Proposed Approval and Promulgation of Revisions to the New Source Review State Implementation Plan; Illinois

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IL78-1-6007; FRL-5078-3]

Proposed Approval and Promulgation of Revisions to the New Source

Review State Implementation Plan; Illinois

AGENCY: United States Environmental Protection Agency (USEPA).

ACTION: Proposed rule.

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SUMMARY: The USEPA proposes to approve with a contingency, and

disapprove in the alternative, a requested State Implementation Plan

(SIP) revision submitted by the State of Illinois for the purpose of

meeting requirements of the Clean Air Act, as amended in 1990 (amended

Act) with regard to new source review (NSR) in areas that have not

attained the national ambient air quality standards (NAAQS). The

requested revision was submitted by the State to satisfy certain

Federal requirements for an approvable nonattainment new source review

SIP for Illinois. This proposed approval is contingent upon the State

correcting existing deficiencies in its NSR submittal before the USEPA

promulgates a final rulemaking on this submittal. Should Illinois fail

to correct all deficiencies in its NSR submittal, then this document

will serve as a proposed disapproval of the State's submittal.

DATES: Comments on this proposed action must be received in writing by

November 22, 1994.

ADDRESSES: Comments on this proposed rule should be addressed to: J.

Elmer Bortzer, Chief, Regulation Development Section, Regulation

Development Branch (5AR-18J), United States Environmental Protection

Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.

Copies of the State's submittal and other information are available

for inspection during normal business hours at the following location:

United States Environmental Protection Agency, Region 5, Air and

Radiation Division, Regulation Development Branch, 77 West Jackson

Boulevard, Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: Jennifer Drury-Buzecky, Environmental

Protection Specialist, Permits and Grants Section, Regulation

Development Branch (5AR-18J), United States Environmental Protection

Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604.

Anyone wishing to come to the Region 5 offices should first contact

Ms. Drury-Buzecky at (312) 886-3194. Reference file IL78-1-6007.

SUPPLEMENTARY INFORMATION:

I. Background

The air quality planning requirements for nonattainment NSR are set

out in part D of title I of the Clean Air Act (Act). The USEPA has

issued a ``General Preamble'' describing its preliminary views on how

USEPA 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 USEPA 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 proposal and the supporting rationale. The USEPA is currently

developing a proposed rule to assist the implementation of the changes

under the amended Act in the new source review provisions in parts C

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

rule will be published for public comment in late 1994. If USEPA has

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

may refer to the proposed rule as the most authoritative guidance

available regarding the approvability of the submittals. USEPA expects

to take final action to promulgate a rule to implement the parts C and

D changes sometime during 1995. Upon promulgation of those regulations,

USEPA will review the NSR SIPs of all States to determine whether

additional SIP revisions are necessary.

Prior to USEPA 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, USEPA 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 apply 40 CFR part 51,

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

SIP requirements.

The September 3 memorandum also addressed the situation where

States did not submit the part D NSR SIP requirements or revisions by

the applicable statutory deadline. For permit applications found

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, USEPA will consider the source to be in compliance

with the Act only where the source obtains from the State a permit that

is consistent with the substantive new NSR part D provisions in the

amended Act. USEPA believes this guidance continues to apply to

permitting pending final action on NSR SIP submittals.

In this rulemaking action on the Illinois nonattainment NSR SIP

revisions, USEPA is proposing to apply its interpretations taking into

consideration the specific factual issues presented. Thus, USEPA will

consider any timely submitted comments before taking final action on

this proposed rule.

II. Proposed Rulemaking Action

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

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

A. Analysis of State Submission

1. Procedural Background

The Act requires States to observe certain procedural requirements

in developing implementation plans and plan revisions for submission to

USEPA. 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.

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\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).

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The USEPA also must determine whether a submittal is complete and

therefore warrants further USEPA review and action. (See section

110(k)(1) and 57 FR 13565 (April 16, 1992).) The USEPA's completeness

criteria for SIP submittals are set out at 40 CFR part 51, appendix V.

The USEPA 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 USEPA within 6 months after receipt of the

submission.

The State of Illinois submitted draft NSR rules to USEPA for

parallel processing on November 15, 1992. The State of Illinois then

held public hearings on January 6 and February 5, 1993, to entertain

public comment on the NSR implementation plan revisions. At those

hearings, the Illinois Pollution Control Board (Board) formally adopted

several interpretations of those rules. Following the public hearings,

the rules were adopted by the State on April 30, 1993, and both the

rules and interpretations were submitted to USEPA on June 21, 1993, as

a requested revision to the SIP. The requested SIP revision thus

includes the NSR rules and the interpretations of those rules adopted

by the State.

The SIP revision request was reviewed by USEPA to determine

completeness shortly after its submittal, in accordance with the

completeness criteria referenced above. The submittal was found to be

complete on August 24, 1993, and a letter was sent on that date to the

Governor's designee, Bharat Mathur, Chief, Bureau of Air, Illinois

Environmental Protection Agency, indicating the completeness of the

submittal and the next steps to be taken in the review process. On May

27, 1994, the State submitted an amendment to its NSR submittal

consisting of a correction of 35 Ill. Adm. Code Section 203.209 (a)(4).

USEPA will consider that amendment in this rulemaking.

2. General Nonattainment NSR Requirements

The statutory requirements for nonattainment new source review SIPs

and permitting are found at sections 172 and 173 of the Act. Part D of

title I of the Act requires States to address a number of nonattainment

NSR provisions in a SIP revision submittal. What follows is a summary

of the requirements and how the Illinois submittal addresses them.

a. No growth moratoriums exist in the State of Illinois subsequent

to USEPA action on December 17, 1992. 57 FR 59928.

b. Illinois has established provisions according to section

173(a)(1) to assure that calculations of emissions offsets are based on

the same emissions baseline used in the demonstration of Reasonable

Further Progress (RFP).

c. Illinois has established provisions according to section

173(c)(1) to allow offsets to be obtained in another nonattainment area

if the area has an equal or higher nonattainment classification and

emissions from the other nonattainment area contribute to a NAAQS

violation in the area in which the source would construct.

d. Illinois has established provisions according to section

173(c)(1) 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.

e. Illinois has established provisions according to section

173(c)(1) to assure that emissions increases from new or modified

sources are offset by real reductions in actual emissions.

f. Illinois has established provisions according to section

173(c)(2) to prevent emissions reductions otherwise required by the Act

from being credited for purposes of satisfying part D offset

requirements.

g. Illinois has established provisions according to sections

172(c)(4) and 173(a)(1)(B) that reflect changes in growth allowances;

specifically: (1) The elimination of existing growth allowances in any

nonattainment area that received a notice prior to the amended Act that

the SIP was substantially inadequate or receives such a notice in the

future; and (2) the restriction of growth allowances to only those

portions of nonattainment areas formally targeted as special zones for

economic development. It should be noted that Illinois does not have

any existing growth allowances in nonattainment areas, nor are there

currently any existing zones for economic development. The State's

submittal, however, does restrict growth allowances to special zones

for economic development in accordance with section 173(a)(1)(B) of the

amended Act.

h. Illinois has established provisions according to section

173(a)(5) that, as a prerequisite to issuing any part D permit, require

an analysis of alternative sites, sizes, production processes, and

environmental control techniques for proposed sources that 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.

i. Illinois has provided according to section 173(d) for the

supplying of information from nonattainment new source review permits

to USEPA's Reasonably Available Control Technology, Best Available

Control Technology, Lowest Achievable Emissions Reduction (RACT/BACT/

LAER) clearinghouse. This provision is contained in the State's

workplan of its NSR grant.

j. Illinois has established provisions according to section 173(e)

that 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, if four conditions are met:

(a) The proposed modification is for expansion of a facility already

permitted for such purposes prior to November 15, 1990; (b) the source

has used all available offsets and all reasonable means to obtain

offsets and sufficient offsets are not available; (c) the source has

obtained a written finding by the appropriate, sponsoring Federal

agency that the testing is essential to national security; and (d) the

source will comply with an alternative measure designed to offset any

emissions increases not directly offset by the source.

k. Illinois has not established provisions according to section 819

of the amended Act that effectively exempt activities related to

stripper wells from the new additional NSR requirements of new subparts

2, 3, and 4 for Particulate Matter of 10 microns or less (PM-10),

Ozone, or Carbon Monoxide (CO) nonattainment areas classified as

serious or less and having a population of less than 350,000. Illinois

does not presently have any stripper well operations and, therefore,

this provision does not apply.

l. Illinois has not established provisions according to section 328

to assure that sources located on the Outer Continental Shelf (OCS) and

within 25 miles of the State's seaward boundary, are subject to the

same requirements applicable if the source were located in the

corresponding on shore area. Because the State is not located on the

OCS, section 328 does not apply.

m. Illinois has established, according to sections 302(z) and

111(a)(3), a definition of ``stationary source'' to include internal

combustion engines other than the newly defined category of ``nonroad

engines''.

n. Illinois has established provisions under section 173(a)(3) to

assure that owners or operators of each proposed new or modified major

stationary source demonstrate, as a condition of permit issuance, the

compliance of all other major stationary sources under the same

ownership in the State.

3. Ozone

According to section 172(c)(5), State implementation plans must

require permits for the construction and operation of new or modified

major stationary sources. The statutory permit requirements in ozone

nonattainment areas are generally contained in section 173, and in

subpart 2 of part D. These are the minimum requirements that States

must include in an approvable implementation plan. For all

classifications of ozone nonattainment areas and for ozone transport

regions, States must adopt the appropriate major source thresholds and

offset ratios, and must adopt provisions to ensure that any new or

modified major stationary source of Oxides of Nitrogen (NOX)

satisfies the requirements applicable to any major source of Volatile

Organic Compounds (VOC), unless a special NOX exemption is granted

by the Administrator under the provision of section 182(f). For serious

and severe ozone nonattainment areas, State plans must implement

sections 182(c) (6), (7) and (8) with regard to modifications. For

emissions of VOC and NOX in ozone nonattainment areas, Illinois

has established major source thresholds, offset ratios, and included

provisions for NOX major stationary sources as follows:

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Major

Area classification source Offset NOXprovisions

threshold ratio

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Marginal........................ 100 1.1:1 provided.

Moderate........................ 100 1.15:1 provided.

Serious......................... 50 1.2:1 provided.

Severe.......................... 25 1.3:1 provided.

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It should be noted that there are no areas classified as extreme ozone

nonattainment areas in Illinois. The State has areas classified as

severe, moderate and marginal.

In addition, with certain exceptions described below, Illinois'

plan submittal reflects appropriate modification provisions, including

a de minimis level of 40 tons for marginal and moderate nonattainment

areas. Section 203.209 of the State's rules details when a net

emissions increase is significant. In general, a net emission increase

is significant if it is equal to the emissions level specified in

section 203.209(a)(1)-(6) and section 203.209(b). In order to establish

whether an increase in emissions is significant, the net emissions

increase must be calculated. USEPA interprets its current regulations

for areas other than serious and severe ozone nonattainment areas as

requiring that a proposed modification must by itself result in a

significant emissions increase to be considered a major modification.

If it does not result in a significant emissions increase, prior

accumulated emissions may be ignored. USEPA interprets Illinois' NSR

rules in the same manner. Traditionally, the calculation of net

emissions involves adding the creditable increases and decreases over a

period of time beginning at the time the emission increase is projected

to occur and going back for the previous consecutive 5 years. Illinois

seeks to rely on section 182(c)(6) of the amended Act to establish a

new method of calculating net emission increases in serious and severe

ozone nonattainment areas.

Section 203.209(b) of the Illinois rule states that an increase in

Volatile Organic Material (VOM), an equivalent term to VOC, or NOX

shall be considered significant if the net emissions increase of such

air pollutant from a stationary source located within such area exceeds

25 tons when aggregated with all other net increases in emissions from

the source over any period of 5 consecutive calendar years which

includes the calendar year in which such increase occurred. Although

Illinois' section 203.209(b) is very similar to section 182(c)(6) of

the Act for netting in serious and severe ozone nonattainment areas, an

issue exists regarding the proper interpretation of ``5 consecutive

calendar years'' and ``net emissions increase''.

USEPA believes that the language of section 203.209(b) by itself

would be approvable, however, the two written interpretations of

section 203.209(b) adopted by the State, unless withdrawn, will require

disapproval of the State's submittal. USEPA, therefore, proposes to

approve section 203.209(b) contingent upon the actual withdrawal of the

Board's interpretations prior to final rulemaking. If the Board does

not withdraw these interpretations by USEPA's final rulemaking, then

this notice serves as a proposed disapproval of this SIP revision

submittal. The reasons for USEPA's proposed approval (contingent upon

withdrawal of these interpretations) are outlined below. For further

information regarding this rulemaking refer to the technical support

document included in this docket.

To accompany section 203.209(b) of the Illinois rule, intended to

implement section 182(c)(6) of the Act, Illinois submitted two

interpretations of the rule adopted by the State. The first

interpretation allows a source in a serious or severe ozone

nonattainment area to use a contemporaneous 5-year period for netting

that includes projected emission decreases in future years as well as

actual decreases from past years. In other words, under Illinois'

interpretation, a source could propose a modification resulting in a

significant emission increase and yet not be required to obtain a major

NSR permit merely because the source asserts that it intends to make a

future modification resulting in an emission decrease. As discussed

below, Illinois' rule and interpretations fail to assure that such

future emission decreases will in fact occur. USEPA is not in this

rulemaking proposing to decide whether future years are acceptable for

purposes of netting emission increases and decreases under section

182(c)(6). In a rulemaking to revise and update its nationally

applicable NSR rules, USEPA will soon propose its interpretation of

section 182(c)(6), (7) and (8) and intends to request comments on the

use of emission decreases in future years as netting credits against

emission increases from a proposed modification or new construction.

After this national rulemaking becomes final, USEPA will reexamine all

NSR SIPs to ensure conformity with USEPA's new regulations to implement

the amended Act.

The State's interpretation allowing the use of emission decreases

in future years does not ensure that these future decreases will be

federally enforceable. For example, the Illinois interpretation of the

rule does not require that future decreases be placed in a construction

permit as a federally enforceable permit condition, nor does the rule

or interpretation require that these future decreases meet all

requirements for creditable netting credits. One such requirement is

that decreases used for netting purposes be actual emission decreases.

Although USEPA does not intend in this proposed rulemaking to address

the issue of whether future decreases may ever be used under section

182(c)(6), USEPA believes that future decreases certainly may not be

used where the SIP does not require these decreases to be federally

enforceable. Federal enforceability is essential to assure that the

projected future netting reductions being relied on to offset the new

emission increase will actually occur so that the net emission increase

is less than a significant increase and is not improperly escaping

review. To summarize, although Illinois' written interpretation of the

rule is not approvable, the language of the rule, standing alone, would

be approvable.

The second interpretation of section 203.209(b) adopted by the

State concerns whether a net emissions increase of a particular

pollutant is significant. The interpretation states that the netting

calculation commences with the date of an area's designation as

nonattainment. Many of these nonattainment designations occurred after

the November 15, 1990, effective date of the Act. Using the State's

interpretation, the 5-year period for calculation of a net emissions

increase of NOX in the Chicago area would not begin until November

15, 1992. This would allow a NOX source applying for a NSR permit

in Chicago on November 15, 1992, to use a 5-year contemporaneous period

from November 15, 1992, to November 15, 1997. Past emission increases

occurring before November 15, 1992, would not be included in the

calculation to determine whether the proposed project would result in a

significant emissions increase because Illinois' interpretation does

not allow the netting calculation for NOX to begin until November

15, 1992.

The Illinois interpretation of the rule specifically provides: (1)

The netting calculation for VOM emissions commences no earlier than

January 6, 1992, in the newly designated nonattainment areas in the

Chicago area; (2) for sources located in all ozone nonattainment areas

of the State, the calculation for NOX commences no earlier than

November 15, 1992; (3) for sources with the potential to emit at least

25 tons per year (tpy) but less than 100 tpy and which are located in

the Chicago nonattainment area, the netting calculation for VOM

emissions commences at either the time that the source became major or

November 15, 1990, whichever is later; and (4) for sources with

complete construction permit applications filed (including Prevention

of Significant Deterioration applications) prior to the date of an area

as nonattainment, or the dates given above, whichever occurs later, the

netting calculation shall not include emission increases allowed by

that permit.

This four-part second interpretation of section 203.309(b)

compounds the problems discussed above concerning the first

interpretation. Whereas the first interpretation allows sources to use

future decreases, the second interpretation, by cutting off use of past

years, compels sources in serious and severe ozone nonattainment areas

to use future years for the netting calculation, again without

requiring these future emission decreases to be federally enforceable.

Thus, all interpretations of the rule adopted by the State do not

ensure the Federal enforceability of all emission decreases in the

contemporaneous period and fail to account for all emission increases.

USEPA believes that all interpretations should be disapproved as

conflicting with the Act. Because the language of the rule, standing

alone, would be approvable, USEPA proposes to approve section

203.209(b) adopted by the State contingent upon the Board withdrawing

all interpretations of section 203.209(b) prior to final USEPA

rulemaking.

The USEPA is limited in its ability to disapprove a portion of a

State rule and approve the remainder if the effect is to make the

approved portion of the rule more stringent than intended by the State.

In Bethlehem Steel Corporation v. Gorsuch 742 F. 2d 1028 (7th Cir.

1984), the Court held that at least in certain circumstances USEPA may

not approve parts of a SIP request and disapprove other parts if the

effect of the action is to make the SIP more stringent than the State

intended. For this reason in order for USEPA to approve the State's NSR

rule, the interpretations of section 203.209(b) adopted by the Board in

its final Opinion and Order of the Board must be withdrawn from the

Opinion and Order.

The State of Illinois' NSR rules for serious and severe ozone

nonattainment areas provide that major modifications to existing

sources that have a potential to emit of less than 100 tpy of VOM or

NOX shall substitute BACT for LAER and may avoid major NSR by

internally offsetting the emissions increase by a ratio of 1.3 to 1.

The State also provides that major modifications to existing sources

that have a potential to emit of greater than 100 tpy of VOM or

NOX may avoid LAER requirements by internally offsetting the

emissions increase by a ratio of 1.3 to 1. For more detail, refer to

the technical support document included with this docket.

4. Carbon Monoxide

The statutory NSR requirements for CO nonattainment areas are

generally contained in section 173, and in subpart 3 of part D. These

are the minimum requirements that States must include in an approvable

implementation plan. States must adopt the appropriate major source

threshold and offset ratio.

Illinois has established a major source threshold of 50 tpy, and an

offset ratio of an amount equal to or greater than the amount of

emission increase for serious CO nonattainment areas. It should be

noted that there are no CO nonattainment areas in Illinois.

5. PM-10

The statutory NSR requirements for PM-10 nonattainment areas are

generally contained in section 173, and in subpart 4 of part D. These

are the minimum requirements that States must include in an approvable

implementation plan. For PM-10 nonattainment areas States must adopt

the appropriate major source threshold, offset ratio, significance

level for modifications, and provisions for PM-10 precursors.

Illinois has established major source thresholds, offset ratios,

modification significance levels, and PM-10 precursor provisions as

follows: In section 203.209(b)(4) a major source threshold level of 100

tpy in an area classified as moderate nonattainment, 70 tpy major

source threshold level in areas classified as serious, and in its

initial submittal, an incorrect significance level of 25 tpy in section

203.209. The State, however, amended this incorrect significance level

to provide for the correct level of 15 tpy in a subsequent rulemaking

effective April 15, 1994. 35 Ill. Adm. Code 203.209(a)(4). This

rulemaking was submitted to USEPA on May 27, 1994, to correct the

deficiency in the original submittal. USEPA is, therefore, proposing to

take action on the corrected 15 tpy significance level. The general

offset requirement of an amount equal to or greater than the amount of

emissions increase is established in section 203.302(a).

The control requirements which are applicable to major stationary

sources of PM must also apply to major stationary sources of PM

precursors unless USEPA determines such sources do not contribute

significantly to PM levels which exceed the NAAQS in that area (see

section 189(e) of the Act.) Illinois has four moderate PM-10

nonattainment areas: McCook, LaSalle, Lake Calumet and Granite City.

See TSD for definitions of these nonattainment areas. On October 21,

1993, USEPA promulgated a final rule finding that precursors do not

significantly contribute to PM concentrations in the LaSalle

nonattainment area. 58 FR 54291. USEPA also proposed a rulemaking

asserting that precursors do not significantly contribute to PM

concentrations in the remaining three nonattainment areas. This

proposal was published on May 25, 1994. 59 FR 26988. If this action is

finalized, section 189(e) would no longer require NSR on major PM

precursor sources. Please see TSD if more information is desired, or

see the May 25, 1994, proposed rule at 59 FR 26988.

6. Sulfur Dioxide

The statutory NSR requirements for Sulfur Dioxide (SO2)

nonattainment areas are generally contained in section 173, and in

subpart 5 of part D. These are the minimum requirements that States

must include in an approvable implementation plan. For SO2

nonattainment areas, States must adopt the appropriate major source

threshold, offset ratio, and significance level for modifications.

Illinois has established a major source threshold of 100 tpy, an

offset ratio of an amount equal to or greater than the amount of

emissions increased, and a modification significance level of 40 tpy.

7. Lead

The statutory NSR requirements for lead nonattainment areas are

generally contained in section 173, and in subpart 5 of part D. These

are the minimum requirements that States must include in an approvable

implementation plan. For lead nonattainment areas, States must adopt

the appropriate major source threshold, offset ratio, and significance

level for modifications.

Illinois has established a major source threshold level of 100 tpy,

an offset ratio of an amount equal to or greater than the amount of

emissions increased, and a modification significance level of .6 tpy.

It should be noted that there are presently no lead nonattainment areas

in Illinois.

8. Nitrogen Dioxide

The statutory NSR requirements for nitrogen dioxide nonattainment

areas are generally contained in section 173, and in subpart 5 of part

D. These are the minimum requirements that States must include in an

approvable implementation plan. For nitrogen dioxide nonattainment

areas, States must adopt the appropriate major source threshold, offset

ratio, and significance level for modifications.

Illinois has established a major source threshold of 100 tpy, an

offset ratio of an amount equal to or greater than the amount of

emissions increased, and a modification significance level of 40 tpy.

It should be noted that there are presently no nitrogen dioxide

nonattainment areas in Illinois.

9. Plantwide Source Definition

On October 4, 1981, the USEPA revised the NSR regulations in 40 CFR

part 51 to give States the option of adopting the ``plantwide''

definition of stationary source which provides that only physical or

operational changes that result in a net increase in emissions at the

entire plant require a NSR permit. For example, if a plant decreased

emissions by the same amount at another piece of process equipment,

then there would be no net increase in emissions at the plant and

therefore, no ``modification'' to the ``source.'' The plantwide

definition is in contrast to the so-called ``dual'' definition [or

definition of structure like that in the 1979 offset ruling (44 FR

3274), which has much the same effect as the dual definition]. Under

the dual definition, the emissions from each physical or operational

change are gauged without regard to reductions elsewhere at the plant.

In the October 1981 rule, USEPA set forth its rationale for

allowing use of the plantwide definition (46 FR 50766-50769). In its

view, allowing use of the plantwide definition was a reasonable

accommodation of the conflicting goals of part D of title I of the Act.

The Act provided for reasonable further progress (RFP) and timely

attainment of National Ambient Air Quality Standards (NAAQS), while

also allowing for maximum State flexibility and economic growth. The

USEPA recognized that the plantwide definition would bring fewer plant

modifications into the nonattainment permitting process, but emphasized

that this generally would not interfere with RFP and timely attainment

primarily because the States under the demands of part D eventually

would have adequate SIPs in place. For instance, USEPA stated:

Since demonstration of attainment and maintenance of the NAAQS

continues to be required, deletion of the dual definition increases

State flexibility without interfering with timely attainment of the

ambient standards and so is consistent with Part D [46 FR 50767].

USEPA also indicated that under the plantwide definition, new

equipment would still be subjected to any applicable new source

performance standard and that wholly new plants, as well as any

modifications that resulted in a significant net emissions increase,

would still be subject to NSR. Thus, USEPA saw no significant

disadvantage in the plantwide definition from the environmental

standpoint, but advantages from the standpoints of State flexibility

and economic growth. It regarded the plantwide definition as

presenting, at the very worst, environmental risks that were manageable

because of the independent impetus to create adequate part D plans.

As a result, USEPA ruled that a State wishing to adopt a plantwide

definition generally has complete discretion to do so, and it set only

one restriction on that discretion. If a State had specifically

projected emission reductions from its NSR program as a result of a

dual or similar definition and had relied on those reductions in an

attainment strategy that USEPA later approved, then the State needed to

revise its attainment strategy as necessary to accommodate reduced NSR

permitting under the plantwide definition (46 FR 50767 and 50769).

In 1984, the Supreme Court upheld USEPA's action as a reasonable

accommodation of the conflicting purposes of part D of title I of the

Act, and hence, well within USEPA's broad discretion. Chevron, U.S.A.

v. NRDC, 104 S.Ct. 2778 (1984). Specifically, the Court agreed that the

plantwide definition is fully consistent with the Act's goal of

maximizing State flexibility and allowing reasonable economic growth.

Likewise, the Court recognized that USEPA had advanced a reasonable

explanation for its conclusion that the plantwide definition serves the

Act's environmental objectives as well (see 104 S.Ct. at 2792). In this

rule USEPA generally reaffirms the rationales stated in the 1981

rulemaking. Those rationales were left undisturbed by the Supreme Court

decision.

The SIP revision USEPA is approving in this action substitutes a

plantwide definition for a dual definition in Illinois' existing

nonattainment NSR program. A September 2, 1994, letter from Bharat

Mathur, Chief, Bureau of Air of IEPA, to Stephen Rothblatt, Chief, Air

and Radiation Branch, USEPA, states Illinois' rationale for

implementing the plantwide definition. The letter further states that

in obtaining USEPA approval of its original part D SIP, Illinois did

not rely on emission reductions from its existing NSR program. Illinois

has nonattainment areas for sulfur dioxide, ozone, and fine particulate

matter. Illinois has submitted several revisions required by the

amended Act prior to attainment of the NAAQS by the statutory dates,

which range from 1994 to 2007 for the nonattainment areas in Illinois.

For example, Illinois has submitted revisions for VOC RACT Rule Fix-

ups, Stage II vapor recovery, employee commute options, 1990 base year

ozone emissions inventories, and emission statement. These revisions

have been or will be acted on by USEPA in subsequent actions.

10. Miscellaneous Definitions

Section 203.123 of the Board's rules adds the definition of

federally enforceable to the State's NSR SIP. The State's definition is

consistent with 40 CFR 51.165(a)(i)(xiv).

Section 203.303 of the Board's rules amends the definition of

baseline and emission offsets determination. The new definition

provides that to obtain offsets for a prior shutdown, the proposed new

or modified source must be a replacement for the shutdown or

curtailment until USEPA approves an attainment demonstration and State

trading or marketing rules for the relevant pollutant. This definition

complies with 40 CFR 51.165(a)(3)(ii)(C).

III. Implications of This Action

Proposed Rulemaking Actions

As stated above, the Illinois NSR submittal contains a deficiency

for which USEPA proposes approval of the State's requested SIP revision

with a contingency and a proposed disapproval in the alternative.

Illinois adopted written interpretations of section 203.209(b) in

an attempt to implement the amended Act's special provisions for

serious and severe ozone nonattainment areas, section 182(c)(6)-(8).

USEPA proposes to approve section 203.209(b) adopted by the State only

if the State withdraws its interpretations. The interpretations adopted

by the State are deficient in that they do not ensure the Federal

enforceability of any future emission reductions used for netting

credits and fail to account for all emission increases occurring during

the contemporaneous period. This proposed approval is contingent upon

the withdrawal of all Board interpretations of section 203.209(b) as

soon as possible. If the Board's interpretations of section 203.209(b)

are not withdrawn before final rulemaking, USEPA proposes in the

alternative that USEPA's final action would be a disapproval of the

entire submittal.

After the completion of the 60-day public comment period, USEPA

will ordinarily require 30 days to prepare a final notice incorporating

all comments received. This notice is then forwarded to USEPA

headquarters for review. Once USEPA headquarters' 45-day review period

is completed, the final notice will be sent to the Office of the

Federal Register for publication. USEPA, therefore, expects to take

final action on this rulemaking within 180 days of publication of this

proposal.

USEPA is alternatively proposing disapproval of the State's

submittal. If finalized, this proposed disapproval would constitute a

disapproval under section 179(a)(2) of the Act (see generally 57 FR

13566-13567). As provided under section 179(a) of the Act, the State of

Illinois would have up to 18 months after a final SIP disapproval to

correct the deficiencies that are the subject of the disapproval before

USEPA is required to impose sanctions. If the State does not correct

its SIP deficiencies within 18 months, then section 179(a)(4) requires

the immediate application of sanctions. According to 179(b), sanctions

can take the form of a loss of highway funds or a two to one emissions

offset ratio. Once the Administrator applies one of the section 179(b)

sanctions, the State will then have an additional six months to correct

any deficiencies. Section 179(a)(4) requires that both highway and

offsets sanctions must be applied if any deficiencies are still not

corrected after the additional six month period.

On August 4, 1994, the USEPA finalized its selection of sequence of

mandatory sanctions for findings made pursuant to section 179 of the

Act. 59 FR 39832. This rulemaking states that the section 179(b)(2)

offset sanction applies in an area 18 months from the date when the

USEPA makes a finding under section 179(a) with regard to that area.

Furthermore, the section 179(b)(1) highway funding restrictions apply

in an area 6 months following application of the offset sanction. The

USEPA will sequence the application of the section 179(b) sanctions in

this manner in all cases unless the USEPA decides highway sanctions

apply first by individual notice-and-comment rulemaking. USEPA,

therefore, anticipates that the first sanction it would impose would be

the two to one offset sanction. If the State has not corrected its

deficiency within 6 months thereafter, USEPA must impose the other

(highway) sanction. Any sanction USEPA imposes must remain in place

until USEPA determines that the State has come into compliance.

If the USEPA's proposed disapproval of all or part of the SIP

submittal for the State's nonattainment new source review provisions

become a final disapproval, this will constitute a ``finding'' under

section 179(a) for which sanctions will apply as described above. If

the State fails to correct the deficiency within 18 months of such

disapprovals, USEPA is required to impose sanctions per section 179(a)

and presumably in the order described above. Note also that any final

disapproval would trigger the section 110(c)(1) Federal Implementation

Plan (FIP) provision. In the interim between the finding and either the

State's correction of the SIP or the promulgation of the FIP, the State

must issue NSR permits that conform with the requirements of the Act.

These requirements will be embodied in the Federal part D NSR

permitting regulations at 40 CFR 52.10.

IV. Request for Public Comments

The USEPA is requesting comments on all aspects of the requested

SIP revision and USEPA's proposed rulemaking action. Comments received

by the date indicated above will be considered in the development of

USEPA's final rulemaking action.

V. Executive Order 12866

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.

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 the SIP shall be

considered separately in light of specific technical, economic, and

environmental factors and in relation to relevant statutory and

regulatory requirements.

VI. Regulatory Flexibility

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

subchapter I, part D of the Act, does not affect any existing

requirements applicable to small entities. Any pre-existing Federal

requirements remain in place after this disapproval. Federal

disapproval of the State submittal does not affect its state-

enforceability. Moreover, USEPA's disapproval of the submittal does not

impose any new Federal requirements. Therefore, USEPA certifies that

this disapproval action does not have a significant impact on a

substantial number of small entities because it does not remove

existing requirements nor does it impose any new Federal requirements.

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 USEPA to base its actions concerning SIP's 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).

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Intergovernmental relations, Nitrogen dioxide, Particulate matter,

Lead, Carbon Monoxide, Reporting and recordkeeping requirements, Sulfur

dioxide, Volatile organic compounds.

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

Dated: September 15, 1994.

Robert Springer,

Acting Regional Administrator.

[FR Doc. 94-23604 Filed 9-22-94; 8:45 am]

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