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Proposed Rule2023-27759

Clarifying the Scope of “Applicable Requirements” Under State Operating Permit Programs and the Federal Operating Permit Program

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Published

January 9, 2024

Issuing agencies

Environmental Protection Agency

Abstract

The Environmental Protection Agency (EPA) proposes to update its title V operating permit program regulations to more clearly reflect the EPA's existing interpretations and policies concerning when and whether "applicable requirements" established in other Clean Air Act (CAA or the Act) programs should be reviewed, modified, and/or implemented through the title V operating permits program. Specifically, this action clarifies the limited situations in which requirements under the New Source Review (NSR) preconstruction permitting program would be reviewed using the EPA's unique title V oversight authorities. Additionally, this action clarifies that requirements related to an owner or operator's general duty to prevent accidental releases of hazardous substances are not "applicable requirements" for title V purposes and are not implemented through title V.

Full Text

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<title>Federal Register, Volume 89 Issue 6 (Tuesday, January 9, 2024)</title>
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[Federal Register Volume 89, Number 6 (Tuesday, January 9, 2024)]
[Proposed Rules]
[Pages 1150-1189]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27759]

[[Page 1149]]

Vol. 89

Tuesday,

No. 6

January 9, 2024

Part II

Environmental Protection Agency

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40 CFR Parts 70 and 71

Clarifying the Scope of ``Applicable Requirements'' Under State
Operating Permit Programs and the Federal Operating Permit Program;
Proposed Rule

Federal Register / Vol. 89 , No. 6 / Tuesday, January 9, 2024 /
Proposed Rules

[[Page 1150]]

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 70 and 71

[EPA-HQ-OAR-2023-0401; FRL-9118-01-OAR]
RIN 2060-AV61

Clarifying the Scope of ``Applicable Requirements'' Under State
Operating Permit Programs and the Federal Operating Permit Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) proposes to update
its title V operating permit program regulations to more clearly
reflect the EPA's existing interpretations and policies concerning when
and whether ``applicable requirements'' established in other Clean Air
Act (CAA or the Act) programs should be reviewed, modified, and/or
implemented through the title V operating permits program.
Specifically, this action clarifies the limited situations in which
requirements under the New Source Review (NSR) preconstruction
permitting program would be reviewed using the EPA's unique title V
oversight authorities. Additionally, this action clarifies that
requirements related to an owner or operator's general duty to prevent
accidental releases of hazardous substances are not ``applicable
requirements'' for title V purposes and are not implemented through
title V.

DATES: Comments: Comments must be received on or before March 11, 2024.
Public hearing: If anyone contacts the EPA requesting a public hearing
by January 15, 2024, the EPA will hold a virtual public hearing. Please
refer to the SUPPLEMENTARY INFORMATION section for additional
information on requesting and registering for a public hearing.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2023-0401, by any of the following methods:
<bullet> Federal eRulemaking Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>
(our preferred method). Follow the online instructions for submitting
comments.
<bullet> Email: <a href="/cdn-cgi/l/email-protection#bedf93dfd0da93cc93dad1ddd5dbcafedbcedf90d9d1c8">[email&#160;protected]</a>. Include Docket ID No. EPA-
HQ-OAR-2023-0401 in the subject line of the message.
<bullet> Fax: (202) 566-9744. Attention Docket ID No. EPA-HQ-OAR-
2023-0401.
<bullet> Mail: U.S. Environmental Protection Agency, EPA Docket
Center, OAR Docket, Mail Code 28221T, 1200 Pennsylvania Avenue NW,
Washington, DC 20460.
<bullet> Hand Delivery or Courier: EPA Docket Center, WJC West
Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004.
The Docket Center's hours of operations are 8:30 a.m.-4:30 p.m.,
Monday-Friday (except Federal Holidays).
Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to <a href="https://www.regulations.gov">https://www.regulations.gov</a>, including any personal information
provided. For detailed instructions on sending comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: Mr. Matthew Spangler, Air Quality
Policy Division, Office of Air Quality Planning and Standards (C504-
05), Environmental Protection Agency, Research Triangle Park, NC;
telephone number: (919) 541-0327; email address:
<a href="/cdn-cgi/l/email-protection#037073626d646f66712d6e6277776b6674436673622d646c75">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION: The Information presented in this document
is organized as follows:

I. Public Participation in This Proposed Rulemaking
A. Does this action apply to me?
B. Where can I get a copy of this document and other related
information?
C. What should I consider as I prepare my comments?
D. How do I request and participate in a virtual public hearing?
II. Purpose of This Regulatory Action
III. Background on Title V Operating Permits and CAA ``Applicable
Requirements''
A. The Title V Permitting Process, Public Participation, and the
EPA's Oversight Role
B. Purpose and Function of Title V Permits
C. Regulatory Definition of ``Applicable Requirements''
D. Requirements That Are Not ``Applicable Requirements'' for
Purposes of Title V Permitting
E. Self-Implementing Applicable Requirements (e.g., NSPS,
NESHAP)
F. Requirements Defined Through Title V Permitting
G. Applicable Requirements Related to the NAAQS and SIPs
IV. Interface Between NSR and Title V Permitting
A. Background: Historical and Current EPA Positions
B. Proposed Action
C. Interaction With NSR Permitting, Oversight, and Enforcement
D. Impacts of Proposed Action
E. Rationale for Proposed Action
F. Alternative Approaches
V. The General Duty Clause Concerning the Prevention of Accidental
Releases of Hazardous Substances
A. Background and Summary of Proposed Action
B. Rationale for Proposed Action
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review,
Executive Order 13563: Improving Regulation and Regulatory Review,
and Executive Order 14094: Modernizing Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
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 and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations and Executive Order 14096: Revitalizing Our Nation's
Commitment to Environmental Justice for All
VII. Statutory Authority

I. Public Participation in This Proposed Rulemaking

A. Does this action apply to me?

Entities potentially affected by this proposed rulemaking include
state, local, and Tribal air pollution control agencies that administer
title V operating permit programs (``permitting authorities''), owners
and operators of emissions sources in all industry groups who hold or
apply for title V operating permits, and any person or group who
participates in the title V permitting process.

B. Where can I get a copy of this document and other related
information?

The EPA has established a docket for this rulemaking under Docket
ID No. EPA-HQ-OAR-2023-0401. All documents in the docket pertaining to
this action are listed on the <a href="https://www.regulations.gov">https://www.regulations.gov</a> website.
Although listed in the index, some information may not be publicly
available, e.g., Confidential Business Information (CBI), Proprietary
Business Information (PBI), or other information whose disclosure is
restricted by statute. Certain other material, such as copyrighted
material, is not placed on the internet and may be viewed with prior
arrangement with the EPA Docket Center. In addition to being available
in the docket, an electronic copy of this Federal Register document
will be posted at <a href="https://www.epa.gov/title-v-operating-permits/current-regulations-and-regulatory-actions">https://www.epa.gov/title-v-operating-permits/current-regulations-and-regulatory-actions</a>.

[[Page 1151]]

Additionally, a number of documents that are relevant to this proposed
action--in particular, prior EPA orders responding to petitions
challenging individual title V permits--are available through the EPA's
website at <a href="https://www.epa.gov/title-v-operating-permits/title-v-petition-database">https://www.epa.gov/title-v-operating-permits/title-v-petition-database</a>.

C. What should I consider as I prepare my comments?

Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2023-
0401, at <a href="https://www.regulations.gov">https://www.regulations.gov</a> (our preferred method), or the
other methods identified in the ADDRESSES section. Once submitted,
comments cannot be edited or removed from the docket. The EPA may
publish any comment received to its public docket.
Do not submit information containing CBI to the EPA through <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Clearly mark the part or all of the information
that you claim to be CBI. For CBI information on any digital storage
media that you mail to the EPA, mark the outside of the digital storage
media as CBI and then identify electronically within the digital
storage media the specific information that is claimed as CBI. In
addition to one complete version of the comments that includes
information claimed as CBI, you must submit a copy of the comments that
does not contain the information claimed as CBI directly to the public
docket through the procedures outlined in Instructions. If you submit
any digital storage media that does not contain CBI, mark the outside
of the digital storage media clearly that it does not contain CBI.
Information not marked as CBI will be included in the public docket and
the EPA's electronic public docket without prior notice. Information
marked as CBI will not be disclosed except in accordance with
procedures set forth in 40 Code of Federal Regulations (CFR) part 2.
Our preferred method to receive CBI is for it to be transmitted
electronically using email attachments, File Transfer Protocol (FTP),
or other online file sharing services (e.g., Dropbox, OneDrive, Google
Drive). Electronic submissions must be transmitted directly to the
OAQPS CBI Office using the email address, <a href="/cdn-cgi/l/email-protection#3d525c4c4d4e5e5f547d584d5c135a524b">[email&#160;protected]</a>, and should
include clear CBI markings as described later. If assistance is needed
with submitting large electronic files that exceed the file size limit
for email attachments, and if you do not have your own file sharing
service, please email <a href="/cdn-cgi/l/email-protection#d4bbb5a5a4a7b7b6bd94b1a4b5fab3bba2">[email&#160;protected]</a> to request a file transfer link.
If sending CBI information through the postal service, please send it
to the following address: OAQPS Document Control Officer (C404-02),
OAQPS, U.S. Environmental Protection Agency, Research Triangle Park,
North Carolina 27711, Attention Docket ID No. EPA-HQ-OAR-2023-0401. The
mailed CBI material should be double wrapped and clearly marked. Any
CBI markings should not show through the outer envelope.

D. How do I request and participate in a virtual public hearing?

To request a virtual public hearing, contact Ms. Pam Long at (919)
541-0641 or by email at <a href="/cdn-cgi/l/email-protection#2f43404148015f4e426f4a5f4e01484059">[email&#160;protected]</a> by January 15, 2024. If
requested, the virtual hearing will be held on January 24, 2024. The
hearing will convene at 9:00 a.m. Eastern Time (ET) and will conclude
at 3:00 p.m. ET. The EPA may close a session 15 minutes after the last
pre-registered speaker has testified if there are no additional
speakers. The EPA will announce further details at <a href="https://www.epa.gov/title-v-operating-permits">https://www.epa.gov/title-v-operating-permits</a>.
Upon publication of this document in the Federal Register, the EPA
will begin pre-registering speakers for the hearing, if a hearing is
requested. To register to speak at the virtual hearing, please use the
online registration form available at <a href="https://www.epa.gov/title-v-operating-permits">https://www.epa.gov/title-v-operating-permits</a> or contact Ms. Pam Long at (919) 541-0641 or by email
at <a href="/cdn-cgi/l/email-protection#65090a0b024b150408250015044b020a13">[email&#160;protected]</a>. The last day to pre-register to speak at the
hearing will be January 22, 2024. Prior to the hearing, the EPA will
post a general agenda that will list pre-registered speakers in
approximate order at: <a href="https://www.epa.gov/title-v-operating-permits">https://www.epa.gov/title-v-operating-permits</a>.
The EPA will make every effort to follow the schedule as closely as
possible on the day of the hearing; however, please plan for the
hearing to run either ahead of schedule or behind schedule.
Each commenter will have 3 minutes to provide oral testimony. The
EPA encourages commenters to provide the EPA with a copy of their oral
testimony electronically (via email) by emailing it to
<a href="/cdn-cgi/l/email-protection#d8b4b7b6bff6a8b9b598bda8b9f6bfb7ae">[email&#160;protected]</a>. The EPA also recommends submitting the text of your
oral testimony as written comments to the rulemaking docket.
The EPA may ask clarifying questions during the oral presentations
but will not respond to the presentations at that time. Written
statements and supporting information submitted during the comment
period will be considered with the same weight as oral testimony and
supporting information presented at the public hearing.
Please note that any updates made to any aspect of the hearing will
be posted online at <a href="https://www.epa.gov/title-v-operating-permits">https://www.epa.gov/title-v-operating-permits</a>.
While the EPA expects the hearing to go forward as set forth earlier,
please monitor our website or contact Ms. Pam Long at (919) 541-0641 or
by email at <a href="/cdn-cgi/l/email-protection#e4888b8a83ca948589a4819485ca838b92">[email&#160;protected]</a> to determine if there are any updates. The
EPA does not intend to publish a document in the Federal Register
announcing updates.
If you require the services of a translator or special
accommodations such as audio description, please pre-register for the
hearing with Ms. Pam Long and describe your needs by January 16, 2024.
The EPA may not be able to arrange accommodations without advanced
notice.

II. Purpose of This Regulatory Action

This rulemaking concerns the relationship between the CAA's title V
operating permit program and certain types of ``applicable
requirements'' established under different sections of the CAA. Many of
the EPA's past statements on this topic are included within the EPA
Administrator's responses to citizen petitions challenging title V
permits issued to individual facilities. Though publicly available,
these Orders may not be widely read by members of the public and/or
permitting authorities. This rulemaking is intended to bring greater
awareness to the EPA's current approach to ``applicable requirements''
within the context of title V so that the public, permitting
authorities, and the EPA can focus their resources on using the title V
permitting process to address issues that can be most effectively
resolved through title V. Specifically, this proposed rule addresses
three issues that have been the source of public interest and, at
times, misunderstanding. This rule also proposes to update the EPA's
regulations to better express the EPA's existing positions on these
topics.
First, section III. of this preamble includes background on the
EPA's existing position regarding general topics involving ``applicable
requirements,'' which the EPA does not propose to change. In summary,
the title V operating permit program is a vehicle for compiling air
quality control requirements from other CAA programs and for providing
conditions necessary to assure compliance with such requirements, but
it is not a vehicle for creating or changing applicable requirements
from those other programs. The EPA has a regulatory definition of the
term ``applicable requirement'' that guides the interaction between
title V and other CAA programs. Some programs establish ``self-
implementing'' requirements that

[[Page 1152]]

can be incorporated into title V permits without further review. Other
programs contain only general requirements that can, in certain
circumstances, be further defined through title V. Section III.G. of
this preamble summarizes existing EPA positions about how these
concepts affect requirements related to the National Ambient Air
Quality Standards (NAAQS) and State Implementation Plans (SIPs).
Second, Section IV. of this preamble addresses the intersection
between title V operating permits and NSR preconstruction permits
issued under title I of the CAA and focuses on the limited situations
in which NSR requirements would be reviewed using the EPA's unique
title V oversight authorities.
Section IV.A. discusses the EPA's historical and current positions
on the intersection between permits issued under title I and title V,
which have changed over time. Section IV.B. explains in more detail the
EPA's existing position, which the EPA proposes to codify through this
rulemaking. In summary, the EPA's current position is that provided a
source obtains an NSR permit under EPA-approved (or EPA-promulgated)
title I rules, with public notice and the opportunity for comment and
judicial review, such NSR permit establishes the NSR-related
``applicable requirements'' of the SIP (or Federal Implementation Plan,
FIP) for purposes of incorporation into a title V permit. As with
``applicable requirements'' established under other CAA authorities,
the EPA would not revisit those NSR permitting decisions through the
title V process. The EPA's framework applies similarly regardless of:
(i) the stage of the title V permitting or oversight process at issue;
(ii) the NSR permit's origin (i.e., from a SIP or a FIP), (iii) the
type of substantive NSR requirement at issue (e.g., NSR permit terms or
major NSR applicability); and (iv) the procedures by which the NSR
permit is incorporated into the title V permit (e.g., sequentially or
concurrently issued permits). However, there are situations in which
the title V permitting process is the appropriate venue for addressing
NSR permitting issues, including where NSR requirements have not been
established through a sufficient title I permitting process, or where
NSR issues and title V issues involve substantive overlap. Although the
EPA believes that the existing regulations may properly be read to
support the EPA's existing position, the EPA proposes amendments to
make this position more explicit. Updating the EPA's regulations will
allow the agency to apply its existing approach nationwide and will
resolve issues stemming from conflicting court decisions from two
federal Courts of Appeals.
Section IV.C. discusses the extent to which this proposal will (or
will not) impact NSR permitting, NSR oversight tools, and NSR
enforcement tools. Section IV.D. further discusses the limited impacts
this proposed rule is expected to have on the EPA, permitting
authorities, regulated entities, and the public. Overall, this proposed
rule is meant to provide clarity about the appropriate mechanisms that
should be used to address concerns with NSR permits. This proposed rule
should create an incentive for permitting authorities to offer
opportunities for meaningful public involvement in NSR permitting
actions, and should encourage the public to take advantage of those
opportunities (instead of attempting to use title V oversight tools to
resolve concerns with NSR permits).
Section IV.E. details the EPA's legal and policy rationale for the
EPA's existing (and proposed to be codified) position. In sum, the
EPA's interpretation is supported by the text of title V, the structure
and purpose of title V, and the structure of the CAA as a whole. The
EPA has the discretion under the statute to apply this approach, which
reflects better policy than alternative approaches. This proposed rule
ensures that applicable requirements established in different CAA
programs are treated consistently in title V permitting. The EPA's
proposal better accounts for procedural, resource-related, and
practical limitations associated with title V oversight tools while
incentivizing the use of proper title I avenues of review. Lastly, this
approach respects the finality of NSR permitting decisions.
Section IV.F. solicits comment on three alternative approaches that
would involve using title V permits to address substantive NSR issues
in additional, targeted situations, while explaining why these
alternatives are not preferred by the EPA.
Third, Section V. of this preamble addresses a distinct and
severable topic related to the ``General Duty Clause'' of CAA section
112(r)(1), which concerns the prevention of accidental releases of
hazardous substances. This proposal seeks to codify the EPA's well-
established position that this General Duty Clause is not an
``applicable requirement'' and is not implemented through title V.

III. Background on Title V Operating Permits and CAA ``Applicable
Requirements''

This section of the preamble contains background information about
the title V program and explains how different types of ``applicable
requirements'' of the CAA are treated in title V permits. This
discussion is intended to clarify multiple related topics that may have
been a source of confusion to the public, regulated entities, and
permitting authorities over the years. The EPA is not proposing any
changes to the agency's longstanding interpretations or policies
discussed in this section. The EPA also considers these interpretations
and policies to be consistent with, and accurately reflected in, the
EPA's existing regulations in 40 CFR parts 70 and 71. Thus, the EPA is
not proposing to revise the EPA's regulations in order to reflect these
existing interpretations and policies.\1\
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\1\ By contrast, the EPA is proposing to revise the EPA's
regulations to more clearly reflect the EPA's positions regarding
the issues discussed in sections IV. and V. of this preamble.
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A. The Title V Permitting Process, Public Participation, and the EPA's
Oversight Role

Congress amended the CAA in 1990 to add, among other provisions,
title V. CAA Amendments of 1990, Public Law 101-549, sections 501-507,
104 Stat. 2399, 2635-48 (1990) (codified at 42 U.S.C. 7661-7661f).
Title V established an operating permit program for major sources of
air pollution and certain other sources.
The title V program, like other provisions of the CAA, involves an
exercise of cooperative federalism, meaning that responsibility for the
program is divided between states and the EPA. Under title V, states
were required to develop and submit to the EPA for approval title V
permitting programs consistent with requirements promulgated by the EPA
in 40 CFR part 70. 42 U.S.C. 7661a(b), (d).\2\ Most states, certain
local agencies, and one Tribe now have approved part 70 programs. Under
these EPA-approved state programs, permitting authorities issue the
vast majority of title V permits (this preamble refers to such permits
as ``state-issued'' permits). The EPA directly issues title V permits
only in limited circumstances.\3\
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\2\ For information about EPA oversight over the content and
implementation of EPA-approved state part 70 programs, see 42 U.S.C.
7661a(i) and 40 CFR 70.10.
\3\ Under 40 CFR part 71, the EPA (or an agency delegated to
issue permits on EPA's behalf) issues title V permits to sources in
most areas of Indian Country, on the Outer Continental Shelf,
jurisdictions where the EPA has determined that a state has not
adequately implemented its part 70 program, and for specific sources
where a state has not satisfied an EPA objection to, or reopening
of, a state-issued permit. See 40 CFR 71.4.

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[[Page 1153]]

Most title V permit actions (including initial permits, renewal
permits, and significant permit modifications) involve public notice
and an opportunity for comment and a hearing on draft permits and
revisions. See 42 U.S.C. 7661a(b)(6); 40 CFR 70.4(d)(3)(iv), 70.7(h).
These opportunities are similar to those provided in other CAA
programs.
Additionally, Congress provided the EPA and the public with unique
oversight tools for state-issued title V permits. The CAA requires
permitting authorities to submit a proposed title V permit to the EPA
Administrator for review for a 45-day review period before issuing the
permit as final. 42 U.S.C. 7661d(a)(1); 40 CFR 70.8(a). The
Administrator shall object to issuance of a proposed permit within that
45-day review period if the Administrator determines that the permit
does not satisfy applicable requirements of the CAA or the requirements
of part 70. 42 U.S.C. 7661d(b)(1); 40 CFR 70.8(c). If the Administrator
does not object to a permit during the 45-day EPA review period, any
person may petition the Administrator within 60 days after the
expiration of the 45-day review period to take such action (hereinafter
``title V petition'' or ``petition''). 42 U.S.C. 7661d(b)(2), 40 CFR
70.8(d), 70.12, 70.13, 70.14. Many of the issues concerning
``applicable requirements'' that are addressed in this rulemaking have
been raised, and addressed, in title V petitions and the EPA's orders
responding to such petitions.\4\
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\4\ For more information about title V petitions, see the
preambles of the proposed and final petitions rule, 81 FR 57822
(Aug. 24, 2016) and 85 FR 6431 (Feb. 5, 2020). Copies of petitions
and the EPA's petition orders are available on the EPA's public
title V petitions database, <a href="https://www.epa.gov/title-v-operating-permits/title-v-petition-database">https://www.epa.gov/title-v-operating-permits/title-v-petition-database</a>.
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The CAA also provides the EPA with the authority--at the agency's
discretion--to determine that cause exists to ``terminate, modify, or
revoke and reissue'' a state-issued title V permit. 42 U.S.C. 7661d(e).
This process is often called ``reopening for cause'' and is described
in 40 CFR 70.7(f) and (g). Among other criteria, a permit may be
reopened for cause when necessary to assure compliance with applicable
requirements. 40 CFR 70.7(f)(1)(iv).
Although this proposed rule is primarily focused on the EPA's
oversight of state-issued title V permits, the concepts discussed in
this preamble related to ``applicable requirements'' are relevant to
nearly all aspects of the title V permitting process in some shape or
form. For example, these concepts guide the information that permittees
must include in title V permit applications, the required content of
title V permits drafted and issued by permitting authorities (including
the EPA), the scope of issues properly subject to the public's input
during the title V permitting process, and the scope of issues
considered by the EPA in exercising its oversight roles (including the
EPA's review of title V permits issued by states and consideration of
citizen petitions on those permits).

B. Purpose and Function of Title V Permits

The title V permitting program was created to assist with
compliance and enforcement of air pollution controls established under
other CAA programs. Before this program existed, the CAA pollution
control requirements that might apply to a particular source could be
found in many different provisions of the Act along with various
federal and state regulations and permits. One court opinion summarized
the relationship between title V and other CAA programs as follows:

Under the regulatory regime established by the [CAA], emission
limits for pollutants and monitoring requirements that measure
compliance applicable to any given stationary source of air
pollution are scattered throughout rules promulgated by states or
EPA, such as [SIPs], new source performance standards [NSPS], and
national emission standards for hazardous air pollutants [NESHAP].
Before 1990, regulators and industry were left to wander through
this regulatory maze in search of the emission limits and monitoring
requirements that might apply to a particular source. Congress
addressed this confusion in the 1990 Amendments by adding title V of
the Act, which created a national permit program that requires many
stationary sources of air pollution to obtain permits that include
relevant emission limits and monitoring requirements.

Sierra Club v. EPA, 536 F.3d 673, 674 (D.C. Cir. 2008) (citations
omitted).
Thus, one key function of title V is to consolidate applicable
requirements established under other CAA programs. This consolidation
function is embodied in CAA section 504(a), which states, in part:
``Each permit issued under this subchapter shall include enforceable
emission limitations and standards . . . and such other conditions as
are necessary to assure compliance with applicable requirements of this
chapter, including the requirements of the applicable implementation
plan.'' 42 U.S.C. 7661c(a). The EPA's regulations implementing title V
contain language similar to the statute. See 40 CFR 70.6(a)(1),
71.6(a)(1).\5\ The EPA's regulations also require that ``The permit
shall specify and reference the origin of and authority for each term
or condition, and identify any difference in form as compared to the
applicable requirement upon which the term or condition is based.'' 40
CFR 70.1(a)(1)(i), 71.1(a)(1)(i).
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\5\ The EPA's regulations also define the specific ``applicable
requirements'' with which each title V permit must assure
compliance. 40 CFR 70.2, 71.2. The definition and concept of
``applicable requirements'' are discussed in more detail later in
this preamble.
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In addition to consolidating existing applicable requirements, CAA
section 504 provides the EPA with the authority to use title V permits
to establish additional requirements necessary to assure compliance
with existing applicable requirements. For example, it is well
established that title V permits may be used to create or supplement
monitoring requirements when necessary in order to assure compliance
with underlying applicable requirements that do not themselves contain
sufficient monitoring provisions.\6\ Various compliance assurance
requirements are included within title V and the EPA's implementing
regulations; not all are restricted to monitoring.\7\
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\6\ See 42 U.S.C. 7661c(c); 40 CFR 70.6(c)(1); Sierra Club v.
EPA, 536 F.3d 673, 674-45, 680 (D.C. Cir. 2008) (``Title V did more
than require the compilation in a single document of existing
applicable emission limits and monitoring requirements. It also
mandated that `[e]ach permit issued under [Title V] shall set forth
. . . monitoring . . . requirements to assure compliance with the
permit terms and conditions.' . . . [T]he Act requires: a permitting
authority may supplement an inadequate monitoring requirement so
that the requirement will `assure compliance with the permit terms
and conditions.' '' (citations omitted)); see also, e.g., In the
Matter of CITGO Refining and Chemicals Co., L.P., West Plant, Order
on Petition No. VI-2007-01 at 6-8 (May 28, 2009).
\7\ See 42 U.S.C. 7661c(a), (b), (c); 40 CFR 70.6(a)(1), (a)(3),
(c), 71.6(a)(1), (a)(3), (c); see also, e.g., In the Matter of
Suncor Energy (U.S.A.), Inc., Commerce City Refinery, Plant 2
(East), Order on Petition Nos. VIII-2022-13 & VIII-2022-14 at 13-17
(July 31, 2023) (Suncor East Order).
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Beyond title V's consolidation and compliance assurance functions,
title V generally does not impose new pollution control requirements on
sources or provide a vehicle to modify such requirements established
under other CAA programs. Thus, the EPA's regulations expressly
provide: ``All sources subject to these regulations shall have a permit
to operate that assures compliance by the source with all applicable
requirements. While title V does not impose substantive new
requirements, it does require that . . . certain procedural measures be
adopted especially with respect to compliance.'' 40 CFR 70.1(b)
(emphasis added). For

[[Page 1154]]

additional information about the purpose and function of title V, see
section IV.E.2. of this preamble.
In summary, the title V operating permit program is a vehicle for
compiling air quality control requirements from other CAA programs and
for providing requirements necessary to assure compliance with such
requirements, but not for creating or changing applicable requirements.
Put simply, title V is a catch-all, not a cure-all. The discussion
throughout the remainder of this preamble builds upon these
longstanding general principles, which the EPA does not propose to
change through this rulemaking.

C. Regulatory Definition of ``Applicable Requirements''

As previously explained, CAA section 504(a) requires that title V
permits ``include enforceable emissions limitations and standards . . .
and such other conditions as are necessary to assure compliance with
applicable requirements of this chapter, including the requirements of
the applicable implementation plan.'' 42 U.S.C. 7661c(a).\8\ However,
the term ``applicable requirements'' is not defined in the Act and the
statute does not otherwise specify how to determine the ``applicable
requirements of this chapter'' for a particular source. When the EPA
developed regulations to implement the title V program, the agency
specifically defined the term ``applicable requirement'' as it relates
to title V permitting. This subsection of the preamble addresses
general topics associated with this regulatory definition. The
subsections that follow elaborate on these general concepts with more
specific examples about how these concepts impact different types of
requirements.
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\8\ Similar requirements appear in other parts of title V.
``Schedule of compliance. The term `schedule of compliance' means a
schedule of remedial measures, including an enforceable sequence of
actions or operations, leading to compliance with an applicable
implementation plan, emission standard, emission limitation, or
emission prohibition'' 42 U.S.C. 7661(3). ``Nothing in this
subsection shall be construed to alter the applicable requirements
of this chapter that a permit be obtained before construction or
modification.'' 42 U.S.C. 7661a(a). Permitting authorities ``have
adequate authority to . . . issue permits and assure compliance . .
. with each applicable standard, regulation, or requirement under
this chapter.'' 42 U.S.C. 7661a(b)(5). The regulations to implement
the program shall include a ``requirement that the applicant submit
with the application a compliance plan describing how the source
will comply with all applicable requirements under this chapter.''
42 U.S.C. 7661b(b). However, like section 504, these sections do not
specify the scope of the term ``applicable requirements'' or how the
permitting authority or the EPA is to determine what the applicable
requirements are for an individual source as part of its title V
permit.
---------------------------------------------------------------------------

As an initial matter, it is important to recognize that
``applicable requirement'' is a legal term of art with a precise
meaning that is unique to title V. Its meaning is closely aligned with
the primary function of title V permits: to consolidate and assure
compliance with the substantive requirements established under other
CAA programs. Thus, in general, the EPA's definition of ``applicable
requirement'' focuses on those substantive requirements of other CAA
programs that must be incorporated into a source's title V permit, and
with which the title V permit must assure compliance. This means that
not all CAA requirements are considered ``applicable requirements'' for
title V purposes. However, the fact that some CAA requirements are not
considered ``applicable requirements'' for title V purposes does not
diminish the independent enforceability or importance of those
requirements. It simply means that those requirements are not primarily
implemented or enforced using title V permits.
The EPA's regulations define ``applicable requirement'' to mean
``all of the of the following as they apply to emissions units in a
part 70 source,'' \9\ followed by a list of 13 types of CAA-based
requirements that qualify. 40 CFR 70.2; see 40 CFR 71.2 (similar
definition).\10\
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\9\ This definition also indicates that requirements that have
been promulgated or approved at the time of permit issuance, but
with which the source is not yet required to comply, are applicable
requirements that must be included in a title V permit. 40 CFR 70.2,
71.2. The EPA is not aware of any issues or confusion concerning
this element of the definition, which is not discussed further in
this preamble.
\10\ The list includes, in summary, requirements from: (1) SIPs
and FIPs under CAA title I; (2) preconstruction permits under CAA
title I; (3) CAA section 111 (NSPS and existing source rules); (4)
CAA section 112 (NESHAP); (5) title IV (acid rain); (6) CAA sections
504(b) or 114(a)(3) (certain types of enhanced monitoring); (7) CAA
sections 126(a)(1) and (c) (interstate pollution); (8) CAA section
129 (solid waste incineration); (9) CAA section 183(e) (consumer and
commercial products); (10) CAA section 193(f) (tank vessels); (11)
CAA section 328 (outer continental shelf permits); (12) CAA title VI
(stratospheric ozone); and (13) any NAAQS, but only as it would
apply to temporary sources under CAA section 504(e).
---------------------------------------------------------------------------

Perhaps the most straightforward aspect of this definition is that,
in order to qualify as an ``applicable requirement'' for title V
purposes, the requirement must be based on the CAA and, more
specifically, one of the CAA sections specifically identified in this
definition. Requirements that are not based on (i.e., derived from) the
CAA are not ``applicable requirements'' of the CAA with which a title V
permit must assure compliance. Further, not all CAA requirements
qualify as ``applicable requirements'' for title V purposes. Some
sections of the CAA were intentionally omitted from the list of 13
types of ``applicable requirements'' because these sections either do
not apply to stationary sources that must obtain title V permits, or
these sections are not implemented through title V for other reasons.
See section III.D.2. of this preamble for more information.
A similarly important definitional element is that ``applicable
requirements'' only include the listed types of CAA requirements ``as
they apply to emission units in a part 70 source.'' Requirements of the
CAA that do not directly apply to a source's emission units are not
``applicable requirements'' for title V purposes, as discussed in
section III.D.3. of this preamble.
Additionally, the requirements of title V itself (and the EPA's
part 70 and 71 implementing regulations) are not technically considered
``applicable requirements'' but are nonetheless centrally important to
title V permitting. See section III.D.4. of this preamble for more
information.
The definition of ``applicable requirement'' can also affect the
manner in which requirements that are considered applicable
requirements are implemented through title V. In summary, some
applicable requirements can be described as ``self-implementing.'' Once
established, those requirements should entail little to no review
through the title V permitting process. Other applicable requirements
may require further site-specific evaluation in order to define the
precise requirements that apply to individual emission units. In
certain circumstances, the latter type of applicable requirements may
be further defined using the title V permitting process. These topics
are discussed in more detail in sections III.E. and III.F. of this
preamble.

D. Requirements That Are Not ``Applicable Requirements'' for Purposes
of Title V Permitting

Sources subject to title V may be subject to a variety of
requirements both within and beyond the CAA. Not all of these
requirements are ``applicable requirements'' that must be included in a
title V permit and with which the title V permit must assure
compliance. Requirements that are not applicable requirements fall into
several categories, discussed in the following subsections.

[[Page 1155]]

1. Requirements Not Derived From the CAA
Many sources subject to title V are also subject to federal laws
beyond the CAA, including environmental laws administered by the EPA or
other federal agencies (e.g., the Clean Water Act (CWA); Safe Drinking
Water Act; Resource Conservation and Recovery Act (RCRA); Comprehensive
Environmental Response, Compensation, and Liability Act; National
Environmental Policy Act, Emergency Planning and Community Right-to-
Know Act, Endangered Species Act, and other statutes). Other federal
laws may also impact the decision-making of state permitting
authorities (e.g., the Civil Rights Act of 1964). These other federal
laws--including the statutes and any implementing regulations--are not
``applicable requirements'' for title V purposes. Such requirements do
not need to be included in title V permits, and title V permits do not
need to assure compliance with these requirements. Further, whether a
permittee or permitting authority has satisfied those requirements is
beyond the scope of issues that the EPA can address through its title
V-based oversight authorities, including the EPA's objection authority
and public petition opportunity.\11\ This is self-evident from the
plain language of the CAA and the EPA's regulations, which limit the
EPA's objection authority to permits that ``are not in compliance with
the applicable requirements of [the CAA].'' 42 U.S.C. 7661b(1), (2);
see 40 CFR 70.8(c)(1), 70.12(a)(2). Nonetheless, the EPA sometimes
receives title V petitions requesting the EPA's objection to the
issuance of operating permits on the basis of alleged violations of
laws other than the CAA. The EPA has denied all of those petition
claims.\12\
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\11\ The EPA's regulations provide that title V permit issuance
may be coordinated with the issuance of permits under the CWA and
RCRA, but that does not mean those other requirements are subject to
review through title V. 40 CFR 70.1(e), 71.1(d).
\12\ See, e.g., In The Matter of Gateway Generating Station,
Order on Petition No. IX-2013-1 at 12-14 (Oct. 15, 2014); In the
Matter of Monroe Electric Generating Plant, Order on Petition No. 6-
99-2 at 27 (June 11, 1999).
---------------------------------------------------------------------------

Other federal authorities are sometimes invoked in the context of
title V permitting (and in particular, title V petitions), including
presidential executive orders. Because executive orders are not legally
binding on state permitting authorities and are generally not based on
the CAA, they do not establish ``applicable requirements'' that states
must implement through title V permitting. Accordingly, the EPA has
denied title V petition claims alleging that state permitting
authorities failed to satisfy executive orders.\13\
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\13\ See, e.g., In the Matter of AK Steel Dearborn Works, Order
on Petition No. V-2016-16 at 17-19 (Jan. 15, 2021) (AK Steel Order);
In the Matter of Orange Recycling and Ethanol Production Facility,
Pencor-Masada Oxynol, LLC, Order on Petition No. II-2000-07 at 32-33
(May 2, 2001) (Pencor-Masada I Order). Note that federal executive
orders may be more directly relevant to EPA-issued title V permits
under part 71 (as well as other types of EPA-issued permits).
---------------------------------------------------------------------------

Many state permitting authorities have air quality laws that are
not derived from the CAA and/or are not included as part of an EPA-
approved state program.\14\ These ``state-only'' requirements are not,
standing alone, enforceable by the EPA and are not applicable
requirements for title V purposes. Thus, these requirements do not need
to be included in title V permits, title V permits do not need to
assure compliance with these requirements, and these requirements are
beyond the scope of the EPA's title V oversight tools. For these
reasons, the EPA has denied numerous title V petition claims alleging
that title V permits fail to satisfy state-only laws and
requirements.\15\
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\14\ This includes requirements that may be designed to
implement a CAA requirement, but which the EPA has not yet approved
(including SIPs, state plans under CAA section 111(d), and state
programs under CAA section 112(l), and part 70 programs).
\15\ See, e.g., In the Matter of Salt River Project Agricultural
Improvement & Power District, Agua Fria Generating Station, Order on
Petition No. IX-2022-4 at 14 (July 28, 2022) (SRP Agua Fria Order);
In the Matter of Shintech, Inc., Order on Petition at 14 (Sept. 10,
1997) (Shintech I Order).
---------------------------------------------------------------------------

State permitting authorities may, at their discretion, include
requirements based on state-only enforceable laws within title V
permits, but they are required to designate such permit terms as
``state-only'' or ``not federally enforceable.'' 40 CFR 70.6(b)(2).
Again, these requirements are not ``applicable requirements'' for
purposes of title V permitting. Thus, from the EPA's perspective,
properly labeled state-only permit terms are not considered part of the
title V permit; they may be physically present in the document, but
they are not legally present for purposes of federal enforceability and
oversight. As such, these permit terms are not subject to the EPA's
objection authority nor the title V petition process. 40 CFR
70.6(b)(2). The EPA has denied many title V petition claims challenging
the content of state-only permit terms.\16\ Note, however, that there
are some limited situations in which state-only requirements intersect
with title V requirements.\17\ Additionally, the CAA requires states to
provide the public with an opportunity to raise concerns with any
conditions of a title V permit, including state-only conditions,
through judicial review in state court systems. See 42 U.S.C.
7661a(b)(6); 40 CFR 70.4(b)(3)(x)-(xii). This opportunity exists in
parallel to the unique oversight authorities (e.g., the EPA's objection
authority and public petition opportunity) that extend only to
federally enforceable requirements of title V permits.
---------------------------------------------------------------------------

\16\ See, e.g., In the Matter of Harquahala Generating Station
Project, Order on Petition at 5 (July 2, 2003) (Harquahala Order).
\17\ For example, the EPA has used and will use title V
oversight tools to assess whether state laws should be considered
federally enforceable ``applicable requirements'' with which a title
V permit must assure compliance. See, e.g., In the Matter of
Georgia-Pacific Consumer Operations LLC, Crossett Paper Operations,
Order on Petition Nos. VI-2018-3 & VI-2019-12 at 14-15 (Feb. 22,
2023). The EPA has also considered whether title V permit terms are
appropriately designated as federally enforceable requirements or
state-only requirements. See, e.g., In the Matter of ExxonMobil
Corp., Baytown Chemical Plant, Order on Petition No. VI-2020-9 at
24-26 (Mar. 18, 2022) (ExxonMobil Baytown Chemical Order).
Additionally, the EPA will consider whether state-only requirements
or permit terms would impair the effectiveness or enforceability of
applicable requirements or other federally enforceable title V
permit terms. See, e.g., Harquahala Order at 5. Finally, note that
any terms of a title V permit that are not designated as ``state
only'' or ``not federally enforceable'' (or similar) become
federally enforceable upon permit issuance and are subject to the
part 70 requirements that govern federally enforceable terms of
title V permits, including requirements related to monitoring,
recordkeeping, and reporting. 40 CFR 70.6(b)(1)-(2); see, e.g., In
the Matter of ExxonMobil Fuels & Lubricant Co., Baton Rouge
Refinery, Reforming Complex and Utilities Unit, Order on Petition
Nos. VI-2020-4, VI-2020-6, VI-2021-1, & VI-2021-2 at 16 & 16 n.26
(Mar. 18, 2022).
---------------------------------------------------------------------------

2. CAA Requirements That Are Not Specifically Identified in 40 CFR 70.2
The CAA is a large and complex statute, composed of many different
programs. Not all of these programs are implemented in the same manner
through title V or establish ``applicable requirements'' for title V
purposes.
One notable example is title II of the CAA, which concerns emission
standards for internal combustion engines in mobile sources and nonroad
engines. Even if such emission units are located at a stationary
source, they are not regulated as a stationary source because they are
excluded from the definition of ``stationary source.'' See 42 U.S.C.
7602(z).\18\ Thus, title II requirements with which a stationary source
must comply are not included within the EPA's title V-focused

[[Page 1156]]

regulatory definition of ``applicable requirement.''
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\18\ Questions sometimes arise regarding whether an internal
combustion engine used at a stationary source should be considered a
nonroad engine or a part of the stationary source. See, e.g., 42
U.S.C. 7550(10); 7602(z); 40 CFR 1068.30. This topic is beyond the
scope of the current rulemaking.
---------------------------------------------------------------------------

Other substantive CAA programs relevant to stationary sources are
similarly not identified in the EPA's regulatory definition of
``applicable requirement'' for title V purposes because Congress did
not intend for them to be implemented through the title V program. For
further information about one example--the ``General Duty Clause''
concerning the prevention of accidental releases of hazardous
substances under CAA section 112(r)(1)--see section V. of this
preamble. Another example is the Greenhouse Gas Reporting Program in 40
CFR part 98. That program applies to stationary sources and uses the
authorities provided in CAA sections 114 and 208 to collect greenhouse
gas emissions information, but it is not an applicable requirement for
title V purposes. Similarly, the Air Emissions Reporting Requirements
program in 40 CFR part 51, subpart A imposes information-gathering
requirements that are generally not implemented through title V.
Some CAA provisions are more general in nature and do not impose
substantive requirements that are incorporated into title V permits.
For example, title III of the CAA includes general provisions related
to a number of cross-cutting topics. See 42 U.S.C. 7601-7628. Although
some of these requirements may directly or indirectly impact title V
permitting, most provisions within title III are not ``applicable
requirements'' for title V purposes.\19\
---------------------------------------------------------------------------

\19\ One notable exception is the Outer Continental Shelf
permitting requirements under CAA section 328, 42 U.S.C. 7627, which
are considered applicable requirements for title V purposes. 40 CFR
70.2, 71.2.
---------------------------------------------------------------------------

3. Requirements That Do Not Apply to Emission Units
Not all requirements from CAA programs identified in the EPA's
regulatory definition of ``applicable requirement'' are considered
applicable requirements for title V purposes. This is because the
definition only includes such requirements ``as they apply to emission
units in a part 70 source.'' 40 CFR 70.2, 71.2. Applicable requirements
generally include the substantive requirements from other provisions of
the Act that dictate the ongoing operations of emission units at the
source. After all, as the name of this program suggests, title V
operating permits are fundamentally designed to specify the conditions
under which a source's emission units must operate. Further, a key
purpose of the title V program is to assure that the source complies
with the requirements to which it is subject. See 42 U.S.C. 7661a(a).
Therefore, requirements of the CAA that do not directly apply to
individual emission units at a part 70 source are not ``applicable
requirements'' for title V purposes. Many of the CAA provisions that do
not apply to emission units at a title V source could be described as
programmatic or procedural in nature. For example, CAA requirements
that specify actions that the EPA must take in order to establish or
oversee different CAA programs (such as promulgating rules, taking
action on state rules, and other programmatic oversight activities) are
not applicable requirements that need to be reflected in a source's
title V permit.\20\ Similarly, the CAA requires state air agencies to
undertake various activities related to the establishment and
implementation of different CAA programs, including attainment planning
requirements (e.g., in developing SIPs).\21\ State permitting
authorities are also subject to various requirements (mostly
procedural) related to the issuance of non-title V permits (e.g., NSR
permits).\22\ In general, the EPA does not believe that Congress
intended the title V program to serve as a vehicle to catch or correct
programmatic or procedural problems associated with the establishment
of applicable requirements in other CAA programs.\23\ Instead, again,
the title V program was designed to ensure that regulated sources
comply with all the substantive air pollution control requirements to
which they are subject. Thus, to the extent these requirements only
directly regulate EPA or state actions--and do not result in
requirements directly applicable to emission units at a title V
source--they are not applicable requirements for title V purposes.
---------------------------------------------------------------------------

\20\ See, e.g., In the Matter of Hu Honua Bioenergy Facility,
Order on Petition No. IX-2011-1 at 6-7 (Feb. 7, 2014) (Hu Honua I
Order).
\21\ See, e.g., In the Matter of Exxon Chemical Americas, Baton
Rouge Polyolefins Plant, Order on Petition No. 6-00-1 at 10-11 (Apr.
12, 2000).
\22\ See, e.g., In the Matter of Century Aluminum of South
Carolina, Inc., Order on Petition No. IV-2023-09 at 19-20 (November
2, 2023) (Century Aluminum Order). However, note that there are
limited circumstances under which procedural issues associated with
other CAA programs (namely, the issuance of NSR permits) may be
implicated in title V. See section IV.B.5.a. of this preamble for
further discussion.
\23\ By contrast, issues related to the procedures used to issue
a title V permit are of central relevance to the title V program,
and the unique title V oversight tools available to the EPA and the
public generally may be used to address those deficiencies. See
section III.D.4. of this preamble for more information on such part
70 requirements.
---------------------------------------------------------------------------

Also, the CAA contains many cross-cutting general provisions (e.g.,
in title III of the CAA) that are not considered applicable
requirements because they do not directly apply to emission units at
part 70 sources.\24\ The same is true for various cross-cutting
regulatory provisions. To the extent these provisions are relevant to
the implementation or enforcement of the title V program, they are
independently enforceable and do not need to be explicitly specified in
a title V permit. One example that often arises in the context of title
V petitions is that of ``credible evidence.'' EPA, states, and citizens
can use any credible evidence to prove compliance and non-compliance
with the CAA, including compliance and non-compliance with title V
permits. See 42 U.S.C. 7413(a), 7604(a)(1), 7604(f)(4); 62 FR 8314
(Feb. 24, 1997). The EPA has repeatedly held that title V permits need
not include language affirmatively restating the existence of this
principle.\25\
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\24\ These general provisions are not considered applicable
requirements for two reasons: (i) they are not specified within the
regulatory definition's list of 13 types of CAA requirements (as
discussed in the preceding subsection of the preamble), and (ii)
they do not apply to emission units at a source (as discussed in
this subsection).
\25\ See, e.g., In the Matter of Plains Marketing LP and Four
Other Facilities, Order on Petition Nos. IV-2023-1 & IV-2023-3 at 50
(Sept. 18, 2023). Note that EPA has also indicated that title V
permits cannot be drafted in such a way that would preclude the use
of all credible evidence in enforcement proceedings. See, e.g., In
the Matter of Valero Refining-Texas, L.P., Valero Houston Refinery,
Order on Petition No. VI-2021-8 at 70 (June 30, 2022) (Valero
Houston Order).
---------------------------------------------------------------------------

4. ``Part 70 Requirements''
As previously stated, the definition of ``applicable requirement''
in 40 CFR 70.2 and 71.2, and the manner in which this phrase is used
throughout the EPA's title V regulations, focus on CAA requirements
arising from other CAA programs beyond title V. By contrast, the
requirements within title V and the EPA's part 70 and 71 regulations
are not technically considered ``applicable requirements.'' \26\
Instead, the EPA generally refers to these as ``part 70 requirements.''
\27\
---------------------------------------------------------------------------

\26\ Part 70 requirements do not meet the regulatory definition
of ``applicable requirement'' because they are not included within
the definition's list of 13 types of CAA requirements. Moreover,
some part 70 requirements (e.g., procedural requirements) do not
directly apply to emission units.
\27\ The phrase ``part 70 requirements'' is based on various
portions of the part 70 regulations that refer to the ``requirements
of this part'' as a distinct, and additional, source of requirements
from ``applicable requirements'' based on other CAA programs. See 40
CFR 70.4(b)(3)(v), 70.6(a)(9)(iii), 70.6(a)(10)(iii),
70.7(a)(1)(iv), 70.8(b)(2), 70.8(c)(1), 70.12(a)(2). This concept is
also relevant with respect to EPA-issued permits under 40 CFR part
71, where a similar distinction exists between ``applicable
requirements'' derived from other CAA programs and the requirements
of part 71 that are derived from title V of the Act. See, e.g., 40
CFR 71.10(g)(1). However, given that this issue most often arises in
the context of state-issued part 70 permits, this preamble uses the
term ``part 70 requirements'' to refer to requirements derived from
title V.

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[[Page 1157]]

This distinction is meaningful because the regulatory use of the
term ``applicable requirement'' is closely tied to the core purpose of
title V: to consolidate and assure compliance with the substantive
requirements from other CAA programs, but not to create or modify such
requirements. Thus, as previously described, the title V permitting
process and title V oversight tools are generally not used to
reevaluate the content of ``applicable requirements'' from other CAA
programs.
By contrast, many ``part 70 requirements'' are directly implemented
through title V permitting, as these requirements relate to the content
of title V permits and the process used to issue them. For example, the
requirements that dictate the content of title V permits are part 70
requirements (not applicable requirements). These include, for example,
the requirement that title V permits include and assure compliance with
``applicable requirements'' established elsewhere, and the authority to
impose, as necessary, additional monitoring and other compliance
assurance provisions. See, e.g., 40 CFR 70.6(a), (c). Further, the
requirements related to public participation in title V permits, the
availability of information, and related procedural requirements are
all part 70 requirements (not applicable requirements). See 40 CFR
70.7(h). Title V and the part 70 regulations contain other unique title
V authorities--such as the ``permit shield'' under CAA section 504(f)
and 40 CFR 70.6(f).\28\ The important distinction between these part 70
requirements and applicable requirements from other CAA programs is
that part 70 requirements are properly subject to the additional
oversight mechanisms unique to title V (including the EPA objection
authority, public petition opportunity, and other programmatic
oversight authorities).
---------------------------------------------------------------------------

\28\ The permit shield is discussed in more detail in section
IV.C.3. of this preamble to the extent it impacts NSR permitting
decisions.
---------------------------------------------------------------------------

E. Self-Implementing Applicable Requirements (e.g., NSPS, NESHAP)

Turning to CAA provisions that are considered ``applicable
requirements,'' not all applicable requirements are treated the same in
title V permits. This subsection addresses applicable requirements with
the most straightforward title V implementation, often referred to as
``self-implementing'' or ``self-executing'' requirements. The hallmark
of a self-implementing requirement is that the underlying statutory or
regulatory provision defines the requirements applicable to a given
emission unit with enough specificity for these requirements to be
independently and immediately enforceable, even before going through
the permitting process.\29\ In other words, these applicable
requirements require no further case-specific decisionmaking (e.g.,
through a permitting process) in order to define the precise
requirements to which a source is subject. Such requirements consist of
prescribed emission standards, operational limitations, testing,
monitoring, recordkeeping, reporting, and other compliance assurance
requirements. These requirements are explicitly identified within an
EPA regulation (e.g., NSPS under CAA section 111, NESHAP under CAA
section 112, Federal Plan under CAA section 111(d), similar rules under
CAA section 129, or a FIP under CAA section 110(c)) or an EPA-approved
state regulation (e.g., SIP under CAA section 110(a) or a State Plan
under CAA sections 111(d) or 129).
---------------------------------------------------------------------------

\29\ This is in contrast with some other programs the EPA
administers, such as certain requirements under the CWA. Some new
requirements under the CWA only become effective once they are
incorporated into a source's National Pollutant Discharge
Elimination System (NPDES) permit. See, e.g., Texas Oil & Gas Ass'n
et al v. US EPA, 161 F.3d 923, 928 (5th Cir. 1998) (``Despite their
central role in the framework of the CWA, [Effluent Limitation
Guidelines, or ELGs] are not self-executing. They cannot be enforced
against individual dischargers, and individual dischargers are under
no legal obligations to obey limits set by ELGs. Rather, ELGs
achieve their bite only after they have been incorporated into NPDES
permits.'' (citing American Paper Inst. v. EPA, 996 F.2d 346, 350
(D.C. Cir. 1993); American Petroleum Inst., 661 F.2d 340, 344 (5th
Cir. 1981)).
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Such self-implementing applicable requirements should generally be
included in, or incorporated into, a title V permit without further
review.\30\ It would not be appropriate, for example, to use the title
V permitting process to reevaluate the stringency of a Maximum
Achievable Control Technology (MACT) standard promulgated by the EPA
through rulemaking under CAA section 112.\31\ The same is true with
respect to the content of self-implementing standards contained in
SIPs, as discussed further in section III.G. of this preamble.
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\30\ The manner in which such requirements may be included in or
incorporated by reference into, a title V permit is beyond the scope
of this rulemaking. For more information about incorporation by
reference, see, for example, ExxonMobil Baytown Chemical Order at
16-19 and White Paper Number 2 for Improved Implementation of the
Part 70 Operating Permits Program, 36-41 (Mar. 5, 1996).
\31\ See, e.g., In the Matter of Borden Chemical, Inc.
Formaldehyde Plant, Order on Petition No. 6-01-1 at 48-49 (Dec. 22,
2000).
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Central to the concept of ``applicable requirements'' is the fact
that each applicable requirement is established through its own
dedicated process, which includes the ability for the public to
participate in the development of and, if necessary, challenge the
substantive sufficiency of the requirement. For example, the EPA
regulations referenced in preceding paragraphs are generally undertaken
under CAA section 307, which establishes various procedural and public
participation-related requirements, as well as the opportunity for
judicial review of final regulations. See 42 U.S.C. 7607(b)-(d). The
promulgation and approval of SIPs often involves two such rulemakings--
one at the state level and one at the federal level. Thus, the fact
that self-implementing applicable requirements are not substantively
re-evaluated through title V does not mean the public is without
recourse; it simply means that the title V permitting process was not
designed to collaterally attack or reopen these previously-finalized
applicable requirements.
Given title V's key role in consolidating applicable requirements,
questions often arise during the permitting process as to which CAA
requirements are applicable to a given source or emission unit. To the
extent that applicability is clearly established within the applicable
requirement itself (e.g., a source-specific SIP provision) or some
other type of final agency action (e.g., a formal EPA applicability
determination under CAA sections 111, 112, or 129), applicability would
not be subject to further scrutiny through title V.\32\ However, there
are cases where the applicability of a requirement--including a
requirement that could otherwise be described as ``self-
implementing''--has not been conclusively established prior to title V
permit issuance. In these cases, the title V permitting process can and
should be used to determine which requirements apply to the source, so
that the title V permit can include and assure compliance with those
requirements. For example, determining which NSPS

[[Page 1158]]

or NESHAP subpart is applicable to a source may require further site-
specific factual analysis through the permitting process. Additionally,
within a given NSPS or NESHAP rule, there may be multiple different
sets of requirements that apply differently to emission units with
different characteristics. In these situations, it may be necessary to
use the title V permitting process to decide (and identify) which
specific requirements within a NSPS or NESHAP rule apply to each
emission unit at a source. In these cases, the title V permitting
process can and should be used to determine which requirements apply to
the source, so that the title V permit can include and assure
compliance with those requirements.
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\32\ The EPA has established formal and informal processes for
EPA to resolve questions regarding the applicability of NSPS,
NESHAP, and section 111(d) and section 129 rules, called the
``applicability determination'' process. See 40 CFR 60.5, 61.06,
62.02(b)(2); EPA Process Manual for Responding to Requests
Concerning Applicability and Compliance Requirements of Certain
Clean Air Act Stationary Source Programs, Appx B (July 2020),
available at <a href="https://www.epa.gov/sites/default/files/2020-07/documents/111-112-129_process_manual.pdf">https://www.epa.gov/sites/default/files/2020-07/documents/111-112-129_process_manual.pdf</a>.
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Finally, even for self-implementing applicable requirements, the
title V permitting process may be used to determine whether additional
compliance assurance provisions (e.g., monitoring) are necessary. See
42 U.S.C. 7661c(c); 40 CFR 70.6(c)(1); Sierra Club v. EPA, 536 F.3d at
680. Further guidance on determining the sufficiency of monitoring and
other compliance assurance provisions is beyond the scope of this
rulemaking.

F. Requirements Defined Through Title V Permitting

Although title V generally does not impose substantive new
requirements, title V permits sometimes serve as the vehicle to further
define applicable requirements from other CAA programs. This most often
occurs when the underlying applicable requirement provides general
direction and requires further source-specific analysis to define the
precise requirements that apply to a given source or emission unit.
Some underlying applicable requirements expressly identify title V
permits as the vehicle for this analysis; others may be more open-ended
about the vehicle used to define the applicable requirement; and still
others may specify a different vehicle for establishing these
requirements (e.g., NSR permits, discussed further in section IV. of
this preamble).
Unlike applicable requirements that are established in full
elsewhere, where the details of an applicable requirement are defined
for the first time through the title V permitting process, questions
about the content of such an applicable requirement are subject to
title V's unique oversight tools, including the EPA's objection
authority and the public petition opportunity.
For example, CAA section 112(g) requires the development of case-
by-case Maximum Achievable Control Technology (MACT) limits prior to
certain construction activities at a major source of HAPs where there
is no NESHAP under CAA section 112(d).\33\ These limits can--and in
some cases, must--be established through the title V process. In such
cases where a title V permit is used to establish a case-by-case MACT
limit, questions about both the applicability and the content of such a
limit (i.e., whether the limit properly reflects MACT) are subject to
the unique oversight tools of title V.\34\
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\33\ Under CAA section 112(g)(2), if the EPA has not established
a MACT standard for a source category, the EPA or the state must
establish a case-by-case MACT emission limit prior to certain
construction activities at a major source of HAPs. Similarly, under
CAA section 112(j)(2), if the EPA has not established a MACT
standard for a source category, a new or existing major source's
title V operating permit must include a case-by-case MACT limit. See
also 40 CFR 63.40-44 (implementing regulations for 112(g)), 63.50-56
(implementing regulations for 112(j)).
\34\ See 61 FR 68384, 68393, 68395 (Dec. 27, 1996) (``Where EPA
determines that the MACT determination made by the permitting
authority fails to meet any of the requirements of Sec. 63.43 [and]
where the MACT determination is made part of a source's part 70
permit, EPA may veto issuance of the permit in accordance with the
provisions of 40 CFR 70.8(c).''); id. at 68395 (``If, during the
EPA's review of the section 112(g) determination, it becomes
apparent that the determination is not in compliance with the Act,
then EPA must object to the issuance or revision of that permit.'');
In the Matter of American Electric Power Service Corp., Southwest
Electric Power Co., John W. Turk Plant, Order on Petition No. VI-
2008-01 at 15-16 (Dec. 15, 2009); In the Matter of Shintech Inc.,
PVC Plant, Order on Petition No. 6-03-1 at 16-21 (July 3, 2003).
---------------------------------------------------------------------------

Other requirements of CAA section 112 NESHAP and section 111 NSPS
regulations may require further definition through, for example,
various types of site-specific operational plans. These plans are
generally developed outside of the title V permitting process, but to
the extent they are necessary to impose or assure compliance with an
applicable requirement of the NSPS or NESHAP, they must be included or
incorporated into title V permits.\35\ The title V permitting process
may also be used for similar case-by-case decisions based on underlying
SIP provisions, as discussed further in the following subsection of
this preamble.
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\35\ Other requirements of CAA section 111 NSPS and section 112
NESHAP regulations may require further definition through various
types of site-specific operational plans. These plans are generally
developed outside of the title V permitting process, but to the
extent they are necessary to impose or assure compliance with an
applicable requirement of the NSPS or NESHAP, they must be included
or incorporated into title V permits. See, e.g., Valero Houston
Order at 25-26.
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In these situations, it is not the title V permit that establishes
the applicable requirement itself. The applicable requirement is still
based on the underlying statutory or regulatory provision, but the
title V permit defines the precise details of the applicable
requirement. Essentially, the title V permitting process is used to
develop the specific ``enforceable emission limitations and standards .
. . and such other conditions as are necessary to assure compliance
with the [more general underlying] applicable requirements. . . .'' 42
U.S.C. 7661c(a). Absent an underlying CAA-based authority, title V
permits should generally not be used to impose new substantive
requirements. 40 CFR 70.1(b).

G. Applicable Requirements Related to the NAAQS and SIPs

CAA requirements associated with the NAAQS and SIPs reflect the
full spectrum of issues discussed in the preceding subsections of this
preamble. Some are not applicable requirements for title V purposes;
others are self-implementing applicable requirements that need no
further review during title V; still others may be defined through
title V permitting; and many are established in the NSR permitting
process. Perhaps due to the variability and complexity of issues
related to the NAAQS and SIPs, the EPA has received numerous title V
petitions raising concerns that the EPA was not able to address through
that mechanism. The EPA hopes that the following discussion will help
reduce confusion about the issues that are--and are not--redressable
through title V oversight tools.\36\
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\36\ As with essentially all other portions of this preamble,
the explanations in this section reflect existing policies, as
expressed in prior rule preambles, guidance documents, and numerous
title V petition orders.
---------------------------------------------------------------------------

Beginning with the NAAQS, it is well-established that the NAAQS are
not themselves applicable requirements because they do not apply
directly to sources.\37\ That is, the promulgation of a NAAQS does not,
in and of itself, automatically result in emission limits or other
control measures applicable to a source. Instead, the NAAQS create an
obligation on states to develop SIPs (and on EPA to promulgate FIPs, as
necessary) that contain requirements necessary to achieve and maintain
the NAAQS. 42 U.S.C. 7410(a)(1), (c)(1).

[[Page 1159]]

The specific measures contained in each state's EPA-approved SIP to
achieve the NAAQS are the applicable requirements with which sources
must comply. 40 CFR 70.2. For purposes of title V permitting, this
means that a state does not have any general obligation to establish
emission limitations or other standards within a title V permit in
order to protect the NAAQS. Whether such requirements are necessary is
largely dependent on the relevant terms of the SIP.
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\37\ 40 CFR 70.2 (defining ``applicable requirement'' to include
the NAAQS ``but only as it would apply to temporary sources''); 57
FR at 32276 (``Under the Act, NAAQS implementation is a requirement
imposed on States in the SIP; it is not imposed directly on a
source. In its final rule, EPA clarifies that the NAAQS and the
increment and visibility requirements under part C of title I of the
Act are applicable requirements for temporary sources only.''); 56
FR at 21732-33 (``The EPA does not interpret compliance with the
NAAQS to be an `applicable requirement' of the Act.'').
---------------------------------------------------------------------------

Some applicable requirements in SIPs could be described as ``self-
implementing'' in a manner similar to the EPA's NSPS and NESHAP
standards discussed in section III.E. of this preamble. For example, a
source-specific SIP provision may impose a specific numerical emission
limit or operational limit on a specific source. Or, a SIP provision,
``permit by rule,'' or ``general permit'' within the SIP may impose
similar requirements on a category of sources or emission units. Such
requirements should be included in the source's title V permit without
further review (except, of course, to ensure that the permit contains
sufficient monitoring and other compliance assurance conditions).
Nonetheless, the EPA has received many title V petitions challenging
such requirements contained in an EPA-approved SIP. Some petitions have
directly challenged the SIP provision itself, asserting that the SIP
requirement was incorrectly established or failed to satisfy certain
legal requirements governing SIPs. More often, petitions have
challenged permit terms that repeat verbatim an approved SIP provision;
such claims effectively challenge the SIP itself. As the EPA has
explained, if an alleged problem lies with the content of the SIP, the
proper remedy would be a ``SIP Call'' under CAA section 110(k), not a
title V petition. Until the EPA approves a corrective SIP revision or
issues a FIP, the SIP provision remains an ``applicable requirement''
that should be incorporated unchanged into the title V permit. The EPA
has consistently denied title V petition claims on this basis.\38\
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\38\ See, e.g., In the Matter of Piedmont Green Power, Order on
Petition Number IV-2015-2 at 28-29 (Dec. 13, 2016) (Piedmont Green
Power Order); In the Matter of Pacificorp's Jim Bridger and Naughton
Electric Utility Steam Generating Plants, Order on Petition No.
VIII-00-1 at 23-24 (Nov. 16, 2000).
---------------------------------------------------------------------------

Other SIP requirements are less specific and must be further
defined in subsequent proceedings (generally before the state) that
involve a fact-specific analysis of the relevant affected sources and
emission units.\39\ Depending on the nature of the SIP provisions at
issue, this analysis may involve, for example, various methods of
qualitatively or quantitatively assessing a source's impact on the
NAAQS (including, but not limited to, ambient air dispersion modeling).
This analysis may also result in case-by-case emission limits designed
to protect the NAAQS. Determining the proper venue for satisfying or
defining these general SIP requirements depends on the specific
language contained in the SIP, as discussed in the following
paragraphs.
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\39\ See, e.g., 56 FR at 21757 (``Where SIP requirements are
clear, the part 70 permit must adopt these limitations and
reestablish them as permit conditions that implement the SIP. Where
the SIP requirements are ambiguous or absent, the permit could
provide a way of resolving questions as to how the SIP applies and
is enforced.'').
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In general, most SIP provisions provide that case-by-case decisions
necessary to fulfill general SIP requirements will proceed either
through subsequent rulemaking actions \40\ or through the NSR
permitting process (as discussed in section IV. of this preamble). Once
established, the more specific requirements of the SIP, as defined
through those processes, are generally not subject to further review
during the title V permitting process.
---------------------------------------------------------------------------

\40\ See, e.g., In the Matter of TransAlta Centralia Generation,
LLC, Order on Petition at 11-12 (Apr. 28, 2011).
---------------------------------------------------------------------------

However, some SIP requirements may be defined for the first time in
a title V permit, in which case the contents of these requirements are
reviewable using the unique title V oversight tools. Again, whether a
SIP-based requirement is reviewable through the title V process depends
on the specific SIP provision at issue. For example, the EPA has
reviewed (and granted) title V petitions requesting analysis of a
source's impacts on the NAAQS or case-specific emission limits designed
to protect the NAAQS in situations where the SIP provisions at issue
specifically suggested that such requirements would be implemented
through title V.\41\ In such cases, the EPA has generally provided the
permitting authority the opportunity to interpret the relevant SIP
provisions and to explain the scope, timing, and applicability of these
provisions as they relate to the source in question.
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\41\ See In the Matter of In the Matter of Alabama Power Co.,
Barry Generating Plant, Order on Petition No. IV-2021-5 at 11-14
(June 14, 2022) (granting a claim related to a SIP provision that
required owner/operators of a certain type of source to
``[d]emonstrate, to the satisfaction of the [state], that sulfur
oxides emitted, either alone or in contribution to other sources,
will not interfere with attainment and maintenance of any primary or
secondary [NAAQS]''); In the Matter of Duke Energy, LLC, Asheville
Steam Electric Plant, Order on Petition No. IV-2016-06 at 11-17
(June 30, 2017) (granting claim related to a SIP requirement that
``the permit shall contain a condition requiring'' controls more
stringent than the applicable emission standards when necessary to
prevent a violation of the NAAQS--a provision the state had
previously relied upon to establish limits in individual permits);
In the Matter of Duke Energy, LLC, Roxboro Steam Electric Plant,
Order on Petition No. IV-2016-07 at 10-15 (June 30, 2017) (same as
Duke Asheville); In the Matter of Public Service of New Hampshire,
Schiller Station, Order on Petition No. VI2014-04 at 8-13 (July 28,
2015) (granting claim related to a SIP requirement to ``apply
special emission limits to the stationary sources on a case-by-case
basis to insure [sic] that their air quality impacts'' do not
interfere with NAAQS attainment in adjacent states).
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The EPA has also addressed other, more general SIP provisions that
do not explicitly require any specific action during the title V
process. These provisions often take the form of broad, general
prohibitions on air pollution, and these SIP provisions are not always
directly tied to the NAAQS or any specific federal requirements. The
EPA has explained that states have discretion under these general SIP
provisions to determine that it is not necessary to impose source-
specific limits through title V permits.\42\ However, this does not
prevent states from using title V to address such general
requirements.\43\
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\42\ See In the Matter of EME Homer City Generation LP and First
Energy Generation Corp., Order on Petition Nos. III2012-06, III-
2012-07, and III-2013-02 at 15-16 (July 30, 2014) (SIP provision
stated ``No person may permit air pollution as that term is defined
in the act''); In the Matter of TransAlta Centralia Generation, LLC,
Order on Petition at 7 (April 28, 2011) (SIP provision prohibited
``emissions detrimental to persons or property''); In the Matter of
Hercules, Inc., Order on Petition at 8 (Nov. 10, 2004) (SIP
provision prohibited emissions that would cause injury or
unreasonably interfere with enjoyment of life or use of property).
\43\ See, e.g., In the Matter of Oxbow Calcining LLC, Order on
Petition No. VI-2020-11 at 10-12 (June 14, 2022) (addressing a
situation where a state permitting authority took enforcement action
against a source that allegedly caused a violation of a NAAQS, on
the basis that this alleged violation also violated permit terms
reflecting a general SIP provision prohibiting air pollution).
---------------------------------------------------------------------------

Although uncommon, some SIP provisions expressly identify title V
permits as a vehicle for establishing or modifying SIP-based limits.
For example, some SIP provisions based on the EPA's Plantwide
Applicability Limit (PAL) rules expressly identify title V renewal
permits as a potential vehicle for adjusting a PAL.\44\ Where the title
V process is specifically identified in a SIP as a means of
establishing or defining an applicable requirement of the SIP,
questions related to these requirements maybe properly raised during
the title V permitting process.
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\44\ See, e.g., 51.166(w)(10)(v); ExxonMobil Baytown Chemical
Order 9 at 13-14.

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[[Page 1160]]

IV. Interface Between NSR and Title V Permitting

Since the title V program was created in the early 1990s, the EPA,
state permitting authorities, and other interested stakeholders have
grappled with questions related to the intersection of the title I
(NSR) \45\ preconstruction permitting programs and the title V
operating permit program. Among other issues, one has persisted: in
what situations, and to what extent, should the unique title V
oversight tools (e.g., the EPA's objection authority and the public
petition opportunity) be used to address alleged deficiencies related
to title I permitting decisions? This issue implicates various
questions about the relationship between title V permits and applicable
requirements established in other CAA programs. For example, when is an
applicable requirement considered established, such that it should be
incorporated into a title V permit without further substantive review?
Should applicable requirements established under NSR permitting
programs be treated the same as applicable requirements established
under other CAA programs? The EPA's answer to these questions has
changed over time, and two federal circuit courts have reached
differing conclusions on the matter, as discussed in section IV.A.3. of
this preamble.
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\45\ For purposes of this preamble, the terms ``title I permit''
and ``NSR permit'' are used interchangeably to describe a
preconstruction permit issued to satisfy the NSR-related
requirements of title I of the Clean Air Act.
---------------------------------------------------------------------------

This action proposes to codify the reasonable approach that the EPA
has implemented on a case-by-case basis since 2017, as further
described and justified in sections IV.A.3., IV.B., and IV.E. of this
preamble. In short, provided a source obtains an NSR permit under EPA-
approved (or EPA-promulgated) title I rules, with public notice and the
opportunity for comment and judicial review, that NSR permit
establishes and defines the relevant NSR-related applicable
requirements of the SIP (or FIP) for purposes of title V. As with
applicable requirements established under other CAA authorities (e.g.,
NSPS, NESHAP), the EPA would not revisit those NSR decisions through
the title V process.
This approach creates an incentive for permitting authorities to
provide opportunities for meaningful public involvement through the
most appropriate venue--the NSR permitting process. However, to the
extent that the public is deprived of the opportunity to participate in
the NSR permitting process, the title V process will serve as a
backstop to ensure that each title V permit contains all applicable
requirements. In other words, even under the EPA's current (and
proposed) framework, there are certain situations in which the EPA
would review substantive NSR issues through the title V permitting
process, as explained in more detail in section IV.B.5. of this
preamble.
The EPA is also soliciting comment on alternative approaches,
presented in section IV.F. of this preamble, that would involve using
title V to review NSR decisions in more situations.
The proposed regulatory changes related to NSR permitting are
distinct and severable from the proposed change related to the general
duty clause under CAA section 112(r)(1), discussed in section V. of
this preamble.

A. Background: Historical and Current EPA Positions

1. NSR Programs (1977-Present)
The title I (NSR) preconstruction permitting program was
established before the title V operating permits program. The NSR
program is based on the 1977 Amendments to the CAA. The overall NSR
program is comprised of three sub-programs, as discussed later.
The NSR program was designed to protect public health and welfare
from the effects of air pollution and to preserve and/or improve air
quality throughout the nation. See 42 U.S.C. 7470(1), (2), (4). The NSR
program requires certain stationary sources of air pollution to obtain
air pollution permits prior to beginning construction. Construction of
new sources and the modification of certain sources with emissions
above statutory and/or regulatory thresholds are subject to ``major
source'' NSR requirements. New sources and modifications below the
relevant emissions thresholds may be subject to minor NSR requirements
or excluded from NSR altogether.
The major NSR program includes two distinct programs that each have
unique requirements for new or modified sources. The applicability of
these two programs depends on whether the area where the source is
located is exceeding the NAAQS for one or more pollutants. The PSD
program, based on requirements in part C of title I of the CAA, applies
to pollutants for which the area is not exceeding the NAAQS (areas
designated as attainment or unclassifiable) and to regulated NSR
pollutants for which there are no NAAQS. 42 U.S.C. 7470-7479. The
Nonattainment NSR (NNSR) program, based on part D of title I of the
CAA, applies to pollutants for which the area is not meeting the NAAQS
(areas designated as nonattainment). 42 U.S.C. 7501-7515.
To implement the CAA requirements for these programs, most states
have EPA-approved SIPs containing PSD and NNSR preconstruction
permitting programs that meet the minimum requirements reflected in the
EPA's major NSR program regulations at 40 CFR 51.166 and 51.165. Upon
EPA approval of a SIP, the state or local air agency becomes the
permitting authority for major NSR permits for sources within its
boundaries and issues permits under state law. Currently, state and
local air agencies issue the vast majority of major NSR permits each
year. When a state or local air agency does not have an approved NSR
program, federal regulations (40 CFR 52.21, through incorporation into
a FIP) apply and either the EPA issues the major NSR permits or a state
or local air agency issues the major NSR permits on behalf of the EPA
by way of a delegation agreement. For sources located in Indian
Country, 18 U.S.C. 1151, the EPA is the permitting authority for major
NSR.
The permitting program for construction of new and modified non-
major sources and minor modifications to major sources is known as the
minor NSR program. In addition to the specific major NSR requirements
in CAA sections 165 and 173, CAA section 110(a)(2)(C) requires states
to develop a program to regulate the construction and modification of
any stationary source ``as necessary to assure that [NAAQS] are
achieved.'' 42 U.S.C. 7410(a)(2)(C). The CAA and the EPA's regulations
are less prescriptive regarding minimum requirements for minor NSR, so
air agencies generally have more flexibility in designing minor NSR
programs in their EPA-approved SIPs. See 40 CFR 51.160-51.164. Minor
NSR permits are almost exclusively issued by state and local air
agencies, although the EPA issues minor NSR permits in many areas of
Indian Country. See 40 CFR 49.151-49.165.
The applicability of the PSD, NNSR, and/or minor NSR programs to a
stationary source must be determined in advance of construction and is
a pollutant-specific determination. Thus, a stationary source may be
subject to the PSD program for certain pollutants, NNSR for some
pollutants, and minor NSR for others.
2. Original Title V Approach to NSR (1990-1997)

[[Page 1161]]

As noted previously, the title V program was established in the
1990 CAA Amendments. The legislative history articulates Congress's
intent that, notwithstanding the enactment of title V, NSR permits
would continue to be issued as they had for over a decade, and that
title V permits would be used to incorporate those requirements, but
not to alter or impose additional NSR-related requirements.\46\ The
text of the CAA implicitly reflects this paradigm. However, the statute
does not unambiguously prescribe the details of how EPA should approach
the intersection of the NSR and title V permitting programs.
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\46\ See sections IV.E.2. and IV.E.3. of this preamble for
further discussion of legislative intent.
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Thus, when the EPA promulgated the original title V implementing
regulations in 1991 and 1992, the agency sought to provide clarity
through multiple regulatory provisions, both of which were introduced
earlier in this preamble. Again, 40 CFR 70.1(b) states: ``All sources
subject to these regulations shall have a permit to operate that
assures compliance by the source with all applicable requirements.
While title V does not impose substantive new requirements, it does
require that . . . certain procedural measures be adopted especially
with respect to compliance.'' Additionally, the EPA created a
definition of ``applicable requirement'' in 40 CFR 70.2 (and later,
71.2) that includes, in relevant part: ``all of the following as they
apply to emissions units in a part 70 source . . . (1) Any standard or
other requirement provided for in the applicable implementation plan
approved or promulgated by EPA through rulemaking under title I of the
Act that implements the relevant requirements of the Act, including any
revisions to that plan promulgated in part 52 of this chapter; (2) Any
term or condition of any preconstruction permits issued pursuant to
regulations approved or promulgated through rulemaking under title I,
including parts C or D, of the Act.''
In the preamble of this initial part 70 rulemaking effort, the
agency spoke directly to the intersection of title V and title I
permitting. The EPA did not express an intention to use the title V
permitting process to review the substance of applicable requirements
established in preconstruction permitting programs under title I of the
CAA. To the contrary, the EPA stated that ``[a]ny requirements
established during the preconstruction review process also apply to the
source for purposes of implementing title V. If the source meets the
limits in its NSR permit, the title V operating permit would
incorporate these limits without further review.'' 56 FR 21712, 21738-
39 (May 10, 1991) (emphasis added). The EPA stated clearly that ``[t]he
intent of title V is not to second-guess the results of any State NSR
program.'' Id. at 21739 (emphasis added). The EPA stated that
``[d]ecisions made under the NSR and/or PSD programs (e.g., Best
Available Control Technology [BACT]) define applicable SIP requirements
for the title V source and, if they are not otherwise changed, can be
incorporated without further review into the operating permit for the
source.'' Id. at 21721 (emphasis added). The preamble to the final rule
further confirms that ``[d]ecisions made under the NSR and/or PSD
programs define certain applicable SIP requirements for the title V
source.'' 57 FR 32250, 32259 (July 21, 1992) (emphasis added).
3. Revised Title V Approach to NSR (1997-2017)
Once state permitting authorities began issuing title V permits in
the mid-to-late-1990s, the EPA began receiving public petitions
challenging those permits. Some of the earliest title V petitions
included challenges to various types of NSR permitting decisions,
proving a test to the statements the EPA made when promulgating its
part 70 rules. The EPA's approach ultimately differed depending on
whether the underlying NSR permit was issued under the EPA's federal
PSD rules (40 CFR 52.21, administration of which was delegated to many
states at the time) or under EPA-approved SIP rules.
For NSR permits issued under the federal rules, the EPA's petition
responses from 1997 onward followed the agency's interpretations and
statements of intent from the early 1990s. In other words, the EPA
declined to use the title V petition process to review the merits of
NSR permits issued by the EPA or a delegated agency under a FIP. The
EPA's reasoning at the time was that appeals of such NSR permits are
governed by 40 CFR 124.19 and are heard exclusively by the EPA
Environmental Appeals Board (EAB). Thus, the EPA concluded that it need
not entertain claims that such permits are deficient when raised in a
petition to object to a title V permit.\47\ The EPA consistently
reiterated the same or similar statements in the decades that
followed.\48\
---------------------------------------------------------------------------

\47\ See In the Matter of Maui Electric Co., Ltd., Order on
Petition (June 16, 1999) In the Matter of Hawaii Electric Light Co.
Ltd., Order on Petition (Apr. 3, 1998); In the Matter of Kawaihae
Cogeneration, Order on Petition (Mar. 10, 1997) (Kawaihae Order).
\48\ See, e.g., In the Matter of East Kentucky Power
Cooperative, Inc., Hugh L. Spurlock Generating Station, Order on
Petition, 5 n.2 (Aug. 30, 2007) (Spurlock I Order); In the Matter of
Carmeuse Lime and Stone, Order on Petition No. V-2010-1 at 7 n.1
(Nov. 4, 2011); see also Hu Honua I Order at 3 n.4.
---------------------------------------------------------------------------

However, starting in 1997, the EPA adopted a different approach to
title V permitting with respect to NSR permits issued by state
permitting authorities under EPA-approved SIP rules.\49\ The EPA began
to interpret section (1) of the definition of ``applicable
requirement'' to allow the EPA, states, and the public to use the title
V permitting process to examine the propriety of prior title I
permitting decisions. For instance, in the 1997 Shintech I Order, the
EPA stated:
---------------------------------------------------------------------------

\49\ For example, within the 1997 Kawaihae Order, in which the
EPA declined to review the merits of a PSD permit issued under
delegated federal authority, the EPA also announced the following
(without explanation): ``In contrast, where a state or local
government has a SIP-approved PSD program and the [EAB] lacks
jurisdiction to entertain PSD permit appeals, the merits of PSD
issues are ripe for consideration in a timely veto petition under
Title V.'' Kawaihae Order at 3.

Where a state or local government has a SIP-approved PSD
program, the merits of PSD issues can be ripe for consideration in a
timely petition to object under Title V. Under 40 CFR 70.1(b), ``all
sources subject to Title V must have a permit to operate that
assures compliance by the source with all applicable requirements.''
Applicable requirements are defined in section 70.2 to include ``(1)
any standard or other requirement provided for in the applicable
implementation plan approved or promulgated by EPA through
rulemaking under Title I of the [Clean Air] Act . . . .'' The
[state] defines ``federal applicable requirement,'' in relevant
part, to include ``any standard or other requirement provided for in
the Louisiana [SIP] approved or promulgated by EPA through
rulemaking under title I of the Clean Air Act that implements the
relevant requirements of the Clean Air Act, including any revisions
to that plan promulgated in 40 CFR part 52, subpart T.'' Thus, the
applicable requirements of the Shintech Permits include the
requirement to obtain a PSD permit that in turn complies with the
applicable PSD requirements under the Act, EPA regulations, and the
Louisiana SIP.\50\
---------------------------------------------------------------------------

\50\ Shintech I Order at 3 n.2 (emphasis added) (citation
omitted).

In a 1999 letter responding to requests from permitting
authorities, the Director of the EPA Office of Air Quality Planning and
Standards articulated the agency's then-current understanding of the
interaction of title I and title V.\51\ The letter stated that
``applicable requirements include the requirement to

[[Page 1162]]

obtain preconstruction permits that comply with applicable
preconstruction review requirements under the Act, EPA regulations, and
SIP's.'' The letter expressed the view that section 505(b) of the Act
provides a form of corrective action in addition to all the other
enforcement authorities the EPA has under the Act. It stated that
generally the agency will not object to a title V permit for NSR
determinations ``made long ago during a prior preconstruction
permitting process.'' However, regarding recently issued NSR permits,
the EPA indicated it may object to improper NSR determinations.
Additionally, the letter said that the EPA could object to a title V
permit where ``EPA believes that an emission unit has not gone through
the proper preconstruction permitting process.''
---------------------------------------------------------------------------

\51\ Letter from John S. Seitz, U.S. EPA, to Robert Hodanbosi,
STAPPA/ALAPCO (May 20, 1999), available at <a href="https://www.epa.gov/sites/production/files/2015-08/documents/hodan7.pdf">https://www.epa.gov/sites/production/files/2015-08/documents/hodan7.pdf</a>.
---------------------------------------------------------------------------

The EPA has also used this reading of the agency's oversight
authority under title V as part of the justification for approving
state PSD programs.\52\ In these approvals, the EPA pointed to its
authority under title I, sections 113 and 167, and stated that title V
``has added new tools'' for addressing concerns with implementation of
PSD requirements by allowing for objection to title V permits under
section 505(b) of the Act. However, the authority to revisit an issued
preconstruction permit does not appear to have been dispositive to the
approval of these PSD programs, as EPA could still conduct oversight
using its title I-based authorities.
---------------------------------------------------------------------------

\52\ See, e.g., Approval and Promulgation of Implementation
Plans; Oregon, 68 FR 2891, 2899 (Jan. 22, 2003); see also Approval
and Promulgation of Implementation Plans; Idaho; Designation of
Areas for Air Quality Planning Purposes; Idaho, 68 FR 2217, 2221
(Jan. 16, 2003).
---------------------------------------------------------------------------

The EPA implicitly or explicitly followed this approach in
responding to title V petitions between 1997 and 2017. In general, the
petition claims at issue alleged two types of defects related to NSR:
First, some claims alleged flaws with the terms of major NSR permits
issued by a state permitting authority--for example, that BACT limits
in a PSD permit were not stringent enough. The EPA refers to these
claims as addressing ``NSR permit content.'' Second, other claims
alleged that a facility should have received a major NSR permit,
instead of a minor NSR permit, to authorize the construction of a new
source or modification. The EPA refers to these claims as addressing
``NSR applicability.'' For both types of issues, the EPA indicated that
the agency could review whether preconstruction permitting decisions
complied with the requirements of the SIP.
During this time period, the EPA often limited or qualified its use
of title V authorities to address substantive NSR permitting issues.
For example, in 1999, the agency stated:

In determining BACT under a minor NSR program, as in
implementing other aspects of SIP preconstruction review programs, a
State exercises considerable discretion. Thus, EPA lacks authority
to take corrective action merely because the Agency disagrees with a
State's lawful exercise of discretion in making BACT-related
determinations. State discretion is bounded, however, by the
fundamental requirements of administrative law that agency decisions
not be arbitrary or capricious, be beyond statutory authority, or
fail to comply with applicable procedures.\53\
---------------------------------------------------------------------------

\53\ In the Matter of Roosevelt Regional Landfill, Order on
Petition, 9 (May 4, 1999).

Applying this framework, the EPA has also drawn an analogy between
this approach and the standard used by the EAB in reviewing EPA-issued
PSD permits, described as a ``clearly erroneous'' standard.\54\ More
recently, the agency summarized this framework as follows:
---------------------------------------------------------------------------

\54\ See, e.g., Spurlock I Order at 4-5 (Aug. 30, 2007) (``The
standard of review applied by the EAB in its review of federal PSD
permits has been explained in numerous orders of the EAB. In short,
in such appeals, the burden is on a petitioner to demonstrate that
review is warranted. Ordinarily, a PSD permit will not be reviewed
by the EAB unless the decision of the permitting authority was based
on either a clearly erroneous finding of fact or conclusion of law,
or involves an important matter of policy or exercise of discretion
that warrants review. Thus, when a response to a petition to object
to a title V permit requires the Administrator to determine whether
an approved state's PSD permitting decision was adequately explained
and meets the requirements of its SIP, EPA believes it is
appropriate to apply a similar standard of review to that employed
by the EAB in its review of federal PSD permits. When EPA
promulgated the regulations governing the EAB's exercise of its
review authority, the Agency noted that the power of review `should
be only sparingly exercised.' Similar deference to the permitting
authority is also justified in the case of a PSD permit issued by a
state with an approved PSD program, as is the case here.'' (quoting
45 FR 33290, 33412 (May 19, 1980); citing In re Prairie State
Generating Company, 13 E.A.D. 1 (EAB 2006); In re Kawaihae
Cogeneration, 7 E.A.D. 107 (EAB 1997)).

Where a petitioner's request that the Administrator object to
the issuance of a title V permit is based in whole, or in part, on a
permitting authority's alleged failure to comply with the
requirements of its approved PSD program (as with other allegations
of inconsistency with the Act), the burden is on the petitioner to
demonstrate to the Administrator that the permitting decision was
not in compliance with the requirements of the Act, including the
requirements of the SIP. As the EPA has explained in describing its
authority to oversee the implementation of the PSD program in states
with approved programs, such requirements include that the
permitting authority: (1) follow the required procedures in the SIP;
(2) make PSD determinations on reasonable grounds properly supported
on the record; and (3) describe the determinations in enforceable
terms. As the permitting authority for [the state's] SIP-approved
PSD program, [the state agency] has substantial discretion in
issuing PSD permits. Given this discretion, in reviewing a PSD
permitting decision in the title V petition context, the EPA
generally will not substitute its own judgment for that of [the
state]. Rather, consistent with the decision in Alaska Dep't of
Envt'l Conservation v. EPA, 540 U.S. 461 (2004), in reviewing a
petition to object to a title V permit raising concerns regarding a
state's PSD permitting decision, the EPA generally will look to see
whether the petitioner has shown that the state did not comply with
its SIP-approved regulations governing PSD permitting, or whether
the state's exercise of discretion under such regulations was
unreasonable or arbitrary.\55\
---------------------------------------------------------------------------

\55\ In the Matter of Appleton Coated, LLC, Order on Petition
Nos. V-2013-12 & V-2013-15 at 5 (Oct. 14, 2016) (Appleton Order)
(citations omitted).

Between 1997 and 2017, the EPA occasionally articulated further
restrictions on the use of title V oversight tools to address title I
permitting issues. For example, on at least three occasions, the EPA
indicated that ``the Agency generally does not object to the issuance
of a title V permit due to concerns over BACT or related determinations
made long ago during a prior preconstruction permitting process.'' \56\
---------------------------------------------------------------------------

\56\ In the Matter of Georgia Pacific Consumer Products LP
Plant, Order on Petition No. V-2011-1 at 17 (July 23, 2012);
Spurlock I Order at 19; see In the Matter of Chevron Products
Company, Richmond, California Facility, Order on Petition No. IX-
2004-08 at 9 (Mar. 15, 2005). Note that this statement is based on
the EPA policy articulated in the 1999 letter discussed in footnote
51.
---------------------------------------------------------------------------

Additionally, on at least one occasion, the EPA suggested that the
title V petition demonstration burden may require a final determination
that NSR applies before the EPA can use the title V process to overturn
an NSR applicability decision made by the permitting authority. The EPA
found ``that [the state] has not reached a final determination in this
permitting context that PSD is an applicable requirement for these
sources, that the USEPA has not determined otherwise, and that a court
has not issued a determination in the litigation context. Accordingly,
there is no requirement under the facts of this case for the permits to
include either PSD limits or a compliance schedule for the source to
come into compliance with such limits at this time.'' The EPA concluded
that ``even if [the state] were to recognize that the potential for
noncompliance [with title I preconstruction permitting requirements]
exists, it is not required to pursue inquiries further in the title V
context,'' but instead could pursue the

[[Page 1163]]

matter through title I enforcement mechanisms.\57\
---------------------------------------------------------------------------

\57\ In the Matter of Midwest Generation-Joliet Generating
Station and Will County Generating Stations, Order on Petition No.
V-2005-2 at 9-10 (June 14, 2007).
---------------------------------------------------------------------------

4. Current Title V Approach to NSR (2017-Present)
Beginning in 2017, the EPA adopted a more nuanced view that, in the
EPA's present opinion, better reflects not only the statute and
Congress's intent, but also the EPA's regulatory definition of
``applicable requirement'' and the manner in which the title V
permitting program interacts with other types of CAA requirements. As
with many of the EPA's views on this topic, the EPA's updated view was
articulated within Administrator-signed orders responding to title V
petitions on individual title V permits.
The first such order was the 2017 PacifiCorp-Hunter I Order.\58\
There, the EPA interpreted the CAA and the EPA's title V regulations to
not require permitting authorities (including the EPA) to examine the
merits of certain title I permitting decisions in the title V
permitting context. Specifically, in response to a petition claiming
that a PSD permit (instead of a minor NSR permit) was required for
certain changes that occurred at the facility at issue approximately 20
years prior, the EPA explained:
---------------------------------------------------------------------------

\58\ In the Matter of PacifiCorp Energy, Hunter Power Plant,
Order on Petition No. VIII-2016-4 (Oct. 16, 2017).

In circumstances such as those present here where a
preconstruction permit has been duly obtained, . . . when a
permitting authority has made a source-specific permitting decision
with respect to a particular construction project under title I,
those decisions ``define certain applicable SIP requirements for the
title V source'' for purposes of title V permitting. 57 FR 32250,
32259 (July 21, 1992). The EPA is now interpreting the regulations
to mean that the issuance of a[n NSR] permit defines the
applicability of preconstruction requirements under section (1) of
the definition of ``applicable requirement'' for the approved
construction activities for the purposes of permitting under title V
of the Act. . . . These source-specific permitting actions take the
general preconstruction permitting requirements of the SIP--the
requirement to obtain a particular type of permit and the
substantive requirements that must be included in each type of
permit--and evaluate at the time of the permitting decision whether
and how to apply them to a proposed construction or
modification.\59\
---------------------------------------------------------------------------

\59\ PacifiCorp-Hunter I Order at 10-11. As the EPA explained:
``This interpretation applies to the facts of this Claim, where a
permitting authority issued a source-specific title I
preconstruction permit subject to public notice and comment and for
which judicial review was available.'' Id. at 11 n.21.

---------------------------------------------------------------------------
Further, the EPA stated:

Consistent with this reading, permitting agencies and the EPA
need not reevaluate--in the context of title V permitting,
oversight, or petition responses--previously issued final
preconstruction permits, especially those that have already been
subject to public notice and comment and an opportunity for judicial
review. Concerns with these final preconstruction permits should
instead be handled under the authorities found in title I of the
Act. Where a final preconstruction permit has been issued, whether
it is a major or minor NSR permit, the terms and conditions of that
permit should be incorporated as ``applicable requirements'' and the
permitting authority and the EPA should limit its review to whether
the title V permit has accurately incorporated those terms and
conditions and whether the title V permit includes adequate
monitoring, recordkeeping, and reporting requirements to assure
compliance with the terms and conditions of the preconstruction
permit.\60\
---------------------------------------------------------------------------

\60\ PacifiCorp-Hunter I Order at 19 (citing 42 U.S.C. 7661c(a);
40 CFR 70.6(a)(3), 70.6(c)(1)).

Shortly after issuing the PacifiCorp-Hunter I Order, the EPA issued
the Big River Steel Order,\61\ which applied similar statutory and
regulatory interpretations to a different set of facts. In Big River
Steel, the EPA declined to use the title V petition process to review
whether a PSD permit satisfied the relevant SIP requirements governing
PSD permit content (including BACT) and modeling related to the NAAQS.
The EPA did so notwithstanding the fact that the PSD permit at issue,
and the title V permit being petitioned, were issued at the same time
and in the same physical permit document. The EPA's rationale was fully
expressed within the PacifiCorp-Hunter I and Big River Steel Orders. To
the extent those or similar rationales are relevant to this proposed
rulemaking, they are presented in section IV.E. of this preamble.
---------------------------------------------------------------------------

\61\ In the Matter of Big River Steel, LLC, Order on Petition
No. VI-2013-10 (Oct. 31, 2017).
---------------------------------------------------------------------------

Since the 2017 PacifiCorp-Hunter I and Big River Steel Orders, the
EPA has issued approximately 20 other title V petition orders
addressing similar issues under different fact patterns. Although the
EPA has consistently followed the overarching interpretations and
policies articulated in the PacifiCorp-Hunter I and Big River Steel
Orders, each decision about whether those interpretations were
applicable depended on the specific facts at issue.\62\ Through these
case-by-case decisions, the EPA has clarified various aspects of the
EPA's interpretation of the title V provisions. However, because those
decisions are spread across many different orders, the EPA understands
that not all stakeholders--including permitting authorities,
permittees, and members of the public--may fully understand the EPA's
views about which types of issues are, or are not, subject to review
through title V.\63\ This preamble summarizes the most relevant aspects
of these prior decisions in order to provide additional clarity about
the EPA's current views.
---------------------------------------------------------------------------

\62\ See, e.g., PacifiCorp-Hunter I Order at 11 n.21 (``This
interpretation applies to the facts of this Claim, where a
permitting authority issued a source-specific title I
preconstruction permit subject to public notice and comment and for
which judicial review was available. The EPA is not considering at
this time whether other circumstances may warrant a different
approach.''); Sierra Club v. EPA, 926 F.3d 844, 850 (D.C. Cir. 2019)
(emphasizing the case-specific nature the EPA's decision to apply
the interpretation at issue in PacifiCorp-Hunter I, as well as the
case-specific nature of any future EPA decisions to apply or not
apply the same interpretation to different fact patterns).
\63\ In recent permitting decisions and title V petitions, the
EPA has observed that both state permitting authorities and public
petitioners have often misapplied, misinterpreted, or ignored the
interpretations and policies expressed in these orders.
---------------------------------------------------------------------------

In some of these decisions, the EPA concluded that NSR permitting
actions established the relevant ``applicable requirements'' for title
V purposes, and the EPA declined to review the substance of those
applicable requirements in the title V petition context. The EPA
applied this approach to many different types of issues, including the
sufficiency of major NSR permit terms,\64\ the sufficiency of minor NSR
permit terms,\65\ issues related to modeling and the NAAQS,\66\
procedures used to issue NSR permits,\67\ whether major NSR is
applicable,\68\ and other

[[Page 1164]]

NSR-related issues.\69\ Some of these orders involved situations where
NSR permits were issued well before the title V permits being
challenged,\70\ while others involved more contemporaneous NSR and
title V permitting decisions.\71\
---------------------------------------------------------------------------

\64\ AK Steel Order at 9-13; In the Matter of Riverview Energy
Corp., Order on Petition No. V-2019-10 at 19-29 (Mar. 26, 2020)
(Riverview Order); In the Matter of South Louisiana Methanol, LP,
St. James Methanol Plant, Order on Petition Nos. VI-2016-24 & VI-
2017-014 at 8-10 (May 29, 2018) (South Louisiana Methanol Order);
Big River Steel Order at 8-20.
\65\ In the Matter of Delaware City Refining Company, LLC,
Delaware City Refinery, Order on Petition No. III-2022-10 at 26
(July 5, 2023) (Delaware City Refinery Order); In the Matter of
Valero Refining-Texas, L.P., Valero Houston Refinery, Order on
Petition No. VI-2021-8 at 65-66 (June 30, 2022) (Valero Houston
Order); In the Matters of Superior Silica Sands & Wisconsin
Proppants, LLC, Order on Petition Nos. V-2016-18 & V-2017-2 at 14-15
(Feb. 26, 2018) (SSS/WP Order); In the Matter of Tennessee Valley
Authority, Gallatin Fossil Plant, Order on Petition Nos. IV-2016-11
& IV-2017-17 at 19-20 (January 30, 2018) (TVA Gallatin II Order).
\66\ Riverview Order at 19-21; Big River Steel Order at 8-20.
\67\ AK Steel Order at 9-13.
\68\ In the Matter of Waelz Sustainable Products, LLC, Order on
Petition No. V-2021-10 at 9-16 (Mar. 14, 2023) (Waelz Order); In the
Matter of Yuhuang Chemical Inc. Methanol Plant, Order on Petition
Nos. VI-2017-5 & VI-2017-13 at 7-8 (Apr. 2, 2018) (Yuhuang II
Order); In the Matter of ExxonMobil Corp., Baytown Olefins Plant,
Order on Petition No. VI-2016-12 at 9-12 (ExxonMobil Baytown Olefins
Order); PacifiCorp-Hunter I Order at 8-20.
\69\ In the Matter of ExxonMobil Corp., Baytown Refinery, Order
on Petition No. VI-2016-14 at 12-13 (ExxonMobil Baytown Refinery
Order); ExxonMobil Baytown Olefins Order at 9-12 .
\70\ Delaware City Refinery Order at 16; Valero Houston Order at
65-66; ExxonMobil Baytown Refinery Order at 12-13, ExxonMobil
Baytown Olefins Order at 9-12; TVA Gallatin II Order at 19-20.
\71\ Waelz Order at 13-15; Riverview Order at 24-28; South
Louisiana Methanol Order at 9; Yuhuang II Order at 7-8; SSS/WP Order
at 14-15; Big River Steel Order at 8-20.
---------------------------------------------------------------------------

In other orders with materially different factual underpinnings,
the EPA determined that it would be appropriate to review certain NSR-
related issues through the title V permitting process. For example, the
EPA substantively engaged with title V petition claims concerning the
sufficiency of monitoring established in NSR permits,\72\ requirements
involving an explicit overlap between NSR and title V,\73\ and other
NSR issues where no underlying NSR permit was issued \74\ or where the
underlying NSR permit did not involve public notice and the opportunity
for comment.\75\
---------------------------------------------------------------------------

\72\ In the Matter of Gulf Coast Growth Ventures, LLC, Olefins,
Derivative, & Utilities Plant, Order on Petition No. VI-2021-3 at
17-19 (May 12, 2022) (Gulf Coast Growth Ventures Order); ExxonMobil
Baytown Chemical Order at 20-21; South Louisiana Methanol Order at
10-11; Yuhuang II Order at 8; see also, e.g., Big River Steel Order
at 17, 17 n.30, 19 n.32, 20; PacifiCorp-Hunter I Order at 16, 17,
18, 18 n.33, 19.
\73\ Suncor East Order at 53-54; ExxonMobil Baytown Chemical
Order at 13-14; In the Matter of Coyote Station Power Plant, Order
on Petition Nos. VIII-2019-1 & VIII-2020-8 at 12-13 (January 15,
202) (Coyote Station Order).
\74\ Suncor East Order at 45-48, 54-55; SRP Agua Fria Order at
11 n.18; In the Matter of Salt River Project Agricultural
Improvement & Power District, Desert Basin Generating Station, Order
on Petition No. IX-2022-3 at 12 n.20 (July 28, 2022) (SRP Desert
Basin Order); In the Matter of BP Products North America, Inc.,
Whiting Business Unit, Order on Petition No. V-2021-9 at 13 n.24
(Mar. 4, 2022) (BP Whiting II Order).
\75\ Suncor East Order at 48; Coyote Station Order at 12.
---------------------------------------------------------------------------

Two of the EPA's petition orders--the PacifiCorp Hunter I Order and
the ExxonMobil Baytown Olefins Order--were challenged in different
federal circuit courts. The U.S. Court of Appeals for the Fifth Circuit
issued the first ruling, upholding the ExxonMobil Baytown Olefins
Order. Env't Integrity Project v. EPA, 969 F.3d 529 (5th Cir. 2020).
There, the court found persuasive the ``EPA's view that Title V
permitting is not the appropriate vehicle for reexamining the
substantive validity of underlying Title I preconstruction permits.''
Id. at 253. The court's conclusion was ``based principally on Title V's
text, Title V's structure and purpose, and the structure of the Act as
a whole.'' Id. at 249.\76\
---------------------------------------------------------------------------

\76\ The court stated its conclusion several ways, as the
following examples illustrate: ``Concluding EPA's interpretation of
the Title V program is independently persuasive and therefore
entitled to the mild form of deference recognized by Skidmore v.
Swift & Co., 323 U.S. 134 (1944), we deny the petition.'' 969 F.3d
at 242. ``[W]e find [the EPA's] reasoning persuasive as a
construction of the relevant provisions of Title V and its
implementing regulations.'' Id. at 247. ``Applying Skidmore, we ask
whether EPA's interpretation of Title V and its implementing
regulations in the Hunter Order is persuasive. Specifically, we
inquire into the persuasiveness of EPA's current view that the Title
V permitting process does not require substantive reevaluation of
the underlying Title I preconstruction permits applicable to a
pollution source. As we read it, the Hunter Order defends the
agency's interpretation based principally on Title V's text, Title
V's structure and purpose, and the structure of the Act as a whole.
Having examined these reasons and found them persuasive, we conclude
that EPA's current approach to Title V merits Skidmore deference.''
Id. at 249.
---------------------------------------------------------------------------

Shortly thereafter, the U.S. Court of Appeals for the Tenth Circuit
issued a ruling vacating and remanding the PacifiCorp-Hunter I Order.
Sierra Club v. EPA, 964 F.3d 882 (10th Cir. 2020). Unlike the Fifth
Circuit, the Tenth Circuit did not address the EPA's statutory
interpretation but instead rejected the EPA's reasoning as inconsistent
with the EPA's regulations. Id. at 897. According to the Tenth Circuit,
the EPA's regulations require that title V permits ensure compliance
with all ``applicable requirements,'' which the court interpreted to
include all requirements in the SIP, including those related to major
NSR. Id. at 885-86, 890-91.
Because these two courts ruled on different grounds (with the Fifth
Circuit focusing on the statute, and the Tenth Circuit focusing on the
EPA's existing regulations), the legal reasoning underlying their
holdings is not in direct conflict. However, for practical purposes,
the differing rulings have made it difficult for the EPA to apply a
uniform interpretation of its current title V regulations nationwide.
Within the Tenth Circuit's jurisdiction, in the EPA's subsequent
responses to petitions on the PacifiCorp-Hunter permit (PacifiCorp-
Hunter II 77 and PacifiCorp-Hunter III \78\), the EPA
reviewed whether a source should have obtained a major NSR permit for
projects previously authorized by a minor NSR permit. This review was
based on the Tenth Circuit's decision on the PacifiCorp-Hunter I Order.
---------------------------------------------------------------------------

\77\ In the Matter of PacifiCorp Energy, Hunter Power Plant,
Order on Petition Nos. VIII-2016-4 & VIII-2020-10 (Jan. 13, 2021).
\78\ In the Matter of PacifiCorp Energy, Hunter Power Plant,
Order on Petition No. VIII-2022-2 (Sept. 27, 2022).
---------------------------------------------------------------------------

In title V petition orders regarding permits issued by states
outside of the Tenth Circuit, however, the EPA has followed a different
approach. As the EPA has explained:

EPA continues to believe that the interpretation of the CAA
upheld by the Fifth Circuit's decision in Environmental Integrity
Project v. EPA, 969 F.3d 529 (5th Cir. 2020), is correct. EPA thus
intends, where supported by the facts of individual permits, to
continue to apply the reasoning of In re Big River Steel, LLC, Order
on Petition No. VI-2013-10 (October 31, 2017), when issuing and
reviewing title V permits and reviewing petitions on permits for
sources in states outside of the Tenth Circuit. That is, where EPA
has approved a state's title I permitting program, duly issued
preconstruction permits establish the NSR-related ``applicable
requirements'' for the purposes of title V. As with ``applicable
requirements'' established through other CAA authorities, the terms
and conditions of those permits should be incorporated into a
source's title V permit without a further round of substantive
review as part of the title V process.\79\
---------------------------------------------------------------------------

\79\ PacifiCorp-Hunter III Order at 16 n.29; see also
PacifiCorp-Hunter II Order at 15 n.26.

Thus, when reviewing permits issued by permitting authorities in
states beyond the Tenth Circuit's jurisdiction, the EPA has continued
to apply its approach dating back to 2017 and has, in many instances,
declined to use the title V process to review the substance of NSR
permitting decisions. In the situations outside the Tenth Circuit where
the EPA decided that it was appropriate to use the title V process to
review certain NSR issues, these decisions were not based on the Tenth
Circuit's interpretation of the EPA's regulations, but rather on
factual distinctions that, in the EPA's view, provided a basis for
reviewing such issues under EPA's post-2017 interpretation of the
regulations.\80\
---------------------------------------------------------------------------

\80\ See Suncor East Order at 46 n.61; Gulf Coast Growth
Ventures Order at 17 n.28; ExxonMobil Baytown Chemical Order at 14
n.27; BP Whiting II Order at 13 n.24; Coyote Station Order at 12.
---------------------------------------------------------------------------

As explained in the next section of this preamble, the EPA
continues to maintain that the Big River Steel Order and subsequent
title V orders reflect the best interpretation not only of the relevant
statutory provisions, but also of the existing regulations.
Nonetheless, in light of the differing circuit court decisions, the EPA
considers it prudent to update the EPA's regulations to reflect its
interpretation of the statute. The changes proposed in this rulemaking
will allow the EPA to apply a single framework across the nation by
amending the text in the regulations.

[[Page 1165]]

This action thus addresses the ruling from the Tenth Circuit by
amending the regulatory language that it found to be in conflict with
the EPA's current interpretation. It also more clearly aligns the EPA's
regulations with the EPA's statutory interpretation endorsed by the
Fifth Circuit.

B. Proposed Action

The EPA proposes to update its regulations to more closely reflect
the agency's current view regarding the intersection between title I
permitting and title V permitting. In sum: provided a source obtains an
NSR permit under EPA-approved (or EPA-promulgated) title I rules, with
public notice and the opportunity for comment and judicial review, such
NSR permit establishes the NSR-related ``applicable requirements'' of
the SIP (or FIP) for purposes of title V. As with ``applicable
requirements'' established under other CAA authorities (e.g., NSPS,
NESHAP), the EPA would not revisit those NSR decisions through the
title V process.
The following subsections of this preamble explore the situations
in which NSR-related applicable requirements of the SIP (or FIP) would
effectively be established through the NSR process, as well as
situations in which the title V process could be used to further
address or define those requirements. Determining the extent to which
title V should be used to address NSR-related requirements inherently
requires a fact-specific, case-by-case analysis of multiple variables
associated with both title I and title V permitting. However, in
general, the EPA's framework applies similarly regardless of: (i) the
stage of the title V permitting or oversight process at issue; (ii) the
NSR permit's origin (i.e., from a SIP or a FIP), (iii) the type of
substantive NSR requirement at issue (e.g., NSR permit terms or major
NSR applicability); and (iv) the procedures by which the NSR permit is
incorporated into the title V permit (e.g., sequentially or
concurrently issued permits).
1. Different Stages of the Title V Permitting and Oversight Process
The EPA's views regarding the NSR-title V interface have primarily
been discussed in the context of one specific oversight tool: the EPA's
responses to title V petitions. This rulemaking would further codify
the scope of issues that would be within, or beyond, the scope of the
EPA's review in responding to title V petitions. However, the concepts
underlying the EPA's current view--as well as this proposed rule--are
not confined to title V petitions, but extend to other aspects of title
V permitting. Specifically, the EPA's approach is equally relevant: (i)
when prospective permittees prepare title V permit applications; (ii)
when permitting authorities (including EPA, where applicable) develop
title V permits and respond to public comments on draft title V
permits, (iii) when EPA reviews and decides whether to object to
proposed title V permits during its 45-day review period; (iv) when EPA
considers reopening title V permits for cause; and (v) when EPA
considers other programmatic oversight actions under, for example, 40
CFR 70.10.
2. Different Origins of NSR Permits
As described earlier in this preamble, the EPA's approach to
reviewing NSR issues through title V diverged in the late-1990s,
depending on whether the underlying NSR permit was issued under a
state's EPA-approved SIP rules (which the EPA would review) or EPA-
promulgated FIP rules (which the EPA would not review). At the time,
this distinction was based on the differing routes to review such NSR
permitting actions; appeals of SIP-based NSR permits were reviewed
through the state court system, while appeals of FIP-based NSR permits
proceeded through the EAB and federal court system.
Instead of presenting a basis to treat SIP-based and FIP-based
title I permits differently, these NSR permit appeal pathways highlight
why they should be treated similarly. Both SIP-based and FIP-based
appeal pathways promote public involvement and ensure the substantive
validity of the underlying NSR permitting decisions. Both pathways are
similar to those used to establish (and, if necessary, challenge) other
types of applicable requirements of the CAA. See section IV.E.4.a. of
this preamble for additional information. The fact that one pathway
leads to the state courts, and the other pathway leads to the federal
courts, simply reflects the cooperative federalism system established
by Congress for the NSR program.\81\
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\81\ For additional information about how the EPA's approach to
SIP-based NSR permits comports with the structure of the CAA and
congressional intent, see sections IV.E.2. and IV.E.3. of this
preamble.
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Overall, the EPA does not view the difference between NSR-based
requirements established pursuant to a SIP, or NSR-based requirements
established pursuant a FIP, to be meaningful insofar as title V is
concerned. Both processes effectively establish and define the NSR-
related requirements of title I for title V purposes. Accordingly, the
EPA's proposed rule would codify the EPA's current approach, which does
not differentiate between NSR permits issued pursuant to a SIP or a
FIP.\82\
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\82\ This is consistent with the existing regulatory definition
of ``applicable requirement,'' which treats SIP-based and FIP-based
requirements the same. See 40 CFR 70.2, 71.2 (definition of
applicable requirement, items (1) and (2)).
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3. Different Types of NSR Requirements
The EPA's current (and proposed) approach applies regardless of the
types of NSR requirements involved. That is, once an NSR permit has
been issued under EPA-approved (or EPA-promulgated) title I rules, with
public notice and the opportunity for comment and judicial review, that
NSR permit defines the NSR-related requirements of the SIP (or FIP)
that are applicable to the construction of the new source or
modification that was the subject of the permit. The terms of both
major and minor NSR permits are applicable requirements that must be
included in title V permits.\83\ These permit conditions are not
derived or created within or through the title V process. Thus, the
title V permitting process should not be used to reevaluate the terms
of such major NSR or minor NSR permits, including questions about (i)
the content of the NSR permit (e.g., whether the permit limits reflect
BACT), (ii) whether additional requirements (e.g., major NSR
requirements) should have been applicable to the construction, and
(iii) other types of NSR requirements (e.g., whether the permitting
authority correctly determined that the construction would not cause or
contribute to a violation of the NAAQS).
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\83\ The EPA's existing regulations reflect this fact. The
current definition of ``applicable requirement'' includes ``Any term
or condition of any preconstruction permits issued pursuant to
regulations approved or promulgated through rulemaking under title
I, including Parts C or D, of the Act.'' 40 CFR 70.2 (emphasis
added). This definition includes not only the specifically listed
major NSR permits (required under parts C or D), but also minor NSR
permits issued under a SIP. This language, included in the 1992
final rule, reflects a change from the language in the 1991 proposed
rule, which only included major NSR permits. See 57 FR at 32276; 56
FR at 21768. Nonetheless, in order to provide maximum clarity to the
public, the EPA proposes a small change to make the inclusion of
minor NSR permit requirements more explicit. Note that not every
single term of every single NSR permit is an ``applicable
requirement'' that must be included in a title V permit. Some terms
of NSR permits may no longer be applicable because, for example,
they are obsolete or extraneous. See White Paper for Streamlined
Development of Part 70 Permit Applications, 7-16 (July 10, 1995).
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This principle is perhaps most intuitive with respect to permit
content. When a permitting authority authorizes construction by issuing
either a major NSR permit or minor NSR permit, it establishes emission
limits and other

[[Page 1166]]

standards necessary to satisfy the SIP requirements relevant to either
major or minor NSR. For example, PSD permits must include emission
limits reflecting BACT; NNSR permits must include emission limits
reflecting the Lowest Achievable Emissions Rate (LAER), and minor NSR
permits may contain analogous requirements depending on the terms of
the SIP. Although SIPs contain general criteria for establishing those
limits, individual permit actions are necessary to specifically define
the limits for each source subject to NSR. Once these limitations are
established through the NSR permitting process, the title V process
should not be used to re-evaluate whether the resulting limits reflect
the general SIP requirements related to BACT, LAER, or other similar
requirements.
Similar concepts apply to questions about NSR applicability. SIPs
contain general criteria and thresholds for determining the
applicability of different SIP requirements. However, determining which
specific requirements apply to individual emission units requires a
fact-specific permitting exercise. When a permitting authority
authorizes construction by issuing either a minor NSR permit or major
NSR permit, it decides which NSR-related SIP requirements are
applicable to different aspects of the project on a pollutant-by-
pollutant basis. The resulting NSR permit might include PSD
requirements (e.g., BACT) for some pollutants, NNSR requirements (e.g.,
LAER) for other pollutants, and/or minor NSR requirements for yet other
pollutants. In this manner, within a single NSR permit action,
questions about the applicability of different NSR requirements may be
inextricably linked with questions about the content of the NSR permit.
Further, questions about NSR permit content and NSR applicability are
fundamentally similar because both questions seek to answer whether
permit limits are set at a level stringent enough to satisfy the
relevant general SIP requirements, and both questions require a highly
technical application of general SIP criteria to specific circumstances
at the source.\84\ Thus, once an NSR permit is issued, the limitations
and other terms of that permit establish all relevant NSR-related
requirements of the SIP (whether major or minor NSR) that apply to
construction or modification of the source, and should be incorporated
into the title V permit without further review.\85\
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\84\ For example, questions about whether (i) an emission limit
that purports to satisfy BACT should instead be made more stringent
in order to satisfy BACT are similar to questions about whether (ii)
an emission limit that purports to satisfy minor NSR requirements
should instead be made more stringent in order to satisfy BACT.
\85\ See section IV.E.4.a. of this preamble for additional
discussion about how the EPA's treatment of NSR applicability issues
aligns with the EPA's treatment of other types of CAA applicability
issues.
---------------------------------------------------------------------------

Permitting authorities satisfy other types of NSR requirements in a
SIP when issuing NSR permits. One requirement that frequently arises in
the context of title V petitions involves determining that the new
source or modification will not cause or contribute to a violation of
the NAAQS. Again, to satisfy this requirement, the state must undertake
a fact-specific analysis through the NSR permitting process. This
analysis may (but does not always) involve atmospheric dispersion
modeling, and this may (but does not always) result in the imposition
of additional permit terms that restrict emissions in order to protect
the NAAQS.\86\ In all cases, the NSR permitting process is designed to
ensure that the NSR permit ultimately contains whatever specific
conditions are necessary to satisfy this NSR SIP requirement. Similar
principles hold true for a variety of other substantive NSR
requirements in SIPs, including a variety of requirements that are
unique to NNSR.
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\86\ In this manner, not all NSR-based SIP requirements related
to the NAAQS result in the imposition of requirements that apply to
emission units at a source. As discussed previously, only those
requirements that ``apply to emissions units in a part 70 source''
qualify as ``applicable requirements'' for title V purposes. 40 CFR
70.2; see 40 CFR 71.2.
---------------------------------------------------------------------------

Overall, substantive issues concerning NSR permit content, NSR
applicability, and other NSR requirements are fundamentally similar.
Each of these decisions require a state to derive specific requirements
for an individual source from general criteria in the NSR portion of
the SIP (e.g., requirements to include limits reflecting certain
technology-based criteria, to issue major NSR permits to projects
meeting certain applicability criteria, or to ensure that permits meet
certain criteria relevant to the NAAQS). Each of these determinations
involve relatively complex, fact-specific decisionmaking, which occurs
during the NSR permitting process. Once that process concludes, the
state issues an NSR permit that contains these source-specific
applicable requirements of the SIP for the construction project being
authorized. Thus, under the EPA's current (and proposed) approach, all
types of different NSR-related issues are generally treated the same
for purposes of title V review. The merit and validity of these
substantive requirements are subject to review and correction through
the available mechanisms for appeal of the NSR permit, and need not be
further reviewed by a state permitting authority or the EPA through
title V.
Note that compliance with procedural requirements associated with
the issuance of NSR permits are also subject to review in appeals of
NSR permits and are also not directly reviewable through title V.
However, the latter is for reasons not directly related to the
interpretation of ``applicable requirements'' at issue in this proposed
rule. Under the statute and the EPA's existing regulations, the EPA can
object to a title V permit that does not comply with ``applicable
requirements'' of the CAA (as that term is defined in EPA regulations)
or requirements of part 70, including procedural requirements of part
70. See 42 U.S.C. 7661d(b); 40 CFR 70.8(c)(1), 70.12(a)(2), (a)(2)(ii)-
(iv). Notably, the EPA's authority to object under CAA section 505(b)
only extends to the particular proposed title V permit before the
agency for review.\87\ Procedural requirements associated with NSR
permit issuance are not ``applicable requirements'' for title V
purposes because they do not ``apply to emissions units at a part 70
source.'' 40 CFR 70.2. Rather, they dictate the behavior of permitting
authorities in issuing NSR permits. Procedural requirements associated
with NSR permit issuance are also not part 70 requirements because they
are not related to title V or the part 70 regulations governing the
issuance of a specific title V permit. Thus, alleged violations of
procedural requirements associated with NSR permit issuance generally
would not provide an independent basis for the EPA to object to a title
V permit that incorporates such an NSR permit.\88\ Nonetheless,
although procedural flaws with the issuance of an NSR permit would not
provide a direct basis for the EPA to object to a title V permit, such
procedural issues could impact whether other more substantive NSR
issues should be reviewed through the title V process. See section
IV.B.5.a. of this preamble for further information.
---------------------------------------------------------------------------

\87\ The references within CAA section 505(b) to ``any permit,''
``the proposed permit,'' ``a permit,'' ``the permit,'' etc. apply to
the title V permit that a permitting authority proposes to issue and
transmits to EPA under CAA section 505(a)(1). 42 U.S.C. 7661d(a),
(b)(1), (b)(2); see also 40 CFR 70.8(c)(1), (d) (similar language
and cross-references as the statute), 70.12(a)(1) (requirement that
petitioners identify the specific title V permit action on which the
petition is based), 70.12(a)(2) (petition claims must be based on
alleged deficiencies in the ``permit process'' associated with the
title V permit being petitioned).
\88\ See Century Aluminum Order at 19-20.

---------------------------------------------------------------------------

[[Page 1167]]

4. Different Procedures for Incorporating NSR Permits Into Title V
Permits
In most cases, the EPA's current (and proposed) approach applies in
the same way regardless of the procedures by which a state permitting
authority incorporates the terms of an NSR permit into a title V
permit. In other words, as long as a permitting authority formally
issues an identifiable NSR permit that has the force of law \89\--and
regardless of whether the NSR and title V permits are issued
sequentially, contemporaneously, or even in the same physical
document--the unique title V oversight tools should not be used to
review the NSR-related decisionmaking underlying that NSR permit.
---------------------------------------------------------------------------

\89\ Because it is the NSR permit that establishes the
``applicable requirements'' for title V purposes, the EPA has long
explained that title V permits do not supersede title I permits--
which must remain in effect to authorize construction and/or
operations--even after the terms of a title I permit are
incorporated into a title V permit. See, e.g., 69 FR 10167, 10170
(Mar. 4, 2004); 66 FR 64039, 64040 (Dec. 11, 2001); Letter from John
S. Seitz, EPA, to Robert Hodanbosi & Charles Lagges, STAPPA/ALAPCO,
Encl. A at 4 (May 20, 1999).
---------------------------------------------------------------------------

The EPA's approach is most straightforward when an NSR permit is
issued in final form prior to the initiation of any title V permitting
action, or when an NSR permit has already been included in a previous
version of a title V permit that is up for renewal. This is the default
approach, as the EPA's regulations allow regulated entities subject to
major NSR preconstruction permitting requirements to submit a title V
permit application within 1 year after beginning operation, in most
cases. 40 CFR 70.5(a)(1)(ii); 71.5(a)(1)(ii). Additionally, where new
requirements become applicable to a source, including by virtue of a
change to the source (e.g., minor NSR requirements), the timeline for
reopening a source's title V permit to include such requirements
depends on the amount of time left in the title V permit; required
revisions would either need to be completed within 18 months or at the
next permit renewal. 40 CFR 70.7(f)(1)(i), 71.1(f)(1)(i). Regardless of
the specific timing, it should be straightforward in these instances to
simply incorporate the applicable requirements from the previously
finalized NSR permit into the title V permit.
Not all NSR and title V permits are processed sequentially. Before
discussing more streamlined permit issuance mechanisms, it is important
to recognize that the NSR and title V permitting programs are based on
distinct federal and state statutory and regulatory authorities and
feature significant differences in both their substantive and
procedural requirements. However, the two programs do feature some
overlapping public participation requirements, including requirements
for public notice, the opportunity for public comment, and the
opportunity for judicial review. Accordingly, some state permitting
authorities choose to streamline permit issuance by conducting one
process that satisfies both sets of overlapping requirements. Based on
the EPA's experience, the mechanisms that state permitting authorities
use to streamline the permitting processes vary considerably across the
nation. Different streamlining mechanisms have received various labels,
including ``combined,'' ``merged,'' or ``unified'' permits.\90\ This
preamble addresses three of the more common forms of streamlining. For
example, some permitting authorities streamline NSR and title V permit
issuance by processing the two permits concurrently, subject to
overlapping public participation opportunities.\91\ There are two basic
variations to this theme. First, the permitting authority could
concurrently issue the NSR permit as a standalone document containing
only NSR permit terms, and also issue a title V permit containing all
existing title V permit terms as well as the new NSR permit terms. Or,
second, the permitting authority could issue one permit document that
contains both the NSR permit and title V permit conditions. Some
permitting authorities employ a third mechanism, whereby the NSR permit
is first issued with enhanced procedural and substantive requirements
(based on title V requirements), and then the NSR permit requirements
are subsequently incorporated into a title V permit through an
administrative amendment process that does not require public
participation.
---------------------------------------------------------------------------

\90\ The EPA considers it more appropriate to refer to the
results of such streamlining as a combined ``permit,'' as opposed to
a combined ``program.'' This is because, although a single permit
document may be used to satisfy both NSR and title V permitting
requirements, the requirements of the NSR and title V programs are
legally distinct. See Riverview Order at 25-26.
\91\ This process is similar to another mechanism for permit
streamlining (not directly implicated by this rulemaking), under
which a permitting authority may consolidate two procedures
associated with title V permit issuance: the public's review of a
draft permit and the EPA's review of a proposed permit. See 40 CFR
70.8(a)(1)(ii).
---------------------------------------------------------------------------

The first approach--featuring separate NSR and title V permit
documents issued at or around the same time--is undoubtedly the
clearest of the various streamlining approaches. There can be no
mistaking the fact that there are two legally distinct permit actions,
and it is simple to identify which requirements are based on the NSR
regulations (and thus not subject to additional review through title
V).\92\
---------------------------------------------------------------------------

\92\ See South Louisiana Methanol Order at 9; SSS/WP Order at
14-15.
---------------------------------------------------------------------------

The second approach is also viable, provided the underlying
authority for the NSR aspects of the permit document are readily
ascertainable from the permit(s) and permit record(s). See 40 CFR
70.6(a)(1)(i). As explained in detail in several petition orders,\93\
even where NSR and title V permit authorizations are contained within
one permit document, such a permit action actually reflects two legally
distinct permit actions by the state: (i) a preconstruction permit
issued under the EPA-approved title I SIP regulations governing NSR,
and (ii) an operating permit under EPA-approved part 70 regulations
governing title V. Again, NSR permits and title V permits are based on
differing statutory and regulatory schemes, and although the two
programs feature similarities, they also feature important substantive
and procedural differences. A permitting authority's decision to
increase administrative efficiency by issuing a single permit document
to satisfy the legal requirements of two distinct permitting programs
does not alter the applicability of requirements associated with each
respective program. For example, substantive requirements unique to NSR
would not be applied to establish or evaluate non-NSR-based title V
permit terms. Likewise, procedural requirements unique to title V
(including the EPA's objection authority and public petition
opportunity, among other things) would not be extended to review
substantive elements of the permit action unique to the NSR permitting
process. The EPA's objection authority, and the public's ability to
petition EPA to object, are confined by the CAA to title V permits. See
42 U.S.C. 7661d(b). Combining the procedures by which a permitting
authority issues NSR and title V permits does not alter this basic
principle.
---------------------------------------------------------------------------

\93\ See Waelz Order at 13-15; Riverview Order at 24-28; Yuhuang
II Order at 7-8; Big River Steel Order at 11-12.
---------------------------------------------------------------------------

The EPA appreciates that the combined-permit approach has the
potential to introduce more confusion about which types of issues can
be raised through different public participation avenues. In general,
provided the permitting authority complies with existing regulatory
requirements, the EPA believes this

[[Page 1168]]

confusion can be minimized. First, the public could comment on all
portions of a combined permit document during the comment period
associated with the combined permit document. Similarly, all portions
of a combined permit document could be challenged in a state court
appeal of the final permit action.\94\ Beyond that, the available
mechanisms to challenge different permitting decisions would diverge.
The EPA's 45-day review of the proposed permit, and the subsequent
public petition opportunity, would apply only to title V-related
aspects of the permit action. Likewise, unique oversight tools
associated with title I permits (e.g., the EPA's authority under CAA
section 167 to order a stop in work) would only apply to title I-
related aspects of the permit action.
---------------------------------------------------------------------------

\94\ Provisions governing the right to appeal final title V
permits in state court is provided by 42 U.S.C. 7661a(b)(6) and 40
CFR 70.4(b)(3)(x)-(xii). For a discussion of equivalent
opportunities to challenge title I permits in state court, see
section IV.C.2. of this preamble.
---------------------------------------------------------------------------

Differentiating between NSR-based and title V-based permit terms in
a combined permit should be straightforward, as all title V permits
``shall specify and reference the origin of and authority for each term
or condition, and identify any difference in form as compared to the
applicable requirement upon which the term or condition is based.'' 40
CFR 70.6(a)(1)(i).\95\ Thus, any NSR-related terms should be readily
distinguishable from any non-NSR-related terms (or any title V-related
terms related to monitoring and compliance assurance). The substance of
appropriately designated NSR-based permit terms should not be subject
to additional scrutiny through the unique title V oversight tools.
---------------------------------------------------------------------------

\95\ This requirement is important in all situations where NSR
permit terms (and permit terms derived from other CAA programs) are
incorporated into a title V permit. However, it is especially
important when NSR permit authorizations are issued within the same
document as a title V permit in the first instance.
---------------------------------------------------------------------------

Although the EPA's approach generally applies the same regardless
of whether NSR and title V permits are sequentially or concurrently
issued, there are important qualifications to this principle. Most
notably, NSR permits must be finalized by the time the title V permit
is finalized in order to establish the ``applicable requirements'' for
title V purposes.\96\ Moreover, it is critically important that
concurrently issued permits (including combined permit documents) are
clear as to the nature of, and the legal authority underlying, the
permit actions reflected therein. This principle applies to the public
notice announcing such permit action, other portions of the permit
record available for public review, and the terms of the permit(s).
See, e.g., 40 CFR 70.7(h)(2), 70.7(a)(5), 70.6(a)(1)(i). Where NSR and
title V permit documents have been merged to such an extent that it is
impossible to legally distinguish the NSR permit action from the title
V permit action, it may be necessary to use the title V process to
review whether the NSR-related requirements of the SIP are included in
the title V permit. The next subsection elaborates on these and other
situations in which NSR issues would be subject to review through title
V oversight tools.
---------------------------------------------------------------------------

\96\ Although the regulatory definition of ``applicable
requirement'' includes ``requirements that have been promulgated or
approved by EPA through rulemaking at the time of issuance but have
future-effective compliance dates,'' 40 CFR 70.2, 71.2, this only
covers future-effective requirements that have already been
finalized at the time of title V permit issuance.
---------------------------------------------------------------------------

A third process used by some permitting authorities is often
described as ``enhanced NSR.'' The EPA's existing regulations allow
requirements from an NSR permit issued with certain enhancements to be
incorporated into a title V permit via administrative amendment
procedures (instead of a significant modification or minor modification
procedures, which would otherwise be required). To qualify for this
type of streamlined processing, the NSR permit would need to be issued
following ``procedural requirements substantially equivalent to the
requirements of [40 CFR] 70.7 and 70.8 . . . that would be applicable
to the change if it were subject to review as a permit modification,
and compliance requirements substantially equivalent to those contained
in [40 CFR] 70.6.'' 40 CFR 70.7(d)(1)(v); see 71.7(d)(1)(v).
This third pathway has the potential to create confusion--and to
conflict with the EPA's current (and proposed) approach--because the
language quoted earlier may be read to mean that the EPA's objection
authority and the public petition opportunity in 70.8(d) apply to the
issuance of the NSR permit.\97\ This result is problematic for multiple
reasons. For one, the CAA only provides the EPA with authority to
object to the issuance of title V permits, not NSR permits. Similarly,
the statutory obligation for the EPA Administrator to respond to
petitions under CAA section 505(b)(2) only applies to petitions on
title V permits. 42 U.S.C. 7661d(b)(2). Moreover, even if the EPA were
to object to the issuance of an NSR permit, the EPA generally lacks
authority to enforce such objection, as the EPA cannot issue the NSR
permit if the state does not resolve the EPA's objection. Again, the
authority to do so only relates to title V permits. 42 U.S.C. 7661d(c).
Further, the existence of this process creates more confusion about the
scope of issues properly subject to review during the NSR permitting
action than the other two streamlined pathways. This is because it may
be more difficult to distinguish title I and title V components within
a single ``enhanced NSR'' permit.\98\ Based on the preamble of the
EPA's 1992 title V rules, it appears that the EPA's original intention
when promulgating this mechanism was to generally confine EPA's review
to the title V-based components of the enhanced NSR permit (i.e., the
compliance requirements in 40 CFR 70.6).\99\ However, contradictory
positions taken by EPA in subsequent years has created confusion.\100\
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\97\ The EPA observes that some permitting authorities have EPA-
approved SIP and/or title V program rules that differ from the EPA's
regulations in this respect. Specifically, some EPA-approved state
rules reserve the EPA's objection authority and public petition
opportunity until the title V permit is administratively amended.
This arrangement features less potential for confusion and less
conflict with the EPA's current (and proposed) approach. See AK
Steel Order at 10-12.
\98\ For similar reasons, this process could cause difficulties
with respect to allocating title V permit fees consistent with 40
CFR 70.9.
\99\ See 57 FR at 32289 (``The primary intent of these
`enhancements' of the NSR process is to allow the permitting
authority to consolidate NSR and title V permit revision procedures.
As stated in the May 10, 1991 proposal, it is not to second-guess
the results of any State NSR determination. For example, if a State
does provide for EPA's 45-day review in its NSR program, EPA would
only be reviewing whether the State had conducted a BACT analysis,
if applicable, and whether that analysis is faithfully incorporated
in the title V permit. The EPA will not use its review period to
object to or attempt to revise the State's BACT determination.
Correspondingly, EPA's failure to object to the substance of the
BACT determination will not limit any remedies EPA might-otherwise
have under the Act to address a faulty BACT determination.'').
\100\ See, e.g., In the Matter of Alon USA, Bakersfield
Refinery, Order on Petition No. IX-2014-15 at 2-7 (Dec. 21, 2016).
---------------------------------------------------------------------------

Although this third pathway reflected the EPA's attempt to allow
for the streamlining of NSR and title V permit procedures, it raises
more issues than it solves, and ultimately it is not necessary. The
other two streamlining mechanisms--concurrent issuance of NSR and title
V permits either in separate documents or in a single combined permit
document--cause fewer problems and provide more advantages.
Specifically, concurrent issuance mechanisms are compatible with the
EPA's current (and proposed) approach to the title I/title V interface,
while the ``enhanced NSR'' mechanism appears to erroneously suggest
that the EPA has authority to directly object to title I permits.
Additionally, concurrent

[[Page 1169]]

issuance mechanisms allow permitting authorities to more clearly
delineate the title I and title V permit actions, providing more
clarity to the public about which issues may be challenged through
different review pathways. Finally, concurrent issuance mechanisms are
more efficient than the enhanced NSR mechanism, as permitting
authorities need not take an additional, separate title V
administrative amendment action after issuing an NSR permit.
For the foregoing reasons, the EPA proposes to remove from its
regulations the provisions relating to enhanced NSR permitting and
related title V administrative amendments. The EPA solicits comment on
whether state permitting authorities should remove equivalent
regulations from their EPA-approved program rules, although the EPA
does not anticipate such actions will be necessary. Instead, it should
be sufficient for permitting authorities to simply stop using this
mechanism in a manner that purports to provide an EPA objection
authority and public petition opportunity directly on an NSR permit. In
any case, the EPA generally will not use its objection authority to
address the substance of NSR permitting decisions made through this
process.
The EPA specifically requests comments regarding additional
mechanisms that permitting authorities use to streamline the issuance
of NSR and title V permits. The EPA requests comments about how these
differing approaches might impact, or be impacted by, the EPA's current
(and proposed) approach.
5. Situations in Which the Title V Process Will Be Used To Review NSR
Issues
There are certain situations in which the title V permitting
process is the appropriate venue for addressing NSR permitting issues.
This conclusion is supported by the same statutory and regulatory
interpretations underlying situations in which the title V permitting
process is not appropriate for addressing NSR permitting issues. In
sum, as explained further in the following subsections, where
applicable requirements are conclusively established under another CAA
program, they are not substantively addressed through title V. Where
applicable requirements are not conclusively established under another
CAA program, they are substantively addressed through title V. Where
the requirements of another CAA program and the requirements of title V
feature substantive overlap, such areas of overlap are addressed
through title V.
a. No Permit Issued Through a Title I Permitting Process With Public
Notice and the Opportunity for Comment and Judicial Review
Under the EPA's current (and proposed) framework, title I permits
issued with public notice and the opportunity for comment and judicial
review conclusively establish NSR-related ``applicable requirements''
of the SIP (or FIP) for title V purposes. But if NSR permitting
decisions are not developed through a formal process that involves
public notice and the opportunity for comment and judicial review, the
public and the EPA have no opportunity to provide input on, or appeal,
whether the relevant NSR requirements were properly established. In
this circumstance, it would be inappropriate to simply incorporate any
such NSR requirements into a title V permit without further review. In
other words, where NSR-related requirements are not established through
a public title I permitting process with an opportunity for judicial
review, the applicable requirements of the SIP (or FIP) relevant to the
construction project at issue are not yet conclusively defined for
title V purposes.\101\ In such a situation, the title V process can and
should be used to assure compliance with the relevant underlying NSR-
related applicable requirements of the SIP (or FIP). This approach is
similar to how the title V process is used to define the specific
requirements necessary to assure compliance with general requirements
of other CAA programs that are not definitively established through a
separate rulemaking or permitting process, as discussed in section
III.F. of this preamble.
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\101\ As explained further in section IV.C.1. of this preamble,
this view relates only to how an NSR permit is treated during the
title V permitting process. It does not in any way affect the
independent enforceability of the NSR permit itself.
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The title V process can be used to review NSR issues in various
situations, some of which the EPA has confronted in recent years. For
example, the EPA has reviewed, and will continue to review, substantive
NSR issues where no title I permit is issued to authorize the projects
at issue.\102\ The title V process can be used to ensure that any new
or modified sources that do not obtain an NSR permit (sometimes called
``unpermitted projects'') comply with all relevant NSR-related
requirements of the SIP (or FIP).
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\102\ See Suncor East Order at 45-48, 54-55 (reviewing NSR
issues where the state ``has not issued any title I NSR permits that
would establish the NSR-related `applicable requirements' of the
SIP''); SRP Agua Fria Order at 11 n.18 (reviewing NSR applicability
issues where no NSR permit had been issued); SRP Desert Basin Order
at 12 n.20 (same); BP Whiting II Order at 13 n.24 (reviewing an NSR-
related emission limit that was established in a title V, as opposed
to an NSR, permit action). Additionally, within a portion of the
EPA's 2017 PacifiCorp-Hunter I Order that was not challenged and not
subject to the Tenth Circuit's partial vacatur, the EPA addressed
the merits of a petition claim involving allegedly unpermitted
modifications. See PacifiCorp-Hunter I Order at 26-31.
---------------------------------------------------------------------------

If a preconstruction permit is issued, but not issued under title
I--that is, not issued under NSR permitting rules that have been
approved by EPA and incorporated into the SIP or FIP--then such a
permit would not establish the NSR requirements of the SIP (or FIP)
that apply to an individual source. Issuance of a non-title I permit
does not reflect a determination as to which of the NSR requirements in
a SIP (or FIP) apply to construction and thus does not fulfill any NSR
requirements in the SIP (or FIP). In this situation, it would thus be
appropriate to use the title V permitting process to assess whether
there are NSR requirements in the SIP (or FIP) that apply to a
construction project covered by a non-title I permit. Moreover, it
would be appropriate to use the title V permitting process to explore
whether a preconstruction permit was issued under a title I-based
authority, as opposed to a non-title I authority.\103\
---------------------------------------------------------------------------

\103\ For example, within a portion of the EPA's 2017
PacifiCorp-Hunter I Order that was not challenged and not subject to
the Tenth Circuit's partial vacatur, the EPA addressed the merits of
a petition claim involving a NSR permit that was allegedly not
issued under EPA-approved SIP rules. See PacifiCorp-Hunter I Order
at 24. Determining the authority underlying a preconstruction permit
could also be relevant in other title V contexts. For example,
states may issue preconstruction permits under state-only-
enforceable laws (as opposed to federally-approved and federally-
enforceable state laws, or federal laws). Such state-only permit
requirements may be included in title V permits, but they must be
labeled as ``state-only'' or ``not federally enforceable'' within a
title V permit. 40 CFR 70.6(b)(2). Questions about the authority
underlying such permits would therefore be relevant to determining
whether 40 CFR 70.6(b)(2) was satisfied. See, e.g., In the Matter of
Phillips 66 Co., Borger Refinery, Order on Petition No. VI-2017-16
at 8-10 (Sept. 22, 2021).
---------------------------------------------------------------------------

The EPA has also reviewed, and will continue to review, substantive
NSR issues where the underlying NSR permit was not issued following
public notice and the opportunity for comment and judicial review.\104\
As previously explained, this is because an NSR permit that is not
issued following such procedures does not provide the title V

[[Page 1170]]

permit writer or public with sufficient assurance that the
preconstruction permitting process has conclusively established the
applicable NSR requirements of the SIP (or FIP) for that source for
title V purposes. Thus, questions about the procedures used to issue
NSR permits may be indirectly relevant to the EPA's review of title V
permits or public petitions on title V petitions.\105\ Specifically,
such questions may inform whether it is appropriate to use the title V
process to review the substance of that NSR permit in order to ensure
that the title V permit reflects, and assures compliance with, all
relevant NSR applicable requirements of the SIP (or FIP). It is
important to recognize that procedural problems associated with the
issuance of an NSR permit would simply present a basis for EPA to
review the underlying NSR issues; such procedural problems would not
present an independent basis for the EPA's objection to the title V
permit.\106\
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\104\ See Suncor East Order at 48 (reviewing NSR-related issues
where ``the current title V renewal proceeding is the first permit
action in which these NSR issues have been subject either to public
notice and comment or the opportunity for judicial review,'' among
other reasons); Coyote Station Order at 12 (reviewing NSR-related
issues ``where no public notice was provided of the underlying NSR
permit action,'' among other reasons).
\105\ To the extent the public raises procedural issues related
to NSR permit issuance in a title V petition, petitioners have the
burden to demonstrate that the correct process was not followed,
similar to all other title V petition issues. 42 U.S.C. 7661d(b)(2);
see 40 CFR 70.12(a)(2).
\106\ As explained in section IV.B.3. of this preamble,
procedural requirements associated with NSR permit issuance are
neither ``applicable requirements'' for title V purposes (because
they do not apply to emission units at a part 70 source), nor are
they part 70 requirements (because they are not related to the
issuance of a specific title V permit).
---------------------------------------------------------------------------

It is also important to recognize that, in proposing to add text to
parts 70 and 71 referencing ``public notice and the opportunity for
public comment and judicial review'' of NSR permits, this proposed rule
would simply establish a precondition relevant to whether underlying
NSR permits are insulated from, or subject to, additional review
through title V. These proposed regulatory revisions will not impose
any binding procedural requirements governing a permitting authority's
issuance of NSR permits. Rather, such procedural requirements are found
in the relevant statutory and regulatory authorities governing NSR, and
the SIP regulations that implement them. See, e.g., 42 U.S.C.
7475(a)(2); 40 CFR 51.161, 51.165(i), 51.166(q). Although the proposed
additions to parts 70 and 71 use language similar to existing
requirements in the NSR rules, this proposed rule does not seek to
define those concepts in the context of NSR. Rather, outside of this
title V proposed rule, the EPA is reviewing opportunities for public
participation in minor NSR permitting.
For title V purposes, provided an NSR permit is issued following
public notice, the opportunity to comment, and the opportunity for
judicial review, the EPA will consider that NSR permit as establishing
the relevant applicable requirements of the SIP with respect to the
activities being permitted. Accordingly, the title V permitting process
will not be used to second-guess the substance of those requirements.
By codifying such criteria through the current proposed rule, the EPA's
intent is not to create new requirements on NSR permitting, but rather
to create an incentive for permitting authorities to offer robust
opportunities for public involvement on NSR permit actions. In this
manner, this proposed rule will reinforce existing requirements
governing public participation on NSR permits and will complement the
EPA's ongoing efforts to improve public participation in minor NSR
permitting decisions.
b. Issues Involving Overlapping Title V and NSR Requirements
The EPA has reviewed (and will continue to review) issues involving
an overlap of title V and NSR requirements. The most notable example
involves using title V to evaluate the sufficiency of monitoring and
related compliance assurance requirements associated with more
substantive NSR permit requirements. As the EPA explained in one title
V petition order:

Unlike the BACT determination claims discussed above, claims
concerning whether a title V permit contains enforceable permit
terms, supported by monitoring sufficient to assure compliance with
an applicable requirement or permit term (such as an emission limit
established in a PSD permit), are properly reviewed during title V
permitting. The statutory obligations to ensure that each title V
permit contains ``enforceable emission limitations and standards''
supported by ``monitoring . . . requirements to assure compliance
with the permit terms and conditions,'' 42 U.S.C. 7661c(a), (c),
apply independently from and in addition to the underlying
regulations and permit actions that give rise to the emission limits
and standards that are included in a title V permit. Therefore, the
EPA will address the merits of those portions of the Petition that
challenge the enforceability of emission limits and the sufficiency
of monitoring conditions in the Permit.\107\
---------------------------------------------------------------------------

\107\ South Louisiana Methanol Order at 10-11; see Gulf Coast
Growth Ventures Order at 17-19; ExxonMobil Baytown Chemical Order at
20-21; Yuhuang II Order at 8; see also, e.g., Big River Steel Order
at 17, 17 n.30, 19 n.32, 20; PacifiCorp-Hunter I Order at 16, 17,
18, 18 n.33, 19.

The EPA has also considered (and will continue to consider) other
issues involving an explicit overlap between NSR and title V. Examples
addressed to date include situations where a state's SIP rules and part
70 program rules explicitly require consideration of NAAQS impacts in a
title V permit proceeding; \108\ where both SIP and part 70 rules
require an evaluation of the scope of the ``stationary source'' or
``major source'' subject to permitting requirements; \109\ and where
SIP rules explicitly require consideration of adjustments to a PAL (a
type of NSR permitting mechanism) in a title V renewal permit
action.\110\
---------------------------------------------------------------------------

\108\ Suncor East Order at 53-54.
\109\ Coyote Station Order at 12-13.
\110\ ExxonMobil Baytown Chemical Order at 13-14.
---------------------------------------------------------------------------

Notably, the EPA's consideration of NSR-related issues within these
past actions did not involve reevaluating or second-guessing the
content of applicable requirements established in NSR permitting
actions. Instead, the EPA's consideration of those issues was based
either on unique requirements of title V (e.g., to add supplemental
monitoring to the requirements in underlying applicable requirements)
or on directives within the SIP itself, which effectively provided a
mandate to further define applicable requirements of the SIP through
the title V process (instead of the NSR process). Thus, the limited
situations in which the EPA does use (and proposes to continue using)
the title V process to address NSR-related issues is wholly consistent
with the EPA's position that, in general, the title V process should
not be used to second-guess or alter substantive applicable
requirements that are established through a title I permitting process
with public notice and the opportunity for comment and judicial review.
6. Summary of Proposed Regulatory Changes
In order to more clearly express the EPA's current approach to the
interface between NSR permits and title V permits, the EPA proposes the
following amendments to the EPA's regulations.
The EPA proposes to update paragraphs (1) and (2) of the definition
of ``applicable requirement'' in 40 CFR 70.2 and 71.2. Paragraph (1)
addresses SIP (and FIP) requirements more generally. This rule would
add text to paragraph (1) to clarify that, for purposes of title V,
where an NSR permit is issued under an EPA-approved or EPA-promulgated
title I program (i.e., SIP or FIP), with public notice and the
opportunity for comment and judicial review, then the terms and
conditions of that preconstruction permit define the NSR-related
applicable requirements of the SIP or FIP that apply to the activities

[[Page 1171]]

authorized by such a preconstruction permit.
This rule would also add text to paragraph (2) to clarify that, for
purposes of title V, the relevant terms and conditions of all types of
NSR permits issued under a SIP or FIP--including minor NSR permits--are
applicable requirements that must be included in a title V permit,
regardless of whether the procedures referenced in paragraph (1) are
followed.
The EPA also proposes to remove the provisions in 40 CFR
70.7(d)(1)(v), 70.7(d)(4), 71.7(d)(1)(v), and 71.7(d)(4) that relate to
the ``enhanced NSR'' and title V administrative amendment procedures,
as discussed in section IV.B.4. of this preamble.
The EPA does not believe any additional changes to the regulations
are necessary. However, the EPA requests comments on other changes to
the regulatory text that would be necessary to fully effectuate the
EPA's proposed approach.

C. Interaction With NSR Permitting, Oversight, and Enforcement

Although this rulemaking addresses the intersection of the NSR and
title V permitting programs, the EPA's proposed approach only directly
affects implementation of the title V permitting program. More
specifically, this rulemaking only affects the extent to which the
title V permitting process will be used to assess whether issuance of
an NSR permit complies with the NSR-related requirements of a SIP (or
FIP). Thus, as explained in the following paragraphs, the EPA's
proposed approach for limiting review of NSR permitting decisions
through the title V process does not affect the independent validity or
enforceability of NSR permit terms or the SIP (or FIP) requirements
upon which they are based.
1. No Impact on the Independent Validity or Enforceability of NSR
Permits
As discussed throughout this preamble, where an NSR permit is
issued following public notice and the opportunity for comment and
judicial review, the terms and conditions of such a permit establish
the NSR-related applicable requirements of the SIP (or FIP) for title V
purposes. Although these permit terms should generally be incorporated
into the title V permit without further substantive review, an EPA
decision not to conduct that review in the title V process does not
mean that the EPA agrees that the state action complies with NSR
requirements. It merely indicates that a title V permit is not the
appropriate venue to correct any deficiencies in the NSR permit. Thus,
even if EPA might find an error upon reviewing a preconstruction
permitting decision made by the permitting authority, for purposes of
the title V operating permit, the terms of the NSR permit should be
incorporated into the title V operating permit until such time that
there is a final action to revise, reopen, suspend, revoke, reissue,
terminate, or invalidate the preconstruction permit, such as a court
order in a state court appeal or through an enforcement action.\111\
---------------------------------------------------------------------------

\111\ As explained previously, this approach is analogous to how
the EPA treats potential defects in other types of applicable
requirements, including (non-NSR) requirements of the SIP. For
instance, even when the EPA has made a determination that a
provision of the SIP is not in compliance with the Act, the EPA will
not object to a permit that includes that provision until there is
final action to remove it from the SIP. See, e.g., Piedmont Green
Power Order at 28-29. EPA's lack of objection to the inclusion of
that requirement in the title V permit does not indicate that the
EPA agrees that it complies with the Act or applicable regulations;
it merely indicates that a title V permit is not the appropriate
venue to correct any such flaws in the SIP.
---------------------------------------------------------------------------

By the same token, if an NSR permit is not issued through a process
that included public notice and the opportunity for comment and
judicial review, this proposed rule would not address whether such a
permit is valid or enforceable in its own right. Rather, this proposed
rule would only affect how such a permit is treated through title V.
The terms of such a permit would still need to be included in the title
V permit under item (2) of the EPA's regulatory definition of
``applicable requirement.'' However, any such permit terms (and
underlying permit decisions) would not be sufficient to conclusively
define the NSR-related ``applicable requirements'' of the SIP under
item (1) of the EPA's regulatory definition. Therefore, questions about
the whether the NSR permit satisfied the requirements of the SIP would
be subject to review through the title V process. But that is the only
consequence insofar as this proposed rule is concerned. Any relevant
requirements of the SIP would remain fully enforceable, and the
independent enforceability of any NSR permit issued without an
opportunity for comment and judicial review would be determined on the
basis of those requirements.
2. Title I Oversight and Enforcement Authorities
Under the EPA's proposed approach for considering NSR permitting
decisions through the title V permitting process, there are meaningful
opportunities for the EPA and the public to review NSR preconstruction
permitting decisions under title I of the CAA.\112\ Congress provided
various mechanisms for EPA and public oversight of NSR permitting
decisions.
---------------------------------------------------------------------------

\112\ If anything, this action has the potential to increase the
availability of certain enforcement opportunities, as discussed in
Section IV.C.4. of this preamble.
---------------------------------------------------------------------------

Specifically, Congress gave the EPA programmatic oversight
authority under title I to disapprove state NSR permitting programs and
call for revisions to those programs if the state's program does not
satisfy federal statutory and regulatory authorities governing NSR. 42
U.S.C. 7410(a)(2)(C), 7410(k)(5). Further, if a state fails to properly
implement its NSR program, the EPA can take additional actions. 42
U.S.C 7413(a)(2), (a)(5).
In terms of reviewing individual title I permits, each SIP must
provide for public notice and an opportunity for comment on proposed
NSR permits in its preconstruction permit program. 42 U.S.C.
7475(a)(2); 40 CFR 51.161, 51.165(i), 51.166(q). The EPA may provide
feedback on state-issued NSR permits through this process.\113\
Inherent in this title I permitting scheme--and reflected in the
congressional record for the 1977 CAA Amendments--is the understanding
that the adequacy of state NSR permitting decisions would be subject to
review in state administrative and judicial forums.\114\
---------------------------------------------------------------------------

\113\ Title I of the CAA specifically contemplates that the
``interested persons'' who may comment on state-issued PSD permits
include ``representatives of the Administrator.'' 42 U.S.C.
7475(a)(2).
\114\ ``In order to challenge the legality of a permit which a
State has actually issued . . . a citizen must seek administrative
remedies under the State permit consideration process, or judicial
review of the permit in State court.'' Staff of the Subcommittee on
Environmental Pollution of the Senate Committee on Environment and
Public Works, 95th Congress, 1st Session, A Section-by-Section
Analysis of S. 252 and S. 253, Clean Air Act Amendments 36 (1977),
reprinted in 5 Legislative History of the Clean Air Act Amendments
of 1977 3892 (1977). Note that the U.S. Supreme Court has also
acknowledged the primacy of state courts to adjudicate disputes over
NSR permit terms. See Alaska Dep't of Env't Conservation v. EPA, 540
U.S. 461, 490 n.14 (2004); see also id. at 491-94 (addressing the
relationship between state court review of NSR permits and federal
oversight tools related to NSR permits). The EPA has expressed
similar views when approving individual NSR SIPs. See, e,g., 77 FR
65305, 65306 (Oct. 26, 2012) (The EPA ``interpret[s] the CAA to
require an opportunity for judicial review of a decision to grant or
deny a PSD permit, whether issued by EPA or by a State under a SIP-
approved or delegated PSD program.'').
---------------------------------------------------------------------------

Congress also provided EPA and the public with various enforcement
mechanisms to address non-compliance with title I permitting
requirements on a facility-by-facility basis. The EPA possesses the
authority to issue

[[Page 1172]]

injunctive orders to halt construction. 42 U.S.C. 7413(a)(5)(A), 7477.
The EPA may also pursue various types of civil or criminal enforcement
actions pursuant to sections 113 and 167 of the Act. 42 U.S.C. 7413,
7477. Under title III of the CAA, Congress also provided authority for
citizens to bring enforcement actions seeking civil penalties and
injunctive relief against a source that has violated certain NSR
requirements. Id. 7604(a)(1), (a)(3). These enforcement-based tools can
be used to address situations where a source failed to obtain a
required major NSR permit (even if it obtained a minor source permit).
See e.g., U.S. v. S. Ind. Gas & Elec. Co., No. IP99-1692-CM/F, 2002 WL
1760699, at *3-5 (S.D. Ind. July 26, 2002); United States v. Ford Motor
Co., 736 F. Supp. 1539, 1550 (W.D. Mo. 1990). They can also be used to
ensure that decisions made in establishing the terms of a major NSR
permit, such as BACT limits, were made on reasonable grounds properly
supported by the record. See, e.g., Alaska Dep't of Env't Conservation
v. EPA, 540 U.S. 461 (2004) (affirming application of section 167 of
the CAA in this context).
3. Title V Permit Shields
The incorporation of the terms and conditions of an NSR permit into
a title V permit does not, by itself, diminish the ability of the EPA
or citizens to enforce preconstruction permitting requirements.
However, enforcement could be affected by a title V ``permit shield''
imposed under CAA section 504(f) and 40 CFR 70.6(f) and 71.6(f). A
permit shield, if part of an approved title V program and expressly
included in a title V permit,\115\ may provide a sufficient defense
from enforcement actions under certain circumstances. This proposed
rule does not change the agency's interpretation or enlarge the scope
of a permit shield.
---------------------------------------------------------------------------

\115\ ``A part 70 permit that does not expressly state that a
permit shield exists shall be presumed not to provide such a
shield.'' 40 CFR 70.6(f)(2).
---------------------------------------------------------------------------

There are two types of permit shields under title V. The first,
default permit shield states that compliance with the title V permit
``shall be deemed compliance with'' title V. 42 U.S.C. 7661c(f). Where
a facility is entitled only to this default permit shield, requirements
of the CAA outside of title V (including NSR requirements) are still
independently enforceable against the facility.
A permitting authority may go further to provide a facility with a
second, more expansive type of permit shield. This more expansive
permit shield has two prongs. Under the first prong of an expanded
permit shield, a permitting authority can provide that compliance with
the title V permit ``shall be deemed compliance with other [non-title
V] applicable provisions,'' but only if ``the permit includes the
applicable requirements of such provisions.'' 42 U.S.C. 7661c(f)(1);
see 40 CFR 70.6(f)(1)(i). Where a title V permit includes this type of
permit shield and also incorporates the terms of an NSR permit, the
permit shield would provide that compliance with the title V permit
would be deemed compliance with the specific applicable requirements
reflected in the NSR permit. However, compliance with such a title V
permit wo

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