RESPONSE TO COMMENTS OF THE NATIONAL RESOURCES DEFENSE COUNCIL TO
EPA’S PROPOSED RULE TO CONDITIONALLY APPROVE OHIO’S CHANGES TO ITS
NEW SOURCE REVIEW RULES.

The National Resource Defense Council (NRDC) commented on EPA’s
proposal to conditionally approve Ohio’s new source review (NSR) rule
changes.  NRDC primarily commented on the requirements of the federal
NSR rules, not Ohio’s application of the federal requirements in its
own rules.  The more appropriate venue for these comments would have
been when EPA public noticed our rule changes.  However, this response
to comment document contains responses to the entire range of comments
in the letter submitted by NRDC on the May 11, 2005 proposal to
conditionally approve Ohio’s NSR rule changes.  Following each point
raised by NRDC in comment, EPA responds to the comment.

Comment:  I. Ohio's Adoption of EPA's 2002 New Source Review Rule

A. Provisions in Ohio's Submission Prevent the State's Revised Plan From
Meeting - and Cause the Revised Plan to Interfere With - the Applicable
Requirements in Sections 110(a)(2)(C), 110(a)(2)(I), and 110(a)(2)(J) .

Provisions in Ohio's submission contravene sections 165(a) and 169(2)(C)
in part C of the Clean Air Act (CAA) and sections 171(4) and 172(a)(5)
in part D of the Act, thereby preventing the permit program in the
state's revised plan from being "as required in parts C and D," id. §
7410(a)(2)(C), from "meet[ing] the applicable requirements of . . . part
C," id. § 7410(a)(2)(J), and from  meet[ing] the applicable
requirements of part D." Id. § 7410(a)(2)(1) . The conflict is stark:
Whereas sections 165(a), 169(2)(C), 171(4), and 172(a)(5) of the Act
apply the preconstruction permitting requirements to all activities that
fall within section I 11(a)(4)'s definition of "modification," id. §§
7475(a) (applying preconstruction permitting provisions to all
"construction"), 7479(2)(C) ("`construction' . . . includes the
modification (as defined in section 7411(a) of this title) of any source
or facility"), 7502(a)(5) ("plan provisions shall require permits for
the construction . . . of new or modified major stationary sources"),
7501(4)( "`modified' mean[s] the same as the term `modification' as used
in section 7411(a)(4) of this title"), the following provisions in
Ohio's submission purport to exempt activities that fall within that
statutory definition:

OAC 3745-31-01:

(O) ("or shall equal the unit's potential to emit if operation of the
new unit has begun")

(Y)

(lll)(4)(c)

(111)(4)(d)

(111)(5)(h)

(111)(5)(i)

(111)(5)(j)

(PPP)(1)(a)(vi)

(PPP)(1)(a)(vii)

(SSS)(3)(d)

(CCCC)

(RRRR)

(ZZZZZ)(2)(h) ("57 FR 3946, Feb. 3, 1992 . . . 67 FR 80244, Dec. 31,
2002")

(ZZZZZ)(2)(u) ("57 FR 3946, Feb. 3, 1992 . . . 67 FR 80244, Dec. 31,
2002")

OAC 3745-31-21 :

(E)(2)

(E)(3)

(E)(4)

OAC 3745-31-30 (entirety)

OAC 3745-31-31 (entirety)

The United States Court-of Appeals for the District of Columbia Circuit
recently held that these very provisions - as found in the EPA rule that
the Ohio revision seeks to implement (see 70 Fed. Reg. at 24734/2,
24735/3) - unlawfully exempt activities that fall within section
111(a)(4)'s definition of "modification ." New York v. EPA, 413 F .3d 3,
40 (D.C. Cir. June 24, 2005) (Attachment 20) ("because the plain
language of the CAA indicates that Congress intended to apply NSR to
changes that increase actual emissions instead of potential or allowable
emissions, we hold that EPA lacks authority to promulgate the Clean Unit
provision, and we vacate that portion of the 2002 rule") ; id. at 41-42
("we hold that EPA lacks authority to create PCP  exemptions from NSR,
and we vacate those parts of the 1992 and 2002 rules . . . as contrary
to the statute") .

[Please note: EPA states that "Ohio also revised the rule language to
require that electric utility steam generating unit actual emissions are
to be based on potential to emit rather than representative actual
annual emissions." 70 Fed. Reg. at 24735/3 . We do not find a provision
meeting EPA's description in the referenced Ohio provision. See OAC
3745-31-01(C)(2) . If Ohio's submission does contain such a provision,
and if the provision applies to determining whether a physical or
operational change "increases the amount of any air pollutant emitted,"
42 U.S.C. § 7411(a)(4), then the provision contravenes and interferes
with parts C and D of the CAA, because "the CAA indicates that Congress
intended to apply NSR to changes that increase actual emissions instead
of potential or allowable emissions." New York v. EPA, 413 F.3d at 40.]

The presence of those provisions in Ohio's revised permit program thus
prevents the state's program from being "as required in parts C and D,"
42 U.S.C. § 7410(a)(2)(C), from "meet[ing] the applicable requirements
of . . . part C," id. § 7410(a)(2)(J), and from "meet[ing] the
applicable requirements of part D." Id. § 7410(a)(2)(I) . Therefore,
EPA will exceed its authority under section 110(k)(3) and violate
section 110(l) if the agency approves Ohio's revised plan.

Response:  EPA responds that EPA’s rules were upheld by the court
which reviewed them, State of New York et al. v. EPA, 413 F.3d 3 (D.C.
Circuit, June 24, 2006), with the exception of the pollution control
project and clean unit provisions.  Therefore, EPA’s rules (with the
exceptions noted) are lawful, and Ohio’s rules based on the EPA rules
are also lawful and, for the reasons stated in the notice of final
rulemaking, are being approved.  In a November 15, 2005 letter, the OEPA
withdrew its request for approval of the sections of the Ohio
Administrative Code that correspond with the vacated portions of EPA’s
rules.  Furthermore, on June 2, 2008 OEPA removed the pollution control
project and clean unit provisions from its rules. The action became
effective June 30, 2008.  EPA is not approving these sections into the
SIP.

Comment:  B. Other Provisions in Ohio's Submission Cause the State's
Revised Plan to Interfere with Applicable Requirements Concerning
Attainment and Reasonable Further Progress.

Other provisions in Ohio's submission cause the state's revised plan to
"interfere with [] applicable requirement[s] concerning attainment and
reasonable further progress." Id. §7410(1). Specifically, the following
provisions in Ohio's submission cause the state's revised plan to
interfere with the statutory requirements that a state plan provide for
attainment, prohibit emissions that interfere with attainment or
maintenance, and require reasonable further progress toward expeditious
attainment, see id. §§ 7410(ax2)(C) ("provide for the . . . regulation
of the modification and construction of any stationary source within the
areas covered by the plan as necessary to assure that national ambient
air quality standards are achieved"), 7410(a)(2)(D)(i) ("contain
adequate provisions . . . prohibiting" significant contribution to
nonattainment – or interference with maintenance - of any national
ambient air quality standard in another state),

7502(c)(1) ("provide for attainment of the national ambient air quality
standards"), 7502(c)(2),

7501(1), 7502(a)(2)(A)-(B) ("require reasonable further progress" toward
"attainment of the applicable national ambient air quality standard[s]"
"as expeditiously as practicable") :

OAC 3745-31-01:

(D)

(O)

(IlI)(6)

(SSS)(3)(a)

(CCCC)

(DDDD)

(EEEE)

(FFFF)

(GGGG)

(HHHH)

(IIII)

(JJJJ)

(KKKK)

(0000)

(ZZZZZ)(2)(h) ("57 FR 3946, Feb. 3, 1992 . . . 67 FR 80244, Dec. 31,
2002")

(ZZZZZ)(2)(u) ("57 FR 3946, Feb. 3, 1992 . . . 67 FR 80244, Dec. 31,
2002")

OAC 3745-31-32 (entirety)

As EPA continues to acknowledge, section 110(l) of the Act prohibits the
agency from approving a state plan revision that would "allow[]
emissions that are prohibited by the current SIP," unless EPA can uphold
a demonstration by the state that "the emissions that are allowed by its
revised rule but are prohibited by the current SIP would not interfere
with attainment or other applicable requirements." 70 Fed. Reg. 36901,
36903/3 (June 27, 2005); accord id. at 36903/2 ("EPA's first concern is
that the expansion of exemptions from Ohio's opacity limits
constitute[s] a relaxation that may interfere with applicable
requirements and thus contravene Clean Air Act section 110(l)."); id. at
36903/2 ("[T]he revised rules allow excess opacity on occasions that
excess opacity is currently prohibited, without any compensating
prohibitions of emissions that are currently allowed."); id. at 36903/3
("EPA cannot approve such a revision that also includes a less stringent
set of opacity limits without a demonstration pursuant to section 110(1)
that the revisions would not interfere with applicable requirements of
the Clean Air Act.").

The 2002 rule provisions that were not vacated by the D .C. Circuit in
New York v. EPA allow previously-prohibited emissions-increases to
occur. See Petition for Reconsideration of American Lung Association, et
al. (May 8, 2003) (Attachment 8), at 1-93; Reconsideration Comments of
NRDC, et al. (Aug. 28, 2003) (Attachment 10), at 3-17, 19-27; Final
Opening Brief of Environmental Petitioners (Attachment 16), at 11-33,
45-47; Brief of Government Petitioners (Attachment 17) at 16-35, 44-47,
51-53 ; Final Reply Brief of Environmental Petitioners (Attachment 18)
at 2-16, 21-23; Reply Brief of Government Petitioners (Attachment 19) at
2-15, 21-26; Abt. Associates, Nucor Steel Analysis (Attachment 1); Abt.
Associates, Mobile Joliet Analysis (Attachment 2); Environmental
Integrity Project, Bright Lines or Loopholes? (Attachment 3); Affidavit
of Craig A. Wright (Attachment 4); Affidavit of Dr. Iclal Atay
(Attachment 5); Affidavit of Marc Allen Robert Cone, P.E. (Attachment
6); National Academy of Public Administration, A Breath of Fresh Air
(Attachment 7); General Accounting Office, EPA

Should Use Available Data to Monitor the Effects of Its Revisions to the
New Source Review Program (Attachment 9); Connecticut, et al.
Reconsideration Comments (Attachment 11); Delaware Reconsideration
Comments (Attachment 12) ; Environmental Integrity Project Letter to EPA
(Attachment 13) ; William R. Moomaw, Assessment of "Reform or Rollback?"
(Attachment 14); Environmental Integrity Project, Additional Results and
Corrections (Attachment 15).

[Please note: The 2002 rule provisions considered by the D.C. Circuit in
New York v. EPA were EPA regulations, not state ones. The court thus had
no occasion to decide whether EPA could approve any state's versions of
any of the 2002 rule provisions consistently with section, 110(1) of the
Act. Cf. 69 Fed. Reg. 54006, 54008/3 (Sept. 7, 2004) ("[C]ertain
requirements in the submitted NSR program may not be needed to satisfy
CAA NSR requirements for major sources and major modifications, but are
necessary to provide EPA with the basis to approve the overall NSR
program revision to supersede the existing SIP-approved Clark County NSR
program under section 110(1)").] 

EPA does not deny this. See, e.g., Brief for Respondent United States
Environmental Protection Agency in New York v. EPA (filed Oct. 26, 2004)
at 78-79 (estimating that, in practice, "the change in the method for
calculating baseline actual emissions" will allow "a higher baseline"
for a group of non-electric utility sources that account for 3 percent
of the total annual emissions-increases from all existing and new
non-electric utility and electric utility sources in the United States);
id. at 81 ("some small number of facilities may be able to increase
emissions without being subject to NSR under the revised rule when they
would not have been able to do so under the old rule"); EPA,
Supplemental Analysis of the Environmental Impact of the 2002 Final NSR
Improvement Rules (Nov. 21 . 2002), at 14 ("the actual-to-projected
actual test would reduce the number of sources who would need to take
permit limits"). Accord New York v. EPA, 413 F .3d at 28 ("EPA
acknowledges that fewer changes will trigger NSR under the 2002 rule
than under the 1980 rule"). Cf. 70 Fed. Reg. at 36903/2 ("Ohio is
correct that its rule revisions do not increase the total amount of
allowable time of excess capacity (i.e. opacity between 20 and 60
percent), nor do the revisions alter the 60 percent opacity cap.
However, the revised rules allow excess opacity on occasions that excess
capacity is currently prohibited, without any compensating prohibition
of emissions that are currently allowed.") (emphasis in original).

The above-listed provisions in Ohio's revised permit program track those
2002 rule provisions, see, e.g., 70 Fed. Reg. at 24739/2 ("This section
of the Ohio permit to install rules regarding PAL applicability is
consistent with 40 C .F.R. 51 .166(w) and 40 C.F.R. 51 .165(f)."), just
as Ohio's preexisting permit program tracked EPA's preexisting rules.

State plans like Ohio's currently do not guard against the new emissions
increases allowed by the weakened permit provisions. See Brief of
Government Petitioners (Attachment 17) at 21-24, 44-47; Reply Brief of
Government Petitioners (Attachment 19) at 6, 9; Abt. Associates, Nucor
Steel Analysis (Attachment 1); Abt. Associates, Mobile Joliet Analysis
(Attachment 2); Environmental Integrity Project, Bright Lines or
Loopholes? (Attachment 3); Affidavit of Craig A. Wright (Attachment 4);
Affidavit of Dr. Iclal Atay (Attachment 5); Affidavit of Marc Allen
Robert Cone, P.E. (Attachment 6); National Academy of Public
Administration, A Breath of Fresh Air (Attachment 7); General Accounting
Office, EPA Should Use Available Data to Monitor the Effects of Its
Revisions to the New Source Review Program (Attachment 9); Connecticut,
et al. Reconsideration Comments (Attachment 11) ; Delaware
Reconsideration Comments (Attachment 12); Environmental Integrity
Project Letter to EPA (Attachment 13); William R. Moomaw, Assessment of
"Reform or Rollback? " (Attachment 14); Environmental Integrity Project,
Additional Results and Corrections (Attachment 15).

EPA does not deny this either. See, e.g., Brief for Respondent United
States Environmental Protection Agency in New York v. EPA at 77 ("State
SIPs must include whatever provisions are necessary to ensure that
sources do not contribute significantly to nonattainment in other
States. 42 U.S.C. § 7410(a)(2)(D) . EPA may enforce this requirement by
compelling States to modify SIPs that are inadequate.") (emphasis
added). 

As it is revised by the above-listed provisions, then, Ohio's plan
"allows emissions that are prohibited by the current SIP." 70 Fed. Reg.
at 36903/3 . Ohio nevertheless has made no "demonstration that the
emissions that are allowed by its revised rule but are prohibited by the
current SIP would not interfere with attainment or other applicable
requirements." Id. Indeed, EPA does not propose to find that Ohio has
made such a demonstration. See 70 Fed. Reg. at 4735/3-39/3. Instead, EPA
proposes to approve the above-listed Ohio provisions on the basis of its
finding that those provisions are consistent with the parallel ones
found in the agency's 2002 rule. See, e.g., id. at 24739/2 ("This
section of the Ohio permit to install rules regarding PAL applicability
is consistent with 40 C.F.R. 51 .166(w) and 40 C.F .R. 51 .165(f) .
Therefore we propose to approve this rule.").

But EPA has never made, or even proposed to make, a finding that
revising Ohio's permit provisions so that they track the non-vacated
provisions of the 2002 rule "would not interfere with attainment or
other applicable requirements." 70 Fed. Reg. at 36903/3. The most the
agency has been able to assert (without any substantiation whatsoever)
is that "implementation of the 2002 rule" as a whole (i.e., before large
portions of it were vacated) will be "environmentally beneficial, or at
worst, neutral" on a national scale. Brief for Respondent United States
Environmental Protection Agency in New York v. EPA at 76.

Neither Ohio nor EPA has analyzed the particular impact of each part of
the rule, much less the particular impact that each part's adoption by
Ohio would have on that state's compliance with the requirements that it
provide for attainment, prohibit emissions that interfere with
attainment or maintenance, and require reasonable further progress
toward expeditious attainment. See 42 U .S.C. §§ 7410(a)(2)(C),
7410(a)(2)(D)(i), 7501(1), 7502(a)(2)(A)-(B), 7502(c)(1) 7502(c)(2).
This despite the D.C. Circuit's observation that the "invalidation of
portions of the new rule may affect [the rule's] overall environmental
impact as compared to the old rule," New York v. EPA, 413 F .3d at 43,
and despite the court's corresponding admonishment:

In light of our vacatur of the Clean Unit and PCP portions of the 2002
rule, . . . on which EPA relied in concluding that "collectively, the
five NSR [provisions in the 2002 rule] will improve air quality,"
ENVIRONMENTAL IMPACT ANALYSIS at 2, there is a heightened need for EPA
to have sufficient data to confirm that the remaining portions of the
2002 rule do not result in increased emissions that harm air quality and
public health.

Id. at 30-31.

Indeed, EPA cannot make a finding that revising Ohio's permit provisions
so that they track the non-vacated provisions of the 2002 rule "would
not interfere with attainment or other applicable requirements," 70 Fed.
Reg. at 36903/3, because the opposite is plainly true. See NRDC, et al.,
Petition for Reconsideration of 2003 NSR Rule (Attachment 22) at 7 ("NSR
serves as a key component of the statutory program for attaining
health-based air quality standards – an objective the Supreme Court
has described as the `heart' of, and `central' to, the Act.") (quoting
Train v. NRDC, 421 U.S . 60, 66 (1975)); Petition for Reconsideration of
American Lung Association, et al. (Attachment 8) at 1-93;
Reconsideration Comments of NRDC, et al. (Attachment 10) at 3-17, 19-27;
Final Opening Brief of Environmental Petitioners (Attachment 16) at
11-33, 45-47; Brief of Government Petitioners (Attachment 17) at 16-35,
44-47, 51-53; Final Reply Brief of Environmental Petitioners (Attachment
18) at 2-16, 21-23; Reply Brief of Government Petitioners (Attachment
19) at 2-15, 21-26 ; Abt. Associates, Nucor Steel Analysis (Attachment
1); Abt. Associates, Mobile Joliet Analysis (Attachment 2);
Environmental Integrity Project, Bright Lines or Loopholes? (Attachment
3); Affidavit of Craig A. Wright (Attachment 4); Affidavit of Dr. Iclal
Atay (Attachment 5) ; Affidavit of Marc Allen Robert Cone, P.E.
(Attachment 6); National Academy of Public Administration, A Breath of
Fresh Air (Attachment 7); General Accounting Office, EPA Should Use
Available Data to Monitor the Effects of Its Revisions to the New Source
Review Program (Attachment 9); Connecticut, et al. Reconsideration
Comments (Attachment 11) ; Delaware Reconsideration Comments (Attachment
12); Environmental Integrity Project Letter to EPA (Attachment 13);
William R. Moomaw, Assessment of "Reform or Rollback?" (Attachment 14);
Environmental Integrity Project, Additional Results and Corrections
(Attachment 15).

Therefore, finalizing the EPA rulemaking proposal at issue here would
violate section 110(1) of the Act. See 70 Fed. Reg. 35946, 35956/1 (June
21, 2005) ("[T]he State has not made a demonstration under section
110(1) of the CAA that the conversion of the vehicle I/M program in the
Cincinnati area (and in the Dayton area) to a contingency measure will
not interfere with attainment of the affected NAAQS or with compliance
with other requirements of the CAA. Therefore, we cannot approve, at
this time, the State's request to make vehicle I/M a contingency measure
in the Cincinnati area 1-hour ozone maintenance plan.") ; id at 35951/2
("EPA must complete rulemaking finding that . . . section 110(1) of the
CAA ha[s] been satisfied before Ohio discontinues the E-Check program
and converts E-Check to contingency measures in the ozone maintenance
plans for the Cincinnati and Dayton areas.") ; id. at 36949/3-50/1 ("We
are deferring this discussion until we review Ohio's section 110(1)
demonstrations of non-interference with attainment of other NAAQS and
with compliance with the requirements of the CAA for this area. Through
that future rulemaking, the public will be given an opportunity to
review and comment on Ohio's new emission projections for 2010 and 2015
.") ; id. at 35954/2 ; id. at 35955/2; id. At 35955/3; id. at 35958/2 .
See also 70 Fed. Reg. 46127, 46128/2 (Aug. 9, 2005) (in part because
"the revised [Ohio] rules provide modified approaches to regulating
fugitive emissions from roadways, parking areas, and storage piles for
the Ford Motor Company and ISG facilities," EPA "deferred rulemaking on
the Cleveland area emission limits pending receipt of a further
assessment of the impact of the revisions on attainment of the annual
air quality standard for particles 10 microns and smaller, known as
PMI0.") ; id. at 46129/1 ("revised. emission estimate is necessary" for
Ohio's modified regulation of "the ISG facility's storage piles,"
because the revised rules do not have "equivalent stringency as the
former rules") .

Response:  Section 110(l) of the CAA states that “[t]he Administrator
shall not approve a revision of a plan if the revision would interfere
with any applicable requirement concerning attainment and reasonable
further progress … or any other applicable requirement of this
chapter.”  CAA, 42 U.S.C. § 7410(l). 

In “Approval and Promulgation of Implementation Plans; NSR; State of
Nevada, Clark County Department of Air Quality and Environmental
Management,” 69 Fed. Reg. 54006 (Sept. 7, 2004), the EPA stated that
section 110(l) does not preclude SIP relaxations.  The Agency stated
that Section 110(l) only requires that the “relaxations not interfere
with specified requirements of the Act including requirements for
attainment and reasonable further progress,” and that therefore, a
state can relax its SIP provisions, if it is able to show that it can
“attain or maintain the NAAQS and meet any applicable reasonable
further progress goals or other specific requirements.”  69 Fed. Reg.
at 54011-12. 

The Ohio Proposed NSR Reform Rules track the federal NSR Reform Rules,
and EPA previously determined that the implementation of the federal NSR
Reform Rules will be environmentally beneficial.  (See 68 Fed. Reg. at
44620 and 63021).  The EPA’s Supplemental Analysis for the federal NSR
Reform Rules estimated that there are likely to be reductions in
emissions of volatile organic compounds (VOC) due to the use of PALs.  A
quantitative methodology was applied in the Supplemental Analysis to
three industrial categories, concluding that 3,400 to 17,000 tons of VOC
emission reduction per year were likely nationwide in just these
categories.  The three industrial categories selected were Automobile
Manufacturing (SIC 3711), Pharmaceutical Manufacturing (SIC 2834), and
Semiconductor Manufacturing (SIC 3674).  These were chosen based on the
Flexible Permit Pilot Evaluation Report  that concluded facilities in
these source categories were likely to adopt a PAL because of frequent
operational, time-sensitive changes, and because of opportunities for
economical air pollution control measures.  Although Ohio has minimal
pharmaceutical manufacturing or semiconductor manufacturing, it does
have several automobile manufacturing facilities which may take
advantage of the PAL option under the federal NSR Reform Rules.  The
Supplemental Analysis determined that 50-75% of the Automotive
Manufacturing facilities would seek a PAL and each of facility would
reduce its emissions by 10-33%.  The following tables evaluate the
potential affects of a PAL in the automobile manufacturing sector in
Ohio. 

Facility Name	VOC (tpy)

HONDA OF AMERICA MANUFACTURING  INC	1,606.96

HONDA OF AMERICA   EAST LIBERTY PLANT	456.09

DAIMLERCHRYSLER CORP	413.98

FORD MOTOR COMPANY - OHIO ASSEMBLY PLANT	679.15

GENERAL MOTORS CORPORATION - MORAINE ASSEMBLY	676.14

KENWORTH TRUCK COMPANY	164.60

GM NAO/SCG LORDSTOWN ASSEMBLY	1,791.59

DAIMLERCHRYSLER CORP	503.78



If 75% of Ohio’s Automotive Manufacturing sources take a PAL

10% VOC Reduction	433.61 VOC in tpy

33% VOC Reduction	1430.9 VOC in tpy

If 50% of Ohio’s Automotive Manufacturing sources take a PAL

10% VOC Reduction	231.52 VOC in tpy

33% VOC Reduction	764.00 VOC in tpy



	10% reduction at largest single source	179.16 VOC in tpy

33% reduction at largest single source	591.22 VOC in tpy



Using the same methodology used in the Supplemental Analysis to assess
the emissions benefits of the Ohio’s NSR Reform Rules in Ohio as EPA
used to assess the benefits nationally, we conclude that the PAL option
would result in a net reduction of between 179.16 and 1430.9 tons of VOC
per year.  

It is more difficult to assess the environmental impacts of the
actual-to-projected-actual test and the “2 in 10” baseline
provisions.  The Supplemental Analysis determined that there is a slight
national environmental benefit brought about by these NSR reform
provisions.  However, in Ohio, sources undergoing construction which are
not subject to the best available control technology or lowest
achievable emission reduction NSR requirements will need to comply with
Ohio’s best available technology provisions under Ohio Administrative
Code 3745-31-05(A)(3).

Overall, we expect changes in air quality as a result of implementing
PALs, actual-to-projected-actual test and the “2 in 10” baseline
provisions in Ohio to be somewhere between neutral and providing modest
contribution to RFP.  Accordingly, EPA determines that these changes
will not interfere with any applicable requirement concerning attainment
and reasonable further progress or any other applicable requirement of
the CAA.

Comment:  C. The Same Provisions in Ohio's Submission Violate Section
193 in Part D.

The same Ohio provisions discussed in part I.B., supra, violate the
Clean Air Act's part D, section 193 ban on "backsliding" in
nonattainment areas.

Section 193 declares, in part, that

No control requirement in effect . . . before November 15, 1990, in any
area which is a nonattainment area for any air pollutant may be modified
after November 15, 1990, in any manner unless the modification insures
equivalent or greater emission reductions of such air pollutant.

42 U.S.C. § 7515.

[Please note: In New York v. EPA, the D.C. Circuit dismissed as unripe
the government petitioners' claim that EPA's promulgation of the 2002
NSR rule violated section 193, on the grounds that EPA had not yet taken
action on any state regulations promulgated in response to that rule.
413 F.3d at 42. EPA is attempting to take such action now, in this
rulemaking.]

NSR is a "control requirement," because it controls emissions increases.
See 67 Fed. Reg. at 80187/2 (Dec. 31, 2002) ("The NSR provisions of the
Act are a combination of air quality planning and air pollution control
technology program requirements for new and modified stationary sources
of air pollution.") (emphasis added); 64 Fed. Reg. 29563-64 (June 2,
1999) (analyzing Rhode Island's state implementation plan revisions,
including changes to NSR applicability requirements, in light of section
193); 58 Fed. Reg. 10964-65 (Feb. 23, 1993) (Massachusetts' state
implementation plan revision consistent with section 193 because it
would "insure equivalent reductions with Massachusetts' prior NSR
program"); EPA Opening Merits Brief in Chevron, U.SA v. NRDC, S. Ct.
82-1005 (Aug. 31, 1983), 1982 Lexis U.S. Briefs 1005, at n.55 (NSR is
one of the "pollution-control measures" applicable in nonattainment
areas.); 42 U.S .C. §§ 7501(3), 7503(a)(2) (sources subject to NSR
must apply "lowest achievable emission rate," which is a stringent
"emission limitation.") ; id. § 7602(k) (defining "emission limitation"
as "a requirement established by the State or the Administrator which
limits the quantity, rate, or concentration of emissions of air
pollutants on a continuous basis, including any requirement relating to
the operation or maintenance of a source to assure continuous emission
reduction, and any design, equipment, work practice or operational
standard promulgated under this chapter"); id. § 7503(d) ("The State
shall provide that control technology information from permits issued
under this section will be promptly submitted to the Administrator for
purposes of making such information available through the RACTBACT/LAER
clearinghouse to other States and to the general public.") (emphasis
added); id. § 7408(h) (provision entitled "RACT/BACT/LAER

Clearinghouse" provides: "The Administrator shall make information
regarding emission control technology available to the States and to the
general public through a central database. Such information shall
include all control technology information received pursuant to State
plan provisions requiring permits for sources, including operating
permits for existing sources.") (emphasis added); id. § 7503(a)(5)
(requiring an alternatives analysis that considers inter alia the
source's "environmental control techniques"); id. § 7418(a) (requiring
federal facilities to comply  with requirements for "the control and
abatement of air pollution," including "any requirement respecting
permits") ; 1990 House Report at 234 (describing NSR as a "graduated
control program" involving increasingly protective requirements for
higher classifications, and including- as the first three examples of
that control program - provisions relating to NSR); id. at 272
(RACTBACT/LAER clearinghouse is to include inter alia information on
"lowest achievable emission rate control requirements proposed or
adopted in each State") (emphasis added); Lead Industries Assn, Inc. v.
EPA, 647 F.2d 1130, 1149 n.37 (D.C. Cir. 1980) (referring to measures in
state implementation plans that impose pollution control requirements on
sources).

Moreover, when NSR is triggered, it often achieves emissions reductions.
That is the case for sources in attainment areas, because the
installation of best available control technology reduces a previously
grandfathered unit's emissions below the pre-modification level. It is
especially the case for sources in nonattainment areas. Specifically,
the permitting agency cannot issue an NSR permit unless it determines
that "by the time the source is to commence operation, sufficient
offsetting emissions reductions have been obtained, such that total
allowable emissions from existing sources in the region, from new or
modified sources which are not major emitting facilities, and from the
proposed source will be sufficiently less than total emissions from
existing sources (as determined in accordance with the regulations under
this paragraph) prior to the application for such permit to construct or
modify so as to represent (when considered together with the plan
provisions required under section 7502 of this title) reasonable further
progress (as defined in section 7501 of this title) ." 42 U .S.C. §
7503(a)(1)(A) ; see also id. § 7501(a) (defining "reasonable further
progress" as "such annual incremental reductions in emissions of the
relevant air pollutant as are required by this part or may reasonably be
required by the Administrator for the purpose of ensuring attainment of
the applicable national ambient air quality standard by the applicable
date") ; id. § 7503(c); 1990 House Report at 234 ("Also included in the
graduated control requirements are increasing offset ratios that require
a greater level of pollution reductions from other sources in the
nonattainment area to offset increases in pollution from new sources or
modifications . This program is intended to allow economic growth and
the development of new pollution sources and modifications to continue
in seriously polluted areas, while assuring that emissions are actually
reduced.") (emphasis added). Accord, id. at 244 (explaining NSR
requirements for extreme areas, committee notes that those areas "cannot
afford to miss any opportunity for greater emission reductions")
(emphasis added).

The Ohio provisions identified in part I.B., supra, modify NSR in
several significant respects. Notwithstanding that fact, Ohio has made
no demonstration, and EPA has proposed no finding, that the
modifications ensure "equivalent or greater emissions reductions." 42
U.S.C. § 7515. EPA made no such finding either with respect to any of
the 2002 rule provisions that Ohio's provisions track. Those facts alone
establish that if EPA takes final action on its proposal, the action
will violate section 193. See 64 Fed. Reg. 70652, 70654 (Dec. 17, 1999)
("[T]he language is in fact `extraordinarily rigid' in its requirement
to provide equivalent or greater emission reductions to offset
relaxations to pre-1990 rules. . . . [S]ection 193 unambiguously
requires any relaxations to control requirements or plans in effect
prior to enactment of the CAA amendments of 1990 to be offset by
equivalent or greater emission reductions. The clarity of the statutory
language supported by the legislative history evidences intent by
Congress that relaxations to pre- 1990 requirements should occur only
where compensating strengthening will result in no increase in
emissions.") ; id. at 70656 ("compensating reductions must be
contemporaneous with the relaxation").

Moreover, Ohio cannot make a demonstration of equivalency, and EPA
cannot make such a finding. Because, far from ensuring "equivalent or
greater emission reductions" than Ohio's preexisting permit provisions,
the modifications ensure that emissions will not be reduced as much as
under the preexisting rules. In fact, the modifications allow emissions
to increase in Ohio's nonattainment areas. See 61 Fed. Reg. at 38251
(the rulemaking was intended to "significantly reduce the number and
types of activities" that trigger NSR); Brief of Government Petitioners
(Attachment 17) at 18-26, 26-33, 44-47, 51-53 ; Reply Brief of
Government Petitioners (Attachment 19) at 2-15, 21-23, 25-26; Petition
for Reconsideration of American Lung Association, et al. (May 8, 2003)
(Attachment 8), at 1-93; Reconsideration Comments of NRDC, et al. (Aug.
28, 2003) (Attachment 10), at 3-17, 19-27; Final Opening Brief of
Environmental Petitioners (Attachment 16), at 11-33, 45-47; Final Reply
Brief of Environmental Petitioners (Attachment 18) at 2-16, 21-23; Abt.
Associates, Nucor Steel Analysis (Attachment 1); Abt. Associates, Mobile
Joliet Analysis Attachment 2); Environmental Integrity Project, Bright
Lines or Loopholes? (Attachment 3); Affidavit of Craig A. Wright
(Attachment 4); Affidavit of Dr. Iclal Atay (Attachment 5); Affidavit of
Marc Allen Robert Cone, P.E. (Attachment 6); National Academy of Public
Administration, A Breath of Fresh Air (Attachment 7); General Accounting
Office, EPA Should Use Available Data to Monitor the Effects of Its
Revisions to the New Source Review Program (Attachment 9); Connecticut,
et al. Reconsideration Comments (Attachment 11); Delaware
Reconsideration Comments (Attachment 12); Environmental Integrity
Project Letter to EPA (Attachment 13); William R. Moomaw, Assessment of
"Reform or Rollback?" (Attachment 14); Environmental Integrity Project,
Additional Results and Corrections (Attachment 15).

Indeed, as the government petitioners noted in their opening brief in
New York v. EPA:

EPA has previously taken the position that NSR regulations that increase
industry flexibility are less stringent. For example, in the Duquesne
Light case referenced above, EPA argued that the State's definition of
"actual emissions" was more stringent than EPA's because it limited
industry's flexibility to "look back" to set its baseline for purposes
of calculating emissions reduction credits. See Brief of Respondent EPA
in Duquesne Light Co. v. EPA, 1998 WL 34084103, at 13 (Oct. 26, 1998)
("Pennsylvania's definition is easily recognized as more stringent than
the federal definition."). In support of this argument, EPA cited the
"ten-year lookback" provision of its own 1996 proposed rule as an
example of a regulation that "increases industry flexibility" and
therefore is less stringent. Id. at 19; see also id. at 18 (it is
"self-evident" that a state regulation that prohibits a facility from
using a "bubble" approach in measuring emissions increases is more
stringent than an EPA regulation with the "bubble" concept).

Brief of Government Petitioners (Attachment 17) at 47; see also Reply
Brief of Government Petitioners (Attachment 19) at 22-23 ("See Brief of
EPA in Duquesne Light Co. v. EPA, 1998 WL 34084103 . . . at 13
(`Pennsylvania's [baseline emissions] definition is easily recognized as
more stringent than the federal definition.')").

Therefore, Ohio's modifications violate section 193, and any EPA
approval of those modifications (even a conditional approval) will also
violate section 193. Moreover, because section 193 lies within part D,
the Ohio provisions prevent the permit program in the state's revised
plan from being "as required in parts C and D," id. § 7410(a)(2)(C),
from "meet[ing] the applicable requirements of . . . part C," id. §
7410(a)(2)(J), and from "meet[ing] the applicable requirements of part D
." Id. § 7410(a)(2)(I) . Thus, if EPA approves Ohio's revised plan,
that action will additionally exceed the agency's authority under
section 110(k)(3) and violate section 100(l).

Response:  As the commenters point out, Section 193 of the CAA provides
in part that: “No control requirement in effect ... before November
15, 1990, in any area which is a non-attainment area for any air
pollutant may be modified after November 15, 1990, in any manner unless
the modification insures equivalent or greater emission reductions of
such air pollutant.”  CAA, 42 U.S.C. § 7515.  

Assuming that section 193 applies to NSR, section 193 does not require
additional emission reductions before this SIP revision is approved.  As
of November 15, 1990, the approved SIP did not contain a major source
NSR program consistent with the requirements of the CAA, which requires
offsets for construction of major sources or major modifications in
nonattainment areas.  The SIP in effect on November 15, 1990 did include
a preconstruction permitting program, but that program did not require
offsets for any sources.  Under Ohio’s new rules, major sources are
subject to permitting requirements that are consistent with current CAA
requirements (while minor sources remain subject to the 1990 permitting
program).  This SIP revision affects only the major source permitting
program.  

Thus, even if section 193 does apply to the permitting program in the
SIP as of November 15, 1990, that program did not achieve any "emission
reductions" from major sources because it did not require offsets for
any sources.  It follows that if there were no emission reductions
generated by the 1990 permitting program, then the section 193
requirement to provide "equivalent or greater emission reductions" of
any air pollutant as part of this SIP revision would be satisfied with
no additional reductions.  Furthermore, for the reasons discussed above
with respect to Section 110(l), EPA has found that the net effect of
these changes will be neutral or environmentally beneficial.

Comment:  II. Ohio's Incorporation of EPA's 2003 New Source Review Rule
by Reference

EPA's notice appears to propose to approve Ohio provisions that
incorporate by reference an EPA rule that has been stayed by order of
the D.C. Circuit, as well as a second EPA rule – a related federal
implementation plan ("FIP") rule - that the agency has acknowledged to
be stayed by virtue of the same D.C. Circuit order. Compare 70 Fed. Reg.
at 24738/2 (proposing approval of OAC 3745-31-01 (ZZZZZ)(2)) to Order on
Motions to Stay (Attachment 26) and 69 Fed. Reg. 40274 (July 1, 2004)
(Prevention of Significant Deterioration (PSD) and Non-attainment New
Source Review (NSR): Equipment Replacement Provision of the Routine
Maintenance, Repair and Replacement Exclusion; Stay). If EPA approves
those provisions - even conditionally – the action will be a violation
of the D.C. Circuit's order. Additionally, the action will exceed EPA's
authority under section 110(k)(3) of the Act while violating sections
110(l) and 193.

In October 2003, EPA finalized a revision to its NSR rules that would
have significantly expanded the rules' exemption for routine
maintenance, repair, and replacement projects. 68 Fed. Reg. 61247,
61277/2 (Oct. 27, 2003) (revising 40 CFR §51 .165(h)(1)) . Two months
later, EPA promulgated another rule that purported to incorporate the
"equipment replacement provision" ("ERP") exemption directly into FIPs.
68 Fed . Reg. 74483 (Dec. 24, 2003).

Numerous citizens groups and states petitioned for review of the rule in
the D.C. Circuit, New York v. EPA, D.C. Cir. Case No. 03-1380 (and
consolidated cases), and requested that the court stay the rule pending
the outcome of their challenges. See, e.g. ., Environmental Petitioners'
Motion for a Stay Pending Review (Attachment 24). The petitioners argued
that the ERP violated the plain language of the Clean Air Act,
conflicted with its structure and purpose, and would irreparably injure
it members. 1d; see also Environmental Petitioners' Reply in Support of
Stay

Motion (Attachment 25).

The court granted the stay motions, ruling that "[p]etitioners have
demonstrated the irreparable harm and likelihood of success on the
merits required for the issuance of a stay pending review." Order on
Motions to Stay (Attachment 26). Because the FIP rule was issued on the
same day that the court stayed the ERP rule, several states asked EPA to
acknowledge that the court's order invalidated the ERP exemption as it
applied to SIPs and FIPs . Letter from Jared Snyder (Office of the
Attorney of General of New York) to C.J Morris Morris (U.S. Department
of Justice) (Feb. 12, 2004). EPA eventually complied with the request by
stating that the FIP amendments were ineffective because "[t]he terms of
the court order prevented the ERP from coming into effect." 69 Fed. Reg.
at 40274/3; see also id. at 4027/2 (stating that because the Court
stayed the ERP two days before the rule was schedule to take effect,
"the new provisions never became effective") ; Letter from Cynthia J.
Morris (U.S . Department of Justice) to Jared Snyder (Office of the
Attorney of General of New York) (February 20, 2004) (acknowledging the
full scope of the court's stay order).

In spite of the D.C. Circuit's order staying the ERP rule, and in spite
EPA's public acknowledgement that the rule "never became effective,"
Ohio has nevertheless attempted to incorporate the text of the ERP rule
into its SIP. Specifically, Ohio's submission states:

(ZZZZZ) Incorporation by reference. This chapter includes references to
certain matter or materials. The text of the incorporated materials is
not included in the regulations contained in this chapter. The materials
are hereby made a part of the regulations in this chapter. For materials
subject to change, only the specific versions specified in the
regulation are incorporated. Material is incorporated as it exists on
the effective date of this rule. Except for subsequent annual
publication of existing (unmodified) Code of Federal Regulations
compilations, any amendment or revision to a referenced document is not
incorporated unless and until this rule has been amended to specify the
new dates.

(2) Incorporated materials

* * *

(h) 40 CFR 51 .165; "Permit requirements;" . . . 68 FR 61276. Oct. 27
2003: 68 FR 63027, Nov. 7, 2003.

OAC 3745-31-01(ZZZZ)(2)(h) (emphasis added).

In its proposal to approve Ohio's revised plan, EPA simply notes that
"Ohio has also updated and added to the incorporations by reference in
OAC 3745-31-01(ZZZZ)(2). Ohio has added references to 40 CFR 51 .165 . .
. ." 70 Fed. Reg. at 24738/2.

If EPA approves Ohio's incorporation of the ERP rule by reference, as
EPA appears to be proposing to do, that action will violate the D.C.
Circuit's order in New York v. EPA, by giving effect to the stayed ERP
exemption. The approval will also contravene EPA's own final rule
reflecting the court's stay in the Code of Federal Regulations, and run
afoul of the agency's accompanying interpretation of the effect of the
stay on the PSD FIP in various SIPs. See generally 69 Fed. Reg. at 40274
et seq.

Moreover, Ohio's incorporation of the ERP rule by reference prevents the
state's revised implementation plan from "meet[ing] applicable
requirements" of the Clean Air Act. 42 U.S.C. § 7410(k)(3). It also
causes the revised plan to "interfere with [] applicable requirement[s]"
of the Act, id. § 7410(1), and to violate outright the Act's
proscription against "backsliding" in nonattainment areas. Id. § 7515.
The Act does not authorize EPA to approve such a plan revision. See id.
§ 7410(k)(3) (authorizing EPA to approve an implementation plan
revision, or portion thereof, that "meets all the applicable
requirements of this chapter") . In fact, the Act prohibits the agency
from doing so. Id. § 7410(1) (EPA "shall not approve a revision of a
plan if the revision would interfere with any . . . applicable
requirement of [the Act]"). Therefore, if EPA approves Ohio's
incorporation of the ERP rule by reference - even conditionally – that
action will be "arbitrary, capricious, an abuse of discretion, [and]
otherwise not in accordance with law." Id. § 7607(d)(9)(A).

Ohio's incorporation of the ERP rule by reference prevents the state's
revised plan from meeting - and causes the revised plan to interfere
with - the applicable requirements in sections 110(a)(2)(C),
110(a)(2)(I), and 110(a)(2)(J) in the same fundamental way that the
provisions discussed in part I.A., supra, do. Specifically, whereas
sections 165(a), 169(2)(C), 171(4), and 172(a)(5) of the Act apply the
preconstruction permitting requirements to all activities that fall
within section 111(a)(4)'s definition of "modification," id. §§
7475(a) (applying preconstruction permitting provisions to all
"construction"), 7479(2)(C) ("`construction' . . . includes the
modification (as defined in section 7411(a) of this title) of any source
or facility"), 7502(a)(5) ("plan provisions shall require permits for
the construction . . . of new or modified major stationary sources"),
7501(4) ("`modified' mean[s] the same as the term `modification' as used
in section 7411(a)(4) of this title"), the ERP exempts activities that
fall within that statutory definition. See American Lung Association, et
al., Comments on Proposed 2003 NSR Rule (Attachment 21); NRDC, et al.,
Petition for Reconsideration (Attachment 22); NRDC, et al.,
Reconsideration Comments (Attachment 23) ; Environmental Petitioners'
Motion for a Stay Pending Review (Attachment 24); Environmental
Petitioners' Reply in Support of Stay Motion (Attachment 25); Order on
Motions to Stay (Attachment 26); NRDC, et al., Supplemental
Reconsideration Comments (Attachments 27, 30, 31); EPA Office of
Inspector General, Evaluation Report: New Source Review Rule Change
Harms EPA's Ability to Enforce Against Coal-Fired Electric Utilities
(Attachment 28); Joel A. Mintz, "Treading Water" (Attachment 29).

The presence of the ERP rule incorporation in Ohio's revised permit
program thus prevents the state's program from being "as required in
parts C and D," 42 U.S.C. § 7410(a)(2)(C), from "meet[ing] the
applicable requirements of . . . part C," id. § 7410(a)(2)(J), and from
"meet[ing] the applicable requirements of part D." Id. § 7410(a)(2)(1)
. Therefore, EPA will exceed its authority under section 110(k)(3) and
violate section 110(1) if the agency approves Ohio's revised plan.

Ohio's incorporation of the ERP rule also violates the Clean Air Act's
part D, section 193 ban on "backsliding" in nonattainment areas. The ERP
fundamentally modifies NSR. Notwithstanding that fact, Ohio has made no
demonstration, and EPA has proposed no finding, that the modifications
ensure "equivalent or greater emissions reductions." 42 U.S.C. § 7515.
EPA has made no such finding with respect to the ERP either. Those facts
alone establish that if EPA takes final action on its proposal, the
action will violate section 193. See 64 Fed. Reg. 70652, 70654 (Dec. 17,
1999) ("[T]he language is in fact `extraordinarily rigid' in its
requirement to provide equivalent or greater emission reductions to
offset relaxations to pre-1990 rules. . . .[S]ection 193 unambiguously
requires any relaxations to control requirements or plans in effect
prior to enactment of the CAA amendments of 1990 to be offset by
equivalent or greater emission reductions. The clarity of the statutory
language supported by the legislative history evidences intent by
Congress that relaxations to pre-1990 requirements should occur only
where compensating strengthening will result in no increase in
emissions."); id. at 70656 ("compensating reductions must, be
contemporaneous with the relaxation").

Moreover, Ohio cannot make a demonstration of equivalency, and EPA
cannot make such a finding. Because, far from ensuring "equivalent or
greater emission reductions" than Ohio's preexisting permit provisions,
the incorporation of the ERP ensures that emissions will not be reduced
as much as under the preexisting rules. In fact, the modifications allow
emissions to increase in Ohio's nonattainment areas. See American Lung
Association, et al., Comments on Proposed 2003 NSR Rule (Attachment 21);
NRDC, et al., Petition for Reconsideration (Attachment 22); NRDC, et
al., Reconsideration Comments (Attachment 23); Environmental
Petitioners' Motion for a Stay Pending Review (Attachment 24);
Environmental Petitioners' Reply in Support of Stay Motion (Attachment
25); Order on Motions to Stay (Attachment 26); NRDC et al., Supplemental
Reconsideration Comments (Attachments 27, 30, 31); EPA Office of

Inspector General, Evaluation Report: New Source Review Rule Change
Harms EPA's Ability to Enforce Against Coal-Fired Electric Utilities
(Attachment 28); Joel A. Mintz, "Treading Water" (Attachment 29).

Therefore, Ohio's incorporation of the ERP rule violates section 193,
and any EPA approval of that Ohio provision (even a conditional
approval) will also violate section 193. Moreover, because section 193
lies within part D, the Ohio provision prevents the permit program in
the state's revised plan from being "as required in parts C and D," id.
§ 7410(a)(2)(C), from "meet[ing] the applicable requirements of . . .
part C," id. § 7410(a)(2)(J), and from "meet[ing] the applicable
requirements of part D." Id. § 7410(a)(2)(1) . Thus, if EPA approves
Ohio's incorporation of the ERP rule, that action will additionally
exceed the agency's authority under section 110(k)(3) and violate
section 100(1).

Finally, for these same reasons, it is further incumbent upon EPA to
require Ohio to amend its underlying state regulations in order to
eliminate the incorporation by reference of the ERP rule and the related
PSD FIP rulemaking. See OAC 3745-31-01 (ZZZZZ)(2)(h). As a result of
these incorporations, Ohio's state plan is inconsistent with the Clean
Air Act, governing EPA regulations, the D.C. Circuit's stay order, EPA
actions acknowledging the legal consequences of that stay, and even
Ohio's own SIP. In order to correct the legal problems created by the
Ohio Administrative Code's incorporation by reference of federal rules
that are at odds with the Clean Air Act and also the subject to a court
stay, and to ensure that Ohio has legal authority under state law to
carry out its responsibilities to administer the PSD/NSR permitting
programs, Ohio must amend its Code to eliminate these incorporations by
reference. Through these comments, and pursuant to the Clean Air Act and
Administrative Procedures Act, we hereby petition EPA to compel Ohio to
amend its administrative code accordingly.

Response:  EPA responds that in a November 15, 2005 letter, the OEPA
withdrew it’s request for approval of the phrase “68 FR 61276,
Oct.27, 2003:” in OAC 3745-31-01 (ZZZZZ)(2)(h).  EPA is not approving
this section into the SIP.  Furthermore, in the November 15, 2005
letter, OEPA commits to strike this phrase during its next 5-year review
which is expected to be completed by June 2006. On November 20, 2006,
the phrase “68 FR 61276, Oct.27, 2003:” in OAC 3745-31-01
(ZZZZZ)(2)(h) was removed.  The change became effective on December 1,
2006.

 The full report, “Evaluation of Implementation Experiences with
Innovative Air Permits,” is included in the Supplemental Analysis as
Appendix A.

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