[Federal Register Volume 59, Number 96 (Thursday, May 19, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-12246]


[[Page Unknown]]

[Federal Register: May 19, 1994]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[NM001; FRL-4886-4]

 

Clean Air Act Interim Approval Operating Permits Program; New 
Mexico Environment Department

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes interim approval of the operating permits 
program submitted by the Governor for the New Mexico Environment 
Department (NMED) for the purpose of complying with Federal 
requirements which mandate that States develop and submit to EPA 
programs for issuing operating permits to all major stationary sources, 
and to certain other sources with the exceptions of Bernalillo County 
and Indian Lands.
DATES: Comments on this proposed action must be received in writing by 
June 20, 1994.

ADDRESSES: Written comments on this action should be addressed to Ms. 
Jole C. Luehrs, Chief, New Source Review Section, at the EPA Region 6 
Office indicated. Copies of the State's submittal and other supporting 
information used in developing the proposed rule are available for 
inspection during normal business hours at the following locations. 
Interested persons wanting to examine these documents should make an 
appointment with the appropriate office at least 24 hours before 
visiting day.
    Environmental Protection Agency, Region 6, Air Programs Branch (6T-
AN), 1445 Ross Avenue, suite 700, Dallas, Texas 75202-2733.
    New Mexico Environment Department, Harold Runnels Bldg., room So. 
2100, 1190 St. Francis Drive, Santa Fe, New Mexico 87503.

FOR FURTHER INFORMATION CONTACT: Adele D. Cardenas, New Source Review 
Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
suite 700, Dallas, Texas 75202-2733, telephone 214-655-7210.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the Clean Air Act as amended in 1990 
(``the Act''), EPA has promulgated rules which define the minimum 
elements of an approvable State operating permits program and the 
corresponding standards and procedures by which the EPA will approve, 
oversee, and withdraw approval of a State operating permits program 
(see 57 FR 32250 (July 21, 1992)). These rules are codified at title 40 
of the Code of Federal Regulations (CFR) part 70. Title V requires 
States to develop, and submit to EPA, programs for issuing these 
operating permits to all major stationary sources and to certain other 
sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within one year after receiving the submittal. The EPA's 
program review occurs pursuant to section 502 of the Act and the part 
70 regulations which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, EPA may grant the program interim approval for 
a period of up to two years. If EPA has not fully approved a program by 
two years after the November 15, 1993, date, or by the end of an 
interim program, it must establish and implement a Federal program.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials
    Pursuant to section 502(d) of the Clean Air Act as amended (1990 
Amendments), the Governor of each State must develop and submit to the 
Administrator an operating permits program under State or local law or 
under an interstate compact meeting the requirements of title V of the 
Act. NMED requested, under the signature of Governor Bruce King, 
approval with full authority to administer the State operating permits 
program submittal, prepared by NMED, in all areas of the State of New 
Mexico with the exceptions of Bernalillo County and Indian Lands. The 
title V operating permits program package for Bernalillo County will be 
submitted separately by the City of Albuquerque Environmental Health 
Department, and it will be addressed in a separate Federal Register 
action. Bernalillo County is granted the authority to administer a 
local air pollution control program by the New Mexico Air Quality 
Control Act.
    In the NMED operating permits program submittal, New Mexico does 
not assert jurisdiction over Indian lands or reservations for purposes 
of 40 CFR part 70 and title V. EPA will, at a future date, conduct a 
Federal title V operating permits program governing title V sources of 
air emissions on Indian lands and reservations in New Mexico.
    To date, no tribal or Pueblo government in New Mexico has authority 
to administer an independent air program in the State. Upon 
promulgation of the Indian air regulations, the Indians will then be 
able to apply as a State, and receive the authority from EPA, to 
implement an operating permits program under title V of the 1990 
Amendments. The Navajo Nation lands, including those in New Mexico, are 
administered under the jurisdiction of EPA Region 9. The State of New 
Mexico recognizes the five (5) reservations and nineteen (19) Pueblos 
throughout the lands of the State. A map outlining and listing each 
tribe by name is attached to the Governor's letter.
    The New Mexico submittal, provided as Item II-''Operating Permits 
Program Description,'' addresses 40 CFR 70.4(b)(1) by describing how 
NMED intends to carry out its responsibilities under the part 70 
regulations. The program description addresses the following areas: (A) 
Organizational structure; (B) Regulations, guidelines, policies, and 
procedures; and (C) Future regulatory actions (40 CFR 70.4(b)(3)(i) and 
(v)). The program description has been deemed to be appropriate for 
meeting the requirement of 40 CFR 70.4(b)(1).
    Pursuant to 40 CFR 70.4(b)(3), the Governor is required to submit a 
legal opinion from the attorney general (or the attorney for the State 
air pollution control agency that has independent legal counsel) 
demonstrating adequate authority to carry out all aspects of a title V 
operating permits program. The State of New Mexico submitted an 
Attorney General's Opinion and a Supplemental Attorney General's 
Opinion demonstrating adequate legal authority as required by Federal 
law and regulation except with regard to criminal fine authority. The 
Attorney General's Opinion acknowledged that a statutory revision would 
be required to bring its criminal fine authority into precise 
conformance with the requirements of 40 CFR 70.11(a)(3)(ii).
    The State statutes cited in the Attorney General's Opinion 
authorize the imposition of criminal fines in the amounts of only 
$1,000 and $5,000 for misdemeanor and felony violations, respectively, 
rather than the $10,000 per violation amounts required by 40 CFR 
70.11(a)(3)(ii) for knowing violations of applicable requirements, 
permit conditions and fee and filing requirements. Further, those 
statutes do not appear to authorize the fine amounts to be imposed per 
day per violation as required by 40 CFR 70.11(a)(3)(ii). Although these 
defects in criminal fine authority preclude EPA from granting full 
approval of the State's operating permits program at this time, EPA may 
grant interim approval, subject to the State obtaining the needed 
criminal fine authority within 18 months after the Administrator's 
approval of the New Mexico title V program pursuant to 40 CFR 
70.4(f)(2).
    The State's Supplemental Attorney General's Opinion addresses the 
criminal fine authority required by 40 CFR 70.11(a)(3)(iii) for 
tampering and false statement. EPA is relying on the State's 
interpretation of its statute, NMSA 1978 section 74-2-14.E., as 
demonstrating that New Mexico law allows criminal fines of at least 
$10,000 per day for each act of tampering and for each false statement 
as required by 40 CFR 70.11(a)(3)(iii).
    40 CFR 70.4(b)(3)(i) requires that the State demonstrate adequate 
legal authority to issue permits and assure compliance with each 
applicable requirement of 40 CFR part 70. New Mexico regulation, AQCR 
770.III.C.1.d., states that ``The department may impose conditions 
regulating emissions during start-up and shutdown.'' EPA is relying on 
the State's interpretation of this language, discussed in the State's 
Supplemental Attorney General's Opinion, as allowing the department to 
impose requirements which exceed title V applicable requirements, but 
not to waive any title V requirements for title V sources.
    40 CFR 70.4(b)(4) requires the submission of relevant permitting 
program documentation not contained in the regulations, such as permit 
forms and relevant guidance to assist in the State's implementation of 
its permit program. The State addresses this requirement in its program 
submittal under Item II-''Program Description'' and Item V-''Program 
Documentation.''
2. Regulations and Program Implementation
    The State of New Mexico has submitted Air Quality Control 
Regulations (AQCR) 770-''Operating Permit Regulations'' and AQCR 771-
''Fee Regulations,'' for implementing the State part 70 program as 
required by 40 CFR 70.4(b)(2). Sufficient evidence of their 
procedurally correct adoption was submitted in a supplemental submittal 
on January 11, 1994, supplementing the evidence of adoption which was 
sent to EPA in the State's original submittal. Copies of all applicable 
State and local statutes and regulations which authorize the part 70 
program, including those governing State administrative procedures, 
were submitted with the State's program. The State also submitted a 
list of insignificant activities with the submittal for EPA to propose 
approving with the approval of the State operating permits program. 
This list which has been through the public participation process 
during the operating permits regulation hearing was addressed by the 
Regional office with no comment. The list can be found in the submittal 
under Item II-''Operating Permits Program Description,'' Attachment II-
3-''List of Insignificant Activities.''
    The New Mexico operating permits regulations followed part 70 very 
closely with a few exceptions. The cross-reference chart can be found 
in the New Mexico submittal under Item VI-''Various Provisions,'' 
Attachment VI-1, indicating where each paragraph of the part 70 
regulation is addressed in AQCR 770. AQCR 770 is submitted as 
Attachment III-1. The following requirements, set out in EPA's part 70 
operating permits program review, are addressed in Item VI of the 
State's submittal: (A) Applicability criteria, including any criteria 
used to determine insignificant activities or emissions levels (40 CFR 
70.4(b)(2)): AQCR 770.II., ``List of Insignificant Activities''; (B) 
Provisions for continuing permits or permit terms if a timely and 
complete application is submitted, but action is not taken on a request 
prior to permit expiration (40 CFR 70.4(b)(10)): AQCR 770.IV A.4.; (C) 
Provisions for action on permit applications (40 CFR 70.4(b)(6)): AQCR 
770.IV.A.3.; (D) Provisions for permit content, (including 40 CFR 
70.4(b)(16)): all applicable requirements: AQCR 770.III.C.1.; a fixed 
term: AQCR 770.III.C.2.; monitoring and related record keeping and 
reporting requirements: AQCR 770.III.C.3. through 5.; source compliance 
requirements: AQCR 770.III.C.7.; (E) Operational flexibility provisions 
(40 CFR 70.4(b)(12)): AQCR 770.III.C.8.; (F) Provisions for permit 
issuance, renewals, reopenings and revisions, including public, EPA and 
affected State review to be accomplished in an expeditious manner (40 
CFR 70.4(b)(13) and (16)): AQCR 770.VI.; and (G) If the permitting 
authority allows off-permit changes, provisions assuring compliance 
with Sec. Sec. 70.4(b)(14) and (15): AQCR 770.C.9. The AQCR 
regulations, in section 770.IV.(H), provide that applicants can receive 
variances from non-Federal conditions only. The State prevents any 
source from receiving a variance from any AQCR 770 or part 70 
requirements.
3. Permit Fee Demonstration
    In AQCR 771, the State's fee regulation, New Mexico established 
fees for criteria air pollutants which are below the presumptive 
minimum. The New Mexico regulation allows for a fee of $10.25 per ton 
for criteria pollutants based on allowable emissions at major sources 
as defined in AQCR 770-''Operating Permits'' regulations. For 
facilities which are only major for hazardous air pollutants (HAP) and 
not for other pollutants, the fees are $150 per ton for the 189 HAPs 
listed in title III of the 1990 Amendments. These fees, when converted 
using EPA criteria, result in the collection of an average of $19.30 
per ton for title V sources. The State of New Mexico, after careful 
review, determined that these fees would support the title V permit 
program costs as required by 40 CFR 70.9(a). New Mexico explains in its 
fee demonstration that it chose this fee structure because it allowed 
for program costs to be covered without unduly penalizing any industry 
in the State, and the fees generated would meet, but not likely exceed, 
program costs. The NMED will have a periodic review of the program fee 
schedule. The New Mexico fee demonstration shows that this fee schedule 
meets the requirements for an operating permits program in New Mexico. 
The State will collect 2.7 million dollars per year to support all 
applicable part 70 activities. The State projects the direct cost to 
fund the operation of the title V program to be 2.3 million dollars per 
year, and the indirect cost to be approximately $372,000. The State 
anticipates increasing its air quality staff by 38 new full time 
employees (FTE), a total of 1/3 of the existing air program staff. Any 
changes in the fees would need to be made by NMED through the New 
Mexico Environmental Improvement Board.
4. Provisions Implementing the Requirements of Other Titles of the Act
    The State of New Mexico acknowledges that its request for approval 
of a part 70 program is also a request for approval of a program for 
delegation of section 112 standards as they apply to part 70 sources. 
The State of New Mexico currently receives delegation of any new 
provisions required by section 112 of the Act (governing National 
Emission Standards for Hazardous Air Pollutants (NESHAP)) on an annual 
basis through a delegation agreement with EPA. Under the 1990 
Amendments, the State can now receive delegation of any new authority 
required by section 112 of the Act through approval of the State 
operating permits program.
    The State has the option at any time to request, under section 
112(l) of the Act, delegation of section 112 requirements in the form 
of State regulations which the State demonstrates are equivalent to the 
corresponding section 112 provisions promulgated by EPA. At this time, 
the State plans to use the mechanism of incorporation by reference to 
adopt unchanged Federal section 112 requirements into its regulations.
    The radionuclide NESHAP is a section 112 regulation and therefore, 
also an applicable requirement under the State operating permits 
program. The EPA will work with the State in the development of its 
radionuclide program to ensure that permits are issued in a timely 
manner.
    Section 112(g) of the Act requires that, after the effective date 
of a permits program under title V, no person may construct or 
reconstruct any major source of any HAPs unless the State determines 
that the maximum achievable control technology emission limitation 
under section 112(g) for new sources will be met. Such determination 
must be made on a case-by-case basis where no applicable limitations 
have been established by the Administrator. After the title V effective 
date and before the promulgation of the Federal 112(g) rule, New Mexico 
intends to implement section 112(g) of the Act with regard to new 
sources through the State's preconstruction process.
    The State of New Mexico commits to appropriately implementing the 
existing and future requirements of sections 111, 112 and 129 of the 
Act, and all maximum achievable control technology (MACT) standards 
promulgated in the future, in a timely manner.
    The State of New Mexico commits to having an acid rain program in 
place by January 1, 1995. The State will submit copies to EPA of any 
proposed program rules, regulations and guidance prepared for review 
and comment to meet the Federal implementation date and to issue 
permits by December 1997.
5. Enforcement Provisions
    The NMED's operating permits program submittal addressed the 
enforcement requirements of 40 CFR 70.4(b)(4)(ii) and 70.4(b)(5) in 
Item VIII-''Enforcement Provisions.'' In a supplemental submittal, 
received by EPA after the November 15, 1993 submittal, the Regional 
Office received a signed Memorandum of Understanding between EPA Region 
6 and NMED. This document, which was the product of negotiations 
between EPA Region 6 and NMED, had been awaiting signature at the time 
of the original submittal. Item VIII of the State's submittal addresses 
the following issues: (A) Compliance Tracking and Enforcement Plan (40 
CFR 70.4(b)(4)(ii) and 70.4(b)(5)); (B) Commitment to Submit 
Enforcement Information (40 CFR 70.4(b)(9)); and (C) Enforcement 
Authority (40 CFR 70.4(b)(2) and 70.4(b)(3)(vii)).
6. Technical Support Document
    The results of this review will be shown in a document entitled 
``Technical Support Document'', which will be available in the docket 
at the locations noted above. The technical support documentation shows 
that all operating permits program requirements of part 70 and relevant 
guidance were met by the submittal for the NMED, except with regard to 
criminal enforcement authority.
7. Summary
    The State of New Mexico submitted to EPA, under a cover letter from 
the Governor dated November 15, 1993, the State's operating permits 
program. The submittal has adequately addressed all sixteen (16) 
elements required for full approval as discussed in part 70, except 
with regard to criminal fine authority. The State of New Mexico 
addressed appropriately all requirements necessary to receive interim 
approval of the State operating permits program pursuant to title V, 
1990 Amendments and 40 CFR part 70.

B. Options for Approval/Disapproval and Implications

    The EPA is proposing to grant interim approval of the operating 
permits program submitted by New Mexico on November 15, 1993. Interim 
approvals under section 502(g) of the Act do not create any new 
requirements, but simply approve requirements that the State is already 
imposing. If promulgated, the State must make the following changes to 
receive full approval: Correct the statutory defect in criminal fine 
authority. In addition to raising the criminal fine amounts to at least 
$10,000 for all offenses listed in 40 CFR 70.11(a)(3)(ii), statutory 
revisions must provide authority for the imposition of those fines on a 
per day per violation basis, as required by 40 CFR 70.11(a)(3)(ii). 
Evidence of these statutory revisions and their procedurally correct 
adoption must be submitted to EPA within 18 months of EPA's approval of 
the New Mexico operating permits program. This interim approval, which 
may not be renewed, extends for a period of up to two years. During the 
interim approval period, the State is protected from sanctions for 
failure to have a program, and EPA is not obligated to promulgate a 
Federal permit program in the State. Permits issued under a program 
with interim approval have full standing with respect to part 70, and 
the one year time period for submittal of permit applications by 
subject sources begins upon interim approval, as does the three year 
time period for processing the initial permit applications.
    If this proposed interim approval is converted to a disapproval, it 
will not affect any existing State requirements applicable to small 
entities. Federal disapproval of the State submittal would not affect 
its State-enforceability. Moreover, EPA's disapproval of the submittal 
would not impose a new Federal requirement. Therefore, EPA certifies 
that such a disapproval action would not have a significant impact on a 
substantial number of small entities because it would not remove 
existing State requirements or substitute a new Federal requirement.

III. Proposed Rulemaking Action

    In this action, EPA is proposing interim approval of the operating 
permits program submitted by the State of New Mexico. The program was 
submitted by the State to EPA for the purpose of complying with Federal 
requirements found in title V of the 1990 Amendments, and in 40 CFR 
part 70, which mandate that States develop, and submit to EPA, programs 
for issuing operating permits to all major stationary sources, and to 
certain other sources with the exceptions of Bernalillo County and 
Indian Lands.
    Requirements for title V approval, specified in 40 CFR 70.4(b), 
encompass section 112(l)(5) requirements for approval of a program for 
delegation of Federal section 112 standards as they apply to part 70 
sources. Section 112(l)(5) requires that the State's program contain 
adequate authorities, adequate resources for implementation, and an 
expeditious compliance schedule, which are also requirements under part 
70. Therefore, as part of this interim approval, the EPA is also 
proposing to grant approval under section 112(l)(5) and 40 CFR 63.91 of 
the State's program for receiving delegation of section 112 standards 
that are unchanged from Federal standards as promulgated. This applies 
to existing and future standards as they apply to sources covered by 
the part 70 program.
    EPA has reviewed this submittal of the New Mexico operating permits 
program and is proposing interim approval. Certain defects in the 
State's statutory criminal fine authority preclude EPA from granting 
full approval of the State's operating permits program at this time. 
EPA is proposing to grant interim approval, subject to the State 
obtaining the needed criminal fine authority within 18 months after the 
Administrator's approval of the New Mexico title V program pursuant to 
40 CFR 70.4.

IV. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
rule. Copies of the State's submittal and other information relied upon 
for the proposed interim approval are contained in a docket maintained 
at the EPA Regional Office. The docket is an organized and complete 
file of all the information submitted to, or otherwise considered by, 
EPA in the development of this proposed rulemaking. The principal 
purposes of the docket are:

    (1) To allow interested parties a means to identify and locate 
documents so that they can effectively participate in the rulemaking 
process; and
    (2) To serve as the record in case of judicial review. EPA will 
consider any comments received by June 20, 1994.

B. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to review of the Office of Management and Budget 
(OMB) and the requirements of the Executive Order. The Order defines 
``significant'' regulatory action as one that is likely to lead to a 
rule that may:Q02
    (1) Have an annual effect on the economy of $100 million or more, 
or adversely and materially affect a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local or tribal governments or communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of Executive Order 12866 and is 
therefore not subject to OMB review.

C. Paperwork Reduction Act

    Under the Paperwork Reduction Act (44 U.S.C. 3501, et seq.), 
Federal agencies must obtain OMB clearance for collection of 
information from ten (10) or more non-Federal respondents.

D. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600, et seq., EPA 
must prepare a regulatory flexibility analysis assessing the impact of 
any proposed or final rule on small entities (5 U.S.C. 603 and 604). 
Alternatively, EPA may certify that the rule will not have a 
significant impact on a substantial number of small entities. Small 
entities include small businesses, small not-for-profit enterprises, 
and government entities with jurisdiction over populations of less than 
50,000.
    Operating permits program approvals under section 502 of the Act do 
not create any new requirements, but simply approve requirements that 
the State is already imposing. Therefore, because the Federal operating 
permits program approval does not impose any new requirements, I 
certify that it does not have a significant impact on any small 
entities affected. Moreover, due to the nature of the Federal-State 
relationship under the Act, preparation of a regulatory flexibility 
analysis would constitute Federal inquiry into the economic 
reasonableness of State action. The Act forbids EPA to base its actions 
concerning operating permits programs on such grounds (Union Electric 
Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C. 
7410(a)(2)).

List of Subjects in 40 CFR Part 70

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Intergovernmental relations.

    Authority: 42 U.S.C. 7401-7671q.

    Dated: May 11, 1994.
Allyn M. Davis,
Acting Regional Administrator (6A).
[FR Doc. 94-12246 Filed 5-18-94; 8:45 am]
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