Review of New Sources and Modifications in Indian Country, 48696-48750 [06-6926]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 71, Number 161 (Monday, August 21, 2006)]
[Proposed Rules]
[Pages 48696-48750]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 06-6926]



[[Page 48695]]

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Part V





Environmental Protection Agency





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40 CFR Parts 49 and 51



 Review of New Sources and Modifications in Indian Country; Proposed 
Rule

Federal Register / Vol. 71, No. 161 / Monday, August 21, 2006 / 
Proposed Rules

[[Page 48696]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 49 and 51

[EPA-HQ-OAR-2003-0076; FRL-8210-4]
RIN 2060-AH37


Review of New Sources and Modifications in Indian Country

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) proposes to 
promulgate a Federal Implementation Plan (FIP) under the Clean Air Act 
(the Act) for tribes in Indian country. The FIP would include two basic 
air quality regulations for the protection of communities in Indian 
country. The first rule would apply to minor stationary sources and 
minor modifications at major stationary sources in Indian country 
(minor NSR rule). The second rule would apply to all new major 
stationary sources and major modifications located in areas of Indian 
country that are designated as not attaining the National Ambient Air 
Quality Standards (NAAQS) (nonattainment major NSR rule). These rules 
would be implemented by EPA, or a delegate tribal agency assisting EPA 
with administration of the rules, until replaced by an EPA-approved 
tribal implementation plan for an area of Indian country.

DATES: Comments. Comments must be received on or before November 20, 
2006. Under the Paperwork Reduction Act, comments on the information 
collection provisions must be received by OMB on or before September 
20, 2006.
    Public Hearing. If anyone contacts us requesting to speak at a 
public hearing by September 11, 2006, we will hold a public hearing. 
Additional information about the hearing would be published in a 
subsequent Federal Register notice.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2003-0076, by one of the following methods:
     https://www.regulations.gov. Follow the on-line 
instructions for submitting comments.
     E-mail: a-and-r-docket@epamail.epa.gov.
     Fax: 202-566-1741.
     Mail: Attention Docket ID No. EPA-HQ-OAR-2003-0076, U.S. 
Environmental Protection Agency, EPA West (Air Docket), 1200 
Pennsylvania Avenue, Northwest, Mailcode: 6102T, Washington, DC 20460. 
Please include a total of 2 copies. In addition, please mail a copy of 
your comments on the information collection provisions to the Office of 
Information and Regulatory Affairs, Office of Management and Budget 
(OMB), Attn: Desk Officer for EPA, 725 17th St., NW., Washington, DC 
20503.
     Hand Delivery: U.S. Environmental Protection Agency, EPA 
West (Air Docket), 1301 Constitution Avenue, Northwest, Room B-102, 
Washington, DC 20004, Attention Docket ID No. EPA-HQ-OAR-2003-0076. 
Such deliveries are only accepted during the Docket's normal hours of 
operation, and special arrangements should be made for deliveries of 
boxed information.
    Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR-
2003-0076. EPA's policy is that all comments received will be included 
in the public docket without change and may be made available online at 
https://www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through https://
www.regulations.gov or e-mail. The https://www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through https://www.regulations.gov your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses. For additional instructions on submitting 
comments, go to I C & D of the SUPPLEMENTARY INFORMATION section of 
this document.
    Docket: All documents in the docket are listed in the https://
www.regulations.gov index. Although listed in the index, some 
information is not publicly available, e.g., CBI or other information 
whose disclosure is restricted by statute. Certain other material, such 
as copyrighted material, will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
in https://www.regulations.gov or in hard copy at the U.S. Environmental 
Protection Agency, Air Docket, EPA/DC, EPA West, Room B102, 1301 
Constitution Ave., NW., Washington, DC. The Public Reading Room is open 
from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal 
holidays. The telephone number for the Public Reading Room is (202) 
566-1744, and the telephone number for the Air Docket is (202) 566-
1742.

FOR FURTHER INFORMATION CONTACT: For technical information, contact Raj 
Rao, Air Quality Policy Division, U.S. EPA, Office of Air Quality 
Planning and Standards (C504-03), Research Triangle Park, North 
Carolina 27711, telephone number (919) 541-5344, facsimile number (919) 
541-5509, electronic mail e-mail address: rao.raj@epa.gov. To request a 
public hearing or information pertaining to a public hearing on this 
document, contact Ms. Pamela S. Long, Air Quality Policy Division, U.S. 
EPA, Office of Air Quality Planning and Standards (C504-03), Research 
Triangle Park, North Carolina 27711, telephone number (919) 541-0641, 
facsimile number (919) 541-5509, electronic mail e-mail address: 
long.pam@epa.gov.

SUPPLEMENTARY INFORMATION:

I. General Information

A. Does This Action Apply to Me?

    Entities potentially affected by this proposed action include 
owners and operators of emission sources in all industry groups located 
in Indian country, EPA, and tribal governments that are delegated 
administrative authority to assist EPA with the implementation of these 
Federal regulations. Categories and entities potentially affected by 
this action are expected to include:

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             Category                NAICS a                     Examples of regulated entities
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Industry..........................       4471  Gasoline station storage tanks and refueling.
                                         5614  Lumber manufacturer support.
                                        21211  Coal mining.
                                        31332  Surface coating operation.
                                        33712  Furniture manufacture.
                                        56221  Medical waste incinerator.
                                       115112  Repellent and fertilizer applications.
                                       211111  Natural gas plant.
                                       211111  Oil and gas production.
                                       211112  Fractionation of natural gas liquids.
                                       212234  Copper mining and processing.
                                       212312  Stone quarrying and processing.
                                       212313  Stone quarrying and processing.
                                       212321  Sand and gravel production.
                                       221112  Power plant-coal-fired.
                                       221119  Power plant-biomass fueled.
                                       221119  Power plant-landfill gas fired.
                                       221210  Natural gas collection.
                                       221210  Natural gas pipeline.
                                       321113  Sawmill.
                                       321911  Window and door molding manufacturer.
                                       323110  Printing operations.
                                       323113  Surface coating operations.
                                       324121  Asphalt hot mix plants.
                                       325188  Elemental phosphorus plant.
                                       325188  Sulfuric acid plant.
                                       331314  Secondary aluminum production and extrusion.
                                       331492  Cobalt and tungsten recycling.
                                       332431  Surface coating operations.
                                       332812  Surface coating operations.
                                       421320  Concrete batching plant.
                                       422510  Grain elevator.
                                       422710  Crude oil storage and distribution.
                                       422710  Gasoline bulk plant.
                                       486110  Crude oil storage and distribution.
                                       486210  Natural gas compressor station.
                                       562212  Solid waste landfill.
                                       811121  Automobile refinishing shop.
                                       812320  Dry cleaner.
Federal government................     924110  Administration of Air and Water Resources and Solid Waste
                                                Management Programs.
State/local/tribal government.....     924110  Administration of Air and Water Resources and Solid Waste
                                                Management Programs.
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a North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be regulated by this 
action. To determine whether your facility is regulated by this action, 
you should examine the applicability criteria in the proposed minor and 
major NSR programs for Indian country, proposed 40 CFR 49.153 and 
49.168, respectively. If you have any questions regarding the 
applicability of this action to a particular entity, contact the person 
listed in the preceding FOR FURTHER INFORMATION CONTACT section.

B. What Should I Consider as I Prepare My Comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through 
https://www.regulations.gov or e-mail. Clearly mark the part or all of 
the information that you claim to be CBI. For CBI information in a disk 
or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM 
as CBI and then identify electronically within the disk or CD ROM the 
specific information that is claimed as CBI. In addition to one 
complete version of the comment that includes information claimed as 
CBI, a copy of the comment that does not contain the information 
claimed as CBI must be submitted for inclusion in the public docket. 
Information so marked will not be disclosed except in accordance with 
procedures set forth in 40 CFR part 2. Send or deliver information 
identified as CBI only to the following address: Roberto Morales, OAQPS 
Document Control Officer (C404-02), U.S. EPA, Research Triangle Park, 
NC 27711, Attention Docket ID No. EPA-HQ-OAR-2003-0076.
    2. Tips for Preparing Your Comments. When submitting comments, 
remember to:
     Identify the rulemaking by docket number and other 
identifying information (subject heading, Federal Register date and 
page number).
     Follow directions--The agency may ask you to respond to 
specific questions or organize comments by referencing a Code of 
Federal Regulations (CFR) part or section number.
     Explain why you agree or disagree; suggest alternatives 
and substitute language for your requested changes.
     Describe any assumptions and provide any technical 
information and/or data that you used.
     If you estimate potential costs or burdens, explain how 
you arrived at your estimate in sufficient detail to allow for it to be 
reproduced.
     Provide specific examples to illustrate your concerns, and 
suggest alternatives.

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     Explain your views as clearly as possible, avoiding the 
use of profanity or personal threats.
     Make sure to submit your comments by the comment period 
deadline identified.

C. Where Can I get a Copy of This Document and Other Related 
Information?

    In addition to being available in the docket, an electronic copy of 
this proposal will also be available on the WWW. Following signature by 
the EPA Administrator, a copy of this notice will be posted in the 
regulations and standards section of our NSR home page located at 
https://www.epa.gov/nsr and on the tribal air home page at https://
www.epa.gov/oar/tribal.

D. How Can I Find Information About a Possible Hearing?

    Persons interested in presenting oral testimony should contact Ms. 
Pamela Long, New Source Review Group, Air Quality Policy Division 
(C504-03), U.S. EPA, Research Triangle Park, NC 27711, telephone number 
(919) 541-0641 or e-mail long.pam@epa.gov at least 2 days in advance of 
the public hearing. Persons interested in attending the public hearing 
should also contact Ms. Long to verify the time, date, and location of 
the hearing. The public hearing will provide interested parties the 
opportunity to present data, views, or arguments concerning these 
proposed rules.

E. Overview of Rule

    In this rulemaking, we \1\ are proposing to fill a regulatory gap 
that currently exists in Indian country. We are proposing two new 
source review (NSR) rules under which the reviewing authority will 
issue pre-construction permits for certain stationary sources of air 
pollution in Indian country. These proposed rules would provide 
additional regulatory tools for us to use in implementing the Act in 
Indian country. The minor NSR rule would apply to new and modified 
minor sources and to minor modifications at major stationary sources. 
Sources subject to this rule would apply control technology, if any, as 
determined by the reviewing authority on a case-by-case basis. In rare 
instances at the discretion of the reviewing authority, such sources 
may also be required to submit an air quality analysis as part of their 
permit application. We are proposing to establish minor NSR thresholds 
so that only minor sources with a potential to emit (PTE) equal to or 
higher than these thresholds would be subject to this rule. 
Additionally, this rule would allow otherwise major stationary sources 
in Indian country to voluntarily accept emission limitations on their 
PTE to become ``synthetic minor sources.'' Such synthetic minor sources 
would include sources that emit hazardous air pollutants (HAP). In such 
a case, they would not be subject to major source MACT regulations 
under 40 CFR part 63. Any limitations on PTE must be enforceable as a 
practical matter (that is, legally and practically enforceable).
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    \1\ In this proposal, the term ``we'' refers to the EPA and the 
term ``you'' refers to stationary sources of air pollution and their 
owners and operators.
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    Under the nonattainment major NSR rule, affected sources would be 
required to comply with the provisions of 40 CFR part 51, appendix S, a 
transitional rule which generally applies to areas that do not have a 
State Implementation Plan (SIP). Sources subject to this rule would be 
subject to requirements for Lowest Achievable Emission Rate (LAER) 
control technology, emissions offsets, compliance certification, and 
net air quality benefit analysis. Due to the limited number of sources 
in Indian country, offsets are not generally available. We have 
proposed options for addressing the lack of availability of offsets in 
Indian country.
    The information presented in this preamble is organized as follows:

I. General Information
    A. Does This Action Apply to Me?
    B. What Should I Consider as I Prepare My Comments for EPA?
    C. Where Can I get a Copy of This Document and Other Related 
Information?
    D. How Can I Find Information About a Possible Hearing?
    E. Overview of Rule.
II. Purpose
III. Background
    A. The New Source Review (NSR) Program
    1. What are the general requirements of the major NSR program?
    2. What are the general requirements of the minor NSR program?
    B. Status of Air Quality Programs in Indian Country
    C. Consultation With Tribal Representatives
IV. Proposed Rules for Indian Country
    A. Minor NSR Program
    1. What is a minor source and which minor sources are subject to 
this rule?
    2. What is a modification and what modifications are subject to 
this rule?
    3. What are the minor NSR thresholds and how did we develop 
them?
    4. Are any emissions units and activities at stationary sources 
exempt from this rule?
    5. What are the permit application, control technology, and air 
quality analysis requirements, and what is the permit issuance 
process?
    6. When are modifications subject to this rule?
    7. Why do we believe that an allowable-to-allowable test is 
appropriate for minor sources?
    8. Is your existing minor source subject to this rule?
    9. How are ``synthetic minor sources'' subject to this rule?
    10. How would section 112(g) case-by-case MACT determinations be 
addressed by this rule?
    11. What are the proposed requirements for public participation 
in the permitting process?
    12. What are the monitoring, recordkeeping, and reporting 
requirements?
    13. What are the criteria for general permits, what source 
categories generally qualify for them, and what are the permit 
application requirements for a general permit?
    14. What is the administrative and judicial review process 
proposed for this program?
    B. Major NSR Program in Nonattainment Areas of Indian Country
    1. What are the requirements for major source permitting under 
appendix S?
    2. What are the options we are proposing to address the lack of 
available offsets in Indian country?
    3. What are the proposed public participation requirements for 
this program?
    4. How do I meet the statewide compliance certification 
requirement of the Act?
V. Legal Basis, Statutory Authority, and Jurisdictional Issues
    A. What is the basis for our authority to implement these 
programs?
    B. How does a tribe receive delegation to assist EPA with 
administration of the Federal minor and major NSR rules?
    C. What happens to permits previously issued by States to 
sources in Indian country?
VI. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health & Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect 
Energy Supply, Distribution, or Use
    I. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    J. National Technology Transfer Advancement Act
VII. Statutory Authority

II. Purpose

    The purpose of today's rulemaking is to ensure that air resources 
in Indian country will be protected in the manner intended by the Act 
as amended in 1990 by establishing a permitting program for

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stationary sources in Indian country. Currently in Indian country, 
there is no permitting mechanism for new or modified minor sources; 
minor modifications at major sources; or new major stationary sources 
or major modifications of regulated NSR pollutants in nonattainment 
areas. In addition, there is no minor source permitting mechanism for 
major stationary sources looking to voluntarily limit emissions to 
become synthetic minor sources \2\ or for approving case-by-case 
maximum achievable control technology (MACT) determinations. Today's 
proposed rules will fill this regulatory gap and provide regulatory 
certainty to allow for environmentally sound economic growth in Indian 
country. By establishing this FIP for Indian country, we will provide 
more consistency with the requirements and programs of the States and 
thus create a more level regulatory playing field for owners and 
operators within and outside of Indian country. We are proposing these 
permit programs pursuant to section 110(a)(2)(C), part D of title I, 
and section 301(d) of the Act.
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    \2\ Sources located within the exterior boundaries of Indian 
reservations in Idaho, Oregon, and Washington can apply for a non-
Title V operating permit to establish synthetic minor status under 
the FIP established for those reservations. See 40 CFR 49.139 and 40 
CFR part 49, subpart M.
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III. Background

A. The New Source Review (NSR) Program

1. What are the general requirements of the major NSR program?
    The major NSR program contained in parts C and D of title I of the 
Act is a preconstruction review and permitting program applicable to 
new major stationary sources and major modifications at such sources. 
In areas not meeting health-based NAAQS and in ozone transport regions 
(OTR), the program is implemented under the requirements of part D of 
title I of the Act. We call this program the ``nonattainment'' major 
NSR program. In areas meeting the NAAQS (``attainment'' areas) or for 
which there is insufficient information to determine whether they meet 
the NAAQS (``unclassifiable'' areas), the NSR requirements under part C 
of title I of the Act apply. We call this program the Prevention of 
Significant Deterioration (PSD) program. Collectively, we also commonly 
refer to these programs as the major NSR program. These rules are 
contained in 40 CFR 51.165, 51.166, 52.21, 52.24, and part 51, 
appendices S and W.
    For newly constructed, ``greenfield'' sources, the determination of 
whether a source is subject to the major NSR program is based on the 
source's PTE. The Act, as implemented by our rules, sets applicability 
thresholds for major sources in nonattainment areas. These thresholds 
are 100 tons per year (tpy) of any pollutant subject to regulation 
under the Act, or smaller amounts, depending on the nonattainment 
classification. For attainment areas the thresholds are 100 or 250 tpy, 
depending on the source type. A new source with a PTE at or above the 
applicable threshold amount ``triggers,'' or is subject to, major NSR.
    For existing major sources, major NSR applies to a ``major 
modification.'' For a modification to be major, the following three 
criteria have to be met:
    (1) A physical change in or change in the method of operation of a 
major stationary source must occur;
    (2) The increase in emissions resulting from this change must be 
significant (equal to or above the significance levels defined in 40 
CFR 52.21(b)(23)); and
    (3) The increase in emissions resulting from the change must be a 
significant net emissions increase. In other words, when the increase 
from the project is added to other contemporaneous increases or 
decreases in actual emissions \3\ at the source, the net emissions 
increase must be significant (equal to or above the significance levels 
defined in 40 CFR 52.21(b)(23)).
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    \3\ In approximate terms, ``contemporaneous'' emissions 
increases or decreases are those that have occurred between the date 
5 years immediately preceding the proposed physical or operational 
change and the date that the increase from the change occurs. See, 
for example, 40 CFR 52.21(b)(3)(ii).
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    Major sources and major modifications subject to nonattainment 
major NSR must apply state-of-the-art emissions control technologies, 
including any pollution prevention measures, to achieve the LAER. The 
LAER is based on the most stringent emission limitation in the 
implementation plan of any State, or achieved in practice, for the 
source category under review.
    Each major source subject to nonattainment major NSR must also 
``offset'' its emissions increase by obtaining emissions reductions 
from other sources in the area, or in an area of equal or higher 
nonattainment classification that contributes to nonattainment in the 
subject source's area. The ratio of the offset relative to the proposed 
increase must be at least one-to-one and is based on the severity of 
the area's nonattainment classification. For ozone and particulate 
matter less than 10 microns in aerodynamic diameter (PM-10), the more 
polluted the air is where the source is locating or expanding, the 
greater is the required offset ratio. The emissions reductions to be 
used as offsets must be surplus (not otherwise required by the Act), 
quantifiable, federally enforceable, and permanent. See sections 173(a) 
and (c) of the Act and 40 CFR 51.165(a)(3).
    Additionally, each major nonattainment NSR permit applicant must 
also conduct an analysis of ``alternative sites, sizes, production 
processes, and environmental control techniques demonstrating that the 
benefits of the proposed emissions source significantly outweigh the 
environmental and social costs of its location, construction, or 
modification.'' Moreover, each major nonattainment NSR permit applicant 
must demonstrate that all other major stationary sources under her/his 
control in the same State are in compliance or on a schedule of 
compliance with all emission limitations and standards of the Act.
    Under the PSD program for attainment areas, a major source or 
modification must apply Best Available Control Technology (BACT), which 
may be based on pollution prevention techniques. In addition, the 
source must analyze the impact of the project on ambient air quality to 
assure that no violation of the NAAQS or PSD increments will result, 
and must analyze impacts on soil, vegetation, and visibility. Sources 
or modifications that would impact Class I areas (e.g., national parks) 
may be subject to additional requirements to protect air quality 
related values (AQRVs) that have been identified for such areas.
2. What are the general requirements of the minor NSR program?
    Section 110(a)(2)(C) of the Act requires that every SIP include a 
program to regulate the construction and modification of stationary 
sources, including a permit program as required by parts C and D of 
title I of the Act, to ensure attainment and maintenance of NAAQS. 
Parts C and D address the major NSR program for major stationary 
sources, and the permitting program for minor stationary sources is 
addressed by section 110(a)(2)(C) of the Act. We commonly refer to the 
latter program as the ``minor NSR'' program. A minor stationary source 
means a source whose PTE is lower than the major source applicability 
threshold for a particular pollutant as defined in the applicable 
nonattainment major NSR program or PSD program.

[[Page 48700]]

    The Federal requirements for minor source programs are outlined 40 
CFR 51.160 through 51.164. States must develop minor source programs to 
attain and maintain NAAQS. The Federal regulations for minor source 
programs are considerably less detailed than the requirements for major 
sources. As a result, there is a wider variety of programs and 
requirements for these ``nonmajor'' preconstruction activities.
    Section 110(a)(2)(C) of the Act provides us with a broad degree of 
discretion in developing a program to regulate new and modified minor 
stationary source construction activities in Indian country.

B. Status of Air Quality Programs in Indian Country

    As we have discussed in previous rulemaking actions which affect 
Indian country, in the absence of an EPA-approved program, we are 
authorized to develop a FIP to protect air quality by directly 
implementing provisions of the Act throughout Indian country. See, 
e.g., 59 FR 43958-61 (August 25, 1994), 63 FR 7262-64 (February 12, 
1998), and 62 FR 13750 (March 21, 1997). Previously, we had already 
promulgated rules establishing requirements for major stationary 
sources in attainment areas and have issued PSD permits in Indian 
country (See 40 CFR 52.21).
    Under the Act and the Tribal Authority Rule (TAR) (See 40 CFR part 
49, subpart A), eligible tribes may seek approval of their own PSD 
programs for their reservations and/or for other areas under their 
jurisdiction. Currently, no tribe is administering an EPA-approved PSD 
program. Therefore, we implement the PSD program in Indian country. 
Unlike for the PSD program, there is currently no FIP to implement 
either the nonattainment major NSR program or the minor NSR program in 
Indian country. Hence, there is a regulatory gap in Indian country. 
Today's proposed rule will allow us to fully implement the NSR program 
in Indian country. We are proposing the minor NSR program at 40 CFR 
49.151 through 49.165 and the nonattainment major NSR program at 40 CFR 
49.166 through 49.175. It is important to recognize, however, that even 
if we adopt a Federal program that applies in Indian country, the 
tribes may still develop Tribal Implementation Plans (TIPs), similar to 
SIPs, to implement these programs. If a tribe develops a TIP to 
implement NSR, the TIP, once it is approved, will replace the Federal 
program as the requirement for that area of Indian country and the 
tribe will become the reviewing authority.
    Sources that obtain enforceable emission limitations can avoid 
major source status by reducing their PTE below the applicable major 
source thresholds. Such sources are commonly referred to as ``synthetic 
minors.'' The practice of creating synthetic minor sources to avoid 
major NSR and title V is common under most State and local minor NSR 
permitting programs. However, outside of Idaho, Oregon, and Washington, 
no such minor source permitting mechanism is currently available in 
Federal regulations for Indian country.\4\ We therefore believe that 
inclusion of this provision in the proposed rules would significantly 
benefit large sources in Indian country by providing them with a means 
to legally avoid more stringent major NSR rules otherwise required by 
title I of the Act. We are establishing this mechanism for both 
stationary sources of regulated NSR pollutants and HAPs.
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    \4\ See footnote 2 for more information on the FIP that is in 
place in within the exterior boundaries of Indian reservations in 
these three States.
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C. Consultation With Tribal Representatives

    Prior to undertaking this rulemaking, we sought to include tribes 
early in the rulemaking process. On June 24, 2002, we sent 
approximately 500 letters to tribal leaders seeking their 
recommendations for effective consultation and their involvement in 
developing this rule.
    We received responses from 75 tribes. Of these 75 tribes, 69 
designated an environmental staff member to work with us on developing 
the rules. Aside from the designated staff, many tribal leaders asked 
that we keep them informed of our progress through e-mail, meetings 
with the EPA Regional Offices, newsletters, and Web sites. However, 53 
percent of the tribal leaders also requested direct phone calls or 
conference calls to discuss the subject. Only 16 percent of the 
respondents requested face-to-face consultation. Of these, only six 
tribes requested senior EPA staff to meet with tribal leaders.
    As a result of this feedback, we developed a consultation plan that 
included three meetings held at the reservations of the Menominee Tribe 
in Wisconsin, the Mohegan Tribe in Connecticut, and the Chehalis Tribe 
in Washington. A fourth meeting was held in conjunction with the 
Institute of Tribal Environmental Professionals' (ITEP) 10th 
anniversary meeting in Flagstaff, Arizona. In addition to conducting 
these meetings, we also visited tribal environmental staff in Indian 
country. Over 30 tribes attended these meetings. As part of our 
outreach efforts to the tribes, we participated in numerous national 
and regional forums including the National Tribal Forums sponsored by 
the ITEP, two National Tribal Air Association meetings, and at meetings 
with tribal consortia, such as the National Tribal Environmental 
Council, United Southern and Eastern Tribes, Inter-Tribal Environmental 
Council, Inter Tribal Council of Arizona, and others.
    Although much of our effort focused on outreach to the tribes, we 
also interacted with State and local air pollution control agencies 
during development of this rule. We had two meetings with the State and 
Territorial Air Pollution Program Administrators and the Association of 
Local Air Pollution Control Officers (STAPPA/ALAPCO) to present the 
draft rules.

IV. Proposed Rules for Indian Country

A. Minor NSR Program

    Today's action proposes provisions for a minor NSR program in 
Indian country. We propose to codify these provisions at 40 CFR 49.151 
through 49.165. Our primary goal in developing this proposed rule is to 
ensure that air resources in Indian country will be protected in the 
manner intended by the Act. In addition, we seek to establish a 
flexible preconstruction permitting program for minor stationary 
sources in Indian country that is comparable to that which applies 
outside of Indian country, in order to create a more level regulatory 
playing field for owners and operators within and outside of Indian 
country.
    It is important to note, however, that outside of Indian country 
there is a great deal of variation among State minor NSR permitting 
programs. As a result, it would be impossible to create a single 
program that creates precisely equivalent regulations among all areas 
of Indian country and the surrounding State areas. Instead, we designed 
the proposed rules to ensure that stationary sources in Indian country 
would operate with a reasonable level of air pollution control, if 
necessary, and in such a manner to ensure that air resources in Indian 
country would be protected.
    We are not attempting through this proposed rulemaking to establish 
a new set of minimum criteria that an eligible tribe, or a State, would 
need to follow in developing its own minor source permitting program. 
Rather, this proposal simply represents how we would implement the 
program in Indian country in the absence of an EPA-approved 
implementation plan. However, if a tribe is developing its own program, 
this can serve as one example of a program that meets the objectives

[[Page 48701]]

and requirements of the Act. We are proposing a minor source permitting 
program that addresses, on a national level, many environmental and 
regulatory issues that are specific to Indian country. We understand 
that States and eligible tribes may face different issues, and may 
therefore choose to develop different programs for their own State or 
Tribal Implementation Plans.
1. What is a minor source and which minor sources are subject to this 
rule?
    A minor source means a source whose PTE is lower than an applicable 
major source threshold. For the NSR program in Indian country, the 
major source thresholds are defined in the PSD program (See 40 CFR 
52.21) and in today's proposed nonattainment major NSR program (see 
proposed 40 CFR 49.167), as applicable, and differ for attainment areas 
and nonattainment areas for the same pollutant. For example, in 
attainment areas the major source threshold for Nitrogen Oxides 
(NOX) for a source is 250 tpy, unless the source belongs to 
a source category that is listed in the major NSR rules (See 40 CFR 
52.21(b)(1)(i)(a)), in which case the major source threshold is 100 
tpy. In contrast, the major source threshold for NOX in 
ozone nonattainment areas can vary from 10tpy in an extreme ozone 
nonattainment area to 100 tpy in a marginal ozone nonattainment area. A 
source can be a major source for some pollutants and a minor source for 
others.
    Today, we are proposing to establish a minor NSR threshold as 
provided in section IV.A.3 of this preamble. The proposed rule would 
apply to only those minor sources whose PTE is equal to or greater than 
the minor NSR threshold for the regulated NSR pollutant. Such sources 
would include (1) New minor sources, (2) modified minor sources, and 
(3) synthetic minor sources including HAP sources. A source's PTE for a 
pollutant is expressed in tpy and generally is calculated by 
multiplying the maximum hourly emissions rate in pounds per hour (lbs/
hr) times 8,760 (which is the number of hours in a year) and dividing 
by 2,000 (which is the number of pounds in a ton), unless the source is 
restricted by permit conditions that are enforceable as a practical 
matter.
    Section IV.A.6 of this preamble includes detailed flowcharts to aid 
you in determining if a proposed new source would be subject to the 
proposed rule. The flowcharts differentiate between attainment areas 
and nonattainment areas because the applicability criteria are 
different for PSD and nonattainment major NSR.
2. What is a modification and what modifications are subject to this 
rule?
    For the purposes of this rule, a modification is defined at 
proposed 40 CFR 49.152(d) as (any physical or operational change at a 
stationary source that would cause an increase in the allowable 
emissions of the affected emissions units for any regulated NSR 
pollutant or that would cause the emission of any regulated NSR 
pollutant not previously emitted.( The following exemptions would 
apply:
     A physical or operational change does not include routine 
maintenance, repair, or replacement.
     An increase in the hours of operation or in the production 
rate is not considered an operational change unless such increase is 
prohibited under any federally-enforceable permit condition or other 
permit condition that is enforceable as a practical matter.
     A change in ownership at a stationary source is not 
considered a modification.
    Note that this definition differs from the term ``modification'' as 
used in the major NSR program, primarily in that it is based on an 
increase in allowable emissions rather than actual emissions. Parts C 
and D of title I of the Act ``the statutory basis for the major NSR 
program` refer to section 111(a)(4) of the Act [the definition of 
``modification'' for purposes of the new source performance standards 
(NSPS) program] to define ``modification'' for purposes of the major 
NSR program. In a recent decision, the D.C. Circuit Court of Appeals 
ruled that, based on the wording of the definition of ``modification'' 
in section 111(a)(4) of the Act, the applicability of major NSR to 
modifications must be based on changes in actual emissions (State of 
New York, et al., v. U.S. EPA, June 24, 2005). However, because the 
statutory basis for the minor NSR program is section 110(a)(2)(C) of 
the Act, which does not define or refer to a definition of 
``modification,'' we believe that we have discretion in defining the 
term as we think it best for the minor NSR program in Indian country 
that we are proposing today. We do not believe that the recent decision 
of the D.C. Circuit Court of Appeals applies to minor NSR programs. We 
seek comment on whether our proposed definition of modification is 
appropriate for minor NSR for minor sources.
    This rule would apply to certain modifications at minor sources and 
to minor modifications (not major modifications as defined in proposed 
40 CFR 49.167 and in 40 CFR 52.21) at major sources. How such 
modifications would be addressed under the proposed rule is explained 
in section IV.A.6 of this preamble. Section IV.A.6 also includes 
detailed flowcharts to aid you in determining if a proposed 
modification would be subject to the proposed rule.
3. What are the minor NSR thresholds and how did we develop them?
    A review of several State minor NSR programs indicated that a 
number of State programs have established cutoff levels or minor NSR 
thresholds, below which sources are exempt from their minor NSR rules. 
We believe that such an approach is also appropriate in Indian country. 
Section 110(a) (2)(C) of the Act requires minor NSR programs to assure 
that the NAAQS are attained and maintained. Applicability thresholds 
are proper in this context provided that the sources and modifications 
with emissions below the thresholds are inconsequential to attainment 
and maintenance of the NAAQS. As discussed further, the minor NSR 
thresholds that we are proposing today meet this criterion. In 
addition, these thresholds will result in a more cost-effective program 
and reduce the burden on sources and reviewing authorities.
    In today's rulemaking, we are proposing to adopt minor NSR 
thresholds as emission rates in tpy. In setting the minor NSR 
thresholds for minor sources of regulated NSR pollutants, we decided to 
use emission rates, rather than air quality impacts, as the basis for 
the exemption. We chose this approach because we were concerned that 
applicability determinations based on projected air quality impacts 
would be excessively complex and resource intensive. In addition, it is 
consistent with the approach used in major NSR.
    We are proposing minor NSR thresholds that we have developed based 
on a review of several State minor NSR programs. We found that there is 
variation in State approaches to minor NSR applicability. Some States 
do not prescribe source applicability thresholds, instead providing a 
list of emission units and activities that are excluded from minor NSR. 
Many of the States that do have applicability thresholds also provide a 
list of excluded emission units and activities. In today's rulemaking, 
we propose threshold levels that we believe are neither the most 
stringent nor the least stringent of the levels found in existing State 
minor NSR rules. These threshold levels represent a reasonable balance 
between environmental protection and

[[Page 48702]]

economic growth, since we did not want them to be so high that they 
were not environmentally protective or so low that they ensured 
environmental protection at the cost of discouraging economic growth. 
We consider the proposed thresholds to be representative of such 
thresholds in State minor NSR programs, and we believe that these 
limits will be appropriate for use in Indian country. The proposed 
thresholds are listed in Table 1.

                                         Table 1.--Minor NSR Thresholds
----------------------------------------------------------------------------------------------------------------
                                                                Minor NSR thresholds for
                                                               nonattainment areas  (tpy)         Minor NSR
                  Regulated NSR pollutant                   --------------------------------    thresholds for
                                                              Extreme ozone                    attainment areas
                                                                  areas        Other areas          (tpy)
----------------------------------------------------------------------------------------------------------------
Carbon monoxide (CO).......................................               5               5                   10
Oxides of nitrogen (NOX)...................................               0               5                   10
Sulfur dioxide (SO2).......................................               5               5                   10
Volatile Organic Compounds (VOC)...........................               0               2                    5
PM.........................................................               5               5                   10
PM-10......................................................               1               1                    5
PM-2.5.....................................................             0.6             0.6                    3
Lead.......................................................             0.1             0.1                  0.1
Fluorides..................................................              NA              NA                    1
Sulfuric acid mist.........................................              NA              NA                    2
Hydrogen sulfide (H2S).....................................              NA              NA                    2
Total reduced sulfur (including H2S).......................              NA              NA                    2
Reduced sulfur compounds (including H2S)...................              NA              NA                    2
Municipal waste combustor emissions........................              NA              NA                    2
Municipal solid waste landfills emissions (measured as Non               NA              NA                   10
 Methane Organic Compounds)................................
----------------------------------------------------------------------------------------------------------------

    The selected minor NSR thresholds distinguish between minor 
stationary sources of regulated NSR pollutants located in nonattainment 
versus attainment areas and by pollutant. We believe this distinction 
is important because of the different air quality goals in 
nonattainment and attainment areas.
    In some cases, a tribe's area of Indian country may be divided 
between a nonattainment area and an attainment area. In this situation, 
the applicable threshold for a proposed source or modification would 
correspond to the designation of the area where the source would be 
located. If a source straddles the two areas, the more stringent 
thresholds would apply.
    To evaluate how the proposed minor NSR thresholds might affect new 
sources locating in Indian country, we looked at the size distribution 
of existing sources across the country. Using the National Emission 
Inventory (NEI), which includes the most comprehensive inventory of 
existing U.S. stationary point sources that is available, we determined 
how many of these sources fall below the proposed minor NSR thresholds, 
how many are between the minor NSR and major NSR thresholds, and how 
many are above the major NSR threshold.\5\ If we assume that the 
distribution of new sources will mirror the existing source 
distribution, this analysis approximates the fraction of new sources 
that will be exempt from minor NSR, subject to minor NSR, and subject 
to major NSR, respectively. The results of this analysis by pollutant 
are summarized in Table 2.
---------------------------------------------------------------------------

    \5\ For this analysis, we used the final 1999 NEI, extrapolated 
to 2001. More on the 1999 NEI can be found at https://www.epa.gov/
ttn/chief/net/1999inventory.html.

                                   Table 2.--Distribution of Sources and Emissions Under Proposed Minor NSR Thresholds
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                    Total facilities      Unregulated minor       Minor sources         Major sources
                                                                 ----------------------        sources       -------------------------------------------
                            Pollutant                                                  ----------------------
                                                                   No. (x10   TPY (x10     % of                  % of     % of TPY     % of     % of TPY
                                                                      3)         6)       total     % of TPY    total                 total
--------------------------------------------------------------------------------------------------------------------------------------------------------
CO..............................................................       28.9       4.43         65        0.8         29         11          6         88
SO2.............................................................       21.2      13.90         76        0.1         16          1          8         99
PM10............................................................       33.9       1.69         65        1.3         32         22          4         76
PM2.5...........................................................       33.8       1.33         59        0.8         38         23          3         76
Ozone--VOC......................................................       43.3       1.60         42        1.1         53         41          5         58
Ozone--NOX......................................................       30.5       7.93         53        0.4         36          6         11         93
Nitrogen dioxide (NO2)..........................................       30.5       7.93         59        0.6         32          7          9         92
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As shown in Table 2, we performed the analysis for each of the 
criteria pollutants except lead, including VOC and NOX 
emissions as the precursors of ozone.\6\ For each pollutant, the table 
gives the total number of facilities in the emission inventory for that 
pollutant and the total, nationwide annual emissions of the pollutant. 
The column

[[Page 48703]]

labeled ``unregulated minor sources'' represents the percentage of 
total sources that fall below the minor NSR threshold, along with the 
percentage of total annual emissions that those sources emit. The 
``minor sources'' column gives the same information for sources that 
fall between the minor NSR threshold and the major NSR threshold, while 
the ``major sources'' column addresses sources that exceed the major 
NSR threshold.
---------------------------------------------------------------------------

    \6\ For the analysis, we used the major NSR and proposed minor 
NSR thresholds for each pollutant based on the attainment status and 
classification of the county in which each source is located. We 
made certain simplifying assumptions, including using the 250 tpy 
major source threshold for all sources in attainment areas, 
regardless of source category or major source status for other 
pollutants. For the details of the analysis,see ``Analysis of the 
Proposed Minor NSR Thresholds'' dated October 24, 2005 in the docket 
for this rulemaking.
---------------------------------------------------------------------------

    We believe that Table 2 provides excellent evidence that sources 
with emissions below the proposed minor NSR thresholds will be 
inconsequential to attainment and maintenance of the NAAQS. For each 
pollutant, only around 1 percent (or less) of total emissions would be 
exempt from review under the minor NSR program. At the same time, the 
proposed thresholds will promote a cost-effective program. According to 
Table 2, anywhere from 42 percent to 76 percent of sources (depending 
on the pollutant) would be too small to be subject to preconstruction 
review.
    We believe that the proposed minor NSR thresholds provide a 
reasonable approach to determining the applicability of the minor NSR 
program. These thresholds would prevent stationary sources that make 
negligible contributions to pollution from being regulated under this 
rule. However, this would not affect the applicability of other 
requirements, such as those found in an NSPS or a MACT standard. At the 
same time, the limits would ensure that intermediate-sized sources 
would be subject to reasonable control technology requirements. We seek 
comment on our approach to selecting the proposed minor NSR thresholds, 
on alternative approaches to selecting such thresholds, and on 
alternative applicability provisions (such as source category 
exemptions).
4. Are any emissions units and activities at stationary sources exempt 
from this rule?
    Certain emissions units and activities at stationary sources either 
do not emit regulated NSR pollutants to the ambient air or emit these 
pollutants in negligible amounts. We propose that such activities 
located at a minor source be exempt from the requirements of this rule 
(See proposed 40 CFR 49.153(c)). We propose that such activities are 
limited to the following:
     Air-conditioning units for comfort that are not subject to 
applicable requirements under title VI of the Act and do not exhaust 
air pollutants into the ambient air from any manufacturing or 
industrial process;
     Ventilating units for comfort that do not exhaust air 
pollutants into the ambient air from any manufacturing or other 
industrial process;
     Heating units for comfort that do not provide heat for any 
manufacturing or other industrial process;
     Noncommercial food preparation;
     Consumer use of office equipment and products;
     Janitorial services and consumer use of janitorial 
products;
     Internal combustion engines used for landscaping purposes;
     Bench scale laboratory activities, except for laboratory 
fume hoods and vents; and
     Any emissions unit or activity that does not have the 
potential to emit a regulated NSR pollutant or HAP, so long as that 
emissions unit or activity is not part of a process unit that emits or 
has the potential to emit a regulated NSR pollutant or HAP.
5. What are the permit application, control technology, and air quality 
analysis requirements, and what is the permit issuance process?
    Permit Application Requirements. Under today's proposed minor NSR 
program, as the owner or operator of a proposed new minor source or a 
proposed modification that is subject to this rule, you must submit a 
complete application to your reviewing authority requesting a minor NSR 
permit specific to your source (unless you wish to seek a ``general 
permit,'' if eligible). In addition to basic information identifying 
and describing your source, your application must include a list of all 
affected emissions units. ``Affected emissions units'' are defined as 
all the emissions units at your proposed new minor source or all the 
new, modified, and replacement emissions units that comprise your 
proposed modification (excluding the exempt emissions units and 
activities listed in proposed 40 CFR 49.153(c)). See proposed 40 CFR 
49.152(d).
    Your application also must document the increase in emissions of 
regulated NSR pollutants that will result from your new source or 
modification so that the reviewing authority can verify that you are 
subject to this proposed minor NSR program, rather than to major NSR. 
For each new emissions unit that you list, you must provide the PTE in 
tpy for each regulated NSR pollutant, along with supporting 
documentation. For any modified or replacement unit that you list, you 
must provide the allowable emissions of each regulated NSR pollutant in 
tpy both before and after the modification or replacement, along with 
supporting documentation. For emissions units that do not have an 
established allowable emissions level prior to the modification, you 
must report the PTE. The allowable emissions for any emissions unit are 
calculated considering any emission limitations that are enforceable as 
a practical matter on the unit's PTE. In calculating these emission 
levels for applicability purposes, we seek comment on whether you 
should include fugitive emissions, to the extent that they are 
quantifiable, for all sources, or include them only for source 
categories listed pursuant to section 302(j) of the Act or exclude them 
for all sources.
    You may include in your application proposed emission limitations 
for the listed emissions units. If you do, you must account for these 
limitations in your calculations of post-construction PTE and/or 
allowable emissions. The application also must identify and describe 
any existing air pollution control equipment and compliance monitoring 
devices or activities relevant to the affected emissions units, as well 
as any existing emission limitations or work practice requirements to 
which any affected emissions units are subject. See proposed 40 CFR 
49.154(a) for the complete requirements for your application for a 
minor NSR permit.
    You may request that the reviewing authority establish an annual 
minor source plantwide applicability limitation (minor source PAL) for 
one or more of the regulated NSR pollutants emitted by your new or 
existing minor stationary source. A minor source PAL is a source-wide 
limitation on allowable emissions of a regulated NSR pollutant, 
expressed in tpy, that is established under the proposed 40 CFR 49.155 
and that is enforceable as a practical matter (See proposed 40 CFR 
49.152(d)).
    For a new minor stationary source, you may request minor source 
PALs for some or all of the regulated NSR pollutants emitted by your 
source. For the other regulated NSR pollutants that your source emits 
(i.e., the non-PAL pollutants), your permit will contain annual 
allowable emissions limits for each emissions unit.
    You may request a minor source PAL for one or more regulated PAL 
pollutants at the time that you are modifying an existing minor 
stationary source. Each PAL will apply across all the emissions units 
at your source, whether or not they are affected by the modification. 
For the non-PAL pollutants, only the emissions units that are affected 
by the modification will receive annual allowable emissions limits. If 
you request one or more minor source PALs for an existing minor 
stationary source at a time when no

[[Page 48704]]

modification is planned, each PAL will apply across all the emissions 
units at your source, but your permit will include no new emission 
limits for the non-PAL pollutants.
    If your source is in a source category covered by a ``general 
permit'' issued under proposed 40 CFR 49.156, you may apply for the 
general permit for that source category. A general permit is a permit 
developed by your reviewing authority for a general category of 
emissions units or stationary sources that are similar in nature, have 
substantially similar emissions, and would be subject to the same or 
substantially similar requirements governing operations, emissions, 
monitoring, reporting, and recordkeeping. The permit application 
requirements for a particular general permit will be specified in that 
general permit. General permits are discussed further in section 
IV.A.13 of this preamble.
    Control Technology Review. As required under section 110(a)(2)(C) 
of the Act, the minor NSR permitting program that we are proposing 
today is primarily designed to assure that the NAAQS are achieved, and 
to prohibit any stationary source from emitting any air pollutant in 
amounts that would contribute to nonattainment or interfere with 
maintenance of the NAAQS. At the same time, we wish to provide 
flexibility in control technology requirements for minor sources 
located in Indian country to promote economic growth and development.
    Therefore, in today's proposal, we are proposing that your 
reviewing authority perform a control technology review on a case-by-
case basis when issuing the permit (other than a general permit). By 
``control technology,'' we mean pollution prevention techniques, add-on 
pollution control equipment, design and equipment specifications, work 
practices, and operational restrictions. This review would consider 
local air quality needs, typical control technology used by similar 
sources in surrounding areas, anticipated economic growth in the area, 
and cost-effective control alternatives. At a minimum, the reviewing 
authority must require control technology that assures that the NAAQS 
are achieved and that each affected emissions unit will comply with all 
requirements of 40 CFR parts 60, 61, and 63 that apply. The required 
control technology resulting from such a review may range from 
technology that is less stringent than the reasonably available control 
technology (RACT) level of control (which is typically required for 
existing major sources in nonattainment areas), to technology that is 
the BACT level of control (which is the level required for new major 
sources and major modifications in attainment areas), depending on the 
air quality needs of the area, other applicable regulatory programs of 
the Act, and technical and economic feasibility.
    Based on the results of the control technology review, the emission 
limitations required by the reviewing authority may consist of emission 
limits, pollution prevention techniques, design standards, equipment 
standards, work practice standards, operational standards, or any 
combination thereof. If it is technically and economically feasible, 
the reviewing authority must require an emission limit (i.e., a limit 
on the quantity, rate, or concentration of emissions) for each affected 
emissions unit at your source.
    For a new minor source that is subject to this rule, the case-by-
case control technology review would be conducted for all emissions 
units [except the exempt emissions units and activities discussed in 
section IV.A.4 and listed in proposed 40 CFR 49.153(c)] that emit or 
have the potential to emit the pollutant for which the source is 
subject to this rule. However, for modifications, such control 
technology review would apply only to the affected emissions unit(s).
    In establishing a case-by-case control technology review process to 
determine an appropriate level of control for minor sources and subject 
modifications in Indian country, we considered a number of factors. On 
the one hand, we believe that the control technology review process 
should be as flexible as possible to provide for the specific needs and 
conditions of each area of Indian country, consistent with the 
requirements of the Act. On the other hand, we believe that a 
reasonable level of air pollution control for new minor sources and 
subject modifications in Indian country is generally warranted to 
ensure protection of air resources in Indian country. In addition, we 
wish to ensure that Indian country not be seen as a potential 
``pollution haven'' where minor stationary sources can go to escape air 
pollution control requirements. At the same time, we do not want to put 
tr