Approval and Promulgation of Implementation Plans; State of Tennessee and Memphis-Shelby County, Tennessee

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[TN-155-1-7178; TN-MEM-149-3-9701; FRL-5669-3]

Approval and Promulgation of Implementation Plans; State of

Tennessee and Memphis-Shelby County, Tennessee

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is approving revisions to the Tennessee State

Implementation Plan (SIP) to allow the State to issue Federally

enforceable state operating permits (FESOP). EPA is also approving

revisions to the Memphis-Shelby County portion of the Tennessee SIP to

allow the County to issue Federally enforceable local operating permits

(FELOP). EPA is also approving the State's FESOP program and the

County's FELOP program pursuant to section 112 of the Clean Air Act as

amended in 1990 (CAA or ``the Act'') so that both permitting agencies

may issue Federally enforceable state operating permits containing

limits for hazardous air pollutants (HAP).

DATES: This final rule is effective April 14, 1997 unless adverse or

critical comments are received by March 17, 1997. If the effective date

is delayed, timely notice will be published in the Federal Register.

ADDRESSES: Written comments should be addressed to Gracy R. Danois at

the EPA Regional Office listed below. Copies of the documents used in

developing this action are available for public inspection during

normal business hours at the locations listed below. Interested persons

wanting to examine these documents, contained in files TN155 and TN149-

3, should make an appointment with the appropriate office at least 24

hours before the visiting day:

Air and Radiation Docket and Information Center (Air Docket 6102), U.S.

Environmental Protection Agency, 401 M Street, SW, Washington, DC

20460.

U.S. Environmental Protection Agency, Region 4, Air and Radiation

Technology Branch, Atlanta Federal

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Center, 100 Alabama Street, SW, Atlanta, Georgia 30303.

Tennessee Department of Environment and Conservation, L & C Annex, 401

Church Street, Nashville, Tennessee, 37243-1531.

Memphis-Shelby County Health Department, 814 Jefferson Avenue, Room

437-E, Memphis, Tennessee, 38105.

FOR FURTHER INFORMATION CONTACT: Gracy R. Danois, Air and Radiation

Technology Branch, Air, Pesticides & Toxics Management Division, U.S.

Environmental Protection Agency, Region 4, Atlanta Federal Center, 100

Alabama Street, SW, Atlanta, Georgia 30303, 404/562-9119. Reference

files TN155 and TN149-3.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

On January 10, 1995, and May 3, 1995, Memphis-Shelby County and the

State of Tennessee, respectively, through the Tennessee Department of

Environment and Conservation (TDEC), submitted SIP revisions to make

certain permits issued under the County's and the State's existing

minor source operating permit program Federally enforceable pursuant to

the EPA requirements specified in the Federal Register notice entitled

``Requirements for the Preparation, Adoption, and Submittal of

Implementation Plans; Approval and Promulgation of Implementation

Plans'' (see 54 FR 27274, June 28, 1989). Additional materials

concerning HAPs and the implementation of the FESOP and FELOP programs

were provided by the State and the County to EPA on March 8, 1996, and

June 12, 1996, and March 13, 1996, and September 4, 1996, respectively.

EPA has always had and continues to have the authority to enforce

state permits which are issued under permit programs approved into the

SIP. However, EPA has not always recognized, as valid, certain state

permits which purport to limit a source's potential to emit. The

principle purpose for adopting the regulations that are the subject of

this notice is to give the State of Tennessee and Memphis-Shelby County

a Federally recognized means of expeditiously restricting potential

emissions such that sources can avoid major source permitting

requirements. A key mechanism for such limitations is the use of

Federally enforceable state or local operating permits. The term

``Federally enforceable,'' when used in the context of permits which

limit potential to emit, means ``Federally recognized.''

The voluntary revision that is the subject of this action approves

Division Rule 1200-3-9-.02(11)(a) into both the State and the County

portions of the Tennessee SIP. This rule and the additional materials

provided by the State and the County satisfy the five criteria outlined

in the June 28, 1989, Federal Register notice. Please refer to section

II of this notice for the analysis of each of the criteria.

II. Analysis of State and County Submittals

Memphis-Shelby County has adopted the majority of the State of

Tennessee's Division Rules in the Memphis City Code. The County

maintains the numbering system used by the State of Tennessee within

its regulations. Therefore, all references to the State of Tennessee's

Division Rules are also applicable to Memphis-Shelby County, unless

otherwise noted.

Criterion 1. The state's operating permit program (i.e. the

regulations or other administrative framework describing how such

permits are issued) must be submitted to and approved by EPA as a SIP

revision. On January 10, 1995, and May 3, 1995, respectively, Tennessee

and Memphis-Shelby County submitted SIP revision requests to EPA

consisting of Division Rule 1200-3-9-.02(11)(a), amending the

stationary source general requirements. Additional materials concerning

hazardous air pollutants and the operating permit program were

submitted to EPA by Memphis-Shelby County and Tennessee on March 8,

1996, and June 12, 1996, and on March 13, 1996, and September 4, 1996,

respectively. These submittals are the subject of this rulemaking

action.

Criterion 2. The SIP revision must impose a legal obligation that

operating permit holders adhere to the terms and limitations of such

permits (or subsequent revisions of the permit made in accordance with

the approved operating permit program) and provide that permits which

do not conform to the operating permit program requirements and the

requirements of EPA's underlying regulations may be deemed not

``Federally enforceable'' by EPA. Division Rule 1200-3-9-.02(6)

requires each air contaminant source to obtain a permit to operate and

to operate in accordance with ``the provisions and stipulations set

forth in the operating permit, all provisions of these regulations, and

all provisions of the Tennessee Air Quality Act.'' In addition,

Tennessee has committed to include the following statement in all

operating permits issued pursuant to Division Rule 1200-3-9-.02(11):

``The permittee is placed on notice that Condition(s) ________ of this

operating permit contain(s) limitations that allow the permittee to

opt-out of the major source operating permit program requirements

specified in Division Rule 1200-3-9-.02(11). Failure to abide by these

limits will not only subject the permittee to enforcement action by the

State of Tennessee, but it may also result in the imposition of Federal

enforcement action by the United States Environmental Protection Agency

and the loss of being Federally recognized as a conditional major

source.'' Memphis-Shelby County has committed to incorporate similar

language in the operating permits it issues pursuant to the same

Division Rule.

Criterion 3. The state operating permit program must require that

all emission limitations, controls, and other requirements imposed by

such permits will be at least as stringent as any applicable

limitations and requirements contained in the SIP, or enforceable under

the SIP, and that the program may not issue permits that waive, or make

less stringent, any limitations or requirements contained in or issued

pursuant to the SIP, or that are otherwise ``Federally enforceable''

(e.g. standards established under sections 111 and 112 of the Clean Air

Act). Division Rule 1200-3-9-.02(6) contains regulatory provisions

which state that operating permits issued by Tennessee and Memphis-

Shelby County will be at least as stringent as any applicable

requirement. Applicable requirement is defined in Division Rule 1200-3-

9-.02(11)(b)(5) to include all SIP requirements.

Criterion 4. The limitations, controls and requirements of the

state's operating permits must be permanent, quantifiable, and

otherwise enforceable as a practical matter. Division Rules 1200-3-

9-.02(6) and 1200-3-9-.02(11)(a) contain regulatory provisions which

satisfy this criterion. Permits must contain a statement of basis

comparing the source's potential to emit with the more restrictive

limit and the procedures to be followed that will insure that the more

restrictive limit is not exceeded. Concerning permanence, Division Rule

1200-3-9-.02(11)(a), establishes that in order to obtain a synthetic

non-title V permit, the facility must agree to be bound by a permit

that establishes more restrictive limitations. Also, the State relies

on the requirements of Division Rule 1200-3-13-.01 as their authority

to seek enforcement action against a source that violates the

conditions of an operating permit. Memphis-Shelby County relies

[[Page 6726]]

on the requirements of sections 16-56, 16-59, and 16-77 of the Memphis

City Code to meet this criterion. Section 16-56, gives the County the

authority to seek enforcement action against sources that violate any

of the requirements of the local air pollution code, which includes a

failure to meet all permit conditions as required by Section 16-77.

Criterion 5. The state operating permits must be issued subject to

public participation. This means that the State and the County agree,

as part of their programs, to provide EPA and the public with timely

notice of the proposal and issuance of such permits, and to provide

EPA, on a timely basis, with a copy of each proposed (or draft) and

final permit intended to be ``Federally enforceable.'' This process

must also provide for an opportunity for public comment on the permit

applications prior to issuance of the final permits. Division Rules

1200-3-9-.02(11)(a), 1200-3-9-.02(11)(f)8. and 1200-3-9-.02(11)(g)

contain provisions establishing that the State and the County will

either deny the request for a permit or give EPA and the public notice

of an intention to issue the permit and provide for a 30 day public

comment period.

A. Applicability to Hazardous Air Pollutants

Tennessee and Memphis-Shelby County have also requested approval of

their FESOP and FELOP programs under section 112(l) of the Clean Air

Act for the purpose of creating Federally recognized limitations on the

potential to emit for HAPs. Approval under section 112(l) is necessary

because the SIP revisions discussed above only extend to criteria

pollutants for which EPA has established national ambient air quality

standards under section 109 of the Act. Federally enforceable limits on

criteria pollutants or their precursors (i.e. VOCs or PM-10) may have

the incidental effect of limiting certain HAPs listed pursuant to

section 112(b).1 As a legal matter, no additional program approval

by the EPA is required beyond SIP approval under section 110 in order

for these criteria pollutant limits to be recognized as Federally

enforceable. However, section 112 of the Act provides the underlying

authority for controlling all HAP emissions, regardless of their

relationship to criteria pollutant controls.

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\1\ 1 EPA issued guidance on January 25, 1995, addressing the

technical aspects of how these criteria pollutant limits may be

recognized for purposes of limiting a source's potential to emit of

HAPs to below section 112 major source thresholds.

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EPA has determined that the five criteria, published in the June

28, 1989, Federal Register notice, used to determine the validity of a

permit which limits potential to emit for criteria pollutants pursuant

to section 110 are also appropriate for evaluating the validity of

permits which limit the potential to emit for HAPs pursuant to section

112(l). The June 28, 1989, Federal Register notice does not address

HAPs because it was written prior to the 1990 amendments to the Clean

Air Act; however, the basic principles established in the June 28,

1989, Federal Register notice are not unique to criteria pollutants.

Therefore, these criteria have been extended to evaluations of permits

limiting the potential to emit of HAPs.

To be recognized by EPA as a valid permit which limits potential to

emit, the permit must not only meet the criteria in the June 28, 1989,

Federal Register notice, but it must meet the statutory criteria for

approval under section 112(l)(5). Section 112(l) provides that EPA will

recognize a permit limiting the potential to emit for HAPs only if the

state program: (1) Contains adequate authority to assure compliance

with any section 112 standard or requirement; (2) provides for adequate

resources; (3) provides for an expeditious schedule for assuring

compliance with section 112 requirements; and (4) is otherwise likely

to satisfy the objectives of the Act.

EPA plans to codify in Subpart E of Part 63 the approval criteria

for programs limiting potential to emit HAPs. EPA anticipates that

these criteria will mirror those set forth in the June 28, 1989,

Federal Register notice. Permit programs which limit potential to emit

for HAPs and are approved pursuant to section 112(l) of the Act prior

to the planned regulatory revisions under 40 CFR part 63, subpart E,

will be recognized by EPA as meeting the criteria in the June 28, 1989,

Federal Register notice. Therefore, further approval actions for those

programs will not be necessary.

EPA believes it has authority under section 112(l) to recognize

FESOP and FELOP programs that limit a source's potential to emit HAPs

directly under section 112(l) prior to this revision to Subpart E. EPA

is therefore approving the Tennessee and Memphis-Shelby County FESOP

and FELOP programs so that Tennessee and Memphis-Shelby County may

issue permits that EPA will recognize as validly limiting potential to

emit for HAPs.

Regarding the statutory criteria of section 112(l)(5) referred to

above, EPA believes the FESOP and FELOP programs submitted by Tennessee

and Memphis-Shelby County contain adequate authority to assure

compliance with section 112 requirements since the third criterion of

the June 28, 1989, notice is met; that is, Division Rule 1200-3-

9-.02(11)(b)(5) states that all requirements in the permits issued

under the authority of the operating permit programs must be at least

as stringent as all other applicable Federally enforceable

requirements. In connection with EPA's review of the Tennessee and

Memphis-Shelby County title V operating permit programs, EPA has also

conducted an extensive analysis of Tennessee and Memphis-Shelby

County's underlying authority to enforce HAP limits. It should be noted

that a source that receives a Federally recognized operating permit may

still need a Title V operating permit under Division Rule 1200-3-9-.02

if EPA promulgates a MACT standard which requires non-major sources to

obtain Title V permits.

Regarding the requirement for adequate resources, Tennessee and

Memphis-Shelby County have committed to provide for adequate resources

to support their respective FESOP and FELOP programs. EPA expects that

resources will continue to be sufficient to administer those portions

of the minor source operating permit programs under which the subject

permits will be issued, because both the State of Tennessee and

Memphis-Shelby County have administered minor source operating permit

programs for a number of years. However, EPA will monitor the

implementation of the FESOP and FELOP programs to ensure that adequate

resources are in fact available.

EPA also believes that the Tennessee and Memphis-Shelby County

programs provide for an expeditious schedule which assures compliance

with section 112 requirements. These programs will be used to allow a

source to establish a voluntary limit on potential to emit to avoid

being subject to a CAA requirement applicable on a particular date.

Nothing in the Tennessee or Memphis-Shelby County programs would allow

a source to avoid or delay compliance with a CAA requirement applicable

on a particular date. In addition, nothing in the Tennessee or Memphis-

Shelby County program would allow a source to avoid or delay compliance

with a CAA requirement if it fails to obtain an appropriate Federally

recognized limit by the relevant deadline. Finally, EPA believes it is

consistent with the intent of section 112 of the Act for States to

provide a mechanism through which a source may

[[Page 6727]]

avoid classification as a major source by obtaining a Federally

recognized limit on its potential to emit HAPs. EPA has long recognized

as valid, permit programs which limit potential to emit for criteria

pollutants as a means for avoiding major source requirements under the

Act. The portion of this approval which extends Federal recognition to

permits containing limits on potential to emit for HAPs merely applies

the same principles to another set of pollutants and regulatory

requirements under the Act.

EPA has reviewed this SIP revision and determined that the criteria

for approval as provided in the June 28, 1989, Federal Register notice

(54 FR 27282) and in section 112(l)(5) of the Act have been satisfied.

B. Eligibility for Previously Issued Permits

Eligibility for Federally enforceable permits extends not only to

permits issued after the effective date of this rule, but also to

permits issued under the State's and the County's existing rules prior

to the effective date of today's rulemaking. If the State and County

followed their own regulations, then each agency issued a permit that

established a Federally recognized permit condition that was subject to

public and EPA review. Therefore, EPA will consider all such operating

permits Federally enforceable upon the effective date of this action

provided that any permits that the State wishes to make Federally

enforceable are made available to EPA and are supported by

documentation that the procedures approved today have been followed.

EPA may review any such permits to ensure their conformity with the

program requirements.

III. Final Action

In this action, EPA is approving Tennessee's FESOP program and

Memphis-Shelby County's FELOP program. EPA is publishing this action

without prior proposal because the Agency views this as a

noncontroversial amendment and anticipates no adverse comments.

However, in a separate document in this Federal Register publication,

EPA is proposing to approve the SIP revisions should adverse or

critical comments be filed. This action will be effective April 14,

1997 unless, by March 17, 1997, adverse or critical comments are

received. If EPA receives such comments, this action will be withdrawn

before the effective date by publishing a subsequent document 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.

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 April 14, 1997.

This action has been classified as a Table 3 action for signature

by the Regional Administrator under the procedures published in the

Federal Register on January 19, 1989, (54 FR 2214-2225), as revised by

the July 10, 1995, memorandum from Mary Nichols, Assistant

Administrator for Air and Radiation. Nothing in this action shall be

construed as permitting or allowing or establishing a precedent for any

future request for a revision of any SIP. Each request for revision of

the SIP shall be considered separately in light of specific technical,

economic, and environmental factors, and in relation to relevant

statutory and regulatory requirements.

IV. Administrative Requirements

A. Clean Air Act as Amended in 1990

EPA has reviewed the requests for revision of the Federally-

approved Tennessee SIP described in this notice to ensure conformance

with the provisions of the Clean Air Act as amended in 1990. EPA has

determined that this action conforms with those requirements.

B. Petition for Review

Under section 307(b)(1) of the CAA, 42 U.S.C. 7607 (b)(1),

petitions for judicial review of this action must be filed in the

United States Court of Appeals for the appropriate circuit by April 14,

1997. Filing a petition for reconsideration by the Administrator of

this final rule does not affect the finality of this rule for 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) of the CAA, 42 U.S.C. 7607 (b)(2).)

C. Executive Order 12866

The Office of Management and Budget (OMB) has exempted this

regulatory action from Executive Order 12866 review.

D. Regulatory Flexibility Act

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 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.

SIP approvals under section 110 and subchapter I, Part D of the CAA

do not create any new requirements, but simply approve requirements

that the State is already imposing. Therefore, because approval of

Federal SIP 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

CAA, preparation of a regulatory flexibility analysis would constitute

Federal inquiry into the economic reasonableness of state action. The

CAA 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) and 7410(R).

E. Unfunded Mandates Reform Act of 1995

Under sections 202, 203, and 205 of the Unfunded Mandates Reform

Act of 1995 (``Unfunded Mandates Act''), signed into law on March 22,

1995, EPA must undertake various actions in association with proposed

or final rules that include a Federal mandate that may result in

estimated costs of $100 million or more to the private sector, or to

State, local, or tribal governments in the aggregate.

Through submission of this state implementation plan or plan

revision, the State has elected to adopt the program provided for under

section 112(l) of the Clean Air Act. These rules may bind the State

government to perform certain actions and also require the private

sector to perform certain duties. To the extent that the rules being

approved by this action would impose no new requirements, such sources

are already subject to these regulations under State law. Accordingly,

no additional costs to the State government, or to the private sector,

result from this action. EPA has also determined that this final action

does not include a mandate that may result in estimated costs of $100

million or more to the State government in the aggregate or to the

private sector.

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F. Small Business Regulatory Enforcement Fairness Act of 1996

Under 5 U.S.C. 801(a)(1)(A) added by the Small Business Regulatory

Enforcement Fairness Act of 1996, EPA submitted a report containing

this rule and other required information to the U.S. Senate, the U.S.

House of Representatives and the Comptroller General of the General

Accounting Office prior to publication of the rule in today's Federal

Register. This rule is not a major rule as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Carbon monoxide,

Hydrocarbons, Incorporation by reference, Lead, Nitrogen dioxide,

Intergovernmental relations, Particulate matter, Ozone, Sulfur oxides.

Dated: December 16, 1996.

A. Stanley Meiburg,

Acting Regional Administrator.

Part 52 of chapter I, title 40, 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 RR--Tennessee

2. Section 52.2220 is amended by adding paragraph (c)(145) to read

as follows:

Sec. 52.2220 Identification of plan.

* * * * *

(c) * * *

(145) Revisions to Division Rule 1200--Stationary Sources--General

Requirements, submitted by the Tennessee Department of Environmental

Protection on May 3, 1995.

(i) Incorporation by reference.

(A) Division of Air Pollution Control Rule 1200-3-9-.02(11)(a),

effective September 21, 1994.

(B) Memphis City Code Section 16-77, reference 1200-3-9-.02(11)(a),

effective October 28, 1994.

(ii) Other materials. None.

[FR Doc. 97-3577 Filed 2-12-97; 8:45 am]

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