[Federal Register Volume 59, Number 164 (Thursday, August 25, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-20951]


[[Page Unknown]]

[Federal Register: August 25, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[LA-001; FRL-5057-6]

 

Clean Air Act Interim Approval of Operating Permits Program; 
Louisiana Department of Environmental Quality

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the operating permits 
program submitted by the Governor of Louisiana for the Louisiana 
Department of Environmental Quality (LDEQ) for the purpose of complying 
with Federal requirements which mandate that States develop, and submit 
to the EPA, programs for issuing operating permits to all major 
stationary sources, and to certain other sources with the exception of 
sources on Indian Lands.
DATES: Comments on this proposed action must be received in writing by 
September 26, 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 listed below. Copies of the State's submittal and other 
supporting information used in developing the proposed interim approval 
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.
    Louisiana Department of Environmental Quality, Office of Air 
Quality, 7290 Bluebonnet Blvd., P.O. Box 82135, Baton Rouge, Louisiana 
70884-2135.

FOR FURTHER INFORMATION CONTACT: Joyce P. Stanton, New Source Review 
Section, Environmental Protection Agency, Region 6, 1445 Ross Avenue, 
suite 700, Dallas, Texas 75202-2733, telephone 214-665-7218.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the Clean Air Act as amended on 
November 15, 1990 (``the Act''), the 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 40 Code of Federal Regulations (CFR) part 70. Title V 
requires States to develop, and submit to the 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 
the EPA by November 15, 1993, and that the 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 
and disapproval. Where a program substantially, but not fully, meets 
the requirements of 40 CFR part 70, the EPA may grant the program 
interim approval for a period of up to two years. If the 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 Act, the Governor of each State 
is required to 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. Louisiana 
submitted, under the signature of Governor Edwin W. Edwards, the 
operating permits program, prepared by LDEQ, to be implemented in all 
areas of the State of Louisiana with the exception of Indian Lands.
    In the LDEQ operating permits program submittal, LDEQ does not 
assert jurisdiction over Indian lands or reservations. To date, no 
tribal government in Louisiana 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 the EPA to implement an operating permits 
program under title V of the Act. The EPA will, where appropriate, 
conduct a Federal title V operating permits program in accordance with 
forthcoming EPA regulations, for those Indian tribes which do not apply 
for treatment as States under the Act.
    40 CFR 70.4(b)(1) requires that the submittal contain a program 
description of Louisiana's operating permits program describing how 
LDEQ intends to carry out its responsibilities under the part 70 
regulations. The program description, contained in Volume I of the 
submittal, explains that this operating permits program was developed 
to satisfy all of the requirements of 40 CFR part 70. The operating 
permits program will incorporate the review and issuance procedures for 
part 70 operating permits into the existing State preconstruction 
permit review and issuance procedures.
    The program description contains a description of the 
organizational structure of the LDEQ Air Quality Division and a 
description of the agency's permit related responsibilities. The Air 
Quality Division is divided into nine sections. Through the Small 
Business Assistance Section, the LDEQ provides technical assistance to 
small businesses to help them comply with new regulations under the 
Act.
    40 CFR 70.4(b)(3) requires the Governor 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 Louisiana submitted an Attorney General's 
Opinion under the First Assistant Attorney General's signature 
demonstrating adequate legal authority as required by Federal law and 
regulation for source category-limited interim approval as further 
discussed below.
    The Attorney General's Opinion contains documentation of adequate 
legal authority to carry out the issuance of permits to all sources 
subject to the requirements of the part 70 regulations, and to 
promulgate regulations in compliance with applicable State and Federal 
laws. The Attorney General's Opinion cites 30 Louisiana Revised Statute 
(L.R.S.) 2023, which establishes a maximum permit term of ten years, 
and allows LDEQ to modify a permit for cause in accordance with law, 
rule or regulation. Through these statutory provisions LDEQ has 
developed regulations which provide a five-year permit term for all 
sources, and which allow permits to be terminated, modified, or revoked 
and reissued for cause.
    The LDEQ has the authority to enforce the regulations either 
through an administrative action to require compliance or a civil 
action to compel compliance and recover penalties. Penalties for 
administrative and civil enforcement are consistent with the penalty 
requirements contained in 40 CFR 70.11. The State also possesses 
criminal authority to compel enforcement. However, for criminal 
violations, the State law requires a willful and knowing violation, 
while part 70 only requires a knowing violation. The Attorney General's 
Opinion demonstrates through case law that there is no distinction 
between these two requirements under Louisiana law. Therefore, this 
difference is not a defect for purposes of part 70.
    30 L.R.S. section 2025(F)(1) provides that an emission of any 
substance in contravention of regulations, permit terms, and conditions 
pursuant thereto, that endangers or that could endanger human life or 
health, is a felony subject to a fine of not more than $1,000,000 or 
the cost of cleanup, and an additional fine of up to $100,000 per 
violation, which may be assessed for each day the violation continues, 
and imprisonment of up to ten years. 30 L.R.S. section 2025(F)(2) 
requires that a person who commits a violation of an emission 
limitation or non-emission related applicable requirement or permit 
condition that does not endanger or could not endanger human life or 
health is guilty of a misdemeanor and may be fined not more that 
$25,000 per violation, which may be assessed for each day the violation 
continues and imprisonment of up to one year. This is consistent with 
40 CFR 70.11 which requires criminal penalties to be recoverable in a 
maximum amount of not less than $10,000 per day per violation for any 
knowing violation of any applicable requirement, any permit condition, 
or fee or filing requirement.
    All records of LDEQ are available to the public under 44 L.R.S. 
sections 1 and 31, unless the Secretary determines that disclosure 
would either impair an ongoing investigation or disclose trade secrets. 
This statute provides that certain environmental information such as 
air emission data may not be held confidential. However, it is not 
clear whether these confidentiality provisions could be interpreted to 
protect from disclosure the contents of the permit itself. As a 
condition of full approval, LDEQ will be required either to submit an 
Attorney General's Opinion demonstrating that its statute is 
interpreted not to allow any portion of a permit to be held 
confidential, consistent with section 503(e) of the Act, or to revise 
Louisiana Administrative Code (LAC) 33:III. Chapter 5, AQ#70, section 
517.F to clarify that no portion of the permit may be considered 
confidential.
    The State statute requires judicial review and a civil judicial 
order to proceed with permit issuance as the only remedy available for 
failure of LDEQ to act on a permit application within the specific time 
requirements. The judicial review provided by the State meets the 
requirements of 40 CFR part 70.
    30 L.R.S. sections 2011(D)(2), 2022, and 2023 of the State statute 
allows LDEQ discretionary authority to issue variances. The EPA regards 
this provision as wholly external to the operating permits program 
submittal and therefore the statutory variance provision is not being 
approved as part of the title V operating permits program. Any 
variances that may be issued by LDEQ will not have the effect of 
revising the title V permit or relieving the source from compliance 
with any requirements of the Act unless the variance is processed 
through title V modification procedures.
    The Attorney General's opinion has demonstrated that oil and gas 
wellheads and pipelines will not constitute part 70 sources. Such a 
demonstration was required by the State statutory provision at 30 
L.R.S. section 2022(C)(1) which allowed for default issuance of State 
permits to wellheads and pipelines 74 days after receipt of a permit 
application by the permitting authority.
    The Attorney General's opinion has also demonstrated that cotton 
gins will not constitute part 70 sources. This demonstration was 
required because the State statute prohibits the State from regulating 
controlled burning of cotton gin agricultural wastes in connection with 
cotton gin operations.
    30 L.R.S. section 2054(B)(2)(b) provides that the Secretary of the 
LDEQ has no jurisdiction or authority to make any regulation with 
respect to burning of agricultural by-products in the field in 
connection with the planting, harvesting or processing of agricultural 
products, or with respect to controlled burning in connection with 
timber stand management or with respect to controlled burning of 
pastureland or marshland in connection with trapping or livestock 
production. These sources do not meet the part 70 definition of major 
source because air emissions from these sources are fugitive, and 40 
CFR 70.2 does not require that fugitive emissions be counted in 
determining whether such sources are major for purposes of section 
302(j) of the Act or title I nonattainment definitions of ``major 
source.'' Therefore, the State's lack of authority to permit the types 
of controlled burning described in this section of Louisiana law is not 
a defect in Louisiana's part 70 operating permits program.
    40 CFR 70.4(b)(4) requires the submission of relevant permit 
program documentation not contained in the regulations, such as permit 
forms and relevant guidance to assist in the State's implementation of 
its operating permits program. The State addresses this requirement in 
Volumes I and III of its title V operating permits program submittal. 
Volume III contains a model permit, application forms and instructions, 
including the standard Phase II acid rain forms. Volume I contains a 
description of the State's compliance tracking and enforcement program, 
including the criteria for monitoring source compliance.
2. Regulations and Program Implementation 
    The State of Louisiana has submitted Air Quality Division 
regulations LAC 33:III. Chapter 5, AQ#70-''Permit Procedures'' (``the 
permit regulations'') and LAC 33:III. Chapter 65, AQ#76-''Rules and 
Regulations for the Fee System of the Air Quality Control Programs'' 
(``the fee regulations''), for implementing the State's operating 
permits program as required by 40 CFR 70.4(b)(2). Sufficient evidence 
of their procedurally correct adoption was submitted in Volume III of 
the 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 following requirements, set out in the EPA's part 70 
regulation, are addressed in the State's submittal: (1) Provisions to 
determine applicability (40 CFR 70.3(a)): AQ#70 section 507.A.1; (2) 
Provisions to determine complete applications (40 CFR 70.5(a)(2)) and 
program documentation (40 CFR 70.4(b)(4)): AQ#70 section 519 and AQ#70 
section 517 respectively, and Volume III, Permit Forms and 
Instructions; (3) Public Participation (40 CFR 70.7(h)): AQ#70 section 
531.A; (4) Provisions for minor permit modifications (40 CFR 
70.7(e)(2)): AQ#70 section 525; (5) Provisions for permit content (40 
CFR 70.6(a)); Volume III, Permit Forms and Instructions; (6) Provisions 
for operational flexibility (40 CFR 70.4(b)(12)): AQ#70 section 507.G; 
(7) Provisions to determine insignificant activities (40 CFR 
70.4(b)(2)): A list of insignificant activities was not included with 
the submittal and may be submitted as a revision at a later date; (8) 
Enforcement provisions (40 CFR 70.4(b)(5) and 70.4(b)(4)(ii)): 30 
L.R.S. section 2025.F and Volume I, Enforcement and Compliance 
Programs.
    Following is a discussion of certain specific provisions in the 
State's submission as they relate to requirements of 40 CFR part 70:

    (a) Applicability criteria, including any criteria used to 
determine insignificant activities or emissions levels (40 CFR 
70.4(b)(2) and 70.3(a)): These requirements are met by AQ#70 section 
517 which requires the permit application to include information 
regarding emissions from sources of all regulated air pollutants and 
does not allow an exemption for insignificant activities. The permit 
regulations require that the applicable sources submit an application 
prior to construction, reconstruction, or modification which may result 
in an increase in air contaminants. AQ#70 section 507.A.3 requires that 
permits incorporate all federally applicable requirements for each 
emissions unit at the source. AQ#70 section 507.A requires all major 
sources, all sources required to obtain an operating permit pursuant to 
regulations promulgated under sections 111 or 112 of the Act (except 
sources that would be required to obtain a permit solely because they 
are regulated sources pursuant to section 112(r) of the Act), and all 
affected sources under the acid rain program to apply for and receive 
an operating permit.
    Because of a regulation involving research and development (R & D) 
facilities discussed below, the State will lack authority to ensure 
that all part 70 sources submit an application in the first year after 
interim approval. This defect in the State's authority will render the 
interim approval granted to the Louisiana operating permits program, a 
source category-limited interim approval. Further discussion of this 
issue follows.
    AQ#70 section 501.B.7 provides that the permitting authority may 
allow a
certain complex within a facility to be considered as a source separate 
from the facility with which it is co-located, provided that the 
complex is used solely for R & D of new processes and/or products, and 
is not engaged in the manufacture of products for commercial sale. The 
permit regulations are inconsistent with 40 CFR 70.3 which requires 
that a State's operating permits program provide for the permitting of 
all major sources, and 40 CFR 70.4(b)(3)(i) which requires that the 
State demonstrate adequate legal authority to issue permits and assure 
compliance with each applicable requirement by all part 70 sources.
    Confusion over this issue has occurred as a result of language in 
the preamble to the final July 21, 1992, 40 CFR part 70 rulemaking (57 
FR 32264). The preamble language indicates that States would have the 
flexibility in many cases to treat R & D facilities separately from the 
manufacturing facilities with which they are co-located. The EPA 
intended for this language to clarify the flexibility in part 70 for 
allowing R & D facilities to be treated separately in cases where the R 
& D facility has a different two-digit Standard Industrial 
Classification (``SIC'') code and is not a support facility. This 
approach is consistent with the treatment of R & D facilities in the 
New Source Review program.
    40 CFR 70.2 requires all sources located on contiguous or adjacent 
properties, under common control, and belonging to a single major 
industrial grouping to be considered as the same source. The Louisiana 
permit regulations could cause certain part 70 major sources, as 
defined in 40 CFR 70.2, or portions of such sources with the same SIC 
code, to be treated as separate sources. This could cause some part 70 
sources to be exempted from coverage by part 70 permits which must 
ensure all part 70 requirements for these sources are met.
    The EPA's August 2, 1993, guidance provides that the EPA can grant 
source category-limited interim approval to States whose programs do 
not provide for permitting all required sources if the State makes a 
showing that two criteria are met: (1) That there were ``compelling 
reasons'' for the exclusions; and (2) that all required sources will be 
permitted on a schedule that ``substantially meets'' the requirements 
of 40 CFR part 70. The EPA considers Louisiana's misinterpretation of 
the preamble language to be a compelling reason for granting this type 
of interim approval. Louisiana has not requested additional time for 
issuing initial permits. In addition, it has been estimated that a 
small number of major sources will be deferred from permitting due to 
the Louisiana R & D provision, and that such sources can still be 
permitted within the three-year time frame. This substantially meets 
the requirements of 40 CFR part 70. Also, for these reasons, the EPA is 
not requesting a detailed, written analysis supporting the State's 
claim that its program substantially meets the part 70 applicability 
requirement.
    Source category-limited interim approval will allow Louisiana to 
develop a permitting schedule to provide for the permitting of any 
``exempted'' sources during the latter part of the program's three-year 
transition period, after the permit regulations have been revised.
    Notwithstanding the granting of source category-limited interim 
approval based on the possibility that some major sources will not be 
required to submit applications within the first year after program 
approval, the EPA expects that any permits issued will address all 
applicable requirements, as required by 40 CFR 70.7(a)(1)(iv).
    For full part 70 approval, the LDEQ will be required to revise its 
permit regulations and demonstrate that no source or portion of a 
source which would be defined as major under 40 CFR 70.2 will be 
exempted from part 70 requirements because an R & D facility is co-
located with the source. Guidance on the R & D issue is expected to be 
forthcoming from the EPA Office of Air Quality Planning and Standards 
in the near future.
    AQ#70 section 502 defines ``title I modification'' as a change at a 
site that qualifies as a modification under section 111 of the Act, or 
section 112(g) of the Act, or that results in a significant net 
emissions increase under part C or part D of the Act. The EPA believes 
the phrase ``modifications under any provision of title I of the Act'' 
in 40 CFR 70.7(e)(2)(i)(A)(5) is best interpreted to mean literally any 
change at a source that would trigger permitting authority review under 
regulations approved or promulgated under title I of the Act. This 
would include State preconstruction review programs approved by the EPA 
into the State Implementation Plan (SIP) under section 110(a)(2)(C) of 
the Act and regulations addressing source changes that trigger National 
Emission Standards for Hazardous Air Pollutants (NESHAPS) established 
pursuant to section 112 prior to the 1990 amendments. The EPA intends 
to revise its criteria for interim approval in 40 CFR 70.4(d) prior to 
final approval on the proposal to grant Louisiana interim approval so 
that interim approval may be granted to State programs, like 
Louisiana's, that adopt a narrower definition of ``title I 
modification'' than the Federal definition.
    As noted, the EPA believes the better interpretation of ``title I 
modification'' would preclude granting full approval to the Louisiana 
operating permits program. However, in the proposal to revise 40 CFR 
part 70, the EPA will be taking comment on whether the criteria in 40 
CFR 70.7(e)(2)(i)(A), including the phrase ``modification under any 
provision of title I,'' should be interpreted in a manner that would 
allow the minor modification process to be used for changes reviewed 
under programs approved pursuant to section 110(a)(2)(C) of the Act and 
changes that trigger the application of NESHAPS established pursuant to 
section 112 of the Act prior to the 1990 amendments. Should the EPA 
adopt this alternative interpretation of ``title I modification'' which 
allows the minor modification process to be used for changes reviewed 
under programs approved pursuant to section 110(a)(2)(C) of the Act and 
changes that trigger the application of NESHAPS established pursuant to 
section 112 of the Act prior to the 1990 amendments, the definition of 
``title I modification'' in Louisiana's operating permits program would 
then be fully consistent with the 40 CFR part 70 ``title I 
modification'' definition without change.
    With regard to the definition of ``major source'', the definition 
in AQ#70 section 502 is broader than the part 70 definition because it 
does not require the sources to belong to a single major industrial 
grouping. This is approvable under part 70, and will result in more 
sources being covered by the State's operating permits program than 
would be required by the part 70 definition of ``major source.''
    (b) Permit application requirements (40 CFR 70.5(c)): These 
requirements are addressed in AQ#70 section 517. In addition to the 
information required to be submitted by 40 CFR 70.5(c), the permit 
regulations also require the submittal of a location map of the 
facility. AQ#70 section 507.G provides for alternative operating 
scenarios, consistent with the requirements of 40 CFR 70.4(b)(12), and 
requires the sources requesting alternative operating scenarios to 
submit the information in accordance with AQ#70 section 517.
    (c) Permit issuance and revision procedures (40 CFR 70.7): These 
requirements are met by the permit regulations. AQ#70 section 507.C.1 
requires all existing sources to submit an application within one year 
of the effective date of the State's operating permits program 
approval. AQ#70 section 507.C.2 requires that a permit application be 
submitted prior to construction, reconstruction, or modification of any 
source. Permit applications for renewal are required at least six 
months prior to the date of permit expiration, but not more than 
eighteen months prior to the date of permit expiration. The permit 
regulations contain criteria for determining completeness of 
applications consistent with 40 CFR 70.5(a)(2). Consistent with 40 CFR 
70.7, the permit regulations prohibit a source from operating after the 
time that the source is required to submit a timely and complete 
application. AQ#70 section 507.B includes 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 consistent with 40 CFR 70.4(b)(10).
    AQ#70 section 507.C.1.b contains the deadlines for submittal of 
acid rain permit applications. Although this section purports to cover 
all relevant dates for submittal of acid rain permit applications, 
however, this section does not contain the deadlines required by 40 CFR 
72.30(b)(2)(iii) for new units and for units that did not serve a 
generator with a name plate capacity greater than 25 Megawatts 
electrical on November 15, 1990, but which serve such a generator after 
November 15, 1990. AQ#70 section 505.D.2 contains the deadlines for 
submittal of acid rain permit applications consistent with those 
required by title IV of the Act, but contradicts AQ#70 section 
507.C.1.b. Even though AQ#70 section 505.A.4 states that any 
requirement, provision, or emissions limitation of the Federal 
regulations of the acid rain program, where applicable to an affected 
source, shall supersede LAC 33:III Chapter 5 of the Louisiana 
Regulations to the extent that such Federal regulations are 
inconsistent with those permit regulations, the inconsistency between 
AQ#70 section 505.D.2, 507.C.1.b and the Federal acid rain regulations 
creates a lack of clarity and should be eliminated. Therefore, for full 
part 70 approval, AQ#70 section 507.C.1.b must be revised to require 
the affected sources to comply with the deadlines in LAC 33.III.505.D.2 
consistent with 40 CFR parts 70 and 72.
    AQ#70 section 519 contains provisions regarding completeness 
determinations and requests for additional information consistent with 
40 CFR 70.4(b)(6), 70.5(a)(2) and 70.7(a)(4). Requirements for 
application contents are found in AQ#70 section 517.D and are 
consistent with 40 CFR 70.5(c).
    AQ#70 section 521 contains the requirements for administrative 
amendments. AQ#70 section 521.A.5 allows an administrative amendment 
for the incorporation of changes to render preconstruction permit terms 
and conditions consistent with emissions data and operating parameters 
as determined by start-up testing results provided the following 
criteria are met: a. The changes are a result of a test performed upon 
start-up of newly constructed, installed, or modified equipment or 
operations; b. increases in permitted emissions will not exceed 5 tons 
per year for any regulated pollutant; c. increases in permitted 
emissions of Louisiana toxic air pollutants or of Federal hazardous air 
pollutants would not constitute a modification under LAC 33:III. 
Chapter 51 or under section 112(g) of the Act; d. changes in emissions 
would not require new source review for prevention of significant 
deterioration or nonattainment, and would not trigger the applicability 
of any federally applicable requirement; e. changes in emissions would 
not qualify as a significant modification; f. the request is submitted 
no later than 12 months after commencing operation; and g. the permit 
contains a term which provides for the incorporation of test results by 
administrative amendment in accordance with the section entitled 
``Administrative Amendments.'' The EPA considers these provisions to be 
similar in many respects to the authority allowed for reasonably 
anticipated operating scenarios without a permit revision under 40 CFR 
70.6(a)(9), because the permit will give adequate notice of and provide 
limitations on the changes that may occur through a subsequent 
administrative amendment. In addition, these provisions are consistent 
with part 70 revision procedures because they achieve substantially the 
same result as would be the case if Louisiana's preconstruction and 
operating permitting programs were separate. Since, if these programs 
were separate, 40 CFR 70.5(a)(1)(ii) and 70.4(b)(14) together would 
allow changes to preconstruction permits to occur prior to revision of 
the part 70 permit (unless such changes conflicted with an existing 
part 70 permit), the use of an expedited revision procedure for 
incorporation of test results, such as that in AQ#70 section 521.A.6, 
produces substantially equivalent results where the preconstruction and 
operating permit programs are merged. In light of these considerations, 
the EPA believes this provision is consistent with part 70.
    AQ#70 section 521.A.6 provides that an administrative amendment may 
be used to revise a permit for changes that would not violate any 
applicable requirement or standard, which do not require permit 
modifications under 40 CFR part 70 and which the permitting authority 
considers to be similar in nature to the changes listed in that 
subsection. This provision could be interpreted to allow administrative 
amendments to permits to incorporate changes authorized by 40 CFR 
70.4(b)(14). These ``off-permit'' changes, which are not addressed or 
prohibited by the permit, may be made under part 70 without permit 
revisions. However, the part 70 rule contains no authority for such 
changes to be incorporated into operating permits except through the 
appropriate part 70 permit procedures, which may be either a minor or 
significant modification. Therefore, for full part 70 approval, section 
521.A.6 must be revised to eliminate administrative amendments for this 
type of change. In the interim, the EPA expects Louisiana to implement 
this provision in a manner consistent with 40 CFR part 70.
    AQ#70 section 521.A.6 also allows changes to be made to operating 
permits by administrative amendment where the State's permitting 
authority has determined they are similar to the changes listed in 
AQ#70 section 521.A. Part 70 allows changes submitted as part of a 
State's part 70 program, in addition to those specified in 40 CFR 
70.7(d)(1), to be made as administrative amendments where the EPA 
Administrator determines those changes to be similar to the changes 
listed in 40 CFR 70.7(d)(1)(i)-(iv). However, no such proposed changes 
were submitted by the State as part of its operating permits program, 
and part 70 does not allow for the substitution of the State permitting 
authority's approval for the Administrator's approval, which is 
required by 40 CFR 70.7(d)(1)(vi). Therefore, for full part 70 
approval, this defect in AQ#70 section 521.A.6 of the permit 
regulations must be corrected.
    The requirements of 40 CFR 70.4(b)(13), (16), 70.7(h), and 70.8 for 
permit issuance, renewals, reopenings and revisions, including public 
notice, and EPA and affected State review are met by the provisions of 
AQ#70 sections 519, 531, and 533. AQ#70 section 533.B of the permit 
regulations requires the applicant, rather than the permitting 
authority, to submit the permit applications directly to the 
Administrator. The notification to affected States will be provided by 
the permitting authority within 5 working days of receipt of a complete 
permit application as required by 40 CFR part 70. AQ#70 sections 533.C 
and D and 531.B provide EPA review, objection and affected State notice 
only for major sources. The Administrator may, at the time of an 
operating permits program approval, waive the requirement for affected 
State and EPA review for any category of sources other than major 
sources pursuant to 40 CFR 70.8(a)(2). Pursuant to 40 CFR 70.3(b)(1), 
the State is, under AQ#70 section 507.A.1, also deferring from the part 
70 program at this time, non-major sources with the exception of acid 
rain sources and solid waste incineration units required to obtain 
permits pursuant to section 129(e) of the Act. This deferral is 
acceptable under 40 CFR 70.3(b)(1) until the Administrator completes a 
rulemaking to determine how the program should be structured for non-
major sources and whether any permanent exemptions in addition to those 
provided for in 40 CFR 70.3(b)(4) are appropriate.
    The requirements of 40 CFR 70.7(e) for minor modification 
procedures are established in AQ#70 section 525. 40 CFR 70.7(e)(2) 
allows the use of these expedited minor modification procedures for 
certain types of changes. Among other limitations, the minor 
modification procedures may not be used for any changes to ``case-by-
case'' determinations. AQ#70 section 525.A.2 of the permit regulations 
defines the criteria for minor modifications.
    Questions have been raised concerning whether the 40 CFR 
70.7(e)(2)(i)(A)(3) provisions prohibiting changes in ``case-by-case'' 
determinations would apply in the instance of a preconstruction permit 
in which the permitting authority, through a minor modification 
procedure, changes a source-specific control technology requirement not 
required under part C or D or section 111 or 112 of the Act, or an 
emission limitation determination established on a source-specific 
basis. The EPA believes the better interpretation of 40 CFR 
70.7(e)(2)(i)(A)(3) requires that any requirement imposed on a source-
specific basis, such as one in which the permitting authority has 
discretion in setting the requirement for the particular source, must 
be considered to be a ``case-by-case'' determination. Therefore, the 
EPA believes that a change involving a source-specific requirement in a 
preconstruction permit would be considered a ``case-by-case 
determination of an emission limitation'' under 40 CFR 
70.7(e)(2)(i)(A)(3), ineligible for processing as a minor permit 
modification. AQ#70 section 525.A.2.d allows the use of minor 
modification procedures for some changes which would be considered 
``case-by-case'' emission limits under the interpretation referred to 
above. The EPA intends to revise 40 CFR part 70 to make interim 
approval possible for a State which uses the approach taken in the 
Louisiana operating permits program for the ``case-by-case'' 
restriction. The EPA is also soliciting comment in the proposal to 
revise 40 CFR part 70 with regard to whether the criteria in 40 CFR 
70.7(e)(2)(i)(A)(3) should be interpreted to allow source specific 
minor preconstruction permit review changes in control technology 
determinations or emission limitation determinations to be eligible for 
minor modification procedures. Should EPA decide in favor of this 
interpretation, Louisiana's approach to the ``case-by-case'' 
restriction would be fully consistent with 40 CFR part 70 without 
change. If the EPA decides, instead, to adopt its current position 
described above, the Louisiana operating permits program would be 
inconsistent with 40 CFR part 70 requirements, because it allows 
changes in control technology determinations and emission limitation 
determinations among other changes that may fall within the 40 CFR 
70.7(e)(2)(i)(A)(3) restriction to be processed through the minor 
modification procedures. Therefore, as a condition of full part 70 
approval, Louisiana would be required to revise these permit 
regulations to provide that such changes must be processed as 
significant modifications, as required by 40 CFR 70.7(e)(4).
    AQ#70 section 525 requires that the application for a minor 
modification be submitted to and approved by the permitting authority 
prior to making the proposed change at the source. AQ#70 section 
525.B.6 states that for any minor modification pertaining to a change 
which affects federally enforceable permit terms and conditions at a 
part 70 source, the terms of the permit revision shall not be federally 
enforceable pursuant to 40 CFR part 70 until after the required EPA 45-
day review period has expired or until the EPA has notified the 
permitting authority that the EPA will not object to final issuance of 
the permit modification, whichever is first. If the permitting 
authority has issued approval of the modification prior to such time, 
the terms of the permit revision shall be enforceable by the State upon 
approval by the permitting authority consistent with the approved SIP. 
AQ#70 section 525.B.7 further provides that, if at any time after the 
approval by the permitting authority the EPA objects, the permit will 
be reopened. This is consistent with 40 CFR 70.7(e)(2)(v). This section 
of the permit regulations provides time-frames for action on the minor 
modification applications consistent with 40 CFR 70.7(e)(2)(iv). The 
permit regulations do not provide for group processing of minor 
modifications for groups of sources. Since the requirements in 40 CFR 
part 70 for group processing are not mandatory, this is acceptable.
    AQ#70 section 527 addresses the criteria for significant 
modifications and substantially meets the requirements of 40 CFR 
70.7(e)(4). AQ#70 section 527.A.3, in allowing certain changes that 
render existing compliance terms irrelevant to be incorporated through 
minor modification procedures, appears to refer to changes such as 
those described in 40 CFR 70.4(b)(14), ``off-permit'' changes. However 
the language of the permit regulations is unclear and requires 
clarification. To remedy this defect, the State should add language 
clarifying that the modification is one which would qualify as a change 
under 40 CFR 70.4(b)(14) because it is not addressed or prohibited by 
the permit and would otherwise qualify for treatment as a minor 
modification under 40 CFR 70.7(e)(2)(i)(A).
    Provisions for permit reopenings are addressed in AQ#70 section 529 
and are consistent with the requirements of 40 CFR 70.7(f).
    40 CFR 70.8(a)(3) requires that each State permitting authority 
keep for five years such records as the Administrator may reasonably 
require to ascertain whether the State program complies with the 
requirements of the Act and 40 CFR part 70. 44 L.R.S. section 1 
contains a very broad definition of ``public records.'' 44 L.R.S. 
section 36 requires the records to be kept for three years unless a 
longer formal retention schedule has been developed. As a condition of 
full part 70 approval, a statutory change will be necessary or a 
supplemental Attorney General's Opinion will need to be submitted 
demonstrating how the current statute ensures that the required records 
will be kept for at least five years.
    (d) Permit Content (40 CFR 70.6(a)): The permit content 
requirements of 40 CFR 70.6(a) are met by the model permit submitted in 
Volume III of the State's part 70 submittal. However, 40 CFR 
70.4(b)(16) also requires provisions in the State's program 
implementing the requirements of 40 CFR 70.6 and 70.7. To meet these 
part 70 requirements, AQ#70 sections 501.C.5 and 6 speak generally to 
permit terms and conditions, but do not set out all requirements for 
each operating permit. Specifically they do not include a requirement 
that the permit specify the origin of and reference the authority for 
each term or condition, nor do they identify differences in form from 
the applicable requirements upon which the terms are based. Other 
elements required by 40 CFR 70.6 are also not addressed. 40 CFR 70.6(a) 
includes requirements for emission limitations, monitoring and 
recordkeeping, and specifies that the regulation must state that no 
permit revision shall be required under any approved economic 
incentive, marketable permits or similar program. A severability clause 
is also required to ensure the continued validity of the various permit 
requirements in the event of a challenge to any portion of the permit. 
These elements must be addressed in the permit regulations in order to 
afford citizens the opportunity to legally challenge permits. Although 
some of these elements are contained in the State's model operating 
permit, one condition of full part 70 approval will be that the permit 
regulations be revised to require that all permit elements of 40 CFR 
70.6(a) be included in each permit.
    AQ#70 section 507.H meets the compliance requirements of 40 CFR 
70.6(c). General permits as allowed by 40 CFR 70.6(d) and temporary 
sources as allowed by 40 CFR 70.6(e) are provided for in AQ#70 sections 
513.A and 513.B, respectively. These sections meet the requirements of 
40 CFR part 70.
    40 CFR 70.6(f) provides that the State may allow a provision in the 
part 70 permit stating that compliance with the conditions of the 
permit shall be deemed compliance with any applicable requirement as of 
the date of permit issuance provided certain requirements are met. 
AQ#70 section 507.I allows a very restricted use of such a ``permit 
shield.'' If the permit does not specifically state that a permit 
shield exists for a specific Federal program, no shield is presumed to 
exist. AQ#70 section 507.I requires all permit shields to undergo 
public notice requirements.
    40 CFR 70.6(g) contains provisions which state that certain 
``emergencies'' may constitute affirmative defenses to actions for 
noncompliance. AQ#70 section 507.J provides emergency provisions 
consistent with those of 40 CFR 70.6(g), using the term ``upset'' 
rather than ``emergency.''
    40 CFR 70.4(b)(12) requires that the State's part 70 submittal 
contain operational flexibility provisions. AQ#70 section 507.G 
provides for operational flexibility consistent with 40 CFR 
70.4(b)(12).
    The permit regulations do not include a definition of ``emissions 
allowable under the permit,'' because the State interprets the plain 
meaning of this term to be clear in the context of the permit 
regulations without further definition. The EPA agrees that the 
Louisiana permit regulations taken as a whole adequately define 
``emissions allowable under the permit.''
    (e) Off-permit (40 CFR 70.4(b)(14) and (70.4(b)(15)): Section 507.F 
of the permit regulations allows off-permit changes which meet the 
requirements and provisions of 40 CFR 70.4(b)(14) and (15).
3. Permit Fee Demonstration
    The fees for criteria air pollutants contained in the fee 
regulations are below the presumptive minimum; therefore a detailed fee 
demonstration was submitted in Volume I of the title V operating 
permits program submittal. The fee regulations require a fee of $9.00 
per ton for criteria pollutants based on actual emissions at major 
sources. For facilities which emit hazardous air pollutants (HAPs), the 
fees are $25, $50 or $100 per ton based on the class of the pollutant. 
These fees, when totaled and divided by the total emissions, result in 
the collection of approximately $19 per ton for part 70 sources. After 
careful review, the State determined that these fees would support the 
title V permit program costs as required by 40 CFR 70.9(a). The fee 
demonstration explains that this fee structure allows program costs to 
be covered without unduly penalizing any industry in the State, and the 
fees generated would meet the program costs. The fee demonstration is 
detailed and contains direct and indirect costs as well as the cost for 
the implementation of enhanced monitoring, and titles III and IV of the 
Act. The number of resource-hours and positions needed to implement the 
program was calculated and the fees were adjusted to meet these costs. 
The fee regulations contain a provision requiring an annual review of 
the program fee schedule and fee regulations, based on the previous 
year's costs of permit program operation. The Louisiana fee 
demonstration shows that this fee schedule meets the requirements for 
an operating permits program in Louisiana. The State will collect 
$11,000,000 per year to support all applicable part 70 activities. 
Total costs to administer the operating permits program are projected 
to be $10.6 million per year. The State will also increase State air 
quality staff by 14 positions. Any changes in the fees would need to be 
made by a revision to the fee regulations.
4. Provisions Implementing the Requirements of Other Titles of the Act
    The State of Louisiana acknowledges that its request for approval 
of a part 70 program is also a request for approval of a program for 
delegation of unchanged section 112 standards under the authority of 
section 112(l) as they apply to part 70 sources. Upon receiving 
approval under section 112(l), the State may receive delegation of any 
new authority required by section 112 of the Act through the delegation 
process.
    The State also 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 the 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 for part 70 sources. There is not yet a Federal definition of 
``major'' for radionuclide sources. Therefore, until a major source 
definition for radionuclides is promulgated, no source would be a major 
section 112 source solely due to its radionuclide emissions. However, a 
radionuclide source may, in the interim, be a major source under part 
70 for another reason, thus requiring a part 70 permit. 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, 
reconstruct or modify any major source of HAPs unless the State 
determines that the maximum achievable control technology emission 
limitation under section 112(g) will be met. Such determination must be 
made on a case-by-case basis where no applicable limitations have been 
established by the Administrator. During the period from the title V 
effective date to the date the State has taken appropriate action to 
implement the final section 112(g) rule (either adoption of the 
unchanged Federal rule or approval of an existing State rule under 
112(l)), Louisiana intends to implement section 112(g) of the Act 
through the State's preconstruction process.
    The State of Louisiana commits to appropriately implementing and 
enforcing 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 Louisiana developed acid rain permit rules as AQ#70 
section 505, which was submitted with the operating permits program 
package. The State also submitted standard acid rain permit application 
forms. These forms will be revised as updated model forms are provided 
by the EPA. These rules and permit applications meet the requirements 
of the acid rain program.
5. Enforcement Provisions
    Louisiana's operating permits program submittal addressed the 
enforcement requirements of 40 CFR 70.4(b)(4)(ii) and 70.4(b)(5) in 
Volume I which included a signed Memorandum of Understanding between 
EPA Region 6 and LDEQ. 30 L.R.S. section 2025.F.1 allows for injunctive 
relief for violations that are emissions-related, and 30 L.R.S. section 
2025.F.2 allows for criminal penalties for violations of emissions 
limitations, fee and filing requirements, tampering with a monitoring 
device, and false statements. 30 L.R.S. section 2025.F.2.c provides 
that a person shall not be considered to be in willful or knowing 
violation of a fee or filing requirement that was not complied with 
through excusable neglect.
    The Louisiana Attorney General's Opinion has demonstrated that the 
State's enforcement authority is adequate under the requirements of 40 
CFR part 70, as discussed above.
6. Summary
    The State of Louisiana submitted to the EPA, under a cover letter 
from the Governor dated November 15, 1993, the State's operating 
permits program. The submittal has been reviewed for adequacy under the 
requirements of 40 CFR part 70. The results of this review are included 
in the technical support document. The submittal has adequately 
addressed all sixteen (16) elements required for full approval as 
discussed in part 70, except with regard to the 70.4(b)(16) requirement 
to include requirements for all permit conditions in the permit 
regulations, the requirement that a permit, or any portion of a permit, 
may not be held confidential, the requirement that the permit 
regulations ensure that no source, or portion of a source which would 
be defined as major under 40 CFR 70.2 will be exempted from part 70 
requirements because an R & D facility is co-located with a 
manufacturing facility, the requirement that AQ#70 section 521.A.6 
ensure that ``off-permit'' changes are not processed as administrative 
amendments, the requirement for approval by the Administrator for any 
changes similar to those allowed by AQ#70 section 521.A to be processed 
as administrative amendments, the requirement that AQ#70 section 
527.A.3 be clarified as referring to ``off-permit'' changes, the 
requirement that AQ#70 section 507.C.1.b be revised to require that 
affected sources comply with the deadlines in AQ#70 section 505.D.2, 
and the requirement that records be kept for five years, as discussed 
above. According to EPA's current interpretation of ``title I 
modification'' and ``case-by-case determination,'' the Louisiana 
operating permits program would also need to be revised for full 
approval consistent with the Federal interpretation, by making the 
definition of ``title I modification'' consistent with the Federal 
definition, and by requiring that changes to ``case-by-case'' emission 
limitation determinations and source-specific control technologies 
among other changes must be processed as significant modifications as 
required by 40 CFR 70.7(e)(2)(i)(3). However, if, as discussed above, 
40 CFR part 70 is revised to adopt the alternative interpretation of 
``title I modification'' and ``case-by-case determination,'' 
Louisiana's regulation with regard to these issues would be fully 
consistent with 40 CFR part 70 without change. Louisiana's operating 
permits program submittal meets all requirements necessary to receive 
source category-limited 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 to the operating 
permits program submitted by Louisiana 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. As discussed above, the State's regulation regarding R & D 
facilities causes the State to lack the authority to ensure that all 
part 70 sources submit an application in the first year following 
interim approval. Therefore, Louisiana will be granted source category-
limited interim approval. In order to receive source category-limited 
interim approval, Louisiana's operating permits program must 
substantially meet the part 70 requirements and demonstrate a 
compelling reason. The EPA is satisfied that these requirements have 
been met. If promulgated, the State must make the changes noted above 
to receive full approval.
    Evidence of these statutory and regulatory revisions and their 
procedurally correct adoption must be submitted to the EPA within 18 
months of the EPA's approval of the Louisiana 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 
the EPA is not obligated to promulgate a Federal permits program in the 
State. Permits issued under a program with interim approval would 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 the 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, the EPA's disapproval of the submittal would 
not impose a new Federal requirement.

III. Proposed Rulemaking Action

    In this action, the EPA is proposing interim approval of the 
operating permits program submitted by the State of Louisiana. The 
program was submitted by the State to the EPA for the purpose of 
complying with Federal requirements found in title V of the Act, and in 
40 CFR part 70, which mandate that States develop, and submit to the 
EPA, programs for issuing operating permits to all major stationary 
sources, and to certain other sources with the exception of 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 40 
CFR 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.
    The EPA has reviewed this submittal of the Louisiana operating 
permits program and is proposing source category-limited interim 
approval. Certain defects in the State's statutes and regulations 
preclude the EPA from granting full approval of the State's operating 
permits program at this time. The EPA is proposing to grant interim 
approval, subject to the State obtaining the needed regulatory and 
statutory revisions within 18 months after the Administrator's approval 
of the Louisiana 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 
interim approval. 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, the EPA in the development of this proposed interim 
approval. 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 approval 
process; and
    (2) To serve as the record in case of judicial review. The EPA will 
consider any comments received by September 26, 1994.

B. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.
C. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. 600, et seq, the 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, the 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 the 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, 
Intergovernmental relations, Operating permits.

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

    Dated: August 12, 1994.
W.B. Hathaway,
Acting Regional Administrator (6A).
[FR Doc. 94-20951 Filed 8-24-94; 8:45 am]
BILLING CODE 6560-50-F