Exclusive State Court Review for NSR Permit Terms and Conditions: Does EPA's Proposal Go Too Far?

Eliza A. Dolin and Ellen L.W. Proctor

Editors' Summary: This Article examines the judicial review provisions of EPA's proposed New Source Review (NSR) Reform Package issued under the 1990 Amendments to the Clean Air Act. The proposed rule would require the terms and conditions of state-issued NSR construction permits under Title I of the Act to be reviewable in state court, and would further allow states to designate the state forum as the exclusive means for judicial review of permit terms and conditions. The authors argue that this assignment of jurisdiction exceeds the authority granted to EPA by the 1990 Amendments, and thus is not entitled to judicial deference under Chevron and its progeny. Moreover, the authors argue that the existing administrative and judicial review procedures under Title V of the Act render EPA's proposal unnecessary, by allowing both state and federal review of NSR permit terms and conditions that are incorporated into a Title V operating permit. Thus, the authors conclude that the proper course of action is for EPA to fully utilize its existing Title V authority for substantive review of NSR permit terms and conditions.

Eliza A. Dolin is the senior associate in Dewey Ballantine's Environmental Practice Group. She is the author of a number of articles and several book chapters addressing the Clean Air Act Amendments of 1990 and other areas of environmental regulation. Ellen L.W. Proctor also is an associate in Dewey Ballantine's Environmental Practice Group.

[27 ELR 10057]

For 15 years, the U.S. Environmental Protection Agency (EPA) has regulated the construction and operation of major new sources of air pollutants under a set of regulations that has remained substantially unchanged. These "new source review" (NSR) requirements under the Clean Air Act¹ (the Act) are among the most complex in all of environmental law, and compliance generally is both time-consuming and expensive. Prompted in part by the clamor for increased "regulatory flexibility" within the program, EPA finally issued a proposal to overhaul the regulations on July 23, 1996.²

Colloquially referred to as the NSR Reform Package, the proposal is intended to achieve two principal goals: implementation of various changes to the NSR requirements as mandated by the Clean Air Act Amendments of 1990 (the Amendments), and a reduction in the number and types of activities that are subject to NSR. Many of the reforms falling into the latter category are controversial, and few would actually make the NSR requirements any easier to understand or implement. Nevertheless, the large majority of those changes come well within EPA's traditional discretionary authority to implement the complex and technical requirements of the Clean Air Act.

However, also tucked away within the almost 200-page notice is a proposal to administratively amend the jurisdictional provisions of the Act. Under the proposal, states would be required to provide for judicial review in state court of state-issued NSR permit terms and conditions. The Clean Air Act does not expressly provide for such review; rather, the revisions would codify EPA's own statutory interpretation, which further holds that review of permit terms and conditions is not available in federal court. EPA also would require that state court review be made available not only to the permit applicant, but also to any person who participated in the public participation process and can satisfy threshold Article III standing requirements. Implementing states also could specify that this state court forum is the exclusive means by which citizens may obtain judicial review of the terms and conditions of a final NSR permit.³

This Article examines EPA's judicial review proposal in light of traditional limitations on the rulemaking authority of administrative agencies. It examines current case law and concludes that EPA's interpretation of the Act, while [27 ELR 10058] a laudable effort to facilitate intergovernmental efficiency, is not entitled to judicial deference.

Moreover, it is the authors' view that the existing administrative and judicial review provisions of Title V of the Act supplant any authority EPA may have had prior to the Amendments to dictate the forum for and scope of judicial review of NSR permit terms and conditions.⁴ Those Title V review provisions provide substantially the same rights to state court review as would EPA's NSR proposal; moreover, Title V also provides an independent route for obtaining federal court review of NSR/Title V permit terms where EPA fails to fulfill its own review obligations. Thus, in addition to being unauthorized, EPA's proposed revisions to the NSR regulations are unnecessary as well.

For the new permit review system to function as contemplated by Congress, however, EPA must be willing to exercise its authority to evaluate Title V permit terms for full substantive compliance with the NSR requirements of the Act. Under its current interpretation of Title V, however, it appears that the Agency would limit its review to essentially procedural matters, thereby shifting much of the burden of ensuring NSR compliance from EPA to citizens, applicants, and the courts. If EPA instead implements Title V according to the plain terms of the statute, the need for judicial review should be minimized—a desirable outcome for all parties.

Background

Overview of the NSR Program

EPA's NSR regulations are authorized by Parts C and D of Title I of the Clean Air Act. Part C is known as the prevention of significant deterioration (PSD) program,⁵ while Part D is known as the nonattainment new source review (nonattainment NSR) program.⁶ These two regulatory programs are referred to collectively as "the NSR program." Both programs generally apply only to new or modified "major" stationary sources—i.e., so-called greenfield sources, and modifications to existing sources, that will emit criteria pollutants⁷ in quantities that exceed specified thresholds.

Broadly speaking, the PSD program applies to emissions from new or modified sources located in or near areas that have attained the national ambient air quality standards (NAAQS). These sources must install air pollution control equipment that qualifies as the best available control technology (BACT).⁸ In contrast, the nonattainment NSR program applies to emissions from new or modified sources located in or near areas that have not attained the NAAQS. These sources must install air pollution control equipment that can reduce emissions to the lowest achievable emission rate (LAER)—a standard even more stringent than BACT—and must acquire sufficient offsetting emissions reductions from other sources to counter the increase in emissions from the new project.⁹

The owner or operator of a source subject to either of the NSR programs must obtain a permit prior to commencing construction of the project. This preconstruction permit may not be issued until the permitting authority has completed its review of the project, formulated the control technology requirements, emissions limitations and other permit terms that will ensure the project's compliance with the NSR regulations, and provided an opportunity for public comment.¹⁰

While the NSR regulations appear fairly simple on their face, EPA has issued hundreds of guidance documents over the years, adding a substantial gloss and additional complexity to the regulatory requirements. Thus, even determining whether the NSR requirements apply to a particular project frequently is a time-consuming and confusing process. Once the applicability determination is made, many more months and dollars can be spent determining exactly which pollution control technologies and emissions limitations are necessary to ensure compliance with the Act.

Adding to the difficulties of consistent NSR implementation is the fact that the PSD and nonattainment NSR programs generally are administered directly by state or local permitting authorities—albeit with varying degrees of EPA oversight—through incorporation of NSR regulations into the state implementation plan (SIP) for the Clean Air Act. Many of these permitting authorities do not have substantial experience with the NSR program, or with a wide range of project types; thus, they may impose emissions limitations or control technology requirements that are either too generous—leading to excessive emissions—or too stringent and therefore not practically achievable—again leading to excessive emissions or to economic hardship.

Such deviations from the NSR requirements can prompt either the NSR permit applicant or a member of the public to seek further review of the terms and conditions of an NSR permit.¹¹ The availability of state administrative appeals is a matter left to state law. The availability of judicial review of state-issued NSR permits, however, is another matter, as discussed below.

Overview of the Title V Program

Added by the 1990 Amendments, Title V of the Clean Air Act establishes a new federal permitting program. Title V requires certain stationary sources that are specially regulated under various Clean Air Act programs, including sources subject to the PSD and nonattainment NSR programs, to obtain operating permits.¹² These "Part 70" or "Title V" permits must incorporate all requirements that [27 ELR 10059] are applicable to the source pursuant to the Act. Thus, a Title V permit would include not only terms and conditions required to ensure compliance with the NSR requirements, but also terms and conditions derived from Title III of the Act (relating to emissions of hazardous air pollutants), Title IV of the Act (relating to the control of acid rain), and so on.

The Title V program does not in any way modify the applicability of the NSR program, nor its control technology and preconstruction permitting requirements. However, Title V does provide new opportunities for judicial review of permit terms and conditions, including terms and conditions derived from the NSR program and incorporated into the Title V permit. It is these Title V judicial review provisions that EPA has not adequately considered in its proposal to revise the NSR regulations.

The Act's Judicial Review Provisions

The Clean Air Act's principal citizen-suit provisions are found at §§ 304 and 307.¹³ Section 304(a) authorizes "any person" to bring a civil action in federal district court (1) against any person who is alleged to have violated an emission standard or limitation or a related EPA or state order, (2) against EPA for an alleged failure to perform a nondiscretionary act, and (3) against any person who proposes to construct or constructs a facility "without a permit required under part C … or part D …," or who is alleged to be in violation of any condition of an NSR permit.¹⁴ Section 307(b) authorizes any person to bring a petition for review of any final action taken by the Administrator.¹⁵

Section 307(b) clearly does not authorize suits to challenge the terms and conditions of an NSR permit issued by a state (as opposed to EPA), nor does subsection (2) of § 304(a). Similarly, the plain language of §§ 304(a)(1) and (3) does not comfortably support federal court jurisdiction over challenges to state-issued NSR permit terms, and the authors are not aware of any case law that addresses the question whether these sections might confer such jurisdiction.¹⁶ What legislative history there is on this point also indicates that such challenges are not contemplated by § 304.¹⁷

Moreover, Congress clearly does know how to expressly designate the forum for judicial review of specific Clean Air Act issues: two other sections of the new Title V program specifically address jurisdiction over citizen and applicant challenges to state-issued Title V permits. Section 502(b) requires EPA to issue regulations establishing the minimum elements of the Title V permit program to be administered by state and local authorities.¹⁸ In § 502(b)(6), Congress specified that state Title V programs must include provisions for public participation, "including an opportunity for judicial review in State court of the final permit action by the applicant, any person who participated in the public comment process, and any other person who could obtain judicial review of that action under applicable law."¹⁹ Thus, pursuant to the Amendments, states clearly must provide for judicial review of state-issued Title V permits in state court.

Section 505(b)(1) of the Act provides that if any Title V permit contains provisions that are found by EPA "as not in compliance with the applicable requirements of this chapter, including the requirements of an applicable implementation plan," EPA "shall … object to its issuance."²⁰ If EPA does not object to the issuance of the Title V permit, § 505(b)(2) provides that "any person" may petition EPA within 60 days to take such action, and EPA must act on the petition within 60 days.²¹ Here again, the Agency must issue an objection if the petition demonstrates "that the permit is not in compliance with the requirements of this chapter, including the requirements of the applicable implementation plan."²² EPA's denial of a petition is expressly made subject to judicial review under § 307. As directed by Congress, EPA issued regulations implementing these provisions in 1992; however, as discussed below, in 1995 the Agency proposed to revise those regulations.

Thus, while § 304 and § 307 do not expressly provide for citizen or applicant suits challenging NSR permit terms in either state or federal court, the Title V program does authorize such challenges in certain circumstances. The critical question is whether the Title V judicial review provisions were intended to authorize review of substantive NSR permit terms and conditions, or merely the "mechanics" of the Title V permitting process. The authors believe that the former reading is the correct one, and that EPA's NSR Reform Package judicial review proposal, coupled with its proposed implementation of the Title V provisions, therefore runs afoul of express congressional directives.

EPA's Judicial Review Proposal

EPA's proposal has three elements. First, the Agency would expressly require that SIPs allow private parties to seek judicial review in state court of PSD and nonattainment NSR permit actions.²³ Second, such review would be made available to the applicant and to any other person who participated in the administrative process and can satisfy what EPA calls "threshold Article III standing requirements."²⁴ Third, states would be authorized to provide in [27 ELR 10060] the SIP that state court review would be the "exclusive means by which citizens may obtain judicial review of the permit" and that such suits must be filed within a reasonable period.²⁵

In its discussion of the proposal, EPA clearly states its belief that the Act and regulations require this opportunity for state court judicial review.²⁶ The Agency asserts both that Congress did not intend to provide for judicial review of NSR permit terms in federal court under § 304(a)(3) and that Congress did intend to provide for such review in state court.²⁷

However, apart from citing some legislative history provided by the staff of a Senate subcommittee involved in the drafting of the 1977 Amendments²⁸ and dicta in a few judicial decisions,²⁹ the Agency provides no meaningful support for its conclusions, and no analysis whatsoever of the operative terms of either the statute or the existing regulations on which the Agency relies to support its interpretation. Instead, EPA's proposal appears to be based on a visceral feeling that "all [affected] persons, as well as the applicant, must be able to challenge NSR permitting actions in a judicial forum."³⁰

The impression that the Agency does not feel constrained in its interpretations by the express terms of the Act is reinforced by its discussion of alternative solutions to the problem. EPA solicits comment on whether the statute "should instead be interpreted as providing for citizen challenges … in Federal court under section 304(a)(3)"; on whether citizens "should be given the option of proceeding in State or Federal court"; and on whether citizens "should be allowed to proceed in Federal court only if a State court remedy is not provided."³¹

Similarly, notwithstanding the plain language of the statute, the Agency seemsto feel that it has discretion to determine the scope of review of NSR permit terms under Title V. Making specific reference to its pending rulemaking to implement the Title V requirements, the EPA proposal states that

EPA solicited comment…on whether EPA review and, ultimately, judicial review under title V should address all or only some of the requirements of PSD and nonattainment NSR permits. Thus, it is not clear at this juncture whether EPA and judicial review under [the Title V implementing regulations at] part 70 will extend to all PSD and nonattainment NSR requirements, and hence, whether adoption of the proposed changes to part 70 would obviate the need for a separate judicial review requirement under title I.³²

As reflected in this proposal, EPA's mindfulness of the factors that must control its regulatory actions—the plain language of the statute, congressional intent, and constitutional constraints on its rulemaking authority—is superficial, at best. As discussed below, no matter how well-intentioned the Agency's judicial review proposal may be, its underlying interpretation of the statute should carry no weight in any challenge to the regulations. More fundamentally, it is the authors' view that EPA's proposal, if finalized, should not be sustained by the courts, for our constitutional system does not contemplate the creation and restriction of judicial jurisdiction by an administrative agency in the absence of express congressional authorization.

Judicial Deference to EPA's Interpretation

It is an elementary proposition that EPA must be granted authority by Congress if it is to issue a rule such as the proposed rule mandating state court review of NSR permit terms. As stated by the U.S. Supreme Court, "it is axiomatic that an administrative agency's power to promulgate legislative regulations is limited to the authority delegated by Congress."³³

The Supreme Court's decision in Adams Fruit Co. v. Barrett³⁴ underscores this point. Adams Fruit expressly held that a "precondition to deference under Chevron is a congressional delegation of administrative authority."³⁵ In that case, the Supreme Court held that a Department of Labor interpretation regarding the preemptive effect of a federal worker protection act over state workers' compensation laws was not entitled to judicial deference under the landmark statutory interpretation case Chevron, U.S.A., Inc. v. Natural Resources Defense Council.³⁶ Since the underlying federal statute did not delegate authority to the agency to decide whether the private right-of-action provided in that statute preempted otherwise exclusive state workers' compensation laws, such a decision was held to be left solely within the province of the judicial branch.

Two recent environmental cases from the U.S. Court of Appeals for the District of Columbia Circuit have emphasized the requirement that an administrative agency must demonstrate statutory delegation of interpretive authority. In Linemaster Switch Corp. v. U.S. Environmental Protection Agency,³⁷ the D.C. Circuit declined to defer to EPA's reading of § 105(c) of the Comprehensive Environmental [27 ELR 10061] Response, Compensation, and Liability Act (CERCLA).³⁸ The court explained that "before we may defer to an agency's construction of a statute, we must find either explicit or implicit evidence of congressional intent to delegate interpretive authority."³⁹ Kelley v. U.S. Environmental Protection Agency,⁴⁰ in which the D.C. Circuit struck down EPA's CERCLA "lender liability" rule for lack of statutory authority, reaffirmed this principle.⁴¹

Interestingly, in contrast to Linemaster Switch and Kelley, the D.C. Circuit in Wagner Seed Co. v. Bush⁴² found that Congress had delegated interpretive authority to EPA with respect to § 106(2) of CERCLA,⁴³ which permits certain persons who have complied with administrative cleanup orders to seek reimbursement from EPA.⁴⁴ Even in Wagner Seed, however, the D.C. Circuit acknowledged that "if the EPA had purported to determine the manner in which a person seeking reimbursement must 'file an action,' or which is the 'appropriate United States district court,' … the rationale of Adams Fruit would seem to apply."⁴⁵ This narrow view of EPA's statutory authority to issue regulations pertaining to matters usually within the province of the judiciary was later borne out in Kelley.

Virginia v. Browner⁴⁶ exemplifies the unusual case in which Congress has expressly granted EPA the authority to issue rules regarding judicial review. That case addressed § 502(b)(6) of the Clean Air Act, discussed above, which expressly requires state Title V programs to provide for judicial review of Title V permit decisions in state court.⁴⁷ Section 502(b)(6) also expressly authorizes EPA to issue regulations implementing that requirement. EPA interpreted the statute to require states to provide standing to anyone who would qualify under Article III. Pursuant to this interpretation, EPA disapproved Virginia's SIP submission because Virginia law limits standing to those who have a pecuniary interest in the case. Virginia v. Browner held that EPA's interpretation of the statute warranted judicial deference because "Congress has charged EPA with inducing the states to implement a permitting program that satisfies certain judicial review requirements, and if Congress has decided that EPA has sufficient expertise in the area, it is not our place to say otherwise."⁴⁸

A common theme clearly underlies Adams Fruit and Kelley: issues traditionally left to the judiciary to determine, such as jurisdiction or liability, may not be addressed by administrative agencies in the absence of a clear delegation from Congress. Wagner Seed, which distinguished between EPA's authority to interpret CERCLA in order to effectuate a reimbursement scheme and EPA's authority to dictate rules governing commencement of judicial actions, points in this direction as well. The authors submit that, in stark contrast to the situation in Virginia v. Browner, a reviewing court considering the validity of EPA's proposed rule pertaining to state court review of NSR permit terms would insist upon—but would not find—a clear delegation from Congress directing EPA to regulate the issue of access to state court.⁴⁹

Congress has not expressly charged EPA with any administrative task that calls on the Agency to interpret the Act with regard to state court review of NSR permit terms. Thus, as demonstrated in Adams Fruit and the other cases providing for an independent determination of the scope of EPA's delegated authority, EPA's interpretation of the proper jurisdictional workings of NSR review is not entitled to deference.

This conclusion is only reinforced by the fact that Congress spoke directly to various other jurisdictional matters in the 1990 Amendments. Congress not only expressly mandated in § 505 that states provide state court review of Title V permits, but also created a right to federal judicial review under § 307 if EPA denies a citizen petition requesting EPA to object to a permit term or condition that is not in compliance with the Act. These are explicit new remedies that implicate the same issues raised by EPA's proposal—the rights of citizens and applicants to challenge NSR permit terms. Had Congress desired to require state court review of NSR permit terms independent of these Title V mechanisms, or to authorize EPA to step into this area, it could have done so.

Relationship of EPA's Proposal to Title V Rulemakings

Under the foregoing analysis, EPA's proposal would appear to exceed the Agency's delegated authority even if Congress had not created two new mechanisms for obtaining substantive review of NSR permit terms via Title V of the Act. Once those mechanisms are taken into consideration, however, the EPA proposal appears to be unnecessary as well as unauthorized, for the Title V provisions already provide a clear solution to the problem EPA seeks to address. EPA's proposal also could create more problems than it solves.

As seen above, § 505 of the Act expressly mandates that EPA must object to any Title V permit term not in compliance with the Act's requirements, and provides for federal court review if EPA fails to do so.⁵⁰ Section 502(b)(6) independently authorizes any person to challenge Title V permits in state court.⁵¹ Since NSR permittees must obtain Title V permits, both EPA review and judicial review necessarily must extend to the Title V permit terms pertaining to NSR requirements. Thus, EPA's proposal to create a separate right to judicial review of NSR permit terms outside of the Title V system appears superfluous. Moreover, if EPA properly interprets and fulfills its new permit review [27 ELR 10062] function under § 505, there should be little need to burden citizens, applicants, and the courts with judicial review proceedings of NSR permit terms. Indeed, EPA's proposal could create unnecessary, and unproductive litigation, for EPA or other interested persons could raise the argument that a plaintiff must bring suit at the earliest opportunity—presumably at the stage when the NSR permit terms are finalized—or be found to have lost its rights to challenge the NSR provisions entirely. This outcome also would be inconsistent with the terms of the statute.

While the statute and policy considerations seem clear on this point, EPA's Title V rulemakings have introduced yet another troubling uncertainty. As discussed below, the Agency's 1992 final Title V regulations, as well as its 1995 proposed revisions to those regulations, include several administrative "fixes" intended to provide states with administrative flexibility and satisfy the regulated community's concerns about prompt permit processing and finality. While those goals are important ones, the Agency's proposed approach to implementing § 505, as reflected in the preambles to those rulemakings, may compromise the authority of the public and the Agency itself to ensure that NSR permits fully comply with the Act.⁵²

1992 Final Rules

As discussed above, § 505(b) expressly provides that EPA "shall" object to the issuance of any Title V permit containing provisions that are not in compliance with "the applicable requirements of this chapter"—meaning the entire Clean Air Act—"including the requirements of an applicable implementation plan."⁵³ Since the substantive PSD and nonattainment NSR requirements are "applicable requirements" of the Act, and moreover are implemented in part by state rulemaking that in turn is incorporated into the SIP, EPA review of Title V permits clearly must encompass substantive NSR requirements.

As directed by Congress,⁵⁴ EPA issued final regulations to implement the § 505(b) review requirements in 1992.⁵⁵ They provide that EPA will object to the issuance of any proposed permit determined not to be in compliance with "applicable requirements."⁵⁶ The term "applicable requirements" is defined to include, inter alia, "any term or condition of any preconstruction permits issued pursuant to regulations approved or promulgated through rulemaking under title I, including parts C or D, of the Act"—in other words, NSR permit terms.⁵⁷ This provision appears to acknowledge the full scope of the Agency's important permit review obligations.

In the preamble to the 1992 final rule, however, EPA intimated that it may limit its review of NSR permit terms incorporated into Title V permits, and thus the grounds on which it will object to a permit. Discussing the state option to "enhance" its existing NSR permitting process by incorporating a 45-day period for EPA review, the Agency stated as follows:

The primary intent of these "enhancements" of the NSR process is to allow the permitting authority to consolidate NSR and title V permit revision procedures…. It is not to second-guess the results of any State NSR determination. For example, if a State does provide for EPA's 45-day review in its NSR program, EPA would only be reviewing whether the State had conducted a [BACT] analysis [under the PSD program], if applicable, and whether that analysis is faithfully incorporated in the title V permit. The EPA will not use its review period to object to or attempt to revise the State's BACT determination.⁵⁸

EPA continues, howevever, by stating that "correspondingly, EPA's failure to object to the substance of the BACT determination will not limit any remedies EPA might otherwise have under the Act to address a faulty BACT determination."⁵⁹

The problem with the logic expressed by EPA in this preamble discussion is that it does not fulfill the statutory mandate. Title V gives new authority to EPA to object to a permit containing deficient NSR provisions, and corresponding new authority to applicants and citizens to petition EPA to object when it does not do so on its own initiative. This objection and petition process only applies in connection with the issuance of the draft Title V permit itself, however, not in connection with the issuance of an underlying NSR permit.

If state NSR programs are "enhanced' without providing for EPA veto power, and EPA limits its subsequent substantive review when those NSR permit terms are incorporated into a Title V permit, EPA has effectively given up the opportunity to object to any but the most superficially obvious procedural deficiencies in the NSR provisions of the permit. While the Agency may have residual authority to contest the permit terms under other provisions of the Act, any a priori limitation on EPA's § 502(b) "veto" authority departs from the plain language of the statute. Moreover, limiting the Agency's review in this manner improperly shifts much of the burden of ensuring NSR compliance from EPA to citizens, applicants, and the courts.

1995 Proposed Revisions

EPA discusses this issue again in its 1995 proposal to revise the existing Title V regulations. Although at first glance it appears that the Agency now intends to conduct a full review of NSR requirements embodied in Title V permits, a close reading suggests that the Agency still has not committed itself to a thorough review of compliance with "the applicable requirements of" the Act.

Several parties have asked EPA to clarify how it would implement EPA's objection opportunity for changes that have previously undergone major NSR…where a citizen petitions for an EPA objection and the alleged error would have a significant environmental affect…. To assure that the permit contains provisions that are in compliance with all applicable requirements of the Act, including SIP requirements, EPA would review a change resulting from [27 ELR 10063] a NSR action to see if the terms of the NSR permit were properly incorporated into the part 70 permit, if the terms are enforceable, and if the applicable substantive and procedural requirements for public review and development of supporting documentation were followed. For major NSR, EPA would review the process followed by the permitting authority in determining best available control technology (BACT) or lowest achievable emission rate (LAER) to assure that the required SIP procedures (including public participation opportunities) were substantially met [footnote omitted] and that any determination by the permitting authority was properly supported, described in enforceable terms, and consistent with all applicable requirements.

The EPA's purpose in reviewing whether an NSR action was consistent with all applicable requirements would be to assure that any BACT requirements were at least as stringent as any other applicable requirements such as an NSPS and that any minimum control requirements specifically articulated in the SIP were met. The EPA would not second-guess case-by-case technology determinations that meet the minimum criteria set forth above.⁶⁰

The first paragraph of this discussion identifies only those NSR requirements that are "procedural" in nature, such as public participation and enforceability requirements. These are important elements in assuring NSR compliance. However, they do not actually limit air emissions, which is the ultimate purpose of the NSR program; instead, proper implementation of the "substantive" BACT and LAER requirements achieves that end.

The second paragraph of EPA's discussion falls short of addressing these substantive requirements. A review that evaluates compliance only with the minimum requirements of the Act or the SIP provides no assurances at all that the BACT and LAER requirements have been properly implemented, for by congressional design those NSR control technology requirements aremore stringent than others in the Act. Confirmation that a permit incorporates some less stringent emissions limitation simply does not constitute a determination that the permit is "in compliance with the applicable requirements of this chapter, including the requirements of an applicable implementation plan," as contemplated by § 505(b).

EPA's new "veto" power over state-issued Title V permits is a powerful tool for assuring full and consistent implementation of the Act, especially its important NSR requirements. By expanding EPA's authority in this way, Congress clearly contemplated that EPA review would be the first, and primary, mechanism for identifying and correcting deficient permit terms. If EPA implements the statute in accordance with its terms, citizens and applicants should have little reason to resort to the courts under the new Title V judicial review provisions—and none at all to seek review of NSR permit terms outside of the Title V process.

1. The Clean Air Act, as amended, is found at 42 U.S.C. §§ 7401 et seq., ELR STAT. CAA § 101 et seq. EPA's existing NSR regulations are found at 40 C.F.R. § 51.165 (nonattainment NSR) and § 51.166 (prevention of significant deterioration).

2. Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR), 61 Fed. Reg. 38250 (proposed July 23, 1996) [hereinafter PSD and NSR].

3. See id. at 38314-15.

4. See 42 U.S.C. §§ 7661-7661f, ELR STAT. CAA §§ 501-507.

5. Id. §§ 7470-7492, ELR STAT. CAA §§ 160-169B.

6. Id. § 7503, ELR STAT. CAA § 173.

7. Criteria pollutants include sulfur dioxide, ozone (measured by its precursors, volatile organic compounds and oxides of nitrogen), oxides of nitrogen (as a harmful pollutant in its own right), carbon monoxide, lead, and various forms of particulate matter.

8. 42 U.S.C. § 7475(a)(4), ELR STAT. CAA § 165(a)(4).

9. Id. § 7503(a)(2), ELR STAT. CAA § 173(a)(2).

10. See 40 C.F.R. §§ 51.160-51.161 (1996).

11. EPA also has authority to challenge state-issued NSR permits in certain circumstances. See 42 U.S.C. § 7413(a)(5), ELR STAT. CAA § 113(a)(5) (authorizing suit against a state not acting in compliance with the Act in connection with NSR requirements); id. § 7477, ELR STAT. CAA § 167 (authorizing suit against a source that would construct in violation of PSD requirements). EPA's direct authority to enforce the NSR provisions would not be affected by EPA's NSR permit judicial review proposal.

12. Id. § 7661a(a), ELR STAT. CAA § 502(a).

13. Id. §§ 7604, 7607, ELR STAT. CAA §§ 304, 307.

14. Id. § 7604(a), ELR STAT. CAA § 304(a).

15. Id. § 7607(b), ELR STAT. CAA § 307(b).

16. Cf. Williamsburgh-Around-the-Bridge Block Ass'n v. New York Dep't of Envtl. Conservation, 30 Env't Rep. Cas. (BNA) 1188 (N.D.N.Y. Aug. 21, 1989) (RCRA citizen-suit provision held not to allow federal court review of state-issued RCRA permit).

17. See STAFF OF SUBCOMM. ON ENVIRONMENTAL POLLUTION OF SENATE COMM. ON ENVIRONMENT AND PUBLIC WORKS, 95th CONG., 1st SESS., A SECTION-BY-SECTION ANALYSIS OF S. 252 AND S. 253, CLEAN AIR ACT AMENDMENTS 36 (1977), reprinted in 5 LEGISLATIVE HISTORY OF THE CLEAN AIR ACT AMENDMENTS OF 1977 at 3892 (1977) [hereinafter 1977 Staff Analysis] (in order to challenge legality of a state-issued PSD permit, "a citizen must seek administrative remedies under the State permit consideration process, or judicial review of the permit in State court.").

18. 42 U.S.C. § 7661a(b), ELR STAT. CAA § 502(b).

19. Id. § 7661a(b)(6), ELR STAT. CAA § 502(b)(6).

20. Id. § 7661d(b)(1), ELR STAT. CAA § 505(b)(1).

21. Id. § 7661d(b)(2), ELR STAT. CAA § 505(b)(2).

22. Id.

23. PSD and NSR, supra note 2, at 38314-15.

24. Id. at 38315. As an alternative, EPA is considering requiring states to submit a legal opinion to the same effect from the state attorney general or independent counsel for the implementing air pollution control agency. On either approach, parties that did not participate in the comment process would be able to bring suit if they can demonstrate that it was impracticable to raise an objection during the comment period. Id.

25. Id.

26.

The EPA is clarifying that the Act and the EPA's implementing regulations require SIP[s] to provide applicants and affected members of the public with an opportunity for State judicial review of PSD and nonattainment NSR permit actions under approved NSR SIP[s] to ensure an adequate and meaningful opportunity for public review and comment on all issues within the scope of the permitting decision as required under parts C and D of title I.

Id. at 38314.

27. Id.

28. 1977 Staff Analysis, supra note 17.

29. The cited decisions are Ogden Projects, Inc. v. New Morgan Landfill Co., 911 F. Supp. 863, 26 ELR 20843 (E.D. Pa. 1996); League to Save Lake Tahoe v. Trounday, 598 F.2d 1164, 9 ELR 20598 (9th Cir.), cert. denied, 444 U.S. 943 (1979).

30. PSD and NSR, supra note 2, at 38314.

31. Id. at 38315.

32. Id.

33. Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988).

34. 494 U.S. 638 (1990).

35. Id. at 649.

36. 467 U.S. 837, 14 ELR 20507 (1984). Chevron sets forth a two-part test for construction of a federal statute with respect to which an administrative agency has been delegated interpretive authority. For a discussion of Chevron and its recent Supreme Court progeny in the environmental area, see generally Donald W. Stever, Eliza A. Dolin, and Edward Normand, The Supreme Court, EPA and Chevron: The Uncertain Status of Deference to Agency Interpretations of Statutes, 25 ELR 10127 (1995).

37. 938 F.2d 1299, 21 ELR 21359 (D.C. Cir. 1991).

38. 42 U.S.C. § 9605(c), ELR STAT. CERCLA § 105(c).

39. 938 F.2d at 1303, 21 ELR at 21360.

40. 15 F.3d 1100, 21 ELR 20511 (D.C. Cir. 1994), cert. denied sub nom. American Bankers Ass'n v. Kelley, 115 S. Ct. 900 (1995).

41. Id. at 1105, 24 ELR at 20512.

42. 946 F.2d 918, 22 ELR 20001 (D.C. Cir. 1991), cert. denied, 503 U.S. 970 (1992).

43. 42 U.S.C. § 9606(b)(2), ELR STAT. CERCLA § 106(b)(2).

44. However, the U.S. Court of Appeals for the Eighth Circuit has held, contrary to Wagner Seed, that EPA is not entitled to deference in interpreting CERCLA § 106(b)(2). Dico, Inc. v. Diamond, 35 F.3d 348, 25 ELR 20296 (8th Cir. 1994).

45. 946 F.2d at 923, 22 ELR at 20003.

46. 80 F.3d 869, 26 ELR 21245 (4th Cir. 1996).

47. 42 U.S.C. § 7661a(b)(6), ELR STAT. CAA § 502(b)(6).

48. 80 F.3d at 878, 26 ELR at 21249.

49. Moreover, if the terms of an NSR permit cannot be challenged under § 304, then EPA would in fact potentially be creating liability if it were to insist on the right to challenge such permit terms in state court—another matter not generally delegated to an administrative agency.

50. 42 U.S.C. § 7661d, ELR STAT. CAA § 505.

51. Id. § 7661a(b)(6), ELR STAT. CAA § 502(b)(6).

52. Indeed, it is EPA's departure from the statutorty framework in the Title V rulemaking that appears to have compelled it to propose that states provide state court judicial review of NSR permit terms, separate and apart from Title V permit terms.

53. 42 U.S.C. § 7661d(b), ELR STAT. CAA § 505(b).

54. See id. § 7661d(b)(2), ELR STAT. CAA § 505(b)(2).

55. 40 C.F.R. pt. 70 (1996).

56. Id. § 70.8(c)(1).

57. Id. § 70.2.

58. 57 Fed. Reg. 32250, 32289 (July 21, 1992).

59. Id.

60. Operating Permits Program and Federal Operating Permits Program, 60 Fed. Reg. 45530, 45543 (Aug. 31, 1995).