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On March 31, 2010, the EPA disapproved the qualified facilities exemption rule that the Texas Commission on Environmental Quality (TCEQ) had submitted for inclusion in its federally approved State Implementation Plan. This action finalizes EPA's September 23, 2009, proposed disapproval of the commission's qualified facility program. Their disapproval is based on the following factors:

  • Inadequate language ensuring that a review of federal NSR applicability, including netting, was performed prior to granting of qualified facility status;
  • Lack of assurance that changes authorized under the qualified facility program would result in the same air quality benefit as the previously authorized emissions, and that the changes would be federally enforceable; and
  • Lack of assurance that the federal definition of best available control technology (BACT) was applied for projects requiring federal NSR.

In its notice of proposed disapproval, the EPA acknowledges that the qualified facility program was intended to apply for minor NSR only. However, its basis for disapproval is that the program does not adequately spell out the minor source only restriction. In response to the EPA's September 2009 proposed disapproval of the qualified facility program, on March 30, 2010, TCEQ approved revisions to the program intended to address its concerns. Among other changes, TCEQ has proposed the following:

  • Incorporate new provisions which clearly state that facility owners/operators must make a determination of the applicability of federal NSR prior to seeking qualified facility status, and that a facility must be authorized under 30 TAC Chapter 106 or 116 to be eligible for a qualified facility change;
  • Amendment of TCEQ NSR regulations to specify that the federal definition of BACT will apply to those NSR projects requiring federal review for federally regulated pollutants and that the existing BACT definition in 30 TAC §116.10 will continue to apply comprehensively for state and federal review so that all pollutants are evaluated for state NSR; and
  • Delete provisions referring to post-change notification for qualified facility changes.  In order to fully address EPA concerns about the eligibility of facilities for changes under the qualified facilities program and the enforceability of those changes, the executive director would require prior notification of proposed changes.

The qualified facilities program revisions are anticipated to be published in the Texas Register on April 16, 2010, with a public hearing to follow on May 10, 2010.

The qualified facilities program was created by Senate Bill (SB) 1126, 74th Legislature, 1995, and authorizes increases in actual emissions at facilities if those increases are below emissions thresholds that require federal new source review (NSR) and if the BACT used at the facility was no older than 120 months from the date of the proposed increase.