[Code of Federal Regulations]
[Title 40, Volume 2]
[Revised as of July 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 40CFR51.165]

[Page 166-198]
 
                   TITLE 40--PROTECTION OF ENVIRONMENT
 
         CHAPTER I--ENVIRONMENTAL PROTECTION AGENCY (CONTINUED)
 
PART 51--REQUIREMENTS FOR PREPARATION, ADOPTION, AND SUBMITTAL OF 
IMPLEMENTATION PLANS--Table of Contents
 
           Subpart I--Review of New Sources and Modifications
 
Sec. 51.165  Permit requirements.

    (a) State Implementation Plan and Tribal Implementation Plan 
provisions satisfying sections 172(c)(5) and 173 of the Act shall meet 
the following conditions:
    (1) All such plans shall use the specific definitions. Deviations 
from the following wording will be approved only if the State 
specifically demonstrates that the submitted definition is more 
stringent, or at least as stringent, in all respects as the 
corresponding definition below:
    (i) Stationary source means any building, structure, facility, or 
installation which emits or may emit a regulated NSR pollutant.
    (ii) Building, structure, facility, or installation means all of the 
pollutant-emitting activities which belong to the same industrial 
grouping, are located on one or more contiguous or adjacent properties, 
and are under the control of the same person (or persons under common 
control) except the activities of any vessel. Pollutant-emitting 
activities shall be considered as part of the same industrial grouping 
if they belong to the same Major Group (i.e., which have the same two-
digit code) as described in the Standard Industrial Classification 
Manual, 1972, as amended by the 1977 Supplement (U.S. Government

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Printing Office stock numbers 4101-0065 and 003-005-00176-0, 
respectively).
    (iii) Potential to emit means the maximum capacity of a stationary 
source to emit a pollutant under its physical and operational design. 
Any physical or operational limitation on the capacity of the source to 
emit a pollutant, including air pollution control equipment and 
restrictions on hours of operation or on the type or amount of material 
combusted, stored, or processed, shall be treated as part of its design 
only if the limitation or the effect it would have on emissions is 
federally enforceable. Secondary emissions do not count in determining 
the potential to emit of a stationary source.
    (iv)(A) Major stationary source means:
    (1) Any stationary source of air pollutants which emits, or has the 
potential to emit 100 tons per year or more of any regulated NSR 
pollutant, or
    (2) Any physical change that would occur at a stationary source not 
qualifying under paragraph (a)(1)(iv)(A)(1) as a major stationary 
source, if the change would constitute a major stationary source by 
itself.
    (B) A major stationary source that is major for volatile organic 
compounds shall be considered major for ozone
    (C) The fugitive emissions of a stationary source shall not be 
included in determining for any of the purposes of this paragraph 
whether it is a major stationary source, unless the source belongs to 
one of the following categories of stationary sources:
    (1) Coal cleaning plants (with thermal dryers);
    (2) Kraft pulp mills;
    (3) Portland cement plants;
    (4) Primary zinc smelters;
    (5) Iron and steel mills;
    (6) Primary aluminum ore reduction plants;
    (7) Primary copper smelters;
    (8) Municipal incinerators capable of charging more than 250 tons of 
refuse per day;
    (9) Hydrofluoric, sulfuric, or nitric acid plants;
    (10) Petroleum refineries;
    (11) Lime plants;
    (12) Phosphate rock processing plants;
    (13) Coke oven batteries;
    (14) Sulfur recovery plants;
    (15) Carbon black plants (furnace process);
    (16) Primary lead smelters;
    (17) Fuel conversion plants;
    (18) Sintering plants;
    (19) Secondary metal production plants;
    (20) Chemical process plants;
    (21) Fossil-fuel boilers (or combination thereof) totaling more than 
250 million British thermal units per hour heat input;
    (22) Petroleum storage and transfer units with a total storage 
capacity exceeding 300,000 barrels;
    (23) Taconite ore processing plants;
    (24) Glass fiber processing plants;
    (25) Charcoal production plants;
    (26) Fossil fuel-fired steam electric plants of more than 250 
million British thermal units per hour heat input; and
    (27) Any other stationary source category which, as of August 7, 
1980, is being regulated under section 111 or 112 of the Act.
    (v)(A) Major modification means any physical change in or change in 
the method of operation of a major stationary source that would result 
in:
    (1) A significant emissions increase of a regulated NSR pollutant 
(as defined in paragraph (a)(1)(xxxvii) of this section); and
    (2) A significant net emissions increase of that pollutant from the 
major stationary source.
    (B) Any significant emissions increase (as defined in paragraph 
(a)(1)(xxvii) of this section) from any emissions units or net emissions 
increase (as defined in paragraph (a)(1)(vi) of this section) at a major 
stationary source that is significant for volatile organic compounds 
shall be considered significant for ozone.
    (C) A physical change or change in the method of operation shall not 
include:
    (1) Routine maintenance, repair and replacement;
    (2) Use of an alternative fuel or raw material by reason of an order 
under sections 2 (a) and (b) of the Energy Supply and Environmental 
Coordination Act of 1974 (or any superseding legislation) or by reason 
of a natural gas curtailment plan pursuant to the Federal Power Act;

[[Page 168]]

    (3) Use of an alternative fuel by reason of an order or rule section 
125 of the Act;
    (4) Use of an alternative fuel at a steam generating unit to the 
extent that the fuel is generated from municipal solid waste;
    (5) Use of an alternative fuel or raw material by a stationary 
source which;
    (i) The source was capable of accommodating before December 21, 
1976, unless such change would be prohibited under any federally 
enforceable permit condition which was established after December 12, 
1976 pursuant to 40 CFR 52.21 or under regulations approved pursuant to 
40 CFR subpart I or Sec. 51.166, or
    (ii) The source is approved to use under any permit issued under 
regulations approved pursuant to this section;
    (6) An increase in the hours of operation or in the production rate, 
unless such change is prohibited under any federally enforceable permit 
condition which was established after December 21, 1976 pursuant to 40 
CFR 52.21 or regulations approved pursuant to 40 CFR part 51 subpart I 
or 40 CFR 51.166.
    (7) Any change in ownership at a stationary source.
    (8) The addition, replacement, or use of a PCP, as defined in 
paragraph (a)(1)(xxv) of this section, at an existing emissions unit 
meeting the requirements of paragraph (e) of this section. A replacement 
control technology must provide more effective emissions control than 
that of the replaced control technology to qualify for this exclusion.
    (9) The installation, operation, cessation, or removal of a 
temporary clean coal technology demonstration project, provided that the 
project complies with:
    (i) The State Implementation Plan for the State in which the project 
is located, and
    (ii) Other requirements necessary to attain and maintain the 
national ambient air quality standard during the project and after it is 
terminated.
    (D) This definition shall not apply with respect to a particular 
regulated NSR pollutant when the major stationary source is complying 
with the requirements under paragraph (f) of this section for a PAL for 
that pollutant. Instead, the definition at paragraph (f)(2)(viii) of 
this section shall apply.
    (vi)(A) Net emissions increase means, with respect to any regulated 
NSR pollutant emitted by a major stationary source, the amount by which 
the sum of the following exceeds zero:
    (1) The increase in emissions from a particular physical change or 
change in the method of operation at a stationary source as calculated 
pursuant to paragraph (a)(2)(ii) of this section; and
    (2) Any other increases and decreases in actual emissions at the 
major stationary source that are contemporaneous with the particular 
change and are otherwise creditable. Baseline actual emissions for 
calculating increases and decreases under this paragraph 
(a)(1)(vi)(A)(2) shall be determined as provided in paragraph 
(a)(1)(xxxv) of this section, except that paragraphs (a)(1)(xxxv)(A)(3) 
and (a)(1)(xxxv)(B)(4) of this section shall not apply.
    (B) An increase or decrease in actual emissions is contemporaneous 
with the increase from the particular change only if it occurs before 
the date that the increase from the particular change occurs;
    (C) An increase or decrease in actual emissions is creditable only 
if:
    (1) It occurs within a reasonable period to be specified by the 
reviewing authority; and
    (2) The reviewing authority has not relied on it in issuing a permit 
for the source under regulations approved pursuant to this section, 
which permit is in effect when the increase in actual emissions from the 
particular change occurs; and
    (3) The increase or decrease in emissions did not occur at a Clean 
Unit, except as provided in paragraphs (c)(8) and (d)(10) of this 
section.
    (D) An increase in actual emissions is creditable only to the extent 
that the new level of actual emissions exceeds the old level.
    (E) A decrease in actual emissions is creditable only to the extent 
that:
    (1) The old level of actual emission or the old level of allowable 
emissions

[[Page 169]]

whichever is lower, exceeds the new level of actual emissions;
    (2) It is enforceable as a practical matter at and after the time 
that actual construction on the particular change begins; and
    (3) The reviewing authority has not relied on it in issuing any 
permit under regulations approved pursuant to 40 CFR part 51 subpart I 
or the State has not relied on it in demonstrating attainment or 
reasonable further progress;
    (4) It has approximately the same qualitative significance for 
public health and welfare as that attributed to the increase from the 
particular change; and
    (5) The decrease in actual emissions did not result from the 
installation of add-on control technology or application of pollution 
prevention practices that were relied on in designating an emissions 
unit as a Clean Unit under 40 CFR 52.21(y) or under regulations approved 
pursuant to paragraph (d) of this section or Sec. 51.166(u). That is, 
once an emissions unit has been designated as a Clean Unit, the owner or 
operator cannot later use the emissions reduction from the air pollution 
control measures that the Clean Unit designation is based on in 
calculating the net emissions increase for another emissions unit (i.e., 
must not use that reduction in a ``netting analysis'' for another 
emissions unit). However, any new emissions reductions that were not 
relied upon in a PCP excluded pursuant to paragraph (e) of this section 
or for a Clean Unit designation are creditable to the extent they meet 
the requirements in paragraphs (e)(6)(iv) of this section for the PCP 
and paragraphs (c)(8) or (d)(10) of this section for a Clean Unit.
    (F) An increase that results from a physical change at a source 
occurs when the emissions unit on which construction occurred becomes 
operational and begins to emit a particular pollutant. Any replacement 
unit that requires shakedown becomes operational only after a reasonable 
shakedown period, not to exceed 180 days.
    (G) Paragraph (a)(1)(xii)(B) of this section shall not apply for 
determining creditable increases and decreases or after a change.
    (vii) Emissions unit means any part of a stationary source that 
emits or would have the potential to emit any regulated NSR pollutant 
and includes an electric steam generating unit as defined in paragraph 
(a)(1)(xx) of this section. For purposes of this section, there are two 
types of emissions units as described in paragraphs (a)(1)(vii)(A) and 
(B) of this section.
    (A) A new emissions unit is any emissions unit which is (or will be) 
newly constructed and which has existed for less than 2 years from the 
date such emissions unit first operated.
    (B) An existing emissions unit is any emissions unit that does not 
meet the requirements in paragraph (a)(1)(vii)(A) of this section.
    (viii) Secondary emissons means emissions which would occur as a 
result of the construction or operation of a major stationary source or 
major modification, but do not come from the major stationary source or 
major modification itself. For the purpose of this section, secondary 
emissions must be specific, well defined, quantifiable, and impact the 
same general area as the stationary source or modification which causes 
the secondary emissions. Secondary emissions include emissions from any 
offsite support facility which would not be constructed or increase its 
emissions except as a result of the construction of operation of the 
major stationary source of major modification. Secondary emissions do 
not include any emissions which come directly from a mobile source such 
as emissions from the tailpipe of a motor vehicle, from a train, or from 
a vessel.
    (ix) Fugitive emissions means those emissions which could not 
reasonably pass through a stack, chimney, vent or other functionally 
equivalent opening.
    (x) Significant means, in reference to a net emissions increase pr 
the potential of a source to emit any of the following pollutions, as 
rate of emissions that would equal or exceed any of the following rates:

                         Pollutant Emission Rate

Carbon monoxide: 100 tons per year (tpy)
Nitrogen oxides: 40 tpy
Sulfur dioxide: 40 tpy
Ozone: 40 tpy of volatile organic compounds
Lead: 0.6 tpy


[[Page 170]]


    (xi) Allowable emissions means the emissions rate of a stationary 
source calculated using the maximum rated capacity of the source (unless 
the source is subject to federally enforceable limits which restrict the 
operating rate, or hours of operation, or both) and the most stringent 
of the following:
    (A) The applicable standards set forth in 40 CFR part 60 or 61;
    (B) Any applicable State Implementation Plan emissions limitation 
including those with a future compliance date; or
    (C) The emissions rate specified as a federally enforceable permit 
condition, including those with a future compliance date.
    (xii)(A) Actual emissions means the actual rate of emissions of a 
regulated NSR pollutant from an emissions unit, as determined in 
accordance with paragraphs (a)(1)(xii)(B) through (D) of this section, 
except that this definition shall not apply for calculating whether a 
significant emissions increase has occurred, or for establishing a PAL 
under paragraph (f) of this section. Instead, paragraphs (a)(1)(xxviii) 
and (xxxv) of this section shall apply for those purposes.
    (B) In general, actual emissions as of a particular date shall equal 
the average rate, in tons per year, at which the unit actually emitted 
the pollutant during a consecutive 24-month period which precedes the 
particular date and which is representative of normal source operation. 
The reviewing authority shall allow the use of a different time period 
upon a determination that it is more representative of normal source 
operation. Actual emissions shall be calculated using the unit's actual 
operating hours, production rates, and types of materials processed, 
stored, or combusted during the selected time period.
    (C) The reviewing authority may presume that source-specific 
allowable emissions for the unit are equivalent to the actual emissions 
of the unit.
    (D) For any emissions unit that has not begun normal operations on 
the particular date, actual emissions shall equal the potential to emit 
of the unit on that date.
    (xiii) Lowest achievable emission rate (LAER) means, for any source, 
the more stringent rate of emissions based on the following:
    (A) The most stringent emissions limitation which is contained in 
the implementation plan of any State for such class or category of 
stationary source, unless the owner or operator of the proposed 
stationary source demonstrates that such limitations are not achievable; 
or
    (B) The most stringent emissions limitation which is achieved in 
practice by such class or category of stationary sources. This 
limitation, when applied to a modification, means the lowest achievable 
emissions rate for the new or modified emissions units within or 
stationary source. In no event shall the application of the term permit 
a proposed new or modified stationary source to emit any pollutant in 
excess of the amount allowable under an applicable new source standard 
of performance.
    (xiv) Federally enforceable means all limitations and conditions 
which are enforceable by the Administrator, including those requirements 
developed pursuant to 40 CFR parts 60 and 61, requirements within any 
applicable State implementation plan, any permit requirements 
established pursuant to 40 CFR 52.21 or under regulations approved 
pursuant to 40 CFR part 51, subpart I, including operating permits 
issued under an EPA-approved program that is incorporated into the State 
implementation plan and expressly requires adherence to any permit 
issued under such program.
    (xv) Begin actual construction means in general, initiation of 
physical on-site construction activities on an emissions unit which are 
of a permanent nature. Such activities include, but are not limited to, 
installation of building supports and foundations, laying of underground 
pipework, and construction of permanent storage structures. With respect 
to a change in method of operating this term refers to those on-site 
activities other than preparatory activities which mark the initiation 
of the change.
    (xvi) Commence as applied to construction of a major stationary 
source or major modification means that the

[[Page 171]]

owner or operator has all necessary preconstruction approvals or permits 
and either has:
    (A) Begun, or caused to begin, a continuous program of actual on-
site construction of the source, to be completed within a reasonable 
time; or
    (B) Entered into binding agreements or contractual obligations, 
which cannot be canceled or modified without substantial loss to the 
owner or operator, to undertake a program of actual construction of the 
source to be completed within a reasonable time.
    (xvii) Necessary preconstruction approvals or permits means those 
Federal air quality control laws and regulations and those air quality 
control laws and regulations which are part of the applicable State 
Implementation Plan.
    (xviii) Construction means any physical change or change in the 
method of operation (including fabrication, erection, installation, 
demolition, or modification of an emissions unit) that would result in a 
change in emissions.
    (xix)Volatile organic compounds (VOC) is as defined in 
Sec. 51.100(s) of this part.
    (xx) Electric utility steam generating unit means any steam electric 
generating unit that is constructed for the purpose of supplying more 
than one-third of its potential electric output capacity and more than 
25 MW electrical output to any utility power distribution system for 
sale. Any steam supplied to a steam distribution system for the purpose 
of providing steam to a steam-electric generator that would produce 
electrical energy for sale is also considered in determining the 
electrical energy output capacity of the affected facility.
    (xxi) [Reserved]
    (xxii) Temporary clean coal technology demonstration project means a 
clean coal technology demonstration project that is operated for a 
period of 5 years or less, and which complies with the State 
Implementation Plan for the State in which the project is located and 
other requirements necessary to attain and maintain the national ambient 
air quality standards during the project and after it is terminated.
    (xxiii) Clean coal technology means any technology, including 
technologies applied at the precombustion, combustion, or post 
combustion stage, at a new or existing facility which will achieve 
significant reductions in air emissions of sulfur dioxide or oxides of 
nitrogen associated with the utilization of coal in the generation of 
electricity, or process steam which was not in widespread use as of 
November 15, 1990.
    (xxiv) Clean coal technology demonstration project means a project 
using funds appropriated under the heading ``Department of Energy-Clean 
Coal Technology,'' up to a total amount of $2,500,000,000 for commercial 
demonstration of clean coal technology, or similar projects funded 
through appropriations for the Environmental Protection Agency. The 
Federal contribution for a qualifying project shall be at least 20 
percent of the total cost of the demonstration project.
    (xxv) Pollution control project (PCP) means any activity, set of 
work practices or project (including pollution prevention as defined 
under paragraph (a)(1)(xxvi) of this section) undertaken at an existing 
emissions unit that reduces emissions of air pollutants from such unit. 
Such qualifying activities or projects can include the replacement or 
upgrade of an existing emissions control technology with a more 
effective unit. Other changes that may occur at the source are not 
considered part of the PCP if they are not necessary to reduce emissions 
through the PCP. Projects listed in paragraphs (a)(1)(xxv)(A) through 
(F) of this section are presumed to be environmentally beneficial 
pursuant to paragraph (e)(2)(i) of this section. Projects not listed in 
these paragraphs may qualify for a case-specific PCP exclusion pursuant 
to the requirements of paragraphs (e)(2) and (e)(5) of this section.
    (A) Conventional or advanced flue gas desulfurization or sorbent 
injection for control of SO2.
    (B) Electrostatic precipitators, baghouses, high efficiency 
multiclones, or scrubbers for control of particulate matter or other 
pollutants.
    (C) Flue gas recirculation, low-NOX burners or 
combustors, selective non-catalytic reduction, selective catalytic 
reduction, low emission combustion (for IC engines), and oxidation/
absorption catalyst for control of NOX.

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    (D) Regenerative thermal oxidizers, catalytic oxidizers, condensers, 
thermal incinerators, hydrocarbon combustion flares, biofiltration, 
absorbers and adsorbers, and floating roofs for storage vessels for 
control of volatile organic compounds or hazardous air pollutants. For 
the purpose of this section, ``hydrocarbon combustion flare'' means 
either a flare used to comply with an applicable NSPS or MACT standard 
(including uses of flares during startup, shutdown, or malfunction 
permitted under such a standard), or a flare that serves to control 
emissions of waste streams comprised predominately of hydrocarbons and 
containing no more than 230 mg/dscm hydrogen sulfide.
    (E) Activities or projects undertaken to accommodate switching (or 
partially switching) to an inherently less polluting fuel, to be limited 
to the following fuel switches:
    (1) Switching from a heavier grade of fuel oil to a lighter fuel 
oil, or any grade of oil to 0.05 percent sulfur diesel (i.e., from a 
higher sulfur content 2 fuel or from 6 fuel, to CA 
0.05 percent sulfur 2 diesel);
    (2) Switching from coal, oil, or any solid fuel to natural gas, 
propane, or gasified coal;
    (3) Switching from coal to wood, excluding construction or 
demolition waste, chemical or pesticide treated wood, and other forms of 
``unclean'' wood;
    (4) Switching from coal to 2 fuel oil (0.5 percent maximum 
sulfur content); and
    (5) Switching from high sulfur coal to low sulfur coal (maximum 1.2 
percent sulfur content).
    (F) Activities or projects undertaken to accommodate switching from 
the use of one ozone depleting substance (ODS) to the use of a substance 
with a lower or zero ozone depletion potential (ODP), including changes 
to equipment needed to accommodate the activity or project, that meet 
the requirements of paragraphs (a)(1)(xxv)(F)(1) and (2) of this 
section.
    (1) The productive capacity of the equipment is not increased as a 
result of the activity or project.
    (2) The projected usage of the new substance is lower, on an ODP-
weighted basis, than the baseline usage of the replaced ODS. To make 
this determination, follow the procedure in paragraphs 
(a)(1)(xxv)(F)(2)(i) through (iv) of this section.
    (i) Determine the ODP of the substances by consulting 40 CFR part 
82, subpart A, appendices A and B.
    (ii) Calculate the replaced ODP-weighted amount by multiplying the 
baseline actual usage (using the annualized average of any 24 
consecutive months of usage within the past 10 years) by the ODP of the 
replaced ODS.
    (iii) Calculate the projected ODP-weighted amount by multiplying the 
projected future annual usage of the new substance by its ODP.
    (iv) If the value calculated in paragraph (a)(1)(xxv)(F)(2)(ii) of 
this section is more than the value calculated in paragraph 
(a)(1)(xxv)(F)(2)(iii) of this section, then the projected use of the 
new substance is lower, on an ODP-weighted basis, than the baseline 
usage of the replaced ODS.
    (xxvi) Pollution prevention means any activity that through process 
changes, product reformulation or redesign, or substitution of less 
polluting raw materials, eliminates or reduces the release of air 
pollutants (including fugitive emissions) and other pollutants to the 
environment prior to recycling, treatment, or disposal; it does not mean 
recycling (other than certain ``in-process recycling'' practices), 
energy recovery, treatment, or disposal.
    (xxvii) Significant emissions increase means, for a regulated NSR 
pollutant, an increase in emissions that is significant (as defined in 
paragraph (a)(1)(x) of this section) for that pollutant.
    (xxviii)(A) Projected actual emissions means, the maximum annual 
rate, in tons per year, at which an existing emissions unit is projected 
to emit a regulated NSR pollutant in any one of the 5 years (12-month 
period) following the date the unit resumes regular operation after the 
project, or in any one of the 10 years following that date, if the 
project involves increasing the emissions unit's design capacity or its 
potential to emit of that regulated NSR pollutant and full utilization 
of the unit would result in a significant emissions increase or a 
significant net

[[Page 173]]

emissions increase at the major stationary source.
    (B) In determining the projected actual emissions under paragraph 
(a)(1)(xxviii)(A) of this section before beginning actual construction, 
the owner or operator of the major stationary source:
    (1) Shall consider all relevant information, including but not 
limited to, historical operational data, the company's own 
representations, the company's expected business activity and the 
company's highest projections of business activity, the company's 
filings with the State or Federal regulatory authorities, and compliance 
plans under the approved plan; and
    (2) Shall include fugitive emissions to the extent quantifiable, and 
emissions associated with startups, shutdowns, and malfunctions; and
    (3) Shall exclude, in calculating any increase in emissions that 
results from the particular project, that portion of the unit's 
emissions following the project that an existing unit could have 
accommodated during the consecutive 24-month period used to establish 
the baseline actual emissions under paragraph (a)(1)(xxxv) of this 
section and that are also unrelated to the particular project, including 
any increased utilization due to product demand growth; or,
    (4) In lieu of using the method set out in paragraphs 
(a)(1)(xxviii)(B)(1) through (3) of this section, may elect to use the 
emissions unit's potential to emit, in tons per year, as defined under 
paragraph (a)(1)(iii) of this section.
    (xxix) Clean Unit means any emissions unit that has been issued a 
major NSR permit that requires compliance with BACT or LAER, that is 
complying with such BACT/LAER requirements, and qualifies as a Clean 
Unit pursuant to regulations approved by the Administrator in accordance 
with paragraph (c) of this section; or any emissions unit that has been 
designated by a reviewing authority as a Clean Unit, based on the 
criteria in paragraphs (d)(3)(i) through (iv) of this section, using a 
plan-approved permitting process; or any emissions unit that has been 
designated as a Clean Unit by the Administrator in accordance with 
Sec. 52.21(y)(3)(i) through (iv) of this chapter.
    (xxx) Nonattainment major new source review (NSR) program means a 
major source preconstruction permit program that has been approved by 
the Administrator and incorporated into the plan to implement the 
requirements of this section, or a program that implements part 51, 
appendix S, Sections I through VI of this chapter. Any permit issued 
under such a program is a major NSR permit.
    (xxxi) Continuous emissions monitoring system (CEMS) means all of 
the equipment that may be required to meet the data acquisition and 
availability requirements of this section, to sample, condition (if 
applicable), analyze, and provide a record of emissions on a continuous 
basis.
    (xxxii) Predictive emissions monitoring system (PEMS) means all of 
the equipment necessary to monitor process and control device 
operational parameters (for example, control device secondary voltages 
and electric currents) and other information (for example, gas flow 
rate, O2 or CO2 concentrations), and calculate and 
record the mass emissions rate (for example, lb/hr) on a continuous 
basis.
    (xxxiii) Continuous parameter monitoring system (CPMS) means all of 
the equipment necessary to meet the data acquisition and availability 
requirements of this section, to monitor process and control device 
operational parameters (for example, control device secondary voltages 
and electric currents) and other information (for example, gas flow 
rate, O2 or CO2 concentrations), and to record 
average operational parameter value(s) on a continuous basis.
    (xxxiv) Continuous emissions rate monitoring system (CERMS) means 
the total equipment required for the determination and recording of the 
pollutant mass emissions rate (in terms of mass per unit of time).
    (xxxv) Baseline actual emissions means the rate of emissions, in 
tons per year, of a regulated NSR pollutant, as determined in accordance 
with paragraphs (a)(1)(xxxv)(A) through (D) of this section.
    (A) For any existing electric utility steam generating unit, 
baseline actual

[[Page 174]]

emissions means the average rate, in tons per year, at which the unit 
actually emitted the pollutant during any consecutive 24-month period 
selected by the owner or operator within the 5-year period immediately 
preceding when the owner or operator begins actual construction of the 
project. The reviewing authority shall allow the use of a different time 
period upon a determination that it is more representative of normal 
source operation.
    (1) The average rate shall include fugitive emissions to the extent 
quantifiable, and emissions associated with startups, shutdowns, and 
malfunctions.
    (2) The average rate shall be adjusted downward to exclude any non-
compliant emissions that occurred while the source was operating above 
any emission limitation that was legally enforceable during the 
consecutive 24-month period.
    (3) For a regulated NSR pollutant, when a project involves multiple 
emissions units, only one consecutive 24-month period must be used to 
determine the baseline actual emissions for the emissions units being 
changed. A different consecutive 24-month period can be used for each 
regulated NSR pollutant.
    (4) The average rate shall not be based on any consecutive 24-month 
period for which there is inadequate information for determining annual 
emissions, in tons per year, and for adjusting this amount if required 
by paragraph (a)(1)(xxxv)(A)(2) of this section.
    (B) For an existing emissions unit (other than an electric utility 
steam generating unit), baseline actual emissions means the average 
rate, in tons per year, at which the emissions unit actually emitted the 
pollutant during any consecutive 24-month period selected by the owner 
or operator within the 10-year period immediately preceding either the 
date the owner or operator begins actual construction of the project, or 
the date a complete permit application is received by the reviewing 
authority for a permit required either under this section or under a 
plan approved by the Administrator, whichever is earlier, except that 
the 10-year period shall not include any period earlier than November 
15, 1990.
    (1) The average rate shall include fugitive emissions to the extent 
quantifiable, and emissions associated with startups, shutdowns, and 
malfunctions.
    (2) The average rate shall be adjusted downward to exclude any non-
compliant emissions that occurred while the source was operating above 
an emission limitation that was legally enforceable during the 
consecutive 24-month period.
    (3) The average rate shall be adjusted downward to exclude any 
emissions that would have exceeded an emission limitation with which the 
major stationary source must currently comply, had such major stationary 
source been required to comply with such limitations during the 
consecutive 24-month period. However, if an emission limitation is part 
of a maximum achievable control technology standard that the 
Administrator proposed or promulgated under part 63 of this chapter, the 
baseline actual emissions need only be adjusted if the State has taken 
credit for such emissions reductions in an attainment demonstration or 
maintenance plan consistent with the requirements of paragraph 
(a)(3)(ii)(G) of this section.
    (4) For a regulated NSR pollutant, when a project involves multiple 
emissions units, only one consecutive 24-month period must be used to 
determine the baseline actual emissions for the emissions units being 
changed. A different consecutive 24-month period can be used For each 
regulated NSR pollutant.
    (5) The average rate shall not be based on any consecutive 24-month 
period for which there is inadequate information for determining annual 
emissions, in tons per year, and for adjusting this amount if required 
by paragraphs (a)(1)(xxxv)(B)(2) and (3) of this section.
    (C) For a new emissions unit, the baseline actual emissions for 
purposes of determining the emissions increase that will result from the 
initial construction and operation of such unit shall equal zero; and 
thereafter, for all other purposes, shall equal the unit's potential to 
emit.
    (D) For a PAL for a major stationary source, the baseline actual 
emissions shall be calculated for existing electric

[[Page 175]]

utility steam generating units in accordance with the procedures 
contained in paragraph (a)(1)(xxxv)(A) of this section, for other 
existing emissions units in accordance with the procedures contained in 
paragraph (a)(1)(xxxv)(B) of this section, and for a new emissions unit 
in accordance with the procedures contained in paragraph (a)(1)(xxxv)(C) 
of this section.
    (xxxvi) [Reserved]
    (xxxvii) Regulated NSR pollutant, for purposes of this section, 
means the following:
    (A) Nitrogen oxides or any volatile organic compounds;
    (B) Any pollutant for which a national ambient air quality standard 
has been promulgated; or
    (C) Any pollutant that is a constituent or precursor of a general 
pollutant listed under paragraphs (a)(1)(xxxvii)(A) or (B) of this 
section, provided that a constituent or precursor pollutant may only be 
regulated under NSR as part of regulation of the general pollutant.
    (xxxviii) Reviewing authority means the State air pollution control 
agency, local agency, other State agency, Indian tribe, or other agency 
authorized by the Administrator to carry out a permit program under this 
section and Sec. 51.166, or the Administrator in the case of EPA-
implemented permit programs under Sec. 52.21.
    (xxxix) Project means a physical change in, or change in the method 
of operation of, an existing major stationary source.
    (xl) Best available control technology (BACT) means an emissions 
limitation (including a visible emissions standard) based on the maximum 
degree of reduction for each regulated NSR pollutant which would be 
emitted from any proposed major stationary source or major modification 
which the reviewing authority, on a case-by-case basis, taking into 
account energy, environmental, and economic impacts and other costs, 
determines is achievable for such source or modification through 
application of production processes or available methods, systems, and 
techniques, including fuel cleaning or treatment or innovative fuel 
combustion techniques for control of such pollutant. In no event shall 
application of best available control technology result in emissions of 
any pollutant which would exceed the emissions allowed by any applicable 
standard under 40 CFR part 60 or 61. If the reviewing authority 
determines that technological or economic limitations on the application 
of measurement methodology to a particular emissions unit would make the 
imposition of an emissions standard infeasible, a design, equipment, 
work practice, operational standard, or combination thereof, may be 
prescribed instead to satisfy the requirement for the application of 
BACT. Such standard shall, to the degree possible, set forth the 
emissions reduction achievable by implementation of such design, 
equipment, work practice or operation, and shall provide for compliance 
by means which achieve equivalent results.
    (xli) Prevention of Significant Deterioration (PSD) permit means any 
permit that is issued under a major source preconstruction permit 
program that has been approved by the Administrator and incorporated 
into the plan to implement the requirements of Sec. 51.166 of this 
chapter, or under the program in Sec. 52.21 of this chapter.
    (xlii) Federal Land Manager means, with respect to any lands in the 
United States, the Secretary of the department with authority over such 
lands.
    (2) Applicability procedures. (i) Each plan shall adopt a 
preconstruction review program to satisfy the requirements of sections 
172(c)(5) and 173 of the Act for any area designated nonattainment for 
any national ambient air quality standard under subpart C of 40 CFR part 
81. Such a program shall apply to any new major stationary source or 
major modification that is major for the pollutant for which the area is 
designated nonattainment under section 107(d)(1)(A)(i) of the Act, if 
the stationary source or modification would locate anywhere in the 
designated nonattainment area.
    (ii) Each plan shall use the specific provisions of paragraphs 
(a)(2)(ii)(A) through (F) of this section. Deviations from these 
provisions will be approved only if the State specifically demonstrates 
that the submitted provisions are more stringent than or at least as 
stringent in all respects as the

[[Page 176]]

corresponding provisions in paragraphs (a)(2)(ii)(A) through (F) of this 
section.
    (A) Except as otherwise provided in paragraphs (a)(2)(iii) and (iv) 
of this section, and consistent with the definition of major 
modification contained in paragraph (a)(1)(v)(A) of this section, a 
project is a major modification for a regulated NSR pollutant if it 
causes two types of emissions increases--a significant emissions 
increase (as defined in paragraph (a)(1)(xxvii) of this section), and a 
significant net emissions increase (as defined in paragraphs (a)(1)(vi) 
and (x) of this section). The project is not a major modification if it 
does not cause a significant emissions increase. If the project causes a 
significant emissions increase, then the project is a major modification 
only if it also results in a significant net emissions increase.
    (B) The procedure for calculating (before beginning actual 
construction) whether a significant emissions increase (i.e., the first 
step of the process) will occur depends upon the type of emissions units 
being modified, according to paragraphs (a)(2)(ii)(C) through (F) of 
this section. The procedure for calculating (before beginning actual 
construction) whether a significant net emissions increase will occur at 
the major stationary source (i.e., the second step of the process) is 
contained in the definition in paragraph (a)(1)(vi) of this section. 
Regardless of any such preconstruction projections, a major modification 
results if the project causes a significant emissions increase and a 
significant net emissions increase.
    (C) Actual-to-projected-actual applicability test for projects that 
only involve existing emissions units. A significant emissions increase 
of a regulated NSR pollutant is projected to occur if the sum of the 
difference between the projected actual emissions (as defined in 
paragraph (a)(1)(xxviii) of this section) and the baseline actual 
emissions (as defined in paragraphs (a)(1)(xxxv)(A) and (B) of this 
section, as applicable), for each existing emissions unit, equals or 
exceeds the significant amount for that pollutant (as defined in 
paragraph (a)(1)(x) of this section).
    (D) Actual-to-potential test for projects that only involve 
construction of a new emissions unit(s). A significant emissions 
increase of a regulated NSR pollutant is projected to occur if the sum 
of the difference between the potential to emit (as defined in paragraph 
(a)(1)(iii) of this section) from each new emissions unit following 
completion of the project and the baseline actual emissions (as defined 
in paragraph (a)(1)(xxxv)(C) of this section) of these units before the 
project equals or exceeds the significant amount for that pollutant (as 
defined in paragraph (a)(1)(x) of this section).
    (E) Emission test for projects that involve Clean Units. For a 
project that will be constructed and operated at a Clean Unit without 
causing the emissions unit to lose its Clean Unit designation, no 
emissions increase is deemed to occur.
    (F) Hybrid test for projects that involve multiple types of 
emissions units. A significant emissions increase of a regulated NSR 
pollutant is projected to occur if the sum of the emissions increases 
for each emissions unit, using the method specified in paragraphs 
(a)(2)(ii)(C) through (E) of this section as applicable with respect to 
each emissions unit, for each type of emissions unit equals or exceeds 
the significant amount for that pollutant (as defined in paragraph 
(a)(1)(x) of this section). For example, if a project involves both an 
existing emissions unit and a Clean Unit, the projected increase is 
determined by summing the values determined using the method specified 
in paragraph (a)(2)(ii)(C) of this section for the existing unit and 
using the method specified in paragraph (a)(2)(ii)(E) of this section 
for the Clean Unit.
    (iii) The plan shall require that for any major stationary source 
for a PAL for a regulated NSR pollutant, the major stationary source 
shall comply with requirements under paragraph (f) of this section.
    (iv) The plan shall require that an owner or operator undertaking a 
PCP (as defined in paragraph (a)(1)(xxv) of this section) shall comply 
with the requirements under paragraph (e) of this section.
    (3)(i) Each plan shall provide that for sources and modifications 
subject to any preconstruction review program

[[Page 177]]

adopted pursuant to this subsection the baseline for determining credit 
for emissions reductions is the emissions limit under the applicable 
State Implementation Plan in effect at the time the application to 
construct is filed, except that the offset baseline shall be the actual 
emissions of the source from which offset credit is obtained where;
    (A) The demonstration of reasonable further progress and attainment 
of ambient air quality standards is based upon the actual emissions of 
sources located within a designated nonattainment area for which the 
preconstruction review program was adopted; or
    (B) The applicable State Implementation Plan does not contain an 
emissions limitation for that source or source category.
    (ii) The plan shall further provide that:
    (A) Where the emissions limit under the applicable State 
Implementation Plan allows greater emissions than the potential to emit 
of the source, emissions offset credit will be allowed only for control 
below this potential;
    (B) For an existing fuel combustion source, credit shall be based on 
the allowable emissions under the applicable State Implementation Plan 
for the type of fuel being burned at the time the application to 
construct is filed. If the existing source commits to switch to a 
cleaner fuel at some future date, emissions offset credit based on the 
allowable (or actual) emissions for the fuels involved is not 
acceptable, unless the permit is conditioned to require the use of a 
specified alternative control measure which would achieve the same 
degree of emissions reduction should the source switch back to a dirtier 
fuel at some later date. The reviewing authority should ensure that 
adequate long-term supplies of the new fuel are available before 
granting emissions offset credit for fuel switches,
    (C)(1) Emissions reductions achieved by shutting down an existing 
source or curtailing production or operating hours below baseline levels 
may be generally credited if such reductions are permanent, 
quantifiable, and federally enforceable, and if the area has an EPA-
approved attainment plan. In addition, the shutdown or curtailment is 
creditable only if it occurred on or after the date specified for this 
purpose in the plan, and if such date is on or after the date of the 
most recent emissions inventory used in the plan's demonstration of 
attainment. Where the plan does not specify a cutoff date for shutdown 
credits, the date of the most recent emissions inventory or attainment 
demonstration, as the case may be, shall apply. However, in no event may 
credit be given for shutdowns which occurred prior to August 7, 1977. 
For purposes of this paragraph, a permitting authority may choose to 
consider a prior shutdown or curtailment to have occurred after the date 
of its most recent emissions inventory, if the inventory explicitly 
includes as current existing emissions the emissions from such 
previously shutdown or curtailed sources.
    (2) Such reductions may be credited in the absence of an approved 
attainment demonstration only if the shutdown or curtailment occurred on 
or after the date the new source permit application is filed, or, if the 
applicant can establish that the proposed new source is a replacement 
for the shutdown or curtailed source, and the cutoff date provisions of 
Sec. 51.165(a)(3)(ii)(C)(1) are observed.
    (D) No emissions credit may be allowed for replacing one hydrocarbon 
compound with another of lesser reactivity, except for those compounds 
listed in Table 1 of EPA's ``Recommended Policy on Control of Volatile 
Organic Compounds'' (42 FR 35314, July 8, 1977; (This document is also 
available from Mr. Ted Creekmore, Office of Air Quality Planning and 
Standards, (MD-15) Research Triangle Park, NC 27711.))
    (E) All emission reductions claimed as offset credit shall be 
federally enforceable;
    (F) Procedures relating to the permissible location of offsetting 
emissions shall be followed which are at least as stringent as those set 
out in 40 CFR part 51 appendix S section IV.D.
    (G) Credit for an emissions reduction can be claimed to the extent 
that the reviewing authority has not relied on it in issuing any permit 
under regulations approved pursuant to 40 CFR part 51 subpart I or the 
State has not relied

[[Page 178]]

on it in demonstration attainment or reasonable further progress.
    (H) Decreases in actual emissions resulting from the installation of 
add-on control technology or application of pollution prevention 
measures that were relied upon in designating an emissions unit as a 
Clean Unit or a project as a PCP cannot be used as offsets.
    (I) Decreases in actual emissions occurring at a Clean Unit cannot 
be used as offsets, except as provided in paragraphs (c)(8) and (d)(10) 
of this section. Similarly, decreases in actual emissions occurring at a 
PCP cannot be used as offsets, except as provided in paragraph 
(e)(6)(iv) of this section.
    (J) The total tonnage of increased emissions, in tons per year, 
resulting from a major modification that must be offset in accordance 
with section 173 of the Act shall be determined by summing the 
difference between the allowable emissions after the modification (as 
defined by paragraph (a)(1)(xi) of this section) and the actual 
emissions before the modification (as defined in paragraph (a)(1)(xii) 
of this section) for each emissions unit.
    (4) Each plan may provide that the provisions of this paragraph do 
not apply to a source or modification that would be a major stationary 
source or major modification only if fugitive emission to the extent 
quantifiable are considered in calculating the potential to emit of the 
stationary source or modification and the source does not belong to any 
of the following categories:
    (i) Coal cleaning plants (with thermal dryers);
    (ii) Kraft pulp mills;
    (iii) Portland cement plants;
    (iv) Primary zinc smelters;
    (v) Iron and steel mills;
    (vi) Primary aluminum ore reduction plants;
    (vii) Primary copper smelters;
    (viii) Municipal incinerators capable of charging more than 250 tons 
of refuse per day;
    (ix) Hydrofluoric, sulfuric, or citric acid plants;
    (x) Petroleum refineries;
    (xi) Lime plants;
    (xii) Phosphate rock processing plants;
    (xiii) Coke oven batteries;
    (xiv) Sulfur recovery plants;
    (xv) Carbon black plants (furnace process);
    (xvi) Primary lead smelters;
    (xvii) Fuel conversion plants;
    (xviii) Sintering plants;
    (xix) Secondary metal production plants;
    (xx) Chemical process plants;
    (xxi) Fossil-fuel boilers (or combination thereof) totaling more 
than 250 million British thermal units per hour heat input;
    (xxii) Petroleum storage and transfer units with a total storage 
capacity exceeding 300,000 barrels;
    (xxiii) Taconite ore processing plants;
    (xxiv) Glass fiber processing plants;
    (xxv) Charcoal production plants;
    (xxvi) Fossil fuel-fired steam electric plants of more than 250 
million British thermal units per hour heat input;
    (xxvii) Any other stationary source category which, as of August 7, 
1980, is being regulated under section 111 or 112 of the Act.
    (5) Each plan shall include enforceable procedures to provide that:
    (i) Approval to construct shall not relieve any owner or operator of 
the responsibility to comply fully with applicable provision of the plan 
and any other requirements under local, State or Federal law.
    (ii) At such time that a particular source or modification becomes a 
major stationary source or major modification solely by virtue of a 
relaxation in any enforcement limitation which was established after 
August 7, 1980, on the capacity of the source or modification otherwise 
to emit a pollutant, such as a restriction on hours of operation, then 
the requirements of regulations approved pursuant to this section shall 
apply to the source or modification as though construction had not yet 
commenced on the source or modification;
    (6) Each plan shall provide that the following specific provisions 
apply to projects at existing emissions units at a major stationary 
source (other than projects at a Clean Unit or at a source with a PAL) 
in circumstances where there is a reasonable possibility that a project 
that is not a part of a major

[[Page 179]]

modification may result in a significant emissions increase and the 
owner or operator elects to use the method specified in paragraphs 
(a)(1)(xxviii)(B)(1) through (3) of this section for calculating 
projected actual emissions. Deviations from these provisions will be 
approved only if the State specifically demonstrates that the submitted 
provisions are more stringent than or at least as stringent in all 
respects as the corresponding provisions in paragraphs (a)(6)(i) through 
(v) of this section.
    (i) Before beginning actual construction of the project, the owner 
or operator shall document and maintain a record of the following 
information:
    (A) A description of the project;
    (B) Identification of the emissions unit(s) whose emissions of a 
regulated NSR pollutant could be affected by the project; and
    (C) A description of the applicability test used to determine that 
the project is not a major modification for any regulated NSR pollutant, 
including the baseline actual emissions, the projected actual emissions, 
the amount of emissions excluded under paragraph (a)(1)(xxviii)(B)(3) of 
this section and an explanation for why such amount was excluded, and 
any netting calculations, if applicable.
    (ii) If the emissions unit is an existing electric utility steam 
generating unit, before beginning actual construction, the owner or 
operator shall provide a copy of the information set out in paragraph 
(a)(6)(i) of this section to the reviewing authority. Nothing in this 
paragraph (a)(6)(ii) shall be construed to require the owner or operator 
of such a unit to obtain any determination from the reviewing authority 
before beginning actual construction.
    (iii) The owner or operator shall monitor the emissions of any 
regulated NSR pollutant that could increase as a result of the project 
and that is emitted by any emissions units identified in paragraph 
(a)(6)(i)(B) of this section; and calculate and maintain a record of the 
annual emissions, in tons per year on a calendar year basis, for a 
period of 5 years following resumption of regular operations after the 
change, or for a period of 10 years following resumption of regular 
operations after the change if the project increases the design capacity 
or potential to emit of that regulated NSR pollutant at such emissions 
unit.
    (iv) If the unit is an existing electric utility steam generating 
unit, the owner or operator shall submit a report to the reviewing 
authority within 60 days after the end of each year during which records 
must be generated under paragraph (a)(6)(iii) of this section setting 
out the unit's annual emissions during the year that preceded submission 
of the report.
    (v) If the unit is an existing unit other than an electric utility 
steam generating unit, the owner or operator shall submit a report to 
the reviewing authority if the annual emissions, in tons per year, from 
the project identified in paragraph (a)(6)(i) of this section, exceed 
the baseline actual emissions (as documented and maintained pursuant to 
paragraph (a)(6)(i)(C) of this section, by a significant amount (as 
defined in paragraph (a)(1)(x) of this section) for that regulated NSR 
pollutant, and if such emissions differ from the preconstruction 
projection as documented and maintained pursuant to paragraph 
(a)(6)(i)(C) of this section. Such report shall be submitted to the 
reviewing authority within 60 days after the end of such year. The 
report shall contain the following:
    (A) The name, address and telephone number of the major stationary 
source;
    (B) The annual emissions as calculated pursuant to paragraph 
(a)(6)(iii) of this section; and
    (C) Any other information that the owner or operator wishes to 
include in the report (e.g., an explanation as to why the emissions 
differ from the preconstruction projection).
    (7) Each plan shall provide that the owner or operator of the source 
shall make the information required to be documented and maintained 
pursuant to paragraph (a)(6) of this section available for review upon a 
request for inspection by the reviewing authority or the general public 
pursuant to the requirements contained in Sec. 70.4(b)(3)(viii) of this 
chapter.
    (b)(1) Each plan shall include a preconstruction review permit 
program or its equivalent to satisfy the requirements of section 
110(a)(2)(D)(i) of the

[[Page 180]]

Act for any new major stationary source or major modification as defined 
in paragraphs (a)(1) (iv) and (v) of this section. Such a program shall 
apply to any such source or modification that would locate in any area 
designated as attainment or unclassifiable for any national ambient air 
quality standard pursuant to section 107 of the Act, when it would cause 
or contribute to a violation of any national ambient air quality 
standard.
    (2) A major source or major modification will be considered to cause 
or contribute to a violation of a national ambient air quality standard 
when such source or modification would, at a minimum, exceed the 
following significance levels at any locality that does not or would not 
meet the applicable national standard:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Averaging time (hours)
             Pollutant                       Annual         --------------------------------------------------------------------------------------------
                                                                       24                      8                      3                      1
--------------------------------------------------------------------------------------------------------------------------------------------------------
SO2................................  1.0 [mu]g/m\3\........  5 [mu]g/m\3\..........    ...................  25 [mu]g/m\3\........
PM10...............................  1.0 [mu]g/m\3\........  5 [mu]g/m\3\..........    ...................    ...................
NO2................................  1.0 [mu]g/m\3\........    ....................    ...................    ...................
CO.................................    ....................    ....................  0.5 mg/m\3\..........    ...................  2 mg/m\3\
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (3) Such a program may include a provision which allows a proposed 
major source or major modification subject to paragraph (b) of this 
section to reduce the impact of its emissions upon air quality by 
obtaining sufficient emission reductions to, at a minimum, compensate 
for its adverse ambient impact where the major source or major 
modification would otherwise cause or contribute to a violation of any 
national ambient air quality standard. The plan shall require that, in 
the absence of such emission reductions, the State or local agency shall 
deny the proposed construction.
    (4) The requirements of paragraph (b) of this section shall not 
apply to a major stationary source or major modification with respect to 
a particular pollutant if the owner or operator demonstrates that, as to 
that pollutant, the source or modification is located in an area 
designated as nonattainment pursuant to section 107 of the Act.
    (c) Clean Unit Test for emissions units that are subject to LAER. 
The plan shall provide an owner or operator of a major stationary source 
the option of using the Clean Unit Test to determine whether emissions 
increases at a Clean Unit are part of a project that is a major 
modification according to the provisions in paragraphs (c)(1) through 
(9) of this section.
    (1) Applicability. The provisions of this paragraph (c) apply to any 
emissions unit for which the reviewing authority has issued a major NSR 
permit within the past 10 years.
    (2) General provisions for Clean Units. The provisions in paragraphs 
(c)(2)(i) through (v) of this section apply to a Clean Unit.
    (i) Any project for which the owner or operator begins actual 
construction after the effective date of the Clean Unit designation (as 
determined in accordance with paragraph (c)(4) of this section) and 
before the expiration date (as determined in accordance with paragraph 
(c)(5) of this section) will be considered to have occurred while the 
emissions unit was a Clean Unit.
    (ii) If a project at a Clean Unit does not cause the need for a 
change in the emission limitations or work practice requirements in the 
permit for the unit that were adopted in conjunction with LAER and the 
project would not alter any physical or operational characteristics that 
formed the basis for the LAER determination as specified in paragraph 
(c)(6)(iv) of this section, the emissions unit remains a Clean Unit.
    (iii) If a project causes the need for a change in the emission 
limitations or work practice requirements in the permit for the unit 
that were adopted in conjunction with LAER or the project would alter 
any physical or operational characteristics that formed the basis for 
the LAER determination as specified in paragraph (c)(6)(iv) of this 
section, then the emissions unit loses its designation as a Clean Unit 
upon

[[Page 181]]

issuance of the necessary permit revisions (unless the unit requalifies 
as a Clean Unit pursuant to paragraph (c)(3)(iii) of this section). If 
the owner or operator begins actual construction on the project without 
first applying to revise the emissions unit's permit, the Clean Unit 
designation ends immediately prior to the time when actual construction 
begins.
    (iv) A project that causes an emissions unit to lose its designation 
as a Clean Unit is subject to the applicability requirements of 
paragraphs (a)(2)(ii)(A) through (D) and paragraph (a)(2)(ii)(F) of this 
section as if the emissions unit is not a Clean Unit.
    (v) Certain Emissions Units with PSD permits. For emissions units 
that meet the requirements of paragraphs (c)(2)(v)(A) and (B) of this 
section, the BACT level of emissions reductions and/or work practice 
requirements shall satisfy the requirement for LAER in meeting the 
requirements for Clean Units under paragraphs (c)(3) through (8) of this 
section. For these emissions units, all requirements for the LAER 
determination under paragraphs (c)(2)(ii) and (iii) of this section 
shall also apply to the BACT permit terms and conditions. In addition, 
the requirements of paragraph (c)(7)(i)(B) of this section do not apply 
to emissions units that qualify for Clean Unit status under this 
paragraph (c)(2)(v).
    (A) The emissions unit must have received a PSD permit within the 
last 10 years and such permit must require the emissions unit to comply 
with BACT.
    (B) The emissions unit must be located in an area that was 
redesignated as nonattainment for the relevant pollutant(s) after 
issuance of the PSD permit and before the effective date of the Clean 
Unit Test provisions in the area.
    (3) Qualifying or re-qualifying to use the Clean Unit applicability 
test. An emissions unit automatically qualifies as a Clean Unit when the 
unit meets the criteria in paragraphs (c)(3)(i) and (ii) of this 
section. After the original Clean Unit designation expires in accordance 
with paragraph (c)(5) of this section or is lost pursuant to paragraph 
(c)(2)(iii) of this section, such emissions unit may re-qualify as a 
Clean Unit under either paragraph (c)(3)(iii) of this section, or under 
the Clean Unit provisions in paragraph (d) of this section. To re-
qualify as a Clean Unit under paragraph (c)(3)(iii) of this section, the 
emissions unit must obtain a new major NSR permit issued through the 
applicable nonattainment major NSR program and meet all the criteria in 
paragraph (c)(3)(iii) of this section. Clean Unit designation applies 
individually for each pollutant emitted by the emissions unit.
    (i) Permitting requirement. The emissions unit must have received a 
major NSR permit within the past 10 years. The owner or operator must 
maintain and be able to provide information that would demonstrate that 
this permitting requirement is met.
    (ii) Qualifying air pollution control technologies. Air pollutant 
emissions from the emissions unit must be reduced through the use of an 
air pollution control technology (which includes pollution prevention as 
defined under paragraph (a)(1)(xxvi) of this section or work practices) 
that meets both the following requirements in paragraphs (c)(3)(ii)(A) 
and (B) of this section.
    (A) The control technology achieves the LAER level of emissions 
reductions as determined through issuance of a major NSR permit within 
the past 10 years. However, the emissions unit is not eligible for Clean 
Unit designation if the LAER determination resulted in no requirement to 
reduce emissions below the level of a standard, uncontrolled, new 
emissions unit of the same type.
    (B) The owner or operator made an investment to install the control 
technology. For the purpose of this determination, an investment 
includes expenses to research the application of a pollution prevention 
technique to the emissions unit or expenses to apply a pollution 
prevention technique to an emissions unit.
    (iii) Re-qualifying for the Clean Unit designation. The emissions 
unit must obtain a new major NSR permit that requires compliance with 
the current-day LAER, and the emissions unit must meet the requirements 
in paragraphs (c)(3)(i) and (c)(3)(ii) of this section.

[[Page 182]]

    (4) Effective date of the Clean Unit designation. The effective date 
of an emissions unit's Clean Unit designation (that is, the date on 
which the owner or operator may begin to use the Clean Unit Test to 
determine whether a project at the emissions unit is a major 
modification) is determined according to the applicable paragraph 
(c)(4)(i) or (c)(4)(ii) of this section.
    (i) Original Clean Unit designation, and emissions units that re-
qualify as Clean Units by implementing a new control technology to meet 
current-day LAER. The effective date is the date the emissions unit's 
air pollution control technology is placed into service, or 3 years 
after the issuance date of the major NSR permit, whichever is earlier, 
but no sooner than the date that provisions for the Clean Unit 
applicability test are approved by the Administrator for incorporation 
into the plan and become effective for the State in which the unit is 
located.
    (ii) Emissions units that re-qualify for the Clean Unit designation 
using an existing control technology. The effective date is the date the 
new, major NSR permit is issued.
    (5) Clean Unit expiration. An emissions unit's Clean Unit 
designation expires (that is, the date on which the owner or operator 
may no longer use the Clean Unit Test to determine whether a project 
affecting the emissions unit is, or is part of, a major modification) 
according to the applicable paragraph (c)(5)(i) or (ii) of this section.
    (i) Original Clean Unit designation, and emissions units that re-
qualify by implementing new control technology to meet current-day LAER. 
For any emissions unit that automatically qualifies as a Clean Unit 
under paragraphs (c)(3)(i) and (ii) of this section, the Clean Unit 
designation expires 10 years after the effective date, or the date the 
equipment went into service, whichever is earlier; or, it expires at any 
time the owner or operator fails to comply with the provisions for 
maintaining Clean Unit designation in paragraph (c)(7) of this section.
    (ii) Emissions units that re-qualify for the Clean Unit designation 
using an existing control technology. For any emissions unit that re-
qualifies as a Clean Unit under paragraph (c)(3)(iii) of this section, 
the Clean Unit designation expires 10 years after the effective date; 
or, it expires any time the owner or operator fails to comply with the 
provisions for maintaining the Clean Unit Designation in paragraph 
(c)(7) of this section.
    (6) Required title V permit content for a Clean Unit. After the 
effective date of the Clean Unit designation, and in accordance with the 
provisions of the applicable title V permit program under part 70 or 
part 71 of this chapter, but no later than when the title V permit is 
renewed, the title V permit for the major stationary source must include 
the following terms and conditions in paragraphs (c)(6)(i) through (vi) 
of this section related to the Clean Unit.
    (i) A statement indicating that the emissions unit qualifies as a 
Clean Unit and identifying the pollutant(s) for which this Clean Unit 
designation applies.
    (ii) The effective date of the Clean Unit designation. If this date 
is not known when the Clean Unit designation is initially recorded in 
the title V permit (e.g., because the air pollution control technology 
is not yet in service), the permit must describe the event that will 
determine the effective date (e.g., the date the control technology is 
placed into service). Once the effective date is determined, the owner 
or operator must notify the reviewing authority of the exact date. This 
specific effective date must be added to the source's title V permit at 
the first opportunity, such as a modification, revision, reopening, or 
renewal of the title V permit for any reason, whichever comes first, but 
in no case later than the next renewal.
    (iii) The expiration date of the Clean Unit designation. If this 
date is not known when the Clean Unit designation is initially recorded 
into the title V permit (e.g., because the air pollution control 
technology is not yet in service), then the permit must describe the 
event that will determine the expiration date (e.g., the date the 
control technology is placed into service). Once the expiration date is 
determined, the owner or operator must notify the reviewing authority of 
the exact date. The expiration date must be added to

[[Page 183]]

the source's title V permit at the first opportunity, such as a 
modification, revision, reopening, or renewal of the title V permit for 
any reason, whichever comes first, but in no case later than the next 
renewal.
    (iv) All emission limitations and work practice requirements adopted 
in conjunction with the LAER, and any physical or operational 
characteristics that formed the basis for the LAER determination (e.g., 
possibly the emissions unit's capacity or throughput).
    (v) Monitoring, recordkeeping, and reporting requirements as 
necessary to demonstrate that the emissions unit continues to meet the 
criteria for maintaining the Clean Unit designation. (See paragraph 
(c)(7) of this section.)
    (vi) Terms reflecting the owner or operator's duties to maintain the 
Clean Unit designation and the consequences of failing to do so, as 
presented in paragraph (c)(7) of this section.
    (7) Maintaining the Clean Unit designation. To maintain the Clean 
Unit designation, the owner or operator must conform to all the 
restrictions listed in paragraphs (c)(7)(i) through (iii) of this 
section. This paragraph (c)(7) applies independently to each pollutant 
for which the emissions unit has the Clean Unit designation. That is, 
failing to conform to the restrictions for one pollutant affects Clean 
Unit designation only for that pollutant.
    (i) The Clean Unit must comply with the emission limitation(s) and/
or work practice requirements adopted in conjunction with the LAER that 
is recorded in the major NSR permit, and subsequently reflected in the 
title V permit.
    (A) The owner or operator may not make a physical change in or 
change in the method of operation of the Clean Unit that causes the 
emissions unit to function in a manner that is inconsistent with the 
physical or operational characteristics that formed the basis for the 
LAER determination (e.g., possibly the emissions unit's capacity or 
throughput).
    (B) The Clean Unit may not emit above a level that has been offset.
    (ii) The Clean Unit must comply with any terms and conditions in the 
title V permit related to the unit's Clean Unit designation.
    (iii) The Clean Unit must continue to control emissions using the 
specific air pollution control technology that was the basis for its 
Clean Unit designation. If the emissions unit or control technology is 
replaced, then the Clean Unit designation ends.
    (8) Offsets and netting at Clean Units. Emissions changes that occur 
at a Clean Unit must not be included in calculating a significant net 
emissions increase (that is, must not be used in a ``netting 
analysis''), or be used for generating offsets unless such use occurs 
before the effective date of the Clean Unit designation, or after the 
Clean Unit designation expires; or, unless the emissions unit reduces 
emissions below the level that qualified the unit as a Clean Unit. 
However, if the Clean Unit reduces emissions below the level that 
qualified the unit as a Clean Unit, then, the owner or operator may 
generate a credit for the difference between the level that qualified 
the unit as a Clean Unit and the new emission limitation if such 
reductions are surplus, quantifiable, and permanent. For purposes of 
generating offsets, the reductions must also be federally enforceable. 
For purposes of determining creditable net emissions increases and 
decreases, the reductions must also be enforceable as a practical 
matter.
    (9) Effect of redesignation on the Clean Unit designation. The Clean 
Unit designation of an emissions unit is not affected by redesignation 
of the attainment status of the area in which it is located. That is, if 
a Clean Unit is located in an attainment area and the area is 
redesignated to nonattainment, its Clean Unit designation is not 
affected. Similarly, redesignation from nonattainment to attainment does 
not affect the Clean Unit designation. However, if an existing Clean 
Unit designation expires, it must re-qualify under the requirements that 
are currently applicable in the area.
    (d) Clean Unit provisions for emissions units that achieve an 
emission limitation comparable to LAER. The plan shall provide an owner 
or operator of a major stationary source the option of using the Clean 
Unit Test to determine whether emissions increases at a Clean

[[Page 184]]

Unit are part of a project that is a major modification according to the 
provisions in paragraphs (d)(1) through (11) of this section.
    (1) Applicability. The provisions of this paragraph (d) apply to 
emissions units which do not qualify as Clean Units under paragraph (c) 
of this section, but which are achieving a level of emissions control 
comparable to LAER, as determined by the reviewing authority in 
accordance with this paragraph (d).
    (2) General provisions for Clean Units. The provisions in paragraphs 
(d)(2)(i) through (iv) of this section apply to a Clean Unit (designated 
under this paragraph (d)).
    (i) Any project for which the owner or operator begins actual 
construction after the effective date of the Clean Unit designation (as 
determined in accordance with paragraph (d)(5) of this section) and 
before the expiration date (as determined in accordance with paragraph 
(d)(6) of this section) will be considered to have occurred while the 
emissions unit was a Clean Unit.
    (ii) If a project at a Clean Unit does not cause the need for a 
change in the emission limitations or work practice requirements in the 
permit for the unit that have been determined (pursuant to paragraph 
(d)(4) of this section) to be comparable to LAER, and the project would 
not alter any physical or operational characteristics that formed the 
basis for determining that the emissions unit's control technology 
achieves a level of emissions control comparable to LAER as specified in 
paragraph (d)(8)(iv) of this section, the emissions unit remains a Clean 
Unit.
    (iii) If a project causes the need for a change in the emission 
limitations or work practice requirements in the permit for the unit 
that have been determined (pursuant to paragraph (d)(4) of this section) 
to be comparable to LAER, or the project would alter any physical or 
operational characteristics that formed the basis for determining that 
the emissions unit's control technology achieves a level of emissions 
control comparable to LAER as specified in paragraph (d)(8)(iv) of this 
section, then the emissions unit loses its designation as a Clean Unit 
upon issuance of the necessary permit revisions (unless the unit re-
qualifies as a Clean Unit pursuant to paragraph (d)(3)(iv) of this 
section). If the owner or operator begins actual construction on the 
project without first applying to revise the emissions unit's permit, 
the Clean Unit designation ends immediately prior to the time when 
actual construction begins.
    (iv) A project that causes an emissions unit to lose its designation 
as a Clean Unit is subject to the applicability requirements of 
paragraphs (a)(2)(ii)(A) through (D) and paragraph (a)(2)(ii)(F) of this 
section as if the emissions unit were never a Clean Unit.
    (3) Qualifying or re-qualifying to use the Clean Unit applicability 
test. An emissions unit qualifies as a Clean Unit when the unit meets 
the criteria in paragraphs (d)(3)(i) through (iii) of this section. 
After the original Clean Unit designation expires in accordance with 
paragraph (d)(6) of this section or is lost pursuant to paragraph 
(d)(2)(iii) of this section, such emissions unit may re-qualify as a 
Clean Unit under either paragraph (d)(3)(iv) of this section, or under 
the Clean Unit provisions in paragraph (c) of this section. To re-
qualify as a Clean Unit under paragraph (d)(3)(iv) of this section, the 
emissions unit must obtain a new permit issued pursuant to the 
requirements in paragraphs (d)(7) and (8) of this section and meet all 
the criteria in paragraph (d)(3)(iv) of this section. The reviewing 
authority will make a separate Clean Unit designation for each pollutant 
emitted by the emissions unit for which the emissions unit qualifies as 
a Clean Unit.
    (i) Qualifying air pollution control technologies. Air pollutant 
emissions from the emissions unit must be reduced through the use of air 
pollution control technology (which includes pollution prevention as 
defined under paragraph (a)(1)(xxvi) of this section or work practices) 
that meets both the following requirements in paragraphs (d)(3)(i)(A) 
and (B) of this section.
    (A) The owner or operator has demonstrated that the emissions unit's 
control technology is comparable to LAER according to the requirements 
of paragraph (d)(4) of this section. However, the emissions unit is not 
eligible

[[Page 185]]

for the Clean Unit designation if its emissions are not reduced below 
the level of a standard, uncontrolled emissions unit of the same type 
(e.g., if the LAER determinations to which it is compared have resulted 
in a determination that no control measures are required).
    (B) The owner or operator made an investment to install the control 
technology. For the purpose of this determination, an investment 
includes expenses to research the application of a pollution prevention 
technique to the emissions unit or to retool the unit to apply a 
pollution prevention technique.
    (ii) Impact of emissions from the unit. The reviewing authority must 
determine that the allowable emissions from the emissions unit will not 
cause or contribute to a violation of any national ambient air quality 
standard or PSD increment, or adversely impact an air quality related 
value (such as visibility) that has been identified for a Federal Class 
I area by a Federal Land Manager and for which information is available 
to the general public.
    (iii) Date of installation. An emissions unit may qualify as a Clean 
Unit even if the control technology, on which the Clean Unit designation 
is based, was installed before the effective date of plan requirements 
to implement the requirements of this paragraph (d)(3)(iii). However, 
for such emissions units, the owner or operator must apply for the Clean 
Unit designation within 2 years after the plan requirements become 
effective. For technologies installed after the plan requirements become 
effective, the owner or operator must apply for the Clean Unit 
designation at the time the control technology is installed.
    (iv) Re-qualifying as a Clean Unit. The emissions unit must obtain a 
new permit (pursuant to requirements in paragraphs (d)(7) and (8) of 
this section) that demonstrates that the emissions unit's control 
technology is achieving a level of emission control comparable to 
current-day LAER, and the emissions unit must meet the requirements in 
paragraphs (d)(3)(i)(A) and (d)(3)(ii) of this section.
    (4) Demonstrating control effectiveness comparable to LAER. The 
owner or operator may demonstrate that the emissions unit's control 
technology is comparable to LAER for purposes of paragraph (d)(3)(i) of 
this section according to either paragraph (d)(4)(i) or (ii) of this 
section. Paragraph (d)(4)(iii) of this section specifies the time for 
making this comparison.
    (i) Comparison to previous LAER determinations. The administrator 
maintains an on-line data base of previous determinations of RACT, BACT, 
and LAER in the RACT/BACT/LAER Clearinghouse (RBLC). The emissions 
unit's control technology is presumed to be comparable to LAER if it 
achieves an emission limitation that is at least as stringent as any one 
of the five best-performing similar sources for which a LAER 
determination has been made within the preceding 5 years, and for which 
information has been entered into the RBLC. The reviewing authority 
shall also compare this presumption to any additional LAER 
determinations of which it is aware, and shall consider any information 
on achieved-in-practice pollution control technologies provided during 
the public comment period, to determine whether any presumptive 
determination that the control technology is comparable to LAER is 
correct.
    (ii) The substantially-as-effective test. The owner or operator may 
demonstrate that the emissions unit's control technology is 
substantially as effective as LAER. In addition, any other person may 
present evidence related to whether the control technology is 
substantially as effective as LAER during the public participation 
process required under paragraph (d)(7) of this section. The reviewing 
authority shall consider such evidence on a case-by-case basis and 
determine whether the emissions unit's air pollution control technology 
is substantially as effective as LAER.
    (iii) Time of comparison--(A) Emissions units with control 
technologies that are installed before the effective date of plan 
requirements implementing this paragraph. The owner or operator of an 
emissions unit whose control technology is installed before the 
effective date of plan requirements implementing this paragraph (d) may, 
at its option, either demonstrate that the emission limitation achieved 
by the

[[Page 186]]

emissions unit's control technology is comparable to the LAER 
requirements that applied at the time the control technology was 
installed, or demonstrate that the emission limitation achieved by the 
emissions unit's control technology is comparable to current-day LAER 
requirements. The expiration date of the Clean Unit designation will 
depend on which option the owner or operator uses, as specified in 
paragraph (d)(6) of this section.
    (B) Emissions units with control technologies that are installed 
after the effective date of plan requirements implementing this 
paragraph. The owner or operator must demonstrate that the emission 
limitation achieved by the emissions unit's control technology is 
comparable to current-day LAER requirements.
    (5) Effective date of the Clean Unit designation. The effective date 
of an emissions unit's Clean Unit designation (that is, the date on 
which the owner or operator may begin to use the Clean Unit Test to 
determine whether a project involving the emissions unit is a major 
modification) is the date that the permit required by paragraph (d)(7) 
of this section is issued or the date that the emissions unit's air 
pollution control technology is placed into service, whichever is later.
    (6) Clean Unit expiration. If the owner or operator demonstrates 
that the emission limitation achieved by the emissions unit's control 
technology is comparable to the LAER requirements that applied at the 
time the control technology was installed, then the Clean Unit 
designation expires 10 years from the date that the control technology 
was installed. For all other emissions units, the Clean Unit designation 
expires 10 years from the effective date of the Clean Unit designation, 
as determined according to paragraph (d)(5) of this section. In 
addition, for all emissions units, the Clean Unit designation expires 
any time the owner or operator fails to comply with the provisions for 
maintaining the Clean Unit designation in paragraph (d)(9) of this 
section.
    (7) Procedures for designating emissions units as Clean Units. The 
reviewing authority shall designate an emissions unit a Clean Unit only 
by issuing a permit through a permitting program that has been approved 
by the Administrator and that conforms with the requirements of 
Secs. 51.160 through 51.164 of this chapter including requirements for 
public notice of the proposed Clean Unit designation and opportunity for 
public comment. Such permit must also meet the requirements in paragraph 
(d)(8).
    (8) Required permit content. The permit required by paragraph (d)(7) 
of this section shall include the terms and conditions set forth in 
paragraphs (d)(8)(i) through (vi) of this section. Such terms and 
conditions shall be incorporated into the major stationary source's 
title V permit in accordance with the provisions of the applicable title 
V permit program under part 70 or part 71 of this chapter, but no later 
than when the title V permit is renewed.
    (i) A statement indicating that the emissions unit qualifies as a 
Clean Unit and identifying the pollutant(s) for which this designation 
applies.
    (ii) The effective date of the Clean Unit designation. If this date 
is not known when the reviewing authority issues the permit (e.g., 
because the air pollution control technology is not yet in service), 
then the permit must describe the event that will determine the 
effective date (e.g., the date the control technology is placed into 
service). Once the effective date is known, then the owner or operator 
must notify the reviewing authority of the exact date. This specific 
effective date must be added to the source's title V permit at the first 
opportunity, such as a modification, revision, reopening, or renewal of 
the title V permit for any reason, whichever comes first, but in no case 
later than the next renewal.
    (iii) The expiration date of the Clean Unit designation. If this 
date is not known when the reviewing authority issues the permit (e.g., 
because the air pollution control technology is not yet in service), 
then the permit must describe the event that will determine the 
expiration date (e.g., the date the control technology is placed into 
service). Once the expiration date is known, then the owner or operator 
must notify the reviewing authority of the exact date. The expiration 
date

[[Page 187]]

must be added to the source's title V permit at the first opportunity, 
such as a modification, revision, reopening, or renewal of the title V 
permit for any reason, whichever comes first, but in no case later than 
the next renewal.
    (iv) All emission limitations and work practice requirements adopted 
in conjunction with emission limitations necessary to assure that the 
control technology continues to achieve an emission limitation 
comparable to LAER, and any physical or operational characteristics that 
formed the basis for determining that the emissions unit's control 
technology achieves a level of emissions control comparable to LAER 
(e.g., possibly the emissions unit's capacity or throughput).
    (v) Monitoring, recordkeeping, and reporting requirements as 
necessary to demonstrate that the emissions unit continues to meet the 
criteria for maintaining its Clean Unit designation. (See paragraph 
(d)(9) of this section.)
    (vi) Terms reflecting the owner or operator's duties to maintain the 
Clean Unit designation and the consequences of failing to do so, as 
presented in paragraph (d)(9) of this section.
    (9) Maintaining Clean Unit designation. To maintain Clean Unit 
designation, the owner or operator must conform to all the restrictions 
listed in paragraphs (d)(9)(i) through (v) of this section. This 
paragraph (d)(9) applies independently to each pollutant for which the 
reviewing authority has designated the emissions unit a Clean Unit. That 
is, failing to conform to the restrictions for one pollutant affects the 
Clean Unit designation only for that pollutant.
    (i) The Clean Unit must comply with the emission limitation(s) and/
or work practice requirements adopted to ensure that the control 
technology continues to achieve emission control comparable to LAER.
    (ii) The owner or operator may not make a physical change in or 
change in the method of operation of the Clean Unit that causes the 
emissions unit to function in a manner that is inconsistent with the 
physical or operational characteristics that formed the basis for the 
determination that the control technology is achieving a level of 
emission control that is comparable to LAER (e.g., possibly the 
emissions unit's capacity or throughput).
    (iii) The Clean Unit may not emit above a level that has been 
offset.
    (iv) The Clean Unit must comply with any terms and conditions in the 
title V permit related to the unit's Clean Unit designation.
    (v) The Clean Unit must continue to control emissions using the 
specific air pollution control technology that was the basis for its 
Clean Unit designation. If the emissions unit or control technology is 
replaced, then the Clean Unit designation ends.
    (10) Offsets and Netting at Clean Units. Emissions changes that 
occur at a Clean Unit must not be included in calculating a significant 
net emissions increase (that is, must not be used in a ``netting 
analysis''), or be used for generating offsets unless such use occurs 
before the effective date of plan requirements adopted to implement this 
paragraph (d) or after the Clean Unit designation expires; or, unless 
the emissions unit reduces emissions below the level that qualified the 
unit as a Clean Unit. However, if the Clean Unit reduces emissions below 
the level that qualified the unit as a Clean Unit, then the owner or 
operator may generate a credit for the difference between the level that 
qualified the unit as a Clean Unit and the emissions unit's new emission 
limitation if such reductions are surplus, quantifiable, and permanent. 
For purposes of generating offsets, the reductions must also be 
federally enforceable. For purposes of determining creditable net 
emissions increases and decreases, the reductions must also be 
enforceable as a practical matter.
    (11) Effect of redesignation on the Clean Unit designation. The 
Clean Unit designation of an emissions unit is not affected by 
redesignation of the attainment status of the area in which it is 
located. That is, if a Clean Unit is located in an attainment area and 
the area is redesignated to nonattainment, its Clean Unit designation is 
not affected. Similarly, redesignation from nonattainment to attainment 
does not affect the Clean Unit designation. However, if a Clean Unit's 
designation expires or is lost pursuant to paragraphs (c)(2)(iii) and 
(d)(2)(iii) of this section,

[[Page 188]]

it must re-qualify under the requirements that are currently applicable.
    (e) PCP exclusion procedural requirements. Each plan shall include 
provisions for PCPs equivalent to those contained in paragraphs (e)(1) 
through (6) of this section.
    (1) Before an owner or operator begins actual construction of a PCP, 
the owner or operator must either submit a notice to the reviewing 
authority if the project is listed in paragraphs (a)(1)(xxv)(A) through 
(F) of this section, or if the project is not listed in paragraphs 
(a)(1)(xxv)(A) through (F) of this section, then the owner or operator 
must submit a permit application and obtain approval to use the PCP 
exclusion from the reviewing authority consistent with the requirements 
in paragraph (e)(5) of this section. Regardless of whether the owner or 
operator submits a notice or a permit application, the project must meet 
the requirements in paragraph (e)(2) of this section, and the notice or 
permit application must contain the information required in paragraph 
(e)(3) of this section.
    (2) Any project that relies on the PCP exclusion must meet the 
requirements in paragraphs (e)(2)(i) and (ii) of this section.
    (i) Environmentally beneficial analysis. The environmental benefit 
from the emission reductions of pollutants regulated under the Act must 
outweigh the environmental detriment of emissions increases in 
pollutants regulated under the Act. A statement that a technology from 
paragraphs (a)(1)(xxv)(A) through (F) of this section is being used 
shall be presumed to satisfy this requirement.
    (ii) Air quality analysis. The emissions increases from the project 
will not cause or contribute to a violation of any national ambient air 
quality standard or PSD increment, or adversely impact an air quality 
related value (such as visibility) that has been identified for a 
Federal Class I area by a Federal Land Manager and for which information 
is available to the general public.
    (3) Content of notice or permit application. In the notice or permit 
application sent to the reviewing authority, the owner or operator must 
include, at a minimum, the information listed in paragraphs (e)(3)(i) 
through (v) of this section.
    (i) A description of the project.
    (ii) The potential emissions increases and decreases of any 
pollutant regulated under the Act and the projected emissions increases 
and decreases using the methodology in paragraph (a)(2)(ii) of this 
section, that will result from the project, and a copy of the 
environmentally beneficial analysis required by paragraph (e)(2)(i) of 
this section.
    (iii) A description of monitoring and recordkeeping, and all other 
methods, to be used on an ongoing basis to demonstrate that the project 
is environmentally beneficial. Methods should be sufficient to meet the 
requirements in part 70 and part 71.
    (iv) A certification that the project will be designed and operated 
in a manner that is consistent with proper industry and engineering 
practices, in a manner that is consistent with the environmentally 
beneficial analysis and air quality analysis required by paragraphs 
(e)(2)(i) and (ii) of this section, with information submitted in the 
notice or permit application, and in such a way as to minimize, within 
the physical configuration and operational standards usually associated 
with the emissions control device or strategy, emissions of collateral 
pollutants.
    (v) Demonstration that the PCP will not have an adverse air quality 
impact (e.g., modeling, screening level modeling results, or a statement 
that the collateral emissions increase is included within the parameters 
used in the most recent modeling exercise) as required by paragraph 
(e)(2)(ii) of this section. An air quality impact analysis is not 
required for any pollutant which will not experience a significant 
emissions increase as a result of the project.
    (4) Notice process for listed projects. For projects listed in 
paragraphs (a)(1)(xxv)(A) through (F) of this section, the owner or 
operator may begin actual construction of the project immediately after 
notice is sent to the reviewing authority (unless otherwise prohibited 
under requirements of the applicable plan). The owner or operator

[[Page 189]]

shall respond to any requests by its reviewing authority for additional 
information that the reviewing authority determines is necessary to 
evaluate the suitability of the project for the PCP exclusion.
    (5) Permit process for unlisted projects. Before an owner or 
operator may begin actual construction of a PCP project that is not 
listed in paragraphs (a)(1)(xxv)(A) through (F) of this section, the 
project must be approved by the reviewing authority and recorded in a 
plan-approved permit or title V permit using procedures that are 
consistent with Secs. 51.160 and 51.161 of this chapter. This includes 
the requirement that the reviewing authority provide the public with 
notice of the proposed approval, with access to the environmentally 
beneficial analysis and the air quality analysis, and provide at least a 
30-day period for the public and the Administrator to submit comments. 
The reviewing authority must address all material comments received by 
the end of the comment period before taking final action on the permit.
    (6) Operational requirements. Upon installation of the PCP, the 
owner or operator must comply with the requirements of paragraphs 
(e)(6)(i) through (iii) of this section.
    (i) General duty. The owner or operator must operate the PCP in a 
manner consistent with proper industry and engineering practices, in a 
manner that is consistent with the environmentally beneficial analysis 
and air quality analysis required by paragraphs (e)(2)(i) and (ii) of 
this section, with information submitted in the notice or permit 
application required by paragraph (e)(3) of this section, and in such a 
way as to minimize, within the physical configuration and operational 
standards usually associated with the emissions control device or 
strategy, emissions of collateral pollutants.
    (ii) Recordkeeping. The owner or operator must maintain copies on 
site of the environmentally beneficial analysis, the air quality impacts 
analysis, and monitoring and other emission records to prove that the 
PCP operated consistent with the general duty requirements in paragraph 
(e)(6)(i) of this section.
    (iii) Permit requirements. The owner or operator must comply with 
any provisions in the plan-approved permit or title V permit related to 
use and approval of the PCP exclusion.
    (iv) Generation of emission reduction credits. Emission reductions 
created by a PCP shall not be included in calculating a significant net 
emissions increase, or be used for generating offsets, unless the 
emissions unit further reduces emissions after qualifying for the PCP 
exclusion (e.g., taking an operational restriction on the hours of 
operation). The owner or operator may generate a credit for the 
difference between the level of reduction which was used to qualify for 
the PCP exclusion and the new emission limitation if such reductions are 
surplus, quantifiable, and permanent. For purposes of generating 
offsets, the reductions must also be federally enforceable. For purposes 
of determining creditable net emissions increases and decreases, the 
reductions must also be enforceable as a practical matter.
    (f) Actuals PALs. The plan shall provide for PALs according to the 
provisions in paragraphs (f)(1) through (15) of this section.
    (1) Applicability.
    (i) The reviewing authority may approve the use of an actuals PAL 
for any existing major stationary source (except as provided in 
paragraph (f)(1)(ii) of this section) if the PAL meets the requirements 
in paragraphs (f)(1) through (15) of this section. The term ``PAL'' 
shall mean ``actuals PAL'' throughout paragraph (f) of this section.
    (ii) The reviewing authority shall not allow an actuals PAL for VOC 
or NOX for any major stationary source located in an extreme 
ozone nonattainment area.
    (iii) Any physical change in or change in the method of operation of 
a major stationary source that maintains its total source-wide emissions 
below the PAL level, meets the requirements in paragraphs (f)(1) through 
(15) of this section, and complies with the PAL permit:
    (A) Is not a major modification for the PAL pollutant;

[[Page 190]]

    (B) Does not have to be approved through the plan's nonattainment 
major NSR program; and
    (C) Is not subject to the provisions in paragraph (a)(5)(ii) of this 
section (restrictions on relaxing enforceable emission limitations that 
the major stationary source used to avoid applicability of the 
nonattainment major NSR program).
    (iv) Except as provided under paragraph (f)(1)(iii)(C) of this 
section, a major stationary source shall continue to comply with all 
applicable Federal or State requirements, emission limitations, and work 
practice requirements that were established prior to the effective date 
of the PAL.
    (2) Definitions. The plan shall use the definitions in paragraphs 
(f)(2)(i) through (xi) of this section for the purpose of developing and 
implementing regulations that authorize the use of actuals PALs 
consistent with paragraphs (f)(1) through (15) of this section. When a 
term is not defined in these paragraphs, it shall have the meaning given 
in paragraph (a)(1) of this section or in the Act.
    (i) Actuals PAL for a major stationary source means a PAL based on 
the baseline actual emissions (as defined in paragraph (a)(1)(xxxv) of 
this section) of all emissions units (as defined in paragraph 
(a)(1)(vii) of this section) at the source, that emit or have the 
potential to emit the PAL pollutant.
    (ii) Allowable emissions means ``allowable emissions'' as defined in 
paragraph (a)(1)(xi) of this section, except as this definition is 
modified according to paragraphs (f)(2)(ii)(A) through (B) of this 
section.
    (A) The allowable emissions for any emissions unit shall be 
calculated considering any emission limitations that are enforceable as 
a practical matter on the emissions unit's potential to emit.
    (B) An emissions unit's potential to emit shall be determined using 
the definition in paragraph (a)(1)(iii) of this section, except that the 
words ``or enforceable as a practical matter'' should be added after 
``federally enforceable.''
    (iii) Small emissions unit means an emissions unit that emits or has 
the potential to emit the PAL pollutant in an amount less than the 
significant level for that PAL pollutant, as defined in paragraph 
(a)(1)(x) of this section or in the Act, whichever is lower.
    (iv) Major emissions unit means:
    (A) Any emissions unit that emits or has the potential to emit 100 
tons per year or more of the PAL pollutant in an attainment area; or
    (B) Any emissions unit that emits or has the potential to emit the 
PAL pollutant in an amount that is equal to or greater than the major 
source threshold for the PAL pollutant as defined by the Act for 
nonattainment areas. For example, in accordance with the definition of 
major stationary source in section 182(c) of the Act, an emissions unit 
would be a major emissions unit for VOC if the emissions unit is located 
in a serious ozone nonattainment area and it emits or has the potential 
to emit 50 or more tons of VOC per year.
    (v) Plantwide applicability limitation (PAL) means an emission 
limitation expressed in tons per year, for a pollutant at a major 
stationary source, that is enforceable as a practical matter and 
established source-wide in accordance with paragraphs (f)(1) through 
(f)(15) of this section.
    (vi) PAL effective date generally means the date of issuance of the 
PAL permit. However, the PAL effective date for an increased PAL is the 
date any emissions unit which is part of the PAL major modification 
becomes operational and begins to emit the PAL pollutant.
    (vii) PAL effective period means the period beginning with the PAL 
effective date and ending 10 years later.
    (viii) PAL major modification means, notwithstanding paragraphs 
(a)(1)(v) and (vi) of this section (the definitions for major 
modification and net emissions increase), any physical change in or 
change in the method of operation of the PAL source that causes it to 
emit the PAL pollutant at a level equal to or greater than the PAL.
    (ix) PAL permit means the major NSR permit, the minor NSR permit, or 
the State operating permit under a program that is approved into the 
plan, or the title V permit issued by the reviewing authority that 
establishes a PAL for a major stationary source.

[[Page 191]]

    (x) PAL pollutant means the pollutant for which a PAL is established 
at a major stationary source.
    (xi) Significant emissions unit means an emissions unit that emits 
or has the potential to emit a PAL pollutant in an amount that is equal 
to or greater than the significant level (as defined in paragraph 
(a)(1)(x) of this section or in the Act, whichever is lower) for that 
PAL pollutant, but less than the amount that would qualify the unit as a 
major emissions unit as defined in paragraph (f)(2)(iv) of this section.
    (3) Permit application requirements. As part of a permit application 
requesting a PAL, the owner or operator of a major stationary source 
shall submit the following information to the reviewing authority for 
approval:
    (i) A list of all emissions units at the source designated as small, 
significant or major based on their potential to emit. In addition, the 
owner or operator of the source shall indicate which, if any, Federal or 
State applicable requirements, emission limitations or work practices 
apply to each unit.
    (ii) Calculations of the baseline actual emissions (with supporting 
documentation). Baseline actual emissions are to include emissions 
associated not only with operation of the unit, but also emissions 
associated with startup, shutdown and malfunction.
    (iii) The calculation procedures that the major stationary source 
owner or operator proposes to use to convert the monitoring system data 
to monthly emissions and annual emissions based on a 12-month rolling 
total for each month as required by paragraph (f)(13)(i) of this 
section.
    (4) General requirements for establishing PALs. (i) The plan allows 
the reviewing authority to establish a PAL at a major stationary source, 
provided that at a minimum, the requirements in paragraphs (f)(4)(i)(A) 
through (G) of this section are met.
    (A) The PAL shall impose an annual emission limitation in tons per 
year, that is enforceable as a practical matter, for the entire major 
stationary source. For each month during the PAL effective period after 
the first 12 months of establishing a PAL, the major stationary source 
owner or operator shall show that the sum of the monthly emissions from 
each emissions unit under the PAL for the previous 12 consecutive months 
is less than the PAL (a 12-month average, rolled monthly). For each 
month during the first 11 months from the PAL effective date, the major 
stationary source owner or operator shall show that the sum of the 
preceding monthly emissions from the PAL effective date for each 
emissions unit under the PAL is less than the PAL.
    (B) The PAL shall be established in a PAL permit that meets the 
public participation requirements in paragraph (f)(5) of this section.
    (C) The PAL permit shall contain all the requirements of paragraph 
(f)(7) of this section.
    (D) The PAL shall include fugitive emissions, to the extent 
quantifiable, from all emissions units that emit or have the potential 
to emit the PAL pollutant at the major stationary source.
    (E) Each PAL shall regulate emissions of only one pollutant.
    (F) Each PAL shall have a PAL effective period of 10 years.
    (G) The owner or operator of the major stationary source with a PAL 
shall comply with the monitoring, recordkeeping, and reporting 
requirements provided in paragraphs (f)(12) through (14) of this section 
for each emissions unit under the PAL through the PAL effective period.
    (ii) At no time (during or after the PAL effective period) are 
emissions reductions of a PAL pollutant, which occur during the PAL 
effective period, creditable as decreases for purposes of offsets under 
paragraph (a)(3)(ii) of this section unless the level of the PAL is 
reduced by the amount of such emissions reductions and such reductions 
would be creditable in the absence of the PAL.
    (5) Public participation requirement for PALs. PALs for existing 
major stationary sources shall be established, renewed, or increased 
through a procedure that is consistent with Secs. 51.160 and 51.161 of 
this chapter. This includes the requirement that the reviewing authority 
provide the public with notice of the proposed approval of a PAL permit 
and at least a 30-day period for

[[Page 192]]

submittal of public comment. The reviewing authority must address all 
material comments before taking final action on the permit.
    (6) Setting the 10-year actuals PAL level. The plan shall provide 
that the actuals PAL level for a major stationary source shall be 
established as the sum of the baseline actual emissions (as defined in 
paragraph (a)(1)(xxxv) of this section) of the PAL pollutant for each 
emissions unit at the source; plus an amount equal to the applicable 
significant level for the PAL pollutant under paragraph (a)(1)(x) of 
this section or under the Act, whichever is lower. When establishing the 
actuals PAL level, for a PAL pollutant, only one consecutive 24-month 
period must be used to determine the baseline actual emissions for all 
existing emissions units. However, a different consecutive 24-month 
period may be used for each different PAL pollutant. Emissions 
associated with units that were permanently shutdown after this 24-month 
period must be subtracted from the PAL level. Emissions from units on 
which actual construction began after the 24-month period must be added 
to the PAL level in an amount equal to the potential to emit of the 
units. The reviewing authority shall specify a reduced PAL level(s) (in 
tons/yr) in the PAL permit to become effective on the future compliance 
date(s) of any applicable Federal or State regulatory requirement(s) 
that the reviewing authority is aware of prior to issuance of the PAL 
permit. For instance, if the source owner or operator will be required 
to reduce emissions from industrial boilers in half from baseline 
emissions of 60 ppm NOX to a new rule limit of 30 ppm, then 
the permit shall contain a future effective PAL level that is equal to 
the current PAL level reduced by half of the original baseline emissions 
of such unit(s).
    (7) Contents of the PAL permit. The plan shall require that the PAL 
permit contain, at a minimum, the information in paragraphs (f)(7)(i) 
through (x) of this section.
    (i) The PAL pollutant and the applicable source-wide emission 
limitation in tons per year.
    (ii) The PAL permit effective date and the expiration date of the 
PAL (PAL effective period).
    (iii) Specification in the PAL permit that if a major stationary 
source owner or operator applies to renew a PAL in accordance with 
paragraph (f)(10) of this section before the end of the PAL effective 
period, then the PAL shall not expire at the end of the PAL effective 
period. It shall remain in effect until a revised PAL permit is issued 
by the reviewing authority.
    (iv) A requirement that emission calculations for compliance 
purposes include emissions from startups, shutdowns and malfunctions.
    (v) A requirement that, once the PAL expires, the major stationary 
source is subject to the requirements of paragraph (f)(9) of this 
section.
    (vi) The calculation procedures that the major stationary source 
owner or operator shall use to convert the monitoring system data to 
monthly emissions and annual emissions based on a 12-month rolling total 
for each month as required by paragraph (f)(13)(i) of this section.
    (vii) A requirement that the major stationary source owner or 
operator monitor all emissions units in accordance with the provisions 
under paragraph (f)(12) of this section.
    (viii) A requirement to retain the records required under paragraph 
(f)(13) of this section on site. Such records may be retained in an 
electronic format.
    (ix) A requirement to submit the reports required under paragraph 
(f)(14) of this section by the required deadlines.
    (x) Any other requirements that the reviewing authority deems 
necessary to implement and enforce the PAL.
    (8) PAL effective period and reopening of the PAL permit. The plan 
shall require the information in paragraphs (f)(8)(i) and (ii) of this 
section.
    (i) PAL effective period. The reviewing authority shall specify a 
PAL effective period of 10 years.
    (ii) Reopening of the PAL permit. (A) During the PAL effective 
period, the plan shall require the reviewing authority to reopen the PAL 
permit to:

[[Page 193]]

    (1) Correct typographical/calculation errors made in setting the PAL 
or reflect a more accurate determination of emissions used to establish 
the PAL.
    (2) Reduce the PAL if the owner or operator of the major stationary 
source creates creditable emissions reductions for use as offsets under 
paragraph (a)(3)(ii) of this section.
    (3) Revise the PAL to reflect an increase in the PAL as provided 
under paragraph (f)(11) of this section.
    (B) The plan shall provide the reviewing authority discretion to 
reopen the PAL permit for the following:
    (1) Reduce the PAL to reflect newly applicable Federal requirements 
(for example, NSPS) with compliance dates after the PAL effective date.
    (2) Reduce the PAL consistent with any other requirement, that is 
enforceable as a practical matter, and that the State may impose on the 
major stationary source under the plan.
    (3) Reduce the PAL if the reviewing authority determines that a 
reduction is necessary to avoid causing or contributing to a NAAQS or 
PSD increment violation, or to an adverse impact on an air quality 
related value that has been identified for a Federal Class I area by a 
Federal Land Manager and for which information is available to the 
general public.
    (C) Except for the permit reopening in paragraph (f)(8)(ii)(A)(1) of 
this section for the correction of typographical/calculation errors that 
do not increase the PAL level, all other reopenings shall be carried out 
in accordance with the public participation requirements of paragraph 
(f)(5) of this section.
    (9) Expiration of a PAL. Any PAL which is not renewed in accordance 
with the procedures in paragraph (f)(10) of this section shall expire at 
the end of the PAL effective period, and the requirements in paragraphs 
(f)(9)(i) through (v) of this section shall apply.
    (i) Each emissions unit (or each group of emissions units) that 
existed under the PAL shall comply with an allowable emission limitation 
under a revised permit established according to the procedures in 
paragraphs (f)(9)(i)(A) through (B) of this section.
    (A) Within the time frame specified for PAL renewals in paragraph 
(f)(10)(ii) of this section, the major stationary source shall submit a 
proposed allowable emission limitation for each emissions unit (or each 
group of emissions units, if such a distribution is more appropriate as 
decided by the reviewing authority) by distributing the PAL allowable 
emissions for the major stationary source among each of the emissions 
units that existed under the PAL. If the PAL had not yet been adjusted 
for an applicable requirement that became effective during the PAL 
effective period, as required under paragraph (f)(10)(v) of this 
section, such distribution shall be made as if the PAL had been 
adjusted.
    (B) The reviewing authority shall decide whether and how the PAL 
allowable emissions will be distributed and issue a revised permit 
incorporating allowable limits for each emissions unit, or each group of 
emissions units, as the reviewing authority determines is appropriate.
    (ii) Each emissions unit(s) shall comply with the allowable emission 
limitation on a 12-month rolling basis. The reviewing authority may 
approve the use of monitoring systems (source testing, emission factors, 
etc.) other than CEMS, CERMS, PEMS or CPMS to demonstrate compliance 
with the allowable emission limitation.
    (iii) Until the reviewing authority issues the revised permit 
incorporating allowable limits for each emissions unit, or each group of 
emissions units, as required under paragraph (f)(9)(i)(A) of this 
section, the source shall continue to comply with a source-wide, multi-
unit emissions cap equivalent to the level of the PAL emission 
limitation.
    (iv) Any physical change or change in the method of operation at the 
major stationary source will be subject to the nonattainment major NSR 
requirements if such change meets the definition of major modification 
in paragraph (a)(1)(v) of this section.
    (v) The major stationary source owner or operator shall continue to 
comply with any State or Federal applicable requirements (BACT, RACT, 
NSPS, etc.) that may have applied either during the PAL effective period 
or prior to the PAL effective period except for those emission 
limitations

[[Page 194]]

that had been established pursuant to paragraph (a)(5)(ii) of this 
section, but were eliminated by the PAL in accordance with the 
provisions in paragraph (f)(1)(iii)(C) of this section.
    (10) Renewal of a PAL. (i) The reviewing authority shall follow the 
procedures specified in paragraph (f)(5) of this section in approving 
any request to renew a PAL for a major stationary source, and shall 
provide both the proposed PAL level and a written rationale for the 
proposed PAL level to the public for review and comment. During such 
public review, any person may propose a PAL level for the source for 
consideration by the reviewing authority.
    (ii) Application deadline. The plan shall require that a major 
stationary source owner or operator shall submit a timely application to 
the reviewing authority to request renewal of a PAL. A timely 
application is one that is submitted at least 6 months prior to, but not 
earlier than 18 months from, the date of permit expiration. This 
deadline for application submittal is to ensure that the permit will not 
expire before the permit is renewed. If the owner or operator of a major 
stationary source submits a complete application to renew the PAL within 
this time period, then the PAL shall continue to be effective until the 
revised permit with the renewed PAL is issued.
    (iii) Application requirements. The application to renew a PAL 
permit shall contain the information required in paragraphs 
(f)(10)(iii)(A) through (D) of this section.
    (A) The information required in paragraphs (f)(3)(i) through (iii) 
of this section.
    (B) A proposed PAL level.
    (C) The sum of the potential to emit of all emissions units under 
the PAL (with supporting documentation).
    (D) Any other information the owner or operator wishes the reviewing 
authority to consider in determining the appropriate level for renewing 
the PAL.
    (iv) PAL adjustment. In determining whether and how to adjust the 
PAL, the reviewing authority shall consider the options outlined in 
paragraphs (f)(10)(iv)(A) and (B) of this section. However, in no case 
may any such adjustment fail to comply with paragraph (f)(10)(iv)(C) of 
this section.
    (A) If the emissions level calculated in accordance with paragraph 
(f)(6) of this section is equal to or greater than 80 percent of the PAL 
level, the reviewing authority may renew the PAL at the same level 
without considering the factors set forth in paragraph (f)(10)(iv)(B) of 
this section; or
    (B) The reviewing authority may set the PAL at a level that it 
determines to be more representative of the source's baseline actual 
emissions, or that it determines to be appropriate considering air 
quality needs, advances in control technology, anticipated economic 
growth in the area, desire to reward or encourage the source's voluntary 
emissions reductions, or other factors as specifically identified by the 
reviewing authority in its written rationale.
    (C) Notwithstanding paragraphs (f)(10)(iv)(A) and (B) of this 
section,
    (1) If the potential to emit of the major stationary source is less 
than the PAL, the reviewing authority shall adjust the PAL to a level no 
greater than the potential to emit of the source; and
    (2) The reviewing authority shall not approve a renewed PAL level 
higher than the current PAL, unless the major stationary source has 
complied with the provisions of paragraph (f)(11) of this section 
(increasing a PAL).
    (v) If the compliance date for a State or Federal requirement that 
applies to the PAL source occurs during the PAL effective period, and if 
the reviewing authority has not already adjusted for such requirement, 
the PAL shall be adjusted at the time of PAL permit renewal or title V 
permit renewal, whichever occurs first.
    (11) Increasing a PAL during the PAL effective period. (i) The plan 
shall require that the reviewing authority may increase a PAL emission 
limitation only if the major stationary source complies with the 
provisions in paragraphs (f)(11)(i)(A) through (D) of this section.
    (A) The owner or operator of the major stationary source shall 
submit a complete application to request an increase in the PAL limit 
for a PAL major modification. Such application

[[Page 195]]

shall identify the emissions unit(s) contributing to the increase in 
emissions so as to cause the major stationary source's emissions to 
equal or exceed its PAL.
    (B) As part of this application, the major stationary source owner 
or operator shall demonstrate that the sum of the baseline actual 
emissions of the small emissions units, plus the sum of the baseline 
actual emissions of the significant and major emissions units assuming 
application of BACT equivalent controls, plus the sum of the allowable 
emissions of the new or modified emissions unit(s) exceeds the PAL. The 
level of control that would result from BACT equivalent controls on each 
significant or major emissions unit shall be determined by conducting a 
new BACT analysis at the time the application is submitted, unless the 
emissions unit is currently required to comply with a BACT or LAER 
requirement that was established within the preceding 10 years. In such 
a case, the assumed control level for that emissions unit shall be equal 
to the level of BACT or LAER with which that emissions unit must 
currently comply.
    (C) The owner or operator obtains a major NSR permit for all 
emissions unit(s) identified in paragraph (f)(11)(i)(A) of this section, 
regardless of the magnitude of the emissions increase resulting from 
them (that is, no significant levels apply). These emissions unit(s) 
shall comply with any emissions requirements resulting from the 
nonattainment major NSR program process (for example, LAER), even though 
they have also become subject to the PAL or continue to be subject to 
the PAL.
    (D) The PAL permit shall require that the increased PAL level shall 
be effective on the day any emissions unit that is part of the PAL major 
modification becomes operational and begins to emit the PAL pollutant.
    (ii) The reviewing authority shall calculate the new PAL as the sum 
of the allowable emissions for each modified or new emissions unit, plus 
the sum of the baseline actual emissions of the significant and major 
emissions units (assuming application of BACT equivalent controls as 
determined in accordance with paragraph (f)(11)(i)(B)), plus the sum of 
the baseline actual emissions of the small emissions units.
    (iii) The PAL permit shall be revised to reflect the increased PAL 
level pursuant to the public notice requirements of paragraph (f)(5) of 
this section.
    (12) Monitoring requirements for PALs--(i) General requirements.
    (A) Each PAL permit must contain enforceable requirements for the 
monitoring system that accurately determines plantwide emissions of the 
PAL pollutant in terms of mass per unit of time. Any monitoring system 
authorized for use in the PAL permit must be based on sound science and 
meet generally acceptable scientific procedures for data quality and 
manipulation. Additionally, the information generated by such system 
must meet minimum legal requirements for admissibility in a judicial 
proceeding to enforce the PAL permit.
    (B) The PAL monitoring system must employ one or more of the four 
general monitoring approaches meeting the minimum requirements set forth 
in paragraphs (f)(12)(ii)(A) through (D) of this section and must be 
approved by the reviewing authority.
    (C) Notwithstanding paragraph (f)(12)(i)(B) of this section, you may 
also employ an alternative monitoring approach that meets paragraph 
(f)(12)(i)(A) of this section if approved by the reviewing authority.
    (D) Failure to use a monitoring system that meets the requirements 
of this section renders the PAL invalid.
    (ii) Minimum Performance Requirements for Approved Monitoring 
Approaches. The following are acceptable general monitoring approaches 
when conducted in accordance with the minimum requirements in paragraphs 
(f)(12)(iii) through (ix) of this section:
    (A) Mass balance calculations for activities using coatings or 
solvents;
    (B) CEMS;
    (C) CPMS or PEMS; and
    (D) Emission Factors.
    (iii) Mass Balance Calculations. An owner or operator using mass 
balance calculations to monitor PAL pollutant emissions from activities 
using coating or solvents shall meet the following requirements:

[[Page 196]]

    (A) Provide a demonstrated means of validating the published content 
of the PAL pollutant that is contained in or created by all materials 
used in or at the emissions unit;
    (B) Assume that the emissions unit emits all of the PAL pollutant 
that is contained in or created by any raw material or fuel used in or 
at the emissions unit, if it cannot otherwise be accounted for in the 
process; and
    (C) Where the vendor of a material or fuel, which is used in or at 
the emissions unit, publishes a range of pollutant content from such 
material, the owner or operator must use the highest value of the range 
to calculate the PAL pollutant emissions unless the reviewing authority 
determines there is site-specific data or a site-specific monitoring 
program to support another content within the range.
    (iv) CEMS. An owner or operator using CEMS to monitor PAL pollutant 
emissions shall meet the following requirements:
    (A) CEMS must comply with applicable Performance Specifications 
found in 40 CFR part 60, appendix B; and
    (B) CEMS must sample, analyze and record data at least every 15 
minutes while the emissions unit is operating.
    (v) CPMS or PEMS. An owner or operator using CPMS or PEMS to monitor 
PAL pollutant emissions shall meet the following requirements:
    (A) The CPMS or the PEMS must be based on current site-specific data 
demonstrating a correlation between the monitored parameter(s) and the 
PAL pollutant emissions across the range of operation of the emissions 
unit; and
    (B) Each CPMS or PEMS must sample, analyze, and record data at least 
every 15 minutes, or at another less frequent interval approved by the 
reviewing authority, while the emissions unit is operating.
    (vi) Emission factors. An owner or operator using emission factors 
to monitor PAL pollutant emissions shall meet the following 
requirements:
    (A) All emission factors shall be adjusted, if appropriate, to 
account for the degree of uncertainty or limitations in the factors' 
development;
    (B) The emissions unit shall operate within the designated range of 
use for the emission factor, if applicable; and
    (C) If technically practicable, the owner or operator of a 
significant emissions unit that relies on an emission factor to 
calculate PAL pollutant emissions shall conduct validation testing to 
determine a site-specific emission factor within 6 months of PAL permit 
issuance, unless the reviewing authority determines that testing is not 
required.
    (vii) A source owner or operator must record and report maximum 
potential emissions without considering enforceable emission limitations 
or operational restrictions for an emissions unit during any period of 
time that there is no monitoring data, unless another method for 
determining emissions during such periods is specified in the PAL 
permit.
    (viii) Notwithstanding the requirements in paragraphs (f)(12)(iii) 
through (vii) of this section, where an owner or operator of an 
emissions unit cannot demonstrate a correlation between the monitored 
parameter(s) and the PAL pollutant emissions rate at all operating 
points of the emissions unit, the reviewing authority shall, at the time 
of permit issuance:
    (A) Establish default value(s) for determining compliance with the 
PAL based on the highest potential emissions reasonably estimated at 
such operating point(s); or
    (B) Determine that operation of the emissions unit during operating 
conditions when there is no correlation between monitored parameter(s) 
and the PAL pollutant emissions is a violation of the PAL.
    (ix) Re-validation. All data used to establish the PAL pollutant 
must be re-validated through performance testing or other scientifically 
valid means approved by the reviewing authority. Such testing must occur 
at least once every 5 years after issuance of the PAL.
    (13) Recordkeeping requirements. (i) The PAL permit shall require an 
owner or operator to retain a copy of all records necessary to determine 
compliance with any requirement of paragraph (f) of this section and of 
the PAL, including a determination of each

[[Page 197]]

emissions unit's 12-month rolling total emissions, for 5 years from the 
date of such record.
    (ii) The PAL permit shall require an owner or operator to retain a 
copy of the following records for the duration of the PAL effective 
period plus 5 years:
    (A) A copy of the PAL permit application and any applications for 
revisions to the PAL; and
    (B) Each annual certification of compliance pursuant to title V and 
the data relied on in certifying the compliance.
    (14) Reporting and notification requirements. The owner or operator 
shall submit semi-annual monitoring reports and prompt deviation reports 
to the reviewing authority in accordance with the applicable title V 
operating permit program. The reports shall meet the requirements in 
paragraphs (f)(14)(i) through (iii).
    (i) Semi-Annual Report. The semi-annual report shall be submitted to 
the reviewing authority within 30 days of the end of each reporting 
period. This report shall contain the information required in paragraphs 
(f)(14)(i)(A) through (G) of this section.
    (A) The identification of owner and operator and the permit number.
    (B) Total annual emissions (tons/year) based on a 12-month rolling 
total for each month in the reporting period recorded pursuant to 
paragraph (f)(13)(i) of this section.
    (C) All data relied upon, including, but not limited to, any Quality 
Assurance or Quality Control data, in calculating the monthly and annual 
PAL pollutant emissions.
    (D) A list of any emissions units modified or added to the major 
stationary source during the preceding 6-month period.
    (E) The number, duration, and cause of any deviations or monitoring 
malfunctions (other than the time associated with zero and span 
calibration checks), and any corrective action taken.
    (F) A notification of a shutdown of any monitoring system, whether 
the shutdown was permanent or temporary, the reason for the shutdown, 
the anticipated date that the monitoring system will be fully 
operational or replaced with another monitoring system, and whether the 
emissions unit monitored by the monitoring system continued to operate, 
and the calculation of the emissions of the pollutant or the number 
determined by method included in the permit, as provided by paragraph 
(f)(12)(vii) of this section.
    (G) A signed statement by the responsible official (as defined by 
the applicable title V operating permit program) certifying the truth, 
accuracy, and completeness of the information provided in the report.
    (ii) Deviation report. The major stationary source owner or operator 
shall promptly submit reports of any deviations or exceedance of the PAL 
requirements, including periods where no monitoring is available. A 
report submitted pursuant to Sec. 70.6(a)(3)(iii)(B) of this chapter 
shall satisfy this reporting requirement. The deviation reports shall be 
submitted within the time limits prescribed by the applicable program 
implementing Sec. 70.6(a)(3)(iii)(B) of this chapter. The reports shall 
contain the following information:
    (A) The identification of owner and operator and the permit number;
    (B) The PAL requirement that experienced the deviation or that was 
exceeded;
    (C) Emissions resulting from the deviation or the exceedance; and
    (D) A signed statement by the responsible official (as defined by 
the applicable title V operating permit program) certifying the truth, 
accuracy, and completeness of the information provided in the report.
    (iii) Re-validation results. The owner or operator shall submit to 
the reviewing authority the results of any re-validation test or method 
within 3 months after completion of such test or method.
    (15) Transition requirements. (i) No reviewing authority may issue a 
PAL that does not comply with the requirements in paragraphs (f)(1) 
through (15) of this section after the Administrator has approved 
regulations incorporating these requirements into a plan.
    (ii) The reviewing authority may supersede any PAL which was 
established prior to the date of approval of the plan by the 
Administrator with a PAL

[[Page 198]]

that complies with the requirements of paragraphs (f)(1) through (15) of 
this section.
    (g) If any provision of this section, or the application of such 
provision to any person or circumstance, is held invalid, the remainder 
of this section, or the application of such provision to persons or 
circumstances other than those as to which it is held invalid, shall not 
be affected thereby.

[51 FR 40669, Nov. 7, 1986, as amended at 52 FR 24713, July 1, 1987; 52 
FR 29386, Aug 7, 1987; 54 FR 27285, 27299 June 28, 1989; 57 FR 3946, 
Feb. 3, 1992; 57 FR 32334, July 21, 1992; 67 FR 80244, Dec. 31, 2002]