public Health and Environmental Services; Texas Commission on Environmental Quality; Members of the Texas House of Representatives; Office of the Mayor—City of Houston, Texas; University of Texas at Austin School of Law—Environmental Clinic; Baker Botts, L.L.P., on behalf of BCCA Appeal Group; Baker Botts, L.L.P., on behalf of Texas Industrial Project; Bracewell & Guiliani, L.L.P., on behalf of the Electric Reliability Coordinating Council; Gulf Coast Lignite Coalition; Texas Chemical Council.

A. General Comments

1. Comments Generally Supporting Proposal

Comment:
Harris County Public Health & Environmental Services (HCPHES) acknowledges that EPA takes issue with the TCEQ regulations because of the lack of specificity regarding definitions and general lack of checks and balances to ensure that Federal requirements are met during the State's permitting processes, and because they do not meet the Minor NSR SIP and Major NSR SIP, including the Major NSR Nonattainment SIP requirements. Those concerns, currently unaddressed by the TCEQ, have ultimately resulted in EPA's proposed disapproval of portions of the TCEQ's most recent SIP submittal. HCPHES views a TCEQ program that meets the Federal requirements as being critical to ensuring that air quality in the Houston Galveston Brazoria (HGB) area returns to levels compliant with the NAAQS. HCPHES is very concerned that the TCEQ programs fall short of Federal requirements and encourages EPA to aggressively pursue the timely correction of these deficiencies to ensure the health, safety, and well being of the citizens of Harris County. HCPHES supports EPA's conclusion to disapprove portions of the SIP as proposed until such time as TCEQ addresses all of the specifics noted in the
Federal Register.

Comment:
Several members of the Texas House of Representatives support EPA's proposed disapproval of the Qualified Facilities Program. While the Qualified Facilities Program was a legislative creation, these members of the Texas House recognize that the statutory language and associated regulations are inconsistent with current CAA requirements regarding modifications and public participation. Particular concerns are:

•
Inadequate TCEQ oversight.
The rules authorize many changes at facilities without any pre-approval by TCEQ or procedures for denial for

cause. These off-permit changes are difficult to track and enforce and may threaten ambient air quality.

•
The lack of understandable and traceable permits.
Texas industry, regulators, and the public should be able to obtain a permit, read it, and know what quantity of what pollutants the facility is authorized to emit. The off-permit changes authorized through the Qualified Facilities rules prevent such transparency.

Comment:
Houston Regional Group of the Sierra Club (Sierra Club) supports EPA's analysis and agrees that all of the September 23, 2009, proposals (including the Qualified Facilities Program) should be disapproved. The commenter generally supported EPA's proposed disapproval of the Qualified Facilities Program; Flexible Permits Program; and Texas Major and Minor NSR SIP for 1997 8-hour and 1-hour ozone NAAQS, Prevention of Significant Deterioration (PSD) SIP, and Standard Permit for Pollution Control Projects. The commenter provided additional comments on our proposed disapproval of the Flexible Permits Program, which EPA will address in its separate action on the Flexible Permits Program.

Response:
Generally, these comments support EPA's analysis of Texas's Qualified Facilities Program as discussed in detail at 74 FR 48450, at 48455-48463, and further support EPA's action to disapprove the Qualified Facilities submission.

Comment:
The Sierra Club Membership Services (SCMS) sent numerous similar letters via e-mail that relate to this action. These comments include 1,789 identical letters (sent via e-mail), which included the following comments:

• The TCEQ is broken and the commenters applaud EPA's proposed ruling that major portions of the TCEQ air permitting program does not adhere to the CAA and should be thrown out;

• While agreeing that the proposed disapprovals are a good first step, the commenters state that EPA should take bold actions as follows:

—Halting any new air pollution permits being issued by TCEQ utilizing TCEQ's current illegal policy;

—Creating a moratorium on the operations of any new coal fired power plants in Texas until TCEQ cleans up its act by operating under the Federal CAA;

—Requiring coal companies clean up their old, dirty plants—no exceptions, no bailouts, and no special treatment—by reviewing all permits issued since TCEQ adopted its illegal policies and requiring that these entities resubmit their applications in accordance with the Federal CAA; and

—Put stronger rules in place in order to reduce global-warming emissions and to make sure new laws and rules do not allow existing coal plants to continue polluting with global warming emissions.

• The commenters further state that Texas: (1) Has more proposed coal and pet coke fired power plants than any other state in the nation; (2) Is number 1 in carbon emissions; and (3) Is on the list for the largest increase in emissions over the past five years.

• The commenters do not want coal to stand in the way of a clean energy future in Texas. Strong rules are needed to make sure the coal industry is held responsible for their mess and that no permits are issued under TCEQ's illegal permitting process. Strong regulations are vital to cleaning up the energy industry and putting Texas on a path to clean energy technology that boosts economic growth, creates jobs in Texas, and protects the air quality, health, and communities.

In addition, SCMS sent 273 similar letters (sent via e-mail) that contained additional comments. These additional comments include the following:

• Commenters suggest that Texas rely on wind power, solar energy, and natural gas as clean alternatives to coal.

• Other comments expressed general concerns related to: Impacts on global warming, lack of commitment by TCEQ to protect air quality, the need for clean energy efficient growth, impacts of upon human health, endangerment of wildlife, impacts on creation of future jobs in Texas, plus numerous other similar concerns.

Response:
To the extent the SCMS letters comment on the proposed disapproval of the Qualified Facility program, they support EPA's action to disapprove the Qualified Facilities submission. The remaining comments are outside the scope of our proposed action relating to the Qualified Facilities Program.

Comment:
The Environmental Clinic, the University of Texas at Austin School of Law (UT Environmental Clinic) commented that EPA should disapprove several other sections of 30 TAC Chapter 116.

Response:
This final rulemaking only addresses the Qualified Facilities Program. Therefore, issues related to other portions of Texas's regulations are outside the scope of this rulemaking.

2. Comments Generally Opposing Proposal

Comment:
TCEQ provided several general comments on the proposal. The TCEQ commented that the Qualified Facilities Program was developed by the 74th Texas Legislature through Senate Bill (SB) 1126, which became effective May 19, 1995. SB 1126 amended the Texas Clean Air Act by revising the definition of “modification of existing facility,” which changed the factors used to determine whether a modification for State permitting (
i.e.
Minor NSR) has occurred. In 1996, 30 TAC Chapter 116 was revised to incorporate this legislative directive. These changes provide that modifications may be made to existing facilities without triggering the State's Minor NSR requirements whenever: (1) The facility to be modified has received a permit, permit amendment, or has been exempted from permitting requirements no earlier than 120 months from when the change will occur; or (2) uses air pollution control methods that are at least as effective as the Minor NSR SIP best available control technology (BACT) that the Commission required 120 months before the change will occur. Such facilities are designated as “qualified facilities.”

TCEQ has always considered the Qualified Facilities Program to be applicable only to Minor NSR and not applicable to Major NSR, although this is not specifically stated in the rule. In summary, under the Qualified Facilities Program, TCEQ: (1) Determines Federal applicability as a first step in processing a Qualified Facilities request; and uses actual emissions, not allowable emission rates; (2) applies Federal NSR requirements when triggered; (3) does not circumvent Federal requirements applicable to major stationary sources or major modifications; (4) considers the use of “modification” to be separate and severable from the Federal definition of “modification” as reflected in the SIP-approved Major NSR Program; and (5) does not violate the approved SIP with regard to Major NSR or Minor NSR Program requirements.

Comment:
The Texas Chemical Council (TCC) comments that it would be short-cited to analyze the three programs (Qualified Facilities, Flexible Permits, and NSR Reform) apart from the dramatic improvements in the air quality in Texas in the past 15 years. TCC goes on to describe these improvements. TCC supports full approval of Qualified Facilities. The Qualified Facilities Program is not intended to shield a source from major NSR. The Program is a robust, Federally enforceable program. The Qualified

Facilities Program is authorized by the TCAA, promotes flexibility, and allows sources to make certain changes without triggering NSR. If Major NSR is triggered, a facility cannot be a Qualified Facility. The definition of a Qualified Facility makes it clear that a Qualified Facility is an existing facility. A Qualified Facility may make a physical change in or change the operation of that facility as long as the change does not result in a net increase in allowable emissions of any air contaminant and does not result in the emission of any air contaminant not previously emitted. Additionally, the facility must be using equipment at least as effective as the BACT required by TCEQ. TCC supports full approval of the three Texas air permitting program submittals. The SIP revisions submitted to EPA by TCEQ over the last 15 years are critical components to Texas air permitting program. Texas should not be punished for EPA's failure to act within the statutory timeframe in the CAA. EPA offers little or no legal justification for proposing disapproval of these programs. EPA's proposed action will have an enormous impact on the country's largest industrial state. The SIP revision submittals for these programs are at least as stringent as the applicable Federal requirements and should be fully approved.

Comment:
Bracewell & Giuliani LLP, counsel to the Electric Reliability Coordinating Council (ERCC), commented that Qualified Facilities provides incentives to implement pollution reduction measures at existing facilities. EPA's proposed disapproval does not provide any evidence that this authorization is actually used for major modifications or in fact interferes with air quality improvements. Discontinuance of this program could deter or delay many pollution reduction measures because the cost and resources associated with a full notice and comment case-by-case permit would outweigh the economic benefits of the additional controls. EPA should determine that the Qualified Facilities Program satisfies the CAA requirements for a state minor source program and retract the SIP disapproval and approve this SIP revision. EPA should recognize the validity of permits issued under the Texas permitting program and refrain from taking enforcement actions to address EPA concerns.

Comment:
Jackson Walker, LLP, counsel to Gulf Coast Lignite Coalition GCLC, provided the following general comments on all three proposed disapprovals (Qualified Facilities, Flexible Permits, and NSR Reform): (1) Commenters disagree with all the proposed disapprovals because the SIP as implemented by TCEQ meets or exceeds CAA requirements and has met the goals of the CAA; (2) EPA has a history of focusing on results; so, EPA should look beyond immaterial differences in the rule provisions and focus on the positive results that Texas has achieved under the TCAA and the State's submittals; (3) Texas sources have relied on the submitted rules for as long as 15 years in some cases. To disapprove the submittals after so long puts too much burden on the regulated community, creates regulatory uncertainty, hurts the vulnerable economy by potentially increasing compliance costs, and may discourage future business expansion; and (4) GCLC requests that EPA work collaboratively, not combatively, with TCEQ to resolve any issues under the CAA.

Comment:
Baker Botts, LLP, counsel for Texas Industry Project (TIP) and Business Coalition for Clean Air (BCCA) provided the following comments. TIP and BCCA support full approval of Qualified Facilities because the submittal will strengthen Texas's permitting program. EPA should work expeditiously with TCEQ to approve the Qualified Facilities Program. Further, under Texas's integrated air permitting regime, air quality in the state is demonstrating strong, sustained improvement. Commenters describe the air quality improvements in Texas in the recent past. Finally, commenters describe their understanding of how the Qualified Facilities Program operates. Qualified Facilities is a Minor NSR applicability trigger that allows existing emissions facilities that employ BACT to make changes without Minor NSR review as long as the changes do not result in net emissions increases. The Qualified Facilities Program is authorized by the TCAA and applies only to existing facilities. The term “facility” is analogous to the Federal definition of “emissions unit,” under Texas's Title V program.
See
30 TAC 122.10(8). The Texas Legislature created the Qualified Facilities Program as an incentive for sites to implement BACT. To be “qualified,” the source must (1) have a permit or permit amendment or exempt from pre-construction permit requirements no earlier than 120 months before the change will occur, or (2) use air pollution control methods that are at least as effective as the BACT that was required or would have been required for the same class or type of facility by a permit issued 120 months before the change will occur.
See
30 TAC 116.116(e). A qualified facility may lose its status as “qualified” if its permit, exemption, or control method falls outside the 10-year window.
See
Texas Nat'l Res. Conservation Comm'n,
Modification of Existing Facilities under Senate Bill 1126: Guidance for Air Quality,
(April 1996), 5 [hereinafter
Modification of Existing Facilities Guidance
].

Comment:
Texas Oil & Gas Association (TxOGA) is encouraged that EPA is taking action to provide certainty in the regulatory process for businesses. TxOGA supports the ongoing goal of improved air quality; however, commenters do not believe that the proposed disapproval does anything to improve air quality in Texas. Further, the proposal may discourage future business expansion in Texas.

Response:
EPA understands TCEQ's explanation of the origination of the Program in SB 1126. Nonetheless, the Qualified Facilities Program must meet all Federal requirements under the CAA in order to be approvable. The fact that EPA failed to act on the Qualified Facilities Program SIP revision within the statutory timeframe does not dictate the action EPA must take on the Program at this time. We cannot approve a program that fails to meet the requirements of the CAA. As discussed throughout our proposal and this final notice, the current Qualified Facilities Program fails to meet all requirements. We disagree with commenters that the Qualified Facilities Program is exclusively a Minor NSR program, based upon the ambiguities in the Program's rules. Furthermore, EPA need not prove that the Program is actually used for major modifications. EPA is required to review a SIP revision submission for its compliance with the Act and EPA regulations. CAA 110(k)(3); Natural
Resources Defense Council, Inc.
v.
Browner,
57 F.3d 1122, 1123 (DC Cir. 1995);
American Cyanamid
v.
EPA,
810 F.2d 493, 495 (5th Cir. 1987). This includes an analysis of the submitted regulations for their legal interpretation. The Program's rules are ambiguous and therefore do not adequately prohibit use under Major NSR. We recognize that TCEQ considers the Program to be a Minor NSR Program; however, the State admits that its rules are insufficient to limit the Program to Minor NSR.
See
74 FR 48450, at 48456-48457; Section V.F. below for further information.

EPA enforcement of Federal requirements in Texas is outside the scope of this rulemaking. Additionally, comments on the Flexible Permits Program and the NSR Reform submittal are outside the scope of this notice. EPA will address the comments on its

proposed disapprovals of Flexible Permits and NSR Reform in separate actions on these programs.

B. Comments That This Action Is Inconsistent With the CAA

Comment:
ERCC commented that EPA's proposed disapprovals are not rationally supported by case law and are inconsistent with the CAA. Congress placed primary responsibility for developing SIPs on the states, so permitting programs among states can vary greatly. EPA determines whether the state SIP satisfies the minimum requirements of the CAA.
Union Electric Co.
v.
EPA,
427 U.S. 246 (1976),
rehearing denied
429 U.S. 873 (1976);
Train
v.
NRDC,
421 U.S. 60 (1975);
Florida Power and Light Co.
v.
Costle,
650 F.2d 586 (5th Cir. 1979); 71 FR 48696, 486700 (August 21, 2006) (Proposed rule to promulgate a FIP under the CAA for tribes in Indian country). The Fifth Circuit Court of Appeals recently stated that “EPA has no authority to question the wisdom of a State's choice of emission limitations if they are part of a SIP that otherwise satisfies the standards set for in 42 U.S.C. 7410(a)(2).”
Clean Coalition
v.
TXU Power,
536 F.3d 469 Fn.3 (5th Cir. Tex. 2008). Texas's permitting programs are based on the recognized Minor NSR flexibility and consistent with prior EPA approvals of other state SIPs. EPA must review other approved state programs to ensure that Texas's sources are not put at a competitive disadvantage.
See
Memorandum from John Seitz, Director, OAQPS,
SIP Consistency Process
(April 4, 10, 1996). EPA's proposed disapprovals could have dramatic impact on industries in Texas. EPA should solicit comments from all EPA regions on whether the proposed actions are inconsistent with other state SIPs and compare the stringency of the Texas programs to those of other states. ERCC is confident that EPA will realize that the Texas programs are consistent and possibly more stringent than other permitting programs throughout the country.

Response:
EPA continues to recognize that permitting programs among states can vary greatly and provide some flexibility for Minor NSR SIP programs. However, in order to be approved as part of the SIP, the Qualified Facilities Program must meet all applicable Federal requirements. Here, the commenter's reliance on the Fifth Circuit's dicta in
Clean Coalition
is misplaced because the Qualified Facilities Program does not meet the standard set in 42 U.S.C. 7410(a)(2)(C). Section 42 U.S.C. 7410(a)(2)(C) requires the State to have a permitting program that complies with PSD and Nonattainment New Source Review (NNSR) permit requirements (at 42 U.S.C. 7475 and 7503, respectively), as well as Minor NSR permit requirements. As part of the State's permitting program, the Qualified Facilities Program fails to meet these requirements of the Act. As discussed throughout our proposal and this final action, the submitted Program fails to meet all requirements for an approvable permitting program, including submitting information sufficient to demonstrate that the Program is restricted only to Minor NSR. Commenters argue that the Qualified Facilities Program is consistent with other SIP approved programs; however, they fail to cite any specific examples.

C. Comments Addressing Whether the Qualified Facilities Rules Allow Sources to “Net Out” of Major and Minor NSR Through Rules That Are Not Adequate To Protect the NAAQS and State Control Strategies

1. Comments Generally Supporting Proposal

Comment:
UT Environmental Clinic commented that the Qualified Facilities Program fails to meet the netting requirements for several reasons. The commenter notes that the Qualified Facilities Program netting calculations can be based on allowable emissions. Allowables netting violates Major NSR because it is inconsistent with
State of New York
v.
EPA,
413 F.3d 3, 40 (DC Cir. 2005) and violates the CAA; it violates Minor NSR because it fails to require an evaluation of the actual emissions impacts on maintenance of the NAAQS.

Response:
Generally, these comments support EPA's analysis of Texas's Qualified Facilities Program as a substitute for a Major NSR SIP program as discussed in detail at 74 FR 48450, at 48459, and further support EPA's action to disapprove the Qualified Facilities submission.

We find that the Program authorizes existing allowable, rather than actual emissions, to be used as a baseline to determine applicability. This use of allowables violates the Act for Major NSR SIP requirements and is contrary to
New York
v.
EPA,
413 F.3d 3, 38-40 (DC Cir. 2005) (“New York I”). 74 FR 48450, at 48459. Under the submitted Program, the project's increases in emissions are calculated based upon its projected allowable emissions. The baseline uses the permitted allowable emission rate (lowered by any applicable state or Federal requirement) if the facility “qualified” under 30 TAC 116.10(11)(E)(i). If the facility “qualified” under 30 TAC 116.10(11)(E)(ii), the baseline uses the actual emission rate (minus any applicable state or Federal requirement). In the applicability netting analysis, the baseline for all the other participating minor and major existing Qualified Facilities is calculated in the same way. The emission reductions are calculated similarly,
i.e.,
reductions beyond the permitted allowable or actual emission rates (minus the applicable state and Federal requirements). Thus, this submitted Program allows an evaluation using allowable, not actual emissions, as the baseline to calculate the project's proposed emission increase and for many of the netting emission reductions, thereby in many cases possibly circumventing the major modification applicability requirements under the Major NSR rules. Therefore, the Program fails to meet the CAA and Major NSR requirements to use baseline actual emissions for major source netting as the starting point from which the amount of creditable emission increases or decreases is determined. 74 FR 48450, at 48459.

EPA agrees that the reductions in the Program's netting are not based on actual emissions. Such netting may be permissible for a Minor NSR Program;
provided
that the netting provisions assure protection of the NAAQS and the SIP control strategies as required by section 110(a)(2)(C) of the CAA. Allowables netting is acceptable because CAA section 110(a)(2)(c) does not explicitly prohibit the use of allowables netting for Minor NSR programs. However, Texas failed to submit sufficient information to demonstrate that the use of allowable emissions in a Minor NSR netting program continues to protect the NAAQS and control strategies; therefore, EPA cannot determine if this requirement is met. Today's rulemaking disapproves netting under the Qualified Facilities Program as a Minor NSR program, in part because the Program fails to ensure that ambient air is protected in consideration of all changes in the netting.

Comment:
UT Environmental Clinic commented that the definitions in section 116.10 do not adequately specify how to calculate emissions reductions for purposes of the netting analysis. For example, the Texas definition of actual emissions is the “highest rate” actually achieved within the past 10 years. It is unclear whether this is the highest emission rate achieved at a single point in time or averaged over some period.

Response:
We disagree that the reductions are not quantifiable. The

netting is based on the most stringent of the permitted emissions rate (which includes the highest achievable actual emission rate) or any applicable state or Federal rule. Nothing in the State's definition of “actual emissions” implies at all that there is any averaging involved in the calculations. The reduction is based upon the highest rate the facility achieved at a single point in time, looking back the past 10 years.

While we proposed to find that the reductions were quantifiable, we requested comments on two aspects of the Program as it relates to this principle. 74 FR 48450, at 48461-48462. First, we requested comment on whether the regulatory provisions at 30 TAC 116.10(1) and (2) provide clear direction on the appropriate calculation procedures sufficient to ensure the reductions are quantifiable. As stated above, we disagree with the commenter's argument that the definitions in section 116.10 do not adequately specify how to calculate emissions reductions for purposes of the netting analysis.

Second, the submitted rules provide that a Qualified Facility nets its emissions increase on the same basis as its allowable emissions limitation. 30 TAC 116.116(e)(3)(A). We requested comment on whether netting on such a basis is sufficiently quantifiable, and whether any additional provisions are necessary to ensure that the entire emissions increase is properly netted against reductions from the other Qualified Facility. We did not receive any comments on this second aspect of quantifiability under the Program. Because no comments were submitted showing the basis was not sufficiently quantifiable, we continue to believe that netting for a Minor NSR SIP program on the adequacy of the Program's netting of emissions increases on the same basis as its allowable emissions limitation, is sufficiently quantifiable.

Comment:
UT Environmental Clinic commented that the Qualified Facilities rules allow all emission reductions at the same account number to be considered in the net emission calculation. In fact, the rules could be read to allow the “offsetting” of emissions above allowables by decreases in emissions at any “different facility.” 30 TAC 116.110(3). Because an account number can include multiple sources, the Texas rules allow consideration of emission decreases from outside the major stationary source in violation of 42 U.S.C. 7411(a).

Response:
Generally, these comments support EPA's analysis of Texas's Qualified Facilities Program as a substitute for a Major NSR SIP program as discussed in detail at 74 FR 48450, at 48458-48459, and further support EPA's action to disapprove the Qualified Facilities submission.

We find the Program is deficient for Major NSR netting because it may allow an emission increase to net out by taking into account emission decreases outside of the major stationary source
6

and, in other circumstances, allow an evaluation of emissions of a subset of units at a major stationary source.
7

The State failed to submit information sufficient to demonstrate that the Program includes the necessary replicability and accountability to prevent such circumvention. Therefore, the Program does not meet the CAA's definition of “modification” and the Major NSR SIP requirements and is inconsistent with
Alabama Power
v.
Costle,
636 F.2d 323, 401-403 (DC Cir. 1980) and
Asarco
v.
EPA,
578 F.2d 320 (DC Cir. 1978). 74 FR 48450, at 48458-48459.

6
The Texas SIP defines an “account” to include an entire company site, which could include more than one plant and certainly more than one major stationary source. SIP rule 30 TAC 101.1(1), second sentence.

7
Under the submitted Program, not all emission points, units, facilities, major stationary sources, or minor modifications at the site or their increases in emissions are required to be evaluated in the applicability netting analysis. So the Program fails to require the evaluation of emissions changes at the entire major stationary source correctly as required by the Major NSR SIP regulations. 74 FR 48459.

Comment:
UT Environmental Clinic commented that the Qualified Facilities netting rules only allow consideration of the increase in allowable emissions from the Qualified Facility undergoing a change, but consider the decreases from any other Qualified Facilities at the same account number. There is no consideration of all the emission increases so there is no adequate impacts analysis from the source.

Response:
Generally, these comments support EPA's analysis of Texas's Qualified Facilities Program as a substitute for a Major NSR SIP program as discussed in detail at 74 FR 48450, at 48458-48459, and further support EPA's action to disapprove the Qualified Facilities submission.

Major NSR netting is based upon all contemporaneous increases and decreases at the same major stationary source that occur within a reasonable period that the states must define in their approved SIPs. The submitted Program's netting is not based upon all contemporaneous increases at the same major stationary source and not all decreases at the same major stationary source. However, the State contends that the Program is not intended to apply for Major NSR netting but only for Minor NSR netting. Moreover, the Program is not intended to allow contemporaneous netting. Instead, one looks to the increases from the proposed change and to decreases made at the same time as the proposed change. Such an approach, if fully delineated in the State's Program rules, would satisfy the minimum requirements for an approvable Minor NSR netting program
provided
that the ambient air is protected in consideration of all changes in the netting. Today's rulemaking disapproves netting under the Qualified Facilities Program as a Minor NSR program, in part because the Program fails to ensure that ambient air is protected.

Comment:
UT Environmental Clinic commented that the Qualified Facilities rules do not define a contemporaneous period nor require that emission reductions occur within a specified period. EPA notes in the
Federal Register
that Texas intended that any relied-upon reductions occur simultaneously with the increase. However, the commenter argues that nothing in the rule requires this.

Response:
We agree with the comment insofar as it asserts that the Program fails to define a contemporaneous period or require that emission reductions occur within a specified period. EPA finds that, while Texas intended that any relied-upon reductions occur simultaneously at the time of the increase,
8

the Program is deficient because it does not expressly define the applicable period in which the reductions must occur. See our response to the previous comment. 74 FR 48450, at 48461.

8
See 21 Tex. Reg. 1573 (February 27, 1996).

Comment:
UT Environmental Clinic commented that because the Qualified Facilities rules allow reductions to be based upon allowable emissions, they do not ensure that reductions are real.

Response:
We disagree that just because the reductions are based upon allowable emissions, these reductions are not real. For example, reviewing authority may presume that source-specific allowable emissions may be equivalent to the actual emissions.
See
40 CFR 51.165(a)(1)(xii)(C) and 51.166(b)(21)(iii). The commenter fails to discuss why the use of allowable emissions makes the reductions not real.

Comment:
The UT Environmental Clinic commented that the rules fail to ensure that netted reductions are permanent.

Response:
We agree with the commenter that the Program lacks any provisions that require that the

reductions are permanent. For reductions to meet the netting requirement to be permanent, the rules must include a prohibition against future increases at the Qualified Facility, or include regulatory language that assures that any future increase at a Qualified Facility at which a previous netting reduction occurred is analyzed in totality to assure that the NAAQS remains protected from the original increase. However, the submitted Program does not include such provisions. Consequently, the Qualified Facilities rules are inadequate because they fail to ensure that the reductions are permanent.

Comment:
UT Environmental Clinic commented that the rules do not prevent double counting of emission reductions.

Response:
For an additional
separate
project, it appears that the state intended that the reductions must occur at the time of that
additional
project that will need to obtain additional reductions to net out. If the regulatory text was consistent with this approach, this limitation would prevent double counting of the netting reductions. The State's intent is that the holder of the permit is required to perform a new, separate netting analysis and rely upon reductions not relied upon in the first netting analysis.
See
74 FR 48450, at 48461 (
citing
21 Tex. Reg. 1573 (February 27, 1996); page 154 of the 1996 SIP revision submittal). We agree that the rules are not clear that a subsequent change at a Qualified Facility that previously relied upon netting must conduct a separate netting analysis that relies upon reductions that were not relied upon in the first netting analysis. EPA cannot find any provisions in the Program to ensure a separate netting analysis performed for each proposed change. Therefore, the Program fails to prevent double counting; and consequently these types of netting reductions are not enforceable as a practical matter at and after the time of the actual change begins; and therefore, not sufficiently creditable. 74 FR 48450, at 48461.

Comment:
UT Environmental Clinic commented that the Qualified Facilities rules fail to ensure that the emission reductions are enforceable. Facilities provide notice of changes to Qualified Facilities on Form PI-E, which is not enforceable, and Qualified Facility changes that affect permitted facilities are not required to be incorporated into a permit until renewal or amendment. TCEQ noted in its Qualified Facility guidance that the form is not Federally enforceable “but is simply a form to provide information to demonstrate that the change meets qualified facility flexibility.” Consequently, Qualified Facility reductions are allowed to remain unenforceable for years. Further, Texas rules make it unclear whether emission reductions are ever made enforceable because a portion of the definition of “allowable emissions” states that “[t]he allowable emissions for a qualified facility shall not be adjusted by the voluntary installation of controls.” 30 TAC 116.10(2)(F). This portion of the definition of “allowable emissions” states that “[t]he allowable emissions for a qualified facility shall not be adjusted by the voluntary installation of controls.” Additionally, there are no monitoring requirements in the Qualified Facilities rules to track compliance with commitments to reduce emissions of limitations on emissions increases.

Response:
We agree that the Qualified Facilities rules fail to ensure that the emission reductions relied upon in a netting analysis are enforceable. We noted at 74 FR 48450, at 48462 that the rules do not require permits for these relied-upon reductions. We also agree that the Program does not require monitoring because no permit is required for each change.
See
Section V.D.1 below.

We disagree that 30 TAC 116.10(2)(F) makes the rules vague as to enforceability. This provision of the rule is defining how to calculate the baseline from which reductions occur. When calculating the allowable emissions for a Qualified Facility participating in the Program, one cannot count any reductions occurring as a result of the voluntary installation of controls. However, a facility can become “qualified” to use the Program by voluntarily installing controls. The reductions achieved by this voluntary installation of controls are not counted in the Qualified Facility's allowable emissions.

Comment:
UT Environmental Clinic states that the Qualified Facilities rules do not ensure that emission reductions have the same health and welfare effects as the emission increase. Because the program allows the emission increase to be offset inside and outside the facility, it allows for emission increases close to the fence line, potentially affecting health and welfare of the surrounding community.

Moreover, the Qualified Facilities Program allows Qualified Facilities to offset emissions increases of one pollutant with emission decreases of another pollutant, as long as the pollutants are in the same “air contaminant category.” The interchange methodology established by TCEQ
9

to ensure that compounds within the VOCs air contaminant category, as interchanged, will have an equivalent impact on air quality, is not included in the Texas rules or statute. The rule merely defines an “air contaminant category” as a group of related compounds, such as volatile organic compounds, particulate matter, nitrogen oxides, and sulfur compounds. 30 TAC 116.116(e)(3)(F). Clearly emissions of all sulfur compounds, say sulfur dioxide and hydrogen sulfide, are not equal in terms of health impacts. Likewise, the health impacts of fine PM emissions are of significantly greater concern than the impacts of larger particles.

9
See 74 FR 48455, n.3.

Response:
With regard to VOCs and nitrogen oxides, EPA disagrees with the comment above that the Program is deficient because the State's rules allow an offset of an emission increase pollutant with emission decrease of another pollutant, as long as the pollutants are in the same “air contaminant category.” The State's interchange methodology goes beyond the fundamental principle to determine whether the interchange of different compounds within the same air contaminant category will result in an equivalent decrease in emissions;
e.g.,
one VOC for another VOC; for VOCs and nitrogen oxides.
See
74 FR 48450, at 48461.

On the other hand, the term “sulfur compounds” in 30 TAC 116.116(e)(3)(F), is broad enough to include hydrogen sulfide. The State failed to demonstrate that use of hydrogen sulfide would protect the sulfur dioxides NAAQS. Therefore, we agree with the commenter that the interchange methodology does not ensure the health impacts of all sulfur compounds will be equal. With regard to the comment concerning particulate matter, the definition of “air contaminant category” allows PM-2.5 to be interchanged with PM-10. However, because PM-10 and PM-2.5 are two separate pollutants and the State failed to demonstrate that such use of PM-10 would protect the PM-2.5 NAAQS, this interchange is inappropriate. Therefore, we agree that the interchange methodology does not ensure the health impacts of all particulate matter will be equal.

We, however, disagree with the comment above that the Program fails to ensure that emission reductions have the same health and welfare effects as the emission increases. The State has established a methodology to use whenever there is a different location of emissions because of the intraplant

trading. For example, where the netting has the effect of moving emissions closer to the plant property line than the Qualified Facility to be changed, the State uses this methodology to analyze whether there could be an increase in off-site impacts.
See
30 TAC 116.117(b)(5). We continue to believe that this will ensure the reductions have approximately the same qualitative significance for public health and welfare, which is required to ensure the reductions are creditable. Nevertheless, as stated above, we are disapproving the Qualified Facilities netting program as a substitute for a Major NSR SIP program and as a Minor NSR SIP program because the Program is inadequate to protect ambient air quality.

Comment:
The UT Environmental Clinic commented that the Qualified Facilities netting Program does not adequately protect air quality under Minor NSR. Specifically, the Qualified Facilities netting provisions do not meet Federal netting standards, which are in place precisely to ensure that air quality is protected. The Program's failure to meet almost all of those basic netting requirements renders the rules inadequate.

Response:
Generally, these comments support EPA's analysis of Texas's Qualified Facilities Program as a Minor NSR SIP program as discussed in detail at 74 FR 48450, at 48460-48462, and further support EPA's action to disapprove the Qualified Facilities submission.

Comment:
The UT Environmental Clinic commented that the Program is clearly inadequate to ensure protection of the NAAQS and to prevent violations of control strategies. The rules cannot be approved as an exemption from Minor NSR permitting because they in no way ensure that the emission increases authorized pursuant to the rules will have a
de minimis
impact on air quality.

Response:
We agree with the commenter that the Program is inadequate to ensure protection of the NAAQS for several reasons. As discussed below in Section V.G.1, we find that the Qualified Facilities rules are not clear that all Qualified Facilities must have obtained a Texas NSR SIP permit. Without the assurance that all Qualified Facilities have obtained a Texas NSR SIP permit, EPA cannot make the finding that each permit for a Qualified Facility includes an emission limitation based on the chosen control technology, with a determination that the Qualified Facility will not interfere with attainment and maintenance of the NAAQS or violate any control strategy. Therefore, the Program fails to ensure that all Qualified Facilities can operate up to a permitted allowable limit such that they do not interfere with attainment and maintenance of the NAAQS and do not violate any State control strategy, as required by the Texas NSR SIP.

Additionally, the Program fails to ensure that the NAAQS are protected because 30 TAC 116.117 lacks language requiring the owner or operator to maintain the information and analysis showing how it concluded that there will be no adverse impact on ambient air quality before undertaking the change.

We agree with the commenter that the Program does not qualify as a
de minimis
exemption from Minor NSR. The State has not provided sufficient information to demonstrate that the exempted changes from the Minor NSR requirements will have only a
de minimis
effect. See Section V.D.1 below for more information.

2. Comments Generally Opposing Proposal

Comment:
TCEQ commented that the Qualified Facilities Program can only be used if a physical or operational change complies with Federal NSR requirements. In order to make a physical or operational change to a Qualified Facility, an owner or operator must demonstrate that the change does not result in a net increase in allowable emissions of any air contaminant previously authorized under state minor source review. 30 TAC 116.116(e)(1). Keeping in mind the State definition of “facility,” 30 TAC 116.116(e)(2) and (3) allow a Qualified Facility to demonstrate that a state modification has not occurred by comparing allowable emissions to allowable emissions before and after a proposed change. Allowable emissions (both hourly and annual rates) are one of the criteria to provide “state qualified” flexibility because the facilities must exist and be authorized, and thereby have undergone appropriate permit review. In addition, no existing level of control can be reduced. 30 TAC 116.116(e)(8). The commenter states that for
major sources,
in addition to State requirements, the evaluation of emissions related to physical and/or operational changes is conducted on a baseline actual to either a projected actual or potential to emit base if applicable. 30 TAC 116.116(e)(4). This comparison is used to determine if an emission increase above the appropriate significance threshold for a particular Federal permitting program has occurred. From the Federal NSR standpoint, if a proposed physical or operational change would result in an emissions increase that exceeds a significance threshold, the appropriate analysis (netting) is triggered. If the results of the netting analysis indicate that a major modification has occurred, the appropriate Federal program(s) is triggered and Federal authorization must be obtained. In such a case, the Qualified Facilities Program would not be an applicable authorization pathway, and a State Minor NSR amendment must be obtained, along with the appropriate Federal NSR authorization. The exemption from the definition of “modification of an existing facility” under the Qualified Facilities Program does not relieve an owner or operator from conducting an evaluation to determine if a Federal major modification has occurred. TCEQ states that from the Federal standpoint, only the project's emission increases are evaluated (without consideration of emission decreases) to determine if a Federal applicability analysis (netting) has been triggered. If the project increases equal or exceed the netting threshold for the pollutant and this program, then a full contemporaneous netting exercise is conducted in an effort to determine if the modification is a major modification. If the project is a major modification, then the appropriate Federal NSR program, either PSD or nonattainment review, is triggered. A permit holder cannot use the “no net emissions increase” concept that is described in the Qualified Facilities Program rules as a mechanism to avoid a Federal NSR applicability analysis (netting).

Comment:
TxOGA commented that the Qualified Facilities Program establishes an allowables-based trigger and has no effect on a permit holder's compliance obligations under Federal requirements. Texas rules clearly require compliance with Federal requirements. 30 TAC 116.117(a)(4) and (d). This interpretation is also supported by TCEQ guidance.

Comment:
The TCC commented in response to EPA's assertion that a Major NSR applicability determination must be based on actual emissions, not allowables. TCC argues that the Qualified Facilities rules do not circumvent any Federal requirements for major stationary sources. TCC reiterates that a qualified facility must demonstrate that the change does not result in a net increase in allowables, the source must follow notification requirements, and the source cannot relax controls at the qualified facility.

Response:
We acknowledge TCEQ's description of how the State intends to implement the Qualified Facilities Program; however, we have determined

that TCEQ's current rules are insufficient to prevent circumvention of Major NSR. EPA disagrees with the comments from TxOGA and TCC. The submitted Program lacks specific requirements that would require an owner or operator who proposes a change under the Qualified Facilities program to first conduct a Major NSR applicability analysis (netting) prior to receiving (or asserting) authorization under the Qualified Facilities Program.

Comment:
TCEQ commented that for facilities undergoing an intraplant trade, where the allowable emissions at one facility are increased while allowable emissions at another facility are reduced an allowable-to-allowable comparison is used only to determine if a new emissions increase has occurred for State purposes. The emissions are reviewed simultaneously, which is more stringent than the Federal requirement that only requires contemporaneous emissions. If a net emissions increase has occurred, an owner or operator cannot use the Qualified Facilities Program to authorize the proposed project, and must find another State mechanism to obtain proper authorization. In addition, the commenter states that the owner or operator must submit pre-change notification if the intraplant trade moves emissions from the interior of a plant site closer to a property line. This gives TCEQ staff the ability to evaluate public protectiveness and evaluate any potential changes in off property impacts as they relate to all contaminants and pollutants with national standards,
i.e.
the NAAQS. This intraplant trade capability only exists to the extent that the project is a Minor NSR action, and does not apply if a major modification has been triggered under Federal NSR requirements.

Response:
EPA disagrees with the commenter that under the Texas rules the Program's intraplant trading does not apply if a major modification has been triggered. As stated above, the program fails to require a Major NSR applicability analysis and is insufficient to prevent circumvention of Major NSR. Intraplant trading based on allowables to allowables netting is prohibited under Major NSR.
See State of New York et al.,
v.
EPA,
413 F.3d 3, 40 (DC Cir. 2005). However, such netting may be permissible for a Minor NSR program, provided that the netting provisions assure protection of the NAAQS.
See
74 FR 48450, at 48462. As discussed above, Texas's Qualified Facilities Program does not meet this requirement. EPA also finds that the Program does not adequately define a contemporaneous (or simultaneous) period or require that emission reductions occur within a specified period. As discussed above, we find that the Program fails to meet the Minor NSR netting requirement for a defined period in which the reductions must occur.

Comment:
TIP and BCCA commented that the Qualified Facilities program exceeds Federal benchmarks for allowable-based Minor NSR triggers. This program is one of the mechanisms that EPA encouraged in its Flexible Air Permitting Rule (FAP) (74 FR 51418, 15423). Further, the program is more stringent than the Federal FAP Program because it requires up-to-date BACT. The Qualified Facilities Program is also comparable to the proposed allowables-based minor NSR trigger in EPA's proposed Indian Country rule, in which EPA allows the use of allowables to allowables netting. To justify the use of an allowables test, EPA distinguished the definition of “modification” under Minor NSR from that used for Major NSR. 71 FR 48696, 48701 (
citing State of New York, et al.,
v.
EPA
(DC Cir. Jun. 24, 2005)). The Qualified Facilities rules meet these criteria and are more stringent than the Federal model because it only extends this flexibility to well-controlled facilities.

The commenter reiterates that the Qualified Facilities Program does not effect a permit holder's obligation to comply with Federal requirements. An allowables-based trigger is permissible because the CAA and Federal regulations do not mandate a method for determining minor NSR. The Environmental Appeals Board confirmed that there is no mandated methodology for the emissions test used for minor NSR.
In re Tennessee Valley Authority,
9 EAD 357, 461 (EAB September 15, 2000). Again, EPA employed an allowables-to-allowables test in its proposed Indian Country rule. States have great flexibility to determine applicability for Minor NSR and that includes the authority to use an allowables-based trigger. TCEQ rules articulate an overriding obligation to comply with Federal requirements. 30 TAC 116.117(a)(4) and (d). Therefore, the current Qualified Facilities rules prevent circumvention of Major NSR.

Response:
EPA disagrees with the commenter. This rulemaking disapproves netting under the Qualified Facilities Program for Major NSR, in part because the Program fails to first require a Major NSR applicability demonstration to show that a proposed change does not trigger Major NSR before the source can take advantage of the Program. In contrast to the Qualified Facilities Program, under the proposed Indian Country rule, 40 CFR 49.153 would explicitly require the proposed new source or modification to determine applicability to Major NSR before taking advantage of the program. The source could only use allowables netting under the proposed Indian County rule after a Major NSR applicability determination.
See
71 FR 48696, at 48705, 48728-48729. The Qualified Facilities rules are deficient because they lack such a requirement. Further, as described above, the Program fails to meet several other netting requirements for an approvable Minor NSR netting program.

EPA's FAP rule is an Operating permit under Title V, not Title I. 74 FR 51418, 51419. While the FAP rule recognizes the use of advance approval programs under Minor NSR, the use of such programs must ensure environmental protection and compliance with applicable laws. “[FAPs] cannot circumvent, modify, or contravene any applicable requirement and, instead, by their design must assure compliance with each one as it would become applicable to any authorized changes.”
See
74 FR 51418, 51422. Further, advance approval under the FAP must be made at the time of permit issuance, and consider the alternate operating scenarios for air quality impacts, control technology, compliances with applicable requirements, etc. Under Major and Minor NSR, advance approval must ensure compliance with control strategy and non-interference with attainment and maintenance of NAAQS for each operating scenario as required by 40 CFR 51.160. We do not see how the Texas Qualified Facility Rule meets these requirements.

D. Comments Addressing Whether the Qualified Facilities Rules Are Practically Enforceable

1. Comments Generally Supporting Proposal

Comment:
The UT Environmental Clinic commented that the rules fail to ensure that netted reductions are enforceable.

Response:
We agree with the commenter that the Program is unenforceable because it fails to explicitly require that a permit application must be submitted for the change and for any relied-upon emissions reductions in the netting analysis. Because the Program is an exemption from a preconstruction permit, and does not require a permit, the Program must qualify as a
de minimis
exemption to be approvable. We find that the Program does not

qualify as a
de minimis
exemption from Minor NSR. The legal test for whether a
de minimis
threshold can be approved is whether it is consistent with the need for a plan to include legally enforceable procedures to ensure that the State will not permit a source that will violate the control strategy or interfere with NAAQS attainment, as required by 40 CFR 51.160(a)-b). 74 FR 48450, at 48460. The State failed to demonstrate that this exemption will not permit changes that will violate the Texas control strategies or interfere with NAAQS attainment. Therefore all of the requirements under 40 CFR 51.160(a)-(b) apply to the Program.

Additionally, the Program allows too long of a lag time before a revised permit is issued in certain circumstances that can lead to a violation of a NAAQS, RFP, or control strategy without the TCEQ becoming aware of it in a timely manner. We proposed that the lag time for reporting a change under the Program should be no longer than six months, rather than a year, but we requested comment on whether six months is an acceptable lapse of time to ensure noninterference with the NAAQS and control strategies. 74 FR 48450, at 48462. We received no comments on this issue except that TCEQ stated they will consider this change during rulemaking. Therefore, we find that the Program allows too long of a lag time before reporting “qualified” changes.

Comment:
The UT Environmental Clinic commented that the Program is clearly inadequate to ensure protection of the NAAQS and PSD increments and to prevent violations of control strategies.

Response:
EPA agrees a Minor NSR SIP must include legally enforceable procedures enabling the State to determine whether construction or modification would violate a control strategy or interfere with attainment or maintenance of the NAAQS. 40 CFR 51.160(a)-(b). Furthermore, any Minor NSR SIP revision submittal that is a SIP relaxation, such as this Qualified Facilities Program, must meet section 110(l). The Qualified Facilities SIP submittal is a relaxation under CAA section 110(l) because it provides an exemption from NSR permitting not previously available to sources. This SIP relaxation creates a risk of interference with NAAQS attainment, RFP, or any other requirement of the Act. EPA lacks sufficient available information to determine that this SIP relaxation would not interfere with any applicable requirement concerning attainment and RFP, or any other requirement of the Act.
See
74 FR 48450, at 48463.

2. Comments Generally Opposing Proposal

Comment:
ERCC commented that the Qualified Facilities Program is enforceable for several reasons. The program's regulations include enforceable registration and recordkeeping requirements. Documentation must be maintained for all Qualified Facility changes that describes the change and demonstrates compliance with the Qualified Facility Program as well as state and Federal law.
See
30 TAC 116.117(a). TCEQ regulations also require that, at a minimum, an annual submission is made to the agency documenting any qualified facility changes not incorporated into a facility permit.
See
30 TAC 116.117(b). Pre-change qualification and approval are required for certain changes including: changes that affect BACT or where MAERT is not available (30 TAC 116.118); certain intraplant trading (30 TAC 116.117(4)); or if the change will affect compliance with a permit condition (30 TAC 116.117(3)). EPA's general comments questioning the proper permit application or registration for qualified facility authorization are unclear given the minor source nature of the program and its function as an exemption from a preconstruction permit.
See
74 FR 48450, at 48462. The Program adequately imposes recordkeeping, reporting, notification and approval regulations to satisfy the minor NSR enforceability requirements.

Comment:
TIP and BCCA also commented in response to EPA's argument that the Qualified Facilities Program is not enforceable because changes are not reflected in a permit. The program is a minor NSR triggering program. Instead of permit revision, a facility qualified to invoke the program must notify TCEQ of changes under the Qualified Facilities rules. 30 TAC 116.118. The commenters explain the scenarios when notification is required and the requirements for effective notification under the rules. Commenters also state that if a change implicates a permit special condition, the permit holder must revise its permit special condition using the procedures specified in Chapter 116, New Source Review. 30 TAC 116.116(b)(3).

Comment:
The TxOGA commented that the Qualified Facilities Program is a minor NSR triggering provision that requires facilities to retain documentation and notify TCEQ of changes under the program. A facility must be qualified at the time the change is to occur. The program is enforceable because the rules contain notification and recordkeeping requirements.

Response:
EPA disagrees with the commenters. The Program does not meet the Federal requirements for practical enforceability. To be approvable, a Minor NSR program must include enforceable emissions limits.
See
74 FR 48450, at 48462. The Program is not clear that each Qualified Facility involved in the netting transaction must submit a permit application and obtain a permit revision reflecting all of the changes made to reduce emissions (relied upon in the netting analysis) as well as reflecting the change itself that increased emissions.
See
74 FR 48450, at 48462. Therefore, the Program is unenforceable. Additionally, the Program allows too long of a lag time before a revised permit is issued in certain circumstances that can lead to a violation of a NAAQS, RFP, or control strategy without the TCEQ becoming aware of it in a timely manner. Because the Program is an exemption from a preconstruction permit, and does not require a permit, the Program must qualify as a
de minimis
exemption to be approvable. We find that the Program does not qualify as an approvable
de minimis
exemption from Minor NSR.
See
74 FR 48450, at 48462; Section V.D.1. above. Therefore all of the requirements under 40 CFR 51.160(a)-(b) apply to the Program. As described throughout this notice, the Qualified Facilities Program fails to meet all of these requirements.
See
74 FR 48450, at 48460. As stated above, the Program fails to require a permit that reflects all of the changes that occurred in the netting process and provides enforceable emissions limits. The notification and recordkeeping requirements, while beneficial, are not sufficient under Federal requirements to ensure enforceability.

E. Comments Addressing Whether the Qualified Facilities Rules Meet Federal Requirements for Major New Source Review

1. Comments Generally Supporting Proposal

Comment:
The UT Environmental Clinic comments that nothing in the Qualified Facility statute or rules limits applicability to minor modifications. The rules require documentation at the plant site sufficient to comply with Nonattainment NSR and PSD, but do not clarify that changes that constitute a major modification cannot be made through a Qualified Facility change.

The commenter further stated that because the Qualified Facilities rules can be used to authorize major

modifications, the rules fail to meet the substantive requirements of Nonattainment NSR and PSD. For emission increases associated with PSD, the Qualified Facilities rules fail to require: (1) Best Available Control Technology; (2) an air quality analysis of impacts on the NAAQS and PSD increments; and (3) additional impact analysis associated with the implementation of the new source or modification. For emission increases associated with Nonattainment NSR, the Qualified Facilities rules fail to require: (1) Lowest Achievable Emission Rate; (2) emission offsets; and (3) demonstration of compliance by other facilities in the State.

Response:
These comments are consistent with EPA's analysis concluding that Texas's Qualified Facilities Program does not meet Major NSR Substantive requirements as discussed at 74 FR 48450, at 48458-48459.

EPA agrees that the Program is deficient because it lacks provisions that require a Major NSR applicability determination for a change at a Qualified Facility before it is exempted from the permitting requirements. The Program's regulations do not contain any emission limitations, applicability statement, or regulatory provision restricting the change to Minor NSR. This lack of such express provisions distinguishes the Qualified Facilities Program from the Texas Minor NSR SIP rules for Permits by Rule in Chapter 106 and Standard Permits in Chapter 116, Subchapter F. The Standard Permits rules require a Major NSR applicability determination at 30 TAC 116.610(b), and prohibit circumvention of Major NSR at 30 TAC 116.610(c). Likewise, the Permits by Rule provisions require a Major NSR applicability determination at 30 TAC 106.4(a)(3), and prohibit circumvention of Major NSR at 30 TAC 106.4(b). The absence of these provisions in the Qualified Facilities rules creates an unacceptable ambiguity in the SIP. Therefore, the Program could allow circumvention of Major NSR.
See
74 FR 48450, at 48456-48458.

EPA also agrees that the Program fails to address the required air quality impacts analysis. The comments concerning BACT, LAER, emissions offsets and a demonstration of compliance by other facilities in the State go beyond EPA's analysis in the proposal and are outside the scope of this rulemaking.

Additionally, section 110(l) of the Act prohibits EPA from approving any revision of a SIP if the revision would interfere with any requirement concerning attainment and RFP, or any other requirement of the Act. There is not sufficient available information to enable EPA to determine that the submitted Program would not interfere with any requirement concerning attainment and RFP, or any other requirement of the Act.
See
74 FR 48450, at 48459; and response above.

Comment:
The Office of the Mayor, City of Houston, Texas, recognizes that the Qualified Facilities Program has no regulatory provisions that clearly prevent the Program from circumventing Major NSR SIP requirements thereby allowing changes at existing facilities to avoid the requirement to obtain preconstruction authorizations. Therefore, major sources of emissions are making major modifications to their facilities without going through the permitting process. The commenter states that this is a fatal flaw in the program, it is inconsistent with the CAA and should not be included in the SIP.

Response:
The comments by the Office of the Mayor, City of Houston, Texas, are consistent with EPA's conclusions as discussed at 74 FR 48450, at 48456-48457 and response above.

2. Comments Generally Opposing Proposal

Comment:
The TCC comments that Qualified Facilities is a Minor NSR Program because TCEQ's rules clearly require sources making changes under the Program to submit specific documentation, including “sufficient information as necessary to show that the project will comply with 40 CFR 116.150 and 116.151 of this title (relating to Nonattainment Review) and 40 CFR 116.160-116.163 of this title (relating to Prevention of Significant Deterioration Review) and with Subchapter C of this Chapter 116 (relating to Hazardous Air Pollutants: Regulations Governing Constructed or Reconstructed Major Sources (CAA 112(g), 40 CFR Part 63)).” 30 TAC 116.117(a)(4).
10

10
In a separate SIP submittal dated February 1, 2006, Texas recodified the provisions of Subchapter C into Subchapter E. TCEQ's rules also state that nothing in the rules governing the Program shall limit the applicability of any Federal requirement. 30 TAC 116.117(d).

Response:
As stated in the above, TCEQ's rules for Qualified Facilities are insufficient to prevent circumvention of major NSR.
See
74 FR 48450, at 48456-48458.

Comment:
ERCC commented that the Qualified Facilities Program is limited to Minor NSR. Qualified Facilities mandates compliance with 40 CFR 51.165 and 51.166, by clearly stating that any change authorized by Qualified Facilities shall not “limit the application of otherwise applicable state or Federal requirements.” TCAA 382.0512(c). TCEQ regulations require that Qualified Facilities changes must be documented minor source modifications.
See
30 TAC 116.117(a)(4); 30 TAC 116.117(d). EPA's dismissal of Section 116.117(a)(4) as a recordkeeping provision is unjustified. 74 FR 48450, at 48457. This Qualified Facilities regulatory reference to the PSD and NNSR programs requires the regulated entity to document that the change is in compliance with the Federal major source permitting programs and in compliance with state and Federal law.

Response:
As stated above, the Qualified Facilities rules are insufficient to prevent circumvention of Major NSR. 74 FR 48450, at 48456-48458.

Although there are recordkeeping requirements in the Program at submitted 40 TAC 116.117(a)(4) requiring owners and operators to maintain documentation containing sufficient information as may be necessary to demonstrate that the project will comply with the Federal CAA, Title I, parts C and D, these are the same general provisions as those in the SIP at 30 TAC 116.111(a)(2)(H) and (I) for Minor
and
Major NSR SIP permits. These recordkeeping requirements, although necessary for NSR SIP approvability, cannot substitute for clear and enforceable provisions, consistent with Texas's other Minor NSR programs, that limit applicability in the submitted Program to Minor NSR only. 74 FR 48450, at 48456-48457.

Comment:
TIP and BCCA comment that sources cannot use the Qualified Facilities Program to circumvent Major NSR. 30 TAC 116.117(a)(4) and (d);
Modification of Existing Facilities Guidance,
at 2. Senate Bill 1126, which authorized the Qualified Facilities program, does not supersede any Federal requirements. Further, “[i]f a change made under the qualified facility flexibility would result in the violation of a permit special condition, the permit holder must revise the permit special conditions to stay in compliance with the permit,” through either the permit alteration process under 30 TAC 116.116(c) or the notification process of 30 TAC 116.117(d).
Modification of Existing Facilities Guidance,
at 9. Therefore, any changes to a facility must comply with Federal NSR and PSD rules. To further show that the current Qualified Facilities rules are sufficient to prevent circumvention, commenter cites to EPA's proposed Indian Country rule and recently approved state SIPs that do not contain explicit language

calling for a major NSR applicability determination before use of the minor NSR tools.
Alaska Admin. Code
tit. 18, § 50.502, approved 72 FR 45378 (August 14, 2007); 7
Del. Code Regs
. § 1102, 65 FR 2048 (January 13, 2000) (granting limited approval based on EPA's concerns about public participation provisions). Further, no Federal requirement mandates such language. Therefore, it is arbitrary for EPA to require Texas to include additional language.
CleanCoalition
v.
TXU Power,
536 F.3d 469, 472 (5th Cir. 2008).

Response:
As stated above, EPA finds that the Qualified Facilities regulatory provisions are inadequate to prevent circumvention of Major NSR and limit the Program to minor modifications. TCEQ's rules and guidance are not clear on their face that circumvention of Major NSR requirements is prohibited. EPA does not understand how the permit alteration and notification requirements are relevant to the issue of circumvention of Major NSR. EPA disagrees with the commenter's analogy to the proposed Indian Country Minor NSR rule. Today's rulemaking disapproves the Qualified Facility Program for Major NSR, in part because the Program fails to first require a Major NSR applicability demonstration to show that a proposed change does not trigger Major NSR before the source can take advantage of the Program. In contrast, under the proposed Indian Country rule, 40 CFR 49.153 would explicitly require the proposed new source or modification to determine applicability to Major NSR before taking advantage of the program. 71 FR 48696, at 48705, 48728-48729. The source could only use allowables netting under the proposed Indian Country rule after it determined that Major NSR does not apply to the project. The Qualified Facilities rules are deficient because they lack such a requirement,
i.e.,
that Major NSR does not apply to the change.

Comment:
The ERCC commented that EPA sent a comment letter on the Qualified Facilities proposed rule and agreed that it “adequately addresses the applicability of major sources and major modifications with respect to PSD and NA permitting requirements.” 21 Tex. Reg. 1569 (February 27, 1996).

Response:
We acknowledge our 1995 comment letter stating that Texas adequately satisfied our concern that the Qualified Facilities Program, as proposed, would not circumvent or supersede any Major NSR SIP requirements. Since we sent that letter, however, the Texas Legislature has revised the Texas Clean Air Act significantly. Specifically, in 1999, the Texas legislature added an explicit statutory prohibition against the use of an Exemption or Permit by Rule or a Standard Permit for major modifications.
See
Texas Health and Safety Code 382.05196 and .057. These 1999 legislative actions required a new legal review of the statutory definition for “modification of existing facility” to see if it was still limited to minor modifications. It is EPA's interpretation that the 1999 legislative changes made this statutory definition ambiguous. 74 FR 48450, at 48456-48457.

F. Comments Addressing Whether the Qualified Facilities Rules Meet Federal Requirements for Minor New Source Review

1. Comments Generally Supporting Proposal

Comment:
The UT Environmental Clinic commented that the CAA requires SIPs to include a program for “regulation of the modification and construction of any stationary source.” 42 U.S.C. 110(a)(2)(C). The program must prohibit any sources, including minor sources, from emitting pollution in amounts that contribute significantly to nonattainment and maintenance of the NAAQS or interfere with measures included in the SIP. 42 U.S.C. 110(a)(2)(D)(i)(I)-(II). EPA has recognized the valuable role that Minor NSR programs play in ensuring that air quality is protected from emissions that are not subject to Major NSR. Technical Support Document for the Prevention of Significant Deterioration and Nonattainment Area New Source Review Regulations, U.S. EPA, Nov. 2002, at I-5-I-12. The Qualified Facilities Program is deficient as a Minor NSR program because:

• The Qualified Facility rules do not require enforceable limits. Qualified Facilities provide notification of “qualified” changes on form PI-E,
11

which TCEQ acknowledges is not enforceable.
Texas Commission on Environmental Quality

Guidance for Air Quality, Qualified Changes Under Senate Bill 1126
(Dec. 2000), 27 [hereinafter
Qualified Facilities Guidance
]. Without enforceable limits, facilities can use emission reductions as part of a netting analysis and subsequently increase those emissions or rely on these reductions to offset other increases. Some Qualified Facility representations are consolidated into a preexisting permit upon revision or renewal at the discretion of the source. Even if representations in the PI-E were enforceable, there are no monitoring or reporting requirements to demonstrate compliance. 30 TAC 116.117(a).
See
74 FR 48450 (Sept. 23, 2009), Docket,
Technical Support Document,
pg. 22.

11
30 TAC § 116.117(b). See regulation text on pages 23-24 of the TSD for this action, which refer to 30 TAC 116.117(b)(2) and (4).

• The Qualified Facility Rules do not include a pre-approval mechanism for all authorized emission increases. The rules have no mechanism that prevents implementation of Qualified Facility changes that may violate a control strategy or interfere with attainment or maintenance of the NAAQS. The Program only requires Qualified Facilities to obtain pre-approval of a Qualified Facility change if it involves interplant
12

trading above a “reportable limit.” 30 TAC 116.117(b)(4). Facilities that do not rely on interplant trading are only required to report their changes on an annual basis. 30 TAC 116.117(b)(1).

12
Although the commenter refers to “
inter
plant” trading, the Texas rules referred to by the commenter relates to “
intra
plant” trading.

Response:
As stated above at Section V.D.1, EPA agrees with the first point that the submitted rules are practically unenforceable because the reductions are not incorporated into a permit. 74 FR 48450, at 48462.

EPA agrees with the commenter that the Program does not include a pre-approval mechanism for all authorized emission increases. Under section 110(a)(2)(A) and (C) of the Act, a Minor NSR SIP must require enforceable emission limits for all minor modifications. The Texas Program is not clear that for each Qualified Facility involved in the netting transaction, the owner or operator must submit a permit application and obtain a permit revision reflecting all of the changes made to reduce emissions (relied upon in the netting analysis) as well as reflecting the change itself that increased emissions. Furthermore, the Program's rules at 30 TAC 116.116(e)(4) and 116.117(b)(1)-(4) are not clear that the PI-E form is a
permit application or registration
that must be submitted and that a revised permit must be issued by TCEQ to reflect the changes made by all of the participating Qualified Facilities. There is no discussion of when TCEQ issues the revised permit.
See
the submittals at 30 TAC 116.117(b); 74 FR 48450, at 48462.

2. Comments Generally Opposing Proposal

Comment:
The TCEQ commented that it has always considered the Qualified Facilities Program to be a Minor NSR Program although it is not stated in the rule. The rule requires the person making a change to maintain sufficient documentation to demonstrate that the

project will comply with 30 TAC 116.150 and 116.161 (Nonattainment NSR), 116.160-116.163 (Prevention of Significant Deterioration Review), and Chapter 116, Subchapter C (relating to implementing section 112(g) of t

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2010-8019. Public record. Not legal advice.