Approval and Promulgation of Air Quality Implementation Plans; Colorado; New Source Review and Prevention of Significant Deterioration

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[CO27-1-5754a; FRL-5012-6]

Approval and Promulgation of Air Quality Implementation Plans;

Colorado; New Source Review and Prevention of Significant Deterioration

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rulemaking.

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

SUMMARY: In this document, EPA is partially approving revisions to the

State Implementation Plan (SIP) submitted by the Governor of Colorado

on January 14, 1993. The submittal included revisions to the State's

new source review (NSR) and prevention of significant deterioration

(PSD) regulations, which were made to bring the State's regulations up-

to-date with the amended Clean Air Act (Act) and the Federal

regulations. EPA finds that the revised State rules meet the Federal

nonattainment NSR permitting requirements of the Act for the State's

carbon monoxide and ozone nonattainment areas. EPA also finds that the

State regulations only partially meet the nonattainment NSR

requirements of the Act for the State's PM-10 nonattainment areas

because the State has not addressed the NSR requirements for new and

modified major sources of PM-10 precursors in some of the State's PM-10

nonattainment areas. Last, EPA finds that the other revisions submitted

are consistent with the amended Act and the Federal regulations in 40

CFR 51 and that the revisions correct previous EPA disapprovals

promulgated in 40 CFR 52, Subpart G--Colorado.

DATES: This action will become effective on October 17, 1994 unless

adverse or critical comments are received by September 19, 1994. If the

effective date is delayed, timely notice will be published in the

Federal Register.

ADDRESSES: Comments should be addressed to Vicki Stamper, 8ART-AP, U.S.

Environmental Protection Agency, Region VIII, 999 18th Street, suite

500, Denver, Colorado 80202-2466. Copies of the State's submittal and

other relevant information are available for inspection during normal

business hours at the following locations: Air Programs Branch, U.S.

Environmental Protection Agency, Region VIII, 999 18th Street, suite

500, Denver, Colorado 80202-2466; and Air Pollution Control Division,

Colorado Department of Health, 4300 Cherry Creek Drive South, Denver,

Colorado 80222-1530.

FOR FURTHER INFORMATION CONTACT: Vicki Stamper, (303) 293-1765.

SUPPLEMENTARY INFORMATION:

I. Background

A. Nonattainment NSR Requirements of the Amended Act

The air quality planning requirements for nonattainment NSR are set

out in part D of title I of the Act. The EPA has issued a ``General

Preamble'' describing EPA's preliminary views on how EPA intends to

review SIPs and SIP revisions submitted under part D, including those

State submittals containing nonattainment area NSR SIP requirements

(see 57 FR 13498 (April 16, 1992) and 57 FR 18070 (April 28, 1992)).

Because EPA is describing its interpretations here only in broad terms,

the reader should refer to the General Preamble for a more detailed

discussion of the interpretations of part D advanced in this notice and

the supporting rationale. A brief discussion of the specific elements

required in a State's NSR program is also included in Section II.B. of

this notice.

EPA is currently developing rule revisions to implement the changes

under the 1990 Clean Air Act Amendments in the NSR provisions of parts

C and D of title I of the Act. The EPA anticipates that the proposed

rule will be published for public comment in the fall of 1994. If EPA

has not taken final action on States' NSR submittals by that time, EPA

may generally refer to the proposed rule as the most authoritative

guidance available regarding the approvability of the submittals. EPA

expects to take final action to promulgate the rule revisions to

implement the part C and D changes sometime during 1995. Upon

promulgation of those revised regulations, EPA will review NSR SIPs to

determine whether additional SIP revisions are necessary to satisfy the

requirements of the rulemaking.

Prior to EPA approval of a State's NSR SIP submission, the State

may continue permitting only in accordance with the new statutory

requirements for permit applications completed after the relevant SIP

submittal date. This policy was explained in transition guidance

memoranda from John Seitz dated March 11, 1991 and September 3, 1992.

As explained in the March 11 memorandum, EPA does not believe

Congress intended to mandate the more stringent title I NSR

requirements during the time provided for SIP development. States were

thus allowed to continue to issue permits consistent with requirements

in their current NSR SIPs during that period, or to apply 40 CFR 51,

Appendix S for newly designated areas that did not previously have NSR

SIP requirements.

The September 3, 1992 memorandum also addressed the situation where

States did not submit the part D NSR SIP revisions by the applicable

statutory deadline. For permit applications complete by the SIP

submittal deadline, States may issue final permits under the prior NSR

rules, assuming certain conditions in the September 3 memorandum are

met. However, for applications completed after the SIP submittal

deadline, EPA will consider the source to be in compliance with the Act

where the source obtains from the State a permit that is consistent

with the substantive new NSR part D provisions in the amended Act. EPA

believes this guidance continues to apply to permitting pending final

action on Colorado's NSR SIP submittal.

B. Correction of Deficiencies in Colorado's NSR/PSD Regulations

Aside from the new provisions of the amended Act, EPA has

previously identified many deficiencies in the State's NSR and PSD

permitting regulations. On June 28, 1985, EPA disapproved certain

provisions in the State's NSR rules (see 50 FR 26734), and on February

13, 1987, EPA disapproved specific provisions in the State's PSD rules

(see 52 FR 4622). In addition, after completing a thorough evaluation

of the State's NSR and PSD regulations, EPA notified the State on

February 17, 1988 of various other deficiencies in Regulation No. 3 and

the Common Provisions Regulation.

On May 26, 1988, EPA issued a SIP call to the State due to the

failure of many areas to attain the national ambient air quality

standards (NAAQS) for ozone and carbon monoxide (CO). Pursuant to the

SIP call, EPA required the State to correct all of the deficiencies in

its PSD and NSR permitting rules.

The State subsequently adopted some of the required NSR and PSD

rule revisions on August 17, 1988. These revisions were submitted to

EPA for approval in the SIP on November 17, 1988. However, EPA found in

its review of the State submittal that many of the previously

identified deficiencies had not been corrected.

Thus, on March 26, 1991, EPA again notified the State of all

outstanding deficiencies and disapprovals in its NSR and PSD

regulations and required that the State provide EPA with a commitment

and a schedule for correcting these deficiencies. On April 29, 1991,

Colorado responded with a list of the deficiencies that the Air Quality

Control Commission (AQCC) had the existing authority to address and a

list of deficiencies that would require changes in the State statute

before the State regulations could be revised. The State committed in

that letter to adopt the revisions for which they had the existing

authority to correct by October of 1991. The State also committed to

present the statutory revisions necessary to correct the remaining NSR

and PSD deficiencies to the Colorado legislature in January of 1992 and

to revise the regulations subsequent to the enactment of the statutory

revisions. EPA subsequently approved the November 1988 revisions on

June 17, 1992 (57 FR 27000), based on the State's April 29, 1991 letter

of commitments.

On October 17, 1991, the State adopted the revisions to its NSR and

PSD rules for which the State had the existing authority to correct.

The Governor of Colorado subsequently submitted the revisions to EPA

for approval on April 9, 1992, and EPA approved these revisions on

September 27, 1993 (58 FR 50270).

The State also enacted legislation in August of 1992 which, among

other things, addressed the remaining NSR and PSD statutory

deficiencies. Subsequently, the State adopted regulatory revisions

addressing the remaining deficiencies on November 19, 1992 and

submitted those revisions, along with other revisions necessary to

bring the State's NSR regulations up-to-date with the amended Act and

amended Federal regulations, on January 14, 1993.

II. Analysis of State Submission

Section 110(k) of the Act sets out provisions governing EPA's

review of SIP submittals (see 57 FR 13565-13566).

A. Procedural Background

The Act requires States to observe certain procedural requirements

in developing implementation plans and plan revisions for submission to

EPA. Section 110(a)(2) of the Act provides that each implementation

plan submitted by a State must be adopted after reasonable notice and

public hearing.1 Section 110(l) of the Act similarly provides that

each revision to an implementation plan submitted by a State under the

Act must be adopted by such State after reasonable notice and public

hearing.

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

\1\Section 172(c)(7) of the Act provides that plan provisions

for nonattainment areas shall meet the applicable provisions of

section 110(a)(2).

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

The EPA also must determine whether a submittal is complete and

therefore warrants further EPA review and action (see section 110(k)(1)

and 57 FR 13565). The EPA's completeness criteria for SIP submittals

are set out at 40 CFR 51, Appendix V (1992). The EPA attempts to make

completeness determinations within 60 days of receiving a submission.

However, a submittal is deemed complete by operation of law under

section 110(k)(1)(B) if a completeness determination is not made by EPA

within 6 months after receipt of the submission.

The State of Colorado held a public hearing on November 19, 1992 to

entertain public comment on the proposed revisions to the SIP.

Following the public hearing, the plan was adopted by the State and

submitted by the Governor on January 14, 1993 as a revision to the SIP.

Specifically, the State submitted revisions to its NSR and PSD

permitting regulations in Colorado Regulation No. 3 and the Common

Provisions Regulation. Also submitted was a revision to the list of

volatile organic compounds which have been determined to have

negligible photochemical reactivity, to be consistent with the Federal

definition of ``volatile organic compounds'' (VOCs), in Regulation No.

7. The revisions to the State's NSR and PSD regulations were made to

bring the State's rules up-to-date with the amended Act and revised

Federal regulations, to correct outstanding deficiencies in the State's

regulations previously identified by EPA, and to make other minor

changes to the State's permitting rules.

The SIP revision was reviewed by EPA to determine completeness

shortly after its submittal. The submittal was found to be complete,

and a letter dated March 11, 1993 was forwarded to the Governor

indicating the completeness of the submittal and the next steps to be

taken in the review process. In this action, EPA partially approves the

State's SIP submittal. EPA finds that the revisions provide for

consistency with the Act and corresponding Federal regulations, and

that the revisions meet the new nonattainment NSR provisions for all of

the State's nonattainment areas, with one exception: The State's

regulations do not meet the NSR provisions for new and modified major

sources of PM-10 precursors in the State's PM-10 nonattainment areas

for which EPA has not made a determination that such sources do not

contribute significantly to exceedances of the PM-10 NAAQS. EPA is also

deleting previous EPA disapprovals of the State's regulations which the

State has corrected in this submittal.

B. Nonattainment NSR Requirements of the Act

The general statutory requirements for nonattainment NSR SIPs and

permitting as amended by the 1990 Amendments are found in sections 172

and 173 of the Act. These requirements apply in all nonattainment

areas. The State of Colorado's nonattainment NSR regulations which had

been approved prior to the 1990 Amendments were not written to be

nonattainment area-specific; the NSR permitting requirements applied to

new or modified sources proposing to locate in any nonattainment area

in the State, including those designated pursuant to enactment of the

1990 Amendments.

Thus, in order to meet the nonattainment NSR program submittal

requirements, the State only needed to revise its existing-approved NSR

regulations to address the new NSR requirements of the amended Act that

were not included in its existing-approved regulations, rather than

submitting a comprehensive NSR SIP submittal for each of its

nonattainment areas.

Since some of the revisions to sections 172 and 173 of the Act as

discussed in the General Preamble clarified previously existing Federal

regulations and policy, many of the new NSR requirements had already

been included in the State's regulations and approved by EPA in the

SIP. Thus, the following represents EPA's review of the State's

submittal and/or existing approved regulations in meeting the new

requirements of the amended Act:

(1) The amended Act repealed the construction ban provisions

previously found in section 110(a)(2)(I) with certain exceptions.

No construction bans are currently imposed in Colorado, so this

requirement is inapplicable.

(2) Section 173(a)(1)(A) of the Act requires a demonstration for

permit issuance that the new source growth does not interfere with

reasonable further progress (RFP) for the area (e.g., greater than 1:1

emission offsets should insure no interference with RFP). In addition,

calculations of emissions offsets must be based on the same emissions

baseline used in the demonstration of RFP.

In previously-approved Sections IV.D.2.a.(iii) and V.E.2. of

Regulation No. 3, the State has established provisions which adequately

address section 173(a)(1).

(3) Section 173(c)(1) of the Act requires that offsets must

generally be obtained by the same source or other sources in the same

nonattainment area. However, offsets may be obtained from other

nonattainment areas if: the area in which the offsets are obtained has

an equal or higher nonattainment classification; and emissions from the

nonattainment area in which the offsets are obtained contribute to a

NAAQS violation in the area in which the source would construct.

In Sections IV.D.2.a.(iii)(B) and (C) of Regulation No. 3, the

State has established provisions that adequately meet the requirements

of section 173(c)(1).

(4) Section 173(c)(1) of the Act requires that any emissions

offsets obtained in conjunction with the issuance of a permit to a new

or modified source must be in effect and enforceable by the time the

new or modified source commences operation.

In previously-approved Sections IV.D.2.a.(iii) and (v) of

Regulation No. 3, the State has established provisions that adequately

meet the requirements of section 173(c)(1).

(5) Section 173(c)(1) of the Act requires that emissions increases

from new or modified major stationary sources are offset by real

reductions in actual emissions.

In previously-approved Section V.E.1.b. of Regulation No. 3, the

State has established provisions for nonattainment areas with approved

demonstrations of attainment which adequately meet the requirements of

section 173(c)(1). For areas which need but lack an approved

demonstration of attainment, previously-approved Section V.F.13.k. of

Regulation No. 3 provides that emissions trades, including offsets, can

only be approved through SIP revisions. Thus, such offsets would be

subject to EPA's criteria, including the requirements of Section

173(c)(1).

(6) Section 173(c)(2) of the Act prohibits emissions reductions

otherwise required by the Act from being credited for purposes of

satisfying the part D offset requirements.

In Sections V.E.9 of Regulation No. 3, the State has established

provisions that adequately meet the requirements of section 173(c)(2).

(7) Revised sections 172(c)(4), 173(a)(1)(B), and 173(b) of the Act

limit and invalidate use of certain growth allowances in nonattainment

areas.

This requirement is inapplicable because the State of Colorado has

not established any growth allowances in its nonattainment area SIPs.

(8) Revised section 173(a)(5) of the Act requires that, as a

prerequisite to issuing any part D permit, an analysis of alternative

sites, sizes, production processes, and environmental control

techniques for a proposed source must be completed which demonstrates

that the benefits of the proposed source significantly outweigh the

environmental and social costs imposed as a result of its location,

construction, or modification.

In previously-approved Section IV.D.2.a.(iv) of Regulation No. 3,

the State has established provisions which adequately address the

requirements of section 173(a)(5).

(9) Section 173(d) of the Act requires States to submit control

technology information from permits to EPA for the purposes of making

such information available through the RACT/BACT/LAER clearinghouse.

Colorado and EPA have established provisions in the annual State-

EPA agreement requiring the State to submit information from

nonattainment NSR permits to EPA's RACT/BACT/LAER clearinghouse. EPA

believes this is acceptable to meet this requirement.

(10) Section 173(e) of the Act provides that States may allow any

existing or modified source that tests rocket engines or motors to use

alternative or innovative means to offset emissions increases from

firing and related cleaning, under certain conditions.

In lieu of imposing any alternative offset measures the permitting

authority may impose an emission limit amounting to no more than 1.5

times the average cost of stationary control measures adopted in that

area during the previous three years.

The State has not adopted provisions for innovative offsetting for

rocket engine and motor firing because there are no such sources in the

State of Colorado.

(11) Section 328 requires that sources located on the outer

continental shelf (OCS) must be subject to the same requirements as

would be applicable if the source were located in the corresponding

onshore area.

Since the State of Colorado is land-locked and not adjacent to any

oceans, this requirement is inapplicable.

(12) Revised section 302(z) of the Act set forth a new definition

of ``stationary source'' reflecting Congressional intent that certain

internal combustion engines must be subject to control under State

permit programs, while requiring the exclusion of the newly defined

category of ``nonroad engines.''

This submittal did not include any revisions to the State's

definition of ``stationary source'' relating to non-road engines.

However, the State intends to revise its regulations to exempt nonroad

engines from construction permitting requirements during its annual

update of its regulations in 1994. Further, EPA believes it is

difficult for states to make the regulatory revisions to exclude

nonroad engines until EPA promulgates regulatory revisions for the

definition and exclusion of ``non-road engines.'' When the Federal

regulations concerning ``non-road engines'' and new source review

permitting requirements are promulgated, EPA will re-evaluate the

State's regulations for consistency with the Federal requirements. If

revisions are needed, EPA will require the State to make the necessary

changes to its regulations and the SIP.

In addition to all of the general nonattainment NSR provision

mentioned above, there are also nonattainment area-specific NSR

provisions in subparts 2, 3, and 4 of part D of the Act, some of which

supersede these general NSR provisions because they are more stringent.

The following provisions are the additional NSR provisions that apply

in Colorado's nonattainment areas:

1. Ozone Nonattainment Areas

The State of Colorado currently has one ozone nonattainment area.

It is defined as the Denver-Boulder area, and it is currently

classified as transitional. (See 40 CFR 81.306 for Colorado's ozone

nonattainment area designations.) States with transitional ozone

nonattainment areas were required to submit NSR rules meeting the

general NSR requirements discussed above by November 15, 1992. These

rules must reflect the 100 tons per year (tpy) major stationary source

threshold for emissions of VOCs for determining NSR applicability. In

addition, States must establish a 40 tpy significance level for

defining major modifications, in order to be consistent with the

current significance level in 40 CFR 51.165(a)(1)(x). None of the

additional NSR provisions of subpart 2 of part D apply in transitional

ozone nonattainment areas.

In previously-approved Section I.B.3.d. of Regulation No. 3, the

State has established a provision which states that any source that is

major for VOCs is considered major for ozone, and the State has

established a major stationary source threshold of 100 tpy in

previously-approved Section I.B.3.a. In addition, in the previously-

approved definition of ``significant'' in the Common Provisions

Regulation, the State has established a major modification significance

level of 40 tpy for VOCs. Because the State has adequately addressed

all of the other general NSR requirements, EPA finds that the State's

NSR program meets all of the requirements for its transitional ozone

nonattainment area.

2. Carbon Monoxide Nonattainment Areas

The State of Colorado has five CO nonattainment areas, four of

which are currently designated as moderate: Denver Metro/Boulder,

Longmont, Colorado Springs, and Fort Collins; and one of which is

currently not classified: Greeley. (See 40 CFR 81.306 for Colorado's CO

nonattainment area designations.) States with moderate CO nonattainment

areas are required to submit NSR rules meeting the general NSR

requirements discussed above and any additional requirements of subpart

3 of part D by either November 15, 1992 or November 15, 1993, depending

on the design value for the area. (For those nonattainment areas with a

design value of 12.7 parts per million (ppm) or less, States were

required to submit the NSR revisions by November 15, 1993. Otherwise,

the NSR revisions were to be submitted by November 15, 1992.) States

with ``not classified'' CO nonattainment areas were required to submit

the NSR revisions meeting the general NSR requirements discussed above

by November 15, 1993. These rules must reflect the 100 tpy major

stationary source threshold for emissions of CO for determining NSR

applicability. In addition, States must establish a 100 tpy

significance level for defining major modifications, in order to be

consistent with the current significance level in 40 CFR

51.165(a)(1)(x). No additional NSR provisions in subpart 3 of part D

apply.

In Section I.B.3.a. of Regulation No. 3, the State has established

a major stationary source threshold of 100 tpy. Also, in the

previously-approved definition of ``significant'' in the Common

Provisions Regulation, the State has established a major modification

significance level of 100 tpy. Of the State's CO nonattainment areas,

only the Denver area had a design value of greater than 12.7 ppm. Thus,

the nonattainment NSR provisions for the other CO nonattainment areas

were not due until November 15, 1993. However, the State's NSR

regulations are not written to be nonattainment area-specific; the

State regulations apply in all nonattainment areas. Because the State

has adequately addressed all of the other general NSR requirements, EPA

finds that the State's NSR rules meets all of the requirements for all

of its CO nonattainment areas.

3. PM-10 Nonattainment Areas

The State of Colorado has seven PM-10 nonattainment areas, all of

which are currently designated as moderate: Denver Metro, Aspen, Canon

City, Lamar, Pagosa Springs, Telluride, and Steamboat Springs. (See 40

CFR 81.306 for Colorado's PM-10 nonattainment area designations.)

States with moderate PM-10 nonattainment areas which were designated

upon enactment of the 1990 Amendments were required to submit NSR rules

meeting the general requirements discussed above and any additional

requirements of subpart 4 of part D by June 30, 1992. However, for the

Steamboat Springs PM-10 nonattainment area, whose designation was not

effective until January 20, 1994, the State has eighteen months after

the date of redesignation (or until July 20, 1995) to submit a PM-10

attainment plan for the area which must include, among other things,

provisions meeting the NSR requirements of part D (see section

189(a)(2)(B) of the Act). States' NSR rules for moderate PM-10

nonattainment areas must include a definition of ``major stationary

source'' reflecting the section 302(j) 100 tpy PM-10 threshold for

determining NSR applicability.

In addition, section 189(e) of the amended Act requires that the

control requirements applicable to major stationary sources of PM-10

must also apply to major stationary sources of PM-10 precursors, except

where the Administrator of EPA has determined that such sources do not

contribute significantly to PM-10 levels which exceed the standard in

the area. Thus, unless the EPA Administrator finds otherwise, States

must submit rules meeting all of the NSR provisions mentioned above,

including the section 302(j) 100 tpy threshold, for new and modified

major stationary sources of PM-10 precursors. PM-10 precursors may

include VOCs, which form secondary organic compounds, SO2, which

forms sulfate compounds, and nitrogen oxides (NOx), which form

nitrate compounds.

Since the State's NSR regulations are not written to be

nonattainment area-specific, the State's NSR regulations apply in all

of its nonattainment areas. The State has established a 100 tpy

threshold for major stationary sources in Section I.B.3.a. of

Regulation No. 3, as well as a 15 tpy major significance level for

major modifications of PM-10 in the previously-approved definition of

``significant'' in the Common Provisions Regulation. In addition, the

State has adequately addressed all of the other general NSR provisions.

Thus, EPA believes the State regulations adequately address the

nonattainment NSR requirements for new and modified sources of PM-10 in

all of its moderate PM-10 nonattainment areas. However, the State's

submittal did not include NSR regulations for new and modified major

stationary sources of PM-10 precursors.

EPA plans to make findings of whether major stationary sources of

PM-10 precursors do not contribute significantly to PM-10 levels in

excess of the NAAQS (and thus whether the requirements of section

189(e) do not apply) concurrent with EPA's action on the State's PM-10

SIP submittals.2 As of the date of this notice, EPA has

promulgated findings that such sources of PM-10 precursors do not

contribute significantly to PM-10 exceedances in the Canon City, Pagosa

Springs, and Lamar PM-10 nonattainment areas (see, respectively, 58 FR

68037 (December 23, 1993), 59 FR 26127 (May 19, 1994), and 59 FR 29734

(June 9, 1994)). Further, EPA has proposed to find that such sources of

PM-10 precursors also do not contribute significantly in the Aspen and

Telluride PM-10 nonattainment areas (see 58 FR 68098 (December 23,

1993) and 59 FR 32402 (June 23, 1994), and EPA anticipates to

promulgate those findings. However, on December 20, 1993, EPA indicated

that major stationary sources of PM-10 precursors (specifically

NOx and SO2) do contribute significantly to exceedances of

the PM-10 NAAQS in the Denver metro PM-10 nonattainment area (see 58 FR

66331). Thus, the State is required to submit nonattainment NSR

provisions for sources of PM-10 precursors for at least one of its

nonattainment areas. Since the State is not required to submit NSR

provisions for the Steamboat Springs PM-10 nonattainment area until

July 20, 1995, EPA will determine the approvability of the State's NSR

provisions for that nonattainment area when EPA takes action on the

Steamboat Springs' attainment plan.

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

\2\Note that EPA's findings are based on the current character

of an area including, for example, the existing mix of sources in an

area. It is possible, therefore, that future growth could change the

significance of precursors in an area.

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

On February 17, 1994, the State adopted nonattainment NSR

provisions for sources of PM-10 precursors (specifically, SO2 and

NOx) in the Denver metro PM-10 nonattainment area. The State

believes that such sources contribute significantly to PM-10

exceedances only in the Denver metro nonattainment area. While EPA does

not anticipate any disagreement with the State on this matter, until

EPA promulgates findings on whether such sources contribute

significantly in the Aspen and Telluride PM-10 nonattainment areas, the

State is required to adopt NSR provisions meeting the requirements of

section 189(e) for these PM-10 nonattainment areas also. Because the

State has not yet submitted these NSR provisions for sources of PM-10

precursors for those areas subject to the June 30, 1992 submittal

deadline, EPA is only partially approving the State's NSR submittal.

Once the State submits adequate nonattainment NSR provisions for new

and modified major stationary sources of PM-10 precursors in the PM-10

nonattainment areas where EPA has not found that such sources do not

contribute significantly to PM-10 exceedances, EPA will be able to

fully approve the State's NSR program as meeting all of the

nonattainment NSR requirements of the amended Act. As noted above, EPA

will address the applicability of section 189(e) of the Act in the

Steamboat Springs nonattainment area at the time EPA takes action on

the State's attainment plan for that area.

Thus, EPA finds that the State has met all of the nonattainment NSR

requirements for the Canon City, Lamar, and Pagosa Springs PM-10

nonattainment areas, and EPA finds that the State has only partially

met the nonattainment NSR requirements for the Aspen, Denver, and

Telluride PM-10 nonattainment areas. Because the State has adopted

nonattainment NSR provisions for the Denver PM-10 nonattainment area

and since EPA does not anticipate any disagreement with the State on

whether such provisions should apply in the Aspen or Telluride PM-10

nonattainment areas, EPA is not partially disapproving the State's

submittal at this time. If the State fails to timely submit the

recently adopted rules and/or if EPA does not promulgate findings that

source of PM-10 precursors do not contribute significantly in the Aspen

and Telluride PM-10 nonattainment areas, then EPA will promulgate the

partial disapproval that is the companion of this approval.

For further information on these requirements and the State's

provisions which meet these requirements, please see the Technical

Support Document (TSD) accompanying this notice.

C. Correction of Deficiencies in Colorado's NSR/PSD Regulations

EPA's review of the State's submittal found that the State had

corrected all of the deficiencies that the State had committed to

correct in its April 29, 1991 letter. These corrections addressed

numerous EPA disapprovals which were promulgated at 40 CFR 52.329 and

52.343. Specifically, the State addressed the following disapprovals:

1. The definition of ``stationary source'' in the Common Provisions

Regulation was revised to delete an exemption due to right-of-way

provisions. This revision addresses an EPA disapproval promulgated at

40 CFR 52.343(a)(4). However, EPA is not acting on this revision in

this notice because the State has previously made other revisions in

the definition of ``stationary source'' which the State has not yet

formally submitted for approval in the SIP. When the State formally

submits the other revisions to this definition for approval, EPA will

act on this deficiency correction.

2. In the definition of ``major modification'' in Regulation No. 3,

the alternative fuel exemption in Section I.B.2.c.(vii) was deleted.

This addresses EPA disapprovals promulgated at 40 CFR 52.329(a)(1) and

40 CFR 52.343(a)(3).

3. The definitions of ``major modification'' and ``major stationary

source'' in Sections I.B.2. and I.B.3 of Regulation No. 3 were revised

to delete the exemption of fugitive emissions in determining major

stationary source and major modification applicability for certain

source categories. This addresses EPA disapprovals promulgated at 40

CFR 52.329(a)(2), and 40 CFR 52.343(a)(1), (2), and (8).

4. Section IV.H.4. of Regulation No. 3, which allowed an

administrative compliance waiver for as long as six months to a new

source which violated a term of its permit, was deleted. This addresses

an EPA disapproval promulgated at 40 CFR 52.343(a)(7).

5. The State deleted Section IV.D.3.b.(i)(B) of Regulation No. 3,

which contained an exemption from PSD requirements for sources whose

emissions consisted of fugitive dust. EPA only allows a PSD exemption

for sources considered to be major based on fugitive emissions that are

not included in the list of 28 sources categories in the definition of

``major stationary source'' (see 51.166(b)(1)(iii)). (See

51.166(i)(4)(ii).) This addresses an EPA disapproval promulgated at 40

CFR 52.343(a)(2).

6. The State deleted Section IV.F. of Regulation No. 3, which

provided for default issuance of a permit if the State failed to issue

the permit in accordance with set timelines. This addresses an EPA

disapproval promulgated at 40 CFR 52.343(a)(6).

7. The State deleted the exemption of fugitive dust from increment

consumption in Section XI.A.4 of Regulation No. 3, in order to be

consistent with 40 CFR 51.166(f). This addresses an EPA disapproval

promulgated at 40 CFR 52.343(a)(2).

EPA is deleting all of these disapprovals, except 40 CFR

52.343(a)(4), from 40 CFR 52.

The State also included revisions to address other revisions to the

Act and to Federal regulations. Those revisions included:

1. To be consistent with sections 162(a) and 164(a) of the Act,

Section VIII.A. of Regulation No. 3 was revised to delete the August 7,

1977 effective date of the boundaries of Class I areas, thus clarifying

that the Class I area boundaries for those areas designated by the 1977

Act must now conform to all boundary changes made between August 7,

1977 and November 15, 1990, as well as all future boundary changes to

these areas.

2. Section 112(b)(6) of the amended Act excludes the hazardous air

pollutants listed in Section 112(b)(1) of the Act from the PSD

requirements of part C of the Act. Thus, certain pollutants, which were

previously regulated under PSD because the pollutants were covered by

the section 112 national emission standards for hazardous air pollutant

(NESHAP) requirements, are no longer regulated under PSD. The State has

addressed these new provisions by deleting the significance levels for

asbestos, beryllium, mercury, and vinyl chloride from the definition of

``significant'' in the Common Provisions Regulation.

3. On March 18, 1991, EPA revised a previously-issued policy

statement and added 5 halocarbon compounds and 4 classes of

perfluorocarbons to the list of organic compounds considered to be

negligibly reactive. On February 2, 1992, EPA promulgated a revised

definition of ``VOCs'' to specifically exclude these compounds from the

definition of VOCs in 40 CFR 51.100(s), as well as to make other

clarifications. The State has revised its regulations to be consistent

with the new definition as follows: Section IV.D.4. of Regulation No.

3, the definition of ``net emissions increase'' in the Common

Provisions Regulation, and Section II.B. of Regulation No. 7 were

revised to incorporate the list of negligibly reactive VOCs. In

addition, the definition of ``VOCs'' in the Common Provisions

Regulation and Regulation No. 7 were revised to be consistent with the

definition in 40 CFR 51.100(s).

4. The State revised the definition of ``significant'' in the

Common Provisions Regulation to add the significance levels for

municipal waste combustor emissions, which were promulgated with the

New Source Performance Standard (NSPS) on February 11, 1991 (56 FR

5507).

Other revisions which were made to the State's regulations were

made to bring the State's regulations up-to-date with the State's

recently amended Act. EPA is approving these revisions because they

provide for clarity and consistency with the Federal requirements in

the Act and 40 CFR 51.165 and 51.166. For further information on the

revisions and the deficiencies addressed in this submittal, please see

the TSD accompanying this notice.

Final Action

EPA is partially approving the revisions to Colorado Regulations

No. 3 and 7 and the Common Provisions Regulation, which were submitted

by the Governor on January 14, 1993 for approval in the SIP.

Specifically, EPA is approving the State's submittal for meeting the

NSR requirements of the amended Act for the State's CO and ozone

nonattainment areas and for the Canon City, Lamar, and Pagosa Springs

PM-10 nonattainment areas. However, for those PM-10 nonattainment areas

where EPA has not promulgated findings that major sources of PM-10

precursors do not contribute significantly to PM-10 exceedances in the

area (which currently include the Aspen, Denver, and Telluride PM-10

nonattainment areas), EPA is only partially approving the submittal

because it did not include NSR provisions for new and modified major

sources of PM-10 precursors proposing to locate in these areas. EPA is

approving the other revisions to the State's PSD and minor source NSR

regulations, as well as the revisions to Regulation No. 7.

This submittal also adequately addresses deficiencies in the

State's PSD and NSR regulations, which EPA previously identified in a

March 26, 1991 letter and which the State committed to correct in an

April 29, 1991 letter. Therefore, EPA is deleting the disapprovals

promulgated at 40 CFR 52.329(a) (1) and (2) and at 40 CFR 52.343

(a)(1)-(a)(3) and (a)(6)-(a)(8).

The EPA is publishing this action without prior proposal because

the Agency views this as a noncontroversial action and anticipates no

adverse comments. However, in a separate document in this Federal

Register publication, the EPA is proposing to approve the SIP revision

should adverse or critical comments be filed. Under the procedures

established in the May 10, 1994 Federal Register (59 FR 24054), this

action will be effective on October 17, 1994, unless within 30 days of

its publication, adverse or critical comments are received.

If the EPA receives such comments, this action will be withdrawn

before the effective date by publishing a subsequent notice that will

withdraw the final action. All public comments received will then be

addressed in a subsequent final rule based on this action serving as a

proposed rule. The EPA will not institute a second comment period on

this action. Any parties interested in commenting on this action should

do so at this time. If no such comments are received, the public is

advised that this action will be effective on October 17, 1994.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any SIP. Each request for revision to any SIP shall be

considered separately in light of specific technical, economic, and

environmental factors and in relation to relevant statutory and

regulatory requirements.

This action has been classified as a Table 2 action by the Regional

Administrator under the procedures published in the Federal Register on

January 19, 1989 (54 FR 2214-2225), as revised by an October 4, 1993

memorandum from Michael H. Shapiro, Acting Assistant Administrator for

Air and Radiation. The Office of Management and Budget (OMB) has

exempted this regulatory action from Executive Order 12866 review.

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et. seq., EPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, EPA may certify that the rule will not have a

significant economic impact on a substantial number of small entities.

Small entities include small business, small not-for-profit

enterprises, and government entities with jurisdiction over populations

of less than 50,000.

SIP approvals under section 110 and subchapter I, part D of the Act

do not create any new requirements, but simply approve requirements

that the State is already imposing. Therefore, because the Federal SIP-

approval does not impose any new requirements, I certify that it does

not have a significant impact on any small entities affected. Moreover,

due to the nature of the Federal-state relationship under the Act,

preparation of a regulatory flexibility analysis would constitute

Federal inquiry into the economic reasonableness of state action. The

Act forbids EPA to base its actions concerning SIPs on such grounds.

Union Electric Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct. 1976);

42 U.S.C. 7410(a)(2).

Under section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by October 17, 1994. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for the purposes of judicial

review nor does it extend the time within which a petition for judicial

review may be file, and shall not postpone the effectiveness of such

rule or action. This action may not be challenged later in proceedings

to enforce its requirements. (See section 307(b)(2).)

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Carbon monoxide,

Hydrocarbons, Incorporation by reference, Intergovernmental relations,

Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and

recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

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

Dated: July 6, 1994.

Kerrigan G. Clough,

Acting Regional Administrator.

Part 52, chapter I, title 40 of the Code of Federal Regulations is

amended as follows:

PART 52--[AMENDED]

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

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

Subpart G--Colorado

2. Section 52.320 is amended by adding paragraph (c)(66) to read as

follows:

Sec. 52.320 Identification of Plan.

* * * * *

(c) * * *

(66) On January 14, 1993, the Governor of Colorado submitted

revisions to the new source review and prevention of significant

deterioration requirements in the Common Provisions Regulation and

Regulation No. 3, as well as a revision to Regulation No. 7 pertaining

to volatile organic compounds of negligible photochemical reactivity.

(i) Incorporation by reference.

(A) Air Quality Control Commission Common Provisions Regulation,

Section I.C. and Section I.G., definitions of ``adverse environmental

effect,'' ``air pollutant,'' ``best available control technology,''

``federal act,'' ``federally enforceable,'' ``hazardous air

pollutant,'' paragraph h. in ``net emissions increase,'' ``ozone

depleting compound,'' and ``significant;'' revised 11/19/92, effective

12/30/92.

(B) Air Quality Control Commission Regulation No. 3 Air Contaminant

Emission Notices, Sections I.B.1., I.B.2.c-e., I.B.3.e-f., IV.B.3-5,

IV.D.2.a.(iii), IV.D.2.c., IV.D.3., IV.D.4., IV.E., IV.F., IV.H.,

V.E.9., VI.B.1., VI.B.4., VI.B.5., VI.C., VII.C., VIII.A., VIII.C.1.,

XI.A., and XIII.A. and B.; revised 11/19/92, effective 12/30/92.

(C) Air Quality Control Commission Regulation No. 7 Emissions of

Volatile Organic Compounds, Section II.B.; revised 11/19/92, effective

12/30/92.

3. Section 52.329 is amended by removing paragraphs (a) (1) and (2)

and revising paragraph (a) to read as follows:

Sec. 52.329 Rules and regulations.

(a) On January 14, 1993, the Governor of Colorado submitted

revisions to the State's nonattainment area new source review

permitting regulations to bring the State's regulations up to date with

the 1990 Amendments to the Clean Air Act. With these revisions, the

State's regulations satisfy the part D new source review permitting

requirements for the following nonattainment areas: the Canon City,

Lamar, and Pagosa Springs moderate PM-10 nonattainment areas, the

Denver/Metro Boulder, Longmont, Colorado Springs, and Fort Collins

moderate carbon monoxide nonattainment areas, the Greeley not

classified carbon monoxide nonattainment area, and the Denver

transitional ozone nonattainment area.

Sec. 52.343 [Amended]

4. Section 52.343 is amended by removing paragraphs (a)(1) through

(a)(3) and (a)(6) through (a)(8) and by redesignating paragraphs (a)(4)

as (a)(1), (a)(5) as (a)(2), (a)(9) as (a)(3), and (a)(10) as (a)(4).

[FR Doc. 94-20344 Filed 8-17-94; 8:45 am]

BILLING CODE 6560-50-P