	ENVIRONMENTAL PROTECTION AGENCY

	40 CFR Part 52

	[EPA-R03-OAR-2007-0522; FRL-        ] 

Approval and Promulgation of Air Quality Implementation Plans; Virginia;
Virginia Major New Source Review for Nonattainment Areas 

AGENCY:  Environmental Protection Agency (EPA).

ACTION:  Proposed rule

SUMMARY: EPA is proposing limited approval of a State Implementation
Plan (SIP) revision submitted by the Commonwealth of Virginia. This
revision pertains to amendments to Virginia’s existing new source
review permit program for owners of sources located or locating in
Nonattainment areas which were submitted to EPA on February 12, 2007.  
EPA is proposing limited approval of these changes to the nonattainment
new source review program, because while the SIP revision submitted by
the Commonwealth strengthens the SIP, it does not fully meet the current
Federal requirements for the allowable lookback period under the
definition of “baseline actual emissions”.  EPA is also proposing
full approval of a related SIP revision submitted by the Commonwealth on
December 16, 2003, pertaining to amendments made to Virginia’s
existing nonattainment new source review permit program at that time. 
This action is being taken under the Clean Air Act (CAA or the Act).  
In a separate action, EPA has addressed changes made by Virginia to its
prevention of significant deterioration (PSD) new source review rules
which were previously submitted on October 10, 2006.  

DATES: Written comments must be received on or before [insert date 30
days from date of publication].  

ADDRESSES:  Submit your comments, identified by Docket ID Number
EPA-R03-OAR-2007-0522 by one of the following methods:

 www.regulations.gov. Follow the on-line instructions for submitting
comments.

     B.    E-mail:  campbell.dave@epa.gov

     C.    Mail:   EPA-R03-OAR-2007-0522, David Campbell, Chief, Permits
and Technical Assessment Branch, Mailcode 3AP11, U.S. Environmental
Protection Agency, Region III, 1650 Arch Street, Philadelphia,
Pennsylvania 19103.

     D.   Hand Delivery: At the previously-listed EPA Region III
address.  Such deliveries are only accepted during the Docket(s normal
hours of operation, and special arrangements should be made for
deliveries of boxed information.

Instructions:  Direct your comments to Docket ID No.
EPA-R03-OAR-2007-0522.  EPA's policy is that all comments received will
be included in the public docket without change, and may be made
available online at www.regulations.gov, including any personal
information provided, unless the comment includes information claimed to
be Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Do not submit information that you
consider to be CBI or otherwise protected through www.regulations.gov or
e-mail.  The www.regulations.gov website is an (anonymous access(
system, which means EPA will not know your identity or contact
information unless you provide it in the body of your comment.  If you
send an e-mail comment directly to EPA without going through
www.regulations.gov, your e-mail address will be automatically captured
and included as part of the comment that is placed in the public docket
and made available on the Internet.  If you submit an electronic
comment, EPA recommends that you include your name and other contact
information in the body of your comment and with any disk or CD-ROM you
submit.  If EPA cannot read your comment due to technical difficulties
and cannot contact you for clarification, EPA may not be able to
consider your comment.  Electronic files should avoid the use of special
characters, any form of encryption, and be free of any defects or
viruses.

Docket:  All documents in the electronic docket are listed in the
www.regulations.gov index. Although listed in the index, some
information is not publicly available, i.e., CBI or other information
whose disclosure is restricted by statute.  Certain other material, such
as copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form.  Publicly available docket
materials are available either electronically in www.regulations.gov or
in hard copy during normal business hours at the Air Protection
Division, U.S. Environmental Protection Agency, Region III, 1650 Arch
Street, Philadelphia, Pennsylvania 19103.  Copies of the State submittal
are available at the Virginia Department of Environmental Quality, 629
East Main Street, Richmond, Virginia, 23219.

FOR FURTHER INFORMATION CONTACT: Sharon McCauley, (215) 814-3376, or by
e-

mail at mccauley.sharon@epa.gov.

SUPPLEMENTARY INFORMATION:  On December 16, 2003 and February 12, 2007,
the 

Commonwealth of Virginia submitted revisions to its SIP for approval of
amendments to 

Virginia’s existing new source review (NSR) permit program for owners
of sources locating in 

nonattainment areas.  

I.    Background 

On December 31, 2002, the U.S. EPA published revisions to the Federal
PSD and nonattainment 

new source review (NNSR) regulations (67 FR 80186), effective March 3,
2003.   These changes 

to the Federal NSR regulations were reconsidered with minor changes on
November 7, 2003 (68 

FR 63021) and collectively, these two final actions are called the
“2002 New Source Review 

(NSR) Reform Rules”.  

The 2002 NSR Reform Rules made changes to five areas of the NSR
programs.  In summary, the 

2002 Rules:  (1) Provide a new method for determining the baseline
actual emissions; (2) adopt 

an actual-to-projected actual methodology for determining whether a
major modification has 

occurred; (3) allow major stationary sources to comply with plant-wide
applicability limits to 

avoid having a significant emissions increase that triggers the
requirements of the major NSR 

program; (4) provide a new applicability provision for emissions units
that are designated clean 

units; and (5) exclude pollution control projects (PCPs) from the
definition of “physical change 

or change in the method of operation.”  The November 7, 2003 notice of
final action added a 

definition for “replacement unit” and clarified an issue regarding
the Plant-wide Applicability 

Limitation (PALs) baseline calculation procedures for newly constructed
units. 

On June 24, 2005, the United States Court of Appeals for the District of
Columbia Circuit ruled 

in New York v. EPA, 413 F.3d 3 (D.C. Cir. June 24, 2005) that EPA lacked
the authority to 

promulgate the Clean Unit provisions, and the Court requested that EPA
vacate that portion of 

the 2002 Federal regulation, codified at 40 CFR 52.21(x), as contrary to
the statute.  Also, the 

Court determined that EPA lacked the authority to create PCP exceptions
from NSR and vacated 

those parts of the 1991 and 2002 rules, codified at 40 CFR 52.21(b)(32)
and 52.21(z), as contrary 

to the statute.  

As stated in the December 31, 2002 “NSR Reform” rulemaking, State
and local permitting 

agencies were required to adopt and submit revisions to their part 51
permitting programs, 

implementing the minimum program elements of that rulemaking no later
then January 2, 2006 

(67 FR 80240).  With this submittal, Virginia requests approval of
program revisions to satisfy 

this requirement. In addition, Virginia has updated their stationary
source permit regulations in 

Chapter 50, Article 4, to conform to the new NSR regulatory program and
translated the Federal 

NSR requirements into their regulatory text in Chapter 80, Article 9 in
a manner that is 

consistent with State regulatory development procedures.  

On February 14, 2007, EPA Region III received a revision request to the
Virginia SIP from the 

Virginia Department of Environmental Quality (VADEQ).  The February 14,
2007 SIP 

revision request consisted of changes to Legislative Rule 9 VAC 5
Chapter 50 Article 4 – 

Stationary Sources, 9 VAC 5 Chapter 80 Article 6 – Permits for New and
Modified Stationary 

Sources, and 9 VAC 5 Chapter 80 Article 9- Permits for Construction and
Major Modification of 

Major Stationary Sources of Air Pollution which Cause or Contribute to
Nonattainment.  These 

rules were adopted by the Commonwealth of Virginia State Air Pollution
Control Board on

June 21, 2006 and became effective September 1, 2006.   The Commonwealth
adopted the 

regulations in order to meet the relevant plan requirements of 40 CFR
51.165.    

II.   Summary of SIP Revision

What is being addressed in this document?

Virginia currently has an EPA-approved NSR program for new and modified
sources.  Today, 

EPA is proposing limited approval of the Virginia pre-construction
permitting program as 

submitted on February 12, 2007 for facilities located or locating in
nonattainment areas.  This 

revision submittal consists of rules titled “Chapter 50, Article 4 –
Stationary Sources”, and 

“Chapter 80, Article 9 - Permits for Construction and Major
Modification of Major Stationary 

Sources of Air Pollution Which Cause or Contribute to Nonattainment”
adopted June 21, 2006 

and effective September 1, 2006.  Virginia also submitted changes to 9
VAC Chapter 80 Article 

6 – Permits for New and Modified Stationary Sources as part of the SIP
revision, however,

Article 6 has not previously been approved as part of the Virginia SIP
and EPA will not be 

taking any rulemaking action on this portion of the SIP submittal at
this time.   

Additionally, on December 16, 2003, Virginia submitted a revision to
Chapter 80, Article 9 that 

made a number of changes to comply with the 1990 Amendments to the CAA,
the primary of 

which was to redefine the offset ratio requirements to accommodate the
requirements of Subpart 

I of Part C of Title I of the Act.  EPA is proposing full approval of
the December 16, 2003 

revision submittal.  

Today’s action will revise the previously-approved versions of these
rules as approved into the 

Virginia SIP on April 21, 2000 (65 FR 21315) and September 21, 1999 (64
FR 51047), 

respectively.  

Copies of the revised Virginia rules and submittal packages, as well as
the Technical Support 

Document (TSD), can be obtained from the Docket as discussed in the
“Docket” Section above.  

A discussion of notable Virginia rule changes that are proposed for
inclusion into the SIP are 

included in the TSD and also summarized below.  

What are the program changes that EPA is proposing limited approval?

In its December 2002 regulatory action, EPA dramatically changed many
aspects of the 

regulations governing the PSD and nonattainment NSR programs (together,
as “NSR”), aimed at 

“providing much needed flexibility and regulatory certainty, and at
removing barriers and 

creating incentives for sources to improve environmental performance
through emissions 

reductions, pollution prevention, and improved energy efficiency.”  
Virginia accepted the 

conceptual framework of EPA’s NSR reform revisions but tailored the
program to their State-

specific objectives.  EPA agrees that Virginia’s regulations, while
different in some limited 

respects, will not prevent companies from benefiting from most, if not
all of the goals of NSR 

reform.   In general, EPA has concluded that Virginia’s regulations,
overall, conform to the 

minimum program elements in 40 CFR 51.165 despite some variations in
their rules from the 

federal program.  It is EPA’s position that every element of NSR
reform is present in Virginia’s 

rules but these elements may be implemented in a way that allows the
Commonwealth more 

scrutiny with respect to how NSR applies to a facility.  The Virginia
NSR regulations for 

nonattainment areas, effective September 1, 2006 are being proposed for
limited approval today.  

The following describes areas within these regulations that vary from
the Federal program.  

Notable Variations in Article 9 from the Federal Program

1.  In the EPA regulations, the period used for establishing the
baseline for each pollutant can be 

different for each pollutant.  The Virginia regulations require that it
be the same for all 

pollutants, except where extenuating circumstances would allow use of
different baseline 

periods.   This variation is acceptable to EPA.  

2.  The EPA regulations do not specify consequences where the owner
determines there is a 

reasonable possibility that a project that is not a part of a major
modification may result in a 

significant emissions increase and does not obtain a permit.  The
Virginia regulations specify 

how the state will act should the owner fail to make an accurate
determination.  EPA believes 

that this variation from the federal rule has no impact on approvability
or the Commonwealth’s 

ability to achieve the goals of NSR reform and is acceptable to EPA.

Please note, the Commonwealth will soon be revising this Section of its
regulations to reflect 

changes made in the EPA final rule dated December 14, 2007 providing
improvements to EPA’s 

New Source Review program regarding “reasonable possibility” in
recordkeeping.   This final 

rule provided an  explanation and more detailed criteria to clarify the
“reasonable possibility” 

recordkeeping and reporting standard of the 2002 New Source Review
Reform rule.  The 

improvements provided in the December 14, 2007 rulemaking were to
reflect the amendments 

found necessary to respond to the decision of the U.S. Court of Appeals
for the DC Circuit in 

New York v. EPA, 413 F.3d 3 (DC Cir. 2005) (New York) which remanded
this portion of the 

December 2002 regulations for EPA to provide an acceptable explanation
for its ‘‘reasonable 

possibility’’ standard or to devise an appropriately supported
alternative.   

3.  The EPA regulations exclude emission increases that could be
accommodated and are 

unrelated to the project, including demand growth, from projected actual
emissions. The Virginia 

regulations included this exclusion but have been revised in order to
clarify the intent of the 

provision and ensure consistency in its application.  This variation is
acceptable to EPA.  

4.  The EPA regulations require owners to develop and maintain
information to support their 

determination that a given project is not a part of a major modification
that may result in a 

significant emissions increase.  The Virginia regulations require
advance notification of the 

availability of the information prior to beginning actual construction
of the project.  This 

variation is acceptable to EPA.  

5.  The EPA regulations establish Plantwide Applicability Limits (PALs)
with a duration of 10 

years; the Virginia regulations contain five-year durations for PALs. 
This variation is acceptable 

to EPA.  

6.  This SIP revision also includes other non-substantive changes to
Virginia’s Nonattainment 

New Source Review program.  There was a need to update regulatory
citations, making 

consistency revisions to the text to bring the regulations in the
Commonwealth up to date.  

EPA’s analysis has found that these non-substantative changes do not
change any of the 

minimum regulatory requirements and are acceptable.  

Once again, the TSD, (located in the Docket), can be reviewed for an
in-depth and full 

explanation of EPA’s regulatory analysis of the Virginia Nonattainment
New Source Review 

program.    

III.  Limited Approval

Why is EPA proposing “limited approval” versus “full approval”
of Virginia’s NSR regulations, effective September 1, 2006 for
Nonattainment NSR areas? 

The Clean Air Act does not expressly provide for limited approvals,
therefore EPA is using its 

gap-filling authority under section 301 (a) of the Act in conjunction
with the section 110 (k) (3) 

approval provision to interpret the Act to provide for this type of
limited approval action.    A 

key aspect of these limited approval actions is that they encompass the
entire rule based on the 

fact that even with limitations, the approval of the entire rule will
strengthen the Common-

wealth’s SIP.  The primary advantage to using this limited approval is
that it will make the 

Commonwealth’s revision submittal Federally enforceable and will
increase the SIP’s potential 

to achieve additional reductions. 

The following is an explanation for this limited approval of the SIP
revision by EPA.  In 

Virginia’s regulations under 9 VAC 5-80-2010 a new definition was
added to reflect the 

necessary changes to the program found in the 2002 Federal NSR Reform
rule.     

Virginia’s definition for “baseline actual emissions” varies from
the Federal definition at 40 CFR 

51.166(b)(47) in two ways.  First, for both electric generating units
(EGUs) and non-EGUs, 

Virginia’s rule allows the use of different baselines for different
pollutants if the owner can 

demonstrate to the satisfaction of the State Air Pollution Control Board
(Board) that a different 

baseline period for a different pollutant(s) is more appropriate due to
extenuating circumstances.  

This is acceptable to EPA.  However in the second instance, for
non-EGUs, the 24-month 

baseline period must occur within the five-year period preceding the
date the owner begins actual 

construction or the permit application is deemed complete, whichever is
earlier, unless the Board 

allows a different time period that it deems is more representative of
normal source operations.  

The allowance of a different or an extended time period by the Board is
acceptable as it allows a 

time period past the more limiting 5-year period, however, the
Commonwealth’s regulations 

do not further restrict the Board from allowing a time period which
could extend past the 10-year 

period currently provided in the Federal NSR Reform rule.     

The Virginia regulations, therefore, meet the general Federal criteria
for expanding the lookback 

period beyond the old requirement of the most recent 24-month period,
and are thus equivalent to 

the Federal requirement.  The purpose of an extended lookback is to
establish a period that is 

most representative of source operation.  Establishment of the most
representative operation not 

only enables sources to plan effective emissions control strategies, it
also provides Virginia with 

more accurate information on which to base long-term air quality
planning strategies.  The 5-

year lookback period can be seen to be more limiting or at times more
restrictive than the Federal 

rule.  Requiring a 5-year lookback instead of a 10-year lookback may,
however, limit a source’s 

potential to find a higher baseline.  This could in turn restrict a
source’s ability to emit and is thus 

inherently more protective than the EPA regulations.   As part of the
February 12, 2007 SIP 

revision submittal, the Commonwealth provided a more detailed
explanation of the 5-year 

lookback period.   

Though it was not Virginia’s intention to exceed the 10-year lookback
limitation, EPA’s decision 

to propose limited approval is based the Commonwealth’s interpretation
of its own regulations as 

provided in their Technical Support Document.   EPA is relying on this
interpretation of the 

regulations as noted above and in part, the basis for our limited
approval.  Furthermore, EPA 

would look unfavorably upon any use of discretion by Virginia that would
allow for baselines 

that exceed a 10-year lookback period.  EPA expects Virginia to correct
the definition at 9 

VAC 5-80-2010 by limiting the discretionary lookback period to 10 years.
 When Virginia 

makes this amendment, they will be eligible for consideration for full
approval of its 

Nonattainment NSR program found in Article 9.

IV. Full Approval 

What is EPA proposing full approval of in this action?

On December 16, 2003, the Commonwealth of Virginia submitted a SIP
revision submittal for   

Chapter 80, Article 9 that made a number of changes to comply with the
1990 Amendments to 

the CAA, the primary of which was to redefine the offset ratio
requirements to accommodate the 

requirements of Subpart I of Part C of Title I of the Act. 
Additionally, administrative permit 

processing provisions were also clarified further within this
submission.  EPA is proposing full 

approval of the December 16, 2003 revision submittal.  

V. General Information Pertaining to SIP Submittals from the
Commonwealth of Virginia 

In 1995, Virginia adopted legislation that provides, subject to certain
conditions, for an environmental assessment (audit) (privilege(' for
voluntary compliance evaluations performed by 

a regulated entity.  The legislation further addresses the relative
burden of proof for parties either asserting the privilege or seeking
disclosure of documents for which the privilege is claimed.  Virginia's
legislation also provides, subject to certain conditions, for a penalty
waiver for violations of environmental laws when a regulated entity
discovers such violations pursuant to a voluntary compliance evaluation
and voluntarily discloses such violations to the Commonwealth and takes
prompt and appropriate measures to remedy the violations.  Virginia's
Voluntary Environmental Assessment Privilege Law, Va. Code Sec.
10.1-1198, provides a privilege that protects from disclosure documents
and information about the content of those documents that are the
product of a voluntary environmental assessment. The Privilege Law does
not extend to documents or information (1) that are generated or
developed before the commencement of a voluntary environmental
assessment; (2) that are prepared independently of the assessment
process; (3) that demonstrate a clear, imminent and substantial danger
to the public health or environment; or (4) that are required by law.

On January 12, 1998, the Commonwealth of Virginia Office of the Attorney
General provided a legal opinion that states that the Privilege law, Va.
Code Sec. 10.1-1198,  precludes granting a privilege to documents and
information (required by law,( including documents and information
(required by Federal law to maintain program delegation, authorization
or approval,( since Virginia must (enforce Federally authorized
environmental programs in a manner that is no less stringent than their
Federal counterparts. . . .(   The opinion concludes that ([r]egarding (
10.1-1198, therefore, documents or other information needed for civil or
criminal enforcement under one of these programs could not be privileged
because such documents and information are  essential to pursuing
enforcement in a manner required by Federal law to maintain program
delegation, authorization or approval.(   

Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that ([t]o
the extent consistent with requirements imposed by Federal law,(  any
person making a voluntary disclosure of information to a state agency
regarding a violation of an environmental statute, regulation, permit,
or administrative order is granted immunity from administrative or civil
penalty.  The Attorney General's January 12, 1998 opinion states that
the quoted language renders this statute inapplicable to enforcement of
any Federally authorized programs, since (no immunity could be afforded
from administrative, civil, or criminal penalties because granting such
immunity would not be consistent with Federal law, which is one of the
criteria for immunity.(   

Therefore, EPA has determined that Virginia's Privilege and Immunity
statutes will not preclude the Commonwealth from enforcing its NSR
program consistent with the Federal requirements.  In any event, because
EPA has also determined that a state audit privilege and immunity law
can affect only state enforcement and cannot have any impact on Federal
enforcement authorities, EPA may at any time invoke its authority under
the Clean Air Act, including, for example, sections 113, 167, 205, 211
or 213, to enforce the requirements or prohibitions of the state plan,
independently of any state enforcement effort.  In addition, citizen
enforcement under section 304 of the Clean Air Act is likewise
unaffected by this, or any, state audit privilege or immunity law.

VI. Proposed Action

EPA has determined that the amendments to Virginia’s nonattainment new
source review permit program at Articles 4 and 9, as submitted on
February 12, 2007 meet the minimum requirements of 40 CFR 51.165 and the
Clean Air Act.  This amendment is being proposed as a limited approval
as described in Section III above, as a revision to the Virginia SIP. 
EPA is also proposing full approval of changes submitted to the
nonattainment new source review permit program at Article 9, as
submitted on December 16, 2003 and as described in Section IV above as a
revision to the Virginia SIP.  EPA is soliciting public comments on the
issues discussed in this document.  These comments will be considered
before taking final action.

VII. Statutory and Executive Order Reviews   

Under the Clean Air Act, the Administrator is required to approve a SIP
submission that complies with the provisions of the Act and applicable
Federal regulations.  42 U.S.C. 7410(k); 40 CFR 52.02(a).  Thus, in
reviewing SIP submissions, EPA’s role is to approve state choices,
provided that they meet the criteria of the Clean Air Act.  Accordingly,
this action merely proposes to approve state law as meeting Federal
requirements and does not impose additional requirements beyond those
imposed by state law.  For that reason, this proposed action:

is not a "significant regulatory action” subject to review by the
Office of Management and Budget under Executive Order 12866 (58 FR
51735, October 4, 1993);  

does not impose an information collection burden under the provisions of
the Paperwork Reduction Act (44 U.S.C. 3501 et seq.);

is certified as not having a significant economic impact on a
substantial number of small entities under the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.);  

does not contain any unfunded mandate or significantly or uniquely
affect small governments, as described in the Unfunded Mandates Reform
Act of 1995 (Public Law 104-4);

does not have Federalism implications as specified in Executive Order
13132 (64 FR 43255, August 10, 1999);

is not an economically significant regulatory action based on health or
safety risks subject to Executive Order 13045 (62 FR 19885, April 23,
1997); 

is not a significant regulatory action subject to Executive Order 13211
(66 FR 28355, May 22, 2001); 

is not subject to requirements of Section 12(d) of the National
Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note)
because application of those requirements would be inconsistent with the
Clean Air Act; and 

does not provide EPA with the discretionary authority to address, as
appropriate, disproportionate human health or environmental effects,
using practicable and legally permissible methods, under Executive Order
12898 (59 FR 7629, February 16, 1994).

In addition, this proposed rule for limited approval of the SIP revision
submitted on February 12, 2007 and the full approval of the SIP revision
submitted on December 16, 2003 for facilities located or locating in
nonattainment areas for Virginia nonattainment new source review does
not have tribal implications as specified by Executive Order 13175 (65
FR 67249, November 9, 2000), because the SIP is not approved to apply in
Indian country located in the state, and EPA notes that it will not
impose substantial direct costs on tribal governments or preempt tribal
law.

List of Subjects in 40 CFR Part 52 

Environmental protection, Air pollution control, Carbon monoxide,
Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate
matter, Reporting and recordkeeping requirements, Sulfur oxides,
Volatile organic compounds. 



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

___June 17, 2008___________           ___________/s/_________________

Dated:                                                      William T.
Wisniewski,

                                                                 Acting
Regional Administrator,

                                                                 Region
III.

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