Approval and Promulgation of Implementation Plans; Ohio

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[OH53-2-6360; FRL-5076-1]

Approval and Promulgation of Implementation Plans; Ohio

AGENCY: U.S. Environmental Protection Agency (USEPA).

ACTION: Final rule.

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SUMMARY: On August 20, 1993, in response to requirements in part D of

title I of the Clean Air Act, the Ohio Environmental Protection Agency

(OEPA) submitted materials to USEPA pertaining to new source review

(NSR) in nonattainment areas. This submittal included no revisions to

any Ohio regulations. Instead, the submittal relied on existing pre-

1990 NSR rules, described how Ohio intended to implement various

applicable part D requirements, and presented a rationale that no

revisions to State regulations would be necessary to satisfy these

requirements. USEPA disagrees with this rationale and disapproves the

State's submittal for failure to satisfy applicable requirements, as

proposed on March 4, 1994.

EFFECTIVE DATE: This final rule becomes effective on October 21, 1994..

ADDRESSES: Copies of the SIP revision request, public comments on the

rulemaking, and other materials relating to this rulemaking are

available for inspection at the following address: (It is recommended

that you telephone John Summerhays at (312) 886-6067 before visiting

the Region 5 Office.) United States Environmental Protection Agency,

Region 5, Air and Radiation Division, 77 West Jackson Boulevard (AE-

17J), Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: John Summerhays, Air Enforcement

Branch, Regulation Development Section (AE-17J), United States

Environmental Protection Agency, Region 5, Chicago, Illinois 60604,

(312) 886-6067.

SUPPLEMENTARY INFORMATION:

I. Background

Sections 172, 173, 182, 189, and other sections of the Clean Air

Act require States to submit implementation plan provisions for new

source review in nonattainment areas to USEPA for approval or

disapproval. Ohio provided various materials to USEPA between November

1992 and April 1993, but USEPA notified the State on June 1, 1993, that

these materials did not constitute a complete submittal and that the

State had failed to submit a complete submittal. On August 20, 1993,

the Ohio provided new material to USEPA addressing new source review in

nonattainment areas. USEPA notified OEPA on October 22, 1993, that it

found this August 1993 submittal complete.

USEPA published a notice of proposed rulemaking on the State's

submittal on March 4, 1994 (59 FR 10349). This document summarized the

history of new source review plans in Ohio, reviewed the submittal of

August 20, 1993, and proposed disapproval of the submittal. In a cover

letter accompanying the submittal, the OEPA Director stated that Ohio's

NSR rules adopted in 1974 were sufficient for USEPA to find the State's

submission both complete and approvable. According to the OEPA

Director, ``Ohio EPA believes that the current, federally approved,

Ohio SIP is adequate for fulfilling the requirements of a NSR SIP, and

that no changes are necessary. . . . Ohio EPA has thoroughly evaluated

the basis for this submittal, and has resolved that the 1974 [NSR]

rules remain the vehicle for the U.S. EPA to review as part of this NSR

SIP submittal.'' OEPA also submitted a document dated October 1992

entitled ``Requirements for Major New Sources in Nonattainment Areas''

(referenced in this document as ``Ohio's statement of permitting

criteria''). On page 4 of this latter document, the State again states

that ``Ohio EPA needs not modify the current rules to conform to the

legislatively mandated changes under the CAA. In fact, the current

state law and Ohio EPA requires that the Director account for these new

requirements in the review of new source applications.'' Ohio thus

seeks approval of its existing pre-1990 NSR rules, along with its

statement of permitting criteria, as satisfying the NSR SIP submittal

requirements of part D of title I of the Act, including the new

requirements imposed by the Clean Air Act Amendments of 1990 (1990

Amendments).

Based on a review of the submittal, USEPA proposed that Ohio's

submittal failed to satisfy the NSR SIP submittal requirements of part

D, both for requirements predating the 1990 Amendments as well as new

requirements imposed by the 1990 Amendments. Concerning requirements

predating the 1990 Amendments, USEPA explained that the State had

failed to make any of the necessary changes to its NSR rules since

USEPA's prior action on September 8, 1993 (58 FR 47211) in which USEPA

concluded that the State had not satisfied the requirements of part D,

even as required before 1990, particularly because of exemptions from

NSR permitting for temporary sources and resource recovery facilities.

Regarding requirements imposed by the 1990 Amendments, USEPA noted that

Ohio's statement of permitting criteria ``was not adopted according to

the full procedures in Ohio for adoption of regulations, even though

this statement is intended to serve purposes normally served by

regulations.'' In an extensive discussion, USEPA also concluded that

``the statement of permitting criteria lacks the specificity, the

regulatory standing, and the assurance of being enforceable that are

needed to satisfy Clean Air Act requirements'' and that the State's

reliance ``on a general regulatory provision (requiring compliance with

the Clean Air Act)'' fails to authorize the State to impose the

necessary ``specific, detailed permit conditions.'' Therefore, USEPA

proposed to disapprove Ohio's submittal.

II. Comments on Proposed Rulemaking

Subsequent to the proposed rulemaking, Ohio requested an extension

of the public comment period, which USEPA granted on May 3, 1994 (59 FR

22776). During the extended comment period, comments were received from

OEPA, the local air pollution control agency for the Dayton area, a law

firm, and the State Chamber of Commerce. The following summarizes the

comments received and USEPA's responses.

Comment: All four commenters disputed USEPA's proposed conclusion

that Ohio's 1974 regulations and its statement of permitting criteria

do not adequately specify applicable new source review requirements.

The Chamber of Commerce stated that

Ohio's submittal has the same specificity as Federal law, the law is

sufficiently specific and clear, and Ohio's submittal meets all

requirements of that law. The State commented that the Clean Air Act

Amendments of 1990 are very specific and clearly specify applicable

requirements, such that further efforts to define these requirements by

regulation would be redundant and unnecessary. Another commenter stated

that ``specificity and clarity of criteria'' are not an appropriate

basis for disapproving a submittal which has the same specificity and

clarity of criteria as the relevant Federal law, and the fourth

commenter stated that ``[d]isagreement over [the form that Ohio's

permitting mandates take rather than over the substance of those

mandates] should not be a basis on which to disapprove Ohio's NSR

program.''

Response: As stated in the proposed disapproval, Ohio's statement

of permitting criteria was not adopted pursuant to the applicable Ohio

procedures for the adoption of binding, enforceable regulations and did

not clearly identify detailed decisionmaking criteria, and therefore

``lacks the specificity, the regulatory standing, and the assurance of

being enforceable that are needed to satisfy the Clean Air Act

requirements.'' A fundamental principle for SIPs is that SIP measures

must be enforceable. See 57 FR 13498, 13568 (April 16, 1982). In its

comments, OEPA did not dispute USEPA's conclusion that Ohio's statement

of permitting criteria does not constitute binding regulations and is

unenforceable. Instead, the State merely responded that ``[t]he

requirements of the CAAA are clearly enforceable via existing Ohio

regulations'' (emphasis added). Ohio's response makes it clear that its

statement of permitting criteria is not enforceable and that Ohio seeks

approval of its submission based on its existing pre-1990 NSR rules.

Accordingly, USEPA concludes that it cannot rely on the unenforceable

statement of permitting criteria to approve Ohio's submittal.

USEPA also evaluated whether Ohio's existing NSR rules, adopted

well before the 1990 Amendments, satisfy current NSR SIP requirements.

As the State conceded in its statement of permitting criteria, several

applicable sections of the amended Act, including sections 182(a)(2)(C)

and 189(a)(2)(A), required states to submit revisions to their State

Implementation Plans for nonattainment NSR permits by various dates in

1992 and 1993. As described above, the State contends that its existing

pre-1990 NSR rules are sufficient to meet current requirements because

they require adherence to ``applicable law,'' including the Clean Air

Act. Thus, instead of submitting revisions to its rules, Ohio asserted

that no such revisions are necessary. USEPA disagrees. It should be

self-evident that Ohio's reliance on its existing pre-1990 NSR rules

does not satisfy the statutory mandates enacted in 1990 for revisions

to the State's NSR rules. USEPA reaffirms its view that a reference in

existing state rules to the Clean Air Act, and references to pre-1990

sections of the Act, do not satisfy current NSR SIP requirements.

USEPA believes that the Act requires States to adopt specific,

enforceable rules to implement the Act's requirements for a

nonattainment new source review program. Although not mandated by the

Act, USEPA has already provided general guidance to states concerning

NSR SIP requirements (See 57 FR 13498, 13552-13556 (April 16, 1982); 57

FR 55620, 55623-55624 (Nov. 25, 1992)), and plans to issue further

guidance and rules concerning NSR SIP measures later in 1994. Although

certain provisions in the Act may present questions of statutory

interpretation, USEPA finds that Ohio's NSR submission, consisting

primarily of existing pre-1990 NSR rules supplemented by the

unenforceable statement of permitting criteria completely fail to

satisfy the statutory obligation to submit specific revisions to its

NSR SIP rules.1

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\1\E.g., lowered major source thresholds, provisions governing

NOx as an ozone precursor in ozone nonattainment areas, specific

mandated offset ratios and other provisions governing emission

offsets, a provision that emission reductions otherwise required by

the Act are not creditable to satisfy NSR offset requirements, and

an alternatives analysis requirement for all nonattainment NSR

permits.

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This regulatory situation is typical. Statutes usually establish

general requirements and usually cannot be successfully implemented

without detailed regulations clearly specifying criteria for evaluating

individual cases. Thus, the issue is not simply philosophical or

superficial, but rather a fundamental question of whether Ohio has

properly set forth a regulatory framework under which to implement the

mandated provisions, and whether USEPA or a member of the public could

successfully object if a permit were proposed that would violate NSR

requirements.

USEPA believes that it would be difficult and impractical for a

commenter to object to a proposed permit based on statutory provisions

in the amended Act where USEPA had approved the SIP as satisfying the

requirements of the amended Act but where the SIP did not contain

specific provisions to implement the amended Act. USEPA further

believes that Federal enforcement of NSR requirements would be severely

jeopardized by USEPA approval of NSR SIP provisions that fail to

contain specific provisions implementing the amended Act. Ohio's SIP

submission fails to provide enforceable NSR provisions which assure

compliance with the amended Act and therefore are disapproved.

A discussion of comments and responses below addresses specific

requirements for offsets, offset ratios, and major source and major

modification definitions. The technical support document for the

proposed rulemaking also identified deficiencies with respect to the

alternatives analysis requirement, and observed that Ohio's statement

of permitting criteria mistakenly assigns various USEPA

responsibilities regarding clean coal technology demonstration projects

to OEPA, such as promulgation of national regulations and review of

other States' submittals. No comments were submitted on these latter

deficiencies, and so they remain as additional examples of Ohio's

submittal being inadequate to implement the mandated requirements.

Comment: The State further commented regarding emissions offsets

that ``[t]hese requirements are all contained and specified in either

Federal rules, the Clean Air Act Amendments of 1990 or in Ohio EPA

policy.''

Response: As discussed above, Ohio's existing NSR rules do not

contain (either directly or by reference) a definition of offset ratios

reflecting the amended Clean Air Act. Ohio observes that the Clean Air

Act identifies the values of the ratios to be used in various

circumstances. However, Ohio does not address the concern identified in

the NPR with the absence (in either the existing NSR rules or Ohio's

statement of permitting criteria) of detailed, explicit criteria for

evaluating offset ratios. Relevant criteria include whether fugitive or

secondary emissions (with or without mobile source emissions) are to be

included in computing the ratio, what averaging time to use, whether

the numerator or denominator is to be potential to emit or actual

emissions, and where the offsets may occur. Since these criteria are

not explicit or implicit elements of Ohio's rules, it would be

difficult and impractical to implement the mandated offset ratios

effectively and consistent with the Clean Air Act.

Comment: The State agrees that ``Appendix S is not explicit in

requiring annual, actual offsets,'' but observes that this requirement

has been established by OEPA policy and is given in Ohio's submitted

statement of permitting criteria.

Response: USEPA acknowledges that OEPA interprets its regulation to

require annual, actual offsets. However, this requirement should be

given full regulatory standing by being incorporated into enforceable

Ohio regulations.

Comment: The State asserts that it has properly relied on

definitions which are given in appendix S to 40 CFR part 51.

Response: The definitions in appendix S are insufficient because of

differences between appendix S and the amended Clean Air Act. Appendix

S defines major stationary sources as sources with the potential to

emit 100 tons per year (or sources modified such that potential to emit

increases by 100 tons per year). The Clean Air Act provides that the

term ``major stationary source'' in some areas includes sources with

lower potential to emit, such as 50 tons per year in Serious ozone

nonattainment areas. See section 182 of the Act. Since Ohio's

regulations reference both the Clean Air Act and appendix S, Ohio's

regulations are unclear as to which cutoffs apply.

Comment: The State commented on USEPA's uncertainty as to whether

the State intended in its statement of permitting criteria to lower the

threshold of nitrogen oxides (NOx) source sizes at which major

modifications would trigger new source review. The State commented it

``does not intend to change this threshold.''

Response: Notwithstanding its recent comments, the State did not

change its statement of permitting criteria. Thus, Ohio's submittal

contains a statement of permitting criteria that contradicts the

criteria for major NOx modifications given by reference (i.e. in

appendix S) in Ohio's regulations.

Comment: Three commenters commented that requiring new State

regulations every time Federal rules change would cause delays and

reduce the adaptability of the new source review process.

Response: With respect to the requirements of the 1990 Amendments,

this rulemaking does not concern whether hypothetical Federal rule

changes would require State rule revisions but rather whether the 1990

Amendments require State rule revisions. The Clean Air Act has had

significant amendments only twice since 1970, whereas Ohio has changed

its Permit to Install (NSR) rules eight times during the same period.

The commenters seek an approach that allows one set of State rules to

impose changing requirements in accordance with changes in Federal

mandates, but such approaches are prone to be too vague as to the

precise obligations of regulated entities imposed by the rules and

statute. In this particular case, the State's reference to the general

mandates in the amended Clean Air Act does not provide sufficient

specificity on the implementation of these mandates to be enforceable.

In any event, Congress clearly provided for States to revise their SIP

rules in accordance with the 1990 Amendments.

These comments raise a further issue, namely the extent to which a

State may change permitting requirements without providing opportunity

for public input by means of a rule revision process. Ohio argues that

the State's regulations provide for the applicability of requirements

resulting from subsequent Clean Air Act amendments even without

revision of the State rules. Under this view, there would be no reason

for any State SIP submittal at all, and therefore no opportunity for

public review and comment on the changed requirements. This runs

counter to the general principle that regulations are to be interpreted

based on requirements contemplated at the time of regulation adoption

and not on the basis of subsequently devised criteria. For this reason

as well, the State and USEPA would face obstacles in trying to enforce

the requirements of the Clean Air Act Amendments of 1990.

Comment: The State comments ``U.S. EPA had expressed a concern

about certain items that were identified in the Clean Air Act as part

of the review of new sources which were not identified in either state

or Federal rules. Ohio EPA proposed a policy that includes these

additional Federal requirements. The policy was issued in proposed

format and a public hearing was held on the document. After a review of

the comments, Ohio EPA submitted that policy as part of the State

Implementation Plan.''

Response: The State implicitly agrees that certain requirements in

the Clean Air Act are not addressed by any rules contained or

referenced in the State's SIP, which suggests further that these

requirements have not been given regulatory standing in Ohio. The

notice of proposed rulemaking focussed on Ohio's statement of

permitting criteria, which USEPA finds to be an inadequate instrument

for giving these requirements regulatory standing, notwithstanding that

this policy statement was subject to public hearing. (Ohio had

previously provided essentially the same policy statement without

public review, but USEPA judged this and related material not to

constitute a complete submittal.)

Comment: The State commented on USEPA's concern that two source

categories (certain types of municipal waste combustors and temporary

sources) are exempted by appendix S and thus by Ohio rules and yet are

not to be exempted under 40 CFR 51.165. The State commented that Ohio

permits must comply with Federal law, Federal law does not permit these

exemptions, and so the State has developed guidance that these

exemptions do not apply.

Response: The State did not submit to USEPA the guidance that it

claims provides that these exemptions do not apply. The State's SIP

does contain appendix S, incorporated by reference in Rule 3745-31-05,

and indeed relies on appendix S to interpret applicable new source

review requirements. Consequently, Ohio's regulations are to be

interpreted as also providing the exemptions in appendix S and

therefore do not satisfy even the pre-1990 NSR requirements of part D

of title I of the Act.

Comment: A local air pollution control agency comments that USEPA's

involvement in permit oversight assures that Federal requirements will

not be misapplied.

Response: Although USEPA agrees that its permit oversight can

improve the quality of State permits, such an oversight program is not

a substitute for an approvable SIP. USEPA cannot through oversight

establish or correct requirements which are not correctly provided in

the State regulations.

Comment: A commenter believes that USEPA acknowledges that Ohio's

statutes and regulation ``already require that the provisions of the

amended Clean Air Act be met.''

Response: The commenter is quoting statements that USEPA used to

characterize the State's position; these statements do not represent

USEPA's position.

III. Final Action

Notwithstanding comments to the contrary, USEPA's review indicates

that Ohio's submittal does not clearly establish the specific criteria

required by the Act by which judgments in new source permitting will be

made. Furthermore, by relying not on properly adopted regulations but

rather on a general regulatory provision (requiring compliance with the

Clean Air Act) in conjunction with an unenforceable statement of

permitting criteria, the State has failed to adopt enforceable SIP

provisions to implement an NSR program in accordance with the Clean Air

Act requirements. Furthermore, Ohio's existing regulations exempt two

types of sources which may not be exempted under the Act and applicable

USEPA regulations. For these reasons, USEPA takes final action to

disapprove Ohio's submittal for failure to satisfy part D requirements.

Under section 179(a)(2), one of the sanctions set forth in section

179(b) shall apply unless the deficiency has been corrected within 18

months of the effective date of this disapproval. Extensive discussion

of USEPA's sanctions procedures is given in the Federal Register of

August 4, 1994, at 59 FR 39832. Pursuant to 40 CFR 52.31, unless a

revised plan has been submitted and proposed for approval in the

meantime, a requirement for two-for-one offsets shall apply to any

permits issued after [insert date 18 months after 30 days from date of

publication] for major new sources and modifications in nonattainment

areas. Highway funding sanctions shall apply [insert date 24 months

after 30 days from date of publication], again unless a revised plan

has been submitted and proposed for approval in the meantime.

Nothing in this action should be construed as permitting, allowing

or establishing a precedent for any future request for revision to any

SIP. USEPA shall consider each request for revision to the SIP in light

of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

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

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, USEPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000.

USEPA's disapproval of the State request under section 110 and part

D of the Clean Air Act does not affect any existing requirements

applicable to small entities. Any pre-existing Federal requirements

remain in place after this disapproval. Federal disapproval of the

State submittal does not affect its State enforceability. Moreover,

USEPA's disapproval of the submittal does not impose any new Federal

requirements. Therefore, USEPA certifies that this disapproval action

would not have a significant impact on a substantial number of small

entities because it does not remove existing requirements nor does it

impose any new Federal 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 OMB has exempted this regulatory action from

Executive Order 12866 review.

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

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

of Appeals for the appropriate circuit by November 21, 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 filed, and shall not postpone the effectiveness of such

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

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

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Carbon monoxide,

Hydrocarbons, Intergovernmental relations, Nitrogen oxides, Ozone,

Particulate matter, Reporting and recordkeeping requirements, Sulfur

dioxide.

Dated: September 8, 1994.

Valdas V. Adamkus,

Regional Administrator.

Chapter I, part 52, title 40 of the Code of Federal Regulationsis

amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

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

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

Subpart KK--Ohio

2. Section 52.1879 is amended by adding paragraph (a) to read as

follows:

Sec. 52.1879 Review of new sources and modifications.

(a) The requirements of sections 172, 173, 182, and 189 for

permitting of major new sources and major modifications in

nonattainment areas for ozone, particulate matter, sulfur dioxide, and

carbon monoxide are not met, because Ohio's regulations exempt source

categories which may not be exempted and because the State has not

adopted the new permitting requirements of the Clean Air Act Amendments

of 1990 in a clear or enforceable manner.

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[FR Doc. 94-23349 Filed 9-20-94; 8:45 am]

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