Approval and Promulgation of State Implementation Plans; Michigan

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[MI58-01-7266; FRL-5967-3]

Approval and Promulgation of State Implementation Plans; Michigan

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: This rulemaking finalizes the United States Environmental

Protection Agency's (USEPA) disapproval of the State Implementation

Plan (SIP) revision submitted by Michigan containing start-up, shutdown

and malfunction (SSM) regulations which would apply generally to

sources covered under the applicable SIP. This action is being taken

under section 110 of the Clean Air Act (Act).

DATES: This final rule is effective March 23, 1998.

ADDRESSES: Copies of the documents relevant to this action are

available for public inspection during normal business hours at the

U.S. Environmental Protection Agency, Region 5, Air and Radiation

Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. (Please

telephone Kathleen D'Agostino at (312) 886-1767 before visiting the

Region 5 Office.)

FOR FURTHER INFORMATION CONTACT: Kathleen D'Agostino, Environmental

Engineer, Regulation Development Section, Air Programs Branch (AR-18J),

U.S. Environmental Protection Agency, Region 5, Chicago, Illinois

60604, (312) 886-1767.

SUPPLEMENTARY INFORMATION:

I. Background

On March 20, 1997 (62 FR 13357), the USEPA published a document

proposing disapproval of a SIP revision containing Rules 336.1912,

336.1913 and 336.1914, which was submitted by the Michigan Department

of Environmental Quality (MDEQ) on May 16 1996. Rule 336.1912 requires

that a source be operated in a manner consistent with good air

pollution control practices for minimizing emissions during start-ups,

shutdowns and malfunctions, and contains notice and reporting

requirements in the event of start-up, shutdown or malfunction. Rules

336.1913 and 336.1914 excuse excess emissions resulting from start-ups,

shutdowns or malfunctions, providing that the notice and reporting

requirements in Rule 336.1912 are met. The rationale for USEPA's

proposed action is explained in the notice of proposed rulemaking and

will not be restated here.

II. Public Comments/Response to Comments

This section summarizes the comments submitted during the public

comment period for the notice of proposed rulemaking and provides

USEPA's response to those comments. The comment period closed April 21,

1997. Adverse comments were received from the Michigan Department of

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Environmental Quality, the Michigan Chamber of Commerce, the Michigan

Manufacturers Association, General Motors Corporation and the American

Automobile Manufacturers Association.

Comment: USEPA's proposed disapproval is not supported by section

110 of the Clean Air Act (CAA). There is no specific language in

section 110 that provides the USEPA with the authority to disapprove

Michigan's SSM rules. Section 110 contains no provisions that prohibit

the type of exemption and affirmative defense contained in the SSM

rules.

Response: It is true that section 110 does not explicitly address

SSM regulations. However, under section 110 of the Act, USEPA is

required to determine whether a SIP submission, inter alia, provides

for the attainment and maintenance of the National Ambient Air Quality

Standards (NAAQS). Because SIPs are developed to attain and maintain

ambient-based standards, any emissions above the SIP-approved limits

may cause or contribute to violations of the NAAQS. USEPA believes that

SSM regulations which are too broadly drawn can threaten attainment and

maintenance of the NAAQS. Therefore, EPA believes that it is reasonable

to interpret section 110 to prohibit generally applicable SSM

provisions.

In addition, Sec. 110(a)(2)(A) of the Act requires that SIP

submissions contain enforceable limitations. Enforceability

deficiencies, i.e., overly broad bypass provisions and definitions of

``malfunction,'' are discussed further below. (See USEPA's response to

the comment that Michigan's SSM rules are consistent with the 1983

memorandum from Kathleen Bennett.)

Comment: Because CAA regulations, e.g., 40 CFR part 63, already

allow for protection which is broader than that proposed in the

Michigan rules, the USEPA is without authority to proclaim that

enforcement discretion is the only avenue for an SSM process to

proceed. It is illogical to argue that Michigan's SSM rules do not

comply with the CAA when CAA regulations provide for at least as broad

protection against enforcement.

Response: The statutory and regulatory focus of NESHAPS (and NSPS)

is fundamentally different from the SIP program and different policies

apply, i.e., technology-based standards as opposed to the air quality

objectives of section 110. The Bennett memoranda recognize that the

attainment and maintenance of the NAAQS cannot be assured with overly-

broad SSM provisions. EPA continues to believe that the health-based

objective of SIPs make general SSM provisions unacceptable, even though

such provisions may be appropriate for technology-based standards such

as NESHAP and NSPS.

Comment: There is a substantive difference between the position set

forth in the Bennett memoranda and the protections afforded by both 40

CFR 63 and the Michigan SSM rules. The promulgated Federal and State

rules provide that there is no violation if the requirements of the

rules are met. In contrast, the USEPA's memoranda position provides

that there is a substantive violation of the CAA which then becomes

subject to its enforcement discretion.

Response: The USEPA acknowledges that the Bennett memoranda

recognize all periods of excess emissions as violations of the

applicable SIP standard whereas periods of excess emissions occurring

during start-ups, shutdowns or malfunctions may be excused under 40 CFR

part 63 for NESHAPS. For the reasons discussed in response to the

previous comment, USEPA believes that this is a reasonable distinction.

Comment: The USEPA misconstrues its authority under section 110 of

the CAA. The United States Court of Appeals for the District of

Columbia Circuit recently affirmed that the USEPA is not authorized

under section 110 to dictate to states the methods to be used to

achieve and maintain compliance with the National Ambient Air Quality

Standards (NAAQS). Rather the D.C. Circuit recognized the relationship

between the states and USEPA as one in which the states determine how

best to regulate emission sources to achieve and maintain compliance

with the NAAQS while USEPA is limited to determining whether each

state's program will achieve the required air quality standards.

In promulgating the SSM statutory provisions and corresponding

regulations, Michigan has exercised its power to ``determine which

sources would be burdened by regulations and to what extent.'' Provided

that attainment and maintenance of the NAAQS is the result of

Michigan's overall implementation plan, the USEPA is not authorized,

under section 110, to reject portions of Michigan's SIP that differ

from the USEPA's enforcement policy.

Response: USEPA agrees that the CAA places primary responsibility

upon the states to formulate requirements it deems appropriate to

protect air quality. However, the CAA does not grant states unfettered

discretion. Rather, the CAA and USEPA policy form a framework which

states must work within when developing SIPs. (Some programs and

requirements are expressly set forth in the CAA, e.g. inspection and

maintenance, reasonably available control technology.) Furthermore, the

Act charges USEPA with the determination as to whether the state's

choices will result in attainment and maintenance of the NAAQS. For the

reasons previously discussed, USEPA believes that the effect of

Michigan's SSM regulations is to create uncertainty as to whether this

statutory goal can be accomplished. In addition, Sec. 110(a)(2)(A) of

the Act requires that SIP submissions contain enforceable limitations.

Enforceability deficiencies, i.e., overly broad bypass provisions and

definitions of ``malfunction,'' are discussed further below. (See

USEPA's response below to the comment that Michigan's SSM rules are

consistent with the 1983 memorandum from Kathleen Bennett.)

Comment: Inconsistency with USEPA policy is not a valid reason for

disapproval of a State Implementation Plan (SIP) revision. There is no

reference to the Bennett memoranda, or any other policy, in section 110

of the CAA. Therefore, it is inappropriate to base the disapproval of

Michigan's SSM rules on such policy memoranda. Statutory authority, and

not policy memoranda, should be the basis for the disapproval.

Response: As noted previously, it is appropriate for USEPA to

clarify regulations and statutes with written policies and guidance

documents. In the context of rulemakings on SIP submissions, the public

has an opportunity to comment and respond to USEPA's policies that

interpret the relevant statutes and regulations. Through rulemaking

actions, such as this, USEPA can determine whether to modify its policy

or whether it still stands by its policy interpretation in light of any

public comments. In this case, USEPA continues to support the policy

established by the Bennet memoranda for the reasons stated in those

memoranda and in this rulemaking action.

Comment: EPA's disapproval of Michigan's regulations, based on

internal policy memoranda, is groundless. The SSM rules are the result

of a publicly conducted work group, and were promulgated in accordance

with all applicable State laws. The rationale offered by USEPA is not

the result of a lawfully conducted notice and comment rulemaking

process, nor does it cite any specific portion of any rule or statute

with which the SSM rules are inconsistent. The substantive rights

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of the regulated community are affected by the enforcement discretion

interpretation contained in the Bennett memoranda. Therefore,

rulemaking is required in order for the interpretation contained in the

policy memoranda to be enforceable.

Response: Policy documents generally interpret the statute and do

not establish binding requirements. Therefore, they are not subject to

notice and comment rulemaking. As discussed above, rulemaking such as

this provides the public with an opportunity to comment and to question

USEPA's policy interpretations. If a sufficient basis had been provided

for USEPA to revise or deviate from its policy, the Agency would do so.

However, the comments submitted have not persuaded the Agency to change

the existing policy, nor its application with respect to the Michigan

SSM rule.

Comment: The enforcement discretion approach is insufficient

following recent statutory and program changes. Title V of the CAA

requires that the Responsible Official certify, under penalty of

imprisonment, all data as truthful, accurate, and complete and requires

periodic submittal of certifications by the Responsible Official

detailing the compliance status of each facility. Thus, the Responsible

Official for each Title V source has a duty to disclose any

noncompliance with any applicable regulation. In addition, the 1990

Amendments provided enhanced criminal penalty provisions and revised

the citizen suit provisions, increasing the likelihood of CAA

enforcement actions. If an owner or operator of a source has knowledge

that a process during startup or shutdown would possibly violate an

emission limitation and proceeds to startup or shutdown the process,

that knowledge could satisfy the intent requirement for a criminal

prosecution. In many cases, compliance with applicable regulations

during startup, shutdown, or malfunctions is technically or

economically impossible. The SSM regulations contained in Michigan's

SIP provide owners and operators of facilities with the appropriate

protection against prosecution for startup problems of older

facilities.

The enforcement discretion approach asks the regulated industry to

rely on the exercise of discretion by both state and federal agencies.

In addition, if such dual discretion does occur, nothing prevents

citizens from pursuing a civil action to impose penalties on the source

for the emission violations. Because of the enhanced federal and state

statutes, the creation of criminal liability, and the lack of

protection from citizen suits, a reliance on enforcement discretion is

insufficient.

Response: With respect to start-up and shutdown situations, it is

USEPA's general policy, as set forth in the Bennett memoranda, that:

``Startup and shutdown of process equipment are part of the normal

operation of a source and should be accounted for in the planning,

design and implementation of operating procedures for the process and

control equipment. Accordingly, it is reasonable to expect that careful

and prudent planning and design will eliminate violations of emission

limitations during such periods.'' If there are circumstances where a

source cannot comply with the SIP during start-up, shutdown or

maintenance situations despite careful and prudent planning and design,

the State should address these particular problems in development of

(or revision to) the underlying rules applicable to those sources and

not through overarching excess emissions provisions. (Any revision made

to the state's rules to address these concerns must be submitted to

USEPA as a SIP revision request.)

USEPA is cognizant of the various remedies under the Clean Air Act

for SIP violations, including those available under the criminal suit

provisions of Section 113(c). It should be noted, however, that no

criminal action may be brought under that section unless a person

knowingly violates the applicable requirement ``* * * more than 30 days

after having been notified * * * that such person is violating such

requirement or prohibition* * *.'' Thus, the scenario envisioned by the

commentor is not realistic, unless appropriate notice is given and the

violations continue. As discussed earlier, where there is such a

likelihood of continuing violation, sources should seek relief through

the SIP revision process.

USEPA also believes that the commentor's concern about the

perceived inadequacy of an enforcement discretion approach is

misplaced. The CAA has long provided for enforcement of SIP violations.

Moreover, the revisions to enforcement provisions in 1990 were not

intended to impact substantive regulations. Rather they were included

with the recognition that the CAA has, at times, been difficult to

enforce. USEPA further notes that reliance on the judicial system and

courts' equitable discretion provides further protection.

Comment: Michigan's SSM provisions are consistent with the February

15, 1983 memorandum from Kathleen M. Bennett, Assistant Administrator

for Air, Noise and Radiation to the Regional Administrators entitled

``Policy on Excess Emissions During Startup, Shutdown, Maintenance and

Malfunctions.'' The SSM rules contain all of the criteria required to

be considered by the regulator in determining whether enforcement

action or discretion is warranted.

Response: The criteria referenced above are to be considered when

determining whether to exercise enforcement discretion for periods of

excess emissions caused by a malfunction, not to excuse those

emissions. As discussed previously, because SIPs protect ambient-based

standards, any emissions above the allowable may cause or contribute to

violations of the NAAQS, and therefore cannot be excused. State and

federal agencies (and citizens) need to be able to seek relief where

public health may be threatened by periods of excess emissions.

Furthermore, the criteria referenced above apply only in the case

of malfunctions. They do not apply to periods of excess emissions

caused by startup, shutdown or maintenance (unless the excess is

attributable to a malfunction occurring during those times). Start-up

and shutdown of process equipment are part of the normal operation of a

source and should be accounted for in the design and implementation of

the operating procedure for the process and control equipment.

Accordingly, it is reasonable to expect that, in most cases, careful

planning will eliminate violations of emission limitations during such

periods.

Moreover, even if USEPA did determine that the state could excuse

these emissions, there remain issues which make the rules unapprovable.

The definitions of ``malfunction,'' contained in 324.5509(1), part 55

of the Michigan Natural Resources and Environmental Protection Act and

R 336.1113(d), Michigan administrative code, do not limit malfunctions

to failures that are ``infrequent'' and ``not reasonably preventable,''

and are therefore too broad. [See e.g. 40 CFR 60.2] Frequent or

reasonably preventable excess emissions would tend to indicate an

underlying problem with the design, operating procedures or maintenance

of a source and therefore should not be considered a malfunction. The

State's bypass provisions in SIP R 336.1913(3)(b) and R 336.1914(4)(b)

are also too broad. USEPA policy regarding bypass states that ``* * *

if effluent gasses are bypassed which cause an emission limitation to

be exceeded, this excess need not be treated as a violation

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if the source can show that the excesses could not have been prevented

through careful and prudent planning and design and that bypassing was

unavoidable to prevent loss of life, personal injury or severe property

damage.'' [Memorandum dated February 15, 1983, from Kathleen M.

Bennett, Assistant Administrator for Air, Noise and Radiation entitled

``Policy on Excess Emissions During Startup, Shutdown, Maintenance, and

Malfunctions'']. The USEPA continues to believe that this is a

necessary policy, and that the bypass provisions contained in the

State's rule are inadequate for the reasons stated in that policy.

In addition, the alternate emission limitations for startups and

shutdowns in R 336.1914(4)(d) could (impermissibly) allow relaxations

of Act requirements, including NSR limitations, New Source Performance

Standards, toxics requirements (NESHAP, MACT), etc. Finally, the State

SSM regulations provide no authority for MDEQ to review and require

revisions to a source's written emission minimization plan for normal

or usual startups and shutdowns. Such authority is necessary to ensure

that operating practices for startups and shutdowns meet good

engineering practice for minimizing emissions, similar to the authority

R 336.1911 currently provides for State review and revision of written

preventative maintenance and malfunction abatement plans.

Comment: The USEPA's position is not consistent with existing,

long-standing regulations, and not consistent with its own rulemakings

in other state's SIPs. Unless the USEPA intends to rescind 40 CFR 63

and other state SIPS as being inconsistent with the CAA, and then

propose a general rule consistent with its internal memoranda, the

USEPA's argument that Michigan's SSM rules do not comply with the CAA

is without merit.

Response: As previously discussed, the difference in approach

between the technology-based NESHAP rules and air quality-based SIP

rules merits the different treatment for provisions concerning SSM

excess emissions. With regard to the suggestion that USEPA's action on

the Michigan submission is somehow inconsistent with its action(s) with

other state submission, without additional information on which

state(s) the commentor is referencing, USEPA cannot reasonably respond

to this comment. However, as noted previously, USEPA continues to

support the policy established by the Bennett memoranda for the reasons

stated in those memoranda and in this rulemaking action. It should

nonetheless be noted that, even if the commentor had identified such an

inconsistent action, USEPA would not be precluded from disapproving

Michigan's SSM submission. Southwestern Pennsylvania Growth Alliance v.

Browner, 121 F. 3d 106 (3d Cir. 1997).

Comment: The USEPA does not identify any deficiencies with Rule

912. Therefore, Rule 912 should be approved as part of the SIP.

Response: USEPA acknowledges that it did not cite any deficiencies

for Rule 912 in its notice of proposed rulemaking. However, USEPA

believes that when Rule 912 was adopted by Michigan, it was promulgated

as an integral part of the SSM regulations; i.e., the protection

granted in Rules 913 and 914 is contingent on meeting the operating,

notification and reporting requirements in Rule 912. In this case,

approving Rule 912 while disapproving Rules 913 and 914 would result in

establishing operating, notification and reporting requirements for

sources without granting the protection to them contemplated by the

companion rules. Under existing case law, USEPA may not partially

approve a state SIP submission if such action will result in the

approved rules being more stringent than was intended by the state when

they were adopted. See Bethlehem Steel Corp. v. Gorsuch, 742 F. 2d 1028

(7th Cor. 1984); Indiana and Michigan Elec. Co. v. U.S.E.P.A., 733 F.

2d 489 (7th Cir. 1984).

III. Final Rulemaking Action

To determine the approvability of a rule, USEPA must evaluate the

rule for consistency with the requirements of the Act, USEPA

regulations and the USEPA's interpretation of these requirements as

expressed in USEPA policy guidance documents. While USEPA understands

the concerns raised by the commentors, rules 913 and 914 remain

inconsistent with the Act and the applicable policies by which USEPA

must evaluate submittals. Therefore, in today's action, USEPA is

finalizing the disapproval proposed on March 20, 1997.

Nothing in this action should be construed as permitting, allowing

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

SIP. The EPA 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.

IV. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

B. Regulatory Flexibility

Under the Regulatory Flexibility Act, 5 U.S.C. Sec. 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. Secs. 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.

USEPA's disapproval of the State request under Section 110 and

subchapter I, 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 does not have a significant impact on a

substantial number of small entities because it does not remove

existing requirements and impose any new Federal requirements.

C. Unfunded Mandates

Under section 202 of the Unfunded Mandates Reform Act of 1995,

signed into law on March 22, 1995, EPA must prepare a budgetary impact

statement to accompany any proposed or final rule that includes a

Federal mandate that may result in estimated costs to State, local, or

tribal governments in the aggregate; or to private sector, of $100

million or more. Under section 205, EPA must select the most cost-

effective and least burdensome alternative that achieves the objectives

of the rule and is consistent with statutory requirements. Section 203

requires EPA to establish a plan for informing and advising any small

governments that may be significantly or uniquely impacted by the rule.

The EPA has determined that the disapproval action promulgated does

not include a Federal mandate that may result in estimated costs of

$100 million or more to either State, local, or tribal governments in

the aggregate, or to the private sector. This Federal disapproval

action imposes no new requirements. Accordingly, no additional costs to

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State, local, or tribal governments, or to the private sector, result.

No new Federal requirements are imposed. Accordingly, no additional

costs to state, local, or tribal governments, or the private sector,

result from this action.

D. Small Business Regulatory Enforcement Fairness Act

The Congressional Review Act, 5 U.S.C. Sec. 801 et seq., as added

by the Small Business Regulatory Enforcement Fairness Act of 1996,

generally provides that before a rule may take effect, the agency

promulgating the rule must submit a rule report, which includes a copy

of the rule, to each House of the Congress and to the Comptroller

General of the United States. USEPA will submit 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 United

States prior to publication of the rule in the Federal Register. This

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

E. Petitions for Judicial 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 April 21, 1998. 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).

V. List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Intergovernmental

relations, Reporting and recordkeeping requirements.

Authority: 42 U.S.C. Sec. 7401 et seq.

Dated: January 30, 1998.

David A. Ullrich,

Acting Regional Administrator, Region V.

[FR Doc. 98-4003 Filed 2-19-98; 8:45 am]

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